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Prasa To Invest $2.4 Billion In Capital Improvements
By JOHN MCPHAUL
February 10, 2005
The Puerto Rico Aqueduct & Sewer Authority (Prasa by its Spanish acronym) announced it will invest $2.4 billion in capital improvements at a time when the government utility already is stretched beyond its means.
The situation raises the question of how Prasa plans to fund the improvements, which include building eight new reservoirs and 30 new water filtration plants authority officials vow will add 140 million gallons of water to the utilitys current 750 million gallon-a-day capacity.
According to the report prepared for the transition between the Calderón and the Acevedo Vilá administrations, Prasa has problems covering its present bills, never mind paying for new infrastructure projects.
The report reveals the authority will have an operational deficit in fiscal 2005 (July 1 to June 30) of $200 million, the difference between only $398.8 million in revenue and total operational costs of $592.8 million. A total of 83% of revenue, equivalent to 55% of its operational costs, go to cover payroll for the authoritys 5,577 employees. Though raising water rates to bridge the gap is thought to be politically unpalatable, the deficit is subsidized with money from the governments general fund, derived from taxes.
Prasa officials said they plan to cover the cost of the program with credit lines from the Government Development Bank of Puerto Rico, appropriations from the Office of Management & Budget, legislative appropriations, and federal funds.
This Caribbean Business article appears courtesy of Casiano Communications.