Washington, DC – A new study by three Iowa State University researchers and a private agricultural economist concludes that the economic costs vastly outweigh any benefits of building new lock extensions on the Upper Mississippi River. The study, published in the Journal of the Transportation Research Forum, validates the earlier work of a U.S. Army Corps of Engineers senior economist, Dr. Donald Sweeney, who disclosed through Public Employees for Environmental Responsibility (PEER) that top Corps commanders had “cooked the books” in an effort to attempt to justify the $1.5 billion project.
Despite an investigation by the US Army Inspector General verifying Dr. Sweeney’s charges, the disciplining of three Corps commanders, and a National Academy of Sciences review validating Dr. Sweeney’s economic analysis, the Corps has restarted the study in order to justify building a series of new, larger locks on the Upper Mississippi River and Illinois Waterway systems.
The Iowa State study, one of whose authors served on the National Academy panel, finds:
* Benefits of less than eleven cents for every dollar invested, even in a best case scenario;
* Most potential transportation cost savings will not be passed on to local farmers but instead to exporters and “consumers in importing countries;” and
* “Large-scale improvements are likely to have only minimal impacts on grain flows and generate negligible increases in net income for elevators and grain producers.”
The study concludes that: “it is unlikely that any theoretically sound study will be able to economically justify investments in lock extensions.”
“This study explains why the Corps is avoiding any economic analysis and relying on qualitative ‘scenario-based’ planning in attempting to resurrect this boondoggle,” stated PEER Executive Director Jeff Ruch. “Contrary to claims that this project is vital to the economic health of Midwest farmers, the study shows that the only people in this country who will significantly profit from this huge taxpayer subsidy is – surprise – the barge industry.”
The study entitled, “Evaluating the Logistical and Economic Impacts of Extending 600-Foot Locks on the Upper Mississippi River: A Linear programming Approach,” was published in the fall 2001 issue of Transportation Quarterly, Journal of the Transportation Research Forum (vol. 40, 83-103).
