If there is anything state and port officials have learned to deal with in their quest to deepen the Savannah harbor, it’s disappointment. From delays and study rewrites to environmental issues and lawsuits, the 15-year path to a 47-foot river channel has been anything but smooth.
Finally green-lighted in October by the Secretary of the Army, the $652 million civil works project needed an approval of its adjusted budget and a significant allocation of federal construction funds to finally begin digging.
They had hoped to find both in the president’s proposed 2013-14 budget Wednesday.
They got neither.
Instead, the White House asked for just $1.28 million in funding, with no mention of adjusting a budget that was set some 14 years ago.
“That was particularly devastating,” said U.S. Rep. Jack Kingston, a Savannah Republican. “We didn’t know how much money the project would get, but we didn’t think there would be a problem with adjusting the original budget.
“We really expected the president to authorize that.”
When the project was originally approved by Congress in the Water Resources Development Act of 1999, the expected funding level was set at $240 million.
“But, because of the potential for extended studies and delays, a clause (902) was added to allow for a budget adjustment down the road,” Kingston said.
“Doing a 902 adjustment was not unusual until earmarks disappeared. Now it’s a little more problematic.”
Kingston and other members of the delegation are putting together a letter to ask the president to adjust his budget request to include the 902 authorization, which would bring the project’s budget in line with the Record of Decision.
While the authorization is also included in the Water Resources Development Act of 2013, Kingston said he would prefer not to rely on that alone.
“At 5.5 to 1, this project has the highest benefit-to-cost ratio of any port project,” he said. “We have to re-open a discussion with the White House. That’s the most important thing right now.”
Georgia Ports chief Curtis Foltz agreed, praising Kingston and the rest of the delegation for taking that initiative.
“It’s encouraging, and it speaks volumes about the commitment and awareness of our delegation,” Foltz said, adding that addressing the U.S. Army Corps of Engineers’ recommended spending limit was necessary before anything else could move forward.
Once the 902 adjustment is OK’d, the Corps and the state — as federal and local partners, respectively — will sign a Project Partnership Agreement, outlining the obligations of each to the project.
That document has already been drafted, Foltz said.
Once that happens, construction can start, utilizing the state dollars already allocated, Foltz said.
The ‘what next’ timeline
There is a specific order in which issues must be addressed, according to Peter A. Oddi, deputy district engineer for programs and project management at the Corps of Engineers.
“Our immediate obstacle to deepening the harbor is the need to increase the total project cost to $652 million,” he said.
“This requires a congressionally authorized increase from the project cost identified in the Water Resources Development Act in 1999. That cost established an upper limit for the project, known as a Section 902 limit. The report we completed last year included additional project features and an accompanying higher total project cost.
“We will not move into construction if it would violate the Section 902 limit.
“We need congressional assistance, either in a WRDA or other legislation, to revise the total project cost as outlined in the April 2012 General Re-Evaluation Report and the Environmental Impact Statement.”
The funding in President Obama’s budget for fiscal 2014 along with additional funds from the non-federal sponsor may be used to begin pre-construction monitoring and complete design work necessary for an efficient start of construction, Oddi said.
“We also need to sign a Project Partnership Agreement (PPA) with the state of Georgia to define how the project’s study and construction costs would be shared between the federal and state governments.
“The PPA could allow the state to offer more non-federal funds up front instead of the yearly match identified in the standard cost share agreement. But a PPA cannot be completed until a revised total project cost is authorized,” he said.
State funds committed
State funds available for the project currently stand at more than $200 million.
“With the understanding that we’ll have a 60-40 federal-state split on funding, Georgia has lived up to its promises,” Gov. Nathan Deal said last week.
“We’ve now put aside $231 million, which is a significant portion of our share. The federal government has funded only a small fraction of its obligations, and we would like to see more and quicker progress on this front.”
That said, Deal pointed out inclusion in the budget, regardless of amount, indicates the administration’s support for the Record of Decision in October and gives the go-ahead for the project to move forward.
“Now that this is an approved project, we hope we’ll receive additional federal dollars through the Corps of Engineers budget for port projects,” Deal added.
Deal has made the harbor expansion, which Georgia officials have sought since the 1990s, a top priority for economic development.
The Port of Savannah handled nearly 3 million 20-foot cargo containers last year, making it the fourth busiest container port in the nation — second only to the mammoth port of New York/New Jersey on the East Coast — and the nation’s second busiest for containerized exports.
Since the president announced the National Export Initiative in 2009, which calls for U.S. exports to double by the end of 2014, exports from Georgia have grown 51 percent.
Last year, the value of goods exported from Georgia totaled $35.8 billion, the most the state has ever exported in a single year and an indication that Georgia companies are aggressively pursuing international markets.
‘A sense of urgency’
Savannah and other ports on the East and Gulf Coasts are racing to deepen their harbors to make room for the supersized cargo ships expected to begin arriving in 2015 after the Panama Canal finishes a major expansion.
No U.S. port from North Carolina to Texas has a waterway deep enough to accommodate the massive ships if they’re fully loaded and arrive at low tides.
Although project opponents are fond of pointing out that the Corps itself has indicated deepening isn’t expected to increase the volume of container traffic coming through the port, the reality is that not deepening could cost the port a significant amount of volume, relegating it to “lower tier” port status.
Last month, Roberto Roy, Panama’s Minister for Canal Affairs, visited the Port of Savannah, providing updates on his country’s massive canal expansion project and getting updates on efforts to deepen the Savannah River channel to the Garden City Container Terminal.
Calling the Port of Savannah “extremely important” to the success of the Panama Canal, Roy, who also serves as Panama Canal board chairman, urged state and local leaders to continue to make the dredging of the Savannah harbor a top priority.
“Savannah is a key player in the changes that will come when our new expansion is complete,” Roy said. “This port is a leader in global commerce and must be ready to accept the larger container ships that will come with the completion of the canal expansion.
“There is a real sense of urgency here.”
Making good on ‘We Can’t Wait’
In July, the president announced that seven “nationally and regionally significant infrastructure projects” at five major ports — including Savannah’s — would be put on a fast track designed to save time and drive better outcomes for local communities.
As part of its “We Can’t Wait” initiative, the White House said it would expedite Savannah’s deepening project and committed to having all federal reviews completed, with a Record of Decision coming no later than November.
Improvements at the ports of Miami, New York/New Jersey, Jacksonville, Fla., and Charleston, S.C., also would be expedited, the White House said.
“President Obama is committed to improving federal permitting and reviews to ensure that smart infrastructure projects like the Port of Savannah can move as quickly as possible through the decision making process, boosting job growth and strengthening the economy,” Jeffrey Zients, acting director of the Office of Management and Budget, said in July.
Technically, the president made good on that pledge when the Record of Decision came in a month ahead of his timeline.
Which is why it “makes no sense at all” that the White House would not continue to move the project forward, Foltz said.
“The state has the money set aside and is ready to spend it on deepening that will greatly improve our economy,” he said. “All the administration really has to do at this point is address the authorized spending limit the Corps has recommended.
“We can begin construction with state monies while our Congressional delegation continues to work on getting federal money.
“This needs to happen. We don’t need any more delays.”