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  • Writer's pictureThe San Juan Daily Star

Bill would require legislative approval of PPP contracts exceeding 5 years


Rep. Ramón Luis Cruz Burgos, who filed House Bill 1650 on Tuesday, noted that the public-private partnership contract reached to operate the Puerto Rico Electric Power Authority’s transmission and distribution system has led to multiple requests for an increase in the power rate by the private operator, LUMA Energy.

By The Star Staff


Rep. Ramón Luis Cruz Burgos introduced a bill Tuesday requiring legislative approval for all public-private partnership (PPP) contracts that exceed five years.


House Bill 1650 seeks to amend articles 9, 10 and 22 of Act 29-2009, as amended, known as the “Public-Private Partnerships Law,” to provide that the authorization of the Legislature will be necessary for the approval of PPP contracts that exceed five years.


“Puerto Ricans need transparency from the government for any contract that puts essential service operations in private hands,” the Popular Democratic Party lawmaker said. “For this reason, it is important that the Legislature intervene in these processes and look after the country’s best interests.”


The measure establishes that it is necessary for citizens, through the Legislature, to know the details of PPP contracts before they are signed and approved. Therefore, the House and the Senate must have the power to evaluate and supervise the contracts, the proposal says.


With the establishment of Law 29-2009, as amended, known as the “Public-Private Partnerships Law,” an entity was sought to unite resources and efforts from the public sector with resources from the private sector, through a joint investment for the benefit of both parties. As provided, the aim was to provide services, build facilities or carry out projects of high priority for the state and/or services of high public interest. This scaffolding assumes that the state does not renounce its responsibility to protect the public interest.


Regarding the processes through which the partnerships will be established, Law 29-2009 indicates that they must promote purity, and encourage transparency on the part of the state in the negotiation and agreements to sign contracts. However, once the negotiation of a partnership contract is completed, the Partnership Committee prepares a report, which must include the reasons for carrying out the partnership, the reasons for the selection of the chosen proponent, a description of the process carried out, including comparisons of the proponent and the recommended partnership contract against other proposals presented and all other information relevant to the process and the evaluation carried out.


“The problem with the current law is that it is not until the entire process is complete and the contract is final, that a copy of the report is presented to the secretariat of both legislative bodies,” Cruz Burgos stated. “The lack of access to crucial information has not allowed the representatives of the people in the Legislature to determine in time whether an alliance [partnership] contract that compromises essential public services would be protecting the public interest, so it is urgent to amend the law so that the Legislature has to approve the contracts.”


Likewise, the lawmaker noted that the experiences with energy contracts have shown that after the agreements have been signed, information about unreasonable clauses that are detrimental to the public interest emerges publicly.


As an example, he noted that the PPP contract reached to operate the Puerto Rico Electric Power Authority’s (PREPA) transmission and distribution system has led to multiple requests for an increase in the power rate by the private operator, LUMA Energy.


Meanwhile, Cruz Burgos said, the public was also unable to learn details about the privatization of the operation and maintenance of PREPA generation plants in a PPP contract that was awarded to Genera PR.

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