I-69 developer’s missed payments ignite political dispute

A southern Indiana mayor blamed Gov. Mike Pence's administration on Wednesday for allowing a private developer to fall behind in payments to subcontractors, leading to a work stoppage on a new section of the Interstate 69 extension project.

State officials have threatened to find I-69 Development Partners LLC in default of its contract to upgrade 21 miles of the current Indiana 37 route between Bloomington and Martinsville, saying it owes more than $9 million to construction companies.

Bloomington Mayor John Hamilton, a Democrat, called the situation "a debacle" and said state government "hasn't kept its end of the bargain" on the project, which state officials touted two years ago as an innovative way of financing construction rather than having the state directly pay the cost.

"The road is built with tax dollars, it belongs to the public, the government has the ultimate responsibility to make sure it is built safely and efficiently," Hamilton said. "It is far past time for this administration to step in, ensure payment and get the road completed as soon as possible."

The Indiana Finance Authority issued a notice of non-performance to I-69 Development Partners on Tuesday in the dispute that has seen Crider & Crider Inc., the contractor responsible for the project's earth-moving operations, stop work in recent days over claims it is owed some $2.3 million.

"The state expects contractors working on this project and all projects to be paid on time," Indiana Public Finance Director Dan Huge said in a statement.

I-69 Development Partners issued a statement saying it has met all of its obligations and "stands ready to exercise "its contractual rights" with independent subcontractor Isolux Corsan to ensure other subcontractors return to work. I-69 Development Partners hired Isolux Corsan to design and build the Bloomington-to-Martinsville segment.

"We are doing everything within our power to ensure that this construction project continues to proceed in a timely manner and is completed within the allotted contractual period," the statement said.

Democratic gubernatorial candidate John Gregg called the project's troubles a failure by Pence and Lt. Gov. Eric Holcomb, who has taken over as the GOP candidate since Pence became Donald Trump's vice presidential running mate.

"Now, thanks to this gross mismanagement, I-69's completion will be delayed, more tax dollars will be wasted and Hoosiers will be forced to contend with more traffic jams, unsafe road conditions and other inconveniences," Gregg said.

The governor's office said state officials were acting to hold the project developer accountable.

"Any accusations to the contrary are just a sad attempt to score political points," Pence spokeswoman Kara Brooks said.

Holcomb said the I-69 project was vital for the state's economic development and that he was committed to making sure it was completed.

"It was responsible Republican leadership that took the much-needed extension of I-69 from an idea to reality," he said.

The Indiana Finance Authority selected I-69 Development Partners — led by Dutch-based Isolux Infrastructure Netherlands — to build the Bloomington-to-Martinsville section, with the state paying $80 million up front and making annual payments of $21.8 million a year for 35 years, with possible adjustments for inflation.

Work started in 2014 and was originally slated for completion by the end of 2016. State officials had already pushed back the expected completion date until June 2017 before the new work stoppage, which Hamilton said could push back the section's completion to 2018.

Don Conard, superintendent with Crider & Crider, said the company stopped work last winter and in March over missed payment deadlines.

"All our equipment is lined up," Conard told The Herald-Times of Bloomington. "None of it's running."

About 95 miles of the I-69 extension have opened since 2012 between Evansville and Bloomington through southwestern Indiana. The total cost of the I-69 extension is estimated at $3 billion. The cost of the final leg from Martinsville to Interstate 465 has not been determined.