State says it will recoup $23 million to pay I-69 subcontractors

I-69 construction between Bloomington and Martinsville will impact Indiana University football traffic.
I-69 money problems
I-69 construction delays update
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MONROE COUNTY, Ind. (WTHR) - The money is on the way! That's the latest from the Indiana Finance Authority to workers on the I-69 project between Martinsville and Bloomington.

A court denied an injunction allowing the state's Canadian partner to access $23 million to pay workers what is owed. It all comes as 13 Investigates reporter Sandra Chapman digs into the contract to show you the trail of trouble.

Lori Thomas has seen it all between Martinsville and Bloomington. I-69 Section 5 is just yards from her front door.

"It's horrendous at times. I saw one guy read a book. He had a book on his steering wheel," said Thomas.

Backed up traffic, angry drivers and machinery shut down when workers walked off the job.

"Were you surprised that they weren't getting paid?" asked 13 Investigates.

"Yeah, I really was, because I just thought the money was all put aside for it," said Thomas.

Apparently, something went wrong. It was the third time workers didn't get paid and a clear indication the public/private partnership was in big trouble.

"It makes no sense," said State Rep. Ed DeLaney (D-Indianapolis), who is now calling on Gov. Mike Pence to demand the Canadian contractors hired to oversee the project, get it financed and fixed now.

"Get on a plane and go to Ottawa and talk to the people in Canada about what are they going to do," said DeLaney.

DeLaney questions why the Indiana Finance Authority put the project in the hands of the I-69 Development Partners.

According to the contract, the state allowed I-69 Development to use its name to get high-rated bonds. The group raised about $250 million.

What you might not know is I-69 Development is comprised of two groups: PSP, the Public Sector Pension Investment Board, which handles the pension for the Canadian Armed Forces and the Royal Canadian Mounted Patrol, and Isolux Corsan, a Spanish company handling the actual construction back on State Road 37.

Here's where the problems start. Portions of Isolux are in bankruptcy.

"We picked what appeared to be a desperate or weak bidder, didn't get guarantees and protections and went forward," DeLaney said.

He also says the I-69 bid came in $60 million lower than the next closest bid and that should have been a red flag.

Dan Huge, director of the Indiana Finance Authority, responded late this afternoon, saying the state had an obligation to take the lowest bid.

"Their proposal was reviewed for both technical and financial (ability and) scored highly," Huge told 13 Investigates.

Huge says the state is picking up the pieces now with a big win in court. Isolux was denied an injunction to keep I-69 Development from taking $23 million from a credit line to help catch up.

"There are approximately $16 million of invoices that are passed 35 days due and those invoices will be paid when those wires are received," he promised.

DeLaney still worries what an extended year will bring. He says the Finance Authority failed to get 100 percent insurance on payment and performance bonds and that puts workers at risk.

"I would say you have some folks who are still trying to figure out exactly what they need to do here and trying to fix it," said Huge responding to the money woes.

"We could have written a check from the surplus to an honest contractor to do that job. A check," said DeLaney, underscoring the fact that the state has a healthy surplus that could have been used for the project.

He believes the state refused to self-fund the I-69 project in order to tout the state's surplus while remaining debt free.

The Finance Authority Director says the state thought it could get top of the line performance like the Ohio River Bridge project.

With all of that aside, Huge says the state is talking with all involved to ensure the road will be completed.

In a statement, Isolux Corsan says it is "committed to work with the state of Indiana" to finish the project. The company said it paid the subcontractors and that the issue has been resolved. It also accuses I-69 Development Partners of "attempting to gain access to Isolux’s letter of credit" after the default and that it is "disappointed that the court did not grant the injunction."