Port of AK to cost almost $2 billion to repair and replace

Published: Jan. 28, 2019 at 3:59 PM AKST
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The price to upgrade, replace and fix the aging Port of Alaska has now grown to almost $2 billion.

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 new price tag, from CH2M Hill, which is now owned by Jacobs Engineering, comes as a surprise the Anchorage Assembly as well as the mayor's office.

"It's certainly an uncomfortable place and what we ultimately want folks to know is that we don't have any particular interest in building a $2 billion, all-in project," city manager Bill Falsey said. "We would like this to be the least expensive port that can meet our needs."

The Port of Alaska is owned and operated by the Municipality of Anchorage, but it serves the entire state. That banana you had for breakfast? It came through the port.

Corrosion is a lot of the problem, and the port is not up to the modern-day standards for ships, which are much larger today than when the port was first constructed.

Another issue facing the port is the failed port expansion that cost millions of dollars and ended up in litigation. The expansion started in 2003, but was quickly stopped after major problems were discovered. What that means is that the expansion has to be removed, costing about $300 million, Steve Ribuffo, the Port director, has previously said.

Falsey says the recent increases can be blamed on several issues.

"Some amount is due to the assumption about the costs of dredging going up because they thought something would be performed by the Corps of Engineers. The Corps of Engineers made some decisions that increased the cost. Some amount was because of the environmental compliance requirement changed, some amount was because of steel tariffs," Falsey said, "still more was because some of the original assumptions about how much it would cost to mobilize equipment from the Lower 48 proved not to be accurate."

So what happens now?

The city wants the public's help looking through the port budget looking for ways to cut the budget.

Assembly member Chris Constant is the co-chair of the enterprise and utilities committee. It's within that working group that the public is asked to comb through the Port budget to find ways to cut the budget.

"We have to be responsible for ourselves so we have to be very smart and look closely at the plans and proposals to make sure we're buying what we need and we're not just writing a blank check for the future," Constant said.

The port would be fixed during several phases. The first one that's ready to start construction is the petroleum-cement terminal, which would be ready to be built in 2020 or 2021. The price for that terminal alone went from $124 million to $223 million. To pay for it, if it's approved, a 3-cent tariff would be added to a gallon of gasoline. That's up from a fraction of a percent now.

Falsey says the price isn't set in stone just yet. He says the city, and the public, will be combing through the proposed budget to find a way to make it less expensive.