Renovating Dallas/Fort Worth Airport’s 39-year-old terminals may cost as much as $220 million more than anticipated, airport board members were told at a meeting on Tuesday.
Additional asbestos abatement, rising building material and labor costs and code compliance issues is creating cost overruns on the $2.3 billion terminal redevelopment program, staff members said. DFW is in the middle of an eight-year project to overhaul Terminals A, B, C and E.
The construction project has also been impacted by airport and airline operational changes that have occurred. For example, DFW has added new carriers, such as JetBlue Airways and Spirit Airlines, which have been expanding in Terminal E, slowing the construction schedule for that terminal. And the uncertainty surrounding the merger between American Airlines and US Airways has affected the project.
“If you look at Terminal A, section A, it may look very different in the B or C section, as the airlines understand what their operational needs are,” said Perfecto Solis, DFW’s vice president of development and engineering. “We are trying to adjust and cope with that.”
Board members noted that the project’s $37 million contingency fund is inadequate to deal with the potential cost overruns and said more debt may need to be issued to cover the costs.
“We have to be very disciplined before we approve more debt,” said board member Jeff Wentworth. “We could easily be $300 to $400 million more when you look out another four or five years to complete the [terminal renovation program].”
The program, which started in 2010, was initially budgeted to cost $1.92 billion. However, the airport decided to increase the scope of the project, adding a new parking garage for Terminal A that grew the budget to $2.3 billion.
So far, the airport has $1.3 billion under contract for construction and professional services and has paid $711 million to date. Under the current program budget, the airport has $1.024 billion left to commit through 2018.
The board also asked for more details on all capital projects planned for the airport, such as roadway projects and additional gates at terminals.
“We’re going to look at this thing holistically, not just [the terminal renovation program], but all of the money we’re spending here at DFW Airport as it relates to these budgetary items,” said board member Bernice Washington. “The truth is we may have to let things go.”
Additionally, the airport’s concessions committee approved a plan to expand retail and concession offerings at Terminal D. The project, estimated to cost $1 million, will remove the moving walkways in the center of Terminal D and add retail space.
“By removing the sidewalks we will be able to create some café seating for our restaurants that are located there,” said Zenola Campbell, the airport’s vice president of concession, adding the project is expected to generate about $2 million in revenue within two years of being completed.