Indiana’s takeover of a troubled leg of Interstate 69 received its final go-ahead Thursday, as the State Budget Committee approved a plan to settle current bonds and reissue approximately $240 million in new bonds.
The action essentially pays off current costs with the developer and bondholders in a settlement agreement and then refinances the remaining project to complete 21 miles of interstate between Martinsville and Bloomington.
The state recently announced it would end its contract with the financially strapped I-69 Development Partners, which would have designed, built and maintained the section. Now, the project could be finished by August 2018, nearly two years past its original completion date.
Officials said an earlier proposal to simply terminate the contract might have been fought by the developer, leading to higher costs.
If the public-private partnership project had continued, it would have cost $590 million, said Micah Vincent, director of the Indiana Office of Management and Budget. Under state control, the estimated completion cost is $562 million, officials said.
“We did generate some savings from part of the project that was done to this point,” said Sen. Luke Kenley (R-Noblesville), who chairs the budget committee. “I think the other element of savings is you have to measure what is going to be the cost going through this process, pushing the reset button and doing this again versus what would be the cost if we had let it go on.
The board action also came two days after Isolux Corsan, the parent company of I-69 Development Partners, filed to seek bankruptcy in its home country of Spain. In its announcement, Isolux Corsan listed seven companies that would be affected by the proceedings; however, I-69 Development was not on the list.
The bankruptcy is not expected to affect the I-69 project, said Dan Huge, public finance director for the state.