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Jorge M. Rebelo at Shaping Transportation: Four Pillars of Urban Transport in Large Metropolitan Regions of Latin America: Issues and Options
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Jorge M. Rebelo at Shaping Transportation: Four Pillars of Urban Transport in Large Metropolitan Regions of Latin America: Issues and Options

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In terms of urban transport, Latin America represents an important region for development policy. Some ideas, such as the Bus Rapid Transit (BRT) in Curitiba and Bogota or the rail concessions in Rio …

In terms of urban transport, Latin America represents an important region for development policy. Some ideas, such as the Bus Rapid Transit (BRT) in Curitiba and Bogota or the rail concessions in Rio and Buenos Aires and the São Paulo Metro Line 4 PPP, are very innovative. Yet Latin America is also a region suffering from huge congestion problems and poor public transport options: There is a lack of infrastructure and, in most cases poor coordination and regulation between the several levels of government in a metropolitan region. Lack of coordination between the different levels of government is probably the main obstacle to faster progress in the sector. Scarce resources are lost due to duplication of investments, lack of uniformity between tariff and subsidy policies and poor modal integration. The users suffer daily with this lack of metropolitan authorities capable of prioritizing investments in infrastructure and services over the medium and long term thereby enticing them to shift from the automobile and the ever increasing number of motorcycles to efficient, affordable and comfortable public transport.

Against this backdrop, World Bank projects have encouraged metropolitan regions to come up with four pillars to help safeguard sustainable urban transport in the region:

the creation of comprehensive metropolitan authorities,
integrated strategies for urban transport, land use and air quality,
financing mechanisms other than government budgets and
public-private partnerships with appropriate regulation


The presentation showcases these four pillars and shows how Bank financed projects have tried to make them a reality in some metropolitan regions. One example is financial mechanisms. It is a well-known fact that a transport system can only be organized and run successfully if the necessary funds are made available. So should there be sole reliance on state funding which is dependent on economic cycles? What other mechanisms are there? Would advertising, additional taxes or the creation of commercial spaces in station buildings be a good idea? Would urban operations which tax the additional floor space created in the areas of influence of the urban transport systems be a feasible alternative? Another example is public-private partnerships: they reduce or postpone the burden on the government and enable planned projects to be implemented more quickly.

Jorge Rebelo has worked at the World Bank for 25 years and is now a lead transport consultant. His expertise covers both urban public passenger transport and freight logistics. He has worked on subway and suburban rail projects in various parts of the world, and freight logistics projects in Brazil, Ecuador, Peru, Colombia, India and China. Before he joined the World Bank he worked in both the private and public sectors as well as in academia.

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  • 1. 0Jorge RebeloFour Pillars for Urban TransportSustainability in LargeMetropolitan Regions of Latin America:Issues and OptionsSHAPING TRANSPORTATION18 - 19 June 2013, London
  • 2. 1Presentation contents Relevance of urban transport interventions Main urban transport problems in large and medium-sizecities of Latin America Cities Strategy to improve urban transport: The four pillars Examples from World Bank portfolio Conclusions and Recommendations
  • 3. 2Presentation contents Relevance of urban transport interventions Main urban transport problems in large and medium-sizecities of developing countries Strategy to improve urban transport: The four pillars Examples from World Bank portfolio Conclusions and Recommendations
  • 4. 3High levels of urbanization in thedeveloping worldEver-growing share of countries GDPgenerated in citiesCities concentrate big pockets ofpovertyPositive link between economic growthand urbanization, between transportefficiency and labor market efficiency.Relevance at the macro level. Impact on economic growthPotential gains from urbanization are sensitive to local conditionsLocal public services affect business costs in cities, and thus the potentialgains from agglomerationUrban Transport is one of these crucial public services
  • 5. 4Long travel times, up to three hours per day in big citiesLow quality transport generates social exclusion, poor accessibility to jobopportunities, to schools, to hospitals, etc.Urban transport represents a high % of households expenditures (higher than allother utilities combined, up to 25% in São Paulo)… except for the poorest who endup not traveling at all or walking / bicycling.Relevance at the micro level. Impact on poverty.Santiago: 40% of the poor walk (comparedto less than 10% for the upper quintile).Same numbers in São Paulo01020304050607080901 2 3 4 5Quintil de gastoGastoabsoluto($/mes)024681012Gastoporcentual(%gasto)Absoluto1997Absoluto2002Porcentual1997Porcentual2002Buenos Aires : % of household expenditures on urbantransport per quintile before and after the crisis.[ mayor a1.599.999 $][ 450.000 -1.599.999 $][ menor a450.000 $]busmetroautootroscaminata
  • 6. 5Presentation contents Relevance of urban transport interventions Main urban transport problems in large and medium-size cities of developing countries Strategy to improve urban transport: The four pillars Examples from World Bank portfolio Conclusions
  • 7. 6Your TaskImagine that you are asked by your government ,a financing institution or a consulting companyto assess the urban transport sector of a large ormedium size metropolitan regionWhat would you do ?What are the issues you would identify and theoptions you would offer to make the sectorsustainable ?
  • 8. 7Most Likely you would identify the following problems:Very High Congestion and high pollution due to road-based vehiclesGrowth in Motorization RatesIncreasing Home-to-work travel timesBus predominanceSmall and inefficient suburban rail and metrorail networksIncreasing proliferation of informal transport and of motorcyclesNo specific financing mechanismsHigh environmental costs due to road based TransportHigh number of accidentsHigh % of low-income salaries to pay for UT home-to-work trips
  • 9. 8Most Likely you would identify the following problems:Scarce money for maintenance of equipment and consequent progressivedegradationNo or little money for new investment and rehabilitationHeavy involvement of government in operation of rail-based systemsSeveral levels of government (Federal, State, Municipal) involved withconflicting objectives and no coordinating authorityLack of Modal and Fare Integration and of uniform tariff and subsidy policiesToo many huge investment projects proposed by different levels of governmentcompeting for scarce fundsLack of Integrated Land Use, Urban Transport, Air quality strategyNo recent Origin-Destination SurveysLack of trained staff in Transport planning
  • 10. 9A simple diagram illustrates the “vicious circle” of urbantransportation in developing countries …CARS MOREATTRACTIVE:GROWINGMOTORIZATIONMORECONGESTIONAND DELAYSPUBLICTRANSPORTA-TION SLOWERAND LESSATTRACTIVELESS DEMAND,DECREASINGREVENUE,HIGHER COSTPER PASS.INCREASEDFARES,REDUCEDFREQUENCIESURBAN EXPANSION WITHLOW DENSITYINCREASED POLLUTION, ACCIDENTS and OVERALLCONGESTION. LOWER GAINS of AGGLOMERATION,NEGATIVE IMPACT on GDP GROWTHPOVERTY AND SOCIALEXCLUSIONRISE OF INFORMALTRANSPORTATIONTRANSPORT OPERATORSFINANCIAL CRISIS.POSSIBLE NEED FOR SUBSIDIESLEADING to ADDITIONAL FISCALBURDENThe vicious circleof urbantransportation
  • 11. 10… and allows for the identification of several major, interrelatedsector issuesRAPID URBANIZATION, GROWING CONGESTION,POLLUTION AND NOISELACK OF COORDINATION BETWEEN LEVELS OFGOVERNMENT IN METROPOLITAN REGIONSTHE ORGANIZATION OF BUS TRANSPORTEXPLOSIVE GROWTH OF INFORMAL SECTOR (VANS)LOW-INCOME USER: ACESSIBILITY, AFFORDABILITY,AVAILABILiTY, ACCEPTABILITYTARGETED VS. GENERAL SUBSIDIESURBAN TRANSPORT PLANNING, FINANCING, STAFFINGMAINSECTORISSUESInefficiencies within the urban public transport system generate negative social andenvironmental impacts, and weaken cities as growth engines
  • 12. 11Rapid urbanization and motorization result in growing congestion,pollution and noise Motorization: a major trend in developing countries. Automobile growth is high (+245% inSantiago from 1991 to 2001) ; and induced by poor public transport. Private automobile main producer of emissions. Trucks and buses very noisy Congestion exists in major cities, and is responsible for substantial negative externalitiesLimited road space is taken by private auto with very limited priority for public transitIncreasing door-to-door travel times. NEED TO GIVE PRIORITY TO PUBLIC TRANSPORT
  • 13. 12Lack of coordination between levels of Government in metropolitanregions No formal metropolitan regions defined No formal metropolitan coordination bodies Need to use federal/national power to create these bodies to avoid duplication of efforts andwastage at the metropolitan region levelMunicipal buses, inter-city buses and rail/metro are not integrated neither physicallynor tariff wiseCAPITAL FEDERALCommuterTrainsFEDERALGOVMT.PROV, OFBS.AS.LOCALMUNICIP.CITY OFBS. AS.TaxicabsBuses within Bs.As.CityBuses City – Prov.of Bs.As.Buses between PBAmunicipalitiesBuses within PBAmunicipalitiesMetro
  • 14. 13The organization of bus transport is inefficient and often notproperly regulated Private monopoly without competitive bidding, mainly permissions passed from generation togeneration Multiple routes; trend to oversupply and overlapping Need for competitive bidding of routes Bus vs. informal vans:Duplication of routes, high tariffs, bus congestion, lack of hub-and-spoke services, notariff integrationFormalarticulatedbuses inBogotáInformaltransportin Lima
  • 15. 14The explosive growth of informal sector (vans) complicates urbantransport even further Why are they multiplying? Lower price (tariffs reductions, financial aids), unemployment Can they be turned into an ally rather than being seen as the enemy? How can they be controlled ? How can they be used to foster competition with the formal bus system and integration with rail?They add to congestion if they don’t work as feeders, are more often than not illegal,are unsafe, stop where they want, don’t pay taxes, but people like them because theyare door-to-door transportLima
  • 16. 15Low-income users often complain of lack of accessibility,affordability, availability and service acceptability Huge concentration of poor/low-income users in theperiphery of metropolitan areas or in pockets close todowntown They spend over 20% of their net income in home-to-worktrips They often have money for one leg but cannot affordreturning home Access to closest public transport hard and unsafe Availability is low Leave very early to get to work return very late home:family problemsSao Paulo Number of walking trips almost40% of daily trips, long distances Non recipients of subsidies payingalmost 20-25% of their grossincomes for UT Users of trains mainly between 2and 4 Minimum SalariesAs a result, access to employment, health and education facilities is becoming moreand more difficult for the poorBuenos Aires after the crisis Poorest households switch out ofpublic transport towards walkingand cycling (12% first quintile) Budget share absorbed by publictransport rises substantially amonglowest quintiles
  • 17. 16Targeted vs. general subsidies Targeted (vale-transporte) vs. blanket The impacts of flat fares in large cities What are the advantages and disadvantages of alternative subsidies to the poor? How can subsidy fraud be controlled ? Is the Bank willing to finance initial subsidies out of loan proceeds?Targeted subsidies are theoretically better and they might be enhanced and better controlledby the smart card. But they must be offered to both formal and informal employees
  • 18. 17Public urban transport financing is a major issue; in Latin America,the private sector has a relevant role Where do the funds for investment, maintenance comefrom when revenues are not sufficient to cover costs ? Should we favor an urban transport fund ? What are other financing mechanisms ? How to establish financing priorities ? Designing adequate and reliable urban transportfinancing mechanisms is a priority in all LAC countriesPrivate Sector Financing Traditional in the bus industry Revenue perception, guarantees Concession or Public-Privatepartnership (PPP) laws How to foster Private SectorParticipation ? PPP are possible and desirable withthe proper risk mitigation and anenabling environment for the PS aswell as a good regulatory agency
  • 19. 18Presentation contents Relevance of urban transport interventions Main urban transport problems in large and medium-sizecities of developing countries Strategy to improve urban transport: The four pillars Examples from World Bank portfolio Conclusions
  • 20. 19The Approach to break the vicious circle is based on 4 mainpillars which must be properly tailored to each metropolitanregionESTABLISHMENT OF AREGIONAL TRANSPORTCOORDINATIONCOMMISSIONFINANCING MECHANISMSTO ENSURE LONG-TERMFINANCIALSUSTAINABILITYPROGRESSIVE PRIVATESECTOR PARTICIPATIONIN OPERATIONS ANDINVESTMENT WITHADEQUATE REGULATORYOVERSIGHT This pillar will ensure that funds are available forinvestment and operation subsidies through generalbudget and other mechanisms created for that purpose This Transport Authority will coordinate planning andpolicy and prioritize investments from different levels ofgovernment, as well as tariff and subsidy policies. It willalso seek the necessary funding This pillar is an attempt to decrease the burden ongovernment and allow for the creativity of the privatesectorINTEGRATED URBANTRANSPORT, LAND USEAND AIR QUALITYSTRATEGY This pillar will ensure a smooth coordination betweenurban transport investment and operations, land usepolicy and regulations and air quality policies
  • 21. 20Pillar 1: Detailed LookCoordination of transport planning with land use and airquality policies, at a regional level with representation of alllevels of government, operators and usersINTEGRATED URBAN TRANSPORT,LAND USE AND AIR QUALITYSTRATEGYESTABLISHMENT OF AREGIONAL TRANSPORTCOORDINATION COMMISSION• Best Examples in the World are : Madrid, Paris, London, Vancouver•Best Practices in developing world: Recife, Lagos•Representatives of 3 levels of government,operators and users•Prioritize project from the MR’s standpoint usingeconomic evaluation•Ensure the necessary funding is available•Establish uniform tariff and subsidy policy•Promote modal and fare integration•Update on a regular basis the Integrated UrbanTransport, Land Use and Air Quality Strategy•Promote User participation in decision-makingthrough user surveys, state televisionannouncement of big projects, web contacts
  • 22. 21Pillar 1- Some points to considerWhy is it so difficult to establish regional transport authoritiesin most developing countries?What are the problems that one faces when there is notransport authority?Do you have any suggestions for your country?
  • 23. 22Pillar 2- A detailed lookINTEGRATED URBAN TRANSPORT,LAND USE AND AIR QUALITYSTRATEGYREORGANIZATION ANDIMPROVEMENT OF THEURBAN TRANSPORTATIONSYSTEMORIENTED TOWARDS THEPOOR AND VULNERABLEUSERSHigh capacity modes on trunk corridors:BRT, rail transit, LRTIntramodal and intermodal serviceintegrationFare integrationIntegrate Land Use with Transport inseveral scenariosChoosing the most adequate vehicles andfuelsEvaluate noise , vibration and visualintrusion of equipment and infrastructureParking PolicyReorganizing network layout with formalservices over trunk and feeder corridorsCongestion pricingDesign networks targeting the pooraccessibility Fare levels affordable by low incomeusersEmphasis on non motorized transport(pedestrians, bicycles)Gender issuesAttention to disadvantaged groupsExamples of good Strategies: São Paulo (PITU), Santiago(PTUS), Rio (PDTU)
  • 24. 23Pillar 2- Some points to considerYou must tailor this pillar to the needs of your metropolitan region. For example, in mostdeveloping countries the main issues are the reorganization of the public transportsystem and the proliferation of informal transport and motorcycles and lots ofaccidents. And of course the vulnerability of the poor to high costs and poor qualityof urban transport.A common question is : Should we go for a BRT or for a rail-based solution?This pillar is normally reasonably well dealt by most developing countries particularlythose which have a loan from a bilateral or multilateral institution because thoseinstitutions require such a plan to lend.It is here that the creativity of local planners may help in shaping the options according tothe needs of the main users of public transport in the metropolitan region.The most common problem is not to find adequate data on Origin-Destination surveys andcosts . This makes demand modeling very difficult .Also finding trained staff is a challengeNeed for very powerful software linking urban transport, land use and air quality andquicker data collection methods so that we do not waste so long to model the presentsituation
  • 25. 24Pillar 3- A Detailed LookFINANCIAL MECHANISMS TOENSURE LONG TERMSUSTAINABILITY• Budget and non budgetsources for financing capitalcosts and subsidies if any•Advertising•Real Estate•Urban OperationsGood Practices : São Paulo, Rio, Santiago, Medellín, France (versement-transport); In the world: Hong Kong, Washington, Madrid, Barcelona,Osaka, Tokyo
  • 26. 25Pillar 3 Without timely funding , it is impossible to keep new investments and existing subsidizedoperations going. Where do you find the money? Normally it would come from the general budget of National, Provincial or Municipal budgets.But often there is no money or it is too little. If it comes from General Revenue , there are so many needs that often urban transport onlygets more money when there are crisis. If there are earmarked funds , that is funds to be used just for urban transport, then in generalthese funds are secured through a gasoline tax or a tax on salaries. Te problem is thateconomists do not like earmarked funds. One good example of earmarked tax is the “ versement transport” in France, a tax on thepayroll iof ech company with more than 6 people , which will beused for investments Another is the “vale-transporte” which is paid by employers who pay the difference between6% of gross salary and the actual costs of home-to-work trips for those employeees whosetravel costs exceed 6% of their gross income.
  • 27. 26Pillar 4- A Detailed LookPROGRESSIVE PARTICIPATIONOF THE PRIVATE SECTOR INOPERATION AND INVESTMENTWITH REGULATORYOVERSIGHT• BOT, PPP,•Concessions,•Management Contractsschemes in rail projects andBRTsGood Practices : São Paulo, Rio, Buenos Aires; In the world:London, Sweden
  • 28. 27Pillar 4-Some points to consider Partnering with the private sector may allow the Government to reduce operating subsidies in anexisting operation (e.g, Rio de Janeiro and initially Buenos Aires) May also provide funds that the Government does not have at a certain moment in time such asthe PPP for operations and maintenance with provision of rolling stock in the São Paulo MetroLine 4 project. But private sector participation demands that Government complies fully with its obligations thesame way that the private sector concessionaire must comply with its contract. This contract mustbe monitored by a regulatory body. If there is a failure in the compliance of obligations, the results can be catastrophic such as inBuenos Aires concessions of some suburban rail The regulatory authority is different from the transport authority and she must be capable ofbeing impartial in its judgments and wherever necessary penalize the State Proper participation of the private sector could be a very efficient way of reducing subsidies and/or postpone State investments, and at the same time be more responsive to the public needs.
  • 29. 28Presentation contents Relevance of urban transport interventions Main urban transport problems in large and medium-sizecities of developing countries Strategy to improve urban transport: The four pillars Examples from World Bank portfolio (Latin America) Conclusions
  • 30. 29Projects in the portfolio are characterized by improvement of publictransport service and infrastructure and its orientation to the poor,addressing the other basic pillars with different emphasisPROJECTLima TransportColombia UrbanTransportSao Paulo Metro Line4Recife (Brazil) raildecen. ProgramBuenos Aires MassTransit projectSantiago urban transportRio Mass TransitprojectsREGIONALTRANSPORTCOORDINA-TIONpartialyespartialyeslowpartialpartialSTRATEGYINTEGRATEDWITH LANDUSE, AIRQUALITYlowpartialhighyesyeshighhighEMPHASIS INFINANCIALSUSTAIN-ABILITYhighhighhighlowmediumhighhighPRIVATESECTORPARTICIPA-TIONhighhighhighlowhighhighhighMAIN FEATURESBRT (busway and feeders), nonmotorized transportBRTs in Bogotá and mediumsize citiesTurnkey and concession of ametro lineSuburban rail rehabilitation,decentralizationMetro and suburban trainsrehabilitation, planningIntegr. transport system (metro,buses, urban toll roads)Suburban rail concession,urban redevelopmentAll projects promote the development of efficient public transport systems, whichare accessible, available, affordable and acceptable particularly for low-incomeclasses
  • 31. 30In a simplified typology, World Bank urban transport operationscan be categorized under three type of projects Several cities in onecountry Strengthen nationalauthority and localauthorities Mix urban developmentand urban transportation I.e.: missing links, paving,sidewalks, lighting Traffic light systems Venezuela First UrbanTransport Project Brazil First and ThirdTransport Project Mexico Medium CitiesUrban Transport Project Focusing on one orseveral corridors BRT or rail mass transit Integration with othermodes Urban improvement in theproximity Private sectorparticipation Non motorized transportsuch as bikeways Lima BRT Colombia´s BRTs Brazil CBTU raildecentralization São Paulo Metro Line 4project Integrated urban transportsystem (operational andfare integration) Linked with air quality andurban developmentpolicies Establishment of aregional transportcoordination Private sectorparticipation Chile´s TransantiagoMainCharacteristicsExamplesTypologyMULTI – CITYMULTIPLE TRANSPORTCOMPONENTSMASS TRANSIT CORRIDORSSINGLE CITYINTEGRATED TRANSPORTSYSTEM
  • 32. 31Curitiba: the precursor-How do you go from a successful BRTsystem to a “metrorail system” in the same axis without affectingland use and providing smooth integration?Segregated buswaysand transit-oriented development
  • 33. 32HOW DO YOU UPGRADE CAPACITY IN A SUCCESSFUL BRT SYSTEMCORRIDOR?
  • 34. 33Rio de Janeiro-PDTU
  • 35. 34Rio de Janeiro: Integrating Metrorail, BRTs and Ferries
  • 36. 35BOGOTÁ-Transmilenio established a new paradigm in the region andthe world- How do you build BOGOTÁ’S first Metro Line andadequately complement Transmilenio?SegregatedBuswaysDedicated busstationsSmart Cards Facilities forpersons withdisabilities
  • 37. 36Infrastructure (State)•Exclusive lanes•Stations•Accessways•Parking Lots & Maintenance ShopsOperation (Private Sector)•Operation companies•Buses•Operation EmployeesCollection System (Private Sector)•Equipment•Card Based•Fiduciary ManagementPlannning, Operation andControl:TRANSMILENIO S.A,Alcaldía Mayor de BogotáTRANSMILENIOBogotá, Colombia
  • 38. 37Lima BRT project followed the same principles as Transmilénio: How doyou connect this system with Lines 1 and proposed Line 2 of Metro
  • 39. 38Santiago of Chile- TRANSANTIAGO …- How do youcompletely restructure the urban transport system?
  • 40. 39TransantiagoHeavy and Light Metro NetworkBus Trunk Network
  • 41. 40Local/Feeders Network Trunk Business Units
  • 42. 41The Sao Paulo CPTM trains modernization project: How do youmodernize an old and decaying suburban rail system?
  • 43. 42São Paulo Metro Line 4 project , the first PPP in Brazil:How do you start a PPP ina public system network?
  • 44. 43First fully automatic operationin Latin AmericaThe driverless system allowsspeed regulation according toneed, giving more flexibilityto the operationHeadway can achieve 90seconds in normal operation,75 seconds in situations ofhighly concentrated trafficAutomatic Operation
  • 45. 44Or would the Line 15 monorail prove afaster and cheaper solution in SãoPaulo?
  • 46. 45Presentation contents Relevance of urban transport interventions Main urban transport problems in large and medium-sizecities of developing countries Strategy to improve urban transport: The four pillars Examples from World Bank portfolio Conclusions
  • 47. 46ConclusionsUrban Transport sustainability requires :– Large agglomerations to strengthen institutional organization at the metropolitan level andavoid wastage that comes with duplication of investments, poor and uncoordinated tariffand subsidy policies. They should pool resources to implement an integrated plan andensure financing mechanisms are in place and new ones are found.– Adequate Integrated Planning is very important but the sustainability of the sectordepends heavily on proper coordination and adequate funding which are often overlooked Mid size cities should follow the same path but start early anticipating capacity problems inmajor corridors and inducing better urban development land use patterns Urban transport training deserves more attention in schools of developing countriesbecause their major cities are well behind the people’s needs and they require immediateaction. More trained specialists in modeling and institutional frameworks are key tostrengthen the sector.Could Quicker Data Collection Methods using Cell Phone data and SocialNetworks help decrease preparation time of models ? Could Morepowerful software integrating Urban Transport, Land Use and Air qualitybe very useful in decreasing lead times for proper decision –making?
  • 48. 47Many Thanksjrebelo@worldbank.orgjrebelo48@gmail.com