Industry News Briefs

June 12, 2008 Headlines
States Look to Tap $400 Billion in Private Sector Infrastructure Funding
Looming Tax Increases Unsettle Construction Industry
Will Cars Be Smarter Than Drivers?
Major Steel Mill Projects Piling up in 2008
Congress Looks to Expand Nation's CO2 Pipeline Network

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States Look to Tap $400 Billion in Private Sector Infrastructure Funding
Crain's Detroit Business (06/02/08) Duggan, Daniel

The U.S. Department of Transportation (DOT) is encouraging Michigan and other states to brainstorm ideas and pass necessary legislation to take advantage of the estimated $400 billion in private sector funding available worldwide for infrastructure improvement, expansion, and development. Ten states have already passed legislation that will allow them to take advantages of public-private partnerships. Toll roads developed through such partnerships in California, Texas, and Florida can serve as models for the rest of the nation. "All that's needed is the political will," says DOT Secretary Mary Peters. While Michigan cannot sell toll roads as Indiana has done, it can pursue "concession-based" partnerships, under which a private investor signs a long-term agreement to manage an asset and receives an up-front payment, says Tammy Carnrike, COO of the Detroit Regional Chamber. Such a model can be used for roads as well as energy generation, waste treatment, and prisons. "Whether it's something new or something being expanded, local governments are struggling with the question of "How do we pay for it?" says Carnrike. Michigan Gov. Jennifer Granholm meanwhile has enlisted the help of Detroit-based Deloitte to explore possibilities for future public-private partnerships. "We hope to move forward in the months ahead to explore opportunities further," says Liz Boyd, Granholm's press secretary. "But it's too soon to say what types of legislative changes are needed until we have a clearer idea of the projects we may want to pursue." While some are calling on the government to learn from the private sector to utilize its resources more efficiently, others note that it is the profit motive that makes and will continue to make the private sector better suited to manage infrastructure development. "Right now, we're not targeting our resources correctly," says Tyler DuVall, U.S. assistant secretary for transportation policy. "Involvement by the private sector will flow money to projects that are the most beneficial, you won't have roads going to the middle of nowhere. It will be using an economic basis, not a political basis to make decisions."

Looming Tax Increases Unsettle Construction Industry
Associated General Contractors of America (06/03/08)

The 2011 expiration of tax cuts enacted in 2001 and 2003 will take a toll on the construction industry. Tax rates will increase for everyone, including pass-through bodies, such as partnerships and "S" companies, which account for the majority of the construction industry's business. The death tax climbs to a rate of 55 percent in 2011, while the impending enactment of 3 percent withholding on public projects contracts will hurt construction companies, which typically earn 2.4 percent on one contract. The high tax rate will prompt many small and medium sized businesses to look for ways to cut costs. Under the new withholding law, the majority of government bodies on every level must take 3 percent from the cost of the contract and give it to the IRS, instead of compensating the firm on a public works contract. Because of this law, many small companies will leave the government market, the costs of carrying out public works contracts will escalate, and the costs to the taxpayer will soar.
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Will Cars Be Smarter Than Drivers?
Design News (06/02/08) Vol. 63, No. 8, P. 58; Murray, Charles J.

The "intelligent highway" is a wireless communication protocol that experts believe will make driving safer. It has vehicle infrastructure integration (VII) that allows vehicles to communicate with one another, traffic lights, and stop signs. Local intersections will also be in correspondence with their communities, government agencies, car dealerships, and traffic control centers. Short-range radio missives will fill the air around intersections and will tell cars things such as who is around them, whether they should remain in their lanes, if they need to reduce their speed, if the roads are wet, if they are approaching traffic, if another car is about to run a red light or stop sign, or if there is road work ahead. For starters, intelligent cars will transmit warnings to drivers; however, they will eventually take over and make choices for drivers, hitting the brake or steering the vehicle when necessary. A dedicated short-range communication system (DSRC) is comprised of transceiver boards for automobiles, traffic lights, and stop signs. The Federal Communications Commission (FCC) has assigned 5.9 GHz as the frequency band for the venture. "The secret sauce of DSRC is its ability to immediately establish communications so corrective action can be taken," says Justin McNew, director of mobility solutions for TechnoCom Corp., a wireless technology firm that is developing transceivers for vehicles and highways. The company's Multiband Configurable Networking Unit is currently being installed at intersections in California, Michigan, and New York. The modules designed for intersections will be larger than the ones created for cars because they will encompass GPS technology, something most vehicles already have. Car modules will only be a little bit wider than a credit card. The technology comes at a price, however. Roadside boxes currently cost thousands of dollars and automobile transceivers are estimated to run between $50 and $100. Still, suppliers predict that 10,000 roadside units will be installed by late 2009, with up to 100,000 deployed by 2011.
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Major Steel Mill Projects Piling up in 2008
Market Wire (06/06/08)

Industrial Info Resources reports that North America should remain a hotbed for steel mill project development for at least the rest of this year and into 2009. A November 2007 study showed $11 billion in major capital and maintenance project work at North American steel mills scheduled to begin construction this year and beyond. Since that report's release, that number has grown to more than $14 billion. Most notable is the $3.7 billion grassroot mill that Germany's ThyssenKrupp is building in Alabama--one of 34 major projects under construction. In addition, Nucor Corp. is on track to complete construction of a $250 million specialty bar quality steel manufacturing mill in Memphis by the end of this year. Capital-spending plans for North America's steel mill sector have increased substantially in '208. At the same time, global consolidation of the steel industry continues, and cash-rich foreign investors remain on the hunt for strategic acquisitions throughout North America. In particular, there is renewed interest and investment in the integrated steel segment. Although there are only 17 operational integrated steel mills in North America, such factors as rising demand, commodity prices and raw material concerns are prompting more and more steelmakers to at least consider integrated steelmaking as an option for new capacity projects.
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Congress Looks to Expand Nation's CO2 Pipeline Network
Pipeline & Gas Journal (05/08) Vol. 235, No. 5, P. 8

Congressional lawmakers are inching closer to creating a federal policy that would allow interstate carbon dioxide-carrying pipelines. Sponsored by U.S. Sen. Norm Coleman (R-Minn.) and a bipartisan group of senators, the Carbon Dioxide Pipeline Study would compel several federal agencies to report on any technical, financing, siting, or regulatory barriers that would frustrate the development of a carbon dioxide pipeline industry. Efforts to persuade lawmakers to sign off on a network much more expansive than the existing 4,000 miles of unconnected CO-2 pipelines happens to coincide with an upcoming vote on climate change legislation that would restrict greenhouse gas emissions from coal-using utilities, manufacturing facilities and other sources. The network would enable manufacturing facilities and coal-burning utilities to redirect the CO2 they produce underground to a storage cavern, where CO2 emissions would then be pumped through a pipeline to businesses that can recycle the gas. Right now, several oil and gas exploration sites use existing underground pipelines to deliver CO2 for enhanced oil recovery.

Beyond Gasoline: Prices Surge for Oil-Based Goods
Christian Science Monitor (06/05/08)

The U.S. Department of Energy calculates that there are 57 major uses of petroleum, including asphalt, highlighting the significance of climbing oil prices. Liquid asphalt is a byproduct of the refinement of crude oil. The price of asphalt has increased 65 percent so far this year, forcing city and state transportation departments to reconsider road projects. A further 10 percent increase is expected in the coming weeks. In addition to higher oil prices, the price of asphalt is being pushed up by the fact that refiners are converting more crude oil into diesel and jet fuel as well as selling more low-grade oil to ocean freight companies, thus reducing supplies available for conversion to asphalt. States are reacting by reducing the number of road projects that have been planned. States have also resorted to using thinner pothole patches and "micro-seals" that wear out faster to stretch budgets. "They are trying to stretch their dollars as much as they can," says Patrick Nelson, special projects manager at Lehman-Roberts in Memphis, Tenn. "It will catch up with the states."
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Is There a Revolution on the Doorstep?
ENR (06/04/08) Tulacz, Gary J.

As the U.S. construction industry manages more projects in their entirety, more opportunities are opening up overseas. Now, more companies and owners are considering integrated project delivery (IPD) to help meet owner demands and finish projects quickly and efficiently. "There are two schools of thought on what IPD is," says Michael Kenig, vice chairman of Holder Construction Co. and chair of the project delivery committee for Associated General Contractors in Arlington, Va. "For many, IPD is a collaborative approach to a project, like with CM-at-Risk. When you add the technology of BIM, you take that concept to a higher level." However, Kenig said others in the industry believe IPD means a contractual relationship where the owner, designer, and contractor work together under a general contract. According to Kenig, recent American Institute of Architects documents are the most comprehensive guide on standards for IPD contracts and tend to support the collaborative approach. "This approach can be used in a variety of project-delivery methods. [IPD] is actually more closely related to a CM-at-risk approach since you have three or more separate firms coming together," says Kenig. Before IPD can become an effective project-delivery model, a series of events must take place, according to Mansour Aliabadi, CEO of Vanir Construction Management and Rise International. "First, you have the increase in collaboration and cooperation further up the project schedule, enabled by BIM," he says. "The next step is to develop contract models to provide a structure for these rights and responsibilities. ... We hope new model contracts will encourage the use of IPD. We must as an industry accept that change is here. The bottom line is that the industry is moving in that direction."

Big-Box Stores Slim Down for Urban Settings
Architectural Record (05/08) Hughes, C.J.

Big-box retailers, in their eagerness to branch out from suburban to urban markets, are reworking their architectural paradigm by building slimmer outlets with multiple levels, cutting back on-site parking, and increasing glass facades. This move presents architects with the challenge of reducing store size without losing too many signature interior design details, while retailers say that customers used to shopping with carts can be discouraged by multi-level establishments. Architects addressed such a problem at Target's Glendale, Calif., store by outfitting the escalator banks with a special dedicated lift system for carts. GreenbergFarrow principal John Clifford says customers can be lured to stores if the outlet is not set back from the street so as to better attract their gaze. In keeping with this aesthetic, Clifford is removing a plaza outside an Atlanta office tower so that the structure's two-story ground-level retail berth can be extended toward a major thoroughfare, and also adding a 40-foot glass facade. Clifford thinks these design features should help attract a big-box retailer.
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UA Professor's Inventions Help Strengthen Structures
Tucson Citizen (AZ) (06/02/08) Rotstein, Arthur A.

Hamid Saadatmanesh, a professor of civil engineering at the University of Arizona, has made it his goal to find ways to use carbon fiber to strengthen concrete, steel, and brick on various structures, including bridges, that have been damaged or fallen into disrepair, formulating a special epoxy to bond carbon fiber sheets to building materials. Soon after arriving at the University of Arizona in 1987 to work on the rehabilitation of bridges, the professor noticed a corroded steel rebar next to the school's engineering building. "Suddenly, it sparked in my mind that this is a problem all over the world, that there are billions of dollars actually spent every year on deterioration of structures because of (rebar) corrosion," says Saadatmanesh. What came to mind was a product that does not corrode. Ultimately the professor focused on carbon fibers, given that rebar has limited applications and, once corroded, cannot be extracted from concrete. "On the average, the material strength of carbon is 10 times stronger than your average steel," says Saadatmanesh. After years of research and backed by more than $1.25 million in funding from the U.S. National Science Foundation, Saadatmanesh developed a special epoxy which is used to bond carbon fiber sheets on the outside of corroded or cracked steel or concrete beams, columns or slabs, right over the corroded elements. The professor's technology has been used by the California Department of Transportation to wrap carbon fiber fabric around bridge columns damaged by a quake in the San Francisco area and is being used on several bridges near New York City. Richmond, Calif.-based industrial contractor J.T. Thorpe and Son has been using the technology for years to strengthen steel storage tanks with refining applications. "You can put it over existing structures that may have lost their integrity like a concrete tank or steel tank, and you can re-establish that to above its original strength," says company official Gary Stewart. The fortified tanks "otherwise would have had to be replaced or go through a process that may have had to be shut down at the cost of power generation or refining capacity."
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What to Consider When Creating Wide-Open Spaces
Structural Engineer (06/08) Vol. 9, No. 5, P. 28; Richard, Dylan

A moment frame is a system of columns and beams that are linked to one another with fully and/or partially restrained moment connections. Moment frames are the logical choice in projects that call for large, open spaces, and where space is limited or unavailable for the addition of shearwall or braced frames without compromising the space. There are three varieties of moment frames: Ordinary moment frames that are expected to bear limited inelastic deformations in their members and connections stemming from lateral forces, which are usually employed in non/low-seismic regions; intermediate moment frames that are expected to withstand limited inelastic deformations in their members and connections as a result of lateral forces and necessitate the employment of pre-qualified connections in accordance with the American Institute of Steel Construction (AISC) or connections that have been subjected to and passed a qualifying cyclic test; and special moment frames that are expected to endure substantial lateral force-generated inelastic deformations in their members and connections and require the use of pre-qualified connections per AISC or connections that have passed a qualifying cyclic test. Structural engineers typically use moment frames as a final option because of their higher cost in comparison to shearwall and braced-frame systems, but the beam-to-column connections in moment frames permit wide-open spaces with zero diagonals members and/or walls. If moment frames are opted for, costs can be minimized by increasing column sizes and thus making doubler plates unnecessary. Other cost minimization guidelines include use of fixed-column base connections to reduce drift of the moment frame; boosting material tonnage to reduce fabrication and/or erection labor; and providing partial penetration welds instead of complete penetration welds at beam-to-column moment connections wherever possible.
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Advancing Road Maintenance Technology
Associated Construction Publications (06/01/08) Fournier, Paul

The National Center for Pavement Preservation (NCPP) is investigating the possibility of developing national standards for polymer-modified asphalt emulsions (PME) to improve pavement preservation for the Federal Highway Administration and the Federal Lands Highway Division . Chip seal, slurry seal, and micro-surfacing are among the different preventative-maintenance treatments currently utilizing polymer-modified emulsions for pavement preservation. Right now, there are no standards for PME similar to those available for other practices such as Superpave, so NCPP is working to address this limitation in various ways, including exhaustively reviewing literature to collect and analyze practices and specifications. Transportation officials are learning about the various benefits they can achieve by modifying asphalt emulsions with different polymers, and NCPP Director Larry Galehouse says more and more data is coming in. "So far, we've conducted interviews with many industry suppliers and performed a detailed survey of suppliers, contractors, agencies, and other pavement practitioners. We're asking for their input on proposed specification, testing, acceptance, and certification practices on the use of PME. What's more, we have partnered with industry representatives and technical experts to ensure that specs are developed to achieve a balance of performance, quality, affordability, practicality, and industry and agency acceptance."
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