Work on the $13 billion international airport that was being built near Mexico City was officially terminated Jan. 3 by the new administration of Mexican President Andres Manuel Lopez Obrador, which would seem to have put an end to the $100 million-plus program management contract for the airport awarded to Pasadena engineering firm Parsons Corp.
But a Parsons spokesman last week said the company’s contract with Mexico City Airport Group, the government-owned entity tasked with overseeing the construction of the new airport, was still in force.
“At this time, Parsons’ work as program manager on the project continues, and no significant changes to our workforce dedicated to Mexico City’s aviation solutions have taken place,” Parsons spokesperson Francis Sheller said in an email. “We are working closely with our client in every way they see fit to improve the aviation experience for their community and the economy of Mexico City.”
This despite the Jan. 3 announcement from Javier Espriu, Mexico’s communications and transportation secretary, that construction work on the new airport was “officially suspended.” Three weeks earlier, on Dec. 19, the Mexican government reached an agreement with project bondholders to buy back roughly one-third of the bonds that had been sold.
Obrador campaigned on a promise to end construction of the airport, a signature project of former Mexican President Enrique Pena Nieto, citing reports of corruption and graft, and noting that the project’s initial budget of $7 billion had nearly doubled. In late October, a majority of Mexican citizens voting on a referendum on the project favored its cancellation.
As of the end of November, the government estimated work on the airport project was roughly 37 percent complete.
In his Jan. 3 press conference as reported in Mexico News Daily, Espriu said contracts with various engineering, infrastructure and construction firms would be formally terminated by the middle of this year. The main issue in these negotiations will be determining how much each contractor should be paid for work already completed.
Parsons, a design and project management firm with $3 billion in revenue last year, stands to lose much of its contract award in these negotiations. That is unless the company is selected to work on an alternative airport expansion plan put forward by Obrador that includes keeping the current Benito Juarez International Airport and supplementing it through the conversion of a military airfield 40 miles away.
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In the Pipeline
Los Angeles water company Cadiz Inc. on Dec. 27 announced an agreement with El Paso Natural Gas Co. to restructure its option to purchase for $20 million a 120-mile idle gas pipeline from Barstow to a point near the California Aqueduct southwest of Bakersfield.
Under the amended deal, Cadiz paid $2 million just before Dec. 31 and deferred the remaining $18 million payment until El Paso Natural Gas met certain unspecified conditions.
The pipeline would complete a second link for Cadiz to export water out of its desert aquifer to major aqueducts; the other pipeline link would head southeast to the Colorado River Aqueduct. That proposed pipeline has been opposed by Sen. Dianne Feinstein and environmental groups because it would traverse sensitive desert habitats. President Donald Trump’s administration had overturned a ruling made by the administration of former President Barack Obama requiring further environmental review for that proposed pipeline. The Trump administration ruling appeared to clear the way for construction. But there’s still the threat of state environmental review.
But this pipeline purchase from El Paso Natural Gas has not been nearly as controversial, primarily because it’s merely a repurposing of an existing pipeline from Barstow to Wheeler Ridge, southwest of Bakersfield. According to Cadiz spokeswoman Courtney Degener, it’s just as crucial for Cadiz’s plans since it crosses two aqueducts: the Los Angeles Aqueduct near Palmdale and the California Aqueduct near Wheeler Ridge. Cadiz has already purchased a 100-mile pipeline from a point near its holdings to Barstow.
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LAX Concessions Boost?
Los Angeles World Airports, the Los Angeles city agency that administers Los Angeles International Airport, announced Jan. 7 that it has named Jeffrey Utterback as deputy director of commercial development.
Utterback currently serves as director of real estate and economic development for the Port of Seattle.
“At Los Angeles World Airports we are in the midst of a major transformation, and Jeffrey Utterback has the background and talent necessary to ensure that we continue to elevate our concession, retail and real estate programs at LAX,” Deborah Flint, LAWA chief executive, said in a statement. “As we bring new facilities and technologies online, our commercial development program is a critical component in strengthening our revenue generation and creating an exceptional guest experience.”
Staff reporter Howard Fine can be reached
at [email protected] or (323) 556-8327.
