(The following story by Christina Sessions appeared on the Alaska Journal of Commerce website on December 29.)
ANCHORAGE — Some surprise contracts in 2003 have increased projections for 2004 for the Alaska Railroad Corp. One of the driving forces of the increase is the resumption of coal shipments to South Korea from the Usebelli Coal Mine.
Projected revenues for 2004 are in the neighborhood of $104 million, with a net income of just over $9 million, said Pat Flynn, public affairs officer for the railroad.
Revenues were budgeted at $99 million for 2003; however the company will post higher earning than expected.
“We put together a conservative budget but we don’t mind being pleasantly surprised,” Flynn said.
One contract that increased the railroad’s revenue this year involved hauling rock from the Bird Creek road construction project, where the state Department of Transportation and Public Facilities is building a parking lot for fishermen.
In addition, naphtha shipments from the Williams refinery in Fairbanks were higher than projected in the budget for ’03.
Gravel shipments from Wasilla to Anchorage also saw higher volumes than expected due to the reconstruction of the North-South runway at Ted Stevens Anchorage International Airport.
These contracts however, will not run over into next year. The railroad expects that both gravel and fuel shipments from Williams will dip slightly in ’04, said Flynn.
Passenger travel is expected to see steady incremental growth of about 1 to 2 percent, he said.
Real estate accounts for between 10 and 11 percent of the railroad’s total revenue. The company will realize slightly less revenue next year due to a decrease in cruise ships scheduled to stop at the railroad’s dock facility in Seward, said Flynn. Some cruise companies have opted to pull out of Seward and call on Whittier instead. However, the decrease should not throw the real estate revenue projection out of the 10-11 percent range.
The capital budget for the railroad next year is set at $82 million. More than half of the budget will come from federal grant money, said Flynn.
The new Fairbanks Intermodal Facility, located near the intersection of Johansen Expressway and Danby Road, is one of the big projects slated for next year.
The $22.5 million project includes a new state-of-the-art train depot, additional bus parking and safe transfer areas for passengers to make connections with other modes of transportation. The project is scheduled for completion in summer 2005.
The Anchorage Yard Operations Center is another project on the books for 2004. The original operations center was found to be structurally unsound in 1997 and had to be abandoned. Since then, yard operations has been housed with freight operations in a building that is not big enough to accommodate the amount of personnel required.
The $9 million, multi-level yard operations center will be about 15,000 to 20,000 square feet. It will contain offices, training rooms, conference rooms, break areas and locker rooms.
Construction is slated to start next spring and be finished by the end of the year.
Track rehabilitation between Anchorage and Wasilla continues to be a priority for the railroad. The rehabilitation not only helps lower operation and maintenance costs but prepares the corridor to accommodate a commuter rail if it ever comes to fruition.
“Continued efforts to improve safety and velocity are core themes (in the projects),” Flynn said.
A major project planned by the railroad is the Ship Creek development. That project involves a new intermodal facility, a parking structure and a means to connect the Ship Creek area to downtown Anchorage. Though significant construction will likely not start next year, planning on the project will continue, according to railroad documents.