More than two years after first announcing “infrastructure week,” President Trump finally has his sights set on the issue.
The administration’s recently announced proposal to streamline “environmental” permitting rules under the National Environmental Policy Act has won applause from taxpayers and consumers who pay the price for projects that take far too long to construct. But even as the regulatory assessment process is halved from more than four years to just two, American ports, a key component of economic growth, will continue to be hobbled by reckless federal policies that result in the wanton wasting of time and taxpayer dollars.
Post-NEPA reform, the Trump administration must open U.S. ports to competition and innovation.
Simply put, American global competitiveness wouldn’t be possible without our national system of hundreds of deeply dredged ports. More than 1 billion tons of imports and exports enter these hubs per year, allowing countless entrepreneurs to debut their products on foreign shelves. But determining the “right” size for a port is tougher than it might sound.
When the government mulls port expansion, there’s typically little incentive to figure out where to stop. Federal officials, after all, will not lose their standing if they champion a port project that is unnecessary and doesn’t correspond to shippers’ needs.
The billion-dollar boondoggle surrounding the Port of Anchorage expansion is an excellent example of what can go wrong. An initial price tag of $360 million (estimated in 2005) has ballooned to an astounding $1 billion or two percent of total Alaskan wealth. This is hardly surprising, given the decade-long delay surrounding the project.
Structural defects in the proposed revamp of the project, which engineers have pointed out from the get-go, have resulted in a bad deal for federal and state taxpayers. Despite having little to no relevant company experience in handling such matters, low-bid contractor Quality Asphalt Paving was selected for key aspects of the project. This should have been a red flag from the beginning. But, as is too often the case with government construction projects, concerns about quality and cost-effectiveness are placed on the back burner.
Expanding ports should mean expanding economic opportunities. For example, after the 2016 Panama Canal expansion, larger ships from China and other exporter nations now have direct access to American ports. But many current American ports are simply not deep enough to accommodate these gargantuan vessels. Not “investing” in dredging and overall expansion closes off potential trade and can lead to millions of dollars in lost revenue.
Unfortunately, though, relying on the government to finance these endeavors means making a deal with the devil. The city of Charleston, for example, believes that federal monies can add to already-record amounts of trade cargo entering South Carolina. A deepening of the port from 45 to 50 feet would mean that ships from around the world would be able to call at port indefinitely. Unfortunately, the Army Corps of Engineers informed officials that any deepening project would not be completed until 2024.
NEPA reform will certainly help speed up this process. But for ports such as Charleston, streamlining alone won’t cut it. It is simply irresponsible to make open-ended commitments of taxpayer dollars to fund even the most dubious of port projects. Port privatization would force owners to seek financing in the open market for new projects, ensuring that ports and projects with the most promise get the most funding.
With ports in private hands, cost overruns would also be kept to a minimum. For example, New Zealand privatized dredging in its main ports of Tauranga, Taranaki, and Timaru in the 1980s, allowing markets to handle questions such as dredging. These ports rapidly expanded as a result, leapfrogging operations to “the top echelon … in terms of profitability and performance.”
If lawmakers can close the spigot of taxpayer dollars, then the United States can be the next case study in port prosperity. If Trump continues his infrastructure push by privatizing ports, America can once again be open for business with the rest of the world.
Ross Marchand is the director of policy for the Taxpayers Protection Alliance.
