AUSTIN, Texas — The hot Texas economy is spurring operators of the state's airport and seaports to provide the new infrastructure needed to accommodate the accelerating pace of activity in the growing state.
Panelists presenting at the two sessions on Tuesday dedicated to transportation infrastructure at The Bond Buyer's Texas Public Finance Conference agreed that projects face funding and political challenges, but the need for expanded facilities should trump those concerns.
Mike Phemister, vice president for treasury management at Dallas-Fort Worth International Airport, said a sixth terminal is on the drawing book.
A $2.3 billion renovation of the five existing terminals is underway at DFW, with completion of the final project expected in 2018.
"We will have to build a sixth terminal sometime in the future," Phemister said at the conference.
"There has been no decision on the schedule for the construction of the new terminal or number of phases, but we will have to do it sooner rather than later," he said.
DFW International served 62 million customers in 2013, Phemister said, and the number of passengers is expected to top 70 million by 2020.
The airport between Dallas and Fort Worth is well positioned to compete with international hub airports, Phemister said.
"We are looking to compete with them based on new wide-body, long-range airplanes being delivered to the airlines, our central location, and our reasonably good weather," he said.
Austin-Bergstrom International Airport will issue $200 million to $300 million of airport revenue bonds in 2014 to expand the terminal as well as add gates and customs areas over the next two years, said David Arthur, assistant director and chief financial officers at the Austin airport.
"Our capital improvement program calls for projects costing more than $500 million over the next five years," he said.
Passenger counts have grown steadily over the airport's 15 years of operation, he said, with more than 10 million passengers in 2013, up 6% from 2012 totals. Activity will increase later this year with a new direct flight to London, Arthur said.
The recently completed modernization of the passenger terminal at Love Field in Dallas was handled by Southwest Airlines to save time and money, said Bob Montgomery, vice president of airport affairs at the Dallas-based carrier.
The airline is also responsible for a new terminal upgrade project at Houston's Hobby Airport, Montgomery said.
"We do a lot of projects on behalf of cities across the country in a quasi-public-private partnership sort of way, and it is going to happen more and more," he said. "We can deliver a facility quicker and cheaper than can a municipality, which is hamstrung by government rules and regulations."
Southwest Airlines moved the Love Field project ahead by working with Dallas to create a special-purpose entity to issue $500 million of special facilities bonds backed by the full faith and credit of the airline, Montgomery said.
"We need these things (terminals) now," he said. "The faster we deliver a project, the better off we are."
The Port of Houston is on track to invest $2 billion in its facilities over the next 10 years as exports from Texas increase, said chief financial officer Tom Heidt, and $3 billion over the next 15 years.
Capital spending over the next three years will total $726 million, he said, much of it to upgrade existing docks that have not been well maintained.
"The Port of Houston is not slowing down," Heidt said. "We are building up and maintaining what we have."
Crude oil shipments from the Port of Corpus Christi produced by hydraulic fracturing in the Eagle Ford shale formation south of San Antonio to other U.S. ports has turned around the export-import activity at the south Texas port, said John LaRue, executive director of the port.
"In 2007 we were handling only oil imports to local refineries," LaRue said. "Last year we shipped out 117 million barrels of Texas-produced oil to U.S. ports."
Current federal law forbids the export of crude oil produced in the United States, LaRue said.
