CHICAGO - The controversial $1.5 billion Illiana Corridor toll road project suffered a fresh blow this week when the federal government dropped its appeal of an adverse court ruling.

It's the latest obstacle for the joint Indiana/Illinois project, already on life support due to lack of support in Illinois.

The Federal Highway Administration on Tuesday withdrew an intent-to-appeal motion filed in reaction to an adverse June ruling from U.S. District Judge Jorge Alonso. The judge had ruled that the federal government's approval of the toll road was invalid in part because it was based on faulty environmental studies.

Alonso's June ruling found that the government's approval of the project was "arbitrary and capricious" and violated federal environmental law. A coalition of environmental groups in Illinois had sued to halt the project.

A spokesman for the FHA declined to comment on why the intent to appeal motion was dropped, saying the administration does not comment on litigation.

A report in Crain's Chicago Business said the Illinois Department of Transportation, which could appeal the ruling, has said it would follow the federal government's decision and that the project "remains on indefinite hold."

The FHA's decision to drop the pursuit of its appeal is the latest, and most serious, blow for the planned

47-mile highway linking Interstate 55 near Wilmington, Illinois with Interstate 65 near Lowell, Indiana.

Indiana has pushed forward, but the plan has hit serious opposition in cash-strapped Illinois. Gov. Bruce Rauner, who has never publicly supported the project, halted all work on it when he took office this year to save money.

Both states planned to use public-private partnerships to finance their portions.

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