BRADENTON, Fla. — Kentucky and Indiana achieved $300 million in savings on the Ohio River Bridges Project primarily because of efficiencies in design and construction, according to a new report.
The two states had estimated the project cost at $2.6 billion but that is down to $2.3 billion in a required update of the financial plan submitted to the Federal Highway Administration.
The new estimate, which does not include financing costs, is included in the fiscal 2013 update of costs and reflects inflation savings due to earlier-than-expected completion as well as the difference between pre-bid estimates and actual bid prices, officials said.
Kentucky is using a conventional design-build contract with Walsh Construction Co. to renovate the existing Kennedy Bridge carrying Interstate 65 through Louisville, in addition to building a new, adjacent I-65 bridge, and reconstructing interchanges in Louisville and Jeffersonville, Ind.
Using a public-private partnership with WVB East End Partners, Indiana is building a new bridge to the east between Prospect, Ky., and Utica, Ind., as well as highways that connect I-265 in both states.
Before construction teams were selected, the states anticipated the project would be complete by the end of June 2018.
The ultimate construction schedules are more aggressive with Kentucky's now proposed for substantial completion in December 2016, nearly 19 months ahead of schedule, and Indiana's to be substantially complete by October 2016, nearly eight months ahead of schedule.
Once the bridges are completed tolls will be collected on all routes and revenues will be split between the states with Kentucky using its share to pay back toll revenue bonds.
In addition to bridge costs, each state has financing expenses.
Indiana reported that WVB East End Partners, which issued private-activity bonds, will shoulder financing costs of $81.2 million during construction for agent and security trustees, rating agencies fees, conduit fees, underwriting fees, funding the debt service reserve, trustee expenses, and working capital costs.
Another $5 million in financing fees are expected to be paid by Indiana as the cost to bond future Department of Transportation appropriations to cover milestone payment obligations, the state said.
Because Kentucky sold $940.4 million of bonds and notes for the bulk of its financing after the close of the fiscal year its financing costs were not reported in the financial update.
Kentucky paid $1.02 million in issuance costs and $4.2 million for underwriters' discounts for bonds and notes that were sold in two transactions before the end of 2013, according to documents provided to The Bond Buyer.
