Alaska ferry system awarded $132M in federal grants

a state ferry
The state ferry Tustumena stops in Kodiak (Brian Venua/KMXT)

The Federal Transit Administration announced on Nov. 30 that rural ferries in Alaska will receive about $132 million. The federal money comes from the 2023 Ferry Grant Program, which is funded by the Bipartisan Infrastructure Law.

The Alaska Marine Highway’s fleet has started showing its age, and the state is struggling to keep the ships staffed. Over the past year alone, there have been significant cuts to service.

In a Nov. 30 address announcing the new windfall, U.S. Sen. Lisa Murkowski said the funds represent “a big, fat deal” for Alaskans who rely on the service.

“I grew up using the ferry system to get around Southeast, and I know how important the Alaska Marine Highway System is to so many Alaskan families,” said Murkowski. “By supporting operations across the state and replacing the Tustumena serving Southwest Alaska, we’re helping connect coastal communities across our state.”

$92 million of the grant will contribute to a project to replace the Tustumena, a passenger ferry connecting communities in Southwest and Southcentral Alaska. The deteriorating vessel, affectionately known as the “Rusty Tusty,” is almost 60 years old. Its replacement will be the state’s first diesel-electric hybrid ferry. The state is required to match at least $23 million for this portion of the grant.

However, the remaining $38 million in funding does not require a match — that amount is earmarked for improving the Marine Highway’s workforce and vessels.

Murkowski said the federal funding will help sustain ferry service to rural communities, and that this is a critical opportunity to transform the crumbling system.

“I encourage the state to smartly take advantage of these investments,” she said. “The future of the Alaska Marine Highway System depends on their efforts and contribution.”

To date, the 2021 Bipartisan Infrastructure Law has brought a total of $716 million to support projects to revitalize the state ferry system.

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