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The World Bank
ReportNo. 15951 AR
STAFF APPRAISAL REPORT
ARGENTINA
BUENOS AIRES URBAN TRANSPORT PROJECT
April 11, 1997
Infrastructure and Urban Development DivisionCountry Department ILatin America and the Caribbean Regional Office
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CURRENCY EQUIVALENTS
Currency Unit = PesoUS$1 = 1 Peso
WEIGHTS AND MEASURES
Metric System
FISCAL YEAR
January 1 - December 31
PRINCIPAL ABBREVIATIONS AND ACRONYMS
AMBA - Buenos Aires Metropolitan Area (Area Metropolitana de Buenos Aires)ATAM - Metropolitan Area Transport Authority
(Autoridad de Transporte del Area Metropolitana)CONAMBA - National Comission for the Buenos Aires Metropolitan Area
(Comisi6n Nacional Area Metropolitana de Buenos Aires)CoNTA - National Commission for Motor Transport
(Comisi6n Nacional de Transporte Automotor)EA - Environmental AssessmentFA - Argentine Railways (Ferrocarriles Argentinos)FEMESA - Metropolitan Railways (Ferrocarriles Metropolitanos, S.A.)GFCNRT - Successor to UCPF (Gerencia Ferroviaria de la Comisi6n Nacional de
Regulaci6n de Transporte)ICB - International Competitive BiddingIERR - Internal Economic Rate of ReturnMCBA - Municipality of the City of Buenos AiresNCB - National Competitive BiddingNGO - Non-Governmental OrganizationNPV - Net Present ValueOCRABA - Agency responsible for urban motorway concessionsPIP - Project Implementation PlanPPF - Project Preparation FacilityPre-ATAM - Technical group, conceived as precursor to Metropolitan Area Transport Authority
(Apoyo a la Creaci6n de la Autoridad de Transporte del Area Metropolitana)SBASE - Buenos Aires Subway (Subterraneos de Buenos Aires, S.E.)SOPyT - Secretariat of Public Works and Transport
(Secretarfa de Obras Publicas y Transporte)TBA - Suburban Railway Company (Trenes de Buenos Aires)TUAMBA - Transport Planning Unit - Successor to Pre-ATAM
(Transporte Urbano del Area Metropolitana de Buenos Aires)UCP - Project Coordination Unit - (Unidad Coordinadora del Proyecto)UCPF - Coordination Unit for the Railway Restructuring Program
(Unidad de Coordinaci6n del Programa de Restructuraci6n Ferroviaria)UEP - Project Implementation Unit (Unidad de Ejecuci6n del Proyecto)
Vice President Shahid Javed BurkiDirector Gobind T. NankaniDivision Chief Asif FaizTask Manager Gerhard Menckhoff
ARGENTINABUENOS AIRES URBAN TRANSPORT PROJECT
STAFF APPRAISAL REPORT
TABLE OF CONTENTSPage No.
LOAN AND PROJECT SUMMARY ............................................. ;
I. THE URBAN TRANSPORT SECTOR ............................................. I
A. BACKGROUND ............................................. 1B. INSTITUTIONAL FRAMEWORK ............................................. 2C. SECTOR ISSUES ............................................. 2D. LESSONS LEARNED IN PAST BANK PROJECTS ............................................. 3E. RATIONALE FOR BANK INVOLVEMENT ............................................. 3F. SECTOR STRATEGY ............................................. 4
II. FRAMEWORK OF URBAN RAIL CONCESSIONS ............................................. 6
A. BACKGROUND ............................................. 6B. THE CONCESSION PROCESS ............................................. 6C. INITIAL BENEFITS OF CONCESSIONING URBAN RAIL SERVICES ............................................. 9D. REGULATORY ISSUES ............................................. 10E. THE METROVIAS CONCESSION ............................................. 10
III. THE PROJECT ............................................. 12
A. PROJECT OBJECTIVES ............................................. 12B. PROJECT DESCRIPTION ............................................. 12C. PROJECT COSTS AND FINANCING ............................................. 15D. PROJECT RISKS AND BENEFITS ............................................. 15E. ECONOMIC EVALUATION ............................................. 17F. FINANCIAL EVALUATION ............................................. 18G. ENVIRONMENTAL IMPACT ............................................. 19H. PUBLIC PARTICIPATION ............................................. 20
IV. PROJECT IMPLEMENTATION ............................................. 21
A. INSTITUTIONAL RESPONSIBILITIES ............................................. 21B. IMPLEMENTATION SCHEDULE ............................................. 21C. PROCUREMENT ............................................. 22D. DISBURSEMENTS AND SPECIAL ACCOUNT ........................................................ 24E. AUDITING ........................................................ 25F. PROJECT MONITORING AND REPORTING ........................................................ 26G. PROJECT SUPERVISION ........................................................ 26
V. AGREEMENTS REACHED AND RECOMMENDATION ............ ................................. 27
This report is based on the findings of an appraisal mission which visited Argentina during October 1996. The mission comprised Messrs.Gerhard Menckhoff (Task Manager and Urban Transport Specialist, LA3EI), Moazzam Mekan (Financial Analyst, LA1IU), Juan Quintero(Environmental Specialst, LATEN), Llvo Pino (Financial Management Specialist, ACTCO); Bernard Montava (consultant), and FrankRaltek (consultant). Ms. Sabine Cornelius (Economist, AFTUI), and Messrs. Ken Gwilliam (Economist, TWUTD), Jorge Rebelo (TransportSpeciaUst, LA1 IU), Lou Thompson (Railways Adviser, TWUTD), and Surhid Gautam (consultant) also particpated In the preparation of theproject. Messrs. Jitendra Bajpai (EAI IN) and John Flora (TWUTD) are the Peer Reviewers. Mr. Craig Leisher edited the report. Ms. SandraAlborta and Mm.. Margarita Lannon assisted in the production of the report. Messrs. Asif Faiz, Orville Grimes and Gobind T. Nankani arerespectively the managing Division Chief, Projects Adviser, and Department Director.
ANNEXES:Page No.
A. Transport in Metropolitan Buenos Aires-Issues and Outlook ..................................... 29B. Project Implementation Plan, as Defined by the Borrower ........................................ 37C. Detailed Project Costs ......................................................... 45D. Implementation Schedule, Monitoring Indicators, and Project Supervision . ....................................... 47E. Disbursement and Procurement Schedules ................................................... 53F. Summary of Urban Transport Study Terms of Reference ........................................................ 55G. Economic Evaluation ........................................................ 59H. Financial Evaluation ........................................................ 701. Environmental Aspects .................................. 75J. Air Pollution in Buenos Aires .................................. 79K. Selected Documents Sent to the Project File .................................. 83
MAPS:
Suburban Railways Operated by Private Concessionaires - IBRD No. 28384
Buenos Aires Subway System - IBRD No. 28385
-i-
ARGENTINABUENOS AIRES URBAN TRANSPORT PROJECT
LOAN AND PROJECT SUMMARY
Borrower: Argentine Republic
ImplementingAgency: Public Works and Transport Secretariat (SOPyT) of the Ministry of Economy and
Public Works and Services
Beneficiaries: Residents of the Buenos Aires Metropolitan Area, particularly those who usepublic transport.
Poverty: Not applicable.
Amount: US$200 million (including up to US$20 million in retroactive financing).
Terms: Repayment in 15 years, including five years of grace, at the Bank's standardinterest rate for variable LIBOR-based US Dollar single-currency loans.
Commitment Fee: 0.75 percent on undisbursed loan balances, beginning 60 days after signing, lessany waiver.
Onlending Terms: Not applicable.
Financing Plan: See para. 3.13.
Net Present Value: At 12 percent: US$239 million for the Metrovias concession; US$338 million forsubway Line A; and between US$0.68 million and US$24.82 million for theroad/rail grade separations.
Staff AppraisalReport: No. 15951-AR, dated April 3, 1997.
Maps: IBRD No. 28384 and IBRD No. 28385
Project ID: AR-PA-39584
1. THE URBAN TRANSPORT SECTOR
A. Background
1.1 Argentina is one of the most urbanized countries in Latin America. Over 87 percent ofthe total population lives in urban areas of 2,000 or more inhabitants. Despite its high level ofurbanization, Argentina is still experiencing significant growth in its urban population. Between 1980 and1991 urban areas grew from 23.2 million to 28.4 million inhabitants (1.9 percent per year). Today 12.4million persons, or almost 38 percent of the country's population, are concentrated in the Buenos AiresMetropolitan Area (AMBA).1 Population densities are high with nearly 14,800 persons per km2 in the cityof Buenos Aires (roughly the same as Paris). The city population (3 million) is growing at a rate of 0.7percent per year. Yet some of the suburban municipalities are growing at a rate ten times faster (17percent per year). Sound urban transport management is critical for meeting the growing transport needsof the AMBA.
1.2 There are nearly 6.5 million motor vehicles in Argentina. On the average week day, 2.5million cars circulate in the AMBA alone. Private car ownership has been on the rise, with about 150,000vehicles being added to the fleet in the AMBA every year. Largely because of the rapidly increasing carownership, the share of public transportation in the AMBA has fallen from 75 percent of motorized trips in1970 to 61 percent in 1994. On the other hand, trips by car have increased from 2.7 million trips per dayin 1970 to 4.5 million per day in 1991, a 60 percent increase.
1.3 The sharp increase in traffic in the city of Buenos Aires, particularly in the central area'snarrow streets, has led to growing congestion, rising air pollution, and an increasing number of trafficaccidents. As a result, the National Congress announced a state of traffic emergency for the city ofBuenos Aires in 1994 and created a special committee comprising representatives of the TransportSecretariat and the Municipality of Buenos Aires. Since then several measures have been implementedto help alleviate the rising congestion problem. Most cars, for example, are now restricted fromcirculating in the central area (Microcentro) during the hours of 10 a.m. to 8 p.m. These measures, had amarginal impact in the Microcentro, but car congestion accentuated by 10,000 buses and 40,000 taxispersists in most other parts of Buenos Aires. Substantial social costs are generated by travel delays, fuelconsumption, and health problems from air pollution and traffic accidents. Strengthening publictransportation is a crucial step in reducing these costs. The subway and suburban railways have a strongpotential for alleviating many traffio-related problems in the AMBA.
1.4 Public transportation in the AMBA is provided by 15,000 private buses, by a 44-kmsubway network, and by seven suburban railway operations 900 km in length. The rise in the number ofprivate cars and the deterioration of the subway and suburban rail services led to a drop in the number ofpeople using public transportation. Between 1984 and 1993, suburban rail usage dropped more than 30percent; the number of subway passengers decreased by more than 20 percent during the same period.
1.5 Until 1993, unreliable schedules and security concems contributed to the decline inridership. Compounded by inefficient management, the results were unsustainable operating deficits. AtUS$150-250 million per year, operating losses on the AMBA suburban railway accounted for 25-40percent of the entire annual deficits for the Ferrocarriles Argentinos, the Government organization thatoperated all the railways in Argentina. With a view towards reducing operating subsidies by increasingefficiency, quality and thus ridership, the Argentine Govemment decided in 1991 to concession bothFerrocamles Argentinos and the Subterrfneos de Buenos Aires (the subway) to private operators.
1.6 The state-owned Ferrocamles Argentinos used to be the sole provider of both railwaypassenger and cargo services. In 1991 the Govemment called for bids on operating concessions forvarious rail packages as a means of introducing private sector participation in Argentine railways. Theprivatization program included six inter-urban rail packages (mostly freight) and seven suburban
The Buenos Almes Metropolitan Area, as defined by "Pre-ATAM," includes the municipality of Buenos Aires and 36 othermunicipaltes boated within a 60-km radius.
passenger packages in the AMBA. By mid-1993, most inter-urban passenger rail services werediscontinued. The responsibility for those which remained was transferred from the National Govemmentto the provincial govemments.
1.7 Passenger service in the AMBA, including the subway, was reorganized under theCoordination Unit for the Railway Restructuring Program (UCPF). The privatization of commuter railservice in the AMBA was initiated by subdividing the network into seven packages to be concessionedtogether with the five subway lines and the pre-metro2 line. It was envisaged that the concessionaireswould operate the awarded lines and execute the capital investments specified in the contract. Under theconcession, the Govemment would continue to own the infrastructure and rolling stock, and wouldfinance investments to modemize antiquated parts of the system.
1.8 As detailed in Chapter II, bids for 10-year concessions (20 years for the subway andUrquiza line) were solicited based on service parameters set by the National Govemment, includingfrequency, capacity and fares. The winning bidder was the one requiring the lowest Govemmentpayment on a net-present-value basis. In January 1994 a 20-year concession became effective for thesubway along with the suburban Urquiza line (having the same track gauge as the subway system). Withthe transfer of the Mitre/Sarmiento systems in May 1995, the entire passenger rail system of the AMBAis now operated by the privaite sector.
1.9 The initial results of private operation are encouraging. In 1996 suburban passengervolumes were 95 percent above the level of 1993, and subway ridership had increased by 37 percent.While some of the increase in paying passengers is attributable to a reduction in fare evasion, the netincrease is primarily due to improved service quality.
B. Institutional Framework
1.10 Transportation in the AMBA is subject to the regulatory and fiscal policies of the national,provincial and municipal govemments. The National Govemment is responsible for construction andmaintenance of national highways, for financing investments and operating subsidies for the suburbanrailways and the subway, and for regulating the 147 commuter bus lines (connecting the city withsuburban districts of the AMBA) which represent roughly half of the 15,000 buses that operate in theAMBA, and for regulating the approximately 3,000 buses operating entirely within the city of BuenosAires. Furthermore, the National Govemment's Traffic Police Division is responsible for traffic controland enforcement.
1.11 The Provincial Govemment of Buenos Aires is responsible for the construction andmaintenance of provincial roads and for the rail passenger services between Buenos Aires and Mar delPlata. It also controls 59 provincial (inter-municipal) bus lines which account for about 20 percent of theAMBA bus fleet. The Municipality of the City of Buenos Aires (MCBA) is the owner of the subwayinfrastructure and rolling stock and is in charge of road and traffic management within the boundaries ofthe city.
1.12 One of the major sources of existing inefficiencies in the AMBA transport system is thelack of coordination and planning among the various jurisdictions and among the agencies responsiblefor road management and public transport provision. The results are high social costs from thecongestion, pollution, traffic accidents, uneconomic investment programs, and decreasing levels ofservice in many areas.
C. Sector Issues
1.13 Institutional Issues. Various attempts have been made to improve coordination amongthe three independent jurisdictions. To date, however, the AMBA is still lacking a consistent, coherentand cooperative approach to urban transport management. The quality, regulations (including motor
2 S Nhe it rail trarsit.
vehicle emission standards), enforcement and administration vary widely among the three jurisdictions.In addition, neither intermodal nor intramodal fare integration has been achieved, resulting in avoidablecosts and travel time increases.
1.14 Proposals were formulated in 1991 to create a multi-jurisdictional entity to facilitate jointplanning, regulation and control of urban transport in the AMBA. Based on an agreement signed by theMayor of Buenos Aires and the Minister of Economy, a working group called Apoyo a la Creaci6n de laAutoridad de Transporte del Area Metropolitana (Pre-ATAM) was created to define and develop anautonomous Metropolitan Area Transit Authority (ATAM). The ATAM would have been responsible forplanning and regulating the AMBA transport system. The political environment, however, was such thatthe bill to create the ATAM failed to be passed by the Argentine Congress. The Pre-ATAM by defaultassumed some of the functions of the proposed ATAM, although with a much more limited mandate, andgrew into a widely respected entity of transport specialists. It was recently converted into a TransportPlanning Unit (TUAMBA) under the Ministry of Economy and Public Works and Services.
1.15 Financial and Economic Issues. Priority investments to rehabilitate and modemize thesubway and suburban railways were identified, and a detailed investment program for each line wasincluded in the concession agreements. The concessionaires are undertaking the physical improvementson a repayment basis as specified in those agreements. As Government payments for completed workslag some 30 days behind the concessionaires' expenses for the improvement programs, theconcessionaires are obliged to bridge the financing gap from their own resources during this time. Themain financial issues relate to the successful continuation of the concessions and the availability of theresources necessary to further modemize and expand the systems. This may require the renegotiation ofthe concession contracts to extend them beyond their current duration, taking into account theexperience gained by the concessionaires and Govemment.
1.16 Environmental Issues. A recent World Bank Study3 concluded that traffic-generated airpollution has become a major problem in the inner sections of Buenos Aires. One of the study'srecommendations, to establish a modem system of air pollution monitoring, is the basis of the projectcomponent described in Annex J.
D. Lessons Learned in Past Bank Projects
1.17 Bank Experience in the Argentine Railway Sector. To date, the Bank has undertakenthree lending operations in the Argentine railway sector. The first two operations focused on investmentsin infrastructure and rolling stock. One of the main lessons emerging from these operations is the needfor demand-oriented investment planning. In both cases, neglect of demand factors adversely affectedcost recovery. The third lending operation, the Public Enterprise Reform Adjustment Loan (Ln. 3291-AR),helped in restructuring the Argentine railways while providing a safety net for about 70,000 redundancies.
1.18 Bank Experience with Similar Projects Elsewhere. Bank-wide experience with privaterailway concessions is still quite limited. There is, however, significant experience from Brazil informulating a comprehensive urban transport approach from which the following lessons can be gleaned:(a) lack of counterpart funds is one of the primary causes of project delays; (b) effective regulatoryagencies are critical to private sector participation; (c) clear institutional responsibilities greatly improvethe effectiveness of implementation; and (d) proposed investments and institutional changes should becompatible with an overall regional transport plan.
E. Rationale for Bank Involvement
1.19 The Bank's country assistance strategy discussed at the Board on May 4, 1995, and anupdate, discussed on April 25, 1996, aim to: (a) consolidate macroeconomic reforms, particularly bystrengthening weak public institutions; (b) rebuild deteriorated infrastructure; and (c) help Argentina'spoor adjust to the country's fast-paced changes. The proposed project would directly address the first two
3 World Bank 1995, Arentinan-Manalng Environmental Poluion: Issues and OpOons, Report 14070-AR, Washington, D.C.
objectives by supporting recent reforms in the AMBA's urban transport sector and by financing therehabilitation of long-neglected transport infrastructure. Further, it would deepen the Bank's previousinvolvement, through the Public Enterprise Reform Adjustment Loan, in the privatization of the Argentinerailways. Buenos Aires is now in the forefront of private mass transit, but its reforms are still quite recentand potentially fragile. The Bank's continued support could be vital for the viability of increased privatesector participation in urban rail services-an approach that could be replicated in other large urbanareas, fitting with the proposed CAS, which highlights provincial reform and development as one of thethree current key development objectives.
F. Sector Strategy
1.20 Buenos Aires has no urban transport sector strategy per se. There is no single institutionresponsible for urban transport planning in the metropolitan area. The proposal to create such anauthority (ATAM) failed to gain political support. The body set up as a precursor (pre-ATAM) has beenacting successfully as an informal coordination group, achieving positive actions such as theimplementation of reserved bus lanes; it was recently renamed Transporte Urbano del AreaMetropolitana de Buenos Aires (TUAMBA) with a view to establish it as a permanent planning groupunder the Secretariat of Public Works and Transport (SOPyT) within the Ministry of Economy.Responsibility for the elements which together determine the nature of urban transport in Buenos Airesremains fragmented. There is relatively little formal collaboration or coordination of policy in areas inwhich the jurisdictions overlap. For example, public transport and some major road investments in theAMBA are the responsibility of SOPyT, while investments and maintenance of the vast majority of theroad network are handled by the provincial or municipal govemments.
1.21 The issues arising from rail privatization at the national level have been analyzed in arecent Bank report.4 Those issues which relate to the Buenos Aires subway and suburban railway systemwere taken into account in the preparation of this project. As there are no recent evaluations of the otheraspects of urban transport in the AMBA, the Bank's project preparation team conducted an independentassessment which is described in Annex A and summarized below.
1.22 From the viewpoint of the Bank's experience in the urban transport sector, the transportcharacteristics of the AMBA present a mixed picture. The emphasis on private rail and bus operationcompares well with international experience on supply efficiency in urban transport. The existence ofcompetition between overlapping routes in a regulated framework for the bus industry also appears to bea good practice.
1.23 What is missing at present is any effective planning and implementation of trafficmanagement, any coordination of road traffic and public transport policy implementation, and anyconcerted effort to deal with the safety and environmental problems associated with metropolitantransport. To some extent that is a matter of intemal coordination between the Transport and PublicWorks Agencies. One of the aims of the project is to improve that relationship through association in themanagement of a technical group for metropolitan transport planning.
1.24 Despite the constraints on what is immediately possible, the case for improvedinterfunctional and interjurisdictional coordination remains. The philosophy of the project is therefore tohelp introduce measures aimed at increasing commitment to a greater level of metropolitan transportcoordination. It is believed that this can best be achieved by demonstrating the possibilities andadvantages of coordinated action, based on strong technical capability, to deal with commonlyrecognized problems. The strategy of the project is to encourage this in three ways:
(a) the development of a core group of technical skills in metropolitan transportplanning to ensure a sound technical basis for the design and implementation ofmetropolitan transport and traffic measures;
4 World Bank 1996, Argenbn,-Transport Pnvaizabon and Regulaton: The Next Wave of Chalenges. Report 14469-AR,Washington, D.C.
(b) the carrying out of an urban transport study which would require the cooperationof diverse agencies throughout the metropolitan area, and produce planningtools and projections useful to all of them; and
(c) the creation of a management committee, which would include representativesof the different functions and jurisdictional levels, to identify problems commonto the separate jurisdictions and to provide policy guidance to the technical coregroup.
1.25 The development of the technical capacity to adequately address the complexinteractions within the urban transport system is at the center of the strategy for institutionalstrengthening. The first part of the strategy is to establish a project implementation unit for the WorldBank project, which would be technically oriented and have close links with the new core groupdeveloped for metropolitan transport planning. These groups would be the agencies responsible for theassembly of the metropolitan transport data base and analysis capability and would have staffrepresentation from road and transport agencies.
1.26 The second part of the strategy is to associate those entities, who would benefit from amore coordinated approach, in the management of the technical group and the urban transport study.The purpose of the management committee (representing the various functional and jurisdictionalauthorities) would be to identify issues of common concern suitable for analysis at the metropolitan level;to address these issues the skills of the technical group would be made available. The initial approach tocoordination is thus problem-oriented, boUtom-up," but with a long-term view of converting thecommittee into a permanent body responsible for transport planning for the entire metropolitan area.
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II. FRAMEWORK OF URBAN RAIL CONCESSIONS
A. Background
2.1 The AMBA is among the world's largest metropolitan areas. In 1991 nearly 5 billion tripswere generated in the area, of which 3.4 billion were by public transport. Passenger railway servicescarried 209 million passengers annually in 2,000 trains over a network of 900 km and 267 stations. TheAMBA's 44-km subway system served another 144 million annual trips.
2.2 Prior to the Govemment's decision to restructure the suburban rail services throughconcessions in 1990, the network had been in rapid decline. Between 1970 and 1991, while thepopulation of the metropolitan area rose from 8.4 to 10.9 million people, both the subway and thesuburban railways lost nearly half of their passengers.
2.3 Since 1961, passenger services had been organized under Fefrocamles Argentinos(FA). Under this arrangement each of the six divisions operating in Buenos Aires was responsible forfreight and passenger services. This latter category of service had grown to nearly 500 million payingpassengers per year at the time of FA's creation. For most people, the railways were the predominantmode of transportation.
2.4 The reasons for the decline suffered by the passenger services were similar to thoseexperienced by Argentina's railway system as a whole. Due to a lack of a commercial outlook, the focuswas more on production targets than on satisfying user needs. Management was also heavily influencedby the interests of labor unions and equipment suppliers. There were too many employees, outdatedoperating practices, little maintenance, and no new investments. Even though the potential market formass transit had grown and services had been attractively priced, the progressive deterioration ofservice quality, reliability and security led to a rapid decline in passengers from the 1 960s onwards.
2.5 By the end of the 1980s, FA passenger services had become unreliable, stations haddeteriorated, fare evasion was extremely high, and grade-crossing accidents were increasing infrequency. In March 1990, at the height of a 75-day railway strike which virtually paralyzed all passengerservices, Metropolitan Railways (FEMESA) was created as a state-owned corporation separate from FA.FEMESA's objective was to provide commuter services within the AMBA. Subsequently, theGovemment decided to privatize FEMESA.
B. The Concession Process
2.6 The concession process was set in motion with the passage of the State Reform andPublic Enterprise Restructuring Law in 1989. The law's aim was to reduce the public deficit and revitalizethe economy by encouraging private sector operation of major state-owned enterprises. Of all stateenterprises, FA was responsible for the largest drain on the national treasury-about US$1.4 billionannually, of which approximately US$465 million was incurred by the Buenos Aires suburban railnetwork. Reducing the losses represented the main motivation for restructuring the railways byconcessioning their operation to the private sector.
2.7 The suburban railway services were grouped into seven different rail networks that hadexisted in the 1950s before the creation of FA: Mitre, Sarmiento, Urquiza, Roca, San Martin, BelgranoNorte and Belgrano Sur. The subway, consisting of five underground metro lines and a surface lightrailway line, and owned by the Municipal Government's Subtejrrneos de Buenos Aires S.E. (SBASE),was placed in a bidding package with the Urquiza line which shares the same track gauge and isphysically connected with the subway.
2.8 The concessioning of Buenos Aires' subway and suburban railways was unique. There isno precedent in the world of using the concession approach for a loss-making urban rail transit system.Buenos Aires' subway system is old and obsolete, with several original sections dating from its openingin 1913. Since the 1950s there have been few improvements. When the decision to concession the
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subway was made, the system was in need of a complete rehabilitation, including tracks, communication,signaling systems, escalators and cars.
2.9 After the multi-faceted evaluation method used for concessioning the freight railwaysproved controversial, the Govemment adopted a single quantifiable parameter for awarding theconcessions for the suburban railways and the subway. Following an intemational competitive biddingprocess, the concessionaires were selected based on the lowest Govemment payment requested in thebid to operate the line and undertake the specified investment program.5 Under this arrangement, theconcessionaires operate the lines and the Govemment (i.e., FEMESA in the case of the suburbanrailways and SBASE in the case of the subway) continues to own the infrastructure and rolling stock.Table 2.1 summarizes the main features of the metropolitan railway concessions.
Table 2.1: Features of the Metropolitan Railway ConcessionsLength 10 years (20 years for the subway and the Urquiza line) plus optional 10-year
extensions indefinitely.
Ownership The National Govemment (the City in the case of the subway) remains theowner of the fixed facilities, including track, stations, and rolling stock.
Labor Concessionaires can introduce whatever labor practices they considernecessary to increase labor productivity. Labor redundancy was financed bythe Govemment.
Operations and All operations are performed by the concessionaires, who are alsoMaintenance responsible for the maintenance of track and rolling stock. The
concessionaires either receive an operating subsidy or pay a 'fee' for the useof the infrastructure. The Govemment sets minimum service level andservice quality for each concession.
Tariffs The Govemment sets maximum fares which are subject to automaticincreases according to the service quality achieved and increases in the costof providing the service. Non-achievement of quality levels results in financialpenalties.
Capital Investment Concessionaires undertake project-specific annual investments as specifiedin the terms of the concession but financed by the Government (except forLine A). Line A investments are to be financed and undertaken by theGovernment.
Financial Net monthly subsidy/fee payments defined for each service corridor for thePerformance entire concession period.
Source: World Bank, 1996, Argenna- Transport Pnvatizaton and Regulaton: The Next Wave of Chalenges, op. cit.
2.10 The Govemment accepted from the start that public financing would be required tooperate passenger rail services and undertake the investments needed to rehabilitate the system. Foreach corridor the Govemment defined both maximum fares and minimum service frequencies. The latterwere defined in terms of rail cars per hour for each 24-hour service cycle and for each day of the week.In addition, service quality standards were defined for each corridor, including percentage of on-timetrains and percentage of canceled trains. If concessionaires reached or surpassed these servicestandards, they would be entitled to increase tariffs beyond authorized maximum levels, as aperformance incentive. Chronic failure to comply with service standards could result in specific penalties.
The rehabilitation of subway Line A was left out of the concession process due to legal problems. An Italian firm had already signeda contract to rehabilitate Line A, but irregularities sent the involved parties to arbitration. (In the end, the case was decided In theGovemmenfs hfvor and the planned works were not carried out). While the rehabilitation of Line A had to be excluded from thesubway and Urquiza concession, the tender documents and subsequently the concession agreement between the Government andthe concessionaire committed the Government to separately rehabilitate Line A by December 1997, in addition to its otherobligations.
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2.11 According to the terms of the concessions, the Govemment was to own the rolling stockand infrastructure, all of which would be assigned to the concessionaire. The concessionaire would havefull responsibility for all rail activities, ranging from marketing to maintenance of rolling stock andinfrastructure. A key design feature in concessioning the suburban railways and the subway was that amonthly payment (combining operating subsidies and investments for the rehabilitation program) was tobe made to the successful bidder for each service corridor over the entire terms of the concessioncontract. The schedule of monthly payments, adjusted for inflation, was negotiated Lip-front,"before theconcession was awarded.
2.12 Concessionaires assumed the risks inherent in most business activities. For example, ifactual ridership (and revenues) exceeded estimates, incremental net income accrued to theconcessionaires. If, on the contrary, actual numbers proved lower than estimates made at the time thecontract was finalized, concessionaires absorbed the resulting loss and were not entitled to additionalsubsidy. The same principle applied to operating expenses. Cost savings would accrue to the benefit ofconcessionaires and cost overruns to their detriment. Concessionaires, however, could not attain lowercosts by compromising the levels of service to which they were contractually committed. Concessioncontracts included several mandatory service standards, such as number of cars to be dispatched perhour, maximum allowable canceled and delayed trains, and equipment maintenance and availabilitystandards. In fact, concessionaires had a strong incentive to exceed these service standards. Only thencould they claim a fare increase.
2.13 The characteristics of the successful bids for each railway package are summarized inTable 2.2. The calls for bids were staggered; first, the Mitre, Sarmiento and Urquiza/Subway; second, theRoca and San Martin lines; and finally the Belgrano Norte and Belgrano Sur lines. On January 31, 1992,seven consortia consisting of 114 local and foreign companies submitted qualifying bids. Constructionfirms with no previous railway operating experience were the most prevalent bidders. Companies withrail operating experience accounted for only 26 percent of those who bid. In all winning consortia therewas a significant participation of private bus companies or groups associated with them.
Table 2.2: Winning Bids for the Metropolitan_Railway_ConcessionsOper. Subsidy Est. Passengers in
Line Concessionaire Takeover Date No. of bids or (Fee) Capital Investment Year 5 Proposed(US$ million) (US$ million) (million) Staffing
Mitre TBA 5/27/95 3 84.1 221.2 63.9 1,660
Sarmiento TBA 5/27/95 3 (177.9) 193.2 106.1 1,528
Urquiza Metrovlas 1/1t94 3 101.7 37.8 26.0 697
Subway Metrovias 1/1/94 3 (438.4) 399.2 171.0 2,129
Roca Trainmet 1/1/95 4 (70.0) 136.0 150.5 2,062
San Martin Trainmet 4/1/94 4 (44.7) 62.7 63.7 867
Belgrano Sur Trainmet 5/1/94 3 166.1 43.8 19.1 788
Belgrano Norte Ferrovfas 4/1/94 2 196.7 58.7 28.2 830
Total (182.4)_ 1,152.6 628.5 10,561
2.14 By the end of 1992, three consortia were selected for the seven service packages:Metrovias for the concession of Mitre, Sarmiento, and Urquiza/Subway; Trainmet for Roca, San Martin,and Belgrano Sur; and Feffovias for Belgrano Norte. The investors for Metrovias later on dividedthemselves into two groups, Metrovias and Trenes de Buenos Aires (TBA) responsible for theUrquiza/Subway and Mitre/Sarmiento concessions respectively. The total amount of Govemmentpayment requested by the winning consortia amounts to about US$1 billion (June 1992 USS value). Most
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of this amount is intended for capital investment, as opposed to the Government subsidies beforeprivatization which mostly financed operational deficits. The real estate assets necessary for theoperation of the concessions (e.g., platforms, ticketing, etc.) were transferred to the concessionaires. Allother assets remained with FEMESA who became custodian of these assets until their final disposed.FEMESA is exploring a number of possibilities, including expanding the use of these assets through theinvolvement of the private sector to construct shopping malls similar to Union Station in Washington,transfer stations, etc.
C. Initial Benefits of Concessioning Urban Rail Services
2.15 The concessioning process for the suburban railway system and the subway whichstarted in October 1991 finally concluded on May 27, 1995 with the transfer of the Mitre and Sarmientolines to TBA. Based on the performance of the concessions so far, they are generally considered to be ahuge success. Recent data for the revenue passengers carried indicate an impressive growth rate overthe last three years. An important reason for this immediate improvement has been the anti-fare evasionmeasures adopted by all private operations. However, even in the case of the subway where fareevasion was a relatively minor problem, 1996 ridership was up by 37 percent compared to 1993, the lastyear before its concession. The traffic gains have also been fostered by the improvements in servicereliability and security, particularly at stations. Other service indicators, such as punctuality, interruptionsand cancellations, also show major improvement. A survey conducted for the Government in early 1995found that 96 percent of the travelers on four suburban lines felt the service was as good or better thanbefore, with a majority stating that it was better. Furthermore, unlike other privatizations, railwayconsumers did not have to pay higher prices for this quality improvement.
Table 2.3: Evolution in Passenger Volumes and Service Quality(January-December Comparison)
Passengers (in million) Capacity (in million car-km) On-time Operation1993 1996 A% 1993 1996 A% 1993 1996 A%Suburban.... Ra.. lway.. ......................................................................................................................................................................................................
Mitre 34.4 69.8 103% 16.3 21.7 33% 76% 96% 26%Sarmiento 60.5 99.3 64% 20.3 23.7 17% 73% 95% 30%Urquiza 16.8 24.7 47% 8.5 9.7 15% 92% 94% 2%Roca 64.9 136.0 110% 26.0 43.1 66% 81% 96% 19%San Martin 21.7 43.5 101% 13.5 15.6 16% 83% 90% 8%Belgrano Norte 11.8 28.8 144% 8.5 10.5 24% 85% 85% 0%Belgrano Sur 2.0 11.1 462% 2.1 6.4 206% 46% 95% 107%
Passengers (in million) Capacity (in million car-km) Minutes of Disruption... .................................................................................................................................................................................................................
Subway 145.3 198.9 37% 20.1 26.8 33% 23,165 9,013 -61%
2.16 From the Govemment's financial perspective, the implications of the restructuringprocess can be evaluated based on a comparison of the total subsidies in the concession contracts withthe actual deficits before restructuring. The operating deficit of the suburban railway in 1993 alone wasestimated to be US$465 million. Additionally, the subway was losing US$40 million per year. Incomparison, the Government payment required to operate all the systems over the life of theconcessions amounts to US$680 million in present value terms (in 1992 US$). The main portion of thispayment (US$560 million) goes toward capital improvement for rolling stock, track, communications,signaling systems, and stations, and only US$120 million represents an operating subsidy. At the end ofthe concession period (20 years for the subway and Urquiza, and 10 years for the other lines), theGovernment is expected to have saved US$5.5 billion in payments and in the process have acquired animproved and well-functioning passenger railway system.
2.17 Another benefit of the restructuring process has been a reduction in the economic costsof operation, mainly through increased labor productivity and more efficient use of capital. FEMESA, atits creation in 1991, employed about 16,000 people to carry a volume of 209 million paying passengers.
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In 1996, the suburban railways carried 413 million passengers with about 8,400 employees. Thus, laborproductivity increased nearly four-fold: from 13,000 passengers per employee to 49,000 passengers peremployee.
D. Regulatory Issues
2.18 The Government's early attempt to create a regulatory agency (ATAM) to oversee urbantransport in the AMBA, including the railways, did not materialize. In practice, the concessions areregulated by the Unidad de Coordinaci6n del Programa de Restructuracion Ferroviana (UCPF) of theSOPyT, which had been responsible for the design and implementation of the concession process. Themain role of the UCPF is to enforce the terms of the contract and to monitor and certify the progress ofthe government-financed investment program. The ultimate authority regarding contractual and tariffchanges rest with the Minister of Economy. Since the concession contracts restrict the ability of theconcessionaire to raise tariffs and require minimum service standards, the approach not only providessimplicity from the perspective of regulation but also provides a strong incentive for the concessionairesto increase ridership.
2.19 As the concession process has matured, several issues have arisen which were notforeseen due to the pioneering nature of the process. The growth in ridership has been beyond expectedlevels, and there is little provision in the existing contracts to accommodate this rapid growth in traffic.The investments are fixed in time and can only be brought forward at the concessionaire's expense.Since the concessionaires do not own the assets, they find it difficult to obtain financial resources withinthe short time frame of the concessions. Since the ridership pattern changed, there is a need to modifythe govemment-financed investment program to undertake more efficient investments in response toincreasing ridership. To address these problems, the bicameral commission of Congress responsible foroverseeing the nation's privatization process gave the Government permission in April 1996 to re-negotiate the contracts with private concessionaires to allow for a change in the terms of the contract aswell as to extend the length of the contract. TBA, the concessionaire for Mitre and Sarmiento lines,already has prepared an ambitious program of investment equivalent to US$900 million, which wouldcompletely revamp its network with new cars, electrification, signaling, communications and eliminationof at-grade road/rail crossings.
2.20 Another issue is the inability of the Government to meet some of the conditions in theconcession contract in a timely manner. The delays stem from higher-than-expected ridership, worse-than-expected condition of the rolling stock and facilities, and a lack of funding for the rehabilitation ofLine A. While the proposed project would help alleviate some of the delays, there is still the issue of theextent to which the concessionaires should be compensated for these delays. In the case of the so-called"automatic tariff increases" that are triggered by changes in the cost of service, delays are common andthere is no clarity on the compensation to the concessionaire for the delays in payment due to the time ittakes the Govemment to institute the changes in the contract to permit a tariff or subsidy increase.
E. The Metrovias Concession
2.21 The original Metrovias consortium was selected for the subway/Urquiza, Mitre, andSarmiento concessions which together account for over 50 percent of all metropolitan rail passengers. Itsowners were a large construction company (Benito Roggio y Asociados, 33.33 percent), a consortium ofbus operators (Cometrans, 30.33 percent), a rolling stock manufacturer (Morrison Knudsen ArgentinaS.A., 16.67 percent), a foreign operator (Burlington Northem, 16.37 percent), and a small constructionfirm (SKS, 3.00 percent). During the final stages of contract negotiations for the Mitre and Sarmientoconcessions, Cometrans, Morrison Knudsen and Burlington Northern formed the new consortium Trenesde Buenos Aires (TBA) and released some of their shares in Metrovias to Benito Roggio. Likewise,Benito Roggio transferred its interest in Mitre and Sarmiento to Cometrans. Metrovias is now majorityowned by Benito Roggio y Asociados with small participation from Cometrans and others.
2.22 The concession held by Metrovias for the Buenos Aires subway and the Urquiza linebegan on January 1, 1994. This concession differs from other passenger railway concessions in that it is
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for a period of 20 years instead of 10. The increased length of the concession was based on the amountof the investment program (US$493 million plus about US$120 million for Line A), and Includes sometechnological change. Under the contract, Metrovias will receive decreasing operational subsidies for thefirst five years of the concession (until 1998). Starting in 1999, it will begin making payments (fees orcanon) to the Govemment which increase every year until the termination of the concession in 2013.
2.23 Over the 20-year life of the concession, Metrovias will pay the Govemment about US$26million for the concession and receive about US$208 million in Govemment payments for undertakingthe specified investment program6 . In addition, the Govemment will provide about US$120 million worthof improvements in Line A. This is advantageous to the Govemment, considering that in 1993 alone thesubway and the Urquiza line incurred an operational deficit of US$54 million. Metrovias' offer was basedon an expected increase in traffic of 60 percent over the length of the concession compared to 1993. Inthe same period, expenses were projected to decrease by 36 percent.
2.24 Given that the concession has now been under private operation for more than threeyears, a clearer understanding of its results is available. Prior to the takeover, traffic on the Urquiza linewas declining at a rate of 4.7 percent per year; the decline in the subway was 2.7 percent per year. By1996, ridership on the subway had increased by 37 percent compared to 1993; on the Urquiza line it wasup by 47 percent during the same period. By the end of 1996, the subway traffic had surpassed yeareight forecast for the traffic as included in the concession documents (see Chart 2.1). On the other hand,ridership on the Urquiza line grew slightly less than expected during this period. Nonetheless, Metroviastotal revenues were up by more than US$20 million in 1995 compared to the projections in theconcession contract.
Chart 2.1: Passenger Projections for Metrovias Concession
350e Start of Private Concession:,.-
325 - Actual | January 1, 1994 - -
300 - Revised Projection_ --. Concession Cortract
250-
1980 85 90 95 20D0 5 10
AssumpUons: an nual growth of 6 percent In 1996-7 which decreases to 4 percent during 198 99 because of the plannedresbliatalon of Une A. Fadlowing tre rehabilitaoon period, total ridership is epected to bounce back to a grpwth of 6 prcent In2000. Thereater, growth in traffic is sxpected to slow down gradually to I percent by 2005. Between 2005 and 2013, tratfic isprojcted to grow by I percent each year which is slightly above the norrnal growth rate of population (0.67%) in themunicipality of Buenos AJres.
In prent vle terrn at a discount rate of 12 percert.
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III. THE PROJECT
A. Project Objectives
3.1 The Project's objectives would be to: (a) support the private-public partnership inimproving the service quality and coverage of mass transit; (b) support the infrastructure improvementsdefined in the concession agreement between the Govemment and the private sector; (c) assist inimproving the conditions of traffic safety and environmental quality; and (d) help in developing anintegrated urban transport (road and rail) system for the AMBA.
B. Project Description
3.2 The project would comprise a package of actions and investments aimed at thefollowing:
(a) finance the rail equipment and infrastructure which are critical for the upgrading of publictransport services;
(b) promote the integration of the transport system by upgrading transfer stations among raillines, building better transfer facilities between rail and road-based transport, andgenerally improving road access to rail stations;
(c) improve traffic safety and environmental conditions through the construction of gradeseparations at high-volume crossings, the enhancement of controls at road/rail gradecrossings, the development of a complementary program of road safety actions, and theintroduction of systematic air pollution monitoring; and
(d) strengthen the institutional framework which would ensure the continued operation of aneconomically and environmentally sustainable transport system in the metropolitan area.
3.3 The proposed works, goods acquisition and technical assistance have been grouped intothe following five subprojects:
(a) support of the basic investment program of the Metrovias concession (36 percent of totalproject costs net of project administration);
(b) rehabilitation of subway Line A (31 percent);
(c) integration of the transport system (9 percent);
(d) environmental monitoring and traffic safety program, including road/rail gradeseparations (16 percent); and
(e) strengthening of the institutional framework (8 percent).
3.4 Basic Investment Program of the Metrovias Concession: The 1992 tenderdocuments for the subway/Urquiza concession included a detailed investment program, which is nowpart of the Govemment's concession agreement with Metrovias. A $142.9 million slice (about threeyears, 1997-1999) of that program would be considered part of the project; $50 million of this would befunded from the World Bank loan. In accordance with Article 3.13(a) of the procurement guidelines,works and goods required for the basic investment program would be procured by Metrovias, using itsown procedures.
3.5 The specific improvements would include: Rehabilitation of subway Lines B, C, D and E,including: (a) partial track renewal; (b) renovation of electric substations and transmission systems; (c)automatic signals and operations control center; (d) station improvements and the rebuilding ofescalators; (e) workshop improvements; and (f) renewal of ventilation and drainage systems. Slightlyover 10 percent of the total would be for similar improvements on the Urquiza line.
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3.6 Rehabilitation of Subway Line A. This subproject would include the complete renewalof track, three new electric substations, renewal of the power transmission system, renovation of thesignal and communications system, installation of a new control center, replacement of drainage pumps,new ventilation systems, renewal of station escalators, and the integration of the existing Lima andPiedras stations at a location which would greatly improve transfer conditions with subway Line C. Theseworks would be grouped into five contracts for (a) track renewal; (b) other civil works; (c) electricalequipment; (d) signals and communications; and (e) expansion of the traffic control center.
3.7 Integration of the Transport System. This subproject has been defined as a sectoralprogram. The specific criteria and procedures, including those related to environmental assessment andconsultation with neighboring communities and businesses, are currently being defined and will becontained in an Operational Manual, the approval of which would be a condition for civil worksdisbursements under this subproject.
3.8 The subproject would complement civil works at transfer stations which have alreadybeen agreed under the concession agreement. It would include the works and actions detailed below,which aim to achieve better synergy among the existing rail and road-based services.
(a) Transfer centers at or near major rail stations where transfer conditions for publictransport passengers would be greatly improved through the incorporation of off-streetbus terminals, pedestrian facilities, car parks, and drop-off areas. Preliminary analyseshave been carried out for an initial 14 locations, identifying the main issues andrecommending improvements. Feasibility studies are underway, including preliminarycost estimates and the preparation of traffic circulation plans. It is expected that, by loaneffectiveness, preliminary engineering will be completed for eight stations; final designsand bidding documents will be prepared thereafter.
(b) Improvements near outlying rail stations to ease the access for buses, pedestrians, carsand/or bicycles. These would largely consist of road and traffic engineeringimprovements, such as bus priorities, traffic signals, geometric changes to provide spacefor passenger drop-offs or to correct traffic bottlenecks near the station, walkways,sidewalk improvements and bicycle facilities. Such schemes would be designed bySOPyT and be implemented in close collaboration with the municipalities concemed.
(c) Some station improvements would include secure facilities for bicycle parking. In thisregard, a promotional program would be developed to encourage bicycle access tooutlying railway stations. Increased bicycle use at these locations is expected to raise railridership as the area of influence of those stations would be expanded and benefit somelow-income rail customers who could save the additional fares needed for feeder busservices.
(d) Other station improvements, especially where improved transfer conditions between tworail lines or between rail and road-based transport would yield significant benefits topassengers and thus make mass transit more attractive.
3.9 Environmental Monitoring and Traffic Safety Program. This subproject wouldcombine the initiation of air pollution monitoring with an action plan that SOPyT has defined to reducethe high number of traffic accidents at road/rail crossings. The air pollution monitoring component isdescribed in Annex J. With regard to the traffic safety program, environmental assessments and publicparticipation exercises were carried out for two proposed road/rail grade separations, selected from aninitial list of 20 schemes on the basis of economic retum. This experience is being incorporated anOperational Manual, the approval of which would be a condition for civil works disbursements under thissubproject; it would include the following components:
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(a) construction of ten to twelve grade-separated road crossings over/under suburbanrailway lines;
(b) development of a comprehensive strategy to improve the safety at grade crossingsbetween the road and the rail systems on the basis of a study to be funded under theproject; and
(c) improvements to the system of barrier-controlled road/rail crossings.
3.10 Strengthening of the Institutional Framework. A key element of the overall projectwould be the strengthening of coordinated transport planning at the metropolitan level, and support forthe creation of a Transport Planning Unit which would be responsible for the formulation of commonpolicies on pricing, financing, project evaluation and selection. It would also aim to develop policieswhich improve cost recovery and increase the long-term financial sustainability of the operating agenciesinvolved. The activities below would be included.
(a) Preparation of a transport model suitable for testing altemative transport investments,rail integration projects, bus route franchising options, tariff policies, and streetcongestion pricing. The last comprehensive survey of travel characteristics was carriedout more than 25 years ago, and is no longer a useful basis for investment and policydecisions regarding transport in Greater Buenos Aires. Numerous and often contradictoryproposals are being promoted by various agencies and interests to extend the subwaysystem, upgrade suburban railways beyond the scope currently envisaged in theconcessions, and to further enlarge the system of urban motorways. The proposedtransport survey and model would establish a sound footing on which the feasibility andrelative priorities of these (and other) proposals can be determined on a quantified basis.The study, to be conducted by a consulting firm jointly with a govemment team formingthe nucieus of a permanent transport planning unit (see (d) below), would receiveguidance from a steering committee which would be composed of representatives of keyagencies responsible for metropolitan transport and road planning and management.
(b) Formulation of a program to improve the city's traffic and street environment, whichcould include such aspects as: (i) updating of the street hierarchy, especially in themicro-center where through traffic, buses, trucks, and pedestrians could be betterseparated; (ii) definition of a traffic calming program for selected streets or areas; (iii)consideration of area-wide traffic demand management through regulatory, pricingand/or physical measures; and (iv) improvement of pedestrian facilities, such asadditional pedestrian streets, sidewalk widening and repairs, and better refuges, signals,and markings at intersections.
(c) Technical assistance to SOPyT to provide advice on technical, financial, environmental,and social aspects during project execution.
(d) Establishment of a Transport Planning Unit (TUAMBA), funded by the Govemment andprimarily consisting of personnel previously working for the Pre-ATAM, which wouldinitially constitute the counterpart staff of the transport study consultants and, after thestudy's conclusion, be responsible for continued transport planning in the metropolitanarea.
(e) Training to professionals of the national, provincial and municipal govemments in suchfields as urban transport planning and economics, environmental management, andespecially traffic engineering and traffic safety management.
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C. Project Costs and Financing
3.11 While the Line A rehabilitation consists of a number of dearly defined works with a distinctcost estimate (US$81.9 million net of contingencies and taxes), the other project components areongoing or future programs which would be supported under the proposed World Bank loan. This permitsa certain degree of flexibility in defining the size and financing of individual project components, takingaccount of the following fixed points:
(a) the proposed loan would total US$200 million, of which US$50 million would be allocatedto the basic investment program of the Metrovias concession; and
(b) the Govemment would provide counterpart funding in an amount equal to the Bank loan.
3.12 The following cost table presents the overall project financing plan, which was confirmed atnegotiations.
Table 3.1: Project Cost Estimate(US$ million)
Subprj World Bank Government Total....................................................... n ......... ..................................................................... ............................................................................................................................
Metrovias Concession 50.0 92.9 142.9Rehabilitation of Subway Line A 64.8 17.1 81.9Transport System Integration 13.6 11.9 25.5Environmental Monitoring and Traffic Safety 24.3 20.6 44.9Institutional Framework 16.4 6.9 23.3Project Administration 6.7 - 6.7
Subtotal 175.8 149.4 325.2
Taxes -- 35.8 35.8Contingencies 24.2 14.8 39.0
Total 200.0 200.0 400.0
3.13 The total project costs are Table 3.2: Financing Planestimated at US$400 million including taxes - _and contingencies, with an estimated foreign Source Local Foreign Total % of Totalcost of US$157 million or about 39 percent of Government 200 -- 200 50the total cost (Table 3.2). Taxes and duties World Bank 43 157 200 50are expected to account for approximately 9 Total 243 157 400 100percent of the total cost, or US$35.8 million equivalent. Physical contingencies amount to 20 percent forLine A (allowing for lack of experience with similar contracts), 0 percent for the concession because of itsfixed price, and 10 percent for all others. Price contingencies amount to 2.3 percent per year. Base costsare expressed in December 1996 prices.
D. Project Risks and Benefits
3.14 Risks. To some degree, the usual risks associated with investment projects-cost andtime overruns-apply to this project. They are partly offset, however, by the fact that the largestcomponent (Metrovias concession) is already being implemented on the basis of agreed prices laid downin the concession agreement.
3.15 The investment is in well-known technology, available from many sources. Littletechnological risk is therefore involved. Commercially, the contractually agreed fixed terms ofremuneration for the concessionaire shift any financial risk associated with the basic investment programof Metrovias to the concessionaire. The risks thus become the risks of the concession failing. Three main
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reasons may be suggested for failure of the concession, namely: (a) financial failure of theconcessionaire due to commercial eventualities; (b) failure due to default by the Govemment on itspayment obligations; and (c) withdrawal of the concessionaire from the concession agreement forreasons other than direct financial failure.
3.16 In respect of the financial viability of the concession, the evidence available so farindicates that traffic and revenue are substantially higher than anticipated. There is also some anecdotalevidence that concessionaires are obtaining supplies at prices lower than those anticipated in theirconcession bids. The increase in aggregate costs being quoted appears to be primarily related toincreased quantity of service supplied. Given the growing passenger demand for rail transport in BuenosAires, the risk of direct financial failure appears small.
3.17 In respect of Govemment default on its obligations, there is also no immediate reason toview the risk as high. The National Govemment has so far made payments to all the rail concessionairesfully and on time. The most significant problem was the fact that the Line A rehabilitation would not becompleted by December 1997, the deadline provided for in the concession contract. However, becauseof the inclusion of that component in the project, a modification of the concession agreement was signedon January 22, 1997, which indicates June 1999 as the new estimated completion date for the Line Arehabilitation.
3.18 A less direct risk of the contract being upset may be associated with the changingpolitical status and management of the Municipality of the City of Buenos Aires (MCBA). Although theconcession contract for the subway is between the concessionaire and the National Govemment, thesubway is formally owned by the Municipality. Last year's move to local democratic election of themayor, in place of direct appointment by the National Govemment, opens up the possibility that themanagement of the subway could become a direct political issue. If, for example, responsibility for publictransport fare control were to pass to the Municipality of Buenos Aires (as is formally the case for themunicipalities within the Province of Buenos Aires), there would be a possibility that the Municipalitymight introduce fare constraints or policies which undermine the contract. Even in the event of such atransfer of responsibility, however, it seems unlikely that the Municipality would wish to undermine theconcession so long as the financing of the concession remains a National Govemment responsibility andthe average subway tariff remains below the bus tariff. Maintaining this responsibility thus seems to bethe best way of mitigating this risk.
3.19 The risk of the investment being invalidated due to the concessionaire voluntarilyabandoning the concession concems the possibility that, at some early stage of the concession, beforethe present value of the contract to the Govemment had become positive, the concessionaire would findit more attractive to withdraw than to remain in the concession. In practice, the phasing of the financialflows under the concession contract are such that at all times during the life of the concession thepresent value of the payments under the concession is less than expected Govemment paymentswithout the concession. In the event of termination of the concession the investment would revert to theGovemment. The Govemment would then have enjoyed a positive value of financial flows during theconcession, and a higher capital stock at the termination of the concession than would have occurredwithout the concession. Experience with other rail companies suggests that it would also then be possiblefor the Govemment to relet the concession to mutual advantage. Regardless, the investment programunder the concession mainly materializes towards the middle to later part of the concession period, thusmaking it unlikely for the concessionaire to walk away from the concession after reaping the profits fromthe investment phase of the concession.
3.20 Benefits. Quantifiable and non-quantifiable benefits are expected from the proposedproject, including cost savings, time savings for the users, and fewer accidents and fatalities. Bysupporting private sector participation in Argentina's railways, the proposed project would decrease thefinancial burden on the Govemment. In addition, there would be a positive environmental impact throughthe reduction of fossil fuel consumption and motor-vehicle related emissions, the introduction of an airpollution monitoring system, and the reduction in road congestion with a consequent improvement in airquality and noise pollution.
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E. Economic Evaluation
3.21 The Subway Investments. The concession awarded to Metrovias involved therehabilitation and operation, over a period of 20 years, of the subway network and the Urquiza suburbanrailway which connects with it. One of the terms of the concession was that Line A of the subway was tobe rehabilitated on the Govemment's account. The present project consists of the investments necessaryfor the Govemment to meet that obligation. If the investment were not to be made, the whole concessionwould be at risk. Economic evaluation was thus applied both to the concession as a whole and to theLine A rehabilitation Itself.
3.22 The basic assumption made in the appraisal of the concession is that, without theconcession, the subway would continue to run at the initial level of service, with annual expenditures byGovemment equal to those made in the final year before concessioning. This is treated as the "do-nothing" case. In the year prior to concessioning the subway carried 145 million passengers and requiredUS$40 million in operating subsidy. In addition, the Urquiza line, with which the subway is linked in theconcession, was losing over US$11 million a year, giving a total cost to Govemment of US$51 million. Ithas been assumed that these losses would continue in the absence of the concession.
3.23 In the years before concessioning, the cost to Govemment had been increasing, whilethe level of service and of patronage had been declining. Moreover, maintenance expenditures werebeing deferred so that the likely future expenditures to keep the system in operation would have had toincrease in any event. In the case of Line A, the oldest line, it is estimated that inability to maintainobsolete equipment would have led to closure within five years. The "constant cost to Govemment"assumption for the status quo is thus very conservative.
3.24 The net present value of the stream of payments by Govemment on the assumption ofconstant subsidy in the absence of the concession agreement amounts to US$401 million at a 12 percentdiscount rate. The stream of payments under the concession (adding together operating subsidies,capital expenditures and the fees payable by Metrovias) has a net present value of US$162 million. Thenet benefit in present value terms is thus estimated to be US$239 million (see Annex G).
3.25 There are three logical limitations to relying solely on the financial evaluations of theconcession. The first is if there are external disbenefits of the concession, the overall social benefit of theconcession might be negative notwithstanding a financial benefit for the Govemment. The second is thateven in the context of a successful concession, it would not be desirable for the Bank to finance aspecific investment which was not economically viable. The third is that there might be a possibility toretain the overall concession benefits by substituting some alternative investment program mutuallyacceptable to the Govemment and the concessionaires. All three of these issues are addressed throughan economic evaluation of the Line A rehabilitation investment itself (see below).
3.26 Line A. The evaluation procedure used is a conventional cost-benefit analysis in whichthe level and performance of traffic in the affected network is estimated with and without the investmentunder consideration over the effective life of the project (taken in this instance to be the 20 years of theconcession). The basic calculation only covered a single direction of traffic-outward along AvenidaRivadavia. The total benefits of the project should be at least double this because the inward joumey inthe corridor is forced to use parallel streets of lower capacity, for which exclusive bus lanes to improveperformance are not feasible.
3.27 The assumptions of this appraisal were that without investment, Line A would collapseafter a period of five years (some sensitivity tests were undertaken to allow for a longer period beforetotal collapse). With the abandonment of service on the line, the traffic would be carried predominantlyby public bus service. Given the limited road capacity in the Line A corridor (Avenida Rivadavia) thiswould involve slower joumey times for those transferred from subway to bus, increased costs of busoperation, and increased joumey time for private transport travelers in the corridor.
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3.28 The economic evaluation considered a number of altematives, with and without theproposed project to determine the correct level of investment and "project". Even though therehabilitation of Line A was thought to be the optimal project, other complementary investments wereconsidered on Avenida Rivadavia where it is possible to introduce an exclusive bus lane, regardless ofwhether Line A is closed.
3.29 Because the bus lane improves traffic flow in any event, the effect of introducing itreduces the calculated rate of return on keeping the Line A open. A range of altematives for the buslane, both with and without the subway, were considered. The calculated NPV for one-directionmovement along Rivadavia only, varies between US$334 million (assuming no bus lane either with orwithout the subway) and US$168 million (assuming that an exclusive bus lane was introduced over thewhole route whether or not the subway was maintained in operation). The results of the investigationdemonstrate that the altemative project (implementing a bus lane) would still be beneficial even if Line Awas rehabilitated. The Line A project, however, is shown to be superior to the altemative (bus lane) sincethe NPV, calculated for the project compared to the without situation that includes a full bus lane, ishigher than the NPV obtained for just introducing the bus lane.
3.30 Assuming that inbound traffic would generate at least the same benefits as the outboundtraffic on Rivadavia (actually the benefits will be more because there is no good altemative on theparallel streets for retuming traffic), net benefits in present value terms exceed any other possiblealtemative by at least US$340 million. It is worth noting that these calculations exclude any evaluation ofenvironmental beneft associated with traffic taken by subway rather than by road vehicle. They are,therefore, extremely robust for the Line A investment.
3.31 Grade Separations. A detailed scheme of economic evaluation has also beenestablished for the proposed road/rail grade separations. This evaluation procedure calculates time andoperating cost savings for road and rail operators and passengers, as well as accident cost savings. Thecalculations also include the effects on both road and rail system users during the period of construction,including those of reduced speed of rail operation and diversion of road traffic to other crossings in theinterim period. Details of the evaluation procedure are contained in Annex G.
3.32 The economic evaluations completed under these conventions adopted give intemaleconomic rates of return in the range of 14 to 90 percent and NPV at 12 percent between US$0.68million and US$24.82 million. However, the results are conservative due to the way in which accidentimpacts are estimated (on the basis of averages unrelated to volumes of various traffics at the specificsites) and evaluated (on the basis of lost future eamings associated with deaths and injuries). In addition,the economic benefits resulting from higher rail frequency due to complete elimination of grade crossingson the Roca line between Plaza Constituci6n and Temperley were also estimated to be about US$7million per year starting in the third year of the completion of the grade separations (against a totalinvestment of US$9 million). Due to the rapid increase in ridership since the concessions were let, thebarrier down-times have exceeded those stipulated in the concession agreements. This means that theimpact of site-specific traffic conflicts is likely to be under-represented, and that the level of rates ofreturn is thus likely to be underestimated.
F. Financial Evaluation
3.33 Metrovias was awarded the concession following a competitive process which ranked thebids on the basis of minimum net present value7 of the Govemment payments (operating subsidy andcapital investment) required to operate the system at a defined tariff and service level. Since tariffs arefixed by the Govemment and cannot be changed by the concessionaire, the profitability of the businessdepends on Metrovias' ability to lower its operating costs and to generate new traffic. In order to take intoaccount the effect of rising prices over the long concession period, the contract provides for an automaticadjustment in the subsidy/tariff level (choice of the Govemment) based on an increase in the cost ofproviding the contractual level of service.
7 Calculated at a discount rate of 12 percent.
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3.34 Metrovias is a private company which holds a 20-year concession for operating theBuenos Aires subway and the Urquiza line. According to the terms of concession, Metrovias is to receivedeclining levels of operating subsidy during the first five years of its concession. During the next 15-yearperiod, Metrovias must make payments to the Govemment for the use of infrastructure on an increasingbasis. Over the life of the concession, Metrovias is to make payments equivalent to US$360 million andreceive from the Govemment US$65 million in operating subsidies8. In 1993, the year before Metroviastook over the control of the system, the Government paid out US$54 million in operating subsidies forthe subway and the Urquiza line.
3.35 The financial and operating results for the first two years of private operations (Annex H),1994-1995, show the concession to be a success thus far. Total revenues were up by about 25 percent ineach of the operating years. In 1996, total ridership was up by 37 percent over 1993. In fact, the level ofridership attained in 1996 for the subway was equal to that of year eight (2001) of the proposal. On theUrquiza line, passenger volumes in 1996 were 48 percent above the 1993 level. Total revenues in 1995surpassed the forecast by about US$21 million. Metrovias also did well on non-operating revenue which,in 1995, was more than double what was included in the concession proposal.
3.36 The high growth in ridership and the requirements for taking over the concessionincreased the cost of providing the service. In 1995, labor costs of US$61 million were up by 14 percentwhen compared to the projections. Similarly, energy costs also increased by about 40 percent during thisperiod. On the other hand, maintenance costs were nearly half of the projection. The biggest increase,by about US$14 million, was in the expense category 'other expenses" which is probably used tobalance the difference between revenues and expenditures to the levels indicated in the concessionagreement. Based on the financial performance so far, there is very little likelihood that Metrovias wouldabandon the concession.
G. Environmental Impact
3.37 The rapid increase in motorized traffic and an accompanying reduction in all publictransport modes, especially rail-based, has led to a deterioration in the urban environment due to anincrease in air and noise pollution and congestion. Although a favorable wind regime has helped to keepair pollution relatively low in the AMBA, traffic fumes accumulate to unhealthy levels during workinghours in narrow, heavily traveled streets of the city center. While air pollution is primarily an inner cityproblem for workers, shoppers and residents who are subject to vehicle pollution, other externalities suchas accidents, noise pollution and congestion are rampant problems in many parts of the metropolitanregion and have contributed to the degradation of urban space.
3.38 Unfortunately, a system to monitor the level of air pollution does not exist in BuenosAires. It is, therefore, difficult to develop effective policies and practices aimed at limiting pollutionwithout knowing the seriousness of the problem. As part of project preparation, an air quality and noisemonitoring program has been defined for Buenos Aires. The proposed project would support theimplementation of the recommended monitoring system, including procurement and installation of themonitoring equipment and an associated training program at an approximate base cost of US$2 million(see Annex J).
3.39 In the case of the traffic safety subproject, a preliminary environmental screening wasconducted for all proposed road/rail crossings (see Annex I). None of the proposed crossings was foundto have adverse environmental impacts. No residential resettlement is envisioned, neither for the trafficsafety nor for any of the other subprojects. However, the operational manuals for the traffic safety andtransport integration subprojects would set out the procedures to deal with impacts on commercial andresidential properties, in accordance with a declaration of principles contained in a Social andEnvironmental Letter, which was agreed during loan negotiations and issued by SOPyT in March 1997.Govemment payments required in this respect would be considered part of project costs (see Table 4.2).
8 These are contractual obligations which differ slightly from the Metrovias initial proposal.
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Moreover, the institutional subproject would include technical assistance to provide advice onenvironmental and social aspects of project execution, under terms of reference acceptable to the Bank.
3.40 Positive environmental impacts would result from a reduction in cars and bus traffic andthus a reduction in air pollution, noise levels, traffic congestion, and road accidents. Other positiveimpacts include the decrease of fatal accidents resulting from the construction of grade separations atthe most dangerous road/rail crossings.
H. Public Participation
3.41 The final designs for most transfer centers and road/rail grade separations would bedeveloped with the participation of the affected population. Summarized in paras. 6 and 7 of Annex I,this process would be detailed in the operational manuals for these subprojects, taking account of asuccessful pilot consultation exercise carried out prior to appraisal for one road/rail crossing site. Withregards to the road/rail crossing component, once the grade separations have been ranked according tothe selection criteria based on maximum economic rates of return, 10 - 12 crossings out of the total 20studied would be presented to the affected communities as possible projects. If any crossings were torequire residential resettlement or otherwise face strong opposition by the affected communities, theywould be replaced by others on the list. On the other hand, if the communities were to object to thedesign and not the crossing itself, the design details would be modified by the municipalities inconsultation with the affected population. Two aspects of design would be especially important: (a)providing acceptable access to the properties adjoining the roads which lead to the underpasses belowthe railway track; and (b) provision for the use of the crossing by pedestrians as well. To address theformer design issue, service roads would normally be provided adjacent to the underpass ramps. In thelatter case, pedestrian passages would need to be well-lighted, secure, and easily accessible in order tomaximize their utility. Similar criteria would apply to the transfer center component.
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IV. PROJECT IMPLEMENTATION
A. Institutional Responsibilities
4.1 The Govemment of Argentina would be the Borrower. Metrovias would implement itsbasic investment program in the same way as it currently does. The other components would beimplemented by SOPyT, which would also be responsible for overall project coordination. To this effect,SOPyT would create a Project Implementation Unit (Unidad de Ejecuci6n del Proyecto - UEP) whichwould report to the Subsecretary of Table 4.1: Implementin A enc for Each Sub roectMetropolitan and Long-DistanceTransport. The Bank would Implementingmonitor the implementation of the ........ ................... . S . p..r o,e9j..cO.A.................. geny..project in accordance with a Basic Investment Program of Metrovfas Concession Metrovfasmonitoring and supervision plan Rehabilitation of Subway Line A UEP(Annex D).
Integration of Transport System UEP4.2 Project Environmental Monitoring & Traffic Safety Program UEP
would be responsible for general Strengthening of Institutional Framework UEPproject coordination. It would actas the liaison with the World Bank,periodically update the work plan, coordinate all technical consultants, oversee procurement practices,and act as the focal point for national, provincial and municipal interaction. It would be staffed by aGeneral Coordinator in charge of overall operations, a Technical Coordinator in charge of technicalanalysis and assistance, a Project Works Coordinator responsible for the bidding, selection and award ofcivil works subprojects, and an Administrative Coordinator in charge of the selection of consultants,acquisition of goods, contracting of work, administration of project funds, and providing periodic progressreports to the World Bank. The UEP would be established, and its coordinator named, shortly after loanapproval. The satisfactory functioning of the UEP would be a condition for loan effectiveness.
4.3 Metrovias. All the investments included in the concession contract are the responsibilityof Metrovias, which generally subcontracts the works to third parties. The National Govemment's SOPyTprovides independent oversight, certifies the amount of work finished each month, and authorizespayments to Metrovias for completed work. The amounts for each part of the basic investment programhave been fixed in the concession contract, with a formula to adjust costs based on changes in theConsumer Price Index of the United States.
B. Implementation Schedule
4.4 The loan is expected to be signed between June and August 1997. The Govemmentestimates that the project would be completed within four years after loan signing. Completion in fouryears is possible if there are no delays. However, the bidding process for each bid may take from 7 to 12months, including the approval of bidding documents, advertisement in the Development Businessjoumal and local press, bid evaluation, recommendations for award, contract signature, and contracteffectiveness. The Bank thus estimates that seven years will be required for project completion; thiswould be more realistic, taking into account the average disbursement profiles of Argentina and of theLatin America and the Caribbean Region. Therefore, the expected project completion date is June 30,2003 and the closing date is December 31, 2003.
4.5 The Bank's participation in financing Metrovias' basic investment program wouldterminate in about 1999, when the US$50 million allocated in the proposed loan is expected to havebeen disbursed.
4.6 If the Govemment exercises the option of carrying out advanced contracting for Line Aand some road/rail crossings, the first contract could be tendered in June 1997 and contracts could besigned in October 1997. Terms of Reference for the transport study and the rail barrier study could also
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be issued in June 1997, giving at least four months for consultant selection and contract signing before tothe loan becomes effective.
C. Procurement
4.7 Procurement would be in accordance with the Bank Guidelines for Procurement ofGoods and Works (January 1995, revised January and August 1996) and the Bank Guidelines for theUse of Consultants (August 1981). Standard bidding documents issued by the Bank would be used forthe procurement of goods and works by International Competitive Bidding (ICB). The Bank-issuedstandard contract for consultant services would be used for major consultants' contracts. In the case ofprocurement under National Competitive Bidding (NCB), standard bidding documents agreed by theBank would be used, taking account of the recommendations of the recent Country ProcurementAssessment Review (May 1996). A General Procurement Notice was published on January 16, 1997.The procurement arrangements are summarized in Table 4.2. All procurement aspects were confirmedduring negotiations.
Table 4.2: Procurement Arrangements............ ....(Estimated cost in UIS$ milli2n)-
Expenditure Category ICB NCB Other N.B.F.-b Total
A. Metrovias Concession - - 142.9 - 142.9(50.0) (50.0)
B. Works - Line A 117.1 - 1.2 .Q' - 118.3(76.1) (0.8) (76.9)
C. Works - Transport Integration 10.0 21.4 0.5 - 31.9(4.0) (8.7) (0.2) (12.9)
D. Works - Environment and Traffic Safety 10.0 39.1 1.5 - 50.6(4.0) (15.7) (0.6) (20.3)
E. Equipment for Air Pollution Monitoring 2.9 - - - 2.9(2.0) (2.0)
F. Other Equipment 0.6 1.8 1.0 - 3.4(0.4) (1.3) (0.7) (2.4)
G. Supervision, Other Technical Assistance and Training ly - - 33.7 - 33.7(27.9) (27.9)
H. Transport Planning Unit - - - 7.7 7.7(0.0) (0.0)
I. Project Administration - - 7.6 - 7.6(7.6) (7.6)
J. Impacts Caused by Transfer Centers and Grade Separations - - - 1.0 1.0(0.0) (0.0)
Total 140.6 62.3 188.4 8.7 400.0(86.5) (25.7) (87.8) (0.0) (200.0)
Figures in parentheses are the respective amounts financed by Bank loan.b' Not Bank Financed.d Expansion of signal control center through direct contracting.y Servces to be procured in accordance wIth World Bank Guidelines: Use of Consultants by Wodd Bank Borrowers and by the WoddBank as Execu0ng Agency (Washington, DC, August 1981).
4.8 Concession for Subway and Urquiza Line. The ROT (Rehabilitate-Operate-Transfer)concession was tendered internationally in 1992 and awarded to Metrovias in 1993. The Bank carried outa detailed evaluation of that process and concluded that the tendering and selection procedures satisfiedthe Bank's criteria of transparency, efficiency and free access for potential bidders. Therefore, inaccordance with paragraph 3.13(a) of the procurement guidelines, goods and works specified in the basic
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investment program of the Metrovias concession would be procured from eligible sources, using theprocedures of the concessionaire.
4.9 Rehabilitation of Subway Line A. In 1992 the Govemment expected to receivebilateral funding (which later failed to materialize) for the rehabilitation of subway Line A. Thus theconcession tenders specified that the Govemment would separately carry out those works, outside thebasic investment program. Most of the rehabilitation works would be carried out under the proposedproject through four large contracts: (a) track replacement and associated civil works; (b) other civilworks; (c) signals and communications; and (d) electrical substations and associated works. The workswould be let by SOPyT as lump-sum ICB contracts, and their execution would be supervised byconsultants engaged by SOPyT. The role and collaboration of Metrovias was confirmed in an agreementsigned prior to loan negotiations. Shareholders of Metrovias would be eligible to participate in the biddingfor physical works, but could not at the same time be selected for construction supervision. In addition,the expansion of the signal control center to accommodate Line A would be contracted directly with thefirm that Is currently assembling the control center for the other subway lines. Direct contracting (forabout US$1.2 million) is necessary to achieve technical uniformity within the control center.
4.10 Other Components. SOPyT would let about twenty contracts between US$2 andUS$10 million to build grade separations at road/rail crossings and to build transfer centers. In addition,there would be relatively minor works and equipment acquisition under the project. Procurementprocedures for these would be as follows:
(a) contracts for goods estimated to cost US$350,000 equivalent or more, andcontracts for works estimated to cost US$8 million equivalent or more, would beprocured through ICB procedures in accordance with Bank guidelines;
(b) contracts for goods estimated to cost between US$100,000 and US$350,000,and contracts for works estimated to cost between US$350,000 and US$8million would be awarded through NCB procedures. Standard NCB documentsacceptable to the Bank would be included in the operational manuals preparedfor the road/rail crossing and transport systems integration components; and
(c) contracts for goods estimated to cost US$100,000 or less would be procuredthrough local or international shopping, up to an aggregate amount of US$1million; civil works costing US$350,000 or less, up to an aggregate amount ofUS$2 million, would be procured under lump-sum contracts awarded on thebasis of quotations obtained from at least three qualified contractors in responseto written invitations.
4.11 Procurement Review. All contracts for goods estimated to cost the equivalent ofUS$350,000 or more, and all contracts for works estimated to cost the equivalent of US$8 million ormore, would be subject to the Bank's prior review of the procurement documentation (advertising,bidding documents, bid evaluation, and contract award). The first two NCB contracts for goods and thefirst two NCB contracts for works would also be subject to the Bank's prior review. For consultantsservices, all terms of reference would be subject to the Bank's prior review. Subject also to the Bank'sprior review would be all consulting firm contracts above US$100,000, all consulting firm contractsselected on a sole-source basis, and all contracts with individual consultants above US$50,000. Thethresholds for the Bank's prior review are shown in Table 4.3.
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Table 4.3: Procurement Thresholds
Description Type of Procurement Prior Review Contract Value............ .................................................................................... ............... .............. ............ .
Works ICB All
NCB First two contracts 350 to 8,000
(Price Quotations from at None < 350least 3 Bidders)
Goods ICB All
NCB First two contracts 100 to 350
(Price Quotations from at None < 100least 3 Bidders)..100
Consulting ServcesFirms All > 100
Firms TOR only up to 100
Individuals All > 50
IndividualsTOon Uto5
D. Disbursements and Special Account
4.12 The bulk of the proceeds of the proposed loan, primarily related to Line A and theMetrovias concession, are expected to be disbursed over a period of four years. Another three yearswould be required to disburse the rest of the loan proceeds especially for traffic safety, transportintegration, and institutional development components. The disbursement period, equal to the averageseven-year profile for Latin America, was determined after taking into account: (a) contractual obligationsof the Government to undertake the railway-related investments according to a specified schedule; and(b) ability to use §3.13a of Bank procurement guidelines for contracts covered under the Metroviasconcession (Basic Investment Program).
Table 4.4: Allocation of DisbursementsExpenditure Category Amount in % of Expenditures to be
US$ million FinancedA. Merovias Concession 50.0 35%B. Works - Line A 65.0 65%C. Works - Transport Integration 11.0 40%D. Works - Traffic Safety 19.0 40%E. Equipment for Air Pollution Monitoring 1.5 70%F. Other Equipment 1.7 70%G. Technical Assistance and Training 22.0 100% net of taxesH. Technical Assistance for Project Administration 6.3 100% net of taxesI. PPF 1.5J. Unallocated 22.0
Total 200.0
4.13 The allocation of loan amount and disbursement percentages is summarized above inTable 4.4. Disbursements in respect of civil works contracts over US$8 million, goods contracts overUS$350,000, contracts with consulting firms over US$100,000 and contracts with individual consultantsover US$50,000 would be fully documented; so would be the first two NCB contracts for works and for
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goods. All other disbursemeiets would be made on the basis of Statements of Expenditures (SOE)certified by the UEP. Relevant documentation in support of SOEs would not be submitted to the Bank,but would be retained by the UEP for the review of Bank supervision missions.
4.14 The payment for works completedunder Category A would be made pan passu with Certification and Payment Processthe Govemment on the basis of work certificates 1. The concessionaire seeks the approval of SOPyT(Certificados de Obra), issued by the SOPyT. For to begin the agreed work by submitting Acta deall other categories, disbursements would be made Comienzo, which includes details of thefollowing standard Bank procedures. During project implementation, benchmarks for gaugingpreparation the accounting and approval process progress, and a payment schedule linked to therelated to the preparation of the work certificates benchmarks.was reviewed and found satisfactory. 2. A SOPyT inspector is permanently assigned to the
work and is responsible for measuring the4.15 Project Preparation Facility. progress against the established benchmarks byDisbursements of up to US$1.5 million are certifying monthly work progress through Actas deexpected prior to loan effectiveness through a Medici6n.Project Preparation Facility (PPF) advance whichwas signed in August 1996. The PPF, which will be 3. Payment requests are made by the concessionaireused almost exclusively for project preparation on monthly basis by submitting to SOPyTdesign consultants, and other forms of technical Certificados de Obra (work certificates) whichassistance, has a 100% disbursement rate net of include US inflation-related price adjustments andtaxes. the inspected monthly progress reports.
4. The SOPyT reviews and approves the work4.16 Retroactive Financing. Retro- certificates and forwards them for further reviewactive financing up to US$20 million (10 percent of and payment to the Ministry of Economy. Fivethe loan amount) would be sought for project percent of the invoice is withheld to be paid at theexpenditures incurred in accordance with Bank completion of the work.procurement guidelines. This retroactive financing 5. Treasury makes the payment within 30 workingwould be for expenditures made primarily under days of the date of the work certificate aftercategory A after July 1, 1996 or one year prior to approval from the Contra/orla.loan signing, whichever is later. Claims forretroactive financing of eligible expenditures would 6. At the conclusion of the work, the concessionairebe submitted to the Bank no later than 90 days recovers the five percent withheld amount.after loan effectiveness. Agreement was reachedduring negotiations on the retroactive financing arrangements.
4.17 Special Account. To facilitate timely project implementation, the Govemment wouldestablish, maintain and operate, under terms and conditions satisfactory to the Bank, a special account inUS dollars at a commercial bank acceptable to the Bank. The Bank would make an initial deposit ofUS$2 million into the Special Account, rising to US$10 million after withdrawals and commitments havereached US$25 million (including payments for retroactive financing). Replenishment of the SpecialAccount would be made in accordance with standard Bank procedures. Documentation would be retainedby the Borrower and would be made available for periodic inspection by the Bank.
E. Auditing
4.18 Agreement was confirmed during negotiations that the UEP would maintain adequaterecords to reflect its operating and financial situation, in accordance with sound accounting principlesapplied consistently. The project's accounts would be available for inspection by the Bank. The UEPwould have its accounts, including those kept for the purposes of the project, the Special Account, andthe statements of expenditure audited annually by independent auditors acceptable to the Bank. Theseaudits would be presented to the Bank no later than six months after the close of the fiscal year.
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F. Project Monitoring and Reporting
4.19 The Govemment through the UEP would be responsible for (a) monitoring theImplementation of all project components; (b) evaluating the impact of the measures supported by theproposed project; (c) reporting to the Bank; (d) disbursement arrangements; and (e) preparing theImplementation Completion Report. The project performance and monitoring indicators are described inAnnex D.
4.20 In about November of each year, the Bank and the Government would conduct a formaljoint review of the progress made in reaching the project objectives and in the implementation of theproposed project. The annual review would provide an opportunity to discuss project issues, in particularcompliance with covenants, technical assistance, traffic safety, and the quality of subprojectimplementation; it would conclude in a set of updated monitoring targets and any remedial actions thatmay be required.
4.21 A Mid-Term Review would be held with the participation of the Government andMetrovias no later than November 1999. The Mid-Term Review would undertake an in-depth interimassessment of progress in implementing project components, based on the implementation indicators.Based on its assessment, the Mid-Term Review would conclude with an agreement on changes in projectimplementation and a schedule for their implementation, if required.
4.22 Reporting. The UEP would submit to the Bank semi-annual project implementationprogress reports relating to January-June and July-December periods no later than 30 days after the endof each semester. The progress reports would describe advances made in implementation of the projectagainst the appraisal estimates. They would present a critical assessment of problems and issues arisingduring project execution. The reports would also discuss compliance with the covenants of the LoanAgreement and other conditions and actions taken to enforce compliance. In cases of unsatisfactoryprogress, the reports would also describe proposals for adjustments and remedial actions. TheImplementation Progress Reports would include updates of the key hidicators of project performance.The UEP would also submit a project completion report not later than six months after the closing date ofthe loan.
G. Project Supervision
4.23 Bank supervision of project execution would be particularly important during the firstthree years of the project, when significant institutional strengthening and policy decisions would beoccurring. The bulk of disbursements is also expected during these initial years. The Bank would conducttwo supervision missions each year; the second of these missions would coincide with the plannedannual/mid-term reviews. Staffing for these missions would normally include the task manager, afinancial analyst, a transport planner, and a procurement specialist. A total of about 50 staff-weeks wouldbe required each year for the first two years, thereafter decreasing to 25 staff-weeks in the third year and15 staff-weeks in the fourth year until the end of the project.
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V. AGREEMENTS REACHED AND RECOMMENDATION
5.1 The following actions were taken prior to negotiations:
(a) the Govemment and Metrovias signed an agreement which inter alia: (a) changed thecurrent deadline for the rehabilitation of subway Line A; and (b) confirmed that Metroviaswill collaborate with the contractors and supervision consultants which the Govemmentwill engage (paras. 3.17, 4.9);
(b) the Govemment confirmed its readiness to establish the UEP and to appoint itscoordinator speedily after loan approval (para. 4.2);
(c) the Govemment submitted a plan for the establishment of a Steering Committee toguide the preparation of a transport model for the AMBA and other aspects of the urbantransport study (para. 3.10 (a)); and
(d) the Govemment submitted a letter of policy on how the UEP and the SteeringCommittee would evolve into metropolitan entities responsible for transport planning(paras. 1.20 - 1.26, 3.10 (a), and 4.2).
5.2 The following assurances were obtained at negotiations:
(a) that the Project Implementation Unit (UEP) will be structured and adequately staffed andotherwise supported in the implementation of its responsibility under the project (para.4.2);
(b) that procurement will be carried out in accordance with Bank guidelines, including: (i) theuse of standard bidding documents for the procurement of goods and works, under NCBand ICB procedures; (ii) use of Bank's guidelines for the selection of consultants; and (iii)specific procurement limits (paras. 4.7, 4.10, 4.11);
(c) that a Special Account in a commercial bank will be opened and maintained (para. 4.17);
(d) that the Special Account and Statements of Expenditures (SOEs): (i) will be auditedaccording to procedures, and by independent auditors, acceptable to the Bank; and (ii)audits will be submitted by June 30 of each year (para. 4.18);
(e) that the project will be executed in accordance with sound environmental practices andwith the Bank's policy on resettlement (para. 3.39);
(f) that the UEP will send the Bank six-monthly progress reports within one month from theend of each semester (para. 4.22);
(g) that the UEP will send the Bank a project completion report not later than six monthsafter the closing date of the loan (para. 4.22);
(h) that annual reviews will be carried out to assess progress and, as necessary, agree onremedial actions (para. 4.20);
(i) that a Mid-term Project Review will take place no later than November 1999 to reviewpre-agreed institutional, operational and financial performance indicators, andcompliance with covenants of the Loan Agreement, to assess project performance and,as necessary, agree on remedial actions (para. 4.21); and
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(D that the Govemment will make its payments to the concessionaires of urban andsuburban rail services in a timely fashion, as specified in the concession agreements(paras. 2.9 - 2.14).
5.3 The following conditions for loan effectiveness were agreed at negotiations:
(a) establishment and appropriate staffing of the UEP (para. 4.2);
(b) establishment and appropriate staffing of the core group for metropolitan transportplanning (paras. 1.24, 1.25 and 3.10 (d)); and
(c) legal opinion confirming the validity of the Government's agreement with Metroviasmentioned above (para. 5.1 (a)).
5.4 The following conditions for disbursements were agreed at negotiations:
(a) preparing an operational manual satisfactory to the Bank, setting out the criteria andprocedures to be followed in the implementation of the road/rail crossings (paras. 3.8 (a),3.39, 3.41 and 4.10 (b)), is a condition for disbursement for civil works to carry out thetraffic safety subproject;
(b) preparing an operational manual satisfactory to the Bank, setting out the criteria andprocedures to be followed in the implementation of the transport systems integrationcomponent (paras. 3.7, 3.8 (a), 3.39 and 4.10 (b)), is a condition for disbursement forcivil works to carry out the transport integration subproject;
(c) compliance with the relevant resettlement, public participation and institutionalrequirements spelled out in the Social and Environmental Letter (para 3.39) is acondition for disbursement for individual major works under the traffic safety andtransport integration subprojects; and
(d) signing an agreement satisfactory to the Bank with the agency selected for themaintenance and operation of the air pollution monitoring system (para. 3.9 and Annex J)is a condition for disbursement for the air pollution monitoring component.
5.5 Retroactive Financing of up to US$20 million (10 percent of loan funds) is recommended forexpenditures made after July 1, 1996 and up to 12 months prior to loan signing. Retroactive financingwould include items such as preparation of final engineering designs and particularly the ongoinginvestments of the Metrovias concession. Claims for retroactive financing would have to be made nolater than three months after loan effectiveness.
5.6 Recommendation. With the above agreements and conditions, the proposed project would besuitable for a Bank loan of US$200 million to the Argentine Republic.
- 29 - ANNEX A
BUENOS AIRES URBAN TRANSPORT PROJECT
ANNEX A: TRANSPORT IN METROPOLITAN BUENOS AIRES-ISSUES AND OUTLOOK
A. Basic Transport Conditions in the Buenos Aires Metropolitan Area
1. The metropolitan area of Buenos Aires exhibits several characteristics which make themaintenance of high-quality transport inherently difficult. First, it is large. It has a total population of over12 million and covers an area of over 16,000 km2. No city of this size in the world is without transport andtraffic problems. Second, it has a difficult shape. Being bounded on one side by the River Plate, andhaving the main administrative and business centers located close together by the river, its road and railtransport networks and flows take the form of a 1800 fan with very heavy concentrations of traffic on themain radials. Third, it is administratively complex. It is comprised of the Municipality of Buenos Aires and36 other municipalities in the Province of Buenos Aires, which share responsibilities for transportprovision with some executive agencies of the National Govemment.
2. Road congestion is perceived as increasing within the city, although there are no reliable directstatistics either on levels of traffic or on average traffic speeds. Nevertheless it is estimated that thenational vehicle stock has increased by 1.7 million vehicles in three years. Over a longer period, theproportion of trips by private car in Buenos Aires has increased from 15 percent in 1970 to 35 percent in1995. Congestion has had a serious effect on the operation of the bus service. One bus operatorestimated that he had increased his fleet size from 72 vehicles to 104 vehicles over a period of 25 yearsin order to maintain the same specified frequencies. More recently it has been estimated that there hasbeen a loss of 5-7 percent on vehicle kilometers between 1992 and 1995 due to increased congestion.
3. Rail passenger transport in the metropolitan area is provided on a network of 37 km of subway, 7km of surface light rail transit, and 900 km of suburban railway. There are proposals under considerationfor two further metro lines within the central area and for the electrification of some sections of thesuburban railways. Service is provided entirely by private sector consortia operating a government-owned system under concessions. The concessions vary in duration and were subject to a procedure ofcompetitive bidding. In all cases, the concession involves a commitment to provide a minimum level ofservice at a specified fare (with adjustment arrangements specified), as well as undertaking investmentprograms defined in the concession contracts. The concessions provide for capital payments for theinvestment program, operating subsidies (particularly in the early years of the concessions) and canons(royalty payments to the Govemment, usually in the later years of the concession). In the case of thesubway, the contract provided for some infrastructure to be rehabilitated directly on the Government'saccount (Line A). Contracts were awarded on the basis of the lowest net present cost to the Governmentof the financial flows proposed.
4. Bus services (colectivos) within the Buenos Aires Metropolitan Area (AMBA) are also providedentirely by the private sector. About 15,000 vehicles operate legally within the region. Service is providedon the basis of route franchises granted either to single companies or to associations of operatorsworking as a single "empresa"(company) for regulatory purposes. Although originally the system had avery fragmented ownership, only about five percent of the total capacity remains in the hands of owner-drivers. Each route (which may have several variants at its peripheries) is granted as a monopolyfranchise, but there is extensive overlap between routes to create and maintain a high level ofcompetition in operation. In addition to these vehicles in public service, a further 1,500 vehicles arelicensed to provide various forms of limited availability and charter service.
5. The size of the bus fleet has remained approximately constant over the last 25 years. Theamount of seat-kilometers available is also estimated to have changed relatively little as a consequenceof the rough balance between increased average number of buses and reduced average operatingspeeds due to congestion. Vehicle size has increased by about 30 percent over 25 years, with 8.5-metervehicles being progressively replaced by 11-meter vehicles.
ANNEX A 30 -
6. Conditions of employment in the industry are strictly regulated. Labor is normally employed oncontracts involving a driving day of eight hours, with vehicles operated on multi-shift systems. Split shiftsare not normally permissible so that inter-peak service is maintained at relatively high levels. Someflexibility has been introduced recently with legal permission for employment of new staff on a 5-hourshift basis, and there has been a progressive elimination of "extra workW arrangements. Recent changeshave included the obligatory use of farebox systems for fare collection and European Unionenvironmental standards for new vehicles.
7. Taxis dominate the central city, where in the central zones they comprise nearly 50 percent ofthe traffic flow. There are about 40,000 licensed taxis in the Municipality of Buenos Aires alone. Thereare also many taxis operating illegally. Unemployment has contributed to this excessive supply.
S. Some modal integration has already been stimulated by market pressures. For example, thepattem of bus routes in the corridor of subway Line A / Rivadavia clearly shows the density of servicesconcentrating on the outer terminus of the rail route. Moreover, some restructuring of bus routes to serverail heads is possible and has been occurring under the present regulatory arrangements. In many suchcases, however, there has been no explicit planning of the infrastructure to facilitate the interchange.Where major traffic routes are involved, this results in heavy pedestrian flows across dense, high-speedtraffic flows with serious safety implications. Lack of coordination or collaboration among disparateagencies is a primary reason for this situation.
B. Current Institutional Arrangements
9. There is no metropolitan-level jurisdiction and hence there is no single institutional focus forurban transport planning in the city region. The agreement between the Minister of Economy and theMayor of Buenos Aires, signed in 1991, set up a precursor of an autonomous agency. Although thelegislation to create a permanent autonomous agency (ATAM-Autondad del Transporte del AreaMetropolitana) was passed by the Senate, it failed to gain broad political support and is unlikely tomaterialize.
10. The body set up as a precursor (pre-ATAM) has developed into a competent planning unit. Itperforms planning, design and assessment functions for metropolitan transport, particularly in respect tomatters which fall within the national jurisdiction, but also, to a lesser extent, in collaboration with otherjurisdictions. In late 1996, it was converted into new unit (TUAMBA-Transporte Urbano del AreaMetropolitana de Buenos Aires) with the objective of maintaining it as a core for metropolitan transportplanning.
11. Responsibility for the elements which together determine the nature of urban transport in BuenosAires remains fragmented. In some cases the same function is performed by a different institutional levelin different parts of the metropolitan area. In many cases functions which interact are exercised bydifferent jurisdictions or agencies, with little formal collaboration or coordination of policy in areas inwhich the functional or jurisdictional interests overlap. Even within the national jurisdiction there hasbeen little coordination between the secretariats of public works and of transport in respect tometropolitan transport responsibilities. In June 1996, the public works and transport functions weremerged into a single Secretariat. Partly in response to suggestions made by the pre-appraisal mission,the Subsecretariat of Metropolitan and Long-Distance Transport has been given road planning functions,in addition to those of public transport planning.
12. Major road investments-particularly the construction of radial motorway access into the city -used to be the responsibility of the public works secretariat within the Ministry of the Economy before itwas merged into SOPyT. New construction is mainly being undertaken by the private sector under tollroad concessions. This is managed by OCRABA, a special agency of the public works secretariat (andnow SOPyT). For the most part, schemes for the major access links are already committed throughconcession agreements, though in some important cases the works have not yet been designed in detail.
- 31 - ANNEX A
13. Maintenance and management of the local road network within the city region fall to theprovincial or municipal governments. However, many provincial roads are maintained by the regionaloffices of the national jurisdiction.
14. Road safety and traffic enforcement is the responsibility of the police, under the Ministry of theInterior. Road safety programs are also prepared by a special purpose unit (Conamba). There is no localcontrol of this policing function. Administration of road safety appears to be very lax, with an absenceeven of adequate accident records and statistics.
15. Road traffic management is a municipal function. This includes not only responsibility forsignaling and general management of street traffic but also specific measures such as theimplementation of bus lanes. Parking policy and implementation is also formally a municipal function,though there is no well-articulated policy on either the quantity of parking provision or on charges forparking. The most important functions of city center traffic management thus fall to the Municipality ofthe City of Buenos Aires (MCBA), which has not been able to prevent the deterioration of city-centertraffic conditions. The situation was considered to have reached such a bad state that the NationalGovemment established a Traffic Emergency Committee in late 1994 to develop immediate measures toimprove the situation. A scheme was introduced to protect the micro-center from through traffic, andsome exclusive bus lanes were designed and implemented as part of this initiative. In some cases (as forexample the bus lane on Avenida C6rdoba) the Municipality sought the technical advice of the nationaladministration (in this case pre-ATAM) in the design of schemes.
16. Metropolitan rail transport is provided by the subway and suburban railways. The former istechnically owned by the Municipality of Buenos Aires and the latter by the National Govemment. Inpractice all metropolitan rail transport has become the responsibility of the nation (through the nationalfinancing and management of the passenger rail concessions, managed by an agency of the SOPyT).The concession contracts were supervised by the Coordination Unit for the Railway RestructuringProgram (UCPF), which in late 1996 was converted into the Gerencia Ferroviaria de la Comisi6nNacional de la Regulaci6n de Transporte (GFCNRT). It is responsible for all aspects of the planning,regulation and control of rail transport.
17. Rail fares are specified in real terms within the concession contracts, with provisions for fares tobe adjusted to account for inflation or in response to achievements of levels of service in excess of thosespecified within the contracts. Complex formulations have been developed for the calculation of thesecontractually permissible fare increases. In practice, the base level of rail fares is very low. Particularlyfor long-distance movements, rail fares are less than half those of the buses (see Table Al).
18. Increases in rail fares to bring them more in line with bus rates might assist some bus operationswhich are in direct competition with rail routes, attenuate the peak demand on rail capacity which is oftenstretched, and generate revenues which might be devoted either to direct reduction of rail subsidypayments through renegotiation ofthe concession contracts or to Table Al: Fare Comparisons for Some Long-Distancefinancing a Metropolitan Transport Metropolitan Public Transport TripsFund to be invested in whatever Trains Busesyields the highest social return. In Origin/ Distance Fare Distance Fare Ratioany event, it is desirable that the Destination (km) ($) (km) ($)impacts of public transport fare CF-Lujan 66.5 1.5 70.5 3.7 2.43changes be examined in the context 80.5 4.2 2.76of developing a consistent and CF-Mercedes 98.1 2.3 114.9 5.8 2.58cornprehensive urban transport CF-Zhrate 91.4 2.2 90.0 4.7 2.13comraehesve ubn rnsotCF-Escobar 51.3 1.2 49.6 2.7 2.25
strategy. 67.5 3.0 2.5049.6 2.5 2.08
19. Bus regulation is divided CF-La Plata 52.5 1.2 61.0 3.3 2.75among three jurisdictional levels. 82.0 4.1 3.42Within the Municipality of Buenos CF-Lobos 99.0 2.3 106.0 5.5 2.44Aires, and for services into and out CF= Federal Capital, i.e., the Municipality of Buenos Aires
ANNEX A - 32 -
of the Municipality, the jurisdiction is national, and is implemented by the National Commission for MotorTransport (CoNTA), which controls about 10,000 of the 15,000 licensed buses in the metropolitan area.Buses operating between municipalities in the Province of Buenos Aires are a provincial responsibility,operated by 114 separate route operators. About 1,000 buses operating entirely within individualmunicipalities in the Province (excluding the Municipality of Buenos Aires) are purely a municipalresponsibility. Policies on bus licensing are much more liberal in some of the outer municipalities than inthe national jurisdiction. Fares for bus services within the national jurisdiction are set by the Secretary ofPublic Works and Transport within the Ministry of Economy. Although bus fares for the other jurisdictionsare formally within the local jurisdictional competence, de facto they follow national jurisdiction fares.
20. Taxi regulation is exclusively a municipal function throughout the metropolitan area. Particularlyin the Municipality of Buenos Aires, implementation of taxi licensing policy has been "liberal", with anestimated 20,000 vehicles operating illegally in addition to the legally licensed stock of about 40,000.Taxi fares also fall within the municipal jurisdiction. The taxi business appears also to have considerablepolitical weight; for example, it was able to persuade the Municipality to allow taxis access to the newly-created bus lane on Avenida C6rdoba very soon after its introduction.
C. Recent Changes and Their Effects on the Transport Sector
21. There is considerable talk of a trisis"in urban transport in Buenos Aires and of the need to re-organize transport arrangements to meet the crisis. However, in considering the current problems of thetransport industry, the depth of the current recession in activity is the dominating factor to be bome inmind. Unemployment is officially declared as being 16.4 percent, but popularly believed to beconsiderably higher. This has direct effects on the demand for all modes. Gasoline consumption fell by 5percent in 1995, and has continued to fall slightly in 1996. The effect of recession has been particularlysevere on the buses, which lost 22 percent of their traffic in 1994 and 1995. In 1996, the traffic losscontinued, though at what appears to be a reduced rate. Studies undertaken by CoNTA, as well as theviews expressed by bus operator associations, attribute the bulk of this decline to the recession.
22. There has been some response to the decline in demand by bus operators, both in reductions infrequency and some route restructuring to take account of rail service improvements (bus servicechanges have to be approved by CoNTA). Surprisingly, there have been few bankruptcies, partlybecause of increases in the minimum bus fare from 35 cents to 40 cents in August 1993, and to 50 centsin August 1994. It is suggested that there has been some consolidation among the buses, as well assome deferment of vehicle replacement. However, there is no strong statistical evidence for either ofthese trends.
23. The recession has also had some direct effects on supply. Unemployment appears to have led toan expansion both in the legally licensed 'remise"(hire car) business, of which there are now estimatedto be about 12,000 operating as taxis or public transport vehicles. There are also about 500 buses andminibuses operating as legal charter services and probably another 1,000 engaged in the operation ofillegal, unfranchised bus operations. This appears to have been of particular importance in the outermunicipalities of the AMBA where competition is particularly fierce and, in some cases, clearly condonedby the local political authority. The licensed buses find this form of competition particularly difficult torespond to in areas where enforcement is lax.
24. Since the concessioning of urban railway services, there has been a substantial increase in railpatronage. Because of the high level of fare evasion before the concessioning, and the absence of directcounts, it is not possible to state with accuracy what has happened to the "actual" level of ridership.Improved service has undoubtedly attracted many new riders, though the increased attention to farerecovery has almost certainly driven some former non-paying passengers away. It is estimated, however,that real traffic (as opposed to the number of passengers paying) has risen by at least 30 percent over atwo-year period.
25. Once reliable rail service has been re-established, direct competition on line haul between railand buses is likely to diminish. An example of what might be expected to occur can be seen in the
- 33 - ANNEX A
experience of one bus operation in the corridor of the Roca line. Before electrification of the rail line inthe 1980s, the bus operated 200 of its 240 vehicles in service directly competing with the railway. Afterelectrification only 90 of the vehicles operate on competitive routings, and 150 operate services that arefeeding the rail system.
D. Identified Problems
26. Road Congestion. Road congestion is perceived as a growing problem, yet traffic restraint isvirtually non-existent outside the micro-center. Responsibility for traffic management falls to themunicipalities which are not well staffed to perform the function, and traffic management within themetropolitan area is generally considered poor. It is, therefore, important to develop skills both of designand implementation at the appropriate institutional level.
27. In the longer term it would be desirable to introduce measures of traffic restraint. A consultantemployed by the Subsecretariat of Metropolitan and Long-Distance Transport recommended that thispossibility be further explored. In the interim some surrogate instrument, such as parking pricing orquantitative restriction in parking availability is desirable. But the current institutional arrangements makethis unlikely in the near future. In that instance, there is a case for the introduction of a fuel tax surchargewithin the metropolitan area as a proxy. While fuel tax is not a very good instrument to proxy for acongestion charge, it is better than nothing. In the current circumstances it would not only have some-albeit very modest-impact as a constraint on use of roads, but would also have the advantage ofgenerating resources for a Metropolitan Transport Fund which might be used to fund metropolitan levelexpenditures on the improvement of the sector as a whole.
28. Bus priority schemes would appear to be justified by the volumes of traffic in a number ofcorridors. Some limited schemes have been introduced by the Municipality of Buenos Aires. The fact thatso little has been achieved so far is partly because responsibility for introduction of such schemes restswith the municipalities which are not well staffed for the design and implementation of such schemes,while the regulation of buses using the lanes is the responsibility of CoNTA (at least in the nationaljurisdiction). A broader system of bus lanes has been designed, but is not being implemented because ofthe lack of commitment by the jurisdictions responsible for implementation.
29. Bus Operations. Fare collection is commonly perceived as a problem. Because many routesare long, a flat fare system is not appropriate. In the case of the buses, the introduction of the "farebox"system of coin payment, considered necessary to secure revenues with one-person operation of thevehicles, has had the effect of making fare payment a relatively slow process. At stops with highboarding rates, this causes delay to the vehicle and congestion of the traffic flow of which it is a part.There is an interest in the development of more technologically-advanced methods of fare collection. Aspart of project preparation an intemational consultant was engaged by Govemment to advise onaltemative means of electronic fare collection and verification. In the first instance the emphasis is onthe identification of a common standard for the separate rail enterprises which would ultimately allowcommon ticketing. Some of the bus managers are also interested in the possibility of smart-ticketingsystems as a means of improving efficiency of operation. This is another area where ensuringcoordination between the actions of separate agencies may have a high pay-off, irrespective of whetherimplementation powers are centralized or not. It is also an area in which the basis for securingcoordination is the development of a center of technical advice on a metropolitan scale.
30. Some bus industry re-organization would be necessary in response to changes in demand. Inparticular, where demand is falling due to improvement of rail service this would require routerestructuring to concentrate on feeder services rather than trunk haul. This has already happened in anumber of cases. It may create difficulties for the operator where there is need to shift from a servicewhich falls under one jurisdiction (services into the Municipality of Buenos Aires) to one which falls underanother (services within an outer municipality). Some coordination of action between jurisdictions is thenrequired. Even where the change falls entirely within one jurisdiction, the process may be complex if achange of route increases competition with existing operators. Similar issues might arise if some roadswere closed to bus traffic as part of general traffic management or environmental protection actions. In
ANNEX A - 34 -
all these cases the problems are inherent in the kind of managed-competition system which has been sosuccessful in the past in maintaining public bus services in Buenos Aires. It is not a reason for anyfundamental institutional change. But it does indicate the need for better collaboration between agenciesand a better basis for understanding the effects of change over a wider area.
31. Environmental and Safety Impact. The environmental impacts of transport currently receivelittle attention. The buses, which might be viewed as beneficial because they obviate the need forincreased use of cars in the city, seem to be regarded somewhat suspiciously because of the veryobvious phenomenon of smoke emissions of the worst vehicies. CoNTA is addressing this by imposingEuropean Union environmental standards on new bus purchases. In contrast, taxis and private cars,which make much more prodigal use of road space, are very liberally treated. There is currently neitherany direct charging for the congestion impacts of these vehicles nor any satisfactory surrogate measure(such as restrictive parking or regulatory policies for vehicles operating in the central area).
32. There appear to be a number of reasons for this neglect of environmental sustainability in urbantransport. First there is a lack of information, with no program of monitoring of transport-relatedenvironmental impacts and hence no basis on which to develop a strategy. This would be one of theearly priorities of the technical group to be developed under the project. Second, there appears to be alack of appreciation at the highest levels of the national administration that environmental protectionrequires a close coordination of the design of infrastructure and its management as well as control of thevehicles operating on it. Third, the fragmentation of responsibilities for the various aspects whichcontribute to environmental management in urban transport prevents the emergence of a comprehensivepolicy.
33. Road safety is also severely neglected. The assignment of responsibilities to Conamba, withinthe Ministry of Interior, inevitably separates the issue from the administration of local traffic managementand infrastructure design which are important contributors to better safety performance. In this area ofenvironmental concem, as with air quality, the necessary initial steps are the organization of a reliabledata base for the identification of topics for priority attention and the establishment of a locus ofresponsibility for traffic safety which can bring together a range of actions in a comprehensive policy.Weaknesses in inter-agency and inter-jurisdictional collaboration clearly need to be addressed.
34. There are over 700 at-grade crossings of railways by roads in the metropolitan area, 500 ofwhich are protected by manually or automatically operated barriers. Accident rates at these crossings arealready high. Delays to road traffic are large and are increasing as rail service frequency improves. Aconcerted effort to improve this situation is being supported by the project. However, it is important toemphasize that effective action in this area, as in many others in Greater Buenos Aires, requiresimproved collaboration between the agencies and jurisdictions (national transport jurisdiction,municipalities, railway concessionaires, police, etc.). Defining a focus for this collaboration andestablishing a capability to prioritize and design schemes is an important requirement.
35. Railway Development and Modal Integration. The concessioning of the railways was achievedrapidly and is already demonstrably successful in improving rail patronage and reducing operatingsubsidy. But it is the inevitable consequence of the speed of the process that some of the investmentprograms which were included in the concession contracts are not considered by the concessionaires tobe the best possible use of resources. Replanning of the investment program and renegotiation of thecontracts is therefore necessary. The establishment and maintenance of a strong technical base for theGovemment responsibilities as a ucustomer' is critical to the success of this further development.
E. The Government Strategy for Urban Transport
36. There are two main policy elements of a strategic nature which have been applied fairlyconsistently: the successful operation of transport services though the private sector, and the ratherinefficient coordination of strategic transport planning and traffic management in the metropolitan area.
-35- ANNEX A
37. Private sector participation in supply, which has long existed in the bus and taxi industry, hasbeen extended over the last four years to the whole of the urban and suburban rail network and to sometrunk road accesses into the city through the concession process. Moreover, in the bus, rail and toll roadsectors there are National Govemment agencies for management of the competitive market (NationalCommission for Motor Transport-CoNTA, Coordination Unit for the Railway Restructuring Program-UCPF, and the agency responsible for urban motorway concessions-OCRABA) to award and supervisethe concession systems.
38. The Government maintains control over prices for all transport modes, despite the move toprivate operation. In most instances this control is exercised centrally, at the highest level, and has beenused to keep transport fares low.
39. Despite these central strategic elements, in identifying current problems it is clear that asubstantial part of the problems arise where the jurisdictions overlap without adequate collaboration orcoordination of action. What is missing in the existing framework is any effective planning andimplementation of road traffic management, any coordination of road traffic and public transport policyimplementation, and any concerted effort to deal with the safety and environmental problems associatedwith metropolitan transport, including the absence of any strategy for traffic restraint. To some extent thatis a matter of intemal coordination between the transport and public works secretariats. One of the aimsof the project is to improve that relationship through association in the management of the technicalgroup for metropolitan transport planning.
40. To some extent, however, the lack of coordination is a matter of the fragmentation ofresponsibility over fields in which there is substantial interaction. Separation of responsibility within theMunicipality of Buenos Aires for bus lanes (municipal jurisdiction) and bus route regulation (nationaljurisdiction) is a case in point. The direct election of the mayor of the Municipality opens up the possibilityof metropolitan transport policy becoming a source of political conflict between authorities under differentpolitical control. The transfer of responsibility to an overarching metropolitan level agency, withappropriate powers and financial resources, would almost certainly be seen as a means of reducing thepowers of the democratically elected municipal government and is thus unlikely to be achieved in theshort term.
F. The Philosophy of the Project
41. From the viewpoint of the World Bank's experience in the urban transport sector, the currentsituation in Buenos Aires presents a mixed picture, including some dimensions in which the city has beenoutstandingly successful and others in which it appears to be relatively backward.
42. The institutions which have been put in place do seem to have come to grips with the problem ofcreating an economically and financially sustainable basis for public transport operations. The emphasison private sector operation accords well with intemational experience on supply efficiency in urbantransport. The existence of competition between overlapping routes in a regulated framework for the busindustry also appears to be structurally good practice. Institutions for supervision of both bus franchisingand railway concessions appear to be reasonably effective.
43. The problems of social sustainability are also being addressed through the measures to ensurethe maintenance and financing of an extensive and affordable public transport system. Insofar as thisinvolves direct subsidy of public transport, the specification of fare levels within the rail concessioncontracts clearly separates Govemment strategic control over fares from company managementresponsibility for supply. This is also a generally advisable structure where transport subsidies are part ofGovemment policy.
44. The major weakness concems environmental sustainability. In this dimension there appears to bean absence of any appreciation of the need for the operational interactions between modes to be takeninto account. In particular the failure to recognize the strategic importance of public sector planning andmanagement of road infrastructure and road traffic threatens ever-increasing road congestion and
ANNEX A -36 -
environmental deterioration (especially as the economy recovers and incomes, car ownership, andvehicle use increase). This failure of vision is reflected in the absence of appropriate institutions.
45. The main initiative which is currently helping to protect the environment is the emphasis onrefurbishing the metropolitan rail network (although this was stimulated as much by immediate financialand social pressures as by environmental objectives). In this context there are some physicalinvestments in the public transport system which should be beneficial even in the absence of appropriatepolicies for road transport. These include the major rehabilitation of the subway Line A, which wouldcollapse without an urgent investment program. Indeed, in this particular case the benefit of theinvestment would be even greater in the absence of efficient measures of road traffic management thanwith them. The investments in the grade crossings and transfer facilities also support increased use ofthe improved rail network. While these are subject to-and satisfy-the normal economic tests, for themost part their benefits are also not dependent on the achievement of any specific institutional reforms.
46. For many of the problems identified above, particularly those which have environmentalsignificance, the absence of coordination between agencies, and the lack of an adequate knowledgebasis for the design and implementation of policies and instruments, is either critical or at the very leastunhelpful. The challenge in designing a project is, therefore, to attempt to find ways of developing abroader political appreciation of the importance of a more comprehensive approach to the problems ofurban transport as a basis for creating appropriate coordination of policies and institutions.
47. The philosophy of the project is therefore to help introduce measures aimed at increasingcommitment to a greater level of metropolitan transport coordination. It is believed that this can best beachieved by demonstrating the possibilities and advantages of coordinated action, based on strongtechnical capability, to deal with commonly recognized problems. The strategy of the project is toencourage this in three ways:
(a) the development of a core group of technical skills in metropolitan transport planning toensure a sound technical basis for the design and implementation of metropolitan transportand traffic measures;
(b) the carrying out of an urban transport study which would require the cooperation of diverseagencies throughout the metropolitan area, and produce planning tools and projectionsuseful to all of them; and
(c) the creation of a management committee, which would include representatives of thedifferent functions and jurisdictional levels, to identify problems common to the separatejurisdictions and to provide policy guidance to the technical core group.
48. The development of the technical capacity to adequately address the complex interactions withinthe urban transport system is at the center of the strategy for institutional strengthening. The first part ofthe strategy is to establish a project implementation unit for the World Bank project, which would betechnically oriented and have close links with the new core group developed for metropolitan transportplanning. These groups would be the agencies responsible for the assembly of the metropolitan transportdata base and analysis capability and would have staff representation from road and transport agencies.
49. The second part of the strategy is to associate those entities, who would benefit from a morecoordinated approach, in the management of the technical group and the urban transport study. Thepurpose of the management committee (representing the various functional and jurisdictional authorities)would be to identify issues of common concem suitable for analysis at the metropolitan level; to addressthese issues the skills of the technical group would be made available. The initial approach tocoordination is thus problem-oriented, bottom-up," but with a long-term view of converting thecommittee into a permanent body responsible for transport planning for the entire metropolitan area.
37 - ANNEX B
BUENOS AIRES URBAN TRANSPORT PROJECT
ANNEX B: PROJECT IMPLEMENTATION PLAN
(AS DEFINED BY THE BORROWER)
A. Government Strategies on Subways/Metropolitan Railways
1. The capital of Argentina, Buenos Aires, is a major urban center where most of the economic andfinancial activities of the country take place. It is estimated that more than 50 percent of the economicactivities of the country develop in Buenos Aires and vicinities, and its population is over 10 millionpeople. Urban transport presents several areas that need improvement to cope with the growingdemand, but the current situation is not as critical as in other cities in the world of comparable size andactivity.
2. In 1989, the Government passed Law 23696 (Ley de Refonma del Estado) which laid thefoundation for a major reform program in the public sector. It declared 'subject to privatization"manypublic enterprises and services, which among others included surface and underground railway services,for passengers as well as cargo. The strategy for concessioning the metropolitan passenger railwaysystem to the private sector was established in 1991, when explicit subsidies and public financing ofworks were allowed to be offered to future concessionaires to encourage their participation. For politicalreasons, tariffs are kept at a low level, and consequently the concept of subsidized concessions was theonly commercially viable option to privatize the service.
3. The suburban railway surface system was then divided into seven lines or groups of services,and in one of them, the Urquiza line, the subway was also included because of technical compatibilityreasons. The Government defined the minimum service to be provided by the concessionaire, and thestandards of service quality. Moreover the Government defined a plan of investments (track renewal,rolling stock, signaling, telecommunications, electric systems, shops, etc.) to be implemented in eachline to be concessioned.
4. Parties interested in becoming concessionaires had to bid, under a competitive framework,specifying the requested subsidy (which could eventually been either positive or negative) to operate theservice during the concession period (10 years for six suburban lines, 20 years for the Urquiza Line -Subway), and the requested amount to be received from the Govemment for executing thepredetermined works. The selection criterion was to award the contract to the bidder that requested theminimum amount from the Govemment, measured as the Net Present Value at 12 percent interest of allrequested amounts.
5. By 1995, the system was completely privatized. Initial results are encouraging. For passengerrailway traffic: (a) the passenger volume has almost doubled in 1996 as compared with the volumetransported in 1993, the last year the system was 100 percent publicly run; (b) the percentage of on-timetrains as compared with the total planned trains, was about 95 percent in 1996, while it had been 77percent in 1993; (c) canceled and delayed trains were about 7,500 in the first quarter of 1996, comparedto 37,000 for the same period in 1993; and (d) coach-kilometers increased 27 percent between the sametwo years. In the subway, passenger traffic volumes increased by 37 percent, minutes of interruptionwere lowered by 61 percent, and coach-kilometers increased by 33 percent between those periods. As aresult, the general public opinion is very positive.
B. Project Objectives
6. The Project's general objectives would be to: (a) support the private-public partnership inimproving the service quality and coverage of mass transit; (b) support the infrastructure improvementsdefined in the concession agreement between the Govemment and the private sector; (c) assist inimproving the conditions of traffic safety and environmental quality; and (d) help in developing anintegrated urban transport (road and rail) system for the AMBA.
ANNEX B - 38 -
7. The specific project objectives would be to:
(a) finance the rail equipment and infrastructure which are critical for the upgrading of publictransport services;
(b) promote the integration of the transport system by upgrading transfer stations along raillines, building better transfer facilities between rail and road-based transport, andgenerally improving road access to rail stations;
(c) improve traffic safety through the enhancement of controls at road/rail grade crossings,the construction of grade separations at high-volume crossings, the development of acomplementary program of road safety actions, and the introduction of systematic airpollution monitoring; and
(d) strengthen the institutional framework which would ensure the operation of aneconomically and environmentally sustainable transport system in the metropolitan area.
C. Overall Project Implementation
8. The Borrower would be the Republic of Argentina, and the Executing Agency would be theSecretariat of Public Works and Transport (SOPyT) in the Ministry of Economy and Public Works andServices. The Secretary of Public Works and Transport would be the National Project Director with theSubsecretary of Metropolitan and Long-Distance Transport as Altemate Director, and would provide thenecessary policy and strategic decisions to facilitate project implementation. The Secretary and Sub-secretary would maintain periodic contacts with the Bank during project execution to reach agreement onkey matters and would exercise overall supervision of project implementation.
9. The management of day-to-day matters related to all stages of project preparation is theresponsibility of a Project Coordination Unit (UCP - Unidad Coordinadora del Proyecto). After loanapproval, the UCP would be transformed into a Project Implementation Unit (UEP - Unidad Ejecutora delProyecto) which would be responsible for project implementation. Main specific tasks of the UEP wouldbe to:
(a) coordinate all activities related to the project;
(b) assist the National and Altemate Directors in monitoring project activities, and in hisrelations with the Bank, other Secretariats of State, municipalities of the AMBA, Provinceof Buenos Aires, concessionaires and other private groups;
(c) establish and implement a permanent system to link project activities with other agentsinvolved, such as municipalities and concessionaires;
(d) take the necessary actions to ensure compliance with Bank requirements in all aspectsof the project;
(e) prepare periodic reports to the Bank as required;
(f) prepare terms of reference to hire consultants and monitor the entire process, includingtheir selection;
(g) coordinate activities performed by intemational and national consultants, together withthe required local counterparts, and review, comment and discuss draft and final reportsbeing prepared by them;
(h) monitor and update the Project Work Plan, and take necessary actions to correct anydeviations;
(i) oversee, with likely help by consultants, the technical activities related to projectpreparation and execution;
0) take all necessary actions to ensure timely availability of funds from different sources;
- 39 - ANNEX B
(k) produce and interpret, periodically, the agreed monitoring indices to assess projectimpacts;
(I) monitor all activities related to any procurement process; and
(m) manage all project accounting activities, including Special Account, disbursements, andauditing reports.
10. The UEP would be headed by a General Coordinator, assisted by a Technical AssistanceCoordinator, a Project Works Coordinator, and an Administrative Coordinator. In each of the three areas,permanent staff and individual consultants would be hired as required by the work load. It is expectedthat the permanent staff of the core unit may be composed of seven senior professionals, five medium-level professionals, five junior professionals and five support staff, who would be complemented by non-permanent staff, as required. For the technical area, where a major study would be developed, theproposal is that personnel formerly working for Pre-ATAM (recently renamed TUAMBA - TransporteUrbano del Area Metropolitana de Buenos Aires) would be contracted by the Govemment for the durationof the loan. The final composition of the UEP would be agreed prior to loan effectiveness. Procurementand works supervision would be carried out by the Project Works area of the UEP. There is also apossibility of contracting the services of specialized agents, acceptable to the Bank, to manageprocurement activities for civil works, goods and/or consultants.
11. In accordance with the concession contract, the concessionaire Metrovias would act asexecuting agent for the Investment Program of the Metrovias Concession.
D. Rehabilitation of Subway Line A
12. This program would include: (a) the complete renewal of track; (b) new ventilation systems,replacement or installation of mechanical escalators, replacement of drainage pumps, and consolidationin one place of two existing subway stations at Lima and Piedras; (c) three new electric substations,renewal of the power transmission system and improvement of the contact line; and (d) renovation of thesignal and communication system. It has been agreed that these works would be carried out in fourpackages of contracts, one for each component. In addition, the contractor currently modernizing thetrain control centers for Lines B, C, D and E would be appointed to carry out the same work for Line A.
13. As specified in the concession contract with Metrovias, the Govemment was to rehabilitate LineA by the end of 1997. The estimated base cost is approximately US$82 million which, after adding taxes,contingencies, and construction supervision, results in an overall cost of about US$121 million. Costestimates are based on preliminary engineering data, cost amounts quoted by different concessionairesat the time of presenting their proposals, unofficial insight of some recent bid results obtained byMetrovias for other subway lines for similar type of works under lump-sum arrangements, and previoussubway experience in lump-sum contracts; they also take account of the requirement that the work has tobe done while maintaining traffic during regular service hours (6 a.m. to 10 p.m.). It is estimated that thecontract would last two years.
14. Because of the technical need for compatibility with the same kind of systems being installed inLines B, C, D, and E, and with the purpose of later permitting operation as one integrated system, itwould be preferable for component (d) in para. 12 to have exactly the same technical characteristics asthe systems being installed in the other four lines. This is true for both the signaling andtelecommunication aspects.
15. SOPyT, through the UEP, would be the executing agent of the four main components of Line A.As such, it would be responsible for the preparation of bidding documents; it would manage the wholeprocurement process; it would select the winning proposal and sign the contract with the contractor; itwould approve detailed engineering plans; it would supervise project execution with the assistance ofoutside consultants; and it would issue monthly payment certificates. The UEP would have to closelycoordinate with Metrovias, which is responsible for the day-to-day operation of Line A. This is spelled outin an agreement between Metrovias and the government, prepared prior to loan negotiations.
ANNEX B - 40 -
16. Economic Costs. Line A was open to traffic in 1913, and very little upgrading has been carriedout since. Therefore, the current conditions are totally unsatisfactory, and it is understood that withoutmajor improvements, total collapse is likely. For the economic analysis of this subproject, it wasassumed that in the without-project situation, the line would have to close in about five years. It was notsimple to define the with- and without-project situations, because of political uncertainties of relevantfinal decisions, and because of the complicated interrelations that exist among different variables in thesubway and in the avenue on top of it. Clearly, surface transportation and the subway act as anintegrated system, diverting traffic volumes from one to another as a result of operating conditions inboth. Consequently, the following scenarios were analyzed: (a) with exclusive bus lanes on avenueRivadavia, located right over the subway alignment, for the same total length of Line A (Plaza de Mayo -Primera Junta); (b) the same arrangement but for half of the total length (Plaza de Mayo - Pueyrred6n);and (c) without exclusive bus lanes. These three cases were considered for both the with- and without-project situations, which makes a total of six scenarios analyzed. The lowest Internal Economic Rate ofReturn was 20 percent for the scenario with total exclusive bus lane in both with- and without-projectsituations. The other scenarios gave results between 25 percent and 74 percent.
E. Investment Program of the Metrovias Concession
17. The 1992 tender documents for the subway/Urquiza concession included a detailed investmentprogram, which is now part of the Government's concession agreement with Metrovias. A US$142.9million slice (about three years, 1997-1999) of that program would be considered part of the project, ofwhich US$50 million would be funded from the proceeds of the World Bank loan. In accordance with theconcession contract, US$399 million is the amount Metrovias will receive for the completion of the 20-year investment program, regardless of the actual amount it would have to pay to the contractors. Thatamount was part of Metrovias' proposal, and it was presented in a competitive environment. There is noadjustment for taxes or physical contingencies, and only price contingency, based on the variation of theConsumer Price Index of the USA, is allowed. In accordance with Article 3.13 (a) of the BankProcurement Guidelines, works and goods required for the basic investment program would be procuredby Metrovias, using its own procedures, because the selection of that concessionaire had been done bythe Govemment, in a manner acceptable to the Bank, following a competitive process.
18. The basic investment program which would be supported by the World Bank loan spans from1994, the beginning of the concession, to 1999, its sixth year. It includes 49 components: 30 for thesubway and 19 for the Urquiza railway line. The total amount is US$248 million (as presented in theproposal and agreed thereafter), with a clear predominance of the subway system (US$220 million, 88percent of the total). Out of this program, the Bank-financed slice would include components to beexecuted between the second half of 19961 and 1999, either already under construction or to be started.
19. The specific improvements, for both the subway (Lines B, C, D and E) and the Urquiza railwayline, would include: (a) partial track renewal on subway lines B, C and E and along 24 km of the UrquizaLine; (b) renovation of electric substations and transmission systems; (c) automatic signals andoperations control center; (d) subway station improvements, including the installation or rebuilding ofescalators, improvements of ventilation and drainage systems, construction of a new technologicalcenter, improvements of transfer centers; and (e) repair and reconstruction of eight electric coaches inthe Urquiza railway line.
20. The improvements under the basic investment program are being implemented by Metrovias,either with its own resources or subcontracting with others. Metrovias presents monthly to theGovemment certificates of construction work and goods delivered, which should be approved by theGerencia Ferroviaria de la Comision Nacional de Regulaci6n de Transporte. Once approved, theGovemment pays Metrovias. All payments have been made in a timely manner since the beginning ofthe concession. Supervision, certification and payments would continue to be done in the same fashionand provide the basis for financing by the Bank.
Rroactive financing of up to US$20 million would pay for expenditures incurred after July 1, 1996 or one year prior to loan signing,whihwer is lter.
-41 - ANNEX B
21. The Bank would finance 35 percent of each certificate up to a total aggregate amount of US$50million, and the Govemment would finance the rest. Based on the expected work scheduling, it isestimated that the Bank loan for this program would be exhausted in 1999, and after that thereafter theGovemment would have to finance 100 percent of the certificates.
22. The economic evaluation of the whole package of concessions by Metrovias (Urquiza railwayline and the subway) aims to evaluate, in a global way, the advantages of private over publicmanagement of business. This comparison was carried out between the With' and Without' projectsituations, taking as the project, the concession program itself. The Without" situation was devisedassuming a continuation of public management during the 20-year concession. The assumptions for thiscase were based on the performance of the subway and Urquiza Line during the last 10 years before theconcession started. Between 1984 and 1993 (Metrovias started the concession on January 1, 1994)traffic demand for the Urquiza line dropped from 27.3 million to 16.8 million paying passengers, at anannual rate of -4.7 percent, while for the subway it came down from 191 million to 145 million, or anannual decrease of -2.7 percent. For the evaluation, in the Without' case it was assumed,conservatively, that the 1995 volumes would remain constant for the concession period. The With"caseincludes projections and financial results presented by Metrovias in its economic proposal at the time ofbidding.
23. The Net Present Value, at a 12 percent discount rate, of Govemment expenses during the 20-year concession period in the Without'situation amounts to US$401 million, while in the With'situationthe comparable amount is US$162 million, which gives an attractive difference of US$239 million.
F. Integration of the Transport System
24. This program aims to help develop an integrated urban transport system in Buenos Aires,through improvements in the vicinity of certain railway stations. This program would complement worksat transfer stations which have already been agreed under the concession agreements; it would include:(a) improvements near outlying rail stations in the Municipality of Buenos Aires, where street andpedestrian access investments are likely to yield high retums; (b) improvements near rail stations in theProvince of Buenos Aires to ease the access for buses, cars, pedestrians, and bicycles, and, eventually,provide adequate parking facilities for them; and (c) other station improvements, especially whereimproved transfer conditions between two rail lines or between rail and road-based transport would yieldsignificant benefits.
25. Improved integration would permit: (a) passenger time and cost savings; (b) increases in theridership of mass transit as opposed to the utilization of private cars; (c) attainment of higher utilizationfactors of vehicles providing feeder services to railways; (d) increase the traffic demand of theconcessioned rail services; and (e) improvements in the overall efficiency of urban transport services.
26. Fourteen rail stations have been pre-selected to improve the transfer conditions among differentmodes. A preliminary analysis has been carried out for each pre-selected station, broadly identifying themain issues, and making some preliminary recommendations on possible improvements. By loaneffectiveness, it is expected that eight sketch plans and functional standards would be defined.Preliminary engineering studies, including preliminary cost estimates and traffic regulation, are underpreparation. Feasibility studies and preparation of bidding documents would be carried out during projectimplementation.
27. This subproject would be defined as a sectoral program; that is, each component does not needto be precisely defined before loan approval, but the selection and evaluation criteria should be agreedbeforehand, including the main parameters to be considered. The set of criteria and procedures toappraise each component would be defined in an Operational Manual, to be agreed with the Bank priorto subproject implementation. The Manual's main objective would be to guide the UEP in appraising thisprogram. This group of components would comprise high-priority, transfer station-related investmentsalready identified by the Govemment, but requiring further studies to confirm their technical, economic,operational, environmental and financial justification. A comprehensive understanding between the Bank
ANNEX B - 42 -
and Govemment would be reached and described in the Operational Manual on how this kind of projectwould be selected, appraised, prepared, contracted and executed.
28. The total project amount included for this program would be US$35.9 million, inclusive of taxes,physical and price contingencies. After a scheme has been appraised and selected for possibleexecution, based on the relevant contents of the Operational Manual, final designs and other aspects ofdetailed project preparation would be carried out, including public participation exercises anddiscussion/negotiations with the rail concessionaire, Municipality, and other involved agencies. Oncethese participants have signed their agreements, which would include, inter alia, maintenance andoperation responsibilities after the construction is finished, construction tenders would be let on a first-come-first-served basis, until the budget is fully committed. The possibility of tendering the specifictransfer center for private finance and construction, in exchange for offering those parties privileges inreal estate development, is being analyzed by the Govemment.
29. The UEP, in close contact with representatives of the relevant municipalities and the railwayconcessionaires, would be responsible for project preparation, tendering, contractor selection, contractaward and supervision of works. It would also take the lead in negotiating and formalizing agreementswith the municipalities and concessionaires. Relevant municipalities and the concessionaires would beinvited to participate in the revision of detailed engineering and final bidding documents. Duringconstruction, each municipality would take necessary measures to facilitate the construction works,including temporary traffic management measures, and would obtain the required work permits. Theconcessionaires would commit themselves to take action to facilitate the construction.
G. Traffic Safety
30. The objective of this program is to improve traffic safety in several aspects of urban transport,with the ultimate aim of reducing the number of accidents. Specific objectives are to: (a) reducevehicular and pedestrian accidents at the current at-grade crossings, which would be closed; (b) facilitateuninterrupted road vehicle traffic by providing grade-separated crossings; (c) eliminate current at-gradecrossing accidents that cause damage to rail equipment; (d) eliminate interruptions to rail traffic as aresult of either accidents or stopped vehicles in current at-grade crossings; (e) reduce air pollution due tovehicles stopped while waiting for the barriers to be lifted; and (f) in some cases, increase rail capacity byproviding a whole corridor free of at-grade crossings.
31. The program is composed of the following components: (a) construction of grade-separated roadcrossings over/under suburban railway lines; (b) installation of automatic barriers at selected road/railcrossings which are now without controls; and (c) technical assistance in the following: (i) definition of arehabilitation program of those grade crossings that currently have automatic barriers which do notcomply with norms; (ii) preparation of a comprehensive strategy to improve the safety at grade crossingsbetween the road and rail systems.
32. The total project amount included for this program would be about US$60 million, inclusive oftaxes, physical and price contingencies.
33. It is envisaged that 10 to 12 grade-separated crossings would be financed with the moneyavailable in the project. They would be selected from a larger list of up to 20 possible locations, which isnow under evaluation. The economic return would be the prevailing criterion for selecting sites, with dueconsideration for the economic consequences of mitigating environmental and other deficiencies. Anenvironment screening exercise was carried out, and the main result is that, in general, the environmentproblems identified are likely to be solved by project adjustments, which may impose an extrainvestment cost to be reflected in the economic evaluation.
34. The amount estimated for installing automatic barriers is about US$2.7 million, inclusive oftaxes, and contingencies. It would consist of the installation of around 13 automatic barriers, complyingwith the existing norms in the suburban rail lines that at present lack protection or signaling. Theestimated cost includes the procurement of the electro-mechanic and electronic equipment, minor civilworks, and pavement rehabilitation.
-43- ANNEX B
35. This subproject would also be defined as a sectoral program, of the same nature as explained forthe transport system integration. Most of the aspects covered in paras. 27 through 29 apply, and are notmentioned here to avoid repetition. In particular, it would be necessary to prepare another OperationalManual, and the agents involved in project implementation would fulfill exactly the same function asexplained earlier.
H. Strengthening of the Institutional Framework
36. The overall objective of this program is to strengthen the institutional framework to facilitate thecontinuous operation of an economically and environmentally sustainable transport system in the AMBA.Five main areas would be included in this program: (a) improvement of the institutional framework; (b)improvement of air quality; (c) a transport study; and (d) formulation of urban and suburban trafficimprovements; and (e) a training program.
37. The lack of coordination among the different actors responsible for urban/suburban transport inBuenos Aires has been one of the major problems for years. There have been overlappingresponsibilities, contradictions, poor decisions, and areas that no one is responsible for, as a result of thecoexistence of different jurisdictions with decision power in the city (and sometimes with opposite orcontradictory interests). In an aHtempt to improve this situation, a temporary planning unit (commonlyknown as Pre-ATAM) was created in 1991 to serve as a foundation of a permanent entity Autorndad deTransporte del Area Metropolitana (ATAM), which was to be composed of representatives of the NationalGovemment, the Municipality of Buenos Aires, and the Province of Buenos Aires. ATAM was to beresponsible for coordinating policies and regulating the city transport. The establishment of ATAM waspassed by one chamber of the Congress but is very unlikely to be passed by the other.
38. Over the years, Pre-ATAM has been acting successfully in an inforrnal way as a coordinationentity, with success in specific decisions such as the creation of dedicated bus lanes. However, effortsshould be intensified to achieve beHter coordination among entities, such as the National, Provincial andMunicipal Secretariats responsible for transport and roads. Positive changes have recently beenintroduced, such as the merging of the Transport and Public Works Secretariat of the NationalGovemment into SOPyT, and the creation of the Undersecretariat of Metropolitan and Long-DistanceTransport under SOPyT; the Pre-ATAM group was recently renamed TUAMBA.
39. The Govemment's thinking is that the staff of TUAMBA, plus the local counterpart staff of theurban transport study would become, in the long run, the foundation for the future Urban TransportPlanning Agency. In the short run, the UEP, as part of its role in project implementation, would continueto handle these maHters in the context of specific project components, which would serve as a kind ofpilot schemes that in a certain area would test the best way to achieve coordination among the differentagencies involved. To provide guidance to the transport study, the Govemment intends to create aninter-agency Steering Committee with a view to strengthen metropolitan transport planning on apermanent basis.
40. The large increase in vehicle utilization and the accelerated deterioration of public transportunits, especially in the high-density areas, have caused a significant increase in traffic congestion, withthe resulting aggravation of environmental problems in air quality and noise levels. A recent World Bankstudy on Environmental Problems in Argentina2 has identified these problems as serious, and has alsoindicated that relevant information is scarce and incomplete.
41. A study was carried out to assess the needs to establish an air quality monitoring system in theFederal District, recommend a system, and estimate its cost. Also, the study recommended anappropriate institutional framework to maintain and operate the system. The UEP would be responsiblefor procuring the monitoring system, which is estimated to cost around US$3 million, inclusive of taxesand contingencies.
2 ArgenIne - Managng Environn7ntal Polutfon: Issues and Opbons. World Bank Report No. 14070-AR, Washington, October 1995.
ANNEX B - 44 -
42. The last comprehensive transport study of the AMBA was carried out in 1970, when the overalltransport situation was entirely different. Moreover, relevant data have not been, in general, updatedsince that time, and consequently there exists at present a significant gap that jeopardizes any planningexercise. Consequently, it is essential to carry out a transport study, including a comprehensive origin-destination survey and the development of adequate computer models that, when properly calibrated,would represent actual behavior and would permit testing policy strategies. Terms of reference to hire aconsulting firm for this study have been prepared. The total estimated cost is US$8-10 million, includingtaxes and contingencies. The UEP would supervise this study and contract consultants in accordancewith World Bank guidelines.
43. Another area requiring attention is the improvement of traffic conditions generally, a subject thatwas studied in detail by the Emergency Traffic Committee appointed in 1994 by the NationalGovemment. Pre-ATAM formulated several recommendations over the past two years. The technicalassistance subproject would support similar analyses that deal with bus priorities, traffic control,management of traffic demand and improvement in pedestrian circulation.
44. Finally, a training program would be implemented aimed at strengthening the capacity ofArgentine professionals, through participation in courses and seminars abroad as well as in-country. Onegovemment employee per year would be sent abroad to, inter alia, urban railway agencies, subwaycompanies, and planning agencies. One selected professional every two years would be sent to areputable foreign university for postgraduate studies in urban transport. Three courses in Argentina wouldbe organized covering subjects such as transport planning, operation, institutional arrangements,modeling, safety and the environment. The first of these courses would be funded by the PPF and beorganized by the UEP. The total estimated cost of the training program is US$2.8 million.
45. The TUAMBA group, responsible for metropolitan transport planning-initially as counterparts ofthe transport study-would be financed in its totality by the Government. The World Bank loan would payfor consultants, extemal technical assistance, and training. Total subproject costs are estimated toamount to US$30 million and cover equipment, technical assistance and training, with taxes andcontingencies included.
I. Project Management
46. The UEP would include about 20 professionals and carry out the tasks described in para. 9.above. It would be funded from the World Bank loan at an estimated cost of US$7.6 million.
-45- ANNEX C
BUENOS AIRES URBAN TRANSPORT PROJECT
ANNEX C: DETAILED PROJECT COSTS
See Next page.
Table Ci: Detailed Project CostsBreakrdosiri of Total Cosft Parameters
Base Cost (In million US dollar) Cost !:IncudIng aotnnIs (US$ Ilo)(nl.Cninis PwrcentgeSubp e 1997 g1996 1999r2000T2001V2002 203TOTAL 1 1997 109 19920 00 0220 TOMAL For. Local Taxes Total hy. Prima For. Tax
1. Metrovlas Concession $70.0 $45.0 $27.9 $0.0 $0.0 $0.0 $0.0 $142.9 $70.0 $46.0 $27.9 $0.0 $0.0 $0.0 $0.0 £4J$60.0 $82.9 -$142.9 42Concession Subtota $70.0 $45.0 $27.9 $0.0 $0.0 $0.0 $0.0 $142.9 $70.0 $45.0 $27.9 $0.0 $0.0 $0.0 $0.0 $142.0 $60.0 $82.9 -$142.9
2. Rehiab,ofUnaeA TrackRenewal $10.1 $10.1 $5.1 $0.0 $0.0 $0.0 $0.0 $26A $14.6 $16.0 $7.7 $0.0 $0.0 $0.0 $0.0 $76 $11.9 $20.0 $5.3 $37.3 20 2.3 32 21OUtw Civi Works $8.9 $8.9 $0.0 $0.0 $0.0 $0.0 $0.0 $17.6 $12A $13.6 $0.0 $0.0 $0.0 $0.0 $0.0 $26.6~: $4.6 $`17.7 $3.7 $26.0 20 2.3 18 21Elactric Equipmnent $4.1 $8.2 $6.2 $0.0 $0.0 $0.0 $0.0 $20.1 $6.2 $141.3 $8.9 $0.0 $0.0 $0.0 $0.0 $6R $16.4 $9.7 $4.3 630.4 20 2.3 54 21Signals & Comm. $0.0 $9.9 $6.6 $0.0 $0.0 $0.0 $0.0 $16.6 $3.3 $11.3 $10.0 $0.0 $0.0 $0.0 $0.0 V241 $14.6 $6.5 $3.5 $24.6 20 2.3 60 21
Total $23.2 $37.2 $19.9 $0.0 $0.0 $0.0 $0.0 $60.3 $36.6 $54.1 $27.5 $0.0 $0.0 $0.0 $0.0 $118.6: $47.5 $53.9 $16.9 $118.3SuperVisi $0.5 $0.6 $0.5 $0.0 $0.0 $0.0 $0.0 $1.6 $0.7 $0.9 $0.7 $0.0 $0.0 $0.0 $0.0 $4 $0.8 S1.2 $0.3 $2.4 20 2.3 34 21
Line ASubtotal $23.6 $37.9 $20.4 $0.0 $0.0 $0.0 $0.0 $81.9 $37.3 $531 $28.3 $0.0 $0.0 $0.0 $0.0 $1201.~ $48.3 $56.1 $17.2 $120.6
3. Transpot,Integration CMlW vorks $2.2 $4.5 $4.5 $4.5 $4.5 $11 $1.1 $22.6 $3.0 $6.2 $6.3 $6.5 $6.6 $1.7 $1.7 69* $9.5 $17.7 $4.7 $31.9 10 2.3 30 21Total $2.2 $4.5 $4.5 $4.5 $4.5 $1.1 $1.1 $22.6 $3.0 $8.2 $6.3 $656 $6.6 $1.7 $1.7 $211 X.$9.5 $17.7 $4.7 $31.9
Supervision $0.0 $0.1 $0.1 $0.1 $01 $0.0 $0.0 $OA $0.0 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $01i $0.3 $0.2 $0.1 $0.6 10 2.3 51 21Total $0.0 $0.1 $0.1 $0.1 $0.1 $0.0 $0.0 $OA $0.0 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 Kit1 $0.3 $0.2 $0.1 $0.6
Technical Assistance $0.8 $0.8 $0.4 $0.0 $0.0 $0.0 $0.0 $2.0 $1.0 $1.1 $0.5 $0.0 $0.0 $0.0 $0.0 $1 $0.7 $1.5 $0.4 $2.6 1 0 2.3 25 2 1Total $0.8 $0.8 $0.4 $0.0 $0.0 $0.0 $0.0 $2.0 $1.0 $1.1 $0.5 $0.0 $0.0 $0.0 $0. 0 $1 $0.7 $1.5 $04 $2.6
conmpensation $0.1 $0.1 $0.1 $0.1 $0.1 $0.0 $0.0 $0.6 $0.1 $0.1 $0.1 $0.1 $0.2 $0.0 $0.0 $07 $0.0 $0.7 $0.0 $0.7 1 0 2.3Total $0.1 $0.1 $0.1 $0.1 $0.1 $0.0 $0.0 $0.6 $0.1 $0.1 $0.1 $0.1- $0.2 $0.0 $0.0 $07 $0.0 $0.7 $0.0 $0.7
Integration Subtotal $3.1 $5.5 $5.1 $4.7 $4.7 $1.2 $1.2 $28.6 $4.1 $7.5 $7.1 $6.7 $6.9 $1.8 $1.8 $69 $10.5 $20.2 $5.2 $35.9
4. Environment and civi Woiks $3.6 $7.2 $10.7 $7.2 $3.6 $1.8 $1.8 $36.8 $4.8 $8.8 $501.3$5.2 $2.7 $2.7 $60.6 $`15.1 $28.0 $7.5 $50.6 10 2.3 30 21Traflic Safety Total $3.6 $7.2 $10.7 $7.2 $3.6 $1.8 $1.8 $36.8 $4.8 $9.8 $15.0 $10.3 $5.2 $2.7 $2.7 $601 $15.1 $28.0 $7.5 $50.6 4>
Air Pollution Equip. $0.1 $0.7 $0.8 $0.2 $0.1 $0.1 $0.0 $2.1 $0.1 $1.0 $1.2 $0.3 $0.2 $0.2 $0.0 $2.1 $2.4 $0.1 $0.4 $2.9 1 0 2.3 81 2 1 Total $0.1 $0.7 $0.8 $0.2 $0.1 $0.1 $0.0 $2.1 $0.1 $1.0 $1.2 $0.3 $0.2 $0.2 $0.0 42A11 $2.4 $0.1 $0.4 $2.9
Other Equipment $0.1 $0.7 $0.8 $0.2 $0.1 $0.1 $0.0 $2.0 $0.1 $0.9 $1.1 $0.3 $0.1 $0.1 $0.0 $27 $2.1 $0.1 $0.4 $2.7 10 2.3 80 21Total $0.1 $0.7 $0.8 $0.2 $0.1 $0.1 $0.0 $2.0 $0.1 $0.9 $1.1 $0.3 $0.1 $01 $0.0 $2.7 $1 $0.1 $0.4 $2.7
Supervision $0.1 $0.2 $0.2 $0.2 $00 $0.0 $0.0 $0.0 $0.1 $0.2 $0.3 $0.3 $0.1 $0.1 $01 11 $0.6 $0.3 $0.2 $1.1 10 2.3 60 21Total $0.1 $0.2 $0.2 $0.2 $0.0 $0.0 $0.0 $0.8 $0.1 $0.2 $0.3 $0.3 $0.1 $0.1 $01 11 $0.6 $0.3 $0.2 $1.1
Technical Asslstanoe $1.6 $2.0 $0.4 $0.0 $0.0 $0.0 $0.0 $4.0 $2.1 $2.6 $0.5 $0.0 $0.0 $0.0 $0.0 $6.2: $3.1 $1.3 $0.8 $5.2 5 2.3 59 21Total $1.6 $2.0 $0.4 $0.0 $0.0 $0.0 $0.0 $4.0 $2.1 $2.6 $0.5 $0.0 $0.0 $0.0 $0.0 £6~.2: $3.1 $1.3 $0.8 $5.2
Cormpensation $0.1 $0.1 $0.0 $0.0 $0.0 $0.0 $0.0 $0.2 $0.0 $0.1 $0.1 $01 $0.0 $00 $00 $0 $00O $0.3 $0.0 $0.3 10 2.3Total $0.1 $0.1 $0.0 $0.0 $0.0 $0.0 $0.0 $0.2 $0.0 $0.1 $0.1 $0.1 $0.0 $0.0 $0.0 $03 $0.0 $0.3 $0.0 $0.3
Environnment and Traffic Safety Subtotal $5.6 $10.9 $13.0 $7.7 $3.8 $2.0 $1.8 $44.8 $7.3 $14.6 $18.2 $11.2 $5.6 $3.0 $2.8 $82. $23.3 $30.1 $9.4 $82.8
5. Institutional and Equipment $0.1 $0.2 $0.2 $0.1 $0.1 $0.0 $0.0 $0.6 $0.1 $0.2 $0.2 $0.1 $0.1 $0.0 $0.0 $0.7 $0.6 $0.0 $0.1 $0.7 10 2.3 81 21Financial Total $0.1 $0.2 $0.2 $0.1 $0.1 $0.0 $0.0 $0.6 $0.1 $0.2 $0.2 $0.1 $0.1 $0.0 $0.0 $0.7 $6 $0.0 $0.1 $0.7
Technical Assistance $1.4 $4.2 $4.2 $2.8 $07 $0.7 $0.0 $14.1 $1.8 $5.6 $5.7 $3.9 $1.0 $1.0 $0.0 $110.C $11.4 $4.1 $3.4 $18.9 5 2.3 60 21Total $1.4 $4.2 $4.2 $2.8 $0.7 $0.7 $0.0 $14.1 $1.8 $5.6 $5.7 $3.9 $1.0 $1.0 $0.0 $1.111 $11.4 $4.1 $3.4 $18.9
Trans. Planninig Unit $0.3 $1.1 $1.1 $1.1 $1.1 $1.1 $1.1 $6.7 $0.7 $1.1 $1.1 $1.2 $1.2 $1.2 $1.2 $7.7* $0.0 $7.7 $0.0 $7.7 5 2.3Total $0.3 $1.1 $1.1 $1.1 $1.1 $1.1 $1.1 $6.7 $0.7 $1.1 $1.1 $1.2 $1.2 $1.2 $1.2 $7.7 $0.0 $7.7 $0.0 $7.7
CapacityBSudding $0.2 $0.6 $0.6 $0.4 $0.1 $0.1 $0.0 $2.1 $0.3 $0.8 $0.8 $0.6 $0.1 $0.1 $0.0 $2.* $1.9 $0.5 $0.4 $2.8 10 2.3 68 21Total $0.2 $0.6 $0.6 $0.4 $0.1 $0.1 $0.0 $2.1 $0.3 $0.8 $0.8 $0.6 $0.1 $0.1 $0.0 $2.6~ $1.9 $0.5 $0.4 $2.8
Institutional and Financial Subtotal $1.9 $6.1 $6.1 $4.4 $1.9 $1.9 $1.1 $23.3 $2.9 $7.7 $7.9 $5.7 $2.4 $2.4 $1.2 $~30.1 $13.9 $12.3 $4.0 $30.1
6. Project Project Execution Unit $1.3 $1.3 $1.3 $1.0 $1.0 $0.3 $0.3 $6.7 $1.4 $1.5 $1.5 $1.2 $1.2 $0.4 $0.4 $71 $0.8 $8.8 $0.0 $7.6 5 2.3 10Administration Total $1.3 $1.3 $1.3 $1.0 $1.0 $0.3 $0.3 $6.7 $1.4 $1.5 $1.5 $1.2 $1.2 $0.4 $0.4 $764 $0.8 $8.8 $0.0 $7.6
GRAND TOTAL $105.6 $106.6 $73.8 $17.9 $11.5 $5.4 $4.4 $326.2 $122.9 $131A $90.9 $24.8 $16.1 $7.6 $6.3 $400.0 $1566.8 $207.4 $38.8 $400.0 39
-47- ANNEX D
BUENOS AIRES URBAN TRANSPORT PROJECT
ANNEX D: IMPLEMENTATION SCHEDULE, MONITORING INDICATORS, AND PROJECTSUPERVISION
A. Project Implementation Schedule
1. The implementation plan of individual components is shown in Table Di. Together with thedetailed cost table of Annex C, it provides the basis for project monitoring and for the disbursementprofile.
2. The UEP will monitor compliance with the individual implementation schedules by defining targetdates for key actions. It will be responsible for updating these targets and will discuss the actualimplementation progress along with any changes in the implementation plan in the semiannual progressreports. These reports should measure advancement in the implementation of the project by linkingactual progress with the updated plan.
3. To assist itself in monitoring compliance with the project implementation schedule, the UEP willdevelop and implement a computerized project management system. The system should be user friendlyand be updated constantly. The semi-annual progress reports should be based on the outputs of theproject management system.
B. Monitoring and Evaluation of Project Components
4. Monitoring would identify the physical, institutional and financial status of each subprojectcomponent, as appropriate, on a periodic basis. The aim would be to identify implementation problemsand the extent of deviation from the previously agreed targets. The results of the monitoring program(the comparison of achieved performance with agreed targets) will be presented in the semiannualProgress Reports prepared by the UEP. The monitoring of each component will provide the basis andinformation for the UEP to prepare measures and actions to resolve implementation problems, if any,and at the same time, to update project costs, disbursement and implementation schedules, if necessary.Monitoring indicators to be employed will vary by type of component but the general guidelines are setout below:
(a) prepare an implementation schedule which sets out target dates for key actions forphysical works, equipment supply and institutional components;
(b) the target dates would define the start and finish of key actions (to the nearest quarter);
(c) for financial performance, give target "percentage completed" by quarter. These dateswill be used for calculating disbursement performance; and
(d) to the extent possible, use the performance indicators included in the Metroviasconcession agreement.
5. Ex-post evaluation would be aimed at determining the effectiveness and efficiency of measuresin meeting the objectives agreed upon at negotiations. In the event that objectives are not met andpreviously anticipated improvements in performance are not achieved, the data would be used to: (a)identify why components had not been fully successful; and (b) modify future components proposed forsubsequent implementation which were based on similar premises. Furthermore, the ex-post evaluationwould be used as a major input to the project Implementation Completion Report. Tables D2 and D3show respectively the qualitative and quantitative performance measures which have been establishedfor the project.
C. Supervision Plan
6. Bank supervision of project implementation would be particularly important during the first threeyears of the project, when significant institutional and procurement decisions would be occurring. The
ANNEX D -48 -
bulk of disbursements are also expected during the initial years. The Bank would conduct twosupervision missions each year; the second of these missions would be used for the planned Annual/Mid-Term Review. Staffing for these missions would normally Include the task manager, a financialanalyst/specialist, a transport planner, and a procurement specialist. A total of about 50 staff-weekswould be required each year for the first two years, thereafter decreasing to 25 staff-weeks in the thirdyear and 15 staff weeks for the fourth year until the end of the project. A Mid-Term Review of the projectis planned for 1999 to examine the progress made, especially in the urban transport study, and policiesto assess the relevance of project objectives and actions, and recommend appropriate revisions, asneeded. In addition, the UEP staff is also envisioned to visit Washington once a year to discuss projectrelated issues and receive guidance on Bank procedures. A summary of key inputs is provided in TableD4.
7. The UEP is also expected to contribute to the supervision effort by: (a) being responsible forproject monitoring and coordination, keeping the Project Monitoring System accurate, and following-upand addressing all issues which are brought to attention by the system; (b) properly managing allprocurement and disbursement considerations, keeping procurement and disbursement records up-to-date; (c) submitting progress reports within one month of the end of June and December of each year,and (d) coordinating arrangements for the Bank supervision missions.
- 49 -
Table DI: Implementation Schedule36 1997 1998 1999 2000 2001 2002 2
Task Nane 3 14 1 12131411121314111213 41 4 2 2 |4112 31| 4 11' 21. Metrovlas Concesion
2. Une A Rehablitation
Bid Documents Ready 41
Bid Invitation 6130
Contract signing * 2/2S
Implementation
Signalling and Comm.
Track Renewal
Electical Equipment IOther CMI Works
Supervision
3. Transport Integration
Operational Manual Agreed
Transfer Centers 1Other Improvemeents
Technical Assistance
4. Environrment and Safety
Air Pollution Monitoring IOM Grade Crossings
Construction of Grade Separatins I IGrade Crossing Strategy Study
Barrier Crossings - i _i
6. Institutional Framework
Transport Study . ITransport Planning Unit
Other Technical Assistance III ITraining I I
6. Project Administration
ANNEX D - 50-
Table D2: Summa of Objectives and Ke Performance Indicators
Objectives Outputs Assumptions Impacts
Support the private- * Complete Rehabilitation * Timely * Successful disbursement of thepublic partnership in of Line A. availability of Loan related to Line A andimproving the service Implementation of the counterpart funds. Metrovias concession.
mass and v of Basic Investment Program * Efficient * On-time performance of Urquiza(1996-1999). regulation and line > 98%.
* Contribute to the * Successful continuance conflict resolution * Number of train cancellations <financial obligations which of Metrovias concession. sysem. 2% of the planned.the Government hasassumed under the * Disbursement of Bank * Metrovias to * Subway/Urquiza ridership up byconcession agreements loan. continue with the the contractual amounts (defined inwith the private sector. concession. the concession agreement).
* Govemment to * Subway/Urquiza car-km increaseshonor the as governed by the concessioncontractual agreement.agreement withMetrovias in a * Subway service interruptionstimely manner. down to the levels specified in the
concession agreement.
* Assist in improving the * Complete Air Monitoring * Coordination * Decrease in the suburban railwayconditions of traffic safety Study and implement its between the related number of fatalities by 25and environmental quality recommendations. participating percent.
entities* Construction of 10-12 (municipalities, * Start monitoring of air pollution inroad/rail grade rail the city of BA.separations. concessionaires,
* Installation of automatic national andbarriers on 8-12 road/rail provincialat-grade crossings. governments)
* Improving rail/bustransfer conditions in 3-5stations.
Help in developing an * Completion of the AMBA * Full coordination * Conversion of the UEP into aintegrated urban transport O-D surveys and transport with all the formal planning and management(road and rail) system for study. municipalities in agency.AMBA. the AMBA, the
province of * Conversion of the SteeringBuenos Aires, and Committee into a permanent bodythe federal responsible for metropolitangovemment. transport policy.
* Increased professional capacity in* Institutional planning agency.capacity within theUEP. * Defined increase in the use of
public transport by car-owningpopulation (to be established by thetransport study).
* Defined increase in transfersbetween public transport modes (tobe established by the transportstudy).
-51- ANNEX D
Table D3: Quantitative Performance Targets(Calendar Year
1997 1998 1999 2000 2001 2002 2003Rehabilitation of Line A
Signaling (% of work completed) 60% 40%Control Center 20% 80%Permanent Way 54% 46%Substations 69% 31%Power Stations 70% 30%Catenary 40% 60%Ventilation Systems 65% 35%Escalators 75% 25%Pumping Stations 65% 35%Consolidation of Lima & Piedras stations 47% 53%Line A Passenger VolumeTraffic Speed on Av. Rivadavia
Subway (Metrovias) (% of work completed)Control Center 30% 40%Signaling System Line B 30% 30%Signaling System Line C 30% 20%Signaling System Line D 32% 25%Signaling System Line E 30% 20%Signaling System Premetro 100%Substation Italia/Independencia 40% 60%Substation M. Fierro 3%Power Station Line C 26% 39%Power Station Line E 47% 25%Permanent Way Line B 28%Permanent Way Line C 30% 65% 5%Permanent Way Line E 5% 65% 30%Pumping Stations 15%Ventilation System 20% 40% 40%Seccionadores 60% 40%Technological Complex 2% 10% 15% 31% 15%Tunnel to the Central Control 26% 74%Closing of Premetro Loop 100%Transfer Center Pellegrini 20% 60% 20%Transfer Center Miserere 67% _
Urquiza Line (Metrovias) (% of workcompleted)
Permanent Way 14% 28%Signaling System 65% 35%Radio Communication 47% 53%Reconstruction of 8 Electric Coaches 20% 30% 30% 20%Elevators 100%Crane 100%Air Compressors 70%Proof Bank 70%Vehicle Crossing 20% 20% 20% 14% 6%
Quality of OperationsOverall Indicator (Subway) 1.089 1.089 1.089 1.089 1.089 1.089 1.089Overall Indicator (Urquiza) 1.061 1.075 1.081 1.081 1.105 1.105 1.105On-time Arrival (Urquiza) 97% 97% 98% 98% 98% 98% 98%Service Interruption min. (Subway)Car-km (Subway) 2,392 2,392 2,392 2,392 2,392 2,392 2,392Car-km (Urquiza) 8,895 8,895 8,895 8,895 8,895 8,895 8,895NPV of Concession @12% 20 20 20 20 -0 0 20NPV of Line A @ 12% 20 20 20 0O Ž0 0o 20
Traffic SafetyDecrease in fatalities at rail crossings 0% 4% 8% 12% 16% 20% 25%
ANNEX D - 52-
Table D4: Bank Supervision Input into Key Activities -
Apptox Key AdAtities Expeded S0 Requirements weeks
Supervision Mission Transport Planner
4/97 (Review. (i) conditions for project effectiveness; and (ii) 2terms of reference and requests for proposals for thetransport study)
Supervision Mission Transport Planner11/97 (Project launch workshop, review. (i) Line A procurement; Disbursement Specialist 12;Procurement Specialist(ii) Operating Manuals and Monitoring system; (iii) special Financial Analyst
coordinating arrangements devised among several Environmental Specialistsectoral agencies participating in project implementation;(iv) existing financial and accounting systems/ proceduresand (v) selection of consultants)
Supervision Mission Transport Planner
(Review Project Monitoring System, Training/ Financial Analyst4/98 Implementation, institutional development including Traffic Safety Expert 6
training programs)
Supervision Mission Transport Planner11/98 (Concentrate on subprojects: (i) contracts; (ii) eligibility/ FinancialAnalyst 6
limits; (iii) costs; and (iv) status)
Supervision Mission Transport Planner4/99 (Concentrate on disbursements, financial status, Institu- Financial Analyst 6
tional development, public transport studies)
Mid-term Review Transport Planner11/99 Financial Analyst 9
(Review results of the project thus far) Procurement SpecialistConsultant
2000 Two Supervision Missions Transport PlannerFinancial Analyst 12Consultant
Two Supervision Missions Transport Planner2001 Financial Analyst 12
Consultant
Two Supervision Missions per year until Loan Closing Transport Planner2002-03 (Project closing) Financial Analyst 24
TOTAL 89
t A reverse mission consisting of the UEP Is planned to visit Washington each year between July-August.
- 53- ANNEX E
BUENOS AIRES URBAN TRANSPORT PROJECT
ANNEX E: DISBURSEMENT AND PROCUREMENT SCHEDULES
Table El: Allocation of DisbursementsExpenditure Category Amount in % of Expenditures to be
... n..................................................................................................................................................................................................................A. Metrovias Concession 50.0 35%B. Works-Line A 65.0 65%C. Works - Transport Integration 11.0 40%D. Works - Traffic Safety 19.0 40%E. Equipment for Air Pollution Monitoring 1.5 70%F. Other Equipment 1.7 70%G. Technical Assistance and Training 22.0 100% net of taxesH. Technical Assistance for Project Administration 6.3 100% net of taxesI. PPF 1.5J. Unallocated 22.0
Total 200.0
Table E2: Bank Loan Disbursement Schedule(USS million)
Bank Fiscal Year 1998 1999 2000 2001 2002 2003 2004................................................................................................. ..............................................................................................................................................
A^nnual 30 46 45 41 25 10 3Cumulative 30 76 121 162 187 197 200
Table E3: Schedule of Estimated Disbursements(US$ million)
IBRD FY Semester Estimated Disbursements per Estimated Cumulative Estimated Cumulative as %Semester Disbursements of Total
1998December 31, 1997 10 10 5%June30, 1998 20 30 15%1999December 31, 1998 22 52 26%June30, 1999 24 76 38%2000December 31, 1999 23 99 50%June 30, 2000 22 121 61%2001December 31, 2000 21 142 71%June 30, 2001 20 162 81%2002December 31, 2001 15 177 89%June 30, 2002 10 187 94%2003December 31, 2002 6 193 97%June 30, 2003 4 197 99%2004December 31 2003 3 200 100%
Table E4: Procurement Schedule for Major Contracts oContractValue Type of No. of Type of Documents Bids Prop. Contract Delivery of Initiation of
Subproject (US$ million) Contract Contracts Bidding Ready Invited Signature Goods bi Works
Rehabilitation of Line A- Track Renewal 37.3 Works 1 ICB 3/97 4/97 11/97 12/97- Other Civil Works 26.0 Works 1 ICB 3/97 4/97 11/97 12/97- Electric Equipment 30.4 Works 1 ICB 3/97 4/97 11/97 12/97- Control Center 1.2 Works 1 Direct 3/97 4/97 11/97 12/97- Other Signals & Controls 23.4 Works I ICB 3/97 4/97 11/97 12/97- Supervision 2.4 Services I ! 4/97 5/97 11/97 12/97
Transport Integration- Virreyes Transfer Center 3.7 Works I NCB 7/97 8/97 2/98 3/98- G. de Laferrere Transfer C. 6.2 Works I NCB 9/97 10/97 4/98 5/98- Other Transfer Centers 22.7 Works Several NCB 6/98 7/98 12/98 1/99- Technical Assistance 2.6 Services Several Q! 2/97 3/97 4/97 5/97 1
Env. and Traffic Safety 4- Air Pollution Monitoring 3.0 Supply/Ser. 1 ICB 5/97 6/97 12/97 7/98- Ituzaingo Grade Separation 4.3 Works 1 NCB 7/97 8/97 2/98 3/98- Moreno Grade Separation 3.1 Works I NCB 9/97 10/97 4/98 5/98- Malvinas Arg. Grade Separ. 5.0 Works 1 NCB 1/98 2/98 8/98 9/98- Other Grade Separations 38.6 Works Several NCB 12/97 1/98 6/98 7/98- Grade Crossing Strategy 0.6 Services I ! 5/97 6/97 1/98 2/98- Other Tech. Assistance 4.6 Services Several / 2/97 3/97 4/97 5/97
Institutional Framework- Transport Study 9.0 Services I Q 5/97 6/97 12/97 1/98- Other Tech. Assistance 10.0 Services Several 9! 2/97 3/97 4/97 5/97- Training 2.7 Services Several v 2/97 3/97 4/97 5/97W Of items to be financed under the Bank loan.k Start of delvry.gI Bank's Guldines for Selecon of Consultants.
- 55 - ANNEXF
BUENOS AIRES URBAN TRANSPORT PROJECT
ANNEX F: SUMMARY OF URBAN TRANSPORT STUDY TERMS OF REFERENCE
A. Background
1. Buenos Aires is the capital and administrative center of Argentina. The Metropolitan Area ofBuenos Aires (AMBA) holds the main economic, commercial and industrial activities of the country. TheAMBA consists of the federal capital and 42 other municipalities, covering an area of over 16,000 km'.Its 12 million inhabitants (one-third of the total population of Argentina) make an estimated total of 18million daily trips, 60 percent of them using mass transit. The AMBA's 200 non-subsidized private buscompanies make up 42 percent of the motorized trips and carry more than 80 percent of publictransportation passengers.
2. Congestion is, however, increasing and spreading along the road network during peak periods,especially in the central area. The car portion of the motorized trips modal split has increased from 15percent in 1970 to an estimated 34 percent in 1995. This trend does not show signs of change; thuscongestion will contribute to further deterioration of bus operations and environmental conditions.
3. Another problem is that the organization of urban transport in the AMBA is fragmented. National,provincial and municipal levels of government have overlapping responsibilities and little coordination.Efforts to develop a fully integrated public transport system are at an early stage. Apart from the financiallimitations, the transport sector suffers from the lack of tools and appropriate methodologies to evaluatealtemative policies aimed at subsidizing the decision-making process.
4. Future AMBA urban transport activities will demand a significant improvement in the planningand management of the metropolitan transport system in order to guarantee overall gains in efficiency.
5. Accessibility to crucial trip generating areas has to be improved. New transfer routes providingdirect connections between suburbs will have to be considered. Special attention must be given to theresulting impacts of transport policies, particularly traffic-related pollution and the disruption of pedestrianflows within central areas of Buenos Aires.
B. Introduction
6. Given the size and importance of Buenos Aires along with the scope and time frame of thestudy, prospective respondents to this invitation for proposals ought to consider this as a majoropportunity to foster the advancement of transport planning and modeling practice. It is expected that theproposed methodology would maximize quality and results within the budget and time constraints.
7. These Terms of Reference focus on specifying the expected results rather than setting strictmethodological guidelines. Detailed requirements conceming procedures adopted in current bestpractices are thus omitted, as these are expected to be known by the consultants. This approach offersconsiderable flexibility to devise a methodology suitable to attain the desired objectives. Nonetheless, itrequires that the proposals contain a complete description and justification of the methodology,addressing its possibilities and limitations conceming the accomplishment of study objectives.
8. The UEP understands that the size and complexity of the study may preclude a detaileddescription of all aspects of the methodology in the proposal. It thus accepts that only keymethodological considerations will be detailed at this stage, so long as the resulting proposal leaves noroom for doubts as to the quality of the proposed work and its potential to fulfill the expectations detailedin these Terms of Reference. It must be clear that this approach requires that the selected consultantssubmit further methodological details for the approval of the UEP during the course of the study.
C. Objectives
9. The general objective is to conduct an Urban Transport Study (URTRAS) for the AMBA. Thespecific objectives include:
(a) the development of a Buenos Aires Transport Model System (BATAM);
ANNEX F - 56 -
(b) the conducting of a comprehensive home interview and complementary surveys in orderto provide the updated information required by the different stages of the analysis,modeling and evaluation processes;
(c) the evaluation of a set of specific strategies addressing the major transport issues in theAMBA including investments in road and rail systems, bus services and networkstructure, intra and intermodal integration, public and private transport pricing policies(including congestion pricing); and
(d) the development of an institutional framework for metropolitan-wide transport planning.
10. The study area will comprise the whole of the AMBA, including the federal capital and the 42other municipalities. Analysis, results and recommendations from the URTRAS must address transportproblems in the study area.
D. The Urban Transport Study
11. In order to achieve the objectives, it is expected that results from the URTRAS should at leastinclude:
(a) the analysis of current and potential key transportation problems in the AMBA, with theidentification of their underlying causes and the assessment of their effects on mobilityand urban development;
(b) the identification of objectives for the transport system in agreement with the urbandevelopment and economic scenarios considered;
(c) the definition of a common evaluation framework to assess objectives attainment,considering at least operational, economic, financial, environmental, safety, social andinstitutional development aspects, at different levels of details and time frames; and
(d) recommendations for the implementation of selected strategies, describing specificactions and their estimated time frame and costs.
12. The proposals must explicitly address those key methodological issues of their approachbelieved to be essential to achieving the expected results. These should at least include:
(a) the procedure for the development of the objectives for the transport system, consideringa wide range of aspects and interests;
(b) the procedure for the generation of altemative transport strategies potentially capable ofachieving the objectives;
(c) the procedure for the generation of planning scenarios, in accordance with urbandevelopment and economic hypotheses adopted and for dealing with uncertainties inthese hypotheses;
(d) the procedures for consistently transforming planning scenarios (usually set at thegeneral level) into inputs to transport modeling and analysis (required at a spatiallydissaggregated level); and
(e) the overall modeling approach to be adopted for simulating the actions combined instrategies.
E. The Continuous Transport Planning Process
13. Only the implementation of a continuous planning process in the AMBA will allow transportproblems to be monitored and addressed in a systematic and objective-orientated manner. It isenvisaged that this study would be the basis for this continuous process.
14. To engage in the activities which will be part of the continuous planning and management effort,the UEP expects that at the end of this study, a local team would be fully capable of: (a) following andanticipating trends in urban development; (b) reevaluating and revising the results of the URTRAS; (c)
-57- ANNEX F
assisting other agencies; (d) operating the BATAM; (e) implementing modifications in the BATAM; and (f)maintaining and expanding an integrated GIS-oriented transport network.
F. Transport Modeling - BATAM
15. The BATAM should support the development of the URTRAS, including the assessment oftransport strategies and the detailing of actions required for their implementation. BATAM will becomethe technical backbone of the continuous transport planning process and will also be a tool for the localtechnical team to address other urban transport issues from a planning point of view.
16. Some of the transport issues to be considered in developing the BATAM are:
(a) the need to provide additional road capacity and improve the overall conditions of theexisting network;
(b) the investment in metro/rail transport, including new lines, extensions, dualing of tracks,electrification, new rolling stock and signaling;
(c) the required improvements to bus transportation, including reshaping of the bus networkstructure and introducing large-scale bus priority measures;
(d) the requirement to evaluate the implementation of additional transfer terminals and therelocation of public transport station/terminals;
(e) the chance of boosting the integration of transport services, including the metro/rail andfeeder buses, park and ride, cycle and ride, etc.;
(f) the urgency to define patterns of competition among public transport services andoperators, including those of different quality standards;
(g) the need to assess alternative fare policies for public transport, including peak and off-peak fares, use of magnetic/smart cards, and specific fare agreements among publictransport operators;
(h) the opportunity for implementing private transport demand management and controltechniques including road pricing;
(i) the importance of alleviating congestion and pollution as well as improving safety;
0) the problems pedestrians face while walking in the central areas; and
(k) the introduction of new major traffic generators (passengers or freight).
G. The Origin-Destination Home Interview and Complementary Data Collection
17. Buenos Aires has not conducted any systematic data collection on transport for more than twodecades. Thus a major data collection effort is considered an important part of this study. This will becentered on a large-scale origin-destination (O/D) home interview survey, which has to be propertycompleted by additional surveys for the purposes of completeness and accuracy.
18. Major objectives of the data collection effort are to:
(a) provide a description of person and freight travel pattems in the AMBA with regard tospatial, temporal, socio-economic and transport characteristics to support policy analysisand decision making.
(b) provide behavioral data for the development and estimation of travel demand models;
(c) provide data for the development and calibration of computer-based transport models;
(d) provide up-to-date estimates of socio-economic and demographic characteristics of thepopulation of the area; and
(e) provide data on economic and other urban activities in the AMBA.
ANNEX F - 58 -
19. The specific objectives of the O/D survey recognize two main uses of the information collected:descriptive analysis and modeling. It is thus expected that the survey provides:
(a) a description of socio-economic and demographic characteristics at a zone level;
(b) a description of travel demand characteristics (e.g., trips by purpose, mode or time ofday) at a zone level;
(c) a description of trip interchanges at the coarse zone level;
(d) detailed socio-economic, demographic and travel activity information for demandmodeling; and
(e) trip matrices at a detailed zone level to be used as seeds in matrix adjustmentprocedures.
20. To obtain the required information, data must be collected at four levels: dwelling units,households, individuals and travel activity. Working day travel activity pattems must be measured.Walking and other short distance trips to relevant activities must be recorded. Bidders may consider theneed for a sub-sample of the sampled households to be approached in order to gather more specific datawhich might be required for modeling or other purposes.
H. Products
21. The products of the study will comprise: reports in Spanish and English; computer models;technical seminars to discuss the work progress; methodologies and findings on a bi-monthly basis;databases and manuals; and hardware.
22. The reports will include inception reports, monthly progress reports, working notes, intermediatereports, draft final reports, final reports, and summary reports.
- 59- ANNEX G
BUENOS AIRES URBAN TRANSPORT PROJECT
ANNEX G: ECONOMIC EVALUATION
1. The concession awarded to Metrovias involved the rehabilitation and operation, over a period of20 years, of the subway network and the Urquiza suburban railway which connects with it. One of theterms of the concession was that Line A of the subway was to be rehabilitated on the Govemment'saccount. The present project consists of the investments necessary for the Govemment to meet thatobligation. If the investment were not to be made, the whole concession would be at risk. Economicevaluation was thus applied both to the concession as a whole and to the Line A rehabilitation itself.
2. Line A, which was built in Table GI: Main Assumptions and Results of the Economic1913, remains in operation with 65- Evaluationyear-old track, wooden coaches and Discount Rate 12 percentoutdated electrical systems. Although Shadow Pricing of Exchange Rate 1the signaling system was renovated NPV of Metrovias Concession US$239 million20 years ago, it is now technically NPV of Line A Rehabilitation US$338 millionobsolete and cannot supportcentralized traffic control. Fiscal Impact of Urban Rail Concessions 5% of 1995 expenses
Fiscal Impact of Metrovras Concession 0.5% of 1995 expenses3. Line A runs for a distance ofapproximately 7 ki, mainly under Table G2: Monitoring Indicators for the EconomicAvenida Rivadavia, which operates as Evaluationa one-way road running out from thecity center. Road traffic in the .Ye.ar!y Mid-Term Completionopposite direction uses other parallel Line A Ridership x x xstreets of lower width and capacity. Traffic Speed on Av. Rivadavia x xThe major impact of the Line A NPV of Line A Rehabilitation xrehabilitation would thus be on the NPV of Remaining Metrovfas x x xcurrent (and future) users of the line, Concessionand on users of the road corridor Performance Indicators of the x x xcentered on Avenida Rivadavia- Urqurmane Indicaywhether they remain road users in the Urquza Line & Subwayfuture or transfer to the rehabilitated Value of Time of Public xsubway system. Transeort and Auto Users
4. The project includes total replacement of the rails, renovation of the electrical supply system,renewal of the signaling system, installation of forced ventilation, renovation of the pumps, improvementof the tunnels to take longer coaches, and some minor complementary works. Although the replacementof the rolling stock is part of the program to be undertaken by Metrovias under the terms of theconcession agreement, the cost of this rolling-stock replacement is included in the cost of renovation ofthe line for the purposes of this economic evaluation.
5. The proposed investment program also includes a sum of about US$6 million for the civil worksinvolved in constructing a new station to replace two existing stations (Piedras and Lima). The benefits ofthis part of the project would come partly from improving the interchange between Lines A and C, partlyfrom creating some opportunities for the exploitation of new commercial space, and partly from loweringthe trains' turn-around time because of the elimination of one scheduled stop in each direction. Noseparate economic evaluation has been undertaken to estimate the additional benefits of the stationconsolidation.
A. Evaluation of the Metrovias Concession
6. The terms of the concession as a whole specified minimum levels of service and the fare levelsat which that service was to be provided. It also specified a program of investments to be undertaken onthe account of the concessionaire. Provisions were made for fare adjustments to take inflation into
ANNEX G -60-
account, and to recognize improvements of service quality above the minimum required in the contract.Bidders were required to specify timings and costing for the program of investments and to indicate otherpayments which they would require (operating subsidies) or are willing to make (canon) during the periodof the concession. The concession was awarded to the bidder offering the stream of expenditures andrevenues to Govemment involving the minimum net present value when discounted at 12 percent whichrepresented the opportunity cost of capital to the Govemment.
7. The basic assumption made in the appraisal of the concession is that, without the concession,the subway would continue to run at the initial level of service, with annual expenditures by Govemmentequal to those made in the final year before concessioning. This is treated as the «do-nothing" case. Inthe year prior to concessioning, the subway carried 145 million passengers, generating US$85.39 millionin traffic revenue, in addition to US$2.53 million of non-traffic revenue. Total revenues were thusUS$67.92 million compared with expenses of US$108.22 million. The direct cost to Government wasthus over US$40 million. In addition, the Urquiza line, with which the subway is linked in the concession,was losing over US$10 million a year, giving a total cost to Govemment of US$53.72 million. It has beenassumed that these losses would continue in the absence of the concession. The stream of costs andrevenues to Government for the "with concession' and "without concession" cases are set out in TableG3.
8. In the years before concessioning, the cost to Govemment had been increasing, while the levelof service and of patronage had been declining. Moreover, maintenance expenditures were beingdeferred so that the likely future expenditures to keep the system in operation would have had toincrease in any event. In the case of Line A, the oldest line, it is estimated that inability to maintainobsolete equipment would have led to closure within five years. The "constant cost to Government"assumption for the status quo is thus very conservative.
Table G3: Evaluation of the Benefit to the Govemment for the Subway/Urquiza Concession(US$ million)
Without Project With Project NetYear Subsidy Investment a/ Subsidy Total Benefits
1 (53.72) (11.13) (11.13) 42.592 (53.72) (27.11) (7.39) (34.50) 19.223 (53.72) (71.12) (3.58) (74.70) (20.98)4 (53.72) (83.99) (2.21) (86.19) (32.47)5 (53.72) (85.33) 8.17 (77.16) (23.44)6 (53.72) (26.21) 13.87 (12.3 41.387 (53.72) (15.93) 18.34 2.42 56.148 (53.72) (13.10) 20.97 7.87 61.599 (53.72) (19.99) 26.66 6.67 60.3910 (53.72) (20.90) 30.70 9.80 63.5211 (53.72) (22.48) 33.42 10.94 64.6612 (53.72) (33.21) 35.05 1.84 55.5613 (53.72) (32.65) 36.68 4.03 57.7514 (53.72) (61.79) 38.40 (23.39) 30.3315 (53.72) (61.79) 39.52 (22.27) 31.4516 (53.72) (0.11) 42.29 42.18 95.9017 (53.72) (0.11) 42.41 42.30 96.0218 (53.72) - 42.59 42.59 96.3119 (53.72) 43.04 43.04 96.7620 (53.72) 40.58 40.58 94.30
jl Includes Une A investment. Net Present Value at 12 percent:
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9. The economic evaluation estimated the discounted expected net present value of the stream ofpayments by Govemment on the assumption of constant subsidy in the absence of the concessionagreement amounts to US$401 million. The stream of payments under the concession (adding togethersubsidies, capital expenditures and the canon payable) has a net present value of US$162 million. Thisgives a net present value to Govemment of the concession in financial terms of US$239. The rate ofretum, while not calculated due to the multiple possible results, is considered high. For the purposes ofthese analysis, a discount rate of 12 percent was used which has been universally applied by theGovemment in all its concessions so far, and reflects the opportunity cost of capital in Argentina. It isworth noting that the NPV of the project would be positive at any discount rate due to positive benefits inthe beginning years of the concession. In addition, this analysis is based on the shadow price ofexchange of 1 due to equivalency between US$ and Argentine Peso3. From the fiscal point of view, theNPV of the concession represents about 0.5 percent of the current budget of the Govemment.
10. The economic value of the concession (assuming that it was the intention of the Govemment tomaintain subway service if possible) is underestimated by this calculation in three ways.
11. First, even on the basis of the traffic figures assumed by the concessionaire in making the bid,there would be an increase in subway traffic which would, in tum, reduce the need for bus services.Although it would be double counting to include the reduction of costs of bus operation as well as theadditional revenues to the subway of traffic diverted, the increase of consumers' surplus for passengerstransferring as well as the environmental and safety benefits associated with the reduced levels of roadtraffic are a net addition to the benefits of the concession.
12. Second, the effect of the improved quality of service provided by the concessionaire has alreadyattracted more traffic than forecast. That implies that these additional passengers are also obtainingbenefits from transferring to the subway. Passenger volumes on the subway in the third year of theconcession were equal to the level projected for year eight in the concessionaire's bid. As might beexpected, the concessionaire claims that this has been achieved as a consequence of increased levelsof service provision, which have associated increases in operational expense, and thus profit has notbeen increased.
13. Third, it has been proposed that increases in subway fares introduced by Govemment to matchincreases in bus fares (but not the increases associated with inflation of supply costs or improvement ofsubway service provided for in the contract) would accrue to Govemment and be paid into an urbantransport fund.
14. The main caveat that should be made on these calculations is that it has been assumedthroughout that the maintenance of subway service at the new level of cost to Govemment is a sociallyworthwhile expenditure. That supposition has not been tested in the cost-benefit analysis for theconcession as a whole. However, the results of the analysis of the investment in Line A, which do includethe costs and benefits to all users of the urban transport network in the affected area (but still not anyenvironmental benefits to non-users) strongly supports the case that the overall benefit of having thesubway is positive. The financial details of the concession agreement are shown in Table G12.
B. Evaluation of the Line A Infrastructure Investments
15. The evaluation procedure used is a conventional cost-benefit analysis in which the level andperformance of traffic in the affected network is estimated with and without the investment underconsideration over the effective life of the project (taken in this instance to be the 20 years of theconcession). The basic calculation only covered a single direction of traffic-outward along AvenidaRivadavia. The total benefits of the project should be at least double this because the inward joumey inthe corridor is forced to use parallel streets of lower capacity, for which exclusive bus lanes to improve
3 The same arguments for the choice of the discount rate and the shadow price of th, exchange rate are valid for the evaluation ofUne A Investments and grade separations.
ANNEX G -62-
performnance are not feasible. The full details of the economic evaluation are contained in the reportprepared for the Project Coordination Unit.4
16. It is assumed that the number of trips taken would be the same with or without the subway (i.e.,no allowance is made for newly generated trips). The subway traffic is assumed to increase over theperiod by the attraction of passengers from the bus mode. The benefit calculation involves estimates ofthe total costs of carrying this traffic throughout the study period with and without the Line Arehabilitation.
17. Traffic which would be carried on the subway in the With project"case is all assumed to becarried by bus in the Without project"case. The assignment of all traffic to the buses is based on thesubstantial difference between the costs of subway and buses on the one hand, and taxis or private carson the other. If, in the event, some of the traffic which would use the subway were to be car or taxi trafficthe level of congestion in the without project case would be higher, and the rate of return on the projectincreased. It is assumed that the extra number of buses required would be determined by the increase inpeak-hour bus demand. The extra number of buses is thus determined by the extra number of peak-hoursurface travelers divided by 70 (a very high estimate of peak load). The buses thus brought into thesystem are assumed to operate throughout the 12-hour day evaluated and the extra costs of bus servicederived from this.
18. The costs of operation of traffic in the Avenida Rivadavia corridor were estimated with andwithout Line A in operation. The costs included were:
(a) costs of operation of road vehicles on Avenida Rivadavia;
(b) time costs of users of public and private transport on Avenida Rivadavia; and
(c) costs of maintenance and operation of Line A (for the 'with, project case only).
19. The traffic data were converted into monetary terms using standard conventions such as speed-flow relationships, vehicle operating cost estimates, and values of time. In the absence of acomprehensive traffic model, the analysis provided only for shifts of traffic between modes (particularlybetween subway and buses) and between routes (particularly between Avenida Rivadavia and otherroutes). For the purposes of the estimation, it was assumed that traffic on Line A continued to decline at20 percent per annum as performance deteriorated over five years, after which the Line would be closed.
20. The costs of operation of private vehicles, taxis and buses were estimated as a function of travelspeed. Conventions for these calculations were taken from a 1995 study of travel in Buenos Aires. Fulldetails are available in the project files.5
21. The unit values of time used in the evaluation were based on the FIEL study (FIEL, op. cit.). Thevalues of working time calculated for auto users was US$7.20 per hour and US$2.80 per hour for masstransport users, giving an average value of US$4.50 for all users. These were used for joumeys in thecourse of work only. For other journeys (to and from work, and leisure and other trips) a value of 20percent of the value of working time was taken. No statistical basis was available for the joumey purposefor the different modes: the assumption made in the study was that 40 percent of auto trips, 35 percent ofsubway trips and 30 percent of bus trips were for work purposes. This gave average values of time forauto users of US$3.74 per hour, for subway users of US$1.61 per hour, and for bus users of US$1.23 perhour. Average auto occupation was 1.8 per vehicle. The value of time used in auto travel was factored toaccount for that level of occupancy.
4 Proyecto de Aodemzacidn de la Lines A de Subterrdneos de is Ciudad de Buenos AJres-Evalueci6n Econ6mcs. April 1996.5 FIEL Ster, Davbs and Gleave. 1995. Study of MHe Finance of Transport in the Metropoltan Area of Buenos Aires. Comments
on the FAne Report.
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22. Traffic Estimation. The subway traffic estimate for the base year was derived from a census ofpassengers on Line A taken by Metrovias in September 1994, which, combined with the results of astudy undertaken in 1990 by the Municipality of Buenos Aires, yielded an origin/destination matrix.Hourly distribution of traffic was also provided by Metrovias.
23. Road traffic conditions were analyzed separately for five sections of Rivadavia, currentlycarrying varying traffic volumes and modal proportions. Current traffic volumes and capacities are shownfor these sections in Table G4.
Table G4: Characteristics of the Affected Sections of Avenida RivadaviaPeak Bus Peak Car Road
Road Section Wdh(nLnghki)Hourly Flow Hourly Flow CapacityW
Montevideo/R. PeAa 18.5 2.04 250 2782 5410
Alberti/Saavedra 15.75 1.30 233 3067 4174
S. de LoriaN. Liniers 16.5 2.24 250 3039 4236
Campichuelo/Balcarce 16.5 0.76 238 2934 5858
Parral/Rojas 16.0 0.57 350 2593 4909t Passenger car equivaleits per hour.
24. The performance of traffic on Rivadavia was calculated using speed-flow relationships shown inTable G5. It was assumed that when traffic volumes exceeded those bringing the average speed oftraffic down to 5 km per hour, 67 percent of the excess traffic would divert to the nearest parallel street inthe same direction (Independencia) and 33 percent would divert to the next nearest (Presidente Per6n).The assumption that speeds would decline to 5 km per hour before substantial diversion would occur wasbased on the evidence of other avenues in the city (particularly C6rdoba) where this has occurred, andon the basis of the low average speeds achievable on the parallel roads because of their lack of capacityand the frequency of intersections.
Table,G5: Speed-Flow-Conventions Aplied to Traffic in the Corridor
Formulae for Speed (km/hr) Calculation
Type of Avenue Free Flow Congested
Less Than Four Lanes 33.1 - 23.2 x (WC) 124.7 - 114.4 x (V/C)
Four Lanes or More 35.5 - 26 x (V/C) 140.4-131 x (V/C)
Streets 20.7 - 14.4 x (V/C) 76.7 - 70.4 x (V/C)
25. The benefit calculations were undertaken on the basis of 12 hours per day. Observed traffic isrelatively stable through the main working hours; the average hourly traffic over the period beingassumed to be 0.93 times the peak-hour traffic. The calculation was based on 273 days per year. Thisnumber of days represented the working days (excluding the weekends and the summer months ofJanuary and February when traffic volumes are lower) and for which no traffic benefits were assumed.
26. A 'hatural rate of growth* of traffic was allowed for in the calculations. This was taken to be0.6689 percent per annum.
ANNEX G -64-
27. Evaluation Results. The Table GG: Comparison of Altemieiveseconomic evaluation considered a Case Scenano Descrption NPVnumber of altematives, with and without USs MdLthe proposed project to determine the no. ith (Project) VUthout (Do Nothing) at 12%correct level of investment andmprojecr. Even when the rehabilitation I Line ARehabilitation As is (absolutelydo 338of Line A was considered to be the Only(BaseCase) nothinno buslane)optimal projects, other complementary It Line A Rehabilitation Full Bus Lane 202investments were considered in theAvenida Rivadavia. On Rivadavia it is .possible to introduce an exclusive bus ll LineA Rehabilitation Partial Bus Lane 328lane. This could be done whether or not IV Full Bus Lane Only As is (absolutely do 163Line A was closed. Recent experience (Absolute Altemative) nothing-no bus lane)with other roads (notably C6rdoba)suggests that this fomn of traffic senernts in one direction only.separation and management would be introduced in the near future, at least for the inner portion of theroute. In the case where an exclusive bus lane was assumed, it was also assumed that stop spacingwould be increased to 350 meters from the existing range of 200-250 meters. Table G6 shows thealtematives considered and their respective results. These results are based on a discount rate of 12percent which was calculated to be the opportunity cost of capital to the Govemment and was previouslyused in award of the railway concessions. The labor cost was calculated at its shadow price.
28. Because the bus lane improves flows in any event, the effect of introducing i reduces thecalculated rate of return on keeping the Line A open. A range of altematives for the bus lanes, both withand without the subway, were considered. Table G7 shows the economic evaluation results of the basecase. The calculated IERR for one-direction movement along Rivadavia only, varied between 74 percent(assuming no bus lane either with or without the subway) and 20 percent (assuming that an exclusive bus
Table G7: Cost and Benefit Streams for Line A Investment: (Base Case)!(US$ million
Costs Benefits NetYear Une A Rolling Journey Total Operating Time Total Benefits
_______ _Rehab. Stock Costs Cost1996 55.69 17.06 72.75 5.57 52.60 58.17 (14.58)1997 26.59 50.00 17.06 93.65 7.09 54.86 61.95 (31.70)1998 50.00 18.76 68.76 9.16 70.17 79.33 10.571999 35.00 20.64 55.64 10.76 84.16 94.92 39.282000 21.67 21.67 12.38 92.43 104.81 83.142001 22.75 22.75 12.72 94.99 107.71 84.962002 23.89 23.89 12.94 97.76 110.70 86.812003 24.13 24.13 13.14 98.80 111.94 87.812004 24.37 24.37 12.98 99.91 112.89 88.522005 24.61 24.61 13.12 99.37 112.49 87.882006 24.86 24.86 12.63 98.10 110.73 85.872007 25.11 25.11 12.09 95.31 107.40 82.292008 25.36 25.36 11.85 91.56 103.41 78.052009 25.61 25.61 11.69 84.33 96.02 70.412010 25.87 25.87 11.47 79.34 90.81 64.942011 26.13 26.13 11.90 78.40 90.30 64.172012 26.39 26.39 12.04 78.44 90.48 64.092013 26.65 26.65 12.21 81.37 93.58 66.93
Internal Rat of Return: NPV X 12% (USS Mil.):
Evalution hor ono dWretion only.
-65 - ANNEX G
lane was Introduced over the whole route whether or not the subway was maintained in operation). Theresults of the investigation demonstrate that the altemative project (exclusive bus lane) would still bebeneficial even if Line A was rehabilitated. The project, however, was considered much superior to thealternative since the NPV calculated for the project even when compared to the without situation thatincluded a full bus lane was higher that the NPV obtained for just putting the bus lane. It is worthremembering, the base case NPV is based on one direction only where as direction does not matter inthe altemative case. If the two cases were equalized, and assuming the inbound traffic would generate atleast the same benefits as the outbound traffic on Rivadavia (actually the benefits would be greaterbecause of no good alternative on the parallel streets for retuming traffic), the base case and altemativeproject would produce US$676 and US$336 million in net benefits (in present value terms) respectively.
29. Sensitivity Analysis. The estimated net present value (and internal rate of retum) for therehabilitation is particularly Table G8: Analysis of Sensitivity of IERR to Traffic Loss andsensitive to two different sets ofassumption. The first is the E Bspeed with which the system Line A traffic Line A trafficwould deteriorate in the absence Scenarios declining at 20% per constant untiof the investment, and year until closure closureassociated with that the extent to ....................................................................which traffic would be diverted to No bus lane without project 128% 32%surface transport in the absence No bus lane with projectof the investment. The sensitivityto this assumption is shown by Full bus lane without project 50% 30%assuming that, without the Partial bus lane with projectrehabilitation, although it wouldstill not be possible to operate Full bus lane without project 56% 30%the subway for more than five No bus lane with projectmore years, during that interimperiod no traffic is lost to the Full bus lane without project 39% 25%surface modes. The second set Fullbuslanewithprojectof assumptions concems whether Partial bus lane without projecta partial or full exclusive bus N'o bus lane with project 98% 36%lane is provided, in both thewithout and with project cases.The estimated intemal rates of return for various altematives, combined with the different assumptions ofinterim traffic diversion to surface modes, are shown in Table G8. In this table, benefits are estimated forboth directions of movement, on the conservative assumption that the benefits for the inbound flowwould be equivalent to those for the outbound flow.
30. No estimation has been made of the environmental impact of the investment. With the presentpoor state of control of gaseous emissions from buses, this is also likely to be high. The introduction ofimproved bus technologies and controls in the future would of course reduce the extra benefit that couldbe attributed to the subway line on environmental grounds.
31. Other potential benefits from the rehabilitation of the line include the avoidance of losses throughaccidents. These take two forms. First there is the possibility of a major accident on the subway in theyears during which an unrefurbished subway line is assumed to continue in operation before its finalclosure. Second, given the much higher rate of accidents per passenger kilometer as road trafficincreases, the shift of movements from road to rail in comparing the "with subway" and "without subway"cases would also be likely to yield substantial benefits.
32. The assumptions of equal benefits for the movement in the return direction and the omission ofany safety or environmental benefits to the Line A rehabilitation are thus very conservative. However,even with those very conservative assumptions the estimate of the IERR on the subway investmentwould be 148 percent. This appears at first sight to be a very high rate of return in comparison with the
ANNEX G -66-
evidence of retums on other subway investments in the range of 1 0-15 percent.6 However, this does notseem so surprising when it is remembered that anything up to 80 percent of the costs of subwayconstruction are accounted for by the costs of tunneling, not needed in this case. Moreover, the lineunder consideration is also a central area line where both prospective traffic volumes are high and thecongestion reduction impact of the diversion of traffic from the surface system (albeit in buses) is alsolikely to be high.
33. Social Analysis. In the case of the Urquiza line, the increasing number of paying passengers islargely due to the crackdown on fare evasion. In the case of the subway, fare evasion was historically nota problem. On the other hand, both the Urquiza line and the subway (as well as other urban railwayconcessions) have benefited highly from increased security in and around stations and in the trains,which has helped to attract more passengers to their services. The control of fare evasion on the Urquizaline may have affected low-income passengers more than others. However, the average eamings of thepoorest 10 percent in the AMBA (US$335 per month)7 are relatively high when compared to other LatinAmerican countries (in Brazil, for example, the minimum monthly salary is only US$112). On the otherhand, the AMBA population still enjoys relatively low railway tariffs; on the Urquiza line they are about25-40 percent below the tariffs of competing road-based transport. In the case of Line A, the averagehourly wage for is ridership was calculated as US$2.80 which suggests the control of fare evasion in thesubway has not caused undue hardship to low-income passengers. Overall, the beneficiaries of theproject would be mainly public transport users whose average income is substantially below thosetraveling by car.
C. Economic Evaluation of the Grade Separations
34. An economic evaluation was performed on 20 prospective road/rail grade separations eventhough the project is not expected to support more than 10-12 of these. The economic rates of returnvaried between 4.83 and 89.5 percent, with 14 of the grade separations having an IERR above 12percent. If the project includes the top 10 grade-separations, the lowest return to be supported by theproject would be above 20 percent. In terms of NPV (at 12 percent), the cumulative benefit of the top 10grade separations will be in the order of US$66 million with a range of US$25 million to US$0.7 million.
35. Methodology. The road traffic base for the calculations was obtained from a 24-hour automaticcount, supplemented by a one-hour classified count during a working day. Where these counts wereundertaken by a municipal authority, they were done in conformity with a guide on counting methods.
36. The rail traffic base for the study was obtained from the concessionaires. This consists of thetimetable of the trains, together with a calculation of numbers of passengers derived from manipulationof an origin-destination matrix of passengers obtained from the concessionaire. From the same sourcesestimates were made of the times for which the barriers are closed to allow the passage of trains.
37. Information on accidents at level crossings were obtained from the report Accidents at LevelCrossings in the Buenos Aires Metropolitan Region, as well as from statistics provided by FEMESA orthe Argentine Railways.
38. Costs and benefits were estimated separately for effects during the period of construction of thegrade-separated crossings, directly associated with the construction process, and for the subsequentperiod of operation of the crossings.
39. Effects During the Period of Construction. The major cost during the period of construction isthe cost of construction itself.
6 Study of Mass Rapid Transit in Doveloping Countnes by Hakcrow Fox and Associates, June 1989.Calculated during the preparation of the proposed Employment Support Loan (Board date: June 1997).
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40. Where the location of the new crossing is the same as that of the existing crossing, that crossingwould have to be closed during the period of construction. The calculation included the costs associatedwith extra travel distance incurred when the existing crossing is closed during construction. For thiscalculation, in the absence of a comprehensive traffic model, a simple reassignment formula was used toassign traffic to alternative crossings. On the basis of this reassignment, the increase in time andoperating costs associated with the works were calculated. In these cases there is also an associatedbenefit in that the costs of guarding the crossing can be avoided immediately. Costs were also calculatedfor the reduction in train speeds in the vicinity of the works during the period of construction.
41. Effects During the Period of Operation. The benefits to road users include both vehicleoperating costs and time costs of passengers. The operating costs were calculated on the basis of theofficial Guide on Studies of the Feasibility of Road Schemes published by the National Directorate ofRoads. For the time dependent costs, these include 1/3 of the depreciation costs in the case of cars,salaries of drivers and assistants, interests on the capital cost of the vehicles, insurance and generalexpenses.
42. Estimates of the value of time savings were derived from the FIEL study Financing of theTransport Sector in the Metropolitan Region of Buenos Aires. Both of these represent a proportion of theaverage earnings of car and public transport passengers based on a weighted average of working timesavings, valued at the hourly average wage rate of the groups concemed, and non-working time savings(including joumeys to and from work), valued at 20 percent of the wage rate. The treatment of the traveltime value of unemployed persons may appear to be relatively high, but in general the treatment of timesavings is considered conservative.
43. Accident rates were calculated on the basis of the number of expected accidents without theimprovements increasing at the rate of increase of vehicles of 3 percent per annum for vehicularaccidents and at the rate of population growth of 1.4 percent in the case of pedestrian accidents. Theseare conservative assumptions, as they make no allowance for the increase in the number of potentialconflicts which is also a function of the increasing number of trains, and the risk associated with apotential conflict which is likely to be a function of train speed.
44. The valuation of accident cost Table G9: Accident Valuationssavings is based on a study of the annualincomes, age and life expectations of Type of Damage Valuation (SJthose affected. The implication is that the Death 80,208cost is essentially that of lost eamings.This gives values for a death of Serious injury 40,104US$80,208; of a serious injury ofUS$40,104 and of a slight injury of Slight injury 4,812US$4,812. Vehicle damage is calculated Destroyed road vehicle 19,290at US$19,290 for a vehicle destroyedand US$13,500 for a vehicle seriously Damaged road vehicle 13,500damaged. Vehicle damage to railway Rail damage (Motor coach - Automatic Barrier) 74,862equipment is differentiated by type ofequipment (motor coach or locomotive Rail damage (Locomotive -Automatic Barrier) 60,040hauled) and by type of crossing(automatic barrier or manual barrier). In Rail damage (Motor coach - Manual Barrier) 30,802summary the accident valuations are as Rail damage (Locomotive - Manual Barrier) 16,040shown in Table G9.
45. Each accident causes an interruption of the rail service. This interruption was estimated, on thebasis of historical data, to be 58 minutes in the case of a vehicle-related accident and 30 minutes In thecase of a passenger-related accident. The number of trains affected was calculated on the basis of thetrain frequency and the accident type. Passenger time delays were then evaluated on the basis of theaverage load factors and time values discussed earlier.
ANNEX G - 68 -
46. Delays to vehicles at barriers were estimated using standard formulae reflecting average arrivalrates at the barrier, closure time of the barrier, cycle time, and capacity of the level crossing. Estimateswere also made of the increased operating costs of vehicles, particularly fuel consumed, on account ofthe low speed of movement into and across the grade crossing.
47. Savings on the maintenance of barriers replaced were estimated as US$33,846 per manualbarrier and US$6,000 per automatic barrier. Costs of maintenance of the grade-separated crossings wereestimated at US$22,500 in years 5 and 15 and US$45,000 in years 10 and 20.
48. For the purpose of the economic evaluation, a residual value of 50 percent of the original cost ofthe works was assumed at the end of the period of appraisal (20 years). Sensitivity analyses wereundertaken halving the value of personal time savings.
49. Evaluation Results. As shown below in Table GIO, 14 grade separations were identified asbeing acceptable, based on positive net present values at a discount rate of 12 percent. In the case ofthe two separations on Roca Line (TMR), Larroque-Chacabuco, and Cenito-Garibaldi, additional benefitswere also calculated due to the fact that with the construction of these two grade separations, the RocaLine will be able to close all grade crossings between Constituci6n and Temperley stations thus allowingfor more frequent rail service. The current level of service is severely constrained by the concessionagreement which establishes the maximum time for barrier closures, a limit which has already beenreached. The closure of at-grade crossings would allow TMR to run an extra 100 trains per day by theyear 1999 which would generate an additional capacity of 57,200 passengers per day. Taking intoconsideration peak and off-peak train frequency, time savings, and feeder services, the extra netbenefds would amount to over US$7 million per year, as shown in Table G 1.
Table GIO: Ranking of Grade Separations by NPV(US$ million)
Municipality Railway Location Cost NPV IRR
1. La Matanza TBA A. Mayo Guemes 3.00 24.82 89.5%2. San Fernandofrigre TBA Col6n-Alte. Brown 6.00 10.46 35.59%3. La Plata TMR Est. Ringuelet 1.89 9.46 71.80%4. Lomas de Zamora TMR Larroque-Chacabuco 5.10 5.87 24.55%5. Lomas de Zamora TMR Cerrito-Garibaldi 4.20 5.52 20.26%6. Mor6n TBA French-Azcu6naga 2.55 3.64 24.43%7. Ituzaingo TBA Av. Ratti (km. 25180) 3.05 2.98 21.77%8. Malvinas Argentinas Ferrovfas Est. Pablo Nogues 3.95 2.97 17.87%9. Avellaneda TMR De La Serna 3.30 2.10 20.27%
10. Moreno TBA Plo XII (Est. Paso del Rey) 2.11 1.74 22.69%11. 3 de Febrero TBA Palacios (Est. Ciudadela) 3.81 1.54 16.39%12. Quilmes TMR Plaza Suiza 2.39 1.21 17.14%13. Berazategui TMR Calle 21 2.59 0.79 15.13%14. 3 de Febrero TBA 9 de Julio-Porrini 3.70 0.68 13.64%
Table GIl: Extra Benefits of a Segregated Roca Line Between Constituci6n & Temperley Stations(US$ million)---- ---
Benefits or (Disbenefits) Year 1 Year 2 Year 3 and BeyondCost of Operation of the Railway (5.76) (5.76) (5.76)Cost of Operation of Road-based vehicles 2.84 5.67 8.54Time Savings 1.42 2.83 4.26
Total (.51) 2.75 7.02
Table G12: Metrovias Proforma Financial Results(USS Millions)
1993 1994 1996 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Passengers (Mll.) Urquiza 16.79 24.80 25.04 25.28 25.52 26.00 26.50 27.00 27.50 28.00 28.50 28.76 29.02 29.28 29.54 29.80 30.10 30.40 30.70 31.00 31.30Subway 145.32 151.50 155.90 160.50 166.80 170.20 177.70 185.80 192.90 200.10 207.80 209.70 211.70 213.70 215.70 217.70 219.70 221.80 223.90 226.00 228.10
162.11 176.30 180.94 185.78 192.32 196.20 204.20 212.80 220.40 228.10 236.30 238.46 240.72 242.98 245.24 247.50 249.80 252.20 254.60 257.00 259.40
RevenueFarebox 72.67 77.96 80.03 82.22 85.43 90.77 94.41 98.72 102.50 106.43 110.54 111.58 112.64 113.70 114.77 115.85 116.09 116.33 116.58 116.83 117.08Other 2.53 2.77 2.84 2.91 2.01 3.20 3.32 3.46 3.58 3.70 3.82 3.86 3.89 3.92 3.96 3.99 3.99 3.99 3.99 3.99 3.99
75.20 80.73 82.87 85.13 87.45 93.97 97.73 102.17 106.07 110.13 114.37 115.44 116.52 117.62 118.72 119.84 120.08 120.32 120.57 120.82 121.07
ExpensesPersonnel 72.63 54.05 53.40 52.50 51.86 49.09 48.45 48.21 48.15 47.92 46.74 46.43 46.39 46.34 46.30 46.25 44.56 44.51 44.47 44.42 44.38Materials 12.66 12.05 11.60 12.28 10.99 10.52 10.52 11.56 12.01 12.68 11.38 11.26 11.27 11.24 11.24 10.37 10.54 10.64 10.47 10.47Maintenance 1.69 1.40 1.28 1.30 1.30 1.36 1.38 1.39 1.41 1.43 1.43 1.44 1.44 1.44 1.44 1.45 1.46 1.46 1.47 1.47Energy 6.30 6.34 6.34 6.97 6.97 7.45 7.45 7.52 7.52 7.52 7.52 7.52 7.52 7.52 7.52 7.52 7.52 7.52 7.52 7.52General 3.50 3.52 3.54 3.57 3.59 3.62 3.65 3.68 3.71 3.75 3.76 3.77 3.78 3.78 3.79 3.80 3.80 3.80 3.80 3.80Mgmt. Fee 2.20 2.25 2.31 2.40 2.56 2.67 2.79 2.89 3.00 3.12 3.15 3.18 3.21 3.24 3.27 3.27 3.28 3.28 3.29 6.58Other . 11.45 11.29 11.13 11.28 11.30 9.80 9.83 9.91 7.89 8.44 8.35 7.93 7.40 6.81 6.81 6.82 6.82 682 6.82 6.27
126.39 91.86 90.26 88.71 89.65 85.80 83.86 83.83 85.10 83.47 83.67 82.02 81.47 80.94 80.32 80.32 77.79 77.91 77.98 77.78 80.49 aO
Oper. Subsidy/ (51.19) (11.13) (7.39) (3.58) (2.21) 8.17 13.87 18.34 20.97 26.66 30.70 33.42 35.05 36.68 38.40 39.52 42.29 42.41 42.59 43.04 40.58Cannon
Capital Subsidy - - (27.11) (50.38) (49.141 (58.74) (26.21) (15.93) (13.10) (19.99) (20.90) (22.48) (33.21) (32.65) (61.79) (61.79) (0. 11) (0.11! - - -
Total Subsidy (51.19) (11.13) (34.50) (53.96) (51.34) (50.57) (12.34) 2.42 7.87 6.67 9.80 10.94 1.84 4.03 (23.39) (22.27) 42.18 42.30 42.59 43.04 40.58
Source: Concession Agreement for Group 3 Services
-70- ANNEX H
BUENOS AIRES URBAN TRANSPORT PROJECT
ANNEX H: FINANCIAL EVALUATION
1. Metrovias began operating and managing the Buenos Aires subway and the Urquiza line onJanuary 1, 1994 under a 20-year concession from the Govemment. Under this arrangement, Metroviasoperates the subway and the Urquiza line and the Government (i.e., FEMESA in the case of the Urquizaline and the Municipality of Buenos Aires in the case of the subway) continues to own the right-of-way,equipment, stations and facilities. Metrovias is expected to manage its affairs as a private enterprise,fully assuming the commercial risks associated with the business. Metrovias is a privately-held companyunder Argentine law, and as such, is not required to make its financial accounts available for publicscrutiny.
2. Metrovias was awarded the concession following a competitive process which ranked the offerson the basis of minimum net present value of the Government payments (operating subsidy and capitalinvestment) required to operate the system at a defined tariff and service level. Since tariffs are fixed bythe Govemment and cannot be changed by the concessionaire, the profitability of the business dependson the Metrovias' ability to lower its operating costs and by generating new traffic. In order to take intoaccount the effect of rising prices over the long concession period, the contract, however, provides for anautomatic adjustment in the subsidy/tariff level (choice of the Government) based on an increase in thecost of providing the contractual level of service. Metrovias' winning bid of US$130.2 million was 18percent lower than the second-highest bid by Metrobaires.
3. The revised financial proposal of Metrovias as part of the concession contract is shown in TableHi. According to the proposal, Metrovias would require a decreasing level of subsidy for the first fiveyears of the concession: from about US$21 million in year 1 (1994) to US$2 million in year 5 (1998).Thereafter, Metrovias would provide a fee (canon) to the Government for the use of the infrastructurefacilities on an increasing scale: from about US$5 million in 1999 to US$32 million in 2012 and US$27million in 2013. During the concession period, revenues are expected to increase from US$81 million in1994 to US$121 million in 2012.
4. Metrovias, being a private company, is not required under the Argentine law to disclose itsfinancial information. However, Metrovias made available to the Bank its unaudited financial andoperating results for the first two years of operation, 1994-1995, which are shown in Table H2. Theseresults show the concession to be so far a huge success: total revenues were up by about 25 percent ineach of the operating years; and passengers carried were up by more than 30 percent over 1993. Thelevel of ridership attained in 1996 for the subway was equal to that of year 8 (2001) of the proposal.While traffic on the Urquiza line has been slow to materialize, compared to 1993, it was up by nearly 40percent in 1995. Total revenues in 1995 surpassed the forecast by about US$21 million. Metrovias alsodid well on non-operating revenue which in 1995 was more than double what was assumed in theproposal.
5. The high growth in ridership and the requirements for taking over the concession also increasedthe cost of providing the service. In 1995, labor costs of US$61 million were 14 percent higher thanprojected, and energy costs were about 40 percent higher. On the other hand, maintenance costs werealmost 40 percent less than projected. The biggest increase, by about US$13 million, was in the categorybther expenses"which probably is used to balance the difference between revenues and expenditures tothe levels indicated in the concession agreement. This balancing between revenues and expenditures ismade necessary if the concessionaire does not wish to disclose the level of profits from operations. It isinteresting to note that in the financial proposal for the concession, their is no line item directly referringto profit margin, dividends, or retained eamings. It is thus assumed that the profitability of the concessionis built into the "other expense" and 'management fees' categories.
6. An additional possible source of revenue for Metrovias is the savings resulting from undertakingthe Basic Investment Program on behalf of the Govemment at a price previously defined in theconcession agreement. Insofar as there are savings in undertaking the Investment Program, they accrueto Metrovias. On the other hand, Metrovias is also exposed to the risk of any cost overruns. While no
ANNEX H -71-
good information is available on the overall financial outcome of undertaking the basic InvestmentProgram, it is believed to be a profitable venture for Metrovias. It is worthwhile to note that the ownershipof Metrovias is dominated by the one of the largest Argentine construction companies, Benito Roggio yAsociados.
7. Ridership. Under the terms of the concession, tariffs are fixed by the Government and can beincreased in two ways only: first, by improvement in the service quality, and second, by an increase inthe cost of providing the service. Quality-based tariff increases are included in the concession agreementwhich quantifies the tariff increase with the level of service. In the case of cost-based tariff increases, theannual cost estimates included in the concession agreement are monitored on a monthly basis bymultiplying each cost category by previously defined indices. The concessionaire is entitled to a tariffincrease (or an increase in subsidy) equivalent to 90 percent of the cost increase if total costs increaseby at least 6 percent. A cost-based tariff increase of about 5¢ due for Metrovias was recognized by theGovernment in May 1995 and implemented in August 1996. For the period between May 1995-July1996, Metrovias was compensated with an increase in operating subsidy. A quality-based tariff increaseof 15 percent for the Urquiza line due for Metrovias was also implemented in August 1995.
8. Projections. Based on the traffic growth experienced thus far, the traffic forecasts were revised(see Chart H1) based on a growth factor of 6 percent in 1997, which decreases to 4 percent during 1998-99 because of the planned rehabilitation of Line A. Following the rehabilitation period, total ridership isexpected to bounce back to a growth of 6 percent in 2000. Thereafter, the annual growth in traffic isexpected to slow down gradually to 1 percent by 2005. Between 2005 and 2013, traffic is projected togrow by 1 percent each year, which is slightly above the normal growth rate of population in BuenosAires. Based on these projections and assuming an average tariff of US$0.50 for the subway andUS$0.37 for the Urquiza line, Metrovias is expected to earn an additional US$612 million in revenueduring its 20-year concession period beyond that which was assumed in its concession projections.Increases in non-operational revenue are expected to increase the cash intake even further.
9. While increased traffic will certainly require higher expenditures, the overall increase inexpenses is expected to be less than the growth in revenues. While certain categories of expenses suchas fuel and energy may rise, substantial savings are expected from a decrease in the average age of therolling stock, automation of ticket sales, and a reduction in the labor force.
10. Metrovias is also expected to be compensated for the delays in the rehabilitation of Line A,which under the concession contract was to be completed by the end of 1997. To make up for thesedelays, Metrovias has requested that the Government advance the procurement of some 84 cars forLine A which were originally scheduled for year 11 (2004) of the concession. This would decrease theaverage age of the fleet considerably. Extensive operating cost savings would also result from therehabilitation program itself, which would reduce the number of stations by one, refurbish most of thestations, replace the track, and provide new signaling and electric systems.
11. Sensitivity Analysis. Using the operating cost estimates established in the concession contract,a sensitivity analysis was undertaken to determine the volume of ridership and/or the increase in totalexpenses which may force Metrovias in abandoning the concession. Assuming that the expense items inthe financial forecast do not include built-in profit margins, the concession would become unattractive tothe Metrovias, i.e., NPV < 0, under the following three scenarios, or a combination, if during the period1997-2013: (a) actual traffic is 35 percent less than the revised forecast; (b) total expenses increase by50 percent over the forecast; and (c) actual traffic decreases 3 percent every year over the life of theremaining concession. The results of the first three years of the concession suggest that the probability ofany of these scenarios occurring is rather remote.
Table HI: Metrovias Contractual Financial Estimates(US$ MIHIons)
3M4 396 WM6 307 399 30M 2000 2001 2002 2003 2004 2005 2006 2007 2006 2006 200 2011 201 205
pseeengere (Mil.)Urquiza 24.80 2604 2s2s 26.52 2600 28.50 2700 27.50 28D0 28.50 29.76 29.02 29.28 29.54 29.90 30.0 32A0 30.70 3100 3.30
SubvAy 15t60 15.90 B.S0 16.80 170.20 177.70 115.90 1290 200.1I 207.80 209.70 21170 217 21.70 217.70 218.70 221B0 223.90 22600 228.1
1e630 1094 15.79 12.32 1W6.20 2420 212.90 220A0 228.2 23630 239As 240.72 242ss 24524 247.50 248.80 292.20 254eo 26700 2590
OA4 OA4 OA4 OA4 O0S O04 OAS OA7 OA7 OA7 OA7 OA7 OA7 OA7 OA7 04 OS OB OA6 OA6
RevenueForebox 779 90.03 92.22 s6A3 90.77 94A1 98.72 WM2.5 6A3 1DM4 16s 112.4 113.70 r477 1s61 11BD9 11.33 11.58 11.93 170g
Other 2.77 2.84 2.91 2D1 3.20 3.32 3Ao 3.58 3.70 3.82 3.8 3.89 3.92 3.9 399 3.99 39 3.99 3.99 3.99
90.73 82.7 95.13 87A5 93.7 97.73 1o2.7 1e67 1.B n437 1144 11.52 11.02 ns.2 nss 120 0.32 w.7 w02 121O7
Expene*eP.monnrl 54. 53A0 52.50 51ts 4908 49A6 48.21 48.s 47.92 46.74 46A3 46.3 46.34 46.30 4.25 44.56 44.51 44A7 44A2 44.38
Materib 1266 1206 118o 1228 ID99 12.52 10.52 n1e 1201 12.88 11.3 1126 1t27 11U24 1124 10.37 12.54 12.84 12A7 VA7
Maintenance 1.69 1.40 129 t10 130 .36 138 138 1A1 143 143 144 1.44 1.4 144 14 1.A 48 1A7 1A7
Energv 6.30 6.34 6.34 6.7 6.97 7A5 7A5 7.52 752 7.52 7.52 7.62 7.52 7.52 7.52 752 752 7.52 762
General 12.A 12.03 11.3 12.53 12.11 111t 114 n14 115 12.73 12.66 12.59 12.61 12.83 12.74 12.55 12.6 12.71 12.64 14.
Inraence 126 .48 153 159 1e6 172 180 198 1 206 2.06 2D6 2D6 2D6 206 2D6 2D6 2D6 2D0 2D0
Mgrnt.Fee 220 225 2.31 2A0 2.56 2.67 2.79 2.99 300 3.12 3.15 3.1 321 3.24 3.27 327 3.28 328 329 6.s5
Ofer _ 1129 1113 1.2 lt30 9.90 9.83 9.91 78 SA4 8.35 7.93 7AO 6.91 6.91 6.2 6.82 6.2 612 6.27
12171 1202 99.i3 10.20 98 93.14 93.11 94.74 93.27 9.70 92.96 92 91 .8 9123 91.33 88.80 9.2 951 88 93.72
`0--9 V8 'e =- --- "M- ----- "" - - ----- - -
Oper. Subeidy/ (209 (V381 3ACq (12.75) (201 4.59 90o 134 1B6 1967 224 24.1 26.78 27As 28.51 31A8 31 31.2 32.13 2735
Cannon
Capital Subsidy (27.11 (5038l .4 (5.74 (26.21 (15231 (13p1 (1) sssi 2sa 332 (3265) (6.79) (81.79) (0..J (o..n
Total Subsidy (20.9 ) (4 ) ( 63.7 ( (.7) (177) (3.1 3 ( (002) ( 90 4) (686) (34.3C (33.28) 3137 3139 3162 . 2735
* Outource maintenancekiwiudes public service and tame
So urce: Co noresso n Agr*ment for Gro up 3 Service
ANNEX H -73-
Table H2: Comparison of Financial Results(USS thousand)
1994 1995Projected Actual Change Projected Actual Change
Trafflc ('000)Urquiza 24,800 22,464 (9.4)% 25,040 23,140 (7.6)%Subway 151,500 171,154 13.0 % 155,900 187,220 20.1 %
176,300 193,618 9.8 % 180,940 210,360 16.3 %
RevenueFarebox 77,960 94,002 20.6 % 80,030 97,327 21.6 %Other 2,768 5,623 103.1 % 2,838 5,905 108.1 %
80,728 99,625 23.4 % 82,868 103,232 24.6 %
ExpensesPersonnel 54,054 61,078 13.0 % 53,403 61,078 14.4 %Materials 12,660 6,550 (48.3)% 12,051 6,550 (45.6)%Maintenance p/ 1,687 873 (48.3)% 1,397 873 (37.5)%Energy 6,302 8,949 42.0 % 6,343 8,949 41.1 %General (taxes, etc.) b/ 12,099 12,099 0.0 % 12,027 12,099 0.6 %Insurance 1,263 4,880 286.4 % 1,483 4,880 229.1 %Management Fee 2,195 2,195 0.0 % 2,252 2,252 0.0 %Other 11,454 24,125 110.6 % 11,293 24,068 113.1 %
101,714 120,749 18.7 % 100,249 120,749 20.4 %
Oper. SuTbsidyCanon | (20,986) (21,124) 0.7 % (17,381) (17,517) 0.8%
aI Outsourced maintenance*/ Includes public service
- 74 - ANNEX H
Chart HI: Ridership Projections
350-350 - > Start ~~~~~~~~~of Private Concession:
325 -
Actual ,
300- - .-- Redk Projection.-- -- Concession ConrBact
I 275-
250 _-k : ,,,."' t____- -
225 - -e% ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ -
200-
175 -
1501980 85 90 95 2000 5 10
Assunm: a growth factor of 6 percent In 1996-7 which decreases to 4 percent during 199899 because of the planned rehabliatinof LUn A. Following the rehabilitation period, totl ridership is expected to bounce back to a growth of 6 percent In 2000. Thereafter, theannual growth In traffic Is expected to slow down gradually to 1 percent by 2005. Between 2005-2013, traffic Is projected to grow by 1percent each year which Is slightly above the normal growth rate of population (0.67%) in the municipality of Buenos Aires.
-75- ANNEX I
BUENOS AIRES URBAN TRANSPORT PROJECT
ANNEX 1: ENVIRONMENTAL ASPECTS
A. Key Environmental Issues
1. Besides the ongoing works under the Metrovias concession, most physical improvements underthe project consist of the rehabilitation of existing facilities, mainly the rehabilitation of subway Line A. Assuch, this subproject involves equipment, escalator and workshop renovation and improvement, trackrenewal, electrical equipment, signals and communications, and some civil works. Bidding documentswill include specific requirements for the management and disposal of construction wastes, earth cutsand old equipment.
2. The most environmentally sensitive subprojects are those related to: (a) the construction ofgrade-separated road crossings over/under suburban railway lines; and (b) the upgrading of transferstations. These subprojects involve construction works in or near populated areas, with densecommercial or residential activities. The environmental work carried out during project preparationinvolved: (a) environmental screening of a set of proposed road crossings; (b) the design of anenvironmental assessment (EA) methodology for projects that may require a more-in-depthenvironmental assessment; and (c) the design of a community consultation methodology for this type ofproject in an urban setting. As a pilot test, both the EA and community consultation methodologies wereapplied to selected grade separations before appraisal. All components to be financed under thosesubprojects will be subject to EA screening, EA, and public consultation according to the agreedmethodologies. As a result of the pilot EA and consultation exercises, subproject design and constructionwill also follow: (a) a well-defined set of environmental criteria and principles (based on World Bankenvironmental and social policies) for the location, design and construction of road crossings and transferstations, and (b) a set of environmental guidelines for the construction of such civil works in urban areas.Specific mechanisms for assuring the application and compliance of all environmental criteria, guidelinesand methodologies would be spelled out in Operational Manuals, the approval of which by the Bankwould be a condition of civil works disbursements for the two subprojects.
B. Environmental Screening and Assessment of Road Crossings
3. An environmental screening exercise of about 20 proposed railway-crossing sites was carried outduring the early stages of project preparation. Most of these projects which were then in a pre-feasibilityphase, involve the solution of bottlenecks and traffic safety black spots through the construction oftunnels (two-way or one-way) and overpasses. The proposed sites were screened for:
(a) the need for resettlement of families and businesses;
(b) potential interruption or limitation of accesses to dwellings or businesses eitherpermanently or temporarily (during construction);
(c) encroachment/reduction of green areas, parks, and other recreational areas;
(d) demolition of buildings of high architectural or historical value;
(e) potential deterioration of urban quality and property value in the immediate vicinity of thecrossings;
(f) the potential for increased accidentality in areas with high density of schools, hospitals,and commercial use;
(g) the effect on urban infrastructure (sidewalks, power and telephone lines, water andsewerage mains, etc.); and
(h) potentially unacceptable nuisances during construction (dust, wastes, and heavyconstruction traffic).
4. The grade separations schemes were ranked according to their environmental sensitivity for boththe construction and operational phases classifying them into: (a) those that require more in-depth
ANNEX I -76-
analysis during the design phase and must include analysis of altematives and public consultation; and(b) those that require specific environmental considerations during the design and construction phase.The main conclusions of the screening exercise were: (a) all schemes would be environmentally feasibleand would solve sensitive urban and traffic problems at the proposed sites; (b) none of the schemeswould entail the resettlement of population nor impact on areas of ecological or historical value; (c)seven schemes required more in-depth environmental analysis including analysis of altematives andpublic consultation; (d) perhaps the most sensitive environmental concem would be the accessibility tohouses and businesses during construction and operation; (e) there is a deeply felt community concomfor seriously considering pedestrian needs into the overall solution of the railway crossing; and (f)impacts during construction must be properly addressed.
5. A methodology for carrying out environmental assessments of this type of works was preparedand applied to two proposed crossings: Banfield and Lomas de Zamora. Specific mitigation measures forthe construction and operation of these crossings, and environmental monitoring programs are identifiedin the report and will be included in final designs and bidding documents. Both EAs are available inproject files.
C. Public Consultation
6. The screening exercise identified the need for community consultation in the area of influence ofparticularly sensitive crossings. A community consultation methodology was designed which includes anopinion survey and a consultation program encompassing broad and specific areas of influence of thecrossings. The methodology includes specifically designed questionnaires and strategies for: (a) publicand community organizations; and (b) the community in general. The public and communityorganizations to be consulted include: (a) local professional associations (including engineering andarchitectural associations); (b) local chambers of commerce and industries; (c) community organizations(neighborhood organizations) and local NGOs. The public and community in general are further dividedinto two groups: (a) public at large in the area of influence; and (b) affected community in the immediatearea of the proposed works. The consultation program involves both formal and informal presentationsand meetings with the target groups, information dissemination campaigns through fliers, posters, andradio announcements; and an opinion survey.
7. The public consultation methodology was tested on one of the proposed crossings (Ituzaingo).The results of the consultation program, the consulted organizations, and the main findings andrecommendations for this specific site are available in project files. All crossings to be financed under theproject would required a community consultation program according to the agreed methodology. Thepilot test at Ituzaingo highlighted and confirmed the benefits of such consultation program through which:(a) there is a broad consensus among organized groups, NGOs and the public at large about the needfor such crossing at that site; (b) specific recommendations for the crossing location and design (forinstance, relocating one of the tunnel entrance 50 meters further would enhance accessibility to houses)have been obtained from meetings and surveys; (c) property owners (about 2) whose accessibility totheir houses would be permanently diminished have found a mechanism to start a dialogue with themunicipality as to different compensation strategies; and (d) a sense of ownership has been achieved inboth the neighborhoods and the municipal institutions. The report on the Ituzaingo consultation isavailable in the project files.
D. Urban Environmental Principles
8. As a result of the environmental screening exercise, the pilot community consultation program,and the environmental assessment of two railway crossing sites, a set of environmental principles for thedesign and construction of such civil works are proposed for the project. These criteria would bedescribed in the Operational Manual in order to be taken into account by stakeholders (municipalities)and would be supervised by the Project Implementation Unit. These criteria are summarized in Box 1.
-77- ANNEX I
Box 1: Urban Environmental Criteria for the Desian and Construction of Crossings
Railway crossing solutions should meet the following urban and environmental criteria:* The designs must avoid/minimize the need for residential resettlement of population, as well as
minimize or avoid the impact on green and recreational areas and buildings of historical orarchitectural value.
* Access to dwellings and businesses should be guaranteed for both the construction andoperational phases. Any restriction or limitation to accessibility to properties should be properlymitigated or compensated.
* Safe and secure pedestrian and bicycle crossings should be integrated into the design andconstruction of the road/rail crossings.
* The design should harmonize with urban surroundings including landscaping and planning forother uses for all additionally created spaces (under-bridges, cul-de-sacs, pedestrian-only streets)in order to minimize negative impacts on environmental quality and property values.
* Altemative solutions and final designs should be subject to public and community consultationwith special emphasis on the property owners directly affected, local NGOs and communityorganizations, and business and professional organizations.
* To minimize public nuisances, construction activities should follow strict environmentalguidelines. Construction schedules and the timing of necessary interruption of public utilities(electricity, water and telephone) should be informed to the affected community.
* All areas and infrastructure affected during construction should be restored to their originalcondition, specially sidewalks, green street dividers, gardens, sidewalk trees, utilities, and sidestreets impacted by traffic diversion.
* The design of road/rail grade separations should contemplate and stimulate the better integrationof both urban sides of the railway.
E. Environmental Guidelines during Construction
9. A set of environmental guidelines for the construction of road/rail grade separations has beendefined for the project. The purpose of these guidelines is to establish specific rules for contractors forminimizing environmental damage and public nuisances during the construction of this type of urbaninfrastructure. Examples of the topics that are included in the guidelines are: (a) traffic and pedestriansafety measures and signals; (b) careful work schedule and infrastructure planning in order to guaranteeaccessibility to properties; (c) the appropriate handling of construction and equipment wastes such asexcavated earth, spoil materials and oily wastes from machinery; (d) noise and dust control measures;(e) information for the public about work schedules and public services interruptions; (f) traffic detours;(g) construction planning, camp location, and rules for workers to minimize public nuisances; (h)stockpiling of materials and drainage on work sites; and (i) camp dismantling and abandonment.
F. Transport Integration
10. The project would also include the upgrading and improvement of transfer stations, most ofwhich have been identified (see Annex B). They will be subject to the same screening-EA-publicconsultation process as the railway crossings. Most of the sites at the existing stations are property of therailways agency, and some of them are occupied by minor structures (stalls, one-story buildings) whichhave been leased to mainly middle class retail, flower, and food vendors. These businesses bid for thesespaces on an annual or semi-annual basis. All of them pay a monthly rent to the railway agency. Inaddition to the screening and consultation process, the Operational Manual would specify the necessarystudies to carry out and conditions which will have to be met in order to guarantee appropriate solutions.The designs should: (a) integrate as much as feasible this type of stalls in the design of the futuretransfer station; and (b) provide assistance to vendors to have access to other sites.
ANNEX I -78-
G. Environmental Management under Project Implementation
11. The project would provide the necessary resources and mechanisms to ensure the applicationand implementation of all environmental criteria and guidelines. This assurance would be achievedthrough:
(a) technical assistance to provide advice on environmental and social aspects, and urbanenvironmental regulations during project execution;
(b) strengthening of the UEP's environmental capability to screen designs and ensurecompliance with environmental requirements;
(c) training programs in environmental management of urban infrastructure, targeting theplanning and design officials of participating municipalities;
(d) environmental criteria, EA and community consuftation methodologies would bespecified in the Operational Manual;
(e) bidding documents would include environmental guidelines for construction, and otherenvironmental requirements stemming from the EA or the public consultation; and
(f) the Operational Manual would include specific criteria for compensating any diminishedaccessibility to dwellings and businesses caused by the construction o f road/railcrossings.
12. In addition to the above mechanisms, the project would finance: (a) the development of asustainable air quality monitoring program; (b) the preparation of a transport model suitable for testingalternative transport investments; and (c) the development of a program to improve the city's traffic andstreet environment, including pedestrian facilities, traffic calming, updating of street hierarchy, sidewalkwidening and repairs, and signals and markings at intersections. These components are expected toimprove environmental management of the metropolitan area.
-79- ANNEXJ
BUENOS AIRES URBAN TRANSPORT PROJECT
ANNEX J: AIR POLLUTION IN BUENOS AIRES
A. Brief Description
1. The rapid increase of vehicles, together with the deterioration of public transport, make it clearthat the capacity of the roads are insufficient for the number of vehicles in circulation. This situationcauses problems of congestion in the densely populated AMBA, air and noise pollution, and roadaccidents.
2. A recent study of the Argentine environmental problems conducted by the World Bank found airand noise pollution in urban areas to be a priority problem and that the information about pollution levelsto be fragmented and scarce.
B. Implementation
3. A study is being conducted whose objectives are to evaluate the need for air quality monitoringin the federal capital, recommend and estimate the costs for an air quality monitoring network, andrecommend appropriate institutional arrangements.
4. A brief summary of what has been accomplished up to October 1996 under the "Design of an AirQuality and Noise Monitoring Program for the Buenos Aires Metropolitan Area" technical assistanceprogram is provided below.
C. Location of Monitoring Sites
5. The preliminary design of the monitoring system calls for ten fixed sites, plus one mobilemonitoring unit and several portable samplers for particulate material. The locations of the fixed siteshave been chosen to serve the following purposes:
(a) to measure environmental conditions at some of the locations in the city most heavilyaffected by noise and air pollution from local traffic. These conditions are experienced bymost of the ciy's residents during part of the day and by some residents for much of theday;
(b) to measure environmental conditions representative of broad areas of the city, which areindicative of the range of average conditions experiences by the general population;
(c) to provide the data needed to validate future air quality modeling efforts; and
(d) to provide a baseline for evaluation the impacts and effectiveness of future air pollutioncontrol efforts.
S. It should be noted that in developing this list of monitoring sites, no attempt was made tocharacterize the areas of greatest impact of specific major stationary sources of air pollution, such as thetwo thermoelectrical plants. Such source-specific monitoring would be desirable as well (especially forthe thermoelectrical plants). It would be most appropriate that such monitoring be provided by theoperators of the major fixed sources in question under the supervision of the city.
7. The ten fixed sites are proposed to be located in the following areas:
Sffes Heavily Influenced by Local Traffic
(a) microcenter (business district)-street canyons with major influences by buses and taxis;
ANNEX J -80-
(b) Centro de Transbordo Constituci6n-one of several major transfer centers betweencommuter rail, buses, and the subway, located in a business/residential district neardowntown;
(c) Avenida Rivadavia-street canyon near the center of the city, with one of the heaviestconcentrations of bus routes; and
(d) Avenida Cabildo-street canyon in a congested area of high-rise residential apartments,heavily affected by public transport and by private automobiles.
Sites Representative of Neighborhood Conditions
(a) Hospital Nacional de Pediatrla-a sensitive location, located near several other hospitalsin a mixed residential/commercial zone, and potentially affected by nearby industry,heavy industry in the adjoining Province of Buenos Aires, and a major themnoelectricplant. An altemative location in the adjoining Barracas district (closer to the heavyindustry sources) is also under consideration;
(b) Saenz district-mixed residential/industrial, heavily affected by truck and bus traffic andby heavy industry upwind in the adjoining Province of Buenos Aires;
(c) Mataderos district-mixed residential/industrial district on the westem (downwind) side ofthe city, with heavy truck traffic; and
(d) Devoto district-near the geographic center of the city, just downwind of the heaviestpopulation concentrations. An altemative location, coincident with the weather stationmaintained by the Servicio Nacional de Meteorologla, is also under consideration.
Background Concentrations
(a) Pdnton Recalada-floating installation in the Rio de La Plata, permanently stationedabout 5 km from the port as a base for the pilots guiding ships into port, also used forweather measurements by the Servicio Nacional de Meteorologla.
8. This list is subject to possible additions and subtractions, depending on the final budgetaryanalysis.
9. Other Installations. In addition to the ten monitoring sites, the network would include alaboratory, a data collection and processing center, and telecommunications to link them together. Thedata collection and processing center would be specified with a view to future expansion, in order toincorporate additional monitoring sites for a total of around 40. These additional sites could include acontemplated future network in the Province of Buenos Aires, as well as any sites required by futuresource-specific agreements. For instance, environmental covenants associated with multilateralfinancing of a new tollway may require air quality monitoring in the vicinity.
D. Institutional Arrangements
10. Under Argentina's federal system, the Govemment of the City of Buenos Aires is responsible forenvironmental planning and development of environmental policies for the federal capital. Thefundamental statute or constitution recently adopted by the city provided that "every person has the rightto enjoy a clean environment, as well as the duty to preserve and defend it for the present and futuregenerations," and requires that the City develop plans for protecting the environmental, including air andwater quality and land use, among many other environmental concerns. Overall responsibility for urbanplanning and environment lies with the Municipal Secretarla de Ambiente Urbano y Medio Ambiente.Within the Secretarfa, responsibility for monitoring and regulation of air quality lies with the DireccionGeneral de Polftica y Control Ambiental (DGPCA), which is part of the Subsecretarla de Medio Ambiente.In addition to air quality and water quality, the DGPCA is responsible for supervision of pest control
-81- ANNEXJ
activities and hazardous materials. The DGPCA staff in 1996 consisted of approximately 100 people,with a budget of US$300,000. Of these, seven people were working directly in the area of pollutionmeasurements.
11. From 1988 to 1982, the City operated a network of 12 ambient air quality monitoring stationsusing manual techniques. Due to budgetary restrictions, this network has been reduced to a singlemonitoring site at present, which is operated by the DGPCA. The manual measurement techniques usedare labor intensive and the equipment is old. Most of the DGPCA's air quality measurement efforts aredevoted to measurements near industrial pollution sources, carried out for enforcement purposes inresponse to citizen complaints.
12. The newly-elected government of the City of Buenos Aires has stated plans to sharply increasethe emphasis on environmental quality in the City. In support of this effort, the budget requested for theDGPCA has increased ten-fold, from US$300,000 to US$3 million. The city is also launching a numberof environmental initiatives, among them a system of inspection and maintenance of private vehicles,which will also be under the supervision of the DGPCA and which is likely to pose significant technicaland political challenges.
13. As the institution responsible for monitoring and assuring the environmental health of the City,the Govemment of the City of Buenos Aires (GCBA) would be a logical institution to own and operate theair quality monitoring network. It has not yet been decided whether this network would be operated byGCBA or another agency with qualifications in this field. Whichever agency is eventually selected, anagreement will have to be signed with that agency stating that it will accept legal ownership of the airquality monitoring and data collection and processing equipment for the network, and that it will assuretheir physical protection. Funds for operation and maintenance of the system would initially be providedfrom the World Bank loan, but these would be replaced within a defined period (not to exceed threeyears) by funds from the agency's budget. The final agreement would also provide that ownership of theequipment revert back to SOPyT if the agency fails to provide the agreed operating funds. SOPyT andthe agency would jointly constitute a working group, in which other interested parties such as theUniversity of Buenos Aires and the Servicio Nacional de Meteorologla would also participate as advisors.This working group would oversee the operation of the monitoring network and would collaborate todevelop plans and policies for air quality management. It is envisioned that the Province of Buenos Airescould also accede to this working group in the future, in conjunction with the expansion of the network tocover the entire metropolitan area.
14. Arrangements for the day-to-day operations and maintenance of the monitoring network wouldinclude daily checks of the equipment, daily changes of filters for particulate monitoring, weighing andchemical analysis of the filters, and a continuous review of incoming data for quality control and qualityassurance purposes. This is estimated to require a staff of about ten people, including six technicians,two environmental chemists, and two data processing/telecommunications specialists. Three vehicleswould also be required.
15. Possible network operation arrangements include having the selected agency operate thenetwork with its own personnel, contracting with a private firm or NGO for network operations, orcontracting with another government agency. Of these, the contracting with a private firm or NGO wouldbe the best choice. The Argentine Govemment has a clearly-defined policy of privatization or contractingout activities where possible. Contracting out the daily operation of the network would also facilitate thesupervisory functions of the working group, since it would be overseeing the work of a hired contractor,rather than the work of one of its own members. Finally, such contracting would greatly simplify thearrangements by which the World Bank loan is to supply the operating and maintenance funds for theinitial period of operation.
E. Procurement
16. The monitoring equipment, installation, training, and supplies and spares for the initial period ofoperation would be procured as a single package under a "tumkey" contract. Procurement would be by
ANNEX J -82-
intemational competitive bidding, following World Bank procedures. Bid specifications and detailed sitingarrangements for the system would be developed by specialist consultants in early 1997. If it is decidedto contract out the daily operations of the system, then operation for an initial period could also beincluded in the equipment contract (i.e., build-operate-transfer).
-83- ANNEX K
BUENOS AIRES URBAN TRANSPORT PROJECT
ANNEX K: SELECTED DOCUMENTS SENT TO THE PROJECT FILE
A. Traffic Management
1. Boletin Oficial de la Republica Argentina, Decreto Transito y Seguridad Vial, November 29, 1995
2. Comisi6n Nacional del Transito y la Seguridad Vial, Programa de Trabajo Afio 1996, Ministeriode Economfa y Obras y Servicios Publicos
3. Pre-ATAM, Diagn6stico de Situacion del Sistema de Transporte y Transito de la Regi6nMetropolitana de Buenos Aires, 1995
4. Gardner, Report of a Review of Traffic, Transport and Road Safety: Buenos Aires, Argentina,Transport Research Laboratory, March 1994
5. Gabinete para la Emergencia del Transito de la Ciudad de Buenos Aires, Propuesta Global parael Ordenamiento del Transito Vehicular de la Ciudad de Buenos Aires, December 16, 1994
6. Instituto de Seguridad y Educaci6n Vial, Informe Estadfstico, December 1994
7. Eduardo Bermudez, Silvia Casir6, Cristina Louro, Seminario-Taller: La Seguridad Vial en laArgentina, Coordinaci6n Interinstitucional, /nforme de los Moderadores, April 1996
8. Municipalidad de la Ciudad de Buenos Aires (MCBA), Sintesis de los proyectos para losservicios de alumbrado publico y seflalizaci6n luminosa, December 17, 1994
9. Ministerio de Justicia, Secretaria de Asuntos Registrales, Direcci6n Nacional del Registro Oficial,Transito y Seguridad Vial, Ley No. 24.449 y Decreto reglamentario No. 779/95, February 6, 1995
B. Suburban Railways
1. El Poder Ejecutivo Nacional, Decreto 1143 (Presidential Decree authorizing metropolitan railwayconcessioning), 1991
2. Joseph Walsh and John Murphy, Argentina Railroad Privatization - Recommendations forOrganization of a Rail Safety Agency, November 1992
3. Ferrovias S.A.C., Una Visi6n Objetiva del Pasado, e/ Presente y el Futuro, 1994
4. Grupo Trainmet, Transportes Integrados Metropolitanos, El Desaflo del Transporte en el TercerMilenio, 1994
5. Javier Cardozo, Concession and Regulation of Commuter Railways and Subway Network in theMetropolitan Area of Buenos Aires, Washington, November 1994
6. Jorge H. Kogan and Louis S. Thompson, Reshaping Argentina's Railways, Japan Railway andTransport Review, June 1994
7. Ministerio de Economia y Obras y Servicios Publicos (MEOSP), Fortalecimiento de lasConcesiones Ferroviarias Suburbanas en /a Region Metropolitana de Buenos Aires, 1994
8. MEOSP, Inversiones Complementarias, April 27, 1994
9. Plan Laura, Master2000, 1995
10. Proyecto ATAM, Estudio de Factibilidad Econ6mica para la Construccion de Cruces Fefrovialesa Distinto Nivel en e/ Area Metropolitana de Buenos Aires, October 1995
11. Ronald Kopicki, Privatization of Railways: A Comparative Study, Chapter 7: Argentina RailwaysCase Study, to be published by World Bank (1995)
ANNEX K -84-
12. Juan Pablo Martinez, Accidentes en los Pasos a Nivel del Area Metropolitana de Buenos Aires,XI Congreso Argentino de Vialidad y Transito, October 1992
13. TBA, Modemizacion del Sistema Mitre y Sarmiento (3 Volumes), September 1995
14. UCPF, Programa de Inversiones y Financiamiento del Transporte de la Regi6n Metropolitana,1994
15. UCPF, Proyecto de Fortalecimiento de Cofredores Fefroviarios Metropolitanos, 1995
16. UCPF, Miscellaneous Financial Projections for Urban Rail Concessions, 1995.
C. Metrovias and SBASE
1. Ministerio de Economia y Obras y Servicios Publicos, Cronograma de Inversiones, Grupo deServicios 3, 1994
2. Claudio Cirigliano, Jose Barbero, Experiencias y Resultados de la Operaci6n Privada deServicios Ferroviarios Urbanos, Vienna, October 1994
3. Metrovias, Metro 2000, 1995
4. Metrovias, Centro de Transbordo General Lemos, 1995
5. Metrovias, Centro de Transbordo Federico Lacroze, 1995
6. Metrovias, Private Concessionaire of the Buenos Aires Subway System and one SuburbanRailway Une (F. C. Urquiza), 1994
7. Metrovias Concession, Capitulo Xl - Llnea "A"
8. Metrovias, Metro 2000, Programa de Desarrollo Estrategico de los Subterraneos y el FefrocarrilUrquiza, Versi6n al 30 de marzo de 1995
9. Metrovias S.A., Concesionario Privado de los Subterraneos y del Ferrocarril Urquiza, 1995
10. Subterraneos de Buenos Aires Linea A
11. Subterraneos de Buenos Aires, Plan de Expansi6n 1993
12. Horacio Torcello y Asociados (HT&A) for Metrovias, Analisis de Factibilidad Tecnica -Combinaci6n Lineas A y C, April 1996
13. UCPF, Tareas a Ejecutar en los Primeros 48 para la Linea "A", 1994
14. Metrovias, June 1996
15. Jose A. Barbero, Resultados del Concesionamiento de Servicios de Transporte Publico enBuenos Aires, Viii Congreso Latinoamericano de Transporte Publico y Urbano, Curitiba, April1996
D. Bus Transport
1. Lic. Susana Kralich, Genesis y Reproducci6n Reciente de Servicios de Transporte Contratado enla Regi6n Metropolitana de Buenos Aires, Secretaria de Transporte, Ministerio de Economia yObras y Servicios Publicos, August 1993
2. Guillermo Krantzer, Jorge Sanchez, Cambio Organizacional Empresano en el AutotransporteUrbano de Buenos Aires, 1994.
3. Jose Larocca, Some Facts about the "Colectivo Buses" and the Experience with Privatization,about 1994
4. CEPAL, El Contexto Institucional del Sistema de Colectivos de Buenos Aires, September 1985
-85- ANNEX K
E. Creation of ATAM, and other Institutional Aspects
1. pre-ATAM - Apoyo a la Creaci6n de la Autoridad de Transporte del Area Metropolitana, Informede Avance de las tareas (1 de enero a) 31 de octubre de 1995), 1995
2. pre-ATAM, El Transporte Urbano en la Regi6n Metropolitana de Buenos Aires, Situaci6n actual -situaci6n institucional, 1994
3. Congreso Nacional, Camara de Senadores, Orden del Dia No. 183, June 1993
4. Fred Salvucci, Public Transport System Integration, MIT Center for Transportation Studies,Cambridge, September 1992
5. Law Approved by Senate to establish ATAM, February 2, 1995
6. Patricia Brennan, Aida Temavasio, Nora Turco, La Creaci6n de /a Autoridad de Transporte delArea Metropolitana de Buenos Aires, ATAM, 1993
7. Pre-ATAM, miscellaneous background documents on Creation of Metropolitan TransportAuthority
8. Acta-Acuerdo between national govemment and city of Buenos Aires establishing Pre-ATAM,June 14, 1991
9. Proyecto de Ley de Creaci6n de la Autoridad de Transporte del Area Metropolitana de BuenosAires
F. General Aspects of Transport in Buenos Aires
1 . Pre-ATAM, Estudio sobre la Ciudad de Buenos Aires (transporte), 1992
2. Arquitectura y Urbanismo (ARQUIS), Issue No. 5, May 1995, Universidad de Palermo, BuenosAires; Three transport-related articles: (a) N6stor Margarifhos, Escenarios Futuros en el AreaMetropolitana de Buenos Aires; (b) Nora Turco, La Vialidad, el Transito y el Transporte en laRegi6n Metropolitana; (c) Autopistas del Sol S.A., Los Grandes Equipamientos de Transporte-Seis Reflexiones y un Emprendimiento-Avenida General Paz y Acceso Norte.
3. pre- ATAM, Datos Basicos del Sistema de Transporte de la Regi6n Metropolitana de BuenosAires, September 1994
4. pre-ATAM, Estudio de /a Estrategia para el Desarrollo del Sistema de Transporte en el AreaMetropolitana de Buenos Aires, July 1993
5. Secretaria de Obras y Servicios Publicos, Evaluaci6n Econ6mico-Social, Plan de Mejoramientodel Transporte Metropolitano de Buenos Aires, September 1996
6. EDI Megacities Seminar, Washington, City: Buenos Aires, City Profiles, April 1991
7. Ing. Susana Arcusfn, Lic. Patricia Brennan, Arq. Afda Ternavasio, Lic. Nora Turco e Ing. OlgaVicente, Desregulaci6n del Transporte y Evoluci6n de la Movilidad en Buenos Aires, March 1992
8. Susana Kralich, Accesibilidad Hogar-Trabajo en el Gran Buenos Aires, TERRITORIO NO 6,Instituto de Geografia, Universidad de Buenos Aires, 1993
9. Unidad de Coordinaci6n del Programa de Reestructuracion Ferroviaria, Programa deInversiones y Financiamiento del Transporte de la Regi6n Metropolitana, 1994
10. Secretaria de Obras y Servicios Publicos, Transporte Metropolitano, June 1996
ANNEX K -86-
G. Proposed Buenos Aires Urban Transport Project - Preparatory Documents
1. Instituto Pro Buenos Aires, Fundaci6n Argentina Siglo XXI, Municipality of the City Buenos Aires,various background documents on air pollution monitoring in Buenos Aires
2. Oscar Figueroa, Diagndstico de los problemas del Transporte en la Region Metropolitana deBuenos Aires y sus implicaciones para el Plan de Corto Plazo, Buenos Aires, febrero de 1996
3. Fred Salvucci and Bruno Wildermuth, Recommendation conceming the Application for Approvalby TBA of Magnetic Ticketing System (Memo), January 1996
4. Unidad de Coordinaci6n del Proyecto (UCP), Programa de Pasos Viales a Desnivel en el AreaMetropolitana de Buenos Aires, Preevaluaci6n Econ6mica, Informe de Avance, April 1996
5. UCP, Programa de Pasos Viales a Desnivel en el Area Metropolitana de Buenos Aires, BajoNivel Larroque-Chacabuco, Partido de Lomas de Zamora, April 1996
6. UCP, Programa de Pasos Viales a Desnivel en el Area Metropolitana de Buenos Aires, BajoNivel Cerrito-Garibaldi, Partido de Lomas de Zamora, April 1996
7. UCP, Informe sobre el Programa de Instalacion de Barreras en Cruces a Nivel sin ProteccionActiva, April 22, 1996
8. UCP, Proyecto de Modernizaci6n de la Llnea A de Subterraneos de /a Ciudad de Buenos Aires -Evaluaci6n Econ6mica, April 1996
9. UCP, Proyecto de Integraci6n Modal, Centros de Transferencia Intermodal, April 1996
10. UCP, Plan de Implementaci6n del Proyecto, April 22, 1996
11. Bruno Wildermuth, A Common Ticketing System for Buenos Aires, February 1996
12. Femando Brunstein, Asistencia T6cnica para el Reconocimiento Ambiental y ConsultaComunitaria del Proyecto de Transporte Urbano de Buenos Aires, Segunda Fase-Informe Final,August 1996
13. FIEL and Steer, Davies and Gleave, Study of the Finance of Transport in the Metropolitan Areaof Buenos Aires, 1995
14. Republica Argentina, Plan de Implementaci6n del Proyecto (PIP), October 1996
15. HT&A Horacio Torcello y Asociados, Analisis de Factibilidad T6cnico-Economica, AnteproyectoAvanzado Combinaci6n Llneas 'A"y 'C", prepared por Metrovias, September 1996
16. SYSTRA, Modemizaci6n de la Llnea A"del Subterraneo de Buenos Aires, Informe de la Mision,October 1996
17. Toronto Urban Transit Associates Inc., Subterraneos de Buenos Aires, Resignalling of Line A,October 1996
18. Christopher S. Weaver, William E. Oslund, Design of an Air Quality and Noise MonitoringNetwork for the City of Buenos Aires, January 1997
19. UCP, Centro de Transferencia, Liniers, Memoria Descriptiva, September 1996
20. UCP, Centro de Transferencia, Ciudad Universitaria, Memoria Descriptiva, September 1996
21. UCP, Centro de Transferencia, Jose Le6n Suarez, Memoria Descnptiva, September 1996
22. UCP, Centro de Transferencia, Victoria - Virreyes, Memoria Descriptiva, September 1996
23. UCP, Centro de Transferencia, Moreno, Memoria Descriptiva, September 1996
-87- ANNEX K
24. Unidad de Coordinaci6n del Programa de Reestructuraci6n Ferroviaria, Programa de PasosViWales a Desnivel en el Area Metropolitana de Buenos Aires, Anexos 1, 2, 3, 4, 5, 6 y 7, October1996 (3 volumes)
25. Correspondence and Background Documents related to World Bank Decision on PrivateProcurement - 1995 and 1996
26. UCP, Estacionamento para Bicicletas en Estaciones Ferrovianas de la Region Metropolitana deBuenos Aires, 1995
H. Other
1. Universidad de Buenos Aires and INAP, Buenos Aires 2000, Plan Estrategico para la Ciudad debuneos Aires diagn6stico, 1995
2. Universidad de Buenos Aires and INAP, Plan Estrategico Buenos Aires 2000, Presupuesto parsla Etapa de Fijaci6n de Objetivos, Abril 1996
3. Selected papers included in two reports of Urban Transport Congress held in Buenos Aires(November 1994):
Congreso LatUnoamericano de Transporte Publico y Urbano (CLATPU)* Carlos A. Badell and Jorge de Mendonca, No pierda e/ tiempo, deje el auto
* Vania Barcellos G. Campos, Uma andlise sobre transfer6ncia de modalidade e nivelde servico: rodovia x ferrovia
* Jos6 A. Barbero, Experiencias y resultados de la operaci6n privada de serviciosfefroviarios urbanos,
* Luis Pablo Belenky and Gustavo Rodolfo Piazza, GUtopfa o realidad?: El desatrollosostenido de un transporte modemo. Su aplicaci6n a la ciudad de Buenos Aires
. Jorge Blanco and Silvia Pupareli, Las relaciones de competencia ycomplementariedad entre e/ subtenraneo y e/ transporte automotor de pasajeros enla ciudad de Buenos Aires
* Guillermo Brennan, Centros de transferencia de pasajeros en la ciudad de BuenosAires. Su problematica y posibles soluciones
* Javier Cardozo, La concesion de subterraneos de Buenos Aires: Antecedentes,logros esperados y esquema de regulaci6n
* Javier Cardozo, Luis Rizzi, and Jorge Sanchez, Inversiones "inercialesT einversiones de integracion modal en drea metropolitana de Buenos Aires
* Amaldo Diano Castillo and Maria del Carmen Calluso, Ideas pare organizar eltransporte publico de pasajeros en la ciudad de Buenos Aires
* Hector C. Collado, La Regi6n Metropolitana de Buenos Aires. Nuevo sistema depercepcion tarifaria en autotransporte pOblico de pasajeros
* Pablo Cortes, Susan Arcusin and Fabiana Zimerman, El manual de capacidad 85'ylos carriles exclusivos. Caso estudio ciudad de Buenos Aires
* Martin Dallas and Maria Lorena Pigliacampo, La inserci6n de los discapacitadosmotrices al sistema de transporte pOblico urbano
* Roberto Domecq and Ricardo Ferrario, Interaccion entre la normativa y los avancestecnol6gicos en los vehlculos destinados al transporte automotor de pasajeros en la
ANNEX K -88-
Argentina, Congreso Latinoamericano de Transporte Publico y Urbano, BuenosAires, November 1994
* Marcelo Gustavo Hasse and Pablo Horacio Vainberg, Impacto de los cambios delsentido de circulaci6n en las avenidas radiales de Buenos Aires,
* Jorge H. Kogan, Privatizaci6n del transporte masivo en el area metropolitana deBuenos Aires - Oportunidades y riesgos para el sector privado
* Susana Kralich, La ciudad funcional y el ambito geografico del transporte urbano: depasajeros. Su definici6n y delimitaci6n
* David Kullock, Delia Krupnik and Carlos Lamadrid, Polltica y realidad urbana enBuenos Aires. Impacto y compatibilidad de los proyectos urbanos en gesti6n
* Ronald J. Mackay & Joe Ferretti, Estado y empresa privada: una conjunci6n quepuso un servicio en marcha
* Osvaldo R. Ramacciotti and Heriberto Allende, Evaluaci6n y propuesta metodol6gicade los centros de transbordo del Area Metropolitana de Buenos Aires
* Aida Temavasio de Lamadrid, Transporte y desarrollo urbano en la regi6nmetropolitana de Buenos Aires
- Mark Whitaker, Satisfaccion del usuario: responsabilidad de todos
MAP SECTION
ARGENTINA
BUENOS AIRES URBAN TRANSPORT PROJECTM Suburban Railways Operated By Private
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MARCH 1997
IMAGING
Report No.: 15951 ARType: SAR
