MOVING FORWARD

Capital development project continues as DFW awaits TSA funds


STUMBLING BLOCKS

Following 9/11, many airports scaled down their development projects or halted them completely. DFW was fortunate enough to continue as planned. "We were heavy into the project and we had to make a choice whether to move forward or just stop everything and have a skeleton of a building for many years," Fegan says. "We looked at the costs, and the pros and cons of stopping or continuing. You certainly can’t shut down a half-constructed project and expect to come back two or three years later when the economy is better and be able to do anything with it. So we made the long-term strategic decision to move forward."

Richard Lee, VP of HKS, Inc., explains that some modifications had to be made to the structure following 9/11. “We upgraded the structural capacity to resist blasts, and there were baggage layout changes to accommodate in-line,” he says.

In spite of the current economic conditions, especially for the airlines, Fegan is optimistic about the future. DFW has worked closely with the airlines, particularly since 9/11, to provide aid to the struggling airlines. "Over the last three years, we’ve probably provided $75 million to the airlines in rent relief," Fegan says. "We did that by cutting our budgets and providing the capital to offset O+M costs for the airlines. We found ways to pay for things, other than passing additional costs onto the airlines."

Originally slated to occupy the north portion of Terminal D, Paslay says American Airlines is "reevaluating facility needs within Terminal D, but they still fully plan to move into [the new facility].”

Industry-Wide Frustration

Airports like Dallas/Fort Worth International aren’t the only ones eagerly awaiting LOIs from the government. Among the companies that have been preparing since 9/11 to help airports meet the goal of in-line baggage screening is Siemens Dematic.

"There’s a lot of frustration because we manned up to do this work and now we’re just waiting," says Peter Metros, member of the board, Siemens Dematic. "We stand ready with the resources."

Siemens Dematic is handling the system design, manufacture, and installation of the in-line baggage screening system in DFW’s new Terminal D, which includes 40,000 linear feet, or close to seven miles, of conveyor. The system is expected to handle 80 bags per minute and is on schedule for the opening of the new terminal.

Steve Axelrod, executive VP for Siemens Dematic Material Handling Automation in the Americas, says once the LOIs are issued, two things could happen: one, in-line systems will be contracted through the TSA/Boeing contract; or two, the contracts will go into the commercial arena.

Axelrod estimates the company could see in-line business totaling some $500 million each year for the next five years. "And that’s just our share," he adds. "There are a number of competitors out there... Few airports have been sole-sourced in the past.”

DHS Signs LOIs

On July 7, the Department of Homeland Security signed three Letters of Intent to three airports to help with the costs associated with installing inline explosive detection systems.

The airports are Dallas/Fort Worth International, Boston Logan International, and Seattle-Tacoma International. The Transportation Security Administration, a division of DHS, expects to agree to similar financial arrangements with several more airports in the next few weeks.

DFW will receive $104 million, while BOS and SEA will receive $87 million and $159 million, respectively. The LOIs are subject to the availability of funds.

Under the agreements, TSA will pay 75 percent of eligible costs over a three- to four-year period while airports agree to cover the remaining portion of the costs. Permitted capital improvement costs include preliminary site preparations, structural reinforcement, electrical work, heating, air conditioning, and other environmental improvements, as well as conveyor belts, tables, and physical enhancements to operate an in line system.

We Recommend