The governor of Puerto Rico, Ricky Roselló, recently announced his plan to “privatize” PREPA…in other words, to sell the island’s entire energy system to Wall Street.
The best way to assess this “privatization” plan, is to study how other plans have done. Have they benefited Puerto Rico?
These plans are often called P3s, or public private partnerships. The latest P3 was engineered by two governors from BOTH political parties: Alejandro Garcia Padilla (PPD) and Luis Fortuño (PNP).
And now Gov. Ricky Roselló will pull off the EXACT same scam, by selling off PREPA.
Ricky Roselló, dancing while Puerto Rico burns
Fortuño and Garcia Padilla used the island’s most profitable highway, PR-22, in order to steal $1.25 BILLION DOLLARS for Goldman Sachs and Abertis Corporation.
Here is how…
PR-22, aka José de Diego Expressay, is 51 miles long. It runs from Santurce to Hatillo, passes through San Juan, and is the island’s busiest highway. Every day, more vehicles pass through PR-22, than any other road in Puerto Rico.
The annual toll revenues from PR-22 are $85 million.
In 2011, Luis Fortuño turned PR-22 into a “public private partnership” (aka “P3”) with Goldman Sachs and a Spanish corporation named Abertis.
This P3 gave Goldman Sachs and Abertis a 40-year lease on PR-22 and PR-5, for which they would receive 50% of the toll revenues (roughly $1.8 billion) in exchange for a $1.4 billion investment, for a profit of approximately $400 million.
AND THEN THEY GOT SLICK
The ROI (return on investment) on this deal seemed reasonable…but now in 2016, the deal suddenly changed.
In the immortal words of Johnny Guitar Watson, “Somebody doing something slick…downtown.”
Five years into the deal, in April 2016, Gov. Garcia Padilla quietly altered the initial contract.
LET’S DO THE MATH
Under the new terms, in exchange for an additional investment of only $115 million, the governor decreased the island’s revenue share on PR-22 from 50% to 25%, and extended the lease term for an additional 10 years.
So for 35 years, Goldman/Abertis will receive an additional 25% annually…
For 10 new additional years, they will receive 75% of 85 million.
The math works out like this:
25% additional of $85 million per year x 35 years = 21 x 35 = $735 million
75% of 85 million x 10 years = 63 x 10 = $630 million
The total added revenue is thus $1,365,000,000 ($1.365 billion), on an investment of $115 million…for a new, additional profit of $1.25 BILLION.
Did you hear about this?
I certainly didn’t.
Somebody doing something slick…downtown.
LET’S BRIBE THE $16 BILLION DOLLAR MAN!
Eight months after this “New Deal” for Goldman Sachs and Abertis, in December 2016, a little news item emerged in Caribbean Business. Luis Fortuño had been named onto the board of directors of Abertis, because Abertis allegedly wanted “independent directors on its board…seasoned experts with a variety of professional profiles.”
Fortuño is certainly seasoned.
He marinated himself in public debt, during his brief stint as governor, by “borrowing” $16 billion from Wall Street. In just 4 years, Fortuño “borrowed” more money from Wall Street, than any other governor in Puerto Rican history.
So at the precise moment that a new $1.25 billion scam goes public, one of the key players hires Fortuño for a “board membership” that will provide elegant vacations to Spain for Fortuño’s family, and hefty board fees to Fortuño.
Fortuño was bribed – some would say “hired” – to provide Abertis and Goldman Sachs with additional influence over the PROMESA Financial Control Board (FCB), which is supposed to “investigate” these questionable deals.
A WORD TO THE JUSTICE DEPARTMENT
Puerto Rico allegedly “owes” $72 billion, and the FCB was created to “help them” pay it.
One of the best ways to do this is to investigate, annul and even prosecute any questionable deals which provide extraordinary and unexplainable profits to a few individuals and private entities, at the expense of the entire Commonwealth.
The PROMESA Control Board did not investigate or prosecute this $1.25 BILLION DOLLAR SCAM… which involved a foreign corporation, a US investment bank, and two governors from both major parties in Puerto Rico.
And now, a NEW P3 scam will devour the island’s energy system. The “privatization” of PREPA will not be a P3.
It will be a P5: a Public Private Partnership for the Plunder of Puerto Rico.
The $300 million Whitefish contract was just a dress rehearsal.
For a history of the War Against All Puerto Ricans, read the book…
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