Tuesday, April 01, 2014

Indiana Toll Road Operator Facing Bankruptcy

The private consortium that operates the Indiana Toll Road is facing growing debt problems according to a recent Wall Street Journal report. A European bank that loaned money to the Spanish firm, Cintra, and Maquerie Group, which paid $3.8 billion to the State of Indiana under the terms of its 75-year lease of the toll road, recently sold $500 million of its debt for the toll road to an outside investor for 60 cents on the dollar. Pressure from bondholders could force the controlling partners to file for Chapter 11 bankruptcy protection according to the Journal. Less-than-expected traffic on the toll road is blamed for the private operator's woes.

The problems encountered by the Indiana Toll Road operator should be giving Gov. Mike Pence pause about rushing into his plan to construct the Illiana Expressway under a public-private agreement the state is undertaking with the State of Illinois, but it isn't. Under that agreement, the private operator will build, operate and maintain the new toll road; however, if toll road fees fail to meet their target, the State of Indiana will have to make up the shortfall to guarantee minimum payments to the private operator. Recent documents prepared for the Illinois Department of Transportation suggest that toll road fees for the Illiana Expressway will cost considerably more than the current toll road fees--at least double--charged to drive on other area toll roads. Deficiency payments required to be paid by the state to the private operator would mean less money to fund other highway projects throughout the rest of the state.

9 comments:

Anonymous said...

And we still don't have I-69, because the Republicans won't build a road unless they can figure out a way to monetize it.

Pete Boggs said...

We don't need an I-69; disconnected by a swamp (DC) to southern border integrity / security. That ain't smart.

Is there no end to "Republican" appetite for growing government & tax increases?

Anonymous said...

You don't want Interstates built that will serve Indiana because you worry about security at the Mexican border? That's kind of nuts.

Pete Boggs said...

Not so Anon 10:16, when you step back far enough to view the mosaic...

Paul K. Ogden said...

Indiana really needed I-69. Anyone who regularly drives in the part of the state knows that.

Anonymous said...

Tell us again how going private...without contracts from Gov. agency watchdogs is good thing...Tif's, DCS/FSSA/IBM, ACS, Highways/ jails and more...Health and Hospital...and the big one...Health Care...and many more...roads, highways, pharmacy...Nursing homes...

Had Enough Indy? said...

Pence is moving forward with a toll road for I-69 between Bloomington and Martinsville. We don't need I-69 - but someone with deep pockets who can buy politicians seems to.

Pete Boggs said...

Again, in the absence of border security as the feds define it, some point along Indiana's new I-69 could be a border checkpoint. Look at the history & insecure checkpoint setbacks in current border states, where signs warn of imported dangers, as a managed problem (not solution) of the fed government.

Fast pass access to the heartland without border security might not be such a great idea...

C. Roger Csee said...

Anon 7:37, you obviously think like a liberal democrat.
Why else would you feel that a road should be built, at any cost, with no way to pay for it, the upkeep, or the future of it?
Maybe that's why this country is $17 TRILLION dollars in debt.