JUNEAU, Alaska — A state legislator has introduced a bill calling for privatization of the Alaska Railroad — although even the bill’s sponsor says the purpose is as much about inspiring discussion as it is about potentially triggering a sale.
HB 332, introduced by Rep. Jesse Sumner (R-Wasilla), calls for the state’s governor to request proposals for purchase of the railroad and related assets by June 15 of this year, and sell the railroad by Feb. 15, 2025, to the party that makes the best offer to continue to operate the railroad for a minimum of 50 years while assuming all existing contracts, including those with labor, shippers, and connecting carriers. The agreement would be subject to approval by the legislature.
Sumner’s Sponsor Statement for the bill says the railroad, under state ownership, “has faced limitations in terms of investment, innovation, and strategic expansion” and that the sale would “streamline governance and inject much-needed private sector expertise into the railroad’s operations.” It also includes a resource development agreement that the statement says “positions the Alaska Railroad to be a key catalyst for unlocking responsible, sustainable expansion of our state’s vast resources.”
“I think at least a conversation about the direction of the railroad is headed and resource development is in order,” Sumner told a March 21 meeting of the state House Transportation Committee. “Whether or not ultimately we should sell the railroad, certainly, is up for debate.”
The railroad, completed by the federal government in 1923, was transferred to state ownership in 1985 under a bill signed by President Ronald Reagan in 1983. Since that date, Transportation Committee Chair Kevin McCabe (R-Big Lake) said, “The railroad has not built one single mile of track. Our resource development since that time has been stifled beyond belief. … They haven’t kept up with our needs. Whether it’s their fault or our [the legislature’s] fault, or both … we’ve got to do something.
“There are people out there that would be interested in building track and helping the state of Alaska develop its resources. Is this a motivational bill? Probably. But it’s also a venue if we need it.”
McCabe also expressed concern that Port MacKenzie, a deepwater port across a body of water known as Knik Arm from Anchorage, does not have rail access. A 32-mile spur to reach the port remains in the planning stage.
“It’s imperative that we get rail to Port MacKenzie, and if has to be through a private corporation rather than a state corporation, that’s what we have to do,” McCabe said.
He also suggested that the stalled A2A project — seeking to link Alaska and Alberta, providing a through connection to the rest of the North American rail network — remains a consideration [see “Company seeking to build Alaska-Alberta rail line enters bankruptcy,” Trains News Wire, June 28, 2021].
“Yes, the private guy they had in there had some issues, and it fell apart, and it seems like pie in the sky,” McCabe said. “But there are many, many, many reasons to put that rail through Canada to the lower 48. It might be as small a reason as hauling that clean Alaska coal to a power plant in North Dakota … or hauling potash from Saskatchewan back to Port MacKenzie or the Port of Anchorage for shipment to Asia.”
The Transportation Committee took no further action after its initial discussion.
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