Rail or road? Heated opinions aired at Sept. 12 special assembly meeting

Debate continues on whether to convert the partially-complete Port MacKenzie rail extension into an 18-mile road. Mat-Su Borough officials say $180 million has been sunk into the project so far and prospects for securing another $200 million to finish it appear dim.

Others, including members of the region’s legislative delegation, say the borough should press on with a quest for federal infrastructure funds.

The borough assembly held a special meeting Sept. 12 to air the issue. No decisions were made, and the assembly had already given Borough Manager Mike Brown permission to explore for money to do the road conversion, which is estimated at $70 million.

Citizens as well as legislators weighed in: “I’m here to support the Port MacKenzie rail extension and I think converting the rail bed to a road is a terrible idea. It’s like turning a diamond into a piece of coal. A train can carry 30 to 40 cargos at a time. A truck can carry only one,” Jessica Wright told the assembly.

“We’ve spent $180 million so far on the rail extension. We need $150 million to finish it. Without rail, we have just a small, local port. This is something that just has to be done,” she said.

There’s more to it than freight, Steven Wright said. A rail connection would cut the travel time to Denali National Park by half, boosting tourism. Ron Johnson, another resident, said “We took a risk when we built the port. Now’s not the time to back away.”

An economic study of the prospects for Port MacKenzie done three years ago, “said the port is viable, but that we’ve done a poor job of marketing,” said C.J. Kohn, another Mat-Su resident.

“If we turn it into a highway we’ll never get money to complete the rail. Yes, it’s expensive, but let’s put it in place and see what happens,” he said. The state took risks at Delta, “but now there are farms there. We’re now developing agriculture at Nenana,” he said.

A different note was sounded by Margaret Stern, of Talkeetna, representing the Susitna Coalition of people interested in environmental and other impacts. Stern said that the proposed road would mingle traffic with trucks and autos coming on the planned West Susitna road to be built from the port area to the Susitna River and eventually further west.

“The overlap with industrial (and public) use can create problems, as we’ll soon be seeing in the Interior with Kinross Gold trucking gold ore,” on public highways, she said.

In opening the discussion, Mat-Su borough manager Mike Brown laid out the background: The estimated cost to complete the rail link is $200 million; the road conversion will cost about $70 million. There’s been no progress on the project for eight years and great uncertainty as to getting support to finish the project or who will take the lead in doing it.

“On the other hand, a road is well within the borough’s capability,” to take on and manage, Brown said, and it would augment the current efforts to improve the overall road linkages in Mat-Su.

Embankments have been finished on three sections of the rail link, Sections 3, 4 and 5 along with six rail bridges. Section two, a 7.1-mile segment to the Point MacKenzie agricultural area has yet to be built but has had the right-of-way cleared. Section one, at Port MacKenzie, also has a completed embankment and Section six, at Houston on the Parks Highway, has its embankment and track actually laid. This is the only part of the project that is actually used by the Alaska Railroad. A communications tower has also been built there.

The plan is to convert the embankments into an 18-mile, 40-foot-wide road.

Brown said the $200 million estimate to complete the link came from the Alaska Railroad, not the borough, and while it came up at different points in the extended discussion, Bill O’Leary, CEO of the state’s Alaska Railroad Corp., said the figure given the borough was not a detailed estimate but a rough one based on the railroad’s knowledge of construction and recent trends in costs.

O’Leary said the railroad has been working with Mat-Su on the rail extension since the idea evolved in 2007 but on informal basis. “It is a Mat-Su project,” with the Alaska Railroad serving, possibly, as a project manager. There is no formal agreement between the borough and the railroad, O’Leary said. “It is just a ‘handshake’ arrangement.”

While the railroad does have a capability to issue bonds the repayment on those must be done by a shipper. “We don’t have the balance sheet (financial resources) to do the project ourselves,” he said. The railroad’s annual capital budget is committed to immediate operations needs, like maintenance and upgrades of existing track.

At that point borough mayor Edna DeVries, who presided at the meeting, asked O’Leary what it would take to get a more detailed, updated estimate for completing the project.

Brown also made the point, separately, that a “do nothing” approach, neither rail or road improvement, would complicate efforts to find commercial and industrial customers for the port and not put the burden of ongoing maintenance on the borough. “This cost would be squarely on the taxpayers,” he said.

Some of the sharpest discussion of the rail-to-road conversion in the meeting came from two or the Mat0-Su’s legislative delegation.

State Rep. Kevin McCabe, R-Big Lake, whose district includes the port and planned rail link, was blunt in his remarks: “This (the rail) needs to be done. If this is converted to a road it is the death of Port MacKenzie,” he said.

The port has potential, “but you can’t find a major port in the U.S. today that isn’t connected to railroad.” Trucking won’t substitute for rail in shipping significant volumes, he said. “We’re 500 truck drivers short in Alaska right now.”

“We’re halfway done with this (extension) but we’ve become timid,” in going after money to finish it. “President Biden loves rail,”McCabe said, because it is efficient and moves freight with fewer climate-damaging emissions. “We need to act now to see if we can get federal infrastructure money to finish the job,” he said.

State Sen. Mike Shower, R-Mat-Su, backed up McCabe, but from a different angle: As a former Air Force officer, Shower is trained to think of backup plans. “In 2018 an earthquake came very close to putting the Port of Anchorage out of commission. What’s our backup in getting goods into Southcentral Alaska? If we have a bridge out (across the Knik or Matanuska river” what’s our ‘plan B’ for getting consumer goods into Mat-Su?”

Shower also thinks the military could become a valuable ally. “The military would support a roll-on, roll-off capability at the port,” (an ability to drive vehicles on and off vessels),” and Port MacKenzie is closer to Interior Alaska military installations than Anchorage’s port.

“We need economic development, but it has to be by rail. There’s just not enough trucks available. You can’t put enough trucks on a road to load or unload a major vessel efficiently, Shower said.

The senator asked O’Leary, the Alaska Railroad CEO, if there had been discussions with the military on Port MacKenzie and the rail link, and if so what the response was.

Shower also asked if it was possible to do both, to have a rail link as well as road use.

Brown said it is possible at least in theory but it would need a larger land corridor, new permits and very likely a new Environmental Impact Statement.

McCabe asked Brown if the borough could pursue construction of the embankment and possible road use in the 7.2-mile Segment Two that reaches to the Point MacKenzie agricultural project. This could happen even as the rail-to-road discussion over the 18-mile planned rail extension continues, he said.