Critical Port of Anchorage expansion stalls as costs skyrocket

Sean DooganAlaska Dispatch News
The busy Port of Anchorage. The first dock was built on the site in 1915, and these days the port needs to expand to accommodate the goods coming into Alaska. That expansion has been vexed, and cost estimates have soared as high as $1 billion. Loren Holmes photo

It’s an Alaska-sized boondoggle that could affect the cost of almost everything bought, sold or built in the Last Frontier. After spending hundreds of millions of dollars and years of work to expand the Port of Anchorage, the project remains stalled, with much of the work completed needing to be re-done.

Work was supposed to be finished this summer, but the planned 6,000-foot expansion of the port -- which handles most of the goods that come into Alaska -- remains in limbo.

Construction stopped in 2010, and the Municipality of Anchorage is looking for a company to take on the project. The federal agency initially charged with managing the work was recently eviscerated in a DOT Inspector General report and wants to pull out. Plus funding needed to finish the job hasn’t been secured.

90% of Alaska goods pass through port

The Port of Anchorage sits on the northern edge of Cook Inlet, near the mouth of Ship Creek. The first dock was built in 1915, and a year later construction began on the nearby Alaska Railroad, ensuring that the port would become a major hub of economic activity in Alaska.

After the 1964 earthquake almost completely destroyed the port in Seward -- 127 miles to the south -- Anchorage’s port became the main receiver of Alaska goods and now accounts for as much as 90 percent of everything that comes into the state. Ships and barges dock there, and unload everything from food and diapers to raw construction materials.

Chances are, anything purchased in an Alaska city or village started its Alaska journey at the port.

“It is not just important to Anchorage, it really is Alaska’s port,” said Anchorage Mayor Dan Sullivan.

As the state has grown, the port has become too small to keep up -- prompting the expansion. When it comes to shipping, bigger is usually better -- and cheaper, too. The port needs to add bigger docks to accommodate larger barges and ships commonly used for marine transportation. It also needs room for bigger cranes -- to unload the shipping containers brought up by those boats.

Because the port is bordered by the city of Anchorage and Joint Base Elmendorf-Richardson -- a sprawling Army and Air Force Base -- there is little room to expand. So a project began to create land by driving sheets of metal into the Cook Inlet silt and backfilling with rock and dirt. But almost since its inception, the project has been plagued by construction problems, delays and cost overruns as the estimated price tag ballooned from $271 million to almost $1 billion.

Mishandled, mismanaged

At a Friday press conference, Anchorage Mayor Dan Sullivan, highlighted the Inspector General’s findings that the federal Maritime Administration (MARAD) -- a little-known branch of the Department of Transportation -- mishandled and mismanaged the Anchorage port work. MARAD was tasked with the job because the port was declared a national security interest, and because much of the funding was came from federal coffers.

The report found that the agency did not establish itself as the lead agency, erred in handing off technical and management responsibility to the city, and mismanaged information about the project to the extent that it could not say, for certain, how federal funds were used and where the money went. To date, about $300 million -- a combination of federal, state, and municipal funds -- has been spent on the project -- and its estimated cost has skyrocketed. Sullivan also released the results of a third-party engineering study that found that both the design and construction was fatally flawed. The city is suing Integrated Concepts and Research Corp. (ICRC) and PND Engineers Inc. because the metal sheets put into the silt to create more land were damaged and crushed during installation.

“Much of that work has to be pulled out and redone,” Sullivan said.

The city has issued a request for proposals to find a firm able and willing to finish the port expansion project. And, even though MARAD wants out of the Anchorage port project, the agency may find it will be required to stick it out. Mayor Sullivan said that MARAD, as the federal agency of record, will have to be part of the expansion.

Who will pay remains unclear.

“Future funding is going to depend on confidence in the team that’s managing the project going forward,” Sullivan said. “I think that we will establish that they will have great confidence in both our team here at the municipality and whatever professional team we hire as project managers,” Sullivan said.

Contact Sean Doogan at sean(at)alaskadispatch.com