North Texas Construction Cost Savings May Be Rerouted to New Transportation Projects

While governments at all levels have been spending extra money during the COVID-19 crisis, one area in which some savings have been realized is in construction costs for transportation projects.

At the North Texas Regional Transportation Council (RTC) meeting last week, Director Michael Morris told local officials that, as forecasted in February 2020, many transportation construction projects saw at least ten percent savings in estimated costs.

Christine Gotti, a program manager at the North Central Texas Council of Governments (NCTCOG), said that from March 2020 to January 2021, the total net savings was $111,335,527, a total percentage savings of 9.95 percent.

“We have seen this happen in almost every economic downturn, and so we knew to watch for it and expect it this time as well,” Gotti told The Texan

The project realizing the greatest savings was work on State Highway 170 from Interstate Highway 35W to the Denton County line. That project was originally estimated to cost $141,479,076, but the bid came in at $98,999,997 bid, a savings of just over 30 percent.

More significant savings will occur in the construction costs of State Highway 121 from the Collin County outer loop to County Road 635, dropping from an estimated cost of $109,092,112 to an accepted bid of $91,386,585 bid, resulting in over 16 percent in savings.

“Not a lot of people talk about the purchasing power elements of revenue,” Morris told the officials at the RTC meeting. “A cost savings of ten percent equals a ten percent increase in revenue, which will be quickly expedited in our region to go to other transportation projects.”

“Technically, cost savings are not going to be used on other projects until the year is over and carryover dollars are calculated. We are awaiting carryover calculations from the [Texas Department of Transportation] for Fiscal Year 2020,” Gotti explained. 

Nevertheless, the RTC has approved three rounds of new projects that will utilize existing funding and any cost savings realized, she said.  

Candidate projects include the Y-Connector at Interstate 20 and Interstate 820, a $1.2 billion project along State Highway 183, and high-speed rail projects from Dallas to Houston and Dallas to Fort Worth.

Morris said he anticipates the new Biden administration will pass a national infrastructure bill, which would provide more funding for transportation projects too.

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