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Transport Industry Waits for Infrastructure Bill Funding

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Congress Continues 2020 Funding Levels through March 11

By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

Heavy highway firms are preparing to mobilize their people, eye potential projects and await project lettings as DOTs await funding appropriations for the new federal infrastructure bill.

It has been three months since Congress passed the $1.2 trillion Infrastructure Investment and Jobs Act (H.R. 3684), yet transportation agencies aren’t able to let contracts without the necessary appropriations. Although the most ambitious infrastructure bill in recent history was enacted into law last November, Congress is still operating on 2020 funding, woefully less than the levels promised under the new law.

The February 18 government appropriations deadline came and went, with the U.S. Senate agreeing upon another continuing resolution to continue the same funding levels through March 11 rather than authorize new spending to include the $1.2 trillion influx.

Contractors and engineering firms say it’s a triple witching effect in the making: a shortage of skilled project team members, a still-clogged supply chain and continued volatility in materials prices. Those who design, engineer and build highway, bridge, rail and mass transit infrastructure would normally be bidding on these projects during this season to enable crews to begin during peak work season.

“The lack of appropriation is putting pressure on agencies such as Missouri Dept. of Transportation in terms of the timeframes and estimated costs of their upcoming projects,” said St. Louis-based KCI Construction Inc. President Tom Huster. “Until Congress appropriates this infrastructure bill and MoDOT receives the funding, the timeline remains in question. We’re excited about the infrastructure bill because it’s the type of work we perform. This funding, coupled with the Missouri gas tax increase that passed in 2021, means good things for the state and the region from an infrastructural standpoint. Yet as an industry, we don’t have nearly enough people…from top to bottom, project managers to laborers in the field, we’re short.”

Criteria that KCI and other heavy highway contractors will be weighing to decide whether to bid or pass on an infrastructure bill-funded project includes: the number of people the company has available or will have available once the project start timeframe becomes clear; the job schedule itself; the scope of work; how much of the work is self-performed versus subcontracted; and lastly, whether the owner/agency’s budgeted project amount is realistic given current labor and materials constraints.

“We have bid projects recently that were over the initial owner budget, and it forced the owner to either cut scope or find more money, and then issue for re-bid,” said Huster. “It’s a challenge to be low on a bid one time, much less twice.”

Cliff Mashuda, Jr. is president of Mashuda Contractors Inc. The earthwork contractor performs much of its work in Wisconsin and Iowa. Mashuda says the firm’s projects range from moving 10,000 cubic yards of dirt to three million cubic yards of dirt.

“There’s definitely quite a lot of uncertainty surrounding the infrastructure bill,” Mashuda said. “If transportation agencies don’t know for sure when the funding is coming, they can’t plan in a realistic fashion. The season typically runs from April 1 until Thanksgiving. It’s already time for DOTs to be appropriating the money at the state level and getting project bids out the door. Once Congress does appropriate the funding, many of us may find that our more experienced project managers are already immersed in managing other jobs. The timing could prove to be poor regarding the four to six weeks it’s going to take to do the paperwork, engineering, preconstruction and mobilization of workers.”

Persisting supply chain issues could also prove detrimental to the start of these projects,” added Mashuda. “We’re already seeing huge delays for certain pieces of heavy equipment and components. If the project demands two or three more (bull)dozers, we may not be able to get them.”

Charlie Quandel is chief executive officer of Chicago-based Quandel Consultants Inc. The niche firm’s specialty is engineering intercity high-speed rail projects. Quandel draws a distinction between the “shovel-ready” projects of the Obama administration’s 2009 federal stimulus package with the “shovel-worthy” projects waiting to be funded via the current infrastructure package.

“There are Midwest-based high-speed rail projects that are indeed ‘shovel-worthy’ and ready to move forward once the necessary federal appropriations are made,” Quandel said. “These are projects which have environmental clearance with the records of decision already in place, and they can move quickly toward construction with concurrence from the freight railroads.”

The Consolidated Rail Infrastructure and Rail Improvements (CRISI) program is working to get its 2022 budget passed so that the federal infrastructure dollars can be appropriated into the various (rail) programs, Quandel added. “Once that is done, the NOFOs (Notices of Funding Opportunity) will come out and then states will be able to submit their applications,” he said. “We’re realistically looking at the latter part of 2022 or early 2023 before funds appropriated by this infrastructure bill could flow to the states. We’ve already seen one high-speed rail project estimating significant increases in costs just over the past six to 12 months.”

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IDOT Rolls Out 6-Year, $20.7 Billion Plan to Rebuild Illinois

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Gas Tax Revenues, Pandemic Relief Dollars to Fund Revenue Stream

By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

Despite fewer miles traveled during the COVID-19 pandemic resulting in reduced motor fuel tax revenues, Illinois will see more than $20 billion allocated during FY 2022-2027 toward constructing and rehabbing the state’s roads, bridges, passenger rail and pedestrian walkways.

Of the total $353 million received by The Illinois Dept. of Transportation from the federal Coronavirus Response and Relief Supplemental Appropriations Act, $227 million will fund the state’s highway program. The remainder will be added to the FY 2022 annual highway program and a future multi-year program. Additional funding for Rebuild Illinois is coming from a 19-cent, per-gallon increase in gas taxes, a 5-cent, per-gallon increase in diesel fuel taxes, $50 to $100 increases in annual vehicle registrations and – starting in July – a five-year phase-in of state sales tax on motor fuels.

Civil engineering design firm EFK Moen, LLC Co-Owner Linda Moen says legislators’ work to supply a more stable funding stream for transportation construction, rather than relying on bonded indebtedness as is often a reality, is a welcome solution.

“A lot of times, with capital programs the (transportation) funding comes from general revenue or the work is bonded, meaning it takes away from other priorities,” Moen said. “Legislators worked in a truly bipartisan manner to make this happen. They’re to be commended.”

Illinois’ new multi-year plan is expected to rebuild more than 2,700 miles of roads and nearly 8 million square feet of bridges. Additional investments under the FY 2022-2027 plan include: $5.79 billion for highway reconstruction and preservation, $4.82 billion for bridge improvements, $2.59 billion for strategic expansion, $1.43 billion for system support such as engineering and land acquisition and $1.21 billion for safety and system modernizations.

For more details on the IDOT multi-year plan, see https://idot.illinois.gov/transportation-system/transportation-management/transportation-improvement-programs-/multi-modal-transportation-improvement-program/index.

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MoDOT Asks Business Stakeholders for Input on State’s Rail and Freight Plan

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By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

MoDOT Waterways and Freight Administrator Cheryl Ball is asking freight owners, shippers, truckers and other stakeholders for input as the agency writes its 2021 combined rail and freight infrastructure plan.

For the first time ever, MoDOT is crafting a 5-year strategic plan that includes both rail and freight. The most recent rail plan was drafted in 2012, and the latest freight plan was completed in 2014. Ball says it makes sense to combine both plans into one to best serve business and industry stakeholders.

“One plan makes sense in terms of interpreting the data and in harnessing the expertise of our stakeholders in the most efficient way,” Ball said. “We’re seeking input from all stakeholders – in Missouri, regionally and across the U.S. – as to how we can continually make operational improvements to make our transportation infrastructure as safe and certain as possible for those whose businesses depend upon reliable, predictable routes and schedules.”

Rail traffic comprises 50 percent of all the freight traffic in Missouri, according to Ball, while truck traffic also comprises 49 percent to 50 percent. Water, air and pipeline together comprise less than 2 percent of all statewide freight traffic.

“Interstate 70 is one focus of our plan,” she said. “For example, trucking industry stakeholders told us that if there’s a crash on I-70 in the rural parts of Missouri, there’s not an escape route. That makes the route subject to a lot of uncertainty in terms of the projected time to carry goods to their destination. We’re looking at work we can do to improve emergency ramps in locations where frequent crashes occur. Operational efficiency strategies are a big part of making our major trucking routes not only safe but also dependable.”

Another example of work with industry stakeholders, says Ball, are communications strategies to ensure that transportation stakeholders are aware, weeks ahead of time, if they need to reroute due to anticipated road projects such as the I-270 reconstruction. “Shippers want to know that if they route a truck through this corridor, is it going to add 45 minutes, two hours or four hours to their time estimate,” Ball said. “Particularly for warehouse and distribution stakeholders, traveling from city to city might be reliable but traveling those last few miles, exiting the interstate to their destination, can wreak havoc with their projected schedules. A major goal of our integrated rail and freight plan is to make changes and improvements that lessen these uncertainties for businesses whose livelihoods rely upon infrastructural and operational efficiency.”

Business and industry members interested in providing input to MoDOT toward its 2021 rail and freight plan are encouraged to contact the agency via https://www.modot.org/contact-information. Trucking companies are also encouraged to take the latest Missouri truck parking survey at https://experience.arcgis.com/experience/079af1bb10154a3da76c8853da10481b/

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