Backlog of work is rising again

Backlog of work is rising again

State deferred maintenance now totals $1.87 billion

Deferred maintenance on public buildings in Alaska, state, university and schools, is on the rise again, with the total increasing $60 million last year to $1.87 billion, state officials told a legislative committee in Juneau. About $1 billion of the total is within the University of Alaska system. UA is budgeting $50 million a year against the backlog but the state itself is unable to do much with its minimal capital budgets. Gov. Bill Walker’s proposed three-year employment tax is targeted at raising $800 million to be spent on the deferred maintenance backlog over three years, but its passage is problematic in an election year.

State gas corporation to solicit first equity investments later this year

The state’s Alaska Gasline Development Corp. will be actively soliciting private equity investment including from Alaskans later this year. This will be a first test of investor confidence in the project. AGDC is developing the long-planned $43 billion Alaska LNG Project and is working with Chinese companies as possible customers. The initial solicitation for equity will be for $817 million to be used in Front End Engineering and Design. The FEED would set the stage for a final investment decision in 2019, but that also assumes the Chinese LNG purchase deal comes together. A deadline for a deal with Sinopec, the lead Chinese customer, is the end of this year. AGDC will make a special offer to Alaskan investors prior to taking the solicitation out on a “road-show,” we were told.

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