New effort underway to secure funds for rail extension to Port MacKenzie

There’s a new effort under way to fund the long-stalled extension of the Alaska Railroad to Port MacKenzie, on the Upper Cook Inlet.

The Alaska Railroad Corp. has filed an application for a $220 million grant under the Federal Railroad Administration’s Consolidated Rail Infrastructure and Safety Improvements program.

This is a new effort to secure federal funds. Alaska lost out on an earlier effort because the Mat-Su rail extension didn’t qualify under government’s 1923 Infrastructure Investment of Jobs Act, its main program to stimulate transportation and other development.

The rail extension cost is estimated at $275 million based a contractor’s assessment, according to Meghan Clemens, an Alaska Railroad Corp. spokesperson. The Federal Railroad Administration program funds 80 percent of project costs and requires a 20 percent match from Alaska. “If we are successful in winning the grant we’ll work with the Legislature to secure an appropriation to support this statewide economic development project,” Clemens said in an email.

“Completing the rail line to Port Mac has lots of potential benefits for resource development, the military, and in creating greater resiliency in port infrastructure north of Anchorage. There is no set date for a decision but we expect an announcement before the election,” which is in November,” Clemens said.

The state or another entity such as the Matanuska-Susitna Borough must come up with $55 million for the match if the federal grant is awarded.

The rail extension involves 32 miles of proposed new track from a junction with the railroad’s

main track at Houston to Port MacKenzie’s a deep-draft dock on Upper Cook Inlet, which is owned by the borough.

Gravel embankments are mostly complete for the extension. One hundred and eighty million dollars in state funds have been invested so far in the project. Work stopped in 2015 when a sharp drop in oil prices and state revenues dried up state capital funds.

The idea behind the extension is to allow bulk commodity shipments to and from the port, which can now be reached only by road. When the project was conceived it was thought that it would facilitate new export shipments of coal from the Usibelli coal mine at Healy, south of Fairbanks.

Usibelli previously exported coal through Seward, but the longer rail journey from the Interior to Seward added costs and coal prices in Asia, the market for Usibelli’s coal, have been depressed.

Usibelli was interested enough that it sponsored a test at Port Mackenzie with a large ocean-going bulk coal carrier to determine if the vessel could handle Upper Cook Inlet’s strong tides and currents, which it did. However, absent the rail link the company was unable to do the export shipments.

The rail link will be a vital asset to the military, however, in shipping equipment to and from Alaska. The U.S. Army now deploys equipment to and from the Port of Anchorage but the Mat-Su rail link will shorten the distance for transportation and also provide ample upland space for storage and movement. The Mat-Su Borough owns 8,940 acres of open uplands adjacent to Port MacKenzie.

Also, if a natural gas pipeline is built to the North Slope a rail link would lower the costs of moving equipment and material to support its construction.