April: InfrastructureForeign investors vie for Chicago's Midway airport

Published 7 April 2008

The administration has given Chicago the green light to sell Midway airport; six consortiums — five of them involving non-U.S. companies — said they would put in their bids; post-DPW rumblings about non-U.S. ownership of U.S. critical infrastructure are already being heard

 

Ever
since the early 2006 firestorm over the the acqusition by Dubai Ports World of
operations management in leading U.S. seaports, there has been a heightened
sensitivity in the United States about non-U.S. entities and investors buying
U.S. critical infrastrctures assets. We should, therefore, follow this story to
see where it leads: Foreign investors are lining up to bid to operate Chicago’s Midway International Airport, the first major U.S. airport to be privatized under a
federal initiative launched more than a decade ago. City
officials say six consortiums, which include firms from France, Australia, Germany, Canada, and Spain, are vying to run Chicago’s secondary airport. While many European airports were privatized years
ago, all commercial airports in the United States are currently operated and owned
by local or state governments. Midway was the first major hub airport to apply
for privatisation approval since the U.S. Congress established a pilot program
in 1996 to explore the use of private operators at commercial airports. Yet it remains unclear whether the effort will
generate a backlash if a foreign firm is chosen, in light of security concerns
raised after a failed effort by a Dubai group to take over major U.S. ports.
“This
will surely generate debate since there may be perceptions about foreign
ownership of sensitive or critical transportation properties like we saw with
the Dubai port deal,” said Joe
Schweiterman, a transportation professor at DePaul University in Chicago.

The
city said that once the firms are determined to be qualified, “the highest bid
amount will be the only factor in determining who will operate the airport. We are very enthused with the strong indications
of interest we have received from teams wishing to operate Midway in what would
be the first lease of a major U.S. airport,” said Paul Volpe, the city’s chief
financial officer. A decision is expected in the next 8-12 months. The deal must be approved by federal regulators
and 65 percent of the six airlines operating at the airport. The private
operator must also meet safety standards and the Transportation Security
Administration (TSA)will continue to oversee screening and security.