The Washington Construction News, June 2004
The tremendous increase in the price of steel has not caused any delays in the construction of the Woodrow Wilson Bridge yet, but those close to the project are quick to note that steel prices are a definite cause of concern.
According to John Undeland, public affairs director for the Woodrow Wilson Bridge project, the increase in steel prices has not yet affected the schedule for the bridge project, but the project’s coordinators are paying attention to the issue. Since June 2003, steel prices have risen more than 65 percent, with a sharp spike of over 30 percent since December. In addition to the rise in steel prices, the projected budget for the project was reduced last year due to the favorable bidding climate. While the 2002 cost estimate was $2.56 billion, the 2003 plan showed a total cost estimate of $2.427 billion, a $137 million decrease from the 2002 estimate. Due to the favorable bidding climate of 2002, several large contracts came in under estimate — the average-under for the project is more than 12 percent — according to Undeland.
The rising cost of steel is an issue of concern for the steel industry, says Marianne Pastor, director of investor relations for Williams Industries Inc., a major steel fabricator on the Wilson Bridge project.
“[The escalating price of steel] is one of the most critical problems in the industry today. It is not only the steel fabricators who are fighting the tremendous price increases of the last several months,” says Pastor. “Any company, such as concrete companies working with rebar, that has to use steel as part of its finished product is involved in the battle raging over the enormous price increases.” Williams Industries, which is based in Manassas, Va., is the steel contractor for the bridge section from Virginia to the drawspan.
Despite the rise in steel prices, the Federal Highway Administration stated in April that it would not fund retroactive increases for steel contracts, but escalator clauses in future contracts would be considered.
On how the company’s contract amount has been affected by the steel price increase, Pastor says, “As a publicly-traded company, Williams Industries generally does not comment on the specifics of any project in order to avoid improper disclosure or any question by regulators. As it relates to the Woodrow Wilson Bridge project, Williams Industries’ subsidiary, Williams Bridge Co., has been doing a significant amount of fabrication for the outer-loop of the project.”
The current Woodrow Wilson Bridge was built in 1961 to accommodate 75,000 vehicles per day; however, approximately 200,000 vehicles now utilize the bridge each day. According to the Virginia Department of Transportation, the accident rate on the bridge approaches is twice the average interstate accident rate. The project includes not only a new bridge but also reconstruction of 7.5 miles of the Capital Beltway (I-495/I-95) and new transparent sound walls.
The existing Wilson Bridge connects Alexandria, Va., to Oxon Hill, Md., over the Potomac River. The first new six-lane bridge is slated to be completed by spring 2006. The old bridge will then be demolished to made way for a twin six-lane drawbridge to be completed in 2008. The new bridge will be located 30 feet south of the existing Wilson Bridge and will be nearly 120 feet tall. The increase to 12 lanes of traffic is aimed to ease traffic congestion. Another improvement to help reduce traffic congestion is the increase of 20 feet of clearance for marine traffic, which will decrease interruption of road traffic by more than 70 percent.
The entire Wilson Bridge project will not be complete until 2012. Because the corridor spans parts of Maryland, Virginia and the District of Columbia, the project costs are shared by all three jurisdictions.
For the Maryland portion of the contract, Potomac Constructors—a joint venture of Edward Kraemer and Sons of Plain, Wis., the American Bridge Co., Pittsburgh, and Trumbull Corp., Pittsburgh—was awarded the $191 million “Maryland approach” contract for the new Wilson Bridge by the Maryland Department of Transportation’s State Highway Administration. The Maryland contract covers construction of the bridge from the abutment in Maryland to the draw span off the Alexandria, Va.,shore. The “Maryland approach” project includes the construction of three bascule spans, including the twin drawbridges. Potomac Constructors’ bid was $191 million, 25 percent below the budgeted amount.
The Wilson Bridge team announced May 12 that progress on the project has moved from the Potomac River to the shore. Marshy soil on the Virginia side was drained of water and injected with cement to create a foundation for the rebuilt Capital Beltway’s entrance to the new bridge. Project officials said it was the first time a portion of the project has been completed on land. Similar work on the Maryland shore will be finished by the end of the year, they said.
Despite the bridge project’s projected on-time completion, the rising cost of steel is still a hot issue for those involved in the bridge project and the steel industry, in general, according to Williams Industries’ Pastor.
“A number of organizations, including the National Steel Bridge Alliance (NSBA), the American Association of State Highway and Transportation Officials (AASHTO), the American Road and Transportation Builders Association (ARTBA), the Associated General Contractors (AGC) and the Federal Highway Administration (FHWA), are all working to try to find a solution to this crisis,” says Pastor. “I use the word ‘crisis’ deliberately because if this situation is not resolved, the results could cripple the American steel industry, both in terms of the mills, who are being short-sighted in their treatment of customers, and in terms of the end-users, many of whom will not survive these unprecedented price escalations. Williams Industries is doing everything in its power to mitigate the impact of these increases on its various subsidiaries and projects. The company is hopeful that all of the various interest groups involved in the process will come to an equitable resolution of the situation in the near term.”