Oil prices may reduce amount of work
Last September, as West Virginia voters were thinking about how to vote on a proposed $1.6 billion bond issue for highways and bridges, the spot price for crude oil was about $50 per barrel. By a couple of weeks ago, it had soared to more than $70.
Petroleum is a key ingredient in asphalt, which is essential for many road projects. Steel is a critical component for bridges and there are indications the cost for it will go up, too.
Construction costs in general are rising for a variety of reasons, not the least of which is the upsurge in the U.S. economy. When that happens, the law of supply and demand kicks in and, in general, it costs more to buy many products and services.
That has put the state Division of Highways and Gov. Jim Justice in a bind. Prior to approval of the bond issue last October, Justice and other state officials put a substantial amount of effort into whipping up enthusiasm for the measure. Long lists of highway and bridge projects, ranging from repairs to entirely new roads, were put out to persuade voters to approve the bonds.
But a problem has arisen. As we reported, bids for the most expensive project on the state list, rehabilitation of pavement and bridges on Interstate 70 in Ohio County, came in between $70 million and $100 million above last year’s estimate.
It is highly doubtful that was a fluke. Bids on other bond program projects are likely to be much higher than anticipated, too.
What to do? We suspect that question has been on the minds of the governor and DOH officials.
Some projects on last year’s list simply have to be undertaken. I-70 is one of them. But even with supplemental federal funding, the state is likely to run out of money before many proposals on the list can be completed.
That will leave many voters feeling deceived. The governor’s list was seen as a promise: Approve the bonds and your pet project will be completed. Unless something changes dramatically, that will not happen.
It is time for the governor and DOH officials to bite the bullet and admit they were wrong. Last year’s list needs a thorough, realistic re-examination.
Priorities will have to be set. Then Justice will have to do something he does not like: He will have to inform West Virginians that he and DOH analysts were wrong, that not everything on the list may get done.
That will not be pleasant for anyone involved. Again, however, unless there is some drastic change in what it costs to build roads and bridges, the governor will have no choice.