Indianapolis Airport Issues $390M in Bonds

The Indianapolis Airport Authority has closed a $390 million bond issue that will fund airport capital projects, including a portion of the New Indianapolis Airport, scheduled to open in late 2008.

The Authority received a historically low interest rate of 4.93 percent on the bonds. This is the fourth bond issuance in a series of five expected bond issuances that will be used to fund the Airport's capital program through 2010, which includes the New Indianapolis Airport.

According to Project Director John Kish, the interest rate was slightly lower than that paid by the Authority on its prior bond issues and well below the 5.50 percent allowed for in the most recent project feasibility study. Kish said the difference in interest rate would save the Airport approximately $78 million over the 30-year life of the bonds, which were issued through the Indianapolis Bond Bank.

Indianapolis-based City Securities, which worked on the Authority's prior three bond issues, was the lead underwriter on the bonds.

The bonds include tax-exempt and taxable bonds that will be repaid with airport revenues.

In other news, construction workers have inspected and tested a massive 207,000-lb. drilling machine to be used to drill a utility connector under the runway to serve the new main passenger terminal building being built at Indianapolis International Airport.

The huge Earth Pressure Balanced drilling machine is 50 ft. long, weighs more than 103 tons, and is capable of drilling a 108-in. diameter hole.

The machine will be used to bore a new utility connector under the existing north-most runway and two taxiways at the airport. The connector will link the new passenger terminal building with the Indianapolis Maintenance Center's Central Energy Plant. The machine will begin drilling the connector later.

Interstate Job Not Done, ARTBA Chair Says

Design and construction of the U.S. Interstate Highway System may be finished, but the job of building and improving America's transportation network to meet the needs of motorists and the business community in the 21st century is not nearly done, the American Road & Transportation Builders Association chairman June 27 told the House Highways, Transit & Pipelines Subcommittee.

"There is a myth being propagated by some that there is no longer a role for the federal government on transportation issues now that the Interstates have been built," Chairman Gene McCormick. "Nothing could be further from the truth.

"Given its role in helping facilitate interstate commerce, the federal government has a critical role to play in formulating new transportation policies to help ensure America remains globally competitive."

The 46,000-mi. Interstate System comprises just over 1 percent of the road miles in the U.S., but carries almost 25 percent of traffic and more than 40 percent of truck traffic. This has increasingly caused a greater strain on the system, he said.

"Over the past four decades, the Interstates have handled traffic volumes and vehicle weights that have dramatically exceeded the usage projections of those who developed and designed the plan in the 1940s and 1950s," he said. "That beating-combined with the system's capacity shortcomings and under investment-has taken a great toll.

"There will be serious consequences for the nation if the capital investment and resource challenges that face the Interstate aren't fully understood and met."

According to the U.S. Department of Transportation, an average annual investment of nearly $19 billion in 2002 dollars would be necessary just to maintain current physical and performance conditions on the Interstate System over the next 15 years. This figure does not take into account the rising cost of highway construction materials and labor, which have increased by over 20 percent in the last two years alone.

By contrast, all levels of government invested only $15.1 billion on improvements to the Interstate Highways in 2003 and $14.7 billion in 2004, according to the Federal Highway Administration. This represents a gap between investment levels and system needs of between $4 and $5 billion annually, the association says.

The amount to maintain current physical conditions and levels of congestion will grow from $20 billion in 2004 to $29 billion by 2015-far more than is being invested.

An ARTBA economic analysis of U.S. Census Bureau data recently found the U.S. population is projected to grow by 50 percent over the next 50 years, from 298 million to 440 million people. Traffic will grow more than 200 percent over the same period.