"Will LAX be left holding bag?"

Tuesday, April 3, 2007

Will LAX be left holding bag? 
The Transportation Security Administration had promised to pay the lion's
share of the cost of a new baggage handling facility. That was in 2003 and
times have changed.
By Doug Irving 
The Torrance (CA) Daily Breeze


An unresolved dispute with the federal government has left Los Angeles
airports staring at potentially hundreds of millions of dollars of
unexpected costs, congressional investigators indicated in a report issued
Monday.

At issue is a project worth nearly $900 million that will overhaul the
baggage-screening systems at Los Angeles International and LA/Ontario
International airports. The main question is how much of the money will come
from the Transportation Security Administration, and how much will come from
the airports themselves. 
 
The TSA agreed in 2003 to pay three-quarters of what it thought the project
would cost -- but that was before those costs began to skyrocket. Its pledge
now amounts to less than a third of the project's total price tag, but the
agency has said it has no obligation to make up the difference.

The General Accountability Office agreed in the report it released Monday.
It concluded that the Los Angeles agency that runs both airports went to the
TSA with premature plans in 2003, yielding an estimate that was nowhere near
the true costs.

"We believe very strongly that the (agreement) should be adjusted," said
Samson Mengistu, the acting executive director of Los Angeles airports.
"This is by no means the final word."

The airports have already begun work on their new baggage systems, which
will move the huge screening machines that currently clutter the terminals
out of sight and out of the way. That should allow fewer federal screeners
to scan more bags in less time, federal analysts have written in earlier
reports.

2003 pacts cited in problems 

The TSA signed agreements with LAX, Ontario and a handful of other U.S.
airports in 2003, pledging to pay up to 75 percent of the cost of their
baggage-system upgrades. At the time, the two Los Angeles airports figured
the project would cost $341 million in all, and the TSA agreed to reimburse
about $256 million of that.

The city's airport agency was relying on a preliminary plan developed by the
TSA's chosen contractor, Boeing, to come up with that estimate.
Significantly, that plan assumed existing buildings at the airports could
house the new baggage systems.

That wasn't the case. By 2005, the airport agency had realized the original
plans wouldn't work in five of the nine terminals at LAX, and in both of the
terminals in Ontario, according to the GAO report.

Its revised plans included entirely new buildings and, in one case, a
screening room dug underneath an existing LAX terminal. It went back to the
TSA with a new estimate: $485 million in all.

In a letter to the GAO, airport officials said they were forced to base
their original estimate on preliminary plans because of the TSA's tight
deadline. They noted that those plans came from the TSA's contractor, not
their own, and said they had been assured that the agency would amend its
agreement if additional costs came up.

Report clears TSA of obligations

But the GAO report found that, under the terms of that agreement, the TSA
has no obligation to reimburse the city for "any additional costs beyond
those agreed to ..."

"TSA officials," it added, "have stated that the agency does not have plans
for such reimbursement."

The cost of the baggage-system project has only continued to rise since
2005; a report to Los Angeles airport commissioners on Monday pegged the
latest estimate at $896 million. The TSA's pledge now amounts to less than a
third of the overall cost.

Mengistu said the overhaul of the baggage system is a "critical
safety-enhancing project. ... We are committed to seeing it implemented."

"We're not prepared to concede that we're not going to get an additional
commitment from the TSA," he said.

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