CHICAGO - Indiana and Illinois have finalized a development pact for the proposed Illiana Corridor toll road that commits the two to a combined funding contribution of up to $350 million.

Both states are eyeing separate public-private partnerships using an availability payment structure.

The binding agreement announced Tuesday calls for both states to use their best efforts to complete their respective portion of the project by the end of 2018. It outlines each state's roles, responsibilities and project management duties, as well as project delivery requirements and schedules.

"This agreement solidifies that partnership and our commitment to the success of this project," Illinois Secretary of Transportation Ann Schneider said in a statement.

The initial "conceptual" estimate for the road is up to $1.5 billion based on the first environmental impact study, but "it is anticipated that the Tier 2 EIS will identify, refine, and detail additional cost factors that will modify the projected conceptual costs," the agreement says.

Illinois has committed up to $250 million to the project and Indiana between $80 million and $100 million, according to the pact. The project would be financed through a mix of state and federal transportation program funds, proceeds of bonds issued by either state, private activity borrowing, Transportation Infrastructure Finance and Innovation Act loans, and developer contributions.

The Indiana Department of Transportation would make availability payments to its private developer through state payments, subject to legislative appropriation, and from toll revenues, over a 35-year term.

Illinois would make its availability payments over a longer 39-year term.

Each state's private partner "will be obligated to design, construct, finance, operate, and maintain" the road. The agreement was signed late last month by Schneider, Indiana Finance Authority Chairman Christopher Atkins and Indiana's public finance director, Kendra York.

The 47-mile east-west tollway would link Interstate 55 in Illinois to Interstate 65 in Indiana.

"The agreement enables us to move the project along efficiently in connecting our distribution centers and trucking corridors to the rest of the world," said Indiana Department of Transportation Commissioner Karl Browning.

Illinois Gov. Pat Quinn and Indiana Gov. Mike Pence are major supporters of the project, saying it will create 13,000 construction jobs and result in an estimated $1.3 billion in wages over a 35-year period and $1 million in daily travel time savings.

In Illinois, some environmental groups and transportation planning organizations have decried the project as a waste of money that could leave the state on the hook for $1 billion if the toll road doesn't draw sufficient traffic. Chicago and Cook County leaders are also against it.

The Environmental Law & Policy Center, representing the Sierra Club and Openlands, filed a lawsuit last month in the Circuit Court of Cook County asking the court to find that the project does not have the necessary approval to proceed.

Transportation officials announced in March that the project was eligible to apply for a TIFIA loan. If approved, the loan's relatively low interest rate could mean a savings of as much as 20%, officials said.

Illinois in January announced its final list of qualified developer teams allowed to bid on what would mark the state's first P3. Indiana's shortlist includes four private teams that will compete to work on the state's latest and largest P3.

The Illinois list includes: Illiana West Mobility Partners, which includes Cintra Infraestructuras, S.A. and contractors Ferrovial Agroman US Corp and White Construction, Inc.; and Illinois Corridor Connection Group, which includes ACS Infrastructure Development, Inc., Fengate Capital Management, Ltd., and contractors Dragados USA, Inc., F.H. Paschen, S.N. Nielson & Associates, LLC, and William Charles Construction Company, LLC.

Others are Illinois Mobility Partners, with members Fluor Enterprises, Inc., Plenary Group USA Ltd., and contractor Illinois Mobility Constructors (Fluor Enterprises, Inc., Lane Construction Corporation, and Granite Construction Co.); and WM Illinois - Illiana Partners, LLC which includes Meridiam Infrastructure Illiana IL, LLC, and Walsh Investors, LLC and contractor Walsh Construction Company, IL, LLC.

The Indiana list includes: Meridiam Infrastructure Illiana IN LLC and Walsh Investors LLC; ACS Infrastructure Development In., and Fengate Capital Management Ltd.; Cintra Infraestructuras S.A.; and Insolux Infrastructure Netherlands B.V.

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