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Expert Finds Dredging “Economically Infeasible”

JULY 11, 2017

NEW REPORT SAYS DEEP DREDGE IS ‘ECONOMICALLY INFEASIBLE’

Independent Expert Finds Major Flaws in Economic Study

JACKSONVILLE, FL – St. Johns RIVERKEEPER has released a new report by a leading international port and shipping expert that finds the proposed dredging of the St. Johns River to be “economically infeasible.”

Dr. Asaf Ashar, an independent consultant and Research Professor (emeritus) with the National Ports & Waterways Initiative at the University of New Orleans, analyzed the U.S. Army Corps of Engineers (USACE) economic feasibility study.

In his report, Dr. Ashar identifies numerous flaws in the USACE’s methodology that he says resulted in a Benefit Cost Ratio (BCR) that is unrealistic and overstated. Ahsar estimated benefits for the dredging project that are substantially less than those calculated by the USACE.

While the USACE study is primarily based on data from 2010, Dr. Ashar utilized recent 2017 data to provide a more accurate assessment of both the current situation and, especially, future changes of Jacksonville’s shipping services and their impact on the economic feasibility of the project.

Dr. Ashar defined four scenarios that address the flaws in the USACE study and calculated a Benefit Cost Ratio (BCR) for each. A BCR is calculated by dividing the total economic benefits by the total economic costs. Ashar’s BCR calculations range from 0.14 to 1.31 for a 13-mile channel. The USACE calculated a BCR of 2.66.

As a result, Dr. Ashar concluded that “the BCR of JAXPORT’s channel-improvement project is likely less than 1.” Projects with a BCR smaller than 1.0 are considered economically infeasible. According to the USACE, “if the benefit cost ratio is less than 1.0, the total costs are greater than total benefits, which is not a good economic investment.”

The BCR calculations for an 11-mile channel range from 0.19 to 1.76. “As seen in the scenarios considered by me as the most likely, Multiport and Feedering, the BCR is still below 1, indicating that the 11-mile Project is still economically infeasible,” explains Dr. Ahsar. 

The USACE has indicated no plans to update its studies for a project to deepen 11 miles of the St. Johns River instead of 13 miles.

Critical Findings by Dr. Ashar:

  • USACE’s vessel data is outdated, resulting in an inaccurate calculation of vessel cost.
  • USACE cargo forecasts are unrealistic, due to the failure to conduct a multi-port analysis and consider competition by other ports.
  • USACE fleet composition forecasts are flawed, as a result of disregarding the multiport nature of shipping services.
  • USACE disregards the possibility of feedering Jacksonville’s Asian cargo in its cargo forecast. Feedering is the practice of utilizing smaller feeder vessels to transport cargo delivered by larger vessels from hub ports to secondary ports. Feeder vessels do not require deepening of JAXPORT’s channel.

According to Dr. Ashar, JAXPORT is likely to remain a secondary port, with or without dredging. Still, he believes that JAXPORT will continue to have opportunities to grow even without deeper water. The report states that “despite the dire prediction of JAXPORT’s consultant that the ‘Asian market will likely disappear at JAXPORT by 2015,’ JAXPORT’s Asian cargo has been steadily growing, even with the existing channel.”

“This new report provides further evidence that the economic projections for the Deep Dredge have been grossly overstated,” says Jimmy Orth, St. Johns RIVERKEEPER Executive Director. “It also demonstrates the urgent need for a transparent community dialogue to fully vet the project before dredging begins. We can’t afford to potentially spend hundreds of millions of tax dollars, cause significant harm to our river, and then find out later that the project wasn’t even necessary.”

Dr. Asaf Ashar is Research Professor (emeritus) with the National Ports & Waterways Initiative (NPWI) at the University of New Orleans and an independent consultant. He has more than 40 years of extensive experience with ports, shipping, and multi-modal transportation projects in the US and more than 30 countries. For more information about Dr. Ashar, visit www.asafashar.com.

Click here for a summary of Dr. Ashar's analysis or download the complete report

Get the facts and learn more about how the proposed dredging threatens taxpayers and the St. Johns River. 

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