News & Analysis

Once again, Puerto Rico is a PPP trailblazer(3)

Behind cohesive legislation, Puerto Rico has privatised a major toll road and is tendering a concession for its main airport. Now, it is lining up its first ever social infrastructure project – a juvenile social treatment centre. An RFQ is due in the first quarter of the year.

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Puerto Rico is preparing what would be its maiden social infrastructure public-private partnership (PPP).

The Public-Private Partnership Authority (PPPA) and Juvenile Institution Administration (JIA) in Puerto Rico have released an initial report on a planned juvenile social treatment centre, the PPPA said.

The authority said the PPP – a design, build, finance and maintain (DBFM) contract – is for a 600-bed building, adding that the DBFM model is the “most adequate procurement structure” for the project. The PPPA pointed out the centre would mark the debut social infrastructure project under the PPP legislation Puerto Rico enacted in 2009.

David Alvarez, executive director of the authority, called social infrastructure “an important area of development for Puerto Rico,” with a “clear need for investment”. He went on to stress the newly conceived facility would need to be a “very successful first project that will help us open the door” for future social infrastructure investment.

The PPPA is developing a request for qualifications (RFQ), set for release in the first quarter of the year.

To advise on the project, the authority has assembled a “robust” team, including CPM for procurement, Advantage Business Consulting for economic and financial advice, law firm Pietrantoni, Mendez & Alvarez, specialised counsel Aird and Berlis, as well as SMRT and Marques + Marques for design and space planning.

In 2009, Puerto Rico passed Act No. 29, which enabled the creation of the PPPA.

Puerto Rico went on to develop its PPP programme with help from the Macquarie Group. The creation of the PPPA and its subsequent legislation has been credited for helping to distance privatisation from the political process.

The first ever PPP in Puerto Rico, a 40-year toll road concession on PR-22 and PR-5, reached financial close in September. PR-22 is an 83-kilometre road. The concession, totalling $1.4 billion, was awarded to Goldman Sachs Infrastructure Partners and Spanish developer Abertis.

In addition to its toll road project, Puerto Rico has also drawn up a 50-year concession – currently in procurement – to modernise and redevelop the Luis Munoz Marin International Airport.