Anchorage Port Intermodal Expansion Program (PIEP) Benefit Cost Analysis of Proposed TIGER Discretionary Grant Funds

Abstract

The Port of Anchorage (POA) has exceeded its design life and has been operating beyond its capacity for a number of years. It is in need of replacement to both minimize operating costs and avoid potential damage in the event of an earthquake. It is in need of expansion to meet the needs of the growing South Central Alaska economy1. In response to these needs the POA has embarked on a multi-year expansion project—the Port Inter-modal Expansion Program (PIEP)2. In early 2009, in the midst of this expansion program, the federal government passed the American Recovery and Reinvestment Act. The Recovery Act appropriated $1.5 billion of discretionary funds to be awarded by the Department of Transportation for capital investments in surface transportation infrastructure (including ports) that would provide long-term economic benefits as well as preserve and create jobs and promote economic recovery3. In support of its request for a “Grant for Transportation Investment Generating Economic Recovery” (TIGER Grant), the POA asked the Institute of Social and Economic Research (ISER) to prepare a Benefit-Cost Analysis (BCA) demonstrating the long term economic benefits that would flow from expenditure of grant funds in support of the PIEP. This BCA follows the guidelines set forth in the Federal Register notice announcing the TIGER grant program. It measures the increase in national income that would result from the expenditure of the grant funds in support of the PIEP. Since the POA funding request would pay only a portion of the cost of the entire PIEP, this BCA is limited to measuring the benefits from the expenditure of the TIGER grant funds rather than the total benefits of the entire PIEP.