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Fiscal Board requests separate fiscal plans for six public corporations

By on October 14, 2016

SAN JUAN–The fiscal oversight and management board imposed by the Promesa Act demanded Friday that the Puerto Rico government submit separate fiscal plans for six public corporations and agreed to appoint an executive director by January 15, 2017.

promesa-board-2The Puerto Rico Aqueduct and Sewer Authority (Prasa), Puerto Rico Electric Power Authority (Prepa), Government Development Bank (GDB), Highways and Transportation Authority (ACT by its Spanish initials), Public Corporation for the Supervision and Insurance of Cooperatives (Cossec by its Spanish acronym) and the University of Puerto Rico (UPR) must each submit a different fiscal plan to the one that Puerto Rico Gov. Alejandro García Padilla presented to the board Friday.

During the first part of the board meeting’s second session, which lasted about two and a half hours, the president of the board, José Carrión, asked to stop the Cossec transaction to allow cooperatives to exchange a certain amount of Puerto Rico bonds in its coffers. The public corporation would issue preferred shares at an interest rate of 4%.

Carrión also insisted that the board review all transactions, financial or not, of the agencies and public corporations they will cover, so he asked not to proceed with decisions without determining if such decisions could go against the Promesa Act.

Protests continue against the board

While the board president spoke, audience members began shouting in protest. Some of the protesters shouted “Vende patria (sellout)” and “Shame on you!”  before they were removed from the hearing room.

2nd-board-meeting-protestBefore the meeting began, another group of demonstrators protested outside the building of the Metropolitan Transportation Authority, located at # 2 Broadway Street, where the meeting was held. A similar event took place during the fiscal control board’s first formal meeting. Demonstrators carried sandwich boards with banners and displayed a Puerto Rican flag painted black, as a sign of mourning.

During the first part of the meeting, prior to the governor’s presentation, the chairman said that the board has the right to intervene in any legal action against Puerto Rico. He addedn that on October 21 they will submit to the court their stance on the demands of various groups of creditors against the government. On this regard, they will discuss whether or not they will extend the automatic stay on litigation, which expires next February.

It was also agreed that the committee comprising four of the seven members of the board will be responsible for making requests for proposal on counseling, legal and financial firms that would work hand-in-hand with the board in carrying out Puerto Rico’s debt restructuring. The committee consists of Carlos García, Ana Matosantos, José Ramón González and Carrión.

It was reported that the board’s two websites (www.juntasupervision.pr.gov and www.oversight.pr.gov) have information on the island’s finances and that it will soon release an official Spanish translation of the Promesa Act.

At the beginning of the meeting, emails and comments from website users were answered, with the board saying it was in the process of answering the remaining questions. One of the emails came from Jorge Pérez, who wished success to the board in its charge of achieving a “stable economic growth so that our children do not have to leave home (in Puerto Rico) in search for a better quality of life “. At this, David Skeel said that this is precisely the mandate that they intend to fulfill in hand with the government and its people.

At least 150 people attended the first meeting of the group and 8,000 saw the broadcasted event live, it was reported.

Governor answers questions of the board

After the presentation of motions, García Padilla made a presentation in which he justified the draft of the fiscal plan that he submitted to the board.

In his speech, the governor emphasized the importance of not hardening the austerity measures or lay off public employees, which would result in an intolerable situation for the Puerto Rican people.

 

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