"North Terminal blues at MIA"

Sunday, May 21, 2006

Opinion
North Terminal blues at MIA
OUR OPINION: PUT THE HAMMER DOWN ON DELAYS, COST OVERRUNS
The Miami (FL) Herald


Building the new North Terminal at Miami International Airport has gone from
dream project to nightmare in 11 years of errors and snafus -- and last week
the nightmare got worse. Bids for a key construction phase of the project
came in at more than triple the $153.8 million that county planners had
expected. Making matters worse, only one company submitted a bid on four of
the project's five parts. If this is a preview of things to come with three
other big projects necessary to complete the massive terminal, MIA is in big
trouble.

Cost overruns are nothing new for the North Terminal project. What is
different this time is the scale of the miscalculation, which, at $500
million, would push the project's cost to nearly $1 billion over budget. The
project already is five years behind schedule.

This puts the county in an untenable position, a situation from which it can
-- no, it must -- extract itself by putting the hammer down in a way that
thus far hasn't been obvious. The new mile-long linear terminal simply must
be built. It is key to a modernization plan to expand airport capacity and
increase efficiency. The big question, though, is how to move forward.
Aviation Director José Abreu promises a forensic-like review of the North
Terminal's costs and assumptions. That, at least, is moving in the right
direction.

Aviation officials should consider every possible option both to reduce
costs and increase revenues for the project. They should rethink the size
and scale of the project, rebid the contracts, negotiate better prices and,
most important, reevaluate the county's own involvement in the project. They
should do whatever it takes to rein in costs and increase competition among
contractors.

As they do this, county planners should make sure that the essential
operational components of the new terminal are maintained and that the
overall costs do not add to airport landing fees, which, because of the
project are projected to be among the highest in the country. Running afoul
of either would put at risk the completed terminal's ability to deliver as
promised. Nevertheless, the county should eliminate aesthetic and
nonessential features.

The greatest effort should focus on changing the perception that the county
itself and how it does business is at the heart of the problem. One
contractor who admittedly has claims against the county bluntly told a Miami
Herald reporter: ''The owner [county] inspires no confidence. . . . If you
had a different cast of players then maybe people would be interested.''
That may be true, or it may be gamesmanship -- but it is a common perception
that must be changed.

In a telephone interview, County Manager George Burgess acknowledged that
the county has had problems paying contractors on time, but he said the
county now has new systems and procedures in place and is chipping away at
the problems. ''We are making real progress in turning things around,'' Mr.
Burgess said.

Notwithstanding the county's own miscues, there are other reasons for
escalating costs. The cost of material and supplies -- made worse by
increased demand triggered by hurricanes and Greater Miami's building boom
-- have skyrocketed in recent years. Delays have rendered early estimates
meaningless. Moreover, the concept of the project itself -- building a new
terminal while operating an existing terminal -- is proving to be more
complicated, difficult and time consuming than anticipated.

Despite the problems, completing the project would be an invaluable
investment in the long-term health of the airport and economy, Mr. Burgess
said. He's hoping today's nightmare will be remembered eventually as merely
a fleeting, bad dream.

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