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Puerto Rico struggles to rebuild after Maria

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Puerto Rico struggles to rebuild after Maria

SAN JUAN, Puerto Rico — Luis Herrera, engineer for the city of Caguas in Puerto Rico, is literally building bridges in the wake of Hurricane Maria.

The Bairoa Bridge in Caguas is both a professional and personal priority for Mr. Herrera, given that the original structure destroyed by the storm was a major conduit for area traffic and he lives just a few blocks from where the bridge is being rebuilt.

But the challenges he faces in rebuilding fallen parts of Caguas, located due south of San Juan, are indicative of the struggles across the island of Puerto Rico since it was devastated by Maria in September — and in other parts of the United States still trying to recover from the catastrophes of 2017 and rebuild in a resilient and sustainable manner ahead of the next natural disasters.

Caguas’ rebuilding efforts are hampered by the need to interact with two key entities: the Federal Emergency Management Agency and Integrand Assurance Co., the local insurer that provides the city’s insurance coverage, he said during an April infrastructure tour organized by Zurich North America and Washington-based consultancy Fuentes Strategies L.L.C.

While FEMA’s eastern federal lands highway division has done an “excellent job” on the bridge project, rebuilding money has generally been slow to arrive, he said.

Between $40 billion to $50 billion will be funded for disaster relief efforts in Puerto Rico, according to a FEMA spokesperson.

More than $10 billion has been funded for hurricanes Irma and Maria recovery since the Irma disaster declaration was signed on Sept. 10, but there are no specific deadlines for allocating the rest of the funds.

Mr. Herrera has estimated about $62 million in damages to 92 buildings and other structures in Caguas, which has received only about $1 million to date from Integrand.

“The insurance company has not done their job,” he said. “They don’t want to sit and discuss the estimate with us.” An Integrand spokesperson said its claims department was evaluating the request for comment, but did not respond by deadline.

Lessons from Puerto Rico

The ongoing challenges to rebuild in Puerto Rico show what the rest of the United States will contend with: an aging infrastructure that will repeatedly be challenged by more frequent and intense natural catastrophes, experts say.

“Puerto Rico’s infrastructure is an example of what’s happening across the entire United States where there’s been a history of a lack of investment in our infrastructure and having a lot of infrastructure becoming outdated and coming to the end of its useful life,” said Paul Horgan, head of North America commercial insurance for Zurich North America in New York.

In 2017, the American Society of Civil Engineers assigned a D-plus grade to the U.S. infrastructure and estimated it would cost about $4.59 trillion to improve the country’s infrastructure.

The insurer released a paper in April called Rebuilding Infrastructure: The Need for Sustainable and Resilient Solutions, which emphasizes the importance of sustainable planning and resilient building as the severity and frequency of severe weather events increase.

“There is no part of the United States that is not exposed to severe weather,” Mr. Horgan said, citing not just the 2017 hurricanes, but winter storms in the Northeast and droughts and wildfires in other parts of the country, which he said underscore the need for resiliency. “Talking sustainability often sounds expensive to people, but the reality is it’s not.”

The impact of climate change should be taken into consideration when rebuilding infrastructure, said Thomas Lewis, adviser to the Zofnass Program for Sustainable Infrastructure at Harvard University and president of Morristown, New Jersey-based engineering and consulting services company Louis Berger.

“Sustainability will pay for itself,” he said. “It’s been proven over and over again.”

Where’s the money?

Investors want two key things when considering potential opportunities: simplicity of doing business and certainty of returns, said Robert Murray, Zurich’s global head of surety, in Owings Mills, Maryland.

Puerto Rico scored 64th out of 190 jurisdictions ranked by the World Bank in terms of the overall ease of doing business, but a deeper drill into the numbers highlighted some of the challenges Puerto Rico faces in attracting investors, Mr. Murray said. For example, the commonwealth ranked 138th in dealing with construction projects, 108th on protecting minority investors and 113th on enforcing contracts, according to the 2017 rankings.

“If you look across the globe, there’s no shortage of capital looking for a good home,” he said. But “there’s a lot of competition for that capital.”

 

 

 

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