The Waterways Council, Inc. has released a study by HDR, Inc. that delves into the persistent challenges of escalating costs, delayed timelines, and deferred economic benefits in U.S. inland waterway capital projects. The study, titled “Recommendations for Improving the Delivery of Inland Waterway Capital Projects,” offers a comprehensive analysis of why these projects often fall short of expectations.
The U.S. Army Corps of Engineers’ Civil Works mission is at the helm of constructing the nation’s inland waterways infrastructure. To understand the systemic challenges, HDR employed a multi-faceted approach, including interviews with Corps customers and relevant entities, as well as extensive background research and broader analyses. The findings reveal that while inadequate funding was once the primary culprit, the infusion of $2.9 billion from the 2021 bipartisan infrastructure bill has made it clear that project execution challenges extend beyond funding.
America’s lock and dam infrastructure has seen little modernization over the past 40 years. Since 1987, only 10 projects to modernize or expand locks on the inland system have been completed. Seven of these projects were initiated and finished between 1987 and 1997, with an average cost overrun of 33%. This stark reality underscores the need for a paradigm shift in how these projects are managed and executed.
Key recommendations from the HDR study include treating the inland navigation waterways as a system rather than a series of individual projects. This holistic approach ensures consistency with the Capital Investment Strategy (CIS), effectively applies lessons learned across projects, and acknowledges how challenges at one project can impact others within the portfolio. The CIS is a 20-year plan developed by the Corps, in coordination with the Inland Waterways Users Board (IWUB), to prioritize funding for lock, dam, and waterways infrastructure upgrades, focusing on reliability and efficiency.
Other recommendations include systemically applying programmatic funding, creating a centralized program management office at Corps Headquarters for inland waterways construction, improving cost estimating and value engineering, using standard designs for locks and dams where possible, expanding site investigation efforts, utilizing 3D modeling, conducting constructability reviews, and centralizing competencies to deepen the Corps’ knowledge base.
The study’s findings reveal that most of the recommendations that can reasonably be implemented by the Corps require support and approval from the Office of Management and Budget (OMB). It also highlights the consequences of OMB’s interpretation of Executive Order (EO) 12322, which limits access to effective solutions such as continuing contracts and alternative delivery methods that provide considerable opportunity to improve execution and reduce risk. The key recommendations to follow the CIS and take a systemic approach with programmatic funding also require OMB participation.
As Andrea Olivi, Global Head of Shipping at Trafigura, noted, “This partnership marks an important step in Trafigura’s commitment to improving efficiency and sustainability across its maritime operations.” Similarly, the HDR study marks an important step in addressing the systemic challenges of inland waterway capital projects. The recommendations, if implemented, could significantly improve the efficiency, cost-effectiveness, and timeliness of these critical infrastructure projects, ultimately benefiting the nation’s economy and commerce.
Søren C. Meyer, CEO at ZeroNorth, added, “We’re proud to partner with Trafigura – one of the largest players in global commodity trading and shipping. This partnership reflects a shared commitment to advancing the use of technology and high-quality data, sending a clear signal to the industry about the vital roles these play in the energy transition.” Similarly, the HDR study sends a clear signal to the industry about the vital roles of systemic approaches and programmatic funding in improving the delivery of inland waterway capital projects.
The study’s recommendations, if acted upon, could reshape the future of inland waterway infrastructure projects, ensuring they are completed on time, within budget, and with maximum economic benefit to the nation.