A Synthesis of Modern, Professional Economic Wisdom and Literature Pertaining to Navigation Projects
Ronald C. Griffin, Arthur P. James and John P. Basilotto, Texas A&M University, February 1997, 109 pp. (467109-1)
If large, complex, lengthy, multiple-use projects of interest to several groups are to be evaluated for their desirability, the criteria for the evaluation must first be agreed to. The setting for modern evaluation of government projects dates back to the River and Harbor Act of 1902, which, “required a board of engineers to report on the desirability of Army Corps of Engineers’ river and harbor projects, taking into account the amount of commerce benefitted and the cost.” Recently, however, environmental critics have charged that previous studies are of limited use because economic benefits present only one side of the ledger i.e., they do not analyze the potentially adverse impacts of maintenance dredging and disposal on natural resources. Industry on the other hand, believes that studies performed by the Army Corps of Engineers that only calculate benefit/cost ratios do not fully measure all of the benefits associated with inland waterway transportation and therefore the benefits are typically understated. Additionally, critics from all camps seem to agree that most studies neglect the “safety” or “risk” value aspects of inland waterway transportation compared to other transportation modes. Knowing how to evaluate and select projects to be approved, paid for, and operated by the government is important to all stakeholders, not just the government. This report examines the elements of cost-benefit analysis pertaining to navigation projects and synthesizes a sample of completed studies of waterway and other related public works projects over the last several years. The purpose of this undertaking is to provide a means of placing these studies into easily identifiable categories to aid future analysts in their task of selecting methodologies for studies they may undertake.
Keywords: Cost-Benefit Analysis, Economic Impact Studies, Gulf Intracoastal Waterway, Risk, Valuation Methodologies, Navigation, Input-Output Analysis, Principles and Guidelines, GIWW