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Frank Turpin: determined driver.

SINCE FIRST UNDER STATE OWNERSHIP, the reins of Alaska Railroad Corp. have been in Frank Turpin's hands. The firm's president and chief executive officer holds a master's degree in chemical engineering from Virginia Polytechnic Institute. A 37-year career with Exxon culminated in his appointment as president of Alyeska Pipeline Service Co. in 1978. In 1985, Turpin retired from Exxon to assume charge of the newly purchased Alaska Railroad.

ABM: What milestones of the last five years are you most happy about?

Turpin: I think the improvements we've been able to make to the physical plant have just been a terrific success. We've invested slightly over $70 million. Prior to the state acquiring the railroad, it was capital-starved. It really hadn't had enough money re-invested to keep it up to an adequate level.

We've been able to buy new equipment, quite a lot of new equipment, both for freight and passengers. So much the average person doesn't see: the roadbed and the amount of work we've been able to do to improve the track. The old timers say it has never been better.

ABM: Have these improvements been made to make the railroad more profitable and useful, or chiefly to give the line a better resale position?

Turpin: We did it for the former reason. However, it certainly makes it more salable. And the fact that we've been able to operate in the black also suddenly makes us attractive, or at least an investment that a lot of organizations are becoming interested in.

After every annual report I get calls from several people who want to know if we're still interested in selling. And some of these are very serious and very good.

ABM: Were there any particular surprises in the first five years?

Turpin: Well, the economy taking a nose-dive the year after we moved in was not exactly predicted. We had a very grand 1985. I think it was about March 1986 we realized the bottom was dropping out.

ABM: You caught a lot of flak from the trucking industry after the state takeover Has that issue been resolved?

Turpin: That was a group of, I guess we say, independent truckers. They weren't companies like Lynden, they actually ship with us. These were people who owned their own rigs. They cried that our rates were predatory. We had people look at that (including the Interstate Commerce Commission) and they found that we were in very fair condition, it was fair competition. As a result of that the truckers began hauling double, that put them certainly closer to our rates. Our percentage of the market has pretty well stabilized, something like 40 percent.

But the independent truckers, I guess as a last gasp, about 1988 put together a petition and managed to get enough signatures on it so it will come before the public to vote on in the primary election this year. And the initiative would severely limit the railroad's ability to compete with anyone.

ABM: What are your feelings about that?

Turpin: Well, I think it's so much rubbish. I don't think there's anything we're doing that's unfair competition. If that initiative passed, the railroad would practically fold up.

ABM: How serious a threat is the initiative?

Turpin: I think if people understand what they're voting for, no one would vote for it unless they wanted to get rid of the railroad. They got their signatures by calling it the "railroad petition," so people thought the railroad was sponsoring it, so sure, they signed it.

ABM: Is there a strategy for dealing with the initiative?

Turpin: We're developing it now. I don't think it's timely to come out at this time. But our unions have come to us and told us they want to help.

ABM: Do you ever come under pressure from people who want you to take a higher Profile or more initiative in pushing new economic development projects?

Turpin: Most of the people who are doing that have never asked us to take a higher profile. More often they say you're supposed to be fostering economic development, therefore you shall operate at a loss so we can make a profit. I hear that all the time, that's right.

ABM: There is always talk about expansion of the existing line. With estimates of $1 million to $8 million per mile for constructing new line, is this really viable?

Turpin: The simplest expansion that I think would probably show the quickest payout (and the quickest payout may be 15 years before it begins to really show a positive impact) would be to extend the present system to the Yukon River from Nenana. I think we probably could reduce the cost of living in the Yukon villages by having just a little more efficient transportation system. You could also go the other way; there are products on the Yukon that you could (bring out).

The other one that I think has very high potential would be to run a freestanding road from north of Red Dog Mine and take it to an ice-free port. The closest one is south of Nome.

ABM: There's nothing in your charter that prevents expansion.

Turpin: The trouble is we're struggling to improve the quality of the existing system. There's no way that our operation could do that. We just don't have the viability to produce that much capital. So any investment that's made would have to come from the state. It's an infrastructure, just like the state would buy a highway somewhere. I can't get the legislature interested in it at all. To me, it would be a great investment for the Permanent Fund.

ABM: Could you expand on this?

Turpin: If the state is not going to use it, then I don't think they have any business being in the railroad. No more than they have being in the dairy business or all these other damn things. We've got enough things for the state to do.

ABM: A nd by using it, you mean aggressively use it as a vehicle for development?

Turpin: Yeah, put some money into the expansion of it. Hell, we pour billions of dollars into a permanent fund, which maybe is great. But to me, it's a much more solid investment for this state to build the infrastructure up than it is to put cash in a bank. That means jobs and that means security for the future.
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Title Annotation:Alaska Railroad Corp. president Frank Turpin
Author:Richardson, Jeffrey
Publication:Alaska Business Monthly
Article Type:interview
Date:May 1, 1990
Previous Article:Harnessing Alaska's iron horse.
Next Article:Small business combat.

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