inflation, supply systems and other facdtors have jacke up the price for this levee system.
The total cost to complete the West Shore Lake Pontchartrain hurricane levee system west of New Orleans and keep it at proper heights over the next 50 years has nearly quadrupled to $3.7 billion due to environmental mitigation requirements, inflation and supply chain issues, the Army Corps of Engineers announced Friday. That means the state will be on the hook for a major increase in its 35% share of construction costs, plus the full cost of expensive future levee lifts. The Corps will also require additional federal funding to complete the project, which has been discussed for decades and finally broke ground in 2021 — after two catastrophic floods in the area. The original cost was $760 million. In a news release announcing the new estimates, the Corps said $1.27 billion in additional funding will be required for the levee itself and $1.7 billion for environmental mitigation and future levee lifts.“An increase in project cost has become common throughout the nation, for not only Corps of Engineers constructed projects, but also for goods and services due to ongoing supply chain issues,” said Col. Cullen Jones, commander of the Corps’ New Orleans District office. “We will continue to press forward in completing the ongoing work as well as awarding new construction contracts while simultaneously pursuing every option for securing additional funds required to deliver this system that will reduce hurricane storm damage risk for more than 60,000 residents in St. Charles, St. James and St. John the Baptist parishes.”
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The State is looking for funding.
State officials said they were committed to completing the project and were looking for funding options. “We are working with the Corps and Pontchartrain Levee District to explore all options for funding, including utilizing the $450 million appropriated for resilience features towards construction, because the most resilient project is a completed project,” said Bren Haase, chairman of the state’s Coastal Protection and Restoration Authority, which is the non-federal sponsor of the project. “While we’re disappointed with the most recent cost estimate, it also does not come as a surprise. We’re seeing increases across the board as other large-scale projects go to bid and begin construction.” U.S. Rep. Garret Graves, R-Baton Rouge, who was instrumental in getting the initial funding for the project approved by Congress, called the Corps’ announcement “absolutely infuriating.” “We are working to secure the funding, again, to complete the project, hold those accountable for the ridiculous cost increases, and turn over projects like this to the state, levee boards, and our parishes rather than the Corps,” he said.
The Pontchartrain Levee District is helping to look for funding.
Monica Gorman, executive director of the Pontchartrain Levee District, which includes the project, said her administration “and our partners will continue to pursue all funding avenues available through federal, state and local sources.” The levee district will eventually be responsible for operation and maintenance of the completed system, while the state shoulders immediate and future construction costs. St. John Parish President Jaclyn Hotard noted continuing work on the levee system and said “all are firmly committed to the quick completion of this critical project.” The project is being built to protect portions of St. John the Baptist, St. James and St. Charles parishes from surges like those that caused billions of dollars of damage during Hurricane Isaac in 2012 and Hurricane Ida in 2021.
Over $100M has been spent so far.
More than $100 million already has been spent on the project, which is scheduled to be completed by the end of 2026. So far, three levee reaches have been built and pile load testing for two new pump stations has been completed. An additional five construction contracts are expected to be awarded by early fiscal year 2024, using existing federal funds, Corps officials said. “No delays are anticipated at this time,” said a Corps statement. “We have funds in hand to continue all ongoing construction and to award and complete the next five scheduled construction contracts. We are assessing the current work and funding to determine when additional funding will be required to issue additional construction contracts.” A Corps spokesman said the agency reviewed the project’s costs under its “value engineering” program in 2020, but decided a re-evaluation was needed this year because of more refined design change details and current economic conditions, including inflation.
Mitigation efforts had a jump in price also.
Included in the new estimate is an increase of $700 million for environmental mitigation projects to offset the effects of building the levee through an 18 1/2-mile stretch of wetlands bordering the lake and through the Maurepas Swamp. The mitigation had originally been estimated to cost $120 million. Last year, the state succeeded in getting the Corps to count its planned construction of the Maurepas Swamp freshwater diversion and an adjoining levee that will be part of the West Shore system against the state’s cost share, and use them to meet the mitigation plans for restoring swamp and marsh damage. According to the Corps, since the diversion is now part of the levee project, its cost will be shared — 65% federal and 35% state. And in the context of the mitigation requirements, the state will be responsible for 35% of the first $375 million, and 100% for any additional costs, as those costs are expected to pay for completion of the diversion. The state was going to use a portion of about $200 million it is receiving from BP Deepwater Horizon oil spill natural resource damage payments to build the diversion and levee. The Corps estimate of additional costs for the diversion includes the cost for its operation, maintenance and any required design changes during its first 50 years of operation, according to Haase. Haase said the Corps has estimated that mitigation for damage to bottomland hardwoods will cost $160 million. The Corps will likely purchase credits at existing privately-owned mitigation banks.
The State takes over maintenance.
The state and levee district likely will also be on the hook for the full $1.3 billion cost of keeping the levees elevated to future 100-year protection levels over its first 50 years, Haase said, as those lifts now fall under the Corps’ definition of operation and maintenance of existing levee systems. A Corps spokesman said that the need for future lifts will depend on local subsidence rates, but it’s likely the first lift will be needed a few years after construction, the second about 5 years later, a third in another 15 years, and a fourth in another 15 years. The Corps said it also has decided to double the capacity of two drainage pumps, to 4,000 cubic feet per second. The pumps’ cost will increase by about $350 million, and will also incorporate improvements in corrosion resistance, following major corrosion problems at pump stations in New Orleans earlier this year. The state would be required to pay 35% of that increase. The Corps said other factors, including inflation, “updated labor market considerations,” levee segment relocations, and cost increases associated with initial construction of levees and floodwalls added $650 million to the project.
The initial appropriation was $776M.
Congress appropriated $760 million for initial construction of the levee system as part of the 2018 Bipartisan Budget Act, and another $453 million in 2022 under a Hurricane Ida federal aid bill to apply lessons learned from that storm to the levee’s design. The Corps said Friday that it has not yet decided whether the $453 million would be applied to the new construction estimate. According to CPRA Director Greg Grandy, the state had already arranged funding for its 35% share of the initial $760 million cost estimate, but “now that this has come out, we’re going to work with our partners to figure out a way to secure the funding for the rest of the cost of the construction and look beyond that as well, to the long-term costs.” The levee is being designed to block storm surges from Lake Pontchartrain that are generated by hurricanes that have a 1% chance of occurring in any year, a so-called 100-year storm.
The original plan was for an 18.5 mile system.
The original plan called for an 18.5-mile system that included 17.5 miles of earthen levee and a mile of floodwall stretching from the Mississippi River just west of Garyville, north into the Maurepas Swamp along Interstate 10, to the west side of the Bonnet Carre Spillway, just east of LaPlace. The levee system also originally called for a ring levee around the town of Gramercy and a U-shaped levee protecting Grand Point, and funds to pay for floodproofing, elevating or relocating some homes that would still face repeat flooding risks.
If Graves thinks the State could do better he is wrong. Too big a project and not the expertise.