Alaska Canada Rail Link Study
Southern Yukon and Port of Skagway Analysis
Table of Contents Executive Summary 1 Business Case 5 Section 1: Skagway, Alaska 10 Section 2: Port of Skagway 11 Section 3: White Pass & Yukon Railroad 16 Section 4: Condition Assessment 18 Section 5: Import and Export 19 Section 6: Analysis & Operating Scenarios 23 Section 7: Infrastructure Improvements 26 Port of Skagway 26 White Pass & Yukon Railroad 40 Appendixes List 47 Glossary 48 Assumptions & References 49
Page 2 Alaska Canada Rail Link Study
Southern Yukon and Port of Skagway Analysis
The most important conclusion of this report is a solid business case exists to modernize the White Pass & Yukon Railroad (WP&YR) to standard gauge and renovate the port facilities in Skagway. It is recommend that the investment level in railroad and port facilities be the smallest capital undertaking technically and economically feasible. This level is described as “Built to Fit Need”. It is important to emphasize the report scenarios assume common ownership and operation of both port facilities and WP&YR. It is recommended that resumption of rail freight service to the Yukon be undertaken by conversion of the WP&YR to standard gauge with a capital investment of $180 million (Appendix 1). Concurrent with WP&YR modernization, it is recommended that investment to the level of $110 million be made in the Port of Skagway to provide year round intermodal and bulk cargo service to the Yukon and Alaska with a rate of return on capital employed on both ventures yielding 9%. The positive central conclusion of this report is revenues generated from exported coal and energy projects freight with rail barge service between Prince Rupert and Skagway will generate attractive returns on capital investments. In all cases the tourist excursion rail business is protected from modernization impacts. This report projects that a southern Yukon rail project is realistically feasible and removes the question of whether constructing the southern Yukon rail segment and rebuilding the port of Skagway is adequate to serve Alaska’s and Yukon’s present and future needs. Resumption of southern Yukon rail with the development of new port capacity in Skagway is recognized as a distinct component of the Alaska Canada Rail Link (ACRL) Feasibility Study. The recommencement of rail freight service to southern Yukon and the improvements to the Port of Skagway will provide the economics necessary for Yukon mining to compete with other Pacific Rim regions. Increasingly, the State of Alaska requires redundancy in its critical transportation facilities not only for transportation economics but also for self-sufficiency in the event of natural disasters, homeland security and national defense. Renewed standard gauge rail service to the Yukon providing the first critical rail link between the Port of Skagway and the Alaska Railroad will provide Alaska with mul