Nearly $3 Billion in New Contracts Will Challenge N.Y. Region Bridgebuilding
Construction officials in and around New York City celebrated on April 24 the award of nearly $3 billion in new bridge construction contracts as a boost to the region's economy and job growth.
The awards, by the Port Authority of New York & New Jersey, include significant rehabs of two key bi-state crossings and the region's first major public-private partnership (P3) financing arrangement in the $1.5-billion project to replace the antiquated Goethals Bridge.
But industry observers say the infusion of regional bridge work and the intricacies of the Goethals' financing arrangement could challenge firms in supply chain, labor and subcontractor management.
Winning the Goethals project was the NYNJ Link Partnership, a joint venture of Macquarie Infrastructure, Kiewit, Weeks Marine, Massman Construction, Transfield Services North America and Parsons Corp.
The team beat two groups headed by contractors Skanska and Spain's ACS, respectively, for the 40-year, design-build-finance-maintain contract to replace the 85-year-old Goethals span between New Jersey and Staten Island. It is the authority's first new bridge since 1931 and the Northeast's "first true surface transportation project" to use a P3, says the agency.
Under the Goethals deal, the authority will make no payments until significant construction milestones are achieved. The bridge is scheduled to open to traffic in late 2016, with substantial construction completion set for the next year.
The authority has access to up to $500 million in a low-cost U.S. Transportation Infrastructure Finance and Innovation Act (TIFIA) loan and a private-activity bond issue, it says.
"We were surprised to see that it was being done as a P3," says Mike Elmendorf, president and CEO of the Associated General Contractors of America, New York chapter. "But this is a good thing because it is a significant, expensive and a complex project—the type of project that would be ideal for a P3."
He adds that "Governor Cuomo's budget proposal [earlier this year] had some design-build finance language, but it didn't survive the budget process, so it was not enacted. if you look at the staggering infrastructure needs that we have [in New York State], the needs far outweigh the resources and P3s could help."
But one construction firm executive, who declined to speak publicly, says the complex structure of project financing and construction contracts "was a deterrent to more than one contractor in bidding this project."
The authority also awarded a $743.3-million contract to a joint-venture team of Skanska Koch Inc. and Kiewit Infrastructure Co. as part of a $1.29-billion program to increase the navigational clearance of the 81-year-old Bayonne Bridge, which also links New Jersey and Staten Island.
Work on the bridge marks the first time the agency will build a bridge's roadbed above an existing roadway as traffic continues to flow on the deck below.
The project, pending environmental review and permitting, is set to start later this year, with completion targeted for late 2015—about the same time the Panama Canal widening project is expected to finish. Increasing the bridge's height will allow new, large-scale post-Panamax vessels to gain access to New York and New Jersey ports, the authority says.
HDR and Parsons Brinckerhoff are the agency's design contractors. A project source says the engineering estimate was about $675 million. A Conti-J.H. Reid team and a venture of American Bridge, Traylor Bros. and Tutor Perini bid $803.4 million and $824.7 million, respectively.
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