Budget Revelations About Olmsted A Shocker
The Waterways Journal
20 February 2012
The presidents 2013 budget leads the river industry to believe
that the Olmsted Lock and Dam project may never be finished. It
could stop progress on other projects as well.
Olmsted was authorized in 1988 at a cost of $775 million with a
seven-year construction period. The new price tag is more than
$2.9 billion, and the government has added 10 years to the
construction schedule. As late as last year, the price tag for
Olmsted had risen to $2.1 billion. Now. it is $2.9 billion.
This development leads industry leaders to believe that "there
will be no meaningful investment in modernization of our aging
inland waterways infrastructure for a decade, or more. if Olmsted
continues down its current path."
Shakespeare was using a Bible reference when he wrote. "Neither a
borrower nor a lender be."
Government has blown the borrowing admonition completely out of
the water. Perhaps more applicable is the statement Jesus made to
the apostles about counting the cost. He suggested that they
evaluate the issue and make sure they could finish the course.
The biblical admonition was apparently ignored totally when it
came to Olmsted. We know Olmsted was being constructed under
experimental methods. But the Corps knew that, too. They have
modern computers, models, and calculators to help them figure out
various project elements. It took from 1904 to 1914 to build the
18-mile long Panama Canal. Most likely calculations were done by
pencil and brainpower. The builders of the Empire State Building
bought the site in 1929 for $16 million and opened the 102-story
building in May 1931.
Readers can find elsewhere in this issue detailed information
about what this budget revelation means to America's economy. But
it is pertinent to the issue that the U.S. has billions of dollars
worth of backlogged projects, many of which have been gathering
moss for decades simply because of poor planning and financing
techniques. Some have been deauthorized because the original
reason for construction no longer exists. Every businessman worth
his salt knows about "counting cost." Those who don't know have
great potential for failure.
Needless to say, Waterways Council Inc. is unhappy over this
budget revelation and is reacting to the delay and increase in the
price tag. The overall leap from $775 million in 1988 to $2.9
Billion today is a big jump. WCI says that under the current plan,
"there will be nothing for the authorized projects on the Upper
Mississippi River, no investment for the Illinois, the Ohio, the
Tennessee. the Cumberland. the Monongahela. or any other
construction on any other part of the system."
What is it that the federal government does not understand about
the importance of water transportation to the economic well-being
of the nation?
According to WCI, "The national economy will lose $700 million per
ear in benefits foregone by the delay in the Olmsted project
alone, as estimated by the Corps' own economists. Our nation will
be placing a risky 10-year bet iii relying on the 'Roaring
20s'-era facilities at Locks 52 and 53, which Olmsted was to have
Bungling this project is a tremendous burden on industry. which
pays 50 percent of the cost of construction plus a similar share
of cost overruns.
Some time hack, industry recognized that the governments present
business model "is broken and that we do not have an efficient way
to construct lock and dam projects." WCl reminds us that the
navigation industry, along with Corps of Engineers experts,
developed the Inland Waterways Capital Development Plan to address
these deficiencies and cap cost overruns. "If this plan were to be
used, it would deliver 25 projects in the next two decades instead
of the six that will be completed under the current process."
developers of the plan said. Interestingly. WO points out, "Panama
is proceeding toward completion of six Olmsted-sized major lock
expansions in 2014. below budget and ahead of schedule."
As for Olmsted. WCI says Congress must decide whether the
experimental methods being used at the construction site should
continue or whether they should return to traditional methods and
bring the cost back under control. "At minimum," writes WCI,
"Congress must act to relieve the Inland Waterways Trust Fund from
further obligation to the Olmsted project."