Indiana legislators okay $5bn of potential PPPs

Republican Senator Ed Charbonneau, the author of the bill to build a toll road linking Indiana with Illinois and several other projects, said he sees PPPs as a way to build infrastructure ‘with other people’s money'.

The Indiana House of Representatives overwhelmingly approved a bill to give the state the authority to pursue several public-private partnerships valued at as much as $5 billion.

Ed Charbonneau

The bill authorises the state to pursue a public-private partnership (PPP) to build a toll road linking Northwest Indiana with southern Chicago suburbs in neighbouring Illinois. The so-called “Illiana Expressway”, aimed at relieving truck traffic congestion on existing roads, is estimated to cost up to $1 billion, according to the bill’s lead author, Republican State Senator Ed Charbonneau.

The bill also authorises PPPs for bridges over the Ohio River in southern Indiana that would link the state with neighbouring Kentucky. Cost estimates for two such bridges being considered range up to $4 billion, according to Charbonneau.

“When you can build a billion-dollar road and maybe two bridges for $4 billion with other people’s money, you have to take a long look at that,” Charbonneau told InfrastructureInvestor.

When you can build a billion-dollar road and maybe two bridges for $4 billion with other people's money, you have to take a long look at that

Ed Charbonneau

Unlike states like California, which passed a bill last year enabling the state to pursue PPPs without limit to location or number, the Indiana legislature must give specific approval to each PPP being pursued in the state.

In 2006, for example, the legislature had to give specific approval to Indiana Governor Mitch Daniels to pursue “Major Moves” – a PPP to lease the Indiana Toll Road in exchange for $3.8 billion. By a tight margin, he was able to get the approval and used the proceeds from Major Moves to fund the state’s long-term transportation spending programme. 

Charbonneau, a former steel executive and chief executive of a hospital, said he favours private-sector participation in infrastructure development because “it frees up Major Moves money to be used on other infrastructure projects that wouldn’t otherwise be built”.

“Indiana’s no different than any other state. We’re not flush with money anymore,” he said. “Plus you’re talking about a huge number of jobs.”

Under the state’s legislative procedures, the bill now goes back to Charbonneau for consideration. He may accept it as is and send it to Governor Daniels for his signature. He may also disagree with it and send it back to a joint House-Senate committee to work out the differences between their respective versions of his bill. He has not yet made up his mind either way.

“I don’t know because I haven’t seen the specific language [of the House bill] yet,” he said.