Privatization of Airport Could Net Chicago Billions

Chicago’s secondary airport, Midway, is set to become the first major American airport to be privatized. On Tuesday, September 30, confident city officials announced that the proposed 99-year lease agreement, upon approval from city council, could net the city $2.5 billion.

Midway was the first major hub airport to apply for privatization approval since Congress established a commercial airport privatization pilot program in 1996. Five smaller airports applied for privatization, but four withdrew their application and the fifth application was terminated.

Midway Investment and Development Company (MidCo) outbid firms from France, Australia, Canada, Germany, and Spain, for the opportunity to lease the airport. MidCo consists of U.S.-based Citi-Infrastructure Investors, John Hancock Life Insurance Co, and Canada’s YVR Airport Services, Ltd., which owns and operates 18 airports on three continents. The city of Chicago will continue to provide the airport with all fire and police services and the Transportation Security Administration (TSA) will continue to screen passengers.

Chicago is the nation’s leader in the privatization of city services. In 2005, it was the first city to lease a major piece of infrastructure, with a $1.8 billion deal for the right to manage a local toll bridge for 99 years. In February 2008, the city offered to lease 360,000 of its parking meters and rented out four of its parking garages to private operators.

Source: AFP