4 P3 groups bid on Kansas City International Airport terminal

Dive Brief:

Four development and construction teams have submitted proposals to design, build and finance a new $1 billion, 750,000-square-foot terminal at Kansas City (MO) International (KCI) airport, according to The Kansas City Star.
The consortia, which include Burns & McDonnell, AECOM, Turner Construction, Edgemoor Infrastructure & Real Estate — a subsidiary of Clark Construction — BlueScope Construction and JLL, according to The Kansas City Business Journal, must present their financing plans by Aug. 10.
Once the airport selects a winning team, a decision that is expected by Aug. 14, the plan must clear the Kansas City Council as well as a public vote on Nov. 7.

Dive Insight:

By all accounts, the Kansas City Airport is in need of an overhaul. The three-terminal design, built in 1972, reportedly creates logjams at ticket counters and is not as welcoming or secure as more modern airports. One of the big barriers to redeveloping the facility into one with a single terminal, however, has been local taxpayer sentiment. Residents have previously pushed back against any plan that could leave them responsible for long-term financial support of the new facility if airport revenue can't cover the costs.

Kansas City–based engineering firm Burns & McDonnell likely had this obstacle in mind in May, when it sent an unsolicited bid to the Kansas City Council that included a private financing option transferring risk away from taxpayers. But it was only a few weeks later that AECOM sent a letter to city officials expressing an interest in spearheading any future public-private partnership (P3) at KCI as well. Despite some negative reactions among council members around privatization and claims that the city could finance the project at lower interest rates, officials subsequently opened the project for public bid.

P3s aren't overtaking traditional delivery methods for airports and other large public projects, but they're certainty making inroads. For example, the Port Authority of New York and New Jersey has embraced the P3 structure and is using it on the $4 billion terminal project at LaGuardia Airport in Queens, New York. New York Gov. Andrew Cuomo has also hinted that a future $10 billion renovation at John F. Kennedy Airport, also in Queens, will be carried out at least in part using a P3.

However, a P3 doesn't guarantee that the project will be a success. When tolls failed to meet expectations along a 41-mile portion of Texas State Highway 130, the P3 entity under contract to maintain and operate it went bankrupt and another group had to take it over. Indiana's Finance Authority had to take control of an in-progress P3 highway project after its private-sector partner allegedly failed to make timely payments to subcontractors, fell behind schedule and left the project without enough funds in place to complete the work.