| Description |
In operation since 1956, the Indiana Toll Road stretches 157 miles across the northernmost part of Indiana from its border with Ohio to the Illinois state line, where it provides the primary connection to the Chicago Skyway and downtown Chicago. The Indiana Toll Road links the largest cities on the Great Lakes with the Eastern Seaboard. Connections with I-65 and I-69 lead to major destinations in the South and on the Gulf Coast. The facility varies from four to six lanes and in 2005 carried approximately 46,000 vehicles per day on its western end and 25,000 vehicles per day in the east.
For the past 25 years the ITR has been operated by the Indiana Department of Transportation (INDOT). However, even before his inauguration Governor Mitch Daniels discussed the possibility of leasing the road to the private sector and in 2005 he tasked the Indiana Finance Authority (IFA) with the responsibility of exploring the feasibility of leasing the Toll Road to a private entity. IFA engaged Wilbur Smith to prepare revenue analysis and Goldman, Sachs & Co. to provide financial advice.
These assessments led to IFA’s release of a Request for Toll Road Concessionaire Proposals on September 28, 2005. Four teams submitted proposals by the October 26 deadline. The lease concession was awarded to ITR Concession Company LLC (ITR) comprises of an even partnership between Cintra of Spain and Macquarie of Australia. ITR submitted the highest bid of $3.8 billion. Other bidders included a group led by Babcock & Brown bidding $2.84 billion, an all Spanish group bidding $2.52 billion, and Kwame Parker, bidding $1.9 billion. A fifth group led by Abertis of Spain withdrew shortly before the deadline.
ITR lease transaction was contingent upon authorizing legislation. House Enrolled Act 1008 (HEA 1008), popularly known as “Major Moves,” was signed into law in late March 2006. On April 12, 2006, ITR and IFA executed the “Indiana Toll Road Concession and Lease Agreement.” Pursuant to its terms, IFA agreed to terminate the current lease to the Indiana Department of Transportation. A ten-member board of directors that oversees ITR and its operations of the Indiana Toll Road. ITR formally assumed operational responsibility for the Toll Road on June 29, 2006. |
| Lenders |
Loans were provided by a collection of seven European banks:
Banco Bilbao Vizcaya Argentaria SA, Banco Santander Central Hispano SA, and Caja de Ahorros y Monte de Piedad de Madrid, all of Spain: BNP Paribas of France;DEPFA Bank of Germany; RBS Securities Corporation of Scotland, and Dexia Crédit Local, a Belgian-French bank. |
| Innovations |
The concession agreement establishes toll rates and possible increases and places limits on the return on investment for the concessionaire.
The concession fee will provide funding for the Major Moves program, which will support about 200 transport projects around the state, including beginning construction of I-69 between Evansville and Indianapolis.
The proceeds will also fund projects in the seven Toll Road counties and provide $150m over two years to all the state's 92 counties for roads and bridges. |
| Related Links / Articles |
This page of the IFC’s website provides access to the important procurement and concession documents associated with the Indiana Toll Road long term lease.
http://www.in.gov/ifa/tollroad.html/
An interesting article originally published by The Washington Post weighing the pros and cons of the lease of the Indiana Toll Road
http://www.post-gazette.com/pg/06169/698927-84.stm
Indiana Supreme Court Opinion to legal challenges to the long term lease
http://www.in.gov/judiciary/opinions/pdf/06200601trb.pdf
Webpage presenting a series of articles from January 2006 on the sale of the Indiana Toll Road organized by The Times, South Bend Tribune and Fort Wayne Journal Gazette.
http://www.tollroadforsale.com/tollmain.php
Indiana Policy Review by the Reason Foundation: Bottom-Line on Indiana Toll Road Deal http://www.reason.org/commentaries/segal_20060710.shtml |
