From left to right, Noel Zamot, Nathalie Jaresko, and José Carrión. (GFR Media)

Five months after Noel Zamot left the Oversight Board Revitalization Coordinator position, the federal agency is still actively searching for a replacement.

However, filling that vacancy created by PROMESA Title V does not seem to be an urgent issue since because expected infrastructure investment has not materialized and the government still faces obstacles to effectively manage proposals for infrastructure projects.

That is what the entity created by PROMESA notified the U.S. President and Congress in its annual report.

The report also indicates that “much of current infrastructure activity is in FEMA (Federal Emergency Management Agency) Cat A/B,” of the Stafford Act, that is debris removal and remediation which “do not require extensive permitting support.”

“Several factors have been cited by project sponsors and/or noted by the CPP team: the expected flow of infrastructure projects under CDBG-DR has not materialized. The Government continues to struggle in effectively managing proposals for infrastructure projects,” says the report on page 61.

The document states that another obstacle for the CPP is that several projects “currently under consideration by Government do not qualify under Title V without an RFP award.”

PROMESA Title V established a mechanism for investors interested in developing infrastructure projects or contributing to the island’s economic recovery to submit their proposals to the Board’s Revitalization Coordinator. If the proposals met certain requirements, they would be designated as "critical project", making them eligible for an expedited permit process for both the local and federal government.

As stated in the document, and as El Nuevo Día reported after Zamot's left office last March, the Board established that before an investor applied to participate in PROMESA Title V, the project must have the government's approval. This decision came amid discrepancies between the government and the Board over the process adopted to review the projects before the entity´s consideration.

According to the annual report, that decision as well as the fact that most of the projects were energy-related ones, led to the withdrawal or to place on hold 55 proposals

“totaling an excess of $9 billion dollars approximately.” Only the View Point real state related project met the initial requirements to be a critical project and has gone under a House investigation into the permitting process followed by the government.

“The Policy clarifies requirements for projects that involve doing business with any Government agency or public corporation, especially, energy-related projects that require a Power Purchase and Operating Agreement (PPOA),” in order to do the work.

PROMESA Title V status is a part of the Board’s annual report for fiscal year 2018. The Board released a document this week summarizing the agency’s activities, the status of PROMESA related litigation and the restructuring process, as well as its budget.

PROMESA requires the Board to deliver an annual report to the federal government, including Congress and the White House.

The Board’s budget

According to the document during the fiscal year that just ended, the Board had a budget of $ 64,8 million and $ 12,000 in interest income.

The Board used 82 percent of its budget to pay for professional services; about $ 4.2 million in payroll and another $ 4 million on purchased service. Travel and transportation expenses were about $ 2 million.

During the past fiscal year, the Board increased its staff “from 17 to 40, and will continue to hire personnel in key areas related to fiscal plan implementation, monitoring, and reporting,” since the entity “is monitoring more than 120 reform implementation plans across the Government, which requires a significant amount of resources and expertise.”

The Board’s estimates suggest that, between 2018 and 2024, expenses related to PROMESA will total about $ 1,5 billion.

“We continue to explore ways to eliminate duplication and minimize professional fees. The Court-established mediation – while certainly welcome – requires a full complement of lawyers and financial advisors spending additional time constituting an added cost to the restructuring expenses. Of course, the mediation may save substantial professional fees if it is successful,” reads the report.

The report says that the Board “reduced its operational budget by 11% to $57.6 million in FY2020,”. This year, the budget allocated to the federal entity, whose constitutionality depends on the decision of the U.S. Supreme Court, is about $ 57.6 million.

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