San Juan Airport? SOLD!
Puerto Ricans? SOLD! to the CFC's
September 24, 2011
Puerto Rico officials on Friday chose six consortia to bid for a long-term concession to run San Juan airport in what the officials hope will be a deal worth USD$1 billion or more.
The finalists are: Zurich Airport, Camargo Correa and PSP Investments; Fraport and Goldman Sachs; GMR and Incheon Airport; Grupo Aeropotuario del Sureste and Highstar Capital; Grupo Aeropuertos Avance, and Puerto Rico Gateway Group.
Officials of the Puerto Rico Public Private Partnership Authority and the Ports Authority are looking for a concession of no more than 50 years and improvements at San Juan airport, the Caribbean's busiest, of between USD$40 million and USD$80 million over the contract's first five years.
"Puerto Rico is in a position to choose from among the best airport operators in the world to bring the Luis Munoz Marin Airport to a new level and provide an important stimulus for the island's tourism sector," David Alvarez, executive director of the island's PPP agency, said at a news conference.
Puerto Rico's international airport handled 8.6 million passengers in 2010, but is not living up to its potential, according to officials. Outbound boardings fluctuate between 4 million to 5 million annually, or half its capacity. and only half its facilities are in use.
Alvarez declined to discuss government expectations, but officials have said they expected to raise USD$1 billion from the proposed concession that had initially drawn a dozen potential bidders.
If completed, the deal, which calls for final proposals by year's end and for a winner to be chosen in early 2012, will likely be the largest airport public-private partnership in the United States under a Federal Aviation Administration pilot project.
Another agreed PPP deal, involving Chicago's Midway Airport, unwound in 2009. That deal called for a USD$2.52 billion, 99-year lease but was killed by the global financial crisis that blocked financing of the deal.
PPPs have been used widely by European and other governments for tollways, airports and other public facilities.
Critics say the deals expose taxpayers to undue financial risk, and some PPPs have soured or been scuttled.