It’s crunch time for the city and Calgary’s airport authority to make a decision about the controversial airport tunnel.

Hampering negotiations are major sticking points such as liabilities and security costs. And if a settlement isn’t reached by May 16, the tunnel could be tossed into the dustbin for good — dashing one of Mayor Naheed Nenshi’s key campaign promises.

Critics say the project is unwarranted and poses too high a financial risk to taxpayers. Meanwhile, a top city official confirms the annual insurance premiums could cost taxpayers up to $2.5 million a year — that’s in addition to the $295 million city council approved for the project in February.

Furthermore, the airport authority has retained the right to stop the project if it hampers its own $3-billion expansion plans — again at the cost of Calgarians.

In April, the authority closed a portion of Barlow Trail north of 48th Avenue N.E. to begin construction of a 4,270-metre runway.

“If we fall significantly behind schedule and they feel that’s going to delay their project then they’re looking for the ability to shut us down,” says Mac Logan, the city’s general manager of transportation.

It’s a risk the city is willing to accept, he adds. “Based on the information we have today we don’t see why that would occur.”

But it’s a gamble Ald. Gord Lowe, a former air traffic control manager at the Calgary International Airport, says he’s never felt comfortable with.

“I’ve never believed it was needed and I see no empirical evidence demonstrating its need,” he says. “I’m not convinced of the cost and furthermore the risk issues and security issues have not been explained to me.”

Last month, city council received a 100-page report outlining several risk factors. However that report remains sealed until a deal is reached, leaving taxpayers in the dark.

City administrators are in the awkward position of negotiating on their knees. Both Ottawa and the province say they won’t hand over any money for the tunnel. Surpassing the $295-million budget would require council’s approval and “chances are slim that it would be accepted if it went back to ask for another $50 million or something,” says Ald. Jim Stevenson.

A strong advocate of the tunnel, Stevenson says both parties have made “significant progress” in negotiations over the past week. But he’s not betting the farm. “I’m hesitant to get too optimistic about it because I’ve been fighting for three-and-a-half years,” he says.

The airport authority contends its daily operations won’t be affected with or without the tunnel; in other words, there’s no incentive or upside for them to have the tunnel, creating a challenge for the city. Nor is the authority willing to stall its own project because of council’s dithering.

Previous city councils rejected the tunnel specifically because of liability and cost issues, says former alderman Bob Hawkesworth, who sides with the airport authority’s position.

“They’re trying to accommodate the city,” he says. “I think it’s quite right for the airport authority to say, “If you want to build the road you have to accept the liability that goes along with it.’”