Update on I-69 Extension in Indiana

[silverback1065]

There are several new articles in the press about the most recent problems with the prime contractor on Section 5. One article is here.

This caused Fitch to again downgrade the bond rating to be considered speculative. So my questions are:
1) What will happen if there is a default?
2) What will this do to potential bond sales for future INDOT projects like the I-69 Ohio River bridge and section 6 of I-69?

Is this the contractor that is from Spain?

[GreenLanternCorps]

Does anyone know if there has been a notable increase in traffic on the completed portion of I-69 now that it is connected to State Road 37?

I am curious if the combination of 4 lane non-interstate quality SR 37 and Interstate 69 is seeing the kind of traffic that we would expect a completed I-69 to see from Evansville to Indianapolis.

[The Ghostbuster]

I guess we'll have to wait for Interstate 69 to be completed between Evansville and Indianapolis to get the answer to that question.

[codyg1985]

I imagine traffic would be steadily increasing along I-69 since it opened to Bloomington.

[thefro]

I imagine traffic would be steadily increasing along I-69 since it opened to Bloomington.

I've heard there's cars on it now as opposed to "it's like the Autobahn, you can drive as fast as you want because nobody's on the road!" before Section 4 opened.  Were a couple stories about kids getting arrested for drag racing on it.

No idea on traffic counts, but I imagine there's some traffic between Bloomington & Crane.  All the Section 5 construction would probably encourage semis to stick with I-65/I-64 to get to Evansville.

[Captain Jack]

I have been averaging about a trip a month from Evansville to Indy or points north, and there is definitely a noticeable increase in traffic. Even with the construction and speed reductions, I have been consistently averaging 2.5 hours from the Lloyd-69 interchange in Evansville to the 37-465 interchange in Indy. I have jumped over at Martinsville to 67 a couple of times, it seems to be a little less congested.

[SW Indiana]

INDOT has updated traffic counts on their website.

On section 4, they conducted counts the end of January of this year:

Between SR 37 and SR 445- 9,807
Between SR445 and SR 45- 8,398
Between SR 45 and US 231- 6,301

The only count station I checked on section 2/3 was between US 231 and SR 58 and it hasn't been updated since section 4 opened:

2013: 2,865
2015: 4,037

[thefro]

http://indianapublicmedia.org/news/pay-dispute-halts-work-i69-section-5-104683/

Bloomington Mayor John Hamilton says at least one major I-69 Section 5 subcontractor walked off the project Friday due to an ongoing pay dispute.

Work on Section 5, the section of interstate from Bloomington to Martinsville, was delayed earlier this year because of similar issues, pushing the completion date from October to June 2017. The private developer I-69 Development Partners is responsible for designing, building, financing, operating and maintaining that portion of interstate through a public-private partnership.

"I called Friday and spoke to the commissioner of the Department of Transportation, I spoke to the director of the Indiana Finance Authority and I said, "˜I believe you need to step in and make sure people get paid so they can keep doing the work,'"  Hamilton says. "I told both of them in no uncertain terms my view is you need to step up, make sure the payments happen, fight about it later."

Rep. Matt Pierce, D-Bloomington, wrote a letter to Governor Mike Pence Friday asking for answers about the ongoing delays. Pierce says he also received information about multiple subcontractors abandoning the project last week after not being paid.

"That caused me to want to ask the governor who oversees INDOT and the Indiana Finance Authority and this project, what is going on with this project?"  Pierce says.

Pierce says the public-private partnership between the state and I-69 Development Partners lacks transparency. He wants to see the state take back control of the project so Section 5 can be completed in a timely fashion.

"For my constituents who use that road a lot to get from here to Indianapolis, for the business community that relies on it for regional commerce and just for safety ... all of that is a reason to get this project done,"  Pierce says.

When asked about the dispute and whether subcontractors walked off the project, spokesman for the Indiana Department of Transportation Will Wingfield said in an email that staff from the Indiana Finance Authority saw contractors working on Section 5 Tuesday.

"The state is closely monitoring I-69 Development Partners and enforcing compliance with its contract,"  Wingfield said.

The city held a meeting with INDOT in August to get an update on the project, but Hamilton says many of his questions remain unanswered.

"These are citizens' tax dollars that are paying for this project, and we need to know what's going on,"  Hamilton says. "We need to know why 100-plus workers are not, on a beautiful day like today when we should be getting work done – they're off the job. That's a failure, and we need to understand."

The Indiana Finance Authority directed questions about Section 5 contractors to Isolux Corsan, the parent company of I-69 Development Partners. The company would not comment Tuesday.

[ITB]

^^^

On Friday, September 2, the day the article alleges that subcontractors walked off the job, I happened to be near the Fullerton Road work zone. Work was continuing, normally, it appeared. Was it a beehive of activity. No. But then again, it was the Friday before a three-day weekend, and I believe, state contracting rules stipulate an early end to work on such days.

Is it possible a subcontractor or two decided that if certain issues weren't resolved by the Labor Day weekend, work would cease? That might have happened. If the news report is accurate, that payments to subs continue to lag due to contractual disputes, it presents a troubling picture. INDOT and the Indiana Finance Authority are not going to sit idly by and let this practice continue. It behooves I-69 Development Partners, the concessionaire, to be careful at this stage. Already, they are in official default, and, as the article reports, local pols are now calling for the state to retake control of the project.

Here's a couple of pictures taken Friday, September 2nd.


Fullerton Road work zone, Monroe County, Indiana.


This is the location of the future western roundabout of the I-69/Fullerton Road interchange. The overpass that will carry Fullerton Road over future I-69 is to the right, up the mound of earth.

More pics and an update to come.

[ITB]

A major article now up on the website of South-Central Indiana's principal newspaper, The Herald Times, confirms that Crider & Crider, one of the main subcontractors of Section 5, has ceased work as of Monday, September 5th. Again, as before, the contractor is apparently not being compensated in a timely manner.

http://www.heraldtimesonline.com/news/local/contractor-stops-i--work-awaits-payment/article_ec413e36-9644-5e88-9573-38d1fe050523.html

The article is only available to subscribers but, in the generous spirit of fair use, here's some quotes:

Crider & Crider Inc., the contractor responsible for earth-moving operations related to upgrading of 21 miles of Ind. 37 between Bloomington and Martinsville to interstate standards, ceased work on the project Monday.

"All our equipment is lined up," said Don Conard, superintendent with Crider & Crider. "None of it's running."

Conard said the work stoppage is related to Isolux Corsan USA not meeting payment deadlines, something that has happened before. He said crews stopped working this past winter and again in March.

...

Reached by phone Tuesday morning to discuss the most recent work stoppage, [Jim] Stark [deputy commissioner with the Indiana Department of Transportation] said he was discussing the situation with [Will] Wingfield [INDOT spokesman] and would call back in about half an hour. He did not. Separate voice mails left for Stark and Wingfield on Tuesday afternoon were not returned by the deadline for this story. State Rep. Matt Pierce, D-Bloomington, said that lack of response is indicative of major transparency issues associated with the project.

Pierce said he's heard from lots of constituents who are frustrated with the traffic delays on Ind. 37 caused by I-69 construction. He said many understand a price has to be paid for progress, but they're only willing to cope with those inconveniences for a period of time.

...

Pierce said he doesn't understand why contractors aren't being paid, since the state already sold private activity bonds to finance the project.

"It's odd to me that if they had this private activity bond on the front end, there's not money to pay for construction," he said.

Equipment for subcontractor Crider & Crider lined up and idle at the Fullerton Road work zone in Monroe County, Indiana.


Another perspective of the Fullerton Road work zone.


And one more; looking north. The mound is where the southbound exit and entrance ramps for the future I-69/Fullerton Road interchange will be located. The overpass that will carry Fullerton Road over Interstate 69 is to the right (but not pictured).

Photos were taken September 6, 2016; 6:30pm.

[GreenLanternCorps]

I was hoping to see pictures of I-69 construction...

Are payment disputes like this normal for a large road construction project?

[codyg1985]

If subs are not getting paid, then INDOT or the overseeing agency needs to step in and make sure they get paid. I am not sure how the main contractor's payment arrangement is set up, but if it is a monthly pay application, I would withhold any further payments until the subs are compensated.

[seicer]

But wait, INDOT says that all of that equipment is active and workers are on site. Right?

[thefro]

The Indiana Finance Authority sent a notice of non-compliance to I-69 Development Partners Tuesday

The Indiana Finance Authority issued a letter of non-compliance to I-69 Development Partners Tuesday after learning the developer owes more than $9 million in undisputed amounts to subcontractors.

The letter comes after at least one subcontractor, Crider and Crider, stopped work on Section 5 because of lack of payment. According to the IFA's letter, I-69 Development Partners owes the subcontractor more than $2.3 million. The letter says other subcontractors are threatening to leave the project.

I-69 Development Partners' failure to pay subcontractors on time is a breach of its public-private agreement with the state. According to the agreement, if the developer doesn't resolve the issue in 30 days it will result in a default.

http://wishtv.com/2016/09/07/mayor-hamilton-to-discuss-i-69-construction-delays/

Also Bloomington Mayor John Hamilton and State Rep. Pierce are having a press conference right now and are rightly raising a major stink as it's a safety hazard to have all these construction zones for longer than necessary.  Subcontractors are saying the project won't be complete until May 2018 with all the delays.

[ITB]

Are payment disputes like this normal for a large road construction project?

No. It is not normal. But with all large projects, whether it be a road or a skyscraper, sometimes issues arise between contractors. Usually, such issues revolve around the quality of work performed, and payment is sometimes withheld until deficiencies are corrected.

An example:  A couple of years ago, a contractor was awarded the contract to raise the bridge and resurface the ramps for the N. Walnut Street overpass at State Road 37 (future I-69) in Monroe County, Indiana. This project was a precursor to Section 5 and is of not part of Indiana's I-69 Corridor Project. The job was completed in timely fashion, but INDOT was unhappy with the ramp resurfacing aspect. Before the official handback, they requested a redo, using the final payments as leverage as well as contract stipulations. As a result, the approach ramps were quickly resurfaced, this time satisfactorily.

If subs are not getting paid, then INDOT or the overseeing agency needs to step in and make sure they get paid. I am not sure how the main contractor's payment arrangement is set up, but if it is a monthly pay application, I would withhold any further payments until the subs are compensated.

Section 5 of Indiana's I-69 Corridor Project is being built and financed under a public-private partnership (in short, a 3P). In 2014, a private entity, I-69 Development Partners, was granted the 35-year concession to design, build and maintain the 21 miles of interstate that comprise Section 5. The public-private agreement is between the Indiana Finance Authority (IFA) and I-69 Development Partners LLC, an entity set up by an international Spanish firm with headquarters in the Netherlands, Isolux Corsán.

INDOT is of course closely involved with monitoring the progress of Section 5, but they do not officially "oversee" I-69 Development Partners, the concessionaire. The State of Indiana, through the Indiana Finance Authority, is the whom the concessionaire must answer to. The State's leverage over the concessionaire is the power to cancel the concession if the concessionaire fails in its obligations as stipulated in the 3P agreement. At this time, the concessionaire is officially in breach of the 3P agreement.

Earlier this year, I-69 Development Partners, was issued a non-compliance notice due to not meeting the stipulated time-frame for project completion as well as for significantly tardy payments to subcontractors. They were given 20 days to correct the tardy payments and 60 days to restructure the project schedule. These issues were seemingly resolved, but, apparently, the nonpayment problem never quite went away, as yesterday it was reported that a major subcontractor had, once again, walked off the job due to not being compensated in timely fashion.

What happens next is currently being decided. There are big questions that need answering, right now. Why aren't subcontractors being paid? Has I-69 Development Partners run out of money? If not, where's the money? In short, answers are needed to the question: What the hell is going on? Ultimately, the State could cancel the concession if the relevant issues aren't satisfactorily resolved, and soon.

For those interested, here's the link to the official 3P agreement between IFA and I-69 Development Partners LLC:

http://www.in.gov/ifa/files/Agreement_-_IFA_-_I-69_S5_-_Public_Private_Agreement_-_4-8-14_-_Execution_Version.pdf

Note: Minor edits to improve accuracy and readability.

[Rothman]

Are payment disputes like this normal for a large road construction project?

No. It is not normal.

It is common for projects to go "into litigation" here in NY.

(personal opinion expressed)

[thefro]

Yeah, this is getting politicized pretty quickly, so business is about to pick up.

2:25 p.m.

Bloomington's mayor is calling the work stoppage on the Interstate 69 extension a debacle and says Indiana Gov. Mike Pence's administration hasn't properly monitored the project's private developer.

Democratic Mayor John Hamilton said Wednesday it's past time for the Pence administration to step in to get the highway's Bloomington-to-Martinsville section finished as soon as possible.

The Indiana Finance Authority has threatened to find I-69 Development Partners in default of its contract after a major subcontractor stopped work this week over $2.3 million in late payments. Hamilton says delays could push back the section's completion until 2018.

Democratic gubernatorial candidate John Gregg blamed the problems on "gross mismanagement" by Pence and GOP candidate Lt. Gov. Eric Holcomb.

Spokesmen for Pence and Holcomb didn't immediately reply to requests for comment.

Gregg's already making this an issue in Indiana and with Pence being the VP nominee, it wouldn't surprise me if this starts getting some national attention if this isn't resolved quickly.

This is also bad for the prospects for the IN/KY bridge and Section 6 if this isn't resolved, as it seemed like those would likely both be P3s.

[Avalanchez71]

Looks like Evansville IN and Henderson KY will be the Breezewood of I-69 for time to come.  That is good news for the local economy in those locales.

[Captain Jack]

Looks like Evansville IN and Henderson KY will be the Breezewood of I-69 for time to come.  That is good news for the local economy in those locales.

I don't agree with this at all. This is a sizable metro, and a few convenience stores and fast food joints in Henderson don't drive the local economy one iota.  A second river crossing and a completed 69 will do far, far more for our area than a handful of junk stops. Most of them will survive just fine, and many more will open around the new interchanges.

[Avalanchez71]

What about the horse track?  This will drive away business.

[silverback1065]

Looks like Evansville IN and Henderson KY will be the Breezewood of I-69 for time to come.  That is good news for the local economy in those locales.

I don't agree with this at all. This is a sizable metro, and a few convenience stores and fast food joints in Henderson don't drive the local economy one iota.  A second river crossing and a completed 69 will do far, far more for our area than a handful of junk stops. Most of them will survive just fine, and many more will open around the new interchanges.

It can drive business down when through traffic stays on the interstate, but it will also spur growth near the interstate, so it could kill certain areas, and create new areas of economic growth.

[ITB]

Yeah, this is getting politicized pretty quickly, so business is about to pick up.

2:25 p.m.

Bloomington's mayor is calling the work stoppage on the Interstate 69 extension a debacle and says Indiana Gov. Mike Pence's administration hasn't properly monitored the project's private developer.

Democratic Mayor John Hamilton said Wednesday it's past time for the Pence administration to step in to get the highway's Bloomington-to-Martinsville section finished as soon as possible.

The Indiana Finance Authority has threatened to find I-69 Development Partners in default of its contract after a major subcontractor stopped work this week over $2.3 million in late payments. Hamilton says delays could push back the section's completion until 2018.

Democratic gubernatorial candidate John Gregg blamed the problems on "gross mismanagement" by Pence and GOP candidate Lt. Gov. Eric Holcomb.

Spokesmen for Pence and Holcomb didn't immediately reply to requests for comment.

Gregg's already making this an issue in Indiana and with Pence being the VP nominee, it wouldn't surprise me if this starts getting some national attention if this isn't resolved quickly.

This is also bad for the prospects for the IN/KY bridge and Section 6 if this isn't resolved, as it seemed like those would likely both be P3s.

Yes, I agree, it's problematic. Be that as it may, it's still too early to say what impact the issues involving Section 5 will have on future 3P projects. Going forward, the State likely will tighten up the rules and requirements for future 3P agreements. This will allow the new governor and legislators to take credit for reforms, while, at the same time, continue to pursue 3P projects, if desired.

Right now, however, with the political season in full swing, things are heating up, as you've noted. The failure of Section 5's public-private partnership would deal a serious blow to Pence, so I imagine a lot is going on behind the scenes. It doesn't look good at all that a company hand-selected by Indiana officials for a major State project can't quite seem to pay its bills on time, and may, in fact, be tottering.

It's hard not to visualize a bunch of execs flying in from Spain and the Netherlands to calm the fires. Something needs to happen. Whether it's personnel changes at I-69 Development Partners or increased oversight by Indiana officials, the status quo is no longer tenable. Even though the State is holding to the new completion deadline of June 28, 2017, it doesn't seem realistic, particularly as the machines lay idle due to the current work stoppage now underway. Substantial completion in December of 2017 is, perhaps, still possible, but the middle of 2018 seems more realistic. That's now less than 22 months away, so they better get moving and soon.

While good progress has been made during 2016, a lot of work remains. The overpass at Chambers Pike and interchange at Tapp Road have yet to start, and major work cannot even begin at Tapp Road until the interchange at Fullerton Road completes. On a positive note, the Fullerton interchange is beginning to take shape, but work there, without a serious push, could easily slip into the spring of 2017. If that happens it's almost a guarantee construction at Tapp Road will extend into 2018.

 

[Captain Jack]

What about the horse track?  This will drive away business.

I would say Ellis Park is the destination for the vast majority of it's customers. Is it possible an occasional motorist passing through sees the park, and decides to stop and play the ponies....yes, but I am certain that is a very, very small part of the customer base there.

It's not like US 41 will be abandoned. There will still be plenty of traffic using this route. Most commuters from Henderson going to Downtown Evansville or points west would probably still go this way, as would travelers from the south, who are also going to destinations downtown or west.

[tdindy88]

Especially if I-69 is going to be a toll bridge. US 41 will be treated the same as the US 31 bridge in Louisville when I-65 becomes toll.

[ITB]

It's been a while since I've put up a photo update, so let's get to it. I'll start with more recent pictures, then move on to ones that were taken earlier but are still relevant.

I headed out about 4:00pm, Thursday, September 8, and found the entire work zone within the city limits of Bloomington dead. Not a worker was to be seen anywhere. This was not unexpected as it was known subcontractors had walked off the job. Nevertheless, the quiet was a little unsettling, all the more so as storm clouds were building. I didn't venture north past the SR 37/SR 46 interchange, so I can't say what was happening at Sample Road or Liberty Church, but if pushed to voice an opinion, I'd say "absolutely nothing." It appears "all" subcontractors have ceased working.

Photos were taken September 8, 2016, unless otherwise noted.


The overpass that will carry Vernal Pike/17th Street over State Road 37 (future Interstate 69) in Bloomington, Monroe County, Indiana; looking west. The deck has been poured, and preps are underway to pour the approach slab.


Looking south from near the future Vernal Pike overpass toward the SR 37/Vernal Pike intersection. In the background a crane sits in the median near the CSX railroad work zone. There mainline bridges crossing over the rail line are being expanded from two to three lanes. The SR 37/Vernal Pike crossing is now one of only two traffic-controlled intersections between the I-69/SR 37 interchange south of Bloomington and the city of Martinsville, Indiana, roughly 25 miles to the north. The other is at Tapp Road.


Looking north from the future Vernal Pike overpass toward State Road 37 (future I-69) and the SR 37/SR 46 interchange.


The extension of 17th Street in Bloomington that will link into Vernal Pike; looking northeast from near the overpass. The box-like structures indicate the locations of storm drains. The drains already have been installed, so the framework likely has been placed for protection.


The point where the construction begins to extend 17th Street in Bloomington; looking east.


Another pic of the overpass that will carry Vernal Pike/17th Street over State Road 37 (future Interstate 69) in Bloomington; looking west. The bridge deck finisher (the yellow apparatus, background) rides this railing during the concrete deck pour. The machine is used to smooth and tine (slightly groove) the freshly poured concrete, while at the same time, form a subtle crown to the roadway. In the foreground, rebar has been placed for the approach slab, while, just beyond, work continues on the bridge sidewalks and sidewalls.

Note: Minor edits for grammar and accuracy.