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Front Page » Top Stories » County Eyes Options For Dealing With Airport Cost Overruns

County Eyes Options For Dealing With Airport Cost Overruns

Written by on February 17, 2005

By Sherri C. Ranta
All options are on the table to solve problems related to an estimated $256 million in cost overruns at the American Airlines-managed North Terminal construction project at Miami International Airport.

"In no one’s view has any option been taken off the table. Clearly, there have been problems in the way that project was managed," Miami-Dade County Manager George Burgess said this week in discussing the future of the $1.5 billion terminal project. He had few answers to myriad questions about the project such as who will pay for current cost overruns, would American remain in charge of the project and would the airline be barred from asking for more money after the current crisis is resolved.

"Those are the precise kinds of issues and questions that we need to deal with the airline directly on and have some resolution," Mr. Burgess said. "American recognizes the issues as much as anyone. They realize the importance of having a solution and the best approach to getting this project done as soon as possible."

Mr. Burgess said resolution of the issues – which eventually would go to the Miami-Dade Board of County Commissioners for approval and additional funding – should be completed "very soon."

Mr. Burgess said he and Carlos Bonzon, the county’s interim aviation director, are working with American officials to analyze rising costs. He said he isn’t surprised about them.

American said last year that there would be at least $66 million in overruns. "At the time, I didn’t believe that $66 million was the end of it," Mr. Burgess said.

County aviation officials said in published reports last week that they estimate $256 million in overruns at the North Terminal. The total includes $70 million for an inline baggage system required by the federal government, $30 million in cost increases for construction materials and $156 million for legal settlements, to fix design flaws and to cover delays.

In related work, American Airlines continues a move to consolidate all remaining work at the North Terminal into one large contract for structural and interior work and a smaller contract for outside apron work.

Miami-Dade North Terminal Development Program Chief Felix Pereira said American opened bids Feb. 11 for the apron work, which carries a $25 million budget. Bidders include Marks Brothers of Medley, $21.1 million; APAC Southeast Inc. of Medley, $28.2 million; and Gilbert Southern of Sunrise, $30.7 million.

The work entails demolishing concourses B and C – built in the 1980s and 1952, respectively – and the existing American Airlines baggage shed and rebuilding of the apron.

"When the concourses come down," Mr. Pereira said, "that will give the North Terminal its linear configuration for 48 gates." American hopes to issue a contract by Friday, he said, and isn’t required to go to the county commission as long as the bid is under budget.

American and aviation officials continue to evaluate a lone $500.8 million bid submitted early this month by Parsons Transportation and Odebrecht Construction to complete the remaining structural and interior work in the North Terminal.

The bid is far more than the $388.7 million budget approved by the county and American. Rebidding or subdividing the work is being considered.

The joint bidders, contractors on the airport’s South Terminal, are experienced companies, said John Cosper, deputy aviation director. "The bid was just way out of the ballpark," he said last week. "I was surprised it was that high."