SWOT ANALYSIS

OPPORTUNITIES

In April 2020, US Department of Transportation expanded air transfer rights for cargo and passengers to the international airport Ponce (as well as San Juan and Aguadilla). With its decision, Puerto Rico becomes the first U.S. territory in the Caribbean to become a hub for foreign air carriers. However, this waiver expires in 2022, unless progress can be demonstrated to developing Puerto Rico (Ponce) as an air transfer hub.

Opportunity to develop new domestic routes for the Mercedita Airport in the Municipality of Ponce under the Federal Department of Transportation’s Essential Air Services Program. The Federal DOT’s Essential Air Services Program offers a subsidy to an airline to provide service from an eligible community to a medium or large hub, as classified by the FAA. A qualifying small hub might also meet the criteria. In the past, American Eagle and Cape Air operations were subsidized under this program.

Calls have been made to “re-shore” the production of certain pharmaceuticals. The SPREDD region could benefit should this policy initiative advance.

Some stakeholders believe there have been great strides in the areas of entrepreneurial development in recent years.   Although not specific to the region, there have been numerous initiatives and programs aimed at entrepreneurial assistance in Puerto Rico. One of the most notable is the Rising Entrepreneurs Program, which is sponsored by the Bravo Family Foundation.

The program is strategically designed to provide small tech cohorts with a deep immersion experience that develops their skills and shows them how to start and run an efficient business and strategies to grow and scale sales. Bravo connects the participants with a global network of investors, companies, and senior executives in the business, technology, and software industries. The foundation is able to make these connections, as Orlando Bravo, is from Puerto Rico and is the Managing Partner of Thoma Bravo, a leading private equity firm focused on the software and technology-enabled services sectors, with over $76 billion in assets under management.

Stakeholders believe there is significant potential to develop the coastal area of the region for additional recreational activities such as nautical tourism. One of the recommendations from stakeholders was to implement anchoring moorings along the coast could result in additional opportunities to further develop the Ocean Economy.

Alternative strategies/development for the Port of the Americas/Ponce. The expanded and substantial development of the Port of the Americas/Ponce was originally conceived in the late 1990s as a cargo transfer hub for Post Panamax ships able to traverse the expanded Panama Canal. (Expansion of the Panama Canal to accommodate Post-Panamax ships was completed in 2016.) For a variety of factors, this vision for the Port of the Americas did not materialize, and Kingston, Jamacia has emerged as a preferred transfer hub for this traffic. Even though the original strategy did not materialize, alternative development strategies have emerged.

 Among the alternative development strategies (opportunities) for the Port of the Americas are:

 

  1. Develop the port into a training center for yacht personnel
  2. Establish a yacht servicing center
  3. Establishing a Jones Act compliant shipbuilding facility
  4. Further develop the port(s) to be able to receive agricultural supplies and equipment to support the industry in the region. At present, farm machinery and equipment are received only in San Juan.

There is an increasing awareness of the value of agriculture to Puerto Rico. Part of this enhanced awareness was brought about by the natural disasters and the ensuing lack of food in the immediate aftermath. However, Puerto Rico imports approximately 85% of the food it consumes, as the island is not capable of producing enough food to feed all of the inhabitants.

Calls have been made to completely redesign Puerto Rico’s energy generation and distribution system. Stakeholders have recommended a form of direct transmission from the generating assets located in the region, which supply power for all of Puerto Rico. By means of direct transmission, stakeholders believe electricity prices can be lower and make the region more competitive.

With respect to a redesign of the energy generating and distribution system, under the Puerto Rico Energy Public Policy Act, which was signed into law in 2019, PREPA has to obtain 40% of its electricity from renewable resources by 2025, 60% by 2040, and 100% by 2050. The building of renewable energy parks to supply power to industries has also been recommended by stakeholders. It is not clear if power generated by renewables will result in lower prices.

The U.S. Department of Energy is exploring the use of Small Modular (nuclear) Reactors (SMRs) in Puerto Rico, which may address the reliability and expense weaknesses noted. SMRs are used to power military ships and submarines and have been successfully used in remote parts of the world (Siberia) to generate electricity for decades. The U.S. Nuclear Regulatory Commission (NRC) issued its final safety evaluation report on NuScale Power’s SMR design in August 2020. This accomplishment is the first of its kind for a SMR and puts NuScale on track to receive a full design certification from the regulator by August 2021. The SMR is capable of generating 60 megawatts of without any need for additional water, power or even operator action. Upon receiving full certification, utilities will be able to reference the design when applying for a combined license to build and operate the new reactors in the United States.

There are many vacant and abandoned buildings that could possibly be repurposed for commercial use. A clear example of an opportunity of this kind is giving a new use and purpose to the unutilized land that is left where the former Commonwealth Oil Refining Company (CORCO) operated. SPREDD recognizes EPA’s efforts to establish the area as a brownfield and to lead the way in recent years to revitalize the PR-127 Corridor of Guayanilla and Peñuelas as a local and federal integrated effort.