DENVER - The estimated cost of Denver International Airport's showcase project is climbing again, this time to as much as $730 million when "related" costs are included.
On Monday, airport spokeswoman Stacey Stegman confirmed that overall project costs could grow 5 percent to 10 percent. That could raise the cost of building a hotel, public plaza and train station to as much as $598 million, up from $544 million.
That new estimate does not count $128 million in what the airport calls other, related costs such as new bridges to the terminal and a $54 million dispute with the Regional Transportation District over the train station. Stegman said those costs could increase by $4 million to $8 million as well.
The latest cost increase would put a project once budgeted at $500 million into a new range of $703 million to $730 million, counting related costs.
"A lot of it has to do with economic conditions," Stegman said. As the economy improved, "labor and material costs have increased."
Denver Auditor Dennis Gallagher released this statement about the project by email:
"I am concerned that the budget for DIA’s Hotel and Transit Center apparently once again needs to be increased. A project originally budgeted at $500 Million is now projected to be $598 Million. When we originally conducted a performance audit of what was then called The South Terminal Redevelopment Project in January of 2012 we determined that the project was behind schedule and $9 Million, or 1.8%, over budget. In our audit we noted that DIA stated that a 10% overage would pose a significant budget risk. That has now ballooned to nearly 20% - a significant budget risk. This risk is compounded by the potential loss of nearly $7 Million in income from the hotel due to its late completion.
"We did a follow-up audit on the project in October of 2013 and we have already commenced our planned Phase II audit of the project. Among other issues, we will try to identify the cause of the budget - $500 Million to $544 Million and now $598 Million – as well as identifying any potential risks, going forward. Future risk can only be mitigated if the cause of the budget problems can be identified and resolved."
Read more about how rising costs could impact airline operations at the airport from our partners at the Denver Post: http://www.denverpost.com/news/ci_25655238/denver-airport-project-costs-rise-5-10-percent#ixzz30GfvGYrs