Puerto Rico and other territories left out of healthcare reform

The Hill Alexander Bolton Healthcare is becoming an increasingly contentious issue between Democratic leaders and Hispanic lawmakers who feel that many Hispanics are being left out of the reform efforts. The latest disagreement splits powerful committee chairmen and Hispanic lawmakers over the issue of whether healthcare reforms apply to the 4 million American citizens in Puerto Rico, which is predominantly Hispanic. A new bill unveiled by Senate Finance Committee Chairman Max Baucus (D-Mont.) raises questions about whether Puerto Ricans will be able to participate in a health insurance clearinghouse intended to reduce costs for Americans living in the 50 states. Complicating the issue for Baucus and Democratic leaders are the promises President Barack Obama made to Puerto Ricans during the 2008 Democratic presidential primary. While campaigning on the island for Democratic delegates, Obama promised that Puerto Ricans would receive equal healthcare assistance. Obama lost Puerto Rico’s primary to Hillary Rodham Clinton, but advocates of Puerto Rico say he still has to make good on his promises, which he reiterated in a Jan. 2 letter to Governor-elect Luis Fortuño. “During my campaign, we pledged to seek equal coverage of Puerto Rico in federal healthcare assistance programs,” Obama wrote earlier this year. “Although it may take some time to implement all of these proposals, Puerto Rico deserves no less.” Americans living on Puerto Rico do not pay federal income tax, so some conservative-leaning members of Congress argue that they do not deserve full healthcare benefits. But proponents of equality for Puerto Ricans, such as Sen. Robert Menendez (D-N.J.) and Reps. José Serrano (D-N.Y.) and Luis Gutierrez (D-Ill.), argue that many Puerto Ricans have fought and died for the United States in wartime and are just as American as anyone else. "Excluding the residents of Puerto Rico from a health care bill -- or any bill -- that is intended to protect our families is an outrage and demonstrates the kind of hypocrisy that makes people resent Washington," Gutierrez told The Hill. "We owe more to our country and more to the Latino population, which is increasingly being pushed out of health care reform. When we effectively bar any population from buying private insurance from the exchange, we relegate them to emergency room care at the highest cost to taxpayers. The dispute also affects the other U.S. territories: Guam, the Northern Mariana Islands and the Virgin Islands, which have a total population of half a million. Residents of those territories likewise will not receive the same healthcare reform benefits as Americans living in the continental United States, Alaska and Hawaii. Under Baucus’s plan, which the Senate Finance Committee will begin marking up on Tuesday, residents of Puerto Rico and these other territories would face higher barriers to enrolling in Medicare Part B, which covers non-hospital medical services. The legislation would also provide lower Medicaid reimbursements to Puerto Rico and the territories. Baucus’s bill would increase Medicaid payments to Puerto Rico by 30 percent a year from 2011 to 2019 over the next nine years, but advocates say that provides little consolation because the federal Medicaid match is so low right now. One expert said the total increase would amount to only $1 billion. “Sen. Baucus is working to balance all of the concerns that need to be addressed in health reform, while at the same time crafting a bill under $900 billion,” said a Finance Committee aide. “He included an increase in the Federal Medical Assistance Percentage (FMAP) and an increase in the existing spending caps for all territories, including Puerto Rico. And he’s pledged to work to improve the bill throughout the legislative process.” Legislation reported by the House Energy and Commerce Committee does not guarantee that Puerto Ricans and residents of other territories will be able to participate in the healthcare exchange, which is supposed to lower costs by giving participants a choice of many competing plans. “That’s not equality,” said Serrano, who was born in Puerto Rico and moved to the mainland as a young child. “The president and the Democratic leadership should stop saying that we’re giving healthcare to all Americans.” The disparity led to a tense exchange between Serrano and Energy and Commerce Committee Chairman Henry Waxman (D-Calif.). Serrano approached Waxman recently to ask if Puerto Rico would be treated the same as the rest of the country in the healthcare reform package. Waxman said, “No, we don’t have the money.” “I told him that was the wrong answer,” Serrano recalled. It is estimated to cost about $10 billion to include Puerto Rico and the territories in the exchange. Serrano says that when House Democrats took up healthcare reform, they decided they would write a bill that met their expectations of fair reform and then weigh its cost — not pick and choose provisions that could fit under an arbitrary price tag. Serrano and other members of the Congressional Hispanic Caucus wrote a letter to Speaker Nancy Pelosi (D-Calif.) at the end of July pressing the issue. “Regardless of how difficult or tempting it may be to cut the territories out of this health reform, it simply cannot happen,” they wrote. “It is our moral obligation to provide residents of the U.S. territories with the same opportunities as everyone else.” Gutierrez, Rep. Nydia Velázquez (D-N.Y.) and Resident Commissioner Pedro Pierluisi (D) of Puerto Rico also signed the letter. Pierluisi said in an interview that he and his staff have had several conversations with the House Democratic leadership and Waxman to improve treatment for Puerto Rico. As a result of that campaign, he said, he is confident that the House bill will include Puerto Rico and the territories in the exchange. Advocates are more worried about the Senate Finance Committee bill. They are counting on Menendez and Sen. Charles Schumer (D-N.Y.) to lean on Baucus, who has very few constituents of Puerto Rican heritage in his state. Menendez, Schumer and Sen. Jeff Bingaman (D), who represents New Mexico, a state that is 42 percent Hispanic, will offer an amendment to the Finance bill allowing Puerto Rico and the territories to participate in the health insurance exchange, according to Pierluisi. Menendez and Schumer will also offer an amendment to make it easier for Puerto Ricans to enroll in Medicare Part B, Pierluisi said. Elderly residents of the island are not automatically enrolled in Part B, unlike those living in the 50 states. The amendment would also increase federal Medicaid payments to Puerto Rico. Menendez has also brought up the sensitive issue of providing healthcare assistance to illegal immigrants. Menendez has said he is concerned that Baucus’s bill would not allow illegal workers to buy health insurance through an exchange, depriving them of the cost savings of increased market competition. Menendez has also criticized the way Baucus would treat families of mixed immigration status. A family with a member or members who are not legal residents would receive lower federal subsidies than all-legal families. Menendez is a member of the Finance Committee, and his vote could decide whether the bill passes because Sen. Jay Rockefeller (W.Va.), the second-ranking Democrat, has already vowed to vote no. The National Hispanic Leadership Agenda, a coalition of Hispanic groups including the National Puerto Rican Coalition and the Hispanic Federation, have called for equal treatment of Puerto Rico in the healthcare reform package. Those groups have met with White House officials and members of Congress to press their arguments. “What’s happening is that because Puerto Ricans are not getting funding and quality healthcare, they are moving to states such as Florida and Connecticut and burdening those systems,” said Rafael Fantauzzi, president of the National Puerto Rican Coalition.

Más no es mejor que igual

El Vocero Ricardo Rosselló El título de esta columna es un argumento filosófico que parece ser un juego de palabras. Crecemos con la idea y la percepción de que lograr “más” debe, por lógica, ser mejor que lograr algo “igual”. Pero, ése no es siempre el caso. Entonces, cabe preguntarnos, ¿cuándo es que “más” no es mejor que “igual”? Yo argumento que, dentro de la situación colonial existente en Puerto Rico, el pedir “más” se nos ha virado en contra para darnos menos. Por décadas, llevamos enviando comisionados, emisarios, expertos y ciudadanos a Washington pidiendo que nos den “más”: más dinero, más foro, más participación. “Más” permite a los promotores de la colonia mantener la ilusión de progreso y, por ende, proyectar que la gente está contenta porque tiene un poco más de lo que tenía antes. Sin embargo, la realidad es que mientras sigamos pidiendo más, nunca llegaremos a ser iguales. En su génesis, el ELA fue diseñado como una etapa transitoria; fue una mutación del estado para que Puerto Rico se equilibrase económicamente, y luego decidiera entre la anexión o la independencia. El ELA fue, y sigue siendo, una mera colonia, sólo con algunos privilegios “más”. Luego de varias décadas, su diseño caducó. La percepción de “más” regresó a su origen insuficiente y antidemocrático. El ELA, que para los años 50 parecía la solución a largo plazo, y que se convirtió en el pilar filosófico del partido más grande en Puerto Rico, no es nada más que un limbo político, donde a los puertorriqueños se les prohíbe gozar de los plenos derechos de su democracia. ¿Cómo ha permanecido este esquema por tanto tiempo? La estrategia incremental del colonialista es, en tiempo oportuno, decir que está consiguiendo “más”. Los agentes de la colonia se han dado cuenta de que pueden extender su existencia con pequeños incrementos en algunas áreas. ¿Por qué escribo hoy sobre esto? Porque un ejemplo de “más” se nos aproxima con los fondos federales que serán asignados a Puerto Rico para la reforma de salud a nivel nacional. Hay varias voces ya reclamando victoria porque a Puerto Rico se le dará 500 millones de dólares. Ciertamente es una cifra que puede ayudar muchísimo, no hay duda de eso. Pero, ¿acaso el recibir “más” no nos estará empañando la visión de lo que realmente debería ser asignado a la Isla? El Senador Baucus ideó una propuesta donde se le otorgaba igualdad en el derecho a la salud a los territorios de Estados Unidos. Igualdad. ¿Cuánto nos tocaría en un escenario donde Puerto Rico sea considerado como igual?: 1,700 millones de dólares. Mil setecientos millones contra 500 millones; la comparación es muy sencilla. El costo de oportunidad por escoger “más” en lugar de buscar ser “igual” - solamente en este renglón - es de 1,200 millones de dólares que no le llegarán a los puertorriqueños. Y a esto podemos añadir el costo de oportunidad en otros menesteres como la Educación, la Seguridad Pública, el desarrollo de la infraestructura, etc., etc. Estamos hablando de miles de millones que la Isla deja de recibir por pedir “más”, en lugar de lograr la igualdad en derechos que en realidad nos corresponde por nuestra condición de ciudadanos. ¿Por qué no se habla mucho de esto? Entiendo que es porque los entes colonialistas y del status quo enfocan toda su energía en proyectar el “más” para opacar lo que verdaderamente significa ser “igual.” “Igual” no les conviene, porque les atrofia su esquema. Lo peor que les puede ocurrir a los promotores de la colonia es un colectivo abrir de ojos del pueblo de Puerto Rico. Se espantan ante la posibilidad de que finalmente nuestro pueblo se dé cuenta de la limitada realidad que vive, aún cuando está recibiendo “más”. Temen que los puertorriqueños entendamos que darnos una primaria presidencial (más) no es suficiente; y que obtener el voto presidencial (igual) nos colocaría a la par - de tú a tú - con nuestros ciudadanos americanos. Que sepamos que tener un solo representante que solamente tiene voz sin voto (más) no es suficiente. Que queramos tener derecho a votar por todos los representantes y senadores federales que permite la Constitución a todos los ciudadanos (igual). Que sepamos que si 500 millones de dólares son buenos en el vacío (más), en realidad no comparan en el contexto de poder recibir un trato ‘igual’ de más de 3 veces esa cifra. Creo que ya es hora que dejemos de recibir menos por pedir “más” y exijamos la igualdad que realmente merecemos. Vamos a ponerle fin a la colonia. El poder está en nuestras manos.

Puerto Rico Public-Private Partnerships Authority will present 25+ new projects—worth $5 billion and create a potential 120,000 jobs

Caribbean Business JOSÉ L. CARMONA *Gearing up to roll out PPPs The recently created Public-Private Partnerships Authority (PPPA), the government entity responsible for implementing public policy regarding public-private partnerships (PPPs), will hold its first Puerto Rico PPP Projects Conference Oct. 15-16 to showcase investment opportunities to potential investors for specific local projects. International companies and investors with experience and interest in establishing PPPs are expected to attend the conference at the Puerto Rico Convention Center to learn about the island, the main government-proposed PPP projects and the new law guiding the establishment of PPPs in Puerto Rico. The PPPA currently has some 32 projects submitted by government entities (agencies and public corporations). These don’t constitute the official PPP project inventory but have the potential to become PPPs provided they pass the PPPA’s evaluation process. The goal of the PPPA, a Government Development Bank (GDB) entity, is to move at least 25 of the top-priority projects, with an estimated investment of at least $5 billion and the potential to create 120,000 jobs (over a period of several years), to the request for qualifications (RFQ) and request for proposals (RFP) phases by year-end. Priority projects submitted by government entities to the PPPA include: landfills; reservoirs; powerplants that use alternative or renewable sources of energy; transportation systems; health, security, education, correctional and rehabilitation facilities; low-income housing projects; facilities for sports, recreation, tourism and cultural activities; ground and wireless communication systems; and high-technology information and mechanical systems. *PPP legislation is key Just three months ago, Gov. Luis Fortuño signed into law Act 29 of June 8, 2009, more commonly known as the PPP Act. The law is the cornerstone of the Fortuño administration’s efforts to spearhead much-needed infrastructure and public works projects that the central government, its agencies and public corporations simply can’t afford to undertake alone. “There are a lot of public-works projects that we want to do, but there’s a reality about the government’s availability of funds. We all know the fiscal situation the island is going through, and this law allows us to do some of these projects in partnership with the private sector, which will bring capital and expertise to the table. This law is not only important as a financing mechanism, but also as an element of economic development and job creation to reactivate the island’s economy,” GDB Executive Vice President Fernando Batlle told CARIBBEAN BUSINESS. “I firmly believe PPPs are going to be a very useful tool for everyone.” Batlle downplayed criticism the law is too restrictive or elaborate to the point it could hinder the establishment of PPPs, indicating so far feedback from investors and financial institutions has been extremely positive. “Our PPP law is the most far-reaching legislation in the nation right now. When I say far-reaching, we must bear in mind the public interest must be protected. In that sense, this law has all the necessary elements to protect the public interest, which gives investors what other jurisdictions can’t provide—security and transparency in the process,” Batlle said. “That’s something we didn’t have before to foster PPPs. The law is very clear on what can and can’t be done, what resources are required from the investor and the time these transactions can cover. People who look at the process could say it has a lot of steps, but at least there’s a clear process that establishes the steps to take,” he said. Batlle left the door open to making improvements to the law during the implementation process. “There’s room for improvement. During the implementation process, we will pay attention to what the private sector is looking for to do good for both the private and the public sectors. Again, safeguarding the public interest is paramount, and that’s how we will do things to make them functional,” Batlle said. *The role of the PPP Authority Among other things, the law established the PPPA as the sole government entity authorized and responsible for implementing the public policy on PPPs and for determining the functions, services or facilities for which such partnerships are to be established. The PPPA is a public corporation attached to the GDB. The duties and powers of the PPPA are to be discharged by a board of directors constituted by five members and chaired by GDB President Carlos García. Gov. Luis Fortuño announced the selection of the new board members last week and they were slated to hold their first meeting last Wednesday. The governor accepted the nominations of attorney Luis Berríos Amadeo and Dr. Hernán Padilla to represent the public interest, which were made by Senate President Thomas Rivera Schatz and House Speaker Jenniffer González, respectively. The other PPPA Board members are García, Treasury Secretary Juan Carlos Puig and Planning Board President Héctor Morales Vargas. *PPPA to pick up speed David Álvarez, PPPA executive director, senior adviser & assistant to García, is the point man for the Fortuño administration’s efforts on the PPP front. “This first board meeting is pivotal because all directors will be briefed on the progress and guidelines moving forward in terms of the projects we want to present to prepare for our first Puerto Rico PPP Projects Conference next month,” Álvarez said. “Things will pick up speed pretty quickly.” The PPPA has already conducted an initial evaluation of the submitted projects to be presented at the conference. “The purpose of this conference is to showcase the opportunities available in Puerto Rico for local and nonlocal investors, bank executives, consultants and others. The goal is to make this event open to the local public as well as people from the U.S. mainland interested in PPPs. The idea isn’t to make the event a conference strictly on what we would like to do, but rather showcase all these projects, show what we visualize happening and have attendees understand the ramifications and magnitude of these projects,” Álvarez said. Álvarez noted the submitted projects cover the island’s main basic infrastructure needs in areas such as energy, transportation, health, water, communications, security and education. “I believe there are interesting infrastructure projects in all areas,” Álvarez said. The PPPA Board will conduct further analysis on each of the projects to determine whether it is advisable to carry them out in terms of serving the public interest, their financial viability and ultimately whether to establish a PPP. The list of submitted projects is available on the PPPA’s website at www.p3gov.pr. *Layers of protection To further ensure transparency throughout the PPP evaluation process, the PPPA will create a partnership committee for each PPP project that will be responsible for selecting proponents and negotiating contracts. “What this means is that each PPP opportunity, each PPP project will have its own partnership committee with a dedicated group of people structuring the PPP contract. In a sense, it is much more reliable because this group will be working with the PPP project from start to finish,” Álvarez explained. “It isn’t the same when a particular government agency has to do everything on its own because the dedication wouldn’t be there.” Each partnership committee will have five members: the GDB president or a delegate; an official from the partnering government entity with direct authority in the project; a member of the board of directors of the partnering government entity or, in the case of government entities with no board of directors, the head of the partnering government entity; and two officials from any government entity chosen by the PPPA Board for their knowledge and experience in the type of project under consideration. Under the new PPP law, the Legislature will also convene a Joint Committee on Public-Private Partnerships. It will be composed of four senators and four representatives, with one minority lawmaker from each chamber. The joint panel will have jurisdiction to examine, investigate, evaluate and study all matters related to PPPs. *RFQS and RFPs by year-end As for a timetable for these projects becoming full-fledged PPPs, Álvarez said the PPPA and the GDB were aiming to have the first RFQs and RFPs before the end of this year. “Our interest and aim is to speed up the projects and move them to the construction phase as soon as possible. However, first, we need to run the structure and test it in all its capacities to see how efficient it can be in accelerating infrastructure investment,” Álvarez said. When PPP projects enter the construction phase will depend on each project, Batlle said. There are projects that due to their complexity and size will take more time to get started, perhaps eight months or more (such as the PR22 extension), while others (such as a desalinization plant) could take less time getting off the ground, he said. People often tend to focus PPPs on large, complex projects, but there are many opportunities for smaller PPP projects as well, Batlle said, adding the varying sizes of the submitted PPP projects make them even more appealing to investors. Taxpayers could see the first PPP projects come online by late 2010 or early 2011. Batlle highlighted the fact that both the PPP law and the PPPA are fundamentally geared toward speeding up projects and ensuring infrastructure investment can begin. “There are steps we need to take, but the main objective is execution. We are ready to execute, we are ready to go,” Batlle said. “Of course, we would like to see things move faster, but I believe we are moving at a very good pace.” *P.R.’s standing in the PPP world Asked how the island compares with other jurisdictions that rely on PPPs such as France, Brazil, Canada, Australia, England, the U.S. mainland and Chile, Batlle stated emphatically: “Very favorably.” “Because our framework, the law, is very clear and specific and removes much of the uncertainty that sometimes occurs in the process, and that’s very important. It clearly establishes the process in terms of how you negotiate and the steps to follow,” Batlle said. “That’s something that doesn’t exist in many jurisdictions.” Also, the island is a legal and politically stable jurisdiction with a stable currency (dollar), which provides investors with a level of certainty not seen in many international jurisdictions, he said. “At a time when there’s so much uncertainty in the world, I think PPP investors will see Puerto Rico in a good light,” Batlle said. Héctor del Río, president of the local chapter of the Associated General Contractors of America (AGC), agreed, adding government credibility is vital to attracting high-caliber PPP investors to the island. “When you are going to invest $500 million or $1 billion in a project, you want to make sure the investment is safe and you expect a process where the project will have continuity no matter who is in charge of government. Also, it’s very important to have a process where all your questions are answered,” Del Río said. “Fortunately, Puerto Rico enjoys advantages not found in other Latin American countries, because investors will be investing in a U.S. territory with U.S. dollars. The same stability and continuity we enjoy every election has to be projected to PPP investors,” he said. As a small Caribbean island of 3,400 square miles, Del Río said Puerto Rico enjoys unique market opportunities not found anywhere else, which could be very attractive for PPP investors. He cited the fact that few islands have four international airports within its boundaries: San Juan, Aguadilla, Ponce and Ceiba, which also holds the potential as a major seaport. The island also boasts already developed seaports in San Juan and Guayanilla and the Port of the Americas transshipment hub in Ponce, which has been in the making for years and is nearing completion. These, too, could be turned into PPPs, he said. In fact, negotiations are already underway between the GDB and a South Korean conglomerate to complete and manage the Port of the Americas. “If the government isn’t financially capable of developing these airports and seaports as needed, then it should seek investors willing to do it, because the end benefit will always be for Puerto Rico,” Del Río said. Del Río said the government should push transportation PPPs first. He cited proposed light-rail projects to Old San Juan, Carolina and Caguas, and the expansion of the island’s toll-roads, including the extension of PR22 between Hatillo and Mayagüez, the second phase of PR66 between Canóvanas and Fajardo and converting PR30 into a toll-road between Caguas and Humacao. That could also open the door for the establishment of concessions (convenience stores, retail shops and gas stations) throughout the island’s expressway system, creating jobs and economic activity in the process, he said. “Even the Urban Train is a candidate for a PPP, as the Highway Authority is running a $110 million deficit each year. If you can find someone who can run it for half that, it could be viewed a success,” Del Río said. Del Río said the fact contractors in a partnership established under the PPP law will be subject to a fixed 10% income-tax rate over net income during the life of the contract is an added benefit to investors who want to do business here. *Misconceptions and models Álvarez noted misconceptions and ignorance of PPPs among island sectors that were often aired during the period prior to the passage of the PPP law. “That’s nobody’s fault, as Puerto Rico isn’t a jurisdiction with vast and solid experience with PPPs. This isn’t Canada, for example, which is very mature with PPPs,” Álvarez said. The biggest misconception about PPPs, according to Batlle, is that they are the same as privatization. “That’s a very unfounded stigma, because the concept of privatization is very far from a PPP. Basically, a PPP is how you pair up the best of the private sector with the financial limitations of the public sector and make it work to benefit both parties,” Batlle said. In a nutshell, a PPP is a contractual agreement between a government agency and a private sector or nongovernmental entity. It allows for greater participation of the private sector in the development and financing of infrastructure and provision of services; improves the fiscal condition of public corporations and the general fund; encourages innovation; and maximizes government assets. A PPP accelerates the design and build phases of a project, while the public entity keeps ownership of the asset. Contracts are usually long-term (50-99 years) to assure investors will receive a return on their investment. “Without exception, all the jurisdictions that use the PPP model experience faster construction of infrastructure projects at a lower cost. One of the beauties of PPPs is that several contract modalities can be used,” Álvarez said. The three basic types of PPP contracts are: design / build, design / build / maintain and design / build / maintain / operate. There are two methods of private-sector compensation: through user fees (such as tolls) and availability of payments (government makes periodic payments to the private-sector entity). “Another myth is that PPPs have no cost for the government, and that isn’t true. There’s an investment the government has to do to make PPPs viable for the investor, such as expropriations,” Del Río said. “To be a major player in the PPP leagues, the government entity must invest $10 million to $15 million in feasibility studies and statistics. For PPPs to work, we also need an agile planning and permits system so investors don’t get disappointed during the process,” he said. The local AGC president suggested the government should find a way to fund on its own those submitted projects that don’t make it as a PPP, as it shouldn’t place all its infrastructure projects into the PPP basket. Public-private partnerships gain ground around the globe As governments around the world face shrinking budgets, more are looking to PPPs to fund infrastructure development Public-Private Partnerships (PPPs) have long enjoyed significant popularity around the world, especially in Europe, Asia and Latin America. According to media reports, more than 1,000 such partnerships were signed in the European Union alone between 1990 and 2005 for a combined investment of more than $285 billion. While PPPs aren’t new to the U.S. and Puerto Rico, there has been heightened interest in their use for transportation and other infrastructure projects as federal, state and local governments face increasing budget limitations to fund vital capital works. In February, for example, California Gov. Arnold Schwarzenegger signed a law allowing the California Department of Transportation (Caltrans) and regional transportation authorities (RTAs) to enter into an unlimited number of PPPs for the construction, operation and maintenance of the state’s transportation infrastructure. In April, the North Carolina Turnpike Authority signed a PPP for a predevelopment study for that state’s first toll bridge. The American Society of Civil Engineers’ “Report Card for America’s Infrastructure” gives the overall condition of the nation’s infrastructure a "D" grade and calls for an investment of $1.6 trillion in infrastructure over the next five years. PPPs have emerged as one tool that may help states and other public entities address a portion of their infrastructure deficits. California became the first state to pass legislation allowing the creation of PPPs to build toll roads. In the 20 years since, more than 20 states have followed California’s example in passing transportation PPP laws, with Texas, Virginia and Florida joining the Golden State in the forefront of PPP-based infrastructure development. Several states have PPP toll projects currently in operation, such as the Chicago Skyway in Illinois and the Northwest Parkway in Colorado. Others have projects in the development stage, such as the I495 / Capital Beltway High Occupancy Toll (HOT) Lanes project in northern Virginia and the addition of 10.5 miles of variable toll express lanes to I595 in Broward County, Fla. Some states are negotiating projects, including a $2.7 billion project for the reconstruction of the I635 / LBJ Freeway and the $1.6 billion North Tarrant Express project, both in Texas. In the highway arena, increased tolling to expand capacity is spurring additional interest in PPPs in the U.S. According to the American Association of State Highway & Transportation Officials (AASHTO), between 2000 and 2006, 30% to 40% of the approximately 150 miles of new expressways built nationally each year were financed through tolls. By 2030, the percentage of new arterial roads in metropolitan areas financed through tolling may increase to nearly 50%. *Tapping private-sector expertise As federal, state and local governments struggle more economically, they are finding ways to involve the private sector to fund the money needed for infrastructure projects and PPPs are one such way. According to some economists, PPPs are also a way for people who use a certain highway, bridge or other PPP facility to pay for it through the use of tolls, instead of all taxpayers in a state paying for something they may never or very seldom use. “The private sector is usually more efficient and can get an asset built on a quality and performance level that is good for taxpayer dollars. So, with PPPs, it’s basically how you take advantage of the private-sector expertise and use it to get a public asset funded over a period of time through lease payments,” Doug Pruitt, national president of the Associated General Contractors of America (AGC), told CARIBBEAN BUSINESS. On a professional level, Pruitt’s general contracting company, Tempe, Ariz.-based Sundt Cos., has been involved in several PPPs, including a 600-unit family-housing complex for the military and a building facility for the Arizona Fish & Game Department. In the case of the building facility, Pruitt’s firm joined the developer to build the project, which was then leased to Arizona Fish & Game. “By using the facility, they get to stretch the payments over 20 to 30 years and ultimately will own the facility at the end of the lease versus having to pay upfront for the construction,” Pruitt explained. “It’s a way for them to use the funds for other things and ultimately own the facility anyway.” The national AGC president is convinced Puerto Rico and the rest of the world will see more PPPs as the public sector simply doesn’t have the money it used to and is now obligated to a host of other priorities, making it impossible to keep up with needed infrastructure. “PPPs aren’t just about highways anymore. We are talking about public buildings and support facilities in all sorts of ways that the government can tap into innovation that exists in the private sector. It’s a much better and more innovative way of procuring construction than 30 years ago,” Pruitt said. *Chile’s 20-year record of success with PPPs Just as with Puerto Rico, Chile tapped into PPPs amid a serious economic crisis during the 1980s as the South American country was looking to open its economy. “The circumstances at the time demanded Chile become an exporter. That required investment, and the only way was to open its economy to the markets,” Javier Hurtado, president of the Construction Chamber of Chile, the country’s leading construction industry trade organization, told CARIBBEAN BUSINESS. “The first thing that resulted from that was the creation of the private pension funds, followed by the complete privatization of Chile’s electrical and water systems and most of its seaports.” These events required legislation for the creation of PPPs by the late ’80s and early 1990s. According to Hurtado, the Chilean legislation, just as the recently enacted one in Puerto Rico, was extremely important as it established the legal framework and bylaws for participants in PPP investments. “From that point on, Chile engaged in numerous PPP projects, to the point that today, infrastructure investment in Chile through PPPs surpasses $11 billion. Highways were first, followed by penal institutions and, more recently, hospitals,” Hurtado said. Recent surveys among users of PPP projects in Chile rated the services provided very favorably, Hurtado said. “The main message here is that management and maintenance contracts for these facilities are long term, which in a way guarantees these PPP projects are financially viable as facilities have to be updated and kept in good condition during the life of the contract,” noted Hurtado, who was one of the keynote speakers during the annual local AGC convention last weekend..

P.R. public employment higher than States

Caribbean Business JOHN MARINO Puerto Rico’s government employs far more workers than most states and appears to have the highest per capita level of public employment in the U.S., according to federal and local labor and population statistics. The central government employed 235,300 workers in July 2009, the most recent statistics released by the Labor Department. When the island’s 61,700 municipal workers are factored in, the total increases to 297,000. Only the three most populous states employ more workers at the state level than Puerto Rico: California with 334,432 employees, Texas with 259,578 and New York with 236,719. On a per capita basis, Puerto Rico employs 5.95 workers per 100 residents in the central government and 7.51 workers per 100 residents in the central and municipal governments combined, based on the most recent U.S. Census Bureau population statistics, which pegged the island population at 3.954 million in 2008. New York State employs 1.21 state workers for every 100 residents, a ratio that increases to 4.24 workers per 100 residents when county, township and municipal workers are also counted. California, meanwhile, employs 0.9 workers per 100 residents at the state level, while the ratio in Texas is 1.06 per 100 residents. Florida employs 0.93 workers per 100 residents at the state level and 2.4 workers when all local government workers are included. In Washington state, 1.53 workers are employed by the state for every 100 residents, a figure that goes up to 2.68 workers when county, municipal and township employees are factored in. In New Jersey, there are 1.65 state workers employed for every 100 residents, a figure that goes up to 2.35 per 100 when other public employment is factored in. The two states with the closest populations to Puerto Rico are Kentucky, which employs 1.60 state workers for every 100 residents (2.62 workers when all local government is included), and Oregon, which employs 1.38 state workers for 100 residents (2.39 per 100 residents when all public workers are counted). Only sparsely populated and geographically giant Alaska has per capital public employment ratios that approach Puerto Rico. With a population of 686,293, there are 3.44 state employees for every 100 residents and 6.8 state, county and municipal employees for every 100 residents. In May, dismissal notices were sent out to some 7,816 Puerto Rico government workers in the first round of what could approach 30,000 layoffs by the end of the calendar year. Gov. Luis Fortuño reiterated last month that $2 billion must be cut from annual government spending. Administration officials say a restructuring of government to bring spending in line with revenue is needed to avoid a downgrade of the Commonwealth’s bond rating to junk, or noninvestment-grade. Last week, the Center for the New Economy warned government layoffs would deal the biggest blow to the island’s middle class which, in turn, would have negative economic consequences. The Planning Board said the economy shrank by 5.5% last year, and the unemployment rate hit 16.5% in July, according to the Labor Department..

El PPD perpetua el inmovilismo

El Vocero Maricarmen Rivera Sánchez La Junta de Gobierno del Partido Popular Democrático (PPD) se reunirá hoy martes para discutir una nueva propuesta de status que define el Estado Libre Asociado (ELA) como una opción “de centro”. El representante Jorge Colberg Toro presentará el manual que preparó y que detalla la nueva filosofía del PPD sobre el status en 45 páginas. El documento debe ser aprobado por la Junta antes de encaminarse como la nueva filosofía de la colectividad. “El Partido Popular va a fortalecer el centro”, dijo Colberg Toro. “Las propuestas de los soberanistas tienen cabida, pero no es fuera de la Constitución de Estados Unidos ni subordinados a la Constitución de Estados Unidos”. Para los populares, el tema del status ha provocado serias grietas desde que perdieron las elecciones en noviembre. Las facciones más evidentes son las de los más conservadores, que buscan perpetuar una anexión con Estados Unidos y el grupo de los más liberales, que insisten en buscar una soberanía, pero que tampoco quieren despegarse del norte. Ambos grupos mencionan la definición de 1998 a la hora de hablar del ELA. El documento que recibirá la Junta mañana argumenta que la soberanía “no es la independencia ni la separación porque ese concepto no está relacionado a ninguna fórmula de status en particular, sino más bien a un ejercicio del poder de decidir irrespectivo de las fórmulas de status”. La propuesta que recibirán los miembros de la Junta es que se persiga un status en el que Puerto Rico pueda negociar con Estados Unidos asuntos como las leyes federales que aplicarán aquí. Estas nuevas delimitaciones, dijo Colberg Toro, son las que estarían contenidas en el denominado ‘Pacto Bilateral’. Incluyen eliminar la Ley de Cabotaje. Buscarían cambiar dos artículos de la Ley de Relaciones Federales: el que obliga a Puerto Rico a cumplir con las leyes federales y otro para permitir que el Gobierno federal traspase a la Isla las propiedades que tiene aquí, pero sólo las que no usa. La jurisdicción del Tribunal federal en la Isla se limitaría a los aspectos que se delimiten en el nuevo “pacto”, según explicó el representante. El nuevo “pacto” de los populares mantendría intactas la ciudadanía estadounidense, la moneda y la participación de los puertorriqueños en el Ejército. “El objetivo del plan se resume en desarrollo económico con crecimiento autonómico”, reza el documento que recibirá la Junta. “El nuevo discurso del Partido Popular está orientado no en las vivencias del pasado, o en las interpretaciones de la historia, sino más bien en la planificación del futuro”. Gran parte del documento está dirigido a hablar de los “peligros” de la estadidad y a detallar los beneficios que obtiene Estados Unidos de su relación con Puerto Rico. Entre los peligros de la estadidad menciona el pago de contribuciones federales..