Just a few months ago, the so-called Illiana Expressway, a planned 47-mile tollway linking Indiana's I-65 to Illinois' I-55, looked good to go.
As planned, the Illinois and Indiana Departments of Transportation (IDOT, INDOT) would hire development teams to finance, construct and operate the $1.1 billion road way, with teams recouping their investments from tolls it generated through 2052. Despite reservations, planning agencies in Illinois and Indiana signed off on the project last fall. This winter, IDOT and INDOT shortlisted development teams competing to construct the project. This spring, IDOT and INDOT proceeded with environmental reviews for Illiana.
Then, in May, the two agencies dropped a bombshell: At a minimum, Illinois would fund $250 million and Indiana $80 million to $110 million in project costs. An agreement between the two states also commits hundreds of millions of dollars to cover shortfalls in toll revenues.
All of which suggests the numbers don't add up and candidate development teams are seeking concessions.
To review: Illiana is intended to support an emerging cargo corridor about 58 miles south of Chicago while relieving congestion on I-80, an east-west corridor slicing through southern edges of the city. The $1.1-billion question is the amount of traffic – and tolls – the project would generate, assuming it is built. If they build it, will truckers come?
Probably not, according to the Chicago Metropolitan Agency for Planning (CMAP). Before signing off on Illiana last year, CMAP issued a report concluding that transportation officials had overestimated the tolls the project would generate and underestimated the costs required to complete, operate and maintain it.
"A robust analysis has determined that Illiana Expressway would yield few benefits in exchange for high – and uncertain – costs,” a September 2013 CMAP analysis reads.
There is precedent for failure of this magnitude. In 2006, the State of Texas contracted with developer Cintra-Zachry to construct a 41-mile segment of State Highway (SH) 130 near Austin. Completed in 2012, the tollway proved an economic asset to towns along its route, but generated only low to moderate traffic due to local preference for an existing freeway. Last, Moody's Investors Service lowered its rating on the tollway company from B1 to Caa3: junk.
So, when is a P3 no longer really a P3, and what will state lawmakers do when forced to confront the question, now that Illiana not only requires public funding – but perhaps quite a lot of public funding? Not to mention Illiana first in line for funding, ahead of other, perhaps worthier, projects in various Illinois districts.
How many strings does Illinois Governor Pat Quinn, Illiana's chief steward, have left to pull in order to pull off Illiana? The Chicago Tribune, among others, is screaming loud and clear for the project's head. Not an auspicious start for Illinois' first major P3 project.