Sweden-Canada group picked for LaGuardia terminal work

New York

A GROUP led by Swedish construction company Skanska AB and a Vancouver-based airport operator have been selected to help finance, build and manage a US$3.6 billion replacement for LaGuardia Airport's 50-year-old central terminal.

The Port Authority of New York & New Jersey, which operates the three major New York City-area airports, made the selection almost two years after soliciting bids.

The plans for LaGuardia, likened by US Vice-president Joe Biden to a facility in a Third World country, call for a new 35-gate terminal with more restaurants and lounges, stores, bigger gate areas and improved passenger and baggage screening.

LaGuardia, in the borough of Queens, is consistently ranked among the worst in the United States in cleanliness, design and delays. In 2014, Governor Andrew Cuomo called LaGuardia's ranking a "disgrace" and vowed to redevelop it and John F Kennedy International.

"For too long, LaGuardia has been the stepchild of our region's airports compared to JFK and Newark International," said Port Authority vice-chairman Scott Rechler.

Stockholm-based Skanska, Vancouver airport operator Vantage Airport Group Ltd and Meridiam, a French infrastructure investment firm, are among 12 members of a consortium that will rebuild the central terminal, known as Terminal B. Current tenants include United Airlines, American Airlines and Southwest Airlines.

The Port Authority's decision was delayed by a design competition announced by Mr Cuomo last October that added months to the process.

A panel advising Mr Cuomo recommended that the reconstruction include a central "Great Hall" to serve as LaGuardia's primary entry, a hotel with 100 to 200 rooms and an automated people-mover. It also recommended an AirTrain connection to the subway, improved roads and adequate parking.

Mr Cuomo in a statement applauded the decision, saying the Port Authority's initial ideas were shortsighted. Now, the plans call for redevelopment of the entire airport, guided by a "master plan".

"My directive was not to rebuild what was but imagine and build what should be," Mr Cuomo said. "New York deserves the best."

The Port Authority's board authorised the agency to negotiate the design of the central hall with the Skanska group. The entrance, which will connect terminals B and C, will cost as much as US$400 million, bringing the project's cost to US$4 billion.

Port Authority executive director Patrick Foye said the added expense was justified because the agency's three airports support thousands of jobs and generate hundreds of millions in revenue. He said the hall would generate additional money.

"We think it's a prudent investment," Mr Foye said.

The Port Authority has said it also needs to find as much as US$10 billion to replace its obsolete bus terminal in Manhattan. It also supports the construction of a new Hudson River rail tunnel, which may cost US$20 billion.

The Skanska consortium will contribute US$200 million and issue US$2 billion of bonds backed by revenue generated by the airport, said Mr Foye. The transit agency is contributing as much as US$1.5 billion from fees assessed to passengers.

Construction is projected to start in the first quarter of 2016 and proceed in stages.

By using a public-private partnership, the Port Authority will be able to complete the project five to six months sooner, and will cause less disruption to airlines, said Mr Foye. The consortium, which will negotiate leases with the airlines, is responsible for cost overruns.

Built in 1964, with a capacity of eight million annual air passengers, the central terminal is expected to serve 17.5 million passengers annually by 2030, according to the Port Authority. Delta Air Lines Inc, which is the busiest carrier at LaGuardia, has its own terminal.

In 2012, Travel & Leisure ranked LaGuardia the worst for cleanliness, design, baggage handling, and check-in and security processes.

In February 2014, while in Philadelphia, Mr Biden said that if he blind-folded someone and took them to the airport in Hong Kong, they'd think they were in the US.

"If I took them blindfolded and took them to LaGuardia Airport in New York, he would be like, 'I must be in some Third World country'. I'm not joking." Bloomberg