L&D 25 Project On Schedule, Under Budget
The lock expansion project at Lock and Dam 25 poured its first concrete November 3 and had another pouring November 15. It is currently on schedule and slightly under budget. Whether that will continue to be the case depends on many things, according to Jose Lopez, program manager of the Lock and Dam 25 Expansion Project for the St. Louis Engineer District.
The project will add a 1,200-foot lock chamber to the facility, built in the 1930s. Its current 600-foot chamber is a bottleneck, causing lock transits of three to four hours for large tows. The replacement lock will cut that transit time to 30 minutes. The project was authorized in 2007 but was not given any money by Congress until it was awarded $732 million in the Infrastructure Investment and Jobs Act in FY2022.
Lopez spoke November 15 to an audience of about 70 members of the St. Louis Agribusiness Club at a venue adjacent to the Cargill grain elevator in East St. Louis, Ill. Lopez has spent 13 years with the Corps.
When the Corps was finally given the money, one of its first tasks was to “go back to the file cabinets” to look at the preliminary work from 2007, Lopez said. “You can lose a lot of institutional memory and momentum in that time,” he noted. “We’re in a design phase right now, and we’re crunching numbers” to figure out what conditions have changed and how the project can best move forward.
At the same time, the project team wants to move forward with whatever it can. Massman Construction Company won the contract in September 2022 for this phase of the project, which involves preparing the guidewall to receive an extension.
“It’s a lot harder to ‘bolt on’ an addition to an existing project built in the 1930s that it would be to build a new lock and dam from scratch,” Lopez said. Massman’s work is scheduled to wrap up in May 2024.
The target date for the new lock chamber to become operational is October 2034, with fiscal project completion by September 2036. One limiting factor is that the Corps intends to keep the existing 600-foot lock open during construction to avoid drastic impacts to industry. That commitment lengthens the project timeline.
It also means the project will be built “in the wet.” In response to a question about Olmsted Locks & Dam, which also used “in the wet” construction, Lopez said the two situations were very different. At Olmsted, it was the dam stretching across the river that was built in the wet. At Lock and Dam 25, it will only be a lock wall that will stretch out alongside the shore.
Lopez said members of Congress always ask, ‘How much will it cost?” That’s impossible to answer right now, he said. “That would be a forecast of a forecast.”
It’s not just because factors like inflation can’t be predicted, but because parts of the project are being bid out under a type of contract called Early Contractor Involvement-Integrated Design & Construction. Contractors are invited to look at the Corps’ design to see how they could reduce costs, but details of bids can’t be made public until a winning bid is announced, to avoid giving unfair competitive advantage. Rising prices – what Lopez called “market escalation risk” – are still being felt by industry.
The project managers are aware that labor will have to be surged. At its height, the project will require between 300 and 400 skilled workers—who will have to be incentivized and trained. Since the area around Lock and Dam 25 is rural, even though it is not far from the St. Louis metro area, Lopez said laborers will have to be paid a premium.
The availability and price of some materials are getting better, he said, but not all. Contract placements have begun for Phase 1 construction.
Grain Markets, Low Water
Greg Lumsden, a Cargill product line leader, gave a “macro overview” of grain markets. Five factors have been affecting U.S. grain exports, he said. The most challenging has been a huge increase in productivity from South American soybean producers, especially in Brazil, coupled with significant improvements in their logistics infrastructure. Brazilian production alone increased 19 percent year-over-year. China bought corn from Brazil for the first time ever this year, Lumsden said.
While yields of this year’s U.S. corn, wheat and soybean crops have been a little bit better than what was predicted earlier in the year, they were still dented by drought.
This means less inelastic demand for U.S. grains, he said. At one time the U.S. was the supplier of choice, despite price, because of quality and transportation reliability. Those advantages are being eroded.
On the plus side, China has made significant buys for its grain reserves from the U.S. after spending a lot in the Brazilian soy and corn markets earlier in the year. There is less concern over Black Sea grain disruptions, Lumsden said, despite Russian destruction of Ukrainian export infrastructure, after Ukraine managed to reroute some exports and keep Black Sea grain moving.
Finally, long-term shifts in demand for biofuels and domestic crush—including for sustainable airline fuel—mean that U.S. export patterns could shift, with domestic demand for soybean oil for sustainable fuel uses leaving more soymeal and DDGs for exports, rather than raw soybeans.
Andrew Paluska, a grain originator at Cargill, focused on the impact of low water on exports. The low water has resulted in a narrower channel, smaller tows, more congestion and increased dredging. “It’s like a highway moving from a six-lane highway to a two-lane country road,” he said. He gave high marks to the Corps of Engineers for its dredging program.
Cargill has grain terminals all along the Illinois River as well as in locations in St. Louis and the Upper Mississippi River. Its two terminals in Louisiana, at Westwego and Reserve, can handle 120,000 bushels an hour.
