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CONTRACTORS URGE AMERICA TO INCREASE TRANSPORTATION INVESTMENT

July 31, 2008

Critical Infrastructure Relies on Secure Financing System

Washington, D.C. - One year after the tragic collapse of the I-35 W bridge in Minneapolis, Minn., the country continues to under invest in its transportation infrastructure. National funding has not been increased and construction materials costs have risen dramatically, further undermining the ability of states to address their increasing transportation needs.

"Here in Minneapolis, the I-35 W bridge has been rebuilt, but the financing system is still failing and that is not a legacy we should leave to the next generation," said Stephen E. Sandherr, chief executive officer of the Associated General Contractors of America (AGC) today during a visit to Minneapolis. "The tragedy of the I-35 W bridge was, unfortunately, a symptom of how age, overuse and other stresses are impacting the America transportation system. The U.S. needs to commit to infrastructure investment and ensure a safer, more reliable and more efficient transportation system."

In reaction to the bridge collapse, the U.S. Department of Transportation (DOT) and the states improved inspection practices, and the U.S. Congress provided an additional one-time boost of $1 billion for states to address bridge needs. Unfortunately, the inspections uncovered significant long-term, widespread issues - more than a quarter of the nation's bridges have structural problems or fail to meet current design standards. State Departments of Transportation have undertaken additional inspections and emergency repairs to ensure there are no immanent failures, yet the system still needs an infusion of $65 billion to repair or replace the significant number of bridges that are fifty years or older.

In addition, states are struggling with the rising prices of construction materials - asphalt has more than doubled since the beginning of 2008, with increases of as much as 40 percent announced in many regions since July 1; on-highway diesel fuel costs have risen 68 percent in the past 12 months; reinforcing steel (rebar) has roughly doubled since the beginning of 2008; and the price of construction plastics, such as polyvinyl chloride (PVC) pipe and plastic fencing and moisture barriers, have risen 10-25 percent since early 2008.

The problem could be made worse next year when the U.S. DOT may be forced to cut highway funds to states by a minimum of 34 percent because revenue into the federal Highway Trust Fund is not adequate to fully fund the program. "For Minnesota, that translates into a $142 million cut," added Sandherr.

Sandherr also noted, "We're seeing a dramatic increase in basic highway construction materials, which has undermined the purchasing power of our public works dollars and caused states to defer projects. Congress has an opportunity to address our nation's long-term transportation needs this year by keeping the highway trust fund solvent, enhancing bridge inspections and focusing vital resources on repairing and replacing critical infrastructure. Next year, when Congress reauthorizes transportation programs we need our elected representatives to restore our roads and bridges to safe and functioning levels."

AGC supported The National Surface Transportation Policy and Revenue Study Commission, which recently released its recommendations to Congress on the future federal role in surface transportation policy. AGC experts testified at three commission field hearings and two AGC experts served as members of the Commission's Blue Ribbon panel.

The Associated General Contractors of America (AGC) is the largest and oldest national construction trade association in the United States. AGC represents more than 33,000 firms, including 7,500 of America's leading general contractors, and over 12,500 specialty-contracting firms. More than 13,000 service providers and suppliers are associated with AGC through a nationwide network of chapters. Visit the AGC Web site at www.agc.org.

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