Bond analysts told IndyStar that terminating the deal could drive up project costs, but it is uncertain how much.
State officials confirmed Monday that the project's new completion date would be pushed back from May 2018 to August 31, 2018.
That's the fourth time the opening has been pushed back as the state's design-build contractor struggles to pay subcontractors and meet deadlines. The original completion date was October 2016.
I-69 Development Partners originally bid $325 million to win the project, which started in 2014.
With the project about half finished, the state notified bondholders on Friday of its intention to take over.
The statement said it would take nearly $237 million to complete the project, and that $72 million was available. That means $164 million is needed to "complete construction and resolve claims."
But the extra cost to taxpayers is unclear.
Understandably the Star wanted to find out what additional costs will be burdening us taxpayers but was unable to find out because as the article reports:
State officials declined to tell IndyStar whether taxpayers would have to foot the bill for the $164 million that is needed. Stephanie McFarland, a spokeswoman for the Indiana Finance Authority, said the "official authority" who could answer IndyStar's question is off until Wednesday.
Translation we need to buy ourselves time until we can come up with some bullshit reason to give to you rubes as to why you all should pay for the state's screw ups!
It doesn't appear much of anyone else connected to this "road to nowhere" was eager to talk either.
The IFA issued a statement from Director Dan Huge on Monday, but it also did not address the issue of cost and where the money will come from. Huge has declined numerous interview requests.
Cherian George, managing director of the Fitch ratings agency, earlier told IndyStar that if a project is terminated for cause, the cost of completion typically would rise.
"As a result, there will be additional cost, because now the state has to take it back and actually deliver the project and fill in the gaps," George said. "It may be more than they thought they were going to pay, but it may not be an exorbitantly higher amount."
There will also be money available from the project's performance bond — insurance that it will be completed. But the state only required a bond covering 25 percent of the project's value,which bond analysts said was on the low end of what would typically be required. And getting money from that bond could also be held up by litigation.
As if possible lawsuits weren't enough to drive up the costs to Hoosiers. The Star also reports that other contractors will probably be more expensive:
What's more, the winning bid was $73 million lower than the next lowest bid, suggesting other contractors might demand more.
The project was originally touted by the state as an innovative public-private partnership that would take advantage of private sector expertise, innovation and efficiency to save taxpayers money.
I-69 Development Partners won a bid to design, construct and maintain the highway for decades after completion. But in March the Spanish company Isolux Corsan — which initially comprised more than 80 percent of I-69 Development Partners — entered insolvency proceedings in Spain.
It had four months to reach an agreement with creditors and avoid potential bankruptcy.
The state's negotiations to buy out the bonds for the project have been unsuccessful so far, but Huge's statement said "the state is moving forward with the goal of assuming control." The state has not, however, declared the developer to be in default.
When asked about the deal, I-69 Development Partners issued the following statement: "I-69 Development Partners and the IFA continue to participate in confidential discussions with the aim of ensuring the successful completion of the project. We are confident that we can reach an agreement with the IFA."
Rep. Matt Pierce, D-Bloomington, said the protracted construction has not only frustrated people but also created safety issues.
"I think they should have been willing to declare the company in default a long time ago," he said.
What is so idiotic about this whole I-69 Development problem. Is that way back in 2014 the late great Gary Welsh reported concerns about I-69 Development Partners over at Advance Indiana.
Gary Welsh writing in 2014 said:
In a separate report this past weekend by the Evansville Courier & Press, questions were raised about the wisdom of Gov. Pence's plan to build the I-69 extension from Bloomington to Martinsville through the use of a public-private agreement. The Pence administration has awarded the project to a Netherlands-based company, Isolux Infrastructure, to upgrade the 21-mile stretch of State Road 37 as another connecting link for I-69. The state will kick in $80 million upfront, while the private contractor will provide $325 million in funding for the extension. In addition, Indiana will make annual payments of $21.8 million to the private consortium over the next 35 years, or a total of $763 million, in exchange for the private consortium agreeing to maintain the highway.
By comparison, $700 million in Major Moves funding was provided for construction of the the nearly 100-mile stretch of new highway from Evansville to Bloomington. State Road 37 between Martinsville and Bloomington is already a 4-lane interstate quality highway absent the interchanges. It looks like Pence is just relying on a public-private agreement for the sake of privatization without any regard to the the extra cost future generations of taxpayers will bear to pay for this small stretch of highway. I hate to see the tab for the final leg between Martinsville and Indianapolis.
Even in death Gary Welsh is still looking out for the taxpayers. Gary was more right than he knew in his concerns about what the tab will wind up being for this section of I-69.
Democrats and republican rivals of Mike Pence have no doubt long ago gathered this and other such stories on Pence to cause him trouble if he decides to ever run for the White House. Buckle up folks it's going to take awhile until Mike Pence is out of elected office. We are all looking forward to sending old Mikey Pence out to pasture! Let's do this people!
UPDATE: As if wasting taxpayers money and patience wasn't bad enough. Now CBS 4 is reporting that the continued delay of the I-69 extension is a safety concern in Bloomington:
BLOOMINGTON, Ind-- Safety concerns over an I-69 roadway project are growing in Monroe County.
Residents and officials are expressing the concern after it was announced the project on the new section of interstate between Martinsville and Bloomington will not be finished until August of 2018.
While the delay is certainly cause for annoyance for people who live in the area, residents say they’re equally fed up with accidents and close calls along the stretch of highway.
“Just pulling out onto here, there have been a few accidents already,” said Julie Aubin.
City officials in Bloomington have also called the project a “safety concern,” citing numerous accidents and injuries amassed on the stretch over the years.
“There are often lane realignments that happen day to day. Even if you drive the road frequently, you can be surprised from one day to the next. We’ve had some real tragedies in the area and are very saddened by that,” said director of communications for the City of Bloomington Mary Catherine Carmichael.
A recent study by the Federal Highway Administration stated that most fatal crashes and injuries in work zones most often occur in the summer and fall months.
Bloomington officials like Carmichael say those are the exact issues they’re hoping to avoid for the remainder of the project’s construction.
Now IR understands that there are difficulties and dangers involved in any road project. But we don't think that it is to much to ask that traffic lanes not be completely realigned on a daily basis! The state must be stopped before it causes more damage!