P3 Authority announces two proposed public-private partnerships

By The Star Staff

Public-Private Partnerships (P3) Authority Director Fermín Fontanés Gómez announced two new P3 projects on Monday.

The first project calls for a contract with a private entity to manage the island’s regional airports and the second would help modernize and optimize the Treasury Department’s tax collection processes, taxpayer services and the call center.

The goal of the latter project is to provide the Treasury Department with robust procedures and capacities in collections, taxpayer orientation and service channels, as well as enable the agency to increase collections and generate efficiencies and savings. The strengthening of collections would have a special emphasis on delinquent accounts and difficult-to-collect segments, among other functions.

Fontanés said the Treasury P3 would represent important benefits in the public interest, as 1) it would allow the modernizing of Treasury Department processes and capacities in an accelerated manner; 2) it would strengthen education for taxpayers and Treasury personnel; 3) it would consistently and permanently increase the collections of the Treasury Department, which in turn would strengthen the fiscal condition of Puerto Rico; and 4) it would improve the provision of services by the government to citizens.

A study is being conducted to determine the feasibility of the Treasury P3.

Meanwhile, the concession for the island’s eight regional airports, located in Aguadilla, Arecibo, Ceiba, Culebra, Humacao, Mayagüez, Ponce and San Juan (Isla Grande), seeks to increase their operational and maintenance efficiency, and the monetization of the Regional Airport Network to optimize their use and commercial performance, Fontanés said.

As part of the project evaluation process, the feasibility of grouping the airports by region is being analyzed as an alternative that would involve granting more than one P3 agreement.

The P3 agreement (or agreements) for the airports represents an opportunity for economic growth through different regions in Puerto Rico, Fontanés noted. By maximizing the particular attributes of each airport, and by increasing air traffic and activities related to the operations and services they provide, the objective of having a favorable impact on the regions where they are located would be achieved, he said.

The ideas for the new P3s came after government agencies in January were given until March to make new proposals for P3s.

“For the P3 [Authority] it is essential to continue identifying opportunities for transformation that translate into benefits for citizens and for Puerto Rico,” Fontanés said. “The public-private partnership mechanism is an effective and proven one. Not only does it have a positive impact on the provision of public goods and services to citizens, but it also has favorable implications for the development, construction and maintenance of the island’s infrastructure.”

In 2020, the P3 Authority brokered public-private partnership agreements for the transformation of the transmission and distribution (T&D) system of the Puerto Rico Electric Power Authority (PREPA), and the transformation of the ferry service of the Maritime Transportation Authority (ATM by its Spanish initials). The agreement for the transformation of PREPA’s T&D system was awarded to LUMA Energy in June 2020 as a result of an 18-month bidding process. Under an operation and maintenance (O&M) structure and for a term of 15 years, the project is currently in the transition phase, which is expected to culminate in June.

Fontanés emphasized that “the agreement between LUMA, PREPA and the P3 Authority seeks to execute the public policy for the transformation of the electric power system, by express provision of the Law to Transform the Puerto Rico Electric System (Law 120).”

“This agreement also complies with the mandate of the Puerto Rico Energy Public Policy Act (Law 17), which specifically provided for the function of operating the electric power transmission and distribution system to be transferred to the private sector through an alliance agreement,” he said.

Likewise, another significant P3 agreement was granted last October to HMS Ferries for the operation and maintenance of the ATM and municipal islands assets, for a term of 23 years.

The selection of HMS Ferries was the result of a bidding process lasting more than 27 months with the purpose of optimizing the operation of the ferry service offered by the ATM to residents of Puerto Rico, especially residents of the offshore island municipalities of Vieques and Culebra.

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