Duffy announces $250 million federal grant to finish Port MacKenzie rail link

U.S. Transportation Secretary Sean Duffy announced a $250 million federal grant Monday to finish the rail link between the Alaska Railroad and Port MacKenzie in the Mat-Su Borough.

"We are going to move this grant at Trump speed," Duffy said at the Gateway Visitor Center. "And what that means is we want to get this out by spring. We want to be turning dirt."

The 32-mile line is partly built but still lacks rail and its final connections between Port MacKenzie and Houston, Alaska News reported Sept. 20. Port MacKenzie is about 27 miles southwest of Wasilla. Alaska Railroad President Bill O'Leary held up a plaque from the project's 2013 groundbreaking and called Monday a huge day for the railroad and the state.

The Federal Railroad Administration's list of selected projects puts the award at up to about $249 million. It says the railroad will pay a 20 percent share of the cost, which may include money from the Alaska Industrial Development and Export Authority, known as AIDEA, and the Mat-Su Borough.

Railroad officials estimated the remaining work at $315 million in June, with a $63 million match needed for a federal grant. "This is over a $300 million proposition for Alaska," Gov. Mike Dunleavy said Monday. He thanked the railroad board and AIDEA.

Duffy said the grant is part of a $2.3 billion nationwide rail package. He said the line would help Alaska reach liquefied natural gas and critical minerals. Dunleavy said it could also carry timber once the state's timber industry recovers, and U.S. Sen. Dan Sullivan said it would help "big mining projects" and the gas line. Sullivan said people across the state "have been focused on getting this done for two decades."

State lawmakers declined earlier this year to put state money toward the project. In May, the Alaska House voted 19-21 against a $58 million amendment and 20-20 against a $1 million version, both offered by Rep. Kevin McCabe of Big Lake. Rep. Calvin Schrage of Anchorage objected that "we do not have the funds available for a $58 million expenditure."

A private consortium, Alaska Infrastructure Partners, has made a separate proposal for the extension. The railroad board authorized negotiations with the group in September.

The Alaska Department of Natural Resources is proposing to give AIDEA about 885 acres near Port MacKenzie at no cost for rail-support and cargo facilities. Written comments on the proposed land conveyance are due by 5 pm Wednesday, Oct. 21.