Puerto Rico lawmakers may approve by the end of the month a blueprint for public-private partnerships.
House Speaker Jenniffer Gonzalez said she plans to bring the bill to a vote on Tuesday after it passes through committee. Gonzalez expects the bill to pass her chamber after Senate members approved the P3 legislation on May 11 in a 20-to-7 vote.
The initiative is part of Gov. Luis Fortuño's economic reconstruction plan. The governor and legislative leaders are all members of the New Progressive Party.
"There's a good environment to make this bill happen," Gonzalez said.
The Government Development Bank for Puerto Rico, the commonwealth's fiscal agent, said the P3 initiative could bring in $6 billion of private-sector investment and generate more than 130,000 jobs.
Officials have identified 25 greenfield or new-construction projects that could benefit from the legislation. Those improvements include clean water and sewer projects, renewable energy plans, highway expansions, light-rail developments, and port upgrades and expansions.
"We need to be able to have comprehensive legislation that will provide a clear legal framework in order for investors to be interested and at the same time to be sure that we protect the public interest," said GDB president Carlos Garcia.
The bill would also authorize concession agreements on existing infrastructure. One such candidate is Route 22, the island's main east-west tollway, although the GDB is still evaluating whether to allow a private company to manage the roadway in exchange for an up-front payment.
"We are looking at all potential opportunities," Fernando Batlle, GDB's executive vice president for financing and treasury, said via e-mail.
In other jurisdictions recently, P3 agreements have hit financial roadblocks. Mississippi officials extended the bidding schedule on construction and management of a new 12-mile toll road to give lenders more time to craft proposals. In addition, an existing 78-mile Florida toll road known as Alligator Alley received no bids from potential investors on Monday.
The GDB said companies have expressed interest in investing in infrastructure projects in Puerto Rico.
Carlos "Johnny" Mendez, who chairs the House Economic Development Committee, said the panel will vote on the P3 legislation this week, or Monday at the latest.
"I expect that in the next week we will be able to discuss the bill on the House floor," Mendez said.
The legislation would create a five-member public-private authority to be chaired by the GDB president and would include the Treasury secretary, the president of the Puerto Rico Planning Board, and two public-sector members recommended by the House and the Senate but appointed by the governor.
The authority's role is to review and weigh in on P3 proposals. All projects must receive at least four out of five votes from the five-member board, with both public-sector members voting in favor in order for any P3 plan to move forward.
Along with the central government, commonwealth agencies, authorities, and municipalities would have the authority to enter into public-private agreements. The bill allows for contracts of up to 50 years, with a 25-year extension pending legislative approval.
While the Popular Democratic Party favors using P3s to finance certain infrastructure developments and help spark economic development on the island, minority members do not support the NPP bill.
"The plan will privatize the government of Puerto Rico," said House Minority Leader Hector Ferrer.
In addition, PDP members believe the P3 bill, as written, would cede power from the legislative branch to the new five-member authority, according to Armando Valdes, chief of staff to Senate deputy minority leader Edwardo Bhatia. Valdes served as executive director of the Office of Management and Budget in the former Gov. Anibal Acevedo Vila administration.
"Giving such a broad consensus of power to this board - to decide upon any government service or any government construction project - that is what the PDP feels is not adequate and does not respond to the best interest of Puerto Rico," Valdes said. "Let's decide more clearly where we can have some of these projects go forward and decide some other areas where perhaps more involvement from the Legislature would be needed in order to protect the public interest."