The Indiana Toll Road is owned by the State of Indiana. A private company, ITR Concession Company LLC, runs it under a 75-year lease that runs until 2081, and that company is in turn owned by the Australian-based asset manager IFM Investors. The highway itself and the land under it belong to the public; the right to operate the road and collect tolls was leased out.
The Indiana Finance Authority put the distinction plainly when IFM took over: “the Indiana Toll Road remains the property of the State of Indiana and Hoosier taxpayers,” and the private operator is “leasing the rights to operate and maintain the stretch of roadway.”1Indiana Finance Authority. New Operator to Manage Indiana Toll Road When the lease ends, control returns to the state with no buyback payment.
Who Operates the Road Day to Day
ITR Concession Company LLC, usually shortened to ITRCC, is the entity drivers actually encounter. It runs the full 157-mile corridor between the Chicago metropolitan area and the Ohio border.2Indiana Toll Road. About ITRCC ITRCC collects the tolls, repaves the lanes, inspects the bridges, and plows the snow across northern Indiana each winter. All of that work is paid for out of toll revenue, not Indiana tax dollars.3National Governors Association. Indiana Toll Road Case StudyToll Road Oversight Information
Who Owns ITRCC
ITRCC is owned by IFM Investors, a global institutional asset manager founded more than 25 years ago by a group of Australian pension funds. IFM now manages retirement savings for more than 160 million people worldwide, and the Indiana Toll Road sits inside a broader infrastructure portfolio.4Indiana Department of Transportation. Toll Road Oversight Information Profits and losses from the road flow through to pension beneficiaries, which is why IFM described its purchase as being funded “largely with U.S. pension capital representing millions of retirees.”5National Governors Association. Indiana Toll Road Case Study
How a Private Company Ended Up With the Lease
In 2005, Governor Mitch Daniels launched a program called Major Moves to rebuild Indiana’s highway infrastructure without raising taxes or issuing new state debt. Leasing the toll road was the centerpiece. In 2006, a joint venture called Statewide Mobility Partners LLC, formed by the Spanish infrastructure firm Cintra and Australia’s Macquarie Group, won the 75-year lease for $3.8 billion.4Indiana Department of Transportation. Toll Road Oversight Information Of that upfront payment, $2.6 billion went into highway expansions, bridge replacements, and other projects across the state.6Indiana Department of Transportation. Major Moves
The original operators later ran into financial trouble. Traffic came in below projections, and the deal’s financing had included a nine-year interest-only loan hedged with a 20-year interest-rate swap whose preset rates reached as high as 11.3 percent. When rates fell after the 2008 financial crisis, mark-to-market losses on that swap pushed total project debt from $3.4 billion at acquisition to $6.0 billion by 2011, and refinancing was no longer possible.7Federal Highway Administration. Infrastructure Case Study – Indiana Toll Road ITRCC filed for Chapter 11 bankruptcy protection in September 2014. The road itself kept running.
A competitive sale followed, and IFM Investors won with a bid of $5.725 billion. The original lease terms stayed intact by court order, and IFM formally assumed control on May 28, 2015.1Indiana Finance Authority. New Operator to Manage Indiana Toll Road
What the State Still Controls
Private operation is not the same as unsupervised operation. Three state entities share oversight of ITRCC: the Indiana Finance Authority, the Indiana Department of Transportation, and the Indiana Toll Road Oversight Board, whose members are appointed by the governor. They monitor whether ITRCC maintains the road to the standards in the lease and whether toll rate increases follow the contractual formula.4Indiana Department of Transportation. Toll Road Oversight Information
When the Road Comes Back to the State
The 75-year lease started in 2006 and expires in 2081.5National Governors Association. Indiana Toll Road Case Study At that point, full management of the corridor returns to Indiana. The state does not have to buy anything back, because it never gave up ownership in the first place. Until then, the road you drive is public property run by a private operator, and the tolls you pay fund that operator rather than the state treasury.