Market, design and timing blamed for Bay Bridge cost rise

Published: February 02, 2005

External market conditions, design complexity and the time schedule caused the escalation in the price of the proposed San Francisco Oakland Bay Bridge east span, according to a new review of the project. Cost estimates for the east span escalated from US$1.29 billion in 1997 to US$5.13 billion by last year. The latest report into the cost increases was prepared by the Results Group and submitted this week to California's Business, Transportation & Housing Agency. The team concluded that three elements caused estimates to double in 2001, then nearly double again in 2004:

External market conditions, including steel price increases, industrial consolidation and other industry dynamics that limited the number of potential competitors.

Design complexity, in that the proposal was for a relatively long, asymmetric self-anchored suspension span. Nothing like this has ever been built before, and the initial optimism on cost was highly unrealistic, says the report. Estimates for the entire project have been driven steadily upward by a growing realisation of the cost and complexity of this section of the work.

Time - the schedule was extended repeatedly, which caused estimates to escalate because of inflation and increases in overheads.

A decision on the bridge design project is due to be taken in a few months. A simpler viaduct structure is now the preferred alternative.

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