June 18 (Bloomberg) -- New York Governor Andrew Cuomo struck a deal with unions to save about $450 million on the construction of a new $5.2 billion Tappan Zee Bridge over the Hudson River, said an administration official with knowledge of the accord.
The agreement guarantees no strikes, a four-day workweek and 10-hour days, said the official, who spoke on the condition of anonymity because the deal hasn’t been officially announced.
It’s similar to an accord reached between unions and the New York Thruway Authority in 1994 for renovations to the existing 56-year-old span, said Ross Pepe, president of the Construction Industry Council of Westchester and Hudson Valley Inc., a group representing 500 building companies.
“It’s different when you’re working on a new bridge, and there’s new things added in to provide productivity and direct cost savings,” Pepe, who participated in the talks, said in a telephone interview before the deal was final. “We support project labor agreements. It’s important for the Tappan Zee Bridge replacement project to have a uniform labor package.”
Cuomo, a 54-year-old Democrat, has made building a new Tappan Zee a priority. Plans to replace the bridge have been discussed for more than a decade, and Cuomo says getting the project done would be an example of the state government moving beyond the political dysfunction that thwarted past plans. He compares its importance to the construction of the Erie Canal in the 19th century.
Matt Wing, a Cuomo spokesman, didn’t immediately respond to an e-mail requesting comment.
The three-mile-long (4.8-kilometer) Tappan Zee, which connects Rockland and Westchester counties as part of the Thruway system, carries 138,000 vehicles a day, 40 percent more than its original design intended.
The savings will be incorporated into the bids from four construction teams put on a short list in February to win the project, Tom Madison, Thruway Authority executive director, said in an April 20 interview in Tarrytown, New York, before the deal was finished.
The construction teams selected include Fluor Corp., Bechtel Group Inc., Skanska AB and Grupo Dragados SA. Final proposals for the project, which would create more than 45,000 jobs, are due next month, with a winner announced in September, according to Cuomo and the request for proposals.
Cuomo has said the project is moving at a “phenomenally rapid” pace with the help of President Barack Obama, who named building a new Tappan Zee Bridge as one of 14 U.S. projects to be sped through federal oversight protocols, and the so-called design-build process. Approved by lawmakers in December, the process puts private companies in charge of designing and building the project, rather than having the state develop the plan and then put it out for bid.
New York has applied for a $2 billion federal Transportation Infrastructure Finance and Innovation Act loan. The request is more than the program has available, and the state suggested in its application the loan could be spread out over several years.
Most of the funding will come from debt issued by the authority, Moody’s Investors Service said today as it revised the outlook on the agency’s A1 long-term rating, the fifth-highest level, to negative from stable. Standard & Poor’s took similar action this month.
The authority is considering a 45 percent toll increase for trucks to help pay for a $1.5 billion highway-improvement program and refinance debt, not a new Tappan Zee. Moody’s said “substantial toll increases” beyond the 45 percent will be needed to maintain targeted debt-service coverage ratios.
“The negative outlook also reflects the potential impact of an uncertain economy on financial performance as the authority doubles or triples its debt load in the face of very limited volume growth,” Moody’s said.
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