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Puerto Rico’s reconstruction advanced in ’23 with $2B in disbursements

The development of reconstruction projects in Puerto Rico has notably increased, with disbursements to subrecipients reaching unprecedented numbers. 

Manuel Laboy, the executive director of the island’s Central Office for Recovery, Reconstruction and Resilience (COR3), said these figures are hovering around $2 billion in reimbursements and advances for various natural disasters.

“At COR3, we started the year with a focus on serving subrecipients,” Laboy said. “To achieve this, we organized events aimed at providing them with training on available initiatives to boost their permanent works, along with technical support for managing the Federal Emergency Management Agency (FEMA) Public Assistance and Hazard Mitigation Grant programs. 

As a result of these efforts, Laboy said, “subrecipients are currently working on 8,102 projects with a total cost of $7.9 billion, ranging from design to construction phases. Additionally, 2,367 permanent projects have been completed, and $1.7 billion has been disbursed between January and December 2023.”

In contrast, last year’s Quarterly Progress Report (QPR) for the same period showed 5,784 permanent projects underway, with obligations exceeding $4.5 billion. In December 2020, there were only around 500 permanent projects in progress, Laboy recalled.

“The implementation of the Working Capital Advance pilot program was the catalyst that drove subrecipients to carry out their reconstruction projects,” Laboy said. “This initiative, along with other internal policy changes to expedite the disbursement process while complying with state and federal laws and regulations, has been instrumental.”

The progress of reconstruction aligns with the increase in disbursements processed by COR3 to subrecipients. The official stated that COR3 expects to end the year with $2 billion in disbursements, and is aiming to disburse about $2.5 billion next year.

“We are well on track with the disbursement of FEMA allocated funds. The federal agency has committed $27 billion for reconstruction works. Considering the financial projections of the Financial Oversight and Management Board, disbursements will continue through 2035, meaning that an annual allocation of around $2.25 billion will be required for the next 12 years,” Laboy added.

The official emphasized that FEMA’s reconstruction and hazard mitigation programs operate on a reimbursement basis, where subrecipients pay for contracted services to carry out reconstruction projects and then request reimbursements from COR3. If they lack funds to initiate the work, they can request advance payments.

“We have made significant progress in the reconstruction process thanks to the teamwork among municipalities, government agencies, nonprofit entities and FEMA,” he said. “In 2024, we will continue to strengthen the technical assistance we provide to subrecipients to ensure the speedy completion of their projects in compliance with applicable regulations. Our commitment is to be a reliable guide in the challenging reconstruction process, in line with the public policy of Gov. Pedro Pierluisi’s administration.”

Throughout 2023, COR3 organized events to promote reconstruction, including “Resilient Puerto Rico: Mitigating Future Risks,” the Compliance Summit, Build Puerto Rico: Reconstruction Summit, “COR3 Comes to You” and “Build Puerto Rico: Reconciliation of Working Capital Advance and Effective Management of Project 428.

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