LOUISVILLE — A day after Kentucky hosted a prebid meeting for its portion of the Ohio River Bridges Project, Indiana hosted its industry day.
More than 350 contractors and builders gathered to receive details about the Indiana portion of the project. Indiana is responsible for constructing the east-end bridge and its approaches on both sides of the river.
While the details of constructing the project were discussed, a large part of the focus remained on how Indiana will finance its portion of the construction.
Indiana and Kentucky are pursuing different methods to pay for their halves, $1.3 billion, of the Ohio River Bridges Project, with Indiana looking to finance its portion through a public-private-partnership arrangement.
Secretary of the Kentucky Transportation Cabinet Mike Hancock touched on the different approaches at the beginning of the meeting Friday.
He said despite taking different approaches for procurement, he reinforced that the project is still under one financial plan.
“As far as we’re concerned we’re developing a joint financial plan,” Hancock said. “This project doesn’t work if both parts of the project don’t work.”
Kendra York, public finance director for the state of Indiana, said the financial plan for the project is expected to be presented and approved at a specially called Louisville and Southern Indiana Bridges Authority meeting on Monday.
Following the approval, Indiana is hoping to get a request-for-qualifications prepared for potential contractors next week, she said.
Indiana’s plan to finance the construction of the bridges is to use $54 million a year, that has been dedicated through Indiana’s Department of Transportation and received in part from Major Moves money, over eight years, and to cover the remaining $868 million shortfall through tolling revenues.
Tim Wilschetz, a principal with KPMG LLP Infrastructure Advisory — a consultant hired to help direct financing and planning for the bistate authority — said there are some other avenues of financing that are still being pursued.
He said an application will be submitted this month to try and secure some of the $500 million available in the fourth round of Transportation Investment Generating Economic Recovery grants. The TIGER grant would be used for Transportation Infrastructure Finance and Innovation Act — TIFIA — payments. The bridges authority has attempted, but has been unable to secure TIGER grants through its three previous distributions.
In addition, Wilschetz said the Indiana Finance Authority will also be submitting an application with Federal Highway Administration to pursue a private activity bond. But if Indiana does not receive a favorable offer, it does not have to continue to pursue a public-private-partnership model to finance the east-end portion of the project.
“Public sponsors do not necessarily want to be locked into this project delivery method if it doesn’t provide what we refer to as good value for money,” Wilschetz said. “I think the Indiana Finance Authority and INDOT have acknowledged that if they don’t receive bids that they feel make sense out of the state of Indiana, that they always have the ability to drop back into more conventional delivery methods.”
As the plan currently stands a concessionaire, or private entity, would be responsible for building all three segments — the Indiana approach, Kentucky approach and the east-end bridge — on the east-end portion of the project.
The concessionaire would also be responsible for maintaining the bridge. Once the project is complete, Kentucky will take over the maintenance costs on its approach, Wilschetz said. He added who will maintain the Indiana approach is yet to be determined.
There is a five-year construction timeline for the east-end portion of the project.
Other issues that must still be resolved before Indiana can break ground include a pending lawsuit with Louisville-based conservancy group River Fields.
“It is something that we’ll have to work with our potential bidders on,” York said. “In all honesty, it will be a concern for them. It’s also not unusual in these types of projects.”
INDOT Spokesman Will Wingfield said the Indiana Finance Authority has hired transaction council, which is working to keep state in compliance with both states and federal legal requirements.
“We’re being very careful to stay within parameters the environmental process sets,” York said. “That’s the last thing earth anybody wants to do is to add any additional opportunities for litigation.”
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