FROM EIR DAILY ALERT
Privatization of Puerto Rico’s PREPA Augurs Disaster
Jan. 28, 2018 (EIRNS)—On Jan. 22, Puerto Rican Governor Ricardo Rosselló announced his plan to privatize the bankrupt state-run Puerto Rican Electric Power Authority, or PREPA, in three phases over the next 18 months. The plan must be authorized by New York bankruptcy Judge Laura Swain and by the Puerto Rican Legislature. Creditors and all manner of financial vultures holding some of PREPA’s $9 billion in debt are already screaming that any privatization must guarantee debt repayment and their "property rights."
Absent a programmatic focus that would incorporate Puerto Rico into the Belt and Road Initiative, writing off its unpayable debt and embarking on high-technology development, including nuclear energy, the proposed privatization will make the island’s desperate situation worse and subject it to greater looting by "disaster capitalists" who are expected to swoop in to make a quick buck. The proposed "environmentally friendly" plan makes no mention of nuclear, and states that renewables will make up 30% of energy generation.
Currently, close to 40% of the island’s population still has no electricity. The dire financial crisis of the past 10-15 years has made PREPA incapable of maintaining the electric grid while issuing ever-larger quantities of debt to offset dwindling revenue. Its $9 billion debt cannot be paid.
The announced privatization is included in a revamped fiscal plan prepared by Rosselló, which calls for no debt service to be paid over the next five years, but which must adhere to the monetarist "structural reform" demands from the Financial Oversight and Management Board (FOMB) set up by Congress in 2016 to oversee the island’s finances.
PREPA was founded in 1941 under Franklin Roosevelt’s New Deal, which has a rich history of promoting real economic development on the island. The Atlantic warned Jan. 24 that privatization means "the functional end of a public sector that has defined life in Puerto Rico for the majority of the island’s history as a United States territory."
