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Many firms vie for Puerto Rico water utility contract

By on July 20, 2018

Editor’s note: This article first appeared in the July 19-25 print issue of Caribbean Business. 

Some 30 companies have expressed their interest in the proposed $300 million design and optimization of the Puerto Rico Aqueduct & Sewer Authority’s (Prasa) metering infrastructure and customer service experience, according to the Public-Private Partnerships Authority (PPPA).

Private proponents, which are required to present the ability to raise financing for the project, must also be willing to join in a partnership with the government through a 15-year contract.

The project, according to PPPA documents, seeks to reduce water losses; re-engineer Prasa’s commercial activities and services; improve water system planning and water resources conservation practices and improve customer experience.

Because of the complexity of the islandwide project, the deadline for submitting qualification documentation to the PPPA was extended to Aug. 17 amid concerns extra time was needed to submit qualification documentation. The original deadline was July 20.

“We consider a one-month period is too short for a public-private partnership (P3) of this magnitude and to comply with the listed RFQ [request for qualification] requirements, particularly for international proponents. One month will likely be insufficient time to get partners, subcontractors, negotiate agreements and memorandums of understanding, and prepare legal, financial and technical documentation. We recommend extending the time period to a minimum of two months,” one company told the PPPA.

Companies can join in consortiums or partnerships to qualify for the project. Proponents may introduce a new team member or a change in team organization after qualified proponents have been announced, but no later than 45 calendar days prior to requests for proposals.

Among the firms that participated in a recent prequalification meeting, with some also expected to join in partnerships, are: Accepta LLC, Honeywell, Acciona (Spain), IBT AMI Solutions LLC, Acciona Agua S.A., Indusa Inc., Acciona Infrastructure (USA), Inframark, ACEA International, Jacobs, Aclara, Klaro Solutions, Aqualia Renatus Advisors, Ares Management LLC, RTS Water, Atkins Caribe LLP, Stonepeak Infrastructure Partners, Badger Meter Inc., Suez Advanced Solutions, Black & Veatch, Truenorth Corp., CH Caribe Engineers, PSC/Jacobs; UBS Financial Services Inc.; Environics Group; Veolia North America; FCC Aqualia; Water Systems Optimization Inc.; GP Strategies Corp. and Water Works Suppliers Corp.

The minimum experience required to be able to compete for the project originally was to have completed the installation and integration of at least two Automated Metering Reading (AMR) or Advanced Metering Infrastructure (AMI) systems with no less than 200,000 customer point connections. The PPPA, however, eased the requirement because AMR/AMI systems that include 200,000 customer connections are uncommon and are limited to high-volume water customers.

To guarantee free competition in the RFQ process, the PPPA extended the experience requirement in AMR/AMI systems to other kinds of services, including power or gas distribution. “Considering the fact that in many countries a customer connection is a building and not per apartment unit, as is the case in Puerto Rico, is it possible to establish a ratio of customers-inhabitants and extend the experience requirement to inhabitants and not only customers,” the PPPA said in a document.

While the companies do not have to be registered as corporations in Puerto Rico to participate in the bid, they must express the desire to register as a corporation and comply with all requirements when the time comes to sign the P3 contract.

“Can a company that manufactures an AMI system, but does not provide other services included in the project scope, be qualified independently to supply the AMI system?”

one company asked in a prequalification clarification.

A technology supplier must partner with other companies to be qualified but may participate on more than one team, the PPPA responded.

The Prasa project is not the only one the PPPA is advancing. Along with University of Puerto Rico (UPR), the PPPA already has two consortia on its shortlist to proceed to the competitive procurement process for the P3 for the Student Life Project at UPR’s Mayagüez campus, a project that bundles the design, construction, finance, operations and maintenance of an on-campus student residence hall, parking facilities and certain additional capital improvements.

The shortlisted consortia are: SI Mayagüez LLC, which comprises Servitas and Interlink, and HILL, or Higher Integrated Learning & Lifestyle Team, composed of M Property Services, HOK International and Venegas Construction.

“We are very excited about the well-recognized consortia that will go on to the procurement process because of their reputation and level of experience. Puerto Rico is certainly winning back the confidence of the P3 market by formulating projects that make technical and commercial sense to potential investors,” said PPPA Director Omar Marrero.

On the downside, the PPPA said that starting in September, nonresidents of Vieques and Culebra will see a hike in ticket prices to travel to the island-municipalities and to transport their vehicles. Hearings are slated to start July 30 and end Aug. 3 at different sites for input on the proposed hikes.

According to the proposed hikes, nonresidents will pay $11.25 to visit the two islands, up from $2. Children under age 11 will pay $6, up from $1. Individuals ages 60 to 74 will continue to pay $1 and those over 75 still travel for free. Small and midsize cars going by ferry will be charged $40 to $50, which up from the current $15 charge. Motorcycles will pay $20, up from $7.

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