Friday, July 11, 2008

This is stupid

Crain's Chicago Business reported* that Chicago is considering privatizing a portion of O'Hare Airport to raise as much as $800 million for airport expansion as expected major funding from United and American airlines is drying up.

Paul Volpe, the city’s chief financial officer, said in a letter to the two airlines that while the Daley administration hopes that the two will agree to pay for the second half of the $14-billion-plus expansion plan (they never did to start with), it "is confident that a practical funding plan that does not include the airlines is available to provide for timely completion."

Bensenville, Elk Grove Village and a bunch of other suburbs are entitled to a big, fat told-ya-so. When those communities unveiled their proposal for a south suburban airport, it would have been almost completely financed by the private sector. Two major international development companies were--and presumably still are--lined up to privately plan, finance, build and operate the airport, essentially without the same kind of taxpayer and airline money that was to fund O'Hare expansion. Nationally recognized aviation experts hired by the expansion opponents concluded that the same traditional funding mechanism would not work for O'Hare expansion.

The combination of bonding, passenger taxes, airline support and government grants simply would not provide enough money for the so-called O'Hare Modernization Program . The whole expansion would collapse for lack of money. This warning came even before the high increase in fuel costs that are driving the airlines into red ink.

If Mayor Richard M. Daley had not used his political clout to effectively delay, if not kill, the south suburban airport plan, traffic already could be using the airport, and O'Hare would not be the national laughing stock that it is now.

*May 23, 2008 article. Available only by paid subscription.

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