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Prospective buyers tour Mat-Su ferry as federal grant deadline moves back

Zaz Hollander

WASILLA -- Armed with a two-month delay in repaying federal money spent on the never-used ferry Susitna, Mat-Su Borough officials now hope to sell or transfer the vessel to the Philippine Navy.

The borough acquired the unique twin-hulled, ice-capable former Navy prototype more than two years ago. But with the borough unable to put the Susitna into Cook Inlet passenger service, the Federal Transit Administration in early August demanded the borough repay more than $12.3 million in federal grants used for the ferry, a Port MacKenzie terminal, and landing design.

The borough this week got a 60-day extension to pay back the grant, borough officials say.

There's also a possibility that the ferry could finally find a home -- and the borough a way to make or offset grant payments -- in the Philippines. 

Three representatives of the Philippine Navy, along with three representatives of the U.S. Navy, inspected and test drove the Susitna last week, Mat-Su port director Marc Van Dongen said Wednesday. The group is eyeing the ferry for humanitarian relief delivering supplies or evacuating people during hurricanes, along with some naval uses.

The borough could give the ferry back to the U.S. Navy for a transfer to the Philippine military, Van Dongen said. It's possible that could relieve at least $6 million of the grant obligation if the FTA deems the Navy a government entity. 

Or the Philippine Navy could buy the ferry outright for $6.5 million including a broker fee, then spend another $6 million converting the vessel before sailing it to the island nation in the Pacific Ocean, he said. The group talked about converting the vessel's two passenger compartments to a dining hall and berthing for overnight use. 

The head of the Philippine Navy plans to discuss the ferry during a Sept. 16 meeting with the U.S. Navy's chief of naval operations in Washington, Van Dongen said.

“Of everybody I've talked to, they seem the most excited about a vessel that fits their needs,” he said. “It's just a matter of whether they can orchestrate a transfer or come up with the funds to purchase it.”

Meanwhile, it looks like borough officials won’t get to meet with U.S. Transportation Secretary Anthony Foxx on the grant demand. Borough Manager John Moosey last month said he got an assurance during a closed-door meeting with the secretary and U.S. Sen. Mark Begich in Wasilla that such a meeting could happen in Washington, D.C.

But during a Mat-Su Assembly meeting Tuesday, a disappointed Moosey said he’s been “trading voicemails” with department officials and now it sounds like the closest he’ll get to Foxx is regional Transportation officials in Seattle. 

“We think we’re probably going to decline that (meeting) because when we have been meeting with Seattle they’ve always said they cannot make those kinds of decisions,” Moosey said Tuesday. “It has to come from Washington (D.C.).”

The borough got the $78 million prototype largely for free in April 2012, but the costs of keeping it berthed in Ward Cove near the shipyard where it was built are mounting. As of last October, the borough had paid about $1.2 million to keep the ferry in storage, with monthly bills of nearly $29,000 since. 

Last week, the Assembly also approved spending $115,000 on maintenance for the long-idled vessel in need of some repair.