The Lock 52 bottleneck and potential impact

An article in the New York Times (November 23, 2016) titled “Choke Point of a Nation:The High Cost of an Aging River Lock” describes the 80 million tons of grain, coal, fuel and other products worth $22 billion in trade that flows on the Ohio river and depends on locks 52 and 53.  It takes 15 hours to pass through lock 52 and 48 hours to pass through lock 53 and thus 5 days to travel 100 miles along the river. Any failure of these locks would freeze water traffic and result in increased costs to move products, and thus higher consumer prices. A replacement dam’s completion has been delayed for over 20 years and is over budget by over $2 billion. How should the cost of such infrastructure, whose benefits are spread across the supply chain, be absorbed by the country? Should private infrastructure companies, who are permitted to recoup their costs through tools, be the solution ? Should the trade groups of users of the infrastructure be asked to develop solutions ?

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24 Responses to The Lock 52 bottleneck and potential impact

  1. Kyle Harshbarger says:

    Privatization seems like the obvious solution. I’m not sure why transportation has not already moved towards a completely pay-for-use system. Surge pricing to handle congestion.

    In the case of the locks, since the cost is being absorbed by some sort of tax funding, this distorts the transportation market. Maintenance costs are baked into transportation costs only when we talk about initial funding at the government level. However they become unmaintained over time because it is not attractive to pay for maintenance. It is not until bridges collapse (see Minnesota) that people start taking maintenance seriously. Unfortunately even that is not enough. Private companies can do this better.

  2. would let Maersk handle it. Two reasons, the first is Maersk is well positioned financially as well technologically and secondly because as is currently seen the public domain or government is the real bottleneck. Thanks to the “GOAL” we can see the importance of managing bottlenecks. MAERSK is one example of a private company that understands the way to address this bottleneck. This is their business and they have perfected their model. In Rotterdam MAERSK not only created land but they introduced robotic technology that now unloads 50,000 containers from ships in less than 24 hours a process that took on average 10 days!

    The increased cost tradeoff to reducing the time delays would well be worth it. GIVE IT TO MAERSK

    • I would let Maersk handle it. Two reasons, the first is Maersk is well positioned financially as well technologically and secondly because as is currently seen the public domain or government is the real bottleneck. Thanks to the “GOAL” we can see the importance of managing bottlenecks. MAERSK is one example of a private company that understands the way to address this bottleneck. This is their business and they have perfected their model. In Rotterdam MAERSK not only created land but they introduced robotic technology that now unloads 50,000 containers from ships in less than 24 hours a process that took on average 10 days!

      The increased cost tradeoff to reducing the time delays would well be worth it. GIVE IT TO MAERSK

  3. Beth Hinchee says:

    How to approach funding large infrastructure projects? One important consideration may be the availability of viable alternatives for the potential users of that infrastructure. Toll roads funded by private companies work in part because people have free alternatives. If you want to go fast on a well-maintained highway, you can take the toll road. If you can’t afford the toll road (or just don’t want to pay), you can choose to take other roads to your destination. This competition helps keep tolls in check and limits extortionary pricing behavior. For projects with few viable alternatives for the users – and very high economic importance – private funding is less likely to be a good answer due to the temptation of profit taking at the expense of national economic interests. In that case, public management of the infrastructure is likely the best answer. That said, this lock project is a good case of inept program management, which should not be tolerated whether the project is publicly or privately funded.

  4. Jesse Kiste says:

    It seems that the best bet would to privatize the construction project. I like Beth’s idea of making it a “toll road” where companies can decide to take the cheaper slower one or use the faster one with a toll. This will make the private company set the price to where they are making money, but at the same time not over pricing it. They also have to make sure that the infrastructure is efficient enough to entice the boating companies to use their system. From a far, it seems like there is plenty of improvement to be made if it currently takes 5 days to move through the river. If you could cut the time in half, technically the boating company could double their Revenue…How much would that company be willing to pay the infrastructure owner to double Revenue?

  5. Lindsey Minto says:

    Since so many companies use the waterway to reduce their own costs of transportation, they should share in the cost of the upgrade and repair. A payment model can be set up, whether it is a fee per use, fee per month or cost sharing program, having the companies who benefit from the project pay for it, is the way to complete it. Since there is another alternative for these companies, they can keep the price in check with their collective buying power.

    The natural inclination of the companies will be to pass that increased transportation cost on to the consumer, which is a reasonable burden. The consumer has the check and balance of paying for a good from a more local company without the transportation cost, thus limiting the increase of the good.

    Some exception might need to be given to essential items, like fuel and coal so that there is not a skyrocketing of the essential goods, making living conditions worse for the lower classes.

    Additionally, for every year that the project gets delayed, the outcome continues to get worse. It is a risky gamble of “not my problem” that will inevitably end in a disaster. There needs to be a serious look at the contract of the project and ways to incentives them to bring the time down. Since the improvements can save the companies who utilize the waterway money, a potential bonus pool for the company completing the project ahead of schedule should be considered.

  6. Aaron Wheadon says:

    It seems a common theme among public work projects include behind schedule, over-budget, delayed implementation (20 years!!), and no common ground between developers, environmental groups, etc. The red tape of bureaucracy is a stumbling block to getting this project completed. I’m not saying their aren’t smart people in government, but the hoops they have to jump through are incredible. A private organization, utilizing the innovation and freedom to operate outside of some government regulations would get his moving.

    With shortages in drivers and equipment, whether by truck or rail, the America’s river systems, as a viable logistics tool, remain a need. Proper project management, with documented payback for monies invested upfront, should be of the highest priority. Certainly spreading the costs in the form of a ‘surcharge,’ or toll as suggested above, must be part of the solution as well, to make the cost bearable and to be able to calculate a return for the private company that does the work. I have no doubt that some public funding would be used as well, in the form of grants, which would also make it attractive to a private contractor.

  7. Christian Kersten says:

    Thinking about large infrastructure projects, delays and extra costs for me it was always a “mystery” how they (projects) could get wrong THIS bad. I really cannot understand how this huge plan-/reality gaps can occur. Is it because state-run projects have no real challenging client like companies from the private sector?

    The main problem are the missing alternatives to that route. If you are willing to take a 5 day trip for a 100mile way, then there must be no alternative.
    Picking up Beth’s point of private owner and maintained toll roads as alternatives, this would probably be a game changer – for all participants in the system.
    The private companies would build and maintain a great highway, charging a fee for using it. The “customer” can decide between a long-lasting boat trip and a fast track, paying money. By building up alternatives it maybe accelateres the seriousness of the state’s construction project to put improvement in place.

    If this scenario is realistic (building a road) the permission for privatization should be considered, whereby it should not be permitted if there are no or just a few alternatives, which then could lead to economically exploiting companies entering the market.

    Another idea is to involve the trade groups for developing ideas – the “knowledge is in the system” – they are experienced with using it and maybe have some ideas for improvement…

  8. Nicholas Vandal says:

    I agree with portions of what many of my colleagues have stated. However, I think it should be a joint venture program between the army corps of engineers, (who if you read the article seemed to have figured out their BIG mistake(s) from the well delayed and over-budget replacement dam (they did also build many other vary important infrastructure projects in the US that should not be forgotten because of this one calamity)) various private sector companies and trade groups such as the Waterways Council. All of these parties should be a part of the development of the replacement dam in order to try and cover all aspects that a project this large would entail. This should not be done with cost-plus accounting, which I assume the initial replacement dam was contracted under (E.g. the company doesn’t get rewarded for the longer the dam takes and the more it costs), but rather with an incentive program for finishing in a timely manner while still abiding by all safety protocols (This was done on the collapsed I35 bridge in Minneapolis, MN which was done in record time and included the newest of technologies). I also think that to recoup money from the build and to save the taxpayers money that the companies that utilize the dam should have to pick up the tab for when its used and even have them pay some sort of tax on their materials brought across the locks. They could also all pick up a portion of some of the costs of the dam that is proportionate to how much it affects them, something similar to the already established maritime law of general averages (see below), just this time it would be pre-emptive instead of after the loss of goods.

    “The law of general average is a legal principle of maritime law according to which all parties in a sea venture proportionally share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency (for instance, when the crew throws some cargo overboard to lighten the ship in a storm).”

    Also, transportation by waterway is number one when transporting goods internationally. On the other hand, within the US, the trucking industry moves 5 times, and trains move 2 times, as much goods as ships and barges. Also, there is the great lakes just to the north of this waterway which the Mississippi gets pretty close to (providing a route to the gulf) so there maybe some alternative routes that could be developed if the developers have the resources to think big enough ( and we shouldn’t put all our chips in one basket (river)).

  9. Ross Ridge says:

    One of the major challenges that exists within the U.S. Government is the lack of cooperation between departments and agencies. Unless the core responsibility lies within that government entity (and the funding that goes with it), they do not see it as their responsibility until they get pulled in because of a national crisis. Plus, the owning agency often will fight to keep others out since it may dilute the funds that they would receive in their budget allocation. The Corps of Engineers, who are responsible for maintaining the Nation’s waterways, is not interested in other government agencies involvement. To change the way we think on this problem, I believe there are three key areas that must be addressed to take on this issue:

    First, we must acknowledge the problem and commit to doing something about it. There is much talk about the problems of rehabilitation, repair or replacement but with little action. Sometimes it takes a crisis and the risk of failure, or in this case infrastructure collapse, to force the government to act. This may only happen by a Presidential mandate or Congressional action, followed by re-allocating budget funds to force government agencies’ involvement and cooperation.

    Second, the government must establish and empower a task force to address the issues. The group should be represented by both public and private entities and charged with developing strategies to address the aging infrastructure and revitalization efforts. Often discussions surrounding contentious issues get stymied because of funding costs; this is just a means to an end. Solutions can generally be realized if people don’t become fixated on the symptoms and truly focus on the effects to be achieved. The old ways of doing things should be considered but the focus must be on developing a new approach and proposing ways to overcoming funding limitations, prioritization of work and how this effort needs to be managed. The task force should not be given an unlimited time to work the problem. Figuratively, they should be locked in a room with no breaks until they come up with a plan for execution. A sense of crisis must be felt by the group too.

    Finally, this problem cannot not be solved solely by the government. Just like the phenomenal efforts undertaken to put people back to work during the “Great Depression” in the 1930s, it will take private industry’s help to fix this problem. The government can provide direction, initial capital and access, but it will take private industry to serve as the engine to generate change. These public-private arrangements should help government get smarter about the way it prioritizes investment and the ways it achieves operational efficiencies to optimize the revitalization and recapitalization efforts. A tight regulatory framework could be established that makes it self-regulating and pushes it toward good asset management.

  10. Sarah C says:

    I would agree with what Ross has said; one of the biggest issues when you have projects as large as this, and as complex, is the communication between different government agencies/ bodies. With so many parties involved there is no one that really leads this projects and maintains momentum which inevitably leads to the breakdown of the project (missing deadlines, not meeting budgets etc.).
    Some of the biggest challenges when working on a government project comes with the ‘red tape’ that you need to adhere to to get anything done. This inevitably delays projects and becomes really draining for the team involved as they spend more time fighting bureaucracy rather than getting the project finished.

    In the instance of this dam, think a collaboration between public and private sector helps to ensure that the project keeps on track, however it also ensures that the project meets the brief.

    An example of such a project in the UK is the Dartford Crossing. There are two tunnels in Dartford to get commuters/ travellers from the North to the South under the River Thames however with an increasing number of vehicles and the amount of congestion it was decided in the 1980’s to build a bridge over the river to alleviate some of this traffic.
    There was then a PFI company created for the public/ privately funded bridge with an estimated cost of construction of £86 million (which would be £170 million-ish at today’s costs). The actual cost was £120 million (£215 million) and it was finally opened (after many delays) in 1991.
    There was a toll put on this crossing to recoup the costs of the build to the PFI which would come to an end in 2003 with the UK government said it would bear the additional costs of this build. However, the European Union waded in and said that it had to continue to be tolled – needless to say this was not popular with the UK people…

    At my own hospital; we are 18 months behind schedule with the new Emergency Department we are building. This, for some reason, in the NHS is seen as ‘standard’ with no sense of urgency or responsibility being taken for this being so behind. Our ED team have been in temporary buildings for the past three years whilst this building work is taking place. They work amazingly hard in really difficult conditions and yet there is no deadline as to when they will be able to get into their shiny new building.

  11. Bradley Wensel says:

    Government projects in the United States seem to be challenged especially ones focused on aging infrastructure improvements, which seem to always be delayed and/or over budget. There needs to be a true need and use assessment done for all government projects like this to find ways where to impose a financial structure that no only benefits as many as possible, but also makes improvements in a fiscal responsible way. This assessment should involve the trade groups in the early stages to fully understand what is needed and alternate ways to use if other improvements are made. This will help ensure that the right improvements are made not only for use today, but future uses as well. I like the idea of a joint venture between the government and private firms on certain infrastructure improvements. The government could add in incentives to private companies to beat deadlines to improve and find ways to setup smarter revenue options. The country definitely benefits from such infrastructure and it is important, but we have to be smart how we fund and maintain. By looking at part private ownership and incentives to build within a set timeline and efficiently with the Government, I personally believe the country will benefit in lower costs and faster improvements. Additionally, putting a revenue model in place to recover the costs to help with our continued expanding national debt issue will allow for other government projects to be funded, which benefit more people. As my colleagues’ state there are ways to think of this as a revenue opportunity and make the users that are clearly seeing the benefits and costs savings from this form of transportation share in the costs, but again trade group involvement early on in this decision is important to ensure they continue to use after improvements are made. The approach Beth outlines for a toll road approach is something that I think could be beneficial. This approach allows the costs to be spread out across the users as well as government funding due to end users outside of this area seeing benefits in end consumer goods and prices, but not at the extent as the government having no way to recover any costs.

  12. Enoch Obeto says:

    The water ways issues described in the article are emblematic of the general state of public infrastructure in the entire United States.Several airports and highways are in dare need of repairs and upgrade, but the dysfunction within the government structures and the high cost of these projects have made it impossible to tackle these issues. It all comes down to funding, and with the mounting Federal Government debt there’s no appetite to take on massive projects of these magnitude. Just like most of my colleagues have articulated, a public-private partnership is the way to go here. The government can provide the initial startup investment, and also maintain oversight and regulatory control, the private sector will in-turn provide the bulk of the funding and maintain management control to ensure these entities are profitable and guaranteed return on investment for the investors. At the end of the day, there may be some tax increases and or toll levies to cover some of the initial cost, everyone has to have a skin in the game and this is where it gets politically expensive. Doing nothing is however not an option, a complete breakdown of these infrastructures will end up costing more, Katrina is a good example. so the government needs to take urgent actions.

  13. Henry Reed-Schertz says:

    Due to the nature of the project and the desired outcomes I think that the country along with the trade groups need to take share in absorbing the costs. The trade group will benefit for the redesign changes over the years to come until it is no longer a desired route. While the country/government must keep the project to the highest standards and want to maintain regulations over use and flow. The cost of a project this large cannot be absorbed immediately but will have to be spread out of multiple budgets whether that is desired or not. From my experience any project of this magnitude and dealing with government bodies will be over budget and delays are inevitable. The delays typically stem from all of the red tape and the approval process even for minor changes that will not affect the integrity of the project. If given the opportunity to turn this project private I think it proves the best chance to get the project completed. If the project were turned to private funding it would fall on the uses of the lock system and they of course would want to be able to recoup that expenditure. The means to do so would be the source of concern as to how to recoup. If the project solves the bottle neck the companies are then making money faster which helps recoup the capital expenditure however it will not cover the project. I like Beth’s point of the toll road, working in the northern Midwest I have the choice almost daily spend the 1-5$/per toll to use the toll road to save me time or I can go the “long way”. As they say time is money, so I choose to utilize the toll road. That would be no different that with the lock system. If there was a company that did not like this or agree there are other means and methods of transporting their goods. I don’t think you can force the trade groups to develop solutions to this problem, but common sense would tell me they would want to provide solutions as this will be affecting their day to day business operations. When given the opportunity to provide input on things that will affect you I would be under the impression you would jump and the chance. By gaining input form users and or customers employees etc. you gain the buy in and trust on the project which will make for a smoother transition and implementation.

  14. Marcello Sanzi says:

    In my opinion I believe the private sector would be able to accomplish this project the fastest and cheapest way possible.

    Unfortunately, we are seeing that a big project like this can take a while to be finished (20 years+) and some of the reasons behind are the difficulties that you face politically creating a lot of bureaucracy and needing to go from one government term to the next for approvals of extra funds thus becoming over-budgeted and not lack of smart people as mentioned by Aaron.

    Henry also have mentioned that projects like this could be easily out of budget, and it will be the responsibility of the running government at the time to focus on reallocating another budget to finish the project. At times this can be difficult and I do believe that a project like this could be turned around faster if private investors would be on top of it to get this working the soonest to have the return on the investment as quickly as possible.

    Beth and Jesse made a good point about the toll; it would be a great way to have a faster way to deliver the goods, with the option to keep the competition naturally. This would make the companies who are using the system to choose which way is more beneficial to deliver their goods.

  15. Vivek Chakrabortty says:

    These types of issues are commonplace in developing countries and always appear to be rooted in corruption. There is no accountability on those in charge and they are walked off with what I presume is tax-payer money. My solution would be to do the following: 1. Cancel the current project in its entirety and launch an immediate audit of the parties involved.; 2. Revisit the business case for this project – 20 years is a long time and a lot has changed.; 3. Make this a public-private partnership with clear transparency on the bid process, outcomes, timelines, budget, and performance measures. Publicizing it will create awareness and keeping it in the public eye will put pressure on those in charge to deliver results.

    • Alan Cottrill says:

      Great comment – revisit the business case for the project. You’re right. In the past 20 years the world has changed and so has transportation needs and capacities.

  16. Steven Jones says:

    Before diving into a solution, the problems and their sources should be reviewed a bit more. It would be overly casual to suggest solutions without understanding the problems and their sources.
    For instance, consider a problem that is inherent to any public works project. If imminent domain has to be exercised, and at the same time the economy is experiencing an inflation, then both private and public organizations would have to deal with unforeseen increases in buying out property and possible lengthy court battles to settle on prices – both would be sources of cost and schedule overruns for either public or private companies. My cohorts and I have observed that government projects tend to suffer both cost and scope creep. They languish for months or years over the schedule with budget overages.

    Are buildout problems, budget overages, and long delays only inherent to government work? I don’t think so, private companies in the infrastructure space also deal with same kind of scope and schedule creeps that cause budget overages. I think the source of the problem affects both government and private entities, mainly project/program management competency, government infusions, politicking between agencies for power that leads to budget control, public approvals (checks and balances), politics as usual, and public expectations,

    Seattle is a great place to use as a lens for infrastructure buildout snafus. Today, the current light rail building plans are $4 billion over budget. The Seattle Tunnel being built to replace the Alaskan Way Viaduct is $223 million over budget and more than 4 years over schedule. Both cases suffer from work stoppages and extra costs not captured in the project planning phase The light rail is being built by a public agency while the tunnel is being built by a private company.

    The public wants both projects to result in world-class transportation systems rather than just enough (see the Washington D.C. Metro as an example of “just enough”). Both compete for talented project management, but in today’s low employment environment struggle to hire the most talented in their fields due to cost controls for project delivery. With this stated, the tunnel project managers failed to decipher that city ground blueprints accurately and thus failed to plan for items in the ground that the burrowing machine hit – and was broken by. And with the delays for repairs and trial runs, the costs skyrocketed past the budget. The tunnel is using the newest technology that was developed just for this project, much like techniques that are being used for the Olmsted Locks and Dam. The idea was that this new technology, although being more expensive than the conventional tools and processes, would save on costs because it would make the project run faster. But, like the Olmsted, the new technology actually slowed down the process.

    As for power and control between government bodies and agencies, I defer to Ross’ comments. However, for public expectations and politics that make infrastructure projects go sideways, I reference the light rail build-out in Bellevue, WA. King County voters (King County in Washington is the largest county in Washington where Seattle and Bellevue sit) voted in the third phase of the light rail buildout. The plan is to run through the Surrey Downs neighborhood in downtown Bellevue. To put things in perspective, Bill Gates lives about a mile and a half from this neighborhood in an enclave called Medina. Surrey Downs, although less expensive to live in than Medina, is still expensive property. The smallest home on sale right now is listed for $1.8 million. The Surrey Downs neighborhood have an item written into the city ordinances that controls sound levels and activity for the area. These ordinances aren’t zoning laws – they are protective orders for this particular neighborhood. For building the light rail, this is practically the only strip of land that the rail can pass through without significant costs added to the project. Therefore, the agency in charge of the light rail, Sound Transit, is compensating the homeowners of the neighborhood $300. Taken as a slap in the face in light of the property values, many in the neighborhood are not accepting the payoff. Therefore, Sound Transit is suing the people who won’t take the cash. The lawyers’ fees for their suit are extraordinarily high because they are suing wealthy people who have strong attorneys themselves. On the other side is a class action suit by people in the neighborhood against Sound Transit for disregarding the ordinance and not providing “just compensation for changing the character of the neighborhood.”

    All these actions result in huge cost overruns – something that any government agency or private or public company would face. When dealing with private land, any group in charge of building will face the same sources of issues. When dealing with large projects that are on public land, the same tension between the need for a high degree of competency in project/program management and low-cost delivery will be present. Therefore, I don’t believe any private, public, government body, or trade groups are inherently better equipped at handling public works projects.

    Therefore, I believe the agency in charge of building Olmsted should continue to do so. The article referenced stated that the Amy Corps of Engineers learned their lesson that the new process of “in the wet” construction is not mature enough to be a faster method than the prevailing method. However, they had progressed past the point of no return, so it was best that they continue using this new process. Would any private company have done the work any differently than the Corps – I don’t think so. So, in this situation, the Corps should continue their work.

    Staying with the Corps certainly means that the country would have to absorb the costs through government budgets. However, at this point in the construction process, I am utterly convinced that no private company or trade group will purchase all of the liabilities associated accrued to date just to own the project.

    I believe a portion of the costs should be recouped in taxes on the businesses moving cargo through the locks. However, to keep the cost burden manageable – or, in other words, to not discourage the owners of the cargo from utilizing the waterway, the taxes should be just above the most minimum that would be seen as affordable. The rest of the costs should be eaten by both the Illinois and Kentucky state governments along with the Federal government as a kind of subsidy. It is for the country’s economic benefit that these waterways exist. Large subsidy’s like this may drive up the cost of borrowing from the Federal Reserve – which, in a way, would be a kind of country-level absorption.

    As a side note, the Corps desperately needs better project/program management. There have to be case studies where “in the wet” construction methods were performed – something where the Corps could have learned and studied. Even if the study took more than a year, that would have been a decade saved in schedule overruns.

    • Steven Jones says:

      I think there are two other issues not discussed. Neither are the not type of organization that builds or fixes this project. One is the type of leadership that builds or fixes this project – and the type of leadership that is rewarded by the public. A good leader to project accurate budgets and schedules would paint a realistic picture, but the type of leader who wins projects is usually the optimistic leader who paints overly optimistic and conservative pictures. The other is the issue of government spending. Loose fiscal policies typically lead to increase costs – not necessarily because an organization “can” charge more – but because the infusion of cash increases demand for services the cash provides, and therefore an increase in costs that that cash pays for.

  17. Alyssa Bybee says:

    Much like Sarah and Ross mentioned, my biggest concern with a strictly government-controlled initiative would be the communication deficiencies that can ultimately stifle the progression and success of the project. With so many “hoops” to jump through, information can easily be lost between agencies and increased costs and delays would be inevitable. This is not only an irritant to those working directly and indirectly on the project, but the consumers and community as well. It seems the consensus among my peers is to privatize this particular project, and I am inclined to mostly agree, as it would eliminate many of these issues we see (and complain about) on a day-to-day basis with projects of this nature.

    Although I particularly liked Brad’s suggestion of an initial government startup investment, with private sector follow-up to completion. This could be a way of incorporating the strengths and positives within each sector while still maintaining a “checks-and-balances” environment and financial motivation to complete the project quickly and efficiently. The cost burden will still ultimately fall onto the consumer through taxes or tolls, but this is a reasonable expectation, considering this particular scenario.

  18. Jessica Heaton says:

    How should the cost of such infrastructure, whose benefits are spread across the supply chain, be absorbed by the country?

    While this article specifically references the struggle with an aging river lock, the issue of replacing infrastructure is a constant challenge. The key question is who is responsible for the cost? For shared resources like locks and bridges, the lack of ownership leads to confusion around who is responsible for the cost of the upkeep. Is it the responsibility of the surrounding cities or states? Is it the responsibility of the federal government as it allows passage from one state to another?

    A bridge in Ohio faced a similar situation, and in order to try to collect the necessary funds for repair a lawsuit was filed by the City of Cincinnati to require the corresponding city in Kentucky to deliver half the funds needed. Lawsuits are by far the optimal solution to deal with these circumstances.

    Like others mentioned before, privatization like in most markets, would drive better efficiency for these projects ultimately reducing the cost and timelines. This in collaboration for government subsidy could provide an interesting opportunity for the private sector. The resulting costs could be charged back to the users through tolls or other “pay for use” options to make it beneficial for investors.

    Ultimately, this is an oversimplified solution as it would require collaboration from many parties for this to work. The government, communities, and users of the infrastructure would all need to partner for the common good of everyone.

  19. Alan Cottrill says:

    How should the cost of such infrastructure, whose benefits are spread across the supply chain, be absorbed by the country? Should private infrastructure companies, who are permitted to recoup their costs through tools, be the solution ? Should the trade groups of users of the infrastructure be asked to develop solutions ?

    Historically the infrastructure of our country, which is old and deteriorating, has been a function of government investment. The vast majority of that major infrastructure, it seems to me, was build in the 2 or generations ago in a time where government was less hindered by red tape and bureaucracy. Obviously, the fact that the project is 20 years delayed, illustrates some of the challenges government projects incur.

    From my perspective it would seem that the cost of such infrastructure would naturally be absorbed over time in the cost of the products traveling up/down the system. Likewise, over time, the efficiencies of a newer, faster and more stable lock system might would also result in cost savings to the businesses using the route and would in turn be passed on to the consumer in a competitive market.

    I think the concept of private companies being involved in this type of project would absolutely help bring the project to fruition more quickly and less costly. In addition a private company might also do a better job of analyzing the actual need vs the government. However for a project of this scale, as some have mentioned, a government & private enterprise venture would be a good way to get the project moving.

  20. Linda Sverdrup says:

    Jesse J’s “Price Tag” song popped into my head from Pitch Perfect. Can almost see Jesse or the Barton Bellas dancing on top of a barge’s shipping containers! Seriously, every choice has a price tag associated with it. Planning for infrastructure and budgeting those costs is a task belonging to the leaders we elect. It is a critical one that has been left to dilapidate the last 9+ years. Planning and Budgeting cycle is extensive and takes about 2 years, if not more; so when we are thinking about a timeline, one has to think strategically if the government is involved.

    Ross was right on target in his comments about the Army Corp of Engineers (their responsible to build) and the competitiveness within government agencies on sharing funds. Now multiply those issues with private corporations involvement! However, we need to manage this space because that is the playing field. One comment in the article stood out – the project is substantially over budget! Ensuring the program managers can manage and get the job accomplished without these overruns is imperative.

    How should the cost of such infrastructure, whose benefits are spread across the supply chain, be absorbed by the country? It can either be a total private endeavor with government oversight, or a managed joint effort with Industry and Government (both State and Federal). The US government cannot afford to do it alone.

    Should private infrastructure companies, who are permitted to recoup their costs through tools, be the solution? YES! Beth’s comments hit a key point in that 1 free route must be available if private entities help build and charge a toll – to prevent unfair price tactics. Any tolls should have a designated end date after costs are re-cooped.

    Should the trade groups of users of the infrastructure be asked to develop solutions? Being “asked to develop solutions” by the government comes with a price tag as well. Therefore if there was a way to solicit this input without the price tag – that would be ideal. The Army Corp of Engineers may not prefer this route, due to the extra complications it inherently brings. They would be the authority to provide oversight and the verbiage on the solicitation. Bottom Line: If a single company or a group of companies wanted a quicker route to build said dam, they should provide white papers for their plans, along with the funding guarantee.

  21. Vinod Reddy says:

    Government is not is money making. they are policy makers and provide governance. 20 years is clearly big red flag on bureaucracy. In developing world, corruption is root problem for delayed projects. US on other have better mechanism to deal with such delay.

    As far as project is concerned, scrap the project. Privatization is best approach. these companies are always time bond on project delivery and have responsibility towards company brand image and share holders. Funding wont not be issue for private players. They should operate BOT model ( Build – Operate – transfer). The companies build with their money, operate for certain period of time to recoup investment by placing toll along the route and Transfer the ownership to government for further operation. This model is working in developing countries.

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