Stalled Port MacKenzie rail project to get new life with $249 million federal grant

The grant requires $62 million in local funding that will be partially covered by the value of a borough land transfer.

What you need to know:

• The Alaska Railroad will receive $249 million in federal funding to complete a 32-mile rail link between Port MacKenzie and the railroad’s main line near Houston. The project also requires a $62 million local contribution that officials said will be covered by borough land transfers, gravel for construction and funding from the Alaska Industrial Development and Export Authority, or AIDEA.
• Railroad officials expect to restart work in May and say the rail link could be completed as early as 2029. The state previously spent $180 million on the project before construction halted in 2017 amid budget cuts.
• The project could lower freight costs, support mining and military operations, and spur industrial development at Port MacKenzie, officials said. Borough studies suggest shipping heavy cargo through the port could cost 40% less than shipping it through Seward.

Full story/read more at: https://www.matsusentinel.com/stalled-port-mackenzie-rail-project-to-get-new-life-with-249-million-federal-grant/

Early in the rail link’s initial construction, some officials raised doubts about the project’s economic feasibility. But the Alaska Miners Association offered strong support from the start, helping convince doubtful legislators to secure the state’s initial round of funding. More recently, a military buildup in Alaska has highlighted the potential use of a rail link to efficiently move equipment to and from installations in Interior Alaska, a factor in securing final approval for the new funding.

If constructed, the new rail route would provide a shorter, more direct route for moving certain types of freight to the Interior from Southcentral Alaska, currently a main entry point for heavy cargo.

Borough studies show that shipping heavy cargo through Port MacKenzie could cost 36% less than shipping it through Seward. Operators of the large Fort Knox gold mine near Fairbanks previously told Mat-Su officials that using the Port MacKenzie rail link could cut their costs of moving bulk supplies to the mine in half, according to sources familiar with the discussion.

NANA Construction accounts for $60-$70 million worth of lumber, steel, pilings, and other supplies
each year; daily trucks move product between Anchorage and Big Lake during manufacturing season,
which begins at the end of March and continues through September. At 180 trucks per year, annual
savings would amount to $7,028.