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The Unceremonious End Of A West Virginia Boondoggle

The West Virginia Legislative Auditor’s Performance Evaluation and Research Division has released its review of the state’s Public Port Authority.  The overview summary is priceless.

“The Legislature should consider terminating the West Virginia Public Port Authority because it receives no funding, has no employees or future projects, and it does not benefit the state.”

Yes, those seem like good reasons.

Like so many failed government efforts at economic development, the Port Authority began with great fanfare and expectations.  The Legislature created the Authority in 1989 and charged it with developing inland product and people transportation ports that would stimulate economic development, create hundreds of jobs and generate revenue for the state.

None of that happened.  Not even close.

The Authority’s most ambitious project was the Heartland Intermodal Gateway (HIG).  This was a public-private project among Norfolk Southern Railway, the Federal Highway Administration, West Virginia, Virginia and Ohio to develop an inland port at Prichard in Wayne County.

The investment was considerable—$18 million from the state, $13 million from the federal government and another $500,000 a year from the state for operating expenses.

The plan was for shipping containers to arrive at the HIG by rail from the Port of Virginia, where they would be transferred to trucks and dispatched to their eventual destinations. The rail-to-truck method was supposed to be substantially cheaper than moving the containers from the coast entirely by truck.

One study projected the HIG would create between 700 and 1,000 jobs, generate an annual benefit to the state of up to $69 million by 2025 and revitalize the local economy. Planners believed that within a few years, 30,000 containers would pass through the port.

None of that happened.

By 2019, the container traffic was less than 500 units. Norfolk Southern pulled out of the deal.  West Virginia Transportation Secretary Byrd White told the Oversight Commission on Department of Transportation Accountability last January, “Our total revenue since inception is $30,797.31.”

White later told me in an interview last year, “It was probably somebody’s great idea.  I don’t know that. (However) It’s not working. It never got the volume it needed to sustain itself. It wasn’t right for the taxpayers of West Virginia to continue to subsidize it.”

So, if it was a great idea, what went wrong?

The Legislative Audit concludes the Port was never marketed. A member of the Wayne County Development Authority told the Oversight Commission, “They (Port Authority) are responsible for marketing. They have done a very poor job of marketing this facility and bringing in any business.”

The proposed marketing budget was $252,000, to be split between the Port Authority and the State Commerce Department. However, less than $13,000 was spent on advertising from 2015 to 2020.  “An October 2017 blog post by the Port Authority Director at the time stated, ‘I wish we had more of a budget for marketing,’” the Audit reported.

The state has given up on HIG and the whole Port Authority idea.  The audit recommends the elimination of the Authority, but only after “outstanding invoices are paid, and the HIG facility has been sold.”

It is an unceremonious end to what many once thought was a great idea.

 

 

 

 





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