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Mat-Su

Mat-Su finally offloads ‘free’ ferry with $12M price tag

  • Author: Zaz Hollander
  • Updated: July 14, 2016
  • Published July 1, 2016

PALMER — The Matanuska-Susitna Borough is finally clear of the free ferry that came at tremendous cost.

The borough's ill-fated M/V Susitna on Thursday became the property of the Philippine Red Cross, which took ownership of the 198-foot former U.S. Navy prototype to use on disaster missions.

The Susitna as of Friday had cost the borough more than $12.6 million, according to an estimate provided Alaska Dispatch News by borough finance director Tammy Clayton. More than $1 million from an open $3 million repair bill remained unpaid as of that reckoning.

The Susitna was long described as free because the federal government largely paid for the $80 million vessel before the borough acquired it in 2011. That was some years after the late U.S. Sen. Ted Stevens tucked it into a Department of Defense funding bill.

But the borough had to pay millions in repair costs, matching grants, dock fees, insurance and other services associated with the years it spent berthed and unused at a Ward Cove dock.

A heavy rainstorm damaged the ferry's engines in February 2015, triggering $3 million in repairs that just wrapped up with successful sea trials in Seattle last week.

The Borough Assembly approved the Red Cross sale in September for $1.75 million.

Borough officials originally hoped to put the vessel into passenger service in Knik Arm between Anchorage and Port MacKenzie in Mat-Su. But ferry landings were never built because of a shortage of money and political will on the Anchorage side.

Then, stuck with a never-used ferry, the borough tried for years to sell it with no success, despite several offers. Officials hoped for $6 million. At one point, the borough offered to give the craft away for free to a government agency.

It could cost still more: the rain damage necessitated $3 million in repairs. The Red Cross paid the $250,000 deductible on the borough's ferry insurance policy but officials have said the borough may have to take legal action against insurer Lloyd's of London to recover repair costs.

There's also a $12.3 million federal grant that's supposed to be paid back because the ferry wasn't put into public service. It was unclear how the sale to a humanitarian organization may change that federal demand.

Originally a landing craft prototype for the U.S. Navy, the Susitna is capable of operating as both a cargo-loaded barge and a twin-hulled vessel with some ice-breaking abilities.

The Philippine Red Cross has said the Susitna will serve as a mobile clinic and hospital ship, serving some of the isolated 7,107 Philippine islands during disasters.

It's possible the organization will tow the vessel to its South Pacific destination to preserve the engines, according to the borough.

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