Budget hawks are screeching about a measure tucked into the government funding deal that raises the spending cap for a dam in Kentucky to $2.9 billion, calling the project an example of federal profligacy and mismanagement.
The Olmsted Locks and Dam is 24 years behind schedule and its cost has tripled since Congress authorized it in 1988. That's mainly because the U.S. Army Corps of Engineers tried a largely untested method when constructing the dam — building it underwater.
The project has broad support on both sides of the aisle, despite its financial maladies. Some conservative groups slammed the authorization in the budget deal as a “Kentucky kickback” for Senate Minority Leader Mitch McConnell, R-Ky. But it was Sen. Dianne Feinstein, D-Calif., not McConnell, who inserted the language.
Olmsted, in the Ohio River on the Illinois-Kentucky border, is the busiest portion of the nation's inland waterway system. Its advocates say the benefits of the dam and replacing two accompanying locks are enormous.
The Corps estimates the project will yield $640 million in economic benefits annually, largely through reduced transportation costs.
“All of the commerce that moves on the Mississippi [River] northbound must move through those two locks, and everything moving downbound must move through those two locks,” said Mike Toohey, president of navigation industry group Waterways Council.
The Corps said it would need to halt the project if Congress didn’t raise Olmsted’s $1.56 billion authorization limit by November. It would cost up to $80 million to stop and restart the project.
Still, critics and boosters alike agree that Olmsted is a mess because of the underwater method.
Congress originally authorized $775 million for the project in 1988, which was slated for completion in 2000. The Corps now says it will cost $3.1 billion by the time it opens in 2024.
That’s largely because the Corps used “in-the-wet” construction for the dam, critics say.
The technique involves building hollow shells — in this case, 66 of them — on the banks of the Ohio River. The Corps then sinks the segments into the river and fills them with concrete.
That’s different than the traditional “cofferdam” process, in which engineers excavate a portion of the river to build in the dry riverbed.
David Dale, the Corps' Great Lakes and Ohio River projects manager, said private consultants and Corps analysts estimated the in-the-wet method would be less costly.
While in-the-wet had never been tried on a river system as volatile as the Ohio, Dale said it was the Corps’ obligation to reduce costs to taxpayers. Sometimes, that requires innovating — and facing the inherent risk that comes with it.
“You don't want to get too far out ahead of yourself," Dale said. "But you’ve gotta stretch sometimes."
Steve Ellis, vice president for spending watchdog group Taxpayers for Common Sense, disagrees.
“I’m not saying you don’t want to stretch, but you don’t want to go out of the realm of possibility," Ellis said.
What really concerns Ellis and others is how Olmsted will be financed.
Currently, the navigation industry and federal government split annual construction costs, each chipping in roughly $80 million.
The House and the Senate have passed legislation requiring Washington to foot more of Olmsted's bill to clear a backlog of Corps projects. The House's water infrastructure bill makes Washington pay 75 percent of Olmsted's construction costs; Washington would pay 100 percent under the Senate version.
“The practical effect of the overrun of this project is there’s no money available” for other projects, Toohey said.
Ellis said the change amounts to the navigation industry "trying to get out of paying their fair share."
Toohey countered that the government is to blame for the escalating costs.
"Every project on the Ohio River since the dawn of the republic has been built using one method of construction," he said. "This method of building the dam didn't work out."