Paris Airport Roof Structure to be Replaced

March 18, 2005

Aeroports de Paris (ADP), the authority that owns and operates both the Charles de Gaulle airport and Orly airport in the French capital, has determined that the entire roof structure of Terminal 2E must be torn down and replaced.

The partial collapse of the newly constructed Terminal 2E last May, killed 4 people and injured 3. In a report, issued in February (See IJ Website Feb.16), an expert commission under the direction of Jean Berthier, engineering Professor at France’s Ecole Nationale des Ponts et Chausées, concluded that both structural and design faults were the underlying cause of the collapse.

According to the ADP, further analysis has indicated that the roof structure itself could constitute a continuing hazard if it is simply repaired. On the other hand the ADP has concluded that the building’s underlying foundation is sound. It plans to demolish the remaining roof structure and rebuild it at an estimated cost of 100 million euros ($133 million).

The new terminal originally cost 750 million euros (app. $1 billion), and up until now tearing it down completely has been a distinct possibility. The decision to replace only the roof therefore decreases the insured loss estimates considerably, although $133 million is far from negligible. In addition the Terminal 2E building will remain essentially closed – although a few flights are operating out of it – until the repairs are completed at the end of 2007.

The original coverage was placed through the broker Gras Savoye. AXA Corporate Solutions was the lead carrier with around 60 percent of the risk, followed by GAN, a division of France’s Groupama, with around 40 percent. According to reports reinsurance was placed with Swiss Re, Munich Re, France’s SCOR Group, General Re and Hannover Re, which has estimated its exposure at no more than 15 million euros ($20 million).

AXA has said only that its exposure would not exceed 10 million euros ($1.33 million). GAN has said that it cannot estimate the amount of the loss, while SCOR indicated that it would have no significant impact on its results.

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