By The Star Staff
Upon learning that the parent company of HMS Ferries has filed for bankruptcy, Carolina District Rep. Ángel Matos García asked the central government on Monday to take over the operation of the ferry system from Ceiba to Vieques and Culebra and from San Juan to Cataño.
Hornblower Holdings, the parent company of HMS Ferries, which operates ferry transportation services in Puerto Rico through a public-private partnership agreement, filed for bankruptcy on Feb. 21 and included a plan for reorganization. The parent company has some 105 affiliated firms, including HMS Ferries.
“For the residents of the municipal islands, the ferry service is vital, so the continuity of operations must be guaranteed,” said Matos García, who is the majority leader in the island House of Representatives. “The government should not rest on what a spokesperson for the HMS company says, but should act according to the facts. The parent company has already declared bankruptcy, so operations could end at any time.”
The lawmaker added that the contract awarded to HMS by the Public-Private Partnership Authority (P3A) should be voided.
“My request to Fermín Fontanés, the executive director of the P3 Authority, is that he annul this contract, which must undoubtedly be based on false information,” Matos García said. “It is not acceptable that three years after granting this contract, the company goes bankrupt.”
Gov. Pedro Pierluisi Urrutia on Monday encouraged Hornblower to give written guarantees to the mayors of the affected towns that their services will not be compromised after filing for a bankruptcy process for restructuring.
“The executive director of the Public-Private Partnerships (AAPP) Authority was aware of this request for reorganization of the parent company of HMS Ferries, which is in charge of transportation to Vieques, Culebra and between Cataño and San Juan,” the governor said in response to questions from the press. “That reorganization process, that bankruptcy process, has nothing to do with the operations of the parent company of HMS Ferries in terms of maritime transportation. It only has to do with their cruise business, which is a minority share, or is a small portion of their operations. The matrix’s profitable operations are in the area of ocean transportation; it serves the Statue of Liberty, it serves Niagara Falls, it serves Alcatraz Island in San Francisco Bay. In other words, they are very busy facilities, critical in the United States.”
Meanwhile, Vieques Mayor José “Junito” Corcino demanded guarantees that the bankruptcy proceedings would not affect services to and from the offshore island municipality.
“We see how the president of the Hornblower Group, Kevin Rabbit, has given assurances to the residents of the city of San Francisco in the state of California that service to the island where the Alcatraz prison was located will not be affected by this restructuring,” Corcino said. “He did the same with the maritime transportation service to and from the island where the Statue of Liberty is located in New York; however, he has said nothing about Vieques. That guarantee is deserved by the residents of this island municipality.”
“The communication with the people of Vieques on the part of HMS Ferries has not been the best and today is another example,” the mayor added. “The bankruptcy process was filed on Wednesday and such a big bankruptcy doesn’t happen out of nowhere. We’re talking about a $1.2 billion bankruptcy. No one informed us of this. Vieques deserves more. We want a guarantee for our people that services will not be affected in any way, because if they can’t [guarantee that], it’s time to evaluate alternatives. What cannot happen is that they leave us in limbo.”
House Minority Leader Carlos “Johnny” Méndez Nuñez said meanwhile in a radio report that the bankruptcy of Hornblower, the parent company, is due to a reorganization of its debts and that ferry services will not be affected. He noted that the service has improved under HMS.
P3A Director Fermín Fontanés Gómez also said the bankruptcy filing by Hornblower will not impact the ferry service.
HMS Ferries signed a 23-year contract in September 2021 to operate ferry routes in Puerto Rico. The government agreed to pay $750 million.
“The determination from Hornblower Group does not affect the operation of HMS Ferries Puerto Rico,” Fontanés said. “HMS Ferries will continue operating in Puerto Rico and fulfilling its responsibilities and contractual obligations as agreed upon.”
Hornblower said in the petition that it has $500,000 to $1 billion in assets, but also $1 billion to $10 billion in liabilities.
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