State Road 37 rebuild in Fishers curbed indefinitely. Here's why and what it means for drivers.

Soaring construction costs will force an indefinite delay on the State Road 37 road project through Fishers, Mayor Scott Fadness said.

The SR 37 reconstruction, already over budget and behind schedule, was supposed to finish at the end of 2023. But the mayor said construction bids for the interchange at 141st Street — the last in the 2-mile-long project — came in well above what was budgeted, so the city decided not to hire any firms.

"With the kind of pricing we're seeing it would be fiscally irresponsible for us to move forward with these market conditions at play," Fadness said.

The city’s engineering department estimated the cost of the 141st Street intersection at $26.6 million. But the three bids the city received were for $49.4 million, $39.9 million and $32.9 million.

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Fadness said the length of the newest delay will equal the time it takes to rebid the job when prices have stabilized.

"We will continue to monitor labor and material cost for a more appropriate time to bid this particular intersection," Fadness said.

The 141st Street interchange is scheduled to be the last one of five completed. The roundabout exit at 126th Street — the first — was completed in 2020 and work on three others is ongoing without delay. Construction began in 2018.

Fadness said inflation is slowing road projects all over the state and Fishers is fortunate it is as far along as it is compared to some others.

“We’ve got everything else bid out and traffic is flowing along the corridor,” he said.

Fishers isn't alone. Costs soar everywhere

Brian Gould, executive director of the Build Indiana Council, a highway industry group, said Fishers is not alone. “In the last group of road project announced by INDOT (Indiana Department of Transportation) 60% came in over bid,” Gould said, of between 300 and 400 projects.

The price of steel, used in bridges, has risen the most, but so have the prices of dirt, gravel and asphalt, which is petroleum-based. The cost of building a bridge is 40% higher. A road, 25% more.

And rising fuel prices have hit construction companies as hard as they hit commuters, Gould said.

“We have big machinery moving tons of material,’ Gould said. “That costs a lot.”

The problem for cities and states is the prices are increasing so fast the real costs have been jumping considerably just in the period between when they make their estimates and the time that bids come back from contractors, said Jong Lee, deputy director-chief of policy for the American Association State Highway Transportation Officials.

"Estimates take a lot of time and planning," Jung said. "But you can't plan for this type of uncertainty. For years it has been a very stable economic environment, with 2-3% inflation."

Some estimates across the country are so far below the updated real costs, he said, "that we are seeing them come back with no bids, or just one."

Richard Hedgecock, president of the trade group, Indiana Constructors, said "there is a lag time we are trying to figure out how to address."

And because the industry is facing supply chain challenges it is nearly impossible to order materials ahead and lock in prices.

“We are being told we will have to wait 50 to 60 weeks for supplies and then will have to pay the price at that time,” Gould said. “There is a lot of risk involved in this for everyone.”

The project's scope and past over

State Road 37 is being rebuilt into an expressway-style corridor with no stoplights between 126th Street and 146th Street. In addition to 126th, roundabouts will be built at 131st and 141st street exits, and more traditional interchanges will be constructed at 146th and 135th streets.

It’s the second time the SR 37 planners have been sidetracked by cost estimates. A wildly inaccurate estimate by a consultant of drainage and infrastructure costs helped boost the price tag of the project by $42 million in 2020. The consultant had projected that work, which happens before the road building, would cost $8 million. The final bill for drainage was $35 million and, combined with other increases, the cost of the project jumped from $124 to $170 million.

Fishers, Noblesville and Hamilton County were responsible for covering the shortfall.

Hedgecock said there were indications in the last few weeks that costs were leveling off.

"We'll watch how it plays out over the next few months but I don't have a crystal ball and forecasting isn't wise right now because everything is so voluble," he said.

Fadness said the progress already made on SR 37 gives the city a cushion.

"For now, we feel confident that with the completion of the other intersections we can wait out the inflation shortages for a period of time," he said.

Call IndyStar reporter John Tuohy at 317-444-6418. Email at john.tuohy@indystar.com and follow on Twitter and Facebook.