March 11, 2025

Rising Inflation Hits Transportation Projects Hard in North Carolina

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News Summary

North Carolina’s transportation sector is facing significant challenges due to rising inflation and construction costs, leading to project delays. Major initiatives such as the transformation of U.S. 1 Capital Boulevard have been postponed until 2032. The Capital Area Metropolitan Planning Organization is exploring tolling options to alleviate funding shortfalls, while the state grapples with escalating expenses that threaten critical infrastructure development for its growing population.

Rising Inflation Hits Transportation Projects Hard in North Carolina

The road ahead looks bumpy for transportation initiatives in North Carolina as the North Carolina Department of Transportation (NCDOT) grapples with significant delays triggered by soaring inflation and escalating construction costs. Over the past three years, the fiscal landscape has changed dramatically, making it increasingly difficult for NCDOT to adhere to original project schedules.

Budgetary Constraints and Delayed Projects

NCDOT’s eastern chief deputy engineer has highlighted that rising construction costs have wreaked havoc on project timelines, leaving the department in a challenging position. The realities of today’s inflation have created a situation where NCDOT cannot exceed the budget set by state legislators, severely limiting the organization’s capacity to flexibly manage soaring expenses.

As a direct result, several major projects, including the transformation of parts of U.S. 1 Capital Boulevard into an interstate from I-540 to Wake Forest, have been pushed back to the year 2032. Concerns have arisen from the local community regarding the lack of funding despite a solid tax base in the region.

Tolling Solutions on the Table

To tackle the funding shortfalls, the Capital Area Metropolitan Planning Organization (CAMPO) is investigating four distinct tolling scenarios for Capital Boulevard. These include two full toll options akin to successful projects like the Triangle Expressway and Monroe Expressway, plus two express lane configurations, similar to the I-485 express lanes in Charlotte.

Impact of Inflation on Project Costs

The cumulative effects of inflation have compelled NCDOT to delay numerous projects statewide. With the National Highway Construction Cost Index having surged by 67% in the past three years, in stark contrast to a modest 22% increase over the previous 14 years, the challenges are evident. Unfortunately, this trend is delaying critical infrastructure necessary for the growing population and economic activities in the state.

Specific project timelines continue to flicker like a faulty signal light: the conversion of U.S. 70 into a freeway is now slated for completion in 2030, while the widening of U.S. 64 in Cary and Apex is deferred to 2032. Meanwhile, the widening of I-85 between Durham and Hillsborough has now been postponed beyond 2035.

Escalating Construction Costs

In 2018, the estimated cost for the Capital Boulevard/U.S. 1 freeway project was set at an ambitious $465 million. Fast forward to 2023, and that estimate has ballooned to $750 million, with the most recent projection climbing to a staggering $1.34 billion. The undertaking involves four distinct parts, with the first segment from I-540 to Durant and Perry Creek roads estimated to cost around $516 million.

Attempts to Manage Costs

In light of the financial strain, NCDOT is striving to better manage its expenses. Initiatives in place include enhanced forecasting methods, offering contractors incentives for cost reductions, and more closely monitoring expenditures associated with various projects. Despite these efforts, the road to completion remains fraught with hurdles.

Business Community Advocates for Acceleration

The freeway’s completion has emerged as a critical priority for the Triangle’s business community. Advocacy for expediting the project may lead to alternative funding being sourced through tolls, aiming to fast-track much-needed infrastructure upgrades.

Looking Ahead: A Call for Public Feedback

As the impacts of rising inflation continue to be felt, lists of delays and revised forecasts are reshaping the timelines and budgets of numerous projects in NCDOT’s State Transportation Improvement Program (STIP) for 2026-2035. The public has the opportunity to weigh in on proposed projects, with comments accepted until April 4, giving residents their chance to influence the transportation landscape of the coming decade.