Posted on June 13, 2018
By David Wren, The Post and Courier
The Army Corps of Engineers is setting aside $49 million this year to help deepen Charleston Harbor to 52 feet — enough money, combined with a state loan, to let big ships navigate to the Port of Charleston’s busiest container terminal around the clock.
The funding is part of the federal agency’s annual work plan and was announced Thursday by politicians familiar with its budget. The Army Corps has not officially released its spending plan and a spokesman declined to discuss the details.
The $49 million in federal funds will be added to a $50 million loan the state Legislature is expected to approve in its upcoming fiscal year budget. That will pay to dredge the harbor’s entrance channel to the Wando Welch Terminal in Mount Pleasant, which handles roughly three-fourths of the port’s containerized cargo.
“It’s really a major achievement for us to be able to get that contract,” said Jim Newsome, president and CEO of the State Ports Authority. “Once we have that done, the rest of the project can be accomplished in a relatively straightforward way.”
Contract bidding should take place late this summer and dredging in that part of the harbor should start by the end of this year. It would be the third of at least five phases for the project, which started in March.
The dredging is necessary so large container ships loaded down with 14,000 or more cargo boxes can visit the port regardless of tidal conditions. Those heavy vessels have become a staple at East Coast ports since the Panama Canal expansion was finished in 2016, and there has been a rush to deepen harbors all along the coast to retain market-share.
While the $49 million in funding is more than the $17.5 million the Army Corps set aside in 2017, it’s still far short of the estimated $90 million the federal government would have to appropriate annually to keep the project on schedule for a March 2021 completion.
South Carolina legislators previously set aside $271 million for the state’s share of the $558 million project. The federal government is responsible for $287 million but has contributed just $66.5 million, including the funds announced Thursday.
Almost all of the dredging to date has been paid for by state funds, and federal dollars are expected to continue to lag annual needs.
A mathematical formula the Army Corps uses to determine how much money the project gets each year doesn’t account for cargo growth at the port — an average of 8.2 percent annually since 2013 — and South Carolina’s investment, giving the initiative an artificially low ranking on the federal agency’s cost-to-benefit ratio.
South Carolina Sens. Tim Scott and Lindsey Graham included a provision in pending legislation that might eventually update that formula, but any change would be subject to a future federal study and further action by Congress. The Senate is expected to vote on the legislation this summer and, if passed, it would have to be reconciled with a House version approved this week.
Newsome said the SPA will find money, either through loans or the port’s operations, to keep dredges working in the harbor even as the agency waits for federal funds to trickle in.
“We’re going to keep this project on track,” he said. “We all know the limitations of funding from the federal government. I think it’s unfortunate, but efforts are being made to correct some of those limitations.”
Barbara Melvin, the authority’s vice president for terminals and operations, said delaying dredging until federal money is approved isn’t an option.
“If you wait to receive federal funding, it escalates the costs tremendously,” she said. “So you have a double hit — you lose business opportunity and you have an escalation in your project costs.”
Even if South Carolina has to front most of the money for the project, Newsome said he’s confident the federal government will eventually pay back its share.
Source: The Post and Courier
