Last month the company that won a 75-year concession to operate the Indiana Toll Road filed for Chapter 11 bankruptcy. That's bad news for the company, but not for the road's users. The bankruptcy demonstrates that, if structured correctly, roadway privatization deals can successfully shift risk to the private sector and protect taxpayers.
In 2005, two companies came together to form the Indiana Toll Road Concession Co. (ITRCC), which won the right to operate the toll road in exchange for a $3.8 billion up-front payment. The deal limited how much tolls could rise and included a trigger requiring the consortium to expand the roadway if certain congestion benchmarks were reached. The $3.8 billion threw off about $250 million that was used to fund other state transportation priorities.