Indiana Toll Road

The 157-mile road that runs across northern Indiana and connects the Chicago Skyway to the Ohio Turnpike is another example of a long-term lease agreement. Following quickly on the heels of the Chicago Skyway deal, the same Spanish and Australian toll road developers beat out 10 other proposals in a bidding process to operate the Indiana Toll Road for 75 years. The consortium paid $3.8 billion and began operating the facility in June 2006.Tolls for cars were limited to $8 through June of this year. From now on, tolls will be increased by the greater of 2 percent, the percentage change in the consumer price index, or the percentage increase in per capita nominal GDP7

The Indiana Department of Transportation is using the $3.8 billion upfront fee to fund 200 highway construction projects and 200 highway major preservation projects under a 10-year program called Major Moves. The seven counties through which the toll road passes are also receiving payments of between $40 million and $120 million for local transportation projects.8

The Chicago Skyway and Indiana Toll Road may be the two best-known long-term lease agreements involving previously existing road assets in the U.S. but they are by no means the only examples of public-private partnerships. As mentioned previously, there are many other types of P3s that can be more suitable to different situations, different parts of the country and different transportation assets.

Examples of the Design-Build type include the E-470 Toll Road in Denver, the I-15 corridor reconstruction in Salt Lake City and Texas State Highway 130 near Austin.9

Examples of the Design-Build-Operate-Maintain type include the Hudson-Bergen Light Rail project in New Jersey and Route 3 North from Boston to the New Hampshire border.10

The CREATE project, an effort to upgrade rail corridors around Chicago, is an example of the Build-Own-Operate model.

The Virginia Department of Transportation signed a Design-Build-Finance-Operate agreement with a private consortium in 2007 for new high occupancy toll, or HOT, lanes on a 14-mile stretch of the Capital Beltway (I-495) from the Springfield Interchange to north of the Dulles Toll Road. The contract is a fixed-price, fixed time, Design-Build contract, with an 80-year lease for operations, maintenance and toll collection. Work to construct the new lanes began in 2008 and must be completed by spring 2013; as of this spring, they are on track to open in late 2012. Virginia will retain ownership of the new lanes and will share in toll revenues if they exceed an 8.1 percent return on investment.11