Alaska Gov. Sean Parnell abruptly changed direction on Tuesday, deciding the state would buy two smaller ferries, acknowledging that building a big 350-foot vessel was destined to run over budget.
"With declining oil production and declining state revenue, we have to be smarter with the people's money," Parnell said during his announcement in Ketchikan. "By setting a new course, Alaskans can build two smaller Alaska Class Ferries and stay on budget, and at the same time provide the same or better level of service Alaskans expect from our marine highways."
The Alaska Legislature had approved $120 million for a new ferry. Initial estimates put the cost of a 350-foot vessel between $150 and $167 million, but those costs increased.
"That $120 million is based on an estimate that's a couple of years old," Mike Neussl, deputy commissioner for marine operations for the Alaska Department of Transportation and Public Facilities, told the legislature in February, according to the Juneau Empire.
The Alaska Marine Highway System is celebrating its 50th anniversary in 2013. Its fleet of 11 vessels includes four ferries built before 1964. The smaller Alaska Class ferries travel the Inside Passage of Southeast Alaska on short routes that don't require overnight accommodations
"While the ferry system produced record levels of revenue last year, we also face this reality: Costs continue to accelerate for the maintenance of our fairly old fleet," Parnell said. "Building Alaska Class vessels will have a major positive impact on our ferry system capacity."
Design work will commence in cooperation with Ketchikan's Alaska Ship and Drydock shortly, Parnell said.
The Alaska Marine Highway has been operating year-round since 1963, four years after statehood. A precursor began in in 1948 when three Haines residents began offering service on the M/V Chilkoot to remote areas without road service.
Passenger and vehicle service is offered to 33 communities in Alaska, as well as Bellingham, Washington, and Prince Rupert, British Columbia