Marine Safety: Current Status of the VTS 2000 Program and Key
Stakeholders' Views on It (Testimony, 04/25/96, GAO/T-RCED-96-129).
Currently, the U.S. Coast Guard and private entities operate radar-based
vessel traffic service (VTS) in several U.S. ports. A VTS system employs
remote surveillance sensors, such as radar or closed-circuit television,
that relay information on maritime traffic conditions to VTS personnel,
who pass it on to mariners and the maritime industry by radio. The
purpose of these systems is to improve the safe and efficient movement
of ships around ports and to protect the environment. The Coast Guard is
considering installing VTS systems in as many as 17 ports. The federal
government will spend as much as $310 million to build the proposed
expansion, known as VTS 2000, and about $42 million annually to operate
it. The report answers the following four questions: What is the status
of the Coast Guard's development of VTS 2000? At ports being considered
for VTS 2000, to what extent do major stakeholders support acquiring and
funding it? If major stakeholders do not support VTS 2000, to what
extent are they interested in acquiring and funding other VTS systems?
What other issues could affect the establishment of VTS systems that are
privately funded?
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-RCED-96-129
TITLE: Marine Safety: Current Status of the VTS 2000 Program and
Key Stakeholders' Views on It
DATE: 04/25/96
SUBJECT: Marine safety
Traffic regulation
Harbors
Marine transportation operations
Navigation aids
Deep water ports
Shipping industry
Data transmission operations
Radar equipment
Privatization
IDENTIFIER: Coast Guard Vessel Traffic Service 2000 Program
Exxon Valdez
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO report. Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved. Major **
** divisions and subdivisions of the text, such as Chapters, **
** Sections, and Appendixes, are identified by double and **
** single lines. The numbers on the right end of these lines **
** indicate the position of each of the subsections in the **
** document outline. These numbers do NOT correspond with the **
** page numbers of the printed product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
** A printed copy of this report may be obtained from the GAO **
** Document Distribution Center. For further details, please **
** send an e-mail message to: **
** **
** **
** **
** with the message 'info' in the body. **
******************************************************************
Cover
================================================================ COVER
Before the Subcommittee on Coast Guard and Maritime Transportation,
Committee on Transportation and Infrastructure,
House of Representatives
For Release
on Delivery
Expected at
10 a.m. EDT
Thursday
April 25, 1996
MARINE SAFETY - CURRENT STATUS OF
THE VTS 2000 PROGRAM AND KEY
STAKEHOLDERS' VIEWS ON IT
Statement of Gerald L. Dillingham, Associate Director,
Transportation and Telecommunications Issues,
Resources, Community, and Economic
Development Division
GAO/T-RCED-96-129
GAO/RCED-96-129T
(344500)
Abbreviations
=============================================================== ABBREV
============================================================ Chapter 0
Mr. Chairman and Members of the Subcommittee:
We are pleased to be here today to discuss the Coast Guard's vessel
traffic service (VTS) 2000 program, a proposed initiative to build
new or improved VTS systems at up to 17 U.S. ports. VTS systems
typically use radar or closed-circuit television linked to a central
data-gathering location, called a vessel traffic center. This center
monitors vessel traffic in port areas and provides information to
vessels in these areas on such matters as marine traffic, tides,
weather conditions, and emergencies.
Our testimony today is based on a recently issued report\1 to this
Subcommittee and covers four topics: (1) the current status of the
Coast Guard's development of VTS 2000, (2) the extent that key
stakeholders (shippers operating in the ports, marine pilots, and
port officials) support acquiring and funding VTS 2000, (3) the
extent that key stakeholders are interested in acquiring and funding
lower-cost VTS systems (if they are not supportive of VTS 2000), and
(4) other issues that could affect the establishment of privately
funded VTS systems. Our report addresses these topics in more detail
and recommends ways that the Coast Guard can minimize the program's
costs, interact to a greater extent with the user community, and
oversee private systems.
We conducted our work at eight of the ports that the Coast Guard is
considering for VTS 2000.\2 These ports were either among the
locations that would most likely benefit from a VTS system or were
involved in operating or considering a privately funded system.
In summary, we found that:
-- Important questions about the VTS 2000 program remain
unanswered, including how many ports need the system, how much
it will cost, and whether other cost-effective solutions are
available. Such uncertainties make it difficult to judge
whether VTS 2000 represents the best approach to ensuring marine
safety in the nation's ports. While the Coast Guard cannot
provide definitive answers to all these questions at the present
time, it can or will soon be able to provide updated information
so that the Congress can make informed decisions about how to
proceed.
-- Widespread support for VTS 2000 was lacking among the key
stakeholders we interviewed. The stakeholders' views at five
ports were predominantly negative; support was somewhat
greater--but still mixed--at the other three ports. Many
believed that the system would likely be more expensive than
needed at their port. Most opposed user fees or other funding
approaches that would transfer the funding of VTS 2000 from the
Coast Guard to users.
-- Support was greater for VTS systems that key stakeholders
perceived to be less expensive than VTS 2000. At four ports
that already have VTS systems, most stakeholders said that
existing systems were sufficient. At two of the four ports that
do not have a VTS system, most favored adding some form of VTS
system, though support for funding the improvements was much
more marginal. At the final two ports, support for a VTS system
was mixed or nonexistent.
-- Several key issues could affect the establishment of privately
funded or privately operated VTS systems. These relate to the
private sector's ability to fund the initial start-up costs of
such a system, the private sector's exposure to liability, and
the Coast Guard's role in establishing and overseeing a
privately funded system.
Before discussing our findings in more detail, we would like to
provide some background information on VTS systems in general and VTS
2000 in particular.
--------------------
\1 Marine Safety: Coast Guard Should Address Alternatives as It
Proceeds With VTS 2000 (GAO/RCED 96-83, Apr. 22, 1996)
\2 We visited Houston, Los Angeles/Long Beach, Mobile/Pascagoula, New
Orleans, Philadelphia/Delaware Bay, Port Arthur/Lake Charles, San
Francisco, and Tampa.
BACKGROUND
---------------------------------------------------------- Chapter 0:1
Under the authority of the Ports and Waterways Safety Act of 1972, as
amended, the Coast Guard operates VTS systems in eight ports.
Operations and maintenance costs for these systems, which totaled
about $19 million in fiscal year 1995, are borne by the Coast Guard
and are not passed on to the ports or the shipping industry. Two
other ports, Los Angeles/Long Beach and Philadelphia/Delaware Bay,
have user-funded systems.
Study of VTS systems was prompted by the Oil Pollution Act of 1990
(P.L. 101-380), passed after the 1989 Exxon Valdez oil spill and
other accidents in various ports. The Act directed the Secretary of
Transportation to prioritize U.S. ports and channels in need of new,
expanded, or improved VTS systems. The resulting report, called the
Port Needs Study, was submitted to the Congress in March 1992. This
study laid much of the groundwork for the proposal for VTS 2000.
CRITICAL QUESTIONS ABOUT VTS
2000 REMAIN UNANSWERED
---------------------------------------------------------- Chapter 0:2
Making funding decisions today about VTS 2000 is complicated by
several as-yet-unanswered questions regarding the need for the system
in certain ports, the system's cost, and available alternatives to
VTS 2000. Having more complete, up-to-date information on these
questions is critical to deciding whether to move forward with the
program.
SYSTEM'S BENEFITS HAVE NOT
BEEN DEMONSTRATED IN MOST
PORTS UNDER CONSIDERATION
FOR VTS 2000
-------------------------------------------------------- Chapter 0:2.1
One uncertainty relates to which ports will receive VTS 2000 systems.
Most of the 17 candidate ports were identified in the 1991 Port Needs
Study, which quantified (in dollar terms) the benefits of building
new VTS systems at port areas nationwide. The Coast Guard is not
scheduled to make a final decision on which ports to include in the
program until fiscal year 2000, but the information developed to date
suggests that the number of ports ultimately selected could be much
less than 17. The Port Needs Study and the follow-on studies
completed so far show that a new system would produce little or no
added benefit at about two-thirds of the ports being considered.\3
Budget information the Coast Guard has provided to the Congress thus
far has not fully reflected the limited benefits of installing VTS
2000 systems in many of the ports being considered. For example, the
Coast Guard should provide to the Congress updated information on the
added benefits, if any, that would be achieved by installing VTS 2000
at various ports, especially for those that already have VTS systems.
In our view, this information, coupled with the Coast Guard's current
thinking on the high and low priority locations for VTS 2000, is
critical to assist the Congress in deciding on whether a development
effort for 17 ports is warranted. We realize that the Coast Guard is
not in a position to make a final decision on all ports at this time,
because it is still gathering information and conducting follow-on
studies to reassess some ports on the list. However, having the most
current and complete data will allow the Congress to better decide on
funding levels for the VTS 2000 program and provide direction to the
Coast Guard.
--------------------
\3 We did not verify the accuracy of the results of the Coast Guard's
studies because it was outside the scope of our review.
UPDATED COST ESTIMATES ARE
LOWER BUT FINAL COSTS ARE
STILL UNCERTAIN
-------------------------------------------------------- Chapter 0:2.2
A second major area of uncertainty is the cost to develop VTS 2000.
This cost is considerable, regardless of whether it is installed at a
few ports or all 17. The Coast Guard initially estimated that
development costs alone (exclusive of installation costs at most
sites) would total $69 million to $145 million, depending on the
number of sites that receive VTS 2000 and the extent of software
development. The estimated costs to install equipment and build
facilities at each site ranged from $5 million to $30 million,
bringing the program's total costs to between $260 million and $310
million. The Coast Guard's updated estimate of annual operating
costs for a 17-site system is $42 million. At present, the Coast
Guard plans to pay for all of these costs from its budget instead of
passing them on to users.
A few days ago, the Coast Guard awarded contracts for initial
development of the VTS 2000 system. The bids from three vendors
currently competing for the contract to design the system were
substantially lower than earlier estimates. Further refinements to
the Coast Guard cost estimates will be made in early 1997 when the
Coast Guard plans to select a single contractor to build the VTS 2000
system.
The system's costs will also depend on the Coast Guard's decision
about how sophisticated the system should be. VTS 2000 can be
developed in four phases; and additional capability can be added at
each phase. For example, phase 1, originally estimated to cost $69
million, would create a system with operational capabilities that are
about on a par with upgraded VTS systems currently being installed at
some ports. The Coast Guard's development plan allows for stopping
after phase 1 (or any other phase) if cost or other considerations
preclude further development.
ALTERNATIVES TO VTS 2000 MAY
BE AVAILABLE
-------------------------------------------------------- Chapter 0:2.3
To date, the Coast Guard's approach has not involved much
consideration of whether feasible alternatives exist to VTS 2000 at
individual ports under consideration. I want to emphasize that we
did not attempt to assess whether other alternatives were preferable,
but many would appear to merit consideration or study. Here are a
few of these alternatives:
-- Reliance on existing VTS systems. The systems in place at seven
locations may be sufficient. For example, the port of Los
Angeles/Long Beach, which is on the Coast Guard's "short list"
for the first round of VTS 2000 systems, now has a VTS system,
which cost about $1 million to build and meets nearly all of VTS
2000's operational requirements, according to a Coast Guard
study. The Coast Guard is reconsidering its decision to keep
the port on the "short list" but is still evaluating it for VTS
2000. Other VTS systems in Houston/Galveston, Puget Sound,
Philadelphia/Delaware Bay, New York, San Francisco, and Valdez
all have been recently upgraded or enhanced or are scheduled to
be upgraded in the near future irrespective of VTS 2000.
Therefore, these systems may provide protection similar to that
of VTS 2000 now and into the future.
-- VTS systems with smaller scope than proposed thus far under VTS
2000. The Port Needs Study and follow-on studies have proposed
blanketing an entire port area with VTS coverage, but less
comprehensive VTS coverage might be sufficient. For example,
some key stakeholders at Port Arthur/Lake Charles, which has no
radar-based VTS coverage, said such coverage was needed at only
a few key locations, instead of portwide. A group is studying
the feasibility of a more limited, privately-funded system. One
vendor estimated that a system to cover key locations at Port
Arthur/Lake Charles would cost $2 million to $3 million. Coast
Guard officials told us that reduced coverage is an option they
could consider when site-specific plans are established for VTS
2000.
-- Non-VTS approaches. In some cases, improvements have been
proposed that are not as extensive as installing a VTS system.
For example, several years ago in Mobile/Pascagoula, the Coast
Guard Captain of the Port proposed a means to enhance port
safety at two locations where the deep ship channels (for
ocean-going ships) intersect the Intracoastal Waterway (which
mainly has barge traffic and small vessels). The proposal
involved establishing "regulated navigation areas" that would
require vessels from both directions to radio their approach and
location to all other vessels in the vicinity. This proposal
may merit further consideration before a decision is made on the
need for a VTS in this port area.
At the ports we visited, few stakeholders said they had been involved
with the Coast Guard in discussing whether such alternatives are a
viable alternative to VTS 2000 systems in their port. In discussions
with us, Coast Guard officials agreed that greater communication with
key stakeholders is an essential step in making decisions about VTS
2000.
An additional study currently being conducted by the Marine Board of
the National Research Council may provide additional information that
will be useful in assessing VTS 2000. Among other things, this study
will address the role of the public and private sectors in developing
and operating VTS systems in the United States. An interim report is
due to be completed in June 1996.
SUPPORT FOR VTS 2000 NOT
WIDESPREAD AMONG KEY
STAKEHOLDERS INTERVIEWED AT
PORTS
---------------------------------------------------------- Chapter 0:3
Most of the stakeholders we interviewed did not support installing a
VTS 2000 system at their port. Their opinions were predominantly
negative at five ports, about evenly split at two, and uncertain at
one. Many who opposed VTS 2000 perceived the proposed system as
being more expensive than needed.
Support for VTS 2000 was even less when we asked if stakeholders
would be willing to pay for the system, perhaps through fees levied
on vessels. A clear majority of the stakeholders was not willing to
fund VTS 2000 at six of the ports; at the other two, support was
mixed.
INTERVIEWED KEY STAKEHOLDERS
SHOWED GREATER SUPPORT FOR
ALTERNATIVE VTS SYSTEMS
---------------------------------------------------------- Chapter 0:4
The stakeholders interviewed at six ports generally supported some
form of VTS system that they perceived to be less expensive than VTS
2000. However, at the four ports with VTS systems, this support did
not reflect a belief that a new system was needed; most stakeholders
said that existing systems were sufficient. The two locations
without a VTS system (New Orleans and Tampa) supported an alternative
VTS system. In contrast, at Mobile/Pascagoula, most stakeholders
were opposed to a VTS system, saying that the low volume of
ocean-going vessels did not warrant such a system. At Port
Arthur/Lake Charles, views were evenly mixed as to whether a system
was needed.
In general, because stakeholders perceived that other alternative VTS
systems could be less costly than VTS 2000, they were somewhat more
disposed to consider paying for them. At two locations with existing
private VTS systems, they are already doing so. At the remaining six
ports, the stakeholders had the following views on paying for
alternative VTS systems: stakeholders' views were generally
supportive at three, opposed at one, and mixed at the other two.
SEVERAL KEY ISSUES COULD AFFECT
THE SUCCESSFUL ESTABLISHMENT OF
PRIVATELY FUNDED VTS SYSTEMS
---------------------------------------------------------- Chapter 0:5
In discussions with key stakeholders at each of the eight ports we
visited, three main concerns emerged that could impede private-sector
involvement in building and operating VTS systems.
Obtaining funding for construction. At half of the six ports that do
not have a privately funded VTS, the stakeholders were concerned that
if local VTS systems are to be funded by the user community rather
than through tax dollars, the lack of adequate funding for
constructing such a system may pose a barrier. The cost of a VTS
depends on its size and complexity; however, radar equipment,
computer hardware and software, and a facility for monitoring vessel
traffic alone could cost $1 million or more at each port. The
privately funded systems at Los Angeles/Long Beach and
Philadelphia/Delaware Bay initially faced similar financing concerns;
both received federal or state assistance, either financial or
in-kind.
Obtaining liability protection. At each of the same six ports, most
of the stakeholders were concerned that private VTS operators might
be held liable for damages if they provided inaccurate information to
vessel operators that contributed to an accident. At locations such
as Tampa and San Francisco, where the possibility of privately funded
systems has been discussed, the stakeholders believe that securing
liability protection is a key issue that must be resolved before they
would move forward to establish a VTS system. Currently, the two
existing privately funded VTS systems receive liability protection
under state laws, except in cases of intentional misconduct or gross
negligence. However, these laws have yet to be tested in court.
Defining the Coast Guard's role. Federal law does not address what
role, if any, the Coast Guard should play in privately funded
systems. At seven of the ports, most of the stakeholders said the
Coast Guard should have a role. In support of this position, they
cited such things as the (1) need for the Coast Guard's authority to
require mandatory participation by potential VTS users and to ensure
consistent VTS operations and (2) Coast Guard's expertise in and
experience with other VTS systems.
-------------------------------------------------------- Chapter 0:5.1
In summary, difficult choices need to be made about how to improve
marine safety in the nation's ports. There is an acknowledged need
to improve marine safety at a number of ports, but not much agreement
about how it should be done. Decisions about whether VTS 2000
represents the best approach are made more difficult by the
uncertainties surrounding the scope, cost, and appropriateness of VTS
2000 over other alternatives in a number of locations. While some
unresolved questions cannot be immediately answered, we think it is
vitally important for the Coast Guard to present a clearer picture to
the Congress as soon as possible of what VTS 2000 is likely to
entail. Complete, up-to-date information will put the Congress in a
better position to make informed decisions about the development of
VTS 2000.
Mr. Chairman, this concludes our prepared statement. We would be
happy to respond to any questions that you or the Members of the
Subcommittee may have.
*** End of document. ***