The road to a budget black hole

AIDEA pushes private industrial road to Ambler

Aug 22, 2019
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What does Alaska’s budget chaos have to do with a proposed private industrial gravel road? 

Caribou in Gates of the Arctic. Photo by Lisa Oakley

Well, it spotlights a political agenda that will slash long-term health care and education jobs while claiming to create short-term work in rural Alaska by paving over traditional hunting grounds, public lands, and natural places.

Truth is, every Alaskan should wonder why the Alaska Industrial Development and Export Authority (AIDEA) continues to push for the proposed Ambler road to benefit a Canadian mining company when estimates claim it will cost at least $300 million–some say as much as $1 billion.

AIDEA should not be pushing another boondoggle project that sends profits out of state and leaves Alaska high and dry.

AIDEA is gambling away Alaska communities

AIDEA has already spent nearly $30 million on the Ambler road proposal and permit applications. Only mining companies would use the road, according to its proposal, and no communities or any members of the public would be allowed access to it–at least that’s what the current proposal says. (Remember the Dalton Highway?)

But the costs go far beyond the expense of building a road.

The proposed gravel drive to the Ambler Mining District would cross 2,900 streams and 11 major rivers, threatening the water systems of the southern Brooks Range and the salmon, whitefish, and sheefish in the Kobuk River watershed. The 220-plus mile road would also disturb the migration of the Western Arctic Caribou Herd, and it would cross 20 miles of Gates of the Arctic National Park and the Kobuk River Wild & Scenic River, permanently altering these wild places.

The Western Arctic Caribou Herd Working Group, along with over a dozen communities and organizations, have adopted resolutions opposing the Ambler road because of its risk to animals like caribou, one of the most important foods to people in the region. 

Yet, Trilogy Metals, the company that wants to mine the area, has repeatedly told the State and media, “No road, no mine.”

Whether you call that a threat, a dare, or a policy, it certainly aims to pressure AIDEA into spending hundreds of millions of dollars on a road with no guarantee of repayment. Sounds like a boondoggle in the making, right?

AIDEA investor rating downgraded

AIDEA is a public corporation of the State of Alaska that issues bonds to support funding of capacity and infrastructure projects. It was created by the Alaska Legislature to “promote, develop and advance the general prosperity and economic welfare of the people of Alaska, to relieve problems of unemployment, and to create additional employment.”

Since the governor appoints the AIDEA board, however, its funding choices can get political fast.

In fact, AIDEA has been called out for awarding a no-bid contract to the grandson of a high-end donor to Governor Dunleavy’s gubernatorial campaign.

Last month, Moody’s Investor Services, a credit rating agency, downgraded AIDEA’s rating. This means that AIDEA is now viewed as a greater financial risk to those investing in bonds. 

AIDEA’s boondoggle past

AIDEA has helped fund a variety of projects for the military, cities, agencies, and corporations. It has recently helped fund the Federal Express Aircraft Maintenance Facility in Anchorage and a new Sonic in Wasilla.

Included in its portfolio is the Anchorage seafood plant that closed in 2003. AIDEA spent at least $50 million to build the plant and millions more trying to save it. It promoted the project as a jobs producer, but the agency never received a rent check for its trouble.

Right now, AIDEA is selling the Ambler project as another job-producing “public-private venture” that will be paid for by mining companies, yet it fails to show how this promised payback would happen and offers no guarantee.

The road to a budget black hole has high price and no guarantees either. If ever a project had “boondoggle” written on it, Ambler is it. 

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