While a political firestorm rages over whether a United Arab Emirates company — Dubai Ports World — should be allowed to manage six U.S. ports (see p. 38), little attention is being given to the overall health of all U.S. ports. Although the Bush Administration's 2007 federal budget includes $65.6 billion for transportation, with $258 million designated for the U.S. Maritime Administration (MARAD), representatives of the nation's ports say that amount is nowhere near enough.
Bernard Groseclose, president and CEO of the South Carolina State Ports Authority and chairman of the American Association of Port Authorities (AAPA), points out that 99% of U.S. overseas cargo, valued at $2 trillion, passes through U.S. ports annually. Under-fundingsecurity and deep-draft channel maintenance could seriously hamper port operations and set off a corresponding ripple effect through the U.S. economy.
"It's particularly troubling that channel maintenance is under-funded since the money to maintain the country's federal navigation channels has been 'prepaid' by the users of the channels via payment of a harbor maintenance tax on imports and domestic cargo shipments," says Groseclose.
Pointing to another area the proposed budget would change, Kurt Nagle, president and CEO of AAPA, notes, "The federal share of the seaport facility security funding partnership needs to be increased, not reprogrammed and diluted." Nagle is referring to a proposal to eliminate the Port Security Grant program and lump maritime security infrastructure needs with trains, trucks, busses and public transit under the Targeted Infrastructure Protection program.
In the five rounds of funding since 2002, the Port Security Grant program has provided U.S. ports with $708 million — one fifth of what the ports themselves said they needed for security.
When the Port Security Grant program began, the U.S. Coast Guard estimated that port facilities would have to spend $5.4 billion over a 10-year period to comply with new regulations in accordance with the Maritime Transportation Security Act of 2002. Since September 11, 2001, the grant program has made only $708 million available out of the nearly $3.8 billion requested for port security expenses. AAPA recommends annual funding at a $400 million level.
The Army Corps of Engineers' Civil Works program, which is responsible for maintaining federal navigation channels, must maintain current programs at authorized project depths to keep the ports operating efficiently, say the port executives. Deep-draft channel maintenance and other programs are under-funded and would require $750 million from the Harbor Maintenance Trust Fund, says Nagle. The budget calls for $707 million and, though that is up $33 million over last year, it is less than the $750 million the AAPA says is needed for navigation channel maintenance. Overall, the Corps' Civil Works budget is funded at $4.7 billion, $700 million less than Congress appropriated.
The budget calls for some draw down of the estimated $3 billion surplus in the Harbor Maintenance Trust Fund, but this is not enough, says Nagle. These are funds already paid into the Trust Fund through the harbor maintenance tax paid by users, and that surplus is expected to grow to $5 billion by 2010. During that time, port volumes are expected to grow dramatically, including container traffic.
Groseclose suggests cargo volumes at the Port of Charleston will double by 2020. The port is already diverting 15% of its capital budget to security. That effect is multiplying among U.S. ports.
Elsewhere, ports complain that only a portion of security expenditures have been reimbursed under the Security Grant program. The Port of Anchorage claims it has spent $5.3 million on security since 9/11 and has received only 12% of that amount from the program. It faces another $630,000 in security spending in the next two years.
Among Texas ports, the Port of Beaumont faces $1.3 million in spending, the Port of Brownsville $2 million, the Port of Corpus Christi $22 million, the Port of Orange $1.1 million and Port Authur $4 million.
"All international borders need protection," says Nagle, but the current budget proposal will force port authorities into choosing whether to fund security requirements or infrastructure maintenance. Some ports are already seeing their harbors and channels losing depth and, consequently, must limit ship access.