"MIA cost overruns growing"

Wednesday, February 9, 2005

Airport cost overruns growing
The Miami (FL) Herald


Total cost overruns for the Miami International Airport expansion project
are now likely to be $256 million, Miami-Dade County's interim aviation
director says -- a sum that will force him to seek additional money from
American Airlines and the County Commission. 

The $4.8 billion expansion plan has been plagued by delays and cost overruns
for the past decade, and was a factor in the ouster of the last aviation
director. 

Now, interim Director Carlos Bonzon says Miami-Dade County has to find tens
of millions of dollars more to complete the work and cover legal expenses. 

"We have no choice," Bonzon said Tuesday. 

The cost overruns have been a flash point since last year, when the
additional expense at the North Terminal being constructed by a contractor
chosen by American Airlines was pegged at $66 million. In December, Bonzon
said he estimated the overrun cost would nearly double, without providing
specifics. 

He said Tuesday that about $35 million would be needed for the South
Terminal, with the rest of the $256 million going to the North Terminal. 

Bonzon's estimated breakdown: $70 million for the installation of federally
mandated in-line baggage systems for bomb detection at both terminals; $30
million for increased costs for plywood, concrete and steel, and the
remaining $156 million for legal settlements, correction of design flaws and
added costs because of delays. 

The county share of the cost, he said, would be repaid by raising either
landing, terminal or counter fees at MIA. 

American Airlines, the airport's dominant carrier and one of the county's
largest employers, says it needs the new North Terminal for speeded up
connections and quicker baggage transfers in order to compete with other
international airports. 

Bonzon said Tuesday that the newest estimate of overruns could set back
construction of the North Terminal as much as four more months, meaning it's
almost two years behind its scheduled completion date of November 2007. 

He said he will ask American Airlines to pay some of the costs at the North
Terminal, but will likely have to seek some money from the county
commission. 

"What we have to do is once we finalize negotiations with American Airlines
and get the final number, anything over $1.515 billion [for the project's
total cost] requires an amendment that must be approved by the commission." 

Miami-Dade Mayor Carlos Alvarez, who spent part of Tuesday doing a
walk-through of the airport with County Manager George Burgess and Bonzon,
said it was "too premature to talk figures," but acknowledged he and Burgess
had been discussing airport problems for the past few weeks. 

The new numbers came as a shock to Miami-Dade Commission Chairman Joe
Martinez. "We can't raise user fees. We're going to price ourselves out of
the market," he said. 

American spokeswoman Martha Pantin on Tuesday would not rule out helping
with the costs, something Senior Vice President Peter Dolara was adamantly
opposed to last summer when the overruns first came to public light. 

"We're working very closely with Dr. Bonzon and Aviation to move this
project forward as partners and to get it built as quickly as possible,"
Pantin said. 

Burgess could not be reached. 

American officials say the airline will end up paying for as much as 60
percent of the airport's total expansion because of its presence at MIA.
Aircraft weight, total passenger seats and counter space determine who pays
the most gate and landing fees. 

A simmering feud involving American, former Aviation Director Angela Gittens
and Burgess reached its apex in October when Gittens was stripped of
oversight powers on the same day American said it wanted to pull out of
managing the construction. 

Gittens resigned under pressure in November and was replaced by Bonzon while
the county seeks a permanent replacement. American almost immediately backed
off its stance of not negotiating over the cost overruns.


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