Public-Private Partnerships (A): The Project Financing of the Indiana Toll Road

Published 25 May 2012
Reference 5828
Region North America
Summary

A consortium made up of Macquarie Infrastructure Group (MIG) and Cintra Concessiones de Infraestructuras de Transporte wins the concession for the Indiana Toll Road at a bid price of US$3.8 billion in January 2006. Market observers think the amount is too high, but MIG is confident the asset is worth the price.

Teaching objectives

Valuation of infrastructure asset, determining the right discount rate, pros and cons of public-private partnerships, winner's curse.

Keywords
  • toll road
  • infrastructure
  • public-private partnership (PPP)
  • project finance
  • privatization
  • step-up swap
  • Q31112
  • Corporate Governance
  • Auditing, Risk Control and Performance