During 2007, plans were laid out to significantly improve and expand Denver International Airport. While no funds were appropriated at that time, the plans included adding shopping areas, a hotel and a train station. Kim Day was the new DIA chief in 2008, and her report to the City Council included a wish list of significant improvements, including a new runway, new gates and an overhaul of baggage handling systems. At that time, her goal was to have all the repairs and expansions completed in 2016 versus the original 2015 date.
Then the cost estimates started rolling in
In 2009, architect Santiago Calatrava estimated that the complete project, including a hotel, road improvements, screening equipment and a train for moving passengers around the airport, would cost in the area of $650 million dollars. Additionally, a new bridge included in the original plans and the associated costs were to be divided between the Regional Transportation District and the Denver International Airport.
The best-laid plans
Unfortunately, as in many locales, the recession had an impact on tourism, growth and revenues in the Denver area. Because of these factors, the overall project was trimmed back in 2011, reducing the size of the planned hotel and eliminating the proposed bridge. Overall, the new estimated cost was anticipated to come in at around $500 million plus up to $250 million more for a new runway, which was anticipated to be complete in 2015.
As with many large construction (and destruction) projects, cost overruns are pretty common, and this project was estimated to run approximately $44 million over budget, due in large part to unexpected excavation costs. Unfortunately, the cost overruns didn't stop there, and during 2013, new cost figures showed the project could come in around $672 million, which was nearly $200 million over the original projections. In addition, the plan for the seventh runway has been postponed, and new estimates are that this will cost upwards of $400 million, while repairs on existing runways are currently moving forward at an estimated cost of just over $7 million.
Some things not as they appear
Denver Mayor Michael Hancock was very proud to announce the awarding of the contract for the mechanical construction to a minority-owned business. The contract was worth more than $30 million. Unfortunately, while the primary company, Burgess Services, was minority-owned, it turned out it was not really equipped to do the work on its own and instead would be subcontracting out much of the work. As it turns out, RK Mechanical Inc., will be doing more than one-half of the work, and it is not a minority-owned contractor. This is not without controversy, due to problems this particular contractor has had on other projects it has worked on at the Denver airport.
The improvements at the Denver airport may not be completed on time, and in fact, Dennis Gallagher, Denver's auditor, has threatened a probe into the cost overruns, especially after DIA officials warned about the risks involved with budget overages. It's also important to note that Moody's Investor Services has graded the airport "negative" over the last three years because of this project. In addition, some of the airlines that serve DIA have issued warnings threatening the airport's status as a hub.