Puerto Rico governor seeks control board

One of the key parts of a Puerto Rican working group plan to turn the US territory's economy around has finally wound its way to the commonwealth's legislature.

Puerto Rico governor Alejandro Garcia Padilla filed a plan with the territory's legislature to create a financial control board, giving oversight of budgets for many of the island's public enterprises to a five member panel, US capital markets correspondent Eric Platt reports.

The so-called Puerto Rico Fiscal Oversight and Economic Recovery Board Act would seek to rein in expenses across the commonwealth, which defaulted in August on some of its debts.

The board would be comprised of five members appointed by the governor and approved by the Senate. Public entities, excluding the commonwealth's power and sewer utilities, would be forced to submit an annual proposed budget each year.

The concept of a control board has been met with some skepticism as investors question its independence from the government. Puerto Rico has been effectively shut out of capital markets as investor concerns mount over its liquidity.

A statement from the Government Development Bank for Puerto Rico said the board would seek to "restore public confidence in the commonwealth, while also remaining in compliance with the commonwealth's constitution".

Members of Congress in Washington have previously floated the idea of imposing a fiscal control board in Puerto Rico — similar to one established in 1995 to oversee the District of Columbia —, as the territory grapples with $72bn in debts.

Puerto Rico governor seeks control board