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Senate panel presses ATM, DTOP on 20-year HMS Feries deal amid cost and service concerns
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Summary
At a Senate commission hearing, officials defended a long-term public–private contract to operate ferry service to Vieques and Culebra while senators questioned whether the deal shifts risk, raises costs and will prioritize tourists over island residents.
A Senate commission examined the public–private contract awarded to HMS Feries Inc. to operate maritime service linking Vieques, Culebra and mainland terminals, pressing transport officials on costs, contract risks and missing procurement records.
Presiding Senator opened the hearing and asked Aylin M. Vélez, secretary of the Department of Transportación y Obras Públicas, and Jorge Dros Yapur, executive director of the Autoridad de Transporte Marítimo (ATM), to explain the award and related documents. Vélez said the session responds to Senate Resolution 31, which orders an investigation into the contract and requested the contract, RFPs, proposals, evaluations and related legal and advisory records.
The secretary summarized the procurement timeline: a draft request for qualifications issued in October 2017, a desirability study in April 2018 recommending private operation, and an RFQ/RFP process in 2018. Five firms initially sought to qualify; two submitted final proposals (HMS Feries Inc. and Puerto Rico Fast Feries LLC), and a committee selected HMS Feries in June 2019. Vélez said the procurement files and the detailed procurement narrative remain subject to the Authority for Public–Private Partnerships’ records under its enabling law.
Vélez described the contract structure as two phases: a three‑year transition period during which ATM will ready vessels and capital improvements, followed by a roughly 20‑year concession in which the private operator would run operations and maintenance. She told the commission the contract contemplates a fixed annual price for the operator’s services, and that ATM retains ownership of the vessels and supervisory responsibility.
Senators challenged those assurances. The presiding lawmaker questioned whether the deal truly transferred risk to HMS or simply shifted costs to the public. "Este contrato ni en esta ni en otra vida, está maximizando el interés común," he said, asserting the arrangement could obligate government funds for decades. He contrasted historical ATM operating budgets—about $24 million in the mid‑2000s, with annual vessel maintenance budgets around $1.2–$1.6 million—with current ATM expenditures he described as near $42–$44 million.
The senator also raised service‑level concerns: he said the contract appears to reduce daily trips and creates incentives for the operator to pursue tourist revenues and terminal concessions that may not serve local residents. He told the commission the public has complained about repeated delays, vessel failures and intermittent service to the island municipalities.
Vélez defended the contract’s allocation of responsibilities and said the operator will be measured against performance metrics and subject to contractual penalties for missed trips or late departures. She stated the contract includes a fixed annual payment "de un promedio alrededor de treinta y un punto un millones de dólares al año," and that fuel costs were modeled at $3.50 per gallon with a 10% threshold above which the operator would bear increases. "El riesgo es de ellos," she said, describing the operator as responsible for daily operations and maintenance while ATM remains the asset owner and federal‑fund manager.
The presiding senator also questioned Jorge Dros Yapur about prior litigation flagged during his nomination. Dros acknowledged two civil cases and explained one involved a property sale that was later remedied in the courts; he said fees or penalties were returned and that matters had been addressed in the judicial process.
Vélez told the commission the ATM submitted requested documentation on Feb. 24, 2021, and that additional procurement specifics are held by the Authority for Public–Private Partnerships. Senators pressed for the underlying desirability study from 2018, which Vélez said was prepared by a private consultant and has not yet been provided to the commission.
The committee paused for a brief recess to conduct a digital vote and planned to resume questioning after the break. The hearing continues the commission’s document review and factual inquiry into whether the contract’s terms and the procurement process serve the public interest.
