Citing a lack of competition that wouldn't benefit taxpayers and travelers, Chicago Mayor Rahm Emanuel halted plans to lease Midway International Airport after one of the remaining two bidding groups backed out.
A team consisting of Ferrovial and Macquarie Group was the only one remaining after a consortium of Industry Funds Management of Australia and Manchester Airports Group withdrew, according to Sarah Hamilton, a spokeswoman for the mayor. The bidders couldn't make an offer that would sufficiently protect taxpayers' interests, Ms. Hamilton said.
Mr. Emanuel announced in December his plans to explore such a transaction, reviving an idea that died in 2009. The contract for the second-biggest Chicago airport could be valued at $2 billion, two people familiar with the auction told Bloomberg News in July.
The lease, which initially drew six bids including from London's Gatwick airport owner Global Infrastructure Partners, was part of a wider Federal Aviation Administration pilot program to privatize airports and spur infrastructure investment.
Spain's Ferrovial, the largest stakeholder in Europe's busiest airport, London Heathrow, had teamed with Macquarie's infrastructure arm in a group called Great Lakes Airport Alliance. Ferrovial operates the Chicago Skyway, a South Side toll road about six miles from Midway that leads to Indiana.
Mr. Emanuel had said the city would receive a percentage fee from the Midway lease deal as well as an annual cash stream. The proceeds would have been used to pay down the debt from the rebuilding of the airport and to invest in mass transit, Ms. Hamilton said.
“The mayor said he would not use any of the money for city operating expenses,” Ms. Hamilton said.
Chicago's credit rating was dropped three levels in July by Moody's Investors Service to A3 from Aa3 because of a $36 billion retirement fund deficit and “unrelenting public safety demands” on the budget.