The cost of a two-year project to revamp deteriorating water and sewer lines along Kapi'olani Boulevard has ballooned by about $10 million from its original estimates in 2005, officials said.

The 45 percent cost increase is largely because of the island's construction boom and increased prices for petroleum — used not only to run equipment but to make asphalt and piping, officials said.

"People are facing tremendous cost escalation," Board of Water Supply spokeswoman Su Shin said. "Prices have gone through the roof."

City and state officials said the $32 million pricetag for the project, set to start in September, comes as the cost of crude oil continues to increase, pushing up construction costs and leaving contractors in a guessing game as they try to forecast oil prices for projects months or even a year away.

From 2004 to 2005, the price of asphalt alone went up 10 percent. Oil costs have soared since then, and the city expects bids due next week for a large, five-street repaving project will be well over earlier estimates.

"There's a lot of things that have happened since the end of 2005," said Marvin Char, chief of the civil division at the city Department of Design and Construction. "Oil prices have climbed. Just the demand for construction products is higher."

Department of Transportation spokesman Scott Ishikawa said rising asphalt prices increased the cost of a six-month project to repave a 2-mile stretch of Kalaniana'ole Highway, from Castle Junction to the Castle Medical Center, by $85,000.

The original cost of the project was $1.8 million.

"Obviously with the oil prices continuing to rise with the situation in the Middle East and other factors, we may have to increase the projected cost of projects," Ishikawa said, adding that if crude oil prices continue to increase, the state will likely have to "rearrange the budget" and put off some work until future fiscal years.

Meanwhile, contractors say the work of guessing how high fuel will go is difficult and inexact. Some have even come up short.

"The guessing game for the contractors is what the price is going to be six months to a year from now. It's a gamble," said Grace Pacific Vice President Bill Paik, adding that the costs of construction projects statewide have also increased because of a dearth of companies and people to do the work.

The Kapi'olani Boulevard work originally was slated to start in February but was pushed back while the board asked for a second round of bids to try to get the cost down.

Officials said it is one of the largest projects undertaken by both the Board of Water Supply and city in recent years.

The water board's work involves installing a 12-inch main to replace a 70-year-old line under Kapi'olani Boulevard. A new water main also will be put in at Atkinson Drive.

There have been 31 water main breaks of the Kapi'olani line since 1990, six of which happened this year or last. Shin said the new main is expected to last for 80 years.

During the project, the city will install a "cured in place" resin pipeline inside a 36-inch sewer main under Kapi'olani. The sewer main was installed in 1923.

City officials said the new work, coupled with emergency repairs in 2004, is expected to extend the life of the line by 50 years.

Shin acknowledged the work will be lengthy and inconvenient, but said it is necessary to avoid future water line breaks. "It impacts our customers and we know that," Shin said, adding that main breaks are often more disruptive.

"The work has to be done."

Part of the work will coincide with a two-phase project to re-pave Ala Moana and the tail-end of Nimitz Highway. The re-paving will only be done at night, though. Ishikawa said work will likely start at 8 or 9 p.m. and wrap up by 5 a.m.

The first part of the project, which will cost $12.5 million, will run from Fort Street Mall on Nimitz Highway to Pi'ikoi Street on Ala Moana.

Also, city Department of Design and Construction Director Eugene Lee said all of Kapi'olani Boulevard likely will be repaved with the help of a federal grant sometime after the sewer and water line project is complete.

He said the work will involve taking up the first few layers of the roadway, and will be more complicated than a more traditional repaving project.

It's still unclear how long the project will take and when it will start.

Reach Mary Vorsino at mvorsino@honoluluadvertiser.com.