LAX APM Goes to Court, and the Court of Public Opinion

This summer the LAX Automated People Mover (APM) project is back in the news, and it is also in court. A yearlong dispute over several delay and cost claims spilled into a lawsuit between the project concessionaire and its public sponsor, Los Angeles World Airports (LAWA) in July.

The lawsuit and public scrutiny come as the project faces crucial deadlines in the coming months. The project is, by all accounts, more than 99 percent complete at this point, but it is in the middle of a rigorous testing schedule. The contractual deadline for project completion is in December. However, the project could enter into financial distress even sooner, as the lender’s longstop date for project completion is in October. The LAX APM project concessionaire has filed delay claims as part of the recent ongoing dispute, but these delay claims have not been granted by LAWA to date.

The lawsuit is the next step to resolving the dispute over the ongoing cost and delay claims on the project, but it is unlikely to reach a conclusion in time for the project’s upcoming deadlines. The APM concession agreement includes a dispute resolution procedure outside of court, in which disputed claims are reviewed by an independent evaluator approved by both LAWA and the concessionaire, called a “project neutral.” The project neutral has evaluated and made recommendations regarding the outstanding claims, but LAWA did not agree with the project neutral’s recommendations nor did it participate in the project neutral’s hearings on the outstanding claims. That leaves a formal claim and litigation as the next step to resolving the dispute (the project neutral’s recommendations aren’t binding). The LAX APM project concessionaire filed a formal claim regarding the current delay and cost claims late last year.

The LAX APM partnership has weathered delay and cost claim disputes before, but this is the first time they have spilled over into litigation. In addition to the litigation and impending deadlines, the project has been on the receiving end of a wave of bad press in recent weeks. A recent LA Times column called the project “the most ridiculously mismanaged construction project in the United States.” That analysis cites a recently published YouTube analysis of the project called “The REAL Story Behind the LAX People Mover Fiasco” which has garnered more than 100,000 views. That was viral enough for a video about an infrastructure project for The Hollywood Reporter to write it up.

More media and public interest in complex infrastructure projects is generally a good thing. There is, however, a problem with the recent wave of attention for the LAX APM project. In this case, almost all of the new coverage is based on the findings of a Los Angeles County Civil Grand Jury investigation of the project, which was published last year.

The source of the report alone could lead one to conclude that the findings come from a place of technical expertise or even a court of law, or perhaps even that the project was under some sort of official investigation for wrongdoing. None of those things are true, however. Sadly, the claims and conclusions in the grand jury report are questionable, and that is putting it very, very nicely. Now that those findings are being presented across major media articles and opinion columns about the project, they warrant a bit of scrutiny.

The LAX APM project is a 2.25 automated rail system connecting LAX’s existing airport terminals. Once operational, it will also provide rail service between the airport and consolidated rental car facility, as well as the existing LA metro transit network. The project was procured as a P3 in 2018.

Of note, the project was originally intended to be completed and opening ahead of major Los Angeles events such as this summer’s World Cup and the 2028 Summer Olympics. The project has already experienced several delays and cost overruns prior to the current dispute. In July 2024, LAWA’s Board approved a global settlement on the project to resolve a number of long-outstanding cost and delay claims for the project. At the time, it appeared that the concessionaire and public sponsor had finally resolved outstanding issues as the project approached completion. The recent cost and delay dispute has again put the project, and the partnership, on the rocks.

The concessionaire for the LAX APM project is LAX Integrated Express Solutions, or LINXS. LINXS is a joint-venture between Fluor Enterprises, Balfour Beatty, Hochtief PPP Solutions, ACS Infrastructure Development, and Bombardier Transportation. The design-build team for the project includes Fluor, Balfour Beatty, Flatiron and Dragados. The lead design firm for the project is HDR Engineering.