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AIDEA's decision, at a May 29 board meeting in Healy, clears the way for the railroad to finalize a separate agreement to acquire the 51 percent of the terminal owned by Hyundai Merchant Marine (America) Inc., a Korean-owned firm.
Both transactions are contingent on final approval of a $9.6 million federal grant to the railroad to pay for the acquisition, according to Alaska Railroad spokesman Patrick Flynn.
Jim McMillan, AIDEA's deputy director for credit, said the sale of the terminal will help the railroad and Usibelli Mines Inc. secure a new contract to export coal from Usibelli's mine at Healy, in Interior Alaska.
Joe Usibelli Jr., president of Usibelli Mines, said the sale is important because it will retain the infrastructure in Seward for loading coal and will strengthen employment in Seward and at the company's mine at Healy when exports resume.
Usibelli had to lay off workers in 2002 when the contract to ship coal to a South Korea utility was suspended. The mine also supplies coal to power plants at Healy and in Fairbanks.
McMillan said there was a danger that the terminal might have been sold and dismantled had the deal with the railroad not gone through. The authority purchased 49 percent of the coal terminal in 1995 from Hyundai in an effort to help Hyundai, Usibelli and the railroad cut costs and retain the coal export contract.
The $5.52 million sale price allows AIDEA to recover its investment made in 1995 plus interest at 7.5 percent, McMillan said.
In another action, AIDEA's board approved an $18.5 million dividend to the state General Fund May 29, based in its 2002 net revenues of $36.5 million.
The board meeting was held at the Healy Clean Coal Project, a $285 million new-technology coal plant owned by the authority which has been shut down since 1999 following a dispute with Golden Valley Electric Assoc. of Fairbanks, which operated the plant.
Also present were members of GVEA's board and its executive staff.
Mike Barry, chairman of AIDEA's board, said the meeting in Healy was held to allow new members of the authority's board to tour the 50-Megawatt plant along with GVEA's board.
It was only a familiarization tour, and no business regarding the plant was conducted at the May 29 meeting, Barry said.
However, the hope is that in seeing the plant and meeting their counterpart GVEA board members, AIDEA will be able to forge a compromise with the Interior electric utility in the four-year dispute which has kept the facility closed.
GVEA argues the plant, which was partly-funded with federal grants to test new coal-burning technologies, is beset with operating problems, and that the new technology systems should be replaced with more conventional and reliable equipment.
AIDEA has maintained that the new systems in the plant can be tweaked to operate better for less cost than a complete retro-fit. The authority is anxious to get the plant back into operation. In its mothballed status it costs AIDEA $9 million a year in maintenance and debt service on bonds.
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