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FEDERAL AVIATION ADMINISTRATION

AIRPORT PRIVATIZATION PILOT PROGRAM PERMIT

SAN JUAN, PUERTO RICO

DATE: SEPTEMBER 28th, 2012, 8:00am-6:00pm

Afternoon Session – English Version

PLACE: VERDANZA HOTEL

ISLA VERDE, PUERTO RICO

Chairman: RANDALL FIERTZ

Transcription: Aledawi Figueroa
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Participant PAGE

Randall Fiertz------------------------------------------------------------------------- 3

Erica Garden-------------------------------------------------------------------------- 4

Glenn Rivera Pizarro --------------------------------------------------------------- 6

Federico Stubbe --------------------------------------------------------------------- 9

José Maldonado --------------------------------------------------------------------11

Carlos Rodríguez-------------------------------------------------------------------13

Clarisa Jiménez---------------------------------------------------------------------15

Harry Narvaez-----------------------------------------------------------------------17

Fernando Batlle ---------------------------------------------------------------------20

Greg Stokes--------------------------------------------------------------------------22

Luis García---------------------------------------------------------------------------26

Samuel Caraballo ------------------------------------------------------------------28

José Gerardo Tirado Vega-------------------------------------------------------31

Jesús Ramos Puente--------------------------------------------------------------33

Abimael Portalatín Rosario-------------------------------------------------------35

Noemí Cardona Tomassini-------------------------------------------------------38

Raúl Bustamante -------------------------------------------------------------------41

Mariela Matías-----------------------------------------------------------------------42

Jorge Valdivieso --------------------------------------------------------------------44

Ángel Figueroa Jaramillo ---------------------------------------------------------47

José Antonio Herrero--------------------------------------------------------------48

Jorge Valdivieso --------------------------------------------------------------------51

Emilia Barreto -----------------------------------------------------------------------51

Jon Borschow -----------------------------------------------------------------------52

Graham Castillo---------------------------------------------------------------------57

Faustino Marques ------------------------------------------------------------------60

Rogelio Figueroa -------------------------------------------------------------------62

Dr. Ramón Torres Morales-------------------------------------------------------67
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(1:30 pm – After lunch)

Randall Fiertz: Good afternoon everybody, we’re gonna start in five 

minutes, just to make sure it’s enough time for people to get inside the 

room. Thank you.

Ok, good afternoon everybody. Welcome, or welcome back for part two of 

this public meeting. Just a little reminder, for some of you who just arrived, 

some of you who weren’t here this morning: the purpose of this meeting is 

for this panel – FAA, Department of Transportation, and the Transportation 

Security Administration -- to collect information from interested parties, 

concerns, questions, support, for this program. And we will use this 

information as well as any information submitted in writing to us as part of 

our --the decision that we need to make collectively on the proposed 

transaction. Unfortunately because of the number of people that are 

interested in speaking we need to limit people to 5 minutes. And 

unfortunately, I’ve had to be pretty strict about that, so there is a timer here, 

there are some lights on there, after the 5 minutes are up they will turn red 

and at that point if you continue to speak I will have to ask you to 

summarize and to stop. But certainly, as I said, written comments, 

supplements, oral comments, are certainly accepted as part of the process. 

I also wanted to mention that, there is a request, that if people have a copy 

of what they’re going to talk about that they are able to give in advanced so 

the translators could use that to work off of, that would be very helpful. 

Certainly not required, but if you have that, if you could turn that in to the 

registration table and they’ll give that to the translators. As I said, that 

would be helpful. Ok, thumbs up from the translation group. Ok! Very 
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good. Anything else I need to mention? No, ok. Alright. Well, let’s get 

started, I think we’re in number 35, is that right? 38 I’m sorry. 38 please. 

Erica Gardner: Hi. Good afternoon. Ladies and gentlemen thank you for 

your time in hearing my comments. My name is Erica Gardner, and I’m 

speaking on behalf of the Corporate Ground Transportation Committee, 

Many of them which are here today. I would like to thank you for the 

opportunity to briefly express our thoughts and concerns as to what we call 

the lease of the Luis Muñóz Marín Airport. We are a committee that 

consists of about 15 business people, mostly luxury ground transportation 

operators, that every day provides chauffer transportation service to 

arriving and departing passengers at the Luis Muñóz Marín Airport. Our 

clienteles range from the average tourist to CEOs of companies that are

looking to invest millions into Puerto Rico’s economy. And even some of 

the most famous artists in the world. First we are looking forward to the 

possibility that there will be long term assurances in the much needed 

change for the airport to provide a positive first impression for our 

customers when arriving to Puerto Rico. We are extremely excited at the 

possibility of developing new business and exploiting the growth potential

for Puerto Rico to be a destination of choice. We look forward to the fact 

that there will be increased operating efficiency, for not only inside the 

terminal, but also outside the terminal, for the ground transportation sector 

as well. It is imperative that our clientele, that we receive, will be able to 

walk off the airplane and connect with their chauffeur in a seeminglessly 

effortless fashion. Most of our clients might be arriving exclusively to 

attend important meetings, only to return to the airport hours later. Time is 

money for everyone involved. Our airport needs designated pick up points 
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and access to meet and greet our passengers as soon as they arrive in 

Puerto Rico Simple things such as proper signage have always been an 

issue for customers, and we are overjoyed at the fact that we might finally 

be able to work with proper management, to make sure that our clients are 

able to locate our chauffeurs and vice versa in a very efficient manner. 

You’ve probably already noticed our great expectations. We know how to 

operate our businesses. And we do have a clear knowledge of how top 

world class ground transportation operates in most of the airports in the 

United States and around the world. We’ve always aimed, and offered to 

work side by side with any management in turns with system and providing 

greater choices in ground transportation. We’ve also look forward to

making sure that all customer and visitors are offered to the highest 

possible safety standards as they move through the airport in order to get 

into their vehicles. 

On the other hand we are no experts in such complicated issues as the 

lease contract that face the airport today. It is our firm concern that here, 

now, the way the airport is, it only can improve from here. After many years 

of stagnant development in our country -- in our industry -- we’re looking 

forward to throwing out the traditional approach and creating new ways for 

our clientele to be serviced. So for many reasons we trust that the FAA 

and your staff to scrutinize every possible detail of the deal. We trust that 

the politics will not be a factor in any direction about your future decision. 

We place in your hands the proper analysis to the procedures and 

conditions of the lease contract. And that the management will have the

rights for decisions for regulations pertaining to our industry. We need to 

be assured that we get the best deal that we can provide Puerto Rico with 
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the best airport transportation service. And we want to end the burocracy 

that overshadows how we provide service to our customers. We aim to 

work with new private management and assist them in providing greater 

new choices in grown transportation. We look forward to making sure all of 

our customers are offered the highest, safety standards possible. Our 

customers are mutual, it is imperative that their experience from the time 

that they step out of the airplane to the time that they arrive to their meeting 

or vacation is an exceptional experience. We need a better and realistic 

opportunity to do what we do better, and private management seems to be 

the road to getting to that goal. We want to move forward from 911, we 

want to provide the best standards possible to every person that comes to 

Puerto Rico. Thank you for your time.

Randall Fiertz: Thank you.

Glenn Rivera Pizarro: Good afternoon, honorable members of the federal 

government, representatives of the Commonwealth of Puerto Rico, 

legislators, representatives of the private sector, representatives of the 

working class of the Country, public employees and general public.

For the record, my name is Glenn Rivera Pizarro, candidate of the PPD to 

Representative for the District 36, which is composed by the municipalities 

of Vieques, Culebra, Ceiba, Fajardo, Luquillo and Rio Grande, for the 

project of privatization of the Luis Muñoz Marin International Airport. Today 

I want to express the feeling of the residents of these municipalities with 

whom I have spoken to about the project that was established by the Port 

Authority, with the approval of the governor, Luis G. Fortuño Burset. I thank 

you for this opportunity. 
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We oppose to this proposal. On the first place, the actual administration of 

this Country lacks the effective and positive experience in the confection, 

administration and follow up of privatization projects. The historical results 

of the previous initiatives indicate that the proposed objectives where never 

achieved, the efficiency and quality of services were not improved; the final 

costs resulted higher than what was contemplated in the initial proposals 

and the government needed to retake the administration of the services. 

Such is the case of the administration of the Diagnostic and Treatment 

Centers (CDT’s), the Urban Railroad and the “Supertubo”, among others.

Secondly, the District I aspire to represent includes three active regional 

airports. The conditions that are part of this privatization proposal, of the 

Luis Muñóz Marín Airport, do not allow the development of the regional 

airports and the nearby municipalities, limiting the free commerce in these 

locations. Specifically, the proposal includes a restrictive clause that 

establishes a penalty to be paid by the Government of Puerto Rico, if there 

is any initiative to increase the services at the regional airports. This 

penalty will be in place, if the privatization project is approved, for a period 

of no less than twenty years.

The negative effects that this clause will produce in the municipalities 

where the regional airports are located will be very bad for the district’s 

economy. The proposal will eliminate the competition that could benefit the 

habitants’ pockets and the air services users of the zone, as well as any 

free commerce possibility.

As part of the application submitted by Ports Authority a plan for Regional 

Airports is included that specifies an increase in all the fees. The tourism 
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industry, which promises to the base and in which all the hopes of 

economic development for the East area are based upon, could be affected 

by this agreement that will cause an increase in other touristic services.

The proposal of the Ports Authority will produce a great income loss in the 

hotel industry of the East, including those in the islands of Vieques and 

Culebra. The occupation report on hospices for Vieques and Culebra for 

the 2012 fiscal year emitted by the Research and Statistics Office of the 

Tourism Company indicates that hotel occupation in Vieques only reached 

55%. This occupation represents half of the total occupation available. One 

of the factors that do not allow increasing the hotel occupation in Vieques is 

that the average of hospice fee is increasing. The fee per night increased 

until it reached $163.49 per night. The annual income obtained for the sale 

of room/per night reached $7,107,891.24 for Vieques hotel industry. Again, 

we advert that that fee increase was the reason it wasn’t higher.

Therefore, if there is an increase in the air fee and in the hotel fees as a 

result of the approval of this project, the hotel occupation will decrease to 

unsustainable levels for the touristic industry of the East area and the 

municipal islands of Vieques and Culebra. Other industries of the local 

economy that could be affected are the ground transportation and the food 

production business like restaurants, among others.

The final result will be the possible closing of business, corporative 

bankruptcy, an increase in the unemployment rate of the district and the 

Country’s public debt; an economic and social crisis of big proportions in all 

the municipalities of the District 36.
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The actual economic profile of the district is very deteriorated. The general 

unemployment rate for the district for the last four years reached 16.7%, 

this is the highest rate in the last four years. The municipalities of Fajardo 

and Luquillo have reached unemployment rates of 22% and 18%, 

respectively. The workforce keeps decreasing during this quadrennium due 

to discourage of the inhabitants produced by useless efforts to find a job.

On the other hand, the municipalities of the District 36 have very limited 

budgets and do not have the necessary funds to, in some way, alleviate 

with incentives the effects of a measure of this nature.

In conclusion, with all due respect I ask the members of this panel that after 

a just evaluation of the position expressed in this public hearing and in the 

submitted documents, do not approve the proposal for the privatization of 

the Luis Muñoz Marin International Airport submitted by the Ports Authority.

Thanks for your attention today; September 28, 2012, Carolina, Puerto 

Rico.

Randall Fiertz: Thank You. 

Federico Stubbe: All right, good afternoon. My name is Federico Stubbe;

I’m the Chairman of Prisa Group. Our enterprise is currently building 4 

hotels in Puerto Rico. The Ritz Carlton Reserve, which is a 6 stars new 

branch from Ritz Carlton Dorado Beach, 2 Hyatt Places, one in Bayamón 

and one in Manatí, and a Hyatt house in San Juan. We are very much 

committed to the growth of the Puerto Rico economy. Unfortunately the 

Puerto Rico economy has not grown in the last 12 years. If you look at 

Puerto Rico and you look at the region where we play and our economy 
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growth, -- and we measure our region as three hours flight time around us, 

a radius of three hours -- the biggest economy certainly is Florida, which 

has a 750 billion dollars economy. The second one is Venezuela with 390 

billion dollars economy, Colombia 290 billion dollars economy. Our 

economy is 63 billion. The future, because so far, being part of the US and 

having all the regulators of the US –and you’re one of them -- is really 

competing against Florida. If we take 5% of the market share of Florida 

we’ll grow 50%, and that would be great for Puerto Rico. The Florida 

airports handles 66 million travelers, our airport has been in the last twenty 

years we have been in 4 million travelers. We could grow our traveling 

business. If we grow by 3 million, we should get that 50% growth in Puerto 

Rico, which would benefit all the people of Puerto Rico. Unfortunately the 

government of Puerto Rico, both the Popular Democratic Party and the 

PNP have not been able to manage the Ports Authority. There no question 

that our airport is so standard in all ways. It’s sub-world class and under 

both political parties we don’t think it will become world-class. We, the best 

projects in Puerto Rico, --if you look at our Power Authority, Puerto Rico 

talking competitively-- we have two and a half times higher energy costs

than Florida has. We cannot compete like that, our best, in the power 

authority, our best production comes from a private company, ECO 

Electrica produces energy at six cents a kilowatt hours. We pay 26 cents, 

so our private parties have done better than the public parties. If you look 

at Roads, the private parties are doing better than Roads. We, personally 

I’m an investor in a company where the management of the public housing 

were privatized; we do much better than the government used to do. The 

government of Puerto Rico is too politized, in both parties, to handle things 

like that where we compete world class. So the airport being such a big 
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part of our central economy package, where we compete globally, needs to 

go into private hands. I commend what has been happening, these people 

that are trying to manage this hotel are world-class hotel operators. I was 

very much impressed by El Nuevo Día, usually papers here and the whole 

press doesn’t really believe too much in private enterprise. Even El Nuevo 

Día talked good about these people that are managing this hotel –this 

airport – so I commend the action, I ask the FAA to approve this project. 

Thank you very much. 

Randall Fiertz: Thank you.

José Maldonado: Good afternoon, my name is José Maldonado. I am the 

owner of MN Aviation, operator of a commercial air carrier under part 135 

of the Federal Aviation Regulations; we’re also the owners of an FBO, one 

of the four FBOs of the airport. I am here today to express my concerns 

over what will happen and what will be available to the people and 

operators of our nature. 

Under the present administration of the airport, under the present rules, the 

Ports Authority, grants us ability to stay at the airport, operate at the airport 

under contract. Those contracts are pretty extensive, those contracts are 

very specific. At the present time since it is under federal aid program, 

companies like ours are guaranteed that we are going to operate. I am not 

here to argue for or against privatization, I am here to make sure that I get -

- that operators like myself have assurances -- that we will be able to 

continue to perform our business, to grow our businesses and to perform 

our trade, to continue our trade. I am deeply concerned, and I want to 

make sure that should this project go through -- and I’m sure that there are 
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good and great intentions, I have met with the people from ASUR, I’m a

pilot, I’ve been to many of their airports, and I see what they do, and I’m 

sure that their intentions are good – but I am deeply involved in interstate 

commerce. As the operator of aircraft, we fly 365 days a year for the US 

Mail, 4 times a day for the US Virgin Islands, I fly the Life Links organs 

from San Juan to various points throughout the western hemisphere, and 

we are also involved in highly sensitive federal contracts, which involves

security, presidential visits, and law enforcement operations. My contract is 

up for renewal, I have been at the airport since 2001, and we have been an 

operator since 1993. I’ve been advised that the Ports Authority cannot 

enter into any negotiation because of this process. Therefore I’m left in 

kind of a void to see if we can continue with our airline, to make any 

investments, etc. I need to know, we need to know in the aviation 

community the FBOs at the airport, we need to know if the FAA rules are 

going to continue to be in effect, and if those FAA rules by which we have 

to abide provide insurances that we will be able to continue our business in 

a free and open competition environment, as we have now under the Ports 

Authority, under a private owner. We want to make sure that we will not 

end up competing or get set aside by any private future owner. Therefore I 

ask:

 If federal funds are going to continue to flow for safety, air traffic

controls, TSA, Immigration?

 If Federal Funds are going to be used at the airport?

 If federal assurance rules apply to whoever takes over the airport? 

Anything that will improve our ability to do business and safely operate our 

aircraft and to make sure our businesses grow, we support. But we want 
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to make sure that we compete in a fair and open environment. In 

conclusion, I just want to make sure that I don’t encounter, under a private 

owner, unfair competition. As a provider of an FBO, we’re involved with

servicing transient aircraft, which includes bigger craft commercial aircrafts 

as well as corporate jets, and I want to make sure that we can continue to 

sell our fuel. Thank you for the opportunity to address you.

Randall Fiertz: Thank you very much.

Carlos Rodriguez: Good afternoon. My name is Carlos M. Rodriguez, 

President and General Manager for Vieques Air Link. We are a regional 

airline with operations in San Juan, Isla Grande, Ceiba, Vieques, Culebra 

and San Juan Luis Muñoz Marín International Airport.

First of all, I’d like to thank the opportunity given to all of us the Airlines, 

Government officials and especially for this opportunity to the general 

public to express themselves regarding the proposed 3P of International 

Airport.

Vieques Air Link has been part of the San Juan Airline-Airport Affairs 

Committee and we are in agreement with the letter that they have already 

sent to this committee. We, although a very small airline operator at Luis 

Muñóz Marín, have equally suffered from the various infrastructure 

deficiencies that this airport has gone through the years.

We strongly believe the location of Puerto Rico and its relationship with 

major carriers and direct flights to the U.S. destinations continue to position 

us as a major hub for Caribbean connections. But this privilege position is 
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at stake if major infrastructure investments are not made in short to 

medium term at the airport.

In order to take advantage this privileged position, we all need to 

understand that we are competing with the best airports in the world and 

not only among the Caribbean airports. That said, our Luis Muñóz Marín 

airport must be at World Class Level.

To grow our business and the tourism industry in Puerto Rico we need 

World Class operational ramps and passenger facilities, and a master 

design towards making the Passenger’s experience at San Juan among 

the best in the world. As a country, the challenge we face is not only 

making these needed improvements in the short to medium term, but it has 

always been to make this investment sustainable in the future. That

sustainability requirement is what I believe that this 3P brings and this 

transaction brings to us at the airport Luis Muñóz Marín.

What I would like to request for this committee to ensure that if this process 

goes through that the regional airports do not get any limitation for all the 

small commuter airlines to grow in there, that’s where most of our 

businesses are. Thank you very much for the opportunity to express our 

opinion. 

Randall Fiertz: Thank you.

Clarisa Jimenez: Good afternoon. I’m Clarisa Jimenez, President & CEO 

of the Puerto Rico Hotel & Tourism Association, a not for profit trade 

organization which represents the shared interests of more than 580 
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corporate members, most of them businesses that are related to our 

island’s tourism industry.

Today, given the fact that we only have 5 minutes to present our 

comments, I will share with you some general impressions regarding the 

transaction currently being evaluated by the Federal Aviation 

Administration and that, if approved, would authorize the establishment of a 

Public Private Partnership for the Luis Muñóz Marín International Airport 

between the Commonwealth of Puerto Rico and Aerostar Airport Holdings.

If Puerto Rico wants to be perceived and recognized as a world class 

destination, its tourism infrastructure and the services offered need to be on 

part with said standard and fulfill the promise we make to our visitors. Being 

an island it is imperative that the facilities of our principal gateway, the Luis 

Muñóz Marín Airport, are kept in top condition and that the services 

provided by both airport officials and the concessionaires operating at the 

airport, are driven by quality principles and consistency. Unfortunately, that 

has not been the history of the Airport.

For more than a decade, we have voiced to Government officials our 

concerns regarding the deterioration of the San Juan Airport's 

infrastructure. We have also warned airport administrators about the strong 

competition that we are facing as a tourism destination and on the need to 

enhance the travel experience of our visitors once they arrive to Puerto 

Rico.

Although several efforts have been made to address some of these 

concerns, none of them have had a significant impact on the quality of the 

facilities and services available at the airport. As a result the Luis Muñóz 
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Marín Airport has experienced a notable decline in passenger traffic. From 

5.3 million enplanements in year 2005, to 4.2 million in year 2011. This is 

unacceptable and that is why PRHTA supports the proposal to establish a 

P3 for the Luis Muñóz Marín Airport.

It is important that the people who select Puerto Rico among the numerous 

tourism destinations who compete for their business, are constantly 

reassured that they made the best decision and the condition of the airport

is critical in guaranteeing their experience.

By entering into an agreement with AAH, the Commonwealth of Puerto 

Rico partners with a consortium that has the expertise and the financial 

capacity necessary to transform the Luis Muñóz Marín Airport into a world 

class airport. The proven records of the entities that integrate AAH gives us 

the confidence to support this important transaction. Also, the plans that 

AAH has for transforming the SJU which have been shared with us are in 

line with Puerto Rico's recent positioning as a destination that caters to

more affluent and sophisticated travelers. The opening of the St. Regis 

Hotel in Rio Grande, the W in Vieques and the future openings of the 

Vanderbilt Hotel in Condado and the Ritz Carlton Reserve in Dorado 

support the image of the island as a premier destination and as such it is 

important that our principal airport be able to comply with the needs these 

kind of travelers demand.

In conclusion, PRHTA recognizes that this is a complex transaction that 

requires serious consideration by the FAA before issuing its final decision. 

Nevertheless, based on the information we have available and considering 

the background of the entities that are part of AAH, we are confident that 
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the proposed P3 for the San Juan Airport will benefit Puerto Rico and our 

tourism sector. If you are in need of additional information from us we will 

be glad to provide them in writing prior to the deadline established of 

November 19, 2012. Thank you very much for the opportunity.

Randall Fiertz: Thanks you.

Harry Narvaez: Good afternoon. My name is Harry Narvaez and I’m a 

regular officer retired from the Air Force, I’m also retired from PRPA. Unlike 

any other airport in the United States, the Luis Muñóz Marín International 

Airport is a Public Joint-Use Airport that supports numerous highly 

classified covert US military and US Government operations as well it 

enjoys a unique strategic geographical location between North America 

and Latin America. The FAA Privatization Pilot Program was established in 

1997. TSA and Homeland Security they were born in about 2003. To me, 

this means that the FAA's Airport Privatization Pilot Program needs to 

consider sensitive key airport security issues that are extremely critical to 

the national security of the United States; including our aggressive ongoing 

wars on drugs and terrorism.

A close security scrutiny is needed to prevent the compromise of classified 

airport security information and the inadvertent unauthorized disclosure of 

covert military and US Government operations.

The Airport Security Program is tied into a fully integrated airport security 

system that encompasses all other airports in the United States.

A particular clause draws my attention: Aerostar says that they will make 

any necessary revisions to the approved Airport Security Plan. The 
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approved Airport’s Security Category is Category "X". For a Category "X" 

you need 5,000,000 domestic enplanements plus 1,000,000 international 

enplanements; that’s a total of 6,000,000.

However in calendar year 2011, by FAA records, it showed that it only had 

3.9 million enplanements. Now the Airport Security Program has to be 

completely reaccomplished in its entirely, not just a little revision, and a 

lower Category may be awarded.

Though current TSA regulations require lowering the Security Category, 

strong security measures must remain in place to insure that we maintain a 

strong airport security program while guaranteeing the continuity of our 

highly aggressive war on drugs and terrorism.

No need to remind you that prior to the 9/11 attacks, one of the 9/11 

terrorists sought temporary shelter in Vega Baja, he was my neighbor. 

Also, as recently as couple of years ago, TSA implemented tougher new 

and stricter security requirements for foreign pilot training. ASUR is also a 

foreign company, so it must be closely monitored. We cannot allow the 

security of the United States be compromised in behalf of a beneficial 

commercial transaction.

I recommend that this proposed commercial transaction be first reviewed, 

coordinated, and approved by affected federal agencies such as the Air 

Force, US Navy, US Coast Guard, US Southern Command, FBI, DEA, CIA, 

US Secret Service, and the US State Department.
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All critical airport security issues and concerns must be clearly clarified by 

affected US military and US Government agencies prior to FAA granting its 

final approval to this transaction.

TSA requires US Citizen a background investigation in addition to a 

fingerprint check to give you an ID Card. I therefore recommend that TSA 

examines ways to keep a foreign company under close surveillance in 

order to safeguard the compromise of classified information or endanger 

the details of covert operations. 

Procedures vary from airport to airport; therefore, the Certification Manual 

and the Airport Emergency Plan, which I brought, I brought both of them,

are unique to each airport. Before FAA approves this final application, FAA 

needs to ensure that critical documents are reviewed, coordinated and 

approved by all affected federal and state agencies. Last but not least, as 

a federal rule stipulates that the Labor Union contract will not be abrogated 

and a new Labor Union Contract should be approved prior to the approval 

of this privatization process. 

I strongly recommend that all operating manuals and the new labor contract 

be completed prior to FAA's approval of this transaction. I’m retired from 

the Air Force, I’m retired from PRPA, I’m FAA Aviation Safety Team Lead 

Representative and I got the 2009 FAA Southern FAA aviation award. 

Thank you.

Randall Fiertz: Thank you very much.

Fernando Batlle: Good afternoon! My name is Fernando Batlle and I am 

here as a concerned citizen representative of the private sector and a firm 
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believer and actor in public-private partnerships. There are many deficient 

areas in the physical aspects of the Airport and also major operational 

aspects that need attention. I have no doubt that many of these 

shortcomings will be addressed by the comments from those that have 

come before me or that will follow. As an architect, familiar with the ground 

transportation operations and problems of the airport since I992 and up to 

the present, I consider this particular aspect of operations as a major issue 

that needs to be addressed in order to elevate the airport to a world class 

level facility that Puerto Rico needs and deserves as a cornerstone of our 

future economic development. 

I come before you in full support of the concession agreement being 

proposed for Puerto Rico's main airport facility. I do so with the conviction 

that placing the operation and necessary improvements in private hands 

but with public oversight is the only way in which accountable and 

measurable professional management will deliver the goals that Puerto 

Rico is striving for.

My involvement with the airport stems from a failed procurement for a 

parking structure proposed by the Ports Authority and that turned out to be 

completely inappropriate and ill-conceived for the needs of the airport. This 

failed effort led to the present parking structure.

Unfortunately, the final implementation by the Ports Authority failed to 

properly address many of the ground transportation issues that were part of 

the original comprehensive concept in which I was involved and that were 

necessary for a successful operation. This was a significant failure of 

purpose by management since the real operational issue facing the airport 
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then, as it still does know, is the lack of a structured and comprehensive 

ground transportation management approach that must go well beyond the 

mere construction of a parking structure. Such approach would have 

affected and improved operations on the air side, the land side and all the 

way up to the curbside. This issue impacts a very broad constituency that 

encompasses a large and important sector of the tourism industry and 

includes visitors, taxis, charter busses, hotel busses, limousine services, 

airport and airline employees, tour operators, car rental operations, cruise 

ship luggage transport and shuttle buses. This list can go on and on and 

will end up spilling over into homeland security issues and concerns.

Twenty years have gone by since this issue was formally articulated. 

During this long period numerous efforts and approaches have been made 

to the Ports Authority management by stakeholders and other interested 

parties in order to tackle this issue and it has been to no avail. Ironically, 

this should have been a self supporting activity that would actually paid its 

own way and therefore there is no excuse for not having done it already. 

Twenty years of inaction, disregard, deterioration, lowering of standards, 

unaccountability, inability to decide, act or execute, absence of vision and 

purpose and an ineffective management structure that can only produce 

mediocrities and abject failures are more than enough justification for the 

action that is being contemplated and is the object of this hearing.

Ladies and gentlemen, there is no other solution in sight that will save our 

airport from further deterioration and its inept management structure. I trust 

that you will come to the same conclusion and wisely impart your approval 

to this innovative undertaking that has proven successful in other

jurisdictions as well as in Puerto Rico. Thank you for consideration.
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Randall Fiertz: Thank you. 

Greg Stokes: Good afternoon and welcome to Puerto Rico. My name is 

Greg Stokes and I am a retiree, federal retiree, which you guys will be one 

day, not too soon I hope. I live here in Puerto Rico in Isla Verde, around 

the corner, so you made quite a bit of noise in my neighborhood today early 

this morning, with all the racket in the street. I don’t really have a dog in 

this race other than I’m a private citizen and the process is something that 

has disturbed me in this particular contract. First, I want to say that I am 

not opposed to the concept of Public-Private partnerships when it serves 

the Public interest.

Secondly, as a Northamerican living in Puerto Rico, I am not affiliated with 

any local political viewpoint. I do want to acknowledge that I have served 

as a public interest Stakeholder of two federal grants during, both, the 

Acevedo Vila administration and Fortuño Administration, so I don’t care 

who’s in power, my interest was the federal grant and serving the needs of 

the people. For that reason, I was acutely-aware of the absence of a 

credible Public Interest Stakeholder in the current government’s PublicPrivate Partnership initiative, all of their Public-Private Partnership 

considerations, not just this contract. And I’ll return to that concern in a 

second, since it’s about this specific contract.

Since its beginning, I have been interested in this Administration's

Public-Private Partnership Program and in fact I was an enthusiastic 

participant in the Oct 22nd and 23rd, 2009 P3 Inaugural conference at 

Conquistador Hotel. I was very excited about the government's initial list of 

100 priority projects for expedited P3 Projects Contract Awards - schools, 
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roads, health information exchange –which is one of the grants that I’ve 

worked on as a public applicant the affordable care Act Implementation in 

the Caribbean and Puerto Rico --and also construction priorities for the arts 

and public parking and municipalities, and affordable housing. Although 

Ports Authority projects were on the list of 100, I didn't recall the LMM

International Airport at the time. I was focused on other things.

But one observation at that 2009 conference was an absence of ethical and 

conflict-of-interest provisions, which several months later, after that 

meeting, were addressed partially by a 5-page Conflicts of Interest and

Unfair Advantages Guidelines document dated December 19, 2009.

During the Conquistador P3 Conference I questioned the P3's privatesector consultant for Public-Private Partnership Development – his name is 

Juan Santamaria – I questioned him about the absence of a credible Public 

Interest Stakeholder or any other evidence of public review in the local 

Authority's process to P3 Contract Awards.

There was no plan for a public interest participation or review at the Puerto 

Rico P3 Authority. I also asked Mr. Santamaria if, in the past, he had been 

able to work for Proponents—or applicants-- seeking contracts in other 

jurisdictions he had advised on Public-Private Partnership development, as

he was doing now in Puerto Rico. His obvious discomfort and body 

language suggested that he, or his Associates, had probably sometimes 

played a dual advisory role with both a P3 Authority and Applicants seeking

contract awards.

It was some time after the October 2009 Puerto Rico P3 conference that I 

noted the first published criticisms of Puerto Rico’s privileged private sector 
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consultants having connections to P3 applicants. My fears of a failed 

conflict-of-interest and credible ethical review were beginning to 

materialize. Later, I noted more specific charges published by opposition 

law makers, who’d say what practice we’re doing here, specifically 

regarding this LMM-Aerostar P3 Contract. And I presume all that is 

available to the public.

Today’s federal Federal Aviation Administration review of the P3-Aerostar’s 

40-year Lease Award, is the first and possibly-final opportunity for any 

semblance of general public or secretarian review about the Puerto Rico 

P3 process.

Thank you. I think most of us living in Puerto Rico are grateful for the 

federal presence here. Amnesty International reported last week that 

Puerto Rico's US District Court prosecutions for public corruption rank #2 

in the United States, after New Jersey. I hope none of you live in New 

Jersey, but if you do you know how we feel, it’s an issue of trust in the 

public and the government making similes decisions, in particular one of 

this gravity. 

I am also a bit surprised at by a more obvious and unspoken concern. 

Puerto Rico having the isolation of an island - the LMM International 

Airport is the primary access to the outside world, which becomes even 

more critical in case of a Haiti-style earthquake or other natural disaster 

common to the Caribbean. We all read and saw daily reports from Haiti 

about the crisis at the airport when that event happened. And it’s curious 

to me that nobody says anything about this.

If we are to believe critics of this contract that future development of other 

island regional airfields will be frozen or limited during first 15-years of the 
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LMM-Aerostar Lease, this private sector monopoly of Puerto Rico's air 

commerce puts the safety of our public sector, my safety, at the mercy of a 

foreign corporation, when local and federal government should be in 

control of such a single vital resource.

Puerto Rico is not like any of the other of the other six state-side airports 

that you guys are or have already transacted or transacting under the Pilot

Program of FAA's Public-Private Partnership operators, where the Public 

enjoys easy access to proximity and multiple access to other neighboring 

states, we don’t have that here, and their public airports - that freely

compete for air travelers, carriers, and capacity as alternatives in any kind 

of an emergency or disaster.

Lacking public interest recourse in the P3 process, Puerto Rico must rely 

on the US federal agencies to correct the risks of public safety and

commercial monopoly implicit in this local contracting process.

And, to insure that any future deliberation regarding this singular asset 

include a healthy and credible public interest representation, which has 

been absent until this review today.

Thank you for your consideration and courtesy to me. I trust that 

you will make the correct review to protect the people of Puerto 

Rico.

Randall Fiertz: Ok, thank you very much.

Luis García: Good afternoon, everyone. My name is Luis Garcia. I will be 

very brief, I will use the five minutes in two parts. The first one, on a 
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personal level as a resident of Puerto Rico and a U.S. citizen. The second, 

as a representative of Secure Wrap of Puerto Rico, the company that 

protects all baggage at almost all airports around the world, thank God. We 

are in 50 airports, more than 50 airports, in almost every continent and that 

is what I leave for later, I'll talk on a personal level first. The first thing I ask 

is that you consider all the statements made here; I know it will be like that, 

take in all the approaches and draw the best conclusions. Evaluate if it is a 

good deal or not, if it is good for Puerto Rico, and it has to be good for the 

United States. Strategically we are in the Caribbean, and I do not want to 

go a little further, but really we are located in an island and the airport is 

one of the most important places that Puerto Rico has, because in order to 

leave Puerto Rico, you have to fly out. The cost-effective cruise departures 

are non-existent. So make the best judgment and make the best 

decision. If it’s yes or no, it is in your hands, and we know that you are well

prepared to make that decision. The other thing I want to say, very briefly, 

as I said, is that we are in 50 airports, from Australia to Africa where there 

are two, in Europe, we have been in Puerto Rico for 17 years wrangling 

with ups and downs, ups and downs, ups and downs, we are there, and we 

opened in Cancun. From the 10 airports that I think ASUR has in Cancun 

we are in eight. That is, we’ve had relationships with ASUR, and with

whoever. So we have had to negotiate with the government of Puerto Rico, 

some for good, others for bad, it does not matter. Be it ASUR, the 

government, or whoever, but chose whatever is best for Puerto Rico. I 

understand that a private company will not do business to lose money, 

nobody, nobody thinks that. All dealers, - I say, I have no such problem 

one has to have two options, win or lose - they all have the fear what if the 

rent is raised, if it is lowered, that if... hello! That's negotiations! The 
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government also raises and lowers the rent, that is, let's talk about what is 

good for Puerto Rico, and if it's good, let it be and if it is not, well then let it 

not be. That's my approach and we will be here not for 17 but 50 or until 

God willing we will be there. Thank you.

Randall Fiertz: Thank you.

Luis García: They say they need 5 million tourists, it’s not five, I remember 

when American would say "get ready because tomorrow we have nine 

thousand passengers" One day American, American Airlines in 2000, it is 

on record. My company sold $92,000 in that month, which is on record; I 

say it publicly that we paid $13,000 to Ports. Today we do not reach half of 

that. But we are there. Now what we want is that whoever comes, improves

everything. But it is not about the bathroom, that's nonsense; anybody can 

clean a bathroom, that’s a metaphor. What we want is that whoever is in 

Puerto Rico ... I forgot that the representative left, he had an approach 

about “Supertubo”. Just so you know, a work of hydraulic engineering that 

was done, brought water from elsewhere, to places there was no 

availability of water supply, and it really went over budget, it happens even 

in one's home, one has a budget and then you spend more, so you make 

your adjustments. Where I live it is a very good and comfortable 

neighborhood, in that moment before I bought it, there was no water, now 

there is water, thanks to the “Supertubo”. That is being done around the 

streets; I believe in the private enterprise, I come from it ... I mean I come 

from another place. But I believe in private enterprise, and the government,

only I would say the smaller the better. There should be intelligent people 

leading us, that’s why we are central states, states of consciousness, if not, 
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we would be a tribe. The less people in the government the better, because 

then they do not have to charge me taxes, because the government does 

not produce, the government gets your money out of the pocket. If instead 

of 5 there would be 2, perfect! But the work of two has to be done by 5. Do 

you understand me? The smaller the government the better.

Randall Fiertz: Thank you

Samuel Caraballo López: Good afternoon to the honorable 

representatives of the Federal Department of Transportation and the 

Federal Aviation Administration who are here with us, and the general 

public who are here with us. My name is Samuel Caraballo Lopez, I am a 

pastor of the Evangelical Church of Puerto Rico, is one of the oldest 

denominations in the country, I am a resident of the municipality of Ceiba 

and president of APRODEC short for The Alliance for Economic 

Development of Ceiba. APRODEC is a nonprofit organization registered 

with the Department of State of the Commonwealth of Puerto Rico on 

October 21, 2003, with the number 43.592, and whose mission is to 

promote the economic, social and cultural development of the 

municipalities of Ceiba, Naguabo and eastern Puerto Rico through actions 

and initiatives. After carefully reading the proposed lease contract that the 

Luis Munoz Marin International Airport, or the Ports Authority, intends to 

sign with a private corporation or a PPP, I have come to this place with the 

purpose of publicizing a growing concern of my community regarding this 

intention. In that contract, in section 3.22 entitled other aviation services 

specifically mentioned, by name, the airport located in the town of Ceiba 

and which was the airfield of the former Roosevelt Road Navy Base until 

March 2004, this section 3.22 that I want to draw attention to represents the 
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redevelopment of the former Roosevelt Road Navy Base, the main 

economic development project in the east area of Puerto Rico and a 

serious obstacle that threatens job creation and re -development of it. As 

you are aware, the former Roosevelt Road Navy Base by decree of the 

Congress of the United States of America closed its doors permanently on 

March 31, 2004, the Law "Brack" which aims to promote redevelopment of 

these military installations and convert them into civilians was immediately 

activated, in order to recover the losses caused by this closure in the 

affected region, in this case the Eastern Region of Puerto Rico. The impact 

of the closure of the Roosevelt Road Navy Base was such that left many 

unemployed residents and from the entire island, creating an environment 

of economic decline in the towns surrounding these facilities mainly Ceiba 

and Naguabo, which endures until now. From that moment governmental, 

municipal and community actions began so that this longed-for 

redevelopment would be under the most favorable conditions for the people 

affected by the closure. After constant efforts for several years, last year on 

October 7

th 2011 Governor Luis Fortuño signed the master plan for the site 

of the former Roosevelt Roads Naval Base, the authority's proposed plan 

for the redevelopment of Roosevelt Roads and was welcomed by the U.S. 

Navy, until that time, and the Planning Board of the Commonwealth of 

Puerto Rico. This is an integrated plan which outlines the growth and 

development of the property of the former Roosevelt Roads Naval Base 

and the transformation from military to civil. This master plan includes 

analysis, recommendations and proposals for the protection of natural 

resources, land use in a sustainable manner, the area's economic 

development, the provision of housing, transportation, and community 

facilities, among others. It is in this plan that transportation infrastructure 
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plays a central role in the development of the whole area. All economic and 

tourism development proposed is subject to the availability of 

communication, transportation, availability of posts and airports within the 

base. The plan establishes the importance of the former military airport and 

emphasizes its 11,000-foot runway, its industrial zones and their ability to 

receive large-scale international flights. It emphasizes this regional airport 

as one that can provide an interface between the island and the eastern 

Caribbean. That is, in all 17 areas of proposed development of that plan, 

which was approved by the Department of Defense and the Navy, the 

transportation infrastructure cannot be disconnected from the desired and 

planned economic development in the east. The Ceiba airport 

development, which is essential not only for national security - which is a 

priority of all airports in the U.S. territory since September 2011 - but for the 

protection of our shores because of the increasing crime activity in the area 

and as infrastructure for the economic development of the region. For all 

these reasons, Section 3.22 establishes that the Port Authority has to 

consider this section. And especially I want to finish by saying this. Request 

number 1, in the light of what was stated here, section 3.22 should be 

deleted because of its adverse effect on the economic, social and cultural 

development of the eastern region, and specially in the municipalities of 

Ceiba and Guaynabo. Besides, the lack of desired development will affect 

not only us, but even to the continental United States. If this section of the 

contract is not amended then we request that no authorization be granted 

to the privatization contract of Luis Munoz Marin Airport. Thank you very 

much and good afternoon.

Randall Fretz: Thank you very much. 
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José Gerardo Tirado Vega: Good afternoon to the FAA panel. Good 

afternoon to the audience. My name is Jose Gerardo Tirado Vega. I am a 

former concessionaire of the Isla Grande Airport and International Airport 

doing business under "World Connections" which was dedicated to freight 

aircraft, helicopters, handling service , air ambulance plane, air ambulance 

helicopter. Representing Volky International Airways Helicopters and 

Health Center. Providing air ambulance service through Volky, also serving 

NAVY through "Air center". In 1992 I had the courage to stand up to the 

government of the time, not giving in to pressure and blackmail from them. I 

would like you to --before reaching a conclusion on this contract approval --

to visit the Department of Justice of the United States in the Puerto Rico 

division, and verify who were the ports’ directors of the last 10 years1992-

2012 and the last 4 directors of the Luis Munoz Marin Airport. The reason is 

because I lived an experience where I was asked for money in order to 

receive contracts for my services, but nobody has heard me. In November 

2011 I went to the offices of the FBI and I submitted all the evidence. On 

the web page queréllate.com on twitter @ querellate I have expressed all 

the evidence. I would like to verify all acts of corruption that took place from 

1996 to this day. And you will see that they all belong to the political party 

in power. I’m not a politician, I'm not affiliated to any political party, nor do I 

care. I would just like for you to somehow check in the Justice Department 

who were the ones involved in these transactions, because I was affected, 

and I lost everything. Because I refused to pay $5,000 to a Director of Real 

Estate who died pleading guilty to the Federal agency. You should also

verify that the Senate’s president said a few years ago that he would 

conduct an investigation about the death of Mrs. Barbara Small, at the 

International Airport in 2009 because there was no land ambulance service, 
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when we had a 24 hour staff. This man said he was going to do some 

research and never carried it out, why? Because he’d be finding guilty 

people such as a former governor. Imagine that when I went to the 

“Fortaleza” to introduce myself and to take this complaint, the person who 

assisted me, was the son of the person who died, which was the one that 

tried to extort me. They stole my Porsche from the other airport, even when 

I was a concessionaire, and did not pay me.

I disagree with the privatization of the airport because many of us who are 

here today, some who have already left, have had the courage to build the 

foundation of what we have today, and now they want to take the best part 

away from us, after we strived for it anonymously, on many occasions, 

providing our services, now they want to sell something that belongs to all 

Puerto Ricans. And I'm Puerto Rican; I am a very proud American 

citizen. But I feel that there has been a violation, why? Because many of 

these people will ask you for money, and I have the names and I'm ready 

... And I demand that you evaluate this before you reach a 

conclusion. Quote all the cases of corruption that have occurred at the 

airport in PRPA. There are many, many ... I just ask you to go to the FBI, 

go to the Department of Justice, I'm more than willing to help, I want this to 

be clarified for me and I want them to return what was stolen from me. Yes, 

I've been robbed. I started when I was 24 years old, I will be 44, and it is 

not fair that I have lost everything only because I refused to give money to 

a public employee who does not deserve to be paid for a service that was 

his responsibility to offer. Thank you and good afternoon.

Randall Fretz: Thank you.
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Jesús Ramos Puentes: Good afternoon to the FAA panel and to the entire 

audience. My name is Jesus Ramos Puentes and I’m the President of the 

“Paradores” of Puerto Rico Association. And a fraternal greeting from 

Puerto Rico’s highest town here to the metropolitan area. Paradores of 

Puerto Rico are small and medium tourism guesthouses that host

tourists. One of the peculiarities of Paradores of Puerto Rico, which is a 

program that best supports the government, is that it is ran by its 

owners. Right now we have 792 rooms offering all rooms’ nights to 

visitors. We understand that the Luis Muñoz Marin Airport has had a 

number of situations, most of them having to do with aesthetics and 

planning, there have been several things that could have been done 

better. But because of the changes of government, economic situations, 

the bureaucracy, unfortunately they have not been handled in the most 

feasible way. We as representatives of paradores in Puerto Rico - that 

although we draw a lot of domestic tourism, however tourism also depends 

on the tourists who come from anywhere around the world - we really need 

the Luis Munoz Marin Airport as a world class airport so that night improves 

and the number of passengers who come here to Puerto Rico grows and 

this will end up nourishing us on nights / rooms. We know it's uphill, but you 

people who are thinking of leasing the airport and have the experience, and 

have the capital, to develop the airport and make it a truly world-class 

airport. So that all our guesthouses continue improving. Note that we 

cannot forget the regional airports, for regional airports are also part of our 

Puerto Rico and they help the paradores that are in different parts of Puerto 

Rico, not necessarily in the center of the island, which may have also its air 

traffic. We the Owners of “Paradores” Association and the Paradores of 
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Puerto Rico we fully support the public-private partnership and long term 

lease of the Luis Muñoz Marín Airport. Thank you very much.

Translation note from the translator: ”paradores” are independent small 

hotels/motels/bed and breakfast type of lodging places.

Randall Fretz: Ok, thank you very much.

Abimael Portalatín Rosario: Good afternoon. My name is Abimael 

Portalatín Rosario; I'm running for mayor for the popular party in the town 

of Ceiba. First of all, on behalf of the residents of the town of Ceiba, I 

express our gratitude for the opportunity given to us to state the position of 

thousands of Ceiba Residents who identify with the statements that we will 

bring up throughout these remarks.

This Commission will be evaluating during these hearings, the lease 

Agreement of the Luis Muñoz Marín International Airport in Carolina, 

Puerto Rico. So that we all understand the concerns that we have about 

some commitments of this agreement and its relationship with the residents 

of the town of Ceiba. It’s not only about Ceiba’s Residents, but about all the 

residents of this east area, which expect from the development of the 

former grounds of the Roosevelt Roads Navy Base but particularly from its 

airport, the economic opportunities that they have been waiting for for many 

years.

In 20 years or so we would see the development completed and would end 

once and forever the half century of unlimited use of our soils. To ensure 

that development is not interrupted, the government of the Commonwealth 

of Puerto Rico and the U.S. signed several clauses required to be 

disclosed to the record of this committee. At its thirteenth 9 (a) part entitled 
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"Federal Aviation Administration Land Use Restriction, Condition and 

Conversant" the following commitment was signed: "Airport Layout 

Plan" The grantee will keep up to date at all times an airport layout plan of 

the airport showing boundaries of the Airport and all Proposed 

additions thereto, together with the boundaries of all offsite areas owned or 

controlled by the grantee for Airport Purposes and Proposed additions 

thereto. The location and nature of all existing and Proposed airport 

facilities and structures (Such as runways, taxiways, aprons, buildings 

terminal, hangars and roads) including all extensions and Proposed 

Reductions of existing airport facilities, and (3) the location of all existing 

and Proposed to non-aviation of all existing areas and improvements 

thereon.

Such airport layout plans and each amendment, revision, or modification 

thereof shall be subject to the approval of the Secretary Which Shall Be 

approval evidenced by the signature of a duty Authorized representative of 

Secretary on the face of the airport layout plan. The GRANTEE will not 

make changes to permit any of Alterations in the Airport or any of its 

facilities are not in conformity that with the airport layout plan as approved 

by the Secretary and which might, in the Opinion on the Secretary, Affect 

adversely the safety, utility or efficiency of the Airport. "

Later on the following clause was reserved:

In the event any of the aforesaid that terms, conditions, reservations, or 

restrictions are not met, observed, or complied with by the grantee or any 

subsequent transferee, whether caused by the legal inability of said 

grantee or subsequent transferee to perform any of the obligations herein 
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set out or otherwise, the title, right of possession and all other rights 

transferred by this instrument to the grantee, or any portion thereof, shall at 

the option of the government revert to the government in its then-existing 

conditions sixty (60) days following the date upon which demand to this 

effect is made in writing by the Secretary or his or her successor in 

function, unless within said sixty (60) days such default or violation shall 

have been cured and all such terms, conditions, reservations and 

restrictions shall have been met, observed, or complied with, or if the 

grantee shall have commenced the actions necessary to bring it into 

compliance with such terms, conditions, reservations and restrictions in 

accordance with the compliance schedule approved by the Secretary or his 

or her successor in function, in which event said reversion shall not occur 

and title, right of possession, and all other rights transferred hereby, except 

such, if any, as shall have previously reverted, shall remain vested in the 

grantee, its transferees, successors and assigns.

Agreement of the Government in Puerto Rico Luis Munoz Marin Airport

Recently the administration of Luis Fortuño announced an agreement to 

lease the Luis Munoz Marin International Airport. In it, among other things, 

they committed to limit the development of the airport Jose Aponte, by 

Section 3.22 of the Agreement. In other words, the entire development set 

out in the Development Plan on Roosevelt Roads Airport that had the 

support of the Federal Aviation Administration on October 11, 2007 will be 

violated with the clause cited above.

Conclusion
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This contractual provision is detrimental to economic development 

opportunities that are expected across the east coast of Puerto Rico. And 

that Section 3.22 is in direct contradiction to what you, the Secretary of the 

Navy and the Government of Puerto Rico had approved on the 

Development Plan on Roosevelt Roads Airport.

A limited use of the airport will obviously limit the development of other 

activities such as the port area and other activities that are expected to be 

installed around the airport. You don’t need to be an expert to conclude that 

the thousands of jobs that were expected, the movement of tourists and the 

creation of new businesses, will no longer be achieved, much less will we 

be able to see a potential economic development if the use of the Jose 

Aponte Airport is limited.

It is possible for you in completing this process...

Randall Fretz: Sir, you need to finish please. 

Abimael Portalatín Rosario: Ok. We do not support the terms signed by 

the Government and the contractor, as being contrary to the Agreement 

signed by the Government of Puerto Rico and the Secretary of the Navy of 

the United States and which was approved by the FAA itself. Thank you.

Randall Fiertz: Thank you very much.

Noemí Cardona Tomassini: Good afternoon to the members of this 

research commission. I am here as a resident from Aguadilla, as a public 

employee, and as the candidate running for mayor of the city of Aguadilla 

for the Popular Democratic Party, with particular interest in the projects that 

affect the population of the Aguadilla municipality. That is the case of the 
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privatization of the Luis Muñoz Marin Airport; especially with an agreement 

we understand is terrible for the development of the regional airports, 

including the Rafael Hernández, which is located in our city at the west part 

of the island.

This contract has the intention of using the Aguadilla airport solely as a 

cargo airport, which would limit the access of thousands of Puerto Ricans

to a passenger airport and would contradict the NPIAS #8 statement. In this 

plan it is established that “the airport system should be extensive and 

provide convenient access to air transportation to the greater amount of 

people in the possible, typically at no more than 20 miles of a NPIAS 

airport.

The airport of Aguadilla has the longest runway of Puerto Rico and the 

Caribbean...more than 11,700 feet. It is the one with greatest development 

potential among the regional airports, precisely for its big land that is above 

1,000 acres. It is not incompatible, then, to develop its potential to move 

cargo but also to move passengers. In fact, nowadays it is possible to 

process up to three domestic flights at the same time and passenger traffic 

increases between two and three percent each year.

Why not develop to the maximum both activities? Why not allow the 

citizens of Aguadilla and nearby towns to use the airport facilities to visit the 

principal cities of the United States where their relatives live and where 

they go for vacation?

Limiting the growth of this and other airports in Puerto Rico as passenger 

airports will only contribute to the development of a monopoly of the San 
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Juan Airport and will limit the access of Puerto Ricans to air transportation, 

and it will be in contradiction with the NPIAS #8 statement. 

The air space of Aguadilla has very little congestion; therefore it is possible 

to bring more flights without creating security problems. This provides for a 

greater expansion capacity. The Master Plan approved by the FAA 

incorporates a good balance of air uses like, Passengers Terminal, Cargo

Terminal, Corporative Hangars, and Service Hangars.

Not allowing the development of the regional airport of Aguadilla will 

constitute a delay in the development of our region. Not developing it would 

be a contradiction of the government, who has the constitutional obligation 

to look after people’s wellbeing, and the economic development of a region 

would contribute to the economic development of Puerto Rico.

Finally, I would like to draw your attention to what a former governor once 

proposed, in this case Pedro Roselló, to a congressional committee that 

came to Puerto Rico to celebrate some hearings about the presence of the 

Marine of the United States in Puerto Rico. “Don’t push it” he said and I 

retake that. What we pretend is for you to solve this to the best interests of 

Puerto Rico. If you push us to a bad business we will defend our right to the 

development with equality and facing the future.

Thank you very much!

Randall Fiertz: Thank you.

Raúl Bustamante: Good afternoon. My name is Raúl Bustamante; I’m 

the chairman of the Puerto Rico Convention Bureau. This organization has 

been bringing groups to Puerto Rico for the past 50 years and we are in 
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favor of this initiative because it represents new opportunities of new 

international airlines serving Puerto Rico. Because it represents new 

investments amounted to over two billion dollars to make the Luis Muñoz 

Marín Airport an airport of world-class. This investment will signify airport 

improvements to position the Luis Muñoz Marín Airport at the level of the 

most important airports in the hemisphere. The present condition of the 

airport lacks the appearance and efficiency that an island like Puerto Rico 

deserves. Another benefit is job creation; the investment will create new 

jobs, not only construction jobs, but additional ones, as much as new 

airlines visit Puerto Rico and start bringing new passengers for business 

and tourism. Passenger traffic is estimated to increase by 200,000 people 

a year, or additional 140 million dollars. Air seat capacity to Puerto Rico 

has decreased by approximately 18% as compared to June 2008, in spite 

of the new airlines serving Puerto Rico in the past three years. This, as a 

result of the loss of American Airlines that has decreased more than 60% 

its flights to Puerto Rico as compared to 2008. The Luis Muñoz Marín 

Airport has lost its predominance in the Caribbean region; since 2004 when 

all airports have increased by 74%, and ours has decreased by 26%. We 

therefore support this initiative for the well being of all Puerto Ricans.

Thank you very much.

Randall Fiertz: Thank you.

Mariela Matías: Good afternoon to everyone here, my name is Mariela 

Matías, I represent the POS Caribbean Company and I address you ... I am 

here before you this evening to express my point of view on the 

participation of the company Aerostar Holdings in the administration and 
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management of the Luis Munoz Marín International Airport. As an 

employee of the private sector and representing the interests of my 

company, I consider it a good choice of this administration the concession 

of the operation of our most important shipping port. We all know that 

Puerto Rico, being an island, one of our main challenges is and always has 

been the movement of people and goods to and from our territory. We are 

highly dependent on them, and we import most of the products and raw 

materials we consume while our economy also depends on the products 

and materials we export. It is therefore of vital importance for all who live 

and work here, to have adequate infrastructure to reach the standard of 

living and socio-economic situation that we long for, and today the Luis 

Munoz Marin Airport is not at the height of our needs. We live in an era 

where there are no boundaries; advances in communication technology 

and the increasing trend towards globalization in all corners of the world 

have opened the doors to a new kind of economy. Today, a Puerto Rican 

company competes not only with similar businesses and our territory, but 

also hundreds of other companies worldwide. This challenge is not a 

negative one, however, has allowed us to expand horizons and become 

more competitive and create more and better opportunities for doing 

business in Puerto Rico, and abroad. But how can a company hope to 

succeed in the world if you do not have the necessary tools that allow you 

to be in equal conditions, or better than your competitors? You cannot, it is 

very difficult, those companies that do not evolve to stay up to date with the 

industry trends are left behind and die. I say this with complete certainty 

that in Puerto Rico we have top quality companies, but have forgotten the 

main and most important thing, the one that belongs to all of us which is 

our island. Puerto Rico as a country competes economically with other 
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states and countries. We compete as a tourist destination, compete as an 

investment destination and very important; we compete as a shipping and 

transit port due to our privileged geographical location. How can we intend 

to be at the forefront in the area that should be our natural strength, if our 

infrastructure is outdated and inadequate? The Luis Muñoz Marín 

International Airport is just one of many tools that we have to be successful 

in our careers. That is why it is in our best interest, and I dare to speak for 

all private companies, to make a drastic change in the way this important 

port currently operates. This change at the hands of Aerostar Holdings, 

formed by Highstar Capital and ASUR, has great potential to be successful, 

when you look at both companies’ prior initiatives, you see that that’s 

enough to realize it. There are great needs and gaps in our country:

education, security, economy and quality of life, all for which our 

government is responsible. Let’s let the Government of Puerto Rico focus 

on what interests us the most: to focus on solving these problems, and let 

the airport management experts manage the airport. That way we will be 

working for the well being of our entire island, creating new jobs, generating 

new business for local companies, creating opportunities for new 

investment opportunities and putting the name of our island up high. 

Finally, I urge everyone to always to keep in mind that the airport is still 

ours, it belongs to the Puerto Ricans and to all the people who live and 

work in our island. Consider this a positive change that will benefit us all 

and we welcome those who come for progress. After all, if there is anything 

that characterizes the Puerto Ricans in the world is our hospitality and 

goodwill. Thank you very much for your attention.
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Randall Fiertz: Thank you. 

Jorge Valdivieso: Good afternoon. My first question is: where can we 

obtain a copy of the contract? I have tried to get it at the Controller’s Office 

where most government contracts are registered and ... they do not have it 

registered, and we just wondered if it’s at the Ports Authority or if it’s 

available there to, so we can get a copy. That’s all?

Randall Fiertz: Just a couple of things. One, if you could tell us your name 

and if you’re representing anybody or an organization and secondly ...

Jorge Valdivieso: My name is Jorge Valdivieso and I’m a private citizen.

Randall Fiertz: Ok.

Jorge Valdivieso: I would like to add that I am a commercial pilot. I’m 

also member of AOPA, the Owners and Pilots Association. And I’m 

concerned also in two cases. First of all, what is the scope of the airport 

arrangement? I mean, in the 1970’s the former governor, governor Luis A. 

Ferré ordered a study of the airport situation in Puerto Rico ... in Puerto 

Rico. For that purpose they brought in one of the leading aerospace 

industries, which was Northrop. Northrop, especially their division of 

Airport Development Corporation, undertook a study of the San Juan 

International Airport and they made various studies, they also made one of 

the new southwest, and their, and the result of the study is that the airport 

would soon to be obsolete. And that it would be best to transfer the main 

location studies. The plans were made, the funding was arranged,

unfortunately there was a change of government, and like in most 

governments when a new one comes in past studies are just drawered, 

etcetera. But nevertheless I do recall one of the main concerns was the 

approach, which was not of the best interest, because it was ... it crosses 
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the whole city of San Juan from one end to the other. Plus, it stalls the 

vertical growth of San Juan. Buildings in the business area can be 

constructed to certain heights and unlike many countries in Latin America 

who boast their skyscrapers etcetera, we are limited to the height of just 

one building in downtown Hato Rey, the Banco Popular building, no 

building can be taller than that. That’s a 20 story building. So, the, that is 

one question. What, if that study at all is to be considered, and I think it 

should be considered as a study for this airport. Number two, what is the 

scope of the arrangement? What if this airport does become obsolete for 

any reason at all? Are we leasing land or are we just leasing airport 

operations? It could be as it is, I’m not very familiar with it, it could be a 

very reasonable rental for an airport operation. If the airport were to 

become obsolete, does the contract persist? And the managing operation 

will have then control of the entire acreage area, right in the center of the 

metropolis? This is a very valuable area, right across from the tourist area.

In fact, the northern runway is about 20 feet away from the ocean; 20 

meters away. So that is the question, what is the scope of the leasing? I 

do not know, I do not have the plan. Now, my personal interest is I am 

from Ponce. Ponce is proud of its regional airport. Ponce has a JetBlue 

flight which arrives in Ponce and leaves completely full. I don’t think there’s 

been an empty seat in the last ... since they started flying there. I don’t 

know, I do not know if flights are going to be limited. I’ve heard some 

people say that this contract limits the regional airports. I do not know if 

this is going to limit the Ponce airport. Ponce is now in the midst of 

construction of a mega port. All the dredging has been done, this very 

expensive cranes have been brought in and this airport is a complement to 

this super port, like have been built in various different reasons. So, it is 
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my inquiry to think that to limit any of these regional airports would be 

harmful to the city itself. In the United States, as a member of AOPA, and 

an active member, in the United States every town and city fights over an 

airport. They usually fight with FAA but they get along very, very well, 

especially under the current administration. And they realize the 

importance of an airport. Some people have not realized the importance of 

an airport. So, that is another question which I have my doubts about. In 

the Dominican Republic, for example, which supposedly we are more 

advanced that they are, JetBlue flies to six different cities. Are we going to 

limit Puerto Rico to just one city? They fly to Samaná, they fly to Santo 

Domingo, they fly to Cape Cana, they fly to Casa de Campo, they fly to 

Boca Chica, they fly to six different places. And here, are we going to be 

limited to just one? Okay, the ... So ... Well, that’s about... I’ll close on 

this. I still do not have an answer right now as to where I can get a copy of 

the ... of the contract. The Chamber of Commerce of Puerto Rico would be 

very interested in having this also. The Chamber of Commerce in Ponce, 

would be very interested. So, if anybody can tell me that.

Randall Fiertz: Yeah.

Jorge Valdivieso: You will get me one? Thank you very much. Thank 

you very much and thank you for your assistance and presence here in this 

very important decision which has to be made.

Randall Fiertz: Thank you for speaking to us. 

Jorge Valdivieso: Again, I would like to close. I have nothing against the 

PPA either, but it’s just the outreach of this airport, how it can affect others 

matter in this situation, which is my concern and from the little I’ve heard 

here is also the concern of many.

Randall Fiertz: Thank you.
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Ángel Figueroa Jaramillo: Good afternoon. My name is Angel Figueroa 

Jaramillo, Chairman of the Workers Union of the Electric Industry of Puerto 

Rico, which groups over 6,000 workers in the electric industry and over 

17,000 in other government branches. I would only like to leave a thought, 

for the record, since our economist Jose Antonio Herrero will be giving the 

presentation. In 1802 Thomas Jefferson said: “ I think the banks are more 

dangerous for our freedom than all the armies listed for combat, if the 

American People were to one day allow banks to control their own money, 

the private banks and all of these entities that would flourish because of 

them, would deprive the citizens of what is rightfully theirs; Beginning with 

inflation and later with recession, until their children wake up without a 

house or a roof on the land their fathers conquered”. This is precisely what 

it would be like to hand over our airport to foreign hands. Now I will leave 

you with our economist, Jose Antonio Herrero.

José Antonio Herrero: Good afternoon, my name is Jose Antonio Herrero 

and I would like to approach the table to hand out some documents that 

may be helpful in the brief presentation I am going to give.

Good afternoon. First of all thank you very much for allowing me to express 

myself before this commission and make some approaches that I believe to 

be important concerning the discussion of the preposition of the PublicPrivate Alliance of the Luis Munoz Marin Airport. My presentation contains 

two fundamental parts. One which I am going talk about today that is based 

on these notes I just handed out, that aren’t finished. The other that I shall 

present in writing that manages the question of risk of the project and the 

distribution of risk between the parts, which is one of the most important 
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things and poorly treated or battered in this proposal being made. I’m 

referring now to the cost-benefit financial analysis of the project in

consideration. First of all I should say, for the record, Puerto Rico has 

raised two important things with regards to financing that are truly the most 

important ones.

1. That the emission of the debt being made is to pay off the Ports 

Authority debt. --I was going to say to my surprise, but it shouldn’t 

surprise me, -- this morning I the President of the Government 

development Bank say that only 55% of the debt will be paid off, 

which means that 45% will be left hanging from a lamp. But it will 

have to be paid. On the other hand, it has been said that the airport 

and Ports Authority is in an unsustainable financial situation that the 

airport does not work, and that it is making a loss. I would like to say

for the record, that the Puerto Rico Airport, the International Airport of 

Puerto Rico is a highly profitable airport. What happens is that we 

don’t stop to look at the facts. On the other hand the Luis Munoz 

Marin Airport generates approximately 70% of Ports Authority 

income. If the Ports Authority’s income is lost and it keeps the 45% of 

the debt that supposedly was going to be paid, then Ports Authority 

will be in a very bad financial situation; and so will be the other 

projects of the other small airports. To give you an idea, since I see 

that the red light is threatening us, I can tell you the following: The 

value of Luis Muniz Marin Airport, valued for 40 years, using the facts 

published by the informational system that the Federal Aviation 

Administration has, the airport has a market price value from 2011 of 

$1.788 billion. Those are at the endnotes. 
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Now, what are the contributions that are going to be made? Or the 

investments said to be made? There are no investments here, only the 

transfer of a property from one hand to another. So now the cake can be 

eaten from one part when it used to be eaten from another, but the cake is 

the same one and hasn’t grown. The present value of the contributions is 

going to be made nominally because everything is going to be financed 

through the government of Puerto Rico. On the closing day the so called 

private partners aren’t going to pay a dollar. Let’s make that clear. Even the 

30 million dollars that they have said they will paid on the closing date are 

subject to the paying off of the debt, and since the president of the bank 

said that the debt will not be paid off then the 30 million will not be paid. To 

conclude, the results of this exercise are in writing and can be verified. All I 

can say is that the Ports Authority will have a lost, according to calculations 

I have done, using published data in Official Statements of bond issues, 

using data from the FAA, data from Ports Authority. It is no projection of 

mine, it is not made it up nor have I invented it. They are borrowed official 

data. Through that transaction we are speaking about to the government of 

Puerto Rico, it will cost Ports Authority in net terms 1.088 billion dollars 

without including federal contributions. If we were to include grants and 

PSTs we are talking about a 1.6 billion dollar loss for Ports Authority. In 

conclusion, so you can see the quality of clientele we’re dealing with, I 

invite you to read the first table. The first table is a piece of heaven based 

on a loan that the Ports Authority will issue, with the emission of $669 

million of bonds issued by AFI, guaranteed with two irrevocable credit 

letters by the Government Development Bank, which will to be used to pay 

the debt and later the private partner will be paying off little by little. This 

means that the private partner is borrowing from the government in order 
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for the government to pay its own debt. Then they make a payment plan, 

they divide the loan in three parts and one of the parts is specified in the 

first table. Let me explain the columns to you. On the second column...

Randall Fretz: Sir, you're gonna have to ... 

José Antonio Herrero: Give me one minute. Just one. 

Randall Fiertz: One minute.

José Antonio Herrero: Please, take a look at the second column; this is a 

schedule of payment. A schedule of payment proposed by the private 

partner. Payments .6 etc, etc, around a million except the last two years. If 

you pay around 80% of the loan, what kind of the client is this? He is asking 

you for a payment plan and he uses the opportunity to not pay a significant 

amount for the first ten years and leave the most important chunk of 

payment for the last two years. And we are talking about only 192 million 

dollars. Assume what would be the approach of these people if they had to 

pay 1,000 million dollars. Thank you very much. 

Jorge Valdivieso: Sir I consumed my turn, but could I ask one more 

question? I’m number 54. Ok, thank you. It’s a question for the FAA. My 

question was: In 1950 if I’d told anybody “well I’m going to the moon” they 

would say “well, you’re reading too much Buck Rogers” and ten years later 

we were walking on the moon. Under those under those circumstances, is

it logical and correct? Maybe this is good, this contract is good, but is it 

logical and correct for forty years? I mean, does anyone of you know what 

the aviation is going to be in 40 years? Well I doubt that very much. I 

know you’re all young but we have to consider that also. We have to 
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consider that also, maybe. Thank you very much again, and sorry to 

interrupt. 

Emilia Barreto: Good afternoon. I’m a private citizen, I’m Nydia Barreto. 

I’m just concerned about some comments here from these speakers. They 

said: To repair and fix the airport, to bring such people. We’ve had guests 

here as good as Jackie Kennedy, Miss Obama, Mr. Obama, presidents, Liz 

Taylor, and we enough for those people. It surprises me when people 

made that kind of comments. To fix and clean to bring such a class and to 

bring people that come to five star hotels. It surprises me that some people 

that come down here do not speak English or French or Italian. And some 

of the people that were here speak very poor English. How can we 

manage an international airport when we are not prepared and ready? I will 

ask a favor to this group to find out who is Fernando Chico; he is the 

president of contract from Mexico. And who is Rafaél del Pino, he is from 

Madrid. Puerto Rico doesn’t need to have routes; Puerto Rico has plenty 

of routes. Let’s keep good routes, we don’t need to. Here is a letter from 

the White House; we citizens worry about our security at Luis Muñóz Marín 

International Airport and the other airports around the Island. There are 

around 5 or 6. I think the problem in Puerto Rico are “los politicos” that’s 

the only problem we have. Lets maintain our properties, let’s keep teaching 

our kids, let’s training our employees, let’s supervise our employees, and 

don’t play around with our properties, we need more security. What’s 

cooking in Mexico today? Think about that. These people from Mexico do 

not manage any airport outside of Mexico. Thanks for listening and I’m 

very very upset. 

Randall Fiertz: Do we have any other speakers? One more? 
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Jon Borschow: Good afternoon, excuse me, good afternoon. My name is 

Jon Borschow and I’m Chairman of the Foundation for Puerto Rico. I’m 

very, very happy to be here and I have a few remarks for you. First of all I 

want to greet all the FAA officers and representatives from the Puerto Rico 

Public Private Partnership Authority, and the Government Development 

Bank and the Puerto Rico Ports Authority and other officers here present.

I am a former, a retired businessman and the founder of a health care 

products distribution company here in Puerto Rico. I am currently 

overseeing the scaling up of a private not for profit foundation devoted to 

economic and social development in Puerto Rico.

I am also an avid global traveler. I will elaborate on the perspective that has 

given me on the importance of a properly functioning and weII-structured 

international airport at the end of this presentation.

First of all, I want to congratulate the FAA, the P3 Authority, the Ports 

Authority and the GDB for the level of transparency in this transaction. I 

have reviewed the FAA Final Application documents which include the

Lease Agreement and the Airport Use Agreement, among others.

I am fully supportive of this prudent experimentation in private management 

of a key public asset, particularly given the crucial role of the Luis Muñóz 

Marín Airport for the overall functioning of Puerto Rico's link to the rest of 

the world. It is a win-win proposal for the entire society and economy of 

Puerto Rico, passengers and users, the Ports Authority and all airlines

operating at Luis Muñóz Marín, which unanimously endorsed this

transaction.
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The selection of Aerostar LLC and the affiliated companies as the private 

operator of Luis Muñóz Marín under a 40 year lease has also been shared 

publicly by PPPA and as part of the Final Application. The partner has been 

selected from an initial pool of twelve, subsequently limited to six (6) 

qualified global respondents, based on the evidence on its reputation, 

managerial, organizational and technical capabilities and experience in the 

operation of airports, with specific reference to airport operations, 

development, maintenance and route development; safety and security; 

airline and passenger customer service; and experience working with 

government authorities. Proponents were also asked to submit evidence of 

their financial capability. The documents made public provide evidence of a 

full due diligence process where these finalists were given access to PRPA 

lease agreements with private operators and all other material information 

over an adequate time frame. A second round of due diligence was made 

available to the two finalists. 

The Ports Authority is currently under a fiscal oversight agreement with the 

Government Development Bank, since it has neither adequate debt service 

to cover the payment of ifs bonds nor will be able to refinance $340 million

in bonds due during 2013. The reduction in revenues and passengers has 

been widely discussed. Even when al economic and promotional strategies 

need to be aligned to boost travel, export and economic activity, having a 

well managed and improve Luis Muñóz Marín Airport is a key starting point. 

Therefore, the P3 transaction is the only way forward to secure much 

needed investment in this valuable asset, the key gateway in and out of 

Puerto Rico. Aerostar will be required by the Lease Agreement and use 

Agreements to perform certain critical capital improvements during the 
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initial years of this lease and expects to perform additional capital 

improvements during this period as well. 

It is critical for the FAA to confirm that the P3 Authority, the Ports Authority 

and the GDB/3 Authority and Ports Authority to jointly devote the 

appropriate effort level and quality of independent supervision of this P3 

agreement. The P3 Authority has stated that these efforts would most 

probably require the appointment of experts. The identification and 

appointment of such experts will be conducted on parallel to the pending 

FAA approval and transaction closing.

In this regard it would be most helpful for the Puerto Rico Legislature to 

amend Act 125 of May 7, 1942, specifically section in order to strengthen 

the composition of the Port Authority Board to include more civil society 

and private sector directors. Article 4 of Act 125 addresses the Executive 

Governance of the ports Authority. It states it will be governed by a Board 

of Directors composed by the Secretary of Transportation, the PRIDCO 

Administrator, the Commerce Secretary (now DDEC), the Tourism 

Company

Executive Director and one private citizen in representation of the public 

interest. This private representative is designated by the Governor, with 

the Senate's consent for a four year term appointment until a success has 

been designated. We recommend for the FAA to request the Government 

of Puerto Rico to amend the governance structure in order to increase 

private sector representatives and have longer appointment periods. Such 

continuity and mix in the profile of directors would be of great benefit to the

optimal oversight of the LMM Airport P3 Agreement.
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Endorsing such improvement in governance would also protect the public 

interest by overseeing the transformation of the Ports Authority post this P3 

transaction. The specific post transaction plan (document 0039 included in 

the FAA Final Application package) needs careful implementation as it 

aims to have the Port Authority return to financial stability and have 

adequate debt service coverage. The income coming from the P3 

transaction annually will assist in reinvesting into the remaining regional 

airports, with Aguadilla as main future provider of high value added logistics 

and cargo services.

We believe at the Foundation for Puerto Rico that our economy cannot 

grow sustainably unless we produce something that someone who does 

not live in Puerto Rico is willing to pay for. Restoring sustainable economic 

growth will depend on our ability at all levels of society to re-visualize 

Puerto Rico’s future as one deeply engaged with the global economy. 

We also believe, as does the White House Task Force on Puerto Rico, as 

noted in its report, that Puerto Rico can and must become an Economic 

and Tourism Hub and Gateway for the Caribbean and Latin America. We 

are here to argue that Puerto Rico cannot be successful as a tourism 

destination or as an Economic Hub for the region without efficient air 

connections with major population centers in the United States, Europe, 

and Latin America. 

Can I take a couple of minutes to finish? 

The geographical situation of Puerto Rico lends itself to becoming an 

excellent transit point for international commercial airline traffic. In the 

Caribbean, it can provide efficient inter-island air transport that is lacking 
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today. Many islands have some direct flights with U.S. and European 

airports but very spotty service between them. 

More broadly, Puerto Rico is at the center of a geographic triangle between 

Latin America, Europe, and the United States. Furthermore, the advent of 

medium size long range aircraft such as the Boeing 787 and

Airbus A350 extends the range to 8500 nautical miles putting Asia and 

Africa within reach including cities such as Belling, New Delhi, Dubai, 

Tokyo, and, Cape Town. 

What is required is an airport that is an international hub...I’m almost 

done... with full in-transit capabilities. These are essential because only by 

permitting transit passengers can destination variety and flight frequency 

be increased to ensure economic viability. All major international airports 

on the globe robustly support in-transit passengers. This is the case not 

only of larger airports like Heathrow, Charles De Gaulle, or SchiPhol, but 

there are also excellent models in much smaller airports such as Keflavik in 

Reykjavik, Iceland or even Tucuman in Panama City. Both of these smaller 

airports share with San Juan a privileged geographical situation that makes 

them viable despite the lack of a large population center. Both have a great 

impact on the economies of their respective countries. Today's expertise 

and technology in airport security is well advanced so as to allow for a fully 

secure international transit hub. Lastly, the partner selected is experienced 

in the management of international airports and brings expertise, financial 

commitment, and access to capital that is essential to the successful 

expansion of the airport. We cannot overstate the importance to the 

economic future of Puerto Rico of the success of this project. Thank you 

very much.
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Randall Fiertz: Thank You. Anybody else who wishes to speak? 

Graham Castillo: My name is Graham Castillo, President of Estudios 

Técnicos, Inc. I appreciate the opportunity to appear before the Federal 

Aviation Administration to offer a summary of the Economic Impact 

Assessment of the LMM International Airport P3 prepared by our firm for 

Aerostar Airport Holdings LLC. 

Estudios Técnicos, Inc supports the implementation of Public-PrivatePartnership models in the Island. For many years, we have promoted the 

need to implement a local PPP initiative as a tool to promote investments in 

areas critical for the Island’s long term economic development. Our firm 

collaborated in the development of the Local PPP Legislation, which 

according to the industry, is a model for other jurisdictions. Emphasis was 

placed on mechanisms that protect the transparency of the transactions 

and the public interest, and also that guarantees a process in which 

decision are made strictly on technical criteria.

The report, which I refer, presents how this transaction will impact local 

business activity, employment, income, and fiscal revenues. The economic 

benefits of the transaction are associated with following:

1. Aerostar’s commitment to investment over $1.8 billion over the 

course of 30 years of which we only considered the initial 10 

years, which is an investment of over 500 million dollars.

2. Aerostar’s operational plan which will result in a significant 

increase in passenger movement; and
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3. The change in ownership structure, which will result in new tax 

revenues to certain jurisdictions.

Accepted economic procedures were adopted to estimate the economic 

impact of the transaction. Puerto Rico has an Input-Output Model, prepared 

by the Puerto Rico Planning Board that was used as the basis to estimate 

the economic impact. 

As presented on our report, the proposed transaction is expected to 

stimulate over $2.3 billion on an annual basis in new commercial activity, 

which will support approximately 14,500 new jobs per year and $437 million 

in annual salaries. Economic impacts increase over time, thus by the end of 

2020, approximately 23,000 jobs and $765 million in salaries would be 

supported by a projected increase in over $4.0 billion in commercial 

activity. The government will benefit from close to a billion dollars in new 

tax revenues over the ten year period. 

Our estimates take into consideration three main impacts:

1. Impact of Aerostar’s 10 year investment plan

Aerostar’s construction activities and investment in machinery and 

equipment of $583 million during the initial 10 years of the agreement will 

support $1.4 billion in new business activity, 913 new jobs per year with 

associated salaries of $23.3 million per year. 

The government will benefit from $67 million in additional taxes during the 

period, of which $35 million are in construction excise taxes, $25.8 million 

in personal income taxes and over $10.3 million in sales taxes. 

2. Impact of Aerostar’s Operational Plan in Puerto Rico 
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The expected increase in passenger movement resulting from Aerostar’s 

operational plan will support an estimated increase of $8.8 billion dollars in 

additional visitor expenditures, accumulated over the period, which amount 

to $19 billion in new business activity accumulated over the ten year period. 

This will promote 11,000 jobs per year with associated salaries of close to 

$340 million per year. 

In addition, the government will benefit from close to $900 million in 

additional revenues associated with new visitor expenditures and 

Aerostar’s tax burden during the initial 10 years of the lease. Of this total, 

$99.5 million will be paid directly by Aerostar in municipal license tax, 

income taxes and the PRPA annual payment. Over $7.6 million in 

municipal license tax will directly benefit the Municipality of Carolina.

3. Economic Impact of New Fiscal Revenues

New tax revenues from the associated agreement would support $2.4 

billion in new business activity during the initial 10 year term of the 

agreement, along with 2,257 annual jobs and close to $77 million in annual 

salaries. 

Estudios Técnicos, Inc. supports the LLM Airport P3. We trust that that the 

Island economy will benefit from this transaction for many years to come. 

I greatly appreciate this opportunity to share our report with this panel. 

Thank you.

Randall Fiertz: Thank you.

Faustino Marquez: Good afternoon to the panel. I’m a private citizen my 

name is Faustino Marquez and I’m also a small operator up in Virginia and 
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looking into the future possibly will be operating seasonal down here. I got 

several concerns. I’m not either in favor or against it, but I really think that 

you guys have the opportunity to review these options that are not 

considered here, none of the discussion that I’ve heard so far. They are 

very simple points, only 3 points. I’m very concerned about the small 

operators’ future here. I’m a single pilot operator. What are the fees, the 

costs, the environment? Are they going to give the opportunity to grow 

even within San Juan or within the other airport around it? It’s not like in 

the states that we’re going to have competition, a fair competition, the 

mayor and the small operators; it will be not an equal opportunity now. The 

same thing is happening with the future operators as far as the regulations 

that they might impose, the airport itself, beyond the ones from the Federal 

Aviation Administration. Would be like costs where the small operators 

would come in. I might be able to land but then all these costs might be 

increasing where a small, single pilot operator will not be able to afford it, 

like probably someone from one of the mayors, let say JetBlue. There’s 

not a balance in there. And the last: As the single operators, the 

agreement not to be able to operate within the other airports and limit this 

to the smaller regional airports. As a small operator, and when I mean a 

small one is a single pilot operator, let’s say has a small aztect, which most 

of the small airports have over here, I would be able to land. But if you limit 

the growth on those then you’ll have a problem where they might not be 

able to go San Juan landing, because let’s say the fees there is excessive. 

So then you’re limiting that opportunity for that small operator may become 

a carrier because of the initial cost they might incur after that. And those 

were the points that I don’t see being addressed here, and that was it, very 

simple.
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Randall Fiertz: Thank you. Any other speakers?

(3:42pm) Silence for a while

(3:44pm) Randall Fiertz: We have one more speaker who was 

preregistered and they won’t be here for another 10 minutes so we can 

recess until then. Until they get here. Apologies for that but I think it is only 

appropriate to give them an opportunity to speak. 

Randall Fiertz: Please go ahead

Rogelio Figueroa García: May I speak in Spanish? 

Randall Fiertz: You may speak in Spanish.

Rogelio Figueroa García: Greetings! Distinguished members of the

panel:

Good afternoon. 

My name is Rogelio Figueroa Garcia and I come here in representation of 

the Political Party Puerto Rican for Puerto Rico. Our party is an 

organization of citizens that are participating for second occasion in the 

electoral process in Puerto Rico. The element that distinguishes and 

differentiates our party from other Political Parties in Puerto Rico is that it is 

composed of people of all status preferences working together in the

economic and social development of our country, from this development, 

route the solution of our political status. 

It is that commitment to develop economic and social development in 

Puerto Rico that we stand today before this Honorable panel in strong 
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opposition to the dominated Privatization Pilot Program Project for the Luis 

Muñoz Marín airport. The reasons for this opposition are the following:

1. The transaction has not been widely and transparently discussed and 

analyzed, taking under consideration its impact and implications for

the country.

2. Because you can see just by overlooking the contract to be signed to 

make possible this transaction, it is clear that it is prepared to favor

private company’s investors at the expense of the interests of Puerto 

Rico.

3. By approving this transaction, it will adversely affect Puerto Rico’s 

future development, since it guarantees investors some conditions 

that in practice would leave without effect the plans of regional 

development already in process. Specifically, it would paralyze the 

activities of development of the regional airports which in turn would 

paralyze expansion activities and growth of the different regions. In 

my case I am from Ceiba, Puerto Rico. I have worked for the last 

seven years in the development of the Roosevelt Roads Navy Base, 

which has an airport in excellent conditions and many promising 

possibilities of usage. Integrating this airport with the potential 

touristic activities and the economic development of Ceiba, Naguabo, 

Vieques and Culebra will imply a development that my communities 

have not been able to have until today. Not letting tourists arrive in 

charter flights, not being able to have direct activities with airports 

from all over the world arriving at Roosevelt Roads Navy Base Airport 

would imply an unprecedented waste of opportunities. We cannot 

afford to lose that opportunity in Ceiba.
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4. The Luis Muñoz Marín International Airport’s valuable property and 

national heritage that would be handed to foreign companies for 

unlimited profits, alienating de country for 40 years of control and use 

for the purpose of such a valuable resource. 

5. The privatization proposal would endanger the stability and the 

permanence of the current commercial operations at the airport, as 

well as of the employees working in them, they would be left at mercy 

of the new administration. And we know this new administration will, 

most probably, take the necessary measures in order to increase 

their profit, and this could mean the replacement of the actual shops

“for business reasons”. We, the people of Puerto Rico, we develop 

many of our businesses in order not only to comply with economical 

purposes, but also with social and economic development purposes 

that consists of our local entrepreneurs and cooperatives; and this 

airport represents a special opportunity that we cannot let go to a 

private partner.

6. There are national security risks to be analyzed with more depth:

 Drug Trafficking

 Control in the hands of foreign companies

These are just some of the reasons for opposing, but in a separate 

document we will elaborate on this point more widely.

We recognize that the administration of the Airport should improve and 

there are alternatives for it to do so without the need to implement a type of

privatization as this one; to a foreign company and with limited participation 

of our entrepreneurs, cooperatives and individuals. Our organization favors 

the formation of a cooperative to manage the Airport, in which the experts 
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in aviation of Puerto Rico and any interested people that know about cargo 

transportation and passenger transportation, logistics, and operating an 

airport can unite and compete with the actual private partner. Puerto 

Ricans have not been given the opportunity to do this, there was no open 

competition, so that Puerto Ricans could get organized in order to offer 

better deals to the government of Puerto Rico and to the Federal Aviation 

Administration. The process was done with only the actual private partner 

and now they want to impose it. All the negotiations were done secretly, in 

closed rooms and without any transparency, without giving the public the 

opportunity to participate in such important initiative. We understand that 

you have great power over this, you can ask the government to look for 

other alternatives in an open manner, in order for you to have more options 

that comply with management conditions, security conditions, and 

conditions that have to do with the well being of the public, not only in the 

local government but in the federal government. This negotiation that is 

taking place is being called a public-private alliance, but in reality it is a loan 

guaranteed with future income, it is not a public-private alliance. The 

public-private alliances build new sites, build new facilities, they are not just 

given a facility like the airport that we have here. Maybe it has damaged 

bathrooms, maybe it has some humid tiles because of humidity, maybe it 

needs a little caring and maintaining, but it is a complete structure that does 

not apply for a public-private alliance. This would apply for a loan other 

than a loan for the finances of the Government of Puerto Rico. We call this 

a pledged loan, in which the income of the airport belongs to it with 

minimum benefits to the country of Puerto Rico. 
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As conclusion we would like to reaffirm that this transaction is both wrong 

for Puerto Rico and the Unites States. We have informed the Honorable 

President that it would be unfortunate that a Democratic Administration 

would approve of a transaction promoted by a Republican Governor with 

the means of a Republican ideology privileging some powerful economic 

sectors bias on mainstream sectors of the population. 

But before I go I want to point out that one of the most negative aspects of 

this transactions is the stagnancy it will provoke by preventing the regional 

airports to develop and fulfill a public need in their region. For example the 

communities of Ceiba, Naguabo, Vieques and Culebras, have been putting 

all their efforts and hopes for many years promoting projects for the airport 

of the Roosevelt Roads Navy Base, in order to make it a touristic place. I 

beg you not to approve this transaction prior to evaluating the impact it will 

have on the regional airports of Ceiba, Aguadilla and Ponce. Puerto Rico 

may be small but very intense. And every region of Puerto Rico has the 

potential to have its own international airport, and this will be a great 

complement in case of a natural disaster. As you all know the airport is in a 

very sensitive area, it is prone to tsunamis, seaquakes and other weather 

conditions, in case of natural disasters. It is very important for us to have 

international airports in good conditions in the four cardinal points of Puerto 

Rico, not only for us to survive but also for national security. 

We fulfill our responsibility to report the negative of this project and express 

our opposition. We know that you can give it the transparency that is 

currently lacking. Let’s give the different regions the opportunity to bring 

alternatives, that way they can come before you with development 

alternatives for the regions that can work parallel with the private partner’s 
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interests or with future possibilities. We ask on behalf of the well being of 

Puerto Rico. Thank you for you for this opportunity.

Dr. Ramon Torres Morales: Good afternoon. Thank you for the 

opportunity to present my comments to this panel. My name is Dr. Ramón 

Torres Morales; I’m a resident of Ponce, past administrator of The Port of 

the Americas in Ponce, for about 8 years. Also I was a member of the 

federal panel of the NOA, Review Federal Panel, and a Professor in Ponce 

in Transportation Management, Logistics and Distribution. 

I deeply appreciate the opportunity to present my comments to this panel 

and with all due respect I would like to present my opposition to the

proposed concession agreement, as presented by the government of 

Puerto Rico. My position is based on four main considerations.

1. PUBLIC INFORMATION: The citizens of Ponce and the Southern 

Region have not been able to receive a detailed presentation of the 

impact of this concession agreement, not only to the airport, but to 

the region. On behalf of half a million citizens of the southern region I 

would like to present a request to this panel and the government 

officials to responsibly coordinate a detailed presentation to the 

Southern Region of the impact and the considerations behind this 

concession agreement. The impact as we see it, it will certainly make 

more fragile an already unstable region, where the unemployment 

may reach 25% in some cities. Certainly the social and economic 

impact of this concession agreement has not been evaluated with 

respect to Ponce and to the citizens of the Southern Region.
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2. CONCESSION AGREEMENT: The document presented by the 

Puerto Rico Public-Private Partnership Agency states that growth at 

the Mercedita Airport will be limited for the next 15 years. That would 

certainly have an impact on the cargo and traffic markets at 

Mercedita that some economist has estimated in a loss of 83,000 

passengers and over a 1,000 jobs will be lost because of this 

concession agreement, in Ponce. 

3. AIRPORT SECURITY: Once again we request to FAA and TSA 

officials to urge the government of Puerto Rico to clearly state how 

under this concession agreement the security of the airport will be 

managed. We all know the impact of illicit traffic, not only of drugs, of 

merchandise and even people, not only in Puerto Rico but all Latin 

America.

4. ECONOMIC GROWTH AND TRADE: As we stated before, there is 

no clear evaluation on economic growth, not only Luis Muñóz Marín 

Airport but on regional airport such as Ponce, Ceiba, Aguadilla, and 

Mayaguez. 

My strong interest is that we need to establish a global strategy for 

transportation development in Puerto Rico. We cannot exclude or 

eliminate options like Ponce, that is within 10 minutes of the Port of 

the Americas, that is the only port in Puerto Rico that complies with 

the maritime trends of having a deeper port than in San Juan, 

equipment up to date with the maritime industry, and that can provide 

support to our economy as recently described by a report of the 

American Society of Civil Engineers, published this week. 
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Transportation Infrastructure needs to be upgraded, and Ponce is 

ready to provide that service, not only within the port, but certainly 

with the airport. 

In summary, we kindly request the completion of social and economic 

impact studies of this PPP Process. I am sure that people in Ponce and the 

Southern Region are willing to collaborate on this effort to move forward 

our economy, competitiveness and productivity levels. But that cannot be 

reached in exchange for our respectful search for a better quality of life. 

Thank you for this opportunity and I hope you receive my comments 

respectfully. Thank you very much.

Randall Fiertz: Thank you.

Any final speakers? People who want to speak? Very good, okay. Well, 

before we close this meeting I just want to remind everybody that there will 

be a verbatim transcript of the meeting available on the internet site 

regulations.gov and the FAA Docket number in which this document will be 

is #2009-1144 and we will continue to collect written comments through 

November 19th on the final application. In addition the application itself will 

be available at the same website as well as some other locations. So 

finally I wanted to thank everyone for their participation in this and I also 

wanted to thank the organizers and the Hotel Verdanza for allowing us to 

hold this meeting here. Great job by the translation crew in particular, very 

impressive, and I appreciate all the other help by everybody else, and as I 

said all the comments that we received from all of you in the audience. It is 

now ten minutes passed four and the meeting is now adjourned. Thank 

you for your participation.
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(4:08pm – procedures are concluded)

CERTIFICATE OF REPORTER

I, Aledawi Figueroa, from Smile Again Learning Center, Corp., 

CERTIFY:

That the above is a true and correct transcript of the recording 

made during the meeting held at the place and date indicated on page 

one of this transcript.

I also certify that I have no interest in the outcome of this matter 

and I have no relationship to any degree of consanguinity with the 

parties involved in it.

In Isabela, Puerto Rico, October 15, 2012. 

Aledawi Figueroa Martínez

Smile Again Learning Center, Corp.

(787)872-5151 / (787)225-6332

widy.figueroa@gmail.com

www.smileagainpr.com