DALLAS -- City officials believe a new federal study endorses the Denver International Airport, but critics of the $2.6 billion project say the audit settles nothing.

Mayor Wellington Webb welcomed the 62-page report from the General Accounting Office as Denver prepares to sell as much as $500 million of airport revenue bonds the week of Oct. 9 for the project.

"He said that critics of the airport may have helped the project by forcing an objective study," said Briggs Gamblin, a spokesman for the new mayor. "He left the report was good news."

Added Gennifer Sussman, the project's finance director, "I think it definitely lays all those questions to rest. We hoped this would be the outcome."

But opponents of the project yesterday questioned the thoroughness and objectivity of the GAO, Congress's investigative arm, in its scrutiny of the nation's largest airport project.

"I think the GAO does what Congress wants and here only two members of Congress wanted this report," said Dick Young, a corporate lawyer in Denver who pushed for the inquiry. "It's a whitewash."

Mr. Gamblin, the mayor's spokesman, dismissed such talk. "That sounds like our grapes to me," he said.

Another critic of the project, Mike Boyd, president of Aviation Systems Research Corp. in Golden, Colo., belives the report answers few questions.

"It just muddies the water more," said Mr. Boyd, an independent consultant. "This thing is built on numbers that have changed every time they come out" for a new bond sale.

In the report, released late Wednesday, the GAO determined that the city's economic projections were reasonable, but warned that changing circumstances could affect the city's ability to meet debt service.

"The probability is low that the airport will be unable to generate sufficient revenues to meet operating expenses and service its debt," the agency wrote. "Nevertheless, the possibility of default always exists and would become more likely if several adverse conditions... were to occur."

The GAO said that such conditions would include cost overruns, schedule slippages, the loss of a carrier that uses it as a hub, and a shortfall in traffic projections.

"All of their what-ifs are already true," said Mr. Boyd. "I think they say that if those four things come about, the project is going to go down, but in this Alice-in-Wonderland world it will work."

He questioned the objectivity of the tests, noting that the GAO and its experts, the Hickling Corp., relied on the city's paid feasibility consultant at Peat Marwick to calculate unaudited economic scenarios on how the airport might be affected.

The GAO said its research showed that even if the airport loses bankrupt Continental Airlines, one of the two carriers that use it as a hub, the project cost would remain under $20 per emplanement. It also found that coverage would average about 1.4 times through the year 2000, when debt service could reach $177 million a year.

The agency said the project, now about 20% built, had not progressed enough to estimate if it will open on budget and by its deadline of 1994, but the report does credit cost controls by Denver with keeping the project on track through August 1991.

Even so, the agency was tentative in its findings, noting, "After reviewing the financial plan for the new airport and weighing key uncertainties associated with the project, we believe that the Denver Airport System can probably repay the bonds as planned."

Frank Mulvey, who oversaw the five-month study for the GAO, said the risk of default diminishes as the project ages. "We said that the greatest likelihood of that is in the first few years," he said.

Ms. Sussman said the report had apparently persuaded two congressmen who earlier questioned the project to change their opposition to federal funding for the airport.

Rep. Frank Wolf, R-Va., and Rep. Bob Carr, D-Mich., had requested the report, but apparently decided against opposing an estimated $615 million in federal funding after reading the report's conclusions.

The federal monies are part of the funding that the GAO said could total $3.78 billion, which includes capitalized interests. Of that amount, the agency estimated that $2.5 billion will come from the sale of general airport revenue bonds.

The city has already sold $1.5 billion in debt that is rated conditional Baal by Moody's Investors Service, BBB by Fitch Investors Service, and BBB-minus by Standard & Poor's Corp.

Early next month, a financing team lead by Lehman Brothers and Pryor, McClendon, Counts & Co. plans to sell as much as $500 million in additional debt for the project.

Project officials believe the GAO report -- not yet widely circulated -- could help its efforts to persuade investors. But critics say bond buyers should beware. "You can sell anything," said Mr. Young, the local attorney. "Paying it off is the trick."

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