DALLAS -- Despite jitters over the Denver International Airport, project officials have always reasured Wall Street that the $2.6 billion project was on time and under budget.
But critics of the project say that may be changing as Denver faces critical decisions in the coming months about construction amid reports that project costs and debt service needs may be $1 billion more than project officials now admit.
Also, analysts have practical concerns over whether Denver has enough time to spend the near $2 billion in contracts remaining to be awarded or paid. At least one investment banker has estimated the city would have to spend as much as $85 million a month over the next two years for the new airport to open on schedule in 1994.
"Believe it or not, that's a lot of money to spend every 30 days," said another banker, who is not involved with the project. "When Chicago and Atlanta built their airports, they hardly approached those kinds of levels."
George, Doughty, Denver's aviation director, said construction is 9% under budget and back on schedule, with 17% of the work completed after concerns in August that work on an airport tunnel system was delayed.
At present, he said, the project has $1 billion of work under contract and expects to add $400 million more by yearend. The airport just awarded its largest of 80 contracts with a two-part $230 million construction of the landslide terminal.
Denver plans to sell up to $500 million of new debt the week of Oct. 9 to pay for the project. The project already has $1.5 billion of outstanding debt, rated conditional Baa1 by Moody's Investors Service; BBB by Fitch Investors Service; and BBB-minus by Standard & Poor's Corp.
As for concerns that there is not enough time to spend the project funds and still finish on time, Mr. Doughty said most of the contract funds are to be spent next year. "It's a skewed bell curve and it's skewed to the latter part of construction," he said. "The spending peaks in 1992.
He and other project officials have said the airport construction schedule has flexible decision points at which plans can be modified without adding to project costs.
Last week, however, the Denver Post reported that city officials said project costs would increase $522 million over earlier plans because of additions demanded by Continental Airlines and United Airlines. According to the newspaper, the new total cost would be $3.6 billion.
Gennifer Sussman, the project's finance director, said the final cost of the project depends on a series of decisions that have not yet been made, but she said the current projection is still $2.6 billion.
Beyond questions about the total cost, some analysts have raised questions about the fate of Concourse A, which Continental Airlines has a long-term agreement to use. Already, the city expects to delay final construction until next April.
"They are building concourse A for an airline that might not exist next year, not to mention for the next 30 years," said an investment banker not involved with the deal. "If Continental is liquidated, like a lot of people are speculating, then you have your primary concourse that won't accommodate many other carriers."
In fact, Continental is rumored to be trying to market its lease agreement to use the primary concourse to other airlines. A spokesman for the Houston-based carrier did not return telephone calls.
Mr. Doughty confirmed that Denver would have to approve the sale of the agreement, though he denied any firsthand knowledge of plans by the airline to sell its lease.
Analysts say that whether the city would support such a move would likely depend on which airline Continental tried to sell the pact to. For instance, American Airlines or Delta -- both strong carriers -- would likely be welcomed by the city.
"United Airlines wouldn't want that to happen," an analyst said. "You would probably see some litigation if that were to happen."
Under an agreement signed in June, Chicago-based United has the right of first refusal if Continental gives up its claim to the primary concourse. However, the United agreement would not likely prevent Continental from selling its lease with city approval.
"The fact that Continental may market their deal to somebody else, I don't think, would affect our relations with United as long as we met our obligations to them," Mr. Doughty said.
Officials at United declined to comment.
Further, Mr. Doughty believes that given the option to move from Concourse B to the primary concourse, United would stay put. Ms. Sussman pointed out that B terminal is more operationally efficient for the airline because it is closer to runways and taxiways.
But if Continental does not use or sell its agreement, what will become of Concourse A? Mr. Doughty said construction is too far along to change the design of the terminal. Instead, he said, it probably would become the international terminal at the airport.
That confuses analysts because of the limited nonstop international service now flying out of the airport: flights to Mexico and London.
Mike Boyd, president of Aviation Systems Research Corp. in Golden, Colo., said foreign carriers have rejected using the new airport. He said U.S. carriers also are not anxious to complete in Denver.
"There is no other airline that would want Continental's terminal," said Mr. Boyd, a consultant. "No one wants to compete with United. Unless you already have a presence here, you're not going to come in."