Alaska ferry system awarded more than $410 million in federal funding

The Alaska Marine Highway System will receive more than $410 million in federal money across six awards, Gov. Mike Dunleavy announced Friday. The money covers both keeping the ferries running and a series of capital projects, from a new vessel to terminal upgrades across Southeast.

The largest single award, $161.2 million, goes to operations, covering crew, fuel, maintenance and vessel operations serving more than 20 communities. That kind of federal support for day-to-day operating costs, rather than just construction, is relatively new: Sen. Dan Sullivan said he secured language in the federal infrastructure law allowing federal dollars to cover ferry operating costs, not only capital projects. "For many of Alaska's 230 communities that are not connected by the road system, marine transportation isn't optional, it's how people travel to meet their everyday needs," Sullivan said.

The rest is capital work. The state won $153.4 million to design and build a replacement for the aging M/V LeConte, and $37.6 million for the Cascade Point Ferry Terminal, which the state says would shorten the Juneau-Haines-Skagway sailing by roughly a third. It received $33.4 million to modernize the Kake Ferry Terminal to handle more of the fleet, including larger vessels, and $20.6 million to expand the Saxman Seaport, improving freight movement and connections among Ketchikan, Saxman, Metlakatla and Prince of Wales Island. A separate $4 million will modernize customer service and operations, including a new reservation system.

"The Alaska Marine Highway System is vital for Southeast Alaska. This investment will provide the resources to build on our successes for the past years to provide for decades of reliable service," Dunleavy said. Sen. Lisa Murkowski, a lead author of the infrastructure law, said the award "will help realize the vision I had."

The awards add to earlier federal ferry money: the state won three Rural Ferry Program grants totaling $177.4 million in 2024 under the same law. The release does not say when the new funds will be disbursed.

The ferry system, meanwhile, has opened winter reservations for sailings running Oct. 1 through April 30, a schedule built around four vessel overhauls.