Summary
In September 2014, the Indiana Toll Road (ITR) in the US Mid-west, privatized as a 75-year concession at an impressive price of US$3.8 billion only nine years earlier, filed for Chapter 11 bankruptcy , having chalked up US$6.3 billion of debt. In the subsequent sell-off the ITR managed to attract an even bigger bid than before - of US$5.72 billion.
Teaching objectives
The valuation of infrastructure assets; determining the right discount rate; pros and cons of public-private partnerships; the "winner's curse".
Keywords
- Toll road
- Infrastructure
- Public-Private Partnership (PPP)
- Project finance
- Privatization
- Step-up swap
- Inner's curse
- Q31516
- Corporate Governance
- Auditing, Risk Control and Performance
- Q31516
