FAIRFIELD (BCN) -- A pavement improvement project on a 50-year-old section of Interstate Highway 80 in Fairfield is the first infrastructure project in California funded by federal stimulus money.

On Thursday morning Governor Arnold Schwarzenegger attended the groundbreaking ceremony for the $13.5 million project, which is fully funded by American Recovery and Reinvestment Act money. His office claims the project will create more than 200 construction jobs.

The section of I-80 between state Highway 12 and Air Base Parkway is used by more than 200,000 vehicles a day.

"The groundbreaking of this project illustrates how quickly and effectively we are pumping Recovery Act funding into our economy to create jobs for Californians and invest in the future of our state’s infrastructure," Schwarzenegger said.

The project will resurface and repair the freeway, extending pavement life and improving road conditions for motorists and truckers. It is expected to be completed by the end of this year.

Top Grade Construction of Livermore submitted the lowest bid, which was 40 percent lower than Caltrans' cost estimate. The savings will be used for other highway projects, Schwarzenegger's office said.

California is expected to receive nearly $850 million in federal economic stimulus money this month for transportation projects.

Estimates indicate the state will receive nearly $2.6 billion from the Recovery Act for highways and local streets and $1 billion for transit projects, according to the governor's office.

Discretionary programs could add another $300 million and Schwarzenegger’s office said the state intends to be competitive in securing a portion of $8 billion set aside nationally for high-speed and intercity rail. 
           
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