Port Mac rail almost out of cash amid budget crunch

The Port MacKenzie rail line extension is nearly two-thirds complete, but there is currently no funding for future work.

Matanuska-Susitna Borough Manager John Moosey said the borough has about $500,000 available for the approximately $303 million endeavor.

“Segment 5 is close to being complete, but essentially what we have for this next season is only money to not mothball the project,” Moosey said.

Construction of the 32-mile rail spur from Houston to Port MacKenzie began in 2013 and to date the borough has received about $183 million, primarily from legislative appropriations, with a portion coming from voter-approved state general obligation bonds.

Construction delays from partial funding have already added about $20 million to the project cost; however, Moosey noted the $300 million-plus cost is in line with initial estimates, which were then lowered.

Getting the remaining $120 million sooner would be much better than later.

“The longer we wait the more (the cost) goes up,” Moosey said.

The eight-segment line is now about 65 percent complete after the summer construction season, he said.

But getting the money through capital funding is all but a lost cause given the state’s $3.5 billion annual deficit.

As it stands, embankment work is done on Segments 1, 3 and 6 — about 14.5 miles that is ready for track, according to Port MacKenzie Director Marc Van Dongen. Segments 4 and 5 are under construction and funding is needed for Segments 2, 7 and 8.

Mat-Su Borough officials have touted the capability of their deep-draft commodity port, but its success is dependent on the rail line being complete.

Plans for transporting liquefied natural gas from Port MacKenzie to the Interior are made much more feasible with direct rail access.

Van Dongen is always quick to note that having the ability to rail raw materials virtually to tidewater at the port would improve the viability of numerous resource extraction projects along the entirety of the Railbelt.

He said the borough is projecting one vessel per week would likely be moored at the 1,200-foot dock within five years of the rail line being complete. After that, the borough has plans for another large general commodity dock on the site. With another dock would come development of another 21.5 acres of gravel pad along the shore, Van Dongen said.

In addition to exporting Alaska’s mineral and timber resources, Port MacKenzie has also been pegged as a site for LNG export facilities by Resources Energy Inc. and WesPac Midstream LLC.

Along with 14 square miles of uplands for lay down area and eventually a mile-long rail loop, the port has the potential for up to four more dedicated LNG terminals, according to Van Dongen.

“Where else in the country do you have the opportunity to develop a deep-draft port a mile-and-a-half from the largest city in the state?” he said. “This is a unique opportunity. We’re still in the infancy of development.”

Port MacKenzie will be a “world-class port” with several million tons of cargo traversing its docks each year after the rail line is complete, Van Dongen predicted.