Gov. Alejandro García Padilla said his administration will invest almost $2 billion in public works in the next 18 months and will work to bolster the economy. Garcia Padilla is proposing a mass transit connection be built between San Juan and Caguas, a city about 12 miles south of San Juan, for $400 million. This would link Caguas with Tren Urbano in San Juan, the Caribbean’s only subway system. Under plans outlined in Garcia Padilla’s state of the state and budget address on Thursday, the government also will invest $100 million in a cancer center and create a “City of Science” in a former penitentiary.
Puerto Rico currently has a 14.2% unemployment rate and municipal bond analysts say that the territory’s economy must improve for its government to become fiscally healthy. Since December, all the major rating agencies lowered the commonwealth’s general obligation debt rating to just above a speculative grade.
García Padilla, who took office Jan. 2 and has a goal to generate 50,000 new jobs in the next 18 months, said his government had created a website to connect workers and employers, and that his government has stabilized industrial taxes at 4%.
“The problems were worse than we were told, the deficits were larger,” he said in the speech. “But this country’s will is much stronger than any problem. We are back on the right path again. In January, we rolled up our sleeves and went to work on the problems.”
The Cancer Center and science center are part of an effort to diversify Puerto Rico’s economy beyond pharmaceutical manufacturing to include life science and health research. The governor said he has traveled to Brazil and Panama recently to promote the commonwealth as a regional center for financial services, telecommunications and medicine.
García Padilla said his administration is pursuing several initiatives in agriculture. In one of them, the island’s schools are switching over to buying locally-grown and raised food.
Disney and Royal Caribbean cruise lines will start to use the island’s capital city, San Juan, as their home port again, having trips start and end there. “Homeporting increases air access to the island, encourages the sale of supplies and creates opportunities for pre and post stays in Puerto Rico’s hotels, and propels the use of restaurants, tourist attractions and transportation,” a spokeswoman for the governor said. Princess Cruises, which abandoned Puerto Rico altogether two years ago, is expected to return with transit cruises in summer 2014.
A Royal Caribbean cruise line spokesman said that the company would start using San Juan as a home port in May.
Of the $2 billion in public works spending, $658 million will be infrastructure projects through alliances with the private sector, the governor said.
Some of the money will be used to convert two electricity generating plants to natural gas. The government also plans to spend $285 million to improve the production, transmission and distribution and electricity.
In a public-private alliance, there will be a $1 billion investment in an expressway between Aguadilla and Hatillo.
Finally, García Padilla is proposing a pedestrian promenade in San Juan at a cost of $36 million.
García Padilla said that he had shifted how the island’s highway authority was going to raise money to pay off its debt. Originally, there had been a proposal to increase tolls.
Instead, the governor is proposing that owners of luxury cars will have to pay more for registering their cars. Taxes on big oil companies and large stores will also contribute to the authority’s revenues, he said.
