Walker halts bridge and dam spending

ANCHORAGE — Governor Bill Walker ordered state departments to stop spending new money on capital mega projects, including two Valley-area projects.

The Knik Arm Bridge and the Susitna-Watana Dam are among six projects included in an administrative order to state agencies announced Saturday. Four other projects — Ambler Road, the Juneau Access Road, the Kodiak Launch Complex, and the Alaska Stand Alone Pipeline Project — are also affected, according to a press release.

The order effectively carries through on glass-half-empty project statements made during Walker’s successful campaign to unseat former Gov. Sean Parnell. Walker had said that all projects were subject to review.

The stop was ordered as a result of budgetary concerns, Walker said, in a statement issued Saturday.

“Our budget deficit grows deeper as oil prices go lower,” he said. “These are large projects that require significantly more state investment to complete. I’ve requested that state agencies not enter into any new contracts until we’ve had a chance to look at the various projects.”

State revenues are about 90 percent dependent on revenues from the state’s oil production facilities. The price of oil fell dramatically in recent months, from more than $100 a barrel to about $55 a barrel Saturday, according to the Bloomberg wire service.

Agencies overseeing the projects, including the Department of Transportation and Public Facilities, Department of Natural Resources, Alaska Energy Authority, Alaska Aerospace Corporation, the Knik Arm Bridge and Toll Authority and the Alaska Gasline Development Corporation must submit reports by Jan. 5 detailing what they’ve spent, and the cost of delaying, suspending, or terminating contracts.

“This is a way for us to not commit new money into projects that may not be continued during this fiscally challenging time,” Walker added.

The dam had recently received an unfavorable report from an Anchorage-based economist, drawing praise from environmental groups who want to see plans for the project nixed.

Contact Brian O’Connor at 352-2269 or brian.oconnor@frontiersman.com.

An earlier version of this story incorrectly described the second of two pipeline projects as ending in Valdez.