FHA green lights Ohio River Bridges Project

It took a revised cost estimate and a cut in construction time before the federal government would approve the Ohio River Bridges Project. That decree will help ensure the project is kept on schedule.

A $2.6 billion Ohio River Bridges Project is better than a $4.1 billion Ohio River Bridges Project – $1.5 billion better, that is.

Just ask the Federal Highway Administration (FHA), which dismissed the initial estimated $4.1 billion cost of the so-called “mega project” to bridge Southern Indiana and Louisville, Kentucky, but today blessed the cross-state undertaking.

Credit Kentucky Governor Steve Beshear, Indiana Governor Mitch Daniels and Greg Fischer – the mayor of Louisville – who together figured out how to shave $1.5 billion off the cost of the project as well as reduce construction time by simply rebuilding instead of relocating the nearby Kennedy Bridge Interchange (nicknamed “Spaghetti Junction”) in downtown Louisville.

The upshot of FHA approval is that it will ensure the procurement process is kept on schedule. The Kentucky Transportation Cabinet (KYTC) opted for a design-build approach, while the Indiana Finance Authority (IFA) is pursuing a public-private partnership (PPP).

Despite their differing procurement, both the KYTC and the IFA expect to have reached commercial close with a partner by the end of the year.

A closely watched, hotly debated industry development in the US, the project had been first estimated to cost $4.1 billion, then $2.9 billion, before being adjusted to its current price tag.

The undertaking was initially conceived as a potential PPP, until Kentucky in late 2011 opted out of private funding for its share of the project and instead chose traditional procurement.

The announcement of the decision by the FHA followed news that Steve Schultz, executive director of the Louisville and Southern Indiana Bridges Authority, had resigned.

The authority is a 14-person committee set up by Kentucky and Indiana to coordinate the project.