Governors ask industry for cheaper and quicker Bridges Project plan

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by Joe Arnold

WHAS11.com

Posted on February 17, 2011 at 2:30 AM

Updated Thursday, Feb 17 at 2:30 AM

Louisville, Ky. (WHAS11) - The private industry that hopes to profit from the construction of the Ohio River Bridges Project was given a challenge in Louisville on Wednesday, to imagine less expensive and quicker ways to finance, design and build the bridges.

Recent proposed changes would trim an estimated $500 million from the long delayed $4.1 billion project.  And, in a joint appearance before 850 construction and financing professionals in downtown Louisville, the governors of Kentucky and Indiana said they want to hear other private sector ideas on how to make the project leaner and faster.

Indiana Governor Mitch Daniels (R) told the forum that the project has shifted away from a traditional mode in which government says "'this is how it is.'  Our attitude now is, 'show us what you got.'"

Asked later about how much more money could be trimmed from the project's estimated cost, the governors were hesitant to set any benchmarks.

"I think our goal simply is, as low as possible," said Kentucky Governor Steve Beshear (D), "and as least expensive as possible."

Daniels said he hopes the bids come in consistent with savings he is seeing on other major projects in Indiana.

"We are experiencing chronic underruns," Daniels explained, "That is to say, bids that are consistently well below what history said and engineering estimates expected. 

"I don't know how much longer this is going to last, but I think it's going to go for awhile and those underruns are on the order of a quarter to a third below what we expected," Daniels continued.

To apply such underrun percentages to the Ohio River Bridges Project's estimate would translate to an additional $900 million to $1.2 billion in savings.

"In addition to savings from speed and I hope savings from creative design," Daniels continued, "We may also incur some savings if we keep moving, just because of the competition to actually do the work when you get to digging and pouring, will also drive costs out."


The start of the forum sends at least two important signals both to and from the private sector bridge partners.

First, the level of interest from the private sector construction and financing industries shows their confidence in the project.  They want in on the action.

"They are making an investment in their future," explained Kerry Stemler, Ohio River Bridges Project Co-chair, "How do they make a connection into this project?"

The other important signal is to the private sector, the united front shown by the principal elected leaders: the governors and Louisville Metro Mayor Greg Fischer (D).

"The first we look at on any large project is, does it have the political support to pull the project through?" explained Jim Dell, Vice-President of Bechtel Infrastructure, "because there's always a lot of twists and turns these projects take."

Bechtel is a construction giant that might bid on the entire project.  Among its other current projects is the extension of the light rail system in Washington, D.C. to Dulles Airport.

"We want to explain to the market where this project is, where it's going, how they can intersect with it," said Stemler, "How they can plug into the extension cord, and help us move it forward."

That team building message was also voiced in videotaped messages from Kentuckiana's most prolific basketball coaches.

"It will be the key to success in this project," said University of Louisville coach Rick Pitino as he tossed a ball off camera, the tape edited to suggest that the ball was passed to University of Kentucky Coach John Calipari.

"On the court we have a pretty intense rivalry with the University of Louisville," Calipari said before endorsing the city of Louisville as the economic engine of the state.

Indiana University coach Tom Crean and Butler's Brad Stevens, whose underdog team came within a shot of the 2010 national championship, also appeared in the video.

"The Ohio River Bridges Project could also be considered an underdog," Stevens said, "until now."

"We are beginning to play in this project like a Final Four team," Kentucky Governor Steve Beshear (D) told the forum.

And to play, Kentuckiana will have to pay.  That's the other message driven home -- that tolls are a key component to the plan.

"This is the only way forward," Daniels said to reporters, "Some sort of a public, private arrangement, some sort of user fee to close the gap in funding.  It's that or no bridges."

The revised plan - as it now stands - is to toll both the new Downtown Bridge and East End Bridge and the renovated Kennedy Bridge.  Revisions also include a streamlining of the project by:

* not expanding Spaghetti Junction's footprint, after all,
* reducing the number of proposed lanes on the East End Bridge and
* removing pedestrian and bike lanes on the proposed downtown bridge to be replaced by such access on the Big Four pedestrian bridge, a separate project that got a $22 million completion commitment on Tuesday.

The Federal Highway Administration must still approve of the changes.

"They are active about this," said Beshear when asked about the highway administration, "They are excited about this project. We'll get a decision in due course about the Kennedy Bridge.  We're very hopeful that that's going to be positive.  And we're confident that we will get a decision that will allow us to move forward and get these bridges built."

"I think they have been very cooperative," agreed Daniels, "I think they understand this is the only way to make this happen."

Beshear added that a new environmental impact study would have had to have been conducted regardless of the revisions that are part of a new study.

Daniels said that President Barack Obama has mentioned that public-private partnerships, known as P3's, are needed to get infrastruture built more timely and less expensive.
 
"It's the irony of our time that the United States in most respects is still the world's incubator of innovation and new ideas," Daniels told the forum, "and is a laggard here."

Despite the national scope of Daniels' comments and the project's sudden momemtum coinciding with the run-up to the 2012 presidential election, Daniels said the project is not being pushed by any possible presidential aspirations of his own.

"The merits of this have been known for so long and don't have anything to do with any other agenda," Daniels said.

The Indiana Governor, however, acknowledged that he is considering a White House bid.

"I'm thinking about it," Daniels said.

And, Daniels hopes the bridges project sends a message to the rest of the country.

"I think this will be one of the vanguard projects in a necessary and sweeping change in how we get big things built in America," Daniels said, "with a mix of public and private activity."

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