Forging Successful PPPs in Puerto Rico

Transcription

1 Forging Successful PPPs in Puerto Rico Mr. David Alvarez Executive Director Puerto Rico Public-Private Partnerships Authority June 8, 2010

2 Disclaimer The Studies here presented seek to determine whether the establishment of certain proposed private-public partnerships (or PPPs ) is advisable. The Studies were prepared pursuant to the requirements of the Public-Private Partnerships Act (the Act ) and the Regulation for the Procurement, Evaluation, Selection, Negotiation and Award of Public-Private Partnership Contracts under Act No. 29 of June 8, 2009 (the Regulation ), adopted by the Public-Private Partnerships Authority (the Authority ) on December 19, The Studies were commissioned to different advisors (the Advisors ) as part of financial, procurement and technical advisory engagements between the Advisors, the Partnering Government Entities and the Authority for the evaluation of the proposed PPPs. The Partnering Government Entities and the Authority assisted the Advisors in the preparation of the Studies. The compensation of the Advisors was not conditioned in any way on the outcome of these Studies. The Studies are based on estimates, assumptions and market information obtained from sources believed to be reliable. Actual results may vary from those anticipated in the Studies. Changes in the different relevant industries (education, energy, toll roads, potable water distribution and airport operations) and the general economy may occur which can alter the assumptions and conclusions presented in the Studies. The Authority makes no representation or warranty whatsoever, including representations and warranties as to the accuracy or completeness of the information contained in the Studies, including estimates, forecasts or extrapolations. The Authority expressly disclaims any liability for any representations or warranties, expressed or implied, contained herein or for any omissions from the Studies or for any other matter related to the Studies. The Act and the Regulation, as well as all applicable Puerto Rico and federal laws and regulations, will govern the dissemination of the Studies. 2

3 Puerto Rico s PPP Framework The PPP Act The Government approved Act No. 29 of June 8, 2009, known as the Public-Private Partnership Act ( Act ). Favor the establishment of PPPs in order to complete projects that develop and maintain infrastructure, A PPP Public Policy Share the risk of developing, operating and maintaining PPP projects, and Place responsibility on the P.R. Public-Private Partnerships Authority for implementing the public policy on PPPs. 3

4 Priority Projects under the PPP ACT Landfills Water reservoirs Power plants that use alternative sources of energy Transportation systems Priority Projects Health, security, education, correctional and rehabilitation facilities Low-income housing projects Facilities for sport, recreation and cultural activities Ground and wireless communication systems High technology information and mechanical systems 4

5 Full framework implemented by a dedicated PPP Authority PPP AWARD PROCUREMENT PROJECT SELECTION Bottom-up development PROJECT ANALYSIS REGULATIONS DEDICATED TEAM BOARD OF DIRECTORS PPP LEGISLATION PPP PUBLIC POLICY 5

6 Significant progress since the approval of the PPP Act PPP Pgm. Progress Approval of PPP Act Jun-2009 Board of Directors / Team Sept-2009 PPP Conference Oct Projects and Regulations Dec months for the implementation of the Program Project Teams Formation Jan-Feb 2010 Desirability Studies Mar-May 2010 Procurement Begins June-Sept months dedicated to preparation of projects for procurement phase 6

7 Progress in the P3 process COMPLETED 1 Getting ready for Procurement 2 Procurement Process 3 Winning Bidder Desirability & Convenience Study RFQ* RFP** Final Proposals Selection of Winning Bid Analysis to determine if the P3 project is convenient for Puerto Rico. Desirability and Convenience Study is posted on the P3 website. Proponent Qualification process. RFQ is posted on the P3 website Proposals are submitted by a handful of qualifiers. Q&A sessions are held. RFP is posted on the P3 website. Qualifiers submit there final proposals. Winning bidder is posted on the web. 7

8 PPP Opportunities in Puerto Rico 8

9 PPP Opportunities in Puerto Rico PR-22: busiest toll road in PR PR-52: longest toll road in PR PR-66: only corridor in the East Natural Gas Plant: Costa Sur LMM Int l Airport: busiest airport in the Caribbean Water Metering: improvement of water metering system 5 Infrastructure Areas = Great Opportunities There is a clear need and consensus that investment in core infrastructure is needed Mix of Brownfield and Greenfield opportunities Favorable asset sizes Clear legal and regulatory framework Transparency through the public release of desirability studies, RFQs and RFPs. * NG = Natural Gas.. 9

10 Toll Roads Project Factor Description of the Project Status: Description Concession toll roads in Puerto Rico in four phases: Phase 1: PR-22 & PR-5 Phase 3: Brown/Green: PR-66 & PR-53 Phase 2: PR-52 & PR-20 Phase 4: PR-22 Greenfield P3 Project Model: DBFOM¹ Desirability Study has been completed. Partnership Committee has been established Preparing for the RFQ phase. Toll Road PR-22 Toll Road PR-66 Next Steps: Launch RFP Finish drafting RFP and PPP Agreement 10 ¹ Design Build Finance Operate Maintain

11 Toll Roads Program Brownfield Phase I 2 Brownfield Phase II 3 Brownfield/Greenfield 4 Greenfield 11

12 LMM International Airport LMM is the busiest airport in the Caribbean Stable growth in its cargo and hangar operations Airport PPP Opportunity Brownfield core infrastructure LMM is the gateway to the Caribbean and has the capacity to became a mayor hub to Central and South America Puerto Rico s PPP of LMM would be the first of its kind as a FAA regulated airport In millions Total Enplanements xxxxxx at LMM Food & Beverage Revenue xxxxxx (per enplanement) per enplanement $2.29 In millions Cargo and Hangar Revenue $10.4 $9.3 $ $1.23 $1.07 $1.04 $5.2 $0.70 $0.57 $0.16 $1.6 $2.8 $ JFK MIA ORD LAX DFW ATL SJU

13 LMM International Airport Project Factor Description of the Project Description Concession of the Luis Munoz Marin International Airport to a Private Operator. P3 Project Model: DBFOM¹ Aerial Pictures Luis Munoz Marin International Airport Status: Desirability Study has been completed. Partnership Committee has been established. Next Steps: Preparing for the 65% airline agreement required by FAA Drafting of RFQ 13 ¹ Design Build Finance Operate Maintain

14 Energy Project Puerto Rico has a clear need to diversify its fuel sources Project with strong construction component Energy PPP Opportunity The new natural gas plant will reduce PREPA s oil consumption by 9% The project is capable to deliver substantial saving to PREPA Positive outlook for Natural Gas prices Second highest cost per KH Jurisdiction in the US Positive outlook for Natural Gas vs. Oil Oil is near 70% of the fuel consumed by PREPA $80.61 $4.50 Crude Oil Prices 2 $ $8.75 Price for Natural Gas 15.7% 16.2% 0.6% Oil Natural Gas 67.5% Coal Hydroelec tric HI PR MA NY CA TX IL FL Source: Public Building Authority, Public-Private Partnership Authority Department of Education and Desirability and Convenience Study for Schools for the 21 st Century., Data corresponds only to the Public Building Authority

15 Energy Project Factor Description Aerial Pictures Costa Sur Description of the Project The construction of a New Natural Gas Combined Cycle Plant with a capacity of 270 MW replacing units 1-4 of Costa Sur complex P3 Project Model: DBOOT¹ Status: Desirability Study has been completed. Partnership Committee has been established. Next Steps: Drafting of RFP 15 ¹ Design Build Own Operate Transfer

16 Water Metering Project 63% of PRASA s production is unaccounted relative to an average of 10% in US. Outdated metering technology affects PRASA: Water PPP Opportunity Water monitoring system High level non-revenue water Commercial inefficiencies Recovering these commercial losses represents the largest single opportunity for PRASA s improvement. Low reading from meters Compared to other Technologies Percent % of reading of Meters from Read the meters 99.9% 99.6% 99.8% Best Best Water Performer Full Performer Industry Avg. AMR Minimal AMR 77.5% PRASA Million Gallons per Day Production Deliveries Non Revenue Water Trend for PRASA From 1981 to 2009 water production increased by 262 mgd 1981 From 1981 to 2009 metered deliveries reduced by 9 mgd Year Unaccounted-for Water (63%) Source: Public Building Authority, Public-Private Partnership Authority and Desirability and Convenience Study for The Implementation of Advanced Technologies for the Reduction of Non-Revenue Water for PRASA.,

17 Water Metering Project Factor Description of the Project Status: Description Implementation of advanced technology system to reduce non-revenue water and re-engineering of commercial services. P3 Project Model: DBO¹ Desirability Study has been completed. Partnership Committee has been established. Preparing for the RFQ phase Manual Metering System Next Steps: Drafting of RFP and PPP Agreement 17 ¹ Design Build Own

18 Concluding Remarks 1. Infrastructure investment is essential for economic development. Puerto Rico has clear needs to restore investment in infrastructure through PPPs. 2. The P3 Authority is committed to making progress the reap the benefits of the implemented PPP framework. 3. Puerto Rico is an island of opportunities with a pipeline of P3 projects in a variety of sectors. Visit: 18