Final stretch of Indiana Interstate 69 project to cost $1.6B

Dive Brief:

The sixth and final segment of Interstate 69 in Indiana, which will connect the cities of Martinsville and Indianapolis, is expected to cost $1.6 billion, according to Indiana Public Media.
According to the Final Environmental Impact Statement (FEIS) released by Indiana's Transportation Department, construction of the 26-mile stretch of highway will require more than 80 businesses and nearly 200 residences to move. With the route established, the state can begin making offers on those properties.
Construction is expected to begin in 2020 and take approximately six years. According to the FEIS, the new highway will have an economic benefit of $4.1 billion across a 20-year period and will see the rehabilitation or replacement of 35 bridges, along with the construction of 39 new bridges. The work will also include the construction or replacement of 13 overpasses and underpasses. The FEIS projected that the new highway will result in 1,300 fewer crashes each year and will reduce travel time between Martinsville and Indianapolis by 11 minutes.

Dive Insight:

Indiana officials and other project stakeholders likely hope that Section 6 of I-69 will have fewer problems than Section 5.

Last year, the Indiana Finance Authority (IFA) took over that segment of I-69 after the state's public-private partnership (P3) with I-69 Development Partners saw numerous delays and cost overruns. The state said it hired the firm in 2014 to design, finance and build the project and then operate and maintain it for 35 years. At the time of the IFA's announcement, state officials said there was $236 million of work left to do but only $72 million left to spend.

The project reportedly incurred a significant amount of debt and saw less-than-expected traffic, resulting in lower revenue.

Still, the state has been able to implement an infrastructure financing mechanism that even the federal government is hesitant to attempt — raising the gas tax. In May, Indiana Gov. Eric Holcomb announced a near-$5 billion infrastructure initiative, noting that one way he planned to fund it was through a 10-cent per-gallon increase in the state's gas tax. The tax will increase by one cent per year for seven years.

Indiana officials said they had requested input from state taxpayers before raising the tax and discovered that state residents didn't mind the tax increase as long as the money was earmarked for road improvements.