IN THE NEWS: Holcomb eyes I-69 bailout

INDIANAPOLIS – Governor Eric Holcomb is on the verge of bailing out a public-private boondoggle and it may leave Hoosier taxpayers holding the bill. Holcomb is suggesting a state takeover of the financing for the “exceptionally delayed” Section 5 of the I-69 project. The Spanish conglomerate leading the public-private partnership is facing insolvency and its financial issues will require an injection of cash to continue the project.

From the Indianapolis Star: Bond rating company says I-69 construction money could run out in July

“S&P, the global credit ratings company, said that either the state or a Canadian Pension Fund also involved in the project would have to infuse it with more cash to head off default [emphasis added].”

Cost to taxpayers

Governor Holcomb is insisting his bailout won’t cost Hoosier taxpayers more, even as the numbers suggest otherwise.

From WIBC: State Doesn’t Expect Extra Costs After Firing I-69 Contractor

“The state doesn’t expect the takeover of part of I-69 construction to put taxpayers on the hook for any more money [emphasis added].

“Until the state reaches a deal with those who bought bonds from the project’s developer, it won’t be clear whether the state has to come up with more money or not, but Holcomb’s office says the state doesn’t expect a shortfall. Holcomb says if more money is needed, it won’t be another gas tax hike on top of one already taking effect next month.”

Meanwhile, Standard & Poor and Fitch downgraded the ratings of bonds used to finance the project.

From the Indianapolis Star: Bond rating company says I-69 construction money could run out in July

“The bond rating went from B- to CCC- as the state attempts to negotiate a deal that would allow it to take over the project from its private partner, I-69 Development Partners.”

From the Fort Wayne Journal Gazette: Verbatim: Fitch downgrades Indiana’s I-69 bonds; rating on negative watch

“Fitch Ratings has downgraded the Indiana Finance Authority’s (IFA) private activity bonds (PABs) issued on behalf of I-69 Development Partners LLC (I-69 DP) for the I-69 Section 5 project to ‘B-‘ from ‘B’. The bonds remain on Rating Watch Negative.”

Public-Private efficacy in question

In the 2014 INDOT press release announcing the agreement, Indiana Republicans assured the public-private deal would:

“…deliver transportation infrastructure sooner than expected and at the lowest possible cost to taxpayers [emphasis added].”

###