Dredging up money for Southern seaport expansion

Eastern seaboard ports are not yet ready to receive colossal cargo ships due to begin transiting the Panama Canal in 2016. And the holdup is mostly a matter of money.

South Carolina’s Port of Charleston and Georgia’s Port of Savannah typify the problem: Dredging their waterways and harbors has not even begun because of a battle over funding between federal and state lawmakers. Both ports are among the nation’s 10 busiest. But the work needed to maintain their world-class status will cost more than half a billion dollars. Among Eastern ports, the only three competitors now ready to welcome the mega ships are Virginia’s Port of Norfolk, the Port of Baltimore, and the Port of New York and New Jersey.

“If you want to be in the running for those bigger ships coming into the ports, it’s a question of not getting left behind,” said Jim Walker, navigation policy director for the American Association of Port Authorities.

Walker does not believe the federal government is shouldering its responsibility to make U.S. ports competitive.

A recent study on dredging the Port of Charleston estimated South Carolina would have to pay two-thirds of the $509 million costs, rather than the maximum of 50 percent outlined by a 1986 law. According to the law, states must chip in for all harbor upgrade projects. Prior to 1986, all the money came from Washington. President Ronald Reagan touted the change as a way to keep states honest over funding, attempting only projects that were truly needed.

But besides making them co-payers, the 1986 law also gave states more freedom to make harbor improvements. So when the U.S. Army Corps of Engineers last Tuesday recommended the Charleston harbor be deepened from 45 feet to 50 feet, state officials countered they were thinking deeper thoughts: 52 feet. This means the state must fund the $75 million it will cost to dredge those extra two feet.

Every extra foot of “draft” enables ships to load at least another 100 containers. And deeper water can mean better turnaround times at dock.

To ensure competitiveness internationally after 2020, when the harbor project is complete, South Carolina has already set aside $300 million of its estimated $330 million share.

“We really felt we needed a harbor that could be accessed with a fully loaded ship 24 hours a day,” said Jim Newsome, CEO of the South Carolina Ports Authority.

In 2013, when President Barack Obama and Vice-President Joe Biden went on a visiting spree to Eastern ports, Florida Gov. Rick Scott said Obama was “late to the party,” despite his 2012 “We can’t wait” initiative, which aimed for regulatory streamlining for the most critical U.S. infrastructure projects—including Charleston, Savannah, and Miami port expansions.

Actually getting federal money for the projects has been like rowing against the tide, with Washington focused on budget cuts and reducing deficits.

So states are laying out more of their own cash in the race for deeper water, especially Florida. Last year, Miami-Dade County spent $108 million and the Florida Legislature agreed to pay the rest of a ship-channel deepening project now nearing completion.

Like South Carolina, Georgia already allocated its share for the harbor project. The $266 million accompanied an agreement allowing a 2015 start for the Corps to deepen the river channel that gives the Port of Savannah access to the Atlantic Ocean. Georgia’s deal with the federal government is to pay only 40 percent of the $706 million project. But Washington has made no guarantees it will continue to fund construction by the time Georgia’s portion gets spent.

“We can’t afford to wait on you fellas in Washington,” Georgia Gov. Nathan Deal said during the signing ceremony Wednesday.

Deal noted the state has been trying for more than 15 years to deepen Savannah’s harbor, where ships must frequently wait on tides to be able to access the port. But the governor will not ask the state to cover more than the agreed 40 percent portion.

If Congress and the president don’t approve construction funding for the Savannah harbor project next year, Georgia may be up the creek.

The Associated Press contributed to this report.