DALLAS – President Donald Trump's top campaign promise – to build a "great wall" between the United States and Mexico – will begin to take shape in March as the government solicits proposals for design and finance of the multi-billion-dollar barrier.
Despite some skepticism in Congress, Trump's administration is wasting little time in promoting the project. "We're building the wall," Trump told the conservative CPAC convention Friday. "In fact, it's going to start soon, way ahead of schedule, way ahead of schedule. Way, way, way ahead of schedule. It's going to start very soon."
Trump could talk specifics for the wall in his first address to Congress Tuesday, when he is expected to outline his budget proposals and discuss a $1 trillion infrastructure program.
In a notice on the federal government's contracting Web site, the Department of Homeland Security said that it would ask for bids for "prototype" border wall construction March 6, with evaluation of the proposals by March 20. In a second round, the department will take full proposals by March 24, including cost.
"Multiple awards are contemplated by mid-April for this effort," the notice states. "An option for additional miles may be included in each contract award."
A Department of Homeland Security internal report said the first phase is expected to cost about $350 million for 26 miles of wall near the cities of San Diego, Calif., and El Paso, Texas, and in Texas's Rio Grande Valley, according to Reuters.
The second phase of construction proposed in the report would cover 151 miles of border in Texas' Rio Grande Valley; Laredo, Texas; Tucson, Ariz.; El Paso, and Big Bend, Texas. The third phase would cover an unspecified 1,080 miles essentially sealing off the entire U.S.-Mexico border.
Noe Hinojosa Jr., chief executive of the financial advisory firm Estrada Hinojosa & Co., said the plans for the wall, a crackdown of undocumented immigrants and plans to renegotiate the North American Free Trade Agreement have already had an impact on some of his clients on the border.
"One thing is for certain, the border economy is changing," Hinojosa said. "I've got a couple of clients that are already expecting a tough year. They are watching their budgets very closely."
Traffic on bond-financed toll bridges on the Rio Grande has already dropped, Hinojosa said. So far, commercial traffic has not declined, he said.
Ken Simonson, chief economist for Associated General Contractors, said that bond issuers such as the Texas Department of Transportation could also see higher costs as well as more demand for roads in the region where the wall is undergoing construction.
"I think that's a great example of an agency that would face higher costs," Simonson said. "Also, they would have to pay more to draw contractors in. Many contractors would be moving to the border itself.
"One other complication is that if this is happening at the same time that many people are being deported, then that's going to add to the labor scarcity," Simonson said.
Although candidate Trump called construction of the wall "easy" and estimated its cost at between $8 billion to $12 billion, DHS' internal report puts the cost closer to $21.6 billion, according to Reuters.
Congress is expected to provide initial funding for the wall by April or May, according to the DHS report, with construction beginning in September.
Trump has guaranteed that Mexico will reimburse the U.S. for the cost of building the wall, but Mexico's president Enrique Pena Nieto denies that his country will do so.
Meanwhile, the U.S. government has begun seeking waivers to address environmental laws on building the wall in some areas, according to the DHS report. The government has begun working with existing contractors and planning steel purchases for the project, according to Reuters.
Some congressional Republicans have said they would not support the financing of the wall without spending cuts to offset the new outlays.
"I have concerns about spending un-offset money, which adds to the debt, period," Texas Sen. John Cornyn told CNN. "I don't think we're just going to be able to solve border security with a physical barrier because people can come under, around it and through it."
Alaska Sen. Lisa Murkowski also said she would not vote for new spending on the wall without offsets.
Along the Texas-Mexico border, local, state and congressional representatives have adamantly opposed the wall. At The Bond Buyer's Texas Public Finance Conference in Austin earlier this month, Laredo Mayor Pete Saenz said he explained the downside of the wall to Trump to no effect.
Saenz said the tributaries to the Rio Grande would be affected while also inhibiting valuable trade.
Under the water treaty governing the Rio Grande, both nations are forbidden to build any structure in the river's flood plain. In the Lower Rio Grande Valley, where the river twists in multiple directions, that led to construction of fencing that created a "no man's land" between the fence and the water's edge.
While environmental organizations such as the Sierra Club have campaigned against what they call a "reckless approach to border security," they are generally brushed aside in the region and largely ignored by Trump and Republicans in Congress.
Under the 2005 Real ID Act, the president was granted authority to waive any law while building walls and roads along the U.S.-Mexico border.
"In total, 37 laws were discarded along more than 500 miles of borderlands, making it the largest waiver of law in United States history," according to the Sierra Club. "Most of the 653 miles of existing border barriers were built without regard for important protections such as the Clean Air Act, Clean Water Act, and Endangered Species Act."
In addition to the cost of actually building the wall, government debt issuers, especially in the fast-growing state of Texas are expected to face higher construction costs as they compete for materials and labor.
Projects such as the expansion of Interstate 35, development of Interstate 69 and construction of schools for fast-growing districts could find costs rising, according to some experts. Billions of dollars of pipeline projects and construction of natural gas liquefaction plants are also underway.
Even before wall construction begins, government and private contractors are already facing higher costs. The producer price index for goods used in construction rose 3.8% from January 2016 to January 2017, according to analysis by the Associated General Contractors of America.
"Steep price hikes have hit a wide range of key materials used in construction in the past few months, and contractors have received numerous letters from vendors announcing large additional increases in the next month or two," said Ken Simonson, the association's chief economist. "For the most part, contractors cannot pass these costs along on projects already underway, and the data show they are not yet able to price new buildings at a level that reflects their rising materials and labor costs."
Analysis by the Portland Cement Association said Texas has the longest unprotected border of the four border states at 217 miles. The estimated total amount of cement needed would be between 1% and 5% of annual Texas cement capacity.
"This demand could easily be supplied by Texas cement producers, even in a robust economy, as current capacity utilization is running at 79.3%," the association reported.
The PCA considered a high and low scenario for the dimensions of the wall. The lowest height of the wall is assumed to be 20 feet, and the highest was assumed to be 60 feet. The narrowest wall was assumed to be 8 inches thick, and the widest was 12 inches.
The PCA estimates that subtracting existing fences and natural barriers from the 2,000 mile border could leave about 960 miles of "wallable" border.
James Kee, president and chief economist for South Texas Money Management, said the construction of the wall will be positive for the region where the work is taking place but negative for the other states paying for it.
"So I look at it as a zero-sum affair in which Texas gains what the other 49 states lose in payments," Kee said in a recent report. "Economic benefits would likely be highest for border towns and materials/engineering firms in Texas in general and south Texas in particular.
"Like most public spending projects, I think the impact will be positive but transient," he said.
Analysts at investment bank Bernstein calculated which materials firms might most benefit by location. The Mexican building company Cemex came out on top to provide materials on both sides of the border.
"As ludicrous as the Trump wall project sounds (to us at least), it represents a huge opportunity for those companies involved in its construction," a Bernstein analyst said in a research report.