News to Note

Article in American Cranes & Transport Magazine April 2006

While commercial construction activity in the Northeastern US continues to thrive, the transportation sector in New Jersey faces a funding crisis.

With more than 50 high-rise buildings under construction in New York City, suburban New Jersey and Boston, one might surmise that the construction sector, and the overall economy for that matter, is booming in the Northeastern US. Commercial building contractors and construction equipment suppliers in the region report that they are pressed to meet the continual demand.

But this is not the case for many highway and bridge contractors in the region. In New Jersey, contractors are fortunate to get work from New Jersey Department of Transportation (NJDOT), which has plenty of jobs on the drawing board and even approved for bidding, but not enough funding to award the contracts.

“The demand for transportation work is there but the lack of funding is the problem,” explains Jim Johnston, III, president of Agate Construction of Clermont, NJ. “The problem in New Jersey is the state's transportation fund doesn't have the money to award the contracts that have been approved for funding. And they are under-budgeting the projects they are bidding.”

New Jersey's transportation funding crisis is a result of the near bankruptcy of the state's Transportation Trust Fund (TTF). But in February, New Jersey Governor Jon Corzine unveiled a plan to replenish and grow the TTF through financial and structural reforms that he and contractors hope will loosen up funding for badly needed highway and bridge projects. Corzine contends that his five-year plan will replenish the TTF, provide for a substantial transportation capital program, and will establish reforms to correct the financial deficiencies in the TTF.

Johnston is hopeful these reforms will work, and will ultimately prevent what happened with his company recently when they placed a bid on the Route 52 project in Katymay County, NJ. In a joint venture, Granite Construction and Agate Construction placed a bid for $240 million, which turned out to be the low bid. Unfortunately, the NJDOT had only budgeted $150 million for the project, so it was put back on the shelf, Johnston says.

“We were the low bidder, and even worse, the next low bidder was $244 million, off by less than 1%,” he says. “After spending all that time, money and effort, the project is on hold. They are now scheduled to advertise the project in April for a bid date in June. We are going to look at it again, but we have not decided if we will bid on it.”

He contends Agate Construction and other such highway and bridge contractors can’t afford to take the time and resources to bid on a project, be identified as the low bidder and then not get the contract. Until the New Jersey DOT gets its act together, Johnston says his company, which posts about $30 million a year in revenues, will continue to “scramble“ to get the work that is out there.

For some 20 years, Agate Construction has completed road, bridge and marine projects throughout the Northeast, including the reconstruction of three timber bridges on Great Bay Boulevard in Tuckerton, NJ, construction of a new 600 foot pier on the East River in Manhattan and building a 700 foot promenade in front of the new minor league baseball stadium in Staten Island. The company did a lot of work in Philadelphia as well, including a $22 million contract to install 8,400 steel piles at depths of 120 feet at the Kvaerner Philadelphia Shipyard. The company also completed the Route 322 and Interstate 50 interchange project in Mays Landing, NJ.

Agate Construction is working on a vertical lift bridge in Paulsboro, NJ. The workhorse on that job is a new Link-Belt 218 Hylab HSL, a 110 ton capacity crawler that it purchased from South Tierney, NJ-based TES Inc last fall. The crane is doing general lift work, mainly steel rehabilitation.

Agate also recently purchased from TES a new 80 ton capacity Link-Belt 138 Hylab 5, which is setting stone mattresses at the Hereford Inlet project in North Wildwood, NJ.

Tom Guzzi, of TES, says Agate has been a customer since TES was awarded the Link-Belt account in the mid 1990s. “The first unit they bought from us was an LS 248,” Guzzi remembers. “They are a good customer and a respected contractor in the region.” Agate Construction has nine cranes in its fleet, ranging in capacity from two 200 ton crawlers to a 45 ton all terrain.