1

FEDERAL AVIATION ADMINISTRATION

AIRPORT PRIVATIZATION PILOT PROGRAM PERMIT

SAN JUAN, PUERTO RICO

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

PLACE: VERDANZA HOTEL

ISLA VERDE, PUERTO RICO

Chairman: RANDALL FERTZ

Transcription: Aledawi Figueroa Martínez
2

Participant PAGE

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

Elizabeth Newman ------------------------------------------------------------------ 4

Randall Fiertz------------------------------------------------------------------------- 7

Emmet McCann---------------------------------------------------------------------- 9

Adolfo Castro ------------------------------------------------------------------------12

Agustín Arellano --------------------------------------------------------------------14

Kenneth McClintock----------------------------------------------------------------16

Luis Rivera Marín-------------------------------------------------------------------18

Juan Carlos Batlle------------------------------------------------------------------21

Hector Ivan Santos-----------------------------------------------------------------23

Anthony Tirri -------------------------------------------------------------------------26

David Alvarez------------------------------------------------------------------------29

Juan Comulada --------------------------------------------------------------------32

Arnaldo Deleo -----------------------------------------------------------------------35

Jaime López -------------------------------------------------------------------------37

Mario González ---------------------------------------------------------------------40

Ruben Hernández Gregorate----------------------------------------------------42

José Pérez Riera -------------------------------------------------------------------45

Luis Vega Ramos-------------------------------------------------------------------49

Juan de León ------------------------------------------------------------------------52

Edgar Sierra -------------------------------------------------------------------------53

Jaime Perelló ------------------------------------------------------------------------55

Mario Pabón -------------------------------------------------------------------------58

Charlie Hernández -----------------------------------------------------------------61

Alejandro Alvelo---------------------------------------------------------------------64

Pedro Pierluisi-----------------------------------------------------------------------65

Astrid Rosario Ortíz ----------------------------------------------------------------71

Armando Montero González-----------------------------------------------------77

Alfonso Fernández -----------------------------------------------------------------79

Benjamín Acosta Badke ----------------------------------------------------------83

Kevin Costello -----------------------------------------------------------------------84

Pablo Figueroa----------------------------------------------------------------------86

Randall Fiertz------------------------------------------------------------------------89

Carlee Cellar-------------------------------------------------------------------------89
3

(8:01am)

Randall Fiertz: All right. We’re going to get started in five minutes. 

Evidently, there’s a bit of a line outside so we’ll give people five more 

minutes. Ah, in the meantime just if people need the headsets, I mean we 

will have simultaneous translation, ah obviously depending on the language 

of the speaker. But the headsets are available at the front, if you want to 

make use of them. 

(8:06am)

We’re gonna get started. For our close to on-time departure. Good 

morning, ladies and gentlemen I’d like to welcome all of you to the public 

meeting, concerning the Puerto Rico Ports Authority’s application for 

participation of the Luis Muñoz Marín International Airport in the FAA’s 

Airport Privatization Program. The program was established by Congress 

in 1996 to permit the sale and lease of publicly own airports to private-own 

operators. The law may be found in the US code 49 USC Section 47134. 

The objective of the program is to determine if private investment and 

capital can be attracted to airport development through innovative financial 

arrangements. The administrator may grant exemptions from certain 

federal statutory and regulatory requirements for up to ten airports to 

encourage privatization on a limited number of airports as a test of the 

benefits of private sector operation of airports. The purpose of this meeting 

is to solicit public comment on the final application. Because the final 

application is presently before the Federal Aviation Administration for a 

decision, we will not be able to discuss the application or the pending 

agency decision at this time. I’d like to introduce the members of the panel; 
4

to my immediate left is James Cole, Deputy General Counsel Office of the 

General Counsel Department of Transportation. On my right is Elizabeth 

Newman, Attorney Advisor Office of the Chief Counsel FAA. On her right is 

Nancy Kessler, Office of Assistant General Counsel for Environmental Civil 

Rights and General Law Department of Transportation and on the far left is 

Mr. José Baquero the Federal Security Director for Luis Muñoz Marín 

International Airport Transportation Security Administration Department of 

Home Land Security. We also have Mr. Kevin Willis standing, he is 

Manager Airport Compliance Division at FAA and Kevin will be filling in if 

anyone of us needs to step off the panel for a moment to ensure that we 

have a full participation. My name is Randy Fiertz and Director of the 

Office of Airport Compliance and Management Analysis at FAA and I will 

serve as the chairperson of this meeting. And at this time I’d like to call on 

Elizabeth Newman, the FAA Attorney Advisor for the FAA to provide a brief 

description of the program. 

Elizabeth Newman: Thank you Randy. Good Morning.

The Airport Privatization Pilot Program permits the sale or lease of publicuse airports to the private sector with some restrictions. Air Carrier airports 

cannot be sold. General aviation airports can be sold or leased. The 

Federal Aviation Administration’s Reauthorization expanded the program to 

10 airports but only one large hub can participate. Title 49 of the United 

States Code, section 47134, authorizes the Federal Aviation Administration 

to permit the public sponsor to –permits the FAA to grant an exemption to 

airport sponsor from federal requirements to permit the public sponsor -- to 

retain and use proceeds from the sale or lease of the airport for other than 

airport purposes, to grant an exemption to the public sponsor to waive any 
5

obligation of the public sponsor to repay grant funds, and grant an 

exemption to the purchaser or lessee from the revenue use requirements to 

permit the private operator to earn compensation from the operation of the 

airport. The private operator is subject to all federal requirements and 

obligations currently imposed on the exiting public owner and must 

continue to operate the airport as a public use airport. Private operator 

must demonstrate how they will comply with nine statutory conditions 

outlined in the statute to the satisfaction of the Secretary. The nine 

conditions must also be included in the lease. These conditions are: The 

airport will continue to be available for public use on reasonable terms and 

conditions and without unjust discrimination. The operation of the airport 

will not be interrupted in the event of a private operator’s financial difficulty, 

insolvency or bankruptcy. The private operator will maintain, improve, and 

modernize the airport facilities through capital investments and will maintain

a capital improvement plan for carrying out airport maintenance, 

improvements and modernization. Charges to air carriers will not increase 

faster than the rate of inflation unless a higher amount is approved by 65 

percent of the air carriers using the airport. Fee increases for general 

aviation aircraft owners will not exceed those imposed on air carriers. The 

private operator will maintain safety and security at the airport at the 

highest possible levels. The private operator will mitigate noise impacts to 

the same extent as at a public airport. The private operator will mitigate 

adverse environmental impacts to the same extent as at a public airport.

The transaction will not abrogate by sale or lease any collective bargaining 

agreement that covers airport employees and is in effect on the date of the 

sale or lease of the airport. FAA must also ensure that the interests of 

general aviation users of the airport are not adversely affected, and must 
6

find that the approval of the application will not result in unfair and 

deceptive practices or unfair methods of competition. As a part of the 

application process, the private operator must provide a description of its 

financial resources for operating the airport, its airport management 

experience, and its capability of complying with the public sponsor’s 

existing grant assurances. FAA will review a private operator’s request to 

be the exclusive provider of commercial aeronautical services on a caseby-case basis. If the exemption is issued approving the transfer of the 

airport to private control, the private operator must file annual financial 

statements with the FAA. Federal Regulations require commercial service 

airports having passenger service to apply for and comply with the 

requirements for an airport security program from the Transportation 

Security Administration and an airport operating certificate from the FAA. 

Private operators leasing airports serving air carriers can apply to collect 

Passenger Facility Charges and will continue to receive Airport 

Improvement Program entitlement funds at the 75% rate in accordance 

with 49 USC 47109(a)(1); however, AIP discretionary funds for all airports 

in the pilot program are reduced to 70 percent Federal participation in 

accordance with 47109(a)(4). To assure that the statutory requirements 

will be met, FAA requires the sale or lease agreements to include 

provisions explicitly granting third party beneficiary rights to the FAA. The 

third party beneficiary rights grant the FAA the right to enforce compliance 

with the grant assurances directly against the private operator. As the 

operator of a federally obligated airport, the private operator as sponsor is 

obligated to the requirements of the FAA’s Airport Compliance Program. 

Any enforcement action would be conducted under 49 CFR Part 16, Rules 

of Practice for Federally Assisted Airport Enforcement Proceedings. FAA 
7

also retains its authority to revoke any exemption should the private 

operator violate any of the nine statutory conditions. When the FAA is 

satisfied that the application meets the requirements of the statute, it issues 

a Record of Decision that summarizes the application and the agency’s 

findings. The lease, the agency’s response to public comments, and the 

Final Application become a part of the Record of the Decision. The Record 

of Decision also identifies and summarizes the exemptions granted by the 

FAA on behalf of the Secretary of Transportation regarding Federal law, 

regulations and grant assurance. Requirements are further outlined in the 

program’s application procedures in the Federal Register at Volume 62 

page 48693, which is dated September 16, 1997. The FAA considers 

airport ownership and control a local issue, and has no policy preference 

for the public or private operations of public-use airports. Participation in 

the program is at the sole discretion of the public owner. 

Thanks Randy

Randall Fiertz: All right. Thank you, Beth. Now just gonna quickly go 

through some of the meeting procedures. Anybody who wishes to speak 

needs to sign in at the speakers’ registration table. We have tried to ask 

speakers, or we’ve asked speakers in general to speak in certain 

categories but, there is obviously some flexibility between the categories, 

as people can only make certain times etcetera. So we’re gonna begin by 

asking Aerostar people to address the panel, then airport officials, and 

government officials, airport employees, airport businesses, general 

aviation and then the general public. And, we will try to take a break 

between about noon and 1:30, that’s the plan anyway. Once recognized 

and before beginning comments we ask that each speaker come forward 
8

and address the panel at one of the two microphones, there’s one in the 

middle and then there’s one up here, to my left. We’d like people to 

alternate speak from either one of these just to help things go through a 

little more smoothly and a little more quickly. So, we would ask each 

speaker to identify themselves and their association or organization that 

they’re representing for the court reporter. Any comments made on the 

application are being made on the record. For your information, a court 

reporter will be preparing a verbatim transcript of the meeting and copies of 

that transcript once it has been transcribed will be placed in a public 

docket. If there are any additional speakers requesting time to make a 

presentation for the public record, please inform the staff at the registration 

table and if there is any time available, will block time at the end of today’s 

session. We have a lot of speakers who have pre-registered, over 60 of 

them. So, there are, there unfortunately are not a lot of extra available 

slots. We ask that each speaker keep their comments to five minutes and 

there is a clock up front here with the amount of time on it and a series of 

light, and unfortunately we’re gonna have to cut people off after five 

minutes because we have so many speakers today. We’ll also up on the 

board here where just people will be able to see who the next, the next 

numbered speaker so they can prepare and perhaps step forward to the 

microphone in advanced and just save a little more time. After each 

presentation the panel may have some follow-up questions. Questions 

from the panel are intended to clarify or focus on particular elements or 

concepts expressed in the presentation and to offer the speaker further 

opportunity to elaborate on those areas. So, we’re not going to be 

engaged in a debate, it’s just we’re here to listen to comments, concerns, 

support, for the propose transaction and to receive information from you. In 
9

addition to providing oral comments, there is an opportunity to provide 

written comments, in addition to or instead of providing oral comments, and 

we will be accepting those in the docket through November 19. And uh... 

the, let’s see, copies of the application are available in the docket as well 

as locally, at the Puerto Rico Department of State One Stop Service Center 

in Old San Juan and the ... yes, the docket number for the final application 

is 2009-1144. So with that, unless there are any procedural questions 

about this meeting ... ok, I’d like to call in the first speaker, please. 

Emmett McCann: Mr. Chairman, ladies and gentlemen. My name is 

Emmett McCann, I’m the managing director of Highstar Capital and I also 

serve under the board of directors for the Aerostar Airport Holdings. I’ve 

been leading Highstar’s investment in the Luis Muñoz Marín Airport for the 

past two years. Highstar is here today and is very proud to be a 50/50 joint 

venture partner with ASUR and Aerostar, the company who’s seeking the 

opportunity to serve Puerto Rico through the management and operation of 

the Luis Muñoz Marín Airport. With me today is the ASUR CEO, Adolfo 

Castro, who you’ll hear from in a moment, followed by Agustin Arellano, the 

CEO of Aerostar. We are thrilled to be here today and we look forward to 

hearing and learning from the great citizens of Puerto Rico. At the outset 

let me assure you of our commitment. If we are honored with the approval 

of this Public Private Partnership, safety, security and efficiency are our top 

priorities and we will bring a customer first orientation to all that we do here. 

We will honor the legacy of Puerto Rico’s first democratically elected 

governor and the recipient of the presidential Medal of Freedom, Luis 

Muñoz Marín, by transforming the airport to a world-class level. We 

respectfully submit that this project is a win-win for Puerto Rico, the PRPA, 
10

Aerostar, and most importantly the traveling public. The PRPA will receive 

an upfront payment from Aerostar, 615 million dollars and over the course 

of the agreement the PRPA will receive an estimated total of 550 million 

dollars in annual payments and revenue sharing, which can be used to 

support the other regional airports, managed by the PRPA. Just as 

importantly the airport will see the benefit of an estimated 1.4 billion in 

capital expenditures and the community will see the creation of jobs in 

Puerto Rico and experience first-hand the benefits that a basting class 

airport can bring to tourism based economy. The airlines can look forward 

to a reduction in their current fees, more attractive terminals and 

concessions and a professional partner in expanding air service. Before I 

turn in the microphone to Adolfo I wanted to give you some more color on 

Highstar. Who we are, what we do, and how we have successfully worked 

with the public sector on several other investments. Highstar has been a 

proven, disciplined and successful infrastructure investor since 1998. Over 

that time we’ve invested more than 6 billion dollars on behalf of our 

investors, who include some of the largest pension and retirement funds in 

the world. But we’re more than just investors; we’re hands-on managers of 

the development and operations of the business in which we invest. Let 

me give you just a few examples. Today we manage London City Airport, 

where I sit on the board, one of the United Kingdom’s leading business 

airports. We have directed the implementation of a successful capital 

improvement program of nearly 100 million dollars to upgrade and expand 

the airport, we’ve optimize the terminal space, and we have reduce the 

security wait times by 30 percent. We’ve also successfully fostered the 

development of innovative and important new routes and services, most 

prominently British airway services to JFK in New York. Another example 
11

is our ports business, thorough a 100 percent owned company Ports 

America we operate 83 marine terminals and 42 ports across the United 

States. We’re the largest independent tri-costal port operator in the United 

States, and we employ more than 11,000 people on a daily basis, including 

more than 10,000 union jobs. As part of this investment we have 

successfully entered into two landmark fifty year Public Private 

Partnerships just like this one at Muñoz Marín; one in the port of Baltimore 

and one in the port of Oakland. Both these investments have been 

resounded successes not only for Ports America, but also for the public. In 

Baltimore I’m happy to say that we just completed the construction of a 105 

million dollars new berth and delivered 4 new super Post-Panamax cranes 

that will give the port a strong competitive advantage on the east coast 

once the Panama Canal widens in 2014. Notably this project was 

completed under budget and two years ahead of schedule. The Baltimore 

project is a significant driver for the local economy and has created 3,000 

construction jobs and 2,700 direct jobs at the port. Ladies and gentlemen, I 

hope these examples provide you with some insight of who we are, what 

our goals and objectives will be and how we will serve the people of Puerto 

Rico in the years to come. In our world we only succeed if we deliver 

improved infrastructure, job creation and true partnership to the 

communities in which we operate. With that I’d like to turn the microphone 

over to our partner and friend, Adolfo Castro who will tell you a little bit 

about ASUR and our vision for Luis Muñoz Marín. Thank you very much. 

Randall Fiertz: Thank you. 

Adolfo Castro: Thank you Emmet. Good morning everybody. My name is 

Adolfo Castro, I’m ASUR CEO and if you’ll excuse me I would like to speak 
12

in English, in Spanish, sorry. Buenos días a todos, estoy honrado de tener 

la posibilidad dirigirme a ustedes el día de hoy, y expresar el compromiso 

en el caso de que sea aprobada la solicitud de Aerostar. Este compromiso 

es con las autoridades, los puertorriqueños, los que trabajaremos en el 

aeropuerto y por supuesto con nuestros inversionistas. En ASUR 

decidimos invertir en Puerto Rico hoy, y por los siguientes 40 años, porque 

creemos en su gente y confiamos en el desarrollo y queremos ser parte de 

este promisorio futuro, que sabemos se podrá alcanzar con el esfuerzo y 

trabajo conjunto de parte de la comunidad aeroportuaria y las autoridades 

federales y estatales. ASUR es una empresa que opera 9 aeropuertos en 

México y es el resultado de la apertura a la inversión privada en el sistema 

aeroportuario mexicano. Esto ocurrió hace 13 años, fue la primera 

empresa aeroportuaria del mundo. Cotizaron sus acciones en las bolsas 

de Nueva York y México. Hoy 92% de sus acciones se cotizan en estos 

mercados con un valor de capitalización de más de 2.7 billones de dólares. 

Hoy quiero compartir con ustedes algo de lo que hemos alcanzado con el 

trabajo y esfuerzo diario por parte de la comunidad aeroportuaria de 

Cancún y sus autoridades. Este aeropuerto después de 8 años de pasión 

y compromiso fue reconocido por sus pasajeros como el mejor de 

Latinoamérica, situación que prevalece hasta el día de hoy. Después de 3 

años de haber alcanzado esto fue reconocido también como el segundo 

mejor del mundo en el rango de 5 a 15 millones de pasajeros. Este 

reconocimiento fue otorgado por el Consejo Internacional de Aeropuertos, 

institución que agrupa a los aeropuertos de más de 170 países en el 

mundo. Hace 13 años estuvimos en el punto que hoy estamos aquí en 

San Juan; un punto lleno de incertidumbre en el que pensamos y nos 

preguntamos qué pasará en el futuro. Al igual que hicimos en aquel 
13

momento la recomendación es dedicación, constancia y trabajo, siempre 

pensando que el servicio al pasajero será nuestro mejor activo. Los 

aeropuertos como todo, no son sólo ladrillos, sino lo más importante es la 

gente y el trabajo que está detrás de ellos. La sonrisa y la amabilidad de 

los puertorriqueños será la diferencia esencial. Nuestro origen latino nos 

dará la fuerza para cambiar y transformar el aeropuerto en aras de un 

mejor futuro. El compromiso de ASUR será la seguridad y protección de 

las instalaciones, sus pasajeros y de todos los que colaboraremos en el 

aeropuerto Luis Muñoz Marín. El trabajo enfocado en el desarrollo de esta 

gran ciudad para que cada día el aeropuerto reciba más pasajeros, 

generar empleos dignos, justos, estables y bien remunerados, en donde 

todos podamos crecer y desarrollarnos como seres humanos sensibles a 

las necesidades de los demás. Cumplir con el deber fiduciario de aquellos, 

de aquellos que han confiado una parte de su patrimonio teniendo la 

certeza de que haremos lo posible por preservarlo y hacerlo crecer. Que 

en el Aeropuerto Luis Muñoz Marín se pueda reconocer la identidad, las 

raíces, los valores y la alegría de los puertorriqueños. Un espacio del que 

nos podamos sentir orgullosos y que transmita el compromiso de los que 

ahí trabajamos y el calor de los puertorriqueños. En caso de que la 

solicitud de Aerostar sea aprobada el aeropuerto Luis Muñoz Marín, que es 

propiedad de los puertorriqueños, y la principal puerta de entrada y salida 

de esta isla tendrá que ser motivo de orgullo para los que ahí trabajamos, 

también para sus familias; aquellos que regresan a casa o aquellos que 

vienen a visitar a sus familiares. Hoy los invito a todos, aerolíneas, 

autoridades, empleados, concesionarios, a crear lo que será la fuente de 

inspiración en un futuro para otros. Sé que esto será posible con una 

comunidad aeroportuaria unida, fuerte, eficiente y justa. Gracias por su 
14

atención y dejo el micrófono a Agustín Arellano, director general de 

Aerostar.

Randall Fiertz: Thank you. 

Augustín Arellano: Good morning. My name is Agustin Arellano, and I’m 

the CEO of Aerostar. On behalf of Aerostar, I would like to thank members 

of the DOT, FAA, TSA, PRPA, and other distinguished government officials 

for their presence here today for this significant milestone in the publicprivate partnership for the Luis Muñoz Marín Airport. In addition, we 

recognize the presence of our airline customers here today, but most 

importantly the employees, members of the traveling public and general 

public. We appreciate each of your contributions to the competitive process 

that has attracted the world's best airport operators and businesses. Let me 

begin by saying that Luis Muñoz International Airport is and will be the 

airport of the people of Puerto Rico. If approved, we humbly pledge to be 

responsible stewards of the public trust, serving not only of airline 

customers and the traveling public, but also building a respectful and 

cooperative relationship with airport employees and the local and regional 

community. Now with your indulgence I would like to switch to Spanish. 

Agradezco la oportunidad para presentar a Aerostar Airport Holdings. 

Aerostar es una empresa operadora de aeropuertos registrada en Puerto 

Rico y cuyos socios en partes iguales son Highstar Capital y ASUR. 

Aerostar ha firmado un contrato de arrendamiento a largo plazo por 40 

años del Aeropuerto Internacional Luis Muñoz Marín con la Autoridad de 

Puertos, quien continuará como propietario y custodio de la instalación 

aeroportuaria. Como parte de esta instalación aeronáutica, Aerostar se 

compromete junto con la Autoridad de Puertos a llevar a cabo los trabajos 
15

de reacondicionamiento del aeropuerto con una inversión estimada de 

1,400 millones de dólares. Permítanme hablar un poco de mi trayectoria. 

Antes de ocupar el puesto de director de Aerostar, me desempeñé como 

director de infraestructura y normatividad de ASUR. Antes de unirme a 

AZUR, fui director general de los servicios de navegación y control de 

tránsito aéreo en México, organización equivalente a la Administración 

Federal de Aviación en los Estados Unidos. Durante mis más de 30 años 

de experiencia en la aviación he participado en el proceso de apertura a la 

inversión privada de los sistemas aeroportuarios mexicano, en Brasil y en 

Puerto Rico. Será mi responsabilidad liderar al equipo de expertos que 

tendrá a su cargo la operación del Aeropuerto Internacional Luis Muñoz 

Marín, y adicionalmente al encargo profesional estaré moviendo mi 

residencia a San Juan con el propósito de integrarme completamente a la 

vida de la isla. Nuestra filosofía de trabajo estará comprometida con la 

integración de profesionales puertorriqueños en nuestro equipo, para 

asegurar una transición exitosa y transparente para todos los usuarios. 

Seremos una empresa socialmente responsable y pro-laboral. 

Reconocemos que el aeropuerto es una fuente valiosa de empleos 

especializados y bien remunerados. Los empleados del aeropuerto 

tendrán la oportunidad, además, de mantener el empleo, sea con la 

Autoridad de Puertos o con Aerostar. In closing, we believe that Aerostar 

can enhance the airport's service to the local community and the world. 

This public-private partnership is good for local employees, is good for the 

airlines, and is good for local businesses, and it's good for the tax payers. 

If approved by the FAA, we are excited to improve the Luis Muñoz Marín 

International Airport to better serve the people of Puerto Rico. And we 
16

would like and be committed to serve as an active community partner in 

Puerto Rico for the many years to come. Thank you very much. 

Randall Fiertz: Thank you. 

Kenneth McClintock: Good morning. My name is Kenneth McClintock 

and I serve as our Secretary of State, which as in Arizona, Oregon, and 

Wyoming fulfills the role of Lieutenant Governor. Among the duties that 

Governor Fortuño has delegated to me, I am responsible for the final local 

approval of public-private partnership projects. I wish to share several 

considerations that make the proposed long-term lease of our airport a 

favorable transaction for the long-term economic development of Puerto 

Rico, the place where the United States becomes a Caribbean nation. The 

proposed lease is essential in strengthening the United States' leadership 

role in the Caribbean, improves our competitiveness and turns Puerto Rico, 

more than simply an air and maritime transportation hub, into the leader, 

the capital of the Caribbean. While we have the largest economy in the 

region with a GNP of 64 billion dollar in 2011, certain segments of our 

economy have not yet realized its full potential. Our tourism sector merely 

reaches 5% of our economy. With a first-class airport, the sky is literally, 

the limit. Lacking a first-rate airport operator, in the last decade, we lost 

ground in tourism to other Caribbean and competitive, competing 

destinations, with Puerto Rico's market share of traveling seats to the 

Caribbean declining from 35% share in 2005 to 26% in 2009, a million 

passengers lost to other Caribbean nations. Neighboring countries such as 

the Dominican Republic, Jamaica, Bahamas and Curacao have 

implemented long-term leases of their airports in order to strengthen their 

economies. Our services sector has great potential for further 
17

development. We've increasingly developed professional, technical, and 

educational services, among others. A large part of the future growth of 

this sector resides in exporting services. Increased connectivity is critical in 

delivering services to the rest of the Caribbean, the rest of our nation and 

the rest of the world. Likewise, manufacturing is the cornerstone of our 

economy for the past 50 years, and it needs a well connected, updated and 

efficient airport. A stronger tourism sector, export of services and more 

efficient services for our manufacturing base are all objectives that will be 

supported by the proposed long-term lease of the airport. We have made 

significant recent progress in competitiveness. The most recent World 

Economic Report on Competitiveness, which incorrectly treats Puerto Rico 

separate from the rest of our nation, ranked us 31st among 142 nations, an 

improvement of 4 positions; very significant. However, our competitiveness 

has to improve in order to reach stronger sustained economic growth. 

Infrastructure plays a major role in improving overall competitiveness. As 

an Island, not only the connectivity provided by our main airport is 

important in order to be competitive, but also the quality, costs and 

efficiency of developing and managing our airport. The proposed long-term 

lease will be a major driver of competitiveness for Puerto Rico. Not only are 

there strong incentives for improving connectivity but also there will be a 

robust capital improvement program, and a disciplined commercial program 

to ensure world-class services to our passengers. The airline rate structure 

contained in the lease enhances competitiveness. Rates and charges for 

aviation at the airport will be frozen for the first five years. Future revisions 

will be conducted in accordance to a core consumer price index. The 

benefit of this proposed structure is that costs per passengers will decline 

as passenger volume increases, effectively making Puerto Rico a more 
18

competitive destination for all passengers. Good transportation logistics is 

critical for enhancing competitiveness. More than ever, Puerto Rico needs 

to be well connected to the rest of the world. Presently, we have a welldeveloped highway system that together with a strong International Airport, 

optimal regional airports and well-developed cargo and cruise ship ports 

can boost to competitiveness. So thank you all for being here, and for 

hearing everybody out today. Thank you very much. 

Randall Fiertz: Thank you. 

Luis Rivera Marín: Good morning and thank you for allowing me to speak 

to you this morning. My name is Luis Rivera Marín and I am the executive 

director of the Puerto Rico Tourism Company, a government agency 

responsible for promoting tourism on the island. Puerto Rico's Luis Muñoz 

Marín International Airport is by far the most important port of entry to the 

island, not only for our own population but also for the millions of tourists 

that visit Puerto Rico. The airport is key to maintaining and developing our 

travel and tourism industry, which represents closet o 6% of Puerto Rico's 

GDP. The airport brings tourists that stay at our hotels and sponsor our 

restaurants and attractions, and also a large number of cruise ship 

passengers that commence their cruises in San Juan, the Caribbean's 

largest home for, port for cruises. While the largest number of visitors to 

Puerto Rico comes from the U.S. mainland, we are growing our share of 

tourists from other markets, including Europe and Latin America. This 

growth, however, has been limited by the number of airlines that serve the 

island and by the consequent limitation of tourism source markets that have 

air service to Puerto Rico. For this to change, and for Puerto Rico to reach 

its full potential as a tourism destination in the Americas, it is imperative 
19

that the airport is transformed into a greater source of business for our 

industry. For all intents and purposes, the airport has not grown in the last, 

past 20 years. Its outgoing passenger base has remained unchanged, at 

approximately 4.7 million passengers departing per year. In order for us to 

change that number, Puerto Rico needs a world class airport that can 

attract more airlines, increase the numbers of flights and other, and offer 

better services to our own residents and our visitors. If, for example, we 

were to increase traveler visits by 10%, it would represent an additional 276 

million dollars to our gross domestic product, creating in excess 3,770 jobs 

and increasing government revenue by more than 4 million dollars. If we 

consider the change that has come to different airports that have leased 

their operations to private companies, the effect of, on our economy would 

be enormous. Cancun, for one example, increased its share of passengers 

served, from 7.7 million to 12.4 million in less than ten years. The 

international airport in Lima, Peru, an airport which compares to ours, 

doubled the number of passengers it serves, from 4.1 million to 8.8 million 

between 2001 and 2009. And the international airport in Sydney, Australia, 

increased passenger volume by more than 25.3 million in 2000, to 35.6 

million in 2010. All these examples speak volumes on the benefits of 

leasing the operations of an airport such as ours. Other important airports 

throughout the world have entered into lease agreements, including 

Singapore's Airport, currently considered the best airport in the world. 

Heathrow, in London, one of the world’s busiest airports, is also operated 

by a public private partnership, as well as the Charles De Gaulle in Paris. 

All the airports in Argentina have been leased; most of the international 

airports in the Dominican Republic, and those in the Bahamas, Chile, 

Jamaica and Costa Rica, among many other notable examples. The reality 
20

is that our airport's deterioration is such that we must invest an enormous 

amount of money and resources to improve its facilities, but we don't have 

the financial capacity to do so. Given this situation, in which the Puerto 

Rico Ports Authority doesn't have the ability to make improvements, and in 

which Puerto Rico's position as a destination has weakened, we must 

make a major transformation of the airport in order for us to reposition 

Puerto Rico as a point of global aerial connectivity, even as we reestablish 

the Ports Authority's financial capabilities. We firmly believe that leasing the 

Luis Muñoz Marín Airport to a public private partnership such as the one 

being proposed will increase passenger volume; at the same time it will 

strengthen the Ports Authority's ability to improve our regional airports. The 

partnership's development plan will increase the number of airlines and 

flights that serve this market, thus increasing the number of tourists and 

broadening the options for Puerto Ricans who reside elsewhere to visit the 

island. By bringing more airlines, we'll also increase competition among 

them, which would then result in lower prices for consumers. Airlines will 

also benefit with an improved infrastructure and better services, and they 

will be better able to plan because there will be more transparency and 

reliability in the fees they pay for using the airport. For the public at large, 

the change will represent easy and quick access and fewer delays in 

leaving the airport facilities. Travelers will be able to see flight information 

on large screens throughout the airport and enjoy larger, more comfortable 

and modern terminals, with more access to seating and comfortable waiting 

areas. The airport will also substantially increase its retail space, providing 

users with a broader array of shopping, food and entertainment options.

Randall Fiertz: Sir, I’m sorry. We’re out of time, if you could finish please. 
21

Luis Rivera Marín: In short, we are convinced that by establishing this 

public private partnership we will see greater growth of the travel and 

tourism industry in Puerto Rico; and that is Puerto Rico’s best interest. 

Thank you very much. 

Randall Fiertz: Thank you. 

Juan Carlos Batlle: Good morning. My name is Juan Carlos Batlle. I am 

the President of the Government Development Bank for Puerto Rico and 

Chairman of the Board of the Public Private Partnership Authority. I am 

here today to talk about the Puerto Rico Ports Authority's financial condition 

and how important the long-term lease of the Luis Muñoz Marín 

International Airport is for the economic development of our Island. 

However, as Chairman of the Board of the Public Private Partnership 

Authority I have the obligation to first set the record straight on a related 

matter. Unfortunately, certain political personalities on the Island, some of 

whom you will hear from today, have been using this transaction to 

promote their personal political agendas, and have ignored the real, 

important facts and attributes that are fundamental for the economic 

development of Puerto Rico. They have put their personal interests ahead 

of the best interests of the good people of Puerto Rico. You will hear 

unfounded accusations and lack, about lack of transparency and merits of 

this long-term lease. This administration has been characterized by many 

outside the political arena as one that has restored credibility and 

transparency to our governmental institutions. This has been widely 

discussed and accepted by rating agencies and investors, and it is an 

indisputable fact that we expect to maintain into the future. Since day one, 

we have published all documents related to the long-term lease on our 
22

website. The documents are there and have been there all along, but 

some seem obsessed with trying to make you and the people of Puerto 

Rico believe that we are hiding information. Well, the facts are that we are 

not and the documents are there to prove it. The Puerto Rico Ports 

Authority has not been able, and will not be able, to maintain this airport to 

the standards that we as Puerto Ricans deserve, to the standards that our 

competitors in the region and worldwide have already taken their respective 

airports, to the standards that our visitors expect and, more importantly, to 

the standards that you, the Federal Aviation Administration, demand and 

require. The Authority simply does not have the financial capability to do 

so. The Bank has a direct involvement and interest in this transaction, not 

only because of its importance for our economic development, but because 

of the involvement and financial support that we have historically provided 

the Authority. Doing nothing and allowing our airport to continue its current 

course is simply too big a risk for our financial well being and economic 

development. I have no doubt that we have an outstanding group of 

professionals at the Authority and we will protect all employees. However, 

we just don't have a financially healthy institution to carry on its obligations 

as it stands today. Over the past nine years, the Authority has had to 

restructure its debt several times. On all occasions the Bank has provided 

support through lines of credit, letters of credit and loan guarantees. In a 

scenario where the proposed long-term lease of the Airport is not approved 

by the FAA, the Authority would continue to be under financial distress and 

would add a financial burden on the Bank and the Government of Puerto 

Rico. The current financial condition of the Authority and its high level of 

debt would continue to impede its ability to expand operations, improve 

services, pay for capital improvements, and continue the development of 
23

the aviation network in Puerto Rico. On the other hand, the approval of this 

long-term lease will allow the Authority to reduce its debt burden by almost 

45%, establish funds to support the development and capital improvements 

of regional airports, and restructure its remaining debt. The long-term 

lease of the Airport will not only strengthen the aviation industry, but will 

allow Puerto Rico and its citizens to enjoy a world class international airport 

that will be an important driver of economic development on all fronts, as 

we get the benefit of more airlines, more passengers and more global 

recognition as a destination where business and investment is welcome 

and respected under the rule of law, without intimidation tactics from some 

politicians trying to make a name for themselves at the expense of the well 

being of our people and our future. Most importantly, this long-term lease 

would have, would leave the Authority in a better financial position. Finally, 

some have tried to make the people of Puerto Rico believe we are selling 

or privatizing this important asset while nothing can be further from the 

truth. This is a long-term lease, not a sale of an asset. At the end of the

40-year lease, the people of Puerto Rico will receive a world class facility, 

transformed by over 1.4 billion dollars in new investment and worthy of 

being Puerto Rico's international airport. Thank you very much. 

Randall Fiertz: Thank you. We have a next speaker. Ok, please, please. 

Héctor Iván Santos: Good morning to the federal panel. I’m Héctor Iván 

Santos, legal counsel of the Ports Authority Employees Association and its 

president Vivian González. The Managerial Association is an employee 

association within the meaning and scope of Puerto Rico's Public Law. 

The majority of the 400 Puerto Rico Ports Authority managerial employees 

are members of the Association, and work at the Luis Muñoz Marín 
24

International Airport, the regional airports and the central offices as 

administrators, supervisors, engineers, and others. I have provided 

enough copies for the panel, so I think the ... We appear before you to let 

you know about our comments and concerns in connection with the 

privatization of the airport by lease to a private party. We will focus on the 

clause concerning the regional airports. Among the four objectives the 

transaction seeks to achieve, we will focus on the following: Operation of 

the Puerto Rico Ports and the regional airports that are an important part of 

the overall transportation system. According to the Puerto Rico Regional 

Airports Operation Plan, submitted to the Federal Aviation Administration 

on September 2012, the Public Private Partnership project for the 

international airport and quote "is directed at ensuring a maximization of 

the international airport and re-focusing attention on regional airports." The 

Ports Authority intends to give priority to the need of the regional airports. 

However, we want to question what are the real intentions concerning the 

development of the regional airports. During 2008 the Ports Authority 

received the Roosevelt Roads Naval Station Airport at Ceiba to develop it 

as a civilian commercial airport. This airport contains the second largest 

runway in Puerto Rico, after the Aguadilla Airport. In order to get it 

transferred, the Ports Authority prepared the Master Plan and the Airport 

Layout Plan for the Roosevelt Roads Airport and entered into agreement 

with the federal government. One of the main justifications included in the 

Master Plan for the transfer was the following, and quote: Goal No. 1 "To 

develop an airport facility that will provide adequate capacity to fill the role 

as commercial and general aviation reliever to Luis Muñoz Marín 

International Airport." The Airport Layout Plan was approved by the FAA 

on September 17, 2007. The goal was to prepare this airport to provide 
25

commercial service and alleviate the congestion at the Luis Muñoz Marín 

International Airport. Since then, the Ports Authority has invested a 

considerable amount of FAA and own funds to convert the facility from a 

military to a civil use. The amount of money invested is 35 million dollars. 

In spite of all this, the lease agreement includes specific provisions and/or 

clauses that will limit and negatively impact the Ports Authority capacity and 

desires to fulfill the goal and compromises established with the FAA and 

other federal agencies for the next 20 years. The new operator of the 

International Airport may be entitled to a Leasehold Compensation if he 

demonstrates a decrease in net income as a result of such commercial 

schedule passenger service. The regional airports transported one million 

passengers in 2011; this represents 11% of the total Ports of Authority 

passengers. This contract provision, this specific contract provision, is 

illegal because it is contrary to the concept of competition in a free 

enterprise economic system. There are five generally accepted elements 

to free enterprise: competition, profit, private property, freedom of business, 

and consumer control. The clear result of this contract provision will have 

the effect of creating a monopoly on the commercial flight services in 

Puerto Rico for the next 20 years. Federal agencies exist to regulate this 

behavior; laws are in place to prevent a business owner from harming or 

deceiving customers. The federal agencies gathered here have the task of 

enforcing the public policy of the United States government related to the 

free enterprise system, specifically the element of competition. Not doing 

so will imposed an "imprimatum" or approval on an illegal practice named 

monopoly, which is contrary to the American economic system, regulations 

and laws. Such is the task and challenge that you face with this public 

meeting. Thank you very much for the opportunity to address this 
26

honorable federal panel. There is enough copy of my position statement 

and have a good day. 

Randall Fiertz: Thank you very much. Thank you. 

Anthony Tirri: Good morning. My name is Anthony Tirri and I represent 

Caribbean Airport Facilities. I would like to thank the FAA and the 

Government of Puerto Rico for the opportunity to present my views of my 

company in this public comment session. The docket also reflects that on 

May 29, 2012 our legal counsel entered a notice to the FAA regarding our 

concerns with the public private partnership, but I wanted to take this 

opportunity to review our position. In addition, there are also several 

ongoing litigations regarding this matter in the expropriation court of San 

Juan, the Superior Court of Carolina, and the United States District court. 

My company has operated at the airport since 1986 and on October 24, 

1988, we entered into our first Ground Lease Agreement with the Puerto 

Rico Ports Authority. That agreement allowed us to develop raw swamp 

land, actually four feet of swamp and convert that into our first hangar, 

office and warehouse complex. CAF 1 is the only transport category hangar 

in the Caribbean and also includes a multistory airline catering facility, 

warehouses, offices, a gas station, aircraft parking ramps, underground fuel 

lines and a package sort facility leased to United Parcel. Since the original 

1988 agreement, as a result of a Federal law suit and subsequent 

stipulation, we have entered into amendments with the Ports Authority in 

1991, 1994, 1997 and 2004. These agreements will not expire until the 

year 2029 and we then have the right to renew, under our contract. As 

mentioned, CAF was first granted a lease on raw swamp land. The 

transition of that swamp into useable airport property entailed making an 
27

investment in the tens of millions of dollars. As a result of that investment, 

which the Ports Authority was incapable of making, just as they are 

incapable today of developing the airport; CAF was given a rent credit as 

compensation for improvements which would allow for the growth of LMM 

airports' cargo capacity. I want to make a point that exactly what is 

happening today, that you’re giving a lease to Aerostar, was pretty much 

the same you did to me. You gave me credits twenty years ago; you’re 

giving these folks the opportunity to run the airport. You have to honor their 

lease, you can’t come to them in twenty years and say “I’m sorry, your 

lease is over with, we’re going to get into a new situation”. I need my lease 

protected that was arranged twenty years ago. That credit ... The credit 

we’re talking about, as mentioned we were granted this lease, we 

transitioned it, we have about 46 million dollars invested in our property. 

The credit still has a substantial balance and will need to be addressed in 

the transition from Ports Authority control to Aerostar control. The credit, as 

I’ve said, has an accumulated value of approximately 46 million dollars and 

is nowhere addressed in this agreement between PRPA and Aerostar. In 

addition to the credits issue, the agreements referred to before also gave 

CAF the rights to build CAF 2 which is a complex of 4 warehouses, a bus 

depot, car rental facility, restaurants and offices. We also are the 

leaseholder of CAF 3 which is the only undeveloped land at the airport. 

CAF has already invested in mitigation, and infrastructure, concrete ramps, 

underground utilities, fuel lines, etc. at the CAF 3. We are also the 

leaseholders of the Airport Hotel which, according to the documents we 

have read, is excluded from the proposed lease between the Ports and 

Aerostar. The proposed lease agreement between the government and 

Aerostar does state that the CAF properties are not included in the 
28

agreement, but it does not speak to how our rights and our tenants rights, 

including IFC, are protected under the new operator. In addition the actual 

property description is not clear, as there are several references made to 

the parcels of land that are leased to us. CAF's agreements with the Ports 

Authority specifically allow us to provide terminal services throughout the 

airport, including but not limited to ticket sales and services, passenger and 

baggage check in, passenger boarding handicap assistance, etc. We also 

have the right to provide ramp services, which include but are not limited to 

meeting and departing aircraft, operation of ground support equipment, 

baggage, cargo and mail loading, aircraft cleaning etc. CAF also has the 

right to perform aircraft dispatch and maintenance, preflight inspections and 

other mechanical services. We also have the right to provide fueling. 

Under our current agreement, CAF has these rights within our leased 

premises and throughout the entire airport. And yet, none of our rights are 

addressed within the proposed agreement between Ports and Aerostar. 

These contractual rights are an important and valuable part of our existing 

agreement with PRPA and we believe that they must be addressed prior to 

any transfer. We have sent letters to Aerostar on August 20 and August 

29, and have not received any response. We would like to have a 

dialogue. We are currently involved with litigation with the Ports Authority 

to protect some of these contractual rights but neither Aerostar nor the FAA 

is a party to these lawsuits. Failure to address the rights we’re talking 

about at this point will only insure amendments to the outstanding litigation 

to include both Aerostar and the FAA. While we understand probably 

better than anyone, that the airport needs more qualified management and 

continuity in the operations, we cannot allow our substantial investment of 

over 50 million dollars in private funds to be ignored and cannot allow our 
29

contractual rights to provide ground handling, fueling and catering to be 

interfered with. To summarize my position, and the position of all my 

companies, we approve the present lease to Aerostar. Ford God sakes 

we’ve seen twenty different administrations and the last four we’ve seen, 

four different Ports Authority directors. There is no continuity at this airport 

is a horrible mess, and has been for the 27 years I’ve been there. We need 

continuity of a new management, we really do. So again, summarizing 

that, we need to have the FAA and the Ports Authority address our 

concerns. At the beginning of this discussion mentioned that there are 9 

statutory provisions that Aerostar has to comply with, I suggest we have a 

tenth one added. The tenth one should be that you protect the proprietary 

and contractual obligations of leaseholders on the airport. So, the nine that 

you have refined but none of those address my concerns, the fact that we 

are a contractual lease holder and we have 50 million dollars invested and 

is not protected, you need to protect it. Thank you. 

Randall Fiertz: Thank you. 

David Alvarez: Good morning to the Federal Panel. My name is David 

Alvarez. I am the Executive Director of the Puerto Rico Public-Private 

Partnerships Authority. Thank you for letting me share my remarks. After 

two years of evaluation, we are confident that the lease, that the proposed 

long-term lease for the Airport is the most effective way of ensuring the 

long-term development of the Luis Muñoz Marín Airport into a world-class 

facility that will benefit the people of Puerto Rico. In this Public Meeting, I 

would like to highlight and clarify several key points regarding the proposed 

long-term lease for the Airport. Point number one: The Government of 

Puerto Rico does not lose ownership or control of the Airport. This is 
30

established, this is not a sale of the asset and this is established in the 

Section 2.1 of the Lease Agreement, which reads that the Lease 

Agreement states that the PRPA is not assigning, transferring or conveying 

title of the LMM, or the Luis Muñoz Marín Airport, to the selected 

consortium. In addition, Section 3.12 of the Lease Agreement provides 

PRPA, together with airlines and the selected consortium, will have the 

right to participate in an Executive Committee that will be established for 

the review of the ongoing operations and policies at the Airport or any other 

proposed changes. Second point that I would like to clarify is that the 

Lease Agreement does not represent a loss of value for the Government, 

as it establishes the framework to maximize the potential development of 

the airport. Presently the net operating income after depreciation of the 

airport as fiscal 2012 was a negative 27 million dollars. In the, under the 

proposed Lease Agreement, there is an alignment, an alignment of 

interests between all the stakeholders that will enhance the value of the 

Airport. Third point that I would like to provide clarification is that proposed 

lease does not represent labor instability. Lease Agreement for the Airport, 

as per Section 3.4, does not abrogate the collective bargaining agreement 

of the HEO labor union at presently at PRPA. The Lease Agreement for 

the Airport allows for employees to retain their jobs in the PRPA and/or 

explore new employment opportunities with the selected private consortium 

on a voluntary basis. The selected consortium will also interview all Airport 

employees who apply for a job. The fourth point that I would like to provide 

further clarification is that the Lease Agreement does not prohibit the 

development of regional airports. The Lease Agreement does not contain 

a protection against competition or a prohibition of development of regional 

airports. Section 3.22 of the Lease Agreement represents a reasonable 
31

restitution in case of deliberate action of the Government that causes a 

reduction in the net income of the Luis Muñoz Marín. This is a very remote 

situation. Moreover, there should be the following clarifications: Section 

3.22 does not apply, in any way, to the governments, -- to the airports --of 

Aguadilla, Ponce and Vieques, which are 139 Certified Airports. Section 

3.22 does not apply when non-Part 139 Airports, such as Ceiba, increase 

activity related to cargo, charters and increase frequency of present 

offering. Section 3.22 does not prohibit non-Part 139 Airports from 

obtaining 139 Certifications and beginning servicing scheduling flights of 

more than ten, of nine passengers. Also, Section 3.22 is fully consistent 

with development plans of non-Part 139 Certified airports, which can be 

designated, can be developed for a "destination within a destination" or 

niche markets. Also, Section 3.22 is fully consistent with the reports 

conducted by 2007, completed in 2007, 2009 that indicate that the 

development of the Roosevelt Roads airport to an international scale would 

take two decades and over 400 million dollars of investment. Next point 

that I would like to provide clarification is that the plan that there has been 

developed, --that we have established a plan for a development-- to 

facilitate greater attention to regional airports. Since its inception PRPA 

has jointly applied revenues to all the, to all the, of all this facilities, 

Maritime and Aviation, towards meeting its operational expenses and debt 

services requirements. This comingling of funds means that all PRPA 

facilities, Luis Muñoz Marín, Maritime and Regional Airports, all contribute 

to the operations of PRPA and LMM revenues are not, have not been 

specifically applied to the Regional Airports. In other words it is important 

to clarify that Luis Muñoz Marín not solely subsidizes the regional airports. 

The last point that I would like to present to the panel is the, that the 
32

propose Lease does not generate any increase in tariffs and that’s 

established in the Lease Agreement clearly with a new rates entirely 

structured and that the proposed long term lease of the private investment 

airport provides a way of increasing value for the airport. Thank you for 

your time. 

Randall Fiertz: Thank you. 

Juan Comulada: Good morning, distinguished federal panel. My council 

Liza Ortiz registered IMC for this presentation. My name is Juan Comulada 

and I am the Country Manager for Airport Shoppes Corporation and its five 

subsidiaries. We are a Puerto Rican corporations that serve as the 

Regional Headquarters of International Meal Company for its operations in 

all of the Caribbean and Central America. IMC is the fastest growing 

company in the food and beverage business in Latin America, operating in 

Brazil, Mexico, Panama, Colombia, the Dominican Republic and Puerto 

Rico, and employing more than 11,000 men and women. Our companies 

have operated for more than 30 years in Puerto Rico, creating jobs and 

helping our economy. Presently, we operate 26 restaurants and food 

concessions at the Luis Muñoz Marin International Airport and provide inflight catering to all commercial airlines with the only FDA approved kitchen 

in the Caribbean. We also provide maintenance services to corporate and 

private aircraft, and fuel services to the U.S. Department of Defense, and 

operate the largest cargo area. We employ over 500 people just in Puerto 

Rico. I want to thank the FAA for holding this hearing, because we truly 

believe that there are a number of issues that need to be carefully reviewed 

before the Ports Authority turns over the operation of the Airport to a private 

foreign company that has never operated an airport in the United States. 
33

These include the actual impact of jobs at the Airport and the creation of 

new ones, as well as security issues within the Airport. If I may, I'll change 

to my native language since I want to express myself clearly so that the 

FAA and everyone in Puerto Rico can understand my concerns. 

Yo nací y crecí en Puerto Rico, y aquí he criado a mis dos hijos. Como 

puertorriqueño me preocupan nuestros empleos y la posibilidad de un 

mejor porvenir. Hoy, ambos están amenazados por la manera en que este 

proceso de privatización se está manejando localmente. En febrero de 

este año, anunciamos una inversión de 22 millones de dólares y la 

creación de unos 1,200 nuevos empleos, con la apertura de unos 12 a 15 

nuevos restaurantes dentro y fuera del Aeropuerto. Hoy día, tanto esta 

inversión como la creación de estos empleos están en riesgo por la 

manera en que se está realizando este proceso. IMC ha invertido sobre 

100 millones de dólares en Puerto Rico desde el 2008. Aún cuando el 

número de pasajeros bajó en un 50% con la reducción de vuelos que tuvo 

American Airlines, nosotros remodelamos todos nuestros restaurantes y 

abrimos nuevos. Esto en un solo restaurante en el Terminal D, 

Margaritaville, invertimos 3.2 millones de dólares y tuvimos que incurrir en 

1.4 millones adicionales en arreglos a la infraestructura porque Puertos no 

tenía los fondos. No obstante a esto, la Autoridad de los Puertos primero 

nos canceló los espacios del Terminal A, previamente otorgados en 

nuestro contrato, firmado y ratificado por Puertos, poniendo como razón el 

hecho de que estaban en medio del proceso de privatización. Y encima de 

esto, el Operador que fue elegido por el Gobierno, anunció que su primera 

acción iba a ser el cierre de los Terminales D y E, lo cual representa el 

cierre inmediato de 10 de nuestros establecimientos, dejando 
34

prácticamente en la calle al menos unos 150 padres y madres de familia 

que laboran en nuestra empresa, esto sin contar las otras entidades 

comerciales que también operan dentro de estos Terminales. Pregúntenle 

a un empleado de más de 25 años de servicio, que su único empleo ha 

sido laborar en uno de estos restaurantes o en la cocina que quieren 

cerrar, y que de su ingreso depende una familia de 5, ¿dónde a sus 60 

años y en esta economía va a conseguir trabajo? De esas 150 personas 

que se quedarían sin empleo uno de cada cuatro ha trabajado en el 

Aeropuerto más de una década o es mayor de 50 años. IMC tiene un 

compromiso con sus empleados, con Puerto Rico y con la creación de 

nuevos empleos, pero ante estas acciones, no nos queda otra alternativa 

que denunciarlas y pedirle a la FAA que vea y analice con cuidado esta 

solicitud. Más aún, cuando esfuerzos similares de privatización no han 

tenido necesariamente los resultados esperados en los Estados Unidos. Si 

quieren una privatización exitosa, entonces tiene que realizarse de forma 

justa y responsable. Eso no es lo que hemos visto hasta ahora. Este 

aeropuerto es el puente que nos conecta con el resto del mundo y es 

esencial para el turismo, una de las industrias más importantes, por lo que 

nuestra economía está en alta dependencia de la confiabilidad con la que 

se maneje la operación del mismo. Confiamos en que ustedes ponderen 

detenidamente este proceso para asegurarse que estos empleos se 

mantengan, que compañías comprometidas con el Aeropuerto como IMC 

inviertan más en Puerto Rico y que nosotros podamos cumplir nuestra 

palabra con más y mejores empleos. Le pregunto a esta honorable 

agencia ¿no vale la pena evaluar bien este proceso para que sea uno justo 

y responsable? Respetuosamente sometido. Buenos días.
35

Randall Fiertz: Thank you. 

Arnaldo Deleo: Good morning, Mr. Chairman, ladies and gentlemen. My 

name is Arnaldo Deleo I’m the general manager of the Luis Muñoz Marín 

International Airport. I have been the General Manager of the Luis Muñoz 

Marín since March of 2009. As such, I am responsible for the day-to-day 

management and operations of the airport. I have been in Puerto Rico for 

the last 40 years and I have worked at Miami and Chicago. Since I began 

working at Luis Muñoz Marín Airport in 1972, I have witnessed first-hand 

the physical deterioration of the Airport, as well as the many missed 

opportunities to bring it to its full growth potential. Managing and operating 

an airport is a highly technical and complex task. Dealing with airlines is 

only a small part of the job. An airport is part shopping mall and part 

property developer. Our tenants include not only airlines but restaurants, 

businesses, hotels, and nearly a dozen government agencies. Four 

decades into my career in aviation, I have come to understand that efficient 

management of an airport requires leadership and its consistent knowledge 

and committed to long-term success. Unfortunately, we have experienced 

the opposite during the long history of the Airport. Since its inception, it has 

been managed ineffective by people who come and go with election terms. 

In the last 10 years, the Ports Authority has had ten Executive Directors. 

Although competent, capable and hard-working, they have few; they had 

little or no aviation experience. I can speak to this because for nearly 20 

years I was the general manager for Eastern Airlines in Puerto Rico, at the 

time the largest airline operating in the airport. As an Eastern Airlines 

executive, I witnessed how resources destined to improve the airport were 

allocated inefficiently and how decisions were made to the detriment of the 
36

facility and the Ports Authority. Over the past several decades, politically 

motivated decisions, as well as bad business judgment has culminated in a 

Ports Authority that is unable to finance even the mere tasks, 

improvements. This substandard management is a trend that I witnessed 

as an outsider during many years of involvement at this airport and one that 

was destined to continue. This is one of the reasons that led me to take the 

position of general manager and try to restore this once proud facility to 

again be the jewel of the Caribbean. Now, under my leadership, we have 

made strides in shifting the balance towards providing a better airport but, 

in the end, given the inherent lack of funds going forward, there is no 

guarantee that the improvements made to date by the entire airport team 

can continue medium and long term. There is no way to implement a long 

term vision and business plan for this airport, the nature of bureaucracy 

would not allow it. The only way to guarantee short, medium and long term 

improvement is through continuity, which will be afforded to the airport 

through the proposed public-private partnership. The current 

administration has the vision to seek an opportunity to get the airport away 

from the four-year political cycle by entering into a long-term lease 

agreement with a partner that will maximize the Airport's potential for the 

benefit of all stakeholders. The key asset will continue to be owned by 

Puerto Rico and I fully support the granting of this lease to a new operator. 

In the very near future, airlines, visitors to the island, and all Puerto Ricans 

will again have the benefit of a first class airport that we both need, that we 

both need and deserve. The private partner selected to operate the airport 

has the experience and know-how necessary to deliver a world-class 

airport for the benefit of Puerto Rico. I am particularly convinced of this 

because I have actively participated in the selection process and our team 
37

has worked with the airport, over the 2 years that we have had dozens of 

meetings with the major airlines serving LMM and they are unanimous in 

their support of this agreement. As a former airline manager, I can attest 

that growth, prosperity and excellence in airports are strongly driven by 

airlines. I believe that the lease will result in much needed improvement of 

our airport's infrastructure, economic growth for Puerto Rico, and enhanced 

opportunities for airlines, airport employees, service companies, and 

passengers of the Luis Muñoz Marín International Airport. Thank you. 

Randall Fiertz: Thank you. 

Jaime López: Good morning. My name is Jaime López and I am the 

Acting Executive Director of the Puerto Rico Ports Authority. We are 

meeting today to discuss the benefits of establishing a private public 

partnership for the management and operation of the Luis Muñoz Marín 

International Airport, something that we see as essential for one of the 

most important elements of the island's infrastructure, for the growth of our 

economy, and for growing Puerto Rico's tourism industry. Our current 

reality can be described in three simple ways: the airport's development 

has been inconsistent and erratic; Puerto Rico's position as a destination 

has been weakened by not having a world class facility for travelers; and 

the Ports Authority does not have the financial means to make the much 

needed improvements. The proposed transaction's benefits are many. 

First, it allows for the airport to be improved, maintained and operated by 

an experienced private partner. It calls for the partner to bring the airport 

to world-class standards as defined by the International Air Transport 

Association and the Federal Aviation Administration. For example, there 

will be an immediate capital investment of 195 million dollars to repair and 
38

improve signage; lighting; boarding ports; the airport's electrical systems 

and Wi-Fi access; water leaks in all terminals; new air conditioning 

systems; repairs to the stairways and security systems in the parking 

garage; to the drainage systems; and landscaping. While there has been 

much public discussion on the transaction in Puerto Rico's media, a 

number of mistaken perceptions have been created by some of the 

project's opponents. Some have argued that the contract will limit the 

growth of our regional airports and will decrease government support for, of 

these airports. Once again, this is far from the truth. This agreement does 

not forbid or limit development for regional airports. Passenger and cargo 

growth at the Luis Muñoz Marín International Airport and regional airports 

are not mutually exclusive goals. To suggest that one cannibalizes the 

other, as unfortunately some local politicians have suggested, 

demonstrates a total lack of knowledge of airport economics. In other 

jurisdictions around the World and in the continental United States we see 

every day primary airports and secondary, --primary airports increasing 

passenger demand, --while secondary airports within the same 

geographical region continue to build on their competitive advantages like 

cargo, private aviation and niche travel and leisure demand. Exactly the 

same situation is expected from airports like Aguadilla, with their recently 

designated Free Trade Zone, Ponce with the economic activity related to 

the Ports of the Americas, and the tourism potential of destinations like 

Ceiba, Vieques and Culebra. All in all, under the proposed lease 

agreement, every component of the airport system in Puerto Rico will 

complement each other, as is the case in similar transactions and markets 

like New Delhi, Mumbai, Bangalore, Seoul, Tokyo, Chicago: O’Hare, 

Midway, New York City: JFK, La Guardia and Newark, Dallas: Fort Worth 
39

and Love Field, and Washington DC with Dulles and the Washington 

National Reagan. Again, no clause or condition of the proposed lease will 

limit our ability to implement this airport system vision for the Island of 

Puerto Rico. On the labor side, once the transaction is closed, current 

Ports Authority jobs, as has been said, will continue under the Authority, 

although employees can certainly explore employment opportunities with 

the private operator should they choose to, should they choose to do so. 

Those employees that are offered job opportunities can either continue 

their careers with the private company or keep their jobs at the Ports 

Authority. Overall, the proposed lease should yield concrete benefits for all 

the parties involved. Puerto Rico will reinforce its position as a preferred 

Caribbean destination and increase its global air connectivity. The island's 

economy will benefit from an increase in passengers, in the number of 

airlines that serve the destination and in greater amounts of air cargo. The 

agreement will also guarantee a much needed sense of continuity in the 

long term investment in the airport's facilities and commercial viability. And 

to the agency I represent, it will continue ... --it will contribute -- positively to 

the restructuring of the Ports Authority's fiscal situation, allowing us to 

improve services to regional airports and other facilities under our 

jurisdiction. The public at large will see great improvements in their travel 

experience, resulting from the airport's efficiency, convenience, safety and 

high quality services. Passengers will truly see the Luis Muñoz Marín 

Airport as a world class facility. By bringing in additional flights and airlines, 

travelers will also benefit from greater competition, which will naturally lead 

to lower prices, better service and greater convenience. I firmly believe 

that the people of Puerto Rico will be well served by this public private 

partnership. Globalization and economic interdependence make it 
40

imperative that we have a modern, updated and improved international 

airport in order to compete on the world stage. This is precisely what this 

public private partnership seeks to achieve. Thank you very much.

Randall Fiertz: Thank you. 

Mario González: Good morning. My name is Mario González. I’m the 

executive director of the Local Redevelopment Authority for the former 

naval base Roosevelt Roads, also known as the LRA. On the behalf of the 

LRA we appreciate the opportunity provided by the FAA, to express our 

perspective regarding the importance of the referenced Public Private 

Partnership transaction of the redevelopment effort of the former Navy 

base at Roosevelt Roads. As a matter of background both in 2004 Re-use

plan and in 2010 addendum to the Re-use plan, serve as a basis for the 

economic development conveyance that we sent to the department of the 

Navy for the transfer of 1,370 acres of lands and facilities. The project 

would motivate people from all over the world to travel to Ceiba and enjoy 

one of the most interesting multi-use projects in the Caribbean. Stimulating 

economic growth in the eastern region, which was severely impacted by 

the base’s closure. Thus, fulfilling the mission and objectives that were part 

of the EDC application. The redevelopment project that Roosevelt is part 

of the government’s economic development strategy aimed at attracting 

private investments, creating jobs and spurring economic growth in the 

eastern region of the island. Located at the former Navy station Roosevelt 

Roads its area is apprised of 8,696 acres of high economic, ecological, 

historical and cultural value. This project is considered one of Puerto 

Rico’s foremost and sustainable economic development initiative. Our goal 

is to attract private investment and companies to the area in a manner that 
41

will drive a robust economic growth, so that together with efforts from the 

community a sustainable project will develop. The project’s impact will be 

significant island wide and in particular on the towns of Ceiba, Naguabo, 

Vieques and Culebra. We estimate that the total investment in the project 

in 20 to 25 years will be approximately 2.6 billion dollars, creating 24,700 

direct and indirect jobs. Altogether, the economic activity that will be 

generated is certain to bring back hope for better quality of life and 

prosperity to the residents of the area. The redevelopment project 

represents an opportunity to transform the region into a unique ecotourism, entertainment, commercial, recreational, institutional and services 

destination in the Caribbean. Additionally, the new strategic vision also 

contemplates a sustainable development, avoiding urban sprawl and 

fomenting environmental protection that are unique in the Caribbean 

region. The redevelopment project maximizes a national eco-tourist 

attractions found within the property and that are unique to the world, 

forming a green triangle with new eco-tourism developments in Vieques 

and Culebra, and the island’s eastern region, el Yunque tropical rainforest 

adjacent to the towns of Ceiba and Naguabo and the 3,320 acres of 

conservation lands located at Roosevelt Roads and managed by the 

conservation Trust. On January 2012 the Department of the Navy 

transferred the local, --transferred to the LRA 1,370 acres of land and 

facilities located primarily in Parcel III, better known as Forrestal. Currently 

the LRA and the Department of the Navy have agreed to terms and 

conditions for the transfer of the Government of Puerto Rico to the 

remaining 2,000 acres. Clearly, the background provided shows the great 

potential of the Roosevelt Roads property and we’re confident that the 

Public Private Partnership under your consideration is a key ally in this 
42

effort, which complements the development of the José Aponte de la Torre 

airport in Ceiba. We strongly believe that the Public Private Partnership will 

greatly improve the chances of maximizing the long-term development 

potential of Roosevelt Roads. This Public Private Partnership provides 

Puerto Rico with a partner that has a required expertise and a business 

plan geared towards increasing passenger traffic in Puerto Rico. Roosevelt 

Roads being a mere 45 minutes away from the Luis Muñoz Marín Airport 

can greatly benefit from the increased traffic to be generated by the Public 

Private Partnership. In addition and after careful consideration, and after 

careful reviewing article 3.22 of the proposed Public Private Partnership 

agreement it is the LRA’s opinion that it will not hinder the development of 

Roosevelt Roads, but quite the contrary. The Public Private Partnership as 

contemplated under the signed lease agreement will serve as a step in the 

right direction towards improving the feasibility of developing Roosevelt 

Roads and under article 3.22 we will be able to carry out the phased 

development of the José Aponte de la Torre airport in Ceiba. Thank you 

very much. 

Randall Fiertz: Thank you. 

Rubén Hernández Gregorate: Good morning to the Federal Panel and all 

the attendants and participants of this Public Meeting. My name is Rubén 

Henández Gregorate and I am the Chairman of the Board of Directors of 

the Ports Authority. First I would like to talk about the importance of the 

airport for transportation and aviation. As an island it is critical for Puerto 

Rico to have ample access to air transportation and that is cost effective 

and up to date. Ensuring the development of the international airport is 

crucial for transportation in Puerto Rico. The airport receives nine out of 
43

every ten passengers coming into Puerto Rico and processes over 80% of 

their air cargo that is exported from or imported to Puerto Rico. 

Additionally, the International Airport is the main venue that connects us to 

the rest of the world and enables a transportation and connection between 

3.7 million Puerto Rico residents and 4.2 million puertoricans in the United 

States. Ensuring the transformation of the International Airport into a world 

class infrastructure agency is key to a transportation sector of Puerto Rico. 

In recent years, the aviation sector in Puerto Rico has been in decline. The 

resulting outcome is that Puerto Rico is now less connected to the rest of 

the world. A long term concession to operate the International Airport will 

allow it to develop into an airport that is more widely connected and better 

prepared to face the changes in the airline industry as well as one with 

strengthened complementary air services for cargo and general private 

aviation. We know that the experience of long-term concessions in airport 

has been beneficial to aviation, both internationally, in places like Lima, 

Perú, London, Sidney and in United States, at John F. Kennedy and 

Sanford, Orlando, among others. Looking at the future for the Ports 

Authority, if the proposed project is approved the Ports Authority will 

continue to exercise its right to develop, manage and supervise the air 

transportation facilities in Puerto Rico. The propose concessioning of the 

airport addresses several challenges that the airport is facing, including but 

not limited to: the long-term stagnation in the volume of passengers, the 

scarcity of resources to carry out a wide ranging program of capital 

improvements, limited commercial development, lack of continuity in 

development plans and the reduction of the Ports Authority public debt. 

The Ports Authority and the Public Private Partnership Authority have 

forged an operational plan to be implemented once the long-term 
44

concession of the international airport is approved. This comprehensive 

plan is based on a combination of measures such as enhancing the 

monitory of federal and other funding opportunities. Supporting measures 

for the establishment of a fund for the regional airports and expansion of 

capital improvement plans for regional airports, and measures to reduce a 

necessary cost, among others. Considering that the development of the 

international airport will be ensured without any cost to the Ports Authority 

and the public debt will be reduced as a result of the proposed deal. If the 

Federal Aviation Administration were to deem this plan acceptable the 

Ports Authority will be able to maintain its other operations. It is important 

to implement these measures effectively. The Ports Authority will continue 

to pursue its goal and mission, having ensured a world-class facility for the 

majority of passengers that come to Puerto Rico. The proposed agreement 

aligns the interest of the Ports Authority and the selected partner. Under 

this agreement the Ports Authority will receive a share of revenue of the 

international airport. This will incentivize the Ports Authority to work in a 

collaborative manner to maximize the development of the international 

airport. In addition, this provides a recurring source of revenue to the Ports 

Authority. This is a concept that we consider provides financial income 

without any expense attached to it. Although the income is fixed for the 

first 5 years, we think this income will benefit the Ports Authority as it 

increases its later years. A conservative estimate puts this amount at 550 

million dollars accumulative throughout the term of the concession. In 

terms of the regional airports, Puerto Rico has become a smaller place due 

to investment in its road and highway system. Today, Puerto Rico is an 

arrival destination where one can go anywhere on the island by road. This 

makes us believe that Puerto Rico could very well profit from having a 
45

world-class airport, besides 3 commercial airports and 3 general aviation 

airports with specialized air services and regional importance. This does 

not mean that any operation must cease but rather that Puerto Rico is well 

served by existing airport pull. 

Randall Fiertz: Sir, we’re out of time, if you could please finish. 

Rubén Hernández: In conclusion, Puerto Rico will be in better shape 

when it has a world-class airport that strengthens its connections. We have 

presented an operational plan that if acceptable for the FAA and 

implemented with discipline, will not only reduce debt, but will put Ports 

Authority in a better position. Thank you very much. 

Randall Fiertz: Thank you. 

José Pérez Riera: Good morning to all, and thank you for providing me 

with the time and the space to express my request for you agency’s 

approval of the propose Luis Muñoz Marín International Airport private 

partnership transaction. My name is José Pérez Riera, Secretary of the 

Department of Economic Development and Commerce, Executive Director 

of the Corporation for Trade and Commerce and Executive Director of the 

Puerto Rico Industrial Development Company of Puerto Rico. I will be 

presenting to you today the benefits of establishing a Public Private 

Partnership for the management, development and operation of the Luis 

Muñoz Marín International Airport with the expectation that this partnership 

will position our airport amongst the best in the world. An essential element 

in any economy that is seeking to promote tourism and business growth is 

air access. Even more so, in the case of an archipelago like Puerto Rico 

that depends on air access to connect to the rest of the world. The 
46

government of Puerto Rico recognizes that air access is a critical 

component to economic development and essential to foster international 

commerce and that it is crucial to maintain it and strengthen Puerto Rico’s 

position as tourism and trade hub of the Caribbean. This administration 

has also recognized that providing excellence, excellent customer service 

to our visitors from the moment that they touch our soil for the first time is of 

the outmost importance for Puerto Rico’s development. The Luis Muñoz 

Marín International Airport is the point of entry for over 80% of our 

approximately 5 million visitors and it is therefore an essential part of our 

infrastructure. Our economic development achievements have resulted in 

improved global competitiveness rankings for Puerto Rico. Puerto Rico 

has scaled up 4 notches, to the 31st position out of 144 jurisdictions 

evaluated in the 2012-2013 edition of The World Economic Forum Global 

Competitiveness Report. This is the highest ranking that Puerto Rico has 

obtained in this report in its history and has surpassed Chile as the most 

competitive economy in Latin America. One of the indicators that was 

evaluated as part of this ranking was the available airline seats, which 

scaled up eleven positions thanks to the promotional efforts of the 

government of Puerto Rico and to an air access incentive program. Since 

the year 2009 Puerto Rico has gained 3 new airlines that include British 

Airways, with twice a week service from Gatwick, Condor with twice a week 

service from Frankfurt and Westjet with twice a week service from Toronto. 

Also, we have negotiated new flights from key domestic cities, like 

Washington D.C., Jacksonville and West Palm Beach, as well as increase 

frequencies to New York City, Philadelphia, Miami, Atlanta, Baltimore, Fort 

Lauderdale, Tampa and Hartford. Without a doubt Puerto Rico has 

advanced its economy and is today in a better position than 4 years ago in 
47

many areas. However, there is still work to be done, and we understand 

that this Public Private Partnership will have a very significant contribution 

to our future economic growth. Primarily, this partnership will generate 

jobs, according to an economic study realized by Estudios Técnicos, which 

is a local consulting firm, it is estimated that Aerostar’s execution of their 

plan for the airport will provide significant economic benefits. These 

benefits include the creation of 3,500 jobs direct and indirect as well as 

induced, an addition of 13,000 jobs by the year 2022 and a stimulus of 10 

billion dollars in total economic activity to Puerto Rico. Additionally, jobs 

will be created as part of a capitals improvement plan and new services 

which will be offered. For example, each million dollar investment will 

generate 23 direct, indirect and induced jobs, while at the same time actual 

jobs at the Ports Authority will be maintained and employees can explore 

job opportunity with the new operator should they wish to do so. This 

Public Private Partnership will also generate immediate economic benefits 

for Puerto Rico. As part of the partnership the Aerostar group will invest a 

total 2.5 billion dollars that will result in an improved airport, better customer 

service for all of us that live here in Puerto Rico and those that come to visit 

us. Asides from generating immediate economic benefits for Puerto Rico 

this Public Private Partnership will improve our air access. As part of the 

agreement it is required that the operator develop a plan to increase air 

seat capacity by bringing in more flights to Puerto Rico. For the last 20 

year the Luis Muñoz Marín International Airport has managed on average 4 

million embarking passengers whereas capacity of the airport is much 

larger than that. With this partnership Puerto Rico will have more airlines, 

more flights and better connections to key cities in the continental United 

States and to international destinations, especially in Latin America, Europe 
48

and in the Caribbean. The economic impact of increase volume, of the 

increase volume of flights, is very significant for Puerto Rico. For example, 

new domestic flight contributes 77 million dollars to the local economy on 

the island and a new international flight contributes 105 million dollars per

year. Each year it is expected that the volume of passengers will increase 

by over 200,000 passengers which translates to an injection to 

approximately 140 million dollars to our economy. These incremental 

passengers include tourists which results in more jobs and increased 

activities in hotels, paradores, restaurants and artisans among many other 

sectors. Improved air access to Puerto Rico allows us to be better 

integrated into the global economy, better connectivity to main cities, 

makes Puerto Rico more attractive to national and international companies 

that are evaluating whether or not to establish their business in Puerto 

Rico. This administration has implemented a set of economic incentives to 

foster investment and attract more companies to the island. These 

incentives have proven to be successful, but we also need to improve other 

areas, like connectivity in order to be able to continue to make Puerto Rico 

an attractive destination for companies that want to establish themselves 

on the island. The potential to increase air access with the partnership 

represents a critical component in achieving this objective, the improved 

connectivity that the Public Private Partnership ... 

Kevin Williams: Sir, we’re going to need you to wrap it up. 

José Pérez Riera: In conclusion Puerto Rico has a first-class legal 

framework, unmatched incentives, renovated infrastructure and soon, if this 

transaction is approved by the FAA, we will have a world-class airport so 

that our visitors have a first impression of our island and so that they can 
49

experience that Puerto Rico does in fact do it better and will allow for the 

economic development of Puerto Rico that we are pushing forward to 

continue for generations to come. 

Kevin Williams: Thank you. 

Luis Vega Ramos: Good Morning. My name is Luis Vega-Ramos and I 

am an At-Large Member of the Puerto Rico House of Representatives. I 

guess that makes me a local politician. Since the proposed transaction is 

one of the utmost importance and could entail serious long term 

consequences for the quality of life, the economy and even the security of 

the people of Puerto Rico, I have decided to present my comments in 

English so that I make sure that you understand the concerns this 

proposed privatization raises for me and many of my constituents. First, I 

must address the alleged transparency of the process from the government 

of Puerto Rico’s part. I am the ranking member of my party's delegation in 

House Ways and Means Committee. In our committee, the budgetary 

concerns, the sources of revenue of economic commitments of the 

government of Puerto Rico are discussed and overseen. Yet, to this 

moment, we have not been presented by any Government official of Puerto 

Rico the details of the proposed transaction for our consideration. If the 

ranking member of the House Ways and Means Committee, has not have 

the chance to discuss the transaction and see the details with the 

government’s officials of Puerto Rico, imagine what the common 

puertorican on the street will know about this transaction. I will be 

submitting via e-mail a longer, more detailed, version of my testimony 

sometime during the next fourteen days. Yet I will summarize my 

objections and concerns in the following six (6) statements: 1. Puerto 
50

Rico's SJU Airport is and through the life of the proposed contract, will 

continue to be, our main facility for air traffic to and from Puerto Rico. The 

reality of Puerto Rico being a group of islands makes the prospect of 

having our most important entrance and exit port in private hands for some 

four decades a very risky proposition indeed. As a matter of federal policy, 

the U.S. Government has decided that the private management of 

International Airports be a very scrutinized exception, a pilot program, if you 

will, and not the general norm. Puerto Rico's SJU Airport is an extremely 

bad candidate to be the guinea pig for the never before conducted 

experiment of having an International Airport of a jurisdiction under the 

FAA's authority to be put in private hands. 2. The financial structure of the 

proposed transaction between the Aerostar Airport Holdings group and the 

Government of Puerto Rico is one that is set mainly to augment the 

effective value of the winnings made by the private entity and to, inversely 

reduce the effective value of the amounts to be paid to the Government of 

Puerto Rico. One of Puerto Rico's leading economists, whose study will be 

presented and discussed throughout this hearing, and the statement will be 

put in the official record, has said that in effective real terms Puerto Rico 

would lose over $1 billion of the real and present value of the operation of 

the Luis Muñóz Marín Airport through the effective dates or the effective 

functioning of this contract. Simply, this deal privatizes earnings for 

Aerostar and leaves the enterprise's risk and loses for the people of Puerto 

Rico to burden. 3. On that regard, the Puerto Rico Ports Authority will incur 

in a $669 million bond issue to remove current debt from Luis Muñóz 

Marín’s books so that it may transfer the facility free of any major economic 

obligations. Furthermore, the way this bond issue is going to be paid back 

also favors the private partner substantially for the very same reasons that 
51

were previously stated. Simply put this bond issue, which I have here with 

me, and which will be made part of the record, has not been discussed not 

even by the Ports Authority Director who is issuing that bond issue. He 

didn’t say anything about it in his statement. 4. Also, we have to 

understand that the FAA should not be led to believe what common sense 

dictates to be untrue. The upfront gains for Aerostar are directly dependent 

on the concentration of passenger flights on Luis Muñóz Marín Airport. 

Plain and simple, that concentration of passenger traffic on SJU will have 

direct effects and dire effects on the regional airports' strategic 

development plans and their role as stimulants of economic growth on the 

areas they serve. Effect of regional tourism and economic industries will be 

great. Also, we are seeing concrete examples of this right now, as this is 

being discussed the Government of Puerto Rico, the Governor himself in a 

letter misrepresented the state of flights from San Juan to Culebra in order 

to concentrate those flights in Luis Muñóz Marín’s Airport and to get out of 

the way three local providers who currently are giving those types of 

services and in order to favor an out of Puerto Rico private entrepreneur. 

So that is already happening, this is not theory. Already the Government of 

Puerto Rico is acting to get out of the way local airlines and local 

businesses as part of the deal to concentrate all passenger traffic in the 

Luis Muñóz Marín Airport. There are also ongoing legal suits to try to throw 

out of their leases tenants in the Isla Grande Airport, which is an airport 

which is very close to the Luis Muñóz Marín. 5. Actually, Today's press 

also reports that they have been put pressure on private sectors. Finally, I 

want to stress two brief points, this administration has said that under the 

Public Private Partnership program it would have created some 99,000 

jobs. It has not created one, so we cannot expect to accept those proposed 
52

estimates. And lastly, I want to stress the fact, that Puerto Rico has 

general elections in little more than a month. This transaction being as 

complex and controversial as it is, we strongly urge that the final 

consideration by the Federal Aviation Administration, of that transaction, be 

withheld until the inauguration of the next governmental period that 

starts on January 2, 2013. The mere possibility of an outgoing 

administration making a forty year commitment on our most important 

airport facility on its last very days must not, and I stress must not, be 

allowed by you. If you choose to greenlight or stop this deal, it should be 

left to the next Puerto Rican government, whichever it turns out to be, 

whichever wins the next election, to have the complete responsibility and 

authority to strike thru or strike down this current deal. Thank you very 

much.

Juan de León: Buenos días y gracias por permitirme hablar ante este 

foro. Me llamo Juan de León y represento a la Federación de Taxistas de 

Puerto Rico. Como taxista, apoyo a cualquier proyecto que esté a favor 

de aumentar el turismo en el país. Como sindicalista, también estoy a 

favor de que se mejoren las condiciones de trabajo de nuestros unionados. 

En el caso de lo que se está evaluando aquí, sobre cambiar la operación 

del aeropuerto internacional para que lo maneje una compañía en alianza 

pública privada con el gobierno, nos unimos a todo lo que se dirija a 

mejorar el turismo y a mejorar nuestra economía. Tengo entendido que la 

compañía que está evaluando para este cambio ya ha pasado por el 

escrutinio del gobierno y otros foros. También sé que la compañía 

Aerostar Airport Holdings es una de varias que se evaluaron y que se 

seleccionó por reunir una serie de condiciones que demostraron su 
53

capacidad para hacer el trabajo y su capacidad para lograr que se hagan 

cambios que necesita el aeropuerto, y para poder ofrecer más y mejores 

servicios a los pasajeros que pasan por el aeropuerto Luis Muñoz Marín. 

Por otra parte, quiero decirles claramente que repudiaremos cualquier 

imposición que atente contra los turistas que nos visitan, de los cuales 

todos los taxistas nos beneficiamos. Cualquier cosa que se haga que 

tenga un impacto negativo en nuestros trabajos y en los turistas que son 

nuestra fuente de ingreso, y que también aportan grandemente a la 

economía de Puerto Rico, será tenazmente rechazada. Entendemos que 

este cambio en el aeropuerto tiene que venir de la mano con beneficios 

para todos los sectores que dependen del turismo. Así que toda mejora a 

las condiciones de trabajo de los taxistas será bienvenida. Como unión, y 

como individuos, queremos ser parte del desarrollo turismo, turístico y 

económico del país. Muchas gracias. 

Randall Fiertz: Thank you. 

Edgar Sierra: Good morning to the Panel and all the participants and 

attendants to this Public Meeting. Today I will be reading my deposition in 

Spanish. Buenos días. Mi nombre es Edgar Sierra. Soy el Gerente de 

Operaciones Aeroportuarias del Aeropuerto Luis Muñoz Marín. Llevo, llevo 

sobre 27 años en la industria de la aviación, tengo experiencia desde piloto 

privado, 10 años en la Fuerza Aérea de los Estados Unidos en el campo 

de Transportación Aérea, soy Despachador de Vuelos de Aviones en 

aerolíneas de carga, y en Operadores de Base Fija. Además fue 

administrador de un Aeropuerto de Aviación General. Actualmente estoy 

certificado por la Agencia Federal de Aviación como Despachador de 

Aviones y poseo Licencia de Piloto Privado con calificación de Vuelos por 

Instrumento y Multi-Motor. También tengo un Bachillerato en Estudios 
54

Liberales con un Grado Mayor en Gerencia. A través de los años he 

experimentado diferentes culturas empresariales y he notado resultados 

tanto exitosos como fracasos. Tengo que decirles hoy que la forma en que 

la Autoridad de los Puertos administra el aeropuerto Luis Muñoz Marín 

limita grandemente su desarrollo. Esto es debido a que muchas 

decisiones están basadas en conveniencias políticas y no en las 

necesidades y beneficios a corto plazo del aeropuerto, corto y largo plazo 

del aeropuerto. Por ejemplo, personas sin destrezas necesarias en 

aviación es contratada en puestos claves solamente considerando su 

afiliación política al partido del gobierno en turno. Aquí se cometen dos 

actos irresponsables; el empleo de personal no calificado en una posición 

crítica y la limitación al desarrollo y crecimiento de un profesional de la 

Industria de la Aviación. Hubiese sido idóneo Ilevar a cabo estas vistas en 

un periodo no eleccionario, con el propósito de evitar agendas políticas 

que desvirtúen el verdadero propósito de la audiencia que llevamos a cabo 

en el día de hoy. Lamentablemente algunos políticos utilizan este foro 

para adelantar causas que no tienen que ver con el bienestar, seguridad y 

empleados del aeropuerto. En conclusión, esta transacción es buena para 

Puerto Rico porque se establece una alianza con una empresa capacitada 

para Ilevar las operaciones del aeropuerto a su nivel óptimo. Por primera 

vez en la historia de Puerto Rico tendremos como socio en la industria de 

aviación a una empresa experta en la innovación y desarrollo de todas las 

áreas en la operación de un aeropuerto, que busca crecer de la mano de 

su capital humano y Puerto Rico se merece un aeropuerto de clase 

mundial. Gracias.

Randall Fiertz: Thank you. 
55

Jaime Perelló: Good Morning and thank you for this opportunity, my name 

is Jaime Perelló. I am an at large representative of Puerto Rico, the high 

ranking member of my delegation in the Government Committee. On 

behalf of the people of Puerto Rico thank you for this opportunity to hear 

about our concerns and debts... --and doubts -- of this privatization process 

in Puerto Rico. I want to read my presentation in Spanish, so it’s more 

easy for the people of Puerto Rico understand this conflict we have here 

but we have copy of our presentation in English that you can read it and it 

is more easy for you. Comparezco a estas vistas como representante a la 

cámara por acumulación de Puerto Rico, pero sobre todo vengo a 

representar a muchos ciudadanos puertorriqueños con legítimas 

preocupaciones sobre este proceso de privatización. Me opongo a que se 

otorgue la administración del Aeropuerto a un operador privado por un 

término de 40 cuarenta años. Una transacción por tan largo periodo, 

indudablemente resulta para el país un acto de enajenación, y limita sus 

facultades para tomar medidas necesarias en el ámbito económico, las 

cuales no deben estar a merced únicamente de intereses privados. Este 

foro es la única oportunidad que va a tener el ciudadano puertorriqueño 

para exponer su posición. Resaltamos el contexto y la importancia de 

estas vistas para significar que los ciudadanos puertorriqueños cifran todas 

sus esperanzas en que ustedes The FAA no aprueben esta solicitud de 

privatización. Las razones para oponernos a esta transacción son 

múltiples pero por razones de tiempo me limitaré a unos aspectos 

fundamentales. Primero, contrario a lo que expone la Autoridad de 

Puertos de Puerto Rico en la solicitud final radicada ante ustedes, el 

proceso que llevó a cabo el gobierno local para conformar la propuesta de 

privatización no contó con un proceso de consulta a la comunidad. El 
56

modelo jurídico que crearon para viabilizar este tipo de alianza 

público-privada excluye que se consulte a la comunidad. Segundo, 

existiría un conflicto de interés si permitimos que ASUR administre nuestro 

aeropuerto, a la vez que administra el de Cancún. En estudios realizados 

por el economista José Alameda y el planificador Carlos del Valle han 

establecido una ecuación de regresión que muestra claramente una 

relación entre los aumentos en los turistas de Cancún, Bahamas y 

Jamaica; y una disminución en los turistas que llegan a nuestra isla. 

Ciertamente, el Aeropuerto Internacional de Cancún, por el destino 

turístico en el cual se encuentra, es una competencia para Puerto Rico. 

Las estadísticas demuestran que el turista de Estados Unidos representa 

para Puerto Rico el 90% y para Cancún el 78.2%. Además, actualmente 

los ingresos derivados del Aeropuerto Internacional de Cancún 

representan para ASUR, socio del consorcio agraciado, 283 millones de 

sus ingresos versus una tercera parte de eso, 80 millones, que significaría 

Puerto Rico. Con este panorama es de esperar que el operador privado 

seleccionando no se encuentra en posición de responder totalmente a los 

mejores intereses de la isla. Tercero, ¿Cuál es la inversión real del 

privatizador durante el término del contrato, conociendo que los 

aeropuertos en Estados Unidos, incluido éste, poseen una fuente de 

fondos para realizar mejoras y proyectos de infraestructura tales como el 

PFC y los "grants" federales? Mismos fondos a los cuales el privatizador 

establece consistentemente en el contrato que se le debe garantizar el 

control sobre su manejo. Es evidente que la transacción propuesta tendrá 

un impacto en los aeropuertos regionales, máximo cuando nuestro 

Aeropuerto ha solventado las operaciones de esos aeropuertos. De igual 

forma, existen restricciones en el contrato que destinan al fracaso los 
57

esfuerzos para desarrollar económicamente nuestras regiones al 

garantizarle al operador privado el no surgimiento de nueva competencia. 

Nuestra condición de isla nos obliga a que cualquier política de promoción 

de un aeropuerto internacional esté vinculada a un modelo de desarrollo 

nacional que integre las regiones. Asunto que se logra, sólo si retenemos 

el gobierno de Puerto Rico junto al Gobierno de los Estados Unidos el total 

control de la administración del Aeropuerto Muñoz Marín, y concebimos a 

los aeropuertos regionales como aliados para el desarrollo regional, y para 

el desarrollo económico y no como competencia. La actual propuesta 

resultará en un rezago de los aeropuertos regionales y de las iniciativas 

que iban atadas a ese crecimiento pues no responden a un esfuerzo de 

planificación integral. Por ejemplo, según el estudio antes mencionado, el 

impacto de esta transacción en las regiones en las cuales ubican los 

aeropuertos de Aguadilla y de Ponce sufrirían una pérdida de 4,700... 

perdón 4,736 empleos y un impacto negativo a la economía local de 377 

millones de dólares. Incluso hemos evaluado las medidas que la 

Autoridad de Puertos propone en la solicitud final a la FAA sobre el plan 

para los aeropuertos regionales, y es evidente que no existe aquí ninguna 

intención de manejar y mucho menos aumentar el flujo de pasajeros, ni las 

rutas y ni líneas aéreas. Y con esto concluyo...esto contrasta con las 

estrategias económicas que tan recientemente como en el 2010 esgrimió 

el actual gobierno, así como otras del gobierno federal, las cuales 

impulsaban el desarrollo de los aeropuertos regionales desde el punto de 

vista de la carga, y también el renglón de pasajeros. Pero el otorgamiento 

de este contrato de privatización marca una desvinculación total de esas 

recomendaciones para desarrollar nuestros aeropuertos regionales, 

regionales. Por todo lo antes expuesto nos oponemos a esta transacción y 
58

le solicitamos que no aprueben la misma por no ser beneficiosa ni para 

Puerto Rico, ni para los Estados Unidos. Muchas Gracias.

Randall Fiertz: Thank you. 

Mario Pabón: Good morning my name is Mario Pabón, and I’m an 

attorney and I appear today as a member of the general public. I have 

prepared a study of whatever I’m going to speak about. It’s 21 pages long, 

so obviously I cannot read it but I’ll present a copy to the panel and I’ll ask 

that it will be published in the website as part of my public comments, and 

I’ll summarize the contents of my study. Basically, the deal we have before 

here is a very bad deal, not only for the people of Puerto Rico but for the 

people, the taxpayers of the United States. First of all, throughout the the 

history of this transaction there have been a denunciation of the many 

conflicts in this process. Including the fact that Highstar Capital, which 

ended up winning this bidding process, should have never been allowed to 

participate according to the request for qualifications issued by the P3A 

Authority. Furthermore, the entire basis of this project which is delineated 

in a desirability and convenience study is totally suspect if you evaluate that 

study as I did in my paper, you can read read it, you will realize that the 

entire basis, the entire foundation for undertaking this transaction is 

absolutely false. This transaction, when you evaluate it in economic terms, 

and it has been evaluated not only by economist Alameda but by 

economist José Antonio Herrero, causes a loss to Puerto Rico people and 

to the Puerto Rico Ports Authority of over a billion dollars over the life of 

this contract. How can the Puerto Rico Ports Authority survive and become 

viable if you’re going to take this amount of money out of its funds? 

Removing the Muñoz Marín airport from the Puerto Rico Ports Authority is 
59

the equivalent of removing the locomotive out of the train. You may have 

the rest of the train but it’s certainly not going to move. This becomes even 

worse when you realize the the P3A Authority and the Ports Authority have 

sold this transaction to the people of Puerto Rico as a transaction where, 

whereby they were going to eliminate most of the debt of the Puerto Rico 

Ports Authority. Today we hear, first it was most of the debt, in the process 

it became almost all the debt and now we hear the president of the GDB 

saying that it is only going to eliminate 45% of the debt. So not only are we 

going to end up with a Ports Authority with no airport but it’s going to end 

up with 45% of its debt, how do they expect it to operate? I don’t know. 

Furthermore, the P3A Authority has been doubting the operating standards 

that are going to be adopted pursuant to this contract. Well those operating 

standards are so much a paper tiger when you realize there are absolutely 

no functional mechanisms to put them in place. The day the governor 

announced the choice of Highstar Capital one of his biggest selling points 

was that the bathrooms in the airport were going to be cleaned 16 times a 

day. Well, guess what? There is absolutely nowhere in the more of a 

thousand of this final application that says what will happen if they are not 

cleaned 16 times a day. And there is no absolutely no mechanism to keep 

in place the operating standards and the only mechanism is a yearly review 

by a private engineer that is going to be paid by the private contractor. 

That doesn’t sound like something that will make the airport better for 

Puerto Rico. There is also some issues regarding environmental liabilities 

that the Puerto Rico Ports Authority are, is not ... is keeping after this. 

Puerto Rico Ports Authority in documents that are filed within the final 

application admits that the way they handle the environmental liabilities 

today is through charging the airlines. But now, what is going when the 
60

Ports Authority keeps the liabilities without having the airlines to charge 

them to? Furthermore, the regional airports are doomed to die under this 

agreement, not only because of section 3.22 which is in fact eliminates 

competition, but if you review the regional airport plan submitted as part of 

the final application, you’ll realize that every single aspect of this 

transaction is geared toward moving all of the passenger traffic from the 

regional airports to the San Juan airport. Every single aspect, increase in 

fees at the regional airport, incentives for increase passenger traffic in San 

Juan etcetera, everything is moved towards moving passenger traffic to 

San Juan . Finally, there’s an issue that is important to the FAA and has 

not been addressed in this application in an effective manner, which is the 

effect of bankruptcy of the private operator. There is only a ... what should 

have been a very extensive opinion from the major ground firm regarding 

bankruptcy, which is totally, totally ineffective given that it does not address 

the issues, particularly the issue that this lease agreement allows in the 

event of bankruptcy, not that the Puerto Rico Ports Authority can take over, 

but that a lease hold mortgagee who we don’t know who it is, we don’t 

know who this entity is, has a right to take over the airport in case of 

bankruptcy and in case of default. Basically, the FAA will be allowing a 

party that is totally unknown, that we don’t know how long they, it will take 

for them to obtain a certificate to operate the airport to have the power to 

control the entrance and exit of Puerto Ricans to this country. For those 

reasons and all the ones that are stated in my report I oppose the 

privatization of the San Juan airport. Thank you. 

Randall Fiertz: Thank you. 

Mario Pabón: Who can I give this to? you?
61

Randall Fiertz: You can give it to me if you want. Excuse me, before you 

begin, I’ve just been asked to remind the speakers about the lights up in 

front. There’s a ... I don’t know if you hopefully can see it from there it’s 

clock winding down the 5 minutes and it gives a warning light, eventually 

moving to a red, in which point I ask you to wrap up. Thank you. Go 

Charlie Hernández: Sí, muy buenos días a todos, se dirige a ustedes el 

representante Charlie Hernández; uno de esos políticos locales al igual 

que el gobernador de Puerto Rico. Soy miembro de la Cámara de 

Representantes de Puerto Rico desde el año 2001. Antes que nada, 

deseo agradecerle a la agencia federal la oportunidad que nos brindan 

para de expresarnos sobre la privatización del Aeropuerto Muñoz Marín. 

Al hacerlo la Agencia Federal desafía al Congresista republicano John 

Mica quien, a espaldas del pueblo de Puerto Rico y probablemente a 

petición de personas que no tienen los mejores intereses de Puerto Rico 

en mente, solicitó que estas vistas se llevaran a cabo de forma expedita y 

fuera de la jurisdicción de Puerto Rico. Aquí está la carta del congresista 

Mica, para los que la quieran leer. Durante los últimos dos años, he 

señalado varias irregularidades y conflictos de interés en el proceso de 

selección del privatizador del aeropuerto Muñoz Marín. Además 

recientemente denuncié como ese privatizador ha canalizado cifras 

escandalosas de dinero para la campaña de reelección del Gobernador 

Fortuño utilizando a la Asociación de Gobernadores Republicanos como 

intermediario. Esos asuntos están siendo investigados actualmente por el 

Departamento de Justicia de Puerto Rico y por la Oficina de Ética 

Gubernamental, ante quien compareceré el próximo lunes a testificar sobre 

este escándalo. Entendemos que este proceso de privatización no es 
62

favorable ni a los mejores intereses del Pueblo de Puerto Rico ni a los 

intereses de los contribuyentes de los Estados Unidos, por lo que nos 

oponemos firmemente. Existen innumerables razones por las cuales no 

debe privatizarse. Hoy discutiré brevemente las que aquellas el tiempo tan 

limitado me permita dar. Como es de conocimiento de esta agencia, la 

Autoridad de los Puertos de Puerto Rico no es sólo un aeropuerto, se 

compone de 11 aeropuertos y 7 puertos marítimos. Excepto por la 

operación del Muñoz Marín, la Autoridad de los Puertos opera sus activos 

con pérdidas y con deuda. No obstante, esta privatización no aclara qué 

ocurriría con la Autoridad de los Puertos, y sus empleados, tan pronto 

pierda su capacidad para emitir deuda. Hemos consultado a economistas 

que entienden que la autoridad dejará de recibir cerca de 1000 millones de 

dólares durante el término de este contrato y que vendrá obligada a cerrar 

la mayoría de sus restantes operaciones. Aun así y aun si la Autoridad de 

Puertos pudiera sobrevivir el impacto económico de esta transacción, la 

misma afectaría negativamente a los aeropuertos regionales en los cuales 

se ha utilizado dinero de los contribuyentes estadounidenses. Uno de 

esos aeropuertos queda en mi distrito. El contrato de arrendamiento 

propuesto penaliza por 15 o 20 años a la Autoridad de los Puertos si 

desarrolla su operación de pasajeros en los aeropuertos regionales. Para 

sobrevivir, esos aeropuertos deberán aumentar dramáticamente sus tarifas 

lo que favorecería el monopolio creado a favor del privatizador en 

aeropuerto Muñoz Marín. De permitirse esta transacción, sería cuestión 

de tiempo hasta que estos aeropuertos se convirtieran en totalmente 

inviables. No me crean a mí, ni le tienen que creer a los exponentes; lean 

la sesión 3.22 del contrato los únicos que creen lo que no dicen son los 

ejecutivos burócratas del gobierno. Entendemos además que esta 
63

transacción es contraria a los mejores intereses de la protección del 

ambiente. De acuerdo al contrato, la Autoridad de los Puertos permanece 

como responsable de todas las reclamaciones de daños ambientales 

existentes o potenciales en el Muñoz Marín, incluyendo cualesquiera 

daños que puedan surgir por la operación, durante décadas, de un sistema 

de distribución de combustible en los predios del aeropuerto. El gobierno 

de Puerto Rico se expone con este contrato a reclamaciones ambientales 

entregando los recursos que podría tener para responder. Le recomiendo 

a la agencia federal que consulte con la Environmental Protection Agency

sobre su posición sobre este asunto antes de continuar la evaluación del 

mismo. Entendemos también que, en una jurisdicción como la nuestra 

donde existe un serio problema de tráfico de armas y drogas, drogas y 

armas ilegales, colocar nuestro principal aeropuerto en manos privadas 

extranjeras levanta serias preocupaciones de seguridad pública. Por tal 

razón, recientemente cursamos una comunicación al Secretario del 

Trabajo... perdón el Secretario del Tesoro y el Chairman del Comité para 

la Inversión Extranjera de los Estados Unidos Timothy Geithner, pidiéndole 

que revisara esta transacción. Aquí está la carta y la haré parte del record. 

Les recomiendo también que aguarden por la respuesta que le dará el 

secretario del tesoro sobre este asunto. Es de alta sensibilidad el aspecto 

de seguridad pública para los puertorriqueños. Finalmente, no hay nada 

que el privatizador pueda hacer que el pueblo de Puerto Rico no pueda 

hacer, si pones tu voluntad y una mejor gerencia que la que ha desfilado 

por aquí a administrar nuestro aeropuerto. La privatización del Muñoz 

Marín sólo adelanta los intereses de un privatizador que, para lograr una 

ganancia excesiva, pone en riesgo la seguridad y la estabilidad fiscal del 

Pueblo de Puerto Rico. Por esas razones, y en defensa del patrimonio que 
64

con sacrifico los puertorriqueños hemos construido, nos oponemos a la 

privatización del Aeropuerto Muñoz Marín. Muchas gracias.

Randall Fiertz: Thank You. Number twenty-three? Number twenty-four?

Alejandro Alvelo: Good morning Chairman, good morning members of 

the committee. I represent the American Federation Of Government 

Employees, who are fellow employees who work in SJU, BQN, PSE and 

Virgin Islands. I am the president of local 557, thank you for the 

opportunity to testify today regarding the lease of the Luis Muñoz Marín 

International Airport. I came here to testify on the lack of transparency on 

the new on-coming lease. Creating concerns among my brothers and 

sisters in the union. Not knowing how it will affect us, creating more 

doubts, as a result of this privatization, we could face higher cost of living in 

the work environment. Meaning that if you pay today a dollar for the coffee, 

tomorrow could be two dollars. This privatization has to have more 

information, guarantees and economic protection for the working class. 

There’s not much that scares me, but the thought of the layoff of my 

brothers and sisters, especially on the airports of Aguadilla and Ponce, who 

are BQN and PSE. The private contractor will force the state to cut corners 

to increase their profits, that scares me the most. I have receive a lot of 

calls from my members from our bargaining union areas, worried about this 

privatization at SJU that could help the SJU airport, but what would happen 

to the other two airports? We cannot keep expanding unemployment at the 

cost of a few to become more rich. Opting for the lease means selling our 

future in a long term. It is too important to be left to a company that would 

not be accountable by the Puerto Rican People. The airport have many 

good jobs, although the working areas need a lot of improvement. Moving 
65

these jobs to the private sector is, at the best, a zero sum game after the 

private company take their profit off the table. We want a more information, 

we want a guarantee, because later on that could hit United States in the 

face. In conclusion American Federation of Government Employees with 

the Executive vote approvement presents its opposition at this moment, 

until they share the information, they guarantees that the lease will not 

affect us and how this would affect the cost of living of the Puerto Rican 

people that work in those airports. Thank you, Chairman for this 

opportunity to address this issue. 

Randall Fiertz: Thank you very much. Do we have a ... Ok. Very good. 

Ok, we’re going to take a slight break in the order of speakers the 

congressman from Puerto Rico is arriving and he, we know he has a very 

tight schedule so we’d like to give him an opportunity to speak, so that he 

can talk to us and then go to his next, his next assignment. So my 

understanding is that he’s in the building making his way here. 

Pedro Pierluisi: I hope you were not waiting too long. 

Randall Fiertz: No, thank you. 

Pedro Pierluisi: Ok. Thank you, Mr. Fiertz. I want to begin by expressing 

my gratitude to you, Mr. Cole from the Office of the U.S. Secretary of 

Transportation, and the other members of the panel representing the 

Federal Aviation Administration and the U.S. Transportation Security 

Administration for traveling to Puerto Rico to receive public comments on 

the matter in question. Mr. Fiertz, I hope you will also convey my thanks to 

Secretary LaHood; to Christa Fornarotto, the FAA Associate Administrator 

for Airports; and to your team at the FAA Office of Airport Compliance, for 
66

the assistance that has been provided to the relevant Puerto Rico 

government agencies throughout this process. As Puerto Rico's sole 

representative in the United States Congress, I am pleased to be here this 

morning to express my support for the final application to enable Luis 

Muñoz Marín International Airport to participate in the national, 

congressionally-authorized Airport Privatization Pilot Program. The 1,600 

page application filed last month with the FAA by the Puerto Rico Ports 

Authority and the Puerto Rico Public-Private Partnerships Authority reflects 

the hard work that has been undertaken by these two local government 

agencies over the past two-and-a-half years. It is clear that they have done 

their best to prepare a comprehensive submission that both fulfills 

Congress's vision for this pilot program and promotes the best interests of 

the 3.7 million U.S. citizens living in Puerto Rico. The scheduling of this 

public meeting, although not required by law, demonstrates the value that 

the FAA rightly places on public participation in this process. This meeting 

affords the federal government an additional opportunity to hear directly 

from my constituents about this application. This is the fourth public 

meeting that has been held in the 16-year history of the pilot program. The 

FAA previously held public meetings about the privatization of airports in 

New York, Chicago, and New Orleans. The FAA subsequently approved 

two of those applications and the other was discontinued. In addition, two 

general aviation airports in Florida and Georgia remain active candidates 

for the pilot program. Earlier this year, Congress expanded the total 

number of airports authorized to participate in this pilot program from five to 

10, through the enactment of Section 156 of the FAA Modernization and 

Reform Act of 2012. I respectfully submit that the Puerto Rico application 

is consistent with the objectives of the pilot program, as it was envisioned 
67

by Congress and the FAA. When Congress established this program in 

1996, it sought to determine whether new investment and capital from the 

private sector can be attracted through innovative financial arrangements in 

order to modernize and otherwise improve the U.S. airport system. In my 

view, the Puerto Rico application is a superb candidate for the program, 

and I want to highlight three reasons why I believe this to be the case. 

First, given the current bond rating of the airport sponsor, the Puerto Rico 

Ports Authority, and the questions surrounding the capacity of the federal 

Airport and Airway Trust Fund to meet future demand across the U.S. 

airport system, participation in the pilot program will help ensure that credit 

can be obtained to finance critical capital improvements at Luis Muñoz 

Marín International Airport. Second, the operational and passenger 

characteristics of this airport make it uniquely suited for a long-term lease, 

as compared with other airports in the U.S. system. Third, participation in 

the pilot program will lead to additional routes, better services for the flying 

public, and enhanced economic development opportunities for my 

constituents. Let me briefly expand upon each of these points. Luis Muñoz 

Marín International Airport is one of Puerto Rico's most important pieces of 

infrastructure, an essential part of our transportation network, and our 

gateway to destinations in Puerto Rico, the 50 states, and abroad. The 

airport employs many workers and is a major contributor to our economy. 

My constituents want, and their leaders must strive to provide, a worldclass airport that meets the highest safety standards, features modern 

amenities, and promotes the Island's positive image as a prime tourist 

destination and a preferred place to conduct business. I firmly believe that 

inclusion in the pilot program is the best way to achieve these objectives. 

Today, the Puerto Rico Ports Authority is burdened with significant debt 
68

and cannot generate the funds necessary to provide the people of Puerto 

Rico and visitors to the Island with the airport they deserve. Between 2004 

and 2008, the debt of the Puerto Rico Ports Authority increased by 63 

percent. In 2009, the Ports Authority had a bond rating of Triple B minus, 

the lowest credit rating above junk status. In 2010, Moody's Investors 

Service warned that the credit rating could be downgraded to junk status, 

which compelled the Puerto Rico Government Development Bank to step in 

and purchase all of the bonds issued by the Ports Authority, effectively 

saving it from being downgraded to junk status. To this day, the Ports 

Authority remains effectively shut out of the bond market. Moreover, the 

airport, given its current usage, cannot generate sufficient revenue on its 

own from fees to finance its capital improvement plan and retire the Ports 

Authority's debt. Nationally, between 2001 and 2011, the volume of U.S. air 

traffic increased by about 14 percent, representing an increase of 108 

million passenger enplanements. This level of growth has helped generate 

the funds necessary for many airport sponsors across the nation to finance 

capital improvements at the airports they operate. By contrast, the number 

of passenger boardings at Luis Muñoz Marín has generally remained 

stagnant, which has served to prevent the fees that are charged to airlines, 

passengers, concessionaires and others from being used to fund 

necessary capital improvements at the airport. In 2011 alone, the number 

of passenger enplanements at Luis Muñoz Marín declined by over 6 

percent compared to 2010. Indeed, over the past 20 years, Puerto Rico has 

experienced no growth in the number of passenger enplanements, instead 

consistently hovering between four and five million boardings per year. I 

would note that the 2011 to 2015 National Plan of Integrated Airport 

Systems, transmitted by the U.S. Secretary of Transportation to Congress 
69

in September 2010, estimates that Luis Muñoz Marín requires an 

investment of nearly 130 million dollars in order to meet federal aviation 

standards. To meet this target, the debt of the Ports Authority must be 

retired and the capital necessary to finance these improvements, whether 

through the bond market or private investment, must be obtained without 

undue delay. Another factor that militates in favor of a long-term lease is 

the uncertainty that surrounds the future availability of federal funds to 

make improvements to the airport. As a February 2011 report by the 

Government Accountability Office demonstrated, the financial condition of 

the federal Airport and Airway Trust Fund has deteriorated over the last 

decade. The Trust Fund is the fund that helps finance FAA investments in 

the U.S. airport system. These investments include improvements in 

construction, security and technology. In short, the combination of a lack of 

access to credit on the part of the Puerto Rico Ports Authority to finance its 

capital improvement plan, along with the potential for reduced federal 

funding from the Trust Fund, are key factors that prompted the government 

of Puerto Rico to consider leasing the airport to a private operator in order 

to ensure that the airport is sustained and strengthened for the future. 

Finally, I believe inclusion in this pilot program represents the most prudent 

course of action because it will provide an incentive for the new operator to 

modernize the airport and attract more airlines, more flights, and more 

passenger traffic. This increase in volume, in turn, will promote the 

economic development of Puerto Rico by bringing more visitors to the 

Island, thereby increasing hotel occupancy and spending at restaurants 

and others businesses. Currently, nine airlines provide nonstop service 

from Puerto Rico to 20 cities throughout the United States. There is clearly 

room for improvement here, especially when one considers that there are 
70

now 4.6 million people in the 50 states of Puerto Rican birth or descent. 

Inclusion in the pilot program is likely to result in more flights between 

Puerto Rico and the U. S. mainland, with the potential for new routes 

connecting the Island and destinations along the eastern seaboard, the 

Midwest, and the west coast. Inclusion in the pilot program can also lead 

to new routes connecting Puerto Rico and international destinations in 

Europe, Canada, and Latin America, which would boost trade and tourism 

between the Island and those expanding markets. In addition, given its 

prime location, a modernized Luis Muñoz Marín can be, and should be, the 

gateway to the Caribbean, a truly international hub connecting passengers 

from North America, Europe and Latin American with points all across the 

Caribbean. By modernizing our airport and increasing flight volume, we 

promote economic development in Puerto Rico and enhance economic 

opportunities for Island residents. To illustrate a recent analysis conducted 

by the Department of Economic Development and Commerce of Puerto 

Rico estimated that every new domestic air route established at Luis 

Muñoz Marín International Airport would contribute 77 million dollars to the 

local GDP, and each new international route would contribute 105 million 

dollars. In conclusion, I believe that approval of this application would 

promote both the national interest and the interest of my constituents. 

Inclusion in the pilot program would help ensure that capital is available to 

convert Luis Muñoz Marín International Airport from a substandard facility 

into a state-of-the-art airport that will be a source of pride for the people of 

Puerto Rico and a jewel in our nation's aviation system. A new and 

improved airport will attract more routes and more passengers, will better 

connect Puerto Rico with the United States and the rest of the world, and 

will strengthen the Island's economy and create jobs. I thank you for the 
71

opportunity to testify and I hope my testimony will serve to inform your 

decision on this application. Good luck with this hearing and thank you for 

coming to Puerto Rico. 

Randall Fiertz: Thank you very much, I appreciate it. Two quick things 

before Ms. Rosario begins. First of all, thank you very much for letting the 

Congressman go before you. And second of all, just say that the audience 

is aware we’ve given Ms. Rosario extra time to speak this morning. 

Astrid Rosario Ortíz: Thank you. Buenos días mi nombre es Astrid 

Rosario Ortíz Represento a la Hermandad de Empleados de Oficina, 

Comercio y Ramas Anexas de Puerto Rico. Esta organización sindical 

data su existencia desde el año 1948. Actualmente representa a los 

trabajadores de administración, operación y mantenimiento que emplea la 

Autoridad de Puertos de Puerto Rico para llevar sus actividades relativas a 

la operación, desarrollo, conservación y mantenimiento administrativo de 

las facilidades aéreas, marítimas de dicha Autoridad de Puertos. Por 

disposición expresa de la Constitución del Estado Libre Asociado de 

Puerto Rico en su Artículo II, secciones 17, 18 los empleados de 

Corporaciones Públicas que operan como negocio tienen el derecho 

constitucional a organizarse sindicalmente y a negociar convenios 

colectivos. Así mismo, iguales derechos garantiza a estos empleados la 

Ley Núm. 130, 8 de mayo de 1945, según enmendada conocida como la 

Ley de Relaciones del Trabajo de Puerto Rico. Teniendo en cuenta que la 

Autoridad de los Puertos de Puerto Rico es una corporación pública que 

opera como negocio privado. Sus empleados tienen el derecho a 

organizarse sindicalmente y negociar convenios colectivos amparados 

públicos Artículo 1 en la Ley 130. Esta doctrina ha sido sostenía por los 
72

tribunales del país en innumerables decisiones. Además de lo 

anteriormente señalado, la Ley Núm. 130 dispone como práctica ilícita de 

trabajo el que un patrono viole los términos de un convenio. Igualmente la 

Ley señala como materia mandatoria de negociación colectiva la 

subcontratación de las labores de la Unidad Contratante. Es decir, no se 

puede proceder a subcontratar las labores de la Unidad Contratante 

representada por la Unión sin haber negociado dicha subcontratación con 

la Unión que los representa. A pesar de lo anteriormente señalado, el 

pasado 2 de agosto de 2012, mediante carta dirigida a mi persona, el 

Director Ejecutivo en ese entonces Sr. Bernardo Vázquez Sántos nos 

notificó los planes de la Autoridad de Puertos para privatizar las 

operaciones y administración del Aeropuerto Luis Muñoz Marín. 

Específicamente se pretende subcontratar nuestras labores mediante la 

otorgación de un contrato de Aerostar Airport Holding. Dicha carta 

específicamente señala: Contemporáneo al recibo de dicha carta, fuimos 

notificados por parte del Sr. Vázquez Santos de una invitación para 

sostener una reunión con los representantes de la mencionada compañía 

Aerostar, a dicha reunión asistieron en Representación de Aerostar los 

señores Carlos Trueba Coll, Director del Aeropuerto de Cancún y Manuel

Gutiérrez Solá Director Comercial de ASUR. Esta breve reunión, cuya

Invitación recibimos el mismo día, duró escasamente una hora. Cabe

señalar que el Director Ejecutivo de la Autoridad de los Puertos no estuvo 

presente, se excusó de la misma. En esa reunión la Autoridad de Puertos

fue representada por la Sra. Zulma Pérez Pérez, Sub-Directora de la

Autoridad de los Puertos de Puerto Rico y el Sr. Arnaldo Deleo, Director 

del Negociado de Aviación. Esta ha sido la única reunión, si esto se puede 

llamar reunión, que hemos tenido con los representantes de la compañía 
73

Aerostar. Toda la información sobre los planes de Aerostar y su subcontratación con la Autoridad de Puertos la hemos obtenido por nuestro 

esfuerzo individual y colectivo, ninguna de ella ha sido provista ni por 

Aerostar, ni por la Autoridad de los Puertos. En el "Reauthorization Act" de 

1996 y el "Federal Aviation Administration Act" del 1996 en Public Law No. 

104-264 de octubre 9 del ‘96, autorizan al Secretario de Transportación y 

por delegación al FAA, la aprobación o desaprobación de las solicitudes 

radicadas bajo las disposiciones de dichas Leyes. Los requisitos que se 

deben cumplir se encuentran en la Sección 47134, específicamente la 

Sección de esa ley 49 U.S.C 47134. Sobre los convenios colectivos 

específicamente la Sección 47134 dicta: "Any collective bargain agreement 

that covers employees of the airport and is in effect on the date of the sale 

or lease of the airport will not be abrogated by the sale or lease". Dicho 

requisito es mencionado e incorporado en el contrato de privatización de 

Luis Muñoz Marín. No obstante mencionarse allí, el término abrogar 

carece de definición y/o explicación alguna de forma que se puedan 

establecer los parámetros adecuados para su entendimiento e 

implementación en cuanto al convenio colectivo que cobija al grupo de 

empleados afectados por este contrato de la privatización. Entendemos 

que la ley y su reglamentación no establecen que la Administración se 

convertirá en la agencia que velará por el cumplimiento de los aspectos 

laborales del contrato. Esta indefinición, dado lo ambiguo de la disposición 

señalada en el “Lease Agreement”, ha permitido que la entidad 

privatizadora Aerostar, no asuma compromiso alguno sobre el 

cumplimiento de nuestro convenio colectivo existente. Igualmente y a 

pesar de lo anunciado públicamente por las entidades gubernamentales y 

según las propias disposiciones, Aerostar se limitará a ofrecer trabajo a 
74

aquellos empleados que así lo soliciten sin garantía alguna de empleo. 

Vemos como no basta incorporar al contrato una expresión general 

parafraseando la obligación legal de cumplir con la Ley y su 

Reglamentación. Esta entidad Federal de Aviación, de Administración 

debe examinar el contrato en su totalidad y ver los efectos que tiene el 

mismo sobre el convenio colectivo para así poder determinar si dicho 

contrato cumple con la Ley. De igual forma, y por otro lado, la única 

obligación que la Autoridad de Puertos aparenta reconocer como 

consecuencia de tener vigente un convenio colectivo es el efectuar la 

notificación que nos envió, el pasado 2 de agosto de 2012, y que ya hemos 

citado anteriormente. Hasta el momento no ha habido expresión alguna 

por parte de la Autoridad de Puertos, ni escrita ni verbal, que aclare el 

destino de las obligaciones contractuales que surgen de su convenio 

colectivo y sobre las consecuencias sobre dicho convenio colectivo a tenor 

con la firma de este "Lease Agreement". Debemos reconocer que este 

peligro sobre la identificación del Término "abrogate" fue señalado en 

comentarios enviados a su agencia en el pasado por uniones hermanas. 

De igual forma, estas ambiguas disposiciones de este "Lease Agreement" 

en torno al convenio colectivo existente han tenido como resultado el 

obviar las consecuencias lógicas de las doctrinas laborales sobre los 

patronos sucesores, tanto a nivel federal y estatal. Con sus actuaciones 

Aerostar y la Autoridad de los Puertos han ignorado totalmente la 

responsabilidad proveniente de esta doctrina. Al presente el sector laboral 

afectado, del cual representamos su parte organizada sindicalmente, ha 

sido ignorado en el trámite de esta negociación de privatización. Aerostar 

y la Autoridad de los Puertos han pretendido cumplir con sus 

responsabilidades legales con una mera mención general en el contrato de 
75

que no dejarán sin efecto el convenio colectivo. De igual forma, y a pesar 

de mencionar, de forma general y específica en su Artículo 11, Sección 

11.1, que Aerostar cumplirá con la ley federal y las leyes del Estado Libre 

Asociado, este contrato ignora totalmente las obligaciones provenientes de 

la Ley de Relaciones del Trabajo. Sólo en cumplimiento de convenios 

colectivos, veamos algunos ejemplos. La H.E.O. ha sido certificada como 

representante exclusiva del grupo de empleados a ser afectados por la 

transición, al igual que su convenio colectivo, han sido dejados a un lado e 

ignorados en todo este proceso. Resulta insólito que de forma expresa el 

contrato de "Lease Agreement" dispone, en abierta violación a la ley 

laboral, la entrevista y contratación individual por parte de Aerostar de los 

empleados unionados. Los términos y condiciones de empleo de estos 

trabajadores, disponen en el Artículo 2, Sección 2 que serán establecidas 

unilateralmente por Aerostar "on terms and conditions designated by the 

Lessee... ". Claramente el convenio colectivo y la Ley de Relaciones del 

Trabajo son considerados como inexistentes por este contrato al permitir la 

contratación y el establecimiento de los términos y condiciones de empleo, 

entre Aerostar y el empleado, unilateralmente obviando la existencia de su 

Representante exclusivo. Mediante estas contrataciones individuales de 

empleados de la Autoridad de los Puertos, las partes del "Lease 

Agreement", la Autoridad de Puertos y Aerostar, ignoran y violan las 

obligaciones laborales vigentes sobre representación exclusiva y claro 

mandato del convenio colectivo en su Artículo 1 de reconocimiento de la 

Unión. La mención superficial de la obligación de que el contrato no dejará 

sin efecto ningún convenio colectivo está en clara contradicción con la 

realidad y las disposiciones específicas del mismo. De igual forma, es 

patente que este contrato violenta las leyes laborales que han garantizado 
76

la seguridad a los trabajadores puertorriqueños por décadas. La norma 

legal es clara y señala que la "Federal Aviation Administration" debe 

garantizar que los términos y condiciones del "Lease Agreement" cumplen 

con los requisitos de ley y su reglamentación. En la discusión sobre la 

Sección 47134 del Título 49 del U.S. Code, Ilevada a cabo por la "Federal 

Aviation Administration" sobre los "Applicative Procedures" del "Airport 

Privatization Pilot Program" donde el documento 28895 señala que la FAA 

“would expect as a part of submitting the exemption application, the issues 

raises by labor should be the basis for discussion between the private 

operator”. En la presente contratación no solamente se le dio discusión o 

diálogo señalado sino que tampoco el "Lease Agreement" cumple con los 

parámetros de ley reglamentarias aplicables que prohíben dejar sin efecto 

el convenio colectivo existente entre la H.E.O. y la Autoridad de Puertos. 

En vista de los antes expuesto y por las razones aquí señaladas este 

"Final Application" que permitiría el traspaso de las facilidades del 

aeropuerto Luis Muñoz Marín debe ser rechazado por la Agencia Federal 

de Aviación. 

Todo lo que expuse aquí en este momento sobre la ponencia lo que hice 

fue una parte corta de resumir todo en la ponencia que le voy a hacer 

entrega a ustedes está todo completo, obviamente la hice en español para 

que ustedes puedan entender la impotencia que yo, como líder sindical, las 

personas que como yo represento y parte del pueblo puertorriqueño 

hemos sentido cuando el Final Report no se ha publicado en español. 

Gracias, buen día.

Randall Fiertz: Thank you very much. Ok, I think we’re ready to continue. 

Twenty six, please. 
77

Armando Montero González: Buenos días tengan todos. Soy Armando 

Montero González, un director de escuela elemental muy cercana a este 

lugar que nos ocupa en el día de hoy. También residente frente al 

Aeropuerto Internacional de Isla Verde. Represento alrededor de 14,000 

empleados gerenciales del gobierno de Puerto Rico. La Federación de 

Asociaciones de Empleados Gerenciales del Estado Libre Asociado fue 

creada para promover el progreso social, económico, y el bienestar 

general del pueblo de Puerto Rico. Otro objetivo de nuestra organización 

es promover la eficiencia en los servicios esenciales al pueblo y abogar por 

prácticas gubernamentales y gerenciales de genuino espíritu democrático 

que favorezcan el libre intercambio de ideas y que permitan a la 

ciudadanía, a través del empleado gerencial, una justa oportunidad de 

desarrollar su creatividad y potencial como país y como ciudadanos. La 

Rama Ejecutiva del Gobierno impulsó y creó la Autoridad para las Alianzas 

Público Privadas de Puerto Rico para supuestamente promover una 

colaboración continua entre el sector público y el sector privado. A través 

de esta ley se pretende ofrecer un servicio de alta calidad, y quiero resaltar 

el término de pretende, a los puertorriqueños que viven en la Isla; y en el 

caso del Aeropuerto Luis Muñoz Marín a los visitantes que salen y 

recibimos en el país. La Federación y otros sectores laborales y 

comunitarios privados señalaron que esta ley afectaría económicamente al 

país porque promovía primero el despido de servidores públicos y el 

enriquecimiento del sector privado. Queremos declarar ante esta 

Comisión que para los empleados gerenciales del gobierno de Puerto Rico 

los datos, estadísticas, estudios y la radiografía general de todo lo 

relacionado a esta transacción no tienen credibilidad. Tampoco confiamos 

en el proceso de selección del candidato para administrar el aeropuerto; ni 
78

en el genuino interés y compromiso de este empresario con el pueblo 

puertorriqueño, datos de ese particular se lo mencionó el Representante 

Jaime Perelló. La Rama Ejecutiva del gobierno en su intento de justificar 

esta mal llamada alianza manifestó que nuestro país se ha debilitado como 

un destino turístico, lo escuchamos hace un momento de nuestro 

comisionado residente, y que el gobierno no tiene la capacidad para 

administrar el Aeropuerto Luis Muñoz Marín. La Federación quiere 

establecer que el único responsable de que haya ocurrido este deterioro es 

el mismo gobierno de Puerto Rico, y nosotros tenemos parte de la 

responsabilidad, con su falta de visión, dejadez e intereses privados y 

principalmente, la intromisión de la política partidista. Con estas acciones 

no se ha permitido que el sector laboral; sindical y gerencial, participar de 

manera efectiva en este proceso y en la toma de decisiones relacionadas a 

la administración pública. La ley de las Alianzas Público Privadas persigue 

establecer la política pública del gobierno para apoyar alianzas bajo un 

esquema legal, claro, transparente, ágil y flexible. Esta transacción no 

cumple con ninguno de estos criterios. Podrá ser legal pero no es justa, ni 

clara, ni transparente, todo lo contrario, organizada en cuartos oscuros a 

espaldas del pueblo y de los empleados afectados por las transacciones. 

Tenemos que reconocer que ha sido ágil, sí, muy ágil, se han utilizado 

para transferir la infraestructura ya construida por el pueblo de Puerto Rico 

a cambio de un ingreso menguado que no le resuelve al gobierno la crítica 

situación fiscal. Y con respecto a la flexibilidad de la transacción propuesta 

en la ley debemos informar que el proceso ha sido atropellado, inconsulto 

y que responde únicamente al interés de la administración de gobierno a 

complacer al solicitante, por intereses económicos y de política partidista. 

En la Federación de Asociaciones de Empleados Gerenciales estamos 
79

convencidos que Puerto Rico lo hace mejor, que los puertorriqueños y 

puertorriqueñas tenemos la capacidad para entender la importancia y 

defender los valores democráticos que nos garantiza la constitución. 

Queremos expresar nuestro total rechazo a este proceso, la poca 

información presentada, la falta de garantías del beneficio a los servicios a 

la ciudadanía, y a la inestabilidad de los empleados afectados por esta 

alianza. Estamos vigilantes ante la evaluación de esta Comisión. 

Confiamos que en los próximos días y en la determinación final que 

ustedes tomen reflexionen sobre la importancia que esto tiene para el 

pueblo de Puerto Rico. Estamos a su disposición ante cualquier 

eventualidad. Ahora somos nosotros un solo movimiento y juntos lo 

hacemos mejor, ese es nuestro logo. Reflexión, prudencia, en Puerto Rico 

se manejan muchas de esas decisiones en un año eleccionario y 

principalmente estamos cercanos a un proceso plebiscitario y todo esto 

pudiera estar afectando el futuro de inclusive la relación de Puerto Rico y 

Estados Unidos. Así que les solicito sobre todo eso, mucha prudencia en 

esta decisión. Que tengan muy buenas tardes. 

Randall Fiertz: Thank you very much. 

Alfonso Fernández: Good morning. Good morning to FAA staff and other 

federal agencies present. My name is Alfonso Fernández; I’m President 

and shareholder of IVYPORT Logistical Services, Inc., a company in the 

aviation business and a concessionaire at Luis Muñoz International Airport, 

since I997. IVYPORT is a I00% minority owned, I00% Hispanic, and 50% 

women owned. Accompanying me this morning is Mrs. María de Los 

Angeles Navas, Executive Vice President and shareholder of IVYPORT, 

and our counsel Mr. Luis Mifiana. We are here today as small hard working 
80

business owners, not opposed and supportive of the privatization effort. 

Nevertheless, we are been steamrolled and our rights have been trampled 

by the way the process has been handled. Apart from my role at 

IVYPORT, I have been involved in the aviation industry from the late I980's 

in various capacities including acting as counsel, investment banker in 

aviation related financings and acquisitions, lecturer in Aviation Law and 

Airline Management at Interamerican University School of Management. In 

addition I’m a yearly contributor to Ground Handling International a British 

based Magazine on matters of Caribbean aviation businesses. I have 

included for the record a small bio-sketch. Pursuant to the FAA's review of 

the final application, we formally request that the FAA includes measures 

that make approval of the application contingent on adequately addressing 

issues regarding IVYPORT at the Luis Muñoz Marín International Airport, 

whose substantial proprietary interests are to acquired by the Government 

of Puerto Rico, for the benefit of the winning bidder. All of this, as a part of 

the privatization plan. Specifically, IVYPORT's real property interests and 

operational authorities are subject to an expropriation proceeding initiated 

by the local Government. As of this date of this Public Meeting, IVYPORT 

has not been notified, nor communicated, as to how the Government 

intends to value and compensate our business. As you know, this process 

has been underway for several years and is a top priority for Puerto Rico 

and its Public Private Partnership Authority. The transfer of property and 

operating funds has been scheduled for December 20I2. Please note that 

IVYPORT supports the privatization of the airport; but we are concerned of 

the lack of communication regarding payment for our interests and the 

possibility of an unjust taking by this action. As a program that has been 

undertaken pursuant of an act of Congress, it is important that the 
81

transaction goes forward since it serves an important public purpose. 

However, the FAA, in its review should make clear to the PPA that the 

rights of private entities, who have made considerable monetary 

investments, be respected and adequately compensated before the 

transaction valued at over 2.6 billion dollars is finalized. In IVYPORT's 

case the amount of 10 million dollars was paid for the acquisition of 

operational authority and non competition rights to conduct various aviation 

related business at LMM in I997. We request that the FAA be diligent and 

act swiftly in contacting the PPA, requesting detailed clarification of its 

plans as part of the public comment process on its intentions with respect 

to IVYPORT interests, which are to be transferred to Aerostar Airport 

Holdings. It is our understanding, that leases such as those of IVYPORT 

have already been included in the concession as stated in page 3I of the 

Partnership Report for the procurement to acquire, lease, finance, operate, 

maintain and operate Luis Muñoz Marín International Airport, dated July 

20I2. These actions appear to be in contravention of various sections of 

the Pilot Privatization statute and the FAA grant assurances. Specifically, of 

49 U.S.C. Sec. 40103(e) and FAA grant assurance No. 23, that states 

without compensation to the affected business by the de facto act of 

excluding a potential competitor in the ground handling business. In 

addition, the Lease Agreement may run afoul of FAA grant assurance No. 

22, to the extent that the actions of the owner of a public-use and public 

funded airport result is discrimination to airport business if the state 

government continues its actions without prompt compensation. For the 

record, we are including a summary of key points and events, which I will 

discuss briefly regarding IVYPORT's claims, which should provide the FAA 

with pertinent information. In I997, IVYPORT, formerly Swissport Puerto 
82

Rico, Inc., leased from Caribbean Airport Facilities the operating authority, 

various rights including exclusivity and non competition for ground 

handling, terminal, and ramp services in a land area of 90.757 acres at 

LMM, expiring in 2028. On March 26, I998 IVYPORT paid 10 million 

dollars for those rights, which were recorded at the Registry of Property of 

Puerto Rico, and which is equivalent to a lien. On December 22, 2009 the 

Puerto Rico Public- Private Authority applied for inclusion of LMM in the 

FAA Privatization Program. More importantly, on December 28, 20II 

eminent domain proceedings, expropriations, were filed by the 

Commonwealth of Puerto Rico depositing 25 million dollars in State Court, 

that included IVYPORT's rights, and in which case IVYPORT promptly 

intervened. On March I5, 20I2 the Commonwealth filed a motion to desist 

from its eminent domain proceedings, said motion was denied, because the 

presiding judge ruled that expropriation had occurred as a matter of law 

when moneys were deposited in Court. 

Randall Fiertz: Sir, you need to finish up, please. We’re out of time. 

Thank you. 

Alfonso Fernández: Basically, my concluding my concluding remarks is 

we would like the following action. The FAA should request the state 

government to clarify and submit compensation plans for our business 

being affected by the privatization process. IVYPORT proprietary interests 

have already been severely affected by this process. We appreciate your 

attention and your presence this morning to review this very important 

matter and we request you give your highest consideration in your 

evaluation of the international airport PPA application and promptly notify 
83

the Puerto Rican government and the PPA of our strong concern. Thank 

you. 

Randall Fiertz: Thank you very much. 

Benjamín Acosta Badke: Good morning to the Federal Panel and all of 

the participants and attendees of this public meeting. My name is 

Benjamin Acosta Badke and I am the Property Development and Marketing 

Director for the Luis Muñoz Marín International Airport. As such, I have 

been tasked with managing the commercial contracts of this airport. I have 

occupied this position since 20I0 and it has been an experience, my first 

government experience ever. When I started back in 2010, I encountered 

a department that was in need of immediate attendance, assistance in its 

development and market driven relations. As many of us know the Luis 

Muñoz Marín International Airport needs and deserves an improved market 

drive, one that benefits the airport and its passengers, as well as the 

private entities which operate within. As the Property Development and 

Marketing Director I have been challenged with securing the commercial 

developments for the airport and managing all of the existing 

arrangements. In dealing with this challenge, I have encountered many 

obstacles that I’ve been able, and have been able to identify flaws in the... 

Forgive me ... I’ve been able to determine many flaws ... Public speaking 

isn’t my thing please forgive me, and the things I wrote here were from my 

heart so I really do want to get them out to you. 

Randall Fiertz: Ok. 

Benjamín Acosta: This challenge, I’ve encountered many obstacles and 

I’ve been able to identify many flaws in the historical process which have 
84

driven the airport its current condition. Some of the most daunting 

challenges include the granting of contracts that are of absolutely no 

benefit to the Airport. Contracts that I would argue were wrongfully 

granted, and include clauses that do not make any sense to the airport or 

the government of Puerto Rico. These include contracts that were granted 

for excessive periods of time, with no apparent compensation to the Airport, 

the government or anybody else. Abusive contracts with such vague 

clauses and stipulations that have landed the Ports Authority in repeated 

litigations resulting in mounting litigation costs. What I need as Property 

Development and Marketing Director is to move forward eliminating 

obstacles. To move forward to a plan that allows for effective data analysis 

and for the availability of more resources and efficiency. We need to take 

politics out of the equation. Removing politics will result in more beneficial 

agreements with the Luis Muñoz Marín International Airport and its 

concessionaires. Most importantly, the Luis Muñoz Marín International 

Airport needs the ability to be able to implement a marketing and 

development plan that has continuity. I thank you for the opportunity 

granted to me today. 

Randall Fiertz: Thank you very much. 

Kevin Costello: Good morning. Thank you for the opportunity to address 

the Panel today. My name is Kevin Costello. I serve currently as the 

Director of Properties and Airport Affairs for JetBlue Airways. In this role, I 

am responsible for the corporate relationships for all the Airport operators 

throughout our network of 76 airports in the United States, Caribbean, Latin 

and South America. In this role, I've had the opportunity to participate in 

numerous Airline Airport Affairs Committees (or AAAC) throughout that 
85

network, including Luis Muñoz Marín International Airport. I’ve also had the 

privilege to also serve as chairman of the Airport Affairs Committee at Luis 

Muñoz Marín International Airport, as selected by my peers at the other 

airlines servicing San Juan. In that role as chairperson, I am here to voice 

the San Juan AAAC's strong support for completing this public private 

partnership transaction, and I offer three points to the Panel and for the 

public for consideration. 

1. The Process. The Puerto Rican Ports Authority and the Public 

Private Partnership Authority have conducted a transparent, 

collaborative and fair process in selecting their preferred bidder. The 

Airlines believe the most important aspect of the process has been 

the PRPA and P3's recognition of the role the airlines play in the 

process, and afforded the airlines a meaningful seat at the table. 

2. Public Interest. A lot of time was dedicated within the process of 

crafting a transaction that would provide significant improvements to 

Luis Muñoz Marín International Airport. This transaction will deliver 

significant capital improvements that are needed for the airport to 

compete in the Caribbean. The transaction calls for the operator to 

be held to a high operating standard, which will improve the customer 

experience. All of this will be accomplished, while keeping airline 

rates and charges lower than they are today, thanks to the 

efficiencies a public private partnership can deliver. With lower costs, 

airlines servicing Luis Muñoz Marín International Airport, can further 

invest in air service to Puerto Rico. Such investments and 

opportunities for growth will only reinforce LMM as a driver in 

economic development in Puerto Rico.
86

3. Aerostar. Aerostar, a joint venture between ASUR and Highstar 

Capital, has quickly engaged the airlines on their development and 

operational plans in a truly collaborative process. The airlines 

embrace this opportunity, and if the FAA grants a favorable decision, 

look forward to that partnership Aerostar is developing with the air 

carriers. ASUR, the operator at Cancún, Mexico, is well known to the 

members of the San Juan’s Airport, Airline-Airport Affairs Committee. 

Cancún is consistently honored as the best airport in customer 

satisfaction in Latin American and Caribbean, by Airport Council 

International. It is not a coincident that Cancún Airport has grown in 

passengers, destinations serviced and airlines operating in Cancún, 

under ASUR's stewardship. This all speaks volumes of the potential 

Aerostar can deliver to Luis Muñoz Marín International Airport. 

The air carriers servicing LMM airport support this public private 

partnership. Given the challenging circumstances that faced the 

aviation community at LMM, the San Juan’s AAAC firmly believes that 

public private partnership of this airport at this time is the best path 

forward to ensure a vibrant and thriving Luis Muñoz Marín International 

Airport for Puerto Rico and its citizens. Thank you for the opportunity to 

address the panel today. 

Randall Fiertz: Thank you. 

Pablo Figueroa: Good morning ladies and gentlemen. My name is Pablo 

Figueroa; I’m the President of The Puerto Rico Chamber of Commerce. 

The Puerto Rico Chamber of Commerce is a non-profit organization 

established in 1913 that will celebrate its 100th anniversary this coming 
87

year. It is the most inclusive multi-sector organization in Puerto Rico and it 

has traditionally been the sounding board and platform for enhancing and 

promoting all private business activity in Puerto Rico. The Puerto Rico 

Chamber’s mission is to advocate in favor of its 1265 constituents at all 

levels, including the preparation of those norms that guide and facilitate 

business opportunities that will support the socioeconomic development of 

Puerto Rico with the purpose of creating sustainable socio-economic 

conditions that enhance its competitiveness. It also helps to foster the 

optimal climate for doing business, to facilitate the creation and expansion 

of local industries, to attract Foreign Direct Investment like the Luis Muñoz 

Marín International Airport PPP initiative, to develop also and increase 

Puerto Rico’s export capacity, to assist in the development of the Island’s 

manufacturing base, in the strengthening of our retail and wholesale base, 

in the expansion of the technical and professional services sector and in 

the augmentation of any other comparative and competitive advantage that 

will support the socioeconomic development of Puerto Rico; all with the 

purpose of fostering the sustainable socio-economic conditions that will 

create jobs, wealth, a robust and vibrant economy, socioeconomic mobility 

and quality of life for all our citizens. In the past two decades, jurisdictions 

and governments around the world have turned to the private sector to help 

them face the daunting challenges that pose a complex and uncertain 

global economy. This uncertainty has resulted in governments with limited 

resources and little financial leeway to develop and maintain vital 

infrastructure. As such, developed economies have not only allowed, but 

also fostered and welcomed, private business participation in the 

management and operation of airports as a mechanism to enhance 

customer service while simultaneously effectively and efficiently managing 
88

the business and financial challenges of its operations. LMIA is Puerto 

Rico’s main air cargo hub. It is well known that the LMIA facility requires 

substantial infrastructure improvements in order to:

1. To develop and promote Puerto Rico as an international hub and 

transportation center with world class air services.

2. To effectively compete in the international business trade. 

3. To increase airline availability and stimulate the local economy activity 

within Puerto Rico 

4. To improve passenger and cargo movement and tourism to and from 

the Island. 

It is also well known that in order to be able to achieve the above 

described plans, the LMIA requires a large capital investment that our 

Government is not in the financial position to implement, on its own. 

Therefore, the P3 mechanism provides the win-win arrangement that will 

limit or eliminate the financial exposure of the Government. Such structure 

will allow the transfer of investment and risk from the Government to 

Aerostar, as its private lessee and operator. Such transfer will be 

channeled through an optimal contract were both thresholds, guarantee of 

minimum income within low market demand and a top maximum of income 

within high market demand which converge optimally in the intermediate 

demand contract. As such, Aerostar has demonstrated strong 

management capabilities and sound financial resources to enhance the 

LMIA’s operations, to generate revenues and to comply with Puerto Rico’s 

employment goals. The proposed PPP will have a substantial economic 

impact for the Island’s economy during the initial ten years of the 

concession agreement. The remodeling and new construction at the 
89

LMIA, as well as the significant increase in passenger movement, will 

benefit local businesses through the new employment, commercial activity, 

capital investment, technology transfer and other competitive opportunities 

for a wide array of international airlines that are keen in entering the 

Caribbean and Latin American air traffic through Puerto Rico. This in turn, 

will increase tax revenues over the contract period. The Chamber of 

Commerce understands that there are four main factors to consider in the 

FAA’s evaluation of the LMMIA P3. They are: 

1. During the first 3 years of operation Aerostar is committed to invest over 

$1.6 billion for immediate and permanent improvements, including jet 

bridges, terminal redevelopments, etcetera. 

2. Aerostar’s operational plan will result a significant increase in 

passenger movement. 

3. A new governance structure focused on transfer of knowledge and 

investment in human resource development will yield a more 

productive, innovative, entrepreneurial work force with augmented 

attributes, skills and competencies that will undoubtedly result in 

improved job conditions and wealth for our work force. 

The Chamber of Commerce trusts that our comments will provide useful 

information to the Federal Aviation Administration in determining the 

feasibility of this important project. Thank you very much. 

Randall Fiertz: Thank you. Do we have a number thirty? Next speaker? 

Thirty one? Anybody before thirty one, or any ...? Thirty two? Thirty 

Three? Thirty four? Thirty five? We’re just going to wait a moment to see if 

there is anybody outside who wants too ... Please, just wait a moment 
90

we’re just gonna see if there’s anybody outside who should be speaking. 

So we will reconvene at 1:00? 

Carlee Cellar: 1:30

Randall Fiertz: Reconvene at 1:30?

Carlee Cellar: Everybody, you all have cards so while you’re in the room 

please put your name on the card if you intend to come back in the 

afternoon. That way you’ll drop your card off out here in the desk and you’ll 

have to pick it up when you come back. Thank you very much. 

(11:42am)

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 11, 2012. 

Aledawi Figueroa Martínez

Smile Again Learning Center, Corp.

(787)872-5151 / (787)225-6332

widy.figueroa@gmail.com

www.smileagainpr.com