The administration of Gov. Mike Dunleavy has signed a $28.5 million contract for work on a new ferry terminal almost 40 miles north of downtown Juneau, days after a public oversight board said the state had not proved that the project is economically viable.

Dunleavy administration officials said the new terminal at Cascade Point, about 30 miles north of the existing state terminal in Auke Bay, will cut ferry time from Juneau to Haines and Skagway by two hours.

But the chair of the Alaska Marine Highway Operations Board - which was created by Dunleavy four years ago to advice ferry system managers - said the department hasn't shared "some kind of business plan or feasibility study" to establish that the terminal is necessary and economically viable.

"The Alaska Marine Highway System has been plagued for 50 years with one-off projects that get foisted upon it, that create operational challenges, that then the system and the users have to deal with," said Wanetta Ayers, chair of the board, during a meeting on July 25.

"This is another one of those situations where it's going to get foisted upon the system and we're going to have to cope with it for 20 or 30 years until somebody admits it's not going to work," Ayers added.

The Cascade Point terminal is planned on land owned by Goldbelt Inc., the Juneau Alaska Native corporation. It has been under consideration since Dunleavy took office in 2019. In May, his administration announced its intention to seek bidders for the first phase of the project.

After receiving two bids, the Alaska Department of Transportation signed a contract on July 28 with K& E Alaska, an Oregon-based company with an office in Sitka. The contract, which has a 2027 completion date, covers engineering and environmental permitting, a bridge over Cascade Creek, a gate, site preparation and retaining wall construction.

The contract does not include any funding for the ferry terminal itself, which is set to cost tens of millions of dollars. The state expects to pay for the terminal using primarily federal funds.

Critics have cited the lack of facilities at Cascade Point, the lack of bus service to the proposed terminal and the high cost of 40-mile taxi rides.

Ayers said on July 25 that the Dunleavy administration had not provided answers to board members' previous questions, and she is troubled by "the pursuit of this project in what is a very unconventional process, where design and now construction are way ahead of operational feasibility and customer service."

Katherine Keith, a deputy transportation commissioner, said during the meeting that the department had commissioned an independent economic analysis of the project, but it was in draft and had not been released. She did not provide any specifics on when it would be available to members of the board or the public.

Ayers wasn't alone among board members to raise concerns about the process used by the department to advance the Cascade Point project.

Board member Paul Johnsen, a former Marine Highway System engineer, said it seemed that the board was "being ignored" by the transportation department. Member Bob Horchover, who was appointed to the board by Dunleavy, agreed.

"I'm against this until we have more information," said Horchover. To move ahead with the project "without even a reason for doing it is, to me, a boondoggle," he added.

While Haines and Skagway officials have bristled at the news that the Dunleavy administration is moving ahead with the Cascade Point terminal, a mining company celebrated the announcement.

Grande Portage, a Canada- based company with a plan to build a new gold mine near Juneau, said in a press release that it has an existing agreement with Goldbelt to cooperate on building a barge terminal at Cascade Point for transportation of ore.

Though the barge terminal is not contingent on the ferry terminal, "having the ferry terminal proceed first is highly advantageous as it would result in the development of infrastructure that will also be necessary for the ore terminal, particularly the new access road and bridge. This reduces the time and cost required for future ore terminal development," Grande Portage wrote in its press release.