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Feds Reach Settlement With Utility

Friday, September 18, 2015

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The U.S. Department of Justice and Environmental Protection Agency have reached an agreement with the Puerto Rico Aqueduct and Sewer Authority (PRASA) to make major upgrades to its infrastructure and improve its inspection process.

The EPA announced the settlement agreement Tuesday (Sept. 15). In its statement, the federal agency said the PRASA has agreed to spend about $1.5 billion to make necessary improvements. It also will invest $120 million to construct sanitary sewers that will serve communities surrounding the Martin Pena Canal.

“These upgrades are urgently needed to reduce the public’s exposure to serious health risks posed by untreated sewage,” said John C. Cruden, Assistant Attorney General for the DOJ’s Environment and Natural Resources Division, in the statement.

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The federal government has reached an agreement with the Puerto Rico Aqueduct and Sewer Authority to upgrade its infrastructure and improve inspections.

“The United States has taken Puerto Rico’s financial hardship into account by prioritizing the most critical projects first, and allowing a phased in approach in other areas, but let me be clear that these requirements are necessary for the long-term health and safety of San Juan area residents.”

Judith A.Enck, EPA Regional Administrator, agreed.

“This agreement will reduce the massive amount of untreated sewage and other pollutants that harm major waterways in the San Juan area, improving water quality and public health conditions for thousands of people,” she said.

Settlement Terms

Under the agreement, the PRASA will prioritize island-wide capital improvement projects and consider the effects of those projects on the people they serve. The Puerto Nuevo system—which will receive upgrades, improved inspections and cleaning of existing facilities—serves  the municipalities of San Juan, Trujillo, Alto and portions of Bayamon, the statement said.

Also, the agreement expands upon previous settlements between the PRASA and the federal government in 2004, 2006 and 2010, according to the statement. The improvements outlined in the agreement will supplement projects already started under PRASA’s Capital Improvement Program.

The agreement is subject to a 30-day public comment period and will be available to view on the DOJ’s website.

Financial Issues

The terms and conditions in the settlement will update the previous decrees between the federal government and the PRASA, according to the statement. Because of PRASA’s financial issues, the agreement is tailored to focus on the most critical issues first and also removes projects from the 2006 and 2010 decrees that have been determined to no longer be necessary.

Meanwhile, Bloomberg Business reported Tuesday (Sept. 15) that the utility paid a significant premium while selling $75 million of short-term notes. Those notes extend a $90 million loan through November, and PRASA was hopeful that it could issue $750 million in bonds over the next few weeks.

Norma Munoz, a spokeswoman for the utility, said PRASA is reviewing and updating its bond documents and “should be back in the market in a few weeks,” the business media outlet reported.


Tagged categories: Government; Infrastructure; Infrastructure; North America; Program/Project Management; Utilities

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