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Dredging inaction disappoints US port execs

Keywords: Tags  dredging, Port of Houston Authority, Alabama State Port Authority, James Lyons, Ricky Kunz, trade, Army Corps, Catherine Ngai

NEW YORK — Executives at major metal-handling ports are disappointed that language in the most recent transportation bill has not translated into more money spent on maintaining the nation’s waterways.

In June, President Obama signed into law a 27-month transportation bill that continued funding for the nation’s roads, bridges and highways. The bill included language stipulating the use of revenue collected via the 0.125-percent harbor maintenance tax for port dredging (, July 11), but port and shipping interests say the fund—which has an estimated $6-billion surplus—hasn’t been used as intended.

James Lyons, executive director of the Alabama State Port Authority, estimated that ports across the United States receive only about half the tax collected. "It’s not a Mobile problem, it’s not a New Orleans problem—it’s every port out there. Look at the Great Lakes—many of those ports haven’t had their full authorized depths for many years," he said.

Lyons said the weak language in the transportation legislation appears to be part of the problem, but the bigger issue is Washington itself. "It’s (the transportation bill’s) soft language (and) ... it’s a bit of a budget game. The reality is that all of the excess unused harbor maintenance tax funds have melted into the budget deficit that we had. There is no true surplus," he told AMM.

Without federal funding for harbor maintenance, imports and exports from major ports could suffer, Lyons said. "Our depth is 45 feet ... and it’s important for us to maintain that 45 feet because we use it. Ships coming out of Brazil with slabs all draw 45 feet. All of the metallurgical coal that we load going to steel mills in Europe, Asia and Latin America—most of that is loaded to 45-feet drafts."

Other ports also have been frustrated at the lack of maintenance funding.

The Port of Houston Authority recently submitted applications to the U.S. Army Corps of Engineers to authorize dredging up to 45 feet at its Bayport terminal, Ricky Kunz, the port’s vice president of trade development and marketing, told AMM. The project will cost the port about $120 million to $130 million to dredge the three-mile channel, and it’s all coming out of the port’s own pockets.

"Because we can’t wait for the federal government, we’re spending the money ourselves. We’re going to try to recover those monies from the federal government, but will it happen? Maybe, maybe not. I don’t know. We’ll have to wait and see," he said. "If we wanted to wait for the Corps, it might be a 10- to 15-year ordeal. Business doesn’t wait for 15 years."

The Port of Houston collects about $130 million in harbor maintenance tax annually and needs about $50 million to dredge its channels, but receives only around $20 million each year from the federal fund, Kunz said. "We are speaking with legislators—congressmen, senators—as well as the Corps of Engineers to work this out. This is obviously a very, very important channel not only for cargo but also for the petroleum industry."

Steel traders from the American Institute for International Steel in the fall urged Congress to spend the harbor maintenance tax fund on dredging needs, which impact costs along the entire supply chain (, Sept. 24).

"It’s a battle ... and there’s no indication that the battle is over," Lyons said. "It’s a battle we’re going to continue to fight."

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