Report: Government Awards $2 Billion in Contracts After Hurricane Maria; Half of Contracts were Unrelated to the Storm

El Nuevo Día newspaper released a review of contracts awarded by the Commonwealth in the aftermath of Hurricane Maria—specifically between September and December of last year. Several central government agencies, public corporations, the Legislature, the University of Puerto Rico and other instrumentalities awarded 16,000 contracts or amendments totaling $2.14 billion. In this 88-day span, a variety of contractual agreements were issued: from the controversial contract (since canceled) with Whitefish Energy Holdings to reestablish electricity on the Island, to the renovation of agreements with insurance companies working on the My Health program, to hundreds of contracts to repair bridges, homes, and schools.

Although the $2.14 billion figure covers all branches and government dependencies, $1.816 billion corresponds to around 5,000 contracts from the central government alone. Another $260 million in contracts were issued by municipalities and the Labor Development Areas, while $65 million in contracts were issued within different units of the UPR. Of the total dollar amount of the contracts or amendments signed during the covered period, it is likely that only half were directly related to natural disaster response.

Please click HERE to view the full report and list of contracts.

House Resources Committee Reprimands PREPA for Corruption, Malfeasance

The Republican leadership of the House Committee on Natural Resources has once again called on the Electric Power Authority (PREPA) to explain “multiple allegations of corruption and serious mismanagement,” in the process of restoring electricity to the Island. Committee leaders Chairman Rob Bishop (R-UT), Doug LaMalfa (R-CA) and Bruce Westerman (R-AR), claimed a “lack of confidence” in the capacity of the Puerto Rican government to “competently” handle billions of dollars in federal funds allocated for the Island’s reconstruction. In a letter to PREPA interim director Justo González, Congressmen Bishop and LaMalfa demanded information on investigations of PREPA employees that allegedly asked for money in exchange for advancing the repair of the electricity system. They also requested information on the inventory of materials in the controversial warehouse 5 of Palo Seco, that provoked a dispute with the US Army Corps of Engineers (USACE). “There are also allegations that PREPA restored electricity in their homes and other areas before critical locations, such as the Medical Center and the Luis Muñoz Marín airport,” added the Congressmen. The Congressmen requested that documentation on issues of corruption and abuse of power be presented to them no later than March 26 at 5:00pm.

Puerto Rico House Passes Controversial Consolidation Bill

The House of Representatives of Puerto Rico approved legislation to consolidate several government agencies, a move that proponents say will save $96 million. This is one of a series of proposals sent by Governor Rosselló to reduce the number of government agencies across the board. This bill was initially introduced, and later withdrawn, over concerns that it would harm the Tourism Company. The new version, although it made some minor changes, would still merge the independent Puerto Rico Statistics Institutes (PRIS) within the Economic Development and Commerce Department (DDEC in Spanish), with the mission of eventually privatizing the newly formed agency. The bill also folds the Tourism Company into the DDEC umbrella.

The privatization of the Statistics Institute is particularly controversial, as the agency is involved in the ongoing investigation over the correct numbers of deaths caused by Hurricane María. There is a general impression that merging PRIS undermines the independence of its current Director, former Federal Reserve Bank official Dr. Mario Marazzi. The move also garnered the opposition of prominent members of Congress, such as Massachusetts Democratic Senator Elizabeth Warren and Congresswoman Nydia Velázquez, also a Democrat, from New York.

FOB Narrows Down List of “Critical” Infrastructure Projects

The Fiscal Oversight Board (FOB) reported that it has discarded four proposed “critical” infrastructure projects, narrowing the list of proposals to seven. Although not all of the proposals address the Island’s dilapidated electricity grid, the vast majority of the proposals focus on this issue.

The critical projects that are still under consideration by the FOB are:

• M Solar Generating, LLC
• Vega Serena Solar Plant
• Cabo Rojo – Photovoltaic Solar Energy System
• Carraízo Dam – rehabilitation of hydroelectric generation for use by the Aqueduct and Sewer Authority
• Blue Beetle III PV Solar Plant in the Barceloneta sub-station
• Repair and Mobilization of the old navy dock of Isla Grande to repair commercial and government boats in San Juan
• Viewpoint in Roosevelt

The projects rejected by the Board are: the Arecibo incinerator proposal, presented by Energy Answers; the Parque Eólico del Norte, presented by the company New Era Eolic, which included the installation of six wind turbines on Highway PR-686 of the Yeguada neighborhood in Vega Baja; improvements to reduce energy and water consumption in the correctional facilities of Bayamón and Ponce de Noresco; and the replacement of generation units of the Electric Power Authority (PREPA), from Team Peaker Puerto Rico. The FOB indicated that the sponsors of discarded projects may have the opportunity to resubmit their proposals.