North / South America
In Ohio, asphalt and concrete battle it out publicly
Jul, 16 2012
Contractors argue over whether ODOT is cutting the best deal for taxpayers. An intense rivalry is heating up over Ohio’s roads.
The war between the asphalt and concrete industries has played out for years. Asphalt seems to be winning, at least in Ohio. It’s the material of choice on 98 percent of the state’s roads.
But an industry group for concrete contractors says that’s due in part to what it calls an unfair advantage the state gives asphalt. Asphalt contractors can include price subsidies to allow for fluctuations the cost of a key ingredient in their product – oil.
And the Portland Cement Association says that’s a waste of taxpayer money. It cites a Federal Highway Administration report that says Ohio spent nearly $37 million on asphalt price adjustments from 2009 to 2010.
That’s when it eliminated their use. But ODOT reinstated them recently. And the cement group’s Great Lakes regional director, Ray McVeigh, says it’s unfairly tough to compete.
“The first bid that took place after the escalators got put back into place, there were no concrete bids, because it made no sense to try to compete against asphalt when they are able to artificially depress their bid prices knowing that if there’s an increase in the cost of material, the taxpayer’s going to eat it.”
No surprise: asphalt contractors have a different read. Cliff Ursich of Flexible Pavements of Ohio says asphalt contractors need the price adjustment clauses to compete with concrete in long-term projects .
“Quite honestly, we don’t like to bid in an environment with risk because it is just so unpredictable. It makes it very challenging to go in as a contractor to bid work so as to go and maintain yourself and be sustainable in the industry.”
While many price adjustments increase the costs to taxpayers, the Ohio Department of Transportation says that’s not always the case. Spokesman Steve Faulkner says asphalt companies returned around $1.5 million in overpayments to the state as oil prices – and the price of asphalt – fell.
“We’re looking at giving the best bang for their buck for Ohio’s taxpayers. What we’re going to look at is pursuing projects in a competitive nature that gives Ohio’s taxpayers the best quality product for the amount of money they’re paying in motor fuel taxes.”
The battle is playing out publicly. The concrete contractors have bought space on billboards around Columbus questioning the costs and noting that ODOT Director Jerry Wray was a lobbyist for the asphalt industry. ODOT’s Faulkner says Wray’s old job and new one have no relationship.
Story by JASEN SOKOL AND M.L. SCHULTZE
(Further editing by ARI-C News)
Add Your Comments
Cost of asphalt
Ohio should not be so generous to oil companies. Force them to quote a long term price. They can always hedge their position on the future's market.
Posted By : Joseph Linck
Posted On : 7/16/2012 9:48:47 AM
Cement-makers want green status for power generated through waste-heat recovery. More
Holcim earns P1.43 billion in first quarter.