State Takes Over I-69 Project From Struggling Developer
The state has reached a deal to take over construction of I-69 from Martinsville to Bloomington.
Office of Management and Budget director Micah Vincent says not counting inflation, it'll cost $30 million less for the state to complete the project than it would have to go forward with a private developer. The OMB and the Indiana Finance Authority declined to disclose the unadjusted costs over the 35 years the state will be in charge of the road.
The state's been looking at taking over the project since at least February, as Spanish-owned I-69 Development Partners began struggling to pay subcontractors and the planned 2016 completion date slid to 2018. At the Holcomb administration's request, legislators tucked a provision into this year's road funding bill authorizing new bonds to pay off the developer's old ones.
Vincent says the state couldn't move to take over the project immediately because the developer and its bondholders didn't want to give up on it.
Vincent says he stands by the original decision to use a public-private partnership instead of having the state operate the project from the beginning. But he says he would have reviewed the developer's qualifications and balance sheet more closely.
Public finance director Daniel Huge says while it's cheaper for INDOT to finish the project now, that's only because it's already half done. Under the original deal, the developer would have been responsible not only for building but maintaining the road. Huge says with much of the construction complete, the handoff makes financial sense.
The IFA tentatively expects to issue about a quarter-billion dollars in bonds at lower interest rates to allow it to buy out the old bonds.
INDOT expects to complete the project in August 2018, nearly two full years behind schedule.