Source: Associated Press, February 7, 2018
A major barrier to restoring power is Puerto Rico’s public power utility, known as PREPA. Bankrupt, its infrastructure dilapidated, PREPA has been unable to repair the island’s devastated grid. It is also seen as corrupt. In January, some customers left in the dark for months received bills for “services rendered.” Thousands more were slapped with overcharges. … Welcoming private energy companies to the island didn’t just weaken PREPA – it also damaged the environment. As revealed in a 2017 investigative reporting series by Puerto Rico’s Centro de Periodismo Investigativo, the multinational AES badly mismanaged the ash byproduct from a coal plant in Guayama, Puerto Rico, to brutal results. …
Opinion: Privatizing Puerto Rico’s energy utility could be Whitefish 2.0
Source: Ramón Luis Nieves, The Hill, February 5, 2018
Hurricane María was a total catastrophe for the people of Puerto Rico. But “Hurricane PREPA”, a man-made disaster, left 3.4 million American citizens without power, and without hope. The Puerto Rico Electric Power Authority (PREPA) and the government of Puerto Rico are not just financially broke — their credibility is also long gone. … Now, with its credibility gone and 30 percent of the island still in the dark, the government of Puerto Rico is proposing to privatize PREPA. At the same time, the government filed several bills to dissolve the Puerto Rico Energy Commission: the only entity that provides oversight over the bankrupt utility and the energy sector. …
Privatization concerns grow as PREPA seeks $1.3B loan
Source: Canadian Press, January 30, 2018
Government officials on Monday denied claims they plan to eliminate the Energy Commission that regulates Puerto Rico’s power company amid plans to privatize the utility, which they have warned will run out of funds by mid-February. The denial came a day after a federal control board overseeing the island’s finances requested that a judge authorize a loan of up to $1.3 billion to Puerto Rico’s Electric Power Authority so it can keep operating. The board said the power company could see an estimated $1.2 billion loss in revenue in the first six months after Hurricane Maria. Jose Roman, president of the Energy Commission, urged the administration of Gov. Ricardo Rossello to keep the body or create a new regulatory entity, saying strong oversight will be needed if the utility is privatized. …
Judge in Puerto Rico case strikes down two bondholder challenges
Source: Robert Slavin, Bond Buyer, January 31, 2018 (Subscription Required)
Puerto Rico Title III bankruptcy Judge Laura Taylor Swain has dismissed two major bondholder and bond insurer challenges. In an order released Tuesday afternoon, Swain rejected the argument that the Puerto Rico Highways and Transportation Authority, Convention Center District Authority and Infrastructure Financing Authority were required to continue to pay their bonds because bonds were secured by liens on pledged special revenue streams. She also rejected the insurers’ argument that the funds in the reserve account were the property of the bondholders and thus should be released to them.
Puerto Rico legislature approves loans for PREPA and PRASA
Source: Robert Slavin, Bond Buyer, January 29, 2018 (Subscription Required)
The Puerto Rico legislature has passed a bill authorizing the central government to loan money to the Puerto Rico Electric Power Authority and the Puerto Rico Aqueduct and Sewer Authority to handle imminent cash shortfalls. On Jan. 22 Gov. Ricardo Rosselló said that PREPA was in danger of running out of money by early February. This could cause a power outage across the island since PREPA is the sole electricity provider. The Puerto Rico Senate first approved the measure. Then on Friday the Puerto Rico House approved it with 43 in voting in favor, four voting against, and four absent. The governor is expected to sign the measure.
The Peril of Privatizing Prepa
Source: Vann R. Newkirk II, The Atlantic, January 24, 2018
The plan for the Puerto Rico Electric Power Authority (Prepa) has been contested hotly for months now, in a power struggle that started even before Hurricane Maria plunged the island into darkness for months. But the ultimate fate for the commonwealth-owned power company has always trended in one direction: privatization. On Monday, Governor Ricardo Rosselló formalized that fate, announcing that over the next year-and-a-half, the Puerto Rican government will pursue a plan to sell the decrepit power utility, ending an effective territorial monopoly on electricity that has existed for almost 80 years, ever since President Franklin Roosevelt’s New Deal. …
Hurricane-Torn Puerto Rico Says It Can’t Pay Any of Its Debts for 5 Years
Source: Patricia Mazzei and Mary Williams Walsh, New York Times, January 24, 2018
Hurricane Maria made Puerto Rico’s already grave financial situation so much worse, the island’s leaders acknowledged late Wednesday, that they will not be able to pay down any portion of their more than $70 billion debt over the next five years. Just before the hurricane, Puerto Rico had made plans to pay creditors a total of $3.6 billion through 2022. That was just a fraction of the amount due, had the island, a United States commonwealth, not gone into default. Now, Puerto Rico expects its budget to be $2 billion to $3 billion in the red, Gov. Ricardo A. Rosselló told reporters at a briefing on Wednesday — a deficit that will take five years to shrink. By then, he said, the cumulative effect of tough economic austerity measures will help the island’s government achieve a balanced budget, as required by the federal oversight board that controls Puerto Rico’s troubled finances. …
How a Hedge Fund Could Derail Puerto Rico’s Debt Negotiations
Source: Brendan O’Boyle, Americas Quarterly, January 24, 2018
Puerto Rico’s $73 billion debt restructuring may soon come grinding to a halt as a judge weighs legal challenges to the entity Congress created to manage the island’s finances. Although many Puerto Ricans have criticized the Fiscal Oversight and Management Board as undemocratic and lacking in transparency, the lawsuit isn’t coming from anyone on the island, but from a New York-based hedge fund that could stand to profit if a new board were created under President Donald Trump. On Jan. 10, Aurelius Capital Management LP asked U.S. Federal Court Judge Laura Taylor Swain to dismiss the restructuring process that the oversight board initiated last May as part of PROMESA, a legislative package designed to rescue Puerto Rico from insolvency by handing its fiscal management to a board of technocrats assembled by Congress in 2016. Aurelius, which holds nearly half a billion dollars of Puerto Rico’s debt, claims that the board is unconstitutional, arguing that the confirmation process for its members violated the rules on how officers with such responsibilities should be appointed.
Puerto Rico to Start Privatizing Embattled Energy Company
Source:Jonathan Levin, Yalixa Rivera, and Michelle Kaske, Bloomberg, January 22, 2018
Puerto Rico Governor Ricardo Rossello said he’s moving to privatize the assets of the island’s electric company, a utility so badly damaged by Hurricane Maria that millions have been left in the dark for months. Selling the insolvent Puerto Rico Electric Power Authority, the largest U.S. public power utility by customers and revenue, could take 18 months, Rossello said. It will start with legislation to establish a legal framework before the government entertains purchase proposals. The move could be a major development in the fate of an agency at the center of the ravaged U.S. commonwealth’s recovery. Lack of power is the central obstacle to resuming normal life. But left unanswered is who might be interested in purchasing a badly damaged system and what a sale would mean for creditors and residents. …
Economists urge massive federal aid to revive Puerto Rico’s economy
Source: Brian Tumulty, Bond Buyer, January 22, 2018
A group of 26 prominent economists is urging the Trump administration to support a massive infusion of federal aid to rebuild Puerto Rico’s economy. “Puerto Rico now has a once-in-a-generation chance to rebuild its infrastructure and economic foundations” because of the severe damage caused by Hurricane Maria in September, the economists said in an open letter released Friday. The group includes top economic policy advisory advisers from the Clinton and Obama administrations, including Nobel Prize winning economist Joseph Stiglitz, a professor at Columbia University who chaired the White House Council of Economic Advisers during the Clinton administration.
Puerto Rico Governor Asks DOJ To Investigate Island’s Public Power Utility
Source: Adrian Florido and Marisa Penaloza, NPR, January 11, 2018
Puerto Rico Gov. Ricardo Rosselló has asked the Justice Department to investigate the island’s public electric utility after federal agents said they found large quantities of critical rebuilding materials stored in a warehouse owned by the public company. On Saturday, employees of the Federal Emergency Management Agency and the U.S. Army Corps of Engineers entered the warehouse near San Juan, took possession of the materials and began distributing them to contractors working to rebuild the island’s flattened power grid, according to a statement from the Army Corps. Details of the operation were first reported by The Intercept. Among the materials found were transformers and metal sleeves that have been in short supply since Hurricane Maria devastated the island and its electrical grid in September.
Puerto Rico board picks four energy projects as infrastructure priorities
Source: Robert Slavin, Bond Buyer, January 8, 2018
The Puerto Rico Oversight Board said it was focusing on four key energy projects for expedited permitting as the island looks to restore its economy and infrastructure. …. The four projects would involve $1.47 billion in investment, nearly all from the private sector. The board estimates that the projects would create more than 8,200 direct and indirect jobs. ….
The GOP’s Tax Bill Kicks Puerto Rico When It’s Down
Source: Jennifer Bendery, HuffPost, December 19, 2017
The hits just keep coming for Puerto Rico. As the U.S. island struggles to climb out of a $70 billion debt crisis and recover from the devastation of Hurricane Maria, House Republicans voted Tuesday to impose a 12.5 percent tax on intellectual property income made by U.S. companies operating on the island and a minimum 10 percent tax on their profits in Puerto Rico.
Puerto Rico Still Waits for $4.9 Billion From U.S. Treasury
Source: Rebecca Spalding, Bloomberg, December 8, 2017
Over two months after Hurricane Maria devastated Puerto Rico, the island’s government still hasn’t received any of the $4.9 billion of short-term loans promised in the storm aid package Congress passed at the end of October. Christian Sobrino, the governor’s representative on the island’s federal oversight board, confirmed Friday that no Puerto Rican entity has received any portion of the funds, which were requested for basic functions like making payroll. This week, the Puerto Rican government told the fiscal control board that the electric company, Prepa, and water utility, Prasa, would run out of money in December. Sobrino said Friday that the island’s fiscal agency was in talks with the U.S. Treasury and Department of Homeland Security about the money and how it would be disbursed. …
U.S. counters hedge fund’s attack on Puerto Rico oversight board (Abstract)
Source: Jim Christie, Reuters, December 7, 2017
The U.S. government defended on Wednesday the federal board overseeing Puerto Rico’s restructuring, countering a bid by a hedge fund that sought to get the U.S. territory’s bankruptcy-like case dismissed by attacking the board’s legality. The restructuring is taking place under a special federal law known as the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) that provides for proceedings in U.S. District Court akin to those under Chapter 9 municipal bankruptcy. …
Bernie Sanders to unveil a $146 billion ‘Marshall Plan’ for Puerto Rico
Source: Jeff Stein, Washington Post, November 28, 2017
Hurricane Maria destroyed Puerto Rico’s decades-old electrical grid when it made landfall on Sept. 20, rendering millions of island inhabitants without power. On Tuesday, Sen. Bernie Sanders (I-Vt.) will unveil an ambitious $146 billion Puerto Rico recovery plan he says will allow renewable power sources such as solar and wind to provide about 70 percent of the island’s energy needs within the decade. The bill, which has the backing of San Juan Mayor Carmen Yulín Cruz, also calls on Congress to consider retiring Puerto Rico’s debt and would give the island billions in additional federal funding for transportation, health care and education in the hopes of stemming a feared mass exodus to the mainland. It would also allocate funds to the Virgin Islands, which were similarly devastated by Hurricane Maria. …
Union, hedge fund trades blows over Puerto Rico oversight board (Abstract)
Source: Jim Christie, Reuters, November 6, 2017
A hedge fund’s Constitutional challenge to the creation of the federal board overseeing Puerto Rico’s finances is a ploy to protect investments in the insolvent island’s debt, a union for government workers said in court papers filed on Friday. The court should reject a bid by Aurelius Capital Management to get Puerto Rico’s case dismissed by challenging how the board was established, the American Federation of State, County and Municipal Employees added in its papers. …
Trump boosts disaster aid for Puerto Rico rebuild
Source: Roberta Rampton, Reuters, November 2, 2017
U.S. President Donald Trump on Thursday agreed to expand the use of disaster aid to help rebuild Puerto Rico’s power grid and other infrastructure wrecked by Hurricane Maria, the White House said. In a unique agreement recognizing both the massive devastation on the island and its dire financial problems, aid from the Federal Emergency Management Agency (FEMA) for infrastructure projects will be released in a faster, more flexible way than is typical after disasters, a senior White House official told Reuters. The plan, agreed to with Puerto Rico Governor Ricardo Rossello, will also provide for third-party advisers to estimate how much money is requires for big-ticket projects, and how it is spent – a provision aimed at protecting taxpayer dollars in what is expected to be a massive, long-term effort to rebuild the island. …
Puerto Rico Lays Out Energy Future With Tesla, Privatization
Source: Jonathan Levin, Bloomberg, October 22, 2017
A Puerto Rican official who has been in talks with Tesla Inc. said the island is serious about transforming its energy infrastructure after it was leveled by Category 4 Hurricane Maria, despite questions about how such an overhaul would be funded. Speaking in a telephone interview Sunday, Department of Economic Development and Commerce Secretary Manuel Laboy said Puerto Rico’s government understands its skeptics: The island’s finances are shot and its electricity system is in tatters. But he said the U.S. territory has a historic opportunity to use federal funds to modernize an aging and weak power grid. At the core of the argument is the government’s belief that funding related to the Federal Emergency Management Agency, or FEMA, can be used to build a new system, not just repair the old one, so that it won’t be susceptible to collapse when the next storm hits. Laboy said Governor Ricardo Rossello’s government is prepared to make its case. …
Puerto Rico taps public private partnerships to boost economy
Source: Robert Slavin, Bond Buyer, October 19 2017
…The island government said Monday that it’s working on six public private partnership projects that would lead to $300 million to $400 million of investment in projects ranging from a hydroelectric dam to student housing. Puerto Rico will seek requests for qualifications for three of the projects and it is already working with companies on the other three. If the projects go forward, they would boost an economy that has been struggling with long-term economic decline compounded by the impacts of two major hurricanes in the last two months….
Elon Musk Is Not the Hero Puerto Rico Needs
Source: Kate Aronoff, In These Times, October 11, 2017
… According to a tweet from the governor late last week, the two are now in talks about bringing renewable energy from Musk’s Tesla and SolarCity operations to the island, whose long-embattled public utility—the Puerto Rico Electric Power Authority (PREPA)—was decimated by Hurricane Maria. … On the one hand, the talks can be seen as a positive development: More than 80 percent of the island remains without power, and the storm could be a once-in-a-lifetime opportunity for Puerto Rico to get back online and become a leader in the transition away from fossil fuels. But the budding friendship between Rossello and Musk is also taking place in the context of a massive attempt to privatize Puerto Rico’s electric utility. Musk’s companies could deliver tangible improvements to Puerto Rico’s grid, but they could also prime the pump for a corporate takeover of the United States’ largest public power provider, putting decisions like who gets power and how much it costs into the hands of corporate shareholders. …
Puerto Rico Faces Restart on Financial Plan After Maria
Source: Heather Gillers and Andrew Scurria, Wall Street Journal, September 26, 2017
It took months to put together a financial overhaul plan for Puerto Rico. Now officials may have to start over following Hurricane Maria. The federal board supervising Puerto Rico’s bankruptcy plans to meet Friday and is likely to discuss possible changes to a commonwealth fiscal plan it approved in March, according to a person familiar with the matter. The conversations could affect the severity of write downs on Puerto Rico’s $73 billion in debt.
… Reconstructing Puerto Rico’s power grid may prove particularly costly because of financial difficulties at its struggling electric utility. … Congress is starting to debate how best to rebuild Prepa. Setting up a reliable power system will require expensive modernization using federal dollars. Prepa is a flashpoint in Puerto Rico’s financial crisis because power rates are a drag on family incomes and company budgets. The oversight board has said it wants to privatize power generation to lower costs and transition Prepa to a regulated utility model. Creditors are skeptical of privatization, concerned that by selling off assets Prepa would lose the revenue streams backing its debt. But raising power rates to repay creditors is politically toxic in Puerto Rico, where the cost of importing fuel from oil tankers has driven power prices higher than in any U.S. state but Hawaii. …
Puerto Rico’s bondholders worried after Hurricane Maria turns out lights
Source: Francine McKenna, MarketWatch, September 21, 2017
If Puerto Rico is without power for months after Hurricane Maria, as authorities now warn, many investors in the $9 billion of Puerto Rico’s outstanding electric utility bonds risk never seeing their money. … The plight of Prepa bondholders—Prepa is Puerto Rico’s main supplier of electricity—was grim even before Irma. … Prepa’s bonds, $9 billion worth, are revenue bonds whose funding stream is based on collecting customer fees. Even before Hurricane Maria knocked power out for good, bondholders were worried that Prepa would deliberately force some plants offline, jeopardizing the collateral, creating justification for a privatization plan that could leave current bondholders high and dry. Proponents argue that a brand new electric authority, free of debt, would be a huge boon to the Puerto Rican economy. …
Hurricane Irma Unleashes the Forces of Privatization in Puerto Rico
Source: Kate Aronoff, Angel Manuel Soto, and Averie Timm, The Intercept, September 12, 2017
For struggling governments around the world, privatizing utilities has come to be seen as a kind of get-rich-quick scheme, offering an upfront infusion of cash to underfunded municipalities. Given Prepa’s size and that of its debt — $9 billion — it has been a long-standing target for privatizers, even before Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act last year to help rein in Puerto Rico’s mounting debt crisis. The blackout following Irma just added fuel to the fire. Days before Irma hit, Rosselló emphasized that privatization is firmly on the table, telling the New York Times that Irma “can become an opportunity or another liability.” …
Irma Grazes Puerto Rico but Lays Bare an Infrastructure Problem
Source: Luis Ferré-Sadurní, New York Times, September 10, 2017
As government workers cleared roads obstructed by uprooted trees and repaired toppled electricity lines, residents of Puerto Rico felt some relief that the eye wall of Hurricane Irma had skirted the island on its recent rampage through the Caribbean. But while the commonwealth had largely been spared the 185-mile-an-hour gusts that had flattened its smaller island neighbors, hundreds of residents still lost their homes, at least three people died and almost 70 percent of households were plunged into darkness. The storm knocked out Puerto Rico’s fragile power grid, exposing the island’s decrepit infrastructure and raising questions about its future viability amid a worsening economic crisis.
… How a commonwealth going through a decade-long recession will be able to pay for much-needed upgrades is the key question. One option is to turn to the private sector, local economists say. Private investments, Mr. Rosselló said, could be accelerated under a provision of a contentious new law called Promesa, which placed the island’s finances under the oversight of a federal board. The provision could expedite and facilitate the process for private investment in electric, highway and water projects. … But the idea of privatizing public utilities is a divisive one on the island. The electrical workers’ union fears that the government purposely let Prepa deteriorate over time to justify privatizing it. …
Puerto Rico wasn’t ready for Hurricane Irma. We couldn’t possibly be.
Source: Carla Minet, Washington Post, September 7, 2017
On the surface, Puerto Rico was as ready as it could be for Hurricane Irma. Government agencies and Gov. Ricardo Rosselló have been taking a proactive, hands-on approach. President Trump has declared a state of emergency, which will generate emergency funds from the federal government. Refugees from the northeastern corner of the island, where Irma’s Category 5 winds already reached Wednesday afternoon, were arriving in shelters. … But Irma — a storm the likes of which we haven’t seen here in decades — is heading for an island whose resources to truly prepare for an emergency are already in grave doubt. … Now Irma may be used as a new rationale for the strategy of privatizing the public service by the Fiscal Control Board, whose members have publicly declared support for selling off the utility. The agency announced that 44 percent of the population — 692,350 clients — were already without electricity service by Wednesday afternoon. …
Government labor strife is latest test for fractured Puerto Rico
Source: Nick Brown, Reuters, August 30, 2017
Puerto Rico’s already frail economy faces a fresh test this week, as the bankrupt U.S. territory’s financial overseers try to force a defiant governor to furlough public workers, the single biggest block of employees on the island. An escalating power struggle between the democratically elected Governor Ricardo Rossello and the federally appointed oversight panel culminated on Monday when the board sued Rossello, saying he had no authority to reject pension cuts and furloughs ordered by the board. The measures are set to begin Sept 1. A competing lawsuit from the American Federation of State, County and Municipal Employees (AFSCME), which represents 12,000 Puerto Rican workers, argues the exact opposite – that the measures violate the U.S. Constitution, and should be halted. At least six unions are staging protests on Wednesday to oppose the austerity, featuring a midday march to the board’s San Juan offices. … Noting a Rossello initiative to privatize some public assets, Eiler said “the unions’ cooperation is imperative” for public-private partnerships. …
Hedge Fund Sues to Have Puerto Rico’s Bankruptcy Case Thrown Out
Source: Mary Williams Walsh, New York Times, August 7, 2017
A hedge fund sued on Monday to have Puerto Rico’s bankruptcy case thrown out, arguing that the federal oversight board guiding the island’s financial affairs was unconstitutionally established. In a lawsuit filed in United States District Court in San Juan, the hedge fund, Aurelius Capital, cited the “appointments clause” of the United States Constitution, which calls for all principal officers of the federal government to be appointed by the president, and then confirmed by the Senate. That did not happen when the seven members of the Financial Oversight and Management Board for Puerto Rico were selected, Aurelius said in its motion to dismiss the bankruptcy-like proceedings. …
Puerto Rico Teachers’ Union-AFT Join Forces Amid Debt Woes
Source: Jaclyn Diaz, Daily Labor Report, August 4, 2017 (subscription required)
The economic devastation in Puerto Rico has pushed the American Federation of Teachers to lend a hand to the island’s educators. Asociación de Maestros de Puerto Rico will continue to represent the 40,000 plus Puerto Rican educators. It signed a three-year affiliation agreement with the 1.6 million-member AFT to help it combat the island’s economic challenges, the two unions announced Aug. 3. … AFT and AMPR will work together to fight austerity measures and privatization on the island, Randi Weingarten, AFT president, told Bloomberg BNA Aug. 4. AFT will lend resources to help AMPR train teachers for the future and to bring in legal assistance to fight the fiscal plan adopted by the Puerto Rican government, she said. …
Is Congress’ plan to save Puerto Rico working?
Source: Edwin Melendez, San Francisco Chronicle, July 31, 2017
A year ago, Congress cobbled together a plan to try to save Puerto Rico from its US$123 billion debt and pension crisis without costing American taxpayers a penny. The law, signed by former President Barack Obama on June 30, 2016, effectively steered Puerto Rico into bankruptcy-like proceedings in federal court to prevent a massive default, while saddling the commmonwealth with an oversight board to ensure it put its fiscal house in order. Though the vote was bipartisan, critics called it a “Band-Aid” that would do little to solve Puerto Rico’s core problems: unsustainable debt that has kept the country mired in recession for almost a dozen years. …
For Sale: Puerto Rico
Source: Heather Gillers, Wall Street Journal, June 26, 2017
Puerto Rico has no cash and can’t borrow money anymore. So it is looking to sell itself off in parts. The troubled U.S. territory is preparing to seek bids in coming months from private companies willing to operate or improve seaports, regional airports, water meters, student housing, traffic-fine collections, parking spaces and a passenger ferry, according to a government presentation reviewed by The Wall Street Journal.
The Bankers Behind Puerto Rico’s Debt Crisis
Source: Michelle Chen, The Nation, June 8, 2017
Puerto Rico’s economic crisis has now washed the burden of its colonial legacy onto Washington’s doorstep. Congress has been trying to contain the island’s ballooning debt under the hardline austerity program of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). But since the program is governed by a control board run by the same financiers responsible for driving the debt crisis in the first place, the island continues to sink into poverty while its creditors feast on the spoils. To underscore how Puerto Rico’s revolving door of big finance and politics is underwriting the debt crisis, a report by the AFL-CIO and the community-labor coalition Committee for Better Banks (CBB) traces the career of the head of PROMESA, Carlos M. García, from his role as a head banker of Santander to his current political post overseeing the privatization and pillage of Puerto Rico’s anemic public assets.
Puerto Rico strikes second restructuring deal with bondholders
Source: Hazel Bradford, Pensions & Investments, May 15, 2017
Puerto Rico reached a restructuring agreement with bondholders invested in the commonwealth’s Government Development Bank, officials announced Monday in San Juan. … Puerto Rico’s Federal Affairs Administration said in that statement that GDB creditors “have agreed to substantial discounts to the principal,” but did not provide further details on the agreement, which calls for bondholders to exchange claims for one of three tranches of bonds issued by a new municipal entity. The new bonds will have varying principal amounts, interest rates, collateral priority, and other payment terms. It is the second agreement reached with bondholders and Gov. Ricardo Rosello, following one announced April 6 with holders of bonds issued by the Puerto Rico Electric Power Authority. The PREPA agreement restructures $9 billion in debt by offering them 85 cents on the dollar, and giving PREPA more time to begin making payments. …
Puerto Rico board extends budget deadline by two weeks
Source: Robert Slavin, Bond Buyer, May 9, 2017 (Subscription Required)
The Puerto Rico Oversight Board extended the deadline for Puerto Rico Gov. Ricardo Rosselló to submit a fiscal year 2018 budget by two weeks. Board chairman José Carrión III told Rosselló that the board had originally set May 8 as the deadline for either the board approving the governor’s budget or notifying the governor of violations and providing a description of corrective actions. “We have received a working draft of the proposed budget and are reviewing the submission and its completeness,” Carrión wrote Monday. “The board will provide the governor an additional 14 days to amend and improve the submission before it approves it or identifies violations.” …
Puerto Rico unveils energy PPPs amid economic turmoil
Source: David Casallas, BNamericas, May 5, 2017
Puerto Rico’s embattled government released a list of priority project proposals for this year, among them energy sector initiatives that would be carried out through public-private partnerships (PPP). The projects envision natural gas use at power utility AEE’s residual fuel oil fired-plants Costa Sur (990MW) and Palo Seco (602MW) which would cost US$150mn-265mn and US$200mn-360mn, respectively. Information from the Puerto Rico Public-Private Partnerships Authority also reveals that AEE seeks partners to develop renewable energy projects, including photovoltaic and wind, for between US$100mn and US$700mn. …
Puerto Rico Declares a Form of Bankruptcy
Source: Mary Williams Walsh, New York Times, May 3, 2017
With its creditors at its heels and its coffers depleted, Puerto Rico sought what is essentially bankruptcy relief in federal court on Wednesday, the first time in history that an American state or territory had taken the extraordinary measure. The action sent Puerto Rico, whose approximately $123 billion in debt and pension obligations far exceeds the $18 billion bankruptcy filed by Detroit in 2013, to uncharted ground. While the court proceedings could eventually make the island solvent for the first time in decades, the more immediate repercussions will likely be grim: Government workers will forgo pension money, public health and infrastructure projects will go wanting, and the “brain drain” the island has been suffering as professionals move to the mainland could intensify. …
Puerto Rico faces bank closure, privatizations
Source: Danica Coto, Associated Press, April 28, 2017
Puerto Ricans will be facing a water rate increase, privatization of government operations and the closure of a bank that once oversaw the island’s debt transactions, officials said Friday as they worked on measures to offset an economic crisis. Some of the changes were outlined in new fiscal plans presented to a federal control board overseeing the island’s finances. The plans for four heavily indebted Puerto Rico agencies will be amended in upcoming weeks, although officials noted that the water rate increase will start in January and that the Government Development Bank will be liquidated within a decade. The board recently approved an overall fiscal plan for the central government that contains several austerity measures. …
Puerto Rico pushes to privatize operation of public services
Source: Danica Coto, Associated Press, April 20, 2017
Puerto Rico is ready to sign dozens of new deals to privatize the operation of public services as government funds dwindle amid a decade-long recession, the island’s governor told some 800 investors attending a two-day financial summit Thursday. Gov. Ricardo Rossello said public-private partnerships could create up to 100,000 new jobs and generate some $5 billion in the next three years for a U.S. territory mired in economic crisis and its government facing a $70 billion public debt load that it is struggling to restructure.
AFSCME Pres. Lee Saunders on Puerto Rico Fiscal Plan
Source: AFSCME Press Release, March 13, 2017
AFSCME Pres. Lee Saunders issued the following statement on the oversight board’s approval of a fiscal plan for Puerto Rico: “The plan approved by the Oversight Board will have devastating consequences for the people of Puerto Rico, especially its most vulnerable citizens. The plan adopts an austerity approach that will slash services, cut pensions and create yet more economic hardship for Puerto Ricans. The winners are wealthy investors who stand to gain from the mass privatization of the services that remain. These actions are the foreseeable result of an anti-democratic law adopted by the last Congress. The people of Puerto Rico have been forgotten; we call on the federal government to act quickly to restore services and pensions.”
Board to Puerto Rico: Cut Pension System, Impose Furloughs
Source: Danica Coto, Associated Press, March 13, 2017
A federal control board on Monday said Puerto Rico’s government needs to cut its public pension system by 10 percent, furlough tens of thousands of its workers and eliminate Christmas bonuses if it cannot generate other types of savings amid a nearly decade-long recession. The seven-member board created by Congress last year to oversee the U.S. territory’s finances voted unanimously to add those measures to a 10-year fiscal plan presented by the island’s governor that the panel approved Monday. The measures will be implemented if the government fails to find other ways to cut spending and increase revenue. Board members said the spending cuts will be necessary so the government will have enough funds to pay for essential services such as education, health and public safety. … The plan drafted by the government and approved by the board also will cap some Medicaid benefits, effectively raise property taxes and scrap some infrastructure projects while possibly turning ferries, ports and parking lots over to private companies. It will freeze salaries until 2020, seeks to privatize the generation of power and increase motor vehicle license fees by 10 percent. …
Puerto Rico governor wants fewer austerity measures
Source: Danica Coto, Associated Press, March 1, 2017
Puerto Rico’s governor submitted an austerity plan made public on Wednesday that would cut deeply into the U.S. territory’s budget while avoiding some of the most painful measures recommended by a federal control board that is overseeing the island’s effort to confront a debt crisis that has led to repeated defaults. Gov. Ricardo Rossello’s plan would cap some Medicaid benefits, effectively raise property taxes and collect a tax on internet purchases. It would also scrap some infrastructure projects and could turn ferries, ports and parking lots over to private companies. But it would fall short of the board’s recommendation of a 30 percent cut in payroll costs and 10 percent reduction in the government pension system, which is on track to run out of money next year. …