Mat-Su Borough rejects $2M offer for unused ferry

The Matanuska-Susitna Borough has received a $2 million offer for an unused ferry that’s racking up monthly maintenance costs, but the borough manager says the municipality needs a higher offer to cover a grant that must be repaid to the federal government.

The borough has turned down the $2 million offer for the ferry from Abu Dhabi Mar LLC, the Anchorage Daily News reported. The borough is on the hook for $6 million to the Federal Transit Administration if the $78 million catamaran Susitna is not used for municipal public transportation.

“I do not see that (the $2 million) being an acceptable offer,” borough manager John Moosey said. “It might be acceptable if we did not have a $6 million liability with the FTA.”

The rejection was a surprise to the company from Abu Dhabi, the capital of United Arab Emirates. The company wanted to use the ferry as a mobile service platform for patrol boats stationed on islands. The Abu Dhabi offer was the highest received.

Johan Valentijn, chief operating officer, said in correspondence to the borough that the company made the $2 million offer in response to a borough request and assurance in mid-August that “the vessel could be ours” for that amount. Later messages indicated frustration with a lack of direction from “confused” borough staff and an indecisive borough assembly.

“It is up to the Borough council to decide to either go forward with us,” Valentijn wrote in a letter Sept. 23. The alternative, he continued, would be to have the ferry remain in “Alaska for the foreseeable future as a memory of bad communications.”

The Susitna can carry up to 130 passengers and 20 cars. It was accepted to provide ferry service between Anchorage and Port MacKenzie. However, no landings have been built, and borough officials concluded that the vessel would be too expensive to operate. Mat-Su officials put the ferry up for sale last year. 

They said they would consider giving the vessel to a government entity that could relieve them of the federal grant obligation.

The assembly in June indicated that it would part with the ferry even if it meant repaying the grant obligation. The ferry has been docked outside Ketchikan and has cost $1.3 million for crew fees and other expenses. 

However, assembly members then authorized Moosey to find a way to store the ferry near the port for the winter.