By Beth Bily
Available infrastructure funding from the state for the Essar Steel Minnesota project might be made permanently unavailable if construction isn’t proceeding by the time grant money deadlines run out later this year.
At last week’s Itasca County Regional Rail Authority meeting, county commissioners were informed that deadlines for the use of state monies were quickly approaching.
According to information provided by Itasca County, there was about $66 million authorized by the state to Itasca County, the rail authority and Nashwauk Public Utilities for infrastructure to support the mining development at the former Butler site near Nashwauk. Infrastructure work included roadway improvements, railroad track, electrical substations, natural gas studies, sanitary sewer and potable water extensions.
As of Dec. 31, 2013 about $62.65 million had been spent and another $150,000 was encumbered but not yet paid. A roadway project, with an estimated cost of $250,000 is scheduled, but not yet started. If state dollars go back, Essar could have to pay the tab for any remaining infrastructure costs.
Dave McKenzie of SEH told commissioners last week that there’s a little more than $2 million in state funding left. Access to those state funds, however, ends on June 30 unless the state decides to extend availability. There already have been four extensions and there is concern that if the company isn’t making construction progress, another extension will be a tough sell to the state.
Currently construction on the project has all but halted, commissioners were told last week. The company has yet to secure financing for the $1.7 billion project and contractors have left the site due to non-payment.
While Kevin Kangas, Essar’s director of HSE, government and public affairs, wasn’t present at last week’s rail authority meeting, he did send correspondence, which was read into record by County Administrator Trish Klein.
Klein told commissioners that the company reports being 80 percent through the financing process and expects “100 percent completion soon.” She added, however, that there is no clear date established for financing completion.
In other business, the commissioners approved the minutes of the Jan. 14 ICRRA meeting.