Deal gives INDOT direct control of delayed I-69 Section 5
INDIANAPOLIS (AP) — The state of Indiana has reached agreements to take control of a long-delayed section of the Interstate 69 extension three years after hiring a private developer to complete the work, the Indiana Department of Transportation said Friday. The Indiana Finance Authority, privately run I-69 Development Partners and the company’s bond holders reached settlement agreements in principle for INDOT to assume control of the halfway-completed Section 5 between Bloomington and Martinsville by July 31, INDOT said. The deal is subject to approval by the Finance Authority’s board.
Indiana Public Finance Director Dan Huge said the deals will not increase the overall project cost to taxpayers and may provide some savings. The original cost of the project in current dollars was about $590 million over 35 years, while the new agreements and financing structure total about $560 million, he said.
The 21-mile Section 5 has been plagued by delays since work started in 2014. It was originally scheduled for an October 2016 completion, but the Finance Authority said in a notice to bond holders earlier this month it estimates work on Section 5 now will be substantially completed by Aug. 31, 2018.
“I am delighted for Indiana taxpayers that we have reached an agreement for the State to assume control and finish this project,” Governor Eric J. Holcomb said in a statement.
The Finance authority will issue lower-interest highway revenue bonds that are expected to be rated AA+ to fully replace the developer’s private-activity bonds, originally rated at BBB-, INDOT said.
I-69 Development Partners will provide an additional $12 million to bondholders and $50 million to the Finance Authority as part of the settlement, INDOT said.
A message seeking comment was left for I-69 Development Partners on Friday.
The agreements will release the state from future liabilities or claims with bondholders, I-69 Development Partners, design-builder Isolux Corsan and insurance and surety companies, INDOT said. However, the state will assume all future financial risk to operate, maintain and preserve the roadway over the 35 years. The developer previously had assumed that risk.
Currently more than 30 subcontractors are working on the roadway and that will continue, INDOT said.
Subcontractors have repeatedly halted work due to payment disputes with Isolux Corsan.
Sections 1 through 4 of the I-69 extension between Evansville and Bloomington are complete. INDOT has started surveying work on Section 6 from Martinsville to Indianapolis.