Private Infrastructure Funding Team Builds a Case for Port MacKenzie Rail Project

That’s why AGDC signed the agreement with AIP for $450,000. The two companies partnering on the project are Macquarie Capital, a division of Macquarie Group that is focused on financing development and infrastructure projects, and Martinus, a global rail developer.

Expect the predevelopment process to move swiftly. AIP plans to reach the end of its first phase of predevelopment assessment—establishing a baseline understanding of what needs to be completed, identifying users, and creating a business case for the project—by February 20.

At that point, Geoff Segal, senior vice president of Macquarie Capital says, the state can determine whether the project should move forward to the next phase or not. Segal told stakeholders and interested parties at a January 7 presentation that a decision is targeted for April 3. At that point, the focus will shift to solidifying the financial aspects and reaching agreement with potential users. If that can happen by July, the focus shifts to “the goal of closing at the end of this year, to push a shovel in the ground next year,” Segal said.

AGDC President Frank Richards says the corporation, which retains 25-percent ownership alongside Glenfarne Group’s majority stake in the Alaska LNG pipeline, signed the agreement with AIP because of the rail extension’s potential value for the Alaska LNG project. He notes that the rail extension to Port MacKenzie is not limited to shipping pipeline materials, however.

“We have unique flexibility under enabling statues to enter into public-private contracts and coordinate project development on behalf of key state, Alaska, and [Mat-Su] Borough stakeholders who want to move forward on the Port MacKenzie Rail Extension Project,” Richards explained during the January 7 presentation.

Richards later clarified, “It’s beyond just the Alaska LNG project. The AIP partners want to get an understanding of the future [of the rail extension], beyond the pipeline.”

Mining companies are likely to be part of that larger group of end users, Mat-Su Borough Port Director Dave Griffin says. For years, the borough has touted the rail extension as a factor that could make opening a limestone mine in the Interior economically feasible, or it could boost other mining projects into the “profitable” zone. Now, he says, the options seem closer to reality. Nova Minerals, which is developing West Susitna properties, is looking at the port as a site for its mineral processing facility, where ore from the company’s antimony mine could be crushed and concentrated before shipping.

“If Nova establishes a mineral processing facility at Port Mac near the rail, then anyone north who has antimony, like old gold mines, could move it down to the port for processing,” Griffin says. “If Alaska is going to develop its resources, and you’ve got President Trump writing executive orders about unleashing Alaska’s extraordinary resource potential… where is that going to get to market? All roads lead to Port MacKenzie.”

“It’s Not a Line on a Map”

Griffin notes that the rail extension is not starting from scratch. When the borough proceeded with the rail extension in 2007, it began like any other government-led infrastructure project: with studies and permits. The federal Surface Transportation Board got involved and ultimately selected a route to connect to the existing rail line.

The project really got rolling around 2011, and the borough spent about $184 million in grant funding from the Alaska Legislature and general obligation bonds, securing right of way and vacating agriculture covenants through the Point MacKenzie Agricultural Project.
“It’s not a line on a map in a book on the shelf,” Griffin says. “It’s a half-built project.”

Twenty-five miles of the thirty-two-mile rail bed have been built. Six of the seven bridges have been built. The remaining seven miles of rail bed crosses farmland, so it’s flat, cleared, and straight. About forty miles of ballast rock, railroad ties, steel track, and fiber needs to be laid along the route, Griffin says, which represents the 32-mile route from the main rail line in Houston to Port MacKenzie, along with a one-mile rail loop at the port and about eight miles of sidings or terminal track. Also on the to-do list are grade repairs, sub ballast work, grade crossing approaches, a communications tower and telecom lines, operational support facilities at the terminal and a bridge over a roadway at the north end of the Agricultural Project.

When oil prices tanked in 2014, then-Governor Bill Walker paused megaprojects including the rail extension. Work that was previously bid continued through 2017, but momentum was lost without new funding, and the project has sat dormant.

Alaska Railroad Corporation External Affairs Director Meghan Clemens says a cost estimate to finish the project, adjusted for 2026, was about $275 million, including additional rail cars and updates to existing facilities. The Mat-Su Borough Assembly discussed in 2023 whether to complete the rail project, acquire the railbed as a road, or leave the project on pause; at the time, the cost estimate was significantly lower, around $200 million. A resolution supporting completion of the rail extension, sponsored by Representative Kevin McCabe passed the Alaska House of Representatives last year, but it stalled in the Senate Transportation Committee.

Mat-Su Borough Manager Mike Brown says the borough fully supports AIP’s efforts, and it plans to pursue an upcoming federal grant funding opportunity that might help. “We’re doing everything possible to move this project forward,” Brown says.

Alaska Railroad President and CEO Bill O’Leary, at the January 7 presentation, said the rail extension is a worthwhile project but not one the state-owned corporation can afford to complete on its own.

“From the railroad’s perspective, we have always maintained that the lack of infrastructure in Alaska is one of the primary drivers, I think, to holding back the state from really meeting its true destiny or mandate. Not surprisingly, we believe rail is key to the infrastructure needs in this state,” O’Leary said. “As we’ve focused on this project over the past few years, it’s very clear to us that it would be too much of a lift for the Alaska Railroad alone. Therefore, there’s a need for partners to come forward and to make this a reality.”