Infrastructure Projects: Perhaps Not So Quixotic After All?
Over the course of 2014, significant steps forward were taken in the quest to find additional sources of funding for inland waterways infrastructure projects.
First came the long awaited and much-celebrated Water Resources, Reform and Development Act of 2014 (WRRDA) in June, which included several provisions to address the funding needs of the ever-worsening condition of the inland waterways infrastructure. WRRDA eased the burden of the Olmsted Locks and Dam on the Inland Waterways Trust Fund (IWTF) by reducing the IWTF’s share of the costs for Olmsted from 50% to 15%. WRRDA also expedited the process by which the U.S. Army Corps of Engineers is to study and carry out new construction and rehabilitation projects for the inland waterways infrastructure.
WRRDA and more
WRRDA laid the groundwork for additional sources of funding in two other respects. First, Section 2004 of WRRDA, captioned “Inland Waterways Revenue Studies,” requires the Secretary of the Army to conduct two studies. One study is to examine the “potential benefits and implications of authorizing the issuance of federally tax-exempt bonds secured against the available proceeds, including projected annual receipts, in the Inland Waterways Trust Fund.” A separate study is to explore the “potential revenue sources from which funds could be collected to generate additional revenues for the Inland Waterways Trust Fund.”
A second provision, Section 5014, is captioned “Water Infrastructure Public-Private Partnership Pilot Program,” and requires that the Secretary establish a “pilot program to evaluate the cost effectiveness and project delivery efficiency of allowing non-Federal pilot applicants to carry out authorized water resources development projects for coastal harbor improvement, channel improvement, inland navigation, flood damage reduction, aquatic ecosystem restoration, and hurricane and storm damage reduction.” More on this provision later.
A final development in increasing the funding for inland waterways infrastructure projects came at the very end of the year: the inclusion in the so-called “tax extenders” legislation of an increase in the tax assessed on diesel fuel used on the inland waterways from 20 cents per gallon to 29 cents per gallon, which takes effect on April 1, 2015. These fuel taxes go into the IWTF, and some industry sources have estimated that the fuel tax increase will generate approximately $40 million in additional revenues for the IWTF every year. If these additional revenues are applied directly to construction and rehabilitation projects, they will bring substantial benefits to the inland waterways infrastructure. Even further, such additional revenues could be leveraged through, say, bond financing to achieve even more dramatic results. A study prepared for the United Soybean Board by the Center for Ports and Waterways of the Texas Transportation Institute, titled “New Approaches for U.S. Lock and Dam Maintenance and Funding,” published in January 2013, explains and illustrates how this could be done. The study can be found at www.soytransportation.org.
This eleventh-hour increase in the fuel tax was almost as surprising as it was welcome. For the past several years, the inland waterways industry has been recommending this increase. This recommendation was included in the Capital Projects Business Model prepared by the Inland Marine Transportation System Capital Investment Strategy Team, which was unanimously approved and adopted by the Inland Waterways Users Board in 2010. In 2013, the Waterways Council and a coalition of nearly 40 stakeholders expressed their support for increasing the fuel tax to at least 26 cents per gallon in a letter to the House Ways and Means Committee.
Early in 2014, Congressman Dave Camp (R MI), chairman of the House Ways and Means Committee, included an increase of six cents in this tax in his draft of the Tax Reform Act of 2014, but his proposal to overhaul the tax code made little headway in the House of Representatives. Despite this discouraging track record in attempting to obtain the fuel tax increase over the past several years, the industry succeeded in getting the increase of nine cents included in the tax extender legislation, which arrived—even without help from FedEx or UPS—just in time for the holidays.
Toward the end of the year an initiative at the state level got under way as well. This is an effort to take advantage of public-private partnership provisions of WRRDA to preserve the authorization of the Navigation and Ecosystem Sustainability Program (NESP). NESP is a long-term program authorized by Congress in the 2007 Water Resources Development Act for navigation improvements and ecological restoration for the Upper Mississippi River System and the Illinois Waterway navigation system, following years of study by the U.S. Army Corps of Engineers, going back to 1989, and collaboration among Illinois and the other states in the Upper Mississippi River System. The primary goal of NESP is to implement an integrated, dual-purpose plan to ensure the economic and environmental sustainability of the Upper Mississippi River System and the Illinois Waterway navigation system by reducing commercial traffic delays while restoring, protecting, and enhancing the environment. Congress last appropriated funding for NESP in 2011. Under current law, NESP could be de-authorized if it does not receive funding in 2016, undoing years of study and multi-state collaboration.
Specifically identified as included within NESP are several locks and dams on the Illinois River, since this waterway connects the Great Lakes with the Upper Mississippi River and commodities shipped on the Illinois River can be transshipped via the St. Lawrence Seaway to Canada and Europe, or via the Mississippi to the Upper Midwest or to the Gulf of Mexico and beyond. Although the full scope of NESP encompasses all of the states within the Upper Mississippi River System, an appropriation by Congress of funds by 2016 for a construction project for one or more of the locks and dams on the Illinois River that are specifically identified in NESP would avoid the de-authorization of NESP for lack of funding.
Enter WRRDA Section 5014 and the Water Infrastructure Public-Private Partnership Pilot Program. Section 5014 allows for the transfer of federally authorized projects to a non-federal sponsor for design, financing, construction, operations and maintenance. The State of Illinois, through its legislature and its Department of Natural Resources, which has responsibility for waterways within the State of Illinois, is evaluating whether to serve as the sponsor for a new public-private regional authority that would become the non-federal sponsor for this program under WRRDA Section 5014.
Then-Governor Pat Quinn of Illinois notified the U.S. Army Corps of Engineers in a letter that Illinois would begin to address the need for an innovative delivery model to upgrade the locks and dams on the Illinois River through the use of a public-private partnership as authorized in WRRDA.
Those working on this initiative have designated it as the “Illinois and Middle Mississippi River Public-Private Partnership Pilot Program,” or IMMR P5. The initial focus will be on the locks and dams within the State of Illinois as the first phase of the program, in order to save the time that would otherwise be required to establish interstate agreements with Iowa and Missouri for the locks and dams on the Mississippi River between Illinois and each of those other two states. If the first phase is successful, then the program would be expanded to a tri-state organization among Illinois, Iowa and Missouri as additional segments of the Upper Mississippi River System are added to the program.
The first practical step would be the formation of an Inland Rivers and Waterways Working Group, under the auspices of the Illinois Department of Natural Resources, with the expectation that it would transition into an Inland Rivers and Waterways Authority that would serve as the non-federal and local sponsor of the program under WRRDA Section 5014.
Failure is Not an Option
Legislative support for this initiative is being led by both Illinois State Senator David Koehler, Chair of the Agriculture Conservation Committee of the Illinois State Senate, and Illinois State Senator Martin Sandoval, Chair of the Transportation Committee of the Illinois State Senate. On December 2, 2014, a subject matter hearing was held before the combined committees on the issues currently needing to be addressed for the locks and dams on the Illinois River and on the feasibility of the IMMR P5 approach. Representatives of the Illinois Department of Natural Resources, of the U.S. Army Corps of Engineers, of the Illinois Soybean Association, of the environmental and engineering consulting firm CH2M Hill, of the Nature Conservancy, and of several environmental advocacy organizations presented testimony. Senator Koehler chaired the hearing.
In his opening remarks, Senator Koehler summarized the importance of the inland waterways to the economic health of Illinois and the nation, and the need to address the continuing deterioration of the inland waterways infrastructure. Following the testimony of certain environmental advocacy organizations who expressed opposition to facilitating commercial navigate on the inland waterways, Senator Koehler asked, “Is anyone here suggesting that we do nothing?” When no one responded in the affirmative, he said, “Good – because that is not one of the options.”
(As published in the February 2015 edition of Marine News - http://magazines.marinelink.com/Magazines/MaritimeNews)
product barge transfer infrastructure facilities since 2005. As the freight cost to ship large cargoes through places like Davenport (Iowa) or Peoria (Illinois) to and from New Orleans has increased significantly, the freight cost to ship through St. Louis to New Orleans has not increased, and in fact, is
aid in financing the construction of four 210-foot, ocean towing vessels. Offshore Logistics has arranged for sale-lease financing, using Continental Illinois National Bank and Trust Company as owner trustee. The owner trustee will own the vessels for the benefit of Continental Illinois Leasing Corp
of fuel oil, 8,000 gallons of fresh water, 8,400 gallons of sanitary water, and 2,000 gallons of lube oil. Specially designed to work on the Illinois waterway system and in the Chicago harbor, she is constructed with a retractable pilothouse to permit passage under the 15-foot bridge levels
Iron Works Corporation (BIW), Bath, Maine, for States Steamship Company of San Francisco, Calif., was launched on December 21, 1976. Named the S/S Illinois, the 684-foot vessel is part of the Maine Class of ships whose flagship is the S/S Maine, launched at BIW in 1975. Since then, the shipyard has
On March 17, 1977, Avondale Shipyards, Inc. and the Great Lakes Dredge and Dock Company christened the new dredge Illinois at the Poydras Street Wharf in New Orleans, La. The Illinois is a 27-inch hydraulic dredge classed by the American Bureau of Shipping and certified by the United States Coast Guar
A set of complicated lock-and-dam projects on the Illinois Waterway, from Chicago to the Mississippi, has yellow lights flashing throughout the Midwest freight industry. In effect, the entire Waterway will be shut down next summer as the Army Corps of Engineers, Rock Island Division, starts some hefty
The Elastec BoomVane solves that problem. BoomVane can also tow heavier booms greater distances than an outrigger arm resulting in wider sweep swaths. Illinois-based Elastec is the manufacturer and owner of the proprietary BoomVane technology. Elastec offers four BoomVane sizes to accommodate various water
infrastructure, there are some locations where conditions are particularly dire. Among those in this latter situation are several locks and dams on the Illinois River, including the La Grange Lock and Dam and the Peoria Lock and Dam, both of which were completed in 1939. Both of them are on the U.S. National
ceremonies. Measuring 168 feet long, with a beam of 40 feet and 11-foot depth, the towboat will operate along the upper Mississippi River and Illinois Waterway. It is powered by two, 16-cylinder General Motors Electro-Motive diesel engines driving twin 102-inch-diameter stainless-steel propellers
. Net proceeds from the trade-in will be deposited in States' Capital Reserve Fund. The fifth C3 vessel, the Mormacbay, may be traded in when the Illinois, also a 20,000-dwt ro/ro vessel being built by Bath, is delivered. The Board denied States' request to deliver the Mormacbay to the National
the principal speaker at the launching of the guided- missile frigate Gallery (FFG-26) . BIW will build the sophisticated training facility at the Illinois base. It will consist of major propulsion components of the FFG-7-class guided-missile frigates, 13 of which are now under contract at the Maine
ar and Environmental Services elor’s degree in technical careers from Ingalls Shipbuilding celebrated the Bret Griebenow has been named vice Southern Illinois University. opening of its new Shipbuilder Acade- president of business development for my site in Gulfport. Participating in the nuclear and environment
Steenhoek, Executive Director, Soy Transportation Coalition A Barge at Starved Rock. An average of 16 million tons of soybeans move through locks on the Illinois Waterway each year. While much needed repairs are underway, Illinois farmers will need to navigate lock closures in 2019, 2020 and 2023. Credit:
will be years to fully recover from the closures. It’s a good news/ severely restricted. bad news story for the inland industry. Stakeholders have The Illinois Waterway is old infrastructure, some might long complained that the work needed to be done, but the say ancient. The ? rst phase of the Waterway
INLAND LOGISTICS Starved Rock Lock, ACE Rock Island District Illinois Waterway Closures: Credit: USACE Look for the Workaround. By Tom Ewing Brandon Road Lock and Dam Credit: USACE October 2019 26 MN
the nation as a whole. This invaluable R.D. James toured Mel Price Locks and system is aging; the Corps of Engineers diligently addresses Dam in Alton, Illinois, and held a Town the systems maintenance needs with resources provided to Hall Meeting to discuss the importance ensure e
Jeffery Mayger BOAT OF THE MONTH FeaturesFeatures Credit: USACE 49 RALAMANDER 1600 Uncrewed rapid response ? re ? ghting for modern ports. 26 Illinois Waterway Clossures Look for the workaround. By Tom Ewing 14 32 Shortsea Shipping All the Right Moves (Finally): Marine Highways Gain
• Inland • Coastal Marine Markets Volume 30 • Number 10 arine OCTOBER 2019 www.marinelink.com News M Autonomous and Ready Sea Machines leads the way Illinois Waterway ClosuresIllinois Waterway Closures Look for the Workaround Shortsea ShippingShortsea Shipping All the Right Moves (Finally) Farm FactsFarm
of former Commissioner Pete a Master of Science degree in engineer- Stauber on the Duluth Seaway Port EBDG Welcomes Nani as ing from the University of Illinois. Authority Board, effective January 8, Project Manager 2019. Jugovich has held many posi- Elliott Bay Design Group (EBDG) tions over the years
providing cus- stalwart advocate for the inland wa- team. As EVP of Strategy and Business tomers with end-to-end services. terways in her state of Illinois, and Development, Ms. O’Brien will over- throughout the United States.” see business development for all Vigor Port of Los Angeles Names business
high-tariff environment.” Regarding coal, the Ports are benefting from continu- ing, strong international demand for coal, again, sourced from the nearby Illinois coal basin. Coda said these coal operations had a “signifcant effect” on Mount Vernon’s 2018 coal volumes. He said that the world market is “still
downriver from Jeffersonville. “continued strong international demand for coal sourced Not only were actual numbers robust, but Port offcials from the Illinois Coal Basin, overseas and domestic de- reported “unprecedented tonnage increases” within the mand for agricultural products and investments to increase
the real thing, but the simulator is close. You have to use your brain, think on your feet. I can run nearly anywhere except the upper Ohio River or Illinois River because I never got the experience yet. However, I’ve run the Mississippi River up to St. Louis, Tenn Tom and the Achafalaya.” Duncan started
. Since 1991, Roberts ISA Selects Ron Kindred to has represented Crowley on major is- Fill District 9 Vacancy sues affecting the industry, including The Illinois Soybean Association Klosowski Sertich the Maritime Security Program, Jones (ISA) board of directors this week se- Act, and economic regulation.
,055-acre I-26 Mega Port @ Kingsbury, in Kingsbury, Indiana; John Kelsey Busi- Site in Newberry, South Carolina. ness and Technology Park, in Greenville, Illinois; Kentucky The South Alabama Mega Site is certifed by the Economic Transpark - Lot 6 in Bowling Green, Kentucky; Kingsboro Development Partnership
Economic Develop- Avard, Oklahoma; Gallup, New Mexico, Great Falls, Montana; ment noted that the Dallas-Fort Worth area is at the confuence Greenville, Illinois; Los Lunas, New Mexico; Middletown, Iowa; of three major Class I railroad networks — Union Pacifc, BNSF Minot, North Dakota; Newton, Kansas; Shafter
recreational access. • The project’s gradual approach is highlighted because it allows for natural 3. Public Beach Protection Pilot in Four Illinois Coastal Communities consolidation and prevents the need to construct Location: Lake Michigan, IL large containment structures. Summary: This
Sediment: Strategic Placement Haleiwa Small Boat Harbor Maintenance Dredging and Beach Restoration HI POD Public Beach Protection Pilot in Four Illinois Coastal Communities IL LRD Deer Island Lagoon Project MS SAD Benefcial Use Placement Opportunities in NJ Using Navigation NJ NAD Channel Sediments:
national security ga (Tennessee River): $89.7 million; and LaGrange (major re- protection, and offer recreational boating and fshing oppor- habilitation, Illinois Waterway): $57.5 million to completion. tunities for the Nation. These ‘inland marine highways’ move It is a great accomplishment to see full and
PEOPLE & COMPANY NEWS AdobeStock_CREDIT Renaschild Illinois Soybean Association Vessel Incidental Discharge Act World Fuel Services multi-mission dry dock and other USCG develops implementing regula- ISA Rallies U.S. Growers to upgrades at Portsmouth Naval Ship- tions for those NSPs (~ 4 years). The
inspection ev- said that, between CBC and its Chi- phia City Dock facility, said Vane’s ery year. He said managers “need to cago-area ? eeting company Illinois COI process formally started early in be aware that this is constant and start 2018. Vane is an AWO member and to determine now how to best stagger
the Indiana Toll Road that runs for more vided by the toll facility, or to continue to use the existing, un- than 150 miles across northern Indiana from Illinois to Ohio. tolled capacity. But waterways P3s would remove that choice, Owned by the Indiana Finance Authority, the toll road was op- with users having
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