SAULT STE. MARIE, MI — Inflation, increased labor costs and supply chain issues have ballooned the estimated cost of a major reconstruction project at the Soo Locks shipping complex according to lawmakers, who say the pricey effort has doubled or tripled in price from current projections.
The new estimates came out this week after Capitol Hill briefings by the U.S. Army Corps of Engineers, which is bidding out final phases in the long-awaited project to build another lock able to handle the largest Great Lakes freighters.
The changes have thrown the rebuild timetable into some question, as Congress may need to reauthorize the project at a higher cost. Congress authorized the project in 2018 for up to $922 million and the work had been scheduled to finish in 2030, but that’s now dependent on Congress and Biden administration budgeting.
“We recognize that funding a larger amount for the New Lock at the Soo is a challenge that could potentially result in schedule impacts,” said Soo Locks spokeswoman Carrie Fox. “The Corps of Engineers is partnering with industry and federal partners to find collaborative solutions aimed at addressing the impact to the costs of our programs and projects.”
Lawmakers say measures to aid the project are being folded into the latest Water Resources Development Act, or WRDA, which is awaiting floor votes in both the House and Senate.
U.S. Sen. Debbie Stabenow, D-Mich., expressed “deep frustration” over the new cost figures, but said project flexibility is being addressed by the WRDA bill, which could enable construction to continue under the existing authorization though fiscal year 2025.
“One way or another, the new lock is going to get done,” Stabenow said.
U.S. Rep. Jack Bergman, a Republican who represents Michigan’s Upper Peninsula, called the new Soo cost projections “extremely disappointing.”
“In addition to inflation and the rising costs of everything from tools and equipment to personnel, the Army Corps made miscalculations in the original cost estimates — making the total cost of the project far higher than originally thought,” Bergman said in a statement.
“This is not something to sweep under the rug or pass off as an oversight,” Bergman continued. “Ultimately, this is on the Corps to take responsibility and be accountable for this issue, but Congress must implement necessary oversight.”
Great Lakes shipping industry advocates say they expect Congressional action in fairly short order, citing longstanding bipartisan support for the project.
“Whether it’s a $1 or $2 billion project, it’s still a good investment in the future of North American manufacturing,” said James Weakley, president of the Lake Carriers Association, a trade group that represents U.S.-flagged ships on the Great Lakes. “I do believe the project will proceed, particularly since they’ve got almost a billion dollars sunk in already.”
Weakley said part of the frustration on Capitol Hill appears to be based on the belief that the project had finally gotten across the finish line, and “now that appears not to be the case.”
“It’s embarrassing that they got it wrong, but it’s better to know sooner than later,” Weakley said. “And it gives Congress a more realistic opportunity to fix it.”
Over the next six years, the Army Corps is reconfiguring the inactive Davis and Sabin locks into a single large chamber similar to the existing Poe Lock, which is 1,200-foot long and 110-feet wide. It’s the only lock big enough to move the increasingly longer and wider Great Lakes ships.
A second Poe-sized lock will ensure that ore from the Minnesota iron range could still reach steel mills on the lower Great Lakes should the lock unexpectedly close.
In January, the Army Corps secured what lawmakers thought was full funding for the project thanks to $479 million from the bipartisan infrastructure law; which followed $480 million from the president’s 2022 budget and almost $300 million in 2020 and 2021 Congressional appropriations.
The project was estimated to cost $1.3 to $1.5 billion.
The Army Corps closed bidding for the third phase of the project, construction of the new lock chamber itself, in January. Afterwards, it realized industry construction estimates were higher than the government’s, according to the Detroit News.
Fox said “market conditions” are affecting the Soo “as well as other civil works projects.”
“We are accounting for those changing market conditions, to include materials, equipment, and labor,” Fox said. “In order to be responsible, the U.S. Army Corps of Engineers is in the process of delivering to Congress a new cost estimate for reauthorization consideration.”
Construction on the new lock began in 2020 by deepening the 25-foot channel leading into the new lock another five feet to accommodate modern vessel drafts. Jacobsville sandstone is being dredged from the channel, resulting in a reddish-brown coloring in the water.
As channel dredging continues, crews have already begun working on the second phase of construction, which involves reinforcing channel approach walls.
“Phase one is wrapping up work. We’re expecting them to be complete within the next couple of months,” said Rachel Miller, project supervising civil engineer. “Phase two just started last summer and they’ve got a couple of years left to go.”
The third phase, building the new lock chamber, is expected to take about six years.
The unused Sabin Lock is being demolished and rebuilt into a wider and deeper lock chamber. The lock was last used in the 1990s and is in deteriorating condition, with large cracks in the concrete walls, decaying wooden gates and growing vegetation.
The new lock will feature hands-free mooring, which Army Corps construction supervisor Kristina Schnettler likened to “giant suction cups” that will hold ships in place while the water level changes, “which is a much safer process because handling the lines, they’re really heavy and there’s also a risk of them snapping and injuring someone.”
The work is complicated and lengthened by a colder climate and the need to halt construction for three months each year, the Army Corps said. Contractors must also cross navigation channels and two active locks, the MacArthur and the Poe, to reach the construction site.
The project was originally authorized in 1986 but was reauthorized in 2018 after the Army Corps recalculated its feasibility using a new cost-benefit analysis that accounted for the lack of railroad transport options to move iron ore should the locks break down.
That update was pushed by the shipping industry, Congress and former Michigan Gov. Rick Snyder’s administration, which agreed to pay $52 million to jumpstart the project in late 2018.
It was also prompted by a 2016 federal Homeland Security report which suggested an unexpected six-month Poe Lock outage would wreak havoc on supply chains, plunge the country into a recession and cost 11 million jobs.
Having a second Poe-sized lock would allow redundancy at a critical supply chain link as well as greater efficiency in general shipping operations. All shipping — including freighters, tour boats, patrol boats, cruise ships and more — are using the Poe Lock this spring while maintenance work is ongoing at the smaller MacArthur Lock, which has been emptied.
“With the new lock, we’re anticipating the delays will be significantly less,” said Lockmaster Chris Albrough last week. “On days we’re backed up with traffic, we can essentially have one-way traffic through each lock.”
Mark Barker, president of Interlake Steamship Company, which operates several ships in the 1,000-foot class, including the largest vessel on the Great Lakes, the Paul R. Tregurtha, said having a second large lock is “vitally important to have a proper working waterway.”
The project cost “matters to us all — we’re taxpayers, right?” Barker said.
“I think we all want to ensure we can make cars and build things that need steel and that lock is what does that,” Barker said. “Trying to put a true value on that is sometimes difficult.”
“You don’t know what you what you lose until you lose it.”
- MLive reporter Sheri McWhirter contributed to this report
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