Indiana I-69 Section 5 Availability Payment Project Closes Financing

On July 23, 2014, the Indiana Finance Authority closed financing on its second availability payment P3 project, the I-69 Section 5 highway project, a 21-mile reconstruction project located outside of Bloomington Indiana, the home of Indiana University.  The project is a component of the I-69 Corridor Project which will strengthen connectivity between the northern and southern portions of the state.  After signing the public-private agreement in April of this year, Isolux Infrastructure, a major Spanish infrastructure company, brought in Infra-PSP Canada, an affiliate of the Public Pension Investment Board, a Canadian crown corporation, to take 49% of the equity in the project development company, the first time an international public pension player has made a direct investment in a US P3 project during the construction phase of the project.  The total equity commitment is approximately $40.4 million. 
 
Total project capital costs are expected to be approximately $370 million; in addition to the private equity commitment, funding is coming from a $243,845,000 tax-exempt private activity bonds issued by IFA with Citi and Jeffries as the bond underwriters.  IFA has committed $80 million in milestone payment payments towards project costs.  After application of the interest-rate risk sharing provision of the agreement, and with the rally in the muni bond market since Isolux submitted its winning bid in January 2014, the final base maximum annual payment decreased by $1.5 million per year.
 
The PABs are comprised of a single short-term serial bond maturing March 1, 2017 and several term bonds with maturities ranging from September 1, 2027-September 2046.  Yields on the term bonds range from 3.98% to 5%.
 
The source of repayment of the PABs is anticipated to be availability payments made by IFA under the public-private agreement as consideration for the private developer designing, constructing, financing, operating and maintaining the project.  The availability payments, which commence on substantial completion of the project, are subject to quarterly deductions if the private developer fails to meet certain performance requirements relating to the availability of the project and compliance with the technical requirements.
 
The project is scheduled for completion on October 31, 2016, which, coincidentally is the same date the East End Bridge project, IFA’s first availability payment P3 project, is scheduled to be completed.

Indiana Achieves Commercial Close on its Second Availability Payment P3

Indiana closed its second availability payment-based P3 project, the I-69 Section 5 project.  "Section 5" is the fifth of six planned sections to link Evansville, Indiana with Indianapolis.  The RFQ for Section 5 was published on May 23, 2013 and the Indiana Finance Authority ("IFA") – once again partnering with the Indiana Department of Transportation – never missed a deadline, achieving commercial close on April 8, 2014.

Indiana’s private partner is the I-69 Development Partners, with Isolux Infrastructure Netherlands B.V., a Spanish-Dutch P3 developer (“IIN”) partnering with its affiliate, Corsan-Corviam Construccion, S.A., as its design-builder, and the joint venture of Arizona-based AZTEC Engineering Group, Inc. and Técnica y Proyectos S.A. (or “TYPSA”), as its designer.  Regional and Indiana-based team members Burgess & Niple, Inc., E&B Paving, Inc. and others round out the concessionaire team.  The I-69 Section 5 project involves reconstructing a 21 mile stretch of existing Indiana State Route 37 to interstate standards, a project with both rural and urban design features, underground geological “karst” challenges and located adjacent to the home of Indiana’s flagship state university in Bloomington.

The Section 5 marks IIN’s first stateside P3.  IIN, with three other major international and domestic  developers and regional P3 players, are also shortlisted for Indiana’s next P3 procurement, the Illiana/I65 Project, linking Northwest Indiana with the companion P3 project being procured by the Illinois Department of Transportation, creating alternative entry into the greater Chicago area.

I-69 Development Partners bid an attractive $21.78 million base year “maximum availability payment,” and also achieved a high technical evaluation score.  Four shortlisted teams submitted proposals in response to IFA’s RFP and  were evaluated in late January.  A low bid and a high technical evaluation won IIN the day.  Financial Close is expected in late June 2014.

John Smolen co-authored this entry. 

Indiana Finance Authority Shortlists 4 Proposers for its Indiana Portion of the Illiana Corridor Project & I-65 Added Capacity Project

On February 28, 2014, the Indiana Finance Authority ("IFA"), in coordination with the Indiana Department of Transportation ("INDOT"), shortlisted four teams for its Indiana Portion of the Illiana Corridor Project (the "Indiana Portion") and I-65 Added Capacity Project ("I-65 Project" and collectively with the Indiana Portion, the "Project").  The project website is located at http://www.in.gov/ifa/2763.htm.  

The Illiana Corridor Project is a collaborative effort among the Illinois Department of Transportation (“IDOT”), INDOT, and IFA to construct a highway, approximately 46.8 miles long, which provides an east-west connection between I-65 in Indiana and Interstates 57 and 55 in Illinois.  The Indiana Portion consists of the new construction of an 11.7 mile, four-lane median divided tolled highway, extending from the Illinois/Indiana stateline at the west end and connecting to I-65 north of Lowell, Indiana at the east end.  The I-65 Project involves the construction of additional travel lanes on I-65 and will be located between SR 2 extending north to US 30.  IDOT is pursuing a separate procurement for the portion of the Illiana Corridor located in Illinois; three out of the four teams shortlisted by IFA were also shortlisted by IDOT.

The Project marks the third foray of Indiana into the emerging availability payment structure of public-private partnerships in the United States, having led with the East End Crossing project (part of the Louisville-Southern Indiana Ohio River Bridges Project), successfully financed at the end of March 2013 and the I-69 Section 5 Project, scheduled for commercial close in April 2014.  The Project also marks the third effort of the joint IFA and Indiana Department of Transportation Team in using innovative project delivery approaches to meet growing transportation infrastructure demands in Indiana.  

The shortlisted teams, in alphabetical order, are: 
  • Indiana Corridor Transportation Group (joint venture of ACS Infrastructure Development, Inc. and Fengate Capital Management Ltd.), partnering with Dragados USA, Inc., F.H. Paschen, S.N. Nielsen & Associates LLC and William Charles Construction Company, LLC  as the joint venture lead contractor, Jacobs Engineering Group, Inc. as the lead engineering firm and with others. 
  • Illiana East Mobility Partners (through its sole equity member, Cintra Infraestructuras, S.A.), partnering with Ferrovial Agroman US Corp and White Construction, Inc. as the joint venture lead contractor and Janssen & Spaans Engineering, Inc., as lead design and engineer and with others.
  • Isolux Infrastructure Netherlands B.V. (with Isolux Infrastructure Netherlands B.V. acting as sole equity member) partnering with Corsan-Corviam Construccion, S.A. as lead contractor, a joint venture of AZTEC Engineering Group, Inc. and TYPSA (Tecnica y Projectos S.A.) working together as the lead engineering firm and with others. 
  • WM Indiana- Illiana Partners, LLC  (joint venture of Walsh Investors, L.L.C. and Meridiam Infrastructure Illiana IN, LLC), partnering with Walsh Construction Company II, LLC as the builder, Parsons Transportation Group as the lead engineering firm and with others.
IFA plans to issue a final RFP in July of this year with award and execution of the comprehensive P3 agreement at the end of 2014.
 
The INDOT press release can be found on the project website. 

Indiana Finance Authority issues the Request for Proposals for the I-69 Section 5 Project

Continuing Indiana’s successful employment of availability payment model public-private partnership (“P3”) concessions, the Indiana Finance Authority (“IFA”) issued its second P3 Request for Proposals (“RFP”) to proposers shortlisted at the end of July for the Interstate 69, Section 5 project (the “Section 5 project”).  As with the successful East End Crossing procurement, IFA, with its partner, the Indiana Department of Transportation, or INDOT, has met each and every procurement deadline since release of the Request for Qualifications (“RFQ”) in late May, which places the Section 5 project on pace to exceed the East End Crossing’s procurement pace, then the quickest procurement of its kind and scale from RFQ to commercial close in the United States.

The Section 5 project is one of six sections under development to complete the federal interstate connection from Evansville, Indiana to Indianapolis, collectively, part of a further development of the national I-69 corridor, running from the U.S. border with Mexico to its border with Canada.  The Section 5 project is approximately 26 miles long, varying from 4 to 6 lanes wide in each direction, located in Morgan, Johnson, and Marion Counties, involving construction of four new interchanges and four new overpasses with varying degrees of improvements to the existing interchanges and overpasses.  Notably, the Section 5 project moves through Bloomington, Indiana, placing maintenance of traffic issues prominently in the would-be Developer’s plan.  Furthermore, the limestone topography of mid-to-southern Indiana presents unique construction challenges.

Proposals are due to IFA on January 23, 2014, and IFA anticipates notifying the preferred proposer by mid-to-late February.

Indiana Finance Authority Shortlists 4 Proposers for its I-69 Section 5 Project

On July 31, 2013, the Indiana Finance Authority (“IFA”), in coordination with the Indiana Department of Transportation (“INDOT”), shortlisted four teams for its I-69 Section 5 Project (the “Project”) located between Evansville, Indiana and Indianapolis, Indiana.  The Project marks the second foray of Indiana into the emerging availability payment structure of public-private partnerships in the United States, having led with the East End Crossing project (part of the Louisville-Southern Indiana Ohio River Bridges Project), successfully financed the end of March, 2013.  The Project also marks the second effort of the joint IFA and Indiana Department of Transportation Team in using innovating project delivery approaches to meet growing transportation infrastructure demands in Indiana. 

The Project is one of six sections that are anticipated to complete the interstate connection from Evansville, Indiana to Indianapolis, Indiana, including improvements to Highway 37 outside of  Bloomington, the home of Indiana University. The broader I-69 project is part of the national I-69 corridor connecting Mexico with Canada. Four of the six sections have either been completed or construction is underway.  Section 5 is approximately 26 miles long, varying from 4 to 6 lanes wide in each direction, located in Morgan, Johnson, and Marion Counties, involving construction of four new interchanges and four new overpasses with varying degrees of improvements to the existing interchanges and overpasses. 

The shortlisted teams, in alphabetical order, are:

  • Connect Indiana Development Partners (joint venture of Macquarie Capital Group Limited, Lane Infrastructure, Inc. and Lane Industries Incorporated), partnering with The Lane Construction Corporation and Ames Construction, Inc. as the joint venture design-builder, Parsons Brinckerhoff, Inc. as the project designer and with others.
  • Isolux Infrastructure Netherlands B.V. (through its members, Public Sector Pension Investment Board and Grupo Isolux Corsán S.A.), partnering with Corsán as the builder, AZTEC Engineering Group, Inc. and TYPSA (Tecnica y Projectos S.A.) working together as the project designer and with others
  • Plenary Roads Indiana (through the Plenary Group), partnering with Granite Construction Company and Fred Weber, Inc. as the joint-venture builder, AECOM as the project designer and with others.
  • WM I-69 Partners (joint venture of Walsh Investors, L.L.C. and Meridiam Infrastructure), partnering with Walsh Construction Company II, LLC as the builder, Parsons Transportation Group as the project designer and with others.

As was the case with the East End Crossing procurement, several new players to the US P3 transportation scene responded to the I-69 Section 5 RFQ, including Isolux and Plenary.

IFA plans to issue a final RFP in October of this year with award and execution of the comprehensive P3 agreement in the first half of 2014.

The press release can be found on the INDOT website or the IFA website.

Indiana Finance Authority Issues the Request for Qualifications for the I-69 Section 5 Project

On the heels of its very successful foray into availability payment model public-private partnership (“P3”) concessions, the Indiana Finance Authority (“IFA”) issued its second P3 Request for Qualifications (“RFQ”) on May 23, 2013, this one to develop, design, build, finance, operate and maintain the I-69, Section 5 project.  As with the preceding P3 procurement of the East End Crossing (part of the broader Ohio River Bridges Project), the I-69 Section 5 project will be a public-private partnership between the State of Indiana, through the IFA and the Indiana Department of Transportation (“INDOT”) and the successful proposer. 

The I-69 Section 5 project consists in upgrading approximately 21 miles of existing State Route (“SR”) 37, a four-lane median divided highway between Bloomington, Indiana (home of Indiana University) and Martinsville, Indiana, and development of a six-lane divided highway in designated urban areas.  In addition, the project involves construction of four new interchanges and four new overpasses with varying degrees of improvements to the existing interchanges and overpasses at the Fullerton Pike, Tapp Road/SR 45/2nd Street, Sample Road and Liberty Church Road, all of which are current intersections with SR 37.

Section 5 is one of six sections under development to complete the interstate connection from Evansville, Indiana to Indianapolis, collectively part of a further development of the national I-69 corridor to connect Mexico with Canada.  Four of the remaining five sections are completed or development and construction are underway, and Section 6 is still in the planning stage.

Over 175 people attended a industry workshop on May 22, where Governor Mike Pence reaffirmed Indiana’s, and his administration’s, commitment to exploring innovative approaches to deliver much-needed infrastructure – particularly transportation – improvements in Indiana.

IFA is an independent financing instrumentality of the State, which in working with INDOT, reprises a successful partnership that brought the East End Crossing to the American P3 industry, the first availability payment concession in the United States to have met each of its procurement schedule deadlines in among the fastest P3 procurements in the United States and to have successfully achieved financial close with a “flat” investment grade rating.

Statements of qualifications are due at the IFA’s offices in Indianapolis, Indiana at 3:00 p.m. on July 9, 2013.  Shortlisting is anticipated by the end of July 2013, with award tentatively scheduled for late first quarter, 2014 and financial close early second quarter, 2014.

Indiana Finance Authority and Indiana Department of Transportation Set Date for I-69 Section 5 Industry Forum

The Indiana Finance Authority (IFA) and the Indiana Department of Transportation (INDOT) will hold the I-69 Section 5 Industry Forum on May 22, 2013.  Sign in will begin at 10:00 a.m. ET and the program will start promptly at 11:00 a.m. at the Government Center South Auditorium, 300 West Washington Street, Indianapolis, Indiana 46204.  Governor Mike Pence, INDOT Commissioner Michael Cline, Public Finance Director of the State of Indiana Kendra York, and INDOT Deputy Commissioner for Innovative Project Delivery Jim Stark are expected to address the attendees.  The presentations will cover the I-69 Section 5 project scope, objectives, procurement timeline, delivery model and Request for Qualifications.

The first 67 miles of the new 142-mile I-69 corridor opened in November 2012 and construction is now underway on all 27 miles of I-69 Section 4.  All highway design, construction and financing firms interested in participating in a design, build, finance, operate and maintain procurement for the Section 5 project are encouraged to attend the forum.

All interested attendees are encouraged to RSVP to Sydney Dudek at sldudek@kpmg.com by 5 p.m. ET on Friday, May 17, 2013.  Those unable to attend in person and wishing to participate virtually should contact Ms. Dudek to ensure registration.

For more information about I-69 between Evansville and Indianapolis, visit the project website.