Airport workers strike over privatization

Dozens of Brotherhood of Ports Authority Employees members were demonstrating outside the airport.

“We are against privatization,” said union President Astrid Rosario Ortiz.

The union boss charged the Ports Authority has neglected upkeep on the airport to drum up support for its privatization. The workers are also raising red flags about a standoff over economic clauses in collective bargaining talks.

The labor group represents nearly 200 workers at Luis Muñoz Marín International Airport and others at the island’s regional airports.

Port Authority Board Director President Ruben Hernandez-Gregorat said the agency does not have enough funds to keep operating and improving the airport. He said all airport employees will retain their jobs.

The Puerto Rico Private Partnership Authority (PPPA) announced last month that it has selected consortia Grupo Aeropuertos Avance (GGA) and Aerostar (AAH) Airport Holdings LLC to put in final bids for a long-term concession to run the Luis Muñoz Marín International Airport.

A final decision on which of the two consortia will land the contract is expected this month and a Federal Aviation Administration review would probably run through September, when the deal could be finalized.

Officials want a concession of 40 years, and are looking for an immediate investment of up to $60 million, plus a long-term investment and maintenance commitment.

They also expect a hefty upfront payment, which will be used to lower the cash-strapped Ports Authority’s nearly $1 billion long-term debt. Ports will also get a percentage of the winning consortium’s earnings from the airport each year.

The government has said a major factor in picking an operator will be a group’s proven ability to develop new air routes and increase passenger traffic, as officials aim to remake Puerto Rico’s main airport into the gateway to the Caribbean, with more connections with the U.S., Europe and Latin America sought.

A PPP at Puerto Rico’s main airport is meant not only to shore up the battered finances of the Ports Authority, but also to transform the Caribbean’s busiest airport to realize its full potential as an economic-development asset.

If completed, the deal will likely be the largest airport PPP in the U.S. under an FAA pilot project, which was recently expanded to include 10 airports.

This is the second large PPP deal Puerto Rico is working on. Last year, Puerto Rico undertook a 40-year concession of PR22 and PR5 to Metropistas, a consortium comprised by Spain’s Abertis Infraestructuras and the Goldman Sachs Investment Fund, which gave the government a $1.136 billion upfront fee, a commitment to invest $56.1 million in immediate improvements, plus an additional $600 million over the contract’s life. It was the biggest deal in the U.S. since 2006 and is being hailed as a model for other jurisdictions to follow.