Fiscal board welcomes new PPP that will leave bankrupt PRHTA debt free
By The Star Staff
The Financial Oversight and Management Board on Tuesday welcomed a proposed new public-private partnership with the Spanish firm Abertis Infraestructuras to operate four toll roads as it will leave the Puerto Rico Highways and Transportation Authority (PRHTA) debt free.
The oversight board said it reviewed and approved the proposed concession agreement, a critical element to improve Puerto Rico’s roads by providing a clear incentive for more efficient maintenance of toll roads and significant new funding for investments in non-toll roads. PR Tollroads, a subsidiary of Abertis Infraestructuras SA, will pay the PRHTA a concession fee of about $2.85 billion, considerably more than the minimum Public-Private Partnership Authority (P3A) had required under its request for proposals (RFP) from all bidders.
The concession fee will enable the PRHTA to pay off its roughly $1.6 billion outstanding debt, including a loan of approximately $360 million from the island government, under the redemption provision of the PRHTA’s plan of adjustment. The debt deal went into effect in December.
In addition, the concession fee will provide an estimated $1.1 billion in new funding. The oversight board supports the creation of a trust that invests those surplus proceeds in road maintenance and other long-term investments for transportation projects and transactions.
“The people of Puerto Rico depend on solid and well-maintained roads to get to work, take their children to school, get groceries, visit friends and family, and for businesses to deliver goods and services and stock warehouses,” said the oversight board’s executive director, Robert F. Mujica Jr.
“The P3A agreement is a big win for Puerto Rico,” Mujica added. “Puerto Rico’s toll roads attracted several highly qualified applicants in a public and transparent bidding process that provides Puerto Rico with substantial new funding. This money comes from Puerto Rico’s road system and should stay with Puerto Rico’s road system.”
“We congratulate P3A and PRHTA for a highly successful private-public partnership process that led to an attractive agreement, promoting market competition and complying with the PRHTA Fiscal Plan reforms and the PRHTA Plan of Adjustment that cut PRHTA’s debt by more than 80%,” the oversight board official said.