Savannah harbor expansion could cost state taxpayers

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SAVANNAH, Ga. — Caught between a fast approaching change expected to bring larger cargo ships to the Savannah River and tough times coaxing money from Washington, Georgia officials are taking a closer look at having state taxpayers pay more upfront to begin deepening the waterway to the bustling Port of Savannah.

The Georgia Ports Authority has been pushing for the $652 million harbor expansion ever since the 1990s and the state finally received the federal permission it needed last year. But federal tax money– which is supposed to cover 60 cents of every dollar spent on the project – has been hard to get.

Georgia officials want to get digging underway along 30 miles of the Savannah River before the year ends. Their hopes were dealt a blow last week when President Obama released a proposed budget that seeks $1.28 million for the Savannah harbor project.

State officials have said in the past they would need $70 million to $100 million in federal funding to begin construction.

One option to keep the expansion on track might be to pay for the first year of construction almost entirely with state money. Georgia lawmakers have set aside $231 million toward the state’s 40 percent share of the project. Gov. Nathan Deal said a year ago he would consider spending more state money upfront if Washington couldn’t come up with its portion.

“That’s a question we’re going to start, you know, having those discussions now” with the federal government, Chris Riley, Deal’s chief of staff, said in an interview Thursday.

East Coast ports are racing to deepen their harbors so they can accept supersized cargo ships expected to start arriving after the Panama Canal finishes a major expansion in 2015.

Few of them have waterways deep enough to accommodate the mammoth ships carrying full loads at lower tides.

During an April 2012 visit to the Savannah port, the fourth busiest container port in the U.S., Deal said that if necessary he would rely on state funds to started deepening the harbor from 42 to 47 feet and have the federal government pay its share later. “We’re not going to let anything slow us down because time is of the essence,” the governor said.

The federal government is responsible for making sure U.S. shipping channels are navigable. And by law federal taxpayers are supposed to foot most of the bill.

But the approaching Panama Canal expansion has U.S. ports growing impatient.

At the Miami port, work is under way to deepen its harbor after local government and Florida state officials decided to fund the $180 million project on their own and hope for reimbursement from the federal government later. In South Carolina, where a deeper harbor for the Charleston port is being studied, state lawmakers have set aside the entire $300 million needed for the project in case they have trouble getting federal dollars.

“You’re looking at business decisions being made on dockside investments while they’re seeing a deadline with the Panama Canal,” said Jim Walker, navigation policy director for the American Association of Port Authorities. “In some cases they’re just saying they feel uncomfortable on how long they may have to wait for the federal appropriations process.”

Meanwhile, attorneys for the Army Corps of Engineers and environmental groups remain in court-ordered mediation over the Savannah harbor expansion that began last fall. Conservations filed a federal lawsuit in neighboring South Carolina, which shares the Savannah River with Georgia, saying the deepening would cause unacceptable environmental harm. Failure to resolve those concerns could send the dispute back to court.

Curtis Foltz, executive director of the Georgia Ports Authority, said last week it’s too early to say if Georgia will try to start deepening the Savannah harbor almost entirely out of the state’s own pocketbook. But he said he still sees “a reasonable chance” for dredging to start in 2013.

“We know that any delay is going to start costing us business down the road and the best time to dig is right now,” said U.S. Rep. Jack Kingston, a Savannah Republican.

But Kingston said he fears Washington rules and bureaucracy could further stall the Savannah harbor expansion even should the state be willing to shoulder the startup costs.

That’s because the estimated cost has grown by nearly $200 million since Congress first authorized the project in 1999 with a spending cap of $459 million. That limit needs to be raised, Kingston said, before state officials can sign a partnership agreement with the federal government that spells out how they’ll share the costs. The Army Corps needs that agreement before construction starts, no matter who pays the bills.

Despite the small amount of money for the Savannah harbor the White House included in its budget, the governor and Georgia congressmen have noted it’s encouraging just to have a line item for the project.

“They’re putting federal money in the port, which is a very good sign,” said Riley, Deal’s chief of staff.


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