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Trump budget proposal leaves an IOU for Charleston Harbor deepening

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The backhoe dredge New York works on the Charleston Harbor deepening project. File/Provided/State Ports Authority 

When President Donald Trump included $138 million for Charleston Harbor deepening in his fiscal 2020 budget, he noted that the appropriation would be enough to bring the project to completion.

But there's still that little matter of the feds paying back the money South Carolina fronted to keep the dredges digging.

The $138 million — combined with funding the state and federal governments previously approved — would bring the total amount appropriated to $549 million. That's the current estimated cost of dredging Charleston Harbor to a 52-foot depth — an amount that's varied by a few million more or less at different times since the project started in 2011.

Broken down, the state will have contributed $304 million and Uncle Sam will have kicked in $245 million.

The rub is that South Carolina was only supposed to pony up $248 million. It's been contributing more than its required share to keep the dredging on track while the dollars from Washington trickled in.

That means the State Ports Authority will, at some point, ask the federal government to refund somewhere between $50 million and $75 million, depending on where the final costs come in.

All of that is dependent, of course, on Congress approving Trump's budget. And if recent legislative bickering is any indication, there's little chance of that happening. But those are the numbers as of late last week.

The actual dredging work — the project is being spearheaded by the U.S. Army Corps of Engineers — started a year ago. The SPA, which owns and operates the Port of Charleston, hopes the dig will be finished by the time its new container terminal opens in North Charleston in late 2021.

Taking the shipping channel's depth to 52 feet is necessary, the authority says, to accommodate the bigger, heavier cargo vessels that are becoming more commonplace.

In addition to the harbor deepening money, Trump's budget includes nearly $26 million for three additional South Carolina projects — routine maintenance dredging of Charleston Harbor, the Cooper River Rediversion Project and maintenance of the Intracoastal Waterway.

Milestone delivery

The 800th 787 Dreamliner to be delivered by Boeing Co.  went to  low-cost carrier Norwegian Air Shuttle last month.

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The 787-9 was built at Boeing's Everett, Wash., plant and handed over on Feb. 28. Boeing also builds the Dreamliner at its North Charleston campus.

Boeing delivered 11 Dreamliners in February, bringing its 2019 total to 19 deliveries of the wide-body plane, according to unofficial figures compiled by Uresh Sheth on his All Things 787 website.

Sheth said Boeing is already producing Dreamliners at the higher rate of 14 per month and expects the company to deliver 14 787s in March. That would meet Boeing's goal of completing its production ramp-up from 12 to 14 Dreamliners a month during the first quarter.

Boeing also continues to add to its order book, with German carrier Lufthansa agreeing to buy 20 787-9s for delivery between 2022 and 2027. So far this year, Boeing has notched 38 firm orders for its Dreamliner jets.

Port slowdown

Seaports worldwide will continue to see growth over the next decade, but on a smaller scale, according to a report by Fitch Ratings.

Ports, including the Port of Charleston, have seen cargo volumes exceeding global GDP in recent years with bigger ships hauling containers to new or expanded terminals with additional cranes and other infrastructure.

"However, growth rates are slowing relative to historical averages as these trends mature, and volume growth, while expected to continue, will likely more closely mirror that of global GDP," Fitch stated.

North American ports are expected to weather the slowdown and shifts in trade policy better than the rest of the world, according to the report.

"Port investment will continue to focus on capacity enhancements to accommodate larger vessels while investor interest in North American port assets appears to be increasing," said Emma Griffith, senior director at Fitch.

Cargo volume at Charleston's port grew at an annual rate of 7.8 percent between 2009 and 2018. The forecast through 2035 is for annual growth at a 3.3 percent clip.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

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