The Illinois Department of Transportation on Friday took a giant step forward in its search for investors for the Illiana Expressway, issuing a lengthy request for qualifications that calls for "substantial completion" of the project by 2018.
The call for private investors represents IDOT's first stab at developing a significant expressway project through a public-private partnership. That was a key selling point when Illinois Secretary of Transportation Ann Schneider won a critical approval for the expressway from a Chicago-area planning agency three weeks ago.
"The state of Illinois looks enviously at other regions that have made this model (of financing) work," said Joseph Schwieterman, a DePaul University professor and noted Chicago-area transportation expert. "They feel it's time to get on the bandwagon."
Illinois Gov. Pat Quinn has invested significant political capital in overcoming opposition to the Illiana Expressway and could face a backlash if the private financing does not come through, Schwieterman added.
The request for qualifications issued Friday by IDOT Friday covers only the 35-mile Illinois segment of the toll road. The Indiana Department of Transportation is expected to issue its own request for qualifications for the 12-mile Indiana segment in the coming weeks.
The Illiana Expressway would run 47 miles from Interstate 65 just northeast of Lowell to Interstate 55, near Wilmington, Ill. It has a projected cost of $1.3 billion.
Responses are due back to IDOT by Dec. 19. Those responses will then be evaluated and a "shortlist" of up to four investment teams will be eligible for the next round. That round will involve the issuance of a request for proposals to the shortlisted teams only.
The request for qualifications issued Friday also affirms IDOT's intention to seek an availability payments financing structure. Indiana officials were the first to announce last month they will be asking private investors to participate in an availability payments program.
It is expected the Indiana request for qualifications will also mimic Illinois' on other key points. However, INDOT has yet to win a critical approval from a local planning agency as IDOT did three weeks ago. That local planning agency is the Northwestern Indiana Regional Planning Commission, which will vote on including the expressway in its long- and short-range transportation plans on Dec. 12.
IDOT's request for qualifications also confirms current proposals for seven Illinois interchanges; open-road, all electronic tolling; four travel lanes with a 60-foot median between; and 86 grade-separated crossings over or under local roads, streams and railroads.
IDOT's intention to seek an availability payments financing structure for the expressway means there will be heavy state involvement in raising money for the estimated $1.03 billion price tag for Illinois' 35-mile segment.
The availability payments structure will include the state making at least one milestone payment to the private investors during construction and then other periodic payments during a 35-year span after completion, according to the request for qualifications.
Despite the doubts of some expressway critics, Illinois officials claim the tolls charged to users should pay the entire cost of building and operating it by the time the 35-year period is done.
Indiana currently is using availability payments to back the financing of the $763 million East End Crossing bridge over the Ohio River.
In availability payment deals, a private investment group pays part or all of the upfront costs for design and construction of a road or bridge. In exchange, the state guarantees it will make annual payments to the investment group for making the bridge "available" to the motoring public. For example, in the case of the East End Crossing, Indiana will pay investment group WVB East End Partners about $32.9 million per year for allowing motorists to use the bridge.
Tolls can be used to make availability payments. But if tolls do not cover the full availability payment, then the state must find other funds to make up the shortage.