Industry News Briefs

August 23, 2007 Headlines

Model Code Changes Adopted Based on Recommendations From the NIST World Trade Center Investigation
Infrastructure Projects Pull in New Investors
If the Levees Fail in California . . .
New LEED Credit Awarded for Carbon Neutral Products
Northeast Lawmakers Push Nuclear in Advance of Climate Debate
New U.S. DOT Rule Allows States Flexibility to Build Roads and Bridges Faster

---

Model Code Changes Adopted Based on Recommendations From the NIST World Trade Center Investigation
Structural Engineer (08/07) Vol. 8, No. 7, P. 12

The International Code Council recently approved a set of building code changes based on recommendations from the National Institute of Standards and Technology following a three-year investigation into the collapse of the World Trade Center towers on 9/11. The changes are designed to make buildings, especially tall structures, more fire resistant and easier to evacuate in emergencies. Among other things, the proposals address collapse prevention, the use of sprayed fire-resistive materials, fire protection system redundancy, fuel oil storage/piping, and stairwell placement. Specifically, it calls for an additional exit stairway for buildings more than 420 feet in height and a minimum of one fire service access elevator for buildings more than 120 feet in height. It also requires a nearly threefold increase in bond strength for fireproofing for buildings 75-420 feet in height and a sevenfold increase for taller structures. "We fully endorse these code changes and are gratified that NIST's WTC recommendations have stimulated fundamental and substantial changes in U.S. building codes and standards that represent a significant improvement in public safety over current practice," says Shyam Sunder, lead WTC investigator for NIST. "NIST is committed to continuing our work to support industry and the nation's building and fire safety officials so that the remaining recommendations are also fully considered."
Free Web Link

Infrastructure Projects Pull in New Investors
The Banker (08/07)

Infrastructure has caught the eye of a new breed of investors, especially those in it for the long haul. "The banks have been there for years, with a recurring appetite to fund infrastructure, energy, and telecoms projects," says Emmanuel Rogy of BNP Paribas. "The new animals are equity-type investors. They have increased liquidity and are looking for returns so there is a demand for assets. At the same time, while there is a demand for public sector investment, governments can't cope with the size of the investments required." Emerging from the trend are vehicles such as private-public partnerships for things like toll bridges and roads, railways, schools, hospitals, waste and water management, and government offices. Deloitte estimates that between $100 billion and $150 billion of equity was raised by funds for infrastructure investment last year, and most of that money has yet to find a target. Traditionally, investments focused on existing infrastructures to avoid the risks associated with new projects, but as the prices of brownfield assets increase, many investors are looking into greenfield projects, forging partnerships with experts in project delivery to mitigate the risks.

If the Levees Fail in California . . .
BusinessWeek (08/20/07) Aston, Adam; Arndt, Michael; Sawyer, Tom

One of the biggest infrastructure risks in the country is the 2,600-mile-long network of levees that extend from the San Francisco Bay to Sacramento. The levee system safeguards approximately 500,000 people, 4 million acres of farmland, and the potable water supply for much of Southern California. Luckily, the state has become aware of the need to refurbish the system, and last November, Californians approved a $4.9 billion bond to pay for repairs. But that amount is insufficient for fixing the entire system, so officials are prioritizing repairs. To do this, they have turned to an innovative threat-assessment model created by a coalition of 300 scientists and engineers formed in the wake of Hurricane Katrina. The coalition is headed by Ed (Lewis E.) Link, a senior fellow in civil and environmental engineering at the University of Maryland. The model's aim is to incorporate a wider range of factors to facilitate decision-making for infrastructure investments. The model takes into consideration the size and condition of levees as well as how they were built and assesses the condition of structures within nearby communities. For the California levees, the biggest threat are earthquakes rather than storms. A quake measuring 6.5 on the Richter scale would completely destroy the levees, according to Link.

Northeast Lawmakers Push Nuclear in Advance of Climate Debate
EnergyWashington Week (08/15/07) Vol. 4, No. 33,

U.S. Reps. Ed Towns (D-N.Y.) and Fred Upton (R-Mich.) have introduced legislation designed to boost nuclear plant construction by addressing the nuclear waste issue. The measure will ensure funding is available to proceed with construction of a waste repository at Yucca Mountain in Nevada and will force Congress to solve the waste confidence issue that has plagued the industry and contributed to hesitation to build new nuclear power plants. Similar measures proposed by the Bush administration and ranking member of the Senate Energy and Natural Resources Committee Pete Domenici (R-N.M.) have failed to garner support, but advocates say that the American Legislative Exchange Council's (ALEC's) recently-declared commitment to nuclear technology could help push the bill through as part of the debate on global warming. ALEC is comprised of state legislature officials who work on template legislative proposals that can be passed in many state legislatures without significant adjustments. "We hope the climate change bill to be debated in the fall will include a nuclear component," says a source with Upton's office.

New U.S. DOT Rule Allows States Flexibility to Build Roads and Bridges Faster
U.S. Department of Transportation (08/16/07)

The U.S. Department of Transportation has released a new rule that gives states more flexibility in building roads and bridges faster, allowing preliminary design work to start even while the National Environmental Policy Act environmental approval process is ongoing under innovative contracting methods such as design-build contracts and long-term concession agreements. The rule also eliminates the required minimum dollar amount for design-build projects, thus broadening its appeal to smaller projects. "This new flexibility will help states build needed roads and bridges faster, while at the same time protecting the environment," says Transportation Secretary Mary Peters. Federal Highway Administrator J. Richard Capka adds, "Innovative contracting leads to speedier project delivery. The new rule will help to mainstream the approach and reduce the costs for states wishing to enter into public-private partnerships." Design-build has reduced the average project delivery time by 14 percent, says Capka.
Free Web Link

Taxing Debate
Traffic World (08/20/07) P. 14; Natter, Ari

Transportation infrastructure funding is at the forefront of congressional debate. Among the proposals being tabled is an increase in the gas tax, an idea that has mustered bipartisan backing within the House Transportation and Infrastructure Committee. Rep. James Oberstar (D-Minn.), the committee's chair, has unveiled a plan to create a Bridge Reconstruction Trust Fund modeled after the Highway Trust Fund that would provide dedicated funding to fix bridges in the National Highway System. Committee member Rep. Don Young (R-Alaska) says, "We have to, as a Congress, grasp this problem. And yes, I would even suggest: Fund this problem with a tax." Though the idea is supported by the American Association of State Highway Officials and the American Road and Transportation Builders Association, it has drawn criticism from the White House. "Before we raise taxes, which could affect economic growth, I would strongly urge Congress to examine how they set priorities," says President Bush, referring to congressional earmarks; Oberstar says his proposal would be free of earmarks. Reason Foundation director of transportation studies Robert Poole Jr. agrees, adding that an increase in tolling and public-private partnerships may be a better solution. Public-private partnerships are being considered as a source of funding for the National Strategic Infrastructure Plan proposed by the ranking member of the House Transportation Committee, Rep. John Mica (R-Fla.), who criticizes Oberstar's plan as a "Band-Aid approach." Mica says, "Addressing these infrastructure needs will require a dramatic investment in our highways, bridges, airports, transit systems, ports, waterways, and passenger and freight rail systems." Meanwhile, Sen. Hillary Rodham Clinton (D-N.Y.) has proposed the establishment of a $10 billion emergency fund for bridges and increased funding for efforts to reduce traffic congestion and modernize seaports.

Copper Crash Suggests How Sub-Prime Crisis Could Hit World Economy
Citywire (08/16/07) Bence, Douglas

The sub-prime mortgage crisis is having an impact on copper prices across the globe as investors speculate on a possible global liquidity crunch and recession. In Shanghai, the price of copper experienced its biggest fall of the year in mid-August though demand remains robust, increasing in July for the first time since March. Nickel is also being impacted, with the price of a pound down to $12, about half what it was in May. "This is now disrupting the global stainless steel marketplace," says Evolution Securities. "Following declines in alloying materials such as nickel some Korean mills have temporarily closed as Asian distributors and end-use buyers are holding back on orders." In North America, stainless steel purchasers have cut back. Service centers there are reporting the lowest monthly shipment rates since last winter. "Distributors aren’t buying as much stainless steel as before because high inventories at the start of the summer haven’t been run down," says Evolution Securities.
Free Web Link, May Require Registration

Steel Industry Expects Stable Prices Next Year
China Daily (08/15/07) Zhengzheng, Gong

Chinese steel executives say they expect raw material prices to remain stable next year. "Local steel companies should boycott any sharp price rise manipulated by iron ore suppliers," says Shen Wenrong, chairman of Shagang Group, China's fourth-biggest steelmaker. "If iron ore prices shot up next year, we would have to raise steel prices. And that would hurt steel consumers." The remarks come as industry representative Baoshan Iron & Steel prepares for negotiations on ire ore prices for next year with the world's top three suppliers, CVRD, BHP Billiton and Rio Tinto, who collectively account for 75 percent of the iron ore traded worldwide and who increased prices by 9.5 percent for this year following a 19 percent hike in 2006 and a 71.5 percent jump in 2005. Investment banks aren't convinced by China's professed optimism, forecasting climbing iron ore prices due to strong demand from China. UBS, for example, has predicted a 25 percent increase.
Free Web Link

'Highway Bridges' Report Reveals Corrosion-Related Technological Gaps
National Association of Corrosion Engineers (08/13/07)

The "Highway Bridges" report commissioned by the National Association of Corrosion Engineers (NACE) stresses the need to close critical technology gaps before bridges of the future capable of lasting for up to 100 years can be designed and built. Written by Hira Ahluwalia of Material Selection Resources, the report focuses on corrosion and how to mitigate its impact. According to Ahluwalia, upwards of 15 percent of U.S. bridges suffer from corroded steel and steel reinforcements. The report stresses the need for collaboration between NACE and the Federal Highway Administration to develop educational tools for bridge engineers relating to corrosion-control. It also highlights the need for an automated system of corrosion monitoring and prognostication that embraces data interpretation, smart sensor, and wireless technologies. Ahluwalia says that corrosion damage assessment must be improved through the use of nondestructive evaluation and other techniques and that new materials must be combined with existing construction materials to build more durable bridges that require less maintenance. "Traffic load and corrosion combine to deteriorate any kind of bridge, whether steel, concrete or suspension," said Ahluwalia. "By addressing these technological gaps, I have no doubt that industry can meet its goal to design bridges that last 100 years or more." NACE president Louis D. Vincent says, "The price of steel, concrete, and other construction materials is on the rise. ... It is absolutely imperative that industry deal with structural deficiencies sooner rather than later." According to NACE executive director Tony Keane, the United States spends more than $8.3 billion a year on highway bridges for corrosion-related repair.
Free Web Link

Transportation Secretary Discusses Concerns About National Infrastructure
PBS (08/15/07)

In this interview, U.S. Transportation Secretary Mary Peters stresses the need to refrain from using the recent Minnesota bridge collapse as an example of a systemic problem with U.S. infrastructures. Rather than rushing into action like raising the gas tax to increase the funding available to fix the nation's bridges and highways, as has been proposed by House Transportation Committee chairman Jim Oberstar and others, Peters says that existing funding needs to be channeled in a more efficient manner that prioritizes risks. "I think Americans would be shocked to learn that only about 60 percent of the gas tax money that they pay today actually goes into highway and bridge construction," says the transportation chief. "Much of it goes in many, many other areas" in the shape of congressional earmarks for among other things museums, bike paths, trails, and lighthouses. "The last highway bill that was passed, in the summer of 2005, contained over 6,000 of those marks, those specially designated projects. And the cost of those projects just in that bill alone was $24 billion, almost a tenth of the bill," says Peters. A good example is the $200 million or so that was earmarked for a bridge in Alaska. The secretary says that the state of the country's road infrastructure has actually improved slightly over the past 10 years. What's worsened is how the infrastructure is performing, as is demonstrated by increasing congestion. To help alleviate urban bottlenecks, DOT is funding congestion relief proposals in several U.S. cities, including New York, Minneapolis, Seattle, San Francisco, and Miami. Peters hails New York City's congestion pricing proposal as an example of a project that would charge taxpayers for the infrastructure they use, thus bringing accountability into the funding mechanism by ensuring that those responsible for the attrition of roadways are those paying for repairs and maintenance.
Free Web Link

Source of New York Steam Blast is a Literal Mystery
IEEE Spectrum (08/07) Murphy, Kieron

Experts are questioning the efficiency of steam-based district-heating systems in the wake of July's steam pipe blast in New York. Steam has been used to provide heating and hot water in U.S. urban areas since the late 19th century, with many of the original systems still in use. Steam provides heating and air conditioning to almost 2,000 customers in New York City, including the Empire State Building and Grand Central Terminal, even though the system includes pipes installed over 100 years ago. Despite its widespread use, some experts believe that steam is an outdated technology. They argue that it would be cheaper to convert district-heating systems to hot water because of the high costs of steam pipe maintenance combined with the efficiency of using hot water. A system using hot water would also take away many of the safety issues that are associated with steam pipes. French officials have already announced plans to convert Paris' district-heating system, the largest in Europe, to hot water. Morris A. Pierce, the energy manager for the University of Rochester, says, "The steam system in Manhattan will be around a while, although from an energy and environmental standpoint, it is relatively inefficient, expensive to maintain, and as you have seen, can be dangerous."
Free Web Link

Johanns Sets USDA Leadership for Efficient Energy and Resource Use
United States Department of Agriculture (08/20/07)

The United States Department of Agriculture has announced the creation of a Sustainable Operations Council to ensure that USDA resources and energy are being used efficiently. "Many people may not realize that USDA's budget is larger than the Gross Domestic Product of most nations in the world, and manages more land than the total acreage of several U.S. states," says Agriculture Secretary Mike Johanns. "This new council helps all USDA's employees work together to operate, promote and use sustainable operating practices so we save energy and practice effective use of our resources."

Successful Bidding; Knowledge of Products and Services is Key to Being Awarded a Bid
Michigan Contractor & Builder (08/13/2007) P. 4

The performance of a subcontractor's estimator or estimating team is vital for a successful bid on a construction project. While estimators are hired to provide the subcontractor with the approximate cost of the job, good estimators need to be able to do more than just come up with a price. Dennis Siekierski, chapter president of the American Subcontractors Association (ASA) of Southeastern Michigan, says, "An estimator needs a keen awareness of market conditions and especially the competition." Estimators can gain information, such as how many other contractors are planning to bid, by talking to in-house sales people and attending ASA meetings. As a representative of a subcontractor, an estimator can also develop relationships with primary contractors that can lead to more business. Contractors are more likely to give work to subcontractors that they know they can trust to get the best prices with, so the estimator's performance is especially critical during the initial bidding process for design-build and negotiated projects.
Free Web Link

Medical Offices on Rise in Area
Washington Times (08/16/07)

With the aging of America's population, medical office buildings are becoming an increasingly hot property niche in the Washington, D.C., market and other areas of the country. Unlike traditional office tenants, doctors routinely look for assurances from building owners they can remain in one place for more than a decade in order to build their practice and not incur the expense of frequently having to relocate expensive medical equipment. Consequently, developers and landlords expect more office condominiums to be developed in Washington and elsewhere to service this growing tenant base. Woodmark Commercial Services principal Geoff Kieffer states, "Whereas a typical office user might spend $50 to $60 per square foot to build up their offices, medical offices will double that and more. When you have that big of an investment, you want to control it for the long term." Most developers like Woodmark and CB Richard Ellis that enter this niche routinely look to build medical office buildings near hospitals. Indeed, CBRE recently teamed with developer the Long Cos. to erect a two-building medical office complex in Merrifield, Va., close to Inova Fairfax Hospital.
Free Web Link

New LEED Credit Awarded for Carbon Neutral Products
FacilitiesNet (08/15/07)

The LEED green building rating system will now award an "Innovation in Design" point to projects using carbon neutral building materials that were manufactured in a climate neutral process. Innovation in Design points are given to projects that meet a variety of criteria, including those that educate, use new technology, or create new solutions. In order to receive the point, building materials must be certified by a third-party as climate neutral, meaning that they net zero greenhouse gases over their life cycle. In order to be classified as carbon neutral, a manufacturer must offset any carbon emissions with at least an equal amount of carbon emission reduction credits. These credits can be obtained by implementing carbon sequestration projects or purchasing green power. Commenting on the motivation behind awarding the additional point, LEED Steering Committee Chair Scot Horst said, "Reducing and off-setting the greenhouse gas emissions created by the manufacture and use of building materials is critical."
Free Web Link

Environmental Responsibility Benchmarking Conference Drawing Top Manufacturers
IndustryWeek (08/07) Kenney, Brad

Representatives from 20 leading U.S. companies are expected in Chicago in late September for the Corporate Climate Response conference hosted by Green Power Conferences. Included will be representatives from Caterpillar, Ford, BP America, Abbott, Time Inc, Motorola, Walgreens, Anheuser-Busch, Wal-Mart, Dow, McDonald's, IBM, AIG, Excelon, Intel, and Baxter Healthcare. They will discuss a host of topics related to emissions reduction, including energy efficiency and waste management. Also attending will be national and state regulatory experts as well as representatives from environmental groups like WWF and NRDC and the U.K. government-funded Carbon Trust, which will discuss its carbon labeling scheme for consumer products.
Free Web Link

Officials Unveil Worksite Enforcement Plan Including 'No-Match' Rule, More Verification
Construction Labor Report Banner Vol. 53, No. 2634, P. 781; Triplett, Michael R.

Pointing to the failure of Congress to pass the Bush administration's comprehensive immigration package, the U.S. departments of Homeland Security and Commerce are taking the initiative in tackling illegal immigration through worksite enforcement. "We all know that a critical part of immigration enforcement is effective interior and worksite enforcement," says Homeland Security chief Michael Chertoff. "The reason for that is because the magnet that brings most economic migrants into this country is work. And if we have worksite enforcement directed at illegal employment, we strike at that magnet." Included in the initiative is the issuance of the final rule on the "no-match letter" regulation proposed last year that will hold employers accountable for failing to act on letters issued by the Social Security Administration when the agency discovers that a Social Security number of an employee supplied by the employer does not match its information. The rule stipulates that civil and criminal charges can be brought against employers failing to respond to no-match letters but provides a "safe harbor" provision to protect employers that attempt to comply with the law. DHS has also announced that it will issue a proposed rule requiring all federal contractors to take part in E-Verify, the department's electronic employment verification system, which will add for the first time a function allowing employers to match photographs provided by employees with photographs that already exist in federal databases from the employment verification documents given to immigrants. Currently, about 19,000 employers participate in the system, with about 1,000 new ones joining every month. Chertoff notes that enrollment in the system would have been mandatory for all employers under the Senate immigration package. "Several construction groups will fight tooth-and-nail" to prevent mandatory participation in E-Verify, says Craig Silvertooth of the National Roofing Contractors Association.

Credit Tightening Weighing on Builder Confidence in August
National Association of Home Builders (08/15/07)

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index for August posted a two point drop to 22, the lowest mark since January 1991, reflecting pessimism among developers in the single-family home market over problems in the housing finance system. "Builders realize that issues related to mortgage credit cost and availability have become more acute, filtering some prospective buyers out of the market and prompting others to delay their decision to purchase a new home," says NAHB President Brian Catalde. "Builders are responding by trimming prices and stepping up non-price incentives to bolster sales and limit cancellations, although we're dealing in a difficult market environment." But, reflects NAHB chief economist David Seiders, "The government-related parts of the mortgage market still are functioning well and the underlying economic fundamentals promise to remain solid for some time-- providing support to the longer-run housing outlook. We now expect to see home sales return to an upward path by early next year and we expect housing starts to begin a gradual recovery process by mid-2008. From there, the market will have plenty of room to grow in 2009 and beyond."
Free Web Link

---

© Copyright 2007 INFORMATION, INC.