Wednesday, October 16, 2019

Ports official lacks answers about working agreement

By on October 3, 2019

(Courtesy)

Puerto Rico House committee threatens to subpoena director

SAN JUAN — The Puerto Rico House Federal, International and Status Committee and the House Economic Development, Planning, Telecommunications, Public Private Partnerships and Energy Committee, chaired by Reps. José Aponte and Víctor Parés, respectively, on Tuesday began to review House Bill 1523 to investigate the process carried out to allow a cooperative working agreement between maritime cargo operators Luis Ayala Colón (LAC) and Puerto Rico Terminals (PRT), creating Puerto Nuevo Terminals (PNT). 

House Bill 1523, co-authored by New Progressive Party (NPP) Reps. Pedro “Pelle” Santiago and Aponte seeks to evaluate concerns that the collaborative agreement would result in anti-competitive practices.

The deputy executive director of the Puerto Rico Ports Authority José Roa testified in a public hearing at the Capitol in Puerta de Tierra and said that he supported any investigation by the Federal Maritime Commission (FMC) or the Justice Department to address concerns related to the possibility of reducing any antitrust issues as a result of the agreement.

However, Roa was not able to answer the committee’s questions regarding whether the Ports Authority has communicated with the FMC about the cooperative agreement or which shipping companies have leases in preferential areas at the ports and when contracts expire. Roa often replied that he did not know the answer or didn’t have the information with him.

To which, at one point, Aponte said, “You are not prepared to answer our questions.”

“As the deputy executive director, you don’t know the area,” Aponte said after showing Roa aerial pictures of the port zone and his inability to point out where the shipping companies were located.

Aponte said the committee will be subpoenaing Ports Executive Director Anthony Maceira under of contempt for not participating at a previous public hearing and delegating the responsibility of answering questions about the merger of the cargo operators to Roa.

Meanwhile, María Caraballo, the president of International Shipping Agency Inc. (Intership), a stevedoring contractor and terminal operator, said that the actions taken by the Ports Authority “have been ones that are not proactive but reactive.”

Caraballo said the agency has not assumed its responsibilities as dictated in the Puerto Rico Ports Authority Act.

“It is the executive director’s responsibility to promote and defend the port facilities and airports and seek resources to ensure that they are functional and operational, including that the continuous flow of cargo and movement of passengers in the event of an emergency, as well as the continued transit activity of imported and exported cargo continues for the overall well-being of our island and its economy,” Caraballo said. 

Santiago asked Caraballo about the mistakes made by Ports regarding the agreement, to which she answered that “an entity like Ports should have worried about the agreement.”

Popular Democratic Party (PDP) Rep. Luis Vega Ramos said that “the government renounced the rights of Puerto Ricans,” adding, “This administration abdicated its duty to protect and seek the well-being of the Puerto Rican people.”

Aponte insisted that the fusion of the maritime cargo operators “is a monopoly.”

Last month, a group comprising trade and labor organizations, dubbed Junte de Voluntades, asked Puerto Rico Gov. Wanda Vázquez to put a stop to the collaborative agreement.

The following day, Vázquez said that unlike the previous administration, she was letting the FMC know she would object to it, were it to affect commerce or consumers in terms of competitiveness, reduction of transportation services or increasing costs. 

“According to what I have been informed, under the public policy of the previous governor, no objection was presented before the FMC about said merger. It is our duty to establish that [our] position is in contrast to the [previous administration’s] and that, certainly, I will promptly address the concerns and complaints about the jurisdiction of the government of Puerto Rico, as well as the scope of the agreement and its implications on consumers and commerce in Puerto Rico,” Vázquez said in a statement last month.

The agreement allowing the joint venture at the Port of San Juan went into effect Aug. 29. However, the FMC noted that concerns about the agreement and its impact on the market led it to adopt stricter oversight than for its traditional monitoring program.

Last month, Maceira told Caribbean Business that “it should be clear” that the Ports Authority’s roles is more akin to managing real estate. “So when they ask the governor to not authorize the agreement; there is no agreement with Ports,” he stressed.

When evaluating the agreement, Maceira said at the time, the FMC considered whether it would hinder competitiveness, reduce transportation availability or increase costs.

“In this case, they evaluated those three criteria, framed in these facts: Puerto Rico’s market is served by a limited shipping market, the cargo volume, commercial trade, which is less than the ones [stateside], the FMC considered the overcapacity of terminal services at the Port of San Juan and that efficiencies are reached; the opposition presented to the agreement and maintaining the same rates, meaning that they won’t go up or down until 2020,” Maceira said.

Based on the evidence the FMC had, Maceira said, it understood competitiveness would be affected or that costs would rise, among the other elements considered.

The official reiterated that Ports didn’t put the agreement into force. As for the “term monopoly, that is a legal term, which the Justice Department is currently evaluating,” Maceira said last month.

—Caribbean Business writer María Miranda contributed to this report.

Related stories: