Newark Airport’s Train-Project Cost to Balloon Beyond $2 Billion

The long-awaited project to replace Newark Liberty International Airport’s train system has gotten even more expensive than its original $2 billion price tag.

(Bloomberg) — The long-awaited project to replace Newark Liberty International Airport’s train system has gotten even more expensive than its original $2 billion price tag.

The AirTrain EWR project, which is designed to replace the existing system that shuttles about 30,000 passengers every day at the airport, is facing “significant increases over the original $2.05 billion estimate,” according to preliminary bond documents provided by the Port Authority of New York and New Jersey ahead of a $1.1 billion debt sale. 

The bi-state agency that runs much of New York City’s air and seaports has offset the cost increases “through value engineering efforts, by reducing project scope or otherwise deferring or reducing spending on other capital projects,” the documents say, without specifying by how much the project will be over budget. 

“The Port Authority is currently in the procurement process for a system designer for the replacement air train system at Newark Liberty Airport, and will follow with the procurement of the civil engineering firm to complete the project,” Thomas Pietrykoski, a spokesperson for the Authority said in an emailed statement. “The outcomes of those procurements will inform the final cost estimate.”

Pietrykoski said the authority takes steps to balance capital spending with its available capital resources on a regular basis. 

The 2.5-mile monorail at Newark Airport opened in 1996 and has been plagued by breakdowns. 

In March, the agency shortlisted three firms — Alstom SA, Doppelmayr Group and Mitsubishi Heavy Industries — to compete to design the new AirTrain, with selection targeted for later this year. After one of those is selected, the Port Authority will procure a civil engineering firm to build the new people-mover. 

The replacement project is expected to be completed in the second quarter of 2029 at the earliest, according to a June presentation to potential contractors.

The AirTrain operates between terminals and connects the airport with rental car facilities, hotel shuttles and parking lots, as well as rail lines operated by New Jersey Transit and Amtrak.

More Expensive Construction

The Port Authority, like other state and city agencies tasked with developing public infrastructure, is facing mounting costs as labor and construction materials become increasingly more expensive. An index measuring the producer prices of construction materials has increased by more than 30% since early 2021, according to the Bureau of Labor Statistics. 

“Currently, the Port Authority is experiencing significant increases in its projected costs for construction programs, especially for large projects due to, among other things, an economy-wide increase in inflation, extraordinary increases in the cost of certain construction materials and relative aversion to excessive economic risk on the part of some large contractors,” the agency said in the bond documents. 

Earlier this year the agency increased funding for the massive renovation at John F. Kennedy International Airport by about $1 billion, to $3.9 billion. The agency is in the midst of a $30 billion renovation to transform the major metro-area travel hubs. 

Read more: Port Authority to Spend Extra $1 Billion on JFK Airport Project

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