INDIANAPOLIS — The state is preparing to issue $250 million in bonds for the construction of the latest phase of Interstate 69 from Bloomington to Martinsville.
The private developer the state chose to build the fifth stretch of the project will repay the tax-exempt bonds.
The state made available as much as $400 million in private activity bonds for the project, but I-69 Development Partners didn’t need the full amount, said Will Wingfield, spokesman for the Indiana Department of Transportation.
The state should issue the bonds this month, and construction could begin sometime later this year on the 21-mile stretch that will upgrade Indiana 37 to interstate standards. Wingfield said a more exact timetable for construction will become available once a final financing agreement on the terms of the public-private partnership is signed.
Crews currently are clearing trees, relocating utilities and demolishing structures to prepare for construction.
“Throughout the procurement, we encouraged the proposers to approach the design, construction and maintenance of the project in a way that maximizes value to the taxpayers while still delivering a quality product,” Wingfield said.
The private developer will repay the bonds from various sources of revenue, according to preliminary bond paperwork released in June. Those sources include payments the state will make to the developer through the public-private partnership and equity contributions, among others.
The state is entering into a contract with I-69 Development Partners, a Spanish-led team arranged by Isolux Infrastructure Netherlands B.V. to build and then maintain the project.
The bond paperwork estimates the total capital cost of the project at $370 million. The state is planning to pay an $80 million “down payment” to the private developer to offset the cost of construction. After the road is completed, the state will make annual payments to the developer, who will operate and maintain the road for 35 years. The maximum payment in current dollars is $21.8 million. Payments are subject to inflation and flat-rate increases over time.
The state also received approval to use federal funds to help pay for the extension from Bloomington to Martinsville. Wingfield said the Indiana Finance Authority, which is leading the partnership with the developer, will pay I-69 Development Partners using state funds. INDOT will then seek federal reimbursement for up to 90 percent of the design, construction and financing costs of the project, although those dollars are subject to appropriations by Congress, Wingfield said.
The new road, which will not charge tolls, is expected to open in October 2016 and will feature four new interchanges and 12 new bridges. The fourth phase of I-69 from Crane to Bloomington is set to open later this year or in early 2015.