Delays dog 'shovel ready' projects in Trump's infrastructure plan

NEW YORK (Reuters) - U.S. President Donald Trump reassured manufacturers gathered in the White House Roosevelt room on March 31 that a massive infrastructure program was coming soon.

“We’re going to make it happen” this year, he said, according to Drew Greenblatt, the president of Marlin Steel in Baltimore, who was present. “That was actually the first thing that he talked about behind closed doors with us,” Greenblatt added.

But putting a trillion-dollar infrastructure program to work could be easier said than done, as some of the projects suggested to the administration underscore. 

Project lists submitted by the North America's Building Trades Unions and by an outside developer who helped with the transition both contain projects that infrastructure builders call “shovel ready.”

But, for a range of reasons, shovel ready does not always mean ready for shovels to break ground. That means any effort to jump-start projects, put people to work and inject economic stimulus could drag on Trump’s promise for a 10-year, $1 trillion infrastructure project

After North America's Building Trades Unions (NABTU) president Sean McGarvey met with Trump on January 23, the group submitted a total of 26 bridge, pipeline and water projects. A second list of 51 projects was assembled by Ohio developer Dan Slane, who assisted with the transition, including everything from inland waterways to ports to a new FBI headquarters.

While details on Trump’s plans are scant, a senior administration official said they’re looking for ways to shorten the lengthy permitting process.

“The current system has just lost its way,” he said.

Nine projects have garnered the support of both Slane and the NABTU, appearing on both lists; of those, seven have yet to start construction, and one has only done preliminary construction, highlighting how hard it is to launch infrastructure projects as quickly as Trump wants to do.

“The shovel ready moniker that they put on projects, it’s just rarely applicable,” said Bill Miller, president and chief executive of two companies that overlap the two lists. The Power Company of Wyoming LLC is building the Chokecherry and Sierra Madre Wind Energy Project, and TransWest Express LLC is developing the TransWest Express Transmission Project, crossing Wyoming, Colorado, Utah and Nevada.

The Chokecherry and Sierra Madre wind project, which is being built in part on federal land, took eight years and “tens of millions of dollars” before it could recently start construction. The TransWest Express transmission project is still waiting for several state-level permits, Miller said.

“To be shovel ready is incredibly expensive and time consuming,” Miller added.

The administration says it wants to get ground broken fast. But some of that just might be out of the president’s hands, such as state-level permitting.

“A significant part of the president’s infrastructure plan will focus on streamlining regulating and permitting so that it is easier for all viable projects to move forward in a timely manner. These reforms might not be driven by the hurdles facing a single project, but rather will create more certainty in the process overall,” a White House spokesperson told Reuters.

   

SEAWATER TO DRINKING WATER PLANT HITS THE ROCKS

The delays that have beset a desalination plant proposed by Poseidon Water, a developer of water-related infrastructure, in Huntington Beach, California illustrate how clashing interests and regulations can hold up projects.

Poseidon first proposed the idea of a plant to turn salt water into drinking water for Orange County in the late 1990s and started permitting in the early 2000s, said Scott Maloni, a vice president at Poseidon and the Huntington Beach project manager.

The city of Huntington Beach originally approved the project in February 2006. But Poseidon still needed to secure 24 permits from state agencies, such as approval from the Santa Ana Regional Water Quality Control Board for the plant’s national pollutant discharge elimination system, which is required by the Environmental Protection Agency.

After the city issued the necessary local approvals in 2006, project builder Poseidon was able to apply to the California Coastal Commission. 

That application was amended several times over the years as the project evolved. For example, the plant had to alter its design after the state began phasing out power plants that use seawater for cooling purposes. Poseidon had planned to desalinate that wastewater, and changed its design to instead take in water directly from the ocean instead.

In 2013, Poseidon shelved the permit application after the state's coastal commission directed the company to look into concerns about the effects of the operation on fish larva in the area. 

The application was resubmitted in 2015, and then withdrawn yet again in September 2016, because the commission wanted proof the plans complied with new, 2015-passed rules from the State Water Board on desalination plants.

That compelled Poseidon to redesign the plant's seawater intake and discharge technologies.

The project still needs three more approvals, from the State Lands Commission, the Santa Ana Regional Water Quality Control Board and the California Coastal Commission.

Poseidon says they're confident they’ll secure the last approvals soon. But even then, construction might not start until the second quarter of 2018, Maloni said.

And the objections from environmentalists haven't stopped. 

The plant is “far from a done deal,” said Mandy Sackett, the California policy coordinator for the Surfrider Foundation. The foundation argues that the plant is unnecessary, expensive and energy-intensive, putting marine life at risk. Sackett said the foundation will continue to fight the project.

“There’s still several opportunities for public input and important regulatory review that is yet to be completed,” she said.

(Editing by Joe White and Edward Tobin)