Mat-Su Borough seeks way to cut losses on unused ferry

Lisa Demer
The ferry MV Susitna performs during sea trials in September 2010. CHARLIE STARR / The Mat-Su Borough

The Mat-Su Borough Assembly, trying to cut its losses on a high-tech ferry that was supposed to provide a quick connection between the Valley and Anchorage, is seeking proposals to beach it for cheap or somehow dry-dock it at the borough port.

The $80 million Susitna was built mainly with federal money as an experiment by the Navy and the borough: part assault vessel, part commuter ferry. It was designed as a military prototype to be turned over to the borough for operations, sea trials and upkeep once built.

The borough has been paying the bills since April, about $300,000 so far. The latest estimates for monthly maintenance, insurance, round-the-clock security and docking in Southeast Alaska, where it was built, approach $70,000 for a ship that some doubt will ever become the foundation of a local ferry system.

Besides beaching it, the borough is looking into selling it, leasing it or giving it away to another government agency such as the Alaska Marine Highway System, a challenge in itself given the vessel's unique design.

The Susitna currently is docked hundreds of miles away, at Ward Cove near Ketchikan.

Not all have given up on the dream of putting the boat to use as a ferry across Knik Arm between Port MacKenzie and Anchorage, though neither side has the special docks needed to load and unload vehicles and passengers, and the borough puts the costs of building such landings at $30 million.

The Federal Transit Administration has put a freeze on the money the borough has remaining in grants -- $6.7 million -- until it demonstrates it can build landings on both sides, said John Moosey, the borough manager.

The borough long ago secured a permit for the special dock needed at Port MacKenzie but has spent years unsuccessfully trying to match that on the Anchorage side. An application for a dock near Ship Creek is pending with the Army Corps of Engineers, said borough Port Director Marc Van Dongen. He figures the borough has a 50-50 chance of securing the approval.

Dave Cruz, a borough Port Commission member who owns construction and maritime businesses, told the Assembly on Thursday that he believes a ferry system is viable and can be established for less money than the borough estimates. The borough shouldn't give away its prized ship. It won't get another, he said.

"This vessel was sold to us on the intent that it will handle 6 foot of ice out in Cook Inlet, that it'll run up on the beach and drop an M1 Abrams tank off, and I really find it hard to believe today that you can't run this thing up on the beach and let it go dry," Cruz said.

Others say it wasn't built to be stored that way.

"Very risky," says Guido Perla, the engineer of record and naval architect who designed it. He said in an email to the borough that the twin hulls must be handled carefully to avoid overstressing them. And the shipyard that built the Susitna itemized the complications and considerations in a recent memo, including how to keep its systems from breaking down if it's stored in an inactive state on land.

The ship has pontoons with a barge deck in between that can rise for faster sailing and lower for beach landings. Just the bow, not the entire ship, was designed for beaching, the builder, Alaska Ship and Drydock of Ketchikan, said in its Aug. 7 memo. And only sections of the hulls were reinforced for ice breaking, Van Dongen noted after the recent meeting, pointing to ship design diagrams.

Yet tug boats and barges sit on the mud routinely without damage, Cruz told the Assembly. "That's the beauty of Upper Cook Inlet. You have all that silt and mud," which should cushion the ship like a pillow, Cruz said after the meeting. If that didn't work, the ship could be stored in a dry dock system similar to the one used at the shipyard, he said.

He earlier had offered to perform a $30,000 study of whether the vessel could stored in the Mat-Su, but the Assembly decided to skip that step, Moosey said.

Instead, the Assembly voted 6-1 to seek proposals for bringing the boat to Port MacKenzie and storing it there, whether on the beach or on a cradle or dry dock facility that likely would have to be constructed. The proposal also should include the cost of refloating the vessel, the Assembly decided.

"We're spending money like drunken sailors on storing the thing in Ketchikan," said Assembly member Ronald Arvin, who participated in the Thursday assembly meeting by phone and made the motion. He said beaching the boat sounded "sketchy" but other methods might work better. With fall and freezeup approaching, the borough needed to get moving, he said. Cruz told the Assembly the ship would need to be in place at the port by Oct. 1.

The lone opposition came from Assembly member Warren Keogh. He said he has visited Ketchikan to see and sail on the Susitna.

"It's an extraordinary boat. It's a very cool boat. I like the boat," he said. But he said he doesn't see how the borough can keep it without big costs to taxpayers.

"It perhaps makes sense to cut our losses sooner rather than later," Keogh said. "I hate to say that because I'm a fan of the boat."

Selling the boat could be accomplished more easily if it stays in ice-free water in Southeast Alaska, he said. Van Dongen agreed. If the ship isn't brought to Port MacKenzie, it may move to Juneau, which could save perhaps $20,000 a month, Van Dongen said.

Borough officials met recently with Michael Neussl, deputy commissioner of marine operations for the state Department of Transportation, to discuss giving the boat to the state ferry system.

Neussl said in an interview that the state is examining the idea but that the Susitna's design and small size are hurdles.

The borough boat can only hold 20 vehicles, and most state ferries accommodate many more, he said. It doesn't have crew quarters, and many ferry runs require a crew change en route. Most significantly, vehicles load onto the Susitna from the bow and most state ferries load from the side -- meaning it is incompatible with many state terminals. The fast ferries load from the stern and perhaps that would work for the Susitna -- if the other details can be worked out, he said.

"It's virtually brand new. Could it serve a niche somewhere in the marine highway system?" Neussl said. "I'm not really too optimistic but you never know."

Still, he's taking the proposition seriously enough that he's traveling to Ketchikan this month to examine and sail on the ship.

Borough manager Moosey said he's spent the last four or five months trying to find a "happier home" for the Susitna. He was excited about running a ferry system when he took the borough job in 2011. But even if everything else can be resolved, the Assembly doesn't want to heavily subsidize a ferry, he said.

The state covers 70 percent of the Alaska Marine Highway System costs, nearly $120 million a year, Neussl said. Van Dongen estimates a single-ferry system would cost the borough $3 to $5 million a year.

The Assembly hasn't decided what should happen to the Susitna long term.

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