Federal transit grant adds $32 million toward Tustumena replacement

The vessel set to replace the M/V Tustumena gained about $32.3 million in federal money last month, money the Federal Transit Administration describes as "additional funding" for a ferry "approaching the end of its service life." The Tustumena has served Southcentral, Kodiak Island and Southwest Alaska since 1964. The FTA recorded the formula grant on Sept. 24. Formula money is distributed by statute rather than competition; the agency's allocations follow apportionments set under the Infrastructure Investment and Jobs Act.

The grant is one of four recent federal awards for the Alaska Marine Highway System totaling about $207 million. The others are $161.5 million in operating assistance, nearly $12 million for Tazlina and Columbia upgrades, and $1.25 million for Chenega ferry terminal improvements.

The award runs through March 23, 2031, lists no subrecipients and goes to the state transportation agency in Juneau. It describes a ship with greater capacity, modernized safety features, increased seaworthiness, "diesel and electric propulsion systems," and more passenger and vehicle space, serving rural coastal communities, ferry passengers, visitors and companies doing business in remote areas.

The Alaska Department of Transportation & Public Facilities identified Louisiana-based Thoma-Sea Marine Constructors as apparent low bidder at about $350 million, in what it called the system's first major vessel procurement in over a decade. Alaska News previously covered that bid's arrival $49 million over budget.

"It's a similar size vessel, but the way it's going to be designed, it's going to hold more vehicles," Ryan Anderson of the state transportation department told the Alaska State Senate Transportation Committee on Sept. 24.

On its own, the $32.3 million would not cover that $49 million gap, and the award record does not explain how it fits into the project's broader financing. USAspending postings also lag actual awards by two to six weeks.

The winter schedule takes the Tustumena out for overhaul from Jan. 15 through April 30, 2027. Craig Tarraga told the Cordova City Council in August, alongside state Rep. Louise Stutes, that Kodiak is expected to be without ferry service during that period, as it was during a similar four-month outage in 2025. He said the only possible stand-in, the Kennicott, has not been staffed at the same time as the Columbia: "there is pain for each one of the communities, unfortunately, right now."

At the same meeting, Cordova resident Milo Burcham said of ferry service, "it's not a luxury for us."