Maritime stimulus

Maritime stimulus

Ports, waterways to benefit from economic recovery act.


By Eric Kulish




      There are a number of programs and new funding streams in the $787 billion economic stimulus plan enacted in February aimed directly or indirectly at helping ports and maritime commerce.

      The money is being distributed through the departments of Homeland Security, Transportation and Energy; the Maritime Administration; the U.S. Army Corps of Engineers; and other agencies.

      The Port Security Grant program, for example, received an extra $150 million on top of the $388.6 million appropriated for fiscal year 2009.

      DHS on April 8 announced how the annual grants are being divided up.

      Ports can use the security grants to cover expenses for security cameras, interoperable communication devices, lighting, access control systems and other investments for monitoring and protecting their complexes, conducting training and implementing the Transportation Worker Identification Credential. Money is divided among ports based on which risk tiers they fall. Tier 1 ports, for example, will receive the most money. Ports compete for the money available in each tier.

      But the money from American Recovery and Reinvestment Act will not be allocated entirely based upon risk levels at various ports. A key factor is how far along projects are in the planning process so that they can be quickly started and create jobs, said Ross Ashley, assistant administrator for the Grant Programs Directorate, at the American Association of Port Authorities' (AAPA) March 17 spring conference in Washington.

      Congress and the Obama administration have established strict criteria for states to show the public that the money from the massive spending plan is well spent. As a result, ports will have to report a lot of information about the status, rationale and benefits of their projects. Contractors that bid on the projects will have to share extensive information with the government such as the number of people hired and their wage rates.

      The accountability standards in the recovery plan are expected to carry over into the regular budget process, because taxpayers now expect to see measurable progress rather than anecdotal evidence that programs are succeeding, according to Ashley.

      'We've got to start pulling the yardstick out to see what's accomplished,' he said, because the government 'wants to be able to show the value of the funding that is going out.'

      Grants available from the recovery plan waive the normal 25 percent match required from marine terminals, port authorities or other applicants. (The non-federal cost share is half for private sector applicants.)

      Ashley said the grants office has also reduced the burden on the maritime industry by eliminating the need for the local match to be in cash and allowing in-kind matches (for equipment, not construction activities). Homeland Security Secretary Janet Napolitano also has the power to waive the matching requirement in individual cases, but he said the department intends to use the authority very carefully.

      'We want to make sure that the secretary is not viewed as just blanketly waiving matches so that some view that as an over interpretation of the statute, and then Congress might restrict it in the future,' Ashley said.

      Based on feedback from the AAPA, the agency is making three improvements to the port security grant program. For the first time, organizations can apply to cover their personnel costs to operate security systems they've installed. Guidance on how to incorporate those personnel costs will be issued soon and will be consistent with how personnel costs are treated in other grant programs, Ashley said.

      Construction costs for projects are still capped at $1 million, but the new rules expand the types of construction projects eligible for security grants.

      The grants directorate is also looking for ways to streamline the red tape necessary to meet environmental and historic preservation standards so that awardees can access their grant money faster, Ashley said. All projects require an environmental impact statement for outdoor construction or if renovations are made to a structure that is 50 years old or more. Before the money can be released, the applicant needs to obtain an environmental impact statement.

      During 2008 the grants office also spent time educating government and industry stakeholders for all its programs to help them better understand how awards are made, what criteria are considered and how to get involved, Ashley said.

      And it is speeding up the process each year for issuing the money once it is appropriated by Congress. April 8 is the earliest date that grants have been awarded. Last year grants weren't announced until May 16.

      The American Recovery and Reinvestment Act also provides Customs and Border Protection with $680 million, some of which the agency plans to use to purchase and deploy non-intrusive inspection systems for land and sea ports of entry.

      The spending plan includes $100 million for MarAd's small shipyard grant program, which represents a 10-fold increase over last year's funding level. Grants can be used to make capital improvements that foster efficiency, competitive operations, and ship construction and repair. Awardees must contribute a 25 percent match to their project.

      Of the money, $75 million is reserved for shipyards with 600 employees or less, and up to $25 million may be awarded to yards with up to 1,200 employees. Grant applications must be submitted by April 20. MarAd intends to award grants no later than Aug. 17.

      Ports can also compete through a $1.5 billion discretionary grant program for funding surface transportation projects of national, regional or metropolitan significance. The Department of Transportation plans to announce criteria for the new program in May. Grants will be between $20 million and $300 million apiece.

      Ports can also apply to their state transportation departments for a piece of the $27.5 billion in highway funding for access roads to intermodal rail facilities on, or near, port compounds.




Navigation Support.    The U.S. Army Corps of Engineers received $4.6 billion for construction, operations and maintenance, including several hundred million for dredging and $375 million for improvements on the Mississippi River and its tributaries. The Corps has a wide range of responsibilities, so only a portion of the money will be used for navigation, jetties, breakwaters, bridges and locks that benefit waterborne commerce.

      The Corps has submitted a proposed list of merit-based projects to the Office of Management and Budget that meet the fast-start criteria of the legislation.

      The agency's focus is on repairing infrastructure that has the highest risk of failure or consequences, and quickly providing jobs.

      Maj. Gen. Don Riley, deputy commanding general and deputy chief of engineers, pledged the Corps will achieve the goals through sound cost estimates, aggressive but achievable schedules, innovative contracting and timely execution. Projects must be completed without requiring additional funding.

      The Corps said it plans to directly create 11,500 jobs for every $1 billion spent.

      Dam and lock projects receiving stimulus funds will not require cost-sharing with the Inland Waterway Trust Fund, the repository for a 20-cent-per-gallon diesel tax on barge and tug operators. Normally, half of the money for such projects comes from the trust fund and half from the general revenues. Congress allowed an exemption in the stimulus act because there isn't enough money in the trust fund to support projects at the required level. In 2008, trust fund receipts declined to $85 million.

      But the Harbor Maintenance Trust Fund used to help pay for maintenance of federal channels did not receive an exemption. The HMTF is supported by a tax based on the value of imported or domestic cargo using U.S. ports. The government has allowed a $4 billion surplus to build up to mask the federal deficit, creating a situation whereby maintenance needs exceed annual expenditures. The Corps has to factor in how much money will be available from the HMTF to meet its share of any deepwater projects to make sure there is no risk to the project schedule, according to Peter Luisa, a manager in the Corps' programs integration division.

      Riley dismissed concerns that the Corps only has 12 hopper dredges to do the new projects. Hopper dredges, which vacuum material off the bottom into barges for disposal offshore, normally do about 25 percent of all channel maintenance dredging, with pipeline dredges doing about 60 percent of the work and mechanical dredges the remaining 15 percent.

      The Corps will hold regional and national meetings with industry to make sure maximum use of available equipment is scheduled.

      'I am confident that the U.S. Army Corps of Engineers, working with our dredging industry partners, can successfully execute this level of dredging,' he said at the AAPA event.

      As part of the accountability requirements in the law, the Corps will measure the degree to which stimulus funds bring about improved channel availability, he said.

      The Coast Guard received $142 million for its program that alters or removes bridges that pose hazards to navigation and $98 million for repairing eight shore facilities, aids-to-navigation, and vessels. The bridge money will be used to alter a bridge over the Mobile River in Hurricane, Ala., and the Elgin, Joliet and Eastern Railway Co. Bridge over the Illinois Waterway in Divine, Ill.

      The Department of Energy is offering up to $400 million to demonstrate and evaluate plug-in hybrids and other electric infrastructure concepts such as truck stop charging stations, electric rail, and cargo handling equipment such as fork lifts.

      The closing date for the transportation electrification funding opportunity is May 13. Agency officials say they hope to announce award selections in July and that all grant paperwork will be signed and in place by the end of September.

      Port authorities can also participate in a $300 million diesel emissions reduction program that covers marine engines, heavy-duty trucks, cargo handling equipment and locomotives. Funds will be directed to support idle reduction technologies such as electrified parking spaces for trucks at rest stops, auxiliary power units, and shore-powered electric connections for vessels at berth, as well as electric refrigerated units for trucks, and diesel engine replacement and retrofits. The Environmental Protection Agency expects to announce awards May 29.

      The tests will help determine how the vehicles perform and their impact on the electric grid, said Lee Slezak, manager of advanced vehicle systems simulation and evaluation.

      Proposals will be evaluated on their environmental benefit, job creation ability, amount of petroleum displaced, advanced technology and market potential within four to five years, he said.

      Project costs must be split with the federal government. Local governments can request a 75/25 percent cost-share, but would receive a lesser score in the competitive grant process and possibly jeopardize an award, Slezak said.

      The Port of Long Beach, for example, plans to apply for funding to help cover the $1 billion replacement of the Gerald Desmond Bridge, a planned $55 million dredging project, security systems, the $2 billion clean-truck replacement program and shore-side power, a spokesman told the Long Beach Business Journal.