Gary/Chicago International Airport is experiencing large cost overruns on the runway expansion project, resulting primarily from the railroads' refusal to agree to early plans to reroute their lines.
If blame has to be assessed, that's the primary target. But now the task is completing the project, so everyone involved -- including the Federal Aviation Administration -- will need to cough up more money.
Today, the airport authority is expected to vote on a contract that would let it use a $30 million grant from the Northwest Indiana Regional Development Authority. The RDA approved the grant 17 months ago, but Airport Authority President Nathaniel Williams said his board hasn't seen it yet.
This is just one sign of cash-flow problems with the airport expansion.
The original cost was estimated at $90 million in 2006, but in March airport officials put the new cost estimate at $166 million.
At an airport, the jets and not the costs are supposed to soar. But other costs have popped up since the project began, including obvious needs like moving utility lines that should have been noticed when the original estimate was made.
The $63,266,230 in cost overruns has boosted the total cost by more than 40 percent. The FAA is being asked to kick in $16 million to reduce the borrowing necessary to pay those additional costs.
Airport officials said in January 2006, when the FAA pledged $57.8 million toward the project, that the project could be completed by 2010. Early last year, the deadline was set for December 2013.
A major obstacle to the runway expansion was moving the railroad tracks to allow the existing 7,000-foot runway to be extended to 8,900 feet. When negotiations with the railroads were at a standstill in 2010, the airport authority hired Los Angeles-based Aecom to manage the project. That $2.8 million fee wasn't anticipated in the original cost estimate, either.
The airport expansion must proceed quickly. The airport holds significant long-term economic development potential that would benefit the entire region.
Let this be a lesson for future airport projects, though. From now on, get a tough negotiator involved on the airport's behalf from the very beginning to manage the project so it can be done on time and on budget.
Please Wait…