Pennsylvania Turnpike officials are keeping a closer watch on costs for building the southern portion of the Mon-Fayette Expressway after the price of relocating a rail yard in Duquesne more that doubled to $44.5 million mostly due to inflation.
The turnpike commission last week approved increasing the cost for moving the Union Railroad yard near Kennywood Park by $22.6 million, up from $21.9 million. The original price was approved in September 2020 to reimburse the railroad for moving the yard, which serves U.S. Steel’s remaining plants in the Monongahela Valley, so the turnpike can build a bridge above the site.
Brian Mostek, project manager for the turnpike, said in an interview that inflation since the project originally was approved increased the cost by about $15.5 million. There also were changes to the scope of work that added removal of a briquette production plant and contaminated waste from the site to the project, Mostek said.
“We’ve seen this over and over where the costs have gone up [above the price designers projected],” Mostek said. “We’ve seen significant increases in almost all of our jobs.”
The railroad formerly was owned by a U.S. Steel subsidiary but now is owned by Transtar, which could not be reached for comment about the work.
This is the second contract where costs came in higher than expected since the long-awaited project began in February to build the estimated $1.3 billion toll road from Jefferson Hills to Duquesne. The low bid for the first section from Route 51 to Coal Valley Road in West Mifflin came in at $214 million, 3.6% higher than expected.
That’s a concern because under state law the project is being paid for with the turnpike’s share of the state’s oil franchise tax and involves no borrowed money or toll revenue. The turnpike waited several years to start construction until it was sure it would have the money to complete the southern section, but rampant inflation last year and the leveling off of proceeds from the franchise tax because of more fuel-efficient vehicles and the growing use of electric vehicles is raising concerns.
“We’ve been taking a step-by-step approach and looking at keeping a close watch on the costs,” Mostek said. “As of now, we’re proceeding, but when the bids come in for the next section, we’ll take a closer look and see where we stand.”
Bids for the second section, from Coal Valley Road to Camp Hollow Road in West Mifflin, are due in late September. Overall, the project calls for seven construction contracts through 2028 with each section opening as it is finished.
The turnpike already is holding off on final design of the last leg of the highway, from Route 837 in Duquesne to the Parkway East in Monroeville, until more money builds up in the franchise tax fund.
Trumbull Corp.’s initial work around Route 51 in Jefferson Hills already has installed piers for ramps at that interchange.
Ed covers transportation at the Pittsburgh Post-Gazette, but he's currently on strike. Email him at eblazina@unionprogress.com.