LMM private management firm selection on track

Written by  //  April 12, 2011  //  Tourism/Transportation  //  No comments

Ports Authority Executive Director Alberto Escudero

In about a year, the Luis Muñoz Marín International Airport in Carolina should be in the hands of a private operator, as per an updated timeline of the process that David Álvarez, executive director of the Puerto Rico Public-Private Partnerships Authority, presented to island investors last week.

The proposal is currently being laid out to airline operators, which late last month received the Memorandum of Understanding regarding the proposed management change at the airport. For the process to move forward, the MOU must get the approval of at least 65 percent of LMM’s carriers.

In a recent interview with News is my Business, Ports Authority Executive Director Alberto Escudero said talks with airline carriers are “on the right track.”

Among other things, that MOU will define how much airlines will have to pay under the new 50-year management concession and how much of that will go to Ports. The agreement will also outline the capital expenditures required to bring LMM up to speed.

Once that hurdle is cleared, the Ports Authority will release a request for qualifications, sometime in June, to begin screening companies that will move on to a second round of bidding.

The annual cost of running the LMM is about $45 million, money that Ports does not have. Furthermore, turning the operations, not the ownership, of the facility to private hands would likely result in investments needed to expand the airport’s capacity and improve infrastructure, Escudero said.

“We want to make sure the airport remains in the conditions that we all want, and that requires a great injection of capital, which we don’t have,” the public official said. “This airport is not only important for us, but also for tourism and economic activity in general.”

The process to privatize the LMM’s operations began in late 2009. In December of that year, the Federal Aviation Administration approved the process, paving the way for Ports to launch talks with airlines serving the airport.

In his presentation, Álvarez noted that between December 2011 and March 2012, the request for proposal should be released, followed by awarding the concession and getting the FAA’s final approval.

The 55-year-old LMM is Puerto Rico’s main airport and serves as a hub for the Caribbean, with 600 arrivals and 8.3 million visitors a year.

Despite its plans to bring in a private operator, Ports will pump $1 million into improvement projects at LMM this year, split equally to cover bathroom remodeling costs and waterproofing.

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