The airport professional's source for airport industry news, articles, events, and careers.
Issue link: http://airportbusiness.epubxp.com/i/643578
CONSTRUCTION FUNDING February/March 2016 airportbusiness 21 When millions of people are depending on the services of the public agency to meet their transportation needs, it is beneficial to have a private team partner with expertise managing and maximizing their valuable infrastructure. The benefits include expanding the financial capacity of public agencies with access to private capital, accelerating the delivery of costly infrastruc - ture projects and ultimately, better management of public assets. AIRPORT DBFOM PROJECTS San Juan's Luis Muñoz Marín International Airport in Puerto Rico was the first privately funded DBFOM project to be completed at an airport and is currently operating under a 40-year lease to the private firm responsible for the design and construction. The project is a long-term airport concession that grants a pri- vate concessionaire the right to operate, manage, maintain, develop and rehabilitate the airport. The airport has five terminals and two runways with a capacity of 5 to 6 million enplanements. The pub- lic-private partnership deal included an upfront fee of $615 million. Potential firms had to satisfy a list of criteria in order to be eligible to design and manage the project, including maintaining public use without discrimination, existing safety and security measures, and a limit on the percentage of airport fee increases. Although it is early in the lease period to judge the full success of the project, the improvements to the airport have been realized to the benefit of the public. On Jan. 18, 2013, the city of Chicago received FAA authori- ty to reinitiate the P3 procurement process for Chicago Midway Airport, issuing an RFQ the same day. This followed a previous failed attempt in 2008 when a deal with a consortium of inves- tors fell apart due to the financial crises of 2008-09. Despite these setbacks, the state of Illinois remains active in alternative project delivery and has several projects in procurement. John F. Kennedy Airport Terminal 4 is the only non-airline, pri- vately-operated terminal at JFK that was delivered by DBFOM. The 1.5 million-square-foot opened in 2001 following a 4-year, $1.4 billion redevelopment that transformed the former International Arrivals Building into a first-class, efficient terminal facility. The conces- sion is currently operating by JFKIAT, LLC under a 53-year lease. SUCCESSFUL PROJECT DELIVERY Because DBFOM is a major investment with both public and private capital, the team leading the project must be a good fit with the long term goals. It requires a firm with a proven track record of P3 and DBFOM project successes, enough employees to service the needs of the project without compromise, and leaders with polit- ical communication experience in the public sector. There must be a good working relationship between key parties and a clear contract outlining responsibilities and performance expectations. A company with a long history is essential in assuring continuity over the life cycle of the project maintenance term. HNTB's approach to design-build helps the firm understand and provide services that result in the most efficient construction methods. The firm's expertise in major national aviation infrastruc- ture projects spans many of the country's most important airports. A WIN-WIN STRUCTURE Privatization of airports is often controversial, but public private partnerships can allow for greater innovation in efficiency and travel experience. As many cities rely on tourism and travel, this can have a large impact on the financial health of the airport infrastructure. www.aviationpros.com/12168942