Alaska state transportation officials are contemplating sinking a ferry to save money.
The Department of Transportation has considered turning the Malaspina into an artificial reef. The ship is one of the two large sister ships, along with the Matanuska, that helped start the Alaska Marine Highway System almost 60 years ago.
The Malaspina has been tied up in Ketchikan since December 2019, when it was taken out of service to cut the budget. The department has said it could cost $18 million for steel repair work and overhaul to put the Malaspina back into service - not counting new engines.
Though it's not running, the ferry still costs the state about $450,000 a year for maintenance and security.
Sinking the ship as an artificial reef could cost between $500,000 and $1 million, but may make long-term financial sense, said state Department of Transportation Deputy Commissioner Rob Carpenter.
The ship would have to be drained of all oils and other pollutants and stripped of all toxins before it could be sunk.
The Malaspina has been a workhorse of the fleet for decades. Just nine years after starting service in 1963, the ship underwent lengthening and renovation in 1972 at the Willamette Iron and Steel Co. in Portland, extending the ferry to 408 feet long, with more than 70 cabins and room for 450 passengers and almost 100 cars.
In February 2020, Gov. Mike Dunleavy ordered a commission to examine the ferry system and recommend improvements. The governor has imposed large cuts on the ferry system budget since taking office in December 2018 and had asked for information about how a private operator or other entity could potentially run the vessels at lower cost.
Retired Coast Guard Adm. Tom Barrett, who chaired the governor's commission, told members of the Senate Finance Committee on March 23 that transitioning the state ferry system into a self-funded state-owned corporation would not be the best solution.
"You're going to have to keep putting money into this system if you want it to operate," Barrett said. "You're going to have to subsidize this for some time to come."
Barrett's commission instead recommended reforms to how the ferry system is governed. For decades, long-term planning has been subjected to the state's annual budget.
Budget cuts have forced the ferry system to tie up ships because the state lacks funds to maintain them, and there is also not enough money to build new ships that require less frequent maintenance.
The department has been paring down the fleet to cut costs, getting rid of ships it no longer uses. The state last month sold its two fast ferries, the Chenega and Fairweather, built at a combined cost of $68 million less than 20 years ago, for just over $5 million to a Mediterranean-based catamaran operator.
The Spanish firm was the only bidder for the 235-foot long vessels, which had been tied up at Ward Cove in Ketchikan the past few years, at an estimated cost of about $1 million until they were sold.
As lawmakers are working through the state budget for fiscal year that starts July 1, legislative subcommittees are considering adding to the ferry system budget. A proposal under consideration in the Senate Finance Subcommittee for the Transportation Department budget would add about $4.5 million more in state dollars than the governor had requested.
The additional state funding, plus passenger and vehicle ticket revenues, would allow the ferry system to increase its level of service next winter, including to Wrangell, Transportation Department officials told senators earlier this month.
The budget increase, however, would not address the system's long-term problems - including declining passenger counts and old ships.
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