Lower Costs Or Just Lowball Estimates For A New Terminal?

Recent public disclosures for Kansas City’s new airline terminal proposal have become more confusing and contradictory. The Kansas City Aviation Department needs to release more thorough information as to why its cost estimates for a new terminal are decreasing.

According to the Kansas City Business Journal, the new terminal plan could cost anywhere between $960 million and $1.35 billion; however, officials with the Aviation Department do not expect costs to go above $1.2 billion and believe they can drive costs down to about $900 million. While these statements make it seem as though $1.2 billion is the cost ceiling for the terminal, the Aviation Department’s Advance Terminal Planning Study puts the expected cost at more than $1.2 billion. That baseline (not ceiling) estimate includes construction, core terminal requirements, necessary new parking structures, repairs to the airfield, and a modest construction overrun cushion.

While construction delays and other unexpected costs could lead to significantly more than $1.2 billion, what are the exigencies through which the Aviation Department could drive down the cost to $960 million, or even $900 million? That would require a savings of $263 million to $323 million, which is more than the costs of all the proposed repairs and improvements to the airport’s runways.  Other than cutting a large, integral part of the new terminal project, there does not seem to be anything in the current plan that could reduce costs to $900 million.

To give the benefit of the doubt to the Aviation Department, let us assume that this is one of the first construction projects in the history of the United States with no construction contingencies required, saving the project 15 percent. In this highly improbable scenario, to reach the hoped-for estimates, the project would need an additional $80 million to $140 million in savings, more than any single component in the Aviation Department’s plans.

The new terminal project is being sold to the public on the argument that its design is efficient and the old terminal is inadequate. The Aviation Department should explain which sections of this plan are not necessary or where the initial cost estimates were overzealous. After this approach is taken to other refurbishment approaches as well, the public can make an informed decision about whether Kansas City International (KCI) needs a new terminal.