JEFFERSON CITY – The Missouri Highways and Transportation Commission today approved plans to improve 802 of Missouri’s lowest rated bridges in five years, starting with 100 structures that will be under construction early next year. The Missouri Department of Transportation, though, will manage the Safe & Sound Bridge Improvement Program differently than the Design-Build-Finance-Maintain contract that was envisioned when the program was launched two years ago.
The Commission decided to conclude the procurement process that had previously identified Missouri Bridge Partners (MBP) as the apparent best-value proposer, citing the turmoil in the financial markets that made the proposal unaffordable, and directed MoDOT to move forward with alternative methods to deliver Safe & Sound.
There will be 554 bridge replacements included in a single design-build package to be advertised this fall and awarded in late spring 2009. The remaining 248 bridges to be improved will be contracted using a modified design-bid-build approach, where projects are grouped by type, size or location to accelerate construction schedules.
“Safe & Sound has always been about fixing bad bridges quickly and economically,” MoDOT Director Pete Rahn said. “The experience of this process tells us that the design-build-finance-maintain approach is very feasible, but for this particular project, at a time of extreme volatility in the nation’s credit markets, the requirement for private financing made Missouri Bridge Partner’s proposal just too expensive for our budget.”
Under the Missouri Bridge Partners plan, MoDOT would have been required to make annual payments that would have ranged between $65-74 million, depending on interest rates.
“We had budgeted for a $50 million annual payment, using roughly one-third of the federal bridge replacement funds Missouri receives each year,” Rahn said. “At a time when we are faced with declining revenues and increasing costs, the Commission was concerned we might not be able to honor our commitments in MoDOT’s five-year construction program if we went forward at a price over our budget. Keeping our promises is the Commission’s absolute top priority.
“The turmoil in the credit markets had a tremendous impact on the cost of this project, and extended contract negotiations while we waited to see if a calming of the credit markets would make this project financially viable. Unfortunately, that did not happen.”
MoDOT has spent $15.6 million on development of the Safe & Sound program, an investment that will enable it to have 100 bridge projects under contract by spring, and will also reduce the cost of other contracting options and speed their implementation. Included in the cost to date are stipends paid to MBP and Team United, the other proposing team that was eliminated from consideration by the Commission in December 2007. Those stipends convey ownership of the technical concepts developed by each team to MoDOT for its future use. Additionally, MBP developed bridge plans and conducted surveys and geotechnical investigations in the field under a Limited Notice to Proceed issued by the Commission in June that MoDOT will use to get work under way. MoDOT also located utilities at bridge locations – work that won’t have to be repeated.
Rahn said MoDOT plans to issue bonds to pay for the project with annual payments of approximately $50 million as budgeted previously. With finance charges, it’s estimated that MoDOT’s new plan will be $300-500 million cheaper than the MBP proposal.
A complete list of all the bridges in the Safe & Sound program and other information can be found on the MoDOT Web site at www.modot.mo.gov/safeandsound.
“Ultimately,” Rahn said, “the question became whether MBP or MoDOT could provide financing for the project at the lowest cost. In view of the present turmoil in the financial markets, the answer is that MoDOT could do it for less.
“Better bridges are coming soon.”
Editor’s note: Recorded comments on this subject from MoDOT Director Pete Rahn can be found at www.modot.org/newsroom.