U.S. has only spent 1.2 percent of transportation stimulus

WASHINGTON Wed Jun 17, 2009 4:30pm EDT

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WASHINGTON (Reuters) - Only a small fraction of the $17.5 billion available for transportation improvements from the U.S. economic stimulus plan has been spent, according to a Transportation Department report, but industry members say that rate does not signal a slowdown.

"The federal funds don't go out until, literally, the states hand in the receipts for the project at the time it's done, or at least an identified phase of the project is done," said Brian Turmail, spokesman for the Associated General Contractors of America.

"It's a better measure of projects completed, or phases of projects completed ... than of work under way currently," he said of the amounts of money spent.

According to the last weekly progress report the Transportation Department posted to its Website on Wednesday, stimulus outlays total $218.8 million, 1.2 percent of the $17.5 billion it has pledged to spend, or "obligated," for projects.

Almost all of the $5 billion for airports in the $787 billion stimulus plan has been obligated. Some projects have yet to begin while a few are complete, said Jane Calderwood, vice president of government affairs for the Airports Council International.

"Some of the airports I've talked to started out with one project in mind," she said. But when bids for projects came in under estimates, sometimes by 30 percent, there was "some rearranging going on."

It took time for airport authorities to negotiate with the federal government and contractors in order to change to bigger projects or expand those they had originally proposed.

This month, President Barack Obama pledged to accelerate the flow of stimulus money to states.

Accomplishing that, though, appears to rest mostly on states.

Over 24 months, the Transportation Department is required to obligate $48.1 billion. Just four months in, the department has already allotted nearly a third of that.

"Every state Department of Transportation has gotten the message to streamline wherever possible," said Tony Dorsey, spokesman for the American Association of State Highway and Transportation Officials. "We have to be prudent, we have to be wise, but we have to be urgent."

Dorsey said departments could dedicate more staff to stimulus projects or find areas to cut. But, he said the media, lawmakers and Obama are now pressing to concentrate road repair projects in economically distressed areas, a new expectation that increases the pressure on the tight timeline.

There are other speed bumps in the stimulus spending, said Turmail. Since they will be reimbursed, the states pay for projects up front and a few financially stressed ones had to dig through already tight budgets for dollars.

Also, he said, some construction companies are pausing because of a requirement to use equipment made in the United States. Contractors would like clarity on how closely they must hew to the provision, given that in some cases necessary equipment is not made in the country.

(Editing by Chizu Nomiyama)

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