An $11 million sewer plant expansion in Liberty Lake is on hold after construction bids for the project came in nearly $1 million higher than expected.
Steel prices, which have nearly doubled in the past year, are to blame for the high estimates, said contractors, who warned that prices would only increase more when Liberty Lake’s sewer and water district restarts the bidding process.
“Maybe they can change the scope of the project, but they’re going to lose more if they wait,” said Rick Edwards, of Williams Bros. Construction.
The low bidder on the project, Williams Bros., estimated costs at $847,000 higher than what the district expected.
The second lowest bid was closer to $1 million higher and two other estimates were considerably over, said Frank Boyle, district commissioner.
It was the second public bidding to come in six figures over expectations in less than a week.
Rising building material costs added $400,000 to the price of South Pines Elementary School on July 27. Steel prices weighed heavily in the school’s cost.
Central Valley School District officials expected to spend $5 million but awarded the bid anyway.
“It’s been very difficult for people with projects,” said Joel Simpson, vice president of Cd’A Metals.
“It’s going up like wildfire. It’s going up faster than wages.”
For 25 years, the price of steel fluctuated 3 or 5 percent, Simpson said. Now, because of a construction boom in China, combined with rising fuel costs and production problems among U.S. producers, steel prices are skyrocketing.
The price of scrap metal has jumped from $60 a ton a couple years ago to around $300 a ton now as China buys up metal, Simpson said.
Steel exporters such as Japan, which frequently shipped to the United States, are now sending their material to China. As a result, American distributors have a limited stock.
Projects like the treatment plant for Liberty Lake Sewer and Water District are being pared down to cut costs. Boyle said the district will consult with its engineers about where costs can be cut, while at the same time working to upgrade technology of the proposed plant.
The project should go out for rebid early this fall.