The New Terminal One (NTO) at JFK

What does being lead sponsor entail?

Ferrovial is deploying its capabilities, from airport investing and operations expertise to design, construction and financial structuring in the United States, our core market. 

With our consortium partners and in collaboration with the Port Authority of New York and New Jersey, we are creating a state-of-the-art terminal that will provide a world-class passenger experience through the main gateway to the United States while delivering community and economic benefits through job creation during construction and operations.

We know that progress will happen only by looking at the project holistically, including the unique characteristics of its surrounding environment. New York is the perfect melting pot for improved infrastructure and local enterprise development opportunities.

What did Ferrovial bring to the project in terms of airport experience?

We are bringing our experience and success in transforming and operating global airport assets, such as Heathrow in the UK and Dalaman Airport in Turkey.

Our expertise in delivering mega projects, such as Heathrow Terminal 2, has been fundamental to anticipating issues, mitigating risks and driving the schedule. Over the last 18 years, we have substantially improved operational performance, making Heathrow the most internationally connected airport and Europe’s busiest hub.

At NTO, we were able to quickly assess the new Terminal One project risk profile and move at pace in the transaction timeline. After the transaction was closed, our involvement as providers of the Management Services Agreement has enabled us to efficiently drive design evolution aligned with operating needs and world-class standards. We are also supporting the air service development activities and attracting top airlines to the new terminal.

Furthermore, as principal of the Project Management Office (PMO), Ferrovial Construction oversees the day-to-day relationship with the design builders, ensuring that best practices are met and the company delivers value through engineering and efficiency.

The results are visible to anyone traveling today through JFK: the head house structural steelwork is complete, while the roofing and curtain walling are underway. We expect to be watertight later this year.

PFI named the financing of the $9.5bn project America’s P3 Deal of the Year 2022: what is special about it?

NTO is the largest public-private partnership (P3) in the US. The scale of this transformative project will consolidate the footprint of the existing Terminal One and former Terminals Two and Three into a unique New Terminal One, becoming the largest terminal at JFK airport and New York City. 

Its technical complexity, including integrating the Airtrain rail and the train stop inside the terminal, will make this a landmark project in the P3 market.

This mega-project leverages local talent capabilities and commitments, benefitting local stakeholders, not only residents, but also local businesses, and underrepresented groups. This is evidenced by a strong commitment to hitting an ambitious 30% participation target for minority and women-owned business enterprises.

Finally, this iconic project was procured, structured and funded through one of the most challenging periods of recent times due to the COVID-19 pandemic, which is a testament to the work of all those involved and underscores why NTO is indeed so special.

How does Ferrovial approach public-private partnerships?

Many of the world’s most successful international airports have benefitted from public-private partnerships, a customisable approach to project delivery and public-asset management.

This partnership model enables public authorities to undertake much-needed airport infrastructure projects. By working together, innovative solutions are tailored to the needs of the airports and surrounding communities.

The P3 model also facilitates the raising of new revenues to support and expand airport services. Cities and regions can create airports that serve as engines of growth, providing economic and social benefits for years to come. At the same time, through a robust contractual framework, the public sector retains control regarding the quality of service and those key parameters that are considered essential to them.

We seek bilateral long-term partnerships and relationships where we can add value through our capabilities as investors, operators, and developers of complex infrastructure projects. Our successful track record in airports, highways, and other infrastructure projects speaks for itself, and NTO is the perfect example of what we can deliver.

The investors won praised for ‘overcoming the obstacles that come with a projectof such size and nature’. What were these and how did you overcome them?

Firstly, becoming comfortable with the risk profile of the project. Our knowledge of the industry, the US market, and the unique characteristics of this project made this possible in a very accelerated timeline. Also, our credentials were adequate for the Port Authority to feel comfortable with our involvement as lead investor and thus, our capacity to deliver the project objectives.

Our expertise in design and construction was also important to close the last outstanding points of complex design and build agreements, among them reaching a guaranteed maximum price. Our expertise in previous airport projects helped address some outstanding challenges relating to interfaces, insurance arrangements, and others that helped bring all parties to a good agreement.

Finally, our financing teams and our partners were able to secure capital for the entire Phase A of the project. All of this was achieved in a difficult market environment with high interest rates and low liquidity, ensuring the feasibility of this project. We continue to pursue our strategy of maximising the efficiency of our assets’ financial structures, with the first $2bn Green Bonds refinancing issued in December 2023.

NTO is a massive undertaking – what is being done to ensure the project’s benefits reach the local community?

The New Terminal One is committed to local inclusion and labour participation with an industry-leading focus on diversity and capacity-building opportunities, including a 30% MWBE (Minority & Women-owned Business Enterprise) participation goal, a 3% SDVOB (Service-Disabled Veteran-Owned Business) participation goal, and prioritisation of opportunities for local residents and businesses. As of now, these ambitious targets have been surpassed and the project is proud to have involved local providers and labour in the construction and delivery of this project. As of today, the project has delivered hundreds of millions of dollars in MWBE benefits.

One of the aims of the new terminal is to future-proof JFK: how will this be achieved?

The New Terminal One will serve as the anchor terminal in the $19bn redevelopment of JFK. The terminal aspires to be rated as a Top 5 Skytrax terminal globally and will serve as the global gateway to New York and the United States.

The international-only terminal will deliver the market’s much-needed wide-body capacity. Once built out, the terminal will be equipped with 22 new widebody gates and one narrowbody gate, anticipated to handle more than 16 million passengers annually. The terminal will deliver the latest green technology with its microgrid generating over 11MW of green energy.

The single largest airport P3 project in the US is a future-proof development that is expected to change the aviation landscape in New York for years to come.