July 19 Puerto Rico's government selected Aerostar Airport Holdings LLC in a deal worth $2.57 billion to run its Luis Munoz Marin International Airport, the largest in the Caribbean, Gov. Luis Fortuno said on Thursday.
The deal calls for Aerostar, which is made up of Aeroportuario del Sureste, an operator of nine airports in Mexico, and Highstar Capital, which has made investments in Baltimore and London, to run the airport for 40 years.
"This offer beat everyone's expectations," Fortuno said.
The figure includes a $615 million up front payment to the U.S. commonwealth's Ports Authority, as well as annual payments to the public corporation over the life of the contract that add up to $550 million, said David Alvarez, executive director of the Public Private Partnership Authority.
The balance of the deal, which government officials say will help boost tourism, involves investments in modernizing and improving the airport and an incentives fund to attract new routes and new passengers.
"AAH is now a partner of the Ports Authority that will help us bring the growth we deserve," Fortuno said, adding that he expects the new operators to increase passenger traffic by 200,000 annually from the current level of around 9 million.
The deal is subject to U.S. Federal Aviation Administration approval, which officials said should be granted in the fourth quarter of this year, with the new operators taking over before year-end.
AAH rose from an original field of 12 bidders, and its final offer edged out the bid from co-finalist Grupo Aerpuertos Avance, comprised of Ferrovial Aeropuertos and Macquarie Infrastructure & Real Assets, the world's biggest infrastructure investment fund.
Last year, Puerto Rico undertook a 40-year concession of the PR22 and PR5 roadways to Metropistas, a consortium comprised of Spain's Abertis Infraestructuras and the Goldman Sachs Investment Fund.
That gave the government a $1.136 billion upfront fee and a commitment to invest $56.1 million in immediate improvements, plus an additional $600 million over the contract's life.