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Derivation of unit transportation savings for each commodity-Continued

Coal (oil company).

Fuel oil (paper company).

Soda ash (paper company).

Rolled paperboard (oversea shipments P from Huss Ontonagon Paper Co. Rate for direct oversea shipment the same from Ontonagon as from Green Bay).

Mr. RHODES. Mr. Chairman, before you leave this item, as I recall, and it is only a recollection, you had a different benefit-cost ratio on this project last year; is that correct?

Colonel PINNELL. Yes, sir.

Mr. RHODES. What was the benefit-cost ratio used last?

Colonel PINNELL. 1.5 to 1. This year it is 1.4.

Mr. RHODES. What is the primary difference?

Colonel PINNELL. We have had recent experience in dredging in this general area. The unit costs of dredging have been higher recently so we have increased our estimate of the cost of dredging for the project.


Mr. BOLAND. We shall turn to one where the benefit-cost ratio is 1.3 to 1; $120,000, Saginaw River, Mich.

Place the justifications in the record.

(The justifications follow:)


(Initiation of planning)

Location and description.-The Saginaw River, located in the east central part of the Lower Peninsula of Michigan, is formed by the union of the Tittabawassee and Shiawassee Rivers. The river, about 22 miles long, flows in a northerly direction from Saginaw, Mich., to its outlet in Saginaw Bay, Lake Huron. The project provides for deepening the existing bay channel to a depth of 27 feet from deep water in Saginaw Bay to the angle in the channel near the mouth of the river; deepening the approach channel to a depth of 26 feet from the angle in the channel to the river mouth; deepening the river channel to a depth of 25 feet from the river mouth to the Detroit & Mackinac Railway bridge and deepening the river channel to a depth of 22 feet, upstream from the Sixth Street Bridge in Saginaw for a distance of 2,800 feet. The project also provides for deepening the Essexville turning basin to a depth of 25 feet, construction of a new turning basin opposite the Clements Municipal Airport, 22 feet deep and for construction of a new turning basin 20 feet deep at Sixth Street.

Authorization.-1962 River and Harbor Act.
Benefit-cost ratio.-1.3 to 1.

Summarized financial data

Estimated Federal cost (Corps of Engineers) –
Estimated Federal cost (U.S. Coast Guard)
Estimated non-Federal cost..

[blocks in formation]

$5,040, 000 55, 000 1 116, 000 0

116, 000

5, 211, 000 120, 000





Balance to complete preconstruction planning after fiscal year 1965.

1 In addition, local interests have incurred costs of $438,000 in development of this harbor. They have also constructed docks and bulkheads and dredged berthing areas, the cost of which is not available.


There has been a substantial increase of waterborne commerce handled on the Saginaw River in the past 10 years reaching a total of 5,041,897 tons in 1962. Coal, limestone, petroleum products, sand, grain, cement, pig iron, and scrap metal are the principal commodities handled by the lake vessels with coal and limestone comprising about 67 percent of the 1962 total. Oversea commerce on the Saginaw River developed rapidly with the opening of the seaway and consists mainly of bulk cargo receipts of benzol, while shipments consigned to

foreign ports consists mainly of iron and steel scrap and chemical products. Present depths are inadequate to permit the use of modern lake vessels and the larger oceangoing vessels using the Great Lakes connecting channels and St. Lawrence Seaway. Deepening the existing channels and turning basins and constructing two new turning basins will permit the use of larger vessels for both domestic and oversea commerce resulting in considerable savings in transportation cost. In addition, the turning basins will provide for easier and safer navigation.

Completed modifications

Under the 1910, 1930, 1937, and 1938 River and Harbor Acts, the river has been dredged to depths of 20 and 21 feet to the mouth and 21 feet in the bay, at a cost of $2,082,000.

Remaining authorized modifications

The River and Harbor Act of September 3, 1954, provides for dredging a new channel in the bay, 350 feet wide and 24 feet deep from the 24-foot contour in Saginaw Bay to the mouth of the river; deepening the river channel to 24 feet deep from the mouth of the river to the Detroit & Mackinac Railway bridge, thence 22 feet deep to the Sixth Street Bridge in Saginaw, with turning basins in Essexville and Carrollton. Dredging the new bay channel and deepening the river channel to the Detroit & Mackinac Railway bridge, including dredging the Essexville turning basin has been completed. Deepening the remainder of the river channel, including the Carrollton turning basin is presently underway. Estimated total cost of this modification, which is about 90 percent complete, is $5,749,000.

Non-Federal costs.-The estimated cost to local interests for modification of existing berthing areas, submarine utility relocation and dike construction for spoil disposal areas is $116,000. The estimated cost to local interests of complying with the requirements of local cooperation on other project modifications is $438,000. In addition, local interests have constructed docks and bulkheads and dredged berthing areas, the costs of which are not available.

Status of local cooperation.-Assurances have not been requested. The Michigan State Waterways Commission, the local cooperating agency, and other responsible local interests are in accord with the project and have indicated a willingness to meet the requirements of local cooperation.

Comparison of Federal (Corps of Engineers) cost estimate.-The current Federal (Corps of Engineers) cost estimate of $5,040,000 is an increase of $260,000 over the latest estimate ($4,780,000, January 1962) submitted to Congress. This increase is due to higher price levels.

Mr. BOLAND. Will you briefly describe this new planning start? Colonel PINNELL. This project would provide for deepening the bay channel to a depth of 27 feet, deepening the existing channel in the Saginaw River up to the Detroit & Mackinac Railroad bridge to a depth of 25 feet, providing two new turning basins, deepening an existing turning basin and extending the 22-foot deep channel 2,800 feet upstream from the Sixth Street Bridge in Saginaw.

There is substantial commerce in this area, now. The provision of these greater depths would permit more efficient and economical use of deeper draft vessels.

Mr. BOLAND. The cost of this project is less than the cost for the Ontonagon Harbor. The ratio, here, is 1.3 to 1 and the other, 1.4 to 1. For this project the lower cost involves a harbor with 5 million tons of traffic. The previous project hopes to get 388,000 tons eventually. Will you comment on the relative merits of these two investments? Colonel PINNELL. May I supply this for the record?

Mr. BOLAND. Yes, sir.

(Information furnished as follows:)

The benefits at Ontonagon result from the large unit savings per ton realized by converting from other modes to deep draft water transportation. Much smaller unit savings per tons are realized at Saginaw where the benefits result in savings in transportation by loading to deeper drafts in an existing deep draft harbor.


Mr. BOLAND. Indian Grave District, Ill., $96,000.
Please place the justification in the record.
(The justification follows:)


(Continuation of planning)

Location and description.-The Indian Grave Drainage District in Adams County, Ill., lies on the left bank of the Mississippi River, opposite and below the city of Canton, Mo. The plan of improvement provides for raising and strengthening of existing Mississippi River and diverted creeks' levees and related work. Authorization.-1954 Flood Control Act.

Benefit-cost ratio.-1.4 to 1.

Summarized financial data

Estimated Federal cost..
Estimated non-Federal cost..
Cash contribution

Other costs _ _

Total estimated project cost
Preconstruction planning estimate.
Allocations to June 30, 1963_

Allocation for fiscal year 1964.

Planning allocation for fiscal year 1965.

Balance to complete preconstruction planning after fiscal year 1965__

$5, 700, 000 1 110, 000


110,000 5,810, 000 246, 000 50, 000 100, 000

96, 000


1 In addition, local interests since 1880 have expended approximately $1,482,000 in construction funds and in excess of $1,223,000 in maintenance and operation funds to provide partial flood protection in the project



The project will provide a high degree of flood protection to 17,777 acres of highly productive farmland, including 72 sets of improvements (farm buildings) on about 80 operating farm units. The existing levees constructed by local interests were seriously threatened during recent Mississippi River floods. During the major flood of June 1947 and March-April 1960, flood-fighting operations by local interests prevented failure of the levee system. In the June 1947 flood, $17,000 was expended by local interests for flood-fighting activities; in 1960 flood-fighting costs were $18,500. Damages, including emergency protective works and losses to crops by seepage through the levees, caused by the June 1947 flood, amounted to $519,000. The last major flood which caused failure of the existing levee structure occurred in March 1929. No information is available concerning damages caused by this flood. In the event of occurrence of the design flood, an estimated $1,576,000 (current prices) in damages would be caused. Average annual benefits for the project are estimated at $344,000.

Non-Federal costs.-The investment required of local interests in construction of the authorized project is estimated at $110,000, broken down as follows: Lands and damages.. Ramps


$102, 000



Local interests are required to maintain and operate the project upon completion. It is estimated that the average annual expenditure for maintenance, operation, and replacement pertinent to the new levee construction will total $6,800.


In addition, the drainage district, organized in 1880 and reorganized in 1914, constructed the original levees and during the period 1929-32 the district paid one-third of the cost of levee improvements by the Federal Government. existing levees and pumping facilities cost $1,682,000, of which $1,482,000 were non-Federal costs. Since organization of the drainage district, and through the period of record in the Rock Island District, accumulated maintenance and operation costs of the levees, drainage ditches, and the pumping plant together with administrative expenses have been in excess of $1,223,000.

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