Puerto Rico targets six public-private deals in 2009
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| Published on Saturday, June 20, 2009 |
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SAN JUAN, Puerto Rico (Reuters) -- The Puerto Rico government will soon activate a new Public Private Partnership Authority and aims to have six PPP projects underway by year's end, according to the head of the Government Development Bank.
"The government is looking to jolt the island out of its three-year-old recession and is seeking PPP investment in infrastructure projects like highways, mass transportation, and renewable energy projects," GDB President Carlos Garcia said.
Puerto Rico officials hope to complete the first projects over the next five years, creating 23,000 direct jobs and as many as 100,000 indirect jobs, as a way to offset massive government layoffs, weak government revenue and double-digit unemployment rates that currently stand at 25-year highs.
The head of the US commonwealth's fiscal agent, Garcia has acknowledged that investment capital for PPPs was limited as the global credit system thaws but said he believes Puerto Rico's new laws setting ground rules will add luster to what should be attractive infrastructure concessions.
Garcia said he anticipates six projects will win approval by year's end and will be culled from 28 strategic infrastructure projects, which the government estimates may need as much as $7 billion in capital.
"Investors are looking for opportunities. Puerto Rico is an option for them," Garcia said in an interview on Tuesday. "There will be interest."
In addition, agency secretaries have 90 days to propose potential projects to the authority.
The strategic projects are spread across the island and include five highway extension projects, development of the port at the former US Navy base in Ceiba and completion of a huge transshipment port in Ponce in the south.
Another proposal focuses on an area adjacent to a city rail system in the capital, San Juan.
Other priority projects are two water filtration plants, four waste-to-energy plants and renewable energy projects using wind, solar and ocean thermal technology.
A law signed by Governor Luis Fortuno on June 8 created the Public-Private Partnership Authority, under the GDB, as the sole government power to authorize and oversee PPPs.
The law limits PPPs to 50-year leases, with an extension to 75 years with legislative approval, and sets a special tax rate.
Once the new entity approves a deal, it will put out a request for qualifications followed by requests for proposals. Garcia said the first deals to be put out will be those that are most advanced.
The PPP legislation was signed weeks after 7,816 government workers were fired, the first wave of dismissals that could reach 30,000 as officials aim to cut $2 billion in government spending during the fiscal year that starts July 1.
Government officials hope to offset those firings, which should be completed by year's end, by jobs created through PPPs. The economy should also get a boost from more than $5 billion in federal funds over the next two years under the American Recovery and Reinvestment Act, augmented by a $500 million local economic stimulus package. | | | | Reads : 925 | | | |
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