The war between the asphalt and cement industries has played out for years. Asphalt seems to be winning, at least in Ohio. It’s the material of choice on 98 percent of the state’s roads.

But an industry group for cement contractors says that’s due in part to what it calls an unfair advantage the state gives asphalt. Asphalt contractors can include price subsidies to allow for fluctuations the cost of a key ingredient in their product – oil.

And the Portland Cement Association says that’s a waste of taxpayer money. It cites a Federal Highway Administration report that says Ohio spent nearly $37 million on asphalt price adjustments from 2009 to 2010.

That’s when it eliminated their use. But ODOT reinstated them recently.  And the cement group’s Great Lakes regional director, Ray McVeigh, says it’s unfairly tough to compete.

“The first bid that took place after the escalators got put back into place, there were no concrete bids, because it made no sense to try to compete against asphalt when they are able to artificially depress their bid prices knowing that if there’s an increase in the cost of material, the taxpayer’s going to eat it.”

Best deal?
No surprise: asphalt contractors have a different read. Cliff Ursich of Flexible Pavements of Ohio says asphalt contractors need the price adjustment clauses to compete with concrete in long-term projects .

“Quite honestly, we don’t like to bid in an environment with risk because it is just so unpredictable. It makes it very challenging to go in as a contractor to bid work so as to go and maintain yourself and be sustainable in the industry.”

Wray's role
While many price adjustments increase the costs to taxpayers, the Ohio Department of Transportation says that’s not always the case.  Spokesman Steve Faulkner says asphalt companies returned around $1.5 million in overpayments to the state as oil prices – and the price of asphalt – fell.

 “We’re looking at giving the best bang for their buck for Ohio’s taxpayers. What we’re going to look at is pursuing projects in a competitive nature that gives Ohio’s taxpayers the best quality product for the amount of money they’re paying in motor fuel taxes.” 

The battle is playing out publicly. The cement contractors have bought space on billboards around Columbus questioning the costs and noting that ODOT Director Jerry Wray was a lobbyist for the asphalt industry. ODOT’s Faulkner says Wray’s old job and new one have no relationship.
http://www.think-harder.org/ohio.aspx