Locked and Dammed: Ohio River Project Decades Late, Billions
Over
Pittsburgh Post-Gazette
19 March 2012
By Len Boselovic /
This is the second of a four-part series.
OLMSTED, Ill. — The motto of the U.S. Army Corps of Engineers is
"Essayons" -- French for "Let us try."
Since 1993, the Corps has been trying to build locks and a
2,500-foot dam across the Ohio River at Olmsted, Ill., about 20
miles upriver from where the waterway joins the Mississippi River.
When the project was authorized in 1988, the estimated cost was
$775 million and the Corps expected to complete it by 2000.
Nearly two decades later, the Corps has spent double the original
estimate and the work is only 40 percent complete. Officials
estimate it will take another $1.6 billion to complete by 2024 --
24 years later than expected.
The latest price tag on the project, $3.1 billion, added $1
billion to an estimate made just a year ago. The news, delivered
at congressional budget hearings this month, stunned industry
officials even though they had learned last summer that another
hefty price hike was in the works.
"It's a huge, catastrophic blunder for the Corps," said Dale Roth,
of the Carpenters' District Council of Greater St. Louis, which
represents half of the union workers at the 160-acre project.
"If you were the CEO of a major corporation and made a $3 billion
blunder, somebody would be out of a job," he said.
In a statement, the Corps said the original $775 million estimate
was too low and that "multiple factors" have caused estimates to
increase over the last 15 years. They include challenging
conditions at the construction site and inflation. The Corps is
investigating "potential improvements in construction methods,
contracting techniques and management approaches," the statement
said.
Unanticipated costs are to be expected at a project the magnitude
of Olmsted, which occupies riverfront property that could hold 150
football fields. One transportation official compared it to the
Egyptians building the pyramids.
But cost overruns have gone viral with the dam at Olmsted, which
contractors started building in 2005. Three years earlier,
contractors completed the twin 1,200-foot-long locks adjacent to
the dam at a cost of $271.5 million. Those locks sit idle until
the dam is completed.
Some of the unexpected costs can be blamed on weather and river
conditions, which limit the time crews can spend building and make
the work more tedious. Other added costs stem from the
congressional system of piecemeal funding, the Corps' fateful
decision on how to build the dam and the fact that no contractor
would bid unless taxpayers assumed the risks of construction
delays pushing up the price.
The fourfold increase in price has created a dam of its own.
Because Olmsted devours the lion's share of the $170 million
available to the Corps each year to replace or repair aging river
infrastructure, work on other critical projects -- including
modernizing locks and dams on the Monongahela River -- proceeds at
a snail's pace.
Locks and dams -- which move about 550 million tons of coal, grain
and other vital commodities annually -- are falling apart faster
than Congress is providing money to replace or repair them.
"This is a ticking time bomb. It's not a matter of if but when
there will be a catastrophic failure on our inland waterway
system," said Michael Hennessey, chairman of the National
Waterways Foundation, a research group funded by companies that
move goods on rivers.
Olmsted is the Corps' top priority. Its new locks and dam will
replace two sets of locks and dams upriver, near where the
Tennessee and Cumberland rivers join the Ohio. Those handle about
90 million tons of cargo annually, making them the busiest locks
on the 11,000-mile inland waterways system.
"It's the No. 1 priority, and that's where all the money goes. No
other place sees any money because of it," said John Fedkoe, the
owner of TowLine River Service, a Neville Island barge operator.
Pushing completion of the project back a quarter of a century
means that many more years of spending millions of dollars to
maintain facilities elsewhere that are slated for destruction.
The Corps faces the same Sisyphean task at its No. 2 priority:
modernizing locks and dams on the Monongahela River at Braddock,
Elizabeth and Charleroi. A new dam at Braddock was finished in
2004, the year the entire project was supposed to be completed.
Instead, that is the only component of the $1.4 billion project
that is operating. Once new locks are built at Charleroi, the dam
and locks at Elizabeth will be torn down, eliminating one stop on
the 30 miles of river between Charleroi and Braddock.
The Corps expects to complete the Mon project in 2024 at the
earliest. Until then, it must keep the 105-year-old locks and dam
at Elizabeth and a Depression-era lock at Charleroi patched
together so the 10 million tons of coal and other commodities that
move along that stretch of river each year can get to the
industries and consumers who depend on them.
Among the major structural problems are a corroding dam foundation
at Elizabeth and deteriorating, unstable concrete walls at
Charleroi.
If stop-gap measures fail, Corps and industry officials said the
dam would be out for at least three years, closing the Mon to
barges moving coal to power plants. Consumers and industry would
face $1 billion in extra electricity costs, according to a study
prepared for the Corps last year.
The irony of caring for increasingly obsolete river infrastructure
slated for the scrap heap is not lost on one member of Congress.
"We've been spending money to keep the Elizabeth dam from
collapsing so we can tear it down," said U.S. Rep. Tim Murphy,
R-Upper St. Clair.
'... down the Olmsted hole'
Mr. Roth, the union critic of cost overruns at Olmsted, is a
director of the Waterways Council, whose members include barge
operators and commodities producers. Those companies pay a
20-cent-a-gallon tax on the diesel fuel that powers barges.
The tax revenue, about $85 million a year, provides 50 cents of
every $1 the Corps spends at Olmsted and every other major
construction project. Matching funds are provided by U.S.
taxpayers.
That means about $170 million is available each year to fund an $8
billion backlog of work needed to replace or make major repairs to
locks and dams on the rest of the nation's rivers.
"There are a number of projects on our rivers that are going to be
frozen in their tracks if we keep pouring money down the Olmsted
hole," said Dan Mecklenborg, senior vice president of Ingram
Barge, a Nashville, Tenn., company that operates a fleet of nearly
4,000 barges.
He and other industry officials see red any way they look at
Olmsted. The latest $1 billion cost increase amounts to $225
million more than the project's original estimated cost. The Corps
already has spent $1.5 billion -- double the original cost -- with
half of the money coming from the tax on diesel fuel.
"We have already paid for all of the original estimate," said
Stephen D. Little, president of Crounse Corp., a Paducah, Ky.
company that operates 1,000 barges and moves 30 millions tons of
cargo a year.
Industry officials are disturbed that they have no say in how
Congress funds the projects or how the Corps manages them.
"We're expected to write a blank check. We have to pay for half of
this, and we have no control over it," said Peter Stephaich,
chairman of Campbell Transportation, a Houston, Pa., company that
operates a fleet of 500 barges.
The Olmsted project is on the site of a former cat litter plant,
964 miles down the Ohio from Pittsburgh. The depth of the river at
the construction site fluctuates 40 to 45 feet a year depending on
snow and rain upriver. That limits the time crews can spend
working in the river.
That's only one factor that affects what it will cost to build the
dam.
There's also the New Madrid fault, located about 30 miles away in
Cairo, Ill. Seismologists say if a major earthquake occurred east
of the Rockies, its source would most likely be the New Madrid
fault.
"It played into every bit of the design," said Bill Gilmour, the
Corps' resident engineer at Olmsted.
But two other challenges loom even larger than Mother Nature.
When the Corps builds an Army base or some other military project,
Congress provides all the money upfront. With funding in hand, the
Corps can purchase construction materials and schedule work
efficiently.
But lock and dam projects are subject to the whims of politicians
and the federal budget process. Funding varies from year to year,
forcing the Corps to break up massive projects into bite-size
chunks and multiple contracts.
At Olmsted, that means purchasing steel, concrete and other
materials in installments and at higher prices. It means
mobilizing and demobilizing construction equipment and a work
force that ranges from 250 to 500 depending on funding and
weather.
The results are cost overruns and construction delays.
"It's not an unfortunate outcome. It's a guaranteed consequence of
the way we do things," said Michael Steenhoek of the Soy
Transportation Coalition, an industry group lobbying for changes
in how waterway improvements are funded.
"How you allocate money is just as important as how much you
allocate," he said.
A bit like giant Legos
Another sore point is the way Olmsted's dam is being built.
Traditionally, construction crews embed massive walls of sheet
steel in the river to create a so-called cofferdam that diverts
water around a rectangular section of the river bed. Water inside
the cofferdam is pumped out, creating a dry hole where the dam can
be built.
In 1997, Corps officials decided to build the Olmsted dam "in the
wet." They believed that would save $64 million and shorten the
construction schedule.
Building "in the wet" involves assembling 42 massive shells made
of concrete and steel on dry land, moving them into the river and
guiding them 60 feet down to the bottom where a network of more
than 3,000 24-inch diameter tubes anchors the dam's foundation.
The largest shells weigh 3,700 tons and are 125 feet long, 102
feet wide and 30 feet high. Each shell takes six to nine months to
build.
When river conditions are tame enough, a 10-story, 5,300-ton crane
that travels on rail lifts a shell from where it is assembled to a
cradle that rests on 104 23-inch wheels.
From there, the shell and the cradle roll down an incline at a
pace of 1 foot per minute, taking two days to reach the river
bank. It is transferred to a catamaran barge, which moves it into
position over the network of tubing, then gradually lowers it to
the river bottom. The margin of error for placing the shell on the
foundation is three inches or less.
From dry land to river bottom, the shell's journey takes three
weeks.
Last summer, workers at Olmsted expected to set seven shells. A
hole was dug in the river bottom big enough to accommodate them.
But because of spring flooding and high river speeds caused by a
drought last fall, workers only had time to set three shells.
When construction crews return this summer, they will have to
clear out a 25- or 30-foot mound of sand, mud and other debris
that settled in the hole. Clearing the debris will take several
weeks or more, Corps spokesman Jon Fleshman said.
The way the contract was bid is also an issue. The Corps
originally sought a fixed-price bid that would have made the
winning contractor assume the risk of completing the project on
time and on budget.
"Nobody bid on the job," said Col. Luke T. Leonard, who in July
took command of the Corps' Louisville, Ky., district, which
oversees Olmsted.
The Corps switched to a contract that required the government to
reimburse contractors for costs and pay them a fee for doing the
work. When it was awarded in March 2004 to a joint venture between
Washington Group and Alberici Constructors, the contract was
valued at $564 million.
"We pay for everything. If their guys work overtime, we pay," Col.
Leonard said. "We absorb the risk here."
Col. Leonard said the Corps will re-examine its decision to build
in the wet and whether it makes sense to switch to more
conventional methods for a 1,700-foot section of the dam.
Len Boselovic: lboselovic@post-gazette.com or 412-263-1941.