A historic recurrence took place Friday when a closely watched attempt to privatise Chicago Midway International Airport crumbled in late-stage procurement.
“The process has been terminated,” confirmed Tom Alexander, a spokesman for Chicago Mayor Rahm Emanuel.
The announcement marked the second time the axe had fallen on a seemingly done deal for ‘Midway Airport,’ the second-biggest airfield in the Chicago metropolitan area.
A 2009 agreement to lease the airport for 99 years to consortium ‘Midway Investment and Development Company’ fell through amid the global financial crisis (GFC).
Infrastructure Investor learned that Emanuel, elected to office in 2011, ended the would-be concession when one of the remaining two consortia in contention dropped out.
Finalist Industry Funds Management (IFM), together with UK private airport operator Manchester Airports Group (MAG), backed out, a person familiar with the bid said.
Australia-based IFM disagreed with the nature of the lease, another person with knowledge of the proposed public-private agreement told Infrastructure Investor.
The offer on the table involved a 40-year lease in return for $2 billion. Alec Montgomery, head of infrastructure in North America for IFM, did not respond to a request for comment.
The second finalist, Macquarie Group, had partnered with Ferrovial to pursue Midway Airport. Paula Chirhart, US spokeswoman for Macquarie in New York, declined comment.
The exit of IFM and Manchester brought to an end the “transparent, competitive bidding process” promised by Chicago Mayor Emanuel, a source said.
The ‘Windy City’ is not likely to put another public-private partnership (PPP; P3) for Midway Airport out to tender, the source went on to explain.
“It was tried, it didn’t work,” the source said.
In 2008 the city, which had leased its Chicago Skyway Toll Bridge System and was fresh off a billion-dollar parking P3, agreed to lease the airfield to Midway Investment and Development Co.
But the consortium, led by financial services provider Citigroup, was unable to make good on the $2.5 billion needed for the 99-year lease.
Former Mayor Richard Daley, who had backed the Chicago Skyway P3 and the contentious $1.5 billion, 75-year parking meter lease, signed off on the first failed Midway Airport deal.
The source said lingering ill-will toward the parking deal and political opposition to the airport lease did not factor in the decision by Emanuel to end the bid.
Emanuel, a longtime Democratic operative and erstwhile Chief of Staff to US President Barack Obama, allowed procurement for a P3 of Midway Airport to go ahead in January.