JEFFERSON CITY - Credit market trouble caused the state transportation commission on Thursday to scrap the Safe and Sound Bridge Improvement Program, a privately financed plan to fix 802 of Missouri's worst bridges.
Instead, the Missouri Highways and Transportation Commission decided to issue $700 million of its own bonds to finance the bridges, which it pledged still would get rebuilt or repaired within five years.
Missouri's failed private financing foray had been praised as a unique approach that could serve as a national road map for quickly renovating aging infrastructure.
But that was before the credit market crisis caused the cost of the bridge project to spike.
The private contracting teams who offered good proposals, "they simply could not overcome the burden of a financial market that has melted down," said Pete Rahn, director of the Missouri Department of Transportation.
The Safe and Sound Bridge Improvement Program, first outlined in September 2006, would have awarded a single contract to finance, design and build 802 bridges within five years and then maintain them for an additional 25 years. The state would have made annual payments to the contractor.
Missouri's massive project gained national attention because of the Aug. 1, 2007, collapse of a Minneapolis Interstate 35W bridge that killed 13 people and injured 145 others.
Meeting in a special session just weeks later, the Missouri Legislature waived conventional contractor requirements that - because of the scope of the project - had prevented it from going forward.
By coincidence, Missouri's decision to scrap its privately financed initiative in favor of state bonds came on the same day the new Interstate 35W bridge opened in Minnesota.
Missouri ranks fourth amongst states with the most bridges in poor condition.
Gov. Matt Blunt said the revised plan still is "the most aggressive bridge program in Missouri history."
"The positive changes this initiative will bring to our state's transportation infrastructure over a relatively short period of time will be dramatic," Blunt said.
Missouri announced in December 2007 it had picked a preferred contracting team for the project, a coalition of state and national firms calling itself Missouri Bridge Partners. The state then set out to negotiate the contract details with a goal of limiting annual payments to about $50 million.
In February, the state nearly closed a deal that would have paid Missouri Bridge Partners $52.7 million annually. But the deal was contingent on the contractors assembling a private financing package through Wall Street firms. As the credit markets tightened, the financing options dwindled and the costs rose.
By September, the cost of the project had escalated to an average annual cost of between $65 million and $74 million, which department officials said could have threatened Missouri's ability to complete other already-scheduled highway projects.
"Despite every creative way we tried to come up with this program, we are not able to overcome the problem that the private financing component of this is bringing to it," said Don Hillis, the Department of Transportaion's highway system management director. "It basically makes it unaffordable."
A spokesman for San Antonio-based Zachry American Infrastructure, which was leading the Missouri Bridge Partners effort, did not immediately return telephone messages Thursday.
After ditching the private financing model, transportation commissioners agreed to a revised plan under which the department will issue the $700 million in bonds to be paid off with future federal highway dollars.
The 25-year cost of the revised plan is estimated at $1.4 billion - significantly less than the private financing estimate of $1.74 billion to $1.96 billion, the department said.
Repairs could begin next spring on 248 bridges, which would be bid out in bundles of 3 to 15 bridges per project.
For 554 other bridges in need of replacement, the state still plans to seek a single contractor to oversee both design and construction. The difference from the original plan is that the state will be responsible for both the financing and the long-term maintenance.
Transportation commissioners expressed disappointment and frustration Thursday but also a realization that the private financing model probably could not work.
"The end game is the same," as far as getting the bridges fixed, said commissioner Jim Anderson, of Springfield. "But obviously the means to the end are different."