Thursday, November 14, 2019

Stakeholders question Puerto Rico port’s public-private partnership

By on September 4, 2019

An aerial view of San Juan Bay’s cruiseship and cargo ports three days after Hurricane María struck Puerto Rico, Sept. 24, 2017. (CB photo)

Cruise association head, travel industry rep call for transparency

Editor’s note: See page 4 of the Sept. 5 issue of Caribbean Business for the full report.

SAN JUAN — The company that won the concession for the cruiseship piers at the San Juan ports is expected to be announced any day now, but the founder of travel agency Cruceros To Go, Daphne Barbeito, said that for many members of the visitor’s economy, important questions remain unanswered. 

“This privatization [of the piers] wrongly managed, without the due protection on the part of the operational services that are provided locally, is going to have dire consequences from the porter and artisans, to the travel agents and the Old San Juan merchants,” said Barbeito, the former chairwoman of the American Society of Travel Agents, Puerto Rico and U.S. Virgin Islands Chapter, and member of the Puerto Rico Hotel and Tourism Association board as well as of the Confederation of Tourism Organizations in Latin America.

“This is going to have an [enormous] impact, and no one knows what is in the document,” she added.

Barbeito argued that the first problem she sees is a lack of transparency. This includes not being able to see the request for proposals issued by the Public-Private Partnerships Authority (PPPA), and the Tourism Co. (PRTC) not meeting with travel agents, cruise lines, Old San Juan business owners or tour operators.

Barbeito’s grievances are similar to those of the Florida-Caribbean Cruise Association president, Michele Paige.

“Last year, the Government of Puerto Rico initiated a public private partnership procurement (PPP) process for the redevelopment and operation of the San Juan cruise piers. The FCCA welcomes the government’s initiative to both improve and grow the cruise facilities in San Juan to ensure competitiveness in the market; however, the FCCA finds it unfortunate that the PPP process has seemingly completely bypassed cruise lines’ participation on the design of future port improvements, despite cruise lines’ port development and operations experience,” said Paige, who heads the organization that represents the cruiselines that roam the Caribbean.

Members of the tourism industry were only shown the request for qualifications, which Barbeito said left important information out. She would like answers on who is going to serve as intermediary for the cruiselines and how prices would be affected, and stressed that changes, especially in the competitive Caribbean market, could impact the number of cruiseships that dock in San Juan. 

“This is a fact. The first ones that are going to be affected are the transit [cruises]. As we know, transit is very flexible,” Barbeito said. “The transit side is going to have an immediate effect. The homeporting side is going to take a bit more time because the schedule is done two years prior and entails other logistics. [Changes in] homeport are going to take longer but, without a doubt, it is going to see and impact,” Barbeito said.

For her part, Paige struck a more conciliatory tone, and argued that there was still time to seek the cruiselines’ input and integrated it in the P3 process. 

“The FCCA does have a long-standing and close relationship with Government and Authorities in Puerto Rico, and our Member Lines, which represent the vast majority of the cruise traffic in San Juan, are interested in not only maintaining the level of business in San Juan, but also are exploring avenues for growth in deployments,” the FCCA president said.

She added, “To ensure the cruise lines are able to continue calling successfully and growing in Puerto Rico, it is vital that they have from the Port Authority and new Port Operator a continued direct channel of communication with Government to communicate cruise lines’ port infrastructure requirements and the requirements to promote a better guest experience, a guarantee with the stability and reliability in future port fees including freedom to select service providers, proper maintenance of the cruise facilities, and the safe and efficient movement of cruise guests around the destination.”

As a travel agency owner, Barbeito also focused on her industry and assured changes would impact the about 200 agencies certified in Puerto Rico. She argued that beyond tourism-related business, the concession could adversely affect the quality of visitors’ experience. 

Central to the concern is the possibility that the awardee to manage piers 1,3 and 4 and 11-14 would contract a tour operator that would then have a monopoly, a problem the San Juan ports has had in the past. Also, tourism stakeholders fear changes to the port’s infrastructure that could dissuade tourists from venturing outside the pier area. As an example, Barbeito mentioned ports that are arranged like shopping malls, with stores and restaurants, rather than encouraging tourists to explore the destination. 

When questioning the soundness of privatizing the San Juan piers to pay for Port Authority debt, Barbeito mentioned the failed privatization of the Mayagüez ports, which had to be reversed.


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