Nov 13 Puerto Rico's governor-elect pledged
Tuesday to not scuttle a $2.57 billion deal to privatize the
island's Luis Muñoz Marín International Airport, saying voiding
a signed contract would hurt its credibility among international
Gov.-elect Alejandro Garcia Padilla of the Popular
Democratic Party campaigned against public private partnerships,
in which government assets are leased out to private operators,
unless such deals created public works that governments cannot
afford to build.
Garcia Padilla a week ago narrowly defeated Republican Gov.
Luis Fortuño of the New Progressive Party, who championed PPPs
as a way to jump start Puerto Rico's long-stalled economy.
Fortuño also cut government spending and laid off some 30,000
government workers in austerity moves encouraged by Wall Street.
Garcia Padilla's victory created doubts about the airport
deal being completed and other parts of Fortuño's economic
"There is a signed contract and I have to uphold the
credibility of the Puerto Rican people before the world. I need
the people who have come to invest to invest," Garcia Padilla
said in a video interview with the El Nuevo Dia newspaper.
Garcia Padilla, who said he was working to prevent possible
ratings downgrades of Puerto Rico's bonds, added: "What I won't
allow is that this contract (to be) used to increase the costs
of services for the public or to fire workers at the airport."
Fortuño's administration in July struck a 40-year deal worth
$2.57 billion in cash and improvements with
Aerostar Airport Holdings LLC to run Luis Munoz Marin airport,
the largest in the Caribbean. The deal is awaiting final
approval from federal regulators.
The airport privatization was the second large PPP deal for
Puerto Rico in as many years. In 2011, Puerto Rico undertook a
40-year concession for toll roads PR22 and PR5 worth over an
estimated $1.8 billion.
Garcia Padilla also said he was "fighting so that (ratings
agencies) don't downgrade our bonds by the end of the year. The
deficit and debt has increased so much that our bonds are in
danger of being downgraded."
Standard & Poor's Ratings Services said last week there was
a 33 percent chance that Puerto Rico's credit ratings could be
downgraded. S&P rates the island's general
obligation debt BBB and its appropriation debt BBB minus.