Granite Construction and Oregon Department of Transportation Reach Agreement to Resume Work on US 20 Project in Oregon

WATSONVILLE, Calif., May 22 /PRNewswire-FirstCall/ -- Granite ConstructionIncorporated (NYSE: GVA) announced today that Granite Construction Company, awholly owned subsidiary, and the Oregon Department of Transportation ("ODOT")have reached an agreement to resume work on the US 20 Pioneer Mountain toEddyville Design-Build project.

Granite President and Chief Executive Officer, William G. Dorey said,"After months of committed value engineering efforts, I am very pleased thatGranite and ODOT have collaboratively found a solution to complete this veryimportant project for the state of Oregon."

In July 2005, ODOT awarded the $130 million highway realignment contractto Yaquina River Constructors ("YRC"), a joint venture led by GraniteConstruction Company and Wilder Construction Company (subsequently acquired byGranite in January 2008). During the course of construction, numerous andmassive landslides at critical sections of the project were discovered. As aresult of large additional anticipated costs and time impacts caused by theselandslides, in July 2007, Granite and ODOT agreed to a temporary suspension ofthe project.

After several months of geotechnical exploration, redesign andnegotiations, Granite and ODOT have executed a change order that ends thesuspension and allows Granite to immediately resume work activities on theproject. Under the terms of the change order, the original contract willremain in place with added modifications to the scope of work includinglandslide stabilization work, environmental monitoring and compliancemodifications as well as a revised completion date of 2011.

ODOT and YRC officials estimate the new contract value to be approximately$177 million. ODOT will hold a separate reserve fund for contingencies foritems such as fuel, materials and labor inflation to be paid to YRC ifnecessary.

"We have a lot of very difficult work out in front of us. If we are ableto perform that work efficiently and with no significant issues going forward,there is the opportunity that this project could improve financially over thenext several years. However, it is too soon for us to make any adjustments inour current forecast until a significant portion of this work is behind us,"said Dorey.

As part of the expanded scope of work to stabilize landslides, ODOT hasbeen working with various regulatory agencies to update the project’senvironmental permits. These updates should be completed and revised permitsshould be issued by mid-June. Both ODOT and YRC have worked hard to protectthe environment and this cooperative and intensive approach has resulted in anexemplary record of storm water management over this past very wet winter.

Scope of the new seven-mile project also includes moving more than 4million cubic yards of earth and the construction of eight new bridges. YRC iscurrently mobilizing equipment and personnel to the site and anticipatesemploying approximately 100 to 125 workers this summer.

About Granite

Granite Construction Incorporated is a member of the S&P 400 Midcap Index,the Domini 400 Social Index and the Russell 2000. Granite ConstructionCompany, a wholly owned subsidiary, is one of the nation’s largest diversifiedheavy civil contractors and construction materials producers. GraniteConstruction Company serves public and private sector clients through itsoffices and subsidiaries nationwide. For the 5th straight year, Granite wasnamed to FORTUNE’S List of 100 Best Companies to Work For. For moreinformation about Granite, please visit their website athttp://www.graniteconstruction.com.

Forward-Looking Statements

This press release contains forward-looking statements, within the meaningof Section 27A of the Securities Act of 1933, as amended, and Section 21E ofthe Securities Exchange Act of 1934, as amended, which represents ourmanagement’s beliefs and assumptions concerning future events such asstatements related to the existence of bidding opportunities and economicconditions on the Company’s future results. Additionally, forward-lookingstatements include statements that can be identified by the use of forward-looking terminology such as "believes," "expects," "appears," "may," "will,""should," "look for," "could," or "anticipates," or the negative thereof orcomparable terminology, or by discussions of strategy. All such forward-looking statements are subject to risks and uncertainties that could causeactual results of operations and financial condition and other events, as wellas the timing thereof, to differ materially from those expressed or implied insuch forward-looking statements. Specific risk factors include, withoutlimitation, changes in the composition of applicable federal and statelegislation appropriation committees; federal and state appropriation changesfor infrastructure spending; the general state of the economy; jobproductivity; accuracy of project estimates; weather conditions; competitionand pricing pressures; and state referendums and initiatives. You should notplace undue reliance on these forward-looking statements, which speak only asof the date of this news release. You should also understand that manyimportant factors in addition to those discussed, referred to or incorporatedby reference in this press release, could cause our results to differmaterially from those expressed in the forward-looking statements. In light ofthese risks and uncertainties, it is important to be aware that the forward-looking events discussed in this release may not occur. We undertake noobligation to revise or update publicly any forward-looking statements toconform the statement to actual results or changes in the Company’sexpectations.

For further information regarding risks and uncertainties associated withGranite’s business, please refer to the "Management’s Discussion and Analysisof Financial Condition and Results of Operation" and "Risk Factors" sectionsof Granite’s SEC filings, including, but not limited to, its annual report onForm 10-K and quarterly reports on Form 10-Q, copies of which may be obtainedby contacting Granite’s investor relations department at (831) 724-1011 or atGranite’s website at http://www.graniteconstruction.com.

SOURCE Granite Construction Incorporated