Daniels calls South Shore talk a 'bad rumor'

INDIANAPOLIS | Republican Gov. Mitch Daniels on Thursday dismissed as a "bad rumor" a Times report that his transportation chief asked the South Shore Line to explore privatization options similar to the $3.8 billion lease of the Indiana Toll Road.

Democrats, meanwhile, pressed the Indiana Department of Transportation and Commissioner Tom Sharp for more information. Twice this week, the top executive for the South Bend-to-Chicago commuter railroad told The Times that Sharp had requested he look into revenue-generating privatization possibilities.

"I never heard a word about this from anybody anywhere until your question (Wednesday)," Daniels told The Times at an unrelated Indianapolis news conference. "It's a complete nonstarter. But there has been so much bogus and false information around the whole subject of transportation that I'm no longer surprised when another bad rumor gets loose."

Daniels' comments allude to the partisan rancor surrounding his push to lease the Indiana Toll Road to a private consortium. The 75-year deal brought a financial windfall that Daniels plans to put toward an ambitious 10-year road construction plan.

The governor's office said Wednesday that it has "zero interest" in exploring anything similar for the South Shore. But Gerald Hanas, general manager for the Northern Indiana Commuter Transportation District, has made remarks to the contrary, saying Commissioner Sharp asked him to look into privatization when the two met on other matters about a month ago.

State Rep. Scott Pelath, D-Michigan City, called on Sharp to clarify the situation.

"If the governor has no interest in selling off Indiana's only commuter railroad, then who prompted Mr. Hanas to explore such a transaction?" Pelath said Thursday in a letter to the commissioner.

The Indiana Democratic Party, meanwhile, said it filed a public records request with INDOT, asking for any written or electronic correspondence between INDOT and Hanas in recent weeks.

Sharp has been on vacation this week and won't return for at least another week, a spokesman said. Earlier this week, INDOT denied that Sharp broached the subject with Hanas. The agency's statement has not changed, a spokesman said Thursday.

The state does not own the South Shore Line but provides about a third of its $30 million annual operating budget. The South Shore has about $350 million in assets, but it would cost more than $850 million to replace all of its current equipment, Hanas said earlier this week.