February 29, 2016
Sunday PM

Ketchikan, Alaska - After nearly a decade, the MV Susitna left Ketchikan in mid-February, under decidedly less pomp and circumstances than accompanied its construction at what was then Ketchikan Ship and Drydock.

On February 19th, an Olson Marine tug pulled the 195-foot ferry, once called one of the most unique vessels ever built, away from the docks in Ward Cove and on its way to a shipyard in Puget Sound to determine whether the Susitna - which cost nearly $80 million to build - would ever go into service or would be scrapped.

The MVSusitna Ferry continues to be berthed at Ward Cove in Ketchikan
while the Matanuska-Susitna Borough continues to work to sell it.
Photo courtesy Matanuska-Susitna Borough, SitNews file photo August 12, 2014

That final decision belongs to the Matanuska-Susitna Borough Assembly. The Philippine Red Cross has offered to buy the Susitna for $1.5 million, but only after three of the four ship engines are repaired. Estimates for the work range from $500,000 to $3 million and some members of the MatSu Assembly have suggested that the best course might be to just scrap the vessel.

The story of the MV Susitna is a controversial one.

It is one of the most hi-tech ships ever built, but its complexity and high operation costs ensure it will never be used for its intended purpose, to bridge Knik Arm between Anchorage and Port Mackenzie in all weather, including heavy ice.

And the US Navy - which spurred the development and construction of the vessel - now appears to have no interest in using the design in its new generation of landing craft.

On the other hand, the challenging project put the Ketchikan Shipyard on the boat building map and led directly to larger projects such as the two Alaska Class ferries currently being built in Ketchikan. Two years ago, Alaska Ship and Drydock was purchased by Vigor Inc. and became part of Vigor’s multi-state shipbuilding enterprise.

After the Susitna was launched in 2010, it remained in Ketchikan, with the MatSu Borough paying around $1 million a year for insurance, moorage and upkeep. Borough officials total those costs as more than $5 million.

The genesis of the MV Susitna began with a local boy who grew up in Anchorage and went to sea.

Lew Madden was a graduate of West Anchorage High School who became a US Navy helicopter pilot and served three tours of duty in Vietnam, according to a 2011 story in the Anchorage Daily News.

Madden spent 26 years in the Navy, at one point as the Director of Anti-Submarine Warfare Systems Architecture and Engineering. He received two masters degrees and retired with the rank of Captain.

Madden then went to work as a program manager for defense contractor Lockheed Martin. In the early 2000s, he and several other Lockheed engineers were working on a new landing craft for the Navy.

According to the Daily News, the biggest challenge facing Madden was coming up with a design that bridged the biggest challenge for the landing craft that had been in use since World War II. In order to land successfully, the craft had to be shallow draft. But that same shallow draft made the ships notoriously unstable when faced with the rough seas that would be encountered close to shore.

"Madden had an idea," the Daily News reported in 2011. "Why not combine the best of very different ships? Make a boat that would transform from a catamaran-like ship to a barge while at sea...he envisioned a barge deck that would lower until it hit the water, adding buoyancy. The twin hulls would rise up until the ship's draft was only three or four feet, allowing it to beach. An onboard ramp would drop down so that a military tank could roll off."

His team began to develop the idea.

In 2002, Madden came to Anchorage for his 40th high school reunion and began seriously thinking about a way to bridge the 80-mile drive from Anchorage to Port Mackenzie, just three miles across Knik Arm.

A bridge had been proposed, but it was projected to cost at least $500 million and Madden thought that a ferry would be cheaper, at least short term. He pitched his idea for a Knik Arm ferry to the Mat-Su Borough and found a receptive audience.

In 2003, the Borough solicited proposals for Knik Arm ferry. There were two proposals. A local group offered a plan that would convert an existing ship into a heavy-duty ferry. Lockheed made a proposal to purpose-build a "transforming" catamaran with an eye to also pitching the design to the US Navy for its landing craft program.

Lockheed won and began designing the ship. Over a three year period, the Borough paid Lockheed a little over $2.5 million - the funds initially came from the Federal Government - to design the ship.

Originally, the heavy duty design which included ice-breaking capacity estimated the Susitna would cost $18 million to $25 million to construct.

The MatSu Borough began looking for Federal money to fund the ship and it found a willing partner in Sen. Ted Stevens. Stevens would eventually funnel all the money for the ship through the Department of Defense budget after the US Navy decided in 2005 to partner with Lockheed to develop the MV Susitna as an experimental ship through which it would develop its landing craft of the future.

With Stevens targeting tens of millions of dollars toward the ship, some viewed it as an example of "pork barrel" spending. The entrance of the Navy onto the project also changed the scope of the new vessel and caused significant modifications to the design that eventually drove the Susitna's cost to more than $78 million. And some of the changes required by the Navy were at odds with the needs of the MatSu causing the ship to become more complicated and to cost more to operate than the borough originally planned.

The problem was that while the Borough sought a heavy duty ship capable of breaking ice and carrying more than a 100 passengers and two dozen vehicles, the Navy sought a fast and highly maneuverable ship. While it was eventually possible to build a ship to meet both those needs, it was not possible to do it inexpensively enough to make future ships feasible.

Further complicating the situation was the fact that shore facilities to handle the new ferry were never built.

Originally, the MatSu borough believed it had a handshake agreement with Anchorage officials to build a terminal in Anchorage, while MatSu would build the other one 3.5 miles away in Port MacKenzie. But that deal fell apart when a new mayor was elected in Anchorage in 2003.

As the Susitna project moved ahead MatSu officials contended that a new deal would eventually be reached with Anchorage, but it never materialized. In the meantime, the design of the Susitna changed several times, eventually requiring a new terminal on the Port Mackenzie side.

By 2012, it was estimated the two terminals would cost nearly $25 million each, sums that were clearly out of the reach of the MatSu Borough.

In order to achieve the unheard of combination of military prototype and working passenger ferry, Adm, Jay Cohen, the head of Office of Naval Research, worked with renowned naval architect Guido Perla of Seattle. Perla looked at the combination idea and initially told Cohen he was "nuts" Cohen told the Anchorage Daily News in 2011.

One of the biggest challenges, Perla told the Daily News was changing the approach to ice breaking. Perla said that traditional ice breakers ride up over the ice and then crush it with their weight. The Susitna would instead lift the ice from underneath and break it.

"We plow the ice, like when you are plowing a field," Perla said.

There were other complications during the design that raised the price.

For one thing, MatSu wanted the ferry to be able to carry the largest vehicles currently allowed on Alaskan roads and that required significant reinforcing of the vehicle deck, but then other areas had to be lightened to meet the Navy's speed standards. Those standards themselves led to the significant increases in the horsepower and torque of the four engines, which led one official to liken the ship to a "sports car on the water."

"For me it was the most demanding project that I ever had in 40 years of business," Perla told the Daily News in 2011. Previously Perla had designed cruise ships, offshore supply vessels and fireboats.

In 2005, when questioned by CBS News about the need for the increasingly more expensive ship, Sen. Steven replied that the dual nature of the Susitna made it worth the effort and the cost to build it.

"The Matanuska-Susitna Borough has championed the ferry project for a decade," Stevens wrote in a statement to the network. "The MatSu is one of the fast growing regions in the United States...Alaskans need an alternative means to travel from Anchorage to the Valley...In addition the E-Craft will provide the Navy with ability to test new technologies and designs...particularly for mobile sea bases."

Stevens also noted that a previous successful program a decade earlier had created a specialized ship in Hawaii that had led to a whole new class of Navy combat ship and he hoped the Susitna project would revolutionize how the Navy staged troop landings in the future.

Besides the federal government and the MatSu Borough, the third partner in the project was Alaska Ship and Drydock in Ketchikan. The local shipyard had been operating in Ketchikan since the early 1990s and had built smaller vessels and barges but nothing on the scale of complexity of the Susitna.

"Part of the motivation of Adm. Cohen was to avoid the cost of large shipyards and defense contractors," ASD Shipyard development director Doug Ward told MarineNews in 2011. "He was looking for a company and a yard that was ready for innovation and capable of building a complex vessel...The commercialization of the E-Craft technology represents our new construction market. It's a purpose built ship for Alaska - the world's first ice strengthened twin hull vessel. It is efficient over long distances, can operate in many sea states and, most importantly, doesn't require expensive terminal and marine civil infrastructure. It can land on a beach or a boat ramp. It's an ideal boat for opening up the North Pacific and Arctic Oceans."

In June of 2010, the Susitna was christened to great fanfare at Alaska Ship and Drydock. On hand was Sen. Lisa Murkowski who had also been on hand for the keel laying in 2006.

"This is our ship, built in our town with our people," Murkowski, who was born in Ketchikan, noted.

Admiral Nevin Carr, who had succeeded Cohen as the head of the Office of Naval Research, lauded the project for its complex merging of its two missions, that of transportation and military research.

"This ship has got to be tough," he told the 500 people who assembled for the christening. "And I know the Navy will get its money's worth."

Carr also noted that the ship had helped improve the American ship building industry.

"You made important contributions to the domestic shipbuilding industry due in no small measure to your pioneering spirit as Alaskans and the tenacity to endure under tough conditions," Carr said.

Shortly after the christening, the Susitna was named one of the "10 Significant Boats of 2010" by WorkBoat Magazine, which lauded its complex technology and its ice breaking skills as being crucial as the Arctic began to open up in the future.

At the 2010 christening, it was announced that the Susitna would remain in Ketchikan for the next few months, undergoing sea trials and some final work. There was talk about hiring it out for other work before it went north to begin serving the commuters on Knik Arm. Part of the delay was also predicated on when work would begin on the two ferry ferry terminals in Anchorage and Port MacKenzie. One of the possible jobs on the Susitna's horizon was working with the Coast Guard as part of the response to the Deepwater Horizon oil spill in the Gulf of Mexico.

But as time passed, the Susitna remained tied to the dock in Ward Cove, with only an occasional run about the harbor to shake out the cobwebs. The monthly bill for its layup eventually grew to more than $75,000, a cost that the MatSu borough had to foot as part of its "operational" costs for the ferry.

There was talk about taking it north to use its landing craft capabilities to serve a variety of small villages along the eastern side of Cook Inlet and Knik Arm, but nothing came of that. As the years begin to pass, it became clear to the MatSu Borough that the MV Susitna would never operate in Knik Arm. Efforts began to try to sell the ship and relieve the borough of the more than $1 million the ship was costing in upkeep.

In 2013, the borough first put the ship on the market and then began negotiating with the Federal government, which was looking to recoup some of its grant money.

Slightly more than $12 million of the money to build the ship had come from the Federal Highway Administration, which was looking to promote mass transit for which the ferry qualified. When it became clear the ship wasn't going to be used its intended purpose on Knik Arm, the FHA said it wanted some or all of its money back. The borough thought otherwise and both sides settled into a lengthy disagreement that continued on in 2016.

Meanwhile, the first effort to sell the ferry came to naught as the only interested party was a company in the Netherlands which offered $750,000 which borough officials noted was even less than the what the borough would recover if they "scrapped" the vessel.

The ship remained for sale for the next three years and there were numerous proposals from all across the world, but nearly all were less than the $5 million that the borough was hoping to recoup and then use to pay off the Federal Highway Administration.

There was even a proposal that the Alaska Marine Highway take over the ship, but a lengthy study by the AMHS determined that the ship would be more expensive to operate than other ferries and would need expensive remodeling of terminals.

There was talk for a time of just bringing the ship up to Knik Arm and beaching it at Port MacKenzie until a buyer could be found in order to relieve the Borough of the rising monthly costs. But concern was expressed that the ship was not designed to spend long periods aground and the weight of the vessel would damage the hull.

Finally, earlhy in 2015, The Philippine Red Cross proposed buying the ship for $1.5 million and the Borough tentatively accepted that offer. But another snag arose in the Susitna saga.

During an intense rain storm in Ketchikan in February of 2015, water had leaked into three of the engines on the ship making them inoperable. As part of the agreement to sell the ship to the Red Cross, the MatSu borough agreed to repair the engines, Cost was estimated at $1 million and insurance was expected to cover up to 75 percent of that.

But later in the year, a closer inspection of the damaged engines estimated that the price tag could top $3 million on the engine work and that it would definitely have to be done at a larger shipyard down south.

After additional lengthy discussions, the borough assembly agreed that the ship needed to go down to Seattle where a final decision would be made on its future. It left Ketchikan on February 19, 2016, just six months before the 10th anniversary of its keel laying in Ketchikan.

Sometime this spring, the MatSu assembly will decide whether to repair the engines and sell the ship or to scrap the ship that never succeeded in revolutionizing ferry travel in northern waters or in giving the US Navy a new way forward in amphibious warfare but did put the Ketchikan shipyard on the map.

Related:

Keel laid for revolutionary dual-use catamaran vessel, M/V Susitna
SitNews - August 25, 2006
http://www.sitnews.us/0806news/082506/082506_susitna.html

MV Susitna one of the ten most significant boats produced in 2010
SitNews - January 05, 2011
http://www.sitnews.us/0111News/010511/010511_ktn_shipyard.html

Alaska port anxious to be rid of $78 million ‘ferry to nowhere’
Stars & Stripes - March 12, 2013
http://www.stripes.com/news/us/alaska-port-anxious-to-be-rid-of-78-million-ferry-to-nowhere-1.211555

Matanuska-Susitna Borough is still undecided about Susitna options
SitNews - August 12, 2014
http://www.sitnews.us/0814News/081214/081214_susitna.html

'Free' ferry running up multimillion-dollar tab for Alaska borough's residents
Stars & Stripes - February 1, 2015
http://www.stripes.com/news/us/free-ferry-running-up-multimillion-dollar-tab-for-alaska-borough-s-residents-1.327164/mv-susitna-1.327165

Philippine Red Cross Proposes to Buy $80M Susitna Ferry for $1.7M
SitNews - September 19, 2015
http://www.sitnews.us/0915News/091915/091915_matsu_ferry.html

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