Highway authority debt adjustment plan appears on track for court approval
By The Star Staff
The bankrupt Puerto Rico Highways and Transportation Authority’s (HTA) debt adjustment plan seems to be almost ready for court approval.
A hearing to confirm the plan of adjustment is scheduled for Aug. 17.
The Financial Oversight and Management Board filed a proposed plan of adjustment in May to restructure about $6.4 billion in claims against the HTA. The plan cuts the HTA’s outstanding debt by more than 80%, to $1.2 billion, and saves Puerto Rico more than $3 billion in debt service payments. The plan has been amended more than four times.
At a pretrial hearing earlier this week, the oversight board informed the Title III court that no party had given notice of an intention to cross-examine any witnesses. Judge Laura Taylor Swain on Tuesday issued a supplemental establishing Friday (Aug. 12) as the deadline for providing notice of an intent to cross-examine declarants. The judge also dismissed an objection raised by Assured Guaranty Corp. and Assured Guaranty Municipal Corp. to a motion filed by the HTA Insured Bondholder Group related to witnesses and evidence in the case.
The oversight board said in a recent report that HTA still needs to make several adjustments in the current fiscal year even if it gets its debt restructured.
The entity, the board said, has not adjusted toll fares for HTA-owned toll roads since 2005. The HTA Certified Fiscal Plan called for an 8.3% increase in toll fares, starting Jan. 1 of this year, to catch up with the 17-year gap as well as keep pace with inflation and the rising costs of maintaining roads and transportation assets.
“If HTA continues not to implement the measures for increasing toll fares, it would risk approximately $118 million in revenues by FY2026 and $3.2 billion in revenues by FY2051, as laid out in its Fiscal Plan,” the oversight board said.
The HTA Certified Fiscal Plan encourages a series of supplementary means that could additionally increase compliance with and the collection of toll fares. However, such measures have not been implemented by the HTA.
As laid out in its fiscal plan, the HTA may increase toll fines in line with inflation and implement a tiered fine system that rewards early payment. Such a combined approach is projected to generate $41.4 million in additional fine revenue through FY2026. Fine optimization measures, along with the implementation of fine increases and a tiered fine system, are necessary to ensure operations are adequately funded, incentivize compliance and reward timely payment of fines, according to the HTA fiscal plan.