‘This Is The Largest Maritime Claim’: Ben Cardin Outlines Cost Of FSK Bridge Repair

2 months ago

On Wednesday, Sen. Ben Cardin (D-MD) questioned officials on the process of rebuilding the Francis Scott Key Bridge in Baltimore, Maryland durign a Senate Environment and Public Works Committee hearing.

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Transcript

00:00to the committee for the record. Thank you.

00:06Thank you, Senator Capitone. I think your questions are extremely important.

00:09So thank you for the manner in which you have presented this. First,

00:13for Administrator Batt, I agree with you. It is the issue of the scope

00:20and scale. This tragedy on the Francis Scott Key has been characterized

00:26as being the largest maritime claim in history. So when you talk about

00:33scope and scale, does this sort of off the charts?

00:40Thank you, Senator, for that question. I mean, I think you referenced

00:44in your testimony the video that we saw. I think that you don't see

00:49we have a lot of issues with bridges. And in the country, we rarely

00:53see a collapse of this size of structure. And so, yes, it will

00:58be the largest maritime claim. And so, from a precedent standpoint,

01:03it is unprecedented. So I just hope that puts somewhat to rest the

01:08difference between this tragedy and emergency relief funding versus

01:13a lot of the others that are nowhere in this category

01:17whatsoever. But this is much closer. Well, this exceeds Minnesota,

01:21but it exceeds even some of the worst emergency circumstances that

01:26we've had. So let me get to Senator Capito's point in regards to

01:32the tolls and tolls offset. First, you raise an interesting point

01:38that the bridge will be rebuilt and there will be tolls coming

01:42from it and that the state benefits from that new facility. But I

01:49would point out that all the emergency relief programs, the

01:55economies locally benefit from the federal government's resources

02:00that are put in. When you dealt with Hurricane Irma and you rebuilt

02:06the infrastructure and community, the businesses got back up quicker,

02:11sales tax revenues increased, local governments did well, states

02:15did well. That's what it's all about. It's getting your economy

02:18back to scale. So in regards to the toll revenues, and I'll repeat

02:25this again because I want to make sure, Secretary Wiedefeld, you

02:28have a chance to respond on this. The overwhelming expenses, as I

02:33understand it, is the operations of these facilities, not the

02:38infrastructure cost itself. Am I right on that?

02:41Yes. The operating costs, particularly labor costs, are a

02:52significant part of any budget for the toll authority.

02:55And we have how many toll facilities in Maryland?

02:58We have nine.

02:59Nine. So this is one of nine. And these revenues will be lost for

03:04a substantial period of time. And when we say lost, let me just

03:08point out to the members of the committee, there are alternatives

03:13to paying a toll to transact through this area.

03:20You can go through city streets, which is the worst example,

03:23because you're going to go through neighborhoods, beating up roads

03:25dramatically with these trucks, interfering with communities.

03:30But that is one option. Another option is to go around the Beltway

03:34where there's no tolls. That's going to probably be the preferred

03:38option for the larger vehicles that can't go through the tunnels

03:41anyway. They don't pay any tolls doing that. So there's a lot of

03:45significant part of the traffic that will avoid paying tolls

03:53for the next couple years, costing the toll facilities those revenues

03:58that were projected. Now, do you have a way of recovering that?

04:04No. So it's adding costs to us because as that traffic moves on

04:09the Beltway, that increases our operating costs. So, for instance,

04:14we have put emergency response units out there because the slightest

04:17hiccup in the system has an exponential impact on congestion up

04:22and down the Northeast corridor. So we put in operating costs for

04:25that. We're anticipating higher maintenance costs due to the heavier

04:29traffic because these are the oversized vehicles and any hazardous

04:34materials now have to take this 25-mile detour on the Baltimore

04:39Beltway. So those are all additional costs that we now will incur

04:43for several years, four plus years. And they're not under the

04:47emergency relief recovery. That's using your normal transportation

04:52revenues, how you obtain them through the user fees, etc. in the

04:57state of Maryland. And I guess the last point on this is that

05:03additionally, the state of Maryland is going to incur considerably

05:08more expenses and the recoveries, 100% of the recoveries related

05:12to the bridge, are returned to the emergency relief fund, are they

05:16not? Yes, they are. So the federal government's not going to pay

05:20100%. They're going to pay 100% less for the recoveries. The

05:24recoveries are not only insurance, they're third-party claims. And

05:27those third-party claims, I admit, it's going to take years before

05:30we uncover that. But there is at least very serious evidence that

05:38there could be wrongdoing in the manner in which the vessel was

05:41handled, which could bring in substantial funds. That will go to

05:46the federal emergency relief fund, as it should. So I don't want

05:50to leave with the impression that the federal government is paying

05:54100%. They're not going to pay 100%. They're going to get the

05:56recoveries. And the recoveries will far exceed the 10%. So as a

06:01matter of the burdens to the state of Maryland, in a manner in which

06:05the state of Maryland is complying with the requirements of the

06:08code as it relates to toll facilities, that's not something that

06:11is not allowed. We're complying with all the requirements. It would

06:16be, I think, just a terrible precedent if we start to try to

06:20figure out the values of the emergency relief funds to the local

06:24governments that are benefiting from this, from all emergencies,

06:27because each one is different. This clearly complies with any

06:32standard on the scope of the tragedy and should be reimbursed

06:38at 100%. Thank you, Madam Chair.

06:41Senator Rickett.

06:43Thank you, Senator Capito.

‘This Is The Largest Maritime Claim’: Ben Cardin Outlines Cost Of FSK Bridge Repair

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