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The type of road to be built in a given area can obviously have a dramatic impact on infrastructure costs. Unfortunately, when strategic and policy decisions must be made about whether to build four lane limited access and grade separated divided highways, as opposed to four lane roads without limited access, the more expensive options seem to be chosen. For instance, both the US-31 and US-23 projects in northern Michigan are being planned as grade separated facilities, yet traffic forecasts and congestion analyses may not support such extensive investments. The Grand Rapids Bypass project may also be overbuilt and now has a project cost estimated at $400 million.
MDOT engineers have been opting for expensive designs with increasing frequency. Increasingly elaborate and expensive highway construction designs have resulted from safety related liability concerns, lack of budget pressure and cost control at the individual project level, and concern over possible environmental confrontations. This has led to many highway designs that exceed federal standards, and that are driving up costs to the state.
Costs of northern Michigan projects could increase substantially if new federal passing lane construction standards are not challenged. These new standards do not allow passing lanes to be constructed in just one direction on existing two lane roads. They result in four lane roads on projects that would have previously allowed a single lane to be added. Many of the minor congestion problems in northern Michigan could have been solved with the traditional one direction passing lane, but now will require far more expensive four lane passing zones in both directions.
Extensive savings are possible from the application of value engineering concepts whatever the road type and design standard being used for a particular project. Studies done for MDOT have suggested potential savings on capital outlay costs of 20%-30% per project. MDOT must aggressively pursue methods of controlling costs and manage more actively at the project level.
Although the savings from more reasonable design standards and value engineering are difficult to estimate, some "what-if" calculations are possible. Current capital outlay spending of $546.8 million on state administered roads, along with an additional estimated $200 million per year from incremental funding increases would result in average spending over the next ten years of $746.8 million per year for capital outlay. The state system could save $37.3 million per year, equal to a gasoline tax reduction of 0.8 cents per gallon, if changes in design standards and value engineering processes resulted in 5% annual savings. Similar savings are possible at the local level. Capital outlay spending of the current $276.7 million on local roads, plus an assumed $100 million increase from new funding, results in $376.7 million per year in local capital outlay spending. Local systems could save $18.8 million annually, equal to a gasoline tax reduction of 0.4 cents per gallon, if just 5% could be saved by improving design standards and value engineering processes.
