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More than $1B awarded to Soo Locks modernization project

More than a billion dollars has been awarded to the Soo Locks modernization project, the U.S. Army Corps of Engineers has announced.

The Corps' Detroit District expects construction to start on a new lock this summer with Friday's award of $1.068 billion for the locks in Sault Ste. Marie.

MORE: Soo Locks project could cost more than triple estimates

"The Corps of Engineers looks forward to beginning construction on the new lock chamber later this summer, and we continue to work hard to maintain the pace and continue to make progress toward New Lock at the Soo total project completion in summer 2030,” new lock project manager Mollie Mahoney said in a statement from the Corps on Friday.

The contract allows the contractor to begin work. With continued funding, the remaining work, valued at $803.95 million may be awarded over the next three years. Corps officials expect Phase 3 construction to take seven years, the Corps said. 

Kokosing Alberici Traylor LLC, a joint venture headquartered in Westerville, Ohio, will begin constructing the largest phase, a new lock chamber and rehabilitation of downstream approach walls.

With Phase 1 nearly complete and Phase 2 scheduled for completion in summer 2024, the third construction phase is a major milestone.

A dramatic cost increase led to a five-month delay in awarding the contract while the Corps of Engineers developed reports to deliver a new cost estimate for reauthorization to Congress.

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The Corps said the root causes of the cost increase are changing market conditions, inflation, a nationwide labor shortage, design modifications and early estimate assumptions.

According to the Corps, since the project was authorized in America’s Water Infrastructure Act of 2018:

•The First Cost, for project authorization use and calculated in today’s dollar, rose from $922 million to $2.932 billion.

•The Project Fully Funded Cost, which allows for escalation through the construction mid-point and anticipates what the project will cost, rose from $1.031 billion to $3.189 billion.

“We recognize funding a larger amount for the New Lock at the Soo is a challenge that could potentially result in schedule impacts,” said Deputy District Engineer Kevin McDaniels. 

“The Corps of Engineers is partnering with industry and federal agencies to find collaborative solutions aimed at addressing the cost impacts to Corps of Engineers programs and projects nationwide.”

The project’s first phase, to deepen the upstream channel, began in spring of 2020 and is substantially complete with punchlist items and final cleanup remaining; the project’s second phase, to rehabilitate the upstream approach walls, began in spring of 2021 and is scheduled to be complete summer of 2024, the Corps said.

The project at the Soo Locks has been in the works for decades. Plans call for a new 1,200-foot-long lock to mirror the aging Poe lock, which is the only one big enough to handle the largest freighters that carry 89% of cargo through the corridor.

An unexpected outage of the Poe could disrupt the supply chain for steel production and manufacturing in North America. The new lock would provide redundancy, so cargo could keep moving in the case of an unexpected outage of the Poe.

The main cargoes moving through the locks are taconite (iron ore) and coal coming from western Lake Superior to ports on the lower lakes, according to the Army Corps.

The Soo Locks see an estimated 70 million tons of cargo pass through the complex each year, supporting 120,000 jobs and more than $22 billion in economic activity.

The modernization project has historically had strong bipartisan support from the Michigan delegation and other Great Lakes lawmakers. First authorized by Congress in 1986 and reauthorized in 2018, the project was supposed to be finished by 2030.

Washington correspondent Melissa Nann Burke contributed.