Monday, June 20, 2011
Press Office
La Fortaleza
Victoria Maldonado
Tel.: (787) 721-9166
E-mail: vmaldonado@fortaleza.gobierno.pr
Ana M. Gregorio
Public Private Partnerships Authority
Tel.: (787) 728-9200
E-mail: ana.m.gregorio@bgfpr.com
Private infrastructure investment to bring improvements, world-class standards to
Puerto Rico’s PR-22 and PR-5 toll roads; will also significantly reduce local Highway and Transportation Authority’s public debt
SAN JUAN, PR – Governor Luis G. Fortuño said that Puerto Rico will receive $1.436 billion in private infrastructure investment—the largest such investment in any U.S. jurisdiction so far this year—as a result of the Public Private Partnership (P3) announced today to immediately upgrade and bring up to world-class standards PR-
22 and PR-5, two of the Island’s major toll roads.
The Governor said that the multi-million investment will also help improve the Puerto
Rico Highways and Transportation Authority’s (PRHTA) financial condition so that it may regain its capacity to fund other transportation projects on the Island.
―This is an important day for Puerto Rico,‖ Fortuño said. ―This P3 project will benefit hundreds of thousands of drivers who will enjoy better paved, better lit, more secure toll roads on a daily basis, and will also have an extraordinarily positive effect on our
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economy,‖ the Governor said. Fortuño added that the investment will benefit the local economy in the form of new jobs, new municipal tax revenues, reliable utility payments, contributions to local police, and enhanced services to drivers.
The Governor’s announcement was made on the occasion of the selection of
Autopistas Metropolitanas de Puerto Rico, LLC, as the winning bidder for this first P3 toll road project to be put together under the Puerto Rico P3 Act of 2009.
Autopistas Metropolitanas de Puerto Rico, LLC—a consortium between Goldman
Sachs Infrastructure Partners II, L.P. and Abertis Infraestructuras— submitted the best proposal with a total estimated investment of $1.436 billion with which the consortium will finance, repair, operate and maintain PR-22 and PR-5 over the next
40 years in accordance with world-class standards required by the local government.
The private investment will allow the PRHTA to retire a significant portion of its outstanding debt.
Goldman Sachs Infrastructure is an investment fund specializing in infrastructure with over $3 billion in capital. It has approximately $10 billion in investments around the world including highways in Mexico. Meanwhile, Abertis Infraestructuras is among the top 10 transportation infrastructure operators in the world, with presence in 15 countries where it directly manages over 2,300 miles of toll roads, including the
Teodoro Moscoso Bridge in Puerto Rico.
According to the Puerto Rico Public-Private Partnership Authority (PPPA), the winning proposal presented by Autopistas Metropolitanas includes an upfront payment of $1.080 billion. In addition, the concessionaire is ready to invest an estimated $56 million to complete what are known under the contract as Accelerated
Safety Improvements (ASUs), among other investsments, in the first three years of the concession and will also comply with a set of Operating Standards to ensure worldclass highways, which have been estimated to require $300 million of additional investment over the term of the concession project.
The Governor highlighted the importance of this P3 project: ―just to put it in perspective, this is the first P3 toll road brownfield project in the U.S. since 2006 and the largest private investment in infrastructure in the U.S. so far this year,‖ he stressed. ―Definitely, users of PR-22 and PR-5 will see and enjoy favorable changes now that will have a positive effect on their quality of life while new investment is being delivered into the economy,‖ the Governor added.
This P3 project consists of an administrative concession to finance, rehabilitate, operate and maintain existing toll roads PR-22 (José De Diego toll road) and PR-5, which is located in the municipality of Bayamón. The concession agreement has a term of 40 years and requires the selected consortium to conduct significant investments in the rehabilitation of said toll road. In addition, it must meet rigorous quality and service standards that will bring about recurring investment and will elevate these toll roads to world-class level with respect to paving, signage, lighting, vehicle flow, safety,
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and service and toll areas, among others. The winning consortium must also meet operation requirements resulting in safer and more durable roads.
Proposals and bids were received from two teams on May 31. There was no need to ask the two teams for best-and-final offers given that both bids were more than 5 percent apart from one another. A second place bid was submitted by a group composed of
Morgan Stanley Infrastructure, Inc. and OHL Concesiones.
PPPA Executive Director David Álvarez indicated that ―the most important objective of the PPPA is to deliver significant investment and world-class infrastructure to the people of Puerto Rico. Both proponents were formidable competitors and we thank them for their interest in Puerto Rico. The P3 process for PR-22 and PR-5 is the initial step in our ongoing efforts to develop other key projects for the Island. Our P3 process is working and delivering excellent results, and today we have clear evidence of it. We look forward to additional projects,‖ indicated Álvarez.
Meanwhile, PRHTA Executive Director and Secretary of Transportation and Public
Works, Rubén Hernández-Gregorat, pointed out that, ―we have taken all the steps to ensure a great project for Puerto Rico. After, twelve months of hard work, we are able to ensure significant new investment for our toll roads and secure world-class maintenance and services for our drivers.‖
The process of procuring this Partnership began with the publication of the desirability and convenience study on June 4, 2010. Then, the PPPA issued a request for qualifications to entities interested in the project (RFQ) on June 15, 2010. On
September 15, 2010, the PPPA made public the shortlisted consortia that passed to the request for proposals phase (RFP). The PPPA sent the RFP to the qualified finalists on
November 19, 2010. The process has taken 12 months since the issuance of the RFQ in
June 2010, which is considered a speedy process compared to other precedents.
―The Government of Puerto Rico will retain ownership of PR-22 and PR-5 while the concessionaire will be held responsible for Accelerated Safety Improvements and compliance with the highest operating standards for the benefit of the users of these roads,‖ Governor Fortuño said. ―We have come a long way in just 24 months since the enactment of our P3 legislation. We will continue to move forward with important projects and our commitment to P3s is stronger than ever,‖ stated the Governor.
The PPPA’s website, www.p3.gov.pr
, has available a series of documents that not only describe the process but also show the selection criteria for this project.
About Autopistas Metropolitanas de Puerto Rico, LLC.:
Autopistas Metropolitanas de Puerto Rico, LLC is an entity owned by Abertis
Infraestructuras and GS Global Infrastructure Partners II, L.P./GS International
Infrastructure Partners II (―GSIP‖).
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Goldman Sachs, a leading global investment banking, securities and investment management firm, is one of the largest infrastructure fund managers globally, having raised over $10 billion of capital since the inception of the business in 2006. The GS
Infrastructure Partners funds are the firm’s primary vehicle to make direct investments in infrastructure assets and companies.
Abertis is an operator and manager of infrastructure businesses around the world with a presence in 17 countries with key focuses on toll roads, airports, telecommunications infrastructure, car parks, and logistic parks. Abertis has operated highways for more than forty years and directly operates over 2,300 miles of tolls roads and has a share in the operation of another 3,400 miles of roads. In 2010, Abertis’ toll roads in Spain recorded more than 360 million toll transactions. A majority of these transactions, approximately 74% were collected using electronic systems.
About the Public-Private Partnerships
Public-Private Partnerships are contracts between a government entity and a nongovernmental entity that allow to foster the economy of Puerto Rico, create jobs and move forward infrastructure projects for the benefit of all Puerto Ricans. This type of contract, known as ―administrative concession‖ exists under the Puerto Rico
Constitution, Civil Code, Puerto Rico Mortgage Law and the Regulation of the Puerto
Rico Property Registry. The Partnerships allow for the development of world-class infrastructure at a time when the difficult financial situation of public corporations prevents them from achieving this through other means. Through the Partnerships, the People of Puerto Rico remain the owners of the projects but their risks are transferred to the private sector, which traditionally develops them more quickly and effectively.
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