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Two airport projects coming in over budget

A financial review of a multi-billion dollar construction program at Atlanta Hartsfield-Jackson International (ATL) found that the project has exceeded initial cost estimates by more than $640 million with five of eight projects behind schedule.

The projects with the largest overruns, according to the Atlanta Journal-Constitution, are the addition of a fifth runway (completed in 2006), which cost $1.2 billion compared with a projection of $869 million in 1999; the construction of an international terminal (under construction), which projected at $1 billion in 2006 compared with $751 million in 1999; and a rental car facility (under construction) that was supposed to cost $275 million according to a 1999 estimate, but now projects at $495 million.

The audit, which was conducted by the Hartsfield-Jackson Development Program/City of Atlanta Auditor’s Office, used calculations through May 2006.

Ben DeCosta, airport general manager, told the Journal-Constitution the program is not over budget, saying the original numbers should not have been used as cost projections, but as preliminary estimates used to establish the share of construction costs allocated to airlines.

“They weren’t original cost estimates,” he told the paper. “There was no design at that point. They were just budget numbers.”

Escalating energy and labor costs have also ballooned the price of expanding Orange County’s John Wayne (SNA) from an initial projection of $435 million to $570 million.

“Across the country we’re seeing an increase in oil and raw material prices, as well as the cost of labor,” airport spokeswoman Jenny Wedge told the Los Angeles Times. “Had fuel costs not gone up we would have been pretty much right on target with our original estimates.”

The increased costs will not stop the project, which includes a multi-level terminal building that will add capacity for six additional passenger gates, six new security checkpoints, greater baggage screening capabilities and new parking and commuter facilities at the north and south ends of the extended terminal.

The costs, Wedge told the paper, will largely be covered by airport revenue that has exceeded projections, and from revenue derived from kiosks, eateries and parking structures, with the remainder coming from Federal Aviation Administration bonds and state grants.

SNA was built in 1990 and was designed at that time to handle 8.4 million annual passengers. Last year the airport accommodated more than 9.6 million travelers. The upgrade will allow it to expand to 10.8 million, the Times reported.

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