State announces takeover of troubled I-69 Section 5 project
INDIANAPOLIS – The state of Indiana announced they are taking over control of the troubled I-69 Section 5 project which runs from Bloomington to Martinsville. The Indiana Finance Authority (IFA), I-69 Development Partners and its bond holders reached the settlement agreement on Friday.
The Indiana Department of Transportation (INDOT) will take direct control of the project by July 31, 2017.
“I am delighted for Indiana taxpayers that we have reached an agreement for the State to assume control and finish this project,” Governor Eric Holcomb said.
This will not increase the overall project cost to taxpayers and may provide the State future savings, according to Public Finance Director Dan Huge. The original cost was approximately $590 million under the public-private structure; the new agreements and structure total approximately $560 million dollars.
Below is a summary of the details of the transaction:
- The IFA will issue lower interest highway revenue bonds, anticipated to be rated AA+ to fully replace the developer’s private activity bonds, originally rated at BBB- and related interest for a total amount of $246 million in bonds
- The I-69 Development Partners will provide an additional $12 million to the bondholders and $50 million to the IFA as part of the settlement
Both agreements will release the State from future liabilities or claims with bondholders, the developer, design-builder Isolux Corsan and insurance and surety companies. The State will assume all future financial risk to operate, maintain and preserve the roadway over the next 35 years.
Currently more than 30 subcontractors are working on the roadway, and INDOT says that will continue under their leadership.
Earlier this month, residents and officials expressed their frustrations with the project after the completion date was pushed back for a fourth time to August 2018. City officials in Bloomington have also called the project a “safety concern,” citing numerous accidents and injuries amassed on the stretch over the years.
Bloomington Mayor John Hamilton issued this statement:
“It has been my position for some time that the most viable option for getting I-69 Section 5 completed as soon as possible would be for the state to take control of the project. I appreciate Governor Holcomb’s commitment to completing Section 5 and I look forward to discussing outcomes with him at our upcoming meeting.
“I remain deeply concerned about traveler and worker safety throughout the construction zone. I urge drivers to continue to use extreme caution and strictly observe all posted advisories and speed limits.”