Costs expected to rise for new state ferry

The new Alaska-class ferry the Alaska Marine Highway System is in the process of getting built is likely to cost more that the $120 million already set aside for its construction, the Legislature was told Tuesday.


“That $120 million is based on an estimate that’s a couple of years old,” said Mike Neussl, deputy commissioner for marine operations for the Alaska Department of Transportation and Public Facilities.

Neussl was testifying before a joint meeting of the House and Senate Transportation Committees reviewing department operations.

Costs are likely rising, and changes that have been made to the project after design work on the new vessel began are likely to result in a higher cost that previously thought, Neussl said. He did not provide a new cost estimate.

The new ferry is designed to be a highly efficient ship to add to the fleet as the state tries to reduce future operating costs. It is expected to take less crew to operate and burn less fuel than existing ferries.

The Alaska-class vessel is likely to be built in Ketchikan, and Alaska Ship & Drydock, based in that city, has been selected as the construction manager/general contractor for that project.

News broke Tuesday that Alaska Ship & Drydock, which operates the state-owned shipyard, may be bought out by Vigor Industrial, a privately held shipbuilder. Vigor owns Todd Shipyards in Seattle, Cascade General’s shipyard in Portland and other West Coast shipyards.

Neussl said he didn’t know yet what the impact of the sale would have on Alaska, and that he’d only heard of the deal a few hours earlier.

Sen. Bert Stedman, R-Sitka, who represents Ketchikan, said elsewhere that the purchase by the larger company could make Alaska Ship & Drydock a stronger company.

“It will enable them to have access to capital, have access to some specialized labor pools, and put Alaska Ship & Drydock in better position to go after larger ships,” he said.

The state has been trying to build a shipbuilding industry in Ketchikan, and has been steering AMHS work to the shipyard there. The shipyard itself is owned by the state’s Alaska Industrial Development and Export Authority, and operated by Alaska Ship & Drydock.

The state-owned shipyard is not being sold, only the company that operates it.

Stedman said a stronger company would be better able to win new work, benefitting Alaska.

The ownership by Vigor will “put that shipyard in better position to participate in the build-out of the fishing fleets that are coming,” Stedman said.

The sale is also likely to bring additional shipbuilding work to the state as Alaska and the Arctic expand their oil industry infrastructure, he said.

Alaska Ship & Drydock was selected to construct the new ferry after Department of Transportation Commissioner Marc Luiken issued a finding that it was in the state’s interest to build the ferry in Alaska.

While it will not be required to bid on the construction contract, it will still have to negotiate a price the state considers fair, state officials said.

Sen. Charlie Huggins, R-Wasilla, congratulated Luiken for the finding.

“Investing Alaskans’ money in Alaska is an important concept,” he said.

In addition to progress on the new ferry, Neussl said the AMHS had improved its flexibility with two new dock projects in Hoonah and Angoon. The rebuilt docks there now allow both standard ferries and fast ferries to be used the same docks despite different ramp configurations.

The Angoon dock can also be used by Alaska Marine Lines to ship propane to the village, which doesn’t have another dock capable of that.

The new docks there don’t have catwalks out to the dolphins to which the vessels tie up, Neussl said.

“They’re self-mooring, they don’t need line handlers to do that,” he said.

Instead, the ferry crews can moor the vessels themselves, Neussl said.

• Contact reporter Pat Forgey at 523-2250 or


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