OVERSIGHT BOARD APPROVES BUDGET RESOLUTION THAT REFLECTS FUNDING FOR PORTS AUTHORITY
$350 Million for Transportation Infrastructure
San Juan, PR – February 5, 2024 – The Financial Oversight and Management Board for Puerto Rico announced that its members have approved a budget resolution for the current fiscal year 2024 to reflect the appropriation of $350 million to fund a Settlement Agreement between the Puerto Rico Ports Authority (PRPA) and the Puerto Rico Government Development Bank Debt Recovery Authority (DRA) and to set aside funds for other transportation infrastructure needs.
Governor Pedro R. Pierluisi submitted a proposed budget resolution to the Oversight Board on January 16, 2024, to include the appropriation, but one chamber of the Legislative Assembly failed to adopt a compliant budget resolution. Every delay results in additional costs and postponement of the capital improvement plans.
Therefore, pursuant to Section 202(d)(2) of PROMESA, the Oversight Board developed and certified a budget resolution compliant with the Fiscal Plan for Puerto Rico.
The concession agreement between the Puerto Rico Public-Private Partnerships Authority and Global Ports Holding PLC for the repair, improvement, operation, and maintenance of the San Juan Bay Cruise Terminals stipulates that PRPA must deliver the pier assets to the concessionaire “free and clear” of liens.
The financial closing of the concession agreement has been extended several times. Further delays pose a real risk to the settlement and the improvement project overall, as well as Puerto Rico’s reputation as an investment destination.
On January 11, the Oversight Board informed the government that it approved the proposed transaction to settle six legacy credit facilities owed by PRPA to DRA, as successor in interest to the Government Development Bank. The proposed settlement is critical to complete the development of the Cruise Terminals, which aims to transform Puerto Rico into the Caribbean’s main cruise ship destination by modernizing and expanding nine docks in San Juan.
The government’s contribution to fund the proposed settlement transaction are part of the proceeds from the recent concession agreement between Puerto Rico Highway and Transportation Authority (HTA) and Puerto Rico Tollroads LLC, specifically those used to repay the loan the Commonwealth had extended to HTA in fiscal year 2022.
The Oversight Board supports the Government’s decision to use such funds for long-term investments in transportation projects, and the San Juan Cruise Port is critical to Puerto Rico’s transportation infrastructure.