Harnessing Alaska's iron horse.

• Author: Richardon, Jeffrey
• Position: Alaska Railroad Corp. - Company profile

FIVE YEARS AGO, AFTER what one legislator describes as a bloody battle, the state assumed control of the Alaska Railroad. Since that time, despite a profitable performance that took many by surprise, the railroad has rarely been far from the center of public debate.

Although moose mortality along the railbelt right-of-way made the most headlines last winter. the long-standing discussion about eventual disposition of the railroad, and its role ill the economic development of the state, continued unabated as well. This discussion predictably revolves around questions such as whether the state should be operating what is essentially a for-profit business, or the degree to which the railroad, as part of the state's transportation infrastructure, should be responsive to political pressure from the communities it serves.

Finding answers to these questions is complicated by the railroad's history, public expectations, the terms of its transfer from the federal government to the state and the uncertainty of Alaska's economic future.

Construction of the railroad was authorized by Congress in 1914. Its purpose was to open up the territory by transporting coal from the Matanuska Valley and gold from the Interior. The line, from Seward to Fairbanks, was completed in 1923 and commemorated by the driving of a golden spike by President Warren Harding at Nenana. In its 66 years of operation, the only major expansion of the railroad has been the addition of a 12-mile spur to the deep-water port of Whittier.

In 1982, Congress took a long look at the railroad, for decades operated at taxpayer expense, and concluded it was chiefly used by the state; there was no longer a strong federal interest in its existence. Generally a red-ink proposition under federal control, the railroad was purchased by the state after lengthy negotiations and legislative consideration that included 48 public hearings.

"The state got into this thing by accident," remembers Frank Turpin, president of the railroad and the man who engineered its quick trip to black ink. "They had no intention of getting into the railroad. And the only reason they got there is because the federal government said, 'I'm going to walk away from it."'

For $22.3 million and another $10 million in payroll and benefit liabilities, Alaska bought itself a railroad. The package included 653 miles of track, buildings valued at $13 million, 57 locomotives, 52 passenger cars, 1,669 freight cars and other rolling stock. Also part of the purchase was 33,000 acres of land, including prime real estate in Anchorage and Fairbanks.

The federal government stipulated that if the railroad were sold within five years, any profit would revert to the federal treasury. State legislators agreed to stay out of day-to-day management of the line and mandated it be put up for sale three times every five years. In 1988, the requirement to sell the line was lifted.

Contrary to some expectations, the Alaska Railroad has operated without a dime of state subsidy since 1985. Even more...