A congressional agency dealt a potentially crippling blow Monday to decades-old plans for a Delaware River channel deepening, declaring that past studies drastically overstated benefits to taxpayers.

In a report released by New Jersey lawmakers, the General Accounting Office said the Army Corps of Engineers relied on miscalculations, faulty assumptions and outdated information to justify the $311 million project.

Taxpayers would recover only 49 cents for every dollar spent, the GAO found, far short of the $1.40 in benefits per dollar spent forecast by the corps since 1992. More than 80 percent of the benefits would have gone to just four upriver refineries.

The GAO finding means the project authorized by Congress in 1992 failed a basic break-even test used to judge eligibility for federal public works funding.

The corps on Monday acknowledged problems found by the GAO and said it would expand a review launched in April. An independent consultant will check the results. "Unless there is a radical reassessment of their conclusions, they should not fund it," said New Jersey Rep. Robert Andrews, D-Haddon Heights. "The magnitude of the errors are rather staggering."

Sen. Joe Biden, D-Del., said he would not support the project without proof of its benefits.

"I haven't read the report yet, but if it says what I've been told, as far as I'm concerned, the project is dead," Biden said.

Sen. Tom Carper, D-Del., and Rep. Mike Castle, R-Del., both said Monday the dredging project should not proceed until the corps answers the GAO's concerns.

Project supporters said a reassessment should be done quickly.

"This project is very important for the Delaware Valley," said Manuel N. Stamatakis, chairman of the Delaware River Port Authority, the project's sponsor. "Thousands of jobs depend on our ability to be competitive with other ports that already got dredging projects."

Support for the project remains strong in Pennsylvania, where Sen. Arlen Specter, R-Pa., assured labor representatives that the dredging would prove justified.

The corps had proposed deepening a 103-mile stretch of shipping channel to 45 feet from its current 40-foot depth. About 33 million cubic yards of sand, sediment, mud and rock would have to be dredged along the route between Philadelphia and the mouth of the Delaware Bay.

Corps managers suspended work on the dredging plan in April, acknowledging "serious questions" about past cost-benefit studies.

Among the problems found by the GAO:

• A $4.7 million overstatement of benefits, blamed on an unspecified corps computer error.

• Double-counting of benefits to some oil shippers, and unjustified benefit forecasts for most tankers delivering to the region.

• Failure to account for global market changes that sharply reduced benefits to key cargo industries.

• Inflated oil traffic forecasts.

"After taking these problems into consideration, we found that the project benefits for which there is credible support would be about $13.3 million a year, as compared to the $40.1 million a year" claimed by the corps, the GAO report said.

Three members of New Jersey's congressional delegation released the results at a riverfront news conference in Camden, N.J.

Andrews sought the review by the GAO - Congress' investigative arm. He was later joined by Sen. Jon Corzine and Sen. Robert Torricelli. All are Democrats.

Opponents said the report validates years of criticism.

"I would hope that the report would be a killer," said Richard A. Fleming, a member of the Delaware Nature Society who has worked with opposing groups. "I think the country has many more pressing problems and issues that need to be addressed than this project, which is economically unjustified, at least in my view."

Project supporters said the deeper channel would save shipper expenses by reducing the need to lighten loads on tankers unable to move up the river at current depths.

The Delaware River Port Authority also contended that local freight centers need a deeper channel to serve future generations of larger cargo vessels. Authority officials said corps forecasts never fully accounted for potential benefits to bulk and freight industries.

Monday's report was the latest in a series of setbacks for corps water projects.

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-- Anonymous, June 11, 2002