Mat-Su Borough to sell off Port MacKenzie conveyor equipment

Cost to repair system too high to justify keeping it
Published: Feb. 1, 2022 at 6:29 PM AKST
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PORT MACKENZIE, Alaska (KTUU) - At its Jan. 18 meeting, the Matanuska-Susitna Borough Assembly passed a resolution directing Borough Manager Mike Brown, to initiate a competitive sale of the Port MacKenzie conveyor system.

The decision comes after an October 2021 strategic action plan report was prepared by The International Association of Maritime and Port Executives, a not-for-profit group. The report states that Port MacKenzie currently experiences low traffic, has inadequate staffing and has limited activities in regard to business development.

According to the action plan, Port MacKenzie recently acquired the dry bulk handling conveyor equipment that has not operated for 10-12 years and requires extensive repairs.

″We estimate around $600,000 to repair it, and we just don’t plan on doing that,” Brown said.

According to Brown, the conveyor was primarily set up for a large-scale wood chipping operation years ago and that lease has since been terminated. Timber has not been a viable commodity as of late due to restricted accessibility and low-quality material caused by environmental situations such as beetle kill. That, coupled with the price tag to make the conveyor operational again, is what led the assembly to decide to put it on the market through a request for proposal.

“The thought was, let’s go out and explore what value you might get out of selling it off to see if it’s useful for somebody else,” Brown said. “In some other purpose, in some other place.”

Port MacKenzie is not currently profitable to the borough and operates in the red. Brown said the borough has to work to reduce expenditures on an annual basis to keep maintenance and operating costs as low as possible.

According to the strategic plan report, staffing at the port consists of one full-time port operations manager and only one part-time maintenance worker. Because there is no on-site operational staff, vessels must hire third-party workers to handle loading and unloading any cargo. But the report also indicates potential for Port MacKenzie by way of socio-economic indicators and competitive opportunities.

“The data on population growth is particularly relevant for Alaska for two reasons,” the report said. “First, as an indicator of economic activity (overall) and second, as an indicator of consumer goods needs (cargo volume) that will have to be transported, as Alaska has limited manufacturing activity in this sector.”

“Proposed reconstruction of piers and wharves at Port of Alaska (Anchorage) could provide an opportunity for Port MacKenzie’s barge dock,” the report continues later on. “However, a leased or purchased crane would be required.”

Brown said the borough hopes to have the request for proposal to purchase the conveyor equipment out within the next month so potential buyers can utilize the summer months to extract it. It’s unclear how much the conveyor is actually worth, but the money earned from it would go back to the borough, and potentially even into Port MacKenzie.

“Its value is what somebody sees its value as being for their, you know, their specific purpose,” Brown said. “And I don’t know what that is so that’s why we need to go out and do a competitive sale to see if there’s somebody out there that might have use of it.”

Port MacKenzie begin construction in 1999 and is currently governed directly by the assembly. The majority of exports out of the port go to the North Slope, South Korea, Japan and China.

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