Panel seeking $7.5M for Davisville port dredging

The port of Davisville, in North Kingstown, maintains a significant competitive advantage over every other port on the Eastern Seaboard, according to a three-year study by a special legislative commission. Though the port needs dredging, maintaining that advantage – the lack of harbor-maintenance taxes often used to pay for such work – is critical to its potential growth as one of the nation’s leading automobile import and export locations, as well as a receiver of other goods, the panel says.
The answer, says the panel, is the issuance by the Quonset Davisville Management Corp. of $7.5 million in revenue bonds to avoid using federal money that requires creation of a harbor-maintenance tax.
Because the Navy last dredged the port in 1977, Davisville has never received any federal funds for dredging; therefore the port and its customers are exempted from paying the maintenance fees, a federal tax imposed on shippers based on the value of the goods being shipped through ports. Set at 0.125 percent of the value of the cargo being imported, the tax equates to $31.25 of added cost to each imported vehicle worth $25,000. The savings was a major reason why Volkswagen of North America moved their operations from Boston to Davisville nine years ago, according to the commission.
Formed by the General Assembly in 2009, the port commission investigated means to grow the economy of Rhode Island’s seaports at Providence, Davisville and Newport. If all its recommendations are enacted, the ports would generate an additional 1,000 jobs, $70 million in personal income, $127 million in business revenue and $8.1 million in state and local tax revenues, the panel claims.
In its Feb. 14 report to lawmakers, the commission advocates the creation of a Rhode Island Port Marketing Collaborative that would create a venue where stakeholders such as port facilities, economic-development agencies and governmental entities can develop and coordinate economic opportunities. It also recommends the governor appoint a port economic-policy ombudsperson.
According to the study, additional opportunities exist in break-bulk imports, particularly with perishable goods. Opportunities related to offshore wind-support facilities and shipping container operations also exist but are dependent on external factors.
In order to provide these opportunities, maintenance and dredging would be required at both Davisville and Providence. In Davisville, dredging would be focused at the piers and would also include a turning basin. According to Thomas J. Sullivan, senior vice president of Moran Shipping Agencies, Inc., in Providence, the projects are long overdue. “For the auto carriers that are calling there the port really needs to be dredged,” he said. “They’ve got a [maximum depth] of about 29 feet. The projected depth of what they want to go down to, 32 feet, would eliminate any situations involving vessels needing to wait for a specific stage of the tide to come in, or delays in docking.”
Usually the Army Corps of Engineers assumes about 80 percent of the cost of all dredging projects, but funding is determined by federal priority and often takes years. “The dredging is needed, and I think the reason why it hasn’t been done is because people have been trying to find a way around using federal funding, which would involve the federal tax kicking in. Without the tax it gives us a great competitive advantage,” Sullivan said.
In order to save time and preserve the Davisville exemption, the commission supports the issuance of $7.5 million in revenue bonds by QDMC, through the R.I. Economic Development Corporation. The bonds would be paid for in part by user fees at the port.
Then there is the matter of disposing dredged material. The state maintains specially permitted, confined disposal locations; however, they are expected to be close to capacity within the next few years. The commission advised the R.I. Coastal Resources Management Council to complete the permitting process for additional disposal cells and the work be funded by the revenue bonds.
Future maintenance dredging of Providence would be done on a regular basis to be determined and provided for by state and federal money.
In order to promote the ports, the commission urged the state to petition the U.S. Department of Transportation’s Maritime Administration to include the three ports as official participating destination ports on the Marine Highway Program. Inclusion could assist the ports in obtaining initiatives, grants or inclusion into federal programs.
Four resolutions have been introduced in the legislature supporting commission recommendations, along with a bill that would create the Rhode Island port-marketing collaborative. &#8226