The owners of the Indiana Toll Road apparently are not on the verge of bankruptcy, but even if they were in financial trouble, there are safeguards in the lease contract with the state that would protect the highway for Hoosiers.
State Rep. Patrick Bauer, D-South Bend, speaker of the Indiana House, told WNDU-TV, The Elkhart Truth's newsgathering partner, on Monday that the foreign consortium that operates the roll road is "on the verge of bankruptcy."
His source for the information is a July 8 story in The Australian that quotes financial analysts as saying that the debt taken on by Macquarie Infrastructure Group to buy the toll road and the Chicago Skyway is too high, given their performance and that the roads could be sold "for a nominal amount ..." -- $1 -- to allay investor fears that more money will have to be pumped into all Macquarie's U.S. assets. The assets also include the Dulles Greenway in northern Virginia and the South Bay Expressway in San Diego.
Bauer told Channel 16 the toll road is "a ping pong ball in a game of international trade."
But Matt Pierce, director of communications at ITR Concession Co., which manages the toll road, said his company is "far from" the verge of bankruptcy. ITR is indirectly owned by Macquarie Infrastructure Group, Macquarie Infrastructure Partners and Cintra Concessiones de Infraestructuras de Transporta, S.A. Those partners manage assets of $35 billion, Pierce said.
"The fundamental financial health of each of those companies is not in question," he said.
Pierce noted that millions of dollars have been spent on improving the toll road since June 2006, when the company took over the lease.
A July 17 story by the same publication quotes Macquarie officials as saying that traffic volumes are stabilizing and that revenue grew in the second quarter, including 9.2 percent on the Chicago Skyway. The company's overall portfolio is still down from last year, the story said, and the company previously said it is reviewing its options to deal with debt and poorly performing assets. (Read The Australian's story here)
Meanwhile, State Rep. Jackie Walorski, R-Elkhart, said she couldn't find any truth to what Bauer was alleging.
"Nobody can run this down with actual real people," she said.
She said she spoke with the Indiana Department of Transportation, the governor's office and House staff Monday and couldn't find anyone who could place any validity in Bauer's claims.
"As far as I'm concerned, I can't verify what he's talking about," she said.
However, Walorski said it doesn't matter because the state protected itself in the lease contract in the event of a problem. The Indiana Finance Authority would have to approve another lease. Effectively, the road would revert back to the state and the state would keep Macquarie's money, plus interest, plus the improvements that have been completed on the road.
Those are safeguards that were placed into the contract, she said, and one of the reasons Gov. Mitch Daniels wanted the $3.8 billion for the lease up front.