Denver International Airport has terminated its contract with Great Hall Partners (GHP) for the renovation of the Great Hall, the area under the tents of the Jeppesen Terminal.
Many factors contributed to the decision. Last November, it was discovered that there were issues with the compressive strength of the airport’s original concrete (placed in 1991) which required additional testing. When the contract was signed, the project was just at 30% design. Since then, a number of design decisions were made to accommodate various airport stakeholders’ safety and operational needs. In addition, GHP has been unable to obtain the necessary permits to keep the project on schedule. Denver and GHP have been in mediation, but have been unable to reach agreement on the cost and schedule impacts of these issues.
The original project was a public-private partnership with Great Hall Partners, comprised of Ferrovial Airports, JLC Infrastructure and Saunders Concessions. The 34-year agreement called for GHP to design and construct all improvements followed by 30 years of operations and maintenance within specific commercial areas of the terminal. The total cost to design and build the project was estimated at US$650-770m, which included a US$120m airport-controlled contingency.
As part of this termination, GHP has no more than 90 days to vacate the project site. During that time, the airport will identify a new contractor to complete construction of the improvements. It will also assume greater control of the project and will be prioritizing passenger flow, minimizing the impact of construction on the traveling public, airlines and other tenants.
The new contractor will be responsible for construction only – and not operations and maintenance or the commercial program as was the case in the original contract. The airport will operate any commercial development and will retain 100% of the revenues.
The total termination payment amount has not yet been finalized and this amount is in addition to the amount the airport will pay to complete the project with a new contractor. The design and construction cost of the project will remain at the original budgeted amount of US$770m with contingency. The airport will own all design work and construction performed to date.
“We are disappointed. This is not the outcome we expected, but we are fully committed to completing the work as quickly as possible. These improvements are necessary to enhance safety and accommodate the rapid growth of our airline partners ensuring the future success of this world-class airport,” said Kim Day, CEO of Denver International Airport.”