VW pledge commitments reach half

VW pledge commitments reach half

June 3rd, 2009 by Mike Pare in News

About half of the more than $235 million in spending pledged by the state, Chattanooga and Hamilton County for construction of the Volkswagen plant is committed so far, officials said Tuesday.

City Chief Financial Officer Daisy Madison said 51.7 percent of the commitments overseen by the Industrial Development Board for the building of the plant are either spent or encumbered.

The major areas of spending include site preparation, infrastructure, and a training facility along with the visitors and welcome centers.

Ms. Madison said all the items are under budget to date.

City Engineer Bill Payne told the board there is a risk that some spending may go over budget, but it's too early to tell.

"With any construction project, there's always that risk," he said.

He said there are negotiations with VW and the state over potential adjustments to future projects related to the plant.

The spending is part of the $577.4 million in city, county and state incentives to attract VW. State and local tax credits along with infrastructure, site and work force training costs were all part of the package.

The $1 billion VW plant is slated to start production in early 2011, creating about 2,000 jobs. A new midsize sedan aimed at American motorists is to be produced.

The plant's paint, assembly, and body shops are under construction. Work also has begun on a temporary visitors center and a training center.

In other business, the board approved a couple of contracts:

Thomas Brothers Inc. of Chattanooga won a $2.1 million contract for site work related to installing sewer and drainage lines around the plant's paint shop.

White Electrical of Atlanta received a $1.8 million contract to provide electrical switch gear connecting the paint shop to a substation.