Summary: Pursuant to a legislative requirement, GAO reviewed the Puerto Rico Highway and Transportation Authority's finance plan for its Tren Urbano Rapid Rail Line Project, focusing on the: (1) financing of the Tren Urbano project; and (2) reasonableness of the assumptions contained in the finance plan.
GAO noted that: (1) the Authority has sufficient funding to meet the expected cost of the project without seeking additional New Starts funds or adversely affecting other parts of the transportation system in Puerto Rico; (2) to finance the project, the Authority plans to use a combination of federal New Starts funds (18 percent), other federal transportation funds (25 percent), and local funds (57 percent); (3) the finance plan identifies numerous local funding sources, including the proceeds of taxes and other receivables that have been committed to the Authority by law and do not require further legislative action; (4) in addition, GAO found that the Authority's finance plan contains reasonable cost and financing assumptions; (5) GAO did, however, find that a number of issues could affect the project's schedule and cost; (6) for example, some of the project's contractors have had problems meeting construction milestones because of the lack of skilled labor; and (7) nevertheless, in light of the Authority's significant dedicated revenues and bonding capacity, the Authority should be able to pay for future cost increases if they occur.
