Rosselló Administration Bets on PPP's to Solve Pension Crisis
The administration of Ricardo Rosselló Nevares is contemplating a Public-Private Partnership (PPP) as one of the alternatives to inject liquidity in the retirement system, as established in his government plan.
The route to establish the PPP's will become official when the government reveals their fiscal plan to the Fiscal Control Board (FCB) next February 28th. 'Certainly the Plan for Puerto Rico specifies that the PPP's, in various government areas, are going to be a vital instrument for taking care of the problems,' said on Monday Public Affairs Secretary, Ramón Rosario.
For Representative Jesús Santa, spokesperson of the Popular Democratic Party (PDP) in the Labor and Retirement Affairs House Committee, establishing PPP's for this purpose is not viable on the short term, taking into consideration that, at the rate the Administration of Retirement Services (ASR) is consuming its assetts, pensioners would be left without their checks as soon as the end of this year or the beginning of 2018.
'If you manage to have one or various PPP's that generate each year $1,100 millions, it would be a great idea. The problem is that I doubt that's possible in the short term. Typically, income from PPP's comes once, when you close the deal on a lease or a management contract,' said Santa to NotiCel. Still, he didn't rule out this strategy, although he sentenced that, by itself, it would not resolve the problem with the retirement system.
On the other hand, economist Martha Quiñones affirmed that the PPP's model for financing pensions is viable not only on a short, but also a long term, although it has to be meticulously regulated to avoid government diversion of those funds. Also, she said that the effectiveness of this strategy is conditioned to the type of Partnership that is established and that it generates enough income to fulfill projections.
'It depends on the type of PPP, but they could generate money. Therefore, I insist that is necessary to define correctly when and what is the priority. If the money assigned is going to be a priority for the retirement service, or if it's going to be secondary. If the money is a priority, it could be financed; if it is not prioritized, and can be used for other things, then there is a problem with the management and use of public resources and that is the principal problem of the government of Puerto Rico,' stated Quiñones.