Negotiations for the concession of the operation and reconstruction of the cruise docks in San Juan continue as planned with the preferred proponent, although the Tourist Alliance will be included as an advisory committee next week, the director of the Authority for Public-Private Partnerships (AAPP as its Spanish acronym), Fermín Fontánez announced.
Caribbean Business confirmed that the selected preferred proponent is Global Ports Holdings, a company that submitted to the government an unsolicited proposal to repair, design, build, finance, maintain and operate the docks for a 30 year period.
The infrastructure investment that the company would have to
make should amount to $ 250 million, based on a study conducted by the United
States Maritime Administration (MARAD).
In its first stage, the company must rebuild the structure
of docks 11 and 12, which have been closed for a decade because of their
deterioration, and build a new one that can be used to dock cruise ships that are
not under a preferential contract. In addition, it must repair the the Pan
American dock structure that is currently being used by Royal Caribbean cruise
line, since its foundations are in an advanced state of deterioration.
On October 21, this newspaper reported the selection by the AAPP of a bidder among the three consortia that competed for the contract: Global Ports Holdings, SACYR and Ports of America. At that time, they did not reveal the name of the company selected because the Public-Private Partnerships Act states that this information must be kept secret until the negotiations are over.
On Thursday morning in a radio interview (Radio Isla), the
director of the Ports Authority, Joel Pizá, was questioned on whether the
negotiations with Global Ports Holdings continued, he answered in the
affirmative and did not reject that this was the selected company. A second
source of CB with knowledge of the negotiations confirmed that Global was the
At the signing of the contract with Global Ports Holdings, Puerto Rico would become the first US jurisdiction in which the company becomes responsible for the reconstruction, operation and administration of its cruise docks.
Global Ports projects itself as the largest cruise ship operation company in the world with presence in 19 ports at 11 countries (Adriatic Sea, the Mediterranean, Singapore, Barcelona, Málaga, Spain and Lisbon, Portugal). In the Caribbean, the company operates the port of Havana, Cuba; Nassau, Bahamas and Antigua.
Earlier this week, Governor Wanda Vázquez met with members
of the Tourism Alliance, a group that reunited representatives from several of
the main sectors that would be affected by this concession. After the meeting
it was implied that the signing was halted until the contracting parties include
the recommendations of the Alliance in the agreement.
Fontánez clarified that the negotiations were delayed for
weeks, so it was not possible to sign the contract with the selected company
before the end of the year, as anticipated when they announced the selection of
the preferred proponent.
“The status at this time is the same, we are in negotiations
with the preferred one. We have met with different groups individually and we
have pressed in that effort in the past few weeks,” the official said.
He also stated that “as part of the policy of dialogue
and transparency of the governor,” it was determined to incorporate the
Alliance as an advisory committee to provide recommendations that allow the
final contract” to be the most beneficial for Puerto Rico.”
The secretary of Labor, Briseida Torres is responsible for
coordinating the committee that should have its first meeting next week.
“The interest is that they (the Alliance) can see what is
being negotiated as to what affects them. They are not necessarily going to sit
down and negotiate with the other party, it is an advisory committee, ”he
Daphne Barbeito, a cruise sector activist and spokesperson
for the Alliance, told Caribbean Business on Tuesday that she acknowledged that
Fontánez had been meeting individually with several sectors to listen to their
“We have been told that the concerns were being addressed
but the lack of credibility that this administration has created and [because]
this is such a serious issue, with such an important impact for the island,
that we want to ensure that in the end what results is beneficial for everyone,
”said Barbeito. At the same time, she stressed that if at the end of the
process they understand that the agreement reached does not meet their
expectations, they will communicate this to the public.
Barbeito said that contrary to the negotiation of the Luis
Muñoz Marín airport concession to Aerostar, nothing forces the members of the
industry to be heard this time. She also said that the airport knew in advance
how much the company promised to invest, while there are no clear numbers in this
No fixed date
As to when they expect to finish the process, Fontánez
explained that at this time “there is no expectation of time”.
“The negotiations have been delayed and we are not in a
position to sign, there are still cardinal points on the table,” he said.
In accordance with the Public-Private Parterships (PPP) Act, once the negotiations are over, the PPP Committee must review and approve the agreement, and then submit it to the Fiscal Oversight and Management Board (FOMB). After being endorsed by the fiscal entity, the final approval by the Alliances Committee is produced and presented to the governing boards of the Ports Authority and the PPP Authority for their endorsement. When all those organizations approve, it passes to the governor for her signature.
“That is a process that could take 30 to 60 days,”
Project segmentation discarded
On the position of cruise lines like Royal Caribbean that oppose the transaction Fontánez explained that the possibility of dividing the project so that Global obtains the concession of the docks 11 to 14 that currently are not under exclusivity contracts is not on the negotiating table .
“That was proposed at the time and the cruise lines showed
no interest. Even now, they have not shown interest in making the necessary
investment, ” the official stated.
A need and convenience study based on the unsolicited
proposal from Global Ports indicates that it is preferable for Puerto Rico to
have only one operator for all their docks.
The study revealed that the structural condition of all the
cruise docks in San Juan Bay requires a multi-million dollar investment to
guarantee its use.
“For the government, that investment in the
infrastructure of the docks is essential,” he said.
Fontánez pointed out, however, that the concerns of the
tourist and commercial sector of Old San Juan must be addressed on the contract
that will be finally signed.
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