Indiana Highway Gives Black Eye to Private Investment in Infrastructure

[question everything]

Source: WSJ

At a time when Washington is promoting private investment in roads, bridges and other infrastructure, a 21-mile stretch of highway in Indiana provides what critics say is a cautionary tale.

The project, a partnership between the state and private investors, was signed by Vice President Mike Pence in 2014 when he was the state’s governor. It is two years behind schedule and only 60% built. The state is in the process of taking it over and will have to issue debt to finish it.

(snip)

Asked about the failed partnership, vice presidential spokesman Mark Lotter said Mr. Pence “was proud of Indiana’s many accomplishments during his tenure as governor” including investments in infrastructure.

The road’s troubles come as more cash-strapped states explore deals with the private sector as an alternative to finance and fund delayed infrastructure projects. More than 30 states have created rules for such deals to be possible. These arrangements, known as public-private partnerships, are still new to the U.S., where states typically have used bonds to pay for such deals. Some of these projects have saved states time and money. Others have landed in bankruptcy.

The southern Indiana project near Bloomington had a raft of setbacks early on. The state selected a consortium that included a Spanish construction company, Grupo Isolux Corsán S.A., that hadn’t worked on a road project in the U.S. Its $325 million winning bid was nearly $75 million below the next-lowest one. The company quickly ran into unrelated legal difficulties in Europe that hurt its finances.



Read more: https://www.wsj.com/articles/indiana-highway-gives-black-eye-to-private-investment-in-infrastructure-1502271003

[radical noodle]

1. It won't let me read it without a subscription

Is it referring to I-69?

[question everything]

3. Yes, sorry. Here is more

The I-69 expansion project was rocky from the beginning. There were permitting and environmental delays, cost overruns and work suspensions because subcontractors had trouble getting paid, according to Stacey Mawson, a senior credit analyst in Fitch Ratings’s Global Infrastructure & Project Finance Group who has been following the I-69 project.

Financial problems arose in part because of “Insolux’s credit-quality deterioration,” she said.

Isolux Corsán, which filed for bankruptcy in July and lost its equity in the partnership last year, didn’t respond to emails and phone calls to its Madrid office seeking comment.

In June, the state said it would assume responsibility for the project. And I-69 Development Partners, now controlled by a company owned by a Canadian pension fund, is negotiating terms of debt with bond holders and the state. Standard & Poor’s Rating Services downgraded the $243 million in debt, saying a “default appears to be inevitable.”

[keithbvadu2]

9. Wonder if political donations to Pence got paid ok?

"because subcontractors had trouble getting paid"

Wonder if political donations to Pence got paid ok?

[INdemo]

6. Go to the indystar.com

Better yet ..here you go

State to take over I-69 section as development deal frays

http://www.indystar.com/story/news/2017/06/05/indiana-finance-authority-i-69-blooomington-martinsville-p-3-public-private-partnership/370165001/


your are allowed so many free articles to read

[radical noodle]

11. Thanks!

I-69 is complete from the Kentucky line to the area where I lived (just south west of Bloomington) and where it was most needed. It's been bogged down at Bloomington for ages. Any idiot should know when a bid is that much lower than the next lowest bid there's a problem.

[salin]

2. Can't read (pay wall) - but this is local - and nuts.

Not only privatized the work then privatized 2 layers of contracting out/financing (paying contractors) the project. Last year - there was a work stoppage because the payments to the construction companies was in arrears by millions. It has been a mess.

[mahatmakanejeeves]

5. Go in through the Twitter account for free access.

https://twitter.com/WSJ

[Chellee]

13. You are brilliant!

That totally works.

Congratulations! You are Person of the Day!

[salin]

15. Thank you.

Just found it/read it via twitter.

[Lonestarblue]

4. What could possibly go wrong!

Here's a link to an article in an Indiana paper.

http://www.indystar.com/story/news/2017/06/18/mike-pence-donald-trump-public-private-partnerships-mitch-daniels-interstate-69-isolux-bloomington/388756001/

Texas also had a similar partnership to build a toll road from Austin to San Antonio. The road was built (or at least part of the planned road), but the company decided it was not making enough money and turned it back to the state to maintain at taxpayer expense.

[dbackjon]

7. Don't forget the privatization of the Indiana Toll Road disaster up in northern Indiana

[radical noodle]

12. That was all on Mitch

the brain behind the choose-your-own time zones.

[snort]

8. I'm proud of them fuckups.

Mighty proud.

[ffr]

10. K&R for exposure...of Gov. Pence's hypocrisy.

Hate that stuffed plastic suit guy.

[mobeau69]

14. Mitch Daniels and the Indiana Toll Road mess.

https://ourfuture.org/20150403/indiana-toll-road-privatizations-highway-to-hell

Besides the financial debacle, the road itself went to hell. They first tried to run the booths without any people. LOL. There are thousands of horror stories that take place at the exits every day thanks to Mitch's and his GOP cronies' brilliant idea. Lines of cars that would make NY and LA look like small potatoes (you only use the "e" in the plural form Danny). It's not uncommon for people, especially those not from the area, to set there for 5 minutes or longer trying their best to figure out the user unfriendly machines. All the while the lines build up even more.

I'll never forget the time I was running late for a medical appointment in Indy and a machine ate my credit card at the South Bend exit. I pressed the help button and the guy on the other end said he would come over there and get me my card back. After waiting 10 minutes or so I rang again and was told he was on his way. I asked "On his way from where?" and was told from a maintenance garage (about 25 miles away)! I had them open the gate remotely and I drove off without my card.

Later that night, when a manager delivered my card to me at my home exit, I asked her what in the hell are you going to do on ND home weekends that are coming up in the fall. The answer: "Oh, we'll have people in all of the booths at the ND exit on game days". What does that tell you?

I'd bet there are rapes and robberies that took place late at night at the now dark and dirty exits that they've covered up. They're now a perfect hunting ground for perverts and other criminals.

I could go on and on with Toll Road privatization horror stories thanks again to Mitch Daniels.

Look for Purdue to go bankrupt in the future.

[mahatmakanejeeves]

16. Access the article via this:

#Indiana highway gives ‘black eye’ to #publicprivatepartnerships in infrastructure https://www.wsj.com/articles/indiana-highway-gives-black-eye-to-private-investment-in-infrastructure-1502271003 … via @WSJ

Link to tweet

[question everything]

17. Thanks. Interesting that they allow Twitter users to access it

but not through regular channels. At least, with some of them, one can google the title

[riversedge]

18. Bad judgment Mr. VP Pence

[not fooled]

19. So how is it

that the more the bad outcomes and negative evidence piles up...against privatized public services, assets, schools, etc. etc. etc....the pukes just keep promoting these discredited concepts?

'Cause they're crackpot zealots.

Wake up 'Murica and stop the madness.

Public ownership, administration, and performance of public assets and services.