Australian investment group IFM has completed financial transactions to take control of the Indiana Toll Road and collect the tolls on it for the next 66 years.
IFM Investors announced the completion of the $5.725 billion transaction on Wednesday, May 27. The company now owns 100 percent of the Indiana Toll Road Concession Co., a Spanish-Australian consortium that initially leased the toll road from the state of Indiana in 2006.
ITR Concession Co. went bankrupt in 2014. The courts allowed the company and the state of Indiana to repurpose the toll road under a new investor.
IFM Investors announced that it used equity from 70 pension fund partners based in the U.S. to achieve financial closing on its latest asset.
In exchange for operating, fixing and maintaining the 157-mile toll road, IFM will collect the tolls on it. A portion of toll revenue will be returned to investors.
IFM, which now has four toll roads in its portfolio, vows to make capital improvements to the roadway and deliver quality service to users.
“IFM Investors’ acquisition of ITR Concession Company is consistent with our stated approach to expanding our North American portfolio of assets where we count over 70 U.S. pension funds as our partners,” said Julio Garcia, IFM’s head of infrastructure for North America.
“Under our stewardship of this vital asset to the region, the Indiana Toll Road will soon undergo a series of improvements designed to enhance the customer experience,” Garcia added.
The former lease holder, Indiana Toll Road Concession Co., declared bankruptcy in September 2014, eight years into its 75-year lease.
The original lease, signed by then-Gov. Mitch Daniels, allowed truck tolls to increase from $14 per trip to $32 within the first five years and be indexed to the rate of inflation after that. The current toll rate for a five-axle truck is $38.70 for a one-way trip.
OOIDA fought against the original lease, which contained a controversial “non-compete” clause that prevents the state of Indiana from significantly improving nearby toll-free routes that compete for toll road traffic.
OOIDA helped back a constitutional challenge of the lease in 2006, but the Indiana Supreme Court struck down the challenge.