The losing bidder on a deal to repair Puerto Rico’s storm-damaged power grid is disputing the contract award while residents grappled yesterday with a power outage that officials blamed on one of the winning firms, WSJ Pro Bankruptcy reported. Some customers may not regain power for 24 to 36 hours following a morning blackout caused by a power line failure, according to the public power monopoly known as PREPA. The incident marks the first island-wide outage since Hurricane Maria struck in September and the latest headache for the U.S. territory as it struggles to restore basic services. PREPA engineer Justo González called the outage “unacceptable” in a press conference Wednesday and blamed it on an excavator mishap involving D. Grimm Inc., a company hired by PREPA contractor Cobra Acquisitions LLC. PREPA hired Cobra in the weeks after Maria struck and has since nearly quadrupled the size of their deal to $945 million. Read more.
In related news, Puerto Rico’s federally-appointed oversight board yesterday unveiled a framework for the bankrupt island’s fiscal turnaround that breaks with Governor Ricardo Rosselló’s vision, pushing pension cuts and labor reforms while hinting at layoffs, Reuters reported. The plan, expected to be approved by the board at a public hearing beginning Thursday in San Juan, forecasts $6.7 billion in debt payment ability through 2023. Tasked with helping the U.S. territory regain access to debt markets, the board has been negotiating with Rosselló for months on a fiscal blueprint for Puerto Rico’s recovery from the dual scourges of fiscal insolvency and natural disaster. But the board can impose a plan unilaterally if it cannot reach terms with the governor, and was expected to do so after Rosselló earlier this month opposed the board’s calls for labor and pension reforms. Read more.
