The Indiana Finance Authority on Thursday announced that it has reached financial close on its portion of the Ohio River Bridges Project.
According to an Indiana Department of Transportation press release, WVB East End Partners will contribute $78 million of private equity and has raised $702 million in tax-exempt private activity bonds for the project. The Indiana Finance Authority and INDOT will make $392 million in milestone payments across the construction period.
“Indiana’s public-private partnership procurement for the East End Crossing is being hailed as a model for other states,” said Indiana Public Finance Director Kendra York. “Indiana kept the project on schedule and received responsive proposals from all four short-listed teams — a first for a P3 procurement in the United States.”
WVB East End Partners — the contractor chosen to design, construct and finance the east-end bridge and its respective approaches — includes a team of Walsh Investors LLC, VINCI Concessions and Bilfinger Project Investments. The group estimated construction costs for its portion of the project at $763 million, $224 million less than the previous construction estimate.
The money that WVB East End Partners will be contributing will go to pay for the up-front construction of the new bridge and its connections to Interstate 265. Indiana will be repaying the upfront costs through two means, said INDOT Spokesman Will Wingfield. He said the payments will come from a combination of milestone payments and annual availability payments.
“It’s coming from combination of funding sources,” Wingfield said of the annual availability payments.
A portion of those payments will come from revenues collected by INDOT through annual gas tax revenues, state and federal transportation resources and tolls. Wingfield added that those availability payments may be adjusted for inflation.
While the financial close was executed Thursday for Indiana, both Kentucky and Indiana are still working to reach a definitive amount on toll rates for the east-end bridge and both downtown Interstate 65 bridges that are part of the project.
Earlier this month, a consulting company preparing a traffic and revenue study for the bridges project told the Kentucky Public Transportation Infrastructure Authority board that frequent commuters can expect $1 tolls each way on three area bridges. Other fees are projected at: $2 for nonfrequent, two-axle vehicles; $5 per medium truck; and $10 per heavy truck.
Toll rates have not been finalized and will be the job of a Kentucky-Indiana Joint Tolling Board, which includes leaders of the two states’ transportation and finance agencies. A final traffic and revenue study is expected sometime in April.
Both states have committed to use all-electronic tolling, in which users of the bridges can pay tolls via a vehicle-mounted electronic transponder that sends a signal to the tolling devices that debits the cost from an established account or a high-resolution video that captures images of a vehicle’s license plate and then send bills to the bridge users.
Wingfield said that the state achieved a number of firsts on its portion of the bridges project and added that the bonds sold earlier this month received highest rating possible for bonds.
“We feel that this was tremendously successful for us in Indiana,” he said.
According to the release, WVB East End Partners expects to start construction in May.