In the biggest highway privatization deal in U.S. history, state officials signed an agreement Wednesday to turn the 157-mile Indiana Toll Road over to a foreign consortium that will operate it for a profit for the next 75 years.
Under the lease, Spanish-Australian consortium Cintra-Macquarie will pay the state $3.8 billion up front and will be responsible for operating and maintaining the highway. It will get to keep the toll revenue it collects.
Republican Gov. Mitch Daniels said the upfront payment will help pay for other transportation projects and create jobs.
Opponents argued it violates the state Constitution and have sued. They said the Constitution requires that the proceeds from the sale of any public works be used to pay off state debt. The Daniels administration said the arrangement is not a sale but a lease.
The state hopes to close the deal and transfer the highway to the consortium by June 30.
The lease authorization passed in the Republican-controlled General Assembly by the bare minimum of votes. All but two Democrats opposed it, saying the state should not turn over a major asset to a private, foreign entity, and noting the consortium would reap billions of dollars through toll revenue and rate increases.
A truckers’ organization has already contributed $10,000 toward the legal challenge.
Last year, Chicago became the first U.S. government entity to lease an existing toll road to private investors, turning over the 7.8-mile Chicago Skyway to the same Spanish-Australian consortium for 99 years in exchange for $1.83 billion.
On the Indiana Toll Road, which cuts across the northern part of the state between Illinois and Ohio, the tolls vary by size of vehicle and distance traveled. A typical car traveling the entire length now would pay $4.65.
The lease allows the consortium to raise rates, but it limits the size of the increases.