Puerto Rico’s responsibility for cleaning Dorado superfund site limited by culpability

08 September 2016

by Maryellen Tighe, and Simone Baribeau

 

Puerto Rico and its instrumentalities would only be responsible for paying the costs of cleaning up the Dorado superfund site if they’re found to be responsible for the contamination, said Environmental Protection Agency (EPA) spokesperson Elias Rodriguez in an interview with Debtwire Municipals.

 

A groundwater site in Dorado, Puerto Rico, was added to the Environmental Protection Agency’s list of superfund sites yesterday (7 September), according to a press release issued at the time.

 

“Once sites are put on the National Priorities List, concurrently with that the EPA seeks to see if there are any viable potentially responsible parties. That process is ongoing,” said Rodriguez. “If we’re able to identify any then they would be liable for carrying out and paying for the cleanup with EPA oversight.”

 

The water supply wells of Maguayo and Dorado Urbano public water systems were found to have solvents which have been linked to liver damage and cancer, according to the press release. These wells serve about 67,000 people.

 

Other locations in Puerto Rico have had been found to have similar solvent contaminants, according to press releases issued at the time. In San German, Puerto Rico, an estimated USD 7.3m will be spent to clean up the site, according to a December 2015 press release. The Cidra, Puerto Rico, superfund site will cost an anticipated USD 12.9m to clean, according to an October 2014 press release.

 

Ramallo Brothers Printing, which was in bankruptcy court at the time, was found responsible for the cleanup of the Cidra site, according to the press release.

 

The process of determining a responsible party is just starting in Dorado, Rodriguez said.

 

“If there are no viable potentially responsible parties identified the site is what is called a fund lead. So the EPA or the [federal] taxpayers are going to pay for the cleanup,” Rodriguez said.

 

The San German and Cidra sites were both resolved via either a pump and treat system or a filtration system, said Rodriguez. Since they’re similar to the Dorado site, that may be the strategy the EPA uses there.

 

However, the Dorado site is just at the beginning of what may be a multi-year program, the San German site was first listed as a superfund site in March 2008 and it was December 2015 before a plan to address the pollution was finalized, according to the December 2015 press release.

 

The next step for Dorado will be a remedial investigation and feasibility study, Rodriguez said.

 

The feasibility study “will specifically have cost estimates for the different technologies that we could use at the site,” Rodriguez said. “We don’t have the specific schedule at this point as far as how long those steps will take.”

 

Any existing studies, like those done by the Puerto Rico Aqueduct and Sewer Authority (PRASA), will be folded into the EPA’s research, Rodriguez said.

 

The superfund declaration was based on samples taken from four wells which have been closed since at least 2000, and 20 other wells which were active at the time, according to information from the EPA. There are 22 superfund sites in Puerto Rico, according to information from the EPA.

 

Rodriguez was not sure how the superfund declaration could impact the availability of water to residents in the area. PRASA did not respond to request for comment.

 

A USD 88.5m tranche of Series 2008A PRASA revenue bonds which mature in 2034 last traded in round lots on 25 August at 62, yielding 11.0%, according to Electronic Municipal Market Access. The bonds were last rated CC by Fitch Ratings in December 2015, Caa3 by Moody’s Investors Service on 1 July and CC by S&P Global Ratings on 12 July. PRASA has USD 5.0bn of bonds and notes payable, according to its FY15 financials.

 

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