CHICAGO — Illinois Gov. Pat Quinn and Indiana Gov. Mike Pence opened a two-day business forum on Monday aimed at luring private contractor and investment interest in a proposed $1.3 billion expressway linking the two states.
The two governors plan to finance the 47-mile Illiana Expressway, which would link Interstate 55 in Illinois with Interstate 65 in Indiana, through a public private partnership. "The Illiana is a key transportation priority for Illinois," Quinn said. "We will deploy an innovative public-private partnership to put thousands of people to work and drive our regional economy forward."
The crowd included hundreds of construction and engineering contractors and potential investors gathered at a convention center in suburban Chicago to learn about the project at the forum titled Partnering for Progress: Financing through Public-Private Partnerships.
"We need your brain power, we need your investment power," Quinn said.
"New opportunities in agriculture and manufacturing create additional needs in infrastructure," Pence said. "As global demand increases, so does the need for efficient transportation. Illiana will improve upon Indiana's transportation system and connect Indiana with the global marketplace."
The project has long been on the drawing board for both states as a means to ease congestion on existing roads, improving travel times and accessibility, while creating an estimated 9,000 construction jobs and more than 25,000 long-term jobs.
Quinn and former Indiana Gov. Mitch Daniels signed a bi-state agreement committing to the project in 2010. While Indiana has turned to the P3 model to finance a series of projects and it leased the Indiana Toll Road in 2006 to raise funds for transportation projects, its neighbor has been slower to embrace the template.
Legislation was needed to permit the use of a P3 for the project in Illinois, and the state has committed about $92 million in its $12.6 billion, six-year transportation budget for ongoing work towards building the new expressway.
Officials from both states' transportation departments are holding meetings during the forum with investment consortiums that have expressed initial interest in the project. The Federal Highway Administration earlier this year approved the corridor but various environmental and financial studies are ongoing. The states hope to begin construction in 2014.
The states are exploring several privatization structures, including one that relies on availability payments.
Indiana used a design-build-finance-operate and maintain model with availability payments to finance the state's half of the $2.6 billion Ohio River Bridges project launched earlier this year. The states are also exploring an upfront investor payment to finance the project, with investors reaping the benefit of toll collections. The terms of the transactions could run between 35 to 50 years.
The Indiana Finance Authority in March issued $640 million of private activity bonds for the Ohio River Bridges project on behalf of WVB East End Partners LLC, the company that is building Indiana's half of the project. It marked the state's first P3 structured with availability payments.