Alaska Seeks New Owner For 63-Year-Old Ferry Matanuska As Repair Costs Top $132 Million Amid Budget Pressure

The State of Alaska has launched efforts to dispose of its oldest ferry, the Matanuska ferry, as part of a plan to cut costs and address a $78 million budget shortfall.

Officials say maintaining the vessel is no longer financially viable, with repair costs potentially exceeding $132 million.

Built in 1963 in Seattle, the 408-foot ferry has been out of regular service for several years and is now being offered for disposal as the state looks to reduce costs and manage a budget shortfall.

A 2022 inspection revealed extensive steel corrosion and asbestos concerns, requiring at least 125,000 pounds of steel replacement.

Per reports, around 125,000 pounds of steel would need replacement. Estimates to bring the vessel back to service range from at least $45 million for regional operations to as much as $132 million if it were to meet international standards.

Given these figures, state staff have said restoring the vessel is not practical under current financial conditions.

Since 2023, the ferry has been docked in Ketchikan, Alaska, where it has been used as a floating accommodation facility for ferry workers. Even in this limited role, the state has been spending about $800,000 per month to keep it operational.

Authorities now plan to remove the ship from state ownership, with another ferry expected to replace it as worker accommodation.

The state issued a Request for Information on March 20, asking interested parties to submit proposals by April 14. Authorities are looking for options that could preserve the ship’s historical value while allowing it to continue serving in some form.

Suggested options include:

• Maritime training vessel
• Tourism or hospitality project
• Museum or heritage site
• Community or cultural center
• Research platform

However, proposals for scrapping or dismantling the vessel will also be considered.

The Matanuska is one of the first three ferries built for the state after Alaska gained statehood in 1959 and is the last of those original vessels still owned by the state.

Over its nearly 60 years of active service, it mainly operated routes between northern areas near Juneau and southern connections toward British Columbia.

The ship measures 408 feet (124 meters) in length, can carry about 450 passengers, has 106 cabins, and space for around 83 vehicles. It also features amenities such as a lounge, cafeteria, solarium, and areas for deck passengers.

Despite its long service history, age and maintenance issues eventually limited its usability. A lack of sufficient funding and increasing repair requirements led ferry officials to recommend retirement, a step that has now been formally followed by the state’s decision to seek a new owner.

Its sister ships have already been retired. The Taku was sold after retirement and later scrapped in Alang, India, while the Malaspina was sold and is currently being used as housing at a cruise terminal in Ketchikan, though its ownership arrangement has faced legal disputes.

References: alaskasnewssource, workboat