The Triangle

Issue date: 7/25/08 Section: News

Media Credit: Karl Kuchs Construction costs may increase due to oil prices, but should not delay the projects.

The rising oil prices have affected the cost of almost everything, including Drexel's construction projects. Robert Francis, vice president for Facilities, didn't deny this, but cautioned against overreactions.

"Energy prices absolutely work their way into the price of everything, but this recent run-up in oil prices is not the first run-up over the last several years," Francis said.

Rising energy prices are not the only thing causing problems, according to Jim Katsaounis, executive director of communications for the Division of Student Life and Administrative Services.

"Escalating construction costs in the Philadelphia market are a great concern," Katsaounis said.

"There are numerous factors in addition to energy that are causing construction costs to escalate, such as the availability of construction building commodities (particularly glass and steel) and the large number of new construction taking place affects how much volume the labor market can absorb," he said.

Francis also acknowledged that commodity prices going up is a concern.

"Recent run-ups in concrete and steel especially have been very tough. Steel recently went from $3500 a ton to $4400 a ton," Francis said.

Francis added that the new Integrated Sciences Building uses 2,193,000 pounds of steel, to illustrate how costly this price hike is.

Joe Campbell, executive director of University Procurement, said he does not think it will affect the projects too much.

"The rising costs are definitively a concern, but I don't think that it should affect the timelines of the projects, or cause them to be delayed."

Katsaounis said Drexel University plans ahead for problems like these to try to minimize the impact of them.

"Current projects taking place on campus, such as the new 34th Street Residence Hall and the Recreation Center have been awarded to construction mangers with price escalations factored into the projects' estimated cost," Katsaounis said.

"Future projects that are part of the five-year master plan and beyond will most certainly cost more as the price for commodities and labor increases, but the University tries its best to forecast the rise in costs when designing and moving forward with prioritizing construction projects," he added.

Continued...

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