Delayed Terminal to Get an Infusion
By Ina Paiva Cordle, The Miami Herald
May 16–The Miami-Dade Airport and Tourism Committee on Thursday unanimously approved contract increases of $43.5 million for Miami International Airport’s North Terminal baggage handling system and $20.8 million for the automated people mover.
Years of delays had piled on charges. Both projects had been slated for completion in 2004. The people mover, contracted by Sumitomo of America, will be ready in 2009 and the baggage handling system, under Siemens Energy & Automation, in 2011.
Alarming some commissioners, the delays resulted in the expiration of warranties on the people mover. The system’s 20 cars, expected to arrive at the Port of Miami in two weeks, must be delivered in working condition. But Sumitomo will not extend its warranties.
“Our only recourse . . . if it doesn’t work, [is to] pay them more money to replace something we never used,” said Commissioner Sally Heyman.
Commissioner Carlos Gimenez likened the situation to buying a car and letting it sit in your driveway for four years. The warranty would expire, whether you drove it or not.
“The manufacturer did what they were supposed to do. They built the cars,” Gimenez said. “It was the airport, American Airlines and their missed timetables that caused the problem. I can’t blame Sumitomo — they fulfilled their obligation. They are not Santa Claus. They can’t say that because you guys had bad luck we will extend our warranty to you.”
The contracts were among 90 assumed by the airport when it took over from American Airlines as construction manager of the North Terminal in 2005.
The increases, which still must be approved by the full County Commission, are within the nearly $1 billion tacked onto the airport’s capital improvement program budget — which now stands at $6.2 billion — in late 2006.
American Airlines spokeswoman Martha Pantin said the airline “fully supports the action taken today in approving two contracts vital to the completion of the North Terminal, a facility critical to American’s continued growth in Miami.”
The contracts underscore the continuing escalation in construction expenses at MIA, where the overall airport improvement program’s costs rose by nearly $1 billion in late 2006 to $6.2 billion. The program’s debt is financed by bonds, and repaid through landing fees and other charges paid by airlines and other airport tenants.
North Terminal’s price and scope have escalated from $975 million at its inception in 1995 to $2.853 billion today. Pushed back again and again, its completion is set for June 2011.
Delays — due to project mismanagement, an incomplete design and a lack of coordination among projects — have led to higher costs for materials, labor and maintenance.
Siemens’ baggage handling system contract was first approved in May 2002, for $104.7 million. The latest change order will bring it to $156.7 million, up 49.7 percent from its original cost. North Terminal construction delays have extended its completion seven years, from 2004 to March 31, 2011.
Sumitomo’s automated people mover contract was first approved for $83.9 million in 1999 and set for completion in June 2004. It will now cost $134.8 million — up 60.7 percent from its original cost — and will be completed by Oct. 31, 2009.
Though Suminoto had finished the train on time, the North Terminal was not ready for the company to install the track on the roof. Sumitomo has charged more than $54,000 a month to store and exercise the system’s 20 cars, which are now en route to Miami by ship. In Mihara, Japan, Japanese engineers periodically drove the trains up and down a specially designed $600,000 track — paid for by MIA. The exercise was needed to keep the train’s rubber tires and electrical systems in working order.
Commissioners realized they had to bite the bullet and approve the increases.
“It’s not pretty — it’s ugly,” Commissioner Jose “Pepe” Diaz said of the change order on the people mover contract. “But we have discussed this. . . . We have cleaned our house, but this is some of the stuff we still have to brush out, and that is what we are doing.”
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