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Lease critics urge Indiana to reclaim toll road

October 18, 2014

Calls are mounting for Indiana to reclaim the Indiana Toll Road amid concerns over its bankrupt operator's ability to maintain the 157-mile roadway and its travel plazas.

Chicago-based ITR Concession Co. filed for bankruptcy in Chicago last month, saying it can't afford the debt payments from the 2006 deal under which its parent company, the Spanish-Australian consortium Cintra-Macquarie, paid Indiana $3.85 billion upfront for the rights to run the struggling highway and keep the toll revenue. It wants to sell the toll road lease to a new operator.

Much of the $3.85 billion was used to pay off debt, fund Major Moves projects, build hundreds of miles of new roads, fix more than 700 bridges and improve thousands of miles of highways.

Lawmakers in Indiana and Washington, D.C., say the state should take the toll road back before conditions deteriorate further.

Sen. Joe Donnelly called the situation "a mess of epic proportions" and has asked the Indiana Finance Authority, which owns the toll road, to ensure road conditions are safe, toll booths are staffed and rest plazas and restrooms are clean.

"The people of northern Indiana and the entire state of Indiana deserve better, and were promised better," he said.

Travelers have complained of long waits at toll plazas, bridges that haven't been repaired in more than a year and rest stops that reek of urine, Donnelly told The Times in Munster.

"It needs to be run the way it's supposed to be run: in a clean fashion, in a safe fashion and in a timely fashion," Donnelly said.

Former Gov. Mitch Daniels, who approved the lease, assured critics in 2006 that if the leasing consortium goes bankrupt, "the Toll Road reverts back to the state's control."

But experts say Daniels misspoke and the Indiana would only get the road back before the lease expires if the restructured entity defaults on its obligations.

Indiana Toll Road Oversight board members say the road's operator spent about $34 million on improvements this year despite the bankruptcy filing.

"It's an old road, it takes a lot to maintain it and they're doing what they need to meet the terms of the lease, which is pretty stringent," board member Kevin Kelly said during a meeting in Granger last week.

The right to run the toll road is expected to be auctioned off to the highest bidder in the next three or four months. If no bidders come forward, ITR Concession's $6 billion dollar debt would be reduced to $2.75 billion and ITR would remain in control, according to WNDU-TV in South Bend.

Critics of the lease aren't happy that reclaiming the road isn't as easy as it was portrayed.

"From day one . it's been a whole bunch of one-liners, all feel-good comments that say, 'Don't worry, it's still our road," state Rep. David Niezgodski, D-South Bend, told the South Bend Tribune. "I think (taking the road back) should be a distinct possibility."

State Rep. Pat Bauer, D-South Bend, a longtime opponent of the lease, said the state might not want the road back.

"If it's in such terrible condition that nobody wants it, then we get a pretty bad deal, because we have to take it back and fix it up and get it ready to go," he said.

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