Governor Ricardo Rosselló said yesterday that the cancellation of the $ 4.7 billion emergency loan approved by Congress is not one of the requests of the Puerto Rican government to the US Treasury to agree on the disbursement of the money.
But the governor acknowledged that, as part of the conversations they have had with the US Treasury to finally disburse part of the loan, the federal agency does not include that cancellation in the negotiation of the terms of the loan, which will be granted through the Community Disaster Loan (CDL) program.
Rossello criticized the fact that Puerto Rican cash flow should be below $ 800 million as one of the conditions established by the US Treasury to release the first part of the loan. The governor encourages instead, that the minimum to be set at $ 1.3 billion.
The experience of Louisiana, after Hurricane Katrina, was that the emergency loan it was granted, was cancelled after four years. The federal government authorized $ 999.8 million in loans. Finally, they disbursed $ 837.3 million. Of that amount, only $ 23.5 million were not forgiven, according to the Federal Emergency Management Agency (FEMA).
Last October, US Congress authorized $ 4.9 billion in loans for Puerto Rico, but Treasury Secretary Steve Mnuchin wants to limit it to $ 2.065 billion. The Treasury has not yet disbursed any funds and negotiations continue, said Rosselló, who recalled that Mnuchin is expected to visit the Island in the near future.
"We are not claiming that there will be immediate forgiveness. Some parameters have to be achieved, but the truth is that 93 percent of these loans are forgiven", said the governor.
Is this stall a result of the cancellation claim?
- No. It is because it became another loan that was not a CDL.
Then, the cancellation is not part of the criteria that the government requires for disbursement?
- No, but the CDL has some cancellation criteria. If these requirements are achieved, then we are asking for this criteria to be included, that they are not ignored.
And the US Treasury asks these cancellation terms not to be included?
- The Treasury ignores them. They do not mention them, and the terms (proposed) are quite onerous. We believe we have to be treated like other jurisdictions, not differently. I understand that it takes a while for it to be cancelled. We have to achieve a number of requirements, but eliminating that potential is changing the CDL loan into any other loan.
Will it reach $ 800 million in cash?
- What is important is that we have been in this discussion. In general, the threshold should be one month of operation.
Would that be $ 1.3 billion?
- Exactly. It would be $ 1.3 billion. I am not saying that they are welcoming ourrecommendations, but, if we look at the historical parameter and what would mean giving certainty to Puerto Rico to operate, it must be that threshold of $ 1.3 billion or to achieve something better.
Will the island come to benefit from this loan?
- I'm going to keep pushing.
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