Puerto Rico and U.S. board disagree on how to emerge from bankruptcy

SAN JUAN, Puerto Rico (AP) — Puerto Rico’s government and a federal board of control overseeing the island’s finances disagreed on Friday on how the U.S. territory should emerge from a long and protracted bankruptcy. controversial.

The two sides were at odds over a deal to restructure Puerto Rico’s electric company debt and how to generate revenue for the island’s transportation authority.

Prominent lawmakers, including the president of Puerto Rico’s Senate, remain unconvinced by a tentative deal that would restructure more than $9 billion in debt held by the Electric Power Authority, the island’s largest government agency. . Bondholders must agree to the deal, which would reduce the utility’s debt by more than 30%. But lawmakers and many citizens say it would lead to even bigger increases in electricity bills, even if the repeated blackouts continue.

That lack of support prompted board chairman David Skeel and others to meet with lawmakers this week to try to secure the necessary votes.

Skeel said there could be other options if lawmakers reject the proposed deal, but he and other board members warned it would be riskier and more expensive.

Board member Antonio Medina agreed: “This opens the door for bondholders to pursue many legal avenues…including receivership.”

Another sticking point between the council and the government of Puerto Rico is a proposed 8.3% annual increase in tolls through fiscal year 2024 to improve road conditions and increase revenue for the Highways and Transportation Authority. from the island.

The council said only 13% of Puerto Rico’s highways are in good condition, compared to a median of 84% in the continental United States. He also noted that toll rates have not been adjusted since 2005.

“Yeah, they’re huge,” board member John Nixon said of the proposed increases. “They’re going to impact audiences, but not implementing them over time…is what leads to such a huge increase.”

Governor Pedro Pierluisi, who attended Friday’s board meeting, rejected the proposed increase and said it was unnecessary because there are other sources of revenue. He noted that the average toll per mile in Puerto Rico is among the highest of any US jurisdiction.

He said his administration remained committed to bringing the Highways and Transportation Authority out of bankruptcy by the end of the year, but would not implement measures that would affect users.

Debt restructurings for Puerto Rico’s authority and power company are the latest major ones still pending nearly five years after the island filed for bankruptcy in the largest municipal bankruptcy in the history of the United States. United States after announcing that it could not pay its public debt of more than 70 billion dollars.