End of the line for rail link to Port MacKenzie? Borough to pursue conversion to a road

This may be the end for the 15-year effort to build a rail link to the Matansuska-Susitna Borough’s Port MacKenzie.

The borough assembly approved a resolution at its July 18 meeting authorizing borough manager Mike Brown to pursue federal or state funding to convert 18 miles of completed embankment for the rail extension to a paved road.

The state has invested $184 million in the project to link the port to the existing Alaska Railroad but construction stopped in 2017. The borough has been unable to raise the estimated $200 million needed to finish the spur.

Converting the project to a road would allow use of an asset that has been a large public investment.

A road would allow vehicles to drive from Houston, on the Parks Highway, to a connection with the existing Port MacKenzie road built south from Wasilla.

“We have to realize that this kills the railroad project,” Brown said as assembly members approved the resolution without comment.

Additional funds would still be required to finish one segment of uncompleted embankment, to do paving and also to reconstruct bridges designed for the roadroad to be used by vehicles.

Ironically, the bridges were reconstructed with federal funds after being damaged in the 2018 earthquake.

I the amount of additional funds needed were not mentioned July 18.

If the conversion proceeds it would bring to an end an innovative vision to create an additional tidewater access point for the Alaska railroad other than Seward. A key problem is that there is currently no current commercial customer that would use the expanded rail link.

Usibelli Mine Inc. at Healy shipped coal for export to Seward for several years but that ended when cheaper coal from mines in Asia took away Usibelli’s customer in South Korea.

If the proposed Alaska LNG Project were built, requiring a 42-inch gas pipeline through Southcentral Alaska, a rail connection would expedite delivery of heavy cargo to Interior Alaska.

In the future, development of new copper mines in northwest Alaska could see shipments of ore to ports in Southcentral Alaska, and Port MacKenzie would involve a shorter distance to ship than ending ore trains through Anchorage to the Port of Alaska,

But those are potential customers that still face uncertainties, and Brown and other Mat-Su officials have been unable to find the money to finish the spur for the near term.

Ironically, the project does not qualify under the new federal Infrastructure and Investment Jobs Act, or IIJA, because that program has money for passenger railroads but not freight railroads like the Alaska Railroad.

The decision to create road does seem to end the rail project but, for the future, dual rail and road systems are not unknown, for example the link to Whittier from the Seward Highway at Portage. But dual-use creates its own problems, like timed vehicle access management for safety.

Still, the decision is likely to bring some criticism. For example, while the plan does make use of a substantial investment by the state it may be difficult to identify the need for additional access to Port MacKenzie to justify the added expenditure.

In another transportation matter, the assembly also set a public hearing July 18 for a plan to issue $65 million in borough general obligation bonds to fund new road improvement projects.

Mat-Su’s public works department has proposed nine projects that could be funded but the list can be changed by the borough assembly, which could draw from an alternative list of other potential projects.

Another initiative that could be funded from general borough revenues would pave gravel roads in the borough. Paving may not qualify to be funded by bonds, the assembly was told.

Borough staff started with 50-plus projects proposed initially after a public consultation. That was reduced in a further review to 34 projects and the nine favored and several alternative projects.

The bonds must be approved by voters in the upcoming October municipal election, and to make the ballot the assembly must make final decisions on the project list in mid-August.

Unlike previous borough general obligation road bonds there will bd no requirement for state matching funds, but Brown said there will still be efforts to get money through the Legislature.