Ports
Maritime Administration Appeals $367M Port of Alaska Ruling
Anchorage still seeking modernization project funding from state
Longshoremen load equipment and cargo onto a ship at the Port of Alaska in Anchorage. The port is in the midst of a major modernization program.
Photo by Alejandro Peña/U.S. Air Force
The U.S. Maritime Administration is appealing a federal judge’s ruling that ordered it to pay $367 million to Anchorage, Alaska, over a failed port expansion project.
The notice of appeal, filed in the U.S. Court of Federal Claims on April 22, states that the agency, part of the U.S. Transportation Dept., will challenge the judge’s opinions and orders related to liability, issued last December and for damages, issued in February, as well as decisions denying its requests to throw out the case years earlier.
The appeal is related to an agreement signed by Anchorage and the Maritime Administration in 2003. The agency was set to oversee an expansion of the municipality’s Port of Alaska—then known as the Port of Anchorage. As ENR previously reported, the project faced various difficulties and languished for years before Anchorage sued the Maritime Administration in 2014 over alleged breach of contract.
Anchorage representatives did not immediately respond to inquiries about the appeal. But local officials previously said the money awarded from the suit would go toward fixing the unstable expansion area, where sinkholes have developed, and there are concerns that fill material could slide into the inlet and block the navigation channel.
Port Modernization Funding
The appeal comes as Anchorage officials are trying to convince Alaska lawmakers to include $600 million for a port-modernization program in the 2023 state budget, on which work still is ongoing.
The Port of Alaska handles about half of the state’s inbound freight and also is deemed a strategic seaport by the U.S. Dept. of Defense. In a video that Anchorage Mayor Dave Bronson released on April 20, he warned that the modernization is necessary to protect the port against earthquakes, claiming that an event just slightly more severe than the 7.1-magnitude quake that shook the Anchorage area in 2018 could cause the port to collapse.
Bronson made a presentation to state lawmakers earlier this month.
Jacobs Engineering has estimated the cost of the next phase of modernization projects at $1.1 billion, including cargo docks to be completed in 2029 and 2032. Those will be followed by construction of a second petroleum terminal, stabilization work along the failed expansion and demolition of one terminal. Overall, the program is expected to cost more than $1.85 billion.
Anchorage also plans to request federal grants totaling $281 million toward the cargo dock projects. It will contribute $222 million locally, most of which will come from revenue bonds it plans to issue. To cover its debt service, the municipality would increase tariffs for port use from $3.30 per ton to $7.83 per ton. But if it receives no federal grants or state funding toward the cargo docks, Anchorage could boost fees to $23.48 per ton.
“Without state assistance, private financing is the only option,” Bronson says in the video. “Tariff increases will be needed to pay off the debt, and the impact will be felt by all Alaskans.”
