.........

Based on cost-benefit analyses and economic data going back over 10 years, it is clear that an I-69 route using I-70 and an upgraded US 41 provides far more “bang for the buck” than a new-terrain route.  As demonstrated below, the enormously expensive new-terrain I-69 has repeatedly failed cost-benefit tests.  By contrast, I-70/US 41 provides nearly all the benefits of a new-terrain route while saving nearly $1 billion in cost.

1990

The “Southwest Indiana Highway Feasibility Study” (a/k/a the “Donohue Study”) was a congressionally funded cost/benefit analysis of four potential highway projects in Southwest Indiana, including a new Interstate between Indianapolis and Evansville.  The study was conducted for the Indiana Department of Transportation (INDOT) and the Federal Highway Administration (FHWA).

The study concluded that “based on the results of the cost/benefit evaluation, construction was not recommended for any of the four alternatives...This suggests that there may be other projects both inside and outside Southwest Indiana that would represent better investments.” (1)

1996 – 1997

INDOT conducted a cost/benefit analysis as part of its 1996 Draft Environmental Impact Statement on a proposed Interstate between Bloomington and Evansville.  That analysis estimated that the cost/benefit ratio would be 1:1.54, meaning that for every dollar invested, $1.54 would be returned in benefits. (2)

In May 1997, Neal Johnson, PhD., an economist at Indiana University, published a review of INDOT’s cost/benefit analysis.  Dr. Johnson’s expertise was in cost/benefit analysis and he taught both undergraduate and graduate-level courses on the subject.  His report was an impartial analysis, motivated by a concern that the benefits and costs of this major project be correctly and honestly calculated and presented to the public.  Dr. Johnson was not paid by either proponents or opponents of the highway, or by anyone else, for the preparation of the report.

Dr. Johnson corrected several deficiencies in INDOT’s methods of calculating benefits, and found that once those deficiencies were corrected, the costs of the proposed Bloomington to Evansville highway would exceed the benefits by $115 million.  The report concluded that the cost/benefit ratio would be 1:0.81, meaning that for every dollar invested, only 81 cents would be returned in benefits.  Dr. Johnson’s conclusion was not disputed by either FHWA or INDOT. (3) 

2002 - 2003

In July 2002, INDOT released a Draft Environmental Impact Statement for a proposed extension of I-69 between Indianapolis and Evansville.  In January 2003, Governor O’Bannon announced he was selecting a new-terrain route for I-69 via Bloomington.  O’Bannon and INDOT rejected the least costly alternative for I-69, which is to use I-70 and an upgraded US 41 as the route.

 INDOT has refused to conduct a cost/benefit analysis on O’Bannon’s preferred route.  The previous poor performance of proposed highway projects between Indianapolis and Evansville may be one reason INDOT is refusing to perform such an analysis.  A comparison of INDOT’s estimated costs and purported benefits of the new-terrain I-69 and the I-70/US 41 route strongly suggests that O’Bannon’s new-terrain route would again fail a cost/benefit analysis and perform much worse than the I-70/US 41 option.

Construction Costs of New-Terrain are Nearly Twice Those of I-70/US 41, and Operation and Maintenance Costs of New-Terrain are Ten Times Those of I-70/US 41...

...While the Benefits of I-70/US 41 and the New-Terrain Route are Nearly the Same

Conclusion

No proposal for an extension of I-69 through Southwest Indiana has ever passed an objective cost/benefit analysis.  INDOT’s refusal to conduct a cost/benefit analysis on Governor O’Bannon’s preferred route is telling.  A review of INDOT’s own cost and benefit data indicates that O’Bannon’s new-terrain route would likely fail a cost/benefit analysis and would certainly perform worse than the I-70/US 41 route.

For more information, contact Andy Knott at Hoosier Environmental Council at 317.685.8800.

Footnotes:

(1) “Southwest Indiana Highway Feasibility Study;” Donohue & Associates, Cambridge Systematics and Congdon Engineering Associates; February 1990;  p. 12.

(2) “Draft EIS – Southwest Indiana Highway Corridor;” Indiana Department of Transportation; March 1996; Appendix A, p. 6-8.

(3) “Re-evaluation of the Benefits and Costs of the Proposed Southwest Indiana Highway;” Neal Johnson, PhD.; Indiana University; May 1997.

(4) Data from “I-69 Draft Tier I EIS;” Indiana Department of Transportation; July 2002; Table 3-33, p. 3-52.

(5) Data from “I-69 Draft Tier I EIS;” Indiana Department of Transportation; July 2002; Table 3-34, p. 3-53 DEIS

(6) Data from “Regional Economic Impact Analysis;” Technical Report 5.3.2 for I-69 Draft EIS; Indiana Department of Transportation; January 2002; Table 1, p. 4.

(7) “Review of I-69 Evansville to Indianapolis Tier 1 Draft Environmental Impact Statement;” Smart Mobility, Inc.; November 2002; p. 24 which uses data from “I-69 Draft Tier I EIS;” Indiana Department of Transportation; July, 2002; Appendix B, Table B-5, Page B-8. (No-Build = 100%)

(8) “Review of I-69 Evansville to Indianapolis Tier 1 Draft Environmental Impact Statement;” Smart Mobility, Inc.; November 2002; p. 24 which uses data from “I-69 Draft Tier I EIS;” Indiana Department of Transportation; July 2002; Appendix B, Table B-6, Page B-9. (No-Build = 100%)

(9) Data from “Regional Economic Impact Analysis;” Technical Report 5.3.2 for I-69 Draft EIS; Indiana Department of Transportation; January 2002; Table 1, p. 4.

 (10) Data from “Regional Economic Impact Analysis;” Technical Report 5.3.2 for I-69 Draft EIS; Indiana Department of Transportation; January 2002; Table 1, p. 4.

(11) Data from “Review of I-69 Evansville to Indianapolis Tier 1 Draft Environmental Impact Statement;” Smart Mobility, Inc.; November 2002; p. 19.  VMT data extracted from INDOT DEIS model files.