BrownWater News October 2011

Congress weighs capital development plan and user financing 

Michael J. Toohey, president and CEO of Waterways Council Inc. (WCI), recommended Sept. 21 that Congress adopt the Inland Waterways Capital Development Plan to improve the reliability of the U.S. inland waterways transportation system and the system's infrastructure over the next 20 years.

Testifying at a hearing focusing on the importance of the waterways and the challenges they face, Toohey said the plan, developed by the so-called Capital Investment Strategy (CIS) team, made up of industry and Army Corps of Engineers representatives, proposes to reform the Corps' project delivery system and to provide an affordable funding mechanism, such as user fees, to modernize the waterways infrastructure.

The hearing was held by the House Water Resources and Environment Subcommittee, whose chairman, Rep. Bob Gibbs (R-Ohio), said in opening remarks that the nation's infrastructure "is falling apart faster than we can fix it."

Among other things, the funding mechanism proposed by the CIS team called for a 30 percent to 45 percent increase — between 6 and 9 cents per gallon of diesel fuel — in the current user fee that commercial users of the system pay.

At the same time, President Obama proposed "a new user financing structure" for the inland waterways supplementing the existing 20-cent-per-gallon diesel fuel tax. The proposal calls for an annual user fee on each vessel operating on any inland waterway.

Neither the fee nor the structure was revealed by the White House, but it was estimated that the new fee would produce $35 million in its first fiscal year, $75 million in the second year and not less than $900 million over the next eight years.

Under the White House proposal, the Secretary of the Army would be authorized to establish a two-tier fee system, with a lower fee for vessels operating only on waterway segments not involving passage through a lock, and a higher fee for vessels "eligible to use the locks."

The proposal also expands the definition of U.S. waterways from the 27 segments in previous legislation to a total of 67. The fuel tax and the new user fee would apply to all of the waterways, including intracoastal waterways.

Toohey, characterizing Obama's proposal as "unworkable," expressed disappointment that it failed to address non-navigation system beneficiaries and the need to improve project delivery.


Public meetings set for comments on towing vessel inspections

The Coast Guard has scheduled three more public meetings to receive comments on a notice of proposed rulemaking that would establish safety regulations governing the inspection, standards and safety management systems of towing vessels.

The proposal includes provisions covering specific electrical and machinery requirements for new and existing towing vessels, the use and approval of third-party auditors and surveyors, and procedures for obtaining certificates of inspection.

The additional public meetings will be held Oct. 24 in St. Louis, Mo.; Oct. 26 in New Orleans, and Nov. 16 in Seattle. The first public meeting was held Oct. 18 in Newport News, Va.

For more information, contact Michael Harmon at (202) 372-1427.


Coast Guard's Deepwater Program held 'unachievable'

The House Coast Guard and Maritime Transportation Subcommittee was presented Oct. 4 with a report in which the Government Accountability Office (GAO) concluded that the Coast Guard's Deepwater Program "remains unachievable."

John P. Hutton, director of GAO's Acquisition and Sourcing Management, delivered the report. He acknowledged that the U.S. Coast Guard has strengthened its acquisition management capabilities but added that the Coast Guard has to take steps to address "the cost growth, schedule delays and capability shortfalls that have made the approved Deepwater Program unachievable."

Hutton said that the total cost of Deepwater could be as much as $29.3 billion, an increase of more than 20 percent in four years. He warned that additional cost growth is "looming" because the Coast Guard "has yet to develop revised baselines for all assets, including the Offshore Patrol Cutter."

Hutton noted that the National Security Cutter baseline shows a total acquisition cost of $4.7 billion, but that an estimated $5.6 billion is required to complete the acquisition of eight cutters, about a 19 percent growth over the approved 2008 revised estimate.

Furthermore, Hutton said, the 2012-2016 capital investment plan shows that the Coast Guard needs more than $2 billion for Deepwater in fiscal year 2015, 65 percent more than the expected $1.2 billion a year, to support the program as currently designed.

"When a program's funding levels are lower than what the program was previously projected to receive, the program can no longer remain on the planned schedule," Hutton said. "As a result, program baselines need to be revised."

Hutton pointed out that as of last July, the Coast Guard had not addressed a year-old GAO recommendation that the service "complete, and present to Congress, a comprehensive review of the Deepwater Program." Hutton said GAO specifically recommended that the review "clarify the overall cost, schedule, quantities and mix of assets required to meet mission needs, including tradeoffs in light of fiscal constraints, given that the currently approved Deepwater baseline was no longer feasible."


Senate panel OKs $4.9 billion for Army Engineers in FY 2012

The Senate Appropriations Committee has approved a bill that includes $4.9 billion for the fiscal year 2012 civil works program of the U.S. Army Corps of Engineers. The total approved for the Corps is $291 million above the president's budget request and $101 million more than that the House bill that was passed in July.

Included in the measure, H.R. 2354, is $125 million for general investigations, $1.6 billion for construction, $250 million for the Mississippi River and tributaries, $2.4 billion for operations and maintenance, and $193 million for the Corps' regulatory program.


House, Senate panels work on Coast Guard appropriations 

On Sept. 8, the House Transportation and Infrastructure Committee approved a bill to reauthorize the U.S. Coast Guard for fiscal years 2012 through 2014 and to authorize a service strength of 47,000 active duty personnel.

The measure, H.R. 2838, authorizes $8.5 billion for the Coast Guard for fiscal year 2012, $8.6 billion for fiscal year 2013, and $8.7 billion for fiscal year 2014.

The bill also prohibits the production of a sixth National Security Cutter until certain capabilities planned for the first five are in place.

A $482 million contract for the construction of the fifth cutter has been awarded to Huntington Ingalls Industries, of Pascagoula, Miss. Construction of the 418-foot cutter James is scheduled to begin next spring.

Meanwhile, three senators have joined in the introduction of a bill to reauthorize funding for the Coast Guard for fiscal years 2012 and 2013 at annual levels of $10.1 billion.

The bill was introduced by Sen. John D. Rockefeller IV (D-W.Va.), chairman of the Senate Commerce, Science and Transportation Committee; Sen. Mark Begich (D-Alaska), chairman of the Senate Oceans, Atmosphere, Fisheries and Coast Guard Subcommittee, and Sen. Olympia Snowe (R-Maine), ranking member of the committee.

Among other things, the Senate bill would require the Coast Guard to study the feasibility and potential of establishing a deepwater seaport in the Arctic to protect and advance United States interests within the Arctic region; and would extend to 2015 the current authority for expedited hiring of major acquisitions experts to work on the Coast Guard's ongoing fleet recapitalization efforts.


Deadline extended for filing membership applications

The Coast Guard has reopened the period for accepting applications for membership to the Lower Mississippi River Waterway Safety Advisory Committee.

In a notice published last March, the deadline for applications was set for May 1. The new deadline is Nov. 15. The Coast Guard said it would consider applications for 25 positions that expired or became vacant March 30.

For more information, contact Lt. Cmdr. Marcie Kohn at (504) 365-2281.

By Professional Mariner Staff