Alaska considers $10 million loan fund to prop up Ketchikan’s shipyard

With the future of Alaska’s ferry system in question, the state may offer short-term financing to incentivize work at Ketchikan’s shipyard.

That would be accomplished through a newly created $10 million loan fund for private sector vessel owners doing work in-state.

“The proposed financing program is targeted to meet the seasonal financing needs of Alaska’s industrial and commercial fleet owners and to facilitate scheduled maintenance cycle work at Alaska’s shipyards,” wrote Alaska Industrial Development and Export Authority CEO Tom Boutin in a 17-page memo to the authority’s board of directors.

The primary beneficiary would be Vigor Alaska which operates the state-owned shipyard and employs more than 100 people in Ketchikan.

There was a round of layoffs last year as work wrapped up on two recently completed two Alaska Class Ferries. It also a number of contracts for maintenance and overhauls for the state’s ferry fleet whose numbers could shrink.

“With a near-term lull in our traditional ship repair business in Alaska and the uncertainty about future work for the Alaska Marine Highway System, due to the ongoing discussions about its future,” said Jill Mackie, spokeswoman for Vigor Industrial in Seattle, “we need to explore every avenue to attract new ship repair business to the Ketchikan shipyard.”

AIDEA would offer as much as $1.5 million in financing to vessel owners. The two-year finance packages would flow directly to Vigor Alaska upon completion of the work.

AIDEA executives told CoastAlaska that short-term financing options could make the difference between a vessel owner doing work in Alaska or the Lower 48.

“The whole agenda of Alaska being ‘open for business’ is trying to define areas where AIDEA can help make Alaska shipyards more competitive,” AIDEA’s Chief Investment Officer Alan Weitzner said Friday.

The loan program is being called AK SHIP. It awaits approval by AIDEA’s board of directors which is slated to review it at its June 26 meeting in Anchorage.