Senate hearing questions HMS ferry contract, costs and maintenance plan for Vieques and Culebra service

A Senate committee on May 27, 2021 reviewed the public‑private contract to operate ferry service to Vieques and Culebra, pressing government officials about costs, maintenance obligations and short‑term vessel rentals HMS Fénix arranged while ATM’s fleet is repaired.

The presiding Senator (unnamed) opened the hearing on Senate Resolution No. 31 and repeatedly asked agency officials for hard numbers and document timelines. The senator told the hearing that an earlier procurement set a guarantee requirement of roughly "$5 million" that, he said, prevented many companies from bidding. He also cited an agency figure of "Trescientos veinte mil dólares mensuales" (about $320,000 per month) for two chartered vessels and said that amount implies roughly $3.8 million a year for those assets.

Secretary (unnamed) and legal advisers described how the HMS contract divides responsibilities. The secretary said HMS is responsible for operations, equipment and ordinary and extraordinary repairs during the contract’s phase two (a 20‑year operational term), and that the contract sets a fuel base of "$3.50 per gallon" with HMS absorbing increases up to 10 percent; larger increases trigger shared adjustments with ATM. "HMS Ferries recibe un pago de veinticinco punto siete millones" in the transition first year, the secretary told the committee, with higher payments planned in later transition years.

Lic. Miguel Betancourt, introduced on the record during the hearing, cited the Code of Federal Regulations on vessel inspections and dry‑dock cycles. "Estos dos años cubren embarcaciones que están construidas en acero, que tienen contacto con el agua salada," he said, explaining that federal rules require inspection and gauging of hulls in dry dock at two‑year intervals. He warned that plans assuming four‑to‑five‑year dry‑dock cycles conflict with that federal standard.

Officials and witnesses described temporary charters HMS secured to cover capacity gaps while ATM’s vessels are repaired. The committee heard that two chartered vessels already in service — Summer Wind and Brizzy Point — each seat 249 passengers and are being used for newly created trips; HMS plans to bring additional vessels (Lady Eve, Lady Brandy, Mister Rowe and Estrella Express) on six‑ to nine‑month charters. Staff said charter rates vary by vessel and term; examples provided during the hearing included monthly charter figures in the low‑hundreds of thousands (dollars) for cargo‑passenger vessels and higher monthly rates for some passenger‑only charters.

The hearing also focused on maintenance history and the 2018 emergency declaration. Senators noted long periods without preventive maintenance after Hurricane María and asked why ATM lacked budget allocations to keep vessels serviceable. Officials said some past underinvestment raised repair costs and reduced fleet redundancy, which in turn motivated short‑term charters and the public‑private arrangement to restore reliable service quickly.

Multiple senators and a participant who identified himself as a literature professor urged caution about privatization. The professor said there is a third alternative beyond "bad management" or privatization: "La tercera alternativa es la buena administración pública," and asked why the government would hand a long‑term contract to a private operator if capable public administrators remain in place. Secretary (unnamed) responded that the contract includes strict performance metrics, a reconciliation mechanism for transition costs and provisions to protect ATM’s ownership of assets; she said the operator has international experience and that the government will continue to supervise and fiscalize the service.

The committee probed governance and process questions as well. Senators raised objections that the authority’s board vote ratifying the contract in October may have lacked the participation of a community‑interest representative; agency counsel said five members were present, the chair found a quorum and the vote carried 3–2, producing a resolution and certification now part of the administrative record.

For follow‑up, the presiding senator ordered the agency to provide a detailed monthly budget and schedule showing maintenance, charter and transition costs through Dec. 31 and demanded other supporting documents within five business days; agency counsel asked to extend to ten business days to assemble memorials and explanatory materials. The hearing recessed at 2:03 p.m. pending those submissions.

What’s next: the committee will review the requested budget and vessel‑timeline documents when they are delivered and may convene follow‑up questioning or a new hearing if the materials leave key questions unresolved.