[Interview] "Unexpected Cost Surges Are the Biggest Variable in U.S. Public Infrastructure Projects... JV Collaboration Remains a Challenge"

ENR Deputy Editor Visits Korea as Keynote Speaker for GICC 2026 Hosted by the Ministry of Land, Infrastructure and Transport
Rising Opportunities in the U.S. Market for Korean Companies
Careful Review of Cost Controls and Contract Practices Essential

"U.S. public agencies do anticipate some increases in material and labor costs, but there are limits to what they can accept."

Jeff Rubenstone, Deputy Editor for News and Technology at ENR, a U.S. construction and engineering specialty magazine, said this in an email interview with The Asia Business Daily on September 20. When asked about risks that private sector participants often overlook in U.S. public-private partnership (PPP) projects, he replied, "Unexpected delays or sudden cost surges can undermine the relationship between the public and private sectors."

Jeff Rubenstone, Deputy Editor of Engineering News-Record (ENR)

Deputy Editor Rubenstone visited Korea to attend the 'Global Infrastructure Cooperation Conference (GICC) 2026', hosted by the Ministry of Land, Infrastructure and Transport and organized by the International Contractors Association of Korea. He also delivered a keynote speech at the opening ceremony held at the Conrad Hotel in Yeouido, Seoul, on September 15. Established in 1874, ENR is a U.S. construction media outlet that publishes an annual list of the 'Top 250 Global Contractors' based on overseas revenue and other metrics. Korean construction companies also use the ENR ranking as a key indicator when assessing overseas performance and competitiveness.

The Korean government has recently intensified its efforts to discover U.S. investment-oriented development projects. Last month, the Ministry of Land, Infrastructure and Transport explained more than 10 construction projects proposed by the U.S. government to domestic companies. This is the first time the government has directly acquired overseas project opportunities and then introduced them to local firms. The Korea Overseas Infrastructure and Urban Development Corporation (KIND) also plans to expand investment-oriented projects where it invests equity and Korean companies handle EPC (engineering, procurement, and construction).

As interest in U.S. projects rises, it becomes increasingly important to consider the cost controls and contractual practices of local clients. Having closely observed construction trends in the United States, Deputy Editor Rubenstone cited the core purpose of PPPs to explain why American public agencies are stringent about construction costs. Rubenstone said, "Many U.S. public agencies choose PPPs to control long-term costs, which is why they are highly sensitive to cost increases on the private partner’s side." He added, "With both construction and material costs fluctuating, it has become more challenging to project business expenses several years ahead."

There have even been cases where main contracts were canceled after price negotiations broke down. Deputy Editor Rubenstone cited the 2024 reconstruction project of Baltimore’s Francis Scott Key Bridge—which involved major U.S. constructor Kiewit—as an example. Kiewit took part as a Phase 1 contractor and completed about 70% of the design, but failed to reach an agreement on Phase 2 construction costs with the client, the Maryland Transportation Authority (MDTA).

The MDTA decided in April not to continue with the construction contract after stating that Kiewit's proposal far exceeded its own cost estimates. This was possible due to an "off-ramp" clause in the Progressive Design-Build (PDB) method, which allows for the suspension of subsequent phase contracts in the absence of price agreements. Kiewit continues to perform the existing Phase 1 contract work. Deputy Editor Rubenstone commented, "The projected costs for the construction phase were higher than what the public agency could accept. Accordingly, the client decided not to proceed with Kiewit for the construction phase based on the contractual terms and will seek a new partner in the market."

In the United States, beyond construction costs, labor and environmental regulations also add uncertainty to project schedules and budgets. Some federally funded projects require project labor agreements (PLAs) and payment of local prevailing wages. Environmental reviews and lawsuits can cause further delays. Deputy Editor Rubenstone also pointed out, "Permits, labor regulations, and political changes all impact U.S. PPP projects." This is why the Ministry of Land, Infrastructure and Transport is leveraging G2G (government-to-government) diplomatic capacity and policy fund equity investments to secure safer access to overseas markets.

Rubenstone named contract and project execution practices as additional challenges foreign firms face in U.S. projects. "Many U.S. construction projects are still carried out under the design-bid-build method," he said. "Construction companies often have to find and hire various subcontractors for each task and manage both costs and risks." He further explained that "for foreign contractors accustomed to doing all EPC work in-house and dealing directly with public clients, working in consortia or JVs with firms that may have different long-term interests can be burdensome."

As an example of successful localization in the U.S. market, he mentioned the acquisition of local firms by global players. "Some major global EPC companies have established a presence by acquiring existing U.S. companies and incorporating them into their portfolios, enabling them to combine local expertise with global resources," he said. Deputy Editor Rubenstone identified Turner Construction, a subsidiary of Spain’s ACS Group, and Weitz, acquired by Egypt’s Orascom Construction, as success stories of localization. He also noted that "among Korean companies, there are those that have succeeded in the U.S. construction market through their subsidiaries," referencing Doosan's acquisition of U.S.-based compact equipment manufacturer Bobcat.

This content was produced with the assistance of AI translation services.