Reports out of Indiana suggest that the foreign operators of the Indiana Toll Road will soon be filing for bankruptcy in an attempt to restructure more $6 billion in debt. The announcement comes just eight years into the Indiana Toll Road Concession Co.’s 75-year lease of the roadway and despite a more than 176 percent toll increase on five-axle trucks.
The ITRCC, which consists of Cintra of Spain and Macquarie of Australia, paid $3.85 billion to lease the 157-mile toll road in 2006, but owes approximately $6 billion in debts according to the Wall Street Journal. The Journal says the company recently struck a deal with its largest creditors to restructure its debts and will declare Chapter 11 bankruptcy protections as part of the negotiations.
Prior to the lease, a five-axle truck paid $14 to cross the state. That same truck currently pays $38.70 regardless of whether the toll is paid in cash or through E-ZPass.
The lease agreement also contained a “non-compete” clause that prohibits the state of Indiana from fixing up nearby toll-free roads that compete with the Indiana Toll Road for traffic.
Speaking of traffic, the projections estimated by high-paid consultants who sold the idea of a long-term lease to then Gov. Mitch Daniels have not panned out due in large part to the recession in 2009.
OOIDA and truckers raised many concerns to the Indiana state government prior to the lease being signed, but the concerns fell on deaf ears. An OOIDA-backed constitutional challenge of the lease was eventually tossed by the Indiana Supreme Court.
The effects of the lease will continue to compound over time. According to lease language, the operator of the toll road is guaranteed a 3-percent toll increase per year through the year 2081. That means the current $38.70 toll paid by trucks will project out to more than $280 by the time the lease expires.
Indiana officials are weighing the possibility of leasing the roadway to another operator, which could alter or restructure the numbers.
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