Alaska May Abandon P3 for Knik Bridge
LOS ANGELES — Alaska lawmakers may try to revive long-stalled plans to build an Anchorage bridge by changing the project from a public-private partnership to traditional public financing.
Under the new plan, construction costs for the proposed Knik Arm Crossing are estimated at nearly $800 million, which will be funded with $300 million of state bonds, as well as other federal funds.
The state government created the Knik Arm Bridge and Toll Authority in 2003 to oversee the crossing project, which would link Anchorage with largely undeveloped territory across the water in the Port MacKenzie area of the Matanuska-Susitna Borough.
The new version of House Bill 23 was introduced in the legislature on Tuesday last week and heard in a Senate Finance Committee on Wednesday.
"Financing includes one-third from bonds, one-third from National Highway System funds, and one-third from the federal [Transportation Infrastructure Finance and Innovation Act] loan program," said KABATA board chairman Michael Foster. "It simplifies the finances of this project to a much more traditional method."
The project calls for a 1.74-mile-long toll bridge over Cook Inlet's Knik Arm.
KABATA pegged the total cost of construction of the project at $782 million - an increase of $76 million from a 2010 cost estimate.
"This represents inflation, the increased bridge length, additional mitigation work, and updated utility relocation costs," said KABATA acting executive director Judy Dougherty.
If costs exceed that amount, the state's Office of Budget and Management, in consultation with KABATA and the Department of Transportation and Public Facilities, has developed a contingency budget of $894 million.
"The contingency number or 'risk adjusted' number protects the state by factoring risks into the financial equation," Dougherty said. "The total cost of the project is expected to come in less than $894 million, but by budgeting for contingency situations it allows the state some flexibility should a cost come in higher than we expect."
Specifically, funds would come from $300 million of bonds issued by the department of revenue and $55 million from Gov. Sean Parnell's fiscal year 2015 capital budget proposal, plus $50 million per fiscal year up to $300 million.
The remainder would come from a TIFIA loan secured with toll revenue pledge only, and not guaranteed by the state.
It would not be the first time Alaska has shifted financing strategy on the Knik crossing.
KABATA turned to the idea of a public-private partnership after hoped-for large federal earmarks failed to appear amid the outcry over Alaska "bridges to nowhere," including another project in Ketchikan.