The Yukon government will provide up-front financing for a $5 million US study into the feasibility of a railway through the North, it was announced Monday.

Premier Dennis Fentie and Alaskan Gov. Frank Murkowski unveiled the initiative during a conference call hosted by the two government leaders and several other elected officials on both sides of the border.

'I am very pleased, the Yukon government is pleased to announce another significant project involving the close collaboration of the State of Alaska and the Yukon Territory,' said Fentie.

'In that regard, today we are agreeing to a memorandum of understanding that will see us commence a feasibility study on the proposed Canada-Alaska link.

'I think it is of great significance that both the state and the Yukon have been able to move this project ahead as we have while we work on our respective federal governments and other jurisdictions to come on board.'

Murkowski signed the MOU in Juneau. He will be in Whitehorse in the near future when Fentie will sign off on behalf of the territory.

Under the agreement, a joint advisory committee of four officials from each of Alaska and the Yukon will be formed to oversee the work of a technical committee whose make-up has yet to be determined.

Fentie said the deadline for completion of the feasibility study is June 30, 2006.

Of the four Yukon positions on the advisory committee, up to two will be made available for representations from the first nations, the premier explained.

He said the Yukon is providing the commitment to match Alaska's contribution. However, he expects the territory to be reimbursed by the federal government based on previous commitments from Ottawa to back an examination of a railway proposal.

The MOU, said the premier, is designed specifically to allow for future participation by Canada and B.C.

Fentie and Murkowski, along with Economic Development Minister Jim Kenyon and several senators from the state, took turns indicating what they believe are mammoth opportunities that a railway would create.

The potential, they emphasized, goes well beyond a transportation system to spark the development and export of resources in the Yukon and Alaska.

A new railway linking Alaska and the Yukon with Fort Nelson or Dease Lake, B.C., could foster port cities in Alaska as new and cheaper links between Asia and North America, as the shipping time to standard ports like Vancouver and Seattle would be reduced by five days, it was pointed out.

Imagine, it was suggested, a railway linking Anchorage and Whitehorse with Halifax, the North to the southern provinces and states.

A railway would mean a significant number of jobs created on both sides of the border, insisted the elected representatives.

Murkowski said the feasibility study will also examine how the railway may fit into a corridor along with a proposed natural gas pipeline and a fibre optic cable, to meld together the synergy of all three projects.

'We have an opportunity that is not going to come again,' he said, noting a corridor would minimize the footprint on the landscape.

The state's Alaska Railroad company, the governor pointed out, is already moving ahead with plans to extend the line to Fort Greely near Tok, not far from the Yukon-Alaska border.

It's expected the cost will be in the billions of dollars, it was suggested.

Fentie said the study will focus on the feasibility of such a project and the route location work that can all be made available to the federal government when the time comes.

A handful of years ago, the U.S. government approved legislation put forward by Murkowski calling for a joint international commission of some 24 members to examine the railway proposal. The legislation included a $6-million US funding commitment.

While U.S. and Canadian officials have raised the matter numerous times, Canada has yet to formally agree to the international commission, and has yet to put any money on the table.

Murkowski also confirmed the Canadian commitment to a railway study, as he witnessed when he and the premier met with Prime Minister Paul Martin earlier this spring.

Acting grand chief Eric Morris of the Council of Yukon First Nations was unavailable to comment this morning on the proposal that Yukon first nations have the option to fill two of the four Yukon seats on the advisory committee.

Roberta Yeomans, the grand chief's executive assistant, said Morris is busy with the council's regular leadership meeting.

The railway feasibility study, however, is on the agenda for discussion Thursday, and Morris will be willing to make comments on the proposal following that,Yeomans said.