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Highlights

The U.S. Army Corps of Engineers' February 1992 Final Interim Feasibility Study and Environmental Impact Statement reported that deepening the Delaware River ship channel from 40 to 45 feet was economically justified and environmentally feasible. However, GAO found that it does not provide a reliable basis for deciding whether to proceed with the project. GAO identified several miscalculations, invalid assumptions, and the use of significantly outdated information on the Corps' benefits estimate. In addition, several unresolved issues and uncertainties were not factored into the Corps' economic analysis, the outcome of which could either increase or decrease the benefits and costs of the project. Because of these shortcomings, the actual economic merits of the project will be unclear until the Corps reanalyzes it. The Corps of Engineers has largely addressed the environmental concerns of federal and state environmental agencies. However, several unresolved issues remain, including the issuance of a permit from the state of Delaware governing construction projects that affect state waters.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Army 1. Considering the significant problems GAO identified with the Corps' economic justification for the Delaware River project, the Secretary of the Army should direct the Corps of Engineers to prepare a new and comprehensive economic analysis of the project's benefits and costs, which includes all aspects of the analysis and corrects for the miscalculations, erroneous assumptions, and outdated information contained in the current analysis.
Closed - Implemented
The Corps of Engineers has committed to, and is currently conducting, a reanalysis of the project, as GAO recommended.
Department of the Army 2. Considering the significant problems GAO identified with the Corps' economic justification for the Delaware River project, the Secretary of the Army should direct the Corps of Engineers to obtain the information, where possible, that is needed to address the uncertainties--such as changing commodity movements over the last decade and alternative dredging techniques--that could significantly affect project benefits and costs.
Closed - Implemented
The Corps of Engineers updated benefit and cost information in its reanalysis of this proposed project. The reanalysis showed that the project could be built for $56 million less than it had previously estimated.
Department of the Army 3. Considering the significant problems GAO identified with the Corps' economic justification for the Delaware River project, the Secretary of the Army should direct the Corps of Engineers to engage an external independent party to review the revised economic analysis to ensure that it accurately and fairly represents the expected benefits and costs of the proposed project.
Closed - Implemented
The Corps of Engineers engaged the services of a consultant to assist the Corps with its reanalysis of the Delaware River Deepening Project, and also engaged an independent party to review the reanalysis. These actions address the intent of GAO's recommendation.
Department of the Army 4. Considering the significant problems GAO identified with the Corps' economic justification for the Delaware River project, the Secretary of the Army should direct the Corps of Engineers to submit the revised analysis, including the external independent review, to Congress for its use in considering future appropriation requests for the project.
Closed - Implemented
This recommendation was a procedural step related to a number of other recommendations GAO made to the Corps of Engineers related to the Delaware Deepening project. While the Corps implemented the essence of this recommendation, it does not warrant a separate accomplishment report, as it was simply a procedural step related to several more substantive recommendations.

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