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Dredging Plan Hurting for Cash, Time by Jim Barnett The Oregonian, May 13, 2005

A House panel's funding threatens to delay the Columbia project,
adding to costs some argue are already too high

WASHINGTON -- A House panel Thursday earmarked just $15 million of the $40 million needed next year to keep Columbia River channel deepening on schedule for completion in 2007, further raising the likelihood of costly delays.

Although the shortfall was expected, it looms larger following recent news that the cost of dredging the first leg of the 103-mile navigation channel is likely to be higher than the U.S. Army Corps of Engineers forecast.

In light of limited federal money, looming cost overruns and potential to harm wildlife, critics said the corps should revisit whether the project is a sound investment of taxpayer dollars.

"It has been the corps all along that has said that if the project were delayed, that it would cost more," said Nina Bell of Northwest Environmental Advocates. "And, yes, the appropriations problems would appear to cause additional delays."

The corps has contended that deepening the channel to 43 feet from 40 feet would help big container and grain ships load more fully and operate more efficiently on their journey out the lower Columbia. Dredging proponents say the improvements are needed to ensure that those ships continue to serve Portland, which has seen container service decline in the past year.

In January 2003, the corps pegged the project's cost at $151 million and said it would save $1.71 in shipping costs for every $1 spent on construction. However, cost estimates were based on an "optimal" schedule with dredging done by 2007. And benefits were forecast with assumptions challenged by outside experts hired by the corps.

Also, earlier this month, the corps said it would scale back the dredging it planned to complete this year. The corps had planned to dredge 25 miles but reduced its goal to 13 miles after construction bids came in 69 percent higher than expected.

The corps has completed some environmental restoration work for the project, and it plans to begin deepening the channel later this summer.

Matt Rabe, a spokesman at the corps' regional headquarters in Portland, said Thursday that agency officials had no plans to revisit their estimates of costs and benefits.

"We will continue to move forward on the project as funding remains available," Rabe said. "It's up to Congress and the president to decide what are the national priorities. Sometimes it takes longer to construct a project because it is competing with other high-priority items."

The corps' optimal plan called for three federal earmarks -- $15 million in 2005, $40 million in 2006 and a final $40 million in 2007 -- with the remainder paid by state and local authorities.

Despite a campaign pledge from President Bush, the project received just $9 million for this year, and Bush called for $15 million in his 2006 budget, released in February.

Eric Nieme, an economist with ECONorthwest consulting firm in Eugene, said any delays will increase how much taxpayers pay for the project while potentially reducing savings in shipping.

"The alleged benefits that we would get from that project are now pushed further in the future, which means they are even more speculative than they were at the time the corps put together this plan," said Nieme. Northwest Environmental Advocates hired his firm to challenge the corps' assumptions.

On Thursday, the energy and water subcommittee of House Appropriations met Bush's $15 million request but did not exceed it, said Rep. Mike Simpson, R-Idaho, a member of the panel.

Simpson said corps officials had indicated to committee staff that they weren't ready to spend $40 million dredging the Columbia in 2006.

"We've had different talks about that, and the corps seemed to indicate to me and seemed to indicate to us that they couldn't spend that much money that fast," Simpson said in an interview after the subcommittee meeting.

Asked about Simpson's comment, Rabe said Thursday that the corps had told Congress in a confidential document that it was prepared to manage a $41 million construction program on the Columbia next year.

"It's entirely possible that somebody outside the Portland district may have said something either deliberately or inadvertently that may have suggested what the representative believes he heard," Rabe said. "But our official position is what we've provided to Congress."

Ken O'Hollaren, executive director of the Port of Longview, Wash., said the port was holding out hope that the project would get more money as Congress continues work on next year's federal budget.

As for the project's completion date, he said, "We'll just have to take that a year at a time here."