Port project cost estimate doubles to nearly $2B

Port of Alaska (Alaska Public Media archive)

Alaska’s biggest port is in dire need of improvements. And according to the latest estimate, those repairs will be twice as expensive as originally forecasted, leaving city officials are dismayed.

In recent years, the Municipality of Anchorage had been bracing for cost of around $1 billion to complete several different projects within a port modernization program. But the engineering firm managing the project has had to adjust that estimate upwards.

“They have given us a revised all-in price-tag of nearly $2 billion. It leaves us in a very uncomfortable place,” said City Manager Bill Falsey.

One of the most immediate updates needed is to a terminal that handles bulk fuel and cement off-loaded at the port. Now, nearly ready for the construction to get underway, that terminal will cost twice as much as initially thought. In documents given to Anchorage Assembly members, the implication is that other aspects of the project will double, as well. Slides presented to the Assembly identify numerous reasons for that, everything from increased steel prices to limited dredge availability to design changes that anticipate higher sea-level rise.

“We are certainly interrogating if there are any bells and whistles that have been added to the project,” Falsey said. “We do not want to build a more expensive port than we need.”

The city of Anchorage does not have anywhere near the roughly $1.9 billion the full modernization project will need, according to estimates laid out in a report by Capstan Consulting. The mayor’s administration has repeatedly implored state lawmakers to fund improvements, stressing that while the port is located in Anchorage, the goods passing through it are distributed across the state, serving a majority of Alaska’s population. As the pilings supporting the docks continue to erode, the risk of catastrophic failure threatens the flow of essential supplies like food, fuel, and construction material into the state.

According to Falsey, in order to pay for the most immediate improvements the city will begin assessing new tariff proposals in the months ahead, which could mean fuel and some building materials will become more expensive.