SAVANNAH - South Carolina environmental regulators will allow Georgia to plead its case for deepening the shared river channel to Savannah's booming seaport before the neighboring state decides whether to finalize its rejection of a permit for the $600 million project, Georgia Gov. Nathan Deal said Wednesday.

Speaking on a panel with industry stakeholders in the long-sought port expansion for Savannah, Deal said South Carolina Gov. Nikki Haley assured him that her state's regulators would hear Georgia's position when they met over lunch earlier this month.

Deal stopped short of saying whether Haley, whose state has a competing port in nearby Charleston, S.C., seems to have warmed to Georgia's plans to deepen the Savannah harbor after she staked out a more combative position after winning office last year.

"I just appreciate the fact that she would allow us to at least make our case to their state agency before they do take final action," Deal told reporters in Savannah. "I think that shows good faith on her part and I appreciate that."

Georgia is scrambling to get permits and funding to deepen 32 miles of the Savannah River from the Atlantic Ocean to the Savannah port, the fourth busiest U.S. container port. The Army Corps of Engineers, which would oversee construction, has sought a water quality permit from South Carolina because it shares the waterway with Georgia.

In late September, South Carolina environmental regulators denied a permit for the project, saying it would do unacceptable harm to the river's endangered fish and fragile marshes. Their counterparts with Georgia's Environmental Protection Division granted a similar permit as long as the Corps abides by a list of 15 conditions in addition to following its plans to offset any environmental damage.

Deal said he believes the Corps and Georgia EPD officials can persuade South Carolina regulators to make a similar agreement. Without Haley's assurance of a hearing, South Carolina officials would have been able to reject an appeal from the Army Corps and Georgia without granting them a chance to plead their case.

Like other states with East Coast ports, Georgia and South Carolina are competing to deepen the waterways to their seaports so they can accommodate giant cargo ships expected to sail through the Panama Canal after it completes a $5.5 billion expansion in 2014.

Panama Canal Authority CEO Alberto Aleman Zubieta said the project is on track to finish in the next three years. The deeper canal will allow transit by ships capable of carrying up to 14,000 cargo containers - more than three times the size of the vessels it accommodates now. He sat on the Savannah panel along with colleagues in the shipping business in an effort to boost support among local business leaders.

"In 2014, when fully loaded ships start coming through the Panama Canal, Savannah will be at a competitive disadvantage" without deeper water, said Chris Parvin, vice president of marine operations for Mediterranean Shipping Company, which operates a fleet of 457 cargo ships worldwide.

Georgia Ports Authority chief Curtis Foltz said he's still confident the Savannah project can win final approval from the federal government by mid-2012. He's hoping Congress will agree to start funding its two-thirds share of the construction after that. Georgia has already committed $134 million to the project, and Deal plans to ask for more money next year.

Regardless, Foltz has said the Savannah harbor deepening would likely be completed in 2016 - two years after the expanded Panama Canal opens.

Rick Gabrielson, director of international transportation for Target Corp., said he hopes to at least see work underway on the Savannah project by the time giants ships can start sailing through Panama. Target has a large distribution center in Savannah that has made its port a key terminal for the retailer in the southeast.

"You want to be able to see dredging activity taking place and activity being started," Gabrielson said.

It's unclear how much South Carolina could slow the project if it insists on denying a water quality permit. The federal Clean Water Act gives states some say in projects that could pollute their waterways. But Col. Jeff Hall, commander of the Army Corps Savannah District, has said he believes the harbor project would be exempt.

Deal said the harbor deepening remains one of his top economic priorities. He sounded unwilling to let South Carolina slow it down.

"We are prepared to do whatever is necessary to go forward with it," Deal said. "The project is too important. But it is much easier if we have cooperation."