June 12, 2002

WASHINGTON, D.C. -- A new report by the General Accounting Office says the U.S. Army Corps of Engineers relied on invalid assumptions, used outdated data and made math errors in its $311 million plan to deepen the Delaware River.

Critics said the report raises new questions about the Corps' proposal to dredge the Columbia River.

The report was released Monday by the GAO, the investigative arm of Congress. It also said the Corps cannot ensure that the project's benefits to the economy would exceed its costs to taxpayers.

"Because of the significance of the problems we identified, the actual economic merits of the Delaware River deepening project will not be reliably known unless and until it is comprehensively reanalyzed," the agency said.

Critics said the GAO report casts doubt on similar projects across the nation, including a $188 million plan to deepen the Columbia. That project is on hold pending the Corps' review of its economic analysis.

'Need for change'

"This report is a ringing endorsement of the need for truly independent peer review of all corps projects," said Jeff Stein of Taxpayers for Common Sense, an advocacy group. "It definitely adds to the chorus of the need for change within the Corps."

In the case of the Delaware, the GAO said the Corps failed to update counts of traffic on the river, relying on old estimates that were higher than actual totals. The Corps also chalked up benefits for some deep-draft ships that would travel at depths shallower than the channel's current 40-foot limit.

The Corps also made errors in its calculations, the GAO said. For example, it counted benefits for 51 years while amortizing them over 50 years. In other instances, the Corps used inconsistent rates to discount benefits to current dollar figures.

In all, the Corps overstated annual benefits of the project by 67 percent, the GAO said. Actual benefits would be about $13 million, or less than half the annualized cost of dredging the Delaware 5 feet deeper.

The criticisms are similar to those included in reports on the Columbia dredging proposal published in The Oregonian newspaper in May. Both the Corps and its major sponsor, the Port of Portland, disputed the newspaper's findings, but the Corps has begun a review and update of its analysis, which it plans to make public in August.

Homer Perkins, a corps spokesman in Washington, D.C., said the GAO's conclusions probably would be incorporated in a review of Corps projects that began last month, as well as the agency's review of the Columbia project.

"It's too soon to tell if one will directly translate into the other," Perkins said. "But we have to go with the assumption that if an item was called into question one place, that we would certainly look at it in the other place. I think that's fair to assume."