Monday, February 06, 2006

Major Moves 101

Governor Daniels' Major Moves gets a little assistance in the form of a briefing his campaign is putting out entitled: "Major Moves 101: An Introduction." So what does it tell us?

The Bid: $3.85 billion cash + $4.4 billion in Toll Road Improvements (over $200M in next three years). Interest on $3.85 billion is estimated at $800 million ($150 million in first year alone).

The Bidder: Statewide Mobility Partners (Macquarie of Australia and Cintra of Spain) Companies operate The Chicago Skyway, Detroit-Windsor Tunnel, Dulles Greenway in Washington, DC, and Trans-Texas Corridor. 47% of Macquarie's assets are in US. 40% of investors outside Australia (mostly in US).

Major Moves creates jobs for a generation. According to USDOT, Major Moves would support 130,000 Hoosier jobs or more.

For the first time in four years, State to provide funds to local governments. $150 million will be provided to local governments for local road projects over three years. Provides additional $100 for Toll Road County road projects, $100 million for the NW RDA, and $100 million for a new NE Indiana RDA.

Major Moves Improves the Toll Road. Indiana is not selling the Toll Road. $4.4 billion in improvements at SMP expense - including more than $200M in next 3 years. Tolls for passenger cars and trucks would be frozen at current rates through 2016. Increases State Police from 45 to 70, and builds a new Police Post at company's expense. Operating agreement mandates standards on everything from pothole repair (24 hours) to the time it takes to remove a dead animal from the road (8 hours)

Major Moves takes I-69 from the drawing board to reality. Previous road plans placed I-69 construction from 2017-2035. Major Moves starts construction in 2008 with completion scheduled for 2018.

Major Moves uses other people's money, regardless of source, to create jobs for Hoosiers in Indiana. Nearly 900 International companies employ 130,000 Hoosiers today. A British company has run all aspects of the Indianapolis International Airport since 1995. SMP is mandated to hire Hoosiers first and "Buy Indiana" for 90% of its purchases.

Major Moves fully funds INDOT's 10-year Plan:

  • Hoosier Heartland Highway.
  • Two new Ohio River Bridges near Louisville.
  • A high speed US 31 between Indianapolis and South Bend.
  • Modern Indiana Toll Road Corridor.
  • Accelerated I-69 between Evansville and Indianapolis.
  • More than 200 other transportation projects.

Hoosiers across the state support Major Moves because it will create jobs. The Teamsters, Sheet Metal Workers, Operating Engineers, and Carpenters unions all support Major Moves in addition to the Indiana Chamber of Commerce, Indiana Manufacturers Association, Build Indiana Council, Indiana Motor Truck Association, US 31 Coalition, Hoosier Voices for I-69, and dozens of other groups and Republican and Democrat elected officials.


Marti said...

I'm not sure if I'm for this or not. My biggest question is... WHAT IS THE CATCH. Momma said "you don't get somethin' for nothin'." What does Statewide Mobility Partners stand to gain from this deal?

And as far as creating jobs, that makes NO sense. If "Major Moves" construction would support 130,000 jobs, how many would the same road construction support under the government control?

No one seems to have the answer to these questions.

Gary R. Welsh said...


The 130,000 construction jobs refers to the work created by the various highway construction projects the state will undertake with, in part, the $3.4 billion the private contractor pays for the lease over the next 10 years. Without the lease, those same projects will be stetched over many years in the future, if they ever happen at all--meaning the jobs will come and go as the state works on them over the next 20-30 years. By doing all the projects at once over a 10-year building plan, those jobs will materialize in a compressed period of time--meaning workers won't be transitioning from one project to another over a period of many years--so theoretically, far more jobs are created in the short term. I hope that makes sense. You can't really compare the actual number of jobs created under the two different approaches unless you know for certain when the projects will occur without the lease.

Anonymous said...

The Toll Road lease may be a good idea -- the net present value of $3.85 billion is significantly more than the same revenues spread out over time.

Yet the Major Moves bill is bigger than the lease. Major Moves shifts all of the authority for public/private partnerships into the hands of the State Executive -- meaning absolutely no meaningfullegislative oversight. The bill provides the Governor with a blank check to privatize any INDOT road or bridge project, including I69.

eliminating constitutional checks and balances over decisions effecting public infrastructure is simply unacceptable. If any Governor or legislature wants to argue the merits of any public/private partnership it should be with full public disclosure with full checks and balances in place.

Gary R. Welsh said...

Even without the enactment of the pending legislation, Gov. Daniels has the authority to privatize the toll road under the Public-Private Agreements Act. He deliberately chose to make the legislature a part of the process--it would not stop the legislature from at any point in the future blocking a privatization effort. The Illinois legislature, for example, several years ago passed a law that prevented the Governor from privatizing prisons after it learned that he was considering such an idea. Nothing would stop the legislature from blocking further privatization in the future.