An Australian company is set to take over management of the Indiana Toll Road that runs through the northern part of the state and into Illinois. This comes after another Australian-based company that originally held the lease went bankrupt.
IFM Investors plans to buy the toll road lease from ITR Concession Company for $5.7 billion dollars, which is quite a bit more than the original toll road lease.
In 2006, then-Republican governor Mitch Daniels leased the Indiana Toll Road for $3.8 billion dollars. The state used that money for construction projects, including U.S. 31 and I-69.
But the company that took on the lease fell into financial troubles and the toll road fell into disrepair.
“We’ve learned during this process that the service plazas along the toll road, all of them, are really in deplorable condition,” Rep. David Niezgodski, D-South Bend, says.
Niezgodski says he wants to make sure that doesn’t happen again under the new lease agreement.
“Maybe our options are going to be limited because of the way this transaction’s going to take place basically paying off the debt,” he says. “But it all comes down to people continually asking me the questions and let’s make this the investment in northern Indiana that is good for the entire state of Indiana.”
In a statement, IFM Investors says the company is committed to maintaining the road to a high standard that provides maximum availability and usability for customers.
The Indiana Finance Authority, which oversees the highway lease, says its experts reviewed IFM’s bid and are confident they can meet their legal obligations to maintain the road.
That means they must perform routine maintenance on the roadways, as well as make upgrades that were outlined in the original agreement when the toll road was privatized. They must do so without raising tolls, which was a condition of the 2006 deal.
The group that a lot of people were keeping an eye on during the bid process wasn’t actually a company; it was a coalition between two northern Indiana counties — Lake and LaPorte — that were trying to form a nonprofit to take over the road’s lease.
The coalition claimed assuming management of the toll road would result in millions of dollars of profits for the counties involved.
The counties hadn’t yet submitted a final bid but were in the process of doing so. The coalition still plans to submit one in case IFM’s offer falls through.
The bid must be accepted and the IFA has final approval over the new operator. That process could take several months.
The previous operator of the toll road hoped to have the bankruptcy process completed by August.