CHICAGO — Indiana would be allowed to privatize two of the state’s largest proposed infrastructure projects under a measure on its way to Republican Gov. Mitch Daniels’ desk.
The Democratic-controlled House and Republican-controlled Senate last week passed a bill allowing the state to enter into public-private partnerships to finance construction and operation of a proposed $1 billion toll road between Indiana and Illinois and a $4.1 billion joint project with Kentucky to build a pair of bridges across the Ohio River.
The measure passed the chambers with strong support from both parties.
Daniels is expected to sign the bill, which allows him to negotiate — without further legislative approval — with private investors interested in the projects.
“In this session, nothing the General Assembly will do will be as tangible and real in increasing new jobs as this bill,” Daniels said during a question-and-answer session with reporters Friday. “The doors are now open to get these long-sought projects up and running.”
Daniels has consistently touted P3s as a way to free up money for projects and avoid taking on new debt.
Both Indiana and Illinois have been leaders in the privatization of public assets. Four years ago Daniels leased the Indiana Toll Road for a record $3.8 billion.
Daniels said he has talked to Illinois Gov. Pat Quinn about setting up a bi-state authority to oversee construction and operation of the toll road, similar to the joint agency that Indiana runs with Kentucky to oversee the Ohio River Bridges Project. He said officials in Kentucky and Illinois are seeking to expand their ability to enter into P3s for the projects.
Without the ability to tap private money, Daniels said the two projects would likely not get built.
“There’s no way in the world either of these projects would have gone forward” without private involvement, the governor said.
“Even Indiana can’t undertake two very large projects like this,” he said, adding that the state has “shattered all records” for infrastructure investment in the past few years among U.S. states.
“Honestly, there wasn’t conceivably the money in Kentucky to do [the Ohio River Bridges Project],” Daniels said. “That’s why we’re looking for a creative way to get this job underway.”
The measure revives the Illiana Expressway plan, first proposed by Daniels in late 2006. A 25- to 30-mile long toll road, the Illiana would link either Interstate 57 or Interstate 55 in Illinois with Interstate 94 in Indiana with the goal of relieving traffic congestion in northwest Indiana. About 10 miles of the road would be built in Indiana.
The state would own the land but a private company would be allowed to build and operate the road in exchange for toll revenue.
The legislation requires the state to prepare an economic impact study and environmental analysis before it issues a request for proposals, and to hold a public hearing on the study.
It requires the Indiana Department of Transportation to study the possibility of new high-speed rail passenger routes connecting South Bend and Fort Wayne.
The bill also allows the state to enter into a public-private partnership to finance its share of the $4.1 billion Ohio River Bridges Project.
Privatization is one of several financing methods the bi-state authority is currently considering. Other methods include issuing revenue bonds or tapping federal dollars.
U.S. Transportation Secretary Ray LaHood said recently that the project could be in line for significant infusion of federal dollars, including $600 million in grants, and could qualify for a $4 billion infrastructure fund.
The Kentucky Asset Liability Commission in late February sold the first bonds for work related to its share of the project — $90 million of grant anticipation revenue vehicle notes.
