Dive Brief:
- The Los Angeles City Council this month approved $200 million in contingency funds to handle legal claims from the contractors building the Los Angeles International Airport people mover project. This ups the total project price tag to $2.9 billion.
- Los Angeles World Airports and the builders are currently negotiating a series of issues that have pushed back the completion date. The funds are expected to settle a series of disputed claims, including disagreements over the project’s timeline, technology access and compensation.
- The design-build team is made up of Irving, Texas-based Fluor, Atlanta-headquartered Balfour Beatty Infrastructure, Broomfield, Colorado-based Flatiron West, New York City-headquartered Dragados USA and HDR Engineering, located in Omaha, Nebraska. Together they’re known as LAX Integrated Express Solutions, or LINXS.
Dive Insight:
Los Angeles World Airports — the city agency that runs LAX — and the contractors are in ongoing discussions regarding the final completion date, as well as payment milestones and technical access issues. Fitch, the bond rating agency that’s accessing the project financials, said in March that though construction was nearly done as of February, a “strained relationship” between the owner and contractors is delaying work.
“The increased delays have been primarily driven by an ongoing information request related to LAWA IT network access requests (NARs), which is driving the critical path of the project. This information is required for LINXS to develop their test procedures and to install and configure network equipment and integration activities,” said Fitch in its March report.
Nonetheless, a May 2 Board of Airport Commissioners document said Los Angeles World Airports and LINXS have been negotiating in good faith over the past year in order to resolve the issues.
“Recent discussions have turned toward negotiating a potential global settlement for all outstanding relief event claims and an appropriate extension of time to complete the project,” the document reads.
It’s not yet clear what claims the $200 million would resolve, but in order to access the funds, the consortium must present change orders to Los Angeles World Airports administrators. Either Los Angeles World Airports CEO John Ackerman or the Board of Airport Commissioners can sign off on change orders under $40 million. For change orders worth more than that, only the board can approve, according to the document.
LAX makeover
The people mover is the centerpiece of Los Angeles World Airports’ ground access makeover, and marks its first public-private partnership, according to the project website. The electric train system features a 2.25-mile elevated guideway, and is expected to transport up to 30 million passengers each year between airport terminals.
Per the project website, the scope includes:
- Five stations that will connect the future Consolidated Rent-A-Car facility.
- Two intermodal transportation facilities.
- Expanded airport parking.
- Regional transit to the LAX Central Terminal Area.
In 2018 when the city council approved the project, it was originally supposed to cost $2.7 billion and open in 2023. Work is now on track to be completed by October 2025, according to Fitch, but no official open date has been announced yet.
