WASHINGTON — The proposed $400 million Satour light rail public-private partnership for San Juan, Puerto Rico, could be financed from any combination of parking garage revenue, fares and debt backed by revenue from special tax districts, representatives of the city and the Macquarie Capital infrastructure firm said Thursday.
The light rail, which the city has said will revitalize a corridor it has been seeking to further develop for years, is slated to open in 2015. The estimated cost of the 5.3-mile line is $365 million, with another $100 million for parking structures and other supporting development, city officials said.
Once completed, the line will connect the Isleta De San Juan, a small island off Puerto Rico’s northeast coast, to an urban corridor that includes Fernando Luis Ribas Dominicci Airport. Bridges currently connect the Isleta to the rest of the city.
Ultimately, the light rail is intended to serve as a key piece of a multibillion-dollar development plan that includes improved “walkability” infrastructure and harbor front development. The undertaking has been a major initiative of San Juan Mayor Jorge Santini.
San Juan announced last month that it had selected Australia-based Macquarie to serve as an advisor in its bid to develop the light rail as a P3, along with Chicago-based law firm Mayer Brown, which served as counsel on the FasTracks Eagle P3 commuter rail expansion project near Denver, Colo. Macquarie previously worked with Puerto Rico to privatize its main highway, PR-22.
Macquarie, a prominent developer of P3s, frequently advises governments on selecting private partners. The firm advised on 547 transactions valued at $150 billion located around the world in fiscal 2011, according to information on its website.
A ridership study conducted by Cambridge Systematics in Boston shows that the light rail would carry between 28,000 and 29,000 per day by 2030, totaling 8.5 million annually, city officials said. Cambridge Systematics has done work for nearly every state department of transportation in the U.S., as well as several federal agencies.
San Juan’s population was about 389,714 in 2011, according to the city.
Despite the projected ridership numbers, though, vice mayor Lourdes Rovira said the project will not likely rely on fare revenue to finance project debt. Instead, revenue from the parking facilities is viewed as a more likely primary source of funding. Rovira said many revenues streams might still be considered, including tax increment financing.
Neither San Juan nor Macquarie officials could say how long the private partner, once selected, would have rights to operate and maintain the light rail.
“All of that will be set up in the request for proposal,” said Robert Valentine, a Macquarie associate director.
A three-day outreach session for companies interested in participating in the project finishes up in San Juan on Friday. Valentine said firms interesting in becoming the project’s private partner would probably be able to submit initial bids beginning in October.
Macquarie and Mayer Brown will assist San Juan in parsing submissions.