Friday, July 20, 2018

Puerto Rico fiscal board to receive critical infrastructure project proposals online

By on August 23, 2017

SAN JUAN – Starting Wednesday, the fiscal oversight board will begin to receive infrastructure projects that can be classified as critical under Title V of the federal Promesa law following the online launch of its critical project presentation and management platform.

Noel Zamot, who is tasked with the Promesa-created role of revitalization coordinator, said seven private projects, all energy related, have already been submitted. All projects have to be submitted to the online platform to qualify as critical and go through the expedited permit process.

“Puerto Rico is open to do business and we will do it through an open process in alliance with the government, federal agencies and private investors to support the sustainable growth of Puerto Rico,” Zamot said.


A critical project, according to Promesa, must meet certain criteria such as having an impact on an emergency and have private capital available. The cost of the project and the amount of government funds required will also be taken under consideration, as will be its environmental and economic benefits, including its job-creation potential, Zamot explained.

Revitalization Coordinator Noel Zamot (Jaime Rivera/CB)

Promesa outlines six steps for the critical project process that have been programmed into the online project submission and management platform. Once submitted online, the process entails a compliance review by the revitalization coordinator; authorization of an expedited permitting process by the relevant agencies identified; and the preparation of a critical project report by the coordinator, which is subject to a 30-day period for public comments. The final report would then be approved by the fiscal board, including a recommendation from the governor.

“We will focus our priority on electric power, transportation and water/waste management projects. The best candidates will be projects of varying sizes that focus on critical infrastructure needs, are consistent with the fiscal plan for Puerto Rico, have secured private funding, count on a solid environmental impact plan, are close to shovel-ready and are poised to create sustainable, good-quality jobs,” he said.

Regarding the process before the agencies, Zamot said that María Palou, the adviser to the governor on development and infrastructure, will be in charge of developing the expedited process for a project as she has six agencies under her supervision. The evaluation process should take about 150 days and includes 20 days for the revitalization coordinator to decide whether to accept the project and five days to decide with which agency it will be paired, as well as 30 days for public comment. The project sponsor will be able to obtain information on the status of the project as it moves along the process.

Although the Title V process will allow for an expedited permitting process, Zamot said projects that already have all permits or are “shovel-ready” may also be submitted under Title V because obtaining the critical project classification ensures they can qualify for low-cost financing. He also said that all types of businesses, whether small or large, can submit projects for consideration.
Regarding costs, Zamot conceded that projects should have private financing because the government has no money.

The critical project process should benefit Puerto Rico because of its focus on projects to help deal with problems affecting the island such as the high number of power outages and traffic congestion. Puerto Rico has 29 landfills, which are mostly on the verge of closure, so projects are needed to help solve the waste-management crisis, Zamot said.

Regarding federal permits, Zamot said that part of his job will be to establish contacts with federal agencies to help move projects forward, noting that the federal permitting flow is more predictable than the local one. However, Promesa does not compel federal agencies to hasten their permitting process.

Asked about environmental impact statements, Zamot said these will have to be completed within the 150-day period. If there is public objection to a project, Zamot said he sees no problem with extending the 150-day period to educate the public about the benefits of a controversial project. “It can be extended if there is a lot of opposition. I prefer to lose 10 days and have people who are happy with a project,” he said.

Will public hearings be held? Zamot said he is open to holding a public hearing on a project, but said the feedback process on the website, should suffice.

When asked how municipalities would be included in the expedited permitting process, given that many are autonomous and have their own processes, Zamot said the Title V process is a central government one.

He added that if there were a conflict with a municipality over a project, city officials will be brought into the process to be able to educate them about the project in question. Using an example of an environmental project that could help alleviate the garbage-collection problem and does not have a cost for the municipality, Zamot said “it would be a situation [for which] we will meet with the city’s leadership.”

Carlos Pesquera, the Transportation and Public Works Secretary during former Gov. Pedro Rosselló’s administration, told Zamot he was concerned about the implementation phase of a project, if the fiscal board classifies a project as critical but the government does not and opts not to sponsor it, such as the case of the Teodoro Moscoso Bridge. Can the fiscal board compel the government to accept a project as critical, he asked.

Zamot said the law is unclear on that issue but sees no problem because the government and the board have agreed on what critical projects are. “We’re having weekly meetings,” he said.

The recently appointed revitalization coordinator did not deny the possibility that projects submitted under Title V could conflict with the bankruptcy process under Title III of Promesa, especially proposed energy projects.

Currently, a group of creditors wants to appoint a trustee to take control of the Puerto Rico Electric Power Authority, which could affect decision-making for certain projects, but Zamot said the infrastructure groups would work such issues out with the executive branch if they arise.

“There is interaction between those two teams. As we review those projects, we will coordinate those efforts,” Zamot assured.

Revitalization Coordinator Noel Zamot and fiscal board Executive Director Natalie Jaresko (Jaime Rivera/CB)

Infrastructure investment will also foster economic growth. “Puerto Rico will need close to $1.6 billion in new investment in infrastructure in order to meet the economic growth targets contained in Puerto Rico’s Fiscal Plan. The Critical Projects Process, alongside the Government’s proposed P3 program, will help attract and fast-track significant private investment into critical infrastructure projects that will benefit the economy and the people of Puerto Rico,” said fiscal board Executive Director Natalie Jaresko who also participated in the presentation at the College of Engineers and Surveyors in Hato Rey.


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