West News Wire: In Tucson, Arizona, the cost of a foot of water pipe has increased by 19%. In a small Massachusetts town, the cost of a ton of asphalt has increased by 37%. The cost of constructing a new airport terminal in Des Moines, Iowa, has increased by 69 percent, with a several-year delay.
Inflation is wreaking havoc on infrastructure projects across the United States, driving up costs to the point where state and local governments are deferring projects, scaling back others, and reprioritizing their priorities.
The price hikes are already eroding the value of President Joe Biden’s $1 trillion infrastructure plan, which he signed into law just seven months ago. The law included a roughly 25% increase in regular highway program funding for states, among other things.
“Those dollars are essentially evaporating,” said Jim Tymon, executive director of the American Association of State Highway and Transportation Officials. “The cost of those projects is going up by 20%, by 30%, and just wiping out that increase from the federal government that they were so excited about earlier in the year.”
In Casper, Wyoming, the low bid to rebuild a major intersection and construct a new bridge over the North Platte River came in at $35 million this spring 55% over a state engineer’s estimate. The bid was rejected and the project delayed as state officials re-evaluate their options.
“If this inflation keeps the way it is, we will have to roll projects from one year into the next, into the next, into the next,” said Mark Gillett, chief engineer of the Wyoming Department of Transportation.
Gillett had hoped the federal Infrastructure Investment and Jobs Act would finance a boom in highway and bridge construction.
“But it’s just not going to go as far as we had hoped,” he said.
In addition to roads, the federal infrastructure bill includes billions of dollars for water projects, railways, airports, broadband internet, electric grids and green-energy projects over the coming years.
Inflation has affected the entire U.S. economy, posing one of Biden’s biggest challenges during a midterm election year. Fuel, food and housing costs all have shot up. Consumer prices surged 8.6% in May over last year, the highest rate since 1981, according to the U.S. Department of Labor.
Prices for some key materials in infrastructure construction have risen even more. Prices paid to U.S. manufacturers of asphalt paving and tar mixtures were up 14% in May compared to last year, according to data from the Federal Reserve Bank of St. Louis. Prices for fabricated steel plate, used in bridges, were up 23%, and ductile iron pipes and fittings used by water systems were nearly 25% higher.
The hikes are being driven by a variety of factors, including worldwide supply-chain backlogs, strong consumer and business spending in the U.S., Russia’s invasion of Ukraine and, some argue, federal energy and fiscal policies.
U.S. Rep. Sam Graves, the ranking minority member on the House Transportation and Infrastructure Committee, contends the infrastructure law itself is contributing to inflation by pouring more federal money into an economy already flush with trillions of dollars in federal pandemic aid.
“They are borrowing more money so they can spend more money, (which) is driving inflation, which is cutting down on the projects that they’re actually wanting to do,” said Graves, a Missouri Republican who voted against the infrastructure bill.
White House senior adviser Mitch Landrieu said the infrastructure law “actually positions us for lowering costs for families in the short- and long-term.” He pointed, among other things, to made-in America requirements for steel, iron and other construction materials that could strengthen supply chains and thus lower costs.
When bids for a road project in Lansing, Michigan, came in 60% above estimates, the city rebid the project and cut its scope in half, said Andrew Kilpatrick, public service director and acting city engineer.
Public water systems across the country also are straining under inflation.
When it bid the most recent phase this spring, pipe costs had risen to nearly $90-a-foot and gate valves to nearly $4,100. The city is now prioritizing what other projects it can afford, and which ones have to wait.
“To sum it up, we’re doing less work for the same amount of money,” said Tucson’s chief water engineer, Scott Schladweiler.