AIDEA ends private Port MacKenzie rail deal as railroad weighs building it itself

The Alaska Industrial Development and Export Authority is ending its deal with a private group to finish the Port MacKenzie rail extension. The Alaska Railroad's board is scheduled to vote Tuesday on finishing the line itself with a $249 million federal grant.

AIDEA gave notice Oct. 27 that its agreement with Alaska Infrastructure Partners, a venture of Macquarie Capital and Martinus Group, ends Nov. 26, according to a proposed resolution in the railroad board's meeting packet. The resolution says AIDEA ended it "for convenience," "as required for the best interests of AIDEA." AIDEA's news releases and board records don't mention it, and no one has spoken publicly for the group.

That $311 million plan is one of three related resolutions. Another would pull the railroad out of the private deal. The third would ask the state for 885 acres near the port, land that AIDEA and a conservation district have also asked for.

The 32-mile line would connect Port MacKenzie, across Knik Arm from Anchorage, to the railroad's main line at Houston. Ground was broken in 2013. Embankments are built on five of its eight segments, but only one has rail. Supporters say it would carry minerals and other cargo to the port. Nova Minerals says its planned antimony refinery would sit directly on the line. The Alaska House voted down state money for it in May.

Alaska Infrastructure Partners proposed in 2025 to build and finance the line and be repaid over 30 years once trains ran. The state's gas line corporation negotiated the deal and handed it to AIDEA in June. The railroad board authorized talks in August, but the railroad says it later reviewed a draft agreement and "identified numerous concerns." The resolution doesn't say what they were. Board vice chair John Binkley has called the group's timeline unrealistic.

While the deal is in effect, its exclusivity terms bar the state from pursuing another way to build the line, "such as that which ARRC would pursue under the CRISI grant," the resolution says. CRISI is the federal rail program behind the grant. Pulling out now would let the railroad move before Nov. 26.

The grant would cover about 80% of the $311.3 million cost. Under the railroad's spending plan, the roughly $62 million match would come mostly from AIDEA, at about $33 million in cash, and the Mat-Su Borough, mostly in land and materials, plus about $3 million from the railroad.

U.S. Transportation Secretary Sean Duffy said in October he wanted to get the grant out by spring and be "turning dirt." The railroad's plan puts most of the spending in 2028 through 2030, after a federal environmental review.

The land is the other open question. The railroad says it needs the two tracts "to locate additional railroad and freight related facilities in the future." The state Department of Natural Resources proposed in September to give the same tracts to AIDEA at no cost for "rail-support and cargo-logistics" use, and it hasn't made a final decision. AIDEA's board directed its staff in June to secure land to store and process mineral ore and load it onto ships.

The Wasilla Soil and Water Conservation District applied in October to keep most of the land in farming. It has grown hay since the state's 1982 Point MacKenzie dairy project, the district says. The borough gave the land to the state this year on the condition that it comes back if economic development doesn't follow within five years.

No record says whether the railroad's request was worked out with AIDEA or competes with it. Commerce Commissioner Julie Sande sits on both boards.

The railroad board also plans a closed-door session Tuesday on next steps for the extension.