Savannah wants to dig deeper but does not have enough cash

Savannah port in Georgia has ambitious plans to deepen its harbour to 15m to get more of the traffic from the Panama Canal after 2014 and lure customers on the transpacific route from Los Angeles/Long Beach in California. The trouble is, America's budget crisis means that the essential federal funding might not be available for Savannah and other ports.

The project aims to increase the depth of a 55 km stretch along the Savannah River from 13m to 15m. The cost is expected to be US$550 million, with federal money paying for 70 percent. Georgia is one of the strongest advocates for a reduction in the budget deficit, particularly the use of "earmarks", which members of congress use to funnel money to their own states.

State leaders want the port and Georgia to start raising money to pay for the whole project, which would be a huge undertaking. Georgia legislators have already set aside $102.3 million, less than half its share of the project.

There is a further complication. All harbour dredging and deepening comes under the authority of the Army Corps of Engineers, which has been able to use money from discontinued or stalled projects to pay for deepening. Stricter control over the budget has stopped this.

Savannah is the fastest growing and fourth largest container port in the nation, moving nine percent of US containerised cargo and 18 percent of all East Coast container trade. Its most recent monthly figures (October) are even more encouraging - 12 percent of all US containerised exports at just over one million TEUs, while breakbulk tonnage recorded a new monthly record of 2.3 million tonnes, 10 percent higher than the previous year.

If the harbour is deepened, the Ports Authority plans to double the amount of cargo Savannah can handle by 2020. It also expects to spend another $1.1 billion on cranes and rail yards to accommodate twice as many containers as possible.

Savannah gets just under half of its container traffic through the Panama Canal.

Similar federal financing problems are being faced by New Orleans. There has been a $22 million cut in federal spending on Mississippi River dredging, which could affect the volume of traffic through the Port of New Orleans.

The New Orleans district of the Army Corps of Engineers now has only $63 million for the dredging budget, which includes $10 million for administrative costs.

Senior officers in the unit say that, unlike recent years, extra money cannot be pulled from other projects. In the past five years, the corps spent $85 million a year to dredge the river.

Savannah is also getting into a pickle over a joint venture with South Carolina for a new port at Jasper, 15 km downstream on the Savannah River. Anticipated to have a capacity of seven million TEUs a year by 2025, the new 1,500-acre port will be on the South Carolina side of the river, with 10 berths and a turning basin.

The first phase, which could be ready in 2015, will have two berths, six to eight ship-to-shore cranes, rubber-tyre gantry cranes and a two-track intermodal yard, capable of handling between 1.2 million and 1.4 million TEUs.

South Carolina says that Georgia's plans for dredging at Savannah cast doubts on the state's commitment to the Jasper scheme and take business away from Charleston.

Dean Moss, chairman of South Carolina's Savannah River Maritime Commission, said there was concern about the impact of Savannah's plans "and Charleston continually worries about competition from anybody".

A rival port to Savannah, Hampton Roads, Virginia, is also going ahead with plans to capture canal traffic. Jerry Bridges, executive director at the Virginia Port Authority, said volumes would more than double to four million TEUS in the next five years, while market share would grow by as much as five percent from the 13 percent of East Coast traffic now. If Norfolk is included, the share could reach 20 percent, he added.

Bridges recently returned from a trip to China and was "amazed" at the pace of development there. He was particularly impressed by Yangshan port, where the infrastructure has been well designed and planned so that after 2 1/2 years in operation it is handling 10 million TEUs a year.

China continues to be uppermost in US port plans. A $500 million coal export terminal has been approved at Longview, Washington state, which will store 300,000 tonnes and handle six million tonnes a year, mostly for export to China. The terminal is being commissioned by Millennium Bulk Logistics, a subsidiary of Australia's Ambre Energy. Unlike port developments in China, this is coming under intense criticism from ecological activists and local communities, who object to the possible pollution in the surrounding area.
(source:www.cargonewsasia.com)