Indiana has announced an agreement to terminate a contract with I-69 Development Partners and take control of construction of the 21-mile stretch of I-69 from Bloomington to Martinsville.
The deal ends the public-private partnership after delays and the near insolvency of one of the project’s key companies.
The Indiana Finance Authority (IFA) will assume direct control of the project, which is about 60 per cent completed. The estimated completion in Aug. 2018 is about two years late.
The Indianapolis Star reports that state officials say they made no mistakes concerning the project. “They also did not discount the possibility of using a public-private partnership for I-69 Section 6 from Martinsville to Indianapolis,” the newspaper reported.
“I think we use them where appropriate,” said Micah Vincent, director of the Office of Management and Budget. “You look at how successful we’ve been on Ohio River bridges. We’ve seen this model work very well. We’ll continue to evaluate and take the best option for Hoosiers.”
The state will need to pay off bondholders and cover about $115 million in increased construction costs, said IFA director Dan Huge. The state says it will get the money from a bond issue, at a lower interest rate than the bonds for the public-private partnership.
Indiana also negotiated a $50 million settlement payment from the company and I-69 Development Partners also will pay $12 million to the bondholders.
Many of the project’s problems occurred in part because of the near insolvency of Isolux Corsan, a Spanish company that effectively owned more than 80 per cent of I-69 Development partners.
“That company struggled with I-69 — its first road project in the U.S. — from the beginning. It is now in a proceeding in Spain to avoid bankruptcy,” the published report said.
The state expects to have a signed agreement by July 31.