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New P3s association looks to boost P.R. infrastructure

Aerostar Airport Holdings CEO Agustín Arellano is one of two founding members of the PPPA, along with Gonzalo Alcalde, CEO of metropistas.

The Public-Private Partnerships Association, a newly created organism that seeks to incentivize collaboration between the government and private sector on infrastructure projects, was formally unveiled Thursday.

The initiative’s founding partners are the heads of Autopistas Metropolitanas de Puerto Rico, LLC — known as metropistas and operators of the PR-22 and PR-5 toll roads — and Aerostar Airport Holdings, or Aerostar, which operates the Luis Muñoz Marín International Airport. Those two concessions are the biggest in Puerto Rico and were approved under the administration of former Gov. Luis Fortuño to improve roads and the island’s main airport.

The PPPA’s goal is to eventually incorporate all of the future P3s granted and other participants interested in P3s that share the same commitment of spurring the island’s economic development through joint public-private participation in infrastructure projects, the group’s representatives said.

Developing P3s is part of Gov. Ricardo Rosselló’s platform, and so far, at least 25 potential projects have been identified.

“We’ve seen it in Puerto Rico, and we’ve seen it all over the world. P3s are a suitable mechanism, particularly in times of economic tightness, to help the public sector to stimulate infrastructure for the benefit of its constituents, endorsing the experience and resources of the private sector, “said Gonzalo Alcalde, CEO of metropistas who, together with Agustín Arellano, CEO of Aerostar, is one of the two founding members of the PPPA of Puerto Rico.

The PPPA’s mission is also to ensure the legal stability of the contractual and regulatory framework governing the operation and development of existing and future APPs on the island.

“P3s are a winning formula for all those involved,” Arellano said. “The government maximizes the use of its funds and directs them to other priority areas. The private sector puts its experience to the test, creates jobs and stimulates the economy, and the citizen benefits from first-class infrastructure and services.”

“The PR-22 and PR-5 highways and the LMM Airport P3s are a clear example. I think there are few who can argue against the benefits that these projects have meant for all Puerto Ricans,” said Arellano.

When it signed the P3 with the government in 2011, metropistas initially invested about $1.2 billion in the rehabilitation of the PR-22 and PR-5 highways. In addition, metropistas has invested more than $110 million in physical and service improvements and have created some 60 direct jobs and about 1,000 indirect jobs. The company pledged to invest another $115 million as a result of an amendment to its concession contract made last year.

Meanwhile, as established in its 2013 P3 contract, Aerostar invested about $615 million initially and has since made an additional capital investment of $169 million for renovations and upgrades at the Luis Muñoz Marín International Airport. Its operation has already generated some 2,900 direct and indirect jobs.

“In such a short period of time, P3s have advanced two important areas of infrastructure for Puerto Rico. Prospectively, and in collaboration with the government and the Oversight Board, we are convinced that P3s will help the island achieve its full potential with a modern infrastructure and the world-class service that its citizens deserve,” Alcalde said.

The PPPA also aims to provide a forum for the exchange of information on the benefits and needs of P3s, promote and facilitate the participation of the private sector, and create awareness among public officials, business people and citizens in general, about the value of these alliances, particularly in times of fiscal tightness such as those currently underway in Puerto Rico.

“P3s can certainly be the solution at this time when the government does not have the resources to avoid further deterioration of existing infrastructure and develop new projects necessary to improve the quality of life for all of us who live here,” Alcalde said.

“The collaboration of the public and private sectors has never been as important as now for Puerto Rico,” he concluded.

Author Details
Author Details
Business reporter with 29 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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