"Airlines watching O'Hare closer in light of overrun"

Sunday, October 15, 2006

Spending for O'Hare expansion plan soars
Officials cite delays caused by opponents, increased land costs
By Jon Hilkevitch
The Chicago (IL) Tribune


Chicago officials acknowledged publicly Friday for the first time that the
expansion of O'Hare International Airport is over budget and running well
behind schedule, blaming the setbacks largely on opponents of the project.

The initial phase to expand the airport is about $400 million over budget,
O'Hare officials told bond rating agencies last week. Delays, they said,
have pushed back the original 2013 completion date.

The officials attributed the overruns in the massive project to receiving
federal approval of the airport expansion 14 months later than the city
expected, costly litigation with O'Hare opponents that is stalling runway
work and higher than expected land-acquisition costs. Those costs,
originally projected at $800 million, have grown to $1.2 billion, officials
said.

Delays in purchasing homes and business properties, which the city blamed on
court fights with Elk Grove Village and Bensenville, accounted for about
$272 million of the overruns. In addition, administrative and engineering
costs exceeded original estimates by about $128 million, said Rosemarie
Andolino, executive director of the O'Hare Modernization Program.

The bad news was delivered in preparation for an O'Hare bond sale set for
next month to finance the construction of new runways.

The $400 million in higher costs does not include construction of a key
taxiway that the Federal Aviation Administration has made a condition for
one of the new runways to open. The so-called Lima Lima taxiway, needed for
both safety and airport efficiency, is projected to cost about $200 million,
according to city documents.

Despite the problems, the construction work awarded so far is running about
1 percent under engineering estimates, according to the O'Hare Modernization
Program. The savings total about $30 million.

However, most of the work has involved moving dirt and other preparations.
Contracts for concrete work on runways, which carry significantly higher
materials costs, have not been awarded yet on any portion of the $15 billion
project, which would result in six parallel runways and two diagonal runways
if completed.

The opening of the first new runway, on the far north end of the airport,
and the extension of an existing runway are now being pushed back to
November 2008, and perhaps later, from an original opening slated in 2007,
Andolino said. She said unusually wet weather this year added to delays,
which began last year when the original bids for the new runway came in
higher than internal estimates.

"I don't know what this winter will bring. We will do whatever we can to
keep to the 2008 schedule,'' Andolino said.

The second new runway, originally planned for completion in 2009, is now on
the books to open in November 2011, Andolino said. But that's only if a
federal court decides in Chicago's favor in a lawsuit over whether the city
can move about 1,600 graves at St. Johannes Cemetery, which borders the
existing airport.

"The litigation over the cemetery is a big unknown,'' Andolino said. "It's
premature at this moment to say when the entire project will be completed. I
don't know how Phase 2 will roll out.''

The city has not yet sought federal funding or airline financial commitments
to pay for the second phase of O'Hare expansion, which is the part of the
project when most of the increase in airport capacity and reduction in
flight delays would occur.

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