Gov. Palin cancels materials contract for Lynn Canal road

Governor plans to evaluate viability of the 51-mile highway

Posted: Thursday, March 01, 2007

Gov. Sarah Palin announced Wednesday she has canceled an $11 million contract to purchase construction material for the 51-mile Lynn Canal highway project envisioned north of Juneau.

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"The concrete girders contract committed millions of dollars to a project that is still under review and lacks the necessary permits to proceed," she said in a prepared statement. The governor was in Washington, D.C., this week.

She also said she was evaluating the overall viability and long-term costs of the controversial project.

"In my opinion, (the state Department of Transportation) acted prematurely in awarding the girder contract during the very first days of my administration," Palin said.

The canceled contract was signed Dec. 4 with Concrete Technology Corp., a Tacoma, Wash., firm, for bridge supports.

During her first days in office, Palin scrapped plans for an $18.6 million construction access or "pioneer" road after a disputed bidding process in the late days of former Gov. Frank Murkowski's administration.

A total of $20.2 million was awarded to buy materials during the first week of December. Department officials said they bought the material in anticipation of higher prices later, even though permits had not yet been issued and the pioneer project was canceled.

"We actually asked our commissioner last summer if we could do this, but permission was not given until the last hours of the Murkowski administration," said Mal Menzies, the department's regional director.

Palin did opt to keep two contracts for steel piles and culverts - one with LeBarge Pipe and Steel for $8.1 million and the other with Contech Construction Products for $585,073.

The decision to cancel only a portion of the total $20.2 million in materials contracts was a practical one, said officials from the governor's office.

Unlike the steel piles and culverts, concrete girders were to be specifically designed for the Lynn Canal highway bridges. If the project was altered or not carried out, there would have been no use for the girders.

Statements from officials Wednesday also suggested that construction of the highway could still be a way off. A federal permit that was expected in April will be delayed, Menzies said.

"We've just learned last week that it could be delayed somewhat longer than that," he said. "It is just a complex permit."

He said the permitting process with the Corps of Engineers for the Gravina Bridge project took two years, but couldn't say if the same will be true for the Lynn Canal highway project, which the federal agency has been reviewing for half that time, or one year.

Permits are also needed from the U.S. Coast Guard and the Department of Natural Resources.

Ultimately, the governor does favor road access to Juneau, and she cautioned that her decision to cancel the materials contract should not be taken as a reflection on the project itself.

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"We want to move forward with developing a long-term transportation solution for Southeast Alaska, which includes both the Alaska Marine Highway System and connecting road system," she said.

"Such challenges can only be met by using a transparent and open process."

The current road proposal is to build a highway in a minimum of four phases from Echo Cove at the southern end of Berners Bay to the Katzehin River on the east side of the Lynn Canal. On the north side of the river, a ferry terminal would be built to shuttle passengers to either Skagway or Haines.

The previous estimate for construction costs was pegged at $258 million, but Menzies said that with inflation that cost is now estimated to be closer to $290 million.

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