OHIO Officials expect delays in highway projects

Material suppliers and contractors are concerned.
COLUMBUS (AP) -- Rising oil prices and higher construction costs could delay several major road projects planned for Ohio in the next few years, state transportation officials said.
Prices for heavy highway construction products such as asphalt, concrete and steel increased about 12 percent last year and 7.5 percent in 2004, officials with the Ohio Department of Transportation said.
Though the higher costs will have little effect on current ODOT projects, the state says it might have to delay some major work scheduled over the next four years.
"I don't necessarily foresee wholesale cancellation, but I would think there would be deferment or the pushing of some projects between fiscal years just to accommodate available revenue," said Andrew Gall, ODOT's chief of staff.
ODOT is reconsidering its entire program, from routine maintenance to complex new interstate construction jobs, Gall said.
It's not known which projects might be delayed, but central Ohio has a number of major ones in the pipeline, including the Interstate 70/I-71 split in downtown Columbus. Beginning in 2009, the state plans to rebuild the 1.5-mile stretch that has seen about 800 crashes a year. The cost may hit $500 million.
ODOT has an annual budget of about $2 billion.
The process
When ODOT draws an original estimate for a project, it factors in specific prices for steel, concrete, asphalt and basic commodity items, plus an inflationary cost of 3 percent to 4 percent.
With volatile commodity prices, it is difficult for contractors to bid on contracts that cover several years.
"They are bidding a worst-case scenario, which is increasing our cost when it comes to final construction contracts," Gall said.
Contractors and material suppliers who work with the state are concerned about the trend.
"Everybody was feeling pretty good two or three years ago, thinking there are sufficient funds for eight-, nine-, 10-year programs," said Clark Street, president of the Ohio Contractors Association.
"Now all off a sudden, maybe they do and maybe they don't. It all depends on what the prices do," he said.
ODOT cited a 130 percent increase in diesel prices since April 2004. Heavy machinery used to move dirt on a job can require five or six gallons of diesel an hour, Street said.
"It is pretty easy to see how you are going to be impacted when the price goes up," he said.
The association has 552 members who are contractors and material suppliers. Together, they perform about 90 percent of ODOT construction work.