Refer to the Exhibit B: 2014 Port of Ponce Employee Roster PDF document posted on the RFP webpage.

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1 AUTORIDAD DEL PUERTO DE PONCE PORT OF PONCE AUTHORITY REQUEST FOR PROPOSALS PPA This document details all written questions received by November 24 th, 2014 as per the RFP published on October 13 th, The Port of Ponce Authority (PPA) answers to those questions are included in this document. No. QUESTIONS ANSWERS 1 The Inventory of the Port s assets, acquisition date and the respective expected remaining life of each asset. The PPA does not have information of expected remaining life of the existing equipment, but is responsible of transferring all equipment in ready to use condition to the operator, including any required certification for operation. 2 The bathymetry/hypsometry and geological conditions of the port area and basin. Has the PPA any geotechnical survey for the alternative expansion of the container terminal, extension of berths 4 to 6)? 3 List of current workforce, and its respective contractual conditions (wages, social benefits, unions, etc.) of the workforce of the port both temporary and permanent. 4 Sub-contracts with services providers for the port, if any. 5 Environmental studies/permits for the expansion projects (if available) and for the current port operations. If the new operator is willing to expand the port with a different project than the initial one (e.g. extend the container terminal aligned with berths 4 to 6) will new Permits be needed? Refer to the Exhibit A: POTA Bathymetric Data PDF document posted on the RFP webpage, which shows the condition of the Port area and basin after dredging for the Port of The Americas development. The PPA has not done a geotechnical survey for the alternative expansion of the container terminal (extension of berths 4 to 6 towards berth 2-3), but has access to previous surveys done for the dredging and other projects which include that area. Refer to the Exhibit B: 2014 Port of Ponce Employee Roster PDF document posted on the RFP There are no obligations through sub-contracts with any service provider. The Environmental Impact Statement has been approved for the development of the Port of The Americas as per the initial design for the project. The Government of Puerto Rico is currently in the process of extending the existing permit for an additional period of 10 years. Realignment of berths 2 and 3 with berths 4 to 6, would require an amendment to the existing permit. PPA would be committed to collaborating and facilitating that process. Port of Ponce Authority RFP PPA: Questions & Answers-December 2, 2014 P.1

2 6 Dredging - Who will be the responsible party for performing and funding maintenance dredging of the berths, channel and turning basin? What would be the minimum distance off of the contemplated wharf face of the expansion to the circumference of the turning basin? How will be defined the adaptation of the access channel and turning basin if needed? 7 Information about possibility of providing funding using PABs or TIFIAs for eventual expansions of the port. 8 Grants: Is there any direct public fund available or expected to finance any possible expansion of this project. If so, what are the means/conditions for this extra investment? 9 Broken down cost of the port (utilities, labor, materials, equipment, advisors/consultants, taxes, etc.) PPA expects operator to be responsible for performing and funding maintenance dredging of the berths, channel and turning basin, but understands that this is part of the negotiation related to the proposals. The actual navigational restrictions will be determined by the pilots serving the terminal, as well as restrictions imposed by the vessel owners. Furthermore, though the dimensions of the turning basin as well as the distance off the wharf are part of the permitting process for the particular project, PPA understands that the expansion of berths 2 & 3 is viable without affecting the turning basin.. The PPA will consider issuing debt instruments on behalf of the operator, with the security for and repayment of such debt provided by the operator. Through Act , PPA has been granted the right to a Line of Credit with the Government Development Bank to promote development of the Port of The Americas. The PPA has access to Thirty Million US Dollars ($30,000,000.00) through this Line of Credit. The PPA is willing to use this line of credit to collaborate in the required investment for development of the Port of The Americas, be it for the expansion of the Port or any other project deemed necessary in discussion with the Operator through its proposal. Refer to the Exhibit C: Port of Ponce Income Statements PDF document posted on the RFP 10 Rental/lease agreements of lands, if any. Refer to the Exhibit D: Port of Ponce Lease Contracts Summary PDF document posted on the RFP 11 Operations agreements, if any current and past. Up to now the Port has always been government operated. There are no current or previous operation agreements. 12 State multi-year transportation plans. The PPA has no information on State multi-year transportation plans. As a recently created Port Authority, the PPA intends to promote development of public policy for such transportation plans for Puerto Rico and envisions an opportunity of leading that effort in collaboration with the operator. Port of Ponce Authority RFP PPA: Questions & Answers-December 2, 2014 P.2

3 13 Historical of Port throughput including breakdown by type of cargo during the last 13 years. 14 Clarification on whether or not the VAZs will be part of the concession O&M. If the Developer does not choose to operate and develop the project dedicated to logistics and VAZ what responsibilities would the awarded operator of the Port have and how the relationship between the port operator and logistics area would be organized. 15 Clarification on the utilization of the Port. Should the Operator have to attend all type of traffic/vessels? Is there any exclusivity in any berth to attend a specific traffic? 16 Clarification on the $ 5,000 incentive for the new jobs created. Considering the concessionaire/operator will be a newly formed company, and in case of the maintenance of the current staff, would the existing workforce be also subject to this incentive? Refer to the Exhibit E: Port of Ponce Cargo Throughput PDF document posted on the RFP Although the RFP is for the operation of the Port, there is no limit as to Proposals considering the development of the VAZs in addition to Port operation. The PPA understands that managing the VAZs or their development is not a requirement for the operator. Nonetheless, since development of the Value Added Zones is an essential component of business growth for the Port, proposers may wish to present particular approaches or express their particular capabilities to promote such development, so that the PPA may consider it through its evaluation. The PPA in collaboration with the operator would regulate and organize the relationship between these programmatic components of the Port of The Americas Project. Preferential berthing will be at the sole discretion of the terminal operator for those berths included in the agreement with the PPA. Act 73 of May 28, 2008, known as "Economic Incentives for the Development of Puerto Rico Act," makes industry operations in Puerto Rico highly profitable while stimulating additional economic development. Act 73 also allows companies to take a tax credit on their corporate income tax return including job creation tax credit of $1,000, $2,500 or $5,000 depending on the physical location of the business operations. PPA understands that these incentives are more oriented towards industrial development of the Value Added Zones, but additional assessment will be made through the Puerto Rico Industrial Development Company. Refer to the Exhibit F: Act (Economic Incentives for the Development of Puerto Rico Act) PDF document posted on the RFP 17 Clarification on the Special deductions on investments (RFP, page 9, 5 th bullet point). Which are those, and under which conditions would they apply? 18 Which are the expected upfront payments expected by the PPA, as per the following text: The PPA may entertain other payments in lieu of certain preferential rights that the Operator may wish to exercise at the Port, as well as upfront concession payments or capital investment together with Minimum Annual Guarantee and Variable Ibid It is to be emphasized that the RFP does not require an up-front payment. The actual payment/concessionaire agreement will be the result of the Proposers approach and understanding of their business opportunity and of the negotiation process. The final payment structure could include an upfront cash payment, a capital investment in the terminal in lieu of an upfront payment, a combination of an upfront payment and an annual land rental or guaranteed annual minimum throughput charge, a management contract with a minimum annual guarantee, Port of Ponce Authority RFP PPA: Questions & Answers-December 2, 2014 P.3

4 Components in lieu of Fixed Components payments. (page 19, first paragraph after item f ) 19 Clarification on the limit date to ask for a postponement of the proposal due date 20 Is there additional documentation available or expected to be available at the website? Is there a basic business plan/feasibility study or any other study of this type available to be provided by the PPA. 21 Is there any regulation on the tariffs (e.g.: maximum tariff)? Is there any subsidy/grant in the tariffs? or any combination of these alternatives that the Proposer understands may better suit the business structure of the Port. The RFP does not establish a specific limit date to ask for a postponement of the proposal due date. Through the One-on-One Meetings celebrated on November 17-18, 2014 prospective proposers, have expressed their interest in the postponement of the Proposal Deadline, to afford enough time to consider clarifications and answers to questions to be provided by the PPA. Through the RFP PPA Addendum No. 1 posted on the RFP webpage, the PPA has established December 8 th, 2014 as the Due Date to request the PPA to postpone the Proposal Deadline. If such formal request is received and the PPA determines to change the Proposal Deadline the PPA will inform its determination no later than December 12 th. In its request, Proposer should present their considerations for the postponement and the suggested new Proposal Deadline to address those considerations. The PPA has been developing a study for the strategic commercialization of the Port. Although this document is expected to be used as an internal reference document for the evaluation of proposals, most of the information gathered trough that study is included in the Exhibit G: Information on the Port of The Americas Market Situation-2014 PDF document posted on the RFP Webpage. Additional information is being posted on the webpage as part of this clarification process. As per the RFP, all additional information or changes to the RFP will be posted on the RFP Webpage. The PPA is currently developing a tariff structure for the Port of The Americas, taking into account the market condition in the Caribbean context. The PPA intends to define these tariffs in conjunction with the Operator to pursue the appropriate tariff structure for the Port. Under the development of a concession, the terminal operator would establish the tariff as well as contract rates for key customers that would provide the revenue stream to the operator to satisfy the concession or management contract between the PPA and the terminal operator. 22 Is the current footprint of land owned by the PPA the limit for the Port in the future? Could contiguous plots be incorporated if they are required for the expansion of the Port? If that is the case, who would be responsible for the acquisition? The government owns most of the land required for Port of the Americas Project as originally proposed. There are still some small plots of private land within the project limit. These properties may be incorporated when required for further development of the Port as per the original master plan. Other properties may be incorporated, if required as part of project development even if it is not part of the original scope, if the PPA agrees that such project is beneficial to the Port of The Americas development. The PPA will be responsible for acquisition of properties, when it is agreed to be necessary for further Port development, based on feasibility considerations. Port of Ponce Authority RFP PPA: Questions & Answers-December 2, 2014 P.4

5 23 Would it be possible to negotiate with other Public Administrations/Agencies changes in regulation that could affect the commercial feasibility of the Port prior to reaching any commitment? 24 Maintenance and repair Who will be the responsible party to maintain and repair the assets, including offsite ones; e.g. roadway, utilities, etc. and sea access. 25 Are proposers required to identify all Team Members? Is Team composition binding at this stage? Could different proposers team up after RFP? 26 Please clarify the request of Item 4.2.3: the key personnel to present is the one suggested for the Port of the Americas project or the key personnel of the organization related with the scope of the RFP? (or both options). The PPA will actively collaborate in promoting viable changes in regulation that could affect the commercial feasibility of the Port. However, considering the interest of the PPA in the most agile commencement of operations through engagement of a private operator, without knowing the specific proposed changes the PPA cannot ascertain that formalizing a final operation agreement may be subject to negotiations external to the PPA. PPA understands that such considerations should be taken into account in the Proposals and that such changes should be considered as milestones during operation which, when met, may trigger different agreement conditions. In that sense, particular operator commitments within the final agreement with the PPA may be subject to certain particular conditions defined by operator. PPA expects operator to be responsible for maintaining and repairing all the assets related to the Port operation, including sea access, but understands that this is part of the negotiation related to the proposals. Maintenance and repair of off-site assets; e.g. roadway, utilities, etc. is a responsibility of the Government through the corresponding government agency. Team refers to cases were the Proposer is formed by more than one legal entity, were the team members would be each of the entities comprising the Team that acts as Proposer for RFP purposes. If that is the case, Proposer should identify all team members and the Team composition is binding if Proposer s compliance with the Proposals commitments are subject to such composition. The PPA, at its sole discretion, always has the right to approve changes to the Team composition. In order for the PPA to consider any change in the Team composition after submission of a proposal, Proposer would have to demonstrate that the final Team composition meets or exceeds the qualifications of the original Team. Key personnel refers to the specific employees of the Proposer entity or entities (when Proposer is a Team), that will be likely to lead the Proposer s efforts to operate and/or develop the Port. 27 Our company does not have a credit rating, and we intend to submit a proposal independently of our Parent Company, which in turn does have a credit rating (i.e. we have enough financial strength not to Include parent company credit ratings as available (as an appendix not counting towards the 30 page limit, if necessary). This information would be relevant, for example, should the issuance of debt be included in the proposal or as an outcome of the negotiation process, and such debt would require the backing of the parent company. Port of Ponce Authority RFP PPA: Questions & Answers-December 2, 2014 P.5

6 depend on our Parent Company so we are not presenting any letter of support from its side). We understand that we do not have to present their credit ratings either. Please confirm our understanding. In case we do have to present our parent company credit rating, please confirm we could do it in an annex (i.e. not counting in the 30 page limit of the body of the proposal). 28 Regarding item of the RFP, we understand we only have to present the audited financial statements (i.e. Balance Sheets, Income Statements and Cash Flow Statements), and not the whole reports that go along with those. Please confirm if our understanding is correct. 29 What is the total estimated cost to rebuild Berths 2 & 3? What are included in that cost estimation? 30 Please provide the list of current employees employed by PPA. What are their individual job scope? 31 Please confirm the contract between the existing users of Port of Ponce can be transferred to the new operator and the annual revenue gained from the rental / lease of terminal facilities to such users. 32 Please assist to provide a breakdown on the cargo handled for the Port of Ponce for the past 2 years. Provide the full audited reports including financial statements and notes to the statements. Estimated cost to rebuild Berths 2 & 3 in their current position is approximately Forty Million US Dollars ($40,000,000.00). This includes demolition of existing berths, and the construction of new platform and wharf face. Estimated cost to rebuild Berths 2 & 3 realigned with berths 4 to 6, as an extension of these improved berths is approximately Seventy Million US Dollars ($70,000,000.00). This includes demolition of existing berths, the required landfill to realign the berths and the construction of new platform and wharf face. Refer to the Exhibit B: 2014 Port of Ponce Employee Roster PDF document posted on the RFP Existing contracts within the Port area may be transferred to the new operator. For information on the annual revenue from these leases, refer to the Exhibit D: Port of Ponce Lease Contracts Summary PDF document posted on the RFP Refer to the Exhibit E: Port of Ponce Cargo Throughput PDF document posted on the RFP Port of Ponce Authority RFP PPA: Questions & Answers-December 2, 2014 P.6

7 33 Please assist to provide the audited Financial Statements of the Port of Ponce for the past 2 years as this is required for us to validate and forecast for the business plan 34 We will greatly appreciate if you can send us the presentation slides made to us during the meeting so that we can use the data for our presentation to our management as well. Refer to the Exhibit C: Port of Ponce Income Statements PDF document posted on the RFP The slides presented by the PPA during our meetings with interested operators on November 17th and 18th, are included in the Exhibit G: Information on the Port of The Americas Market Situation PDF document posted on the RFP Port of Ponce Authority RFP PPA: Questions & Answers-December 2, 2014 P.7