Posted on 08/21/2017 1:10:38 AM PDT by Tolerance Sucks Rocks
The state has officially taken over the Interstate 69 Section 5 project from I-69 Development Partners.
The Indiana Finance Authority announced it had reached an agreement with the private developer in June to take over construction, operation and maintenance of the project after several delays in the completion schedule. To officially take control of the project, the Indiana State Budget Committee had to approve the plans. Additionally, all parties had to endorse a settlement agreement and bondholders had to be paid in full.
The finance authority announced Monday it had completed the settlement transaction to terminate the contract with I-69 Development Partners and reimburse bondholders for $246 million.
“The state is officially in charge of this important project,” Gov. Eric Holcomb said in a press release. “Our focus is to complete this crucial stretch of roadway that provides a promising path to economic growth for Hoosiers and businesses in southern Indiana.”
The state hired a private development company called I-69 Development Partners — formed specifically for the Section 5 project — in 2014 to finance, design, build, operate and maintain that crucial stretch of roadway. The state estimated upgrading 21 miles of Ind. 37 from Rockport Road in Monroe County to the Indian Creek bridge in Morgan County would cost about $347 million. I-69 Development Partners submitted the winning bid of $325 million, claiming construction would be substantially complete by Oct. 31, 2016. The private developer was responsible for coming up with the initial financing and the state would make "milestone" payments as key milestones were reached in the construction process as well as annual operations and maintenance payments for 35 years after completion.
The state ended up helping to finance more than half the cost of construction when the Indiana Finance Authority issued nearly $244 million worth of tax-exempt, private-activity bonds on behalf of I-69 Development Partners.
Troubles first came to light in the spring of 2016 when at least one subcontractor stopped working due to late payments. While those payment issues were eventually resolved, similar issues would stop work again. The completion date would be extended multiple times and the bonds sold to help finance the project would be downgraded to junk status before the state took action to take over the project.
Highway-revenue bonds are being used to retire the private-activity bonds, according to the press release. These bonds are rated AA+, while the private-activity bonds were initially given ratings of BBB and BBB- from Fitch Ratings and S&P Global.
The project, now under Indiana Department of Transportation control, is expected to be complete in or before August of 2018. The department of transportation has been working with Walsh Construction over the past month to assess the project and identify milestones to keep it on track. Most of the primary subcontractors who worked on the project under the previous arrangement were retained, according to the release.
bad news - full privatization means just that, keep it private. Another crony capitalist bailout.
Not hardly.
I-69, like all Interstates, US Highways, and State Highways is owned by the State.
The lowest bidder on the I-69 Section 5 project (Upgrading State Road 37 from Bloomington to Martinsville to Interstate standards) turned out to have a parent company in Europe with severe financial problems. This did not become apparent until after construction started.
The Indiana Finance Authority stepped in when the contractor failed and is now has a new contractor to finish the project.
More here from the I-69 Indiana Thread on the AA Roads Forum. It covers the project since 2011.
http://www.aaroads.com/forum/index.php?topic=4855.2475
all interstates should be fully privatized
Foolish thought
because the gov’t is so efficient ?
privatizing the interstates will result in reduced costs and improved quality because the private sector does everything better
From what I read elsewhere, Walsh (selected to assist in completion) built some of the earlier phases including the two bridges over the Ohio. They were also short listed on this phase 5 and not selected.
I know the design firm, Burgess and Niple, who was stuck with the failing foreign equity and foreign lead contractor.
That might be the White River.
The I-69 bridge over the Ohio, is still in the planning process. It will be a Toll Bridge until the construction bonds are paid off (per Kentucky law).
http://www.aaroads.com/forum/index.php?topic=3245.800
The bridges that I am talking about are the pair at Louisville on I-65 and I-64 I believe. Somehow, Indiana had the lead instead of Kentucky.
Yes, Indiana and Kentucky split projects like this, Indiana was the lead on the The Ohio River Bridges Project in Louisville. Kentucky is taking the lead on the I-69 Bridge in Evansville.
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