Streamlined approval process will save time and money for waterway construction.
BY SHERYL S. JACKSON
An 11-day shutdown of New Orleans’ Industrial Canal lock created a traffic jam of over 95 vessels along the Gulf Intracoastal Waterway in early January 2014. Three cracks in the 15-ft main steel gear in the lock delayed delivery of petrochemicals and other commodities with an estimated impact of $1 million a day.
“Limited funding for maintenance and replacement of locks and dams that have surpassed their intended age have left us with a chaotic patchwork of repairs throughout the country’s water transportation system,” explains Jimmy Christianson, director
of government affairs, federal & heavy construction division of the AGC of America. This pent-up need for repair or replacement of an aging infrastructure has focused attention on passage of the Water Resources Development Act (WRDA).
Although WRDA is not an appropriations bill, it serves as a roadmap that authorizes between 20 and 30 projects that are mostly new construction at an estimated cost between $10 and $30 billion, he explains. “In the 1980s and 1990s, WRDAs were passed every two years but since 2000, we’ve had seven-year gaps between passage of the Acts.” Because prices increase and deterioration accelerates in seven years, the actual cost of projects that make it to the appropriations stage increases significantly, he adds.
In addition to authorizing specific projects, the WRDA bill includes much-needed process reforms, points out Christianson. The current process to assess need, impact and cost of a project can mean the timeframe between identification of need to start of construction can take anywhere from 10 to 20 years, he explains. Multiple layers of reviews and requirements for different agencies create a burden that adds cost to the overall project and can result in a project that is out-of-date before construction begins, he adds. Reform of the study process will allow the U.S. Army Corps of Engineers (Corps) to get projects to the approval stage in a timely manner.
The WRDA bill limits study time to three years and a cost of $3 million by eliminating duplicative reports, streamlining approval processes, limiting timeframe for lawsuits related to the project and enabling innovative funding mechanisms that allow private-public partnerships to fund some projects. The bill also addresses the Harbor Maintenance Trust Fund appropriations and expansion of the type of harbor construction for which the funds can be used.
The seven-year delay between authorization for new construction projects along with the one-year budget process for funding Corps projects present several challenges to maritime and marine contractors, says Jamey K. Sanders, vice president, Choctaw Transportation Company, a Louisiana AGC and Mississippi Valley Branch member. “About 10 to 12 years ago, the budgeting process was fairly reliable and the Corps would let us know what maintenance or construction work would be scheduled for the following year,” he explains. With project authorization bills only passed every seven years and no Congressional budget passed since 2009, the Corps is unable to plan into the next year, he says. Although the Corps is able to continue funding ongoing projects through continuing resolutions, some of those projects come to a halt until the exact funding level is determined. “By the time appropriations are made, there are six months left in the budget year and the Corps must spend a year’s worth of money in six months,” he adds. “This means contractors’ employees, barges and equipment sit idle for six months, then have to meet tight deadlines, which increases costs and jeopardizes safety.”
While some of the reforms in the WRDA bill won’t solve the budgeting issue, the opportunity for innovative funding will be beneficial, says William H. Hanson, vice president of government relations & U.S. business development for Great Lakes Dredge & Dock Corporation, an AGC of California and Mississippi Valley Branch member. “We are working on the Miami harbor now on a Corps project authorized by Congress but funded by the port authority and the state of Florida,” he says. The $200 million was given to the Corps as the project manager but the project was fasttracked because it did not have to go through the congressional appropriations process. “There are several states that fund harbor or major waterway projects in an effort to move them forward.”
Port authorities along the East and Gulf coasts are especially focused on deepening channels and harbors to handle the larger ships that will travel through the expanded Panama Canal in 2015. “Expanding Gulf and Mississippi ports to handle larger ships is critical for access to global markets,” says Tony Zelenka, president of Bertucci Contracting Company, a Louisiana AGC and Mississippi Valley Branch member.
ECONOMY DEPENDENT ON WATERWAYS
While growing support for WRDA is positive, there is a lack of understanding among the general public about the importance of rivers and harbors to the U.S. economy, says Sanders. “Water transport is the cleanest, most environmentally safe way to move commodities.”
Keeping traffic moving on rivers has been an increasing challenge as traffic has increased and existing dams and locks have reached their maximum limits. The half-mile long Olmsted Locks and Dam project 17 miles upriver from the confluence of the Mississippi and Ohio rivers is more than 15 years past its original completion project, partly due to funding deficits. With 2020 set as a new completion deadline, Corps officials say the reduction in tow and barge delays will produce an estimated annual benefit of between $400 million and $700 million for the inland waterways shipping industry through savings of fuel, maintenance and other costs.
The Olmsted Locks will replace two aging locks upriver. “Locks that were expected to last 50 years are now 90 years old,” says Zelenka. Even if locks and dams are well maintained, deterioration due to age is inevitable. Unfortunately, in the economic downturn, routine maintenance was often overlooked as funds were used to address immediate repair needs.
“My company was affected by the shutdown of the Industrial Locks in New Orleans,” says Zelenka. Barges carrying materials for three major projects were sitting at the backside of the locks for seven days while employees, tugboats and barges were waiting on the other side. “We lost seven days of work but other barges were carrying materials to ships waiting in the harbor. Everyone had to wait.”
Protecting shorelines, inland areas and communities from flood and hurricane damage is another critical component of WRDA, says Leonard R. Vernamonti, vice president for federal programs at Cajun Constructors, a Mississippi Valley Branch member. “Inclusion of the Morganza to the Gulf project is critical to protect southeast Louisiana.” Morganza is a flood protection program comprised of a levee, lock and floodgate system designed to protect communities, marshes and inland waterways from the storm surge associated with a category 3 hurricane. “This protection is necessary for coastal areas to attract and keep businesses,” he adds.
AGC staff, leaders and members have worked to support passage of WRDA in a number of ways. In addition to individual members contacting their representatives, other efforts included meeting with representatives and committees to promote the benefits of:
- An adequate and efficient project authorization process;
- Spending harbor maintenance tax revenues on harbor maintenance;
- Addressing the Olmsted Locks and Dam project in a way that allows other necessary inland waterways projects to proceed;
- Environmental streamlining and project delivery acceleration through limiting the time to file lawsuits on projects under the National Environmental Policy Act and setting firm deadlines for pre-construction project studies; and
- Innovative financing methods — including a publicprivate partnership pilot program and Water Infrastructure Finance and Innovation Authority — that supplement, not replace, traditional government funding for water resources infrastructure.
WRDA will pass but the timeframe and final provisions are unknown, admits Christianson, who adds, “First quarter of 2014 is realistic. We definitely want it to pass before June at the latest or we’ll bump up against elections.” The Act lays out a better way for Congress and the Corps to do business, says Henry J. Massman, president, Massman Construction Company, an AGC member of multiple chapters. “The natural result of it will mean more work done for the same amount of dollars because it cuts waste by streamlining the process.”
He summarizes the benefits of passage of WRDA by saying, “For contractors, the Act will mean increased opportunity for federal waterways work, for businesses it means improved access to the global marketplace, and for communities along waterways it means improved flood and storm protection as well as jobs.”