The State of Alaska is seeking proposals to dispose of the aging ferry Matanuska, the oldest vessel in the Alaska Marine Highway System fleet, as part of an effort to reduce operating costs and address a budget shortfall.
The Matanuska, built in 1963, has been out of regular ferry service for several years. A 2022 maintenance overhaul identified extensive steel damage and other issues, and since 2023 the vessel has been used as a floating hotel to house ferry workers in Ketchikan. Officials previously estimated that at least $45 million would be required to return the vessel to seaworthy condition, with costs rising to as much as $132 million to certify the vessel for international service.
Alaska Department of Transportation officials said disposing of the vessel could save the state approximately $800,000 per month in operating expenses. The move is part of a broader plan to address a $78 million gap in the Alaska Marine Highway System operating budget caused by delays in federal ferry funding.
State officials are seeking ideas for the vessel’s future through a request for information, with letters of interest due April 14. The state said it is looking for proposals that preserve the vessel’s historic significance while allowing it to continue serving Alaska in a new capacity. Potential uses could include maritime training, tourism, community or cultural uses, education programs, museum preservation, research platforms, or other maritime-related purposes. Proposals to scrap or dismantle the vessel may also be submitted for consideration.
The Matanuska is the last remaining vessel owned by the state among the three original Alaska Marine Highway System ferries. Its sister ships, the Taku and the Malaspina, were previously sold and later repurposed for housing and other uses after retirement from ferry service.
State officials said the disposal process could take several months, and another mainline ferry could be reassigned to serve as worker housing in Ketchikan once the Matanuska is removed from state ownership.
