It completed a Final Interim Feasibility Study and Environmental Impact Statement for the project in 1992. Most Environmental Concerns Have Been Addressed, but Several Related Issues Remain Unresolved

The Corps has largely addressed the likely environmental effects of the project’s dredging operations and dredge material disposal to the satisfaction of federal and state environmental agencies; however, several issues are not yet resolved. As of May 2002, the State of Delaware was still considering the permit application. Also, the Corps has not yet obtained a special use permit from the U.S. These involved several miscalculations, invalid assumptions, and reliance on outdated information. Consequently, we believe that the Corps’ current project analysis does not provide a reliable basis for deciding whether to proceed with the project. In addition, there are a number of uncertainties about the project that could increase or decrease both benefits and costs. Recommendations for Executive Action

Considering the significant problems we identified with the Corps’ economic justification for the Delaware River project, we recommend that the Secretary of the Army 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and costs, which includes all aspects of the analysis and corrects for the miscalculations, erroneous assumptions, and outdated information contained in the current analysis;  obtain the information, where possible, that is needed to address the uncertainties—such as changing commodity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; 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; and submit the revised analysis, including the external independent review, to the Congress for its use in considering future appropriation requests for the project.
Why GAO Did This Study

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.

What GAO Found

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.