PORTLAND MAX AIRPORT EXTENSION

Swot Analysis

STRENGTHS (+)

Good existing infrastructure on which to base development

A large site allowing for future development
The public costs involved in developing the airport link were reduced by about 23%
The MAX Airport Extension has significantly improved transit access to Portland International Airport( PDX)
Encouraged greater use of transit for airport trips, supporting regional policies to reduce private vehicle use.
Significantly improved transit access to PDX and encouraged greater use of transit for airport trips, supporting regional policies to
reduce private vehicle use. Furthermore, the operating costs of the extension are partly offset by the fare revenue from transit trips
generated by the Cascade Station development.
This project was constructed through a public-private partnership (PPP) with Bechtel Enterprises, which allowed the project to be
completed many years earlier than had been planned
Primary goal is to create a major employment centre on the east side of the city, taking advantage of its proximity to major transportation
infrastructure, including the airport that revenue from induced property tax, hotel/motel tax, utility franchise fees, and business license
fees were projected to exceed the Citys direct and indirect costs of providing a share of the infrastructure and standard municipal
services.
 The PDC memorandum also stated that the preliminary engineering study that had been undertaken under an intergovernmental
agreement between the PDC, Port of Portland, and TriMet had determined that the project could be built within the existing publicly-
owned right-of-way for the capital cost originally discussed by the parties and within the timeframe proposed amount of retail
development rights at Cascade Station and allowing a limited number of larger stores would not have an adverse effect on other regional
retail centers.
Portland City Council amended the Cascade Station/Portland International Center Plan District to allow up to three larger-format stores,
increase the allowable amount of retail use, and adjust other allowable uses and that these changes would help attract anchor stores and
revive development interest in Cascade Station, with the anchor stores providing the customer draw to attract smaller retail stores and
related businesses.
The Red Line Airport extension was funded by a combination of local funds and the contribution from Bechtel Enterprises.
No direct federal funds were used in the project, which simplified approvals and allowed more rapid decision-making.
The funds were then repaid by Bechtel through a $28.2 million assignment fee paid to the PDC for the development rights at Cascade
Station, which PDC then assigned to Tri-Met to pay off the bonds.
The Airport MAX project represents an innovative approach to the use of a public-private partnership to allow a major airport ground
access project to be implemented many years earlier than it would have been otherwise.
MAX Airport Extension has significantly improved transit access to PDX and encouraged greater use of transit for airport trips, which
supports regional policies to reduce private vehicle use.
By configuring the Cascade Station development around two stations on the MAX Airport Extension, the operating costs of the
extension are partly offset by the fare revenue from transit trips generated by the development.
 WEAKNESSES ()

Current low passenger numbers

Only 3 air routes originating from Portland (Portland-Hamilton, Portland-Avalon, Portland via Hamilton to Essendon)
District had reached its maximum authorized indebtedness of $73 million prior to the expiry date. From that point on, PDC project
activities within the URA must be funded from the sale or lease of property in the URA acquired by PDC over the years.
Environmental assessment had been completed but had not yet been made public.
Developing the Cascade Station site using more conventional approaches, or compare the net public benefits to the potential return on
investment of CSDC.
Preliminary engineering costs were $3 million and construction costs were $125.8 million. However, earlier documents from the project
partners reported that construction costs were only $125 million.
Whether the Cascade Station development has proved a good deal for Bechtel Enterprises is less clear.
Uncertainty whether the overall costs to society of using private funding sources to develop public infrastructure are reduced or
increased compared to funding these projects entirely from public sources.
While private sector funding may be viewed as free money by the agencies sponsoring a particular project, which do not have to meet
these costs out of constrained budgets, these funding contributions are most certainly not free from the perspective of society as a whole,
but have to repaid one way or another.
Since the project has 4 different entities that form alliance for the project, this is likely to develop conflicts of interest between them.
Subsequently there is a another contractor engaged as a main contractor so there are possibilities that this certain contractor might not be
experienced and might cause the project progress to be affected.
 OPPORTUNITIES (+)

Public costs involved in developing the airport link will reduced about 23 %
Provides opportunity of development such as Cascade Station(PAC) and township
Air passenger traffic at PDX is forecast to increase to about 27 million by 2035.
Attract aviation based commercial activities to airport
Expand route network
Increase Freight operations
Develop grow existing Regular Transport Passenger (RTP) (tourism) market
In October 2005, IKEA, an international home furnishings retailer, announced plans to locate their Portland store at Cascade Station.
Projects will lead to a surge of activity by other retailers and restaurants, together with office and hotel development.
 THREATS ()

Further funding for future development is not available

Large operating deficit is incurred to run airport
Sole RTP provider limits transport options, limits revenue capacity
Traffic flow will be affected during construction, susceptible to induce traffic congestion
Increases the like hood of accidents both in the construction site and the surrounding areas.
Project might be delayed / halted due to regulatory issues or non-compliance to OSHA
Changes in the government policies might cause disruption in the projects
Possibilities of land acquisitions by the government to start other new government projects.
Unavoidable circumstances for instances natural disasters like tsunami, flood & earthquake.

Risk Identification
Risk Number
1.0 2.0 3.0 4.0 5.0 6.0

Risk Event Insufficient Insufficient , Interference from Environmental & Technology & Unexpected
Description Funding sources inexperience changing safety issues machinery issues stakeholders
labour & technical government
expertise policies and
regulations
Risk Project might Design errors Laws and local Construction Technology Failure to
Consequences be delayed or and omissions standards workers are changes comply with
even become Design process change three times contractual
halted takes longer Tax change more likely to quality
Construction than anticipated Government be killed and Requirements
cost overruns Failure to carry economic twice as likely Scheduling
Estimating out the works policy and to be injured as errors,
errors; in accordance market workers in other contractor
Inadequate with the regulations occupations. delays
productivity, contract have an The costs of Project team
Cost, change, Inexperienced influence on these accidents conflicts
or contingency workforce and the projects are immense to Expired
control staff turnover Contractors the individual, temporary
Poor Delayed must comply to the employer construction
maintenance, deliveries with and to society. permits
security, regulations Contradictions
purchasing, etc established by in the
federal, state construction
and local documents
Increased governments. They can Poor conflict
spending also Any tax amount to an management;
 eats into the increase will appreciable poor project
limited pool of discourage proportion of organization and
savings, investment, the contract definition of
leaving less especially price responsibilities;
money for among Triggers public absence of
private financiers, objections on leadershipi
investment. who take the the project
risks of
starting and
managing
projects.

Risk Response Ensure Hire an New Improve

expenditures experienced alternatives communication,
are within project required to project goals
budget manager and avoid, mitigate understandings
Increase the experienced or minimize & team support
frequency of workforce. environmental
project impact
monitoring Complete
Use CPM & environmental
WBS analysis