US Govt Commits Funding for Chicago O'Hare Project

US Govt Commits Funding for Chicago O'Hare Project

CHICAGO(Reuters)— The U.S. government has committed more than $337 million in federal funds to the first phase of a $7.5 billion expansion of Chicago 's O'Hare International Airport, U.S. Secretary of Transportation Norman Mineta said on Monday. The announcement cleared the way for Chicago to sell up to $1.5 billion of new and refunding general airport revenue bonds next month. City officials have said the Federal Aviation Administration's intention to fund a share of the project was needed before any bonds could be priced. Mineta said the $2.88 billion initial phase of the project would increase the airport's capacity by 18 percent, or nearly 482 more flights a day, when it is completed in 2010. "American taxpayers are making indeed a very good investment," Mineta said at a news conference with Chicago Mayor Richard Daley. Along with bond proceeds and FAA airport improvement program grants, the city also plans to tap passenger facility charges for the project. FAA officials have said the O'Hare Modernization Program would cut down on flight delays that ripple through the U.S. air traffic system. The $300 million from the federal Airports Improvement Program will be paid to the city in $20 million installments over 15 years, Mineta said. The letter of intent he signed Monday will also pay the city $37.2 million over the next five years. The two federal grants will cover about 10 percent of the cost of the first stage of the project. The FAA funding announcement was the second spate of good news in less than a week for the airport project, which will add, relocate and extend runways and build a new terminal at O'Hare, the world's busiest airport in terms of take-offs and landings. Last week, a U.S. District Court judge in Chicago dismissed a challenge brought by two suburbs and a cemetery that stand to lose property to the project. Officials in Bensenville, one of the suburbs, subsequently voted to appeal that ruling. The opponents have claimed the project and the approval process were legally and constitutionally flawed. The federal court ruling also lifted a temporary restraining order that had stopped Chicago from acquiring land for the airport. Other projects planned for O'Hare that were not part of the FAA's final approval on September 30, but which some analysts say were necessary for the project to work, would push the price up to nearly $14.3 billion, according to FAA documents. Secretary of Transportation Norman Y. Mineta today signed a letter of intent to make available more than $337 million in Federal funds over the next fifteen years to expand Chicago O'Hare International Airport, saying the airport must expand to stay ahead of increasing air traffic. The expansion project is expected to allow O'Hare to handle nearly 482 more flights each day, increasing capacity by 18 percent when work is finished later this decade, the Secretary noted.