Paying for bridges
Wednesday, October 1, 2008
It will be months or years before the full impact of the current world credit crisis is assessed. Millions of Americans are feeling the effects in a variety of ways. And so is Missouri state government, which last month had to give up on a bold financing package for a multibillion-dollar upgrade for some 800 of the state's bridges most in need of repair.
The Missouri Highways and Transportation Commission's Safe and Sound Bridge Improvement Program was established in 2006. The plan called for awarding a single contract for the financing, designing and building of 802 bridges within five years plus maintenance for those bridges for an additional 25 years. The successful contractor would have received annual payments from the state.
The benefits of the plan included a fast-paced construction schedule and long-term maintenance at a predetermined cost. The innovation financing plan received considerable attention from other states looking for ways to pay for massive infrastructure improvements. Because of Missouri's bidding requirements, legislative action was needed to allow exceptions for the one-contractor, one-bid plan.
But the plan relied on available and affordable credit, both of which have disappeared as mortgage lenders, banks and other financial institutions have all but shut down making loans -- even to each other.
As a result, the highways and transportation commission will issue bonds, and the commission believes the bridges will still be built in five years. But the overall cost to taxpayers will be determined by all of the financial gyrations we are experiencing now -- and in the future.