News 3 investigates inflation impacts on infrastructure projects, including HRBT Expansion

Posted at 9:00 AM, Aug 04, 2022
and last updated 2022-08-04 09:11:55-04

NORFOLK, Va. - We've all been seeing it and feeling it this year. Whether it’s at the gas pump or down grocery store aisles, inflation is leaving its footprint at many places we rely on.

“It's ridiculous right now,” John Menard said. “It's hard right now. It's paycheck to paycheck, for real. Bills are barely getting by.”

But what about local roads, bridges and tunnels, like the Hampton Roads Bridge Tunnel (HRBT) that help us get around to those places?

When it comes to traveling the HRBT, the following comes to mind for Hampton University student Deondre Little.

“You're going to Norfolk, Virginia Beach, traffic,” Little said. “I can be trying to leave work and just coming back to school, but this whole right side of traffic will just be backed up.”

He's looking forward to when the HRBT Expansion Project is finished.

“It will definitely be less pain for us, especially for people over here on this side,” Little said.

According to VDOT, officials currently have construction underway on the South and North Islands.

In the marine ‘zones’, VDOT officials said crews are working to construct the temporary structures for the North and South Marine trestles which will make up the new bridges and roadway.

“We are a third of the way through the project and continue to press forward,” HRBT Expansion Project Director Jim Utterback told News 3.

According to VDOT, the HRBT Expansion Project is the largest highway construction project in Virginia's history.

The project will widen the current four-lane segments along nearly ten miles of I-64 in Norfolk and Hampton, with new twin tunnels across the harbor. VDOT officials said this will add more capacity, ease congestion and helping with your travel time.

The project's total budget is worth more than $3.8 billion, which make it one of the largest infrastructure projects in the United States.

As construction continues on the HRBT Expansion Project and other infrastructure projects around the country, economists like ODU’s Bob McNab say infrastructure projects, in general, are feeling the impacts of inflation.

“The price of not only diesel has increased, and gasoline has increased, but [also] concrete, steel and other products that are used in everyday construction,” McNab said.

News 3 investigators reached out to VDOT, asking if any infrastructure projects they're working on are affected by inflation, and if any amendments have been made to project contracts due to a rise in costs.

In a statement, VDOT officials told News 3 they've been actively preparing for impacts of fuel costs on their operations and contractual commitments.

They also point to their recommended budget approved by the Commonwealth Transportation Board, which includes contingency reserves for the impact of asphalt and fuel adjustments in contracts, as well as the impact of fuel costs on agency operations.

The program reserves include FY 2023 estimates totaling more than $129 million.

News 3 is told the use of these reserves will be determined after the completion of the paving season early next year.

Utterback said the HRBT Expansion Project is not immune to dealing with inflation pressures.

“I would say inflation has been a challenge for everybody,” he said.

News 3 asked Utterback how has inflation impacted the HRBT Expansion Project, specifically.

“It's difficult to answer that just right off the cuff,” Utterback said. “The contract is set up. We're several years into the contract. The contract was signed in 2019. We're in a little different place than where we were then. But, we do set up a contract like this with commodities that are indexed.”

These commodities include asphalt, fuel and steel.

“In other words, if the price of fuel goes up, then the indexing goes up. If the price goes down, then it goes down.”

When asked about indexing related to this project, VDOT officials said it means items that are listed in the contract officials measure regarding price movement over time.

The contractor is aware of certain items and may opt in for adjustment before work on a project starts to reflect any increases.

If the price falls during the work, then VDOT is reimbursed.

VDOT officials told News 3 it helps ensure the contractor has protection if prices on commodities were to rise throughout the project.

So far, according to Utterback, $1.5 million has gone to commodities.

“We have a project budget, and there’s contingencies on the budget to deal with things like this,” he said. “There are changes. We have some change orders that have some monetary impact, and we deal with those as they come in.”

Utterback confirmed with News 3 the project has stayed within its budget. That means there hasn't been any impact to taxpayer money.

Of the more than $3.8 billion total budget for the project, its contractor has, so far, spent about $1.3 billion.

“That's more than everything that's been spent on the HRTAC projects, the interstate improvement projects, the widening of the peninsula, the I-264 interchange, the High Rise Bridge, all put together, is like $1.2 billion,” Utterback said.

As for what’s next for the project, VDOT officials said some of the large milestones will be traffic shifts onto the temporary bridge structures. VDOT anticipates the first traffic shift happening in early 2023.

Widening and rehabilitation work continues on the Mallory Bridge in Hampton, and also on the Willoughby, Oastes and Mason Creek Bridges in Norfolk. VDOT told News 3 drivers may see a lot of this work from the roadway.

The project is scheduled to be complete in November 2025.

VDOT officials told News 3, at this time, the contractor has fallen behind schedule. However, the agency has not changed the contracted completion date.

“The message, I think, is evident in the work that's being done,” Utterback said. “We're proceeding with the work and moving forward as fast as we can.”

READ: VDOT Hampton Roads Projects

VDOT officials also told News 3 the agency is reviewing all projects going out for bids in the upcoming year and determining the impact on estimates.