4 construction stories that dominated the first half of 2017
As the sun prepares to set on the first half of 2017, we're taking a look back at the biggest construction stories so far this year. Whether they're based on legacy issues or on new concerns, these stories captured the industry's attention from January through June.
Renewed focus on infrastructure at the federal and state levels
The new year brought the U.S. a new president, Donald Trump, and with him came hopes for a massive, $1 trillion infrastructure program. The prospect of such a plan, although short on details until this month, sent construction-related stocks soaring and drew the interest of private investors, who, according to Trump's team, could turn $200 billion of direct federal spending into the promised $1 trillion investment over 10 years.
The administration has been advocating for public-private partnerships (P3s) to play a major role in the country's infrastructure ambitions, but Congressional Democrats have pushed back against any move that could lead to the privatization of public assets. Republicans have promised to kill any bill that hints at a public spend anywhere near the size of the Obama administration's stimulus package.
Trump has enlisted the help of colleagues from the business world to help him figure it all out. Billionaire Richard LeFrak heads up the president's infrastructure task force and has suggested ways to streamline the potential 10-year permitting process — at least for major projects — by utilizing a system similar to that of bankruptcy courts, in which one person expedites paperwork and has the final say on regulatory and environmental reviews.
Meanwhile, many states have taken it upon themselves to move forward with big infrastructure initiatives of their own. Just this month, the Virginia Commonwealth Transportation Board approved a six-year, $18.6 billion program of transportation and rail funding that is set to begin on July 1. Not only will the program cover highway construction projects, but it will also help pay for items like the cost of P3s and the state's SMART SCALE program.
States like Indiana, Texas and Illinois are also investing billions into either statewide repair programs or single initiatives, like toll roads, but California has authorized the biggest spending program at $52 billion. The state has reported a $130 billion backlog of highway and other infrastructure needs, and the American Society of Civil Engineers estimates that 50% of the state's roads are in disrepair.
Some states, including California and Indiana, have raised the gas tax and other driver-related fees to pay for infrastructure, a price drivers seem to be willing to pay as long as the money is actually used for its intended purpose
Regulatory rollbacks by the Trump administration
Along with the focus on infrastructure, the Trump administration has also taken aim at regulations, which many in the industry argue add too much cost and time to projects. Within a few days after his inauguration, Trump cleared a path for the Dakota Access and Keystone XL projects to get started again, ordered all agencies to take another look at pending regulations and directed agencies to roll back two rules for every new one they wanted to introduce.
This new regulatory outlook has led to the removal of several Obama-era regulations thus far, and the Department of Labor has been the primary target.
The Occupational Safety and Health Administration (OSHA), a DOL department, this week announced that it intends to modify the beryllium exposure rule that recently went into effect. The agency said there was little evidence that ancillary requirements of the rule would increase safety in the construction and shipyard industries and said it is opening up the proposed changes for comments.
The agency also announced in April that it will delay enforcement of a new silica exposure rule to Sept. 23, a regulation that won out over much industry pushback both during the comment period and when OSHA issued the final rule.
Implementation of OSHA's electronic recordkeeping rule has also been indefinitely suspended. This rule requires employers to file their injury and illness logs online and allows the public to view the information, which some companies claim violates their First and Fifth Amendment rights.
Along with the delay of some rules, OSHA has also nearly eliminated the "shaming" press releases that it used to issue through the news releases section of its website when a contractor or business received a large fine or when a repeat violator was cited again — another move that is considered "business-friendly."
Some controversial DOL regulations have also fallen under the axe this year. In March, Trump repealed the Fair Pay and Safe Workplaces Act, also known as the "blacklisting" rule, which would have required companies to disclose prior DOL violations when bidding on federal contracts.
Another rule that could soon bite the dust is the "persuader" rule, which would have forced companies to reveal internal communication with third parties about their employees' unionization efforts. The law was blocked in November, and the DOL this month proposed revoking the rule altogether.
Efforts to advance the Mexico border wall
Another big Trump-related story this year was the scramble among administration officials to get construction going on a border wall between the U.S. and Mexico. This was one of the key promises of Trump's campaign. Before he was elected, Trump insisted that Mexico would pay for the wall, but Mexico has repeatedly stated it would not fund its construction.
Add to that the fact that the administration has not requested a sum anywhere near the estimated $22 billion that the Army Corps of Engineers said it could cost, and some are saying that enthusiasm for the project could be flagging.
The U.S. Customs and Border Patrol did publish limited wall specifications and a request for proposals earlier this year, however, and more than 700 companies expressed interest. Prominent infrastructure companies like Bechtel and AECOM said they would not be bidding on the controversial project.
In fact, officials from cities like San Francisco, Oakland, CA, and New York City have proposed measures that would ban contractors that bid on the wall from being able to bid on public work in those municipalities.
In May, project officials said they had whittled the list of bidders down to just a few, but they have not released the names of the winning contractors. Those firms will build prototypes, which will then be incorporated into the existing barriers along the 1,000-mile-long border.
Maryland's ongoing Purple Line legal troubles
Some stories span many years, and it looks like Maryland's Purple Line is destined to be one of them. What started as a goal of creating an economic boon for the Bethesda, MD, area and a record-setter for P3s has turned into a seemingly never-ending court battle.
Last summer, U.S. District Judge Richard Leon halted the project and revoked its federal and state approval — along with a $900 million federal grant — after local advocates filed a lawsuit claiming that the ridership figures Purple Line officials used in their environmental review failed to properly consider the declining ridership on the DC Metrorail, which the Purple Line used to justify its own numbers.
When 2016 ended, the Federal Transit Administration and the state of Maryland were awaiting Leon's decision as to whether he would require a supplemental environmental review in the wake of the FTA's determination that the original ridership figures were sufficient.
The December ruling deadline came and went, but, just when the state of Maryland was preparing to file a motion that would force Leon into making a decision, he ruled that the Purple Line team must submit an additional environmental review, putting the time-sensitive project in jeopardy. The Maryland Attorney General's office has since filed an appeal, and the project team has requested an emergency ruling that could ultimately let the project move forward.
In the meantime, officials have warned that if there is no resolution by Aug. 1, the $5.6 billion, 16-mile project could be permanently shelved.
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