Highway and bridge construction revived by Act 89

Excerpted from Pa Business Central

On Oct. 24, the state Public-Private Partnership Board (P3) and Department of Transportation (PennDOT) announced that the Plenary Walsh Keystone Partners won the competition for the $889 million P3 Rapid Bridge Replacement program. The partnership will replace 558 structurally deficient bridges in the commonwealth in the next 48 months.

According to the American Road and Transportation Builders Association, more than 5,200 of the commonwealth’s 22,600 bridges – about 23 percent – are rated structurally deficient under federal guidelines, more than any other state.Act-89-opening-pic

Although some dramatic bridge collapses in the U.S. have made the news in recent years, the state’s structurally deficient bridges are not about to fall down. The weight restrictions placed on them, however, can force commercial drivers whose trucks are over the weight limit to go miles out of their way to pick up and deliver goods, adding transportation costs and forcing drivers to detour through narrow streets designed for local traffic.

The P3 board consists of many members of the construction industry, including Plenary Walsh Keystone Partners – a consortium comprised of the Plenary Group, The Walsh Group, Granite Construction Company and HDR Engineering.

The P3 team also includes 11 Pennsylvania-based subcontractors, including five from the region:

• Glenn O. Hawbaker Inc. of State College, Centre County

• J.F. Shea Construction Inc. of Mount Pleasant, Westmoreland County

• Larson Design Group of Williamsport, Lycoming County

• Swank Construction Company of New Kensington, Westmoreland County

• TRC Engineers, Inc. of Export, Westmoreland County.

The P3 program is one of the first public-private partnerships in the nation to construct hundreds of bridges under a single contract.

The Plenary Walsh team will privately fund the design, build, and maintenance of the bridges in exchange for periodic payments from the state raised through a bond program. Under the 28-year contract, the project will cost an average of $65 million annually.

According to PennDOT, the P3 program could save the state more than $220 million, because the average cost per bridge under the P3 contract is $1.6 million versus the state’s average of over $2 million per bridge.

The Transportation Funding Act of 2013 (Act 89)

Glenn O. Hawbaker of State College, one of the P3 team’s subcontractors, had been receiving about half of its annual revenue from highway projects before the Great Recession. When federal and state highway funds dried up, the company was forced to lay off 300 employees.

Hawbaker won the first stimulus highway project in Pennsylvania and hired some of the workers back, but those “shovel ready” projects were short-lived. Of the $700 billion in stimulus funds, only $27 billion were allocated to infrastructure across 50 states.

To compensate for the lack of road work, Hawbaker diversified into new areas including building a railroad terminal for offloading asphalt and salt for Penn DOT, making mulch for State College’s parks, recycling building materials, and constructing roads and well pads for the Shale gas industry. In the past five years, the company rebuilt its workforce to more than 1,400 employees.

Act 89 was signed into law last year by Gov. Tom Corbett to fund road projects, bridge repairs and public transit. The new law has provided $2.4 billion in transportation projects this year so far, and by 2018, transportation projects will get an additional $2.3 billion per year, which makes it the largest increase in state transportation infrastructure funding in decades.

“Now we have some backlog, which gives us the ability to plan our business in advance and know where we’re going,” said Charlie Campbell, director of special projects at Hawbaker. “Act 89 finally put us in position to repair our roads and update our infrastructure for the 21 century.

“What’s unique is that it’s not just a year or two funding like the federal highway bill, but it’s ongoing and doesn’t require periodic renewal,” Campbell said.

Hawbaker picked up 25 highway and bridge projects in the past six months, representing about $150 million worth of business. The company expects to receive between 50 to 60 percent of its revenue from highway and bridge work next year and to hire new workers.

Finding those workers might be challenging, according to Jason Wagner, director of policy and government relations for the Associated Pennsylvania Constructors (ABC), Harrisburg.

“During the recession, a lot of highway construction workers were laid off and are working in other industries such as the Shale gas industry or building trades where there was more stable employment,” said Wagner. “Now that we have the funding in place and know that it’s going to increase, we have to engage in some comprehensive workforce development efforts in order attract workers back to the highway construction industry again so we can staff these new projects.

Wagner said most job positions require workers with technical skills, including basic computer knowledge. The company is working with Penn DOT to develop workforce development programs, as well as unions, which have new training centers.

Another contractor in the region benefitting from Act 89 is Jay Fulkroad & Sons, a family-owned business in McAlisterville, Juniata County.

On Oct. 23, Fulkroad won a $2 million contract to construct a small bridge as part of three-phase Potters Mills Gap Project near the Centre/Mifflin County line to west of S.R. 0322 / PA 144 intersection. The goal is to improve safety, reduce congestion, enhance mobility and alleviate access concerns by building a bridge across the mountain gap and a 4-lane roadway that will pass near State College and then run south to Seven Mountains.

“The design engineering for the bridge will be starting in a couple weeks and will take about 45 days to complete,” said Don Peck, Fulkroad’s project manager. “We anticipate starting construction sometime in December or January, depending on the weather.”

The bridge needs to be built before the roadway construction begins on Sept. 1, 2015.

The new bridge will connect the two sides of the mountain to provide a crossing for the Seven Mountains Campgrounds, which is 15 miles east of State College.

Fulkroad’s Act 89 projects range from $900 million to $2.5 million. The company also won the bid on a $4 million dam rehabilitation project. Fulkroad was forced lay off 50 workers during the recession and now has 75 employees.

While Peck is happy about the Act 89 funding, he remains somewhat critical of the plan.

“The state might save millions of dollars with the public-private partnership, but the bulk of the millions being spent on the 558 bridges is going to companies based outside of Pennsylvania,” Peck said. “The rest is going to only 11 large firms based in the state, because it’s hard for smaller companies like ours to compete with larger firms since they have economies of scale.

“If Penn DOT was in charge of the bridge program, they probably would have broken the jobs into more pieces and employed more small firms,” Peck continued. “But at least those structurally deficient bridges are finally getting replaced, and that’s a good thing for Pennsylvanians.”