By Riley Board
KDLL public radio Kenai 

Anchorage-Kenai state highway project more than doubles in cost since 2018


August 2, 2023 | View PDF

A major highway project improving the connection between Anchorage and the Kenai Peninsula has more than doubled in cost over the past five years — from $350 million in 2018 to the latest estimate of $840 million — and the new pavement is still four years away from opening to the public.

The bypass — officially the Sterling Highway Milepost 45-60 Project — is a decades-old plan to divert traffic around the small Kenai River community of Cooper Landing by creating a 10-mile bypass cut through the forested and sloped terrain north of the town.

Construction includes a 462-foot-long, single-span steel arch bridge over Juneau Creek Canyon, one of the longest such bridges in the state. The bridge alone is estimated to cost $165 million, with the federal government covering $150 million and the state the rest.

The state reports that traffic counts on the highway range from about 1,000 vehicles a day in the winter to about 8,000 during the peak of salmon dipnetting season in Kenai in August.

The project was originally estimated at $350 million in 2018. Work started in 2019. By 2021, that number was closer to $500 million; by 2022, it had risen to almost $700 million. The latest assessment this year came in at $840 million, according to Shannon McCarthy, with the Alaska Department of Transportation.

McCarthy said dramatically rising costs have caused concerns about funding the project, but are currently not expected to delay the opening of the road. She said DOT attributes the latest cost increase to inflation, but said the agency is also going to take another look to make sure it’s a reasonable estimate.

“We’ll have to take a look at that and see, just confirm, are we doing this the right way, have we added something in that we don’t need to,” she said.

In June, the project manager expressed concerns about funding, pointing to a lack of money in the state budget and suggesting the completion date could be delayed.

Federal funding covers about 90% of the cost, with the state responsible for the rest. But because federal aid to highways is limited, additional money spent on the Sterling Highway project takes away from other road work in the state that same year.

McCarthy said the project is expected to open to traffic in 2027, but DOT will need to seek alternative sources of funding and readjust the work schedule over the next four years.

“When Congress passed the Infrastructure Investment in Jobs Act, they created a number of competitive grant opportunities, and one of them is called the Mega Program,” she said. “This is the one which supports these really large, complex projects that are difficult to fund in other ways. It’s kind of tailor-made for a Cooper Landing bypass project.”

She said the department plans to apply for that federal pot of money, and other grants. It’s also reorganizing the schedule for the project to work around cost issues.

“Because of the cost increases, we are going to have to think about spreading the phases out a little more than we originally had wanted. But it is moving forward, and we are going to pursue this alternate funding in hopes of securing that last bit that we need and still not impact other projects statewide,” McCarthy said.


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