In early March, the state’s Coastal Protection and Restoration Authority announced it was soliciting proposals from engineering firms to design the Mid-Barataria Sediment Diversion, an estimated $1.4 billion project to rebuild marshland by redirecting sediment from the Mississippi River into the Barataria Basin south of New Orleans.
The announcement was a big deal for the CPRA, as Business Report details in its new cover story. After years of planning for marquee projects like Mid-Barataria, money from the BP Deepwater Horizon oil spill settlement was finally making its way to Louisiana and serious coastal rebuilding could begin.
To underscore the project’s importance to the state, Gov. John Bel Edwards requested in January that the Mid-Barataria project and four others be placed on the federal “dashboard,” a process intended to fast-track the permitting process.
Nevertheless, at a March 15 meeting of the CPRA board of directors in New Orleans, the district commander for the U.S. Army Corps of Engineers told a standing-room-only crowd that permits for the project likely won’t come until 2022. In other words, it will be five years before construction can even begin, much less be completed.
Many in the room were stunned. Earlier estimates had put the permitting timetable at around 2.5 years. CPRA Chairman Johnny Bradberry wasn’t having any of it.
“Five years is unacceptable,” he said. “We are going to push hard to get that expedited. If you look at where we are that is just not acceptable. The leadership in the Corps knows this. We are going to push every damned day on this.”
Rebuilding Louisiana’s coast is proving to be slow and difficult, not that anyone thought it would be quick or easy. But for years, the coastal effort mostly consisted of planning. Now that there’s a solid funding stream—thanks to the BP settlement and federal offshore oil drilling revenues—there’s real money to put behind the projects. There are also questions about why more projects aren’t shovel-ready.
Part of the reason things are moving so slowly is because of the federal government’s complex, Byzantine permitting requirements. Part of it has to do with challenges acquiring land rights.
But financing these massive projects remains the biggest hurdle. The state has a 50-year master plan containing 120 projects with a collective price tag of at least $50 billion. It has identified just $10.7 billion that it reasonably expects to receive over the next 15 years, and another $8 billion or so over the next 35 years beyond that—totaling about one-third of what’s needed.
Not only is there not enough money, but there’s a cash flow issue. The federal dollars that are coming in from the oil spill settlement, which will go to pay specifically for restoration projects, don’t come in lump sums. Rather, they’re paid out in the form of reimbursement grants, and only a certain amount is available each year. As a result, it’s impossible to bid out an entire construction project that’s expected to cost, say, $500 million, if only $50 million is in the pot today.
That’s why an increasingly frustrated private sector has been brainstorming innovative ways to streamline the permitting process, leverage the existing dollars, and finance the design and construction of projects.
Read the complete cover story, which includes graphics detailing the funding sources the CPRA has identified for Louisiana’s coastal projects through 2032, and some of the estimated costs of waiting to tackle critical coastal projects. Send your comments to editors@businessreport.com.
