- Associated Press - Tuesday, April 15, 2014

INDIANAPOLIS (AP) - Indiana officials have approved a deal with the private company that will finance and build the new section of Interstate 69 between Bloomington and Martinsville.

The Indiana Finance Authority and Indiana Department of Transportation said the agencies finalized the agreement Monday with private contractor I-69 Development Partners to upgrade a 21-mile stretch of the existing Indiana 37.

Private bonds to finance the project are set to be sold in June and construction is scheduled to start this year, the agencies said. The new section of I-69 is slated to open by the end of 2016.

Construction is estimated to cost $325 million, with the state making payments over 35 years. The Dutch-led contractor would oversee the road, including maintenance - such as the cost of repaving, snow removal and pothole patching - projected to cost $340 million over that span.

“The state’s payment structure makes rising construction costs and the risk of operations and maintenance the responsibility of the private developer, and requires the developer to meet performance standards for quality, schedule and maintenance to avoid reductions in recurring payments,” the highway agency said in a statement.

Indiana will make an $80 million payment to the private contractor, led by Isolux Infrastructure Netherlands B.V., during construction. When the section is complete, the state will pay $21.8 million a year, though a portion of the payment is subject to inflation.

Supporters say the public-private partnership is innovative, but critics maintain the deal will cost Indiana taxpayers more in the long run.

Then-Gov. Mitch Daniels paid up front for the first phases of the I-69 extension from Evansville to Bloomington, the money coming from the $3.8 billion made off the long-term lease of the Indiana Toll Road and a traditional combination of state and federal funds.

A 67-mile stretch of I-69 opened in 2012 from near Evansville at I-64 to near the Crane Naval Surface Warfare Center southwest of Bloomington. Construction is underway on a 27-mile section between Bloomington and Crane that could open late this year.

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