A new U.S. General Accounting Office report sharply criticizes the Corps of Engineers' economic analysis for a proposed $420-million dredging project on the Delaware River. The GAO report, released June 10, says the Corps' 1998 analysis has "material errors." GAO estimated the channel deepening's benefits at $13.3 million a year, or less than a third of the Corps' projection of $40.1 million.

The project would involve deepening the Delaware's channel to 50 ft, from the current 45 ft., in a 103-mile section from Philadelphia and Camden, N.J., south to the Delaware Bay. The federal share of the cost would be about $287 million, GAO says, with the rest to be contributed by the local project sponsor, the Delaware River Port Authority.

After being briefed by GAO several weeks ago about the tentative upcoming findings, Maj. Gen. Robert Griffin, the Corps' director of civil works, put the Delaware project on hold on April 22, pending a re-study. GAO recommends a new analysis that would then be reviewed by an independent evaluator.

Under Secretary of the Army R.L. Brownlee said that the GAO report "identifies legitimate concerns that warrant comprehensive reanalysis." The Corps also concurred that the new analysis should be reviewed by an outside party.

Among the errors in the Corps economic analysis, GAO said the agency "misapplied commodity growth rate projections, miscalculated trade route distances and continued to include benefits for some import and export traffic that has declined dramatically over the last decade."