PPP transaction for cruise terminals concession
We advised the Puerto Rico Port Authority (PRPA) on designing and tendering a concession for the upgrade and operation of all cruise facilities at the Port of San Juan. By expanding berthing capacity and enhancing commercial performance, our efforts will strengthen San Juan’s position as a major home port in the Caribbean cruise market. The renovated piers will also create thousands of new direct and indirect jobs, while providing much-needed capacity for hospital ships and the unloading of relief supplies during future disasters.
The challenge
The Puerto Rico Port Authority (PRPA) required substantial capital improvements to upgrade and expand the cruise piers and redevelop currently unused wharves into world-class cruise terminals. Additionally, the port infrastructure sustained damage from Hurricane Maria in 2017, further increasing the immediate investment requirements. The Authority consolidated all facilities into a single concession to enhance integration, achieve economies of scale, and optimize the cruise terminals master plan.
The approach
As technical and commercial advisers, our initial role involved reviewing an unsolicited proposal received by the Authority. In accordance with P3 legislation, the Authority then organized the procurement process through an international competitive tender. We helped translate the PRPA’s vision into minimum operational and investment requirements for the prospective concessionaire.
To address the long-term volatility of the cruise market, we developed a multi-phased investment program to guide shortlisted bidders, minimizing operational downtime during construction while maximizing the potential integration of federal funding sources available to the PRPA to support the port’s reconstruction, which is a key driver of the island’s economy.
The transaction achieved commercial close in 2022 and financial close in 2024, with an investment exceeding US$400 million.
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Impact
Strengthened San Juan's position as a major home port in the Caribbean cruise market.
