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Details not included in Daniels' toll road lease plan:

Skeptics wary of details of Daniels' toll road lease plan

The Associated Press

January 22, 2006

GRANGER, IND. -- Most details of the governor's plan to lease the Indiana Toll Road to help fund major highway projects remain unclear as lawmakers face a Feb. 2 deadline to advance the legislation, three northern Indiana newspapers reported Sunday.

Gov. Mitch Daniels' administration outlined some details of the lease plan to lawmakers last week _ including continued policing by state police and maintenance standards set by the Indiana Department of Transportation.

But many facets of the deal may not be made public until the state concludes negotiations with the winning bidder, said the joint report by the South Bend Tribune, The Times of Munster and The Journal Gazette of Fort Wayne.

The authorizing legislation for the plan, dubbed Major Moves, does not mandate the use of fully trained state troopers to patrol the 157-mile freeway, and it's unclear exactly what might happen to the 45 officers now assigned to the Toll Road or to nearly 600 other state workers who collect tolls, clear snow and maintain equipment and vehicles, said the newspapers' report.

The 74-page House bill, made public less than two weeks ago, also does not answer questions about development rights that might accrue to the operator on Toll Road property or at interchanges.

Lawmakers face a Feb. 2 deadline to vote the legislation out of the House and send it to the Senate.

Friday was the deadline for companies to submit lease bids, and Daniels was expected to make an announcement about them Monday. The newspapers' report said the bids, which were likely to come only from foreign-based companies, could be as high as $4 billion, based on the recent $1.83 billion lease for the Chicago Skyway over 99 years.

Skeptics questioned the wisdom of a long-term lease for which details can't possibly be imagined by authorizing legislation during the current short legislative session.

"It's a bad deal to borrow money for 75 years and spend it in 10," says Terry S. Miller, public policy director for the Chamber of Commerce of St. Joseph County.

Daniels has asked lawmakers for broad legal authority to sign a decades-long lease agreement for the Toll Road and to hire a private firm to design, build and operate a new toll road from Indianapolis to Evansville. He also plans to nearly double fares for cars on the Indiana Toll Road this year while boosting truck fares nearly fourfold over four years.

Combined, Daniels said, the fare increases and Toll Road lease could generate enough money to build 130 transportation projects across the state, at a cost of $2.8 billion over 10 years.

The Daniels administration has said no other financing method, such as bonding or gas tax increases, can generate the huge lump-sum payout that is needed to jump-start road construction in every major highway corridor of the state.

Tom Sharp, state transportation commissioner, said the promise of improved roads in the near future is necessary to attract factories or distribution hubs, and the jobs they would bring, for major corporations such as Wal-Mart and Toyota.

"They need to see something like this (plan), and I think they need to see that it's funded," Sharp said. "It's not a dream."

The state has promised 34 percent of net lease proceeds to the seven northern Indiana counties along the Toll Road's route, but how much money that will be cannot be determined yet. Net proceeds represent the gross bid, minus $200 million to pay off outstanding bonds, plus significant broker and legal fees and other negotiated costs.

The broker, Goldman, Sachs and Co., will earn a percentage of the winning bid, according to the Indiana Finance Authority, which has not revealed its specific fee arrangement with Goldman, the report said.