MIA: Cost Overruns or Mismanagement?

MiamiHerald.com | 10/27/2006 | Expansion costs at MIA rise by $1 billion

Construction cost overruns at MIA, and in this case the nontrivial amount of $1 billion (how much affordable housing could have been financed in Miami for this amount of money), are always attributed by management and contractors to external factors outside of their control.

The main culprit is escalating costs for materials and labor at the North Terminal, to be used by American Airlines and its alliance partners. The terminal, which will be completed in 2010, will now cost $2.66 billion, up from $1.94 billion, airport projections presented to the county’s Regional Transportation Committee show.

What experience tells us is that the main culprit is the mismanagement of the project and the delays in the construction. If the project had been executed as planned, its construction would have been more advanced than it is now and thus the cost overruns would have been less or not ocurred at all. How much better would MIA have been it were run like a private business like many airports are being run in the developed world.

About Stephen E. McGaughey
International consultant in economic development programs and projects

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