Posted March 19, 2019
Two of the biggest container ports on the U.S. East Coast received top billing from President Trump’s 2020 budget plan that allows their harbor deepening projects to remain on schedule for completion within three years.
The South Carolina Port Authority (SCPA) was budgeted for $138 million to continue deepening Charleston harbor to 52 feet. The Georgia Ports Authority (GPA) is budgeted to receive $130 million to continue dredging the Savannah harbor to 47 feet.
The projects are the highest funded on the U.S. Army Corps of Engineer’s fiscal 2020 construction budget list. Funding is subject to Congress passing appropriations legislation later this year through the Energy and Water appropriations bill.
Significantly for the Port of Charleston, it’s benefiting from a recalculation made last year by the Corps of Engineers in its benefit-to-cost ratio – driven by recent cargo volume growth – that made it eligible to make the 2020 budget.
“The Charleston Harbor Deepening Project is a strategic priority for South Carolina, and it will be a driver of economic development across our state and region well into the future,” said SCPA president Jim Newsome. He said that by the time the project is completed in early 2021, the state will have invested more than $2 billion in port infrastructure to support population and manufacturing growth in the region.
“Our deepening project answers the need for a Southeastern port to handle 14,000 to 18,000 twenty-foot equivalent [TEU] container unit vessels drafting 50 feet or more without significant depth and other navigation restrictions,” Newsome stated.
For GPA, it’s the third year in a row that it is receiving full federal appropriations for its Savannah Harbor Expansion Project, which is slated for completion in 2022.
“Funding at this level, which represents full capability for the coming year, ensures that the project remains on schedule and that the United States will soon benefit from the substantial return on investment that the Savannah Harbor Expansion Project represents,” said GPA Chairman Jimmy Allgood.
The 4.36 million TEUs handled at the Savannah port in 2018 made it the second-busiest container port on the East Coast after the New York/New Jersey port complex and fourth-busiest in the United States, with its gates processing 10,000 to 12,000 container drayage trucks per day.
The funding for the ports in Charleston and Savannah reflects the emphasis by the Trump administration’s budget to complete ongoing construction projects overseen by the Corps of Engineers that show a high investment return nationally, as opposed to funding new projects.
“By proposing not to start any new construction projects, the budget enables the Corps to focus on completing these ongoing priority projects faster and at a reduced cost, allowing the affected communities to see their benefits sooner,” according to budget documents.
The administration’s $4.8 billion proposed for the Corps of Engineers’ entire civil works budget for 2020 is a slight increase from what had been proposed last year for 2019, but $2.2 billion less than what was actually enacted.
The Harbor Maintenance Trust Fund (HMTF), which is funded by a usage tax paid by cargo owners to maintain harbor channels for commercial vessels, was budgeted for $965 million, as was the case in the 2019 budget. However, the 2020 budget includes a proposal to make the HMTF a separate line item for appropriations purposes, a change that the American Association of Port Authorities (AAPA) opposes.
“While the intent is to give more visibility to harbor maintenance tax spending, it would result in a restriction of how the Corps spends money when its budget has not passed in time,” the AAPA told FreightWaves in a statement, noting that only once during the last 15 years has the agency not been subject to a continuing budget resolution in Congress. “AAPA will again file objections to the FY 2020 HMTF proposal.”