DALLAS A new federal report says the Denver International Airport will be able to meet debt service payments on more than $3.4 billion in bonds even if it doesn't open until July 1, 1996, and its operating deficit exceeds $415 million.

However, the most recent General Accounting Office report fails to predict whether the airport will open by the city of Denver's deadline in four months and bases its conclusions on some financial assumptions that have been questioned by at least one Colorado congressman.

"The mayor of Denver has announced a new opening date of Feb. 28, 1995, but there is no guarantee that Denver International Airport will, in fact, open then," according to the report, released late last week. "Therefore we examined the impact on operating revenues and debt service costs if the airport is not open until July 1. 1996."

The GAO, an investigative arm of the U.S. Congress, projected that the airport would face an operating deficit of $230 million by Feb. 28, 1995, and $415 million by Dec. 31, 1995. It did not list a figure for the deficit the airport would face by July 1996, but said that it expected costs to mount by more than $18 million a month, which would push the total figure past $500 million.

"If current traffic forecasts materialize and if the current projections of the airport's operating costs are accurate, then regardless of whether the Denver International Airport opens by March, 1995, or by July 1, 1996, expected revenues appear to be sufficient to allow the airport to meet scheduled debt service payments," the report said.

The GAO maintained that Denver air traffic would have to drop by 25% to trigger sustained revenue shortfalls after the airport is opened and that officials have solved baggage system troubles that have caused some of the four opening delays in the past year.

City officials applauded the results of the report, but they said the latest study does not convey new major substantive issues. The first GAO study on the airport was released in 1991.

"I believe the assessment to be honest, thorough, and balanced," said Mayor Wellington Webb of Denver. 'The report correctly identifies the automated baggage system and its software as the problem keeping DIA from opening. The report also clearly confirms our position that this project is on a sound financial footing."

Although generally positive, the report casts doubt on whether the city will be able to solve enough of the airport's baggage system troubles for an opening in four months.

The report said the agency initially wanted to estimate the probabilities that the airport would open on certain dates, but technical specialists surveyed by the GAO refused to speculate on when the baggage system woes would be corrected.

The city is currently building a conventional, backup baggage system to help insure a Feb. 28 opening while United Airlines and a Texas firm work on modifying the flawed, automated baggage system, which loses luggage along the 22 miles of track at the nation's largest airport. The problems with the baggage System are considered the major impediment to opening the airport.

While the city, Texas-based BAE Automated Systems, and United recently reached agreements to settle claims and expedite construction of baggage systems, few are predicting whether an efficient system will be operating in four months.

"There is still some uncertainty that it will open Feb. 28," an industry source said. '*To know when the baggage system troubles would be corrected, we would have to be engineering and software experts."

Some other uncertainties also exist. The GAO maintains the airport system has $467.2 million available to cover the cost of further delays and that some costs could be debt-financed. The city would have to tap the bond reserve fund by October 1995 ff projections are accurate, the report said.

However, some sources questioned their financial calculations and assumptions. "They have assumed investors would provide capitalized interest," the industry. source said.

Sen. Hank Brown, R-Colorado, who requested the GAO study, criticized the report because it does not reconcile discrepancies is financial statements and because it fails to assess whether the city's assumptions are valid.

In a letter last week to Charles A. Bowsher, head of the GAO, Brown said several questions should be resolved, including Conflicting figures in city reports on debt service payments and the amount of debt.

He also said the GAO needs to study the financial impact that could stem from the loss of rent from Continental Airlines, which has dramatically reduced the flights from its Denver hub.

Denver officials maintain that Continental must pay $50 million to the city under its interpretation of the lease agreement, while the Houston-based airline contends it can bail out of the agreement for $5 million.

In addition, Brown said the GAO should examine whether the city will receive sufficient revenue from the air cartiers on the airport's concourse C, where fewer than one-third of the 20 gates are leased.

City officials said they have answered Brown's concerns. Vicki Braunagel, deputy director for administration in the city's aviation department, and Debts DeMuth, assistant director of aviation for finance, said they have provided reconciled figures to Brown's office.

They said the differences in bond amounts reported by the city stem partly from whether the city backed-debt includes special facilities debt that is backed by airlines or users. DeMuth also said figures vary depending on how interest is calculated for the city's capital appreciation bonds.

On disputes over Continental leases, Braunagel said the city would be able to meet its debt obligations by raising other carrier fees even if the Texas airline pulled out of Denver.

She also dismissed potential revenue shortfalls because there are many unleased gates in concourse C. Braunagel maintains the city would haul in enough revenue from that concourse because unleased gates would still be used by airlines and bring in fees.

Peter Bianchini, a director at Standard & Poor's Corp. office in San Francisco, said the New York City finn believes revenues could be adequate to pay debt, although the risks inherent in the project prompted the ratings agency to give the airport bonds a junk grade or BB rating.

"We believe the revenues will be sufficient, but the questions are whether the airport will open on time and if the city's projections accurately reflect the costs at the airport," Bianchini said. Also, "we would like to see how efficient the airport is when it opens."

Fitch Investors Service and Moody's Investors Service give the bonds their lowest investment-grade rating, or BBBminus and conditional Baa, respectively. Meantime, other questions have surfaced at the new Denver International Airport. A former airport inspector, Dean Hill, said he quit his job after be refused to approve shoddy work at Denver International, where he said workers cut corners that could result in collapsing floors, buckling walls, and failing ceilings.

After the allegations became public several days ago, city officials on Monday asked for copies of inspection information in Hills possession and set up a team to review allegations.

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