Granite Construction Requests Termination of Contract for Highway Project in Oregon

WATSONVILLE, Calif., April 11 /PRNewswire-FirstCall/ -- GraniteConstruction Incorporated (NYSE: GVA) announced that Granite ConstructionCompany, a wholly owned subsidiary, has formally requested that the OregonDepartment of Transportation ("ODOT") terminate its contract to build the US20 Pioneer Mountain to Eddyville Design-Build project. The $130 millioncontract was awarded in July 2005 to Yaquina River Constructors ("YRC"), ajoint venture of Granite and its majority-owned subsidiary, WilderConstruction Company.

While clearing and excavating the site, numerous and massive landslidesthroughout the seven-mile project site were discovered. Some of theselandslides are at critical sections of the project, including under bridgeabutments. The additional costs and time associated with these slides iscurrently estimated to be approximately $61 million and would add two years tothe duration of the project. After conferring with ODOT on the most costeffective way to deal with these differing site conditions, Granite requestedthat ODOT terminate the original contract with YRC. ODOT responded in writingthat it is willing to consider a negotiated contract termination. The agencywill discuss the proposal with YRC in the coming weeks to determine iftermination would be in the best interests of Oregon taxpayers.

"We do not believe that either YRC or ODOT could ever have known theextent or location of these massive ancient landslides until the site wascleared and construction was underway," said Mark E. Boitano, Granite ChiefOperating Officer. "We feel that by terminating the original Design-Buildcontract, ODOT will have more flexibility to address the landslide issuesseparately. Subsequently, ODOT can re-bid the work without having to incur thecost of delays and the accompanying overhead the project is now experiencing.The project design is approximately 98% complete, which will benefit ODOTgoing forward."

The scope of the original contract included the construction of at leasteight new structures over creeks, rivers and a railroad and also includedconstruction of retaining walls, culverts and drainage improvements. Theproject was originally scheduled to be completed in December 2009.

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 serves public and private sector clients through its officesnationwide. For the 4th straight year, Granite was named to FORTUNE’S List of100 Best Companies to Work For. For more information about the company, pleasevisit their website at www.graniteconstruction.com.

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," or "anticipates," or the negative thereof or comparableterminology, or by discussions of strategy.

SOURCE Granite Construction Incorporated