Airport expansion price tag: $672M
By: Bartley Kives | Winnipeg Free Press
The price tag for expanding Richardson International Airport will reach approximately $672 million once the cost of financing is taken into account, but the Winnipeg Airports Authority does not expect future interest payments to pose a problem.
The cost of the airport expansion, which includes a new terminal, parkade, utility building and groundwork, was fixed at $585 million in 2006. Financing charges will add another $87 million to the project, WAA president Barry Rempel said Wednesday, as the corporation reported promising financial results for the final three months of 2008.
Airline passengers at Richardson International pay a $20 airport improvement fee that the WAA uses to pay for the expansion. Slightly more than 3.57 million passengers passed through the airport in 2008, equalling a record set the previous year and contributing about $29 million toward the airport’s expansion.
As of this week, construction crews have completed the new parkade, most of the utility building and most of the groundwork, Rempel said.
Only about 35 per cent of the new terminal building is finished, but the WAA still expects to be ready for a grand opening sometime in 2010.
“We better be; I believe we are. I can only go by what the professionals are telling us,” Rempel said, referring to the contractors in charge of the ambitious expansion.
Once the expansion is complete, about $500 million worth of capital and financing charges will remain on the WAA’s books. Airline passengers will continue to pay for the expansion for decades through future airport improvement fees, said Rempel, adding that the prospect of a downturn in airline travel does not threaten the project.
The WAA has witnessed more passenger growth in recent years than it expected, and that alone will fuel the a i r p or t ex pa n sion i n le a n ye a rs , he s a id. “We’re already ahead of the curve.” The current economic crisis has not left Richardson International unscathed, as passenger trips began to decline in May 2008 and continued to drop for the rest of the year. The near-record number of passenger trips tallied up at the end of 2008 merely reflected strong growth at the beginning of the year, Rempel said. “The economy here, while considerably stronger than other places, is not (immune),” he said. “The fourth quarter was not nearly as strong.”
Despite a drop in passenger trips, the WAA still managed to report increased revenue, earnings before charges, and net income for the final quarter of 2008. Net income for October, November and December was $6.5 million, up from $5.5 million during the same period of 2007, a WAA spokeswoman announced. New leasing revenue allowed Richardson International to make more money during a quarter when many businesses around the world took a nosedive, Rempel explained.
Standard Aero is expanding its regional jet facility north of the existing terminal building, Canada Post is building a $50-million mail-sorting plant to the south and Greyhound Canada is erecting a $6.3-million bus terminal to the east.
The airport is also finding ways to become more efficient through new technology, Rempel said. An automated access portal means staff do not need to guard every door in the airport, freeing up labour for other tasks. GPS technology will reduce the cost and environmental impact of de-icing fluid, as only the precise sections of runway that are slippery will be doused with chemicals, Rempel said.
bartley.kives@freepress.mb.ca