CHICAGO -- Mayor Richard Daley of Chicago unveiled a revised plan Monday that shows building an airport on the city's southeast side would cost about $8.5 billion less than previously estimated and includes the issuance of up to $8.7 billion of revenue bonds.

The city's updated feasibility study pegged the cost of an airport at the so-called Lake Calumet site at $10 billion.

In addition to its new cost estimate, the city also released a financing plan for a Lake Calumet airport that incorporates the issuance of up to $8.7 billion of revenue bonds between 1996 and 2014.

Lake Calument is one of five sites under consideration by the 11-member Policy Committee for the Site Selection of a Supplemental Airport in the Chicago Area, composed of Illinois, Indiana, and Chicago officials. In October, a preliminary financial feasibility analysis conducted for the committee by Price Waterhouse found an airport at the Lake Calumet site would cost $18.5 billion, by far the most expensive of all the sites.

The other Illinois sites and their estimated cost were Kankakee at $3.8 billion, Peotone at $3.7 billion and the Beecher area at $4 billion. The cost of building the airport at the existing Gary, Ind., Regional Airport was pegged at $ 9 billion, but Indiana officials have issued their own report that places the cost at $6 billion.

The $10 billion price cited in Chicago's latest feasibility study for a Lake Calumet airport is also about $5 billion more than the estimated cost contained in the city's first study, released in February 1990.

Under the financing plan included in Chicago's study, the development of a Lake Calument airport would be done in three phases. The first two phases -- which would include four runways, land acquisition, and site improvements -- would require the issuance of $5.8 billion of bonds from 1996 to 2014. For all three phases, which would bring the total number of runways to seven, the total bonding requirement would be about $8.7 billion over that same time period to cover project costs, capitalized interest, issuance expense, and debt service reserves, according to the study.

The city's bond projections assume 19 30-year bond issues with a coupon rate of 8%, as well as capitalized interest of 6%.

Other sources of funds cited by the study include federal aviation and road funds, state grants, user fees, and passenger facility charges. In a statement, Mayor Daley estimated a $3 charge at the city's two existing airports would generate about $90 million a year.

Chicago officials have said the city's experience in financing and operating O'Hare International Airport, along with its ability to collect a passenger facility charge, and the proximity of the Lake Calumet site to the downtown would give that site an edge over its competitors.

On Monday, the mayor said the third phase of the Lake Calumet airport would be done "if demand is there." He added that his "improved plan" for the site, which decreased the number of homes and businesses that would e displaced from the 1990 study, indicated that more people would benefit from an airport there than at any of the other sites.

However, proponents of the rural sites argued that Mayor Daley's study was not impartial, like the studies being conducted for the bistate committee by TAMS Consultants Inc., which was hired by the Federal Aviation Administration.

"It's ridiculous," said Mike Robinson, a spokesman for the Third Airport Alliance. "Clearly Chicago's hired consultants have a partisan interest."

Officials of the alliance have said the higher cost of the Lake Calumet site would ultimately eliminate that site from contention.

Don Corinna, program manager for the bi-state committee, declined to comment on Chicago's study.

The site selection process, which has been going on for two years, will end Jan. 5 -- the bi-state committee's deadline for choosing a site or a "no build" option. One source close to the deliberations said Indiana officials were expected to try to force a final vote at the committee's Dec. 16 meeting. However, the source said that attempt would probably not be successful. Mr. Corina said an agenda for that meeting had not yet been put together.

The committee is made up for four members appointed by Gov. Evan Bayh of Indiana, who favors the Gary site, three members appointed by Mayor Daley, and four members appointed by Gov.Jim Edgar of Illinois, who has taken a neutral position.

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