Mr. Tom Parlon:

Those currently operating projects are still here. One of the companies that went out of business had signed a contract for a substantial road project, but had not begun it. I understand that the increase in the price of diesel was a factor. Large excavators that are used to haul a lot of stuff out and in use a lot of diesel The increase in the price of diesel over the past three or four months has caused a 10% increase in the overall cost of a contract. That situation is untenable.

The report we commissioned shows that contractors are only putting about 2.2% aside for risk. Clearly, if people are taking on an inflation rate of 15% or 20%, they are losing a lot of money. Businesses could very well go broke if their cash flow runs out. Other business may decide that a project is no longer tenable. People have a responsibility to not trade recklessly and may decide to cease working on a contract. We know from past experience-----