To effectively compete in global markets, Puerto Rico should significantly reduce energy costs and “work in unity of purpose with one voice” to ensure special tax treatment to stateside companies established on the island, said Puerto Rico Manufacturing Association President Carlos Rivera-Vélez during a recent trip to Washington, D.C.
“Although both points have been widely discussed over the years, they have not been adequately addressed and today more than ever we must ensure that all sectors are focused on unity of purpose to achieve our common goal, which is to promote the competitiveness of Puerto Rico on the global stage,” he said.
An important takeaway from the trip to the federal capital is that the private sector has to be “assertively present” in industrial promotion, he said.
“Puerto Rico has to strengthen and maintain constant presence in Washington to ensure that the island remains in the minds of Congress and those in decision-making circles. As part of our work plan, the PRMA will strengthen its presence to maintain continuity in these efforts,” said Rivera-Vélez.
A PRMA delegation was recently in Washington to participate in the SelectUSA 2015 investment summit, as part of its commitment to promote industrial expansion and strengthen its presence in government circles in Washington.
This investment summit brought together investors, economic development professionals and business leaders worldwide to facilitate investment in U.S. territory. The PRMA participated in conjunction with the Department of Economic Development and Commerce, the Puerto Rico Industrial Development Company to attract investment to Puerto Rico, by highlighting the island’s competitive advantages.
During the event, the PRMA said it validated that Puerto Rico meets a lot of requirements to seek investors — talent and education, and tech-savvy workforce; tax advantages; incentives; political stability; and maturity of its manufacturing ecosystem.
However, on the issue of cheap energy, Puerto Rico has a significant competitive disadvantage, as the U.S. mainland is competing with prices ranging between 8-10 cents, or a fraction of the costs on the island.
To move forward on the energy issue, which has been somewhat stagnant since the energy reform was passed last summer, the PRMA believes a number of issues must be brought to the table, he said.
To draw the millions of dollars in required investments, an environment of certainty at the Puerto Rico Electric Power Authority is key, and would be obtained if the agency announced its restructuring plan, laid out a financial plan that demonstrates its ability to service its debt while implementing an energy plan, and reduced energy costs throughout its tariff structure: industrial, commercial and residential.
The Puerto Rico Energy Committee must also release the rules and rates allowing energy transshipment to Puerto Rico, which the PRMA believes would “provide a wide avenue of participation by the private industry to produce and sell energy at competitive prices, while providing an immediate boost to PREPA so that it may be transformed into a dynamic and competitive entity, or into one accepting of its inability to meet the demand for competitive prices, clean energy and compliance with health and the environment,” he said.
Finally, Puerto Rico needs to complete the diversification of fossil energy sources along with efficient generation.
While in Washington, the PRMA sat in on about 15 meetings with U.S. lawmakers, attorneys and tax professionals.