The Puerto Rico Public-Private Partnership Authority last week received eight responses from infrastructure investment firms looking to bid on a potential long-term lease agreement for the commonwealth’s busiest roadway.
Officials are looking to enter Route 22, an east-west toll road through the island’s northern region, into a 50-year brownfield concession agreement.
The public-private partnership could offer the government an up-front payment in the billions and shift capital project, maintenance, and operating costs to a company or consortium. In return, the concessionaire would collect toll revenue generated from the 52-mile roadway.
The eight respondents to the RFQ are: Abertis Infraestructuras of Spain and Goldman Sachs Infrastructure Partners II LP; CCR (Companhia de Concessôes Rodoviárias), headquartered in Brazil; Citi Infrastructure Investors and Itínere Infraestructuras SA of Spain.; Grupo ODINSA SA, based in Columbia; Interplan-Grodco-Consorcio Remix Development Group; JPMorgan Infrastructure Investments Fund; Morgan Stanley Infrastructure Inc. and OHL Concesiones, located in Spain; and Road Development of Puerto Rico (which is a consortium of ICEIN SA and CONCAY SA, both headquartered in Columbia).
According to the P3 authority, the eight participants currently operate a combined 15,600 miles of toll roads around the globe and oversee more than 900 million vehicle transactions annually.
“The level of interest, combined with the high caliber of the participants, is a conclusive indication of the great opportunity that Puerto Rico has to renovate and deliver a high-quality toll road network through the use of PPPs,” executive director David Alvarez said in a statement.
The potential long-term lease also includes Route 5, which is a four-mile long toll road that connects to Route 22. Route 5 runs through the San Juan area and further south through Bayamon.
The commonwealth would need to pay down outstanding debt associated with the two roadways before handing over the toll revenue stream to an outside operator. Officials have declined to release the amount outstanding on Route 22 and Route 5.
The Puerto Rico Highways and Transportation Authority oversees the two toll roads, along with Route 66 on the eastern side of the island and Route 52, which connects San Juan and Ponce. The highway agency has around $7 billion of total outstanding debt.
The P3 authority anticipates selecting qualified bidders from the group to participate in a request for proposals to be released Aug. 27.
Macquarie Capital Inc. is the financial adviser for the toll road P3 plan.
The current toll rate on Route 22 ranges from $3.25 to $3.75. The highway authority collected $85.1 million of toll revenue in 85 million traffic transactions in fiscal 2009, according to the RFQ.
Tolls on Route 5 cost 50 cents. The roadway generated $4.2 million of toll revenue in eight million traffic transactions in fiscal 2009.
