A $12-Billion Plan

Hoosier State Makes Major Moves with Highways

By Steve Kaelble

Indiana’s nearly $12-billion Major Moves program is designed to be much more far-reaching than business as usual in highway construction.

Major Moves was launched in 2005 as a comprehensive, 10-year highway plan involving more than 400 projects. It’s a mix of new construction and major road-preservation projects, prioritized based on need, safety and economic-development potential.

Karl Browning, commissioner of the Indiana Department of Transportation, says one of the factors that set this program apart from previous plans is that there’s a funding mechanism in place to pay for all of the projects—making them more than just promises. The projects “are named, funded and scheduled,” he says.

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What’s innovative about that? Browning can point to a number of major projects people in Indiana have discussed for years, including the Hoosier Heartland Highway. The idea was conceived a full quarter-century ago to create a multilane highway between Lafayette and Fort Wayne, linking interstates 65 and 69 with a combination of highway upgrades and new-terrain construction. It’s been talked about for a generation, some of the pieces have been built, but there’s still no multilane connection going the whole distance.

“There was no way we could have built a $400 million project like that with standard funding,” Browning adds.

The same goes for the extension of Interstate 69 from Indianapolis to Evansville, much of which is a new-terrain highway project, and improvements to U.S. 31 designed to speed the trip between Indianapolis and South Bend by adding lanes and steering around congested areas. There’s been lots of talk about those projects for a long time, but only marginal progress.

“With I-69, the problem has never been a lack of planning; it’s been a lack of money,” Browning says. Major Moves has $700 million slated for the I-69 extension, which is enough to pay for just part of the project, between Interstate 64 near Evansville and U.S. 231 southwest of Bloomington. The project’s northern part to Indianapolis is not covered by Major Moves.

These three projects—the Hoosier Heartland Highway, I-69 and U.S. 31—are among the biggest-ticket items in Major Moves.

The final section of the Hoosier Heartland Highway cutting a new path between Lafayette and Logansport is under construction, while the $1 billion-plus I-69 project begins this year with construction at the south end of the corridor near Interstate 64. In 2009, work gets into full swing on the U.S. 31 project, which will spend about $1.1 billion in and near South Bend, Kokomo and Carmel by 2015.

Cashing in on Toll Road

Having extra cash on hand is one of the keys to making it work. Much of the money comes from a $3.8 billion lease of the Indiana Toll Road that crosses the northern part of the state.

Executed in 2006, the lease gives a consortium of infrastructure investors from Spain and Australia control of the highway for 75 years, in return for a $3.8 billion upfront payment that is now destined for highway projects.

Before it’s all spent, that $3.8 billion sum will generate about $900 million in interest, says Andy Dietrick, communications director for InDOT. To that will be added billions of dollars in regular highway funding from gas taxes, including $5.3 billion in taxes earmarked for highway maintenance and preservation plus $2.5 billion tagged for new construction.

Dietrick says the end result is a quadrupling of spending on new construction, from $213 million spent in 2005 to an estimated $874 million scheduled to be spent in 2015. Total spending on preservation and new construction would have run roughly $800 million a year without Major Moves; instead, by the end of the plan in 2014 and 2015, spending will be at or above $1.4 billion a year. Of the $11.9 billion that the Major Moves plan divvies up, about 54% supports major new construction.

Major Moves includes projects across the state, from improvements to Interstate 65 in Lake County near Chicago to highway approaches leading to new Ohio River bridges across the river from Louisville, Ky.

A $187 million project reconstructing and expanding the Borman Expressway from the Illinois state line to I-65, and rebuilding interchanges, is to be finished by the end of 2009. Work begins this year on the 11-mi, $124 million Indiana section of the proposed “Fort to Port” project expanding and rerouting U.S. 24 between Fort Wayne and the Port of Toledo in Ohio.

Major Moves also sets aside tens of millions of dollars to revamp and increase the capacity of interstates 69 and 465 on the heavily traveled northeast side of Indianapolis.

The plan includes significant sums to maintain highways big and small all over Indiana, including Interstate 64 crossing the southern edge of Indiana and Interstate 70 slicing across the middle of the state.

Browning says the Major Moves funding also has allowed the state to move quickly on special highway projects when necessary, such as a new Interstate 74 interchange and related highway improvements needed to support the new Honda assembly plant under construction near Greensburg.

Those projects total about $60 million and are to be done in January, just 2.5 years after the automaker announced the new factory.

It’s a good example of how infrastructure projects support economic development, and “we have the flexibility to meet these fairly immediate demands,” Browning says.

Enough Labor Capacity?

With all of this road-building on the map and in the budget, it’s fair to ask whether Indiana will be able to line up enough construction labor and capacity to get the job done.

Some industry studies have suggested that labor shortages could be in the offing, but thus far there’s been no significant difficulty, according to Gary Price, president of the Indiana Construction Roundtable.

“The shortages that were predicted are happening, anecdotally, but they’re not as severe,” he says.

Vicki Kitchin, executive director of the Build Indiana Council, says she is confident that the industry can meet the need.

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