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Front Page » Top Stories » County To Negotiate With Airline Over Cost Overruns At Airport

County To Negotiate With Airline Over Cost Overruns At Airport

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Written by on December 9, 2004

By Sherri C. Ranta
Interim Aviation Director Carlos Bonzon plans to head up renegotiations with American Airlines to cover about $143 million in cost overruns for Miami International’s North Terminal construction.

A new agreement should be submitted to the county commission early next year, he said. A 1995 agreement with Miami-Dade County authorized American to manage construction of the North Terminal.

"We wanted to make it clear to everyone from day one," Mr. Bonzon said this week, "that we wanted a realistic cost for completion and to make provision for contingencies" that occur in a project of this magnitude.

American officials said in the fall that they would ask for a minimum $66 million to cover overruns.

Renegotiations have been delayed to some extent by management changes in the county’s administration. Mr. Bonzon was put in charge of the airport’s $4.8 billion capital-improvement project in October and said he wanted to propose a new agreement this month. Mr. Bonzon since has been named interim aviation director.

The county, he said, will seek to recover funds for mismanagement and negligence either through amicable solutions, mediation or the courts.

Aviation officials want to resolve the matter as soon as possible so it will not affect county bond ratings. County officials will meet next week in New York with representatives of all three bond rating companies – Standard & Poor’s, Moody’s and Fitch.

The airport has sold about $2 billion in bonds, Mr. Bonzon said, and expects to sell another $300 million to $400 million in May.

"American is as eager as we are to finish this terminal at the lowest cost possible," he said. "They run 200 flights a day. Their customers are being inconvenienced."

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