PR to name winner of airport PPP

Grupo Aeropuertos Avance (GAA) and Aerostar Airport Holdings LLC (AAH) were chosen last month from a field of six to place final bids to operate the Caribbean’s busiest airport.

The Puerto Rico government is looking for a concession of 40 years, and for immediate improvements at the airport of $50 million over the first five years of the contract, as well as for a commitment for longer-term investment over the life of the contract.

Puerto Rico expects to receive an upfront payment that will allow the cash-strapped Ports Authority to pay down some of its nearly $1 billion long-term debt, as well as an annual payment based on the amount of money the operator earns from the facility over the life of the contract.

GAA is a consortium headed by Ferrovial Aeropuertos, which operates six airports in the United Kingdom including Heathrow, as well as an airport in Chile, and Macquarie Infrastructure & Real Assets, the world’s biggest infrastructure investment fund, which has invested in eight airports including sites in Brussels, Copenhagen and Australia.

AAH, meanwhile, comprises 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, according to the PPPA.

Both operators have a track-record of increasing flights and passengers served, and have close relationships with many of the world’s largest airlines, according to Public-Private Partnership Authority Executive director David Alvarez.

After a winner is picked, the deal would undergo a Federal Aviation Administration (FAA) review and could be enacted as early as late this year. If completed, the deal will likely be the largest airport PPP in the U.S. under an FAA pilot program, which has been expanded to 10 airports across the nation.