Federal investigators to audit port project

HUGE COST OVERRUNS: Municipality also wants more oversight.

Anchorage Daily NewsSeptember 11, 2011 

The municipality's troubled port expansion project is getting new scrutiny.

A federal audit is under way, focusing on the role of the federal Maritime Administration, an agency of the U.S. Department of Transportation that has had the lead government role in the expansion. Auditors are headed to Anchorage this month to conduct interviews.

At the same time, the Anchorage Assembly is considering a proposal to strengthen the municipality's role. Some changes already have been made to give the city a role in overseeing the project, but the Assembly has not formally signed off on a new agreement with MARAD, as the federal agency is known.

The expansion is stalled because of construction complications and a shortage of dollars. The estimated costs have tripled since 2005 to about $1.2 billion. City officials have talked about abandoning their vision of building a whole new port and scaling down the project, which still would cost hundreds of millions of dollars.

The city has been working for more than a decade to replace the docks at the 50-year-old Port of Anchorage. Much of what Alaskans eat, wear and drive comes through the port.

Under the direction of Port Director Bill Sheffield, the project design transformed from a traditional dock-on-piling structure to one in which U-shaped cells of steel are being installed, then backfilled with dirt and gravel to create new land. The goal was to create a new steel dock face 1.5 miles long, new berths for bigger ships, and 135 acres of new land for port operations and industry.

But hundreds of the steel sheets were bent and damaged during installation in 2009. The last two summers have been spent trying to assess and repair the damage. A bulldozer operator on the project was killed this summer when dirt collapsed beneath him.

While the Port of Anchorage is a city entity, the Assembly agreed back in 2003 to give the Maritime Administration the lead role in its port expansion, even though the agency had never managed a port project before.

In May, the inspector general of the Department of Transportation announced an audit of "MARAD's coordination and oversight of port infrastructure projects for state, local and territorial authorities."

As of May, about $265 million had been spent on the project. Much of the money has come from congressional earmarks.

The Port of Anchorage will be the lead case example but the review will also examine projects in Hawaii and Guam that were started after Anchorage's, according to the May 9 audit announcement.

The review will examine oversight, risk management, contract awards and administration, the notice said.

Assembly chairwoman Debbie Ossiander said Sunday she and possibly other Assembly members will meet with auditors. She said she wants the Maritime Administration to be more hands-on in overseeing the project.

The audit won't be complete until next spring or early summer.

The Assembly also is considering revamping its agreement with the Maritime Administration. The Assembly is scheduled to consider the new agreement Tuesday, but Ossiander said she will ask for the matter to be delayed so it first can be considered by an Assembly committee that oversees the port.

The proposal would establish a project oversight and management organization that includes representatives from the Maritime Administration, the port and the Sullivan administration. That group would manage the project day to day, under the proposal. Earlier this year, a similar group began meeting weekly but its authority was not formally defined.

The proposal also says the municipality would take over administering contracts for the project next year. Ossiander said she doesn't believe that's the intent and wants to clarify what's being proposed.

In another area, the proposal says the Maritime Administration would transfer project funds to the U.S. Army Corps of Engineers for a technical evaluation of the design.

A city advisory committee has been calling for a technical review for years.

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