Puerto Rico gov’t loses $8.6M in partnerships that never materialized
SAN JUAN – The Puerto Rico Government invested $8.6 million in four public-private partnership (P3) projects that were never completed and currently represent accounts receivable for the Public Private Partnerships Authority (PPPA) with little likelihood of being recovered. One of the projects is the Caguas commuter train to San Juan, which cost about $6.4 million.
This was revealed in a public hearing of the Joint Commission for the P3s, chaired by Sen. Larry Seilhamer. The other three incomplete projects are the conversion of Puerto Rico Electric Power Authority’s (Prepa) north region plants to natural gas, the concession of PR-52 and PR-20 and the development of correctional facilities.
“The multimillion-dollar spending during the past four years in projects for which interagency agreements were not even signed, which is the document that allows the PPPA to recover from the line of credit the investment in the various technical and financial studies is, without a doubt, a lack of sound administration,” Seilhamer declared in writing.
The also vice president of the Senate explained that in the case of the Caguas train, for which “there was an interagency agreement, they continued with the hiring of consultants even though they became aware that the project was not economically viable.”
The legislator stressed that the development of the aforementioned train required an investment of $400 million with operating expenses of $12.8 million annually, although ticket sales would only recover $7.9 million annually. For this reason, the Desirability and Convenience study indicated that the government should subsidize the project for at least 10 years at a cost of $20 million per year.
In the case of the development of the correctional institutions, P3A Executive Director Omar Marrero indicated that $1.5 million was invested but there was no interagency agreement or feasibility study conducted before its cancellation in June 2015.
“None of the initiatives for public-private partnership of the past administration were completed, they only reached the initial process of technical studies and / or desirability and convenience,” Marrero said.
Dispute over cancellation of the project
When the information transpired, Rep. José Varela of the Popular Democratic Party (PDP) criticized Seilhamer for allegedly ruling out the completion of the Caguas light-rail project when it has been studied for several years.
“Rejecting the project without having analyzed all the elements does not bode well for the central-eastern zone of the country, because a project of this scale would boost the economic development of the region. Not all development has to be for the metropolitan area,” the legislator said.
However, in another written submission, Seilhamer clarified it was the former administration itself that stopped the project out of need for funds amid the crisis.
“This is stated in a letter the P3A sent to the Municipality of Caguas, the Department of Transportation and Public Works, and the Highways Authority, dated September 13, 2016. I want to make it clear to the representative that it was his own administration that decided not to continue with the project,” the New Progressive Party senator said.
Being Vigilant of the 7 Benchmarks to end 2022
We are just about to end the fourth quarter of...
- Posted November 22, 2022
Inflation Heading Down, What Happens Now?
The Four Benchmarks to review that confirm inflation may be...
- Posted November 14, 2022
The Six Factors to Expect during the end of 4Q22
We are deep within the fourth quarter we thought it...
- Posted November 10, 2022
Puerto Rico Banks Deliver strong earnings, beating most banks
Puerto Rico Banks Transformed their operational model The Puerto Rico...
- Posted November 9, 2022
US Congress Discrimination affecting the Puerto Rico’s Healthcare Ecosystem
The market dynamics that changed the Healthcare Ecosystem as we...
- Posted November 8, 2022
MCS contributes over $5 million to support member healthcare
The insurer distributed the amount among 409 community pharmacies in...
- Posted November 7, 2022
Droguería Betances Launches 60th Anniversary Ad Campaign
Droguería Betances has launched a new advertising campaign, “60 Reasons...
- Posted October 31, 2022
Puerto Rico Food Industry Helps Communities in Aftermath of Hurricane Fiona
Over three-quarters of a million dollars in aid to...
- October 24, 2022
Medplus Solutions celebrates 10 years Saving Lives
Innovation and continuous growth Expansion of specialized and more...
- May 18, 2022
Amazon Web Services Expands Operations in Puerto Rico
Local Office Will Offer Services to other Caribbean Islands...
- April 22, 2022
García Padilla: Rubio Is No Friend of Puerto Rico
Governor Says Rubio's Remarks Confirm he Works for 'Vultures'
- February 26, 2016
Why the plebiscite was a disaster
A column by A. W. Maldonado
- June 16, 2017
[Annotation] The People Have Spoken
By abstaining, you can’t express anything
- June 15, 2017
You must be logged in to post a comment Login