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Alaska Marine Highway Explores Reefing a Ferry to Cut Costs

Alaska considers reefing a ferry
Malaspina was built in 1963 and rebuilt in the 1970s (AMHS photo)

Published Apr 2, 2021 4:09 PM by The Maritime Executive

Long plagued by financial deficits and state budget cuts, the Alaska Marine Highway is considering reefing one of its oldest vessels as it explores ways to reduce costs. Considered a vital service connecting many of the coastal communities of the state, the Marine Highway System, operates with four vessels on its mainline and five more for day boat and shuttle service, while a state commission has been examining its future.

Alaska State Governor Mike Dunleavy, who convened the commission in 2020, proposed cutting another $7 million from the Marine Highway System budget for 2022. This continues the state’s history of underfunding the system, not providing for long-term maintenance of the fleet, and funding new ship construction. Seeking to eliminate annual subsidies, the governor proposed converting the operation into a self-funded state-owned corporation.

Seeking to lower costs for the system, the state’s Department of Transportation has been looking at vessels being held in long-term storage for the Alaska Marine Highway. In March, the DOT announced that it had completed the sale of the system’s two high-speed ferries for a significant financial loss. Built in the early 2000s, the two fast ferries had been designed to update the system and reduce sailing times. After a little more than a decade of service, AMHS took both vessels out of service citing rising fuel and operating costs.

Attention has now turned to the system’s other vessel that remains in long-term lay-up. Built in 1963, the Malaspina was one of three sister ships that made up the original AMHS fleet. After being lengthened in the early 1970s, the vessel is 408 feet long and able to accommodate 450 passengers and approximately 80 cars. In 2019, it was announced that the Malaspina required $16 million in repairs. Saying that the money for the repairs was not in the state budget, AMHS announced that the 9,100 gross ton vessel would be put in cold storage as of December 2019. Budget cuts caused her sister ship the Taku to be retired in 2015 while the third ship, the Matanuska continues to operate but experienced mechanical problems this winter.

The Department of Transportation says disposing of the Malaspina is one way to lower costs. At a meeting this week of the Alaska House’s finance committee, they told the legislators that it is costing $450,000 a year to hold the ship in its current cold lay-up. Rob Carpenter from the DOT said they had explored selling the 58-year-old ferry, but believe there is little interest in the market. 

AMHS could scrap the vessel or another idea that the DOT is exploring for the Malaspina is to sink her as an artificial reef. Carpenter told the legislators that they were talking with the EPA exploring a reefing operation. They estimate a cost of between $500,000 and $1 million for cleaning and preparing the ship, including the removal of asbestos and other harmful materials.

Disposing of the Malaspina, however, would not solve AMHS’s financial woes. The legislators also proposed eliminating the Governor’s proposed $7 million cut to maintain the budget at current levels. As part of the hearings, the commission exploring the future for the Marine Highway System is recommending reforms to the operations but concluded that the state needs to continue to subsidize AMHS if it wants to maintain the service.