The long-term investment grade (BBB-) bonds were issued on the US municipal bond market and via North American institutional investors. Together with equity capital invested by GPH, this project is mobilizing significant private capital into Puerto Rico’s cruise industry.
San Juan Cruise Port (SJCP) has now taken over operations and will commence its multimillion-dollar plan to repair, rebuild and upgrade infrastructure in line with its PPP agreement with the Puerto Rico Ports Authority.
Concession fee and initial investment
Under the terms of the 30-year concession agreement, SJCP will pay the ports authority an upfront concession fee of $77m. During the initial investment phase, SJCP will invest approximately $100m, primarily focused on critical infrastructure repairs at Pier 4 and the Pan American Piers together with upgrades to the terminal buildings and the walkway in front of the Old San Juan piers.
In addition, the investment includes transaction expenses, reserve accounts and other incidental uses of proceeds.
Implementing GPH's operating model
As part of this initial investment, SCJP will also work to modernize the port experience for passengers, cruise lines and local vendors and will use GPH’s global expertise and operating model to improve operations. This will include investments in systems, equipment and technology to enhance the operational performance and ensure environmental protection, safety and security, GPH said.
GPH and SJCP are to ensure the port is integrated into Old San Juan and Puerto Rico's thriving tourism sector, creating opportunities for local businesses to benefit directly from the improved facilities and the anticipated growth in passenger volumes.
Second phase new pier and terminal
The second investment phase will commence subject to pre-agreed criteria, including cruise passenger volumes recovering to pre-pandemic levels. In this phase, SJCP will invest an estimated $250m to expand the capacity of San Juan Cruise Port by building a new pier and homeport terminal capable of handling the world's largest cruise ships at Piers 11 and 12.
The financing for this second phase is expected to come from the US municipal bond market and North American based financial institutions as well.
Strategically important
San Juan is significant to GPH's Caribbean ambitions.
The port welcomed 1.8m unique passengers in 2019, including about 400,000 homeport passengers, representing 2.2m passenger movements. It is the third largest cruise port in GPH's global network.
'As well as being a fantastic destination, San Juan is a strategically important port that is perfectly positioned to play a pivotal role in Eastern and Southern Caribbean itineraries for decades to come,' GPH Chairman & CEO Mehmet Kutman said.
To benefit Puerto Ricans
'... Everyone at GPH is looking forward to us delivering on our plans to bring the iconic San Juan Cruise Port to its rightful, pre-eminent position in the Caribbean cruise industry for the benefit of all Puerto Ricans.'
Mike Maura Jr, GPH Americas regional director, thanked the government of Puerto Rico and the Puerto Rico Ports Authority for their support throughout the negotiation process and said: 'We look forward to delivering a world-class cruise port that will benefit Puerto Ricans for many years to come.'
The San Juan Cruise Port team, including GM Federico González-Denton, second right
SJCP GM Federico González-Denton said a command center has been established in Old San Juan and personnel hired, 90% of them Puerto Rican.
'Additionally, we've onboarded top talent from the PRPA’s Maritime Bureau, ensuring a smooth transition as we assume management of the port.'
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited.
Add Seatrade Cruise News to your Google News feed.  |
