Anchorage Assembly looks to reduce the costs to fix the Port of Alaska

Published: Feb. 20, 2019 at 4:45 PM AKST
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Many Alaskans had sticker shock when they saw the updated cost for the Port of Alaska: Almost $2 billion.

It prompted many lawmakers and city leaders to rally behind what is essentially an audit of the project.

Anchorage Assemblyman Chris Constant organized a special meeting of Municipality of Anchorage Utility and Enterprise Committee on the Port Modernization Project. He invited Jacobs Engineering, Moffatt Nichol, R&M Consulting, PND Engineers and DOWL. Constant says DOWL couldn't attend.

"Our goal is to facilitate an informational, collaborative conversation with the experts to help us in our decision-making process," Constant wrote. "This will be the first in a series of meetings the committee will host as we perform our due diligence in charting the path forward."

The Port is vital to the state. It handles more than 3.5 million tons of food, building supplies and all things that make life enjoyable and workable for Alaskans. It is also designated as a strategic seaport for the Department of Defense.

The updated price tag, from current Port contractor CH2M Hill, which is now owned by Jacobs Engineering, came as a surprise the Anchorage Assembly and the mayor's office.

"There are some pretty substantial cost increases and I don't think any of the members of the Assembly are interested in writing a blank check for a project we don't fully understand," Constant said.

Jeff Bool with CH2M Hill/Jacobs Engineering, says the price went up because of design, risks, marine mammal protections and escalations on a port with a current design to last 75 years.

"There's a lot of unknowns," Bool said. "It's risky work and very expensive demolition."

He walked the Assembly through the construction phases and where prices are high and could possibly be lowered.

He also talked about the risks associated with the project, including encountering obstructions during pile driving, delays in costs because of marine mammals in the Inlet, obstacles with the demolition of existing sheet piles, and unpredictable commodity volatility from a tariff on steel.

Several times he spoke about the risks crews face during construction, and design requirements including a requirement that the port meets the highest seismic standards.

"There's $290 million in the current cost estimate for risk," Bool said. "Examples of different site conditions, the previous program had a lot of obstructions trying to drive pilings. We think that our pile is much bigger and we're using a much bigger hammer. And we feel like we're either going to drive through some of those smaller obstructions, or it's kind of a needle in a haystack. We may miss them, but we think that our approach is better."

Then, there are the individual needs from the Port's users.

"Terminal 1 is currently pegged at $747 million, 39 percent of the total program cost," Bool said. "Included in that is Matson-requested requirements of $273 million that's effectively greater than what the current port has right now."

Constant said this initial meeting will continue with others. Previously, the city has said it has no interest in paying $2 billion.

"This is a real sobering moment for Anchorage," Constant said. "We are at a decision point on which direction we go forward."