Road costs underestimated

Letter to the editor

Posted: Tuesday, January 18, 2005

Concerning the proposed highway to Skagway costing about $300 million, I find that number quite surprising. Some 10 years ago, the cost of the project was estimated to be $260 million. Doing the numbers, in 11 years, 1994 to 2005, at a per-year increase in cost of 5 percent (inflation rate), the project would now cost over $580 million. At a 10 percent rate of inflation, the cost would be nearly $675 million, more double that which is currently being projected. To get to a current cost of $300 million, the projected inflation rate of the construction project would be about 2 percent.

I find it very difficult to believe that construction costs in this state have increased at an annual rate of only 2 percent. Five percent, maybe, but I'll bet the increase in construction costs in Alaska over the past 10 years or so is more like 10 percent. Perhaps even more.

Once they begin this project they won't stop until it is completed, no matter what the cost. I think we ought to ask the governor and the Legislature what in the current state budget will have to go in order to make up the $300 million-plus or so difference between what is currently being estimated as the cost of building a road to Skagway and what will more likely be the actual cost.

Steve Wolf


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