The Federal Agency for Emergency Management (FEMA) intends that this year the reconstruction projects that are pending since Hurricane Maria passed through the island in 2017 will be able to be put on track.
José Baquero Tirado, federal coordinator for Disaster Recovery (FDRC, for its acronym in English) reported that there is a list of obstacles to overcome before implementing the money allocated: ensuring that municipalities can receive the money and have the funds to comply with pareos; get the materials for reconstruction; and hire the labor that is scarce in the construction area.
“It is important to know the capacity of the contractors that exist in Puerto Rico and that may be available, as well as the construction materials,” said Baquero in an interview with THE SPOKESMAN. “Even if we were to make a fanciful estimate that we are going to spend $ 15 billion ($ 15 billion) in three years, that is not going to happen because there are no labor, materials and contractors to do all those projects,” he added.
There is also a lack, he added, of coordination to ensure that, for example, the repair of a highway is not affected by the repair of an aqueduct pipe.
“If there is money to fix a road and we make it very beautiful, but suddenly the Aqueduct and Sewer Authority (AAA) says that it has to break it because a pipe has to be fixed, that kind of coordination must be taken into account”, stated the official.
Baquero was appointed to the position in August 2020 and upon arrival it was reported that he will permanently direct the coordination of recovery operations and coordination between federal and state agencies. It is in their hands to ensure that the thousands of pending projects are carried out and that billions of dollars that are in various phases of the restrictions that these funds must go through are distributed: to be earmarked, appropriate and designated to a project.
The FEMA coordinator spoke with this medium with Manuel Laboy, who was appointed by Governor Pedro Pierluisi as the new executive director of the Central Office for Recovery, Reconstruction and Resilience (COR3, for its acronym in English). Laboy insisted that this year they intend to advance the construction of projects, a process that has been in a trickle.
However, it should have recognized that there are at least six “challenges” inherited by the current administration.
The first of these pitfalls is the capacity of municipalities to move auctions and purchasing processes governed by federal rules.
“There are municipalities that may not have that capacity,” Laboy admitted. “We can give you all the money in the world, but we can’t run that auction. You have to follow processes governed by law and for them to be eligible you have to follow the purchasing processes, ”he explained.
Other challenges, he said, are the capacity that municipalities may have to handle the grant, request reimbursement, meet the requirements to administer these funds, pay for the work and then have the financial capacity to wait for the reimbursement from FEMA. It is a situation that worries him, considering that there are many municipalities with serious fiscal problems.
To these challenges are added the capacity of the construction sector to carry out pending projects and the hiring of labor.
“That is the most challenging because the construction sector had come before (the hurricanes) Irma and María, since 2006 it had been in a tailspin,” said Laboy. “We are going to inject billions of dollars into the economy that go to the construction sector and there are not enough people or materials.”
The solution, indicated the head of COR3, “is going to have to come together from the construction sector and the state and federal government,” he warned.
Account to advance money
Laboy spoke about the approval of an allocation of $ 750 million – which will be administered by the Financial Advisory Authority and Fiscal Agency (Aafaf) – and that can be used to advance the payment of the works that will later be reimbursed by FEMA.
“This fund is going to be used to advance money and – complying with the requirements – that money is advanced and the process can be carried out. When they start asking for refunds from FEMA and those eligible refunds comply, the money goes back into the revolving fund and we keep pushing that machine. There are other emergency funds destined to attend to the cash flow. There are several mechanisms to meet the need to have money in advance so that the work can run, ”Laboy said.
In addition to large projects to rebuild the island’s electrical system, sewer system, and schools, FEMA has 2,500 pending projects identified as “small” and for which there is $ 100 million that has not been used. Works such as court repair and some curb repair fall into this category.
“There are projects in the area of recreation and sports and we met with the Department of Recreation and Sports to advance the auction of over 110 facilities throughout Puerto Rico that spend obligatory money and that we can run those auctions,” said Laboy, who was Secretary of the Department of Economic Development and Commerce (DDEC) in the last administration.
“The idea is that these auctions are awarded in March and the contractors start the works in April,” said the official.
Last September, both the local government and FEMA announced the allocation of $ 12.804 million in federal funds to rebuild the electrical system and 1,109 school facilities.