State puts up $10 million in roads money

Posted: Wednesday, May 07, 2003

JUNEAU (AP) Gov. Frank Murkowski campaigned on a gravel dream: new roads built in far-flung parts of Alaska to open up country to more oil, timber and mining development.

Now Senate budget leaders have agreed to provide startup cash.

They want to give the governor $10 million in state funds to explore the potential of building roads in areas many Alaskans have never heard of, from the flat tundra of the North Slope to the mountainous rain forest of the panhandle.

It is nearly half the $21 million state general fund spending increase the Senate Finance Committee has proposed over the current year for the capital budget for state infrastructure projects.

I think it's an investment,'' said Fairbanks Republican Sen. Gary Wilken, the prime Senate architect of the capital budget. The governor is attempting to build a road to development. This is certainly a road to development.''

But Anchorage Republican Sen. Con Bunde said it could drive the state treasury deeper into the red. One of the proposed projects, a road to Nuiqsut on the oil-rich North Slope, could make money for the state, he said, but the rest are more questionable.

Timber and mining projects, even if developed, bring scant money into the state treasury, he said. And, he added, if the roads are constructed, the state will need to maintain them. He argues that if people move to areas opened up with roads, the state, which faces a budget shortfall of several hundred million dollars, will need to build schools.

I want people to get opportunities,'' Bunde said. But we also have to be aware of the cost.''

The $10 million is to start preliminary work on four or five potential road projects, said John MacKinnon, deputy commissioner of the state Department of Transportation and Public Facilities. The money will go to scoping out the routes and starting the permitting process, he said.

Then, if it looks like the project will pencil out, the big question of how to pay for construction will need to be addressed. The traditional method is just to wait for federal funds, but Murkowski officials are trying to think of alternatives.

One idea for the proposed road to Nuiqsut, MacKinnon said, is for the state to fund construction through bond debt and have the oil companies that use it pay tolls.

The proposed 108-mile project would take about five or six years to build at a cost of about $200 million, MacKinnon said. It would run roughly from the trans-Alaska oil pipeline's Pump Station Two, along the foothills of the Brooks Range to Nuiqsut, providing access to state lands that oil companies have leased.

The idea is that the road access would encourage development of the leases, MacKinnon said, bringing royalty dollars into the state treasury and jobs to the state.

The Nuiqsut road has a good chance to be one of the projects with preliminary work funded this year with the $10 million, MacKinnon said. There are 13 possible industrial development roads'' as well as 18 potential community access road'' projects vying for the money.

The department will decide soon which four or five would be funded in the coming year, he said, while the Murkowski administration plans to ask for additional money in coming years to start other projects on the list.

Some proposed projects are relatively modest, like the three-mile reconstruction of a deteriorated road out of Nome to a gold deposit, for about $4 million to $6 million.

Others are highly ambitious, such as a proposed road to encourage the development of gold projects, like the Donlin Creek mine, in the Yukon-Kuskokwim area. That idea, which involves a road to a river port at the Yukon River village of Ruby, does not even have a price tag at this point.

There is even a proposed full-blown Yukon River Highway that would link the Dalton Highway to Nome. There is $4 million in federal funds in the budget to study that idea.

There is also a proposed road on the list linking Chena Hot Springs Road outside Fairbanks to Circle Hot Springs Road near Central. It would provide a loop for tourists to visit both Interior hot springs and surrounding areas, MacKinnon said.

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