The massive renovation to New York City’s John F. Kennedy International Airport has gotten even more expensive.
(Bloomberg) — The massive renovation to New York City’s John F. Kennedy International Airport has gotten even more expensive.
The Port Authority of New York & New Jersey increased its funding authorization for the infrastructure portion of the project by about $1 billion, making the new budget $3.9 billion, after costs surged due to higher inflation, soaring labor expenses and supply chain disruptions. Board members of the Port Authority voted to approve the increase on Thursday.
“These increases are driven by market conditions, the elongated schedule, escalation and the post-Covid market outlook,” James Heitmann, director of aviation redevelopment at the Port Authority, said during the board meeting. The Authority received bids that “significantly” exceeded the $2.9 billion budgeted for the capital plan, he added.
The entire redevelopment project is a public-private-partnership that relies on nearly $16 billion of private investment which will provide much needed terminal upgrades to New York City’s largest airport, which handles nearly 62 million passengers a year. The redevelopment is essentially a terminal expansion to accommodate expected growth and includes building a new Terminal One, the expansion of Terminals 4 and 8 along with the redevelopment of Terminal 6.
The Port Authority’s costs will cover necessary infrastructure improvements like upgrades to roadways, power and communications systems and sanitary and storm drainage facilities. Heitmann said the infrastructure is “critical” to support the $16 billion of private investment.
“The construction marketplace is a very difficult environment. It’s not limited to New York, it’s not limited to New Jersey, it’s a national question,” Port Authority Executive Director Richard Cotton said during a briefing. “Project by project, how do you package them, how do you move them forward and manage what is a very, very difficult construct costs environment?”
The bi-state agency, which also operates LaGuardia Airport and Newark Liberty International Airport, is in the midst of a $30 billion renovation to transform the major metro-area travel hubs.
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