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Front Page » Top Stories » Construction Firm To County Pay Later For Work Now

Construction Firm To County Pay Later For Work Now

Written by on January 18, 2007

By Dan Dolan
A Hialeah construction company is offering the state a $140 million buy-now, pay-later deal to finish rebuilding an 18-mile stretch of US 1 between Florida City and the Jew Fish Creek Bridge in the upper Florida Keys, transportation officials said this week.

Florida Department of Transportation District 6 Secretary Johnny Martinez said Tuesday that his agency received an unsolicited proposal from Community Asphalt Corp. to build and finance the final 11-mile stretch of the 20-year-old road-improvement project now in return for payment in 2012.

Mr. Martinez said the proposal benefits the state, motorists and the company, which is constructing a $39 million 3-mile section of the highway under a state contract.

"If we accept this idea, the entire project gets done at least five years ahead of schedule without having to pay any money now," Mr. Martinez said. "That’s a tremendous benefit to the state. But the real benefit is for motorists and residents. Completing this project early will save at least 11 lives every year."

Even though Community Asphalt would be digging into its own pockets to pay for construction, Mr. Martinez said the company stands to increase its long-term profit because the state’s reimbursement would be based on projected costs for 2012, when work on the final legs is scheduled to begin.

"The contractor is figuring he can build it cheaper now than he could in 2012," Mr. Martinez said. "But regardless of what he spends today, he wants us to pay him the amount we estimate it will cost us to build the road five years from now."

That difference could be substantial. Mr. Martinez said the state builds in at least a 3% annual cost increase in all project estimates. Without compounding, a five-year delay could increase project costs 15%, or $21 million. The contractor would pocket that money on top of his normal profit, Mr. Martinez said.

But the exact numbers are still flexible and subject to negotiation, Mr. Martinez said. The state has advertised for competing proposals from other contractors who may offer better terms, Mr. Martinez said. All other bids must be submitted by March 6, he said.

"If there are no other bidders, we can negotiate directly with this company," Mr. Martinez said. "We’re still reviewing the contractor’s proposal, which was submitted about three weeks ago. We’re very interested."

According to Mr. Martinez, the stretch of US 1 under consideration begins at the South C-111 Canal and stretches to Southwest 344th Street. He said the project includes widening of the roadway, a new northbound shoulder that could be used as an emergency evacuation route, an additional median barrier and restoration of natural water flow under the highway.

"This project represents a tremendous improvement in environmental quality and traffic safety," said Javier Rodriguez, the Florida Department of Transportation’s District 6 director.

A Community Asphalt executive confirmed that his company has a proposal pending with the state but declined to give details about the offer. Advertisement