Gov. Alejandro García Padilla, promoting the territory's business climate, pointed to the Puerto Rico Electric Power Authority's agreement with creditors to revamp its operations as an example of positive structural reforms.
Puerto Rico's Senate passed a bill overhauling the island's energy sector Wednesday, as the government worked toward meeting a condition of the utility's forbearing bondholders in an agreement to restructure about $8.4 billion of bond debt.
The "bill paves the way for over $2 billion in capital investments to our current electricity infrastructure, significantly reduces its debt stock, modernizes operations, de-politicizes governance, improves client service efforts, and promotes a safer work environment for our public employees," Gov. Alejandro García Padilla said in a speech to the Puerto Rico Investor Summit in San Juan.
Adoption of the reforms is dependent on Puerto Rico's House of Representatives, where they may not be enough votes for passage. PREPA's debt plan is seen as a possible model as Puerto Rico seeks to restructure about $70 billion of public sector debt, which the governor has said is unpayable under current economic conditions.
According to the El Vocero news web site, after the investment speech the governor, in a news conference, said the alternative to the energy bill could be PREPA creditors gaining control of the authority through a receivership and hiking electric rates.
In his investment summit speech, García Padilla said his government had unveiled a five year Fiscal and Economic Growth Plan a few months earlier, aimed at achieving "long-term stability, which will lead to sustainable growth."
The governor said the government's goal was to "transform Puerto Rico's economy into an international services model that can connect the business world in the Americas."
Among advantages to locating businesses in Puerto Rico he cited the island's tax incentives, use of the United States dollar, Federal Deposit Insurance Corp. backed banking system, protection by the Homeland Security Act, U.S. legal framework for intellectual property, and world class infrastructure and connectivity.
"Puerto Rico is in the midst of an economic revolution that will position the island as a vital player in the western hemisphere," he said.
