INLAND WATERWAYS AND INFRASTRUCTURE PLANNING
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1 INLAND WATERWAYS AND INFRASTRUCTURE PLANNING Mark Hammond Co-Tech Director, Planning Center of Expertise for Inland Navigation (PCXIN) Great Lakes and Ohio River Division (LRD) 22 November 2013 US Army Corps of Engineers
2 Inland Waterways and Infrastructure Planning* 1) Corps Planning Process 2) Challenges 3) Conclusions * This presentation is in support of the TRB s consensus study titled Reinvesting in Inland Waterways: What Policy Makers Need to Know. 2
3 Six Step Planning Process 1) Identify Problems & Opportunities - Scoping 2) Inventory & Forecast Critical Resources* 3) Formulate Alternative Plans Nonstructural, Structural 4) Evaluate Alternative Plans NED, EQ, RED, OSE 5) Compare Alternative Plans 6) Select Recommended Plan NED, NER, Combined Planning Guidance Notebook ER Apr 2000 * Involves readying the economic model(s) too! 3
4 Problems & Opportunities Reliability and aging infrastructure (decay) Construction and declining revenues Maintenance backlog with flat budget Infrastructure Investment means jobs and economic growth 4
5 Inventory and Forecast Study Area Resources Industries Commodity Traffic Transportation Systems Shippers (Demand) Traffic Demand (uncertainty) Transportation Rates Willingness to Pay Project Performance (Supply) Reliability (risk) Capacity Price P Q S D Quantity 5
6 Inventory and Forecast UNCERTAINTY Ohio River Basin Forecast Waterway Demand Forecasts Based on Alternative Futures 6
7 Inventory and Forecast Transportation Rates Waterway & Overland Base Rate Savings Current Future Waterway Cost: $ 10 $ 16 Overland Cost: $ 20 $ 20 Savings/Ton: $ 10 $ 4 Water Routing Land Routing Metropolitan Statistical Area 7
8 Inventory and Forecast Willingness-to-Pay for Barge Transportation Price Elasticity of Demand Shipper Stated Preference Curve εpq = % p/% q $ $ Max. $ WTP Rail R Q Rail Rail Barge B Q Barge B Q Barge B Q Q e 8 Q e Q e
9 Inventory and Forecast Modeling Lock Performance - Capacity Tonnage-Transit (Supply) Curve WAM uses LPMS data to simulate Supply Greenup Main Chamber Closures Transit Time (Hrs) Full Op 1-day Main 3-days Main 5-days Main 10-days Main 15-days Main 30-days Main 45-days Main 60-days Main 90-days Main 180-days Main 365-days Main ,000 40,000 60,000 80, , , , ,000 Tonnage (KTons) Family of Curves set of curves for different closure durations 9
10 Inventory and Forecast Component Engineering Reliability - RISK 100% Hazard Function Event Tree 80% 60% 40% 20% 0% MINOR #1 Replace Hz MINOR #2 MAJOR Performance over time Non-Price Determinant of Supply CATASTROPHIC 10
11 Inventory and Forecast Demand Forecast (Uncertainty) Rates (Cost) Elasticity (Shape, Slope) Supply Capacity (Ton-Transit) Reliability (Risk) Savings ($) per Ton $180 $160 $140 $120 $100 $80 $60 $40 $20 Million Tons ORS Forecasts LOW BASE HIGH Transit Time (Hrs) Full Op 1-day Main 3-days Main 5-days Main 10-days Main 15-days Main 30-days Main 45-days Main 60-days Main 90-days Main 180-days Main 365-days Main Greenup Main Chamber Closures $- - 50,000, ,000, ,000, ,000, ,000,000 Tonnage Year of Following Annual Time Prob. Prob. Year Failure Year Dependent Degree of Repair Repair of Closure 1/2 Spd Effect on Probabilities Failure Level Level Repair Days Days Reliability Component Cost Satisfactory New Gate 5% 1 $13,150, all future years R=1 Table Values 2 $3,150, Main - Gate Event Tree Major Major Repair 35% 1 $1,575, Back 5 years 100% 2 $1,575, Temporary Repair with 60% 1 $3,575, R=1 all future years New Gates 60% 2 $3,575, Annual Unsatisfactory 3 $5,050, Table Values 100% Minor 20 0% 90% Scheduled Replacement Year 1 = 30 - closure days and cost $5,050,000 Year 2 = 30 - closure days and cost $5,050,000 80% 0 Future Reliability will be equal to 1.0 for all future years after replacement 0 20,000 40,000 60,000 80, , , , ,000 70% Tonnage (KTons) 60% 50% 40% 30% 20% 10% 0%
12 Formulate Alternatives Management Measures Structural/Non-Structural Without-Project Condition With-Project Condition Formulate to maximize benefits to national economy and environment Structural + all below options Rehabs + Comp Replacements and Reactive Maintenance Component Replacements + Reactive Maintenance Reactive Maintenance Fix-as-Fails 12
13 Four Accounts Evaluate Alternatives NED* changes in economic value of the national output of goods and services EQ* non-monetary effects on ecological, cultural, and aesthetic resources and effects of ecosystem restoration RED changes in regional economic activity (income and employment) OSE community impacts, health and safety, energy conservation, etc. Price P S S P * required Q Q D Quantity 13
14 Compare Alternative Plans Formulation Criteria Matrix ranked by average annual net benefits Blue superior, green-acceptable, yellow-questionable, red-unacceptable performance to meet study objectives 14
15 Select Recommended Plan Preferable to no action NED Plan maximizes net benefits NER Plan (for ecosystem restoration projects) Combined NED/NER Plan optimum LPP - complicated 15
16 National Freight System 16
17 Challenge - Aging Lock Inventory Age in 2012 (Years) Dewatering and repairs of Inner Harbor Lock, GIWW, which opened in 1923 for steamboats % > Number of Operational Lock Chambers 17
18 Challenge - Condition Half of locks more than 50 years old Investments in water resources infrastructure have declined in real terms Result: more frequent closures for repairs, decreased performance and costly delays Leaking miter gates, Lock & Dam 52, Ohio R. Crumbling lock wall, Lower Mon 3, opened in 1907 Concrete deterioration at Chickamauga could result in lock failure 18
19 Challenge IWTF $ Million IWTF History / Projection FY Annual Surplus / Deficit Trust Fund Balance 19
20 Challenge - O&M Funding Current $ and 1996 Constant $ * Flat or declining O&M funding in constant dollars, even as project portfolio grows and ages Lock wall, Lower Mon $ Million Current$ Constant$ * Fuel-Taxed Waterways Only 20 Lock wall deterioration, Chickamauga
21 Conclusions Civil Works Transformation emphasizes planning, budgeting, delivering and sustaining infrastructure growing recognition that cost growth and insufficient funding disadvantages new construction Methods of Delivery initiatives include Production, Design, & Planning Centers PCXIN with study ready models and data sets supports Civil Works Transformation Waterways are part of national transportation system both competitive and complementary with other modes Maintenance may present as big a challenge as construction Public sector under-investment leads to private sector underinvestment resembling the downward spiral of urban decay Remediation requires effective public-private partnership that is dedicated to sustaining the inland system (revenues, finance, policy) 21
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