Georgia to step up with project funds, despite White House’s proposed 2015 budget void.
When President Obama released his fiscal year 2015 budget proposal in March, a $3.9 trillion request that would fuel the government for next year, port officials in Savannah, Ga., were in for a bit of bad news.
They had been counting on $400 million to go to the Savannah Harbor Expansion Project to get the long-gestating development started, but the money was nowhere to be found. State government officials and members of Congress viewed this lack of funding in the White House budget proposal as a bit of hypocritical politicking — they noted that Obama had said the Savannah project was important to national competitiveness — but for port officials, this appeared to be yet another bump in a very long road.
The project calls for deepening the inner harbor of the Savannah River to 47 feet and the entrance channel to 49 feet, extending the entrance channel by seven miles, and expanding existing terminals.
In addition to federal funds, officials are waiting on the 2013 Water Resources Development Act to pass Congress to move forward. The act contains a provision allowing for the expansion by green-lighting the Army Corps of Engineers to undertake the project. Approval is needed because the cost of the project has increased since Congress initially approved the plan.
In November 2010, when the Corps first got behind the project, the price tag was expected to run $560 million, but would bring $116 million in yearly benefits. With the upward revision in costs, the benefits have also increased, with the Corps estimating Georgia will see $174 million each year.
The Savannah River was last deepened 20 years ago (per the 1992 Water Resource Development Act), bringing the channel from a depth of 38 feet to 42 feet by 1994. Port officials soon thereafter released the Savannah Harbor Expansion Reconnaissance Report. The report pointed out problems with the channel that could be remedied by digging deeper. The Georgia Ports Authority completed a project feasibility study in 2008, coming to the conclusion that 47 feet was the ideal depth. Since then, the project has been about gaining various approvals from government agencies and waiting for the federal dollars to roll in.
After Obama’s budget announcement, Georgia Gov. Nathan Deal pledged the state would move forward with some aspects of the expansion. Deal will bankroll this with the $266 million the state had previously earmarked for the project as funds that would be used in concert with the federal government’s contribution.
“We’ve dotted every ‘i’ and crossed every ‘t,’ we’ve received every federal permit required, and we’ve already waited too long,” he said. “Under the federal law recently passed, we will begin dredging using state funds until the federal government lives up to its obligations in this partnership.
“Vice President Biden promised in the past year that we’d get this project done come ‘hell or high water,’” he continued, “but it’s more accurate to say the administration is going to put us through the former to get to the latter.”
Even though funding hasn’t been approved, the project can move forward because it has been labeled an on-going construction project, according to a federal spending bill implemented in January. Reports on the governor’s plans put these initial funds being used for the acquisition and preparation of land.
Sen. Johnny Isakson, R-Ga., called the lack of federal funding “a mind-boggling failure.” He praised Deal’s decision to move the project forward without federal funds.
“Governor Deal has shown real leadership on this issue, and clearly understands the importance of beginning construction now,” added Sen. Saxby Chambliss, R-Ga. “When ‘we can’t wait’ turned into ‘we can’t fund,’ the governor was left with no other option.”
Giving an update on the project during the Georgia Foreign Trade Conference in February, Col. Thomas Tickner, the Corps’ commander and district engineer for the Savannah district, said the agency has been focused for the past 15 years on the Savannah expansion. He noted the project’s benefits are much greater than the $174 million annual figure that the federal government has tied to the development. Georgia will see an increase in commerce and the ability to stay competitive when the project is complete, he said.
“I’ve been told that I’m not authorized to say [it’s ready to go], but I’m very optimistic that we’re going to hear something soon and when that happens, I’m sure we’ll all get together and celebrate because it’s been a long, long time,” Tickner told the conference attendees.
Curtis Foltz, executive director of the Georgia Ports Authority, had estimated in 2013 the Corps would roll out dredging contracts during the second half of the year, but federal funding holdups have dampened that timeline. Before Obama’s fiscal year 2015 budget was released, port officials talked about getting dredging underway this June.
“The Savannah project will move forward this year. We are confident that the Corps will be awarding contracts relatively soon,” Foltz said.
“We still have a tremendous amount of lifting that has to be done over the next three or four years, but we’re about to finally get started on this much-needed project,” he added.
GPA recently completed a 10-year strategic plan to carry the port authority through 2024. In it, GPA pledged to spend $1.4 billion on improved infrastructure and facilities throughout the state, in addition to the $652 million needed for the expansion. These investments, Foltz said, will “continue to make sure the port system in Georgia is as advanced as it could possibly be.”
Upgrading infrastructure will help the state keep up with an anticipated population increase in the near future. As people move to the Southeast, and more trade is focused in the region, a robust infrastructure is important, Foltz said.
“The Southeast needs its ports, not individual terminals, but its port system to continue to grow. We need to have capacity in Charleston, we need capacity in Savannah, we need capacity in Jacksonville,” Foltz said. “The Southeast demographic growth, both on the manufacturing side and the consumer side, is going to require all the port capacity that we can possibly build in the Southeast to service this continued growth.”