Funding and financing marine infrastructure

Introduction

In the United States, the Army Corps of Engineers (Corps) is responsible for building and maintaining much of the federal water resources infrastructure and is responsible for the construction and maintenance of navigation projects on 12,000 miles of river channels that comprise 27 inland river systems, and 207 lock chambers at 171 lock sites. However, a crisis is developing in the area  of maintenance of lock and dam (L&D) infrastructure. The Corps faces a higher demand for building and maintaining its projects than available federal funding allows. This situation is raising basic questions about how the Corps functions, including the effectiveness, efficiency, and equity of Corps planning and implementation.

One of the primary objectives of the main study was to explore the potential for transitioning from the current funding approach in the US to the bonding style (lump sum up-front) approach used abroad.i In order to support this objective, this study analysed and compared economic, funding, and financing issues associated with three case studies of waterway infrastructure projects: McAlpine locks and dam in the US, the Panama Canal,  and Deurganck Lock in the Port of Antwerp, Belgium. This article summarises these case studies and their findings. The researchers concluded that it would be possible to maintain, improve, and ensure the long-term viability of US inland waterway infrastructure through alternative approaches, but significant changes would be required in regards to policies, funding mechanisms, programs, and procedures related to project planning and implementation.

United States – McAlpine locks and dam

The overall cost of the McAlpine locks and dam rehabilitation increased by 38 percent to a total cost of US$430 million due in large part to the almost 14-year duration from initial funding to completion (1996-2009). Cost overruns, design changes, and funding availability were constant challenges. For most fiscal year funding cycles, the McAlpine project did not receive the full-year funding capability limit (the amount of funds that can be obligated effectively and efficiently on a project in a fiscal year, consistent with law and policy). According to the Corps it received on average 61 percent of full annual capability funding levels. A bonding style approach (ie. 100 percent of funding for a project provided up front) would likely have resulted in significant reductions in the construction time for the McAlpine project.

Conservative construction schedule estimates suggest that the …

 

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C. James Kruse, director, Annie Protopapas, associate research engineer, David R. Ellis, research scientist and Nicolas D. Norboge, assistant research scientist, A&M Transportation Institute
Edition: Edition 61

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