First US PPP airport gets thumbs-up

Celebrations are finally underway as Chicago aldermen approve US’s first PPP airport.

Last week, the Midway Investment and Development Corporation (MIDCo), comprised of Citi Infrastructure Investors, Vancouver Airport Services (YVRAS) and John Hancock Life Insurance Company were announced as winners of the $2.5bn, 99-year lease contract to operate and develop the Chicago Midway Airport.

However, yesterday aldermen were seeking answers on a range of issues, including whether the city was getting the best price for the project. According to Chicago local press there were concerns that the $2.5bn price tag could be even higher after the credit crunch.

News that the city council panel have unanimously approved the deal will give the US PPP market some well-needed good news. Last week Pennsylvania Transportation Partners announced they would be walking away from the $12.8bn PPP lease. The partnership between Abertis Infraestructuras of Spain and Citi Infrastructure Investors said it had become clear it would not get a floor vote.

However, one industry source said the Pennsylvania Turnpike PPP was doomed from the start describing the 75 year deal as "absolutely nuts".

They said: "This deal shouldn’t have gone through anyway. It was rushed and poorly conceived. These 75 and 99 year deals are absolutely crazy. Schemes like this would never go through like this in Europe. I do not understand why Americans are so obsessed with exorbitant scales for PPPs."

But this may not be the last we hear of the project. Democratic governor Ed Rendell has been ruthlessly driving the deal and has not ruled out further negotiations next year. In a joint statement released by Citi-Abertis, Rendell said he hoped that a lease with the partnership will be enacted eventually.