Latin American consortium vying to manage Puerto Rico Highway 52
Editor’s note: This story first appeared in the July 26 – Aug. 1 print issue of Caribbean Business.
A consortium of Peruvian and Mexican investors is already eyeing the possibility of taking over management of PR52, known as the Luis A. Ferré Expressway, in a public-private partnership (P3) with the government.
The fiscal plan for the Highways & Transportation Authority (HTA) calls for a hike in all tolls on PR52 and a study to be completed by 2020 to determine the viability of operating the highway through a P3. The 5.5 percent hike in tolls is slated to take place starting in 2019.
Even though the government has not issued requests for proposal to privatize PR52, there is a marked interest to establish one. Alberto Colón, president of Multibanco International, an international financial entity that began operations this year, said he was approached by a Latin American client about opening an account to participate in P3s with the government.
Colón said the client is involved in highway construction and maintenance in Latin America but declined to reveal the name, citing confidentiality concerns.
“This client is mostly interested in the privatization, for which the public notice has yet to come out, of Luis A. Ferré Expressway, and it is understandable because Puerto Rico does not have money to maintain highways, which is one that also needs to be extended,” he said during an interview about international banks.
The Public-Private Partnerships Authority, in written remarks to Caribbean Business, said the privatization of PR52 has yet to be referred to the entity, which then refers all questions to the P.R. Fiscal Agency & Financial Advisory Authority, which stated the process to complete the viability study is underway.
HTA Director Carlos Contreras opposes the control board’s fiscal plan because it calls for toll hikes to adapt to inflation and a 15 percent payroll cut, which would be difficult to execute. The plan calls for the HTA to reduce traffic congestion to help grow the gross domestic product by reducing travel time. Among the initiatives to reduce road congestion are to implement a dynamic tollgate lane for PR52. There are also plans to build a traffic management center in Caguas, as well as improvements to the traffic signal system.