CT Port Authority’s New London pier, once mired in cost overruns, projects profit as wind energy hub
The once-troubled State Pier project in New London is on track to show a $1 million dollar profit over its first year in operation, a departure from its rocky start when construction costs ballooned to more than three times the original estimate.
After four years of construction, the massive but long-neglected state pier on the state’s only natural deep water harbor has been reconfigured as one of the nation’s premier, heavy lift cargo terminals and is now the principal supply site for billions of dollars of offshore wind energy construction south of Block Island.
The Connecticut Port Authority, which owns the pier, said its outside auditors projected the $1.1 million operating profit for the fiscal year ending June 30.
The $309 million rebuild of the massive pier complex is substantially complete and the authority has turned over operation to Gateway Terminal of New Haven under a lease agreement that gives it a percentage of Gateway’s wharfage and stevedoring revenue.
Gateway payments are projected to account for about $1 million in profit. The Authority also is collecting on a separate, 10-year, $20 million lease agreement with regional electric utility Eversource and multi-national offshore wind developer Orsted, which are collaborating on three offshore wind farm projects about 30 miles south of New London.
“The surplus is the result of new revenue sources flowing consistently and secure for the next decade,” said David Kooris, who was appointed authority chairman after a disastrous start that resulted in overruns that tripled the cost of the reconstruction project from the original $93 million estimate..
As partners with the Authority in the public-private reconstruction project, Eversource and Orsted are paying one third of the total reconstruction cost, in addition to the $20 million in lease payments.
In spite of occasional interest from economic development officials in Hartford, the pier has been an underutilized state asset, seen by much of the public over the last half century as a long-term berth for dated U.S. Navy vessels attached to the submarine base a half mile up the Thames River.
The 40-acre pier is now the country’s only facility capable of supporting cargo of up to 5,000 pounds per square foot on two separate heavy lift platforms and loads of up to 3,000 pounds across the entire surface of the terminal. Its potential as a cargo terminal — a rail freight line passes nearby — has attracted interest in related maritime development in historic New London Harbor.
Kooris said Wednesday that the authority believes it can rely on offshore wind development alone for profitability for at least the next 15 years.
Eversource and Orsted are already working on three offshore wind farms, Southfork, Revolution and Sunrise Wind, which are expected to require three years to complete. The 300-foot tall tower and turbine systems for those projects are now being shipped to the pier, assembled there and then shipped offshore again.
Orsted is expected to continue to rely on the pier for follow-on offshore wind projects. projects for which it has acquired seabed leases on the continental shelf and is pursuing energy contracts with states .
“It is also likely that other projects and likely projects from developers other than Orsted will use it over the course of the following 15 years or so,” Kooris said.
The pier reconstruction encountered some remarkable engineering challenges that, combined with what a variety of officials now acknowledge were woefully inadequate, early cost estimates contributed to staggering cost overruns.
To create a pier platform designed to support pressures of up to 5,000 pounds per square foot, the port authority contractor, Kiewit Corporation, drove nearly 700, 30-inch and 42-inch steel pilings as far as 100 feet through building-sized boulders and granite ledge to reach bedrock.
Drills 4 feet in diameter were used to pierce the ledge. The work consumed, among other things, nearly 5 million pounds of steel, 10,000 yards of concrete, 22 miles of electric cable and hundreds of thousands of tons of stone fill.
The officials said project mismanagement and ethical lapses early in the construction process also contributed to the overruns.
The recent audit by CohnReznick of Hartford reported no adverse findings or recommendations.