Construction of a key stretch of the state’s largest ongoing highway project is nearly two years behind schedule. Accidents have increased as the road work drags on month after month. Residents, commuters and business owners are deeply frustrated by delay after delay. And now, the company that was a key part of the deal to build I-69 between Bloomington and Martinsville has declared bankruptcy.
How did we get here? More important, how do we avoid arriving here again?
State Sen. Luke Kenley, R-Noblesville, and other legislators are pushing the Indiana Finance Authority to carefully review the decision-making process that led to a $325 million contract with a consortium hired to construct and maintain the 21-mile stretch of interstate. The state now has been forced to take over the project because of the consortium’s financial problems and general ineptitude.
Lesson one: The lowest bid isn’t necessarily the best. I-69 Development Partners, largely controlled by Spanish-based Isolux Corsan, proposed to build and maintain the highway for $73 million less than the next closest bidder. But Isolux Corsan, which filed for bankruptcy this week, had never before built a highway in the United States. In going with Isolux Corsan, as IndyStar reporters Mark Alesia and Kaitlin Lange have documented, the state passed over other bidders who had successfully completed projects in Indiana. One of those companies is now set to take over management of the project.
The competitive bidding process is an important safeguard for taxpayers, one designed to ensure that costs remain in line with the market and that favoritism doesn’t drive decision-making. But a bid that came in about 20 percent below those from more experienced companies should have raised concerns about the bidder’s ability to deliver. As it turned out, I-69 Development Partners couldn’t deliver.
Lesson two: Public private partnerships are an important tool that’s worked well for the state in the past, but they’re only as good as the details of the deal and the strength of the partners. In this case, the state decided to partner with the wrong company, and that critical error has had costly consequences.
It would be a mistake, however, to reject a model that led to construction of a long-needed bridge over the Ohio River and the lease of the Indiana Toll Road, a move that enabled the state to complete a number of key infrastructure projects. Public-private partnerships have their place, but each deal requires careful review.
Lesson three: Accountability and transparency are essential. It’s important for state leaders to set aside their defensiveness over the deal with I-69 Development Partners to engage in an honest conversation about what went wrong. That conversation needs to include the public. Unfortunately, this week, Hoosiers were given less than 24 hours notice before the State Budget Committee met to review problems with the I-69 deal. Not surprisingly, no one from the public attended the hearing. Last-minute meeting notices are unacceptable, especially so when addressing such an important issue.
With road funding set to increase significantly over the next two years, it’s more important than ever for the state to ensure that its vetting process for business partners and contractors is thorough and effective.
The fiasco that’s become one tormented section of I-69 must not be allowed to happen again.