Value creation in capital waterway projects: Application of a transaction cost and transaction benefit framework for the Miami River and the New Orleans Inner Harbour Navigation Canal

Waterways have many more ties with society than as a medium for the transportation of goods alone. Waterway systems offer society many kinds of socio-economic value. Waterway authorities responsible for management and (re)development need to optimize the public benefits for the investments made. However, due to the many trade-offs in the system these agencies have multiple options for achieving this goal. Because they can invest resources in a great many different ways, they need a way to calculate the efficiency of the decisions they make. Transaction cost theory, and the analysis that goes with it, has emerged as an important means of justifying efficiency decisions in the economic arena. To improve our understanding of the value-creating and coordination problems for waterway authorities, such a framework is applied to this sector. This paper describes the findings for two cases, which reflect two common multi trade-off situations for waterway (re)development. Our first case study focuses on the Miami River, an urban revitalized waterway. The second case describes the Inner Harbour Navigation Canal in New Orleans, a canal and lock in an industrialized zone, in need of an upgrade to keep pace with market developments. The transaction cost framework appears to be useful in exposing a wide variety of value-creating opportunities and the resistances that come with it. These insights can offer infrastructure managers guidance on how to seize these opportunities

Do we need to rethink our waterways? Values of ageing waterways in current and future society

In the past canals were developed, and some rivers were heavily altered, driven by the need for good transportation infrastructure. Major investments were made in navigation locks, weirs and artificial embankments, and many of these assets are now reaching the end of their technical lifetime. Since then the concept of integrated water resource management (IWRM) emerged as a concept to manage and develop water-bodies in general. Two pressing problems arise from these developments: (1) major reinvestment is needed in order to maintain the transportation function of these waterways, and (2), it is not clear how the implementation of the concept of IWRM can be brought into harmony with such reinvestment. This paper aims to illustrate the problems in capital-intensive parts of waterway systems, and argues for exploring value-driven solutions that rely on the inclusion of multiple values, thus solving both funding problems and stakeholder conflicts. The focus on value in cooperative strategies is key to defining viable implementation strategies for waterway projects