Wednesday, September 17, 2014

Puerto Rico: Commonwealth to Compensate Ten US-Based Consultants $890,000...Each

According to The Latin American Tribunethe Puerto Rico Electric Power Authority (PREPA) said it signed a $9.7 million contract with a US-based consultant to restructure its operations.

COMMENT: As many of our readers know, the Obama Administration has provided funding to the Commonwealth from Washington-based funding to conduct a referendum before 2016 as to whether Puerto Ricans want the following:

1. To remain a Commonwealth;

2. To become independent from the US; or

3. To pursue US statehood.

In the interest of transparency, why in the world would the Mainland be interested in making the Commonwealth the 51st state when it is essentially:

a. Bankrupt;

b. Has the highest crime rate of any US state on the Mainland;

c. Has an uneployment rate twice that of the Mainland (15%);

d. Has a reputation for intentionally being deceptive in terms of its financial  posture; 

e. Has a high number of illegal Dominicans residing in the Commonwealth;

f. Has a clearance rate for crime 50% lower than on the Mainland; 

g. Thus far, eight candidates for Superintendent of Police have come and gone in Puerto Rico since 2009 with few remaining much longer that a few months. Perhaps it is because the job is tantamount to being MISSION IMPOSSIBLE; and

h. Puerto Rico has a police force with a high incidence of officer misconduct and human rights violations which is so bad that even the US Department of Justice had to step in to clean house.

The one reason that Washington chose to fund the referendum was the fact that in 2012, 75% of Puerto Ricans voted for the Democratic Party. 

The state-owned company, which is on the brink of bankruptcy, generates and distributes electricity on the island.

Under the terms of the contract, which runs only until April 15, 2015, the consulting firm, AlixPartners, will deploy a team of ten members for which they will be paid an average of $890,000 EACH.

Perhaps PREPA, in a spirit of transparency, could share a copy of the contract with all residents of Puerto Rico so they might comprehend what compensation in the amount of $890,000 actually looks like, considering that 15% of Puerto Ricans are unemployed!

AlixPartners will also be able to claim an additional 8% to cover expenses?

Burdened with a $9 billion debt, PREPA recently was unable to pay $671 million to its bondholders, and negotiated with them for an extension until March 2015 to reorganize its finances and come up with the necessary  payments.

Credit-rating agency Fitch said Monday (September 15) it would keep PREPA’s notes under review with a bias toward lowering the utility’s rating. 

The Puerto Rican company’s credit rating is already “CC,” considered “high risk” with “some type of default probable.”

The agreement signed by PREPA with its creditors on August 14 provides temporary relief on the credit lines’ deadlines, Fitch said in a statement.

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