San Juan, Puerto Rico — Puerto Rico’s governor on Tuesday announced a public-private partnership to renovate the island’s cruise ship docks as part of a $425 million project to boost the U.S. territory’s tourism sector.
Governor Pedro Pierluisi said the project aims to transform Puerto Rico into the Caribbean’s premier cruise ship destination by upgrading, repairing and expanding nine docks in the capital city of San Juan to accommodate larger ships and more passengers.
“Today is an extremely important day for tourism in Puerto Rico,” said Carlos Mercado, executive director of the island’s Tourism Company.
San Juan Cruise Port – a subsidiary of London-based Global Ports Holding, the world’s largest cruise port operator – will be responsible for operating and overseeing the project under a 30 years with the Puerto Rico Port Authority that lasted five years in the making. The contract stipulates that the island government will receive annual payments representing at least 5% of the operator’s gross income.
As part of the deal, the number of docks currently capable of serving as a base port for four cruise ships at a time will double to eight. Crews will also upgrade docks battered by Hurricanes Irma and Maria in 2017 that have been worn down over decades, with the first built in the 1970s.
“We haven’t been able to compete on a large scale with other jurisdictions,” Pierluisi said.
Joel Pizá, executive director of the Port Authority of Puerto Rico, said the docks are currently not designed to accommodate larger ships or 5,000 or more passengers at a time. He also noted that the agency has $350 million in debt, making it difficult to issue bonds to repair and improve the docks despite federal officials identifying serious structural deficiencies that would require more than $200 million. to be repaired.
“That’s the reality,” he said. “Capital investment is much needed right now.”
Maximum mooring fees and passenger fees are not expected to change as part of the deal, officials said.
The announcement is the latest public-private partnership the U.S. territory has launched as the central government and some public agencies emerge from deep bankruptcy amid an ongoing economic crisis. Previous partnerships have led to private companies taking over the management and operation of the island’s main international airport, some highways, and electricity transmission and distribution, among other things.
Some have criticized the most recent partnership, demanding that federal officials consider privatizing some $5 billion in infrastructure for an initial initial investment of $75 million. Puerto Rico Representative Ángel Matos García, spokesman for the island’s House of Representatives majority, said he and other politicians would meet with federal officials in Washington, DC, to discuss the deal. .
Tourism makes up less than 7% of Puerto Rico’s economy, but officials hope to change that with the new partnership, with work due to begin next year.
Puerto Rico saw record numbers of cruise ship passengers before the pandemic, only to have the docks close for 16 months. But business has since rebounded. The government reported more than 420,000 passengers in fiscal year 2021-22, a 23% recovery from fiscal year 2018-2019
This fiscal year, officials expect more than one million passengers — about 80% of pre-pandemic traffic — with eight new cruise ships expected to visit the Port of San Juan for the first time.
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