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Old 11-26-2019, 01:12 PM
 
Location: Philly
10,227 posts, read 16,856,074 times
Reputation: 2973

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interesting dilemma. the port is being privatized because it would require $250 million in public debt which the government does not have. presumably the private company wants to recoup the investment whereas there is hope that a public port will be subsidized. given that cruise ship passengers are relatively low impact ($44 million appears to be a cruise ship estimate and since only one line is threatening cancellations, it remains possible other cruises pick up some of the slack), how much is reasonable to subsidize? would the island be better off addressing, say, beach erosion or things that attract airline tourists which tend to spend a lot more (including hotel stays)? perhaps vazquez should stand strong and let it go through and call their bluff. in the end, it is the strength of the market that determines pricing power.
Quote:
Roughly 90 cruises would be affected by the cancelations through the end of 2020. If the cancelations go through, the port would see roughly 360,000 less passengers next year and would represent a loss of $44 million to the area.he report only mentioned one cruise line (Royal Caribbean). John Heald, Brand Ambassador at Carnival Cruise Line, said that at the moment Carnival has “absolutely no plans of canceling any cruises” to San Juan.
https://cruisefever.net/cruise-ships...n-puerto-rico/

Quote:
The reason for the cancellations is the privatization of the cruise docks in San Juan due to much-needed maintenance that is needed. Around $250 million investment is needed to make sure cruise ships can continue to dock there in the years to come. There is an urge for governer Wanda Vazquez to not go ahead with the privatization so this news is fluid.
https://www.cruisehive.com/cruise-sh...canceled/35941
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Old 11-27-2019, 07:43 PM
 
Location: On a Long Island in NY
7,800 posts, read 10,126,615 times
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Quote:
Originally Posted by pman View Post
interesting dilemma. the port is being privatized because it would require $250 million in public debt which the government does not have. presumably the private company wants to recoup the investment whereas there is hope that a public port will be subsidized. given that cruise ship passengers are relatively low impact ($44 million appears to be a cruise ship estimate and since only one line is threatening cancellations, it remains possible other cruises pick up some of the slack), how much is reasonable to subsidize? would the island be better off addressing, say, beach erosion or things that attract airline tourists which tend to spend a lot more (including hotel stays)? perhaps vazquez should stand strong and let it go through and call their bluff. in the end, it is the strength of the market that determines pricing power.

https://cruisefever.net/cruise-ships...n-puerto-rico/


https://www.cruisehive.com/cruise-sh...canceled/35941
NotiUno630 is now reporting that Royal Caribbean said they plan to keep the current itinerary through March of 2021 with "fewer visits" thereafter. Here's an English language source: https://www.royalcaribbeanblog.com/2...o-rico-cruises

The Puerto Rican media has really been dropping the ball as of late.
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Old 12-08-2019, 04:03 PM
 
Location: The Circle City. Sometimes NE of Bagdad.
24,542 posts, read 26,096,990 times
Reputation: 59975
Stumbled across this conversation on the topic.

https://www.facebook.com/10867951365...50816652063978
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Old 12-08-2019, 06:13 PM
 
Location: The Circle City. Sometimes NE of Bagdad.
24,542 posts, read 26,096,990 times
Reputation: 59975
^^ This was part of the above video that I for got to include.

This is a short explainer on what's happening in Puerto Rico, with the port situation, from travel expert Peter Greenberg. Royal Caribbean is in a fight with the Puerto Rican government which wants to privatize the ports. Communication has broken down & millions of dollars are at stake. @paddingtonboricua makes an unexpected cameo in the video
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Old 12-09-2019, 08:37 AM
 
Location: Philly
10,227 posts, read 16,856,074 times
Reputation: 2973
Quote:
Originally Posted by motormaker View Post
Stumbled across this conversation on the topic.

https://www.facebook.com/10867951365...50816652063978
thank you, this is very helpful. oftentimes things get lost in the
privatization versus government owned but the real problem here appears to be that the improvements are not supported by the customers (the cruise ship operators) and when that happens, bad things happen (see the pittsburgh airport). a similar thing happened in philadelphia when the government tried to build a vanity project that the airlines weren't willing to finance. the city eventually gave in. secondarily, it is entirely believable that the RFP here was written to maximize graft..a situation where the intent was good (modernize the port) but the process was broken. I think that corporate welfare is generally unproductive (and in those cases it pays to let the companies walk) but it is also unproductive to soak companies for unnecessary projects.
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Old 12-10-2019, 02:33 PM
 
Location: Philly
10,227 posts, read 16,856,074 times
Reputation: 2973
https://caribbeanbusiness.com/san-ju...privatization/
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Old 12-27-2019, 10:24 AM
 
Location: Philly
10,227 posts, read 16,856,074 times
Reputation: 2973
Quote:
Caribbean Business sources confirmed that the selected preferred proponent is Global Ports Holdings, a company that submitted to the government an unsolicited proposal to repair, design, build, finance, maintain and operate the docks for a 30-year period.

The infrastructure investment the company would have to make should amount to $250 million, based on a study conducted by the United States Maritime Administration (MARAD).

In its first stage, the company must rebuild the structure of piers 11 and 12, which have been closed for a decade because of their deterioration, and build a new one that can be used to dock cruise ships that are not under a preferential contract. In addition, it must repair the Pan American dock structure that is currently being used by Royal Caribbean cruise line, since its foundations are in an advanced state of disrepair....Barbeito said that contrary to the negotiation of the Luis Muñoz Marín International Airport concession to Aerostar, nothing forces the members of the industry to be heard this time. In contrast to the airport concession, in which there was advanced knowledge of how much the company would invest, there are no clear numbers in the case of the cruise dock negotiations...On the position of cruise lines like Royal Caribbean that oppose the transaction, Fontánez explained that the possibility of dividing the project so that Global obtains the concession of piers 11 to 14, which currently are not under exclusivity contracts, is not on the negotiating table .

“That was proposed at the time and the cruise lines showed no interest. Even now, they have not shown interest in making the necessary investment,” the official stated.
https://caribbeanbusiness.com/confir...ncession-deal/

the move by Royal Carribbean appears to an attempt to gain leverage as negotiations move forward. I don't have any insight as to whether they will ultimately be willing to walk away or not. I do think that simply giving in is probably inadvisable on the part of the government but I suppose this a test of vazquez administration to negotiate an agreement that is good enough for everyone. from the sound of it, the cruise lines want something for nothing but they may also simply be trying to influence the agreement which I certainly can't blame them for. fwiw, the private company would not want to invest in the ports unless they are either guaranteed a return or thought they would be able to reasonably recoup the money.
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