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Five Entities Must Submit Individual Fiscal Plans by February

By on January 28, 2017

By Cindy Burgos and Luis J. Valentín

FAJARDO — Promesa’s Fiscal Oversight & Management Board requested that five government entities will have to submit their individual fiscal plans by Feb. 21, a week before the date on which the administration of Gov. Ricardo Rosselló must present a draft of the government’s fiscal plan.

The five covered entities that must present their plans ahead of the government are the Aqueduct & Sewer Authority (Prasa), the Electric Power Authority (Prepa), the Government Development Bank (GDB), the Highways & Transportation Authority (HTA) and the Public Corporation for the Supervision & Insurance of Cooperatives (COSSEC), all public entities with economic difficulties.

Fiscal Oversight & Management Board (Juan J. Rodríguez/CB)

Fiscal Oversight & Management Board (Juan J. Rodríguez/CB)

Meanwhile, the University of Puerto Rico (UPR), which was also required to submit an individual fiscal plan, will have until March 31 to submit a draft. This is because the government’s fiscal plan will influence that of the UPR, the board stated during Saturday’s meeting, which was under strict security protocols that included by hundreds of police and three checkpoints.

Nevertheless, this was not the case for the GDB, even though the future of the financial institution is directly tied to what will finally happen with the GDB’s portfolio of loans given to different central government agencies.

When asked by Caribbean Business about whether, under the same premise used for the UPR, the GDB should have been given more time to deliver its fiscal plan, the government’s representative to the board, Elías Sánchez, indicated that although both go hand in hand, they hope to have a clearer picture by Feb. 21 on the government’s fiscal plan, which will allow for the timely delivery of the GDB document.

The bank’s president, Christian Sobrino, added that the GDB’s team “is not operating isolated from the rest of the government” and that the information needed for the fiscal plans is shared so that both are aligned.

See also: Fiscal Oversight Board Appoints Ramón Ruiz Comas as Executive Director

Financial Advisory & Fiscal Agency Authority Director Gerardo Portela said the island’s fiscal agent is working with these public entities in the preparation of their fiscal plans, although he didn’t provide details on this process.

Both the new delivery date for the government’s fiscal plan –Feb. 28 – as well as those for the other six public entities, were unanimously approved by the board.

The body’s decision to give more time to the government to turn in these fiscal plans are subject to the administration’s commitment to “a once and done’ solution to achieve fiscal balance without additional borrowing, the implementation of a liquidity plan including a protocol for priority of payments, a regular cash flow forecasting report and the establishment of a joint working arrangement, information sharing protocol and work plan, among others,” said board president, José Carrión III.

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