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Rail extensions to Port MacKenzie and north face large funding gaps; railroad seeks partners and grants
Summary
Alaska Railroad described remaining funding needs for the Port MacKenzie rail extension and the Northern Rail Extension and said large matches and multi‑stakeholder partners will be required to complete the projects.
Alaska Railroad officials told the House Transportation Committee on Feb. 27 that two major rail extension projects — a Port MacKenzie link and the Northern Rail Extension toward the Canadian border — remain incomplete and would require hundreds of millions to billions of dollars to finish.
Bill O'Leary summarized the Port MacKenzie project as a 32‑mile link for which the Matanuska‑Susitna Borough previously secured about $180 million in state appropriations but that construction stalled after additional funding did not materialize. The railroad said additional construction today would likely require roughly $280–300 million and noted that federal competitive grants and a significant local match would be necessary. "It's going to take a village," O'Leary said, describing outreach to customers, the borough and the congressional delegation.
Megan Clements said the railroad is preparing a U.S. Department of Transportation competitive grant application in partnership with the borough and has solicited support letters from local organizations; she said initial business outreach found some customers who would be interested if tracks were in place but that current committed volumes are less than half of what would be needed to support debt service.
On the Northern Rail Extension, which would ultimately approach the Canadian border, O'Leary said the state and federal governments previously invested roughly $180–184 million and completed a first phase (including the longest bridge over the Tanana River), but that finishing to Delta Junction has an order‑of‑magnitude cost estimate of about $1.7 billion. He said the original military interest in the project was an early driver but that budgets and priorities have shifted.
Officials told the committee they continue to pursue federal grants, private partners and potential anchor customers or military support, but they said the railroad cannot fund these extensions on its own. Committee members and railroad staff noted that any successful application for competitive federal funds will likely require a substantial local match and coordinated commitments from multiple stakeholders.
