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Anchorage Assembly approves $42 million contract for first new dock at Port of Alaska

Yellow fenders, used when docking container ships, at the Port of Alaska on Thursday, May 16, 2019. (Loren Holmes / ADN)

The Anchorage Assembly has approved funding to start a total rebuild to the docks at the city’s beleaguered port a decade after construction problems halted prior efforts to upgrade the essential infrastructure.

An 8-3 Assembly vote at a July 30 special meeting allows city officials to award a $42.1 million contract to Seattle-based Pacific Pile and Marine to build the first phase of a new, roughly $220 million petroleum and cement terminal at the city-owned Port of Alaska.

The Assembly had delayed the vote twice before at its regular bi-weekly meetings on the hope officials in Mayor Ethan Berkowitz’s administration could reach an agreement over the work with a consortium of eight Port of Alaska customers, who object to the plan, primarily because of its cost.

The port user group is composed of the general cargo shippers Tote Maritime and Matson Inc.; five fuel supplier and distribution companies; and Alaska Basic Industries, which is a primary cement distributor in the state.

Representatives of the user companies have stressed at numerous Assembly committee meetings and work sessions over the past few months that city and port officials do not have a plan to finance the rest of the petroleum and cement terminal, or PCT, and cannot explain how the cost of the project went from $38 million in 2014 to more than $200 million today.

Millions of dollars have already been spent on preconstruction dredging in front of the docks and other soil stabilization work.

The user companies have urged the city to stop work to advance the port modernization project and reexamine the whole scope of the project to replace all of the five cargo and fuel terminals at the port, which is now estimated to cost $1.9 billion, a price tag no one sees as viable.

A significant portion of the $1.9 billion cost is for removing what’s left over from the original port expansion project, which stopped in 2010 after large sections of sheet piling meant to support the new docks were found to have been damaged during installation.

Anchorage Municipal Manager Bill Falsey acknowledged during the July 30 meeting that the city is still about $100 million short of finishing the PCT, but said the city’s plan “is to responsibly make incremental progress” on port work while ways to bring down the cost of the rest of the dock replacement are examined.

Falsey also noted the PCT needs to be built first, as its location south of the existing facilities will open up space for work on the rest of the docks while vessels continue to call on the port.

He has long insisted that city officials recognize the $1.9 billion plan is wholly unaffordable, even though the PCT is the first part of that plan.

However, ongoing examinations of the badly corroded steel piles that support the current docks — many of which are more than 50 years old — continue to reveal damage from the November 2018 earthquake, adding to the urgency of the matter, according to port officials. Their experts contend the port has less than 10 years before some of the docks will have to be de-rated for weight capacity or closed altogether if they are not rebuilt.

The $42.1 million contract to build a PCT trestle and dock platform next year “begins to put petroleum and cement deliveries back on reliable footing,” Falsey said.

Dave Karp, a senior vice president with Tote Maritime’s parent company Saltchuk, said before the vote that the user group and city officials met multiple times over the past week but were unable to reach a compromise path forward. He emphasized the users do not want to obstruct progress on rebuilding the port as they agree the work needs to be done; they just don’t believe it is so pressing that it needs to happen before a comprehensive look at the project costs is complete.

“Do we really want to risk history repeating itself?” Karp asked Assembly members, in reference to the failed port expansion project that cost roughly $300 million and produced little viable infrastructure.

Consultants hired by the Assembly to review the project for cost-saving measures have said alignment between the city and the users will be critical to move the project forward successfully.

Falsey said the city will “wring out the big costs from the rest of the project while making incremental progress” on the PCT.

The users have suggested repairing one of the existing petroleum terminals but the viability of that is unclear at this point.

Adding to the pressure, Pacific Pile and Marine representatives have said the contract needs to be approved by Aug. 1 in order to ensure the massive steel pilings can be ordered and fabricated in time for the 2020 construction season and to get the best price.

Assemblyman John Weddleton, who voted against the contract, said it’s difficult to stop a major project once it is started and questioned when the current Assembly members — none of whom were a part of the body at the time — would’ve stopped the failed expansion project.

“I don’t want to get stuck with something else we don’t need,” Weddleton said.

“I’m ready to pause. I’m going to say, ‘let’s look.’ ”

Assemblywoman Meg Zaletel said the city needs to move forward with the PCT, contending the debate over it has served as a catalyst to bring the city and users to the table for important discussions about the rest of the project despite the disagreement over how and when to move forward.

“I understand there’s debate but I’m convinced there’s critical need for this infrastructure,” she said.

The Assembly also approved the formation of a formal five-member port working group to facilitate better communication between the city, users, and the Assembly on major port reconstruction decisions. The group will have two members nominated by the users and approved by the Assembly, two city officials and one Assembly-selected member, likely the Assembly’s consultant hired earlier this year to examine the overall scope of the port work for cost savings.

Assemblyman Fred Dyson, who voted against awarding the contract, said he doesn’t expect major savings will result from the meetings, but he commended the users and the city for making good-faith efforts to reach a compromise.

Assemblywoman Crystal Kennedy was the third “no” vote.

Karp reiterated after the vote that the users will continue to work with the city on ways to improve the final port project.

Falsey also emphasized again that the administration is open to hearing from anyone who can help produce a better, less costly, port modernization plan.

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