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January 15, 2010

BWI for sale? Not quite

A report in, the Financial Times' web site, saying Gov. Martin O'Malley had expressed interest in the sale of BWI Marshall Airport or an initial public offering of stock in a privatized BWI may have been a tad exaggerated -- at least in terms of its impact in the blogosphere. But it certainly was interesting enough to send us in search  of an explanation from the Maryland Department of Transportation.

So what's changed? According to MDOT spokesman Jack Cahalan, not much. Apparently a reporter asked the governor whether the state would be open to a deal at the airport similar to  that recently concluded deal at the port of Baltimore for a long-term lease of Seagirt Marine Terminal. O'Malley, in response, didn't close the door on privatization, but Cahalan said he didn't open it any wider than it already was.

"There is no proactive effort by the administration to change the staus of BWI Marshall," Cahalan said.

Cahalan said the idea of an initial  public offering is not  plausible now  because "we're not a private company." He said the department would continue to monitor trends and "best practices" in the airport industry but added that state officials know of no realistic privatization models worth even looking at -- let alone duplicating.

Cahalan added that the O'Malley administration is "open to new ideas" and has a process in place at the Maryland Transportation Authority to evaluate  any unsolicited offers it might receive for state assets.

However, he added that the administration's policy on public-private partnnerships was that they  would have bring public value, create  jobs and improve a public service to merit consideration. Cahalan said  last year's lease deal with Ports America at Seagirt met those criteria, but  he cautioned that such an arrangement might not work at the airport.

"Just because one has worked for  the port doesn't mean that other public-private partnerships will automatically work for every other property," Cahalan said. "Each property would have to be evaluated and examined thoroughly on its own merits because each proposal is different, as is each property."

In other words, the idea that a public-private partnership at BWI or anywhere else will provide a short-term fix to the state's transportation budget woes is likely way off the mark.





Posted by Michael Dresser at 11:37 AM | | Comments (7)
Categories: Air travel


The previous administration tried to sell the airport, in a sense.....

Ehrlich & Steele's Widening Airport Scandal

and we weren't the only state affected....

Ehrlich & Steele's Airport Scandale Hits Nashville

sell it to a mideast country or China, they own us anyway. In the next few years, the USA will matter no more so lets keep selling ourselves out now and not worry about the future.

Ehrlich & Steele's "Widening" Airport Scandal ???

What are YOU smoking? Did I miss that scandal? Were there indictments?

Oh, nevermind, you're on O'Malley's "Business & Jobs Creation Team", you know the team of people and State Legislators he has helping to run jobs and businesses out of Maryland. My bad.

This is such a bad idea.

Just imagine an Airports Authority from another country charging YOU to: park at, fly out of, fly in to, or rent a car at, BWI airport.

Pretty soon you will feel like a resident of a third world country.

BWI, along with Bradley International, are the only airports in the continental US that are under the ownership of a state. BWI is grandfathered by FAA, allowing the State of Maryland to take the airport revenues and place them in the Transportation Trust Fund. Because of the way that other airports and airlines raise revenue, and receive funding from FAA, these monies cannot be used by other entities. For example, the City of Atlanta wanted to use revenues from Hartsfield Atlanta, but the law was very clear and it was not allowed. Because BWI's money goes into the Trust Fund, the Airport must go to the legislature for it's budgetary needs - a nightmare - and there is no P & L Statement for BWI, unlike other comparable airports. Several years ago, a study was conducted as to the ability of the Airport to become a separate entity, an authority, and it was turned down. Clearly, the State did not want to give up it's cash cow - BWI. Also, when MWAA was formed, BWI had a chance to be part of it and turned this arrangement down too. This is one reason the International Terminal has little international traffic - it all went to IAD and PHL. Finally, because BWI is not governed by an independent authority, like the Authority that oversees the Bay Bridge and Key Bridge, BWI cannot issue bonds and raise funds as needed.

The Airport is filled with poorly trained, inexperienced political hacks. If they tell the Governor the truth, they would tell him that he cannot sell the airport, he can only contract out it's management. Since the FAA paid for so much of the airport, they (the FAA) would have to be paid back in the event the airport was formerly sold.

Take a look at how Branson is structured and how unhappy many are with BAA ownership. Conversely, Vancouver's ownership has been successful and the model has been used at other airports - sometimes well, sometimes not so well.

Who would buy an airport with no P & L statements, no financials, an untrained staff, long-term contracts that can't be broken, poor cargo facilities with refrigeration and no parallel runways?

Right. We weren't the only state affected.

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About Michael Dresser
Michael Dresser has been an editor, reporter and columnist with The Sun longer than Baltimore's had a subway. He's covered retailing, telecommunications, state politics and wine. Since 2004, he's been The Sun's transportation writer. He lives in Ellicott City with his wife and travel companion, Cindy.

His Getting There column appears on Mondays. Mike's blog will be a forum for all who are interested in highways, transit and other transportation issues affecting Baltimore, Maryland and the region.

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