Daniels criticized for lopping costs on I-69 extension

Standing along a two-mile ribbon of fresh concrete, with 140 miles more of Interstate 69 to build, Gov. Mitch Daniels nevertheless
appeared triumphant in May.

The first stretch of the new road—from Evansville to Crane—would be finished by the end of 2012, three years
ahead of schedule and on budget at $700 million, Daniels proclaimed just north of Evansville.

“The completion of the I-69 dream is nearer than anyone imagined,” Daniels told downstaters who’ve long
complained of being neglected by Indianapolis. The highway will mean “more jobs in Indiana, corner to corner.”

The controversial highway won’t be exactly as everyone dreamed, however, raising questions whether Daniels is undermining
the road’s economic development potential.

At least two interchanges of the southernmost section are being deferred. A handful of overpasses along with a rest stop
also have vanished from original plans. And the state has invited contractors to bid asphalt alongside the concrete that’s
traditionally considered superior for new-terrain interstates.

As a result, critics are complaining the Evansville-to-Indianapolis project, whose cost estimate has swelled from $1.8 billion
to $3 billion, won’t live up to its promised economic development potential.

They also contend compromises could haunt future generations with greater maintenance costs. Concrete can last 50 years versus
the 15 to 20 years before asphalt needs a major topping.

“If you start cutting all that stuff, you’re not going to get the [supposed] benefits,” said Thomas Tokarski,
who heads Citizens for Appropriate Rural Roads, a Bloomington area not-for-profit that opposes the I-69 extension. “It’s
bait-and-switch.”

Tim Maloney, senior policy director of the Indianapolis-based Hoosier Environmental Council, said, “If you’re
deleting interchanges, you’re deleting one of the rationales for the highway.”

Maloney’s group still argues the project should be canceled in favor of upgrades to Interstate 70 west of Indianapolis
to Terre Haute and then south on U.S. 41 to Evansville.

The Indiana Department of Transportation downplays the effect of the proposed changes.

It is only deferring construction of two interchanges, one in south Daviess County at State Road 57 and another in northern
Pike County, the department says, and the savings could hit $34 million.

“As we reviewed the data, the numbers did not support the need for those interchanges at this time,” said INDOT
spokeswoman Cher Goodwin.

However, INDOT will buy land now for the northern Pike interchange in anticipation of its being needed in the future.

Traffic counts suggest the interchange would be used infrequently at first, but Petersburg Mayor John W. Craig said the interchange
nevertheless could shift more than 1,000 coal trucks a day off its main street and position the town for growth.

“This area is poised for further industrial growth with the construction of the interchange,” added Craig, who
sees it as access not just to Indianapolis but to the rest of the world. “All of our eggs have been in one big basket,
a big basket of coal.”

Also disappointed are folks in Daviess County, although the area of the now-deferred interchange doesn’t have sewers
large enough for significant economic development.

“Because of the limited economic development potential, I don’t see it as a detriment” now, said Ron Arnold,
executive director of the Daviess County Economic Development Corp.

I-69Besides deferring two interchanges, INDOT has been able to get lower-than-expected bids for
materials and construction work. Materials such as cement are in less demand with the cooling of the residential and commercial
construction markets. Hungry contractors aren’t as busy and are willing to make less money to stay busy.

“We’re finding overall our bids are coming in up to 30 percent less than our engineers estimate,” Goodwin
said.

Highway opponents also have noted that the width of center medians appears to have been narrowed, from 84 feet to 60 feet,
to save money. Tokarski said that could mean safety hazards, particularly from large trucks that could cross the median into
oncoming lanes.

INDOT’s Goodwin counters that 60-foot medians are typical for rural interstates. The 84-foot medians are generally
reserved for areas where highway planners anticipate adding lanes in the future, she said. “There is no need for any
potential third lane to be constructed.”

Flirting with asphalt

Perhaps the most controversial aspect of INDOT’s quest to stay on budget, one that could become more of an
issue as it builds potentially more expensive northern segments, involves its choice in pavement types.

Agency documents reveal that INDOT last year quietly sought alternate bids to determine whether to use asphalt or concrete
on 10 projects—mostly on U.S. 31 upstate but also for a stretch of I-69 to be built in Gibson County.

Ordinarily, INDOT determines the pavement type before letting bids. But the department invited contractors to submit bids
in either type for the 10 projects.

The idea, said INDOT spokesman Will Wingfield, was to invite competition between contractors from both asphalt and concrete
industries in the hope of lowering costs for INDOT and ultimately benefiting taxpayers.

INDOT estimates the new process saved taxpayers $325,000. The department chose concrete after sifting through 11 bids rather
than the typical five. Six contractors proposed concrete and five, asphalt. Concrete was deemed to offer the lowest long-term
cost despite the asphalt being cheapest initially.

INDOT also invited alternate bids on a stretch of I-69 in Daviess County. It received at least one bid for asphalt, from
Indianapolis-based Milestone Contractors LP.

Milestone ultimately lost to a bidder that proposed concrete. Asphalt, which is generally less expensive than concrete construction,
has been less competitive in recent years as the price of its key ingredient, oil binder, shot to $485 per ton from $390 a
ton in June last year, according to INDOT price data.

Road repairs funded by federal stimulus programs also have pushed up the price of asphalt.

“We haven’t been successful, so far,” Milestone’s president, Ted Lucas, said of I-69. “We just
couldn’t overcome the big material price differential.”

Asphalt comeback?

That’s not to say asphalt won’t become an attractive alternative for I-69 in years ahead, particularly
when the economy improves and the price of concrete rises with renewed demand.

In fact, the Asphalt Association of Indiana has been lobbying INDOT to be more open to asphalt. Last fall, the group presented
a paper to top agency officials calling for reducing I-69 construction costs “without compromising the integrity of
the design.”

Among concepts it floated to INDOT was “staged asphalt” construction, in which a thinner layer could be applied
initially—say 9 inches rather than the foot or more normally used on major new highways. Then, as traffic increases
in 10 or 15 years, an inch or two of the top layer would be stripped off to remove the rutted surface and a 7-inch strengthening
layer could be added.

Such a technique could save $700,000 per lane mile in construction costs, the association told INDOT. Milestone proposed
the technique when it bid on paving a portion of I-69. Lucas noted that portions of Interstate 64 in southern Indiana were
built using such a method decades ago.

The association has also proposed other techniques, such as thinning pavement in passing lanes and inside shoulders, noting
that big trucks spend most of their time in the slow lane.

Uncertain future

The state might need to reconsider some of the asphalt industry’s other ideas as it proceeds farther north
with I-69 construction.

INDOT estimates it can complete the first three of six sections with the $700 million it allocated toward I-69 from the $3.8
billion lease of the Indiana Toll Road in 2006.

And although Daniels insists that a fourth section, between Crane and Bloomington, can be finished in 2014, that section
is largely unfunded. Typically, the federal government covers at least 80 percent of the cost of such projects, but Congress
has yet to take up a multiyear surface transportation funding.

“That will be a major determining factor moving forward,” Wingfield said.

Besides funding issues, Maloney of the Hoosier Environmental Council notes INDOT faces more difficult terrain as it moves
north from flat farm fields toward Bloomington, which is rocky and underlain with karst, limestone riddled with sinkholes,
fissures and caves.

There will be additional environmental issues, as well. The U.S. Environmental Protection Agency told INDOT in March that
“streams and karst features are resources of concern” in the southernmost section of I-69, and urged it to keep
detailed records of potential effects.

Farther north, INDOT’s challenges will include routing the highway through the Martinsville area and through suburbanized
Perry Township, completing the section with a tie-in to Interstate 465 on the south side of Indianapolis.•

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