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San Juan Cruise Port files permits to upgrade infrastructure

San Juan Cruise Port, the Puerto Rican company selected by the island’s government to repair, rebuild, maintain and operate the San Juan cruise ports under a public-private partnership (P3) with the Puerto Rico Ports Authority, announced the filing of documentation to obtain permits from the U.S. Army Corps of Engineers (USACE) to upgrade the port infrastructure.

As News is My Business reported, the 30-year agreement between the Ports Authority and San Juan Cruise Port entails a private capital investment of more than $400 million to meet the infrastructure and modernization needs of the Ports Authority’s piers 1, 3, 4 and 11 to 14, as well as Pan American I and II.

Under the P3, San Juan Cruise Port is responsible for repairing, designing, improving, financing, maintaining and operating the San Juan cruise ports. The agreement includes an upfront concession fee and contributions to the costs of dredging the San Juan Bay, “payable to the Puerto Rico Ports Authority and an ongoing revenue-sharing agreement over the 30-year term.” 

In addition to the upfront concession fee, the project’s first phase of construction represents a commitment by the San Juan Cruise Port to make additional investments of about $100 million in private capital. Subject to specific “trigger events,” the project also includes additional expansion investments at later stages that could total another $250 million, for a total of more than $425 million in investments.

San Juan Cruise Port officials said the committed construction projects consist of improvements and upgrades to the existing structures due to the historical deterioration, as well as damages resulting from hurricanes Irma and Maria in 2017, required to ensure the safety, quality and passenger satisfaction of the operations at the cruise facilities. 

“This is a critical step towards our successful delivery on the commitments we made to the people of Puerto Rico under the P3 agreement,” said San Juan Cruise Ports’ general manager, Federico González-Denton. “During this transition period — after the signing of the P3 agreement and before the start of construction and operations — we must obtain all the necessary permits to make the planned improvements needed to turn San Juan into a world-class cruise port. The federal permit [awarded by] USACE is one of the most critical components of the permitting process. We are excited about the progress we’re making.”

González-Denton stressed that the permits are crucial for the closing of the transaction and receiving the keys from the government to operate the cruise ports, which is expected later this year.

The general manager noted that the project received clearance from the Committee on Foreign Investment in the United States, which is composed of nine cabinet-level officials and representatives from 16 U.S. departments and agencies (including Treasury, Defense, State, Commerce and Homeland Security) who review foreign investment and real estate transactions to determine whether they affect national security. San Juan Cruise Port’s parent company, Global Ports Holding, is based in London. 

The selection of San Juan Cruise Port was the result of a procurement process that began in 2017 with the goal of addressing the deterioration of the cruise ship terminals and optimizing their structural conditions to bring them up to date with current and future cruise ship industry standards.

“The cruise line industry has always been an important component of what we have to offer to the world but at this moment, we can’t compete on a large scale with other jurisdictions that are being transformed to attract more ships with better port facilities,” Gov. Pedro Pierluisi said last August, adding that a P3 will allow increased port access in the San Juan Bay, which would strengthen the island’s position as a tourism destination in the Caribbean.

As part of the process under the Public-Private Partnerships Act of 2009 the government’s Public-Private Partnership Authority conducted a desirability and convenience study that analyzed several options to address the cruise terminals’ conditions.

The study concluded that a P3 “is the appropriate mechanism for the project, given that it allows for the capital investment necessary to bring the terminals up to world-class standards and maximize the impact of the cruise sector on the island’s economy and tourism.”

Author Details
Author Details
Maria Miranda is an investigative reporter and editor with 20 years of experience in Puerto Rico’s English-language newspapers. In that capacity, she has worked on long-term projects and has covered breaking news under strict deadlines. She is proficient at mining data from public databases and interviewing people (both public figures and private sector individuals). She is also a translator, and has edited and translated an economy book on Puerto Rico’s fiscal crisis. She worked as an interpreter for FEMA during the recent recovery efforts of Hurricane María and earned her FEMA badge.

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