* Officials hope deal will boost airport use, tourism
* Forty-year agreement valued at $2.57 billion
Feb 26 The U.S. Federal Aviation Administration
signed off on Tuesday on a 40-year lease of Puerto Rico's Luis
Munoz Marin International Airport to Aerostar Airport Holdings
LLC, making it the first large U.S. airport to be placed in
The deal for the Caribbean's busiest airport, with nearly 9
million passengers a year, is a milestone in Puerto Rico's
privatization program and a bid to expand tourism to help an
economy that has long been ailing.
Puerto Rico officials have valued the deal at $2.57 billion,
which includes a $615 million up-front payment and annual
revenue-sharing payments estimated to add up to $552 million.
The balance of the deal involves investment in modernizing
and improving the airport. Aerostar has pledged to invest an
average $46 million in the facility each year, or more than
three times the current $13.5 million average annual investment.
"The selected private operator is qualified to operate the
airport, meets federal expectations regarding grant assurances,
and can comply with general statute requirements relating to
airports," the FAA said in a 40-page decision released on
AAH is comprised of Aeroportuario del Sureste, which
operates nine airports in Mexico, and Highstar Capital, which
has made investments in Baltimore and London and has close
relationships with British Airways, Lufthansa and Air France.
The deal will provide new cash to bail out the island's
Ports Authority, which is weighed down by nearly a billion
dollars in long-term debt and lacks the financial strength to
tap U.S. municipal bond markets.
But officials say they also want to grow the airport through
the deal, which would lift tourism as the island struggles to
recover from six years of recession.
Puerto Rico selected Aerostar last July after a competitive
process that originally attracted a dozen bidders. Gov.
Alejandro Garciá Padilla, elected in November, said he would
support the deal to protect the island's credibility in the
international investment community.
But the new governor has stated his opposition to P3s where
existing government assets are leased out to the private sector
and supports only private partnerships in the development of
public works the government cannot afford to build.
In 2011, Puerto Rico undertook a 40-year concession of toll
roads PR22 and PR5 to Metropistas to a consortium comprised of
Spain's Abertis Infraestructuras and the Goldman Sachs
Investment Fund. That deal gave the government a $1.136 billion
upfront fee, a commitment to invest $56.1 million in immediate
improvements, plus another $600 million in coming years.