After nearly a dozen years of study and debate, the Army Corps of Engineers put on hold a final decision yesterday on whether taxpayer funds should be spent to deepen the Chesapeake and Delaware Canal, essentially ending work on the project until the port of Baltimore can prove it will generate enough new shipping business to justify its $40 million-plus price tag.
The port requested the delay last week after the corps indicated that it was prepared to recommend against spending federal funds on the project, considered critical to the port's efforts to retain its containerized cargo business and attract new shipping lines. The canal provides deep-draft ocean ships a shortcut to the port, saving shippers the time and expense of a longer trip up the Chesapeake Bay.
The corps said it would give the port three years to submit additional data showing an increase in shipping business through the canal, which port officials want deepened from 35 feet to 40 feet. If the port hasn't experienced a turnaround by that time, the project will remain in hibernation for up to seven years, after which federal law requires that it be removed from consideration. At stake is about $26 million worth of federal funding for the project.
The corps' decision was largely hailed as a victory for environmentalists, taxpayer groups and citizen activists critical of the Corps of Engineers' tactics in the wake of recent accusations that the federal agency has manipulated studies to justify costly water projects, including the C&D Canal.
But it also deals a blow to the port just as it is beginning to reap the benefits of a 1996 strategic plan to attract more automobiles, farm tractors, forest products and other niche cargo to Baltimore. State officials complained that the corps' analysis ignores those niche markets, instead focusing its economic analysis solely on the port's struggling container business.
"It has become clear that, based on recent downturns in containerships calling on the port of Baltimore, it is unlikely there is federal interest in proceeding with the C&D Canal project at this time," Lt. Col. Timothy Brown, the corps' Philadelphia District engineer, wrote to state transportation officials after they requested the delay.
Kathleen Broadwater, director of planning and business development for the Maryland Port Administration, said that, despite the downturn, the port is starting to see some improvement in its container business, with container cargo volume up 11 percent during the first half of last year compared with the corresponding period of 1999. And, she said, there is evidence that ships carrying automobiles, forest products and other niche cargo to Baltimore might benefit from a deeper canal - a factor the corps' analysis did not consider.
Generally, such ships do not now draw more than the current 35-foot depth of the C&D Canal.
"We've had such good success in some of our niche cargo markets and some of those segments have indicated they are going to start to use larger ships," Broadwater said.
She said transportation officials have not ruled out funding the project entirely with state money.
Industry analysts say the port of Baltimore needs a deeper C&D channel if it is to remain a contender for lucrative container business. Trends in the industry suggest that an increasing number of vessels calling at East Coast ports will draw at least 38 feet of water. Such ships take the longer trip up the Chesapeake Bay, which is maintained at 50 feet.
"The container fleet is outgrowing the C&D Canal," said Kevin Horn, a research professor with the National Ports and Waterways Institute at Louisiana State University.
Evergreen Marine Corp., the largest container line to call at Baltimore's port, had previously threatened to pull back service to the city if the canal were not deepened.
The threat became a key argument in the port's campaign for the project. The shipping line indicated yesterday that it remains committed to the city. "The C&D Canal is a very important issue to Evergreen," said Barbara Yeninas, a spokeswoman for the company. "But Evergreen's relationship with the port of Baltimore even without the canal project is still as a strong and viable market."
Critics say the Corps of Engineers decision validates their arguments against the project.
At the top of the list is Maryland Rep. Wayne T. Gilchrest, 1st District Republican, and a group of Eastern Shore residents, who for the past four years have been loudly calling attention to what they contend are fundamental flaws in the corps' original draft report justifying the C&D project.
In defiance of the governor and the rest of Maryland's congressional delegation, Gilchrest and his working group have consistently argued that the project would harm the Chesapeake Bay while doing little to reverse a more than decade-long decline in the port's container cargo business.
"We sacked their quarterback, and now we're in a position to make a field goal," Gilchrest said yesterday. "I see this as a continuation in long struggle to ensure that federal agencies take their role seriously as independent."
John Williams, a retired DuPont Co. engineer on Gilchrest's working group, said the project might have been approved if not for the efforts of Gilchrest and others. Williams is credited with pointing out mathematical errors in the corps' initial analysis. "The corps' process [is broken]," he said. "I don't know if it ever worked."
A spokesman for the corps disputed suggestions that the C&D project would have been approved had it not been for the intervention of Williams and other activists.
"They certainly had an impact, but at this point the key is the fact that the economic trends have headed down significantly [for the port] and that's what is driving it," said Edward Voigt, who works in the Philadelphia District.