Fiscal Board and government bet on public-private partnerships
SAN JUAN – The fiscal control board and the government of Puerto Rico are in tune with the main role public-private partnerships (P3s) will play in meeting infrastructure needs on the island.
“I am particularly optimistic about the P3s […] I find it interesting and exciting,” said fiscal board Chairman José Carrión III about the mechanism to advance critical infrastructure projects, as defined by Title V of Promesa.
He added that this type of transaction has already been successfully tested in Puerto Rico and praised the P3 Act, which was recently amended to allow unsolicited proposals, among other changes.
During the board’s meeting in San Juan Friday, both the deputy executive director of the board, Ramón Ruiz Comas, and the executive director of the Public-Private Partnerships Authority, Omar Marrero, explained the efforts being made to advance a dozen projects already identified under the certified fiscal plan.
Marrero admitted that the amount of public funds the government would have to invest to enable some of the projects before they can become P3s is a challenge.
The list mainly includes projects related to energy infrastructure, water, transportation and solid-waste management. For the next 10 years, the document estimates some $5.1 billion in investment for the 12 projects identified and implemented through P3s. According to the plan, this would create 100,000 construction jobs.
Meanwhile, Marrero said there are about $1 billion in a series of additional projects that have been identified in social infrastructure and technology, although they are not part of the certified fiscal plan.
To questions about the role of the board in identifying projects, Carrión said the governing body does not choose “a particular project, it is up to the government to identify them.” The board would be supporting and encouraging this type of transaction on the island because it believes it will help reverse the economic decline.
For his part, Marrero emphasized that the government “has no resources” to meet infrastructure and capital investment needs, and said aggressive efforts are made to identify projects and promote them to the private sector. He mentioned the event that will be held by the government April 20 and 21, in which he hopes to reveal a roadmap of the projects and assets for which there is interest in establishing P3s. Carrión said he was optimistic about the event.
For his part, the government’s representative to the board, Elías Sánchez, said that contrary to establishing a fast-track permit process for critical projects under Promesa, taking the time necessary to implement best practices is sought. He assured it will all be in compliance with the law and that if carried out faster than it was done in Puerto Rico does not mean it will be done incorrectly.
During Friday’s infrastructure panel, Neyssa Varela spoke on behalf of the Associated General Contractors about the serious situation the construction sector in Puerto Rico faces and the little investment in infrastructure on the island during the past decade.
The organization urged the reinitiation of investment in infrastructure through contractors and Puerto Rican companies. She recommended maximizing the use of federal funds, identifying projects that do not need government or P3 involvement, and addressing the liquidity situation at the Highway Authority, particularly in funds subject to various federal programs.