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"Tracking airport terminal woes"
Monday, July 11, 2005
Tracking airport terminal woes
Price tag in Indy soared to $1 billion
By Theodore Kim
The Indianapolis (IN) Star
John Kish remembers skimming the latest engineering report and cost estimate
-- $808 million -- for the new terminal at Indianapolis International
Airport on Sept. 7, 2001.
The9/11 terrorist attacks four days later would render much of the report
Within months, airport officials faced new security and construction costs,
the principal forces that have added more than $250 million to the project's
price tag, raising it to $1.07 billion.
Terminal construction is to begin this month. It will be among the first
terminals in the nation to be built since the 2001 terrorist attacks,
aviation experts said.
The stakes are enormous for Central Indiana and area leaders, who are aiming
to build a symbol of regional pride and a functional gateway with room to
Airlines, which pay for most of the project through landing and space rental
fees, are the most directly affected. But high airline fees could reduce the
airport's chances of attracting new flights and carriers and, in the worst
case, raise airfares and parking charges for consumers.
The story of how an $800 million effort swelled to more than $1 billion is
many-sided, driven by erroneous projections, an airline industry in turmoil
and soaring prices for construction materials, according to budget documents
and interviews with project officials, consultants and industry experts
But the terrorist attacks were the main force. The aftermath required
airport officials to overhaul the terminal's interior, earmark millions in
funding for explosives-screening and other security gear and delay the
opening for 18 months, to fall 2008.
In March 2000, the plans called for construction of a 340-foot control
tower, to be among the world's tallest, and an interchange on Interstate 70
that would serve as the airport's new public entrance.
The centerpiece, however, was a new terminal with 40 main gates and enough
landing capacity to rival Chicago's Midway Airport.
But the terrorist attacks required a redesign.
"Terminals since 9/11 have been impacted more than any other part of airport
construction," said Stephen Van Beek, a policy expert at Airports Council
International in Washington, an advocacy group.
Architects devoted 41,000 square feet to two separate security checkpoints,
more than doubling the area originally set aside. Planners supplied five
times the amount of office space initially intended to hold security
personnel. More cameras were added.
And because nonpassengers were forbidden beyond checkpoints, designers
fashioned a new circular plaza outside security where those people could
congregate. The main concessions area was moved outside the checkpoints, as
Construction workers, meanwhile, were required to be escorted by security
guards in some areas -- another added cost.
Most significantly, officials set aside about $17 million to install a
below-ground system of sensing equipment and conveyor belts that would
screen every checked bag for explosives as part of a federal directive
issued in 2003.
Issues unrelated to security also emerged.
For example, engineers had earmarked about $20 million for the Indiana
Department of Transportation to build a new interchange from I-70 to the
terminal, part of a larger highway project that also included other
But the share paid by the terminal project rose to about $40 million after
planners discovered that the concrete bridge ramps leading to the terminal
needed to be much longer than first thought.
The airlines became nervous about the terminal project's cost as they
grappled with falling revenues, smaller passenger loads and an industry in
They began pressuring airport officials and Mayor Bart Peterson to mothball
the expansion for a year or longer. In December 2003, the terminal's opening
was delayed from July 2007 to fall 2008.
Last summer the Indianapolis project's price tag was pegged at $975 million.
Much of the added expenses came from security, inflation and the unforeseen
cost of the bridge ramps. Projections for the baggage screening system also
rose to $36 million.
Kish and other officials have brushed aside the concerns. Despite inflation
and the security enhancements, airlines' future cost per passenger is
projected to be around $10.50 after the terminal opens. Growth in airport
traffic, meanwhile, has recovered since 2001 and now is climbing at a record
Airport officials hope to lower the airlines' costs by building a larger,
7,100-space parking garage. The $112 million garage is about double the
original cost. But the aim is to generate more parking revenue by
encouraging more motorists to choose the garage over less-expensive surface
Challenges remain -- most notably the skyrocketing cost of steel, fuel and
Construction prices have risen 8 percent to 10 percent annually in recent
years, industry estimates show. Those expenses have consumed much of the
project's contingency fund, Kish said.
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