The evaluation, selection, sequencing, and scheduling of lock reconstruction and rehabilitation projects is a major concern for inland waterway systems. As traffic increases and existing lock conditions deteriorate, users suffer substantially longer processing times and delays. Lock projects tend to be interdependent as improvements at one lock may shift bottlenecks elsewhere. A generalized waterway simulation model that is independent of network geometry was developed to evaluate the system over a multiyear planning horizon. A genetic algorithm was also developed in order to efficiently explore the solution space of this large investment optimization problem. The proposed combination of two stochastic models can solve selection, sequencing, and scheduling problems for interdependent projects in large waterway networks but requires long computation times. Due to lock interdependency, the benefits of multiple projects are not directly obtainable by adding individual project benefits; they are measured from the marginal increment of total system delays. The results show how interdependent projects should be scheduled and how operational lock control improvements can sometimes improve delays significantly without requiring major construction investments.