TABLE A.-Variations in estimates of transportation savings for proposed Burns Waterway Harbor

TABLE B.-Variations in estimates of tonnage for proposed Burns Waterway

TABLE C.-Variations in estimates for construction cost for coal facilities at proposed Burns Waterway Harbor

In a letter dated February 3, 1964. Mr. Clinton Green announced: "The port commission is now in a position to return to the prospective users of the proposed facilities and attempt to secure agreements to lease' such facilities."

Now here we are, more than a year later, and the port commission tells us that they can't provide solid evidence of nonsteel mill port usage until after they spend our money for the harbor. What businessman would invest $92 million under such conditions?

It may be that potential users are confused about what they would have to pay. The schedule of fees proposed by the port commission differs, depending upon who is listening. Below is summarized such a variance:

TABLE E.-Variations in estimates of fees for proposed Burns Harbor
SCHEDULE OF PORT TERMINAL FEES (PER YEAR)

(As submitted by Clinton Green to the U.S. Bureau of the Budget)

Source: Tables prepared by Save the Dunes Council Engineering Committee.

NOTE. The total at right differs from the total of $3,407,351 shown on p. 6 of exhibit G. Operational costs, such as loading, railroad switching, etc., must be added to above.

The big question: Have the shippers agreed to pay the above fees? If the fee structure can change so radically, as compared above, will it change again? Which schedule is the one actually to be used? Or will it be a different one? How were the totals obtained where a per ton fee is used?

You have a right to be confused. Port shippers have a right to be confused. The taxpayers have a right to be confused. One thing is clear, however: The steel companies pay little or nothing.

TABLE F.—Variations in estimates of first costs for proposed Burns Waterway

Arbitrary amounts seem to have been lifted or added without reason. The variations cannot be explained by the normal percentage of variance of cost estimating. Note items which drop a neat, round one-half million each. Nor can the variations be explained by differences in quantity for most items. If the high figures are correct, then essential portions of the project will not be built due to insufficient funds or the taxpayer will be asked to contribute more later

on.

While certain items were being reduced, the New York Central Railroad was being enriched. Why?

For some unexplained reason, phase II cost estimates are drastically lowered for the same item, as calculated by Sverdrup & Parcel

DEAR MR. SHEPHERD: This is in reply to your letter of January 30, 1965, to the Director regarding the proposed Burns waterway harbor project in Indiana. In response to your question, we have not given verbal or written approval of the Sverdrup & Parcel design, but we would not have had any occasion to give any approval or disapproval.

Sincerely,

JOSEPH LAITIN, Assistant to the Director.

EXHIBIT H

U.S. ARMY ENGINEER DISTRICT, CHICAGO,

CORPS OF ENGINEERS, Chicago, Ill., February 3, 1965.

Mr. C. OWSLEY SHEPHERD,

Special Writer, Chicago's American

Chicago, Ill.

DEAR MR. SHEPHERD: This is in reply to your letter dated January 30, 1965, relative to the Great Lakes harbors study-interim report on Burns waterway harbor, Indiana.

In a report to the Secretary of the Army dated July 12, 1963, the Chief of Engineers concurred in the recommendations of the Board of Engineers for Rivers and Harbors which provided, subject to certain conditions of local cooperation, for Federal construction of: (1) north, west, and east breakwaters totaling 6,720 feet in length; (2) an approach channel, 400 feet wide and 30 feet deep, extending from deep water in Lake Michigan to the north end of the east breakwater; (3) an entrance channel, 800 feet wide and 28 feet deep, from the end of the approach channel to the west breakwater; and (4) an outer harbor area of 225 acres, 27 feet deep. In commenting on the report of the Chief of Engineers, the Bureau of the Budget recommended authorization of the Burns Waterway Harbor as a Federal undertaking, subject to several additional conditions, and the Secretary of the Army transmitted the report to the Congress with budget comments, by letter dated September 24, 1963.

Any deviation from these recommendations and conditions including approval of plans and designs of non-Federal interests, would require action at administrative levels beyond the authority of this office.

Sincerely yours,

JOHN C. MATTINA,
Colonel, Corps of Engineers,
District Engineer.

EXHIBIT J

OFFICE SPECIAL ASSISTANT TO THE

SECRETARY OF THE ARMY FOR CIVIL FUNCTIONS.
Washington, D.C., February 19, 1965.

C. OWSLEY SHEPARD,
Chicago's American,
Chicago, Ill.:

The Department of the Army has taken no position, tentative or otherwise, either for or against, the proposed harbor design suggested by Sverdrup & Parcel. Should pending legislation be enacted, the Corps of Engineers would be expected to study this proposal.

ALFRED B. FITT. Special Assistant for Civil Functions.

EXHIBIT K

The potential pollution due to the proposed port of Indiana is of critical importance. One of the conditions recommended by the U.S. Bureau of the Budget and endorsed by the Army Corps of Engineers is: "Water and air pollution sources will be controlled to the maximum extent feasible in order to minimize any adverse effects on public recreational areas in the general vicinity of the harbor."

However, no evidence of plans for such preventive measures exist. One of the users of the proposed harbor would be the Rail-to-Water Transfer Co., which now operates a coal transfer facility along the Calumet River. This is an extremely dirty operation as illustrated by the remarks of Mr. Leo Geissal, president of Rail-to-Water, as taken from the record of the Interstate Commerce Commission hearings concerning the Monon Railroad plans for a coal dock. Excerpts from Mr. Geissal's testimony are as follows:

Page 1558

By Mr. Krueger :

Q. Mr. Geissal, when you are on the dock, as you describe in your testimony, in operation, does it produce any dust?-A. Well, at certain times of the year; yes, sir. Under certain loading conditions it does.

Q. Now, what is your prevailing wind direction at your dock?-A. The prevailing wind at our dock is from the west.

Q. At the time your operation-your dock is in operation, does this wind have any effect on the dust?-A. Yes, sir; it carried the dust toward the east. Q. You are explaining the action of the wind.-A. And sometimes I will have to admit, the dust is pretty thick which causes a scum to form on the river.

Q. Does that scum on the river lie dormant around the dock or does it move with the water?-A. It just depends on how much movement we have in the river, sir. Sometimes if there is no movement in the river the dust stays there, but when a ship comes around and agitates the water then, of course, it is carried away.

*

Page 1560

By Mr. Shepard:

Q. You testified that we have no practical way of allaying the dust that you testified to at this time. That means that you don't have at Rail-to-Water any particular installation for the purpose of allaying the dust; is that correct?—— A. I do not have.

Q. But there are such devices in existence?-A. Yes.

The plans of the Indiana Port Commission are to transfer the existing equipment from the Calumet River to the lakefront only 114 miles west of the proposed Indiana Dunes National Lakeshore and 3 miles west of the existing Indiana Dunes State Park. Since the wind and water can carry coal dust many miles, you can understand our concern.

A review of the cost breakdown for moving and reconstructing the coal dock as shown by the Indiana Port Commission includes no allowance for coal dust