The Public-Private Partnerships Authority established by the administration of former Gov. Luis Fortuño has been dismantled by the new administration of Gov. Alejandro García Padilla, basically ending this initiative, CARIBBEAN BUSINESS has learned.
The three officials heading the authority have left their posts: David Álvarez, who was the executive director; Ángel González, the deputy director; and attorney Gerard Gil, who served as general counsel, sources said.
Some officials were transferred to other government agencies, as was the case with Gil, who now works with Government Development Bank President Javier Ferrer. The two have a longstanding professional relationship since Gil and Ferrer previously worked together at the law firm Pietrantoni, Méndez & Álvarez LLC. Meanwhile, David Álvarez and Ángel González left the authority of their own accord, sources said.
One source said the authority “ceased operations” just a few days after the deal was signed in late February that put Luis Muñoz Marín International Airport under private operation. “The staff was waiting for new people to come in, so there would be a transition process, but nothing happened. The whole [authority] team stopped working.”
At the same time, the authority and its responsibilities have now been placed under the wing of the Infrastructure Financing Authority, known as AFI by its Spanish acronym. “The authority’s responsibilities were placed under AFI, but the authority’s staff didn’t go with the move,” said a second source.
While current AFI staff has been “assigned” to handle the authority’s responsibilities, there have been no clear instructions, this source said. “The new administration hasn’t given any clear directives as to the way forward. There’s no mention or commitment to pursue any other public-private partnership project.”
Law firms in San Juan’s Hato Rey district, interested in these deals, have reportedly been calling AFI staff for more information.
The authority was actively working to secure a public-private partnership (P3) project for the Juvenile Institutions Administration (JIA). The advisory committee had prepared a feasibility analysis, and corrections’ and legal experts from the U.S. and Canada were also brought onboard to advise the local government.
Sources said Grace Santana, who heads AFI, has been “open” to move the JIA project forward, but all depends on La Fortaleza and the Corrections secretary. “This project was already in the advanced stage. It is self-sustaining and has a lot of potential,” the first source said.
Just weeks ago, García Padilla signed the deal putting the Muñoz Marín, Puerto Rico’s main airport, under private operation. The 40-year deal gave the government an upfront payment of $615 million, helping the cash-strapped Puerto Rico Ports Authority pay off debts.
The governor had been a vocal critic of P3s when he was running for office. While García Padilla said he would have managed the airport deal differently, he said Puerto Rico couldn’t go back on its word, as he also touted its benefits. “Right now, the Ports Authority has zero dollars to invest in this airport. As everyone who has visited the airport knows, its infrastructure has to be improved greatly and quickly.”
The authority is the government entity responsible for implementing P3s in Puerto Rico. Several P3 initiatives were launched during the Fortuño administration: Schools for the 21st Century, which renovated about 100 public schools islandwide; and the administrative concession of toll highways PR-22 and PR-5. The 40-year concession of the two toll roads was awarded to Metropistas, a consortium that comprises Goldman Sachs Investment Fund and Spain’s Abertis Infraestructuras.
In these tough economic times, sources now wonder how the Puerto Rico government will finance important infrastructure projects.