Port Mac on schedule, if funding keeps flowing

The Matanuska-Susitna Borough continues to envision the railroad extension now being built to Port MacKenzie as a major step forward for resource development in Alaska.

Mat-Su Economic Development Director Don Dyer gave the Anchorage Chamber of Commerce an update on the project and detailed the borough’s vision for the port Sept 23.

Dyer said the $270 million-plus rail extension from Houston to Port MacKenzie on Knik Arm will help support a diversified economy and tax base for the state’s future.

“(The rail extension) is not just a Mat-Su Borough project, it’s not just a Valley project, but it’s for all of Alaska,” Dyer said.

By getting rail service to Port MacKenzie — a deepwater, raw commodity driven operation — he said potential and existing mines, and other large projects on the railbelt would have a means of efficiently moving materials in and out of the state.

With about 90 percent of state government revenue coming from a combination of oil taxes and the federal government, he said the state is currently counting on the unsecure future of federal spending, oil flow through the pipeline and near-record high oil prices.

To date, the rail project has received $146 million in state appropriation funding and approval for another $30 million in general obligation bond money approved by Alaska voters last November. Dyer said the borough, which owns the port, awarded $56 million in future construction bids this summer. The borough is still seeking about $100 million to complete the project, he said.

Without funding or regulatory holdups, Dyer said, the rail line is expected to be finished on schedule in 2016.

The borough estimates about 200 construction jobs were generated from the $116 million worth of work done on the rail this summer.

In June, the port secured a major lessee when Central Alaska Energy LLC received loan approval from the Alaska Industrial Development and Export Authority to borrow $13.9 million from the state for construction of a 7 million-gallon fuel storage facility at the port. The fuel terminal will sit alongside the rail and should be completed by late next year, Dyer said.

Central Alaska Energy is a subsidiary of Vitus Energy, a holding company for fuel supply operations across Alaska. Vitus built a worldwide name for itself for organizing the fuel delivery to iced-in Nome in January 2012.

The Southcentral port is uniquely suited to serve as a hub for resource flow because of its physical characteristics, Dyer said.

Port MacKenzie is a naturally scouring deep-water port that does not require dredging because of the strong tidal currents that parallel the dock face. At mean low tide it has a depth of 65 feet. Adjacent to the marine infrastructure, the port has 9,000 acres zoned for industrial use, Dyer said, providing for large quantity material storage and possibly value-added processing facilities.

Additionally, when the rail segment is completed, the port will have the only terminal rail loop in Alaska, Dyer said. The mile-long loop will have space for 110 rail cars to load or unload goods quickly with direct conveyor access to the water, he said. Dyer added that the borough estimates a train will be able to leave the Fairbanks area, take care of business at Port MacKenzie and be back in Fairbanks within a day once the operation is up and running.

“The only thing keeping (resources) from tidewater is that 32-mile stretch from the rail line at Houston to Port MacKenzie,” he said.

Because of its emphasis on transporting raw goods and possibly large equipment, Port MacKenzie is supplemental to the nearby Port of Anchorage, Dyer said, not a competitor. He said port officials are not interested in the container and roll-on, roll-off business conducted at Anchorage.

If developed, Dyer said studies have indicated the precious metal, coal and limestone deposits near the state’s rail and road system could generate up to 4,000 long-term jobs in the state.

Government officials and business leaders in Fairbanks are excited about the prospect of transporting construction supplies via rail to their city, he said.

“Building up the infrastructure of the Interior is one of the things that makes Port MacKenzie viable because we can assist in that,” Dyer said.

Elwood Brehmer can be reached at [email protected].

10/03/2013 - 4:54am