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Hager Questions Cost-Benefit Analysis for Flood Control Projects

By Worth Hager
President, National Waterways Conference, Inc.

Our thoughts and prayers are with those still in the areas impacted by Hurricane Katrina as well as those displaced. We are trying to get in touch with all of our friends and colleagues in the Gulf region and our hearts and pocketbooks will be open to those who have lost everything.

Last night the Senate passed a $10.5 billion Emergency Supplemental Appropriations bill. Funding was not included for the U.S. Army Corps of Engineers' work that is outside of the scope of that work tasked by FEMA. This means that the funds required to cover the New Orleans levee repair, as well as other responses, must be diverted from ongoing projects across the country.

We hope both the House and Senate will quickly pass an additional emergency supplemental appropriations bill that includes adequate funding for the Corps hurricane response effort as well as replacing those funds for ongoing projects affected by the diversion of funds. We estimate the Corps will need upwards of $2 billion.

The press has been asking if the flooding problems in New Orleans could have been prevented with adequate funding. The better question is why should water resources projects, such as flood control projects, be singled out as subject to a cost-benefit analysis which, by its very nature, assumes that one is willing to risk a massive flooding event to save money in the short term. The levees which were breached in New Orleans were designed to withstand a category 3 hurricane, although many had been pushing for a higher level of protection.

The fact is, the Corps of Engineers flood damage reduction program saves lives and prevents almost $8 in damages for each dollar spent. And in the Mississippi Valley and tributary system, the system affected by hurricane Katrina, just the national return on investment is $24 for each dollar spent. The National Waterways Conference estimates that the Corps needs at least $5.6 billion to begin addressing critical concerns, although a budget of close to $8.4 billion is what is truly required to address current needs.

The Corps is only able to function at 50 percent capacity at the rate of funding proposed by the Office of Management and Budget, which has contributed to benefits-foregone by taxpayers and endangered lives. America’s contractors--who build and maintain projects--as well as farmers, power companies, manufacturers, recreational boaters and the cities and towns that rely on the system, will continue to suffer if adequate funding is not restored for the transportation, flood control, hydropower, recreation and water supply projects overseen by the Corps.

The Senate recently passed an FY 2006 appropriation of $5.298 billion and the House of Representatives passed a budget figure of $4.746 billion. The President's budget proposal was $4.513 billion. (Of that, $883 million of the $1.979 billion for operation and maintenance is contributed through user funds.) The final appropriation figure will be discussed in conference when Congress comes back into session.

In addition to mitigating storm damage, our water resources contribute mightily to our nation’s well- being. Ports and waterways are integral to our national transportation system -- ensuring domestic and international trade opportunities and safe, low- cost and eco-friendly transportation of the building blocks of America's economy such as grain, steel, coal, fertilizer, salt, sand and gravel, cement, petroleum and chemicals. Shore protection projects provide safety from hurricanes and other storm events for transportation, petroleum and agriculture infrastructure around our coastal waterways and deltas, as well as recreational benefits, returning $4 in benefits for each dollar invested.

The Corps' mission is diverse-- transportation, flood damage reduction, hydropower, water supply, recreation and environmental restoration. Right now our infrastructure is crumbling before our eyes due to insufficient funding. With proper investment, including operation and maintenance, our waterways and ports have the potential to help strengthen our economy, help ease our nation's growing congestion problem, and provide a finer quality of life---a vital part of the President’s stated budgetary priorities.

In addition to the needs of flood control, one must not forget that an investment in the nation’s water highways is essential as we face serious fuel shortages in this country. As we consider solutions to the fuel crisis that looms before us, we are neglecting the most economical and fuel efficient resource in our country. Waterways can carry cargo and equipment much more economically than truck or rail. One gallon of fuel in a tow boat can carry one ton of freight 2.5 farther than rail and 9 times farther than truck.

In response to overwhelming media interest in the affects of Katrina on navigation, we have made available on our website Army Corps of Engineers data regarding specific areas. On our website at the top of the page is a link to the status of navigation conditions from the Army Corps of Engineers. Check back regularly as the status changes on the controlling depths of waterways.

Questions regarding the status of navigation or levels of Corps of Engineers funding can be directed to (Ms.) Worth Hager, President, The National Waterways Conference, Inc., 4650 Washington Boulevard, #608, Arlington, VA 22201. Ph: 703-243-4090, Fax: 703-243-4155, e-mail: worth@waterways.org

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