ICF wins $188 million disaster relief contract for Puerto Rico in wake of María

05 July 2018 Consultancy.lat

Management consulting firm ICF has received a contract worth up to $188 million from the US Federal Emergency Management Agency to organize and deliver relief. The contract can last anywhere between three weeks and 37 months, and will see the firm provide assistance to Puerto Rico’s government to recover from hurricanes Irma and María. 

Virginia-based ICF are a consulting firm which combines advisory with digital and operates across North America, Europe, Asia and MENA regions. The firm has an annual revenue of over $1.2 billion and has 5,000 professionals working across 67 offices globally, including one in Guaynabo, Puerto Rico. 

The contract comes as a US government response to the a streak of natural disasters in the past few years, the most recent of which – María – caused upwards of $94 billion worth of damage. Whilst the US government initially put the immediate death toll at 64, new research by Harvard University has come out this week that suggests thenumber may be as high as 4,645 including those who died in the wake of the hurricane. 

“Our results indicate that the official death count of 64 is a substantial underestimate of the true burden of mortality after Hurricane Maria,” the Harvard report authors wrote. The announcement for the contract has come out roughly in the same time frame as the release of the information, which had become a contentious issue for residents of the island. 

“As the United States prepares for its next hurricane season, it will be critical to review how disaster-related deaths will be counted, in order to mobilize an appropriate response operation and account for the fate of those affected,” the authors wrote.

ICF have received up to $188 million disaster relief contract for Puerto Rico in wake of María

The consulting firm will be assisting in the recovery by reviewing disaster recovery grant claims, formulating disaster recovery projects and assisting those services. Written in the contract, which was signed last week by the firm and Federal Emergency Management Agency (FEMA), were the terms of duration: “The contract term is approximately 37 months through June 30, 2021, which is comprised of an approximate 3 week base period and three one-year option periods.”

The firm’s website comments on the job which they will be undertaking, starting with an emotional shared sentiment. “When Hurricane María made landfall in Puerto Rico, millions of our citizens lost everything, from their homes to basic necessities, like water, power, and fuel for their cars.”

“Throughout it all, the community united under a rallying phrase: Puerto Rico se levanta, or “Puerto Rico rises.” For ICF, this message hits home. Our teams are working closely with local leaders and communities to ensure that Puerto Rico has the necessary tools, resources, and teams.” 

The firm states that for Puerto Rico to truly recover then efforts must go beyond simply rebuilding, and that decades of neglecting the commonwealth’s infrastructure have exasperated the impact of María. The major areaswhich have affected and will continue to affect the island are the malfunctioning electric grid, road and highway networks, the clean drinking water delivery system, and overcrowded urban and rural housing areas.

“Public-Private Partnerships (PPP) enable governments and local jurisdictions to accelerate long-term disaster recovery, laying the foundation for infrastructural, social, and economically resilient communities within Puerto Rico. ICF has global experience establishing public-private and voluntary program partnerships, in-depth knowledge of disaster recovery programs and resilient infrastructure planning, and a successful track record leveraging disaster recovery funding streams on behalf of federal, state, and local government clients,” concludes the firm.


Avianca Brasil needs major restructuring effort to stay flying

18 February 2019 Consultancy.lat

Brazilian airline Avianca Brasil will need to sell 14 of its 50 aircraft and improve its operational efficiency, if it wants to continue flying while being able to repay its creditors, according to an analysis by Galeazzi & Associados. 

The São Paulo based management consultancy was hired by Avianca Brasil in December shortly after the airline filed for bankruptcy protection. Consultants of the firm have since assessed the financial performance of the company and crafted restructuring plans in a bid to turn Avianca’s fortunes. Galeazzi & Associados is also exploring future options for the airline, which include finding a partner, a buyer, or even filing for bankruptcy.

Following a number of payment defaults, Avianca’s main creditors, aircraft lessors Aircastle and General Electric Capital Aviation Services, sounded the alarm bells on the company’s financial position. The two creditors have in the meantime been seeking to repossess their planes, however, their attempts have so far been successfully fended off by Avianca, allowing the company to maintain its current flight schedule. According to Reuters, consultants from Galeazzi & Associados have visited the carrier’s creditors to discuss scenario’s and potential measures. Concrete results have though not materialised.Avianca Brasil needs restructuring effort to stay flying

In the background, Avianca is negotiating with Elliott Management, a hedge fund, about a 250 million real ($69 million) loan, sources close to the matter disclosed. As part of bankruptcy protection process, any investment would need to happen within the regulatory guidelines, likely in the form of debtor-in-possession financing. Brazil’s fourth-largest airline plans to ask the judge overseeing its bankruptcy for more time to reach a final deal, pointing at the progressive loan talks held with Elliott Management. 

In the analysis by Galeazzi & Associados, the advisors conclude that a major restructuring effort is required for Avianca Brasil to continue its operations. Around 14 of the 50 aircraft would need to be disposed, in order to optimise the capacity usage of the fleet. As per the plan, 36 aircraft would combined be capable of achieving 235 flights per day. The sale of the aircraft would provide a needed buffer to repay creditors.

On top of this, the airline will need to reduce its operational expenses and attract investments to the tune of $75 million to stay afloat.

Last year, another Latin American airline, Aerolíneas Argentina called in the help of an external consulting firm to reshape its loyalty program.