October 8, 2019

Alaska issues RFQ for partner on $70M cruise ship terminal

ANCHORAGE, Alaska — The Alaska Railroad is looking for a partner to help it update and expand its cruise ship facilities in Seward in order to meet ever-increasing demand in the state's tourism industry.

Railroad officials issued a request for qualifications on Sept. 16 to start the process of searching for a project developer for what is estimated to be an approximately $60 million to $70 million undertaking.

Specifically, the state-owned railroad wants to replace its current passenger vessel, pile-supported dock in Seward, which is 736 feet long and was built in 1966, with a floating dock capable of accommodating two vessels up to 1,080 feet in length. The plan also calls for building a new cruise passenger terminal building with space to accommodate up to 1,500 people.

It's all intended to meet the railroad's needs for moving cruise passengers from port at the head of Resurrection Bay to other Southcentral destinations for the next 50 years.

Railroad officials expect construction to begin in late 2021 and continue into the fall of 2023. However, the current facilities would need to be available for use while construction was ongoing during the May-September cruise season, according to the railroad's project schedule.

Seward is the most popular Southcentral cruise destination; cruise ships called on the small town 95 times in 2019, according to the Alaska chapter of the Cruise Lines International Association. That's up from 2015 when 11 ships made 64 calls on Seward, according to a railroad passenger report drafted in 2017.

More broadly, Alaska's tourism industry has boomed since visitor numbers bottomed out following the Great Recession roughly a decade ago. Overall railroad passenger ridership — driven largely by visitors arriving or leaving Alaska's Railbelt by cruise ship — increased 5% in 2018, according to the Alaska Railroad's annual report. The total number of train passengers has grown steadily each year for a 13% increase since 2014.

Statewide, leaders of the Southeast Conference, a regional economic development organization, reported that more than 1.2 million tourists visited Alaska by cruise ship this year, for 7% year-over-year growth.

The number of cruise passengers traveling through Seward has grown in recent years as well, from 122,000 in 2013 to nearly 185,000 in 2016, according to the 2017 passenger report.

Cruise passengers regularly disembark vessels in Seward, Whittier or Anchorage and board the train to Anchorage or Fairbanks where they take flights back to their home destinations. The railroad frequently contracts to pull passenger cars owned by cruise companies on those routes.

What the cruise passenger facility overhaul means for the railroad's adjacent and idled coal terminal is unclear; railroad officials could not be reached with questions in time for this story, but the need to upgrade passenger infrastructure that sits alongside now unused freight facilities is indicative of a gradual shift in the railroad's business and Alaska's economy as a whole.

The railroad's freight business, which is still its primary revenue line, has been on a general downward trajectory while its passenger service continues to grow.

Responses to the railroad RFQ are due by Oct. 30. The project is expected to start in May 2020.