Potential public-private partnerships on tap for two major U.S. airports

Airports could be a busy sector for the public-private partnership industry if plans materialize for P3s at two major U.S. airports.

Newark Liberty International Airport and Washington Dulles International Airport are considering potential design-build-finance-operate-maintain contracts for ambitious redevelopments. The Port Authority of New York and New Jersey, which owns the Newark airport, in December approved a capital plan that provides funding to establish a public-private partnership to build a new terminal at the airport, according to the 10-year, $45 billion plan.

The capital plan calls for a P3 to build a "new world-class, light-filled and inspiring Terminal B at Newark Liberty International." Meanwhile, the Trump administration has floated a Request for Information from private parties to a complete overhaul of Dulles, which Trump has called "a terrible airport" that was "incorrectly designed."

With U.S. airports facing an estimated $174 billion in infrastructure needs through 2029, per the Airports Council International-North America, P3 market participants hope that alternative delivery models will become a more common piece of the airport financing puzzle. The use of P3s in the U.S. airport sector remains rare compared to other areas in the world. The U.S. also lags globally when it comes to the privatization or long-term lease of an entire airport. There is only one full airport lease, the Luis Munoz Marin International Airport in San Juan, Puerto Rico.

Both Chicago and St. Louis pulled the plug on plans to privatize their airports after facing obstacles presented by market conditions and political unpopularity. Denver International Airport in 2019 terminated a P3 to renovate its main terminal, a move that cost the airport up to $210 million in penalties.

The PANYNJ has already established itself as the frontrunner in the U.S. airport P3 space with its high-profile overhauls of JFK International Airport and LaGuardia Airport funded in previous capital plans.

"By 2035, a $50 billion wholesale remaking of three major airports will be complete, anchored by historic public-private partnerships in cooperation with our airline and development partners," the PANYNJ's latest capital plan said. The 2017-2025 program and the new funding "will bring our paradigm shift to fruition: moving our airports from worst to first."

The PANYNJ has made an "extraordinary investment" in its airports in recent years, outgoing PANYNJ executive director Rick Cotton said at a December press conference about the capital plan.

"We've poured billions of dollars into upgrading and renovating all of the port authority airports and we will continue to do that," Cotton said in response to a question about increased fees on rideshares at the airports. "That cost has to be addressed in some way. The lion's share of that cost comes from private terminal operators, from the port authority's own capital."

Over in Northern Virginia, interested parties have until Jan. 20 to comment on the U.S. Department of Transportation's RFI for Dulles. Proposals should include design, construction and financing for new terminals and concourses. The administration is looking for "bold, creative and uncompromising" concepts for a "new international gateway airport for the national capital region," the proposal said.