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August 30, 2012

St. Croix River Crossing Project Minnesota and Wisconsin. Cost Estimate Review Closeout Presentation. August 30, 2012. Project Map. C ost Estimate Review Objective.

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August 30, 2012

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  1. St. Croix River Crossing Project Minnesota and Wisconsin Cost Estimate Review Closeout Presentation August 30, 2012

  2. Project Map

  3. Cost Estimate ReviewObjective Conduct an unbiased risk-based review to verify the accuracy and reasonableness of the current total cost estimate to complete the St. Croix River Crossing Project and to develop a probability range for the cost estimate that represents the project’s current stage of design.

  4. Review Agenda • MONDAY – August 27 • CER Introduction by FHWA • Project Overview by Project Personnel • Overview State Estimation Process • Define Contingency, Risk Template & Inflation • Roadway • Pavement • TUESDAY – August 28 • Structures • Retaining Walls • Noise Barriers • Right of way and Utilities • Erosion Control • Drainage • MOT • Environmental Mitigation Costs • Miscellaneous Costs

  5. Review Agenda • WEDNESDAY – August 29 • Visual Enhancements • Lighting, Traffic Control, Traffic Surveillance and Signals • ITS • Soft Costs • Begin Findings and Report Preparation • Findings and Report PreparationDraft Presentation • THURSDAY – August 30 • Closeout Presentation

  6. Basis of Review Review based on estimates provided by the Project Team in advance with revisions made during the review Reviewed estimates to determine the reasonableness of assumptions used Reviewed project elements to identify and model risks Discussed project conditions to develop base variability, market conditions and inflation percentage Not an independent FHWA estimate Did not verify quantities and unit prices Goal is to verify accuracy and reasonableness of estimate Risk-based Probabilistic Approach

  7. Review Participants FHWA Headquarters – Office of Innovative Program Delivery MN Division Office Minnesota Department of Transportation Wisconsin Department of Transportation

  8. Review Methodology Verify Accuracy of Estimate Review major cost elements Review allowances and contingencies Adjust estimate as necessary Discuss / Model Base Variability Market Conditions & Inflation Key Schedule & Cost Risks Perform Monte Carlo simulation to generate a project estimate as forecast range Communicate Results

  9. Documentation Provided Project Cost Estimate LWD Cost Estimating Method - MnDOT Project Schedule Minnesota Inflation Forecast Project Website Project Map and Location

  10. Review Findings Estimate is comprehensive, covering entire construction scope of project Estimate includes all soft costs (design, CE, environmental mitigation) Estimate includes all ROW, Utility Relocation Estimate current as of May 21, 2012 Found basis for pricing to be relevant and used similar project experience for the major bridge Found the Project team used good estimating practices in preparation of the cost estimate Good communication among Project Team to ensure estimate covered the entire project scope

  11. Review Baseline Pre-CERProject Information • Total Cost (YOE): $623,566,730 • Total Cost (Current): $548,538,322 Project Completion Date: November 2017

  12. Adjusted Baseline CER Adjusted Project Information • Total Cost (YOE): $565,389,188 † • Total Cost (Current): $527,779,322 † • Project Completion Date: November 2017 † - includes -$20.76 M in adjusted costs

  13. Base Variation Analyzed by Section of Project MN Section: +/- 15% WI Section: +/- 15%

  14. Conceptual Overview of Inflation & Market Conditions Current Year YOE aba Worse As-Planned Market Conditions Better Inflation Base Estimate

  15. Market Conditions - MN Assumptions Market Conditions remain as-planned: 20% Market Conditions better than planned: 60% Market Conditions worse than planned 20% Variation of better than planned from as-planned: 10% Variation of worse than planned from as-planned: 10%

  16. Market Conditions - MN Worse Than Planned = 20% Better Than Planned = 60% As Planned Engineer Estimate = 20% -10% +10% Variation from the Base

  17. Market Conditions - WI Assumptions Market Conditions remain as-planned: 25% Market Conditions better than planned: 50% Market Conditions worse than planned 25% Variation of better than planned from as-planned: 10% Variation of worse than planned from as-planned: 10%

  18. Market Conditions - WI Better Than Planned = 50% Worse Than Planned = 25% As Planned Engineer Estimate = 25% -10% +10% Variation from the Base

  19. Inflation Forecasts MnDOT Construction Inflation STIP/HIP Projections for SFY 2013 - 2022 (based on recent trends and available forecasting through September 2011) 2012 – 2013 = 5% (modeled to vary @ +/- 10%) 2014 = 4% (modeled to vary @ +/- 10%) 2015 – 2022 = 5% (modeled to vary @ +/- 10%)

  20. Risk Register Risks identified through discussions with SMEs Modeled significant risks (threats and opportunities) Cost Risk / Schedule Risk Project team quantified unidentified risks

  21. Significant Cost Threats Difficulty in constructing foundations due to contaminated materials and remnant from the energy plant, land fills site or other unknown difficulties related to the Super Fund site Superfund Site Wall construction Superfund Site ROW Purchase Complications during construction of the drop shaft on the Wisconsin bluff Material and labor costs increase above estimated inflation increasing project costs Issues with casting and transporting precast deck sections and River access Cost associated with Procuring an early foundation contract

  22. Significant Cost Threats Unfavorable weather may impact construction activities Foundation work, difficulty in construction due to artesian pressure MOT complications associated with maintaining Beach Rd with possible Temporary Bridge Presence of endangered species may impact the construction of the bridge (during construction) Permits delay from other regulatory agencies Risk of Loop Trail support wall not being able to support bike/pedtrail Use of a precast cofferdam seal/marine enclosure to mitigate the inability of a traditional coffer dam to work with poor subsurface material

  23. Significant Cost Opportunities There is an opportunity to reduce the size of the drilled shafts piles(from 10 ft. to 8 ft. shafts - 130 feet deep)

  24. Significant Schedule Threats Utility Relocation Impacts and coordination Unfavorable weather may impact construction activities Foundation work, difficulty in construction due to artesian pressure Flow rate impacts to ponds at Wisconsin approach MOT complications associated with maintaining Beach Rd with possible Temporary Bridge Presence of endangered species may impact the construction of the bridge (during construction) Permits delay from other regulatory agencies Issues with casting and transporting precast deck sections and River access Use of a precast cofferdam seal/marine enclosure to mitigate the inability of a traditional coffer dam to work with poor subsurface material

  25. Significant Schedule Opportunities Opportunity with Procuring an early foundation contract my offer potential schedule advantages for the project

  26. CER Outputs Review findings/recommendations Adjustments made to estimate during review Project cost estimate at 70% level of confidence Risk Register – Threats/Opportunities

  27. Total Project Cost with Risks (2012 Dollars)

  28. Total Project Cost with Risks (YOE)

  29. CER Outputs – Total Cost Forecast

  30. Project Schedule – 70% Confidence

  31. MnDOT & WisDOT Cost Forecasts Information Only

  32. MnDOT Remaining Costs (YOE)

  33. CER Outputs – MnDOT Cost Forecast

  34. WisDOT Remaining Costs (YOE)

  35. CER Outputs – WisDOT Cost Forecast

  36. Recommendations Include range of YOE forecast values in NEPA document Submit revised Major Project Initial Financial Plan with value equal to or greater than CER 70% results – prior to authorization of construction Develop a plan to manage threats and opportunities Continue to work towards procurement to take advantage of current market conditions Continue to monitor market conditions through procurement

  37. Risk Management Process

  38. CER Next Steps • FHWA will prepare a final report documenting review findings. • Draft report for review within 30 days • Draft report will be e-mailed to Division Office • Division Office will review the draft and forward it to the State Project Team • Final report issued within 30 days after receipt of comments • Final report forwarded to the Division Office for distribution to the State Project Team • FHWA uses the report for the review of the Initial Financial Plan • Estimate review is a snapshot of the current estimate

  39. St. Croix River Crossing Project Questions?

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