A publication of the Upper Mississippi Waterway Association.
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December 2016 
Happy Holidays from Members and Staff of the UMWA

Survey says: Fix It!   

 A new poll commissioned by the Association of Equipment Manufacturers (AEM) and taken in the waning days of the 114th Congress says that Americans want their infrastructure fixed and are willing to invest to build and rehabilitate it. 
     No one can say whether the AEM poll played a role in final passage the Water Resources Development Act of 2016 (WRDA), but that bill was approved late Saturday night (Dec. 10) on a 78-21 vote. 
     AEM says the poll showed that: 54% of registered voters think this country’s water infrastructure is in fair or poor condition and nearly seven in 10 think that more should be spent to on waterways and water pipelines. And, 74% of those registered voters polled supported or strongly supported WRDA.
     The organization says the survey is part of its work to develop a long-term national vision for U.S. infrastructure, an initiative it calls the “Infrastructure Vision 2050 initiative.”
     WRDA 2016 now goes to President Obama for his signature.

(Above) As the Executive Director's column below points out, the Corps of Engineers does,'so much with so little.' But it will take more than periodic maintenance, such as that being conducted in this dewatered lock, to keep the nation's inland waterways competitive in the world marketplace.  (COE photo)

From the Executive Director . . .
Inland Waterway Infrastructure: Old Issue Gets National Spotlight
     “Thanks to Donald Trump, the poor state of the U.S. inland waterway system is getting some national attention”.  During his campaign, or since, Trump has not mentioned waterways, but has made investment in the nation's crumbling infrastructure a central part of his agenda, wrote Pamela Glass of WorkBoat Magazine.  Despite rumblings about raising much of the $1 trillion spending plan from the private sector with a proposed tax credit in return for investing in such projects, he offered no specifics, Glass said.
The New York Times gets it
     It was this focus on infrastructure, said Glass, which led The New York Times to publish a November 23rd article showing how aging locks are causing bottlenecks and delays that further threaten the effectiveness of the U.S. transportation system.
     Glass, in summarizing the Times article which focused on Locks and Dams 52 and 53 located near the mouth of the Ohio River, which is one of the busiest spots on the inland waterway system, handling some 80 million tons of grain, fuel and other goods each year.  Both locks, she quoted, were built in the 1920s and will be replaced by the Olmsted Locks and Dam which is decades behind schedule and billions over budget. 
Bubble Gum and Duct Tape
     That’s the way the Times article describes the Olmsted expansion project, built with an experimental “in the wet” construction method: Hollow sections of the dam were built on the bank, skidded down to the river, towed into position and lowered into the water, where they were filled with concrete.  While the “in the wet” method was supposed to save time and money and minimize delays, explained the Times, it did just the opposite.  “By the time the corps realized its folly, it was too late to alter course.  The novel construction process and inadequate congressional funding, among other things, have dragged the project past the quarter-century mark.”
Nevertheless, insists Glass, it’s good to have a pledge to address ailing infrastructure topping the presidential priorities list. And, exposure of these priorities in the New York Times helps inform national policymakers of the need of waterways improvements.
Corps does so much with so little
     The Times article, Glass continued, warned that should Lock 52 fail, the tonnage would likely gravitate to rail and roads, but in this case the railroads aren’t nearby and there’s no room on highways.  The article confirmed that domestically, trucks move five times as many goods, by weight, as ships or barges did in 2013.  Trains moved twice as much as was moved via water, and planes moved far less.  But 72% of international trade moved on the water in 2014, compared with 10% via truck and 5% via rail.  “Many supply chains rely on multiple modes of transportation, and no single mode has enough redundancy to accommodate the goods of another.”
     Yet despite lack of modal redundancy and heavy demand on aging structures, “The corps does so much with so little” the Times quoted Harley Hall, Tennessee Valley Towing’s vice president for operations, but “until Olmsted is completed we have a ticking time bomb.”
P3 Investors
     Referring to the rumblings of a tax credit, the Times article reported that Mike Toohey, president of the Waterways Council, an advocacy group for the river shipping industry, said that even with a tax credit, companies building roads or locks would want a return on their investment – mostly in the form of a toll collection.  WCI, he said “is not in favor of a toll”.  Still, he said, we are optimistic that spending on inland waterways will increase under a new administration.
A different view
     Others don’t see it that way.  In a white paper released earlier this month, the Center for American Progress sees the Trump Infrastructure Plan as failing America and has fatal flaws.  For example, the plan:  Would push state and local governments to use equity capital that can cost 300% to 500% more than if raised through municipal bonds; would not support critical maintenance and reconstruction projects; and would result in high-cost tolls and user fees to satisfy the 10% to 14% annual returns required by equity investors.  Part of the reason that Wall Street is so eager to invest in P3s, says CAP, is that these deals offer a chance to earn high returns with relatively low risk.  Throughout its discourse, CAP made no mention of the Inland Waterways Trust Fund, nor the $80 plus millions annually commercial waterway users pay into that fund.
     According to CAP, the U.S. has a massive existing stock of capital projects that make up the productive backbone of the economy that have come to the end of their useful life.  At the same time the U.S. population will add another 100 million people over the next 50 years, an increase that will further strain underperforming resources.  Unfortunately, the proposed infrastructure plan will not attract money for maintenance and expansion projects, but will focus on federal tax subsidies for revenue-generating megaprojects in large urban areas.  That and other shortcomings, says CAP, leaves the rest of America’s infrastructure needs behind. 
     “At this point”, concluded Glass, “Trump’s plan remains vague, which gives the workboat industry and waterways users the opportunity to influence the outcome and make sure that the plan not only includes waterways, but does so in a way that doesn’t hurt the barge industry. 
We at WorkBoat, said Glass, have been covering this issue for decades, and will have a new report on it in the January issue.
Disclaimer:  Thoughts and opinions expressed in this column are those of its author and not necessarily those of the Upper Mississippi Waterway Association or its members.
Other items of interest;

*  Phase II of a Wisconsin freight and infrastructure study identifies four marine highway corridors and compares their, “feasibility, cost and potential for mode diversion to parallel highway corridors.  CFIRE says the four include three Great Lakes corridors as well as the Mississippi River.  The study, done by the National Center for Freight & Infrastructure Research & Education Department of Civil and Environmental Engineering College of Engineering University of Wisconsin–Madison, says in almost every scenario the marine corridors will offer lower costs to Wisconsin shippers and businesses.  “Leveraging our Comparative Advantage, Phase II: Identification and Development of Wisconsin Port Market Scenarios,” is available for download online.

*  U.S. Department of Transportation Maritime Administrator, Paul “Chip” Jaenichen says the country, “desperately needs to rediscover” its river infrastructure because rail lines and roads are already strained.  Jaenichen was in St. Louis at the beginning of the month to announce nearly $5 million in grants to help build infrastructure and market information to support the container on barge effort on the Mississippi.  "It's not a matter of if, it's just a matter of when," Jaenichen told reporters.

*  Muscatine, Iowa has started a feasibility study to see if that city would benefit from developing a river shipping port.  Community Development Director Dave Gobin says, “It will analyze whether or not it makes economic sense to do a port or to build a port in Muscatine or even in the region.  Second thing it’ll do is justify the investment of what it’s going to cost to build such a port.”

*  Marc Glowczewski, project manager with the Pittsburgh District of the U.S. Army Corps of Engineers says infrastructure in his district as elsewhere in the country is crumbling.  He says a recent study on the first three locks on the upper Ohio River show a 50 percent chance that one or more could fail by 2028. “I don’t want to say it’s a flip of the coin because that sounds trite, but at a 50 percent probability, that’s just as likely to happen as not. And so that makes it kind of -- terrifying, he says.” Among the issues that a failure would bring, Glowczewski says are a threat to drinking water and a complete halt in shipping which would ripple through the economy.   And, he says, if a dam goes, “You’d be able to walk across, shore to shore, at the point of Pittsburgh and get your ankles wet, and that’s it.”
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