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District briefs OMB on Olmsted Project

Published July 24, 2009

Project Background

The Olmsted Locks and Dam site near southern Illinois is scheduled to replace locks 52 and 53 by 2016. The massive project is necessary because the older locks—built in the 1920s—are difficult to maintain and unreliable, causing costly traffic jams as barges are sometimes forced to wait hours, even days, to move through the locks.

The location of the Olmsted project is critical to the inland waterways system, and is often referred to as "The Hub." The Ohio River is the busiest stretch of inland rivers in the United States.

In a struggling economy, the expenditure of taxpayer dollars is scrutinized more than ever.

Last month, the Office of Management and Budget visited the Louisville District’s Olmsted Locks and Dam site to make sure Americans’ hard-earned federal contributions were being properly spent on the massive inland waterways project. After all, the project has exceeded the projected completion date and the total estimated cost, results that reasonably invite questions about the Corps’ progress.

Olmsted Project Manager Larry Bibelhauser and other district employees used a 90-minute briefing to explain the project’s timeline and convince OMB representatives that the Corps is a watchful steward of the nation’s monetary resources.

Bibelhauser began the discussion explaining the importance of building two locks instead of one. First, he said, the flow of barge traffic will eventually decide whether one lock is designated for upriver while the other is used for downriver, or whether both will feed in one direction during different parts of the day.

But two were definitely needed. Olmsted will eventually replace locks and dams 52 and 53. Ninety million tons of goods pass through 52 and 80 million tons pass through 53 annually. The area around Olmsted is referred to as "The Hub" of this country’s inland waterways system.

"The economics are such that if you have one, and you shut it down, then you shut down river traffic, and that impact is so significant that it makes sense to build two," he said.

The Feasibility Report was prepared by the Corps in 1985. The project was authorized in the 1988 Water Resources Development Act with an estimated cost of $775 million (price level Oct 1987) with construction taking seven years. Today, Olmsted is expected to cost $2 billion, and it’s not expected to be operational until 2016. But there are many factors that explain the cost increase and the extended finish date.

"Even if everything went well, the cost is still going to escalate because it’s now 2009," Bibelhauser said.

Global economics are unpredictable as are natural disasters, and both affect prices. For example, China’s economic surge sharply raised the demand for steel, as have natural disasters such as Hurricane Katrina.

The crews are always at the mercy of Mother Nature, and upcoming work on the base of the dam and wicket system can only be done during the low-water season. Weather delays not only push the completion date back, they also cost money. The cofferdam, used to construct the locks, flooded, costing a total of $15 million—$5 million for the Corps, $5 million for the insurer, and $5 million for the contractor.

But the biggest variable that impacts dates and final costs is annual funding, said Deputy District Engineer David Dale. The amount Congress sets aside every year may or may not pay for the planned construction for that year.

"We’re here administering the contract for the best interests of the nation," he said. "Here are two facts: A year’s worth of delay is about $30 million in project costs and $500 million in forgone benefits (to the nation)."