MUNSTER, Ind. (AP)
— A state agency says it is monitoring the Indiana Toll Road operator's
finances as it works to make an upcoming debt payment on the financing of
its $3.8 billion lease payment to the state eight years ago.
The Indiana Toll
Road Oversight Board has asked the Spanish-Australian investor group Cintra-Macquarie
about the status of the payment it owes this month after state officials
made similar inquiries after news reports that it was struggling last year
to make an interest payment, board Director James McGoff told The Times of
"The answer is the
same, they are trying to negotiate more favorable terms with their lenders,"
made the upfront payment of $3.8 billion to the state in 2006 for a 75-year
lease of the highway that crosses Indiana's northern counties, but its toll
revenue since then hasn't met expectations.
Paula Chirhart, a
senior vice president for Macquarie Group Limited, declined comment on the
consortium's current financial situation.
The group's Indiana
Toll Road subsidiary turns an operating profit from tolls, but it has
struggled under a debt load now calculated at $4.4 billion in the most
recent annual report from Macquarie Atlas Roads. Some $3.9 billion of debt
matures in 12 months and will have to be refinanced by June 2015, according
to that report.
The ITR Concession
Co. announced this month that the cost of driving on the highway is going up
an average of 2.7 percent on July 1 for those without E-ZPass transponders.
Driving a car the
full length of the toll road will be $10, up from the current $9.70. The
toll for a typical five-axle semitrailer going the 157-mile length of the
highway will be $39.70, up from its current $38.70. The annual increases are
stipulated in the 2006 lease agreement.
The state has spent
much of the lease money on highway projects, although $500 million was
placed in an investment fund that collects interest to pay for future road
Daniels, who spearheaded the lease plan, said in 2011 that Cintra-Macquarie
troubles showed that the state had hit the jackpot as the consortium
"overpaid" for the lease.
McGoff said the
lease agreement allows the state to potentially take the highway back over
if the consortium misses its debt payments.
"If they default,
the road comes back to us," he said.
The Indiana Toll
Road Oversight Board continues to monitor that the operator to make sure its
meeting lease requirements that the highway is kept good repair.
"We are in constant
communication to make sure the road is up to the same standards as INDOT
maintains for all its roadways in the state," McGoff said.