Highstar team wins Puerto Rico airport

Highstar Capital and partner ASUR have been named private operator of Luis Munoz Marin International Airport. The consortium offered $615m upfront as well as $550m annually, plus investing $1.4bn to improve the airport.

Luis Munoz Marin International Airport entered a new phase as a privately held asset yesterday when Puerto Rico put a consortium led by US fund manager Highstar Capital in charge of operating the 57-year-old airfield.

The decision marked the second time the Caribbean island, a US territory, has handed over a publicly- or government-owned asset to a private concern in a public-private partnership (PPP). Puerto Rico, via its Public-Private Partnership Authority (PPPA), auctioned its Puerto Rico Highway 22 in a toll road concession last year.

The deal also marked the latest winning bid for Highstar, a $5.5 billion infrastructure investment company that a day earlier paid $1.9 billion for Veolia ES Solid Waste.

In winning the Luis Munoz Marin International Airport contract, Highstar partnered with Aeroportuario del Sureste (ASUR) as Aerostar Airport Holding. The consortium promised to shell out $615 million upfront to Puerto Rico. Additionally, the consortium will pay $550 million annually over the course of its 40-year lease to run the airport.

Aerostar outbid Grupo Aeropuertos Avance, a consortium teaming Macquarie Group and Ferrovial Aeropuertos. Sydney, Australia-headquartered Macquarie guided Puerto Rico in developing its PPP legislation, culminating in the 2009 formation of the PPPA.

Highstar and ASUR, a major airport operator in Mexico, will equally split ownership of Luis Munoz Marin International Airport, an 8.5 million passenger-a-year operation that has come under criticism for not operating to its fullest potential. Aerostar is planning to put $1.4 billion toward renovating the facility.