Borough one step closer to selling MV Susitna

The U.S. State Department has given the Mat-Su Borough the green light to proceed with the sale of the ill-fated MV Susitna. The sale was initially announced in September, but was subject to federal approval.

The borough plans to sell the former naval prototype to the Philippine Red Cross for $1.75 million. Because the buyer is located outside of the United States, federal clearance is required. According to Borough Attorney Nicholas Spiropoulos, the State Department informed the borough that the sale is not subject to Department of Defense controls, but export provisions from the Department of Commerce will apply. That means that the final agreement between the borough and the Philippine Red Cross will contain resale restrictions.

The MV Susitna has been a continual drain on borough resources due to maintenance and insurance costs. Earlier this year, the vessel suffered engine damage after heavy rainfall in Ketchikan, where the Susitna is stored. Part of the sale agreement includes the Philippine Red Cross depositing $250,000 to pay the borough’s insurance deductible for repair of the ship.

The sale of the MV Susitna is one step toward ending the saga of the failed attempt to create ferry service between Anchorage and the Mat-Su Borough. One thing that still remains to be negotiated with the federal government is the status of $12 million in Federal Transit Administration grants that were given to the borough to set up the service. Some of those funds were used for a facility at Port Mackenzie and for refitting of the Susitna.