Cintra files bankruptcy on Indiana Toll Road, is SH 130 next?
Link to article here.
Cintra, Macquarie file bankruptcy on Indiana Toll Road
By Terri Hall
Examiner.com
September 23, 2014
Yesterday, the two private, foreign corporations that tookover the Indiana Toll Road in 2006 filed for Chapter 11 bankruptcy. Former Indiana Governor Mitch Daniels sold it to Spanish infrastructure company Cintra and Australia-based Macquarie in a $3.8 billion, 75-year lease that raised eyebrows around the world.
Few thought a road could fetch so much money. It set off a chain reaction of state governments clamoring for quick cash to shore-up shrinking highway funding. Indiana used the money to build other highway projects, forcing Indiana Toll Road users to pay for other road expansion they don’t use. The state has long since spent the money in the short-term, but now the tollway is in long-term trouble.
When Cintra and Macquarie acquired the tollway, they immediately doubled the toll rates. The troubled road has failed to attract enough traffic to repay its $5.8 billion in debt still owed on the project. It shouldn’t surprise anyone that the road is in bankruptcy when they’ve doubled the cost to use it. In a true market approach, if not enough customers are buying your product, you lower the price, not increase it. The hedge fund and distressed debt investors that now own about 80% of the debt have agreed to allow Cintra and Macquarie to restructure their debt or dupe another company into buying it.
Like TURF
Follow TURF