Inflation drives up costs for major Sacramento area public works projects
From building bridges to water and power plants, several public works projects in the Sacramento region are being impacted by rising costs.
UC Davis economics professor Derek Stimel says large-scale projects face much higher risks from inflation.
"You have the war with Iran and all the uncertainty and all the impacts on oil prices and transportation costs because so much of this material that is needed for these big projects is imported," Stimel said.
The pricetag for building a new I Street bridge in Sacramento was estimated to be $300 million last year, but construction bids have now come back and the new cost is between $98 million and $217 million more.
"The general inflation and the economy really pushed up labor costs in construction," Stimel said.
Jessica Hollins, who lives in West Sacramento, said she avoids going over the current I Street Bridge because it's so old and narrow.
"Inflation is everywhere right now, unfortunately, so I'm not surprised," Hollins said.
The Sacramento Sewer District's Harvest Water project is also being impacted by inflation. The project broke ground in 2023 and will provide treated sewage water to farms and wildlife habitats.
But this week, project managers asked the state for an additional $52 million to cover rising costs.
In Roseville, the price to purchase a new centrifuge for the city's power plant is now higher. The original cost was $510,000 but that's gone up by an additional $75,000 due to import tariffs and taxes.
The City of Sacramento is now postponing construction on the new bridge, which was supposed to start this year. Stimel says waiting for prices to go down may not be the most economical idea.
"Who knows what event's going to take place two years in the future that might also impact this kind of thing," he said.
The Harvest Water Project remains on schedule to begin operations next year.
The City of Sacramento is seeking new bids on the bridge project, which will delay construction until at least 2027.
