Dive Brief:

• Denver International Airport (DIA) officials announced they have selected Spain-based Ferrovial Airports to put together a public-private partnership (P3) plan for the overhaul of the 1.5-million-square-foot Jeppesen Terminal.
• The P3 will finance, design and perform the terminal renovations, as well as share future operation revenues with the airport.
• If DIA officials and Ferrovial agree on predevelopment terms, such as the scope of work, the P3 agreement will go before the Denver City Council for approval, after which Ferrovial and DIA will take six months to flesh out the deal.

Dive Insight

Ferrovial operates several U.K. airports, including London's Heathrow Airport, and beat out Westfield Corp., Manchester Airport Group and Plenary Group for the chance to negotiate a P3 with the Denver airport authority.

Airport and hotel worker union Unite Here has voiced objections to DIA's choice of Ferrovial because, according to union officials, two of the company's toll road projects in Texas and Indiana filed for bankruptcy protection, its new baggage-handling system at Heathrow does not function properly and, overall, the company is "anti-labor."

Construction is underway on the $4 billion LaGuardia Airport project in New York City, and Skanska USA, which leads the private component of that P3, said it is the company's largest project ever. Skanska-led LaGuardia Gateway Partners (LGP) is building a new terminal, central entrance hall and necessary ancillary infrastructure. It will also perform in an operational capacity through 2050 under an agreement with the Port Authority of New York and New Jersey.

As a demonstration of how extra costs can come as somewhat of a surprise, earlier this year, Port Authority officials announced that the LaGuardia terminal project's costs had increased from $4.2 billion to $5.3 billion because of development work not included in the original LGP P3 contract costs. Before that discovery, LaGuardia officials announced a month earlier that cost increases had pushed the final price tag from $3.6 billion to $4.2 billion. In that case, the original estimate did not include the airport's new central hall.