Friday, August 04, 2006

Ah, the smell of cooked books in the morning

WisDOT yesterday released projections showing a $384.6 million increase in the cost of 27 projects from what was projected just six months ago, in February. In the previous six-month report, projected costs rose just $3 million.

Curious, aina? Inflation in road-building has been an issue for at least two years, but it didn't hit Wisconsin projects until just before state budget requests are due to be submitted to the governor.

What is that cooking smell? Could it be WisDOT books?

Curiouser and curiouser: the inflation rate varies widely by project. For example, there is absolutely no cost increase projected in the controversial Highway 23 widening between Fond du Lac and Plymouth. The project in February was expected to cost $95.6 million, and in August is still projected to cost $95.6 million. This puppy is still in the planning stages -- WisDOT says $2.1 million has been spent on design work thus far.

The expansion of US Highway 41 from DePere to Saumico, on the other hand, is expected to cost $51.8 million more than WisDOT thought just six months ago. (This project also is in the early stages -- $2.9 million has been spent on design work thus far.) This expansion project was projected to cost $364.7 million in February and now is expected to cost $416.5 million. That's a supersized 14% increase. "Cost increases are due to higher prices for construction materials and / or refinements in the estimated quantitities needed for the project," WisDOT explains in the report.

There is a huge amount of wiggle room in that explanation. In a few short words, WisDOT folks offer an explanation that means one of two very different things: "This cost increase is beyond our control" or "Our earlier estimates were a crock." Can a 14% correction to that crock be a "refinement"?

These books aren't just cooked. They are burned to a crackly crisp.


grumps said...

Actually, I'd be tempted to cut a little slack on this one.

A job still in planning most likely has taken into account the drastic upswing in asphalt and concrete prices over the last eighteen months.

A job that was planned 4 or five years ago and now in the execution was probably planned at much lower material costs and inflation in material prices is causing the volatility.

This one might not be off as far as it looks.

Gretchen Schuldt said...

That may be true, but both these projects are still in the planning stages. Neither is in the execution stage...