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Indiana Toll Road gets $3.85 billion bid

Jan. 30, 2006
Last week Indiana Gov. Mitch Daniels announced a $3.85 billion bid from Australian-Spanish consortium Cintra Concessiones de Infraestructuras de Transporte, S.A. and Macquarie Infrastructure Group for a 75-year lease agreement to collect the tolls and maintain the Indiana Toll Road

Last week Indiana Gov. Mitch Daniels announced a $3.85 billion bid from Australian-Spanish consortium Cintra Concessiones de Infraestructuras de Transporte, S.A. and Macquarie Infrastructure Group for a 75-year lease agreement to collect the tolls and maintain the Indiana Toll Road.

The 157-mile corridor spans the state from east to west and consists of sections of I-80/90/94. It acts as a conduit between Illinois and Ohio. Gov. Daniels is seeking authorization from the state legislature to approve the lease—known as measure HB 1008.

According to the Owner-Operator Independent Drivers Assn. (OOIDA), which is against the concept of privatizing the interstate highway system, the Republican-led House Ways and Means Committee voted 14-10 to advance the measure on Jan. 24. The bill now heads to the full House, where the Republicans also have a majority.

If the lease agreement is approved, the state will receive a lump sump payment that, according to the Governor’s Office, would completely reverse the $2.8 billion transportation budget shortfall over the next ten years.

“Continuing the status quo would result in only half of Indian’s critical transportation construction projects being built,” according to the Governor’s Office.

The same foreign consortium had in 2004 signed a $1.8-billion agreement to lease the Chicago Skyway for 99 years.

According to the Governor’s Office, the lease agreement would assure the leasing company will maintain and improve the roads through actions and sanctions for non-compliance and set conditions for the state to revoke the contract. The Governor’s Office pointed out that the Chicago Skyway agreement dictates everything from maintenance upgrades to the time it take to remove dead animals from the roadways.

Meanwhile, Indiana local officials are urging the Governor to slow down his drive to accept the bid. John A. Swanson, executive director of the Northwestern Indiana Regional Planning Commission (NIRPC), sent the governor a letter requesting that HB 1008 strip language authorizing the lease of the Toll Road to give the public and stakeholders more time to consider the proposal.

“There needs to be consideration of the whole concept of privatizing and the quality of the proposal,” said Kenneth Dallmeyer, NIRPC director of transportation planning. “We feel there hardly hasn’t been any public discussion on it.”

He added that the bid to privatize the Indiana Toll Way represents the largest highway privatization plan to date.

“By using clever terms like ‘innovative financing’ or ‘public private partnerships’ they lull many people into believing this is okay, or that it might even be good public policy—it’s not.” said OOIDA executive vp Todd Spencer. “It’s just another way to get more people to part with more of their money while allowing policy makers to avoid making intelligent decisions on how transportation dollars are spent.”

About the Author

Terrence Nguyen

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