Sound Transit says the $460 million increase for the light rail extension to Federal Way was driven by two major factors: higher-priced land it needs to buy along the route and the rising costs of construction.
The 7.8-mile extension is now projected to cost $2.5 billion.
"You've got a bit of a labor shortage and you have a lot of projects going on right now so you don't have the abundance of contractors bidding on projects like you may have had five or 10 years ago," said Scott Thompson of Sound Transit.
Thompson said tariffs on construction materials are also a factor.
"We've seen a lot of increased prices in steel and copper and concrete and aluminum and even lumber and plywood," Thompson said.
"There are a number of materials that are going up at double-digit rates," said Ken Simonson, chief economist for The Associated General Contractors of America.
Simonson said the cost of steel beams rose 16 percent from June 2017 to June 2018.
Copper is up 17 percent, aluminum prices rose 20 percent.
Simonson points to tariffs from two years ago and just this year.
Some of President Trump's tariffs are still taking effect.
They're projected to bring higher prices, even as the White House sends mixed signals on trade with Europe.
"Huge uncertainty as to how much materials will cost going forward and contractors need to provide a guaranteed price to an agency like Sound Transit," Simonson said. "So to protect themselves, they're likely to put in much higher bids than they might have a few months ago."
Bids on Sound Transit's Federal Way extension are expected in the coming months.
Construction is expected to start in late 2019, with service beginning in 2024.
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