WASHINGTON –
Federal stimulus money will pay for hundreds of extra
roads, bridges and buildings this year because almost
all of that work has been far less expensive than expected.
The stimulus law President Obama signed in February
was slated to pour billions of dollars into thousands
of building projects across the country, perhaps the
best-known part of a $787 billion plan to create jobs
and revive the economy. As that work began this summer,
the state and federal officials in charge of paying
for it say a dramatic slump in the construction industry
brought bargain prices.
Now they're launching hundreds of millions of dollars'
worth of additional projects to use the extra money.
"That gives us the ability to create more jobs
through even more projects," says Federal Highway
Administrator Victor Mendez.
There is no measurement of exactly how much the government
has saved. But an analysis of 700 projects for USA TODAY
by Onvia, a private firm that tracks government contracts,
found that those jobs will cost an average of 16% less
than expected. On those projects alone — a tiny
fraction of all the stimulus work approved so far —
the government has paid $620 million less than it anticipated.
The savings will pay for additional stimulus work.
For example:
• Pennsylvania launched an extra 52 road and
bridge projects this summer because its original list
of stimulus projects cost 10% less, says Rich Kirkpatrick,
a state Transportation spokesman.
• The Transportation Security Administration
says it anticipates price drops will allow savings of
almost a quarter of the $1 billion Congress gave it
to improve security at the nation's airports. It will
use the remainder to install faster luggage-scanning
systems in 10 more airports nationwide.
• This year's road projects in Oregon came in
$43 million under budget, and the state plans to use
most of that money to buy new rail cars for Amtrak passenger
trains, says state Transportation spokesman Dave Thompson.
"We were guessing they'd come in a little under,
but we were very surprised by how much," he says.
Prices have fallen because of a huge slowdown in the
construction industry. That has pushed down the price
of concrete, steel and other materials, and has sharply
increased competition for the work that remains, pushing
prices even lower, says Kenneth Simonson, chief economist
for Associated General Contractors of America trade
group.
No one knows how long the construction fire sale will
last. Simonson calls it a "limited-time offer."
Source: USA Today, August 25, 2009
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