Airport ‘surprises’ may inflate costs

RIAC rejects bids on deicing project that top estimates by $7M


Although the low bid to build a system to capture aircraft deicing fluid and keep it from polluting Buckeye Brook is $7 million more than estimated, Rhode Island Airport Corporation’s (RIAC) interim director believes costs can be trimmed and the system will be operational and “spot on” by the March 2015 deadline set by the state.

Peter Frazier said yesterday RIAC is canceling bids for the project and will re-bid the system in three independent contracts representing different phases on the total project. Not only does Frazier feel this will reduce costs, but that RIAC will also meet the requirement set forth by its Department of Environmental Management (DEM) permit. J.H. Lynch & Sons of Cumberland was the apparent low bidder for the system that has been in planning and permitting for years. The system was projected to cost $21 million. Lynch bid $28 million. There were three other bids with the highest being $32 million. The deicing, or glycol, recovery system isn’t the only surprise. Peat and utilities are another two. As RIAC prepares for the demolition of Hangar 1 to extend the runway protection zones of Runway 16-34, they discovered that utilities for many of the buildings at the north end of the airport run through the hangar. Relocating them is a task they hadn’t anticipated. And, at the east end of that runway, where the runway protection zone will be extended into Buckeye Brook wetlands, they have encountered peat, the softness of which as a foundation could complicate construction.

“We found a patch of it,” said Frazier. “We’re trying to quantify it and, once we do, we’ll come up with a game plan.”

He said design of the extension of the runway protection zones, which will incorporate a form of crumbling concrete tile or EMAS [engineered material arresting system] to slow planes that over-shoot the runway, will be completed late this summer with the award of a bid in the winter of 2014. He said RIAC expects to pre-order the EMAS, as it takes time to manufacture and is not something that can be bought off the shelf.

There’s also progress on the other major airport project, the extension of the longer runway bringing it from 7,166 to 8,700 feet. RIAC is in the final stage of design to relocate the Winslow Park playing fields and reroute a portion of Main Avenue at the southern end of the runway.

Overseeing all of the work is Paul McDonough, PE and vice president of engineering, who is a member of the RIAC team. McDonough has had extensive airport construction experience, including runway projects at Boston’s Logan Airport and Portland, Maine.

“We’re pulling out all the stops to get it down,” McDonough said of the bid for the deicing system. McDonough said RIAC would look at “value engineering” and the possibility of acquiring certain materials so as to lock in prices long before the work starts. The project will be advertised in three phases – flat work that consists of trenches and piping, vertical construction and storage tanks. Unlike many airport projects, there won’t be any matching federal funds for this project. The money is to come from a $25 million revenue bond RIAC is looking to secure from the Rhode Island Clean Water Finance Agency. The agency would enable RIAC to borrow the money at several interest points lower than open market rates, thereby saving a substantial amount in interest payments over the life of the bond.

It would be repaid through airport operating revenues.

But could those costs push airline costs up, too and put Green at a disadvantage?

“The airlines signed on to this,” said Frazier, “they were at the bargaining table.”

He says the airlines “aren’t going to go away,” if the cost of operating from Green is within their budgets. He noted that Green’s cost per enplanement – the cost for airlines to operate at Green divided by the number of boarding passengers – has remained at a consistent $11 for the past three years. What would lower that cost are more people flying and Frazier sees that as a reflection of the economy. With an improved economy and with higher levels of discretionary income, he expects air travel to increase.

As for the relocation of the playing fields to an area cleared of homes in the Lakeshore neighborhood, Frazier said RIAC is negotiating to buy two properties where owners did not sell during the voluntary acquisition program so that the entire area can be secured. This is in response to neighborhood concerns that parents will cut through the neighborhood rather than use a service road intersecting with Airport Road to reach the softball and soccer fields. Frazier sees the convenience of the intersection as critical to stemming the use of neighborhood roads. The plan remains to construct the fields in 2014 and to give them almost a year for the grass to take root before they become operational the following year.

“We’ll do everything in our power to address the concerns of the neighbors,” he said. He said many of the old growth trees would be kept in the play field area.

The rerouting of Main Avenue to account for the runway extension is projected to affect about 18 properties. The reason for the uncertainty, Frazier explained, is the precise right of way for the road. While not required, Frazier said RIAC would offer to buy all properties impacted by the new right of way even if it’s only a matter of a foot. Naturally, there won’t be a choice for some owners whose property is in the path of the new road.

Rather than the neighborhood meetings RIAC has used to inform affected people of its plans and their options, Frazier said there would be one-on-one meetings.

Working with the city planning department and with an aviation planner and real estate broker, Frazier said RIAC will also look at selling excess airport property – most of it for commercial purposes – so as to put it back on the tax rolls. That may be what happens to come of the land acquired along Main Avenue. As another example, Frazier cited the former Atwood Grill property on Post Road that RIAC has determined it won’t be using.

Frazier said Kelly Fredericks, who was named RIAC president and CEO, is scheduled to step into the job as planned on April 8.

“We’re all looking forward to having another PE [registered professional engineer] aboard,” he said.

Fredericks, who has more than 30 years of aviation experience, including running airports, is coming to Rhode Island from the Corradino Group in Fort Lauderdale where he has been the program manager for the design and construction of a multi-billion dollar expansion of the Fort Lauderdale-Hollywood International Airport.


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"The money (for the glycol plant) is to come from a $25 million revenue bond RIAC is looking to secure from the Rhode Island Clean Water Finance Agency. The agency would enable RIAC to borrow the money at several interest points lower than open market rates, thereby saving a substantial amount in interest payments over the life of the bond."

Does anybody know who will pay the subsidy? The cities and towns with Warwick paying 20% of the subsidy...

Clean Water passed on this application from RIAC because RIAC did n ot complete the part of the loan application that discusses whether it has the power to borrow the money. The fact is RIAC does not have that power. Clean Water's annual report says only cities and towns and sewer districts can borrow money from them. Clean Water's financial advisor has been sued by RI Economic Development over the 38 Studios disaster.

RIAC is going to have to go to EDC for the funds, a bond issue that would be well over $30 million given the prices that bidders have presented to builld the plant. This amount exceeds the state Kushner authorization and will probably trigger a hearing at the General Assembly.

Tuesday, March 19, 2013