The Puerto Rico Investor s Guide to Government Resources

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The Puerto Rico Investor’s Guide

to Government Resources

Good marketing is what sells a product. Your product or service may be the best in the world but if you don’t market it—not just adequately but aggressively and passionately—you won’t be able to convince anyone to buy it.

As an investment destination, Puerto Rico is a great product. For decades it has been effectively “sold” to interested “buyers” around the world. Top executives from the largest global companies have been convinced and continue to reap the benefi ts of investing on the island.

I know. Years ago I had the privilege of being the person in charge of that critical function of our economic development: marketing Puerto Rico. And based on my many years of experience promoting Puerto Rico as an investment destination, followed by all my years in the publishing business as the publisher of Puerto Rico’s leading business publication, CARIBBEAN BUSINESS, I can tell you without hesitation that what you’re holding in your hands is the best marketing tool Puerto Rico’s economic development has ever had.

We are very proud to have been asked by the government of the Commonwealth of Puerto Rico to assist in the production and publication of the fi rst Investor’s Guide to Government Resources.

In it you will fi nd the most complete, most up-to-date information on all the government agencies responsible for the economic development of the island—the Department of Economic Development & Commerce, the Government Development Bank, the Economic Development Bank, the Puerto Rico Industrial Development Co., the Puerto Rico Trade Co., the Puerto Rico Tourism Co., the Convention Center District Authority, the Offi ce of the Commissioner of Insurance, the Offi ce of the Commissioner of Financial Institutions, the Puerto Rico Film Commission, and more. Also, profi les on the most important utilities and infrastructure agencies— the Electric Power Authority and the Aqueduct & Sewer Authority, the Ports Authority and the Department of Transportation & Public Works. And exciting information on a series of cutting edge economic development initiatives such as: Ciudad Mayor, Mayagüez 2010, the Knowledge Corridor and Portal del Futuro.

We trust you will fi nd this Guide informative and useful as you consider the tremendous investment opportunities that await you and your company here in Puerto Rico.

Manuel A. Casiano

Chairman & CEO, Casiano Communications Inc. Manuel A Casiano

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CARIBBEAN BUSINESS • 1

Thank you for your interest in Puerto Rico’s economic development efforts and in how you may be part of our exciting vision for the Commonwealth’s future. I am pleased to share a few highlights with you as we encourage all of Puerto Rico’s citizens, as well as the broader international business community, to learn about our goals and become part of our plan to achieve them. Over the past ﬁ fty years, Puerto Rico has built a reputation as a manufacturing powerhouse. But with the global manufacturing economy shifting production to lower cost locations, my Administration has seen an opening to broaden Puerto Rico’s economic base. No longer is Puerto Rico an island that simply makes things, now we are establishing a foundation for creating, developing and managing new products and services. As the global “knowledge economy” evolves, we will ensure that Puerto Ricans are ready to compete and lead.

This focus on knowledge-based work means we must prepare Puerto Rico for a new type of profession. Our education and training programs are being strengthened, particularly in the sciences, mathematics and engineering. In these ﬁ elds, Puerto Rico is uniquely positioned for growth because of our years of expertise in pharmaceuticals and medical device manufacturing. Building on our existing strengths will give us a leg up over competing jurisdictions, as investors identify this particular advantage for Puerto Rico.

Because our goal is to develop greater participation in Puerto Rico’s knowledge economy, my Administration is also creating and improving the tools used by our citizens to create new businesses. While large companies like Amgen, Eli Lilly, Microsoft, Boeing and others are investing in Puerto Rico, the backbone of our economy will continue to be small businesses—including those that serve as suppliers and service providers to global corporations located here. New programs to foster entrepreneurship and to educate Puerto Ricans on how to start a business will provide better opportunities than ever before. And with my Administration’s comprehensive streamlining of the permit process underway, we will make doing business in Puerto Rico easier than ever before.

Puerto Rico’s greatest advantage is its Commonwealth relationship with the United States. Our ability to provide fi nancial incentives to lure new growth to the Island has been a tool for economic development for fi ve decades and as we launch our ambitious new vision, will continue to play an integral role. When I talk with business leaders from across the country, the combination of offshore benefi ts with the protections and security of being in the United States, along with our educated and trained workforce, is consistently raised as an area of distinction for Puerto Rico.

Puerto Rico’s presence in the global economy is growing, in impact and in reputation. I encourage you to learn more about how the government of Puerto Rico is creating the next wave of economic opportunity—and how you can take part.

Sincerely,

Governor Aníbal Acevedo Vilá Commonwealth of Puerto Rico

Hon. Aníbal Acevedo Vilá

Governor of Puerto Rico

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2 • CARIBBEAN BUSINESS

Rich in advantages, the Commonwealth of Puerto Rico is a great place to do business. Governor Aníbal Acevedo Vilá’s administration has made transforming the needs of industry into opportunities for the island a hallmark. Capitalizing on our unique assets and aligning them with the changing needs of the marketplace, Puerto Rico is emerging as a top competitor in the increasingly technological and global economy.

The Acevedo Vilá administration has established public-private-academic partnerships as a tool to support the growth of key industries on the island and provide quality jobs for our citizens. For example, when the pharmaceutical manufacturing sector— at home in Puerto Rico for the last four decades—began evolving into the broader life sciences industry, Governor Acevedo Vilá and his economic development team worked with industry and university leaders to provide the infrastructure and trained workforce necessary to support its needs. Our institutions of higher learning now offer degrees speciﬁ c to the industry and construction of several facilities for life sciences research and development is underway in Puerto Rico. The proof of our success lies in the numbers: Four years ago, the island did not produce biotechnology products; today 25 percent of the biotechnology products used worldwide are manufactured in Puerto Rico. Over the same time period, the island has gained more than $4 billion in biotechnology investments from top international companies like Amgen, Eli Lilly and Abbott.

Another of our assets is Puerto Rico’s university system. Today’s high-tech industries demand an agile, highly educated labor force and Puerto Rican graduates can compete with the best in the world. The University of Puerto Rico-Mayagüez (UPR-M) and Puerto Rico Polytechnic University boast some of the highest engineering enrollment numbers in the nation and UPR-M ranks ﬁ rst in the number of chemical engineering graduates in the United States. We are also proud that Puerto Rico graduates the most Hispanic engineers and ranks third in the number of women engineers in the United States.

The beneﬁ ts are already paying off. The U.S. aerospace and security industries anticipate a shortage of skilled labor in the coming years: The number of engineering students is down nationally and both industries are restricted in their ability to outsource sensitive security work. Again, Puerto Rico’s impressive engineering programs are poised to meet labor needs and our Commonwealth relationship with the United States guarantees the same protections offered on the U.S. mainland. In the last 12 months, top companies including Infotech Aerospace Services, Hamilton Sundstrand, Lockheed Martin and Honeywell have invested more than $66 million and provided more than 700 new jobs. Currently the Puerto Rico Industrial Development Company is in negotiations with ﬁ ve other aerospace businesses to expand or establish operations in Puerto Rico.

To compete in today’s rapidly evolving global marketplace, local economies must make realistic assessments of their assets and capitalize on them. By leveraging Puerto Rico’s many natural advantages, Governor Acevedo Vilá, our corporate partners and the leaders at our universities and nonproﬁ t organizations are developing a diverse, vibrant economy on the island.

Jorge Silva Puras

Chief of Staff to the Governor The Commonwealth of Puerto Rico

Jorge Silva Puras

Governor’s Chief of Staff

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With its strategic location, world-class infrastructure and focus on improving the ease of doing business, Puerto Rico presents valuable business opportunities to both outside investors and to its own citizens. The Puerto Rico Department of Economic Development & Commerce, and its individual agencies and companies focused on speciﬁ c sectors and investment areas, are prepared to partner with businesses to spur economic development and job creation.

Puerto Rico provides a stable business environment and the capacity to facilitate local and international operations. At the intersection of trade routes from North America, the Caribbean, Latin America and Europe, Puerto Rico provides access to growing markets and traditional business hubs like New York City and Miami. Our government is investing heavily in the island’s infrastructure by upgrading airports, seaports and roads, all allowing for easier movement of people and products to and from Puerto Rico. Also, signifi cant commitments to Puerto Rico’s telecommunications networks are ensuring that businesses operating on the island are connected to the rest of the world electronically through a secure and cost-effective system. Under Governor Aníbal Acevedo Vilá, Puerto Rico has aggressively sought to make opening a business on the island easier and faster. We are revamping the permit process, enabling entrepreneurs to begin operations more quickly by housing representatives of all participating agencies together as the Offi ce of Technical Evaluation. This effort will eliminate parallel bureaucratic processes and make our agencies more effi cient. Further, the new process includes an electronic system that allows developers to submit applications via the Internet. The government is also emphasizing entrepreneurship in general, providing micro loans and training programs to qualifi ed applicants who are ready to contribute to the island’s economy. As a Commonwealth of the United States, Puerto Rico offers unparalleled tax incentives, alongside the protections and oversight of the United States. Puerto Rico’s adherence to U.S. intellectual property laws and homeland security regulations provides assurance to high-tech companies considering offshore destinations. Simultaneously, by registering as a controlled foreign corporation and reinvesting in Puerto Rico operations, companies can receive our unique tax advantages.

With over ﬁ ve decades as a global manufacturing and related services hub including tourism, groups and conventions, the value proposition offered by Puerto Rico stands out from its international competitors. I invite you to take a closer look into our many operational advantages and discover why Puerto Rico is a world-class investment destination.

Boris Jaskille, Esq. Executive Director

Puerto Rico Industrial Development Company The Commonwealth of Puerto Rico

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A World Class Puerto Rico

As prospectIve business partners, we are pleased to present you with the ﬁ rst Investor’s Guide to Government Resources, a comprehensive and coherent reference guide with detailed information on how to establish, expand and do business in Puerto Rico.

Governor Aníbal Acevedo Vilá has designated the island’s economic development as a matter of utmost priority. His vision is simple yet ambitious: To transform Puerto Rico into a world class destination, or as we say in Spanish, Un Puerto Rico de Primera. Our island is poised to become one of those places on earth that truly inspires: a place people around the world can’t wait to visit, and return to; a place companies around the world zero in on during their strategic decision-making process for future investment and expansion; a place that consistently delivers on its promise of unparalleled rewards for those who visit, invest or live on the island.

Before discovering Puerto Rico’s new vision, we invite you to learn about our existing competitive advantage highlighted by the agencies proﬁ led in this Guide.

This Guide includes the most complete information about the agencies that move Puerto Rico’s economic development forward as well as cutting-edge investment initiatives like Ciudad Mayor: Metrópolis del Caribe; Knowledge Corridor; San Juan Waterfront; Mayagüez 2010; Port of the Americas and Portal del Futuro.

Puerto Rico: the strategic advantage

Business waits for no one. Fortunately, Puerto Rico is already at the center of today’s growing global economy. A stable local economy with high quality services in the areas of banking, insurance, manufacturing, biotechnology, engineering, medicine, technology and pharmaceutical development.

An advantageous geographic location, state-of-the-art transportation, cutting edge telecommunications networks and world class infrastructure offer rapid access to new and proﬁ table markets and provide the perfect setting for business. An excellent and highly trained cadre of human resources lends its expertise to give your company the competitive edge that will catapult your business to global success.

With more than 25,000 academic degrees conferred each year, and some 10,000 of those in science and engineering, our brain power is hard to surpass. Puerto Rico has the highest educational level in Latin America and our academic programs rank among the very best. The proven quality of our highly skilled workforce has made us a favorite choice for companies looking to outsource projects or hire specialized teams to work in their countries. Currently, Puerto Rico is home to 168 regional ofﬁ ces of Fortune 500 companies and 62 of the Fortune 100.

Our expertise has earned us the trust of the most important companies. In fact, 13 of the top 20 selling prescription drugs in the U.S. are manufactured in Puerto Rico, accounting for 25% of the world’s biological manufacturing capacity and quickly earning as the title of “BioIsland.” With a strong vote of conﬁ dence in Puerto Rico’s biotech facilities, the investment to expand local operations from global companies such as AMGEN, Lilly del Caribe and Abbott will exceed $3 billion over the next couple of years.

All of this activity generates a healthy inﬂ ux into an economy that also boasts some of the most advanced banking and insurance services in the Caribbean with 11 commercial banks and three world class money centers with combined assets of $52.5 billion.

Ease of doing business is the ﬁ rst step into the U.S. mainland market. Puerto Rico’s strategic location, economic stability and unique relationship as Commonwealth of the United States, coupled with its Spanish heritage, language, culture and shared traditions with Latin America and the Caribbean, make it the ideal gateway to the Americas.

Puerto Rico also conducts business under U.S. commercial rules and regulations; operates with U.S. currency and under the same judicial and banking systems; maintains one of the busiest U.S. free trade zones in the continent; is exempt from federal income tax and delivers a fully bilingual business environment. This is valuable knowledge for companies seeking to enter the U.S. market as well as conduct business efﬁ ciently within a familiar, social and culturally rich environment.

The Puerto Rico Convention Center is the largest in the Caribbean, located at the entrance of Old San Juan. The $1.3 billion complex offers 152,700 square feet of exhibit space and 12 fully-equipped meeting rooms supported by expert technical staff.

Hotels from the world’s leading hospitality chains—many catering to the thousands of business travelers that visit Puerto Rico every year—are only minutes away and provide additional meeting space and leisure facilities. This exclusive business village stands minutes away from the airport, main waterways and the metro area’s business district, better known as the Golden Mile.

Business runs smoothly in Puerto Rico, ﬂ owing from an outstanding transportation network that includes a metropolitan rail system and more than 16,000 km of comprehensive highway infrastructure

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CARIBBEAN BUSINES 5

that provide access to any given location in two hours or less. It travels along an invisible path of the most advanced ﬁ ber optic and digital telecommunications technology to date, reaching through air and seaports to connect visitors and businesses alike quickly and effortlessly anywhere in the world.

Millions of cargo tonnage move through our air and seaports every year. San Juan ranks among the top seven U.S. ports in container movement in the Western Hemisphere. This important port is undergoing a $117 million investment expansion that will strengthen its infrastructure, capacity and merchandise movement. The island’s transshipment industry is being reinforced with the expansion of the Port of the Americas in Ponce at a cost of $250 million.

Our main airport, Luís Muñoz Marín International Airport receives more than 10 million visitors every year. In combination with the Mercedita Airport in Ponce and the Rafael Hernández Airport in Aguadilla, featuring the Caribbean’s longest runway, the improved port of San Juan and future Port of the Americas, will provide full access to other Caribbean islands, South, Central and North America as well as Europe and Asia. Currently, the island’s airports provide direct access to 56 destinations through 500 weekly nonstop ﬂ ights to the U.S. mainland and more than 20 and 33 direct ﬂ ights to Europe and South America, respectively.

A tradition into the future

This Investor’s Guide also reveals the roadmap to success as it details Governor Acevedo Vilá’s six-point plan to guide our journey to become

Un Puerto Rico de Primera, a new tradition into the future.

For starters, the vision aims at diversifying Puerto Rico’s economy by leveraging its existing competitive advantage with planned infrastructure and business development. It is also an integrated vision whereby industry sectors not only complement each other but contribute signiﬁ cantly to the island’s ﬁ nancial soundness.

The six strategic components of Puerto Rico’s vision

are:

• World-class infrastructure, using innovative ﬁ nancial models like public-private partnerships (PPPs) to promote a steadfast development of infrastructure and capital improvement projects. • Accelerate Puerto Rico’s knowledge-based economy, creating a

center of excellence in biotechnology, engineering and computing. The Science & Technology Trust has set its goal to develop The Knowledge Corridor, a world class center for research and cutting-edge developments in biotechnology, information technology and aerospace sciences. This, among other initiatives, will help this government to achieve its fullest potential as a BioIsland.

• Promote local entrepreneurship by providing innovative alternatives for fi nancing, to access domestic and foreign markets. A diversifi ed economy by defi nition is driven by the thousands of small and medium-sized businesses that employ the bulk of our people and are the backbone of our economic future. The Supporting Our Own (“Apoyo al de Aquí”) program, consolidates efforts of several agencies to accelerate the growth and development of small and

medium-sized businesses. The program’s four main objectives are: capacity building; ﬁ nancing; access to domestic and foreign markets and promptness in the evaluation of permits. Thus, the government has increased its capacity for investment in venture capital.

• Transform of the tourism industry as engine for economic development. This strategy is aimed at improving and diversifying the island’s tourism product offering—with a greater variety of segments including convention, sports, ecotourism, historical, cultural and more—and to expand traditional promotional efforts beyond the San Juan metro area through regional initiatives such as Porta del Caribe and Porta del Sol.

• Energy diversiﬁ cation. Puerto Rico’s commitment to its people, existing businesses and potential investors is to cut oil dependency from the current 73% down to 50% by 2010. To achieve this, the Puerto Rico Electric Power Authority is moving full speed ahead with a number of initiatives including diversiﬁ cation of energy alternatives from oil, gas, coal and renewable energy sources like waste-to-energy, oceanothermic energy (OTEC) and wind.

• Transform our Government into a more responsive, effective and agile organization to offer ﬁ rst class services to all citizens and contribute to Puerto Rico’s socioeconomic development fol-lowing seven guiding principles: professionalize the island’s work-force, technology, transparency, re-engineering, reorganization, decentralization and better use of government real estate.

Engines of progress

In addition to the vision’s six strategies, driving our transformation are four important initiatives, or engines of progress, that will propel Puerto Rico’s economic development. They are: Ciudad Mayor; Mayagüez 2010; Port of the Americas and Portal del Futuro. Ciudad Mayor, the future Metrópolis del Caribe, is an urban development plan to improve the quality of life for all Puerto Ricans featuring signiﬁ cant green areas, an extensive functional mass transit system, abundant world class attractions such as historic sites, museums and theaters, and vibrant economic activity.

Mayagüez 2010 will not only give way to the 2010 Central American and Caribbean Games to be held in 17 Western cities, but it will pave the way for the New West, fulﬁ lling the phenomenal potential Western Puerto Rico has long had to become a vibrant and exciting area to live, work, study and visit. Mayagüez 2010 represents a total of 89 projects and an investment of $1.9 billion.

Portal del Futuro, located on 8,600 acres of land formerly known as the Roosevelt Roads Naval Base in Ceiba, promises to deliver a ray of opportunity for the East including breathtaking natural reserves, airports, residential, retail and tourism development. Once completed, Portal del Futuro will create more than 20,000 jobs. The Port of the Americas in Ponce promises to put Puerto Rico back on the global transshipment map with an aggressive 10-year development, the creation of 10,000 jobs and capacity to move 1.5 million TEUs. We are implementing this vision with great urgency as well as an awesome sense of responsibility because what it mean to future generations of Puerto Rican families and for every company to doing business on the island.

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A world-class investment

destination

The new economic development vision for Puerto Rico includes a central role for PRIDCO in two of the six strategies.

First, the promotion of companies that will be part of the Knowledge Corridor, as well as the manufacturing and nonmanufacturing companies and industries that will es-tablish operations in Puerto Rico to produce and export the products that will stem from the Corridor. Second, the promotion and expansion of locally owned companies on the island.

To carry out its international promotion initiatives, the new PRIDCO integrates interdisciplinary promotional teams, highly specialized by industry, that are dedicated to proactive research and competitive intelligence activity that will lead to the identification and early detection of emerging industries with a high potential for creating jobs. Other teams provide outstanding service to multi-national companies across all sectors that already have a presence on the island, with the objective of retaining them and facilitating their growth.

PRIDCO not only aims to attract companies within the context of the knowledge-economy vision. The agency also offers incentives to attract other international sec-tors such as: food industry, plastics and metals, furniture, textiles, printing, call centers, services, and others. PRIDCO promotes tax advantages offered by the Com-monwealth of Puerto Rico to U.S. and foreign compa-nies with the purpose of boosting their establishment in Puerto Rico. As a U.S. Commonwealth, Puerto Rico is a jurisdiction of the United States without federal income taxes, which means that residents and corporations do

Puerto Rico Industrial

Development Company

(PRIDCO)

Boris Jaskille, Esq. Executive Director

Promote Puerto Rico internationally as a preferred investment site for high-technology companies and industries, particularly in bioscience, information technology and services. Promote the expansion of multinational companies operating on the island, with the objective of creating new jobs. Promote the growth and development of locally owned companies.

Since 2003, local investment by global biotechnology leaders has surpassed $3.5 billion, including Amgen, Abbott and Eli Lilly.

55 of Fortune 100 companies and 178 of Fortune 500 companies have operations in Puerto Rico. Of the 20 best-selling pharmaceutical products in the United States, 13 are made in Puerto Rico. In the same manner, 50% of all pacemakers and deﬁ brillators sold in the U.S. are manufactured in Puerto Rico.

Projects of higher economic impact that have been negotiated, attracted and announced since the beginning of the 2006-2007 ﬁ scal year, include: St. Jude Medical ($200 million, 1,200 jobs), Microsoft Vista ($66 million, 85 jobs), Pall Life Sciences ($58 million, 250 jobs), Roche ($46 million, 40 jobs), Hamilton Sundstrand ($40 million, 374 jobs), Abraxis Biosciences ($32.5 million, 450 jobs), Infotech ($7.3 million, 100 jobs) and Honeywell Aerospace ($5.8 million, 105 jobs).

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not pay federal income tax. Moreover, fiscal autonomy of the Government of Puerto Rico allows the Commonwealth to provide continental U.S., foreign and local companies low tax rates in order to spur economic growth. Eligible busi-ness activities that qualify for tax exemption include: com-mercial scale manufacturing, export services, research and development (R&D), film industry, recycling and renewable energy generation.

PRIDCO’s employment and training benefits include: reimbursement of costs, grants based on the number of jobs created, grants from the Workforce Investment Act (WIA) and several local-government programs.

As Puerto Rico’s biggest landlord, PRIDCO owns the largest inventory of industrial and commercial properties on the is-land suitable for industry and commerce—around 25 million square feet—mainly in industrial parks located throughout the island.

PRIDCO also offers very low-rate leasing of real estate, ac-cording to location. PRIDCO officials are available to advise clients regarding site selection for their type of business. For particular industrial projects, PRIDCO builds and rents properties that are customized for the client’s needs.

For Local Entrepreneurs

The new vision for the economic development of Puerto Rico, in its eagerness to diversify and achieve a stronger bond with social and entrepreneurial development includes a starring role for PRIDCO in the promotion and growth of Puerto Rican companies. To that end, PRIDCO offers the following incentive programs for the local entrepreneur:

The Manufacturing Extension Program (PRiMEX) provides technical support to small and medium-sized companies. For more details, visit www.primexpr.org.

The Procurement Technical Assistance Center (PTAC) pro-vides orientation to small and medium-sized companies on how to do business with the Federal Government. For more information, visit www.ptacpr.com.

The Puerto Rico TechnoEconomic Corridor (PRTEC) seeks to transfer to small and medium-sized companies the focus on scientific and technological innovation. You may visit www. prteconline.com for additional information.

The Small Business Technology Development Center (SBTDC) promotes the development of advanced technology for local entrepreneurs. For more details, visit www.prsbdc.org. Venture capital through Grupo Guayacán. An initiative that includes the annual competition Guayacán EnterPRize, which grants awards to the most outstanding business plans in Puerto Rico. Information is available at www.guayacan.org.

The Special Incentive Fund for Marketing Activities, assists companies with their promotional and marketing expenses. Eligible companies must be part of the PRIDCO program and have sales margins between $100,000 and $75 million. For more details, go to www.pridco.com.

Finally, the Patent Program helps entrepreneurs and inventors in the process of protecting their intellectual property. Additional information is also available by visiting www.pridco.com.

For more information: 787-758-4747

or visit www.pridco.com

PRIDCO promotes the

companies and industries that

will make up the

Knowledge Corridor.

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The Center of Attraction

Fast forward to 2020. The Convention Center District is fully developed, the glitzy Condado intersection in full bloom, with abundant hotel capacity hosting the conventioneers that come each year by the tens of thousands. The San Juan Waterfront is also completed, stretching along Puerta de Tierra up to El Morro, bustling with visitors and entertainment well into the night, every night.

The Ciudad Mayor Cultural District, this one stretching from Old San Juan down to Río Piedras, connected by a state-of-the-art transportation system, is crowded with visitors ﬁ lling the galleries, the quaint outdoor cafés, niche theatres, bookstores, parks and promenades, with bohemias and tertulias running well into the night, every night.

With the Knowledge Corridor in full swing as well, business travelers and researchers, students and scientists, friends and families, stroll around town, taking in the sights. The Puerto Rico Coliseum, with major events all year, is also a big draw.

Outside San Juan metro, thousands of visitors tour the island. They’re everywhere, it seems, in and out of hotels small and large. Nature travelers and eco-tourists, surfers and golf players, culinary buffs and history buffs, folks who can’t get enough of our culture and traditions, with captivating shows in Ponce and Guayama, must-see events in Ceiba and Mayagüez, breathtaking eco-tours in Toro Negro and Monte del Estado (no longer just El Yunque Rainforest).

Europeans, Asians and Latin Americans (no longer just U.S. mainlanders), visitors from all over coming to witness for themselves the great Caribbean destination they have heard so much about, the new Puerto Rico, now recognized by leading international critics as one of the best upscale spots in the world. THE place to go, full of excitement and variety,

Puerto Rico Tourism

Company (PRTC)

Terestella González Denton

Executive Director

Make Puerto Rico the preferred choice of world travelers and business executives alike, by providing them with an unparalleled and incomparable experience. Optimize the quality and service we provide to our visitors. Develop the industry so that it may increasingly contribute to Puerto Rico’s economy under the philosophy of “Tourism by All and for All.”

Tourism represents 7.1% of Puerto Rico’s GDP, with 60,000 jobs and ﬁ ve million visitors per year.

Goal: 30,000 hotel rooms and a 20% share of the Caribbean tourist market by 2020.

More than 5,300 new hotel rooms

developed between 2005 and 2008, with an investment of more than $1.3 billion and the creation of 3,775 new jobs.

40 new direct ﬂ ights from 26 destinations

promoted since 2005, generating more than $120 million in economic activity, thanks to a $4 million incentive plan provided by the agency’s new Air Access Program.

New incentives totaling $10.7 million have led to a 2.6% increase in cruise ship visits to San Juan, bringing 6% more visitors (80,000 people), with the economic impact of additional cruise activity expected to reach $300-$500 million by 2011.

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and full of amazing people, with so much history and tradition. Having gone through years of intensive preparation and education in the areas of quality and service, history and cultural attributes, Puerto Ricans are at their prime, ready to show off the island, eager to serve.

Welcome to the future, courtesy of the Puerto Rico Tourism Company (PRTC), its friends in government and the private sector. If there’s anything that marks a difference between today’s Tourism Company and those of the past, it is this propensity to think big and move aggressively. The PRTC plan, intended to carry out a new economic development vision for the island—the transformation of tourism—is built on ﬁ ve objectives:

• New hotels

• Air, sea and ground transportation

• Improvement of the tourist offering (called the “product”) • Quality and service

• Marketing and branding

Puerto Rico already offers a highly competitive incentive package to draw hotel investors and chains. The challenge now is to make a smarter and more aggressive pitch, ease the permit process, provide improved support services and bring them in. Of the additional hotel rooms, PRTC is shooting for 5,300 between 2005 and the end of 2008. The ﬁ rst-ever Puerto Rico Tourism Investment Conference, held on December 4-5, 2007 at the new Convention Center, was a complete success.

Helping out is the Government Development Bank (GDB), which will take PRTC to market for the agency’s ﬁ rst-ever bond issue, largely to fund the revamped Hotel Development Corporation (HDC) and trigger additional hotel development.

On the transportation front, PRTC is making the best of recently approved incentives that have attracted new direct ﬂ ights and cruise ship stops, with improvements in ground transportation as well.

The Puerto Rico “product” is also being improved aggressively: accelerated development of the San Juan Waterfront and the Ciudad Mayor District (see proﬁ les), creation of an eco-tourism offering around the island, cleaner beaches and streets, better signage, continued marketing of the island’s regions—Porta del Sol (West) and Porta Caribe (South)—and the development of additional niche attractions and markets like: culture, sports, culinary, ﬁ shing, and more.

In the areas of quality and service, PRTC is embarking on a comprehensive and ambitious multiyear effort stressing knowledge of Puerto Rico, expanding English proﬁ ciency and improving customer service—including an outreach program called “Super Host.”

A new campaign to encourage the development of local businesses in the area of tourism is being headed by PRTC in a joint effort with various economic development agencies called upon to promote new businesses under the entrepreneurial initiative of the Supporting Our Own Policy (see proﬁ les of PRIDCO, CCE and EDB).

Yes, indeed. So long, Cancún. Hello, Puerto Rico!

For more information call 787-721-2400

or visit www.GoToPuertoRico.com

If anything marks a difference

in today’s Tourism Company,

it is this propensity to think big

and move aggressively.

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From Local to Global

The Puerto Rico Trade Company (CCE by its Spanish acronym) is the government’s lead agency entrusted with the task of carrying out the third strategy of Puerto Rico’s new economic development vision: to promote local entrepreneurship—“Apoyando al de Aquí” (Supporting Local Businesses)—with new ﬁ nancing alternatives and access to internal and external markets.

This initiative combines the efforts of different public agencies to offer the tools Puerto Rican businesses—especially small and medium-sized businesses (PYMES by their Spanish acronym)— need in order to accelerate their growth and ﬁ nancial contribu-tion. There are four key focal areas:

• Entrepreneurial training • Financing

• Access to domestic and foreign markets • Speediness in evaluating and granting permits

To implement the ﬁ rst two objectives, the CCE and the Puerto Rico Economic Development Bank (BDE by its Spanish acronym) have come together to launch the “La Llave para tu Negocio” (The Key to Your Business) program, to provide training and ﬁ nancing to new and existing businesses in Puerto Rico.

As part of La Llave para tu Negocio, the BDE grants loans of up to $50,000 with preferential terms and conditions. Loans in excess of $50,000 will be considered in combination with other products offered by the BDE.

Also, entrepreneurs will receive training in important business administration areas that are so necessary for the business’ success and continuity.

To promote the growth of new businesses, CCE offers salary incentives through its Urban Center Direct Employment (EDCU by its Spanish acronym) program. This program offers a salary subsidy of up to $2.75 an hour per each new employee. This may represent up to $132,000 per year for job creation within the urban center (up to a maximum of 25 employees). If the business is located outside the urban center (and has a maximum of 15 employees) it will receive a subsidy of up to $80,000.

In order to facilitate access to international markets, the CCE offers a wide range of services under an initiative called Puerto

Puerto Rico Trade

Company

Juan M. Román Castro

Executive Sub-Director

The Puerto Rico Trade Company (CCE by its Spanish acronym) is a public corporation under the Commonwealth of Puerto Rico’s Department of Economic Development & Commerce. Our mission is to act as the main access to an agile information and services network that fosters the success of small and medium-sized Puerto Rican companies at local and international levels.

La Llave para tu Negocio (The Key to Your Business) - Makes it possible to create and expand Puerto Rican businesses through entrepreneurial training and ﬁ nancing.

CETPYMES - 20 days: average time to award Conventional Use Permit.

Ideal Certiﬁ cation - Electronic processing of 12 government certiﬁ cations in only one place.

PR Exports*

New businesses with export potential: 162 Commercial events: 14 Participating businesses: 127 Projected sales: $41,820,320

Foreign Trade Zone #61*

Merchandise received: $171,119,439 Exports from the

Foreign Trade Zone: $52,449,581 Departures toward U.S.A.: $29,008,612 Departures toward

Puerto Rico: $107,979,466

* 2006 data

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Rico Exports. Its goal is to provide local businesses with the basic tools required to be successful in international markets. This program offers local entrepreneurs a diagnosis of their company’s export potential, technical assistance in the export process and participation in international fairs and missions.

Another CCE focal point is to make it easier to start businesses in Puerto Rico by eradicating governmental bureaucracy and using technology as a vehicle to access different services. The Express Processing Center for Small and Medium-Sized Businesses (CETPYMES by its Spanish acronym) was created to speed up the process to acquire the Conventional Use Permit for small and medium-sized businesses and reduce the time needed to obtain permits. Currently, it has been possible to reduce this time from nine months to an average of just 20 days, in addition to reducing operational processes by 75%. CETPYMES has eight ofﬁ ces throughout Puerto Rico, located in San Juan, Carolina, Ceiba, Ponce, Bayamón, Arecibo, Caguas, and Mayagüez.

The Ideal Certifi cation is another important initiative. This certifi cation will initially include up to twelve certifi cations/ endorsements issued by the following agencies: State Department, Treasury Department, Department of Labor & Human Resources, Minors Support Administration, Municipal Revenue Collection Center, State Insurance Fund Corporation and the Puerto Rico Police Department. The petitioner will receive certifi cation by email and it will be valid in any government agency for one year after its issue date.

For businesses that need a distribution center to assemble, import and/or export their products, the CCE has strategically located facilities in San Juan, Ponce and Mayagüez.

As an added value to these facilities, the CCE manages the Foreign Trade Zone #61 (ZLC#61). Multiple Use Foreign Trade Zones are spe-cially designated areas with restricted access, regarded as being outside the jurisdiction of the United States Customs Service and located within or next to a port of entry. These beneﬁ ts are provided within the International Mercantile Center grounds in Guaynabo and the buildings at the Mayagüez Distribution Center. Storage space offered at the ZLC#61 feature all components needed to facilitate transportation, distribution, logistics, warehousing, re-export and

other value-added activities. Some of the beneﬁ ts of establishing a business in a Foreign Trade Zone (or creating a sub-zone within your operation facilities) include:

• Exemption from paying customs duties and taxes on foreign merchandise admitted into the Zone

• No time limit for storing the merchandise and no need to divulge its ﬁ nal destination

• Eliminate or postpone payment of customs duties and taxes on the merchandise, depending on its ﬁ nal destination

• Freedom to select the lowest applicable customs duty rate, be it the one that applies to components or the one that applies to the product

• No customs duty payment on the value added

• No restrictions on quotas established by the United States • Excellent security services, loading and unloading area, ample

roads and green areas, designation of a federal crime upon theft of the merchandise kept in the Zone

To promote Puerto Rico as an international center for business, the Puerto Rico Trade Company holds the license of the Puerto Rico World Trade Center (PRWTC). This tool gives local entrepreneurs ac-cess to the best and most updated ideas on international commerce issues. In addition, it offers access to new international market channels and extends the Puerto Rico World Trade Center Associa-tion’s beneﬁ ts to its members. The PRWTC offers a wide range of services including:

• Entrepreneurial training • Meeting rooms

• Local and international commercial fairs and missions

• Counseling and services on matters associated to international commerce

• International commerce library

For more information call 787-294-0101

or visit www.comercioyexportacion.com

CCE is the leading agency in

ful

fi

lling the third strategy of

Puerto Rico’s new vision

for economic development:

boost local companies.

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Development In The Fast Lane

During the next 10 years, the Department of Transportation & Public Works (DTOP by its Spanish acronym) and the Highway Authority (ACT by its Spanish acronym) plan to complete what will no doubt be one of the most effective road and mass-transit systems in the entire world.

The vision is clear and full of hope for the future of Puerto Rico. It begins with the culmination of decades of dreams to complete the island’s strategic road network. What once seemed far into the future, and at times out of reach, today is right around the corner: the extension of PR-22 from Hatillo to Aguadilla, the highway conversion (without traffic signals) of PR-2 from Ponce to Mayagüez, the completion of PR-10 from Ponce to Arecibo, the extension of PR-66 from Canóvanas to Río Grande and the extension of PR-53 through the new bridges and underground tunnels of Maunabo, all of it completed within the next 10 years.

In the context of the new economic development vision for Puerto Rico, the timing could not be better. The PR-53 tunnels to the south and PR-66 to the north will make the Gateway to the Future (“Portal del Futuro”) in Ceiba more accessible. The PR-2 expressway conversion is on a fast track to be completed on time for the Mayagüez 2010 Games. The PR-22 Aguadilla extension will be instrumental in meeting the goal of ranking the Aguadilla Regional Airport as the first in cargo and the second in passengers. PR-10 will be ready when the Port of the Americas in Ponce breaks stride.

The entire network, once in place, will propel the island’s strategic vision: ecotourism, sports tourism, the companies and plants that will make up the products developed in the Knowledge Corridor and the boom among local businesses throughout the island, engaged domestically as well as in foreign trade.

Departament of Transportation

& Public Works (DTOP)

Carlos J. González Miranda, Ph.D.

Secretary

Plan, design, build and maintain the state road network around the island. Administer and regulate the infrastructure with innovative transportation systems that facilitate the movement of people and cargo, as well as the delivery of services. In doing so, stimulate economic development and a better quality of life for all citizens and visitors.

A capital improvement plan worth more than $5 billion, including construction and improvement of roads and highways, as well as the completion of the mass transit system in the San Juan metro area.

Two underground tunnels in Maunabo (PR 53): Santa Elena and Mariani, part of a route that also includes construction of 11 connecting bridges.

Achieved record maintenance improvements, including more than 13,500 tons of asphalt to cover 130,000 potholes and more durable materials to extend the life of those improvements. More than $242 million have been invested thus far and $242 million are in the works to repair an additional 140 kilometers.

The extension of PR-22 from Hatillo to Aguadilla, the extension of PR-66 to Río Grande, the concessions at Urban Train stations and other DTOP projects are open to development by public-private partnerships between DTOP and private companies.

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When we drive to San Juan and transport ourselves to the fully consummated Ciudad Mayor, the new Metropolis of the Caribbean as it should stand in 10-15 years, we find an intermodal mass-transit system that is integrated and world-class. It has an abundance of light-rail trains, streetcars, buses, express buses, public cars, taxis, shuttles and ferries, all interconnected among each of them as well as with the Urban Train. They will reach more places, with more stops and stations, keeping highly efficient schedules with greater availability, mobility, frequency in routes and greater security, offering an appealing passenger experience.

For the vanguard development of the Metropolis—San Juan Waterfront, Convention District, Cultural Network, Metropolitan Environmental Network, Knowledge Corridor, Ciudad Red, the densification and repopulation of Santurce, urban renewal of various towns and neighborhoods, and more—this mass- transit system is as indispensable as it is attainable, since it, too, is right on time for most of these initiatives and ready to spark the completion of the DTOP’s 10-year vision.

It is a mass-transit system that will go a long way towards creating a metropolis without traffic jams, or at least with congestion far less onerous than today’s. The purpose behind DTOP’s thinking—in fact, the island’s public policy—is to discourage and reduce the use of automobiles by providing reliable mass transit that people will want to use.

However, for those who must use their automobiles as a mode of transport, the DTOP’s plan—indeed, the agency’s No.1 priority at the moment—calls for the execution of a long list of road improvements with the goal of substantially easing congestion and placing all roads in optimum conditions.

In the last two years, the DTOP has invested the largest sum ever for a similar period in Puerto Rico’s history on the repaving,

rehabilitation and maintenance of the island’s roads. And to ensure that improvements have a long life—double the norm —the DTOP is using new materials that are more durable than previous ones.

To further relieve traffic congestion, the DTOP has accelerated the construction of bridges, overpasses and bypasses and the widening of roads. The Department is providing incentives and aggressively promoting the AutoExpreso program, which collects toll payments electronically (without the car having to stop) instead of “cash” at the toll booth. A third of all vehicle- traffic in Puerto Rico have already subscribed in the program, with the number growing by 15,000 drivers every month.

From a strategic perspective, the objective of these initiatives is to provide Puerto Rico’s transportation system with the highest possible traffic-handling capacity for the movement of people and cargo, which will automatically facilitate the development and quality of life called for by the vision. This does not necessarily mean more cars. It means ease and sustainability of transport of people and cargo, whether in cars, trains, buses, ferries or other means of transportation.

For more information you may call Servilínea at 787-977-2200

or visit www.dtop.gov.pr

When we transport ourselves

to the Metropolis of the

Caribbean as it should stand in

10-15 years, we

fi

nd an

intermodal mass-transit system

that is world-class.

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Facilitator Par Excellence

The Convention Center, the San Juan Waterfront, Mayagüez 2010, ecotourism around the entire island, the Knowledge Corridor, an upsurge in local business activity, a boom in exports and trade by local companies—all economic development activities that will produce one result: a signifi cant increase in the fl ow of passenger and cargo traffi c to and from Puerto Rico. The government agency with the mission of facilitating and accommodating this boom and thus providing for the growth of the economy is the Puerto Rico Ports Authority (PRPA), by way of the island’s 11 airports and 10 seaports.

The economic growth that is expected for Puerto Rico in the coming years, with the full implementation of the island’s new economic development vision, is substantial. In order to achieve it, the Authority’s capital improvement plan from 2007 to 2011 includes 79 projects in its agenda. Forty-eight of them deal with improvements and new infrastructure for the air travel network with a $444.5 million investment and 24 maritime projects will have a $439.1 million investment.

Since its creation in 1942, PRPA has been engaged in a constant growth and investment plan, thanks to the steady growth in passengers and cargo that stems from the island’s economic growth during the last six decades. PRPA is positioned as a central player in the development of the strategic initiatives that will propel the local economy into a new period of sustained and rapid economic growth.

One of PRPA’s core strategies is the diversifi cation and decentralization of the island’s airports and seaports. The bulk of passenger and cargo traffi c in and out of Puerto Rico has always gone through the Port of San Juan and the Luis Muñoz Marín International Airport in Isla Verde. To accommodate substantially greater traffi c, while improving the basic service offered to tourists, residents and companies, PRPA is in the midst of an aggressive expansion program for the Rafael Hernández Airport in Aguadilla, a huge investment to create the new Port of the Americas in Ponce and the redevelopment of the airport and seaport at the former Roosevelt Roads Naval Base in Ceiba.

Puerto Rico Ports

Authority (PRPA)

Fernando J. Bonilla

Executive Director

To be the leaders in air and maritime transpor-tation beyond the Caribbean region by devel-oping world-class facilities.

In 2006, the Luis Muñoz Marín International Airport in Isla Verde handled 10.6 million pas-sengers and 10 million short tons of cargo.

Last year, the Port of San Juan handled 10 million short tons of cargo and 1.3 million cruise passengers.

PRPA administers the regional airports

of Ponce, Patillas, Mayagüez, Aguadilla, Are-cibo, Isla Grande, Fajardo, Humacao, Ceiba, Culebra and Vieques. Puerto Rico’s regional maritime ports include those in Guayanilla, Pe-ñuelas, Guánica, Guayama, Yabucoa, Ceiba and Arecibo.

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Air cargo will be decentralized with the development of facilities in the Aguadilla and Ceiba airports, making both the principal venues for this service. This transformation will save signiﬁ cant time and money to companies outside San Juan, since they will receive merchandise closer to their operations. The move also helps local authorities pursuade companies to establish operations in these sectors.

Both airports’ development plans stretch approximately 15 years and include efforts to improve passenger-handling facilities and services. The Aguadilla Airport in particular, which already receives an average of 380,000 people per year, is being primed for the Mayagüez 2010 Central American and Caribbean Games to be held in sports venues throughout Western and Southern Puerto Rico. Jet Blue, Continental and Spirit are some of the airlines that have recently initiated direct fl ights from Aguadilla to several U.S. mainland destinations. PRPA is improving Aguadilla’s passenger terminal area, the runway (longest of any local airport), air traffi c control tower, new gates and concessions for stores, restaurants and other amenities. Once improvements are completed, the Aguadilla regional airport will be the biggest on the island in cargo traffi c, with 1.3 million square feet of space for that business and second in passengers. The terminal area will have 180,000 square feet of space.

The success story of Ponce’s Mercedita Airport is one of PRPA’s proud achievements. A total of 215,578 passengers went through Mercedita in fi scal year 2007, which constitutes an unprecedented amount since commercial fl ights began servicing the airport in June 2005. The PRPA has given the green light to a $12.5-million investment to expand the passenger waiting area, provide air conditioning throughout the terminal, remodel the fl oors, and have new front and back building facades. Security systems are being strengthened in Puerto Rico’s airports and seaports, including the latest surveillance technology, a new command center, radioactivity monitors, radar for vessel detection, and more.

As new routes out of San Juan are being opened, a considerable investment is made to expand Luis Muñoz Marín International Airport, the Caribbean’s leading airport. The 2007-2011 improvement plan

for this airport amounts to $390 million and includes the construction of the new and impressive Terminal A, refurbishing Runway 10-28, improvements to Terminal D with 20,000 square feet destined for additional businesses, a new general aviation area and parking area expansion.

The Port of San Juan includes the Puerto Nuevo and Isla Grande cargo ports and the Puerta de Tierra and Old San Juan cruise piers. The PRPA heads the San Juan Waterfront project, which will allow Puerto Rico to continue standing out as one of the world’s best tourist destinations and includes a modern urban redevelopment

featuring hotels, marinas, residential units, parks and businesses. The cruise ship industry has found San Juan an ideal location in the Caribbean with more than 1.3 million passengers visiting these facilities each year.

The Port of San Juan also has an important role as location where over 90% of Puerto Rico’s cargo arrives to the island. Every day thousands of containers enter and depart the island through the cargo seaports located in the Puerto Nuevo and Puerta de Tierra area. Here more than 9.8 million short tons of cargo are handled, which places us among the 20 busiest seaports in the United Stated. Other seaports that help support our island’s economy are those located in Yabucoa, Guayama, and Guayanilla.

Today we can afﬁ rm that the Ports Authority has become the bridge between Puerto Rico and the world.

For more information you may call 787-723-2260

or visit www.prpa.gobierno.pr

One of the core strategies

of PRPA’s development plan is

the diversi

fi

cation and

decentralization of the island’s

airports and seaports.

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Illuminating Economic Growth

No power, no growth. This basic principle of the modern economy provides the backdrop for the central role the Puerto Rico Electric Power Authority (PREPA) plays in carrying out the island’s new economic development vision. The first core strategy of the vision is the development of a top-notch physical and urban infrastructure.

For PREPA, development of energy infrastructure for the next few decades is all about completing the total diversification of energy sources in the next few years. Diversification is the starting point toward achieving PREPA’s two other primary objectives: lowering the cost of energy for end users (consumers, businesses, etc.) and improving the environmental impact of energy consumption and generation on the island.

As recently as the 1990s, 98% of the electricity consumed in Puerto Rico came from oil, subjecting local consumers to price fluctuations in the global oil market and producing greater environmental impact from toxic emissions and occasional coastal oil spills. Today, that figure is down to 73.1% and is expected to drop swiftly in the coming years, to 49% in 2010 and 32% in 2015.

Natural gas and coal are the two sources that will energize Puerto Rico’s growth going forward. Today, natural gas provides 12.8% of the island’s total energy, while coal represents 13.6% of the total. Both sources are notably less expensive than oil and better for the environment. Clean coal uses a technology far more eco-friendly than it has been in the past.

By 2010, natural gas will be 37% of Puerto Rico’s total energy and coal will stand at 13%. By 2015, the match will be dead even: 33% natural gas, 33% coal and only 32% oil. Hydroelectric energy and other renewable sources, which today stand at 0.5%, will grow to 2% by 2015.

Puerto Rico Electric Power

Authority (PREPA)

Jorge A. Rodríguez Ruiz

Executive Director

Provide the people of Puerto Rico with an efﬁ cient and reliable electric power service at the lowest possible cost, while contributing to the island’s quality of life and economic de-velopment, all in harmony with the environment. To always be a world-class, agile and competi-tive company, with employees committed to a high level of service and excellence.

PREPA ranks No. 1 among power utilities in the United States in the number of customers served and in income earned. It is No. 5 in kilowatt (kw) sales and No. 6 in power generation, according to a study of 1,284 utilities in the U.S. conducted by the American Public Power Association.

An 11% discount is available to manufactur-ing companies that consume at least 250 kw of electricity and meet other criteria.

Generation: 5,365 megawatts (mw) of elec-tricity. Peak demand: 3,685 mw. Transmission lines: 2,380 miles. Distribution lines: 30,480 miles. 38 kV substations: 278. 115 kV substa-tions: 45.

The $2.4 billion issue of triple-tax-exempt municipal bonds in April 2007 was the largest in the agency’s history.

In every “light” bill in Puerto Rico, 54% of the amount corresponds to the price of fuel, while 20% corresponds to the purchase of energy.

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For the next five years, diversification will focus on natural gas. EcoEléctrica, the only natural-gas power plant in Puerto Rico, will begin pumping gas to three other plants around the island as early as next year. A web of gas pipelines (“gasoductos”), already under construction, will transport the fuel from EcoEléctrica’s facility in Peñuelas to the Aguirre plant in Guayama, a turbine facility in Mayagüez, the Cambalache plant in Arecibo and finally the San Juan plant. Contracts have been signed with Grupo Gas Natural (operation) and Skanska (construction).

This is the first step in efforts to convert the Mayagüez, Cambalache and San Juan plants completely to natural gas by the end of 2010, and to increase their generating capacity—100 mw more in Cambalache, 120 mw in Mayagüez and 464 mw in San Juan.

Still, more generation will come from two brand-new power plants: a 400 mw natural-gas plant in Mayagüez, to be up and running in 2013, and a 500 mw coal plant, which will be in full operation in 2017.

PREPA is also working on several renewable energy sources. First in line will likely be two windmill parks, one in Guayanilla (45 mw) and another in Arecibo (50 mw), to be in full operation in 2010. PREPA is also looking into two waste-to-energy proposals, as well as proposals for ocean-thermal energy and the use of biodiesel in existing power plants. PREPA officials are following the torrent of research around the world on new and existing technologies (particularly solar and wind) to make renewable energy more viable for future deployment in Puerto Rico.

The planned increase in generating capacity is being complemented with a $1 billion investment (2008-2012) to improve the island’s transmission and distribution system —new and improved substations, underground lines in San Juan metro (30 miles in six construction phases) and more, all

designed to cut operating expenses and secure a more reliable system. Those objectives are also being pursued by way of an internal re-engineering and efficiency initiative, as well as new technology to improve the operation and its environmental footprint.

To contribute still more to the environment, PREPA is in the midst of a public awareness campaign to promote energy conservation. Better use of energy by businesses and consumers lowers the risk of global warming and saves money. Yet another initiative, “Siempre Limpia” (Always Clean), communicates the various ways in which PREPA improves its own treatment of water, land and air.

The new vision for the island includes a commitment to improve service to citizens and businesses, using as a model the best customer-service practices found in the private sector. PREPA has launched various initiatives: “A Plena Luz” (In Broad Daylight) is improving lighting where more is needed; some PREPA offices are being moved to larger and better locations to improve service; the agency’s website is becoming more user-friendly and internally employees are profiting from an intense training program to improve motivation and customer service.

For more information you may call 787-289-4696

or visit www.aeepr.com

By 2015, the supply of energy

in Puerto Rico will be evenly

matched among the three

principal sources: 33% natural

gas, 33% coal and only

32% oil.

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Safe Water

Communities around the island enjoy a potable water system that is reliable, self-sufficient, has financial soundness, access to capital for new water plants and reservoirs, reductions in the number of leaks and for water unaccounted. Lifting of EPA restrictions and elimination of fines.

News coming out of the Puerto Rico Aqueduct & Sewer Authority (PRASA) has become…positive! The times of crisis and difficulty are a thing of the past. Today the water flows, with quality, reliability, service and stability.

It is a swift and dramatic turnaround that opens the floodgates to the surge in growth that will result from the implementation of Puerto Rico’s new economic vision and its multiple hubs and poles of development, construction and jobs, since a reliable water infrastructure is indispensable for sustained short and long-term growth.

The surge begins with PRASA’s ambitious capital improvement plan—$2 billion over the next five years to finance what at first glance appears to be an endless list of strategic projects and maintenance initiatives all across Puerto Rico. After undergoing years of capital-improvement drought, PRASA is ready to manage a torrent of investments that promises to bring the island’s water utility system up-to-date, while significantly improving customer service and reducing the agency’s environmental impact.

Improvements to the infrastructure are organized around four basic initiatives. First, the plan contemplates construction of four new reservoirs in the Metro and East regions, the area that is seeing the most economic development on the island, with an increase in the system’s supply of water of roughly 60 million gallons daily (mgd).

Puerto Rico Aqueduct

& Sewer Authority (PRASA)

José F. Ortiz Vázquez

Executive President

Provide the people of Puerto Rico with an aqueduct and sewer system that supplies the water needed to achieve a high standard of living, public health and a strong economy, today and for generations to come.

Five-year, $3.2 billion capital improvement plan relying on public-private partnership to an unprecedented degree.

Recovery of the conﬁ dence of bondholders and ﬁ nancial markets, allowing for a historic $1.2 billion bond issue.

Extraordinary reduction in regulatory violations: from 89 in May 2006, to 9 in April 2007, leading to the elimination of multiple restrictions imposed by the U.S. Environmental Protection Agency (EPA).

Assist 250 communities featuring commu-nal systems not connected to PRASA with an education program in alliance with Metropoli-tan University.

Installation of 1,540 telemetry facilities

over the next three years to improve meter readings.

Monthly production of 84 cubic yards of compost, which supplies a compost recycling plant in Mayagüez to produce fertilizer for agriculture, soil treatment, prevention of soil erosion, gardening and more.

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CARIBBEAN BUSINES 19

The first reservoir, in Fajardo, is already in operation. Next in line, due in 2008, is the Río Blanco reservoir in Naguabo, with an investment of $128 million, followed by Valenciano in Juncos in 2011, with an investment of $100 million. The fourth reservoir, Beatriz, will be built in Caguas at an investment of $63 million and is presently in the planning stage.

The master plan’s second major initiative is the consolidation and simplification of the system’s filtration and treatment plants, along with the accompanying pump stations. For each new modern and high-capacity plant built—and for each modernization done on existing plants—the agency will close and/or consolidate several plants, for a net reduction in the number of plants around the island. That, in turn, will produce big savings in the cost of the system and will improve PRASA’s environmental footprint.

In the next five years, under the theme “More Capacity with Fewer Plants,” PRASA will only open one treatment plant, to be located in Utuado. By contrast, the agency will close 11 treatment plants in the same period. The sanitary plants that remain open will undergo a major efficiency conversion to create greater treatment capacity. In Caguas, for example, four treatment plants will close between now and 2009, and the survivors will see their treatment capacity doubled from 12 to 24 mgd.

Consolidation of fi ltration plants will not be nearly as dramatic—12 new plants to open, 14 existing plants to close—but the hike in fi ltration capacity will be every bit as substantial thanks to the same focus on improvements in technology and high capacity. The new fi ltration plant in Culebrinas, Aguadilla, for example, will start with a 5 mgd capacity, which is higher than any other plant in the region and will double to 10 mgd in its second phase.

The plan’s third focus involves the myriad improvements to the system’s underground web of transmission and distribution

water lines, for both potable and used water—a total of 71 projects around the island, including the replacement of 643 kilometers of water lines.

In some cases, new pipelines that allow for the transport of water across greater distances will lead to additional plant closings and greater efficiencies. A new sanitary line to be built from Cabo Rojo to Mayagüez, for example—along with an upgrade in the capacity of the regional treatment plant in Mayagüez—will provoke the shutdown of three treatment plants that will no longer be needed.

Finally, PRASA’s improvement plan contemplates a sizeable investment in the system to achieve several objectives: reduce water and pipe leaks to the bare minimum, reduce losses due to unaccounted water, cut water pressure in places where high pressure may lead to pipe cracks and water waste, replace meters, implement widespread use of remote meter readings, and more.

The “Eliminate Deficient Communities” initiative is one of the guiding principles behind PRASA’s massive public works, referring to the communities that suffer from deficient water service. Of 70,000 clients (households and businesses in 166 such communities) in November 2005, only 18,000 remained without reliable water service by August 2007. The goal is to cut that to zero by the end of 2008.

For more information you may call 787-620-2482 or 1-877-411-2482

or visit www.acueductospr.com

It is a dramatic turnaround that

opens the

fl

oodgates to the surge in

economic growth that will

result from Puerto Rico’s new

economic vision.

PLA_18-19 19