Finance Plans and Cost Escalation Forecast for Accelerated Bridge Program
As part of the Massachusetts $3 billion Accelerated Bridge Program (ABP), HDR is providing financial plans and economics services to MassDOT. In particular, we are leading the development of finance plans for ABP mega bridge projects of $100 million or more. The finance plan is a required submittal to Federal Highway Administration (FHWA) for larger projects and includes cost estimates, schedules, sources of funds, project risks and cash flow expenditures. HDR has completed or contributed to the finance plans for the Longfellow Bridge in Boston, and the Whittier, Fore River and Worcester-Shrewsbury Bridges located throughout the Commonwealth of Massachusetts.
HDR also has been retained to forecast construction cost escalation for the multi-year ABP. We completed an initial construction cost escalation forecast in 2010 and have updated the forecast multiple times since to reflect current market conditions. The forecasts included a thorough review of national and regional cost data from various sources for the core commodities that serve as material cost drivers on major bridge projects. In addition, potential labor cost escalation was evaluated using local, federal and labor contract data. These escalation data sets were forecasted by commodity (steel, concrete, wood, etc.) using risk analysis techniques to reflect historical price variations and were aggregated into bridge construction categories varying by cost and use of materials.