With support from the mayor’s office, the Port of Alaska is moving forward with an expanded design that could add hundreds of millions of dollars to its already substantial price tag.
Under the new concept, the terminals would be identical: same width, same contiguous tracks, laid down for cranes considerably more capable than the outdated ones currently serving a single terminal. It was approved in a 3-2 vote at a Dec. 20 meeting of the port project’s Design Advisory Board.
Critics — including representatives for some of the port’s primary commercial users — say the decision was made hastily, with insufficient consultation or consideration of those who will have to foot the bill. Supporters — including the port’s director, the administration, and one of the big freight shippers — say the plans amount to a modest upgrade that will ensure maximum operability at the facility for decades to come. And with tranches of federal money rippling outward for infrastructure projects across the country, they say, it’s an opportune moment to build not only bigger, but better.
“We’ve gotta have a facility that we’ve got certainty is flexible enough to handle everything,” said Port Director Steve Ribuffo during the at-times contentious two-and-a-half-hour Design Advisory Board meeting in December. “What matters to me is the facility that will serve the purposes that the municipality wants it to have. What it costs is what it’s going to cost. It’s never going to be cheaper to build than it is today.”
It’s a change from the preliminary design concept approved by the Anchorage Assembly in 2021, which was more modest in its ambitions. That plan called for one terminal built for using cargo cranes to handle freight, and a second narrower, more bare-bones terminal for handling freight that rolls off ocean freighters directly onto the docks.
The revised model, recommended by Mayor Dave Bronson, calls for building cargo docks big enough to support 100-foot gauge cranes — gauge refers to the distance between parallel rails supporting the legs at the base of a crane. A bigger gauge means a bigger crane. The current cranes run on a 38-foot gauge, equipment abandoned by the shipping industry long ago.
“There seems to be some confusion surrounding the administration’s desire on how the cargo terminals are to look and be built,” wrote Deputy Municipal Manager Kolby Hickel in a November email to port leadership. “The administration would like both terminals to be identical. Terminals one and two will have a uniform face with crane rails running along both ... The uniform dock will support the people of Alaska for the 75-year projected lifespan of the docks.”
But more deck space means more pilings driven into the earth, which means more labor and materials, which means more money. Compared to estimates for the variable dock model, the uniform design is projected to add $150 million-$200 million to the overall project, according to an estimate from David Ames with Jacobs, the engineering firm handling the current phase of the modernization program.
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Some of those who have worked most closely on modernizing the facility in recent years felt blindsided by the sudden proposal for an expanded design concept.
“It appears that significantly cheaper alternatives that would continue to adequately serve Alaskans and Alaska’s military operations are available to the municipality,” wrote Art Dahlin and Bert Mattingly in a minority report letter sent to Bronson and members of the Assembly’s Enterprise and Utility Oversight Committee on Jan. 20, in response to the vote for an expanded port concept.
Both Dahlin and Mattingly sit on the Design Advisory Board and voted against the new plan. Dahlin works for TOTE Maritime, one of the two primary shippers bringing freight into the port. Mattingly represents the various petroleum and cement businesses operating at the facility.
One of the main reasons TOTE opposes the expanded port concept is that their business doesn’t require it for the operations their vessels employ for off-loading freight with trucks and trailers, known in industry parlance as “roll on/roll off,” or “roro.” They do not need the extra room, the rail tracks, or the cranes, according to Dahlin, and are not keen to help foot the bill for a bigger facility that offers them no benefits and will have to eventually be paid for in the form of tariffs on the commercial port customers that are passed on to consumers in the form of higher prices for goods.
“This is an overbuild,” Dahlin said at the December meeting. “We all love progress, but the reality of the situation is: what we started out with four years ago gave us all the functionality we need to serve this market.”
Though the Bronson administration supported the bigger dock model, nothing is set in stone at this stage.
“The administration is considering all options when it comes to the design concept and will be working with the design advisory board, the port of Alaska user group, and the Anchorage Assembly to finalize a design this year,” said Bronson spokesman Hans Rodvik.
The Port of Alaska is a fraught topic in state and local politics, having guzzled massive amounts of public money in a failed expansion project in the mid-2000s. The Municipality of Anchorage spent years suing the U.S. Department of Transportation’s Maritime Administration for flawed oversight of shoddy construction work by contractors, and in February was awarded $367.4 million by a federal judge in the suit. MARAD is appealing the ruling.
But the fiasco had reputational costs of its own; in spite of pleas for funds by Anchorage politicians, for years, state lawmakers were reticent to send any more money to a project viewed as mismanaged, even as the decades-old pilings supporting the ports’ docks continue rotting away into Cook Inlet. The municipality even renamed the facility to the Port of Alaska — neé “of Anchorage” — to highlight that it is an essential piece of infrastructure for the entire state, handling roughly half of Alaska’s imported cargo, and an even larger share of bulk supplies like petroleum and cement.
More recently, though, the tide changed. On top of the lawsuit funds awarded to the municipality, state legislators included $200 million for the port in their capital budget last May. That money can be used to potentially leverage matching funds, extending the value even further.
All of which helps with a total bill for the Port of Alaska Modernization Project, that is estimated at somewhere between $1.8 billion and $2.2 billion, according to Ribuffo.
But beyond cost, Dahlin and others are raising other objections. One rested on the process by which supporters brought the expanded design up for a vote with inadequate communication to the full design board, and without sufficient cost estimates attached to different proposals for members to factor into their decisions.
“It’s a poor use of public resources ... without identified revenue streams on that,” Dahlin said.
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Another objection voiced at the meeting was that there would be a political cost. It would be changing course on the conservative approach approved by the Assembly when it opted to move forward with the more modest design concept in 2021.
“I think there’s going to be some pretty significant backlash,” said David Karp, managing director for Saltchuk, a marine services company that operates at the port. “I mean, it looks a little bit like a shitshow.”
Ribuffo pushed back hard during the December meeting, defending the need for the expanded design. He pointed out that TOTE and Matson, the other main commercial shipper with a preferential user agreement, are just two customers using the port. He said the municipality must also consider the needs of the military and federal emergency response entities, both of whom rely on the facility, even if they’ve been slow to “pony up” funds for improvements. The uniform dock plan, Ribuffo said, not only gives the city more options for the kinds of ships and cargo it handles in the years to come, but means greater resilience if one of the terminals is put out of commission by an earthquake or other disaster.
“I’m backing a higher cost. But the fact of the matter is I never liked that first design in the first place,” Ribuffo said ahead of the December vote. “It was a capitulation to the Assembly, who gagged when they heard $2.2 billion for the cost of the project.”
In an interview, Ribuffo said it’s premature to be basing essential strategic design decisions on early-stage cost projections, since engineers and planners have not yet gotten to the phase where they are down in the weeds on variables like materials, seismic standards and wharf-pile design — all of which will determine expenses later on in the process.
“The jury is out on whether it is a bigger price tag,” Ribuffo said. “Frankly, $200 million could be a wash.”
He and others noted that there is a favorable federal funding landscape right now that may help cover construction costs, reducing the amount of the money the municipality has to finance through borrowing. Though recent federal infrastructure bills are more generous to rail and road projects than ports, there are still more dollars available for improvements than ever before, according to Ribuffo, and the port and its backers are aggressively trying to go after them.
Those arguments did not persuade the dissenting members of the board. Their letter asks the mayor to make the Design Advisory Board reconsider its December vote and require Jacobs to present alternative design options, along with responsible cost estimates.
The Design Advisory Board’s recommendations have not yet been reviewed by the Assembly committee tasked with overseeing the port modernization project. Any change to the essential design concept will have to be approved by the full Assembly before it can move forward.