Abernethy Bridge Cost Triples to $750 million

Oregon DOT’s I-205 Abernethy Bridge rebuild, advertised as costing $248 million, will really cost $750 million

The project’s estimated cost has tripled in just over five years, and still has further cost overrun risk

ODOT’s plans to cover these cost overruns would mean cancelling dozens of other projects around the state, and/or a huge statewide gas tax increase

The Oregon DOT has experienced massive cost-overruns on all of its largest construction projects, and has systematically concealed and understated the frequency and scale of cost overruns

The I-205 Abernethy Bridge: Now three times as expensive

This is at least the third cost-overrun for the Abernethy Bridge project. ODOT originally told the Legislature in a 2018 that the project would cost $248 million. When bids were opened in 2022, the cost of the project doubled to $495 million. As soon as ODOT began construction, there were further cost increases, to $662 million. And now, ODOT admits it will cost $750 million to build the project—three times what it told the Legislature when the project was allowed to go forward. The latest cost overruns are revealed in the meeting materials for the May 9th, 2024 Oregon Transportation Commission meeting.

The official explanation from ODOT staff for these overruns:

The estimated cost to complete construction of the I-205 Abernethy Bridge Project has increased for a number of reasons, including structural engineering elements, unanticipated project changes, and delay, escalation and risk for a multi-year project.

Of course, all of these same factors—and more—will likely plague ODOT’s other pending mega=projects (the Interstate Bridge Replacement and Rose Quarter freeway widening), which are, respectively two-and-a-half times and roughly ten times larger and more complex than the Abernethy Bridge. Does anyone think we won’t experience similar (and likely much larger) cost overruns on IBR and Rose Quarter should they ever break ground? Does ODOT or the OTC have any kind of plan to learn from these mistakes and avoid them in the future? If so, it’s not in evidence here.

Who will pay? Robbing money from other projects statewide, or raising everyone’s taxes

The new higher cost of the Abernethy Bridge project worsens a financial situation that Oregon Governor Tina Kotek has already called “catastrophic funding challenges.” ODOT’s gas tax revenues are falling, its principal truck tax faces a legal challenge, and Governor Kotek has pulled the plug on the program that would have tolled I-5 and I-205 to pay for the bridge and other projects. ODOT faces, by its reckoning a multi-billion dollar financial hole.

Its memorandum to the Oregon Transportation Commission lays out an unpalatable set of choices. One option is to cut funding from $300 to $550 million on other projects approved for the next three years. This would wipe out dozens of other bridge, highway and safety projects around the state. ODOT specifically targeted cuts to Great Streets, Safe Routes to School, Pedestrian/Bike Strategic, Innovative Mobility, and transit programs funded from FHWA formula funds. Another alternative would be to raise taxes, ODOT estimates that backfilling the shortfall would necessitate a 10 cent a gallon statewide tax increase (plus a commensurate increase in truck weight/mile taxes). ODOT also suggests borrowing the money, but borrowing has to be paid back, either by finding new revenue or slashing other spending, so it’s a way to kick the can down the road, but not solve the underlying problem.

And ODOT’s financial calculations likely understate the size of the problem. A key issue: ODOT has not included any estimates of the costs of the Interstate Bridge Replacement project in its financial estimates. As we’ve noted, the IBR project has its own cost-overrun problems, and is likely to cost as much as $9 billion—and Oregon will be on the hook for its share of those costs, which are still unresolved. Moreover, the 2023 Legislature authorized the issuance of $1 billion in General Obligation Bonds to finance a down payment for the IBR project, but many legislators assumed that these bonds would ultimately be repaid from transportation revenues, not from the general fund revenues that pay for schools, health care, housing and other public purposes. ODOT has not presented a financial plan that fully pays for the IBR, allows for cost-overruns, or repays the G.O. bonds authorized last session.

Finally, there’s a major equity dimension to this financial problem. ODOT problem is paying for three billion-dollar-a-mile projects that principally serve a fraction of the peak-hour commute traffic in the Portland area (the IBR and the Rose Quarter, chiefly for Vancouver commuters, the Abernethy Bridge, for Clackamas County). Because it is largely foreclosing tolls as a source of paying for these projects, and instead shifting to a combination of either statewide taxes, or cuts to other projects around the state, what is really happening is that the cost of these projects are being shifted from Portland commuters who would pay tolls to everyone else in the state. For example, a ten-cent-a-gallon gas tax increase statewide to pay for these projects would be taxing the people of Pendleton, Klamath Falls, and Newport an additional dime a gallon to pay for adding lanes to Portland area roads (that are really only needed a few hours a day). In short: instead of the actual users paying $2-$3 each time they used one of these new billion-dollar-a-mile roads, every motorist in Oregon would be forced to pay $1-$2 every time they filled up their vehicle. How’s that for “equity?”

Background on the Abernethy Bridge Cost Overruns

For some years, the idea of widening and seismically retrofitting the I-205 Abernethy Bridge across the Willamette River between Oregon City and West Linn (in Portland’s southern suburbs) has been on the wish list of state and local transportation officials. The Legislature didn’t fund the project as part of a major transportation package in 2017, but did direct ODOT to produce a “cost to complete” report so that it would have some idea of how much money would be needed. ODOT produced that report in 2018. It said that retrofitting and widening the bridge would cost $248 million (The bridge project was identified as “Package A” in this cost estimate..

Armed with that figure, highway advocates pushed forward, and in getting the Legislature to direct ODOT to take on the project. But—and we know you won’t be surprised—ODOT’s estimate was wrong—very wrong. In the Fall of 2021, ODOT prepared a “construction phase cost estimate” of $375 million, which represented a 50 percent increase in costs over its “cost to complete” report. When the project went to bid in 2022 bids came back at just a shade under $500 million. As is common practice, the original 2018 estimate was officially forgotten when reporting the further escalation of costs in 2022, with ODOT reporting only the additional cost increase of roughly $125 million, not the full cost increase of $250 million from its original estimate. The key takeaway though, is that, in the space of just over five years, the cost of this project tripled.

Deja vu all over again.

Regular City Observatory readers will no doubt have a sense of deja vu. Cost overruns are endemic to major ODOT projects. The Interstate Bridge Replacement project, advertised as costing $4.8 billion in 2020, has increased to $7.5 billion, and may likely go to $9 billion. The I-5 Rose Quarter freeway project, originally billed as costing $450 million has had a series of cost overruns, first to $795 million, then $1.45 billion and now $1.9 billion—and further increases are likely. The Abernethy Bridge, the Interstate Bridge Replacement Project are all massively expensive, already costing more than $1 billion per mile.

ODOT Cost Overruns: The Reign of Error

To some, a cost increase of this magnitude may seem like an aberration. For anyone who has followed ODOT closely, its apparent this is very, very common. This isn’t a recent phenomenon—it’s a well established pattern. Over the past two decades, ODOT has blown through the budget estimates of virtually every large project they’ve undertaken.

Like other highway agencies, ODOT has consistently underestimated the cost to complete its major highway projects. A review of ODOTs own reports for the largest projects its undertaken in the past 20 years shows a consistent pattern of cost overruns, as summarized here:

Source: Compiled from ODOT reports. Note: Newberg Dundee estimates are for entire project, which is only partially complete. Other projects latest cost reflect total cost as completed.