"County to negotiate with airline over cost overruns at Miami airport"

Thursday, December 9, 2004

County to negotiate with airline over cost overruns at airport
By Sherri C. Ranta
Florida Today


Interim Aviation Director Carlos Bonzon plans to head up renegotiations with
American Airlines to cover about $143 million in cost overruns for Miami
International's North Terminal construction.

A new agreement should be submitted to the county commission early next
year, he said. A 1995 agreement with Miami-Dade County authorized American
to manage construction of the North Terminal. 

"We wanted to make it clear to everyone from day one," Mr. Bonzon said this
week, "that we wanted a realistic cost for completion and to make provision
for contingencies" that occur in a project of this magnitude.

American officials said in the fall that they would ask for a minimum $66
million to cover overruns.

Renegotiations have been delayed to some extent by management changes in the
county's administration. Mr. Bonzon was put in charge of the airport's $4.8
billion capital-improvement project in October and said he wanted to propose
a new agreement this month. Mr. Bonzon since has been named interim aviation
director.

The county, he said, will seek to recover funds for mismanagement and
negligence either through amicable solutions, mediation or the courts.

Aviation officials want to resolve the matter as soon as possible so it will
not affect county bond ratings. County officials will meet next week in New
York with representatives of all three bond rating companies - Standard &
Poor's, Moody's and Fitch.

The airport has sold about $2 billion in bonds, Mr. Bonzon said, and expects
to sell another $300 million to $400 million in May.

"American is as eager as we are to finish this terminal at the lowest cost
possible," he said. "They run 200 flights a day. Their customers are being
inconvenienced."


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