Document of The World Bank

Public Disclosure Authorized Report No: 20767-PH

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN Public Disclosure Authorized

IN THE AMOUNT OF US$60.0 MILLION

AND A GLOBAL ENVIRONMENT FACILITY GRANT

OF SDR 1.0 MILLION (US$ 1.3 MILLION EQUIVALENT)

TO THE

REPUBLIC OF THE PHI-LIPPINES

FOR THE Public Disclosure Authorized METRO URBAN INTEGRATION PROJECT

MAY 23, 2001

East Asia and Pacific Region Tr2nsport Sector Unit Public Disclosure Authorized CURRENCYEQUIVALENTS (ExchangeRate EffectiveMay 23, 2001) CurrencyUnit = PhilippinePesos (PhP) 1 PhP = US$0.02 US$1 = PhP50

FISCALYEAR January 1 -- December 31

ABBREVIATIONSAND ACRONYMS

ADB Asian DevelopmentBank CAS CountryAssistance Strategy DBM Departmentof Budget and Management DENR Departmentof Environmentand Natural Resources DPWH Departmentof PublicWorks and Highways DOTC Departmentof Transportationand Communications ECC EnvironmentalCompliance Certificate EDSA Epifanio de los SantosAvenue EIAPO EnvironmentalInpact AssessmentProject Office GEF Global EnvironmentFacility GHG GreenhouseGas ICB InternationalCompetitive Bidding LGU Local GovernmentUnit LRT Transit MARIPAS ,, MMDA MetropolitanManila Development Authority MMURTRIP Metro ManilaUrban Transport IntegrationProject MMUTIS Metro ManilaUrban TransportationIntegration Study NCB National CompetitiveBidding NCTS National Center for TransportationStudies NEDA National Econormicand DevelopmentAuthority NGO Non-GovernmentalOrganization NMT Non-MotorizedTransport NRIMP-1 FirstNational Roads Improvementand Manag. Project PMO ProjectManagement Office QCBS Quality- and Cost-BasedSelection TEC TrafficEngineering Center URPO Urban Roads ProjectOffice VOC Vehicle OperatingCost

Vice President: Jemal-ud-dinKassun CountryDirector: Vinay K Bhargava Sector Director: Jitendra N. Bajpai Task Team Leader: Sally L. Burninghiam METRO MANILAURBAN TRANSPORT INTEGRATION PROJECT

CONTENTS

A. ProjectDevelopment Objective Page

1. Projectdevelopment objective 3 2. Globalobjective 3 3. Key performanceindicators 3

B. StrategicContext 1. Sector-relatedCountry Assistance Strategy (CAS) goal supportedby the project 4 2. Main sectorissues and Governmentstrategy 5 3. Sectorissues to be addressedby the project and strategicchoices 9

C. ProjectDescription Summary

1. Projectcomponents 10 2. Key policy and institutionalreforms supported by the project 13 3. Benefitsand targetpopulation 13 4. Institutionaland implementationarrangements 14 D. Project Rationale 1. Projectalternatives considered and reasons for rejection 16 2. Major relatedprojects financedby the Bank and other developmentagencies 17 3. Lessonslearned and reflectedin proposedproject design 18 4. Indicationsof borrowercommitment and ownership 19 5. Value addedof Bank supportin this project 19

E. SummaryProject Analysis 1. Economic 20 2. Financial 21 3. Technical 22 4. Institutional 22 5. Environmental 23 6. Social 24 7. SafeguardPolicies 26 F. Sustainabilityand Risks

1. Sustainability 26 2. Critical risks 27 3. Possiblecontroversial aspects 28

G. Main Loan Conditions

1. EffectivenessCondition 28 2. Other 28

H. Readinessfor Implementation 29

I. Compliancewith BankPolicies 29

Annexes

Annex 1: ProjectDesign Summary 30 Annex 2: DetailedProject Description 34 Annex 3: EstimatedProject Costs 43 Annex4: Cost BenefitAnalysis Summary 45 Annex5: FinancialSummary 54 Annex6: Procurementand DisbursementArrangements 55 Annex7: ProjectProcessing Schedule 71 Annex8: Documentsin the ProjectFile 72 Annex 9: Statementof Loans and Credits 73 Annex 10: Countryat a Glance 75 Annex 11:Project Information Brochure 77 Annex 12:Institutional Framework for Traffic Engineeringand TranspottPlanning 79 Annex 13:Global EnvironmentFacility (GEF) supported Non-Motorized Transport component - 84 MarikinaBicycle Network. Estimation of the benefitsderiving from the savingsin greenhousegas emissions Annex 14:Global EnvironmentFacility (GEF) supported Non-Motorized Transport component - 93 MarikinaBicycle Network. Incremental Cost Analysis

MAP(S) IBRD30420 - TrafficManagement and MARIPAScomponents IBRD 30421 - SecondaryRoads components PHILIPPINES Metro ManilaUrban TransportIntegration Project Project Appraisal Document

East Asia and Pacific Region Transport SectorUnit Date: May 23, 2001 TeamLeader: Sally L. Bumningham CountryDirector: Vinay K. Bhargava SectorDirector: JitendraN. Bajpai ProjectID: P057731 Sector(s): TU - Urban Transport LendingInstrument: Specific Investment Loan (SIL) Theme(s): PovertyTargeted Intervention: N GlobalSupplemental ID: P066509 Team Leader: Sally L. Burningham SectorManager/Director: Jitendra N. Bajpai SupplementFully Blended? Yes Sector(s): TU - Urban Transport ProgramFinancing Data [XI Loan [ ] Credit [ Grant [ Guarantee [ Other: For Loans/Credits/Others: Amount (US$m):US$60 million | ProposedTerms (IBRD): Fixed-SpreadLoan (FSL) Grace period (years): 8 Years to maturity:20 Commitmentfee: 0.85% the first four years; 0.75% Front end fee on Bank loan: 1.00% thereafter FinancingPlan (US$m): Source Local Foreign Total BORROWER 36.30 0.00 36.30 IBRD 29.60 30.40 60.00 GLOBALENVIRONMENT FACILITY 0.50 0.80 1.30

Total: 58.60 39.00 97.60 BorrowerlRecipient:REPUBLIC OF PHILIPPINES Responsibleagency: DPWH Departmentof PublicWorks and Highways Address: BonifacioDrive, Port Area,,Philippines ContactPerson: Mr. TeodoroEncarnacion, Undersecretary for TechnicalServices Tel: 63-2-3043228 Fax: 63-2-3043485 Email: n/a OtherAgency(ies): Metro ManilaDevelopment Authority Address: MMDABuilding, EDSA Corner OrenseStreet, Guadalupe, City, Metro Manila, Philippines ContactPerson: Mr. BenjaminS. Abalos, Chairman Tel: 63-2-8820908 Fax: 63-2-8820859 Email: ogm(@mmda.gov.ph City of Marikina,Metro Manila Address: Brgy. Sta. Elena, Shoe Avenue,Marikina City, Metro Manila,Philippines ContactPerson: Mayor BayaniFernando Tel: 63-2-646 1634 Fax: 63-2-646 5277 Email: [email protected] Estimated disbursements ( Bank FYXUS$m): FY 2001 1 i2002 1 0 2003 0 2004 J 2005 I 2006 i Annual 0.00 1.70 8.23 1 25.60 I 17.35 7.12 Cumulative 0.00 1.70 9.93 35.53 52.88 60.00 Project implementationperiod: 5 years Expected effectiveness date: 09/01/2001 Expectedclosing date: 09/01/2006 OCS PAD F.w- Rev MmdC,2

-2 - A. ProjectDevelopment Objective

1. Projectdevelopment objective: (see Annex 1) The project developmentobjective of the Metro ManilaUrban Transport Integration Project (MMURTRIP)is to assist the Governmentof Philippinesin enhancingthe economicproductivity and qualityof life of Metro Manilaresidents by improvingthe operationalefficiency and safety of the transport system with better opportunitiesfor accessto publictransport and nonmotorizedtransport, the dominant transportmodes of low-incomeresidents.

To this end, the project will implementschemes of trafficmanagement to improveaccess to newly opened Light Rail Transit stationsand transferopportunities between road-basedpublic transportmodes, pedestriancirculation, road frontagecontrols, street lighting,and traffic circulationin general.Physical measuresin the project corridors/areaswill also improvecritical interchanges and provideroad accessand missinglinks. To promotethe use of nonmotorizedtransport, the projectwill implementa localbike path networkand a supportingawareness campaign. Institutional measures will aim to strengthenthe MetropolitanManila Development Authority (MMDA), the agencyresponsible for coordinating developmentplans and programs,and specifically,traffic managementacross the 12 cities and five municipalitiesof Metro Manila.

2. Global objective: (see Annex I) The globalenvironment objective of the proposedNonmotorized Transport Global EnvironmentFacility (GEF)supported component is to reducegreenhouse gas emissionsby promotingthe use of zero-emission bicycle and pedestriantransport in the City of Marikinaas an alternativeto greenhousegas-emitting motorizedtransport. A secondobjective is to demonstrateand publicizethe benefits and viabilityof bicyclesas an alternativetransport mode to encouragereplication of this pilot programin other parts of Metro Manila, elsewherein the Philippines,and in other countries.

3. Key performanceindicators: (see Annex 1) The key performanceindicators, to be measuredalong the projectcorridors, are:

Objective Actions Indicators A. Providebetter opportunities Improvetravel conditions, * Reducedtravel time. for accessto includingthe related safetyand * Sustainedproportion of public facilitiesby improvedtraffic environmentalaspects, along the transportuse. management. three most heavilyused public * Improved satisfactionof public transportcorridors in Metro transport users. Manila(along Light Rail Transit Line 3; EDSA; LRT Line 2-AuroraBoulevard, and the SouthemCorridor). B. Enhanceaccess from the Implementa seriesof projects in * Reducedtravel time. outer areas to Metro Manila. MarikinaValley on the key * Sustainedproportion of public access routes to Metro Manila. transportuse. * Improvedsatisfaction of public transport users.

-3 - Objective Actions Indicators C. Improveoperational Invest in strategicsecondary * Reducedtravel time. efficiencythrough an improved roads. * Sustainedproportion of public road hierarchy. transportuse. * Improved satisfactionof public transport users. D. Enhancequality of life Promotethe use of nonmotorizedSustained or increasedmode share for throughincreased use of transportthrough a pilot non-motorisedtransport trips. non-motorisedtransport and demonstrationin one of the local thereby address air pollution. governmentunits (LGUs),the City of Marikina. E. Improvemetropolitan Strengthencapacity of * Effectivecoordination mechanism governancein trafficmatters in MetropolitanManila in place betweenthe key agencies Metro Manila. DevelopmentAuthority and Local GovernmentUnits. (MMDA)and involve them as * Effectivetraffic managementand directproject implementers. enforcementmeasures planned and designedby the relevant agencies

B. StrategicContext 1. Sector-relatedCountry Assistance Strategy (CAS) goal supportedby the project: (see Annex 1) Documentnumber: R99-55(IFC/R99-46) Dateof latestCAS discussion: 05/04/99 To help the Philippinesachieve its overarchinggoal of povertyreduction, the WorldBank Country AssistanceStrategy (CAS) policiesand programsare directedto sevenareas consistentwith the Medium- Term PhilippinesDevelopment Plan:

1. Addresscrisis effects and promoteeconomic recovery. 2. Enhancehuman developmentand socialservices for the poor. 3. Accelerateenvironmentally sustainable rural development. 4. Promotesustainable urban developmentand combaturban poverty. 5. Developinfrastructure, particularly in the provinces. 6. Enableexpansion of the private sector. 7. Improvegovernance and transparencyand combatcorruption.

Among medium-termdevelopment priorities of the Governmentof the Philippines,the CAS highlightsthe need to targettransport problems in Metro Manila. The MMUTRTRIPproject will improveand developthe basic transportinfrastructure (item 5) and promotesustainable urban development (item 4) by providing necessarytransport access to fast-growingouter areas, particularlyto the low-incomepopulation that dependson public transportmodes.

la. GlobalOperational strategy/Program objective addressed by the project: The NonmotorizedTransport component is consistentwith the objectivesof Global EnvironmentFacility (GEF) OperationalProgram 11 on Transportation,which statesthat "GEF will promote,amongst others, nonmotorizedtransport technologies and measures,especially in medium-scalegrowing cities." The NonmotorizedTransport component will demonstratethat bicycle networksare a low-cost,convenient, and acceptablealternative method of city transportationover short-to-moderatedistances and have excellent

- 4 - prospects of sustainability. This component has strong local government and nongovernmental organization support and is a national priority for GEF assistance.

2. Main sector issues and Government strategy: Urban transport congestion, with its related impacts, is one of the most pressing problems in the Philippines. The key area for concern is Metro Manila, now a massive, gridlocked urban area that accommodates 10.2 million people (1997), produces over one-third of national GDP, and contains 17 Local Government Units (LGUs), of which 12 are cities and five are municipalities. By 2015 Manila is expected to become a massive conurbation of 13 million (MMUTIS 1996). Economic prosperity in recent years has accelerated motorization and the demand for mobility, causing severe traffic congestion and environmental problems. Residents perceive traffic congestion as their number one problem, followed by air pollution (the primary source of which is the transport sector), garbage collection, flood control, and the need for security.

The level of congestion in Metro Manila is severe enough to cause an average speed of 10 kilometers per hour, only slightly faster than that of Bangkok, which has the slowest travel speed of any major Asian city (figure B. 1).

Figure B.1 Average travel speed in major Asian cities 35 - 30. 30 - _ _ 25 e2 - -

20 15 15 15 15

0

.. - Figure B.2 Typical traffic congestion on EDSA in Metro Manila, May 27, 2000

-5- The Metro ManilaTransportation and Traffic SituationStudy HouseholdInterview Surveyof the 1996 MMUTISstudy involvedinterviews of 235,000people, or 50,000households (about 2.5 percent sampling).The surveyshowed that about 20 percentof householdsin Metro Manilaown cars, fewerthan in many other large citiesin the region. Despitea trendof rising car ownershipin recent years, public transporthas alwaysbeen the dominanttransport mode in Metro Manila, and the populationdepends heavilyon road-basedpublic transportmodes in the form ofjeepneys and more recentlyFXs, a type of shared taxi.

Table B.1 MetroManila socioeconomic profile PhilippinesGDP per capita (1999) US$1,020 Metro ManilaGRDP per capita (1996) PhP 59,580;US$1,490 Populationof Metro Manila(1997) 10.2million Percentageof householdsowning cars (1996) 20 Car ownershipper 1000 population(1996) 59 Householdincome, average per month(1996) PhP 12,356;US$309 per household Householdsbelow poverty line (1996) 6.5 percent Source Population:World Bank documents;car ownershipand poverty: MMUTIS 1996.

Data fromthe 1996 MMUTIShousehold interviews show that 79 percentof motorizedtrips weremade by public transport (41 percentby , 13 percentby , 19 percentby tricycle,2 percentby light rail transit,5 percentby taxi, and a negligibleproportion by the PhilippinesNational Railway),while only 21 percentwere made by private car or utilityvehicle; 20 percentof total trips were walkingtrips. This split is unlikelyto be influencedby the completionof the two new Light Rail Transit(LRT) Lines 2 and 3. The existingLRT Line 1 operates at capacity,carrying about 350,000-400,000passengers per day. The LRT Line 3 along EDSA opened in December1999 and currentlyaverages about 65,000passengers per day. The LRT Line 2 is under constructionand due to openin 2002. The predictionof a dramaticincrease in the percentageof private car use from 22 to 34 percentand decreasein the percentageof public transportuse from 79 to 66 percent (Table B.2)by 2015 is worrying.

Table B.2 Trip modalsplit in MetroManila Transport 1996 2015 2015/1996 Motorized Public 18.5 million/day(79%) 28.9 million/day(66%) 1.56 Private 4.7 mnillion/day(21%) 14.8million/day (34%) 3.15 Total 23.2million/day (100%) 43.7 million/day(100%) 1.88 Walking 6.5 mnillion/day 10.8million/day 1.66 (22% of total) (20% of total) Total 29.7 million/day 54.5 million/day 1.84 Source:MMUTIS 1996

It is also interestingto note that 30 percentof trips are less than 2 kilometers(Ian) in lengthand these trips are thoughtto be contributingto a large amount of the congestion (Table B. 3).

- 6 - Table B.3 Motorizedtri ps by mode and distancein MetroManila (1MUTIS study area) Predominanttravel mode Totaltrips Trips < 2 km Percentof trips<2km Car + Utilityvehicles 4,658,760 1,057,398 22.7 Tricycle-motorized 4,307,129 2,425,283 56.3 Taxi 1,152,654 184,361 16.0 Jeepney 9,574,501 3,067,772 32.0 Bus 3,034,977 126,289 4.2 Light Rail Transit(LRT) 442,164 8,108 1.8 NationalRailways 7,275 369 5.1 Total public 18,518,700 5,812,182 31.4 Total private 4,658,760 1,057,398 22.7 Grandtotal 23,177,460 6,869,580 29.6 Source:MMUTIS 1996

The main sectorissues and the Govenmment'sstrategy to addressthem are describedbelow.

The need for trafficmanagement. In general,road constructionin Metro Manilahas not taken into accountthe stop and dropoff sites, transferpoints, and waitingareas neededby ,jeepneys, and tricycleservices. The resulting chaotictraffic alongmajor corridorsand near road junctionsseverely affectsthe overalltraffic flow, causes delays, and increasessafety hazards. Because of insufficient sidewalksand crossings,pedestrians often encounterhostile and dangerousstreet conditions.Given Metro Manila's high dependencyon road-basedpublic transport (buses and jeepneys),imnproved traffic flows would directlyaffect the capacityof the public transportsystem and related environmentaland safety conditions.Without efficient street-level collection and dispersalof lightrail passengers,and efficient traffic to and from expressways,mega-investments will not be fully effective.Traffic management deserves the highestpriority in the sectorand shouldbecome the most essentialhousekeeping function of Metro Manila.Whereas European cities have done much to encouragethe return of walking and cyclingthrough innovativepedestrianization, traffic-calming schemes, and other initiatives,walking and cyclingare being squeezedout of Asian cities (especiallydeveloping Asian cities)through increasingly hostile traffic and urbanenvironments and lack of policy attention.Currently, only Japanand Singaporeare tryingto enhance conditionsfor these modes.

Such an approachrequires strong coordinationamong the responsibleagencies in the Philippines: for physicalimprovement -- the Departrnentof PublicWorks and Highways(DPWH), and LocalGovernment Units (LGUs);for traffic operationsand control-- DPWH,the MetropolitanManila Development Authority(MMDA), and LGUs; and for the enforcementof regulations-- the police and the Departmentof Transportationand Communications(DOTC). To addressthis issue, the MMDA was assignedthe responsibilityof coordinatingtraffic operationalenforcement. Though the MMDAhas made some progress,there is room for considerableimprovement. In additionto adequatehunan and financial resourcesin the MMDA,strong Govenmmentcommitment is neededto streamlinethe overlappingroles of nationalagencies and the MMDA in Metro Manila.

The need for enhancedaccess fromouter areas. As Metro Manilarapidly expands outside the circumferalboundary of EDSA, the constraintsposed by currenttransport access to these outer areas are becomingmore evident.People seekingwork in Metro Manilaexperience long commutes,and residents perceiveaccessibility and public transportservices as poor. For example,vehicle ownership in both the MarikinaValley and Rizal Province,despite lower-than-average household incomes, is 24 percent comparedwith about 20 percent in Metro Manila,because people see private transportas a necessityto

- 7 - combatthese constraints.There are approximately500,000 trips to Metro Maniladaily from the Marikina Valleyarea, and an additional 135,000pass throughMarikina Valley from easternRizal to Metro Manila for which the primary routes are Marcos Highwayand OrtigasAvenue.

The need to improvethe road networkhierarchy. To facilitatebetter dispersalof traffic over the networkand reducetraffic on arterialroads, overallnetwvork capacity needs improvedconnectivity and enhancedcapacity of existingsecondary roads. These can be achievedby implementingmissing links; rehabilitatingpavements, sidewalks, and drainage;and controlling/removingencroachments.

The need to addressair pollution:local impactsand globalimpacts. Residents rate air pollutionas the area's numbertwo qualityof life problem,after traffic congestion.Mobile source air pollutionfrom the transportsector is the major cause of air pollutionin Metro Manila.The Governmentis pursuinga combinationof pricingand administrativecontrol measures to bringmobile emissionsdown to a healthier level.The ongoingMetro ManilaAir QualityImprovement Sector Development Program, with US$300 millionfinancing from the AsianDevelopment Bank, aims to promotethe use of cleanerfuels and a vehicle inspectionprogram directed mainly towardlocal impactpollutants. The programincludes a motorvehicle inspectionsystem, an industrialair emissionspollution abatement program, production of cleaner fuels, introductionof antipollutiondevices suchas catalyticconverters, anti-smoke belching, road rehabilitation, ambientair qualitymonitoring, public awareness raising, capacity building, and institutionaldevelopment. The Air QualityImprovement Program does not addressnonmotorized transport. In the less congested outer areas of Metro Manila, such as the City of Marikina,about 2 percent of all trips are by bicycle,but the anticipatedincrease in traffic will likelycause the disappearanceof this mode of transportation.This pattern has alreadybeen experiencedin inner Metro Manila(and in many other Asian metropolises)where bicycleshave been crowded out by overwhelmingtraffic, resulting in the loss of a nonpollutingmeans of transport.

The contributionof motorizedfonns of transportto globalgreenhouse gases is significant.The Philippines has ratified the United NationsFramework on ClimateChange Convention (UNFCCC) and is a cosignatoryto the 1997 Kyoto Protocol.This reflectsthe country'sstrong commitmentto addressingits contributionto GHG emissions.On a globalscale, motorvehicles play a significantrole in the emissionof GHGs, with the greatestcontribution made by carbon dioxide (COC2) , the greenhousegas so far most responsiblefor atmosphericchange. Road transportcontributes 15 to 20 percent of CO emissions worldwide.Since the amountof CO2resultingfrom the combustionof a given quantityof gasolineremains constantregardless of emissioncontrols, trends in CO2emissionswill directlyfollow increasesin the use of these fuels.Therefore, motor vehicleshave the potentialto play an even greaterrole in increasingthe greenhousegas effectin the future.Thus preservingor reversingthe modal split to less pollutingand nonpollutingmodes is an importantobjective from both a local and a globalpoint of view.

The need for implementationof an urban transportstrategy in MetroManila. To date in Metro Manila, nationalagencies have sponsoredmode-specific plans and policies, with limitedregard for developingan integrated,intermodal transport system. Due to land acquisitionand fiscal constraints,road networkexpansion has been limited(only about 75 kilometersof new roads have been constructedsince 1982).To address infrastructureand developmentissues that transcendthe municipalboundaries of the 17 LGUs comprisingMetro Manila, the Governmentestablished the MMDA in March 1995.To date, the MMDAhas been less effectivein its mandatedrole in metropolitantransport planning and traffic operationsmanagement. Strengthening under both the Metro ManilaAir QualityImprovement Sector DevelopmentProgram and the MMURTRIPproject will contributeto the efficacyof the MMDA.The Governmentapproved a reorganizationof the agencyon March 15, 2000. The MMDA's Letter of Sector

-8- Policyoutlines its actionplan for implementingthe MiMIJTISstudy (see Annex 11). To develop a long-termstrategy, the Governmentundertook the Metro ManilaUrban TransportationIntegration Study (MMUTIS),sponsored by the Departmentof Transportationand Communication(DOTC) and fundedby the JapanInternational Cooperation Agency (JICA). Completed in March 1999, the MMUTISstudy defines a MasterPlan to 2015 and a Medium-TermTransport Development Plan from 1999to 2004. MMURTRIPis one of the projectsrecommended in the Medium-TermTransport Development Plan. The MMDAis the lead agencytasked to coordinateand monitorthe implementationof the recommendationsof the MMUTIS.

The need to realizethe underutilizedasset of the railway(Philippines National Railways). Rail corridorsextend throughout Metro Manilaand have significantpotential to address the area's congestion problems.However, these assets are underutilized,and the performanceof the PhilippinesNational Railwaysis inadequateto serve the needs.The need to preservethis asset is criticalto developsustainable commuterrail operationsboth in the north and south of Metro Manila.The Governmentis pursuing possibleprivatization and concessionoptions with the supportof United StatesTechnical Development Assistanceand the Asian DevelopmentBank, howeverlittle progress has been made.

Coordinationof activitiesin the UrbanTransport Sector. In the Urban TransportSector in Metro Manilathere are severalongoing activities with supportfrom severallocal sources, foreign donor sources, and the private sector financingsupport. Initially the Metro ManilaUrban TransportationIntegration Study (MMUTIS)was undertakenunder the lead of a Govemmentinteragency steering committee and with fundingfrom JapanIntemational Cooperation Agency. This study had been adoptedand all prograrnsare in line with the proposalsset forwardin this studyand includethe Light Rail Line 3 currentlyunder constructionunder JapaneseBank for InternationalCooperation (JBIC) fundingsupport, the Light Rail Line 2 which was opened in December2000 underprivate sectorconsortium funding, severalfly-overs under JBIC funding. The MMURTRIPproject provides complementaryinfrastructure to these mega projects as recommendedin the MMUTISstudy. As an examplethe MMUJRTRIPproject will provideroad based interchangefacilities at the last stationon the Light Rail Line 3. The Governmenthas also implementedan upgrade of traffic signalswith a SCATSsystem under Australian aid financing.The NMIVURTRIPproject will financefurther such signalslinked into the currentsystem to expand coverage. The Urban Air QualityManagement Strategy in Asia - Metro ManilaReport (URBAIR)study was undertakenwith fundingfrom the WorldBank and the recommendationsof the study were used to develop the ongoingMetro ManilaAir QualityImprovement Sector Development Program with fundingsupport from the AsianDevelopment Bank. The GEF componentof MMURTRIPwill addresssglobal emissions which are not coveredby this Air Quality Program.

3. Sector issues to be addressedby the projectand strategicchoices: Among the varioussector issues,the MMURTRIPproject will address:

The need for trafficmanagement by improvingjeepney, bus, and lightrail transit interchangeon the LRT Lines 2 and 3 corridorsand at the interchangeson the South SuperHighway.

The need for enhancedaccess fromouter areas by implementinga seriesof projects on the key accesses to the MarikinaValley situatedto the east of Metro Manila.

The need for an improvedroad networkhierarchy by investingin strategicsecondary roads.

The need to addressair pollutionby meansof a nonmotorizedtransport component that will test and

-9- demonstratethe benefitsof pedestrianand bicyclefacilities in selectedareas.

The need for implementationof an urbantransport strategy in MetroManila by developingthe capacityof the MetropolitanManila Development Authority (MMDA) in the area of traffic management. Developedby an interagencycommittee led and chairedby the MMDA,the MMURTRIPproject has been a vehicle to allow the MMDA to undertakeits mandatedrole as the metropolitantransport planning agency.To further developthis capacityand to allowthe MMDAto maintainits strategicrole in the developmentof the project and otherrelated activities,the Governmentis stronglycommitted to the role of the MMDAin projectimplementation, including planning and coordinatingstrategic metrowide investmentsand formulatingand implementingstrategic traffic managementand enforcementmeasures. A stronger,well-equipped MMDA would enhance the effectivenessof the present project and in turn further strengthenthe role of the MMDA in Metro Manila. The MMDAhas little experiencein managing implementationof works contracts.The projectwill give the MMDAthe opportunityto develop this capacity.Such an authorityshould have the role of implementingtraffic management works.

The strategicchoices made in MMURTRIP'sdevelopment include a focus on:

* Includingthe MMDA as an implementingagency. * Complementingthe ongoingMetro ManilaAir QualityImprovement Sector Development Program and not repeatingefforts underwayin that project.Issues related to local air pollutionand the railwaysare not addressedunder MMIJRTRIP,since these are being addressedby projects with the financialassistance of other donors. * Corridorsthat carry the heaviesttraffic and public transportpassengers. * Interventionsthat complementthe committedmegaprojects rather than implementingfurther major investments. * Projectcomponents that encouragepublic transport. * Developmentof improvedaccess to Metro Manilafrom the outer areas. * Projectcomponents that minimizeresetflement and land acquisition.All componentsthat involved majorresettlement were removedat the projectconcept stage. The two remainingcomponents involvingland acquisitionare the MarikinaBridge and AccessRoad componentand the Don MarianoMarcos AvenueExtension component. * Limitingthe nonmotorisedtransport component to one city for a demonstrationeffect. Since politicalcommitment is the key to the successof suchinitiatives, the componentwas pursued on the basis of a proposal fromthe Departmentof PublicWorks and Highways(DPWH) and the Urban Roads Project Office(URPO), as well as a subsequentdirect request from the Mayor of the City of Marikina.The nonmotorizedtransport component was not promotedby the WorldBank, but rather initiatedby the partiesin the countrythemselves. While a barrierto such implementation existsat the country level,local supportis being tappedto address this barrier.The proposalhas been endorsedand confirmedas a nationalpriority for GEF assistanceby the GEF Focal Pointin the Departmentof Environmentand Natural Resourcesof the Philippines.

C. Project DescriptionSummary 1. Projectcomponents (see Annex 2 for a detaileddescription and Annex 3 for a detailed cost breakdown): The Metro ManilaUrban TransportIntegration Project (MMURTRIP) project includesthe following componentsin the 12 cities and 5 municipalitiesmaking up the Metro Manilaarea:

- 1 0 - A. TrafficManagement Improvements on the Light (LRT) Line 2 corridor;the EDSA (Epifaniode los SantosAvenue)-LRT Line 3 corridor;and the Bicutanand Alabanginterchange on the southerncorridor. Project componentsinclude public transportimprovements such as integrationof modes; improvementof interchangefacilities and measuresto introducepublic transportpriority; traffic managementboth at and between intersections;measures to controlinappropriate frontage activity; measuresto improveroad safety for pedestriansby providingsidewalks, pedestrianized areas, and traffic calming;and provisionof bicycle accessand pedicabbicycle parkingat stations.

B. Marikina,Rizal, Pasig (MARIPAS)Access Improvements in the MarikinaValley, including the MarikinaBridge and AccessRoad componentand the MarcosHighway and OrtigasAvenue Extension.

C. A SecondaryRoads Program for 15 road sections(listed in annex 2), includingpavement rehabilitation,drainage and sidewalkimprovements, traffic management,and constructionof missinglinks for comprehensivecorridor treatment so that secondaryroads can fulfilltheir functionon the road hierarchy.

D. NonmotorizedTransport in the City of Marikinain Metro Manilaunder Global Environment Facilityfunding.

E. InstitutionBuilding/Technical Assistance to establishand strengtheninstitutions responsible for futureurban transportmanagement in MetroManila. The institutionbuilding componentwill strengthen the capacityof the MetropolitanManila Development Authority (MMDA) to effectivelycarry out the traffic engineeringand managementresponsibilities it was given underthe MMDAAct. The MMURTRIP projectwill complementthe assistanceextended under the Metro ManilaAir Quality ImprovementSector DevelopmentProgram by supportinga capacitybuilding program for 2001 to 2005. The MMDA,in consultationwith the DPWH,has developeda year-by-yearinstitutional plan includinga descriptionof its expandingfunctions and staffingrequirements.

ComponentsA, B and C includethe installationof traffic signals.A total of 75 intersectionswill receive new signalsor an upgraded systemwhich will linkinto the recentlyinstalled SCATS system. The designof the projectcomponents addresses the desireof the Local GovernmentUnits to install signage,provide street lightingalong the LRT corridors,and introducetheir respectivecity motifs in the beautificationand design of sidewalksand medians.Project components include the greeningand landscapingplans of the MMDA, the Local GovemmentUnits, and the Metro ManilaGreen Ladies (spousesof the 17 Metro Manila mayors).These componentsaim to improvethe urban environmentin the heavilytrafficked areas to make them more user friendlyfor pedestriansand public transportusers. As 22 percent of car journeys and 32 percentofjeepneyjoumeys are less than 2 kilometerslong, a betterurban environmentand walkingareas might persuadepeople to walk ratherthan drive or take transport.These short trips, many of them on the main arterialnetwork, are considereda major contributorto local traffic congestion(MMURTRIP FeasibilityStudy, 1997).

- 11 - Inidicative Bank %of GE Wof Component ; S.ctor Cost* of financing Ba filfl GEF .Sm) : Tta {UM)l financingln (US$M)9 c A. Traffic Management Urban Transport 0.0 0.0 0.00 0.0 Improvements LRT Line 2 Corridor Urban Transport 5.50 5.6 4.00 6.5 0.00 0.0 EDSA-LRTLine 3 Urban Transport 5.70 5.8 3.90 6.3 0.00 0.0 Corridor SouthernCorridor-Bicutan Urban Transport 0.60 0.6 0.50 0.8 0.00 0.0 InterchangeImprovements SouthernCorridor- Urban Transport 1.70 1.7 1.30 2.1 0.00 0.0 InterchangeImprovements B. MARIPASAccess Urban Transport 0.0 0.0 0.00 0.0 Improvements Marikina Bridge and Urban Transport 23.30 23.9 11.20 18.1 0.00 0.0 AccessRoad Marcos Highway Urban Transport 19.70 20.2 13.90 22.5 0.00 0.0 OrtigasAvenue Extension Urban Transport 5.20 5.3 4.40 7.1 0.00 0.0 C. SecondaryRoads 32.70 33.5 19.20 31.0 0.00 0.0 D. NonmotorizedTransport Urban Transport 1.50 1.5 0.00 0.0 1.30 100.0 (NMT) E. Institution Institutional 1.10 1.1 1.0 1.6 0.00 0.0 Building/Technical Assistance Development . Total Project Costs 97.00 99.4 59.40 96.0 1.30 100.0 Front-end fee ___ 0.60 0.6 0.60 1.0 0.00 0.0 Total Financing Required 97.60 100.0 60.00 96.9 1.30 100.0

Note:Discrepancies in projectcosts are theresult of figuresbeing rounded. The costof detailedengineering design, supervision,Project ManagementOffice engineeringoverhead, and advisory services is included in the cost of each component

la. Description of the Global Environment Facility (GEF) supported component: Global EnvironmentFacility (GEF) grant fundingwill support the design and implementationof a system of bikewaysand related facilitiesdesignated for the NonmotorizedTransport component in the City of Marikina,one of the cities of Metro Manila.This incrementalcomponent of the overall MiMURTRIP projectwill demonstratethe benefitsof this alternativemode of transport.Nonmotorized transport here includesbicycle lanes for both bicyclesand pedicabs(nonmotorized passenger transport) and facilitiesfor walkingtrips. The NonmotorizedTransport component will includethe following:

* A networkof about 66 kilometersof bikewaysof which 50 kilometerswill be developedalong existingroads and 16 kilometersof bikewaysalong the MarikinaRiver banks. The networkwill connectthe residentialareas with the main trip attractors(factories, schools, hospitals, market areas and shoppingmalls) and public transportterminals including the new LRT Line 3 stations. * Traffic calmingand pedestrianizationmeasures and facilitiesaround schools and market areas and provision of bicycle parking facilities. * Street lighting where necessary to ensure safety after hours. * Trainingand CapacityBuilding for the staff of the MarikinaBikeways Program Office,with particularfocus on planningcapacity and monitoringand evaluationactivities. * Educationand public awarenesscarnpaigns targeted to potentialusers as well as car users and

- 12 - city's traffic management/enforcementpersonnel. * Replicationcampaigns targeted to neighboringMunicipalities and other cities that are suitablefor bikewaydevelopment.

2. Key policyand institutionalreforms supported by the project: A central theme of the projectis the need to coordinaterelevant institutional roles and physicallyintegrate variousmodes. With this view, the projectwill demonstratethe role of Governmentand the importanceof complementaryinvestments in enhancingthe full potentialof public or private investments.

Recognizingthat metropolitangovernance is criticalfor Metro Manila, the project will strengthenlocal governmentfunctions and serve as a vehicle to allow the MetropolitanManila Development Authority (MMDA)to play its mandatedrole by addressingthe sectorissues listed above.The MMi4DAis the metropolitanauthority for the 17 LocalGovernment Units of the Metro Manilaarea. Duringthe project preparationphase, coordinationwas initiatedamong the key agenciesof the DPWH,the DOTC,the MMDA and the NationalEconomic and DevelopmentAuthority (NEDA), with the MMDAchairing the projectdevelopment commnittee. Although the coordinationmechanism was maintainedover the preparation period, the effectivenessof the MMDAneeds further strengthening.The MMIRTRIP projectwill address this need throughinstitution building and chargingthe MMDAwith the ultimateresponsibility for implementingcivil works contracts.

In addition,policy changesin the road sector and the DPWHas a whole are being pursued throughthe parallelWorld Bank funding assistanceof the First NationalRoads Improvementand ManagementProject (NRIMP-1),which will help the Governmentof the Philippinesin commercializingthe road sectorand separateroad sector-specificpolicymaking and regulationfrom operations.The NRIMP-1project, effective March 2000, will also help the DPWHbuild capacityand developits operations,including procurement and financialmanagement systems, as well as provide supportto the EnvironmentalImpact Assessment ProjectOffice (EIAPO). These actions will further supportthe implementationof the MMURTRIPproject.

Physicalintegration of variousmodes is most clearly demonstratedin the recentlyopened LRT Line 3, developedunder private sectorfinancing arrangements. The MMURTRIPproject will developthe complementaryaccess infrastructure,such as pedestrianizedareas and interchangefor jeepney and LRT passengers.Moreover, the project stressesthe importanceof trafficmanagement measures as a cost-effectiveway to reducecongestion.

3. Benefitsand targetpopulation: Traveltime savings.The project's major quantifiedbenefit would be traveltime savings as a result of the proposedinterventions (see para. El). For example,on the LRT Line 2 corridor,the overalltravel speedon AuroraBoulevard/R. Magsaysay would rise from the present averageof about 8 kilometersan hour to 13 kilometersan hour. Similarly,on the EDSA-Line3 corridor(one of the busiest bus corridorsin the world)the total delay for buses that pass throughall intersectionsbetween North Avenue and Roxas Boulevardwould be 15 minutes once the proposedmeasures are in place. This is an overall improvementin bus journey times of around 35 percent. Vehicleoperating cost savingshave also been quantified.(Source: MMUTRIPFeasibility Study, 1998)

Improvedurban environment. A major unquantifiedbenefit of the project will be an improvedurban environmentand increasedsafety. The LRT schemeswill generateconsiderable access/egress at the

- 13- stations.But inadequatefacilities will exposepedestrians to road traffic, causinga safetyhazard and disruptingroad traffic.The projectwill providefacilities to safeguardpedestrians in and aroundthese stations.

Public transportusers. The project is targetedat publictransport users, many of whom are poor "captive" users. Althoughalmost all householdsuse public transportin someform, the lower-incomegroups primarilyuse buses and jeepneys.Based on the 1996 MMUTISStudy, for example,people with household incomeunder PhP3,000per month(US$100, or US$1,200per year) make 85 percent of total trips by public transport.People with householdincome of PhP40,000to PhP50,000per month (US$1,333to 1,667, or US$16,000 to 20,000 per year) make fewerthan 50 percentof trips by public transport.These numbersindicate the strong link betweenpoverty and publictransport use in Metro Manila. While there is a growingconcentration of wealthin Metro Manila, with the averagehousehold income estimated at PhP173,600, a little over twice the nationalaverage, 31 percent of the populationin Metro Manilalive below the povertyline of PhP11,230 per capitaper year (US$1,826per householdper year). The 1997 TrafficSurvey indicates that "Socio-economicclass is a very significantfactor in differentiatingthe conunutingexperience. Among ABC Metro Manilans,or the rniddleclass and up, 62%use their own vehiclefor commutingto work and only 38% use public transportation.Those who take public transportationfor goingto work, are 86% among Class D, and 82% among Class E." (SocialWeather Station,Bulletin 97-22).

Lowerincome groups. A significantimpact of the project will be accessimprovements for the Marikina Valley (MARIPASarea), where the averagefamily income is lowerthan that in the centralparts of Metro Manila.Only one of the 17 M TUTIStraffic zonesin the MarikinaValley has an averagehousehold incomehigher than the Metro Manilaaverage of PhP13,968 per month, and ten of the 17 zoneshave an averagehousehold income of less than PhP10,000per month(US$340, or US$4,000per year). In central Metro Manilalower-income groups and squattersare not concentratedin any particulargeographic area but rather spread throughoutthe city. Therefore,project componentscould not be geographicallytargeted in these areas.

Pedestrians.Space for pedestrianswill make it possiblefor peopleto switch short-distancetrips to walking trips, potentiallyreducing motorized congestion, and allow safe accessto employmentand other facilities for the large percentageof the poor who walk.

3a. Global benefitsof the GEF supportedcomponent:

The directbenefits of the NonmotorizedTransport component will be less motorizedtraffic and congestion and the consequentdecrease in emissionsof greenhousegases and otherpollutants relative to the situation withoutthe project.This reductionis estimatedat more than 30,000tons of carbon dioxide equivalentper year (see Annex 13 for a detailedquantitative analysis of directbenefits). An indirectbenefit of no less value will be a demonstrationof the advantagesand viabilityof bicycle and nonmotorizedtransport so that similarfacilities might be adopted/developedelsewhere in MetroManila and in the Philippines.The benefitsof this form of transport(sustainability, lack of pollution,low cost, good altemativefor commuting)may thus be realized over a widerarea.

4. Institutionaland implementationarrangements: Implementationperiod. Five years, from September2001 to September2006.

Projectconcept development. The projecthas been developedand agreedby an interagencysteering

- 14 - committeeled and chairedby the MetropolitanManila Development Authority (MMDA), and endorsedby the Councilof Mayors'of Metro Manila,also underthe chairmanshipof the MMDA.The interagency steeringcommittee was co-chairedby the Departmentof PublicWorks and Highways(DPWH) which has been designatedas the overallexecuting agency for the project.

Projectimplementation. There are three implementingagencies for the project.Each will undertakeits own procurementand award of contracts,have its own financialmanagement, have its own special account,produce its own ProjectManagement Reports (PMRs), and monitor the impact of its own componentsagainst defined monitoring criteria. Each will procure its own consultantservices for constructionsupervision and for advisoryservices related to these components.The three implementing agenciesare:

* The Departmentof PublicWorks and Highways(DPWH)-Urban Roads ProjectOffice (URPO)is responsiblefor the MARIPASAccess Improvements components and for 10 of the Secondary Roads Program components. Establishedin 1973 as a specialprojects office,the URPO has extensiveproject implementationexperience. It also has a good understandingof World Bank-fundedprojects, having been involvedin suchBank-assisted projects as the Metro Manila Urban Transport StrategyPlanning Project (MMUSTRAP)and Metro ManilaUrban TransportationProject (MUTP) phase 1. The DPWIH-TrafficEngineering Center (TEC)is responsiblefor the traffic signalspackage to be appliedto most project components. * The MetropolitanManila Development Authority (MMDA) is responsiblefor the Traffic ManagementImprovements components, for five of the SecondaryRoads Programcomponents, and for the InstitutionBuilding component. A projectimplementation team headedby the Assistant GeneralManager for Operationswill managethe implementationof the componentsand coordinate the procurementof works,goods, and servicesto be undertakenby existingunits of the MMDA. * The City of Marikinais responsiblefor the NonmotorisedTransport component. The City is one of the 17 Local GovernmentUnits of the Metro Manila areaand an autonomousunit headed by a democraticallyelected mayor. The City has establisheda BikewaysProgram Office(BPO), which will be part of the City Administrator'sOffice. The BPO will be in chargeof coordinatingthe implementationand the monitoringof the program.In particular,it will coordinatewith the relevantdepartments of the City, with the NGOsand with the other stakeholders.The BPO will also be responsiblefor the monitoringand evaluationactivities. The evaluationactivities in particularwill focus on the projectas well as on the methodologyapplied to estimatethe benefits derived from the resultingsavings in greenhousegas emissions.A five-yearplan for the developmentof the bikewaysis also part of the responsibilitiesof the BPO.

ParticipatingLocal Govemment Units (LGUs)have createdlocal projectimplementation and monitoring teams underthe coordinationof the MMDAproject implementation team. TheseLGU teams have been active in detailedengineering and in mobilizingpublic participation in their constituencies.The teamswill be responsiblefor field supervisionand monitoringof the SecondaryRoads Program components.

Projectexecution. The DPWHwill assumethe role of overallexecuting agency for the project,through its UrbanRoads ProjectOffice (URPO). DPWH will monitor works and activitiesto be undertakenby the DPWH,MMDA and the City of Marikina(figure C. 1). The DPWH will report quarterlyto the steering committeeon the progressof works.A memorandumof agreementhas been signedbetween the DPWH, MMDA,and the City of Marikinaoutlining their variousresponsibilities.

- 15 - FigureC.1 VMM'URTRIPproject implementation structure

IDPWH SecretrI SteeringComoiittee MMDA (chairs), D (chair),DPWH(co-chair), DPWH- Urban DOTC,NEDA, DBM, RoadsProject Of fice NCTS,Marikina (UTRPO)l~~~~Executing ~oa Goenenlnt Agency

noTrafficEngineering Centert Proj O | i

t LocalGovetnmentUnits c l LGUsl

Monitoring.The interagencysteering committee will monitorand directthe project duringproject implementasion.The relevantMetro ManilaLGUs willbe invitedto join this advisorycommittee. The interagency steering cornmiitteeconsists of representatives from the MMDA (chair), the DPWH (co-chair), the Departmnentof Transportation and Conununications (DOTC), the National Economic and Development Authonty (NEDA),the Departmentof Budget and Management(DBM), the NabionalCenter for rransportaiionStudies (NCTS) and the City of Maikina. The comjlittee shall meet at least quarterlyto discussand resolve implementationissues and conceins.

.nvironment.The Enviroin ent ImpactAssessment Project Office (EeO) in the DPWH has undertaken the EnvironmentalAssessment and documentationfor the MMURTRIPand has secured the clearancesfor theproject from the Departwentof Enviroinnentand NaturalResources (DENR). The EIAPOwill be responsiblefor monitoringproject compliancewith the envirodnentalassessment for all project components.The unit has the capacityto undertakesuch work and has been strengthenedunder the First NationalRoads Impnflicted alw othereimProvject (NRIMP-1)supported by the WorldBank.

Project ofplementationplan. The DPWHand tiMDA jointly preparedthe project implementationplan of May 2001 (see projectfiles), whichwill be used to guidethe implementation.

D. Project Rationale 1. Project alternatives considered and reasons for rejection: To combatthe rapidlygrowing imbalance between transport capacity and demand,the Gove2ment of the Philippineshas embarkedon building severallight rail lines and expressways,mostly with fnancing from private developers. Although only three of these megaprojects are under imnplementation,from the outset they have conflicted physically with other irmprovementsundertaken by sector agencies, namely the Departmnentof Transportation and Cormmunicafions(DOTC), the Department of Public Works and Highways (DPWVH),and private sponsors. Specifically, the megaprojects have paid lirnited attention to:

*Transfers between Light Rail Transit (LRT) Lines I and 2 and Lines 2 and 3. *The need for LRT terminals as major transfer stations between LRT and bus, jeepney, and tricycle

- 16 - services. * Safe and efficientaccess and egress at LRT stations. * Safe and efficientaccess and egress at expresswayinterchange points. * Better generaltraffic flow alongmajor corridorsto improvethe efficiencyof bus,jeepney, and other traffic. The Metro ManilaUrban TransportIntegration Project (MMURTRIP) will addressthe aboveissues by developingmeasures to complementthe megaprojectsso as to ensuremaximum benefit and betterservice for the travelingpublic. An alternativeoption, financing further megaprojects, was rejectedbecause other donors,particularly the JapaneseBank for InternationalCooperation, are investingin such projects,and theircontinued sole applicationis not considereda long-termsolution without complementary measures. In addition,the almostimpossible task of implementingresettlement and land acquisitionin Metro Manila eliminatedcomponents that requiremajor construction.The use of an adaptableprogram lending (APL) facilitywas not consideredto offer any advantagesover a specificinvestment loan (SIL). la. AlternativeGEF supportedcomponents considered and reasonsfor rejection: In the frameworkof the MMURTRIP,other possiblecomponents that could have received GEF support would have been a systemof emissionscontrol for both privateand public transportationmodes in the entiremetropolitan area and a strategyto promoteand introducecleaner fuel and improvedengine technology.The Governmentof the Philippinesis alreadypromoting initiatives in emissionscontrol with the supportof a US$300million program loan from the AsiaDevelopment Bank. The secondmore technicallycomplex possible component of cleanerfuel, improvedengine technology, and emissionscontrol would have requiredan extensivepreparation period, thus affectingthe timetableof the whole MMURTRIP.Therefore it was decidedto focus on a simplercomponent, which is innovativein the Philippinesand in Asian and is potentiallymore rewarding,particularly in terms of changingthe approach to transportationpolicy and travelbehavior.

2. Major relatedprojects financedby the Bankand/or other development agencies (completed, ongoingand planned). = _ LatestSupervision SectorIssue Project (PSR)Ratings (Bank-financedproiects only) Implementation Development Bank-financed Progress (IP) Objective (DO) Theneed for managementsystems in First National Roads S S the DPWHfor effectivemanagement of Improvementand Management the nationalroads network Project(NRIMP-1): US$150 million Privateparticipation in infrastructure IFC/MIGA-ManilaNorth development TollwaysCorporation-:IFC loan of up to US$46 million.

- 17- IFC-PhilippinesInternational Air TerminalsCompany, Loan of up to $150 millionto construct,operate and maintain a new internationalpassenger terminal,Terminal III, at the Ninoy AquinoIntemational Airport (NAIA)in Manila. Otherdevelopment agencies Urbanair pollutionand the harmful Metro ManilaAir Quality effectsof mobile sourceair pollution ImprovementSector DevelopmentProgram: US$300 millionfrom the Asian DevelopmentBank Replacementof poorly functioning SMARTsignal project: traffic controlsystem AustralianAid Grant Lack of an urban transportstrategy MMUTIStransport study: JICA Imbalancebetween transportcapacity LRT Line 2 development: and demand JBIC Privateparticipation in infrastructure LRT Line 3 development: development Privatefinancing

IPIDORatings: HS (HighlySatisfactory), S (Satisfactory),U (Unsatisfactory),HU (Highly Unsatisfactory)

3. Lessonslearned and reflectedin the projectdesign: Duringthe past decade,the World Bankhas not providedany fundingsupport in the Metro Manilaurban transportsector. Projectsfunded by other agencieshave indicatedthe difficultiesof resettlementin Metro Manila.The componentsof this projecthave thereforesought to minimizethe need for resettlement,and severalprojects components which would have involvedresettlement have been deletedfrom the original project proposal.

The WorldBank has experiencewith urbantransport projects throughoutthe world. Severalof these projectshave demonstratedthe benefitsof traffic managementin improvingurban congestion, including high rates of return.An Urban TransportImprovement Project that startedin November 1998in Vietnam consistssolely of traffic managementinterventions.

3a. Lessonslearned and reflectedin the GEF-supportedcomponent design: The experienceof cities in Japan, the Netherlands,Germany, and severalother Europeanand Latin Americannations demonstratesthat modernizingurban transportation requires not total motorizationbut the appropriateintegration of walking,nonmotorized transport, and motorizedtransport. People in these citiesmake most of their trips on foot or by bicycle.Nonmotorized transport could also play an important role in the urbantransportation system of Metro Manilain the coming decades.However, the futureof nonmotorizedtransport in Manilaand in many Asian cities is threatenedby growingmotorization, loss of street spacefor safe nonmotorizedvehicle use, and changesin urban formprompted by motorizationwith majornegative effects on air pollution,energy use, urbansprawl, and the employmentand mobilityof low-incomepeople.

- 18- 4. Indications of borrower and recipient commitment and ownership: The MMU.RTRIP project was first proposed in 1997 by an interagency steering committee chaired by the Metropolitan Manila Development Authority (MMDA) and including the MMDA, DPWH, DOTC, DOF and NEDA. Subsequent workshops of this committee and consultations with Metro Manila Local Government Units developed a list of investments that now form the key components of the project. A feasibility study was completed with Policy and Human Resources Development (PHIRD)grant funding and an initial project proposal was presented to the Investment Coordination Committee (ICC) of the NEDA Board in July 1998. The ICC endorsed a detailed project proposal in August 1999, subject to the more direct involvement of the MMDA. Subsequent proposals for the involvement of the MMDA have been endorsed. Political commitment to the project is strong, particularly in support of the development and involvement of the MMDA. The ICC approved the project on March 28, 2000. The DPWH included the MMURTRIP project in its three-year rolling priority investment program for 1999-2001.

The Local Governments Units of Marikina, Rizal, and Pasig, in an association called MARIPAS, drew up a plan with the DPWH regional office to tackle their comrnon transport problems. The MMURTRIP project will implement the Marikina Bridge and Access Road, Marcos Highway, and Extension components of this plan.

4a. Indications of recipient commitment and ownership of the GEF supported component: The Nonmotorized Transport component of MMURTRIP was proposed by the Department of Public Works, Urban Roads Project Office and subsequently endorsed by the mayor of the City of Marikina in a request to the World Bank for GEF funding support for this incremental cost. The City of Marikina administration demonstrates exceptional comrnitment to nonmotorized transport and related environmental improvements. It has funded preliminary diagnostic work on the component and set up a counterpart team composed of staff of the various city offices (Settlement, Health, Engineering, Administration). This team will be responsible for liaison and coordination among the various adrministrativeunits and with the consultants and contractors.

To inform the public of the design process and implementation of the Nonmotorized Transport component of the project, focus group discussions have been held wNithstakeholders from the communities and businesses that will be affected by the component. The discussions have confirmed strong support for the use of bicycles and the need for appropriate facilities. The local newspaper has published an article on the so-called Marikina Bicycle Network. The information campaign that is envisaged as part of the component, as well as continued promotion and awareness building, will help maintain momentum.

5. Value added of Bank and Global support in this project: The value added of World Bank support has been to stTess the importance of multimodalism, traffic management, and supporting institutional arrangements at the metropolitan level, at a stage when the government had committed to several megaprojects and the transport sector regularly confronted poor traffic management, fragmented institutions, and physical conflicts between rail and highway projects and privately and publicly funded projects. The World Bank has supported urban transport projects in many large cities of developing countries. The Operations Evaluation Department (OED) of the World Bank, recommends in its Country Assistance Review that the World Bank remain active in the transport sector because of the sector's important strategic role, institutional weaknesses, and need for public investment, as well as the considerable experience of the World Bank in transport. The value of global support in this project lies in supporting an innovative incremental project component that otherwise would likely not find

- 19 - funding.

E. SummaryProject Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic(see Annex 4): * Costbenefit NPV=US$1063 million;ERR = 137 % (see Annex4) O Cost effectiveness O IncrementalCost O Other(specify) Methodology. The economicevaluation of the componentswas carried out using a standard cost-benefit analysiswith a 15 percent discountrate. In accordancewith standardpractice in evaluating transportprojects, the benefitsare derived from vehicleoperating cost (VOC) savings and from value of time (VOT) savings.The benefitsarising from accidentcost savingshave not been includedbecause of the difficultyof this type of calculation.However, improved safety will result from fewerpotential conflicts betweenvehicles and pedestrians,and will lead to more benefits.The costs of the project includeinitial constructioncosts, right-of-wayacquisition costs, and future maintenancecosts.

Benefits. The greatestbenefits of the projectare derivedfrom VOT savings, with relativelyfewer benefitsfrom VOC savings.The VOT savingsinclude the valuationof work traveltime, commutingtravel time, and leisuretravel time. Comnuting and leisuretime has been valued at 50 percent of work time. Assigninga value to leisuretravel time is in line with WorldBank practice in evaluatingurban transport projects.Local evidence indicates that the seeminglyhigh value of 50 percent (the usual averageis 25-30 percent of work time) is not unwarrantedin the Manila context.The value of work time ranges from PhP41 to 52 per hour (at 1997prices of US$1= 29.4 PhP, US$1.39-$1.76per hour) and is based on Metro ManilaUrban TransportationImprovement Study (MMUTIS) 1996household interview survey data.

Assumptions. The analysisassumes a 5-yearlife span for trafficmanagement improvements, mainly on Light Rail Transport (LRT)Line 2 and EDSA,and a 20-yearlife span for the more substantial components.The assumedtraffic growthrate of 2 percentwithin and along the EDSA corridorand 5 percent outsidethe EDSA corridorreflects the currentsituation, population growth differentials, and networkcapacity constraints.

Results. The results of the analysis(Table E. 1) show high returns.World Bank experiencewith similartraffic managementprojects in other countriesshows that suchprojects consistentlyproduce high returns becauseof their significantbenefits, such as improvementsgenerated with relativelysmall investments.

- 20 - Table E.1 Econonic evaluation summary Component Cost Cost Length EIRR EIRR NPV (15%) (milions (millions (km) (VOC) (VOC/ (PhP) of US$) of PhP) (VOC) (oT)

A. Traffic management improvement LRT Line 2 Corridor 5.5 275 12 64 142 980.8 EDSA-LRT Line 3 Corridor 5.7 285 18 18 155 1,025.8 Bicutan Interchange 0.6 30 n/a 37 192 489.6 Alabang Interchange 1.7 85 n/a 56 119 407.5 B. MARIPAS Access Improvements Marikina Bridge and Access Road 23.3 1165 n/a 4 19 808.8 Marcos Highway 19.7 985 4.6 22 162 5,575.6 Ortigas Avenue Extension 5.2 260 6.8 133 565 7,485.7 C. Secondary Roads Program 32.7 1634 69.1 52 133 36,400.8 Project total 94.4 4720 37 137 53,145 a EconomicInternal Rate of Return. * n/a=not applicable. Note:Se ction length is not so relevant in certain sections because works are concentrated at points. For example, the traffic managementimprovements are largely at LRT stations, and the Bicutan and Alabang Interchangeimprovements are concentratedat the interchange.EIRR was calculated excludingtaxes.

1-A. GEF supported component (see annex 14): A GEF Project Development Fund Block A Grant partly financed a pre-feasibility study to determine the economic viability of the project. The preliminary results of the study and the data collected were used as input for a simple incremental cost analysis (see annex 14). This analysis focuses on the cost of achieving the main global benefits (reduced greenhouse gas emissions) by implementing the Nonmotorised Transport component (the GHG case) compared with a baseline case in which the component is not implemented.

2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = % (see Annex 4) No financial evaluations of the components were carried out since this is not appropriate for the project.

Fiscal Impact: Both the Department of Public Works and Highways (DPWH:) and the Metropolitan Manila Development Authority (MMDA) are national government agencies. The DPWH was organized and established through Executive Order 124 (1987), and the MMDA through Republic Act 7924 of 1995. Both agencies receive project funds through the annual budget allocations. Funds are not on-lent to these agencies. The Department of Budget and Management (DBM) included provision for the MMURTRIP project in the DPWH budget allocation for the fiscal year 2001. The project is included in the 3-year rolling budget cycle of the agencies, as required by the DBM. The full project cost (that is, both the Government of the Philippines part and the Loan proceeds) is included in the Forward Obligational Authority (FOA) issued by the DBM (FOA No. E-01 -002-3 dated 10 May 2001) which indicates the amount that will be proposed by the President of the Republic to the Philippine Congress to cover the total Loan proceeds and peso counterpart required by MMURTRIP. About PhP 187.0 million (US$ 3.7 million) is assigned for DPWH

- 21 - for MMURTRIP for 2001. For 2002, PhP362.2 million (US$7.2 million) is proposed by DPWH and PhP 273.0 million (US$5.5 million) by MMDA for MMURTRIP (table E.2).

TableE.2 Projectbudget for 2001 and 2002 Agency 2001 2002 PhP million US$ million PhP million US$ million DPWH Total agency 34,700.0 694.0 46,000.0 852.0 MMURTRIP 187.0 3.70 362.2 7.2 MMDA Total agency 1,719.0 34.4 3,432.0 68.7 of which National gov't. subsidy 639.5 12.8 1,616.0 32.3 MMURTRIP - - 273.0 5.5 Notes: Budget for 2001 is the re-enacted2000 budget. Budget for 2002 to be confirmedwhen budget is approvedby Congressin April 2002. Exchangerate used is US$1=PhP50. Source:Department of Budget and Management.

3. Technical: A feasibility study on all project components was completed in July 1998 under Policy and Human Resources Development (PHRD) grant funding from the Japanese Government. The detailed engineering for half the project components is complete. The detailed engineering for the remaining project components will begin in October 2001. The project aims to demonstrate the cost-effectiveness of traffic management measures to reduce congestion. Little of this approach has been used to date in Metro Manila, where most investments have been on megaprojects. Traffic management is a recognized tool in urban transport for maximizing the efficiency of existing road space and is suitable where the scope for expanding road space is limited due to cost and environental concerns. A road safety audit is included for all project components.

4. Institutional:

4.1 Executing agencies: The Department of Public Works and Highways (DPWH) is the designated executing agency and will be responsible for reporting to the World Bank and to the project steering committee. The DPWH-Urban Roads Project Office (URPO) will implement about 77 percent, the MMDA will implement about 23 percent, and the City of Marikina will implement about 2 percent of the value of civil works. The DPWH- Traffic Engineering Centre (TEC) is responsible for the signals equipment package. The project is implemented by existing structures of the agencies. No special offices have been set up for the project. 4.2 Project management: The Director of the DPWH-URPO, under the Undersecretary for Operations of the DPWH, will be responsible for managing the DPWH components. The Assistant General Manager for Operations, under the General Manager of the MMDA, will be responsible for managing the MMDA components. Both the DPWH-URPO and the MMDA will be assisted by a project advisor (funded by the project) who will report to the director of the DPWH-URPO and of the MMDA. 4.3 Procurement issues: World Bank staff undertook a procurement assessment (see project file) of the DPWH-URPO, the MMDA

- 22 - and the City of Marikinaas the implementingagencies. The assessmentwas fully discussedand agreed with the agenciesin May 2000. The DPWH-URPOprepared a MicrosoftProject procurement implementationschedule (see projectfile) for the wholeproject. Overall risk assessment:Average Risk category(see annex 6).

4.4 Financialmanagement issues: World Bank staffundertook a financialmanagement assessment (see project file) of the DPWH-URPO,the MMDA,and the City of Marikinaas the implementingagencies. The assessmentwas fully discussedand agreedwith the agenciesin May 2000. Each implementingagency will have a specialaccount for the componentsfor which they are responsible.The overallfinancial management of the DPWH (and DPWH-URPO),the MMDA,and the City of Marikinasatisfies the World Bank minimumfinancial managementrequirements. Project Management Report (PMR)-based reporting will be implemented. However,PMR-based disbursement is targetedat a later stage in the project executionto coincidewith the improvementof financialmanagement for DPWHas a whole underthe assistanceof the NRIMP project. (see Annex6).

5. Environmental: Environmental Category: B (Partial Assessment) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. The project is rated category B since there is limited resettlement and land acquisition and since the project is not expected to have negative environmental impacts. Rather the project aims to:

* Improve the urban environment for pedestrians and public transport users. * Improve public transport service ancillary facilities, which would have a positive impact on the environment. * Include landscaping and greening programs. DPWH Order No 15, Series of 2000 requires Tree Planting along National Roads. This will be included in all project corridors.

All project components comply with all environmental clearance requirements of the Government of the Philippines and World Bank Operational Policy OP 4.01 on Environmental Assessment. The Environmental Impact Assessment Project Office (EIAPO) of the DPWH, in conjunction with an independent environmental consultant, has produced an Environmental Assessment report covering each project component. The Government of Philippines Department of Environment and Natural Resources (DENR) has cleared all project components by either issuing Certificates of NonCoverage or Environmental Compliance Certificates as applicable. The Environmental Assessment (see project file) was disclosed in the World Bank Infoshop, the World Bank Office in Manila Public Information Center, and publicly in-country by the DPWH and local newspapers on August 14, 2000. The World Bank requested supplemental information on air and noise impacts for two project components, namely the Marikina Bridge and Access Road component and the Marcos Highway component. The DPWH has undertaken work on this and submitted draft reports to the World Bank. The reports are however still incomplete and the Government has agreed to complete the reports to the satisfaction of the World Bank and to adopt the recommendationsas a conditionof Loan Effectiveness.

With regard to urban air quality and transport, the Metro Manila Air Quality Improvement Sector Development Program (refer to the Asian Development Bank Project Report of November 1998, RRP: PI 30480) is ongoing. Leaded gasoline was phased out in Metro Manila on April 1, 2000 in line with the Clean Air Act and as part of the ongoing work on the air quality project. The Air Quality project also promotes the use of cleaner fuels (particularly important for the jeepneys, which run on diesel and are a

- 23 - major cause of particulatepollution) and a vehicle inspectionand anti-smoke-belchingprogram. 5.2 What are the main featuresof the EMP and are they adequate? All constructioncontracts for the projectcomponents have appropriateclauses dealing with the short-term environmentalimpacts during construction.The supervisionconsultants are responsiblefor ensuringthat the provisionsof the DPWH with respectto environmentare enforcedon site.The supervisiondocuments includeappropriate clauses, and the supervisionconsultant includes a social/environmentspecialist in the team.

5.3 For CategoryA and B projects,timeline and statusof EA: Date of receipt of final draft: July 31, 2000

5.4 How have stakeholdersbeen consultedat the stage of (a) environmentalscreening and (b) draft EA reporton the environmentalimpacts and proposedenvironment management plan? Describemechanisms of consultationthat were used and whichgroups were consulted? The EnvironmentalAssessment and the two ResettlementAction Plans were announcedin local newspaperson August 14, 2000. The institutionalframework for the project has ensuredthe full involvementof Local GovemmentUnits in the developmentof the project.The DPW" developeda plan for stakeholderconsultation, the OperationalFramework for Public Participationand Consultation,DPWH, EIAPO,April 2001, for the MMURTRIPproject.

5.5 What mechanismshave been establishedto monitorand evaluatethe impactof the projecton the environment?Do the indicatorsreflect the objectivesand results of the EMP? The EnvironmentalImpact Assessment Project Office (EIAPO) in the DPWHis mandatedto monitorthe environmentalimpacts of the project.In accordancewith DPWHDepartment Order (DO) 220 of November9, 1999,the EIAPOis mandatedas the environmentalservice arm of the DPWHto provide environmentaland socialassessment support and to implementand overseethe EnvironmentalManagement Plan (EMP) for projects.The supervisionconsultants are also requiredto report on compliancewith the EMP. 6. Social: 6.1 Summarizekey social issuesrelevant to the projectobjectives, and specifythe project'ssocial developmentoutcomes. Resettlementand LandAcquisition. All projectcomponents are identifiedand have had feasibilitystudies completed.Only two projectcomponents involve resettlement and land acquisition.A ResettlementAction Plan (RAP) for each (see project file) was disclosedin the World BankInfoshop, World Bank Officein ManilaPublic Information Center, and publiclyin-country by the DPWHand in local newspaperson August 14, 2000. The finalversions have been disclosedin the InfoShop.The project components involvingresettlement and land acquisitionare:

* The MarikinaBridge and AccessRoad component.The resettlementand land acquisitionis documentedin the ResettlementAction Plan (finalversion April 2001) and currentlythe resettlementof 56 ProjectAffected Families is beingimplemented and will be completedprior to commencementof workson this componentunder the project. * The Don MarianoMarcos AvenueExtension Secondary Roads component.This is currentlya "missinglink" in a road. This involvesonly land acquisitionof one piece of land from one landownerof approximately500 m X 38 m. No resettlementis involvedas no parties live on the land. In accordancewith the ResettlementAction Plan (final versionOctober 2000) the land

- 24 - acquisitionwill be completedprior to commencementof works on this component.The component cost is PhP40 million (aboutUS$1 million) and land acquisitionabout PhP 230 million (US$4.6 million). The ResettlementAction Plans comply with WorldBank OperationalDirective 4.30 on Involuntary Resettlement.The RAPs have been preparedin accordancewith the comprehensiveDPWH Policy Frameworkfor Land Acquisition,Resettlement and Rehabilitationfor MMURTRIP,April 2001, satisfactoryto the WorldBank and endorsedby DPWHprior to negotiations.The final versionof the "ResettlementPolicy" has been disclosedin the WorldBank InfoShop. Any additionalresettlement and land acquisitionissues encountered during implementation of the MMURTRIPproject will be dealt with in accordancewith the abovepolicy framework.

6.2 ParticipatoryApproach: How are key stakeholdersparticipating in the project? The developmentof the MARIPASAccess Improvements component has been based on consultations among the LocalGovernment Units of Marikina,Rizal, and Pasig. Theseunits have formed an association calledMARIPAS and with the DPWHregional office have drawnup a plan to tackle their variouscommon transportproblems. Parts of this plan will be implementedunder the project. The mayorsand officialsof the Local GovernmentUnits (LGUs)are key stakeholdersin the project.The MMDAhas played a key role in ensuringtheir participation.Each LGU has set up a counterpartteam for the project.The EnvironmentalAssessment documents the consultationmeetings with local government officials.The LGUs have participatedactively in the detaileddesigns of the project.Their common prioritiesare the installationof signage,street lightingalong the LRT corridors,and use of theirrespective city motifs in the design and beautificationof sidewalksand medians.The LGUs have consultedaffected commercialand other establishmentson the designsto ensure their acceptancebefore construction. The DPWH submittedthe EnvironmentalAssessment and the two ResettlementAction Plans for public review on August 14, 2000. The availabilityof the documentswas announcedin at least one local newspaperand one nationalnewspaper. The DPWHrequires at least two publicmeetings to invite commentsand discussionfrom stakeholdersand affectedindividuals. The DPWH developeda plan for stakeholderconsultation, the OperationalFramework for PublicParticipation and Consultation,DPWI-, EIAPO,April 2001, for the MMURTRIPproject.

6.3 How doesthe project involveconsultations or collaborationwith NGOs or other civil society organizations? Each LocalGovemment Unit is responsiblefor consultationwith the affectedmembers of the public and beneficiariesof the MMURTRIPproject with the assistanceof MMDAand EIAPO.The mayor of each LGU is democraticallyelected in a 3-yearelection cycle. Focus group discussionsand user surveyswere conductedfor the NonmotorizedTransport component of the MMURTRIPproject. These are documented separatelyin the FeasibilityStudy for the MarikinaBikeways Network. For the phase I projectcomponents, the LGUs are consultingregularly with civil society.Each Local GovernmentUnit has a defined systemof consultationand informationdissemination. The consultative systemof QuezonCity, documentedin the EnvironmentalAssessment, is an example.The planningofficer of QuezonCity has developedclear guidelinesfor consultationsincluding the following: * A communityrelations office to handleroutine inquiries, with a staff memberassigned as a full-timeinformation officer to answerinquiries. Every Monday the Mayor's officesponsors a "People's Hour," a kind of opentownhall meeting where the public can raise issues. * Informationprovided by the planningoffice routinely at no cost, or by a lendingservice that

- 25 - releases documents temporarily so that users can make copies. The planning office helps users find documents from other agencies that are not in their records. Some maps are also available on request.

The project will follow the existing consultation systern It will expand this system when necessary beyond simple information dissemination to soliciting public feedback to improve the design process. 6.4 What institutional arrangements have been H .;,ided to ensure the project achieves its social development outcomes?

The institutional arrangement (see Figure C. 1t ensures the direct involvement of the MMDA local government units in the project, thus serving ,3sa bridge between the national government agency, the DPWH, and the local level. This arrangemenit,strongly promoted by the National Economic and Development Authority (NEDA), has already shown benefits during project preparation and will ensure that the project achieves its social development outcomes by incorporating local needs. 6.5 How will the project monitor perfonnance in terms of social development outcomes? The Environmental Impact Assessment Project Office in the DPWH will monitor the social development outcomes of the project.

7. SafeguardPolicies: 7.1 Do anYof the following safeguard policiesapply to the project? Policy ApplicXbility Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) * Yes 0 No Natural habitats (OP 4.04, BP 4.04, GP 4.04) 0 Yes 0 No Forestry (OP 4.36, GP 4.36) 0 Yes * No Pest Management (OP 4.09) 0 Yes 0 No Cultural Property (OPN 11.03) 0 Yes 0 No Indigenous Peoples (OD 4.20) 0 Yes 0 No InvoluntaryResettlement (OD 4.30) _ * Yes 0 No Safety of Dams (OP 4.37, BP 4.37) 0 Yes * No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) 0 Yes 0 No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60) 0 Yes * No

7.2 Describe provisions made by the project to enstire compliance with applicable safeguard policies. The Environmental Impact Assessment Project Office in the DPWH will monitor compliance of the project with the Environmental Assessment Operational Policy and the Involuntary Resettlement Operational Directive.

F. Sustainabilityand Risks 1. Sustainability: The project aims to demonstrate the effectiveness of traffic management measures, however, the sustainability of these measures will depend on the willingness and effectiveness of the Metropolitan Manila Development Authority (MMDA), Local Government Units (LGUs), and related agencies in enforcing traffic management measures. The effectiveness of the MMDA during and after project implementation is a critical risk for the sustainability of the project. To mitigate this risk, the MMDA's participation was ensured throughout the project preparation. The risk is weighed against the considerable benefits derived from the involvement of MMDA.

- 26 - 2. CriticalRisks (reflectingthe failureof criticalassumptions found in the fourth column of Annex 1): Risk Risk Rating Risk MitigationMeasure FromOutputs to Objective Risk that the MMDAand related M The MMDA'sparticipation was ensured responsibleagencies and Local throughoutproject preparation.The MMDAis a GovernmentUnits of Metro Manilado directparticipant in projectimplementation and not implementcomplementary traffic thus a key stakeholderthat will have an inter,-sL enforcementmeasures such as controlof in ensuringthe project impact and its frontage activities,adherence to traffic sustainability. rules, proposedtraffic circulation strategies,and generaltraffic management. Risk that the LGUs of Metro Manilado M The MMDAis a directimplementing agency of not continueto be consultedregularly, the project. SinceMMDA is a "governingbody' involvedin projectimplementation, and for the 17 LGUs of the Metro Manilaarea, this empoweredto providetheir directinvolvement of MMDAwill supportthe input/feedbackfor specificproject institutionallink to the LocalGovernment Units. actionsthrough the coordination mechanisms. Riskthat the City of Marikinadoes not M The City of Marikinais an implementingagency continueits commitmentto sociallyand in the project and a directrecipient of a GEF environmentallysustainable transport Grantfor the project. A BikewaysProject Office policiesand planning. is located in the City.

FromComponents to Outputs Riskof delay on somekey componentsof M Institution-buildingsupport will be providedto the projectunder MMDAsince they have the MMDA.Components of the currentAir no experienceimplementing a project Quality Projectare implementedby the MMDA, underWorld Bank fundingwith its related and institution-buildingactivities under that requirements. projectwill aid the MMURTRIPproject. Risk of procurementdelays under both M The DPWH is revisingits procurementsystems the Departmentof PublicWorks and (underNRIMP) and the Governmentsysterr, as Highways(DPWH) and the MMDA. a whole will streamlineprocurement. Changes includeusing post-qualificationinstead of prequalification,which shouldspeed processing.The World Bank Manilaoffice providesdirect assistanceand training.A detailedprocurement schedule will be developed. Timely availabilityof counterpartfunds. M The countryteam reviewsthe Government budget situation.Counterpart funding is part of the multi-yearprogram discussions of the DPWH and the Governmentin their annual review and consultations.

OverallRisk Rating M RiskRating - H (HighRisk), S (SubstantialRisk), M (ModestRisk), N(Negligible or LowRisk)

- 27 - 3. Possible ControversialAspects: While no controversialaspects are identifiedfor the project specificallyit is noted that corruptionis a concern in the Philippines.The WorldBank report "CombatingCorruption in the Philippines"(May 3, 2000) indicatesthat of the total corruptioncomplaints received by the Ombudsman'sOffice from 1993 to 1998, 27 percent (1,762 complaints)were aboutthe Departmentof Public Works and Highways (Ombudsman'Office 2000). Procurementin the DPWH is typicallydone for large and complexworks, and difficultiesdo arise. Under the NRIMPproject the departmentis making a major effort to developand streamlinetransparent systems of procurementand financialmanagement, which will be expanded nationwide.Under the MMURTRIPproject all contractsare subjectto prior review by the World Bank. Althoughthe WorldBank report mentionedabove doesnot addressthe MMDA,all contractsin the MMDAwill also be subjectto suchprior review. The institutionalframework of the MMURTRIPproject (a steeringcommittee and the involvementof the MMDA and localgovernment units) will also contribute to transparency.

G. Main Conditions 1. EffectivenessCondition 1. The standardeffectiveness condition of the legal opinionfrom the PhilippinesDepartment of Justice applies. The followingare specifiedas additionalmatters, to be includedin the legal opinionor optionsto be furnishedto the WorldBank:

(a) that the ProjectAgreement has been duly authorizedor ratifiedby MetropolitanManila DevelopmentAuthority (MMDA), is legallybinding upon MMDAin accordancewith its terms. (b) that the SubsidiaryAgreement has been duly authorizedor ratified by the Borrowerand MMDA, and is legally bindingupon MMDA and the Borrowerin accordancewith its terms. (c) that the ResettlementPolicy and ResettlementAction Plans for MarikinaBridge and Access Road componentand the ResettlementAction Plan for Don MarianoMarcos Avenue Extension componentare legallybinding upon DPWHand MMDA in accordancewith its terms.

2. that the SubsidiaryAgreement has been executedon behalf of the Borrowerand MMDA.

3. that the GEF GrantAgreement has been executedand delivered.

4. that the SupplementalEnvironmental Assessment and Mitigationand MonitoringPlans for each the MarikinaBridge and AccessRoad componentand the Marcos Highwaycomponent has been adopted by the DPWH (see paragraph5.1).

2. Other [classifyaccording to covenanttypes used in the LegalAgreements.] In addtion to the standardlegal covenantson financialmanagement, audit, reportingand performance indicatorsthe followingare project specificlegal covenants:

1. (a) The Borrowershall maintain the SteeringCommittee to monitor the progressof the Project and to coordinateits components.

(b) The Borrowershall maintain the ProjectManagement Office in each of DPWHand MMDAheaded by a ProjectDirector with qualificationsand experiencesatisfactory to the World

- 28 - Bank, assistedby such other competentstaff in adequatenumbers having suchfunctions, responsibilities,funds and other facilitiesas shallbe requiredto enable the Project Management Officeto undertakethe overallsupervision and monitoringof the Project.

2. (a) The Borrowerwill implement the Projectin accordancewith the ProjectImplementation Plan; and

(b) The Borrowerwill onlyamend the ProjectImplementation Plan in agreementwith the World Bank.

H. Readinessfor Implementation 1 1. a) The engineeringdesign documents for the first year'sactivities are completeand ready for the start of project implementation. El 1. b) Not applicable.

1 2. The procurementdocuments for the first year's activitiesare completeand ready for the start of projectimplementation. O 3. The ProjectImplementation Plan has been appraisedand foundto be realistic and of satisfactory quality. El 4. The followingitems are lackingand are discussedunder loan conditions(Section G):

!. Compliancewith Bank Policies Z 1. This project complieswith all applicableBank policies. El 2. The followingexceptions to Bankpolicies are recommendedfor approval. The projectcomplies with all other applicableBank policies.

Sally L. Bumingham Jitendra N. Bajpai Vinay K. Bhargava TeamLeader SectorDirector CountryDirector Senior Transport Engineer

- 29 - Annex1: ProjectDesign Summary PHILIPPINES:Metro Manila Urban Transport Integration Project

Hirach o Ojetves niator Moni0toing&; Evauaion94;l Critical supio4ns Sector-relatedCAS Goal: SectorIndicators: Sector/country reports: (fromGoal to BankMission) CAS Objective: Poverty Maintenanceof favorable reduction:"Develop macroeconomicenvironment. infrastructure"and"Promote sustainableurban development."

Sector-relatedCAS Goal: * Improved transit * Traffic and public Improve deterioratingurban capacityand modal transport studies and transport situation in Metro integrationin Metro surveysin Metro Manila. Manila. Manila. GEFOperational Program:

ProjectDevelopment Outcome/ Impact Projectreports: (fromObjective to Goal) Objective: Indicators: To improve the operational * Reducedtravel time * MMUTIS initial and Effective coordination efficiencyand safety of the experiencedby public monitoring data on betweenthe DPWH, local transport system of Metro transportusers on the mobility pattems, travel govemmentunits, the DOTC, Manila, with better project corridors. time/costs,and modal and the MMDA. opportunitiesto use public shares in Metro Manila transport and nonmotorized and other specific transport, the dominant surveys. transport modes of low-incomeresidents.

* Sustained current * Public transport proportionof public operatorsand transportuse on the associationrecords, project corridors. data, and annual reports

* Improvedsatisfaction of * Public opinion and public transportusers on transportusage surveys the project corridors. to be conductedat project inceptionand one year after works completion on project corridors.Responsible agency:MMDA.

- 30 - Key Performance Mierarchyof Objectives Indicators Monitoring& Evaluation Critical Assumptions Outputfrom each OutputIndicators: Projectreports: (fromOutputs to Objective) Component: A. Traffic Management * Improvedlevel of * Traveltime surveys on The MMDA's participation Improvements serviceof the corridors project corridorsat was ensuredthroughout Complementarytraffic measuredby average project inception and project preparation.The enforcementmeasures such as travel speed of all one year after works MMDA is a direct participant control of frontageactivities through-vehiclesalong completion.Responsible in project implementationand and adherence to traffic rules, the corridors. agency:MMDA. thus a key stakeholderthat proposed traffic circulation will have an interest in strategies, and general traffic * Improvedlevel of * Modal share surveys on ensuringthe project impact managementimplemented by servicefor bus and project corridors at and its sustainability. the MMDA and related jeepneys along the project inceptionand responsible agenciesand corridorsmeasured in one year after works LGUs have improvedthe terms of productive completion.Responsible Local GovernmentUnits of effectivenessof the corridors capacityaverage. agency:MMDA. Metro Manila continueto be and their elements, including consultedregularly, involved intersections,public transport * Improvedlevel of in project implementation, interchanges,and passenger serviceof walkwaysand * Specificsurveys at and empoweredto provide and pedestrianfacilities. public transport queuing project inception and their input/feedback for areas. one year after works specificproject actions completion.Responsible through the coordination agency:MMDA with mechanisms. DPWH-TEC.

B. MARIPASAccess * Decreasedaverage Improvementshave travel time and cost improvedthe accessibilityof (across modes)for trips the Marikina Valley. with Origin-Destination in the Marikina Valley.

C. Efficientorganization of * Increasedlevel of the SecondaryRoads in a serviceof the secondary hierarchyhas improved roads measuredby traffic dispersal and increased averagetravel speed of capacity. all through-vehicles.

* Increasedcapacity at intersectionsbetween secondaryroads and project corridors.

- 31 - D. Developmentof * Increasednonmotorized * Travel surveys and The City of Marikinaremains NonmotorizedTransport transport mode share for trafficcounts for the committedto sociallyand Facilities has improvedpublic trips within Marikina City of Marikinato be environmentallysustainable transport accessibilityand and nonmotorized conductedat project transport policies and mobility of low income users. transport-public inceptionand one year planning. transport combined after works completion. mode share for trips Responsibleagency: originating in Marikina. City of Marikina with the assistanceof MMDA.

E. IncreasedInstitutional * Effective coordination * Regular travel and Capacityhas improved mechanismin place traffic surveys metropolitangovernance and betweenthe key (includingusers' strengthenedlocal agencies and Local satisfactionindicators) governmentfunctions. GovernmentUnits. along major corridors and at intersections and * Effectivetraffic public transport managementand facilitiesby the relevant enforcementmeasures agencies. planned and designedby the relevantagencies.

- 32 - KeyPeel ormance Hierachy of Objecves Indicators Monitoring& Evaluation Critical Assumptions ProjectComponents / Inputs:(budget for each Projectreports: (fromComponents to Sub-components: component) Outputs)

A. Traffic Management US$13.5million * Supervisionreports Institution-buildingsupport is Improvements from supervision providedto the MMDA, consultants which demonstratessufficient implementationcapacity despite lack of experience with World Bank projects.

B. MARIPASAccess US$48.2million * QuarterlyProject Revisionof procurement Improvements ManagementReports systems,under way in the (PMRs) from DPWH, and the Government implementing system as a whole, streamline agencies. procurement. C. SecondaryRoads Program US$32.7million

D. NonmotorizedTransport US$1.5million * Project audit reports Timely availabilityof counterpartfunds. E. InstitutionBuilding US$1.1million

TOTAL US$97.0million

- 33 - Annex 2: DetailedProject Description PHILIPPINES:Metro ManilaUrban TransportIntegration Project

ByComponent:

ProjectComponent 1 - US$13.50million PhP675rnillion including all physicaland price contingencies.

A. TrafficManagement Improvements.

Implementationarrangements. The MetropolitanManila Development Authority (MMDA) is the implementingagency for these TrafficManagement Improvements components. MMDA will undertake their own procurementand award of contracts,have their own financialmanagement, have theirown special account,produce their own ProjectManagement Reports (PMRs), and monitor impact of these componentsagainst defined monitoringcriteria. MMDA will procuretheir own consultantservices for constructionsupervision and for advisoryservices related to these components.The procurementmethods are indicatedin Annex 6.

Aspects to be addressed. The projectcomponents (Table 2.1) includepublic transportimprovement measurescomprising integration between modes, improvement of interchangefacilities, and measuresfor introducingpublic transportpriority; traffic management(both at and between intersections);measures for controllinginappropriate frontage activity and measuresfor improvingroad safetyfor pedestriansby providingsidewalks and other facilities;measures for bicyclesand pedicabs;and safe bicycle parking at stations.Landscaping and greeningwill be includedon all project components.

Table 2.1 Componentsof TrafficManagement Improvements

LRT Line 2 corridor-CM City of Manila, San MMDA 12 5.5 275 Recto to Juan, QuezonCity, (Santolan) City of Marikina,and Pasig City EDSA LRT Line 3 corridor- QuezonCity, MMDA 18 5.7 285 North Avenueto Roxas ,Makati, Boulevard and City Southerncorridor-Bicutan Paranaque MMDA n/a 0.6 30 interchangeimprovements Southerncorridor-Alabang MMDA n/a 1.7 85 interchangeimprovements Total 13.5 675 Note "Agency" indicates the agencyimplementing the civil works.

* LRTLine 2 corridor- CMRecto-MarcosBridge (Santolan).This componentaims to integrateat street level the currentinvestments on the Light Rail Transit(LRT) Line 2 under JapaneseBank for InternationalCooperation (JBIC) financing.In the environsof ,the projectwill improvepedestrian access between the stationand surroundingattractions, including bus terminals,

- 34- QuiapoChurch and the nearby LRT Line 2 corridor;improve roads used for bus and jeepney circulationin the area; and improveinterchange arrangements between LRT Line 2 and passing jeepneyroutes. In the environsof LegardaStation, the project will improvepedestrian routes betweenthe station and surroundingland uses (predominantlyuniversities); enhancements include possibleclosure of the road leadingto the stationto createa pedestrianizedstation approach. From Nagtahanto Araneta,the projectwill providepedestrian crossings and sidewalkswith an emphasis on the Nagtahanintersection, where existingpedestrian facilities are inadequate.The project will improvethe Old intersection(the confluenceof two busy jeepney routes and the site of the Stop and Shopjeepney terminal)and the Araneta intersection.From Araneta to Cubao, Cubao to ,and Katipunanto Marcos Bridge,the project will improvepedestrian facilities, institutetrafflc managementmeasures at intersections,and improve accessto the LRT stations.

* EDSA LRT Line 3 corridor- North Avenue to .This componentaims to integrate at street levels the LRT 3 system,which startedoperating in December1999. This systemwas implementedunder private financing arrangements. The objectiveof this project componentis to reduce delaysto public transportby generallyimproving intersection operations and bus stopping arrangements.

* Southerncorridor -Bicutan interchangeimprovements. This interchangeon the South Super Highwaycurrently functions as major public transportinterchange between bus serviceson the expresswayand jeepney feederservices on the adjacentservice roads and other major access routes.The project proposalscenter on traffic managementimprovements to facilitatethe modal transferand improvesidewalk provision and crossingsfor pedestriansinterchanging at these points.

* Southern corridor- Alabang interchangeimprovements. This interchangeon the South Super Highwaycurrently functions as majorpublic transportinterchange between bus serviceson the expresswayand jeepneyfeeder serviceson the adjacentservice roads and othermajor access routes. The projectproposals center on traffic managementimprovements to facilitatethe modal transferand improve sidewalkprovision and crossingsfor pedestriansinterchanging at these points.

ProjectComponent 2 - US$48.20million PhP2,410million, including all physicaland price contingencies.

B. MARIPASAccess Improvements.

Implementationarrangements. The Departmentof Public Worksand Highways- Urban Roads Project Office(URPO) is the implementingagency for these MARIPASAccess Improvements. DPWH-URPO will undertaketheir own procurementand award of contracts,have their own financialmanagement, have their own specialaccount, produce their own ProjectManagement Reports (PMRs), and monitor impact of these componentsagainst defined monitoringcriteria. DPWH-URPO will procure their own consultantservices for constructionsupervision and for advisoryservices related to these components.The procurement methodsare indicatedin Annex 6.

Aspects to be addressed.The MARIPAS-MarikinaValley area is characterizedby large commuterflows, as local residentsseek work in centraland westernparts of Metro Manila. The Local GovernmentUnits (MarikinaCity, Rizalprovince, and Pasig City)jointly produceda plan to tackle their variouscommon

- 35 - transportproblems. The componentsemerging from the plan (Table2.2) will be addressedunder the project.Landscaping and greeningwill be includedon all projectcomponents in line with DPWHOrder No 15, Series of 2000 which requiresTree Plantingalong NationalRoads.

Table 2.2 Componentsof MARIPASAccess Improvements

Component ~~~OICaGovernment Aey km cost Cs

MarikinaBridge and Marikina, City DPWH n.a 23.3 1165 AccessRoad (linkingC5 to URPO Marcos Highway) Marcos Highway Marikina,Pasig, DPWH 4.6 19.7 985 (Marcos Bridge/Santolanto , URPO Masinag) OrtigasAvenue Extension Pasig, Cainta, Taytay DPWH 6.8 5.2 260 (C5-Manggahan-Tikling) URPO Total 48.2 2410 Note. "Agency" indicates the agency implementingthe civil works. n.a.= not applicable.

9 Marikina Bridge and Access Road component (linking C5 to Marcos Highway). This link is an alternativeroute betweenthe C-5 circumferentialroute and the Marcos Highway.The alignment runs from the E. RodriquezAvenue/Boni Serrano intersection to Marcos Highwayin the vicinityof the Marcos Bridge/SantolanLRT Line 2 station.The schemewill relieve the Marcos Highway/AuroraBoulevard corridor and provide an alternativeroute for C-5, thus improving access to the east of Metro Manila.LRT Line 2 is being constructedas far as the terminal/depotat Santolan(adjacent to the MarcosHighway); the projectproposes to ensure thatjeepneys can functionas feeder servicesto this station.Four hundredjeepneys an hour pass the site in each direction.Once the stationis established,at least 100jeepneys an hour shouldbe able to turn around at the station,thus acting as a feeder serviceto the LRT rather than going all the way downtown.The project thereforeincludes jeepney dropoff and turnaroundfacilities.

- Marcos Highway (Marcos Bridge/Santolan to Masinag). This component begins adjacent to the final stationof the LRT Line 2, Santolanstation and extendsto SumulongHighway at Masinag. The proposalis to establishan at-gradetraffic managementscheme which, togetherwith priority measuresfor public transport,will act as an efficientconduit for traffic to and from Metro Manila. It will also assist public transportvehicles to accessthe LRT terminal,thus providinggreater integrationbetween road-based and rail-basedpublic transportservices. It is intendedthat the roadwaybe widenedto 4 lanes in each direction,with additionallanes as requiredat intersection approaches.The designs includea cross-sectionto allowfor sidewalks,bicycle lanes, covered drains,tree lining and a 4-meter-widemedian for futureeastward expansion of the LRT 2 line. This road extensionis one of the most criticalin the whole MarikinaValley and provides one of the few accessroads to the easternareas of MetroManila. The designs includeautomated and coordinatedtraffic controlsystems, and intersectionand corridormanagement measures including adequatesidewalks, pedestrian crossings, and public transportpriority. The results of TRANSYT runs indicatethat as significantincrease in overalltraffic speed couldbe achievedby a properly managedcoordinated traffic signalsystem. Existingsystem AM peak 8.5 kilometersper hour and with managementimprovements 16 kilometersper hour.

- 36 - * Ortigas Avenue Extension (CS-Manggahan-Tikling). This road section is one of the most critical in the wholeMarikina Valley and provides one of the few accessroads to the easternareas of Metro Manila. Proposedimprovements include automated and coordinatedtraffic controlsystems, and intersectionand corridormanagement measures including adequate sidewalks, pedestrian crossings,lighting, and public transportpriority.

Project Component3 - US$ 32.70 million PhP1,635million, includingall physicaland price contingencies.

C. SecondaryRoads Progranm

Implementation arrangements. The Department of Public Works and Highways - Urban Roads Project Office(URPO) is the implementingagency for ten of the SecondaryRoads Programcomponents as given in Table2.3 below. DPWH-URPOwill undertaketheir own procurementand award of contracts,have their own financialmanagement, have theirown specialaccount, produce their own ProjectManagement Reports(PMRs), and monitor impactof these componentsagainst defined monitoring criteria. DPWH-URPOwill procuretheir own consultantservices for constructionsupervision and for advisory servicesrelated to these components.The procurementmethods are indicatedin Annex 6.

The MetropolitanManila Development Authority (MMDA) is the implementingagency for five of the SecondaryRoads Programcomponents as given in Table2.3 below. MMDAwill undertaketheir own procurementand award of contracts,have theirown financialmanagement, have their own specialaccount, produce theirown ProjectManagement Reports (PMRs), and monitor impact of these componentsagainst definedmonitoring criteria. MMDAwill procure theirown consultantservices for constructionsupervision and for advisoryservices related to these components.The procurementmethods are indicatedin Annex6.

Aspects to be addressed. The proposedinterventions of this program(Table 2.3) component,on about 70 km of secondaryroads, includea wide rangeof actionsfor comprehensivecorridor treatment to allow secondaryroads to fulfilltheir functionin the road hierarchy.These actionsinclude pavement rehabilitation,drainage and sidewalkimprovements, traffic management measures, and constructionof missinglinks. While proposalsfor major wideningand major right-of-wayacquisition issues have been removedfrom the project,the projectincludes the remainingset withoutmajor wideningbut with missing links, on the basis of the priority drawnup by the DPWH.One road link, the Don MarianoMarcos Avenue Extension,involves acquisition of a strip of land 18 metersby 500 metersfrom a commerciallandowner. This will completea missinglink betweenmajor roads. Landscapingand greeningwill be includedon all project components.

Table 2.3 Componentsof the SecondaryRoads Program

Component LocalGovernment Agency km cost Cost Unitsinvolved (US M) (Pmp)) D. Romualdez City of Manila DPWH 1.44 0.2 10 Legarda City of Manila DPWH 0.97 0.2 10 QuezonBoulevard City of Manila DPWH 1.28 0.2 10 PasongTamo Makati MMDA 2.42 2.9 145 Pedro Gil/NewPanaderos City of Manila DPWH 5.17 1.9 95

- 37 - Tayurnan City of Manila DPWH 1.37 0.9 45 M. de la Fuente (Trabajo) City of Manila DPWH 2.14 0.1 5.0 JacoboFajardo City of Manila DPWH 1.00 0.1 5.0 South Super Highway Pasay, Paranaque, DPWH 14.3 7.3 365 West/EastService Road Muntinlupa 12.9 QuirinoHighway QuezonCity DPWH 11.8 6.8 340 10 th Avenue Caloocan DPWH 2.83 1.1 55 Don MarianoMarcos Ave Ext QuezonCity MMDA 1.00 6.9 345 AntonioAmaiz Avenue Makati MMDA 2.01 1.0 50 Sen. Gil PuyatAvenue Makati MMDA 5.43 1.6 80 Banaue Avenue QuezonCity MMDA 3.00 1.5 75 Total 69.1 32.7 1,635 Note "Agency"indicates the agency imnplementing thecivil works

ProjectComponent 4 - US$1.50million PhP 75 million,including all physicaland price contingencies.

D. NonmotorisedTransport (NMT) component.

The City of Marikinawill implementthis componentand the GlobalEnvironment Facility (GEF)will provide fundingsupport. The City of Marikinawill undertaketheir own procurementand award of contracts,have their own financialmanagement, have their own special account,produce their own Project ManagementReports (PMRs), and monitorimpact of this componentagainst defined monitoring criteria.

Background.The DPWH proposeda pilot componentfor a nonmotorizedpedestrian and bicyclepath in MarikinaValley to connectcommunities with employmentcenters and LRT stations. This proposal stemmedfrom the work of the DPWH-UrbanRoads ProjectOffice (URPO) with the NGO Green Forum. Statisticsshow that 20 percentof total trips are walkingtrips in the MARIPASarea, where the component is proposed.People in this area make more trips on foot and by tricyclethan on averagethroughout Metro Manila. Twenty-twopercent of all trips are made on foot and 30 percentby tricycle, comparedwith 20 percenton foot and 14 percentby tricyclein Metro Manila, where tricyclesare banned on many major cornidors. The City of Marikina,one of the 17 municipalitiesof Metro Manila,is a medium-sizecity of about 360,000people situatedat the eastem border of the Metro Manilaadministrative area. Metro Manilahas a populationof 9,447,156,of which Marikinaaccounts for 357,231 (MMUTIS 1995).Because the city is locatedsomewhat on the peripheryof Metro Manila,levels of congestionhave not yet reachedthe intolerablelevels of inner Metro Manila.About 2.9 percent(10,500) of all trips in Marikinaare made by bicycle,compared with 1.7 percent(160,200) in Metro Manila. In terrnsof ratio to population, 1.7 percent of the Metro Manilapopulation uses bicyclesfor trips comparedwith 2.9 percent in Marikina.But predicted increasein traffic will likelycause the levelof bicycleuse in Marikinato decline to the current levels in most of Metro Manila. In Metro Manila20 percentof householdsown cars, while in Marikina only 15 percentof householdsown cars. Objective.Given Marikina'scurrent high and acceptedbicycle use and lower levelsof congestion,the projectconsiders it an ideal city in which to irnplementa bicyclenetwork to preservethis mode of transport

- 38 - in the face of the inevitablecreep of congestionby motorizedtransport. This pattem has alreadybeen experiencedin inner Metro Manilaand many other Asianmetropolises, where bicycles have been crowded out as a viablemode of transport.The net resultof the dominanceof motor vehiclesin Metro Manilahas been severecongestion accompanied by air pollutionand severeconstraints on transportation,especially for the poor, who then becomecaptive users of unpleasant,expensive, and unreliablepublic transport. Benefits. Given the present growthtrends in transportdemand and motorization,the directbenefits of developingthe bikewaysystem proposed under the project will be a reductionin expectedtraffic and congestionand a consequentdecrease in emissionsof pollutantscompared with the situationwithout the project.An additional indirectbenefit, of no lesservalue, will be to demonstratethe benefits and viability of bicyclesand nonmotorizedtransport so that similarfacilities might be adopted/developedelsewhere in Metro Manilaand in the Philippinesonce people recognizethat this form of transportis sustainable, nonpolluting,inexpensive, and a good altemativefor commuting.

Description.The NonmotorisedTransport (NMT) component in the City of Marikinawill includethe following:

* A networkof about 66 kilometersof bikewaysof which 50 kilometerswill be developedalong existingroads and 16 kilometersof bikewaysalong the MarikinaRiver banks. Thenetwork will connectthe residentialareas with the main trip attractors(factories, schools, hospitals, market areas and shoppingmalls) and public transportterminals including the new LRT line 3 stations. * Trafficcalming and pedestrianizationmeasures and facilitiesaround schools and market areas and provisionof bicycleparking facilities. * Street lightingwhere necessaryto ensure safetyafter hours. * Trainingand CapacityBuilding of the Marikinabicycle officials working staffing the Bikeways ProgramOffice, with particularfocus on planningcapacity and monitoringand evaluation activities. 3 Educationand public awarenesscampaigns targeted to potentialusers as well as car users and city's traffic management/enforcementpersonnel. 3 Replicationcampaigns targeted to neighboringMunicipalities and other cities that are suitablefor bikewaydevelopment.

The 66 kilometerbikeway network will connectresidential communities with schools,employmnent centers, the new LRT station,and other public transportterminals, where appropriateparking facilitieswill be created.Its developmentwill help prevent the crowding-outof nonmotorizedtransport seen in other large cities. Moreover,the connectionwith publictransport terminals will promotethe use of nonmotorized transportcombined with LRT/busfor trips between Marikinaand the rest of Metro Manila. A seriesof pedestrianizedareas and traffic calmingmeasures will preservewalking trips. Street lightingin some areas will improvethe safety of both cyclists and pedestrians. The currentroad networkwithin the municipalboundary covers 300 kilometers.The 66 kilometerbicycle networkconnecting key attractors,schools, industrial sites, the new LRT metro terminal,markets, and malls willbe implementedin three phasesover three years. The proposednetwork will include49.7 k ilometerson existingroads, of which 30.8 kilometersare withinthe existingroadway width and 18.9 kilometersrequire some road wideningto accommodatethe bicycle lanes. 16 kilometerswill be along the banks of the MarikinaRiver (connectingto the LRT station),of which 8.4 kilometersare new construction and 8.2 kilometersinvolve upgradingexisting walking paths.

The bicycle lanes will be physicallyseparated from other traffic but largely withinthe existingroadway,

- 39 - with flow largelyon each side of the road on two-wayroads and on one side on one-wayroads. The lanes will be 1.5 meterswide, with a physicalbarrier provided between adjacent traffic and the bicycle lanes (figure2.2). Traffic counts done at seven strategiclocations in the City of Marikinain October 1999 showedabout 70 bicyclesin the peak hour. Thus the proposed1.5 meter widthis consideredsufficient (the Netherlandsrecommnends 1.5 metersfor 0-150bicycles per hour in peak hour). Issues of roadsideaccess to shopsand propertieswill be addressedduring the detaileddesign stage.Where pavement has deteriorated, reconstructionmay be necessary.Green asphalt or concretewill be used to designatethe bicycle lanes. Wherenecessary some new facilitieswill be constructedto facilitateaccess, for examplein the accessto the new LRT stationon the southernboundary of the City of Marikina.This facilitywill link to the main componentsof the MMURTRIPproject, namely the MarikinaBridge and AccessRoad componentand the MarcosHighway component.

Figure2.2 Typicalcross section,Bayan-Bayaanan Road (metres)

15.6

1.5 12.6 1.

Training,Capacity Building, Education and ReplicationCampaigns. The City of Marikinahas establisheda BikewaysProgram Office(BPO) withinthe City administration.The BPO will consist of a core team of six people includinga ProgramManager, an EducationProgram and Coordinator,and an Events and PromotionsCoordinator. These officerswill be assistedand trained so that they can properly develop,implement, and monitorthe BikewaysProgram. Moreover, they will coordinatethe educational and promotioncampaigns that will be carriedout in Marikinaas well as in its neighboringmunicipalities and in other Philippinescities. These campaignswill be prioritizedand will first target citiesthat are well suitedfor bikewaydevelopment. These will be citiesthat are similarto Marikinain terms of modes of transport,high-density building, lack of space,and where a bicycle culturealready exists. The BPO in collaborationwith local NGOswill carry out a BaselineResearch which will provide inputs for the implementationof the BikewaysProgram as well the foundationfor the monitoringand evaluation activities.The evaluationactivities in particularwill focus on the project as well as on the methodology appliedto estimatethe benefitsderiving from the resultingsaving in greenhousegas emissions.A five-year plan for the developmentof the bikewayswill also be part of the responsibilitiesof the BPO.Consultant serviceswill be providedto enhancethe capacityof the BPO to the mentionedplanning and monitoringand evaluationactivities.

Costing. The cost of the NonmotorizedTransport component is estimatedat US$1.51million, of which Global EnvironmentFacility (GEF)grant financingis US$1.26million. The City of Marikinawill provide the counterpart(Table 2.4). The breakdownof the costs is givenin the table below. The cost of detailed engineeringdesign, surveyscosts and supervisionis estimatedat 10 percentof the cost of the works and includedin the cost of the component.Works will be executedby local contractors, so taxes are estimated at 20 percentof the total amount of works and 7 percent of the services. This will be paid by the Administrationso a total of about 16 percent of project costs will be coveredby the City of Marikina.In particular20 percentof the cost of the public disseminationand bicycle safety campaignwill be coveredby the City of Marikina.This work willbe done by the BikewaysPrograrn Office staff and consideredas their

- 40 - counterpartto the project cost.

Table 2.4 Componentsof the NonmotorisedTransport component

Component Sector Indicative GEF Cityof Cityof costs (US$m) financing Marikina Marikina (US$m) (US$m) (%) Bikeways(66 Urban 1.08 0.92 0.16 15% kilometers) Transport Traffic calmingand Urban 0.18 0.14 0.04 22% pedestrianisation Transport Lighting Urban 0.10 0.08 0.02 20% Transport Training and capacity Urban 0.05 0.04 0.01 20% building at the BPO Transport EducationCampaigns Urban 0.05 0.04 0.01 20%

______Transport______Replication Urban 0.05 0.04 0.01 20% Campaigns Transport Total 1.5 1.26 0.25 16.5%

Beneficiaries.A seriesof focus group discussionswere held on successiveweekends in October 1999to gaugepublic perceptionsof bicyclingin the City of Marikinaand of the proposalsfor a bicyclenetwork. Residentsuse bicyclessignificantly and clearlyvoiced the benefitsof this mode of transport.They consideredthis modebeneficial for the poor. The participantsin the discussionsfelt that congestionin Marikinawas still relativelylow, making cyclinga still-viablemode of transport.Having seen other parts of Metro Manila,however, they felt this situationwould not last. Some alreadyfelt that cyclingwas hazardous(few womencycle, for that reason),and felt stronglythat bicycle lanes physicallyprotected from other traffic wereneeded. Participantsalso stronglydemanded a bicycle safety and educationcampaign. Residentssaid they would be preparedto pay fees for bicycleparking and security facilities.

The MarikinaCity Workers AffairsOffice surveyed 12 companiesinvolved in food manufacturing;shoe manufacturing;marketing, sales, and rental of heavy equipment;and other sectorsin Octoberand November1999. The surveys found that 53 percentof the workersin these companieslive withinthe City of Marikinaand the rest in adjacentmunicipalities. Thus the averagetravel distancein Marikinais within what is consideredviable for bicycletravel (bicycletrips up to 6 or 7 kilometerslong are considered viable).The currentmodal share of trips of workersin Marikina(table 2.5) is 11 percent bicycles,3 percentpedicabs, and 28 percentwalking.

-41 - Table 2.5 Modesof transportto work used by Marikinaworkers

Mode of Transportationto work Numberof trips by mode Percentage Companyshuttle 48 1 Public transport 1,479 41 Tricycle(motorized) 309 9 Pedicab(nonmotorized) 111 3 Bicycle 410 11 Walking 1,019 28 Others 239 7 Total 3,615 100 Source:Marikina City Workers AffairsOffice 1999.

Project Component5 - US$1.10million PhP55million, including all physicaland price contingencies

E. InstitutionBuilding/Technical Assistance component.

The Metro ManilaAir Quality ImprovementSector Development Program supported by the Asian DevelopmentBank includesa componentto strengthenthe MMDA's traffic managementfunction in 2000 to 2004. The MMURTRIPproject will complementthis programby supportingcapacity building in 2001 to 2005. The MMDA(in consultationwith the DPWH)has developeda year-by-yearinstitutional plan, includinga descriptionof its expandingfunctions and staffingrequirements. Moreover, this component aims to ensurethat effectivecoordination mechanisms are in placebetween the key agenciesand LGUs. This coordinationwill favour the balancedintegration among modes,including Nonmotorised Transport (NMT).

-42 - Annex 3: EstimatedProject Costs PHILIPPINES:Metro ManilaUrban Transport Integration Project

Local Foreign Total ProjectCost By Component US $million US $million US $million A. Traffic management improvements 0.00 LRT Line 2 corridor 2.20 2.40 4.60 EDSA LRT Line 3 corridor 2.50 2.50 5.00 Southern corridor-Bicutan interchange improvements 0.30 0.30 0.60 Southern corridor-Alabang interchange improvements 0.70 0.70 1.40 B. MARIPAS Access Improvements 0.00 Marikina Bridge and Access Roads 14.40 5.60 20.00 Marcos Highway 8.90 7.30 16.20 Ortigas Avenue 1.60 3.20 4.80 C. Secondary Roads Program 16.50 10.20 26.70 D. Nonmotorised Transport (NMT) pilot 0.80 0.70 1.50 E. Technical Assistance/Institution Building 1.00 0.00 1.00 TotalBaseline Cost 48.90 32.90 81.80 PhysicalContingencies 2.90 1.70 4.60 Price Contingencies 7.60 3.00 10.60 Total Project Costs 59.40 37.60 97.00 Front-end fee 0.60 0.60 Total FinancingRequired 59.40 38.20 97.60

Local Foreign Total Project Cost By Category US $million US $miilion US $miflion CivilWorks 39.90 24.30 64.20 Equipment 0.50 5.90 6.40 Services 2.80 7.20 10.00 PMOengineering overhead and Land Acquisition; 16.40 0.00 16.40 Operationsand Maintenance TotalProject Costs 59.60 37.40 97.00 Front-end fee 0.60 0.60 TotalFinancing Required 59.60 38.00 97.60 Note: Discrepanciesin projectcosts are the resultof figuresbeing rounded.

The component costs are made up of construction costs, provision of street lighting, and provision of traffic signals. The costs include all detailed engineering design costs, construction supervision costs, project management office engineering overhead, advisory services and local taxes. l. Detailed engineering cost for phase I was PhP23,053,200 (about US$576,330 equivalent at the time of the contract) 2. Detailed engineering costs for phase II are estimated at 6 percent of civil works costs. 3. Construction supervision costs are estimated at 10 percent of civil works costs. 4. Project Management Office engineering overheads are estimated at 3.5 percent of civil works costs. 5. Advisory Services are estimated at 3 percent of civil works costs. 6. Operations and Maintenance costs during the project implementation period are included in the project costs. 7. Local taxes and duties on works are estimated at 20 percent (based on a study of actual contracts

- 43 - underthe HighwayManagement Project), on servicesat 7 percent,and on vehiclesand computers at 30 percent. 8. Civil works: Foreigncost: 40 percent;local cost: 60 percent(for TrafficEngineering Center related works local cost is 100percent) 9. Services:Foreign cost: 80 percent;local cost: 20 percent;Project Management Office engineering overhead,100 percent localcost. 10. Signalequipment: Foreign cost: 100percent. 11. Foreigninflation is estirated at 3 percentper annum (basedon the WorldBank's DevelopmentEC PlanningAssumptions Note November2000); local inflationrate is estizmatedat 7 percentper annum. 12. Land acquisitioncosts are estimatedat total of US$ 13.5million for two project components. 13. World Bank cost sharinglirmit for Loans for the Philippinesis 75 percent of total projectcost, net of taxes. 14. Front end fee is 1 percent of WorldBank Loan amount. Identifiabletaxes and dutiesare 12.7 (US$m)and the totalproject cost, net of taxes,is 83.6 (US$m). Therefore,the projectcost sharingratio is 71.77%of total projectcost net of taxes.

- 44 - Annex 4: Cost BenefitAnalysis Summary PHILIPPINES:Metro ManilaUrban TransportIntegration Project

The economicevaluation has been carriedout utilizinga standardcost benefit analysis(CBA). The evaluationcovers the Project'smajor investmentcomponents: Traffic Management Improvements, MARIPASAccess Improvements, and SecondaryRoads Program. These componentsaccount in total for about94 percentof the project cost. Given their specificnature, two other componentsare not considered in this analysis:Nonmotorized Transport (NMT) Pilot and InstitutionBuilding/Technical Assistance. The NonmotorizedTransport component was the subjectof a detailedincremental cost analysis(ICA), which is describedin Annex 14.

In the frameworkof the CBA approach,the investmentsin each of the project's subcomponentswere evaluatedseparately to ensure that each is economicallyviable. The results were then aggregatedat project level.Whenever possible, costs and benefitswere quantifiedby comparing"with" and "without"project scenarios.Benefits are derived from vehicleoperating cost (VOC) and value of time (VOT) savings.Costs includeinitial construction costs, right-of-wayacquisition and futuremaintenance costs.

The basic data,main assumptions,and methodologyused in the evaluation,as well as an exampleof their applicationand the results of the evaluation(table 4.1), are summarizedin the followingsections. Full details of the economicevaluation can be foundin the MMURTRIPFeasibility Study carried out in 1998 by localand internationalconsultants (see projectfile).

Table 4.1 Costs and benefitsof the MMIRTRIP project(US$ million)

Benefits 1063* Costs 94 Net Benefits 969 InternalRate of Return 137percent *Present value of flows discountedat 15 percent.

Summaryof Benefits and Costs:

Data Sources The evaluationrelies heavily on the data availablefrom the JapanBank for InternationalCooperation (JICA)-fundedMetro ManilaUrban TransportationIntegration Study (MMUTIS) from March 1997. These data are recent and comprehensiveand covermost of the needsfor the CBA approach.The MMUTISstudy includesthe whole of Metro Manilatogether with the surroundingmunicipalities that make up the Greater Manilametropolitan area. The main types of data used from this sourceare origin-destination(O-D) trips, includingland-use and socioeconomicinformation; cordonline and screenlinevehicle and passengercounts; public transport(bus and jeepney) frequencydata; public transportboarding, alighting,and terminaluse data; and travelspeed data. For the evaluationof some specificcomponents, MMURTRIP Study consultants used more detailedtraffic data than is availablefrom MMUTIS.These data includetraffic counts at signalisedand nonsignalised

- 45 - intersectionsobtained fromthe Traffic EngineeringCenter (TEC) of the DPWH. TransportModels MMUTISdeveloped a state-of-the-artrecursive transportation model for Metro Manila. In this model,the networkconditions were specifiedseparately for each of the vehicle types, allowingbus lanes and bans to be modeled.However, the capacityrestraint procedures in the model could refer only to network links, and delaysat junctionswere not simulatedfor individualturning movements.There were also some limitationsin the way the model dealtwith the choicebetween different transport modes. Moreover,at the time of this economicevaluation the model was not sufficientlydeveloped to be of use in analyzingtravel demandpattems in the MMIURTRIPcorridors. Therefore, the MMURTRIPStudy consultantsintegrated the informationof the MMUTISmodel with a seriesof basic assumptionsto quantifythe existingtransport situation along the project corridorsand to make predictionsabout the future.These assumptionsare summarizedin the next sections. TransportDemand Forecasts While basing its conclusionson present-daytransport requirements in Metro Manila, the MMURTRIP Study addressesthe impact of future changesin distributionof land uses and pattem of transportprovision in orderto evaluatethe feasibilityof the proposedcomponents. However, as noted above,neither the developmentof future land use scenariosnor the developmentof the analyticaltransport model were sufficientlyadvanced for the purposesof the economicevaluation. Therefore the evaluationwas based on figures for future transportdemand pattems estimatedby the MMURTRIPStudy Team, assumingthe possibledevelopment scenarios considered by MMUTIS.Generally this has amountedto applyingsimple growthfactors and ad hoc analysesof the diversionaryeffects of new transportinfrastructure, tempered by professionaljudgment and detailedknowledge of the existingsituation. IntersectionAnalysis The TRANSYT/10suite of programswas used extensivelyto analyzesignalised intersections, calculate revised signaltiming/phasing, and test the impactof revisedgeometric layouts for the design of the new installations.The outputsincluded accumulated delay and other performanceindicators, which provided useful inputs to the evaluation.

MainAssumptions:

Traffic Flows

The estimationof benefits dependson the traffic flowsthrough each project. Given the lack of a model capableof assessingeither trafficgrowth or reassignmentresulting from networkmodifications, it has been necessaryto use uniformgrowth factors insideEpifanio de los SantosAvenue (EDSA)and outside to estimate futuretraffic flows. Traffic withinEDSA is assumedto grow at a 2 percent rate, and traffic outsideEDSA at a 5 percentrate. This assurnptionis based on past experiencewith differentschemes in Metro Manila. In accordancewith normalpractice, these growthrates have only been appliedup to the point wherethe existingnetwork can accommodatetraffic flows.The growthrate assumptionis conservative,because it ignores the benefitsenjoyed by road users who take up the additionalcapacity provided by the project. Hence it reducesthe possibilityof overestimationof benefits. In the case of road projects,the study used Metro ManilaUrban Transportation Integration Study (MMUTIS)"unlinked" trip surveydata to analyzetravel patterns in the relevantcorridor, together with

- 46 - simplediversion curves to predictreallocation of corridortraffic to new roads. For the public/privatemodal split, the study assumedthe overallgrowth would not changethe respectivemodal sharesof privateand public transport,even with growing car ownership.This assumptionis justified by the fact that improvementsto the public transportsystem to be implementedin futureyears would enhancethe attractivenessof public transportservices, which in turn is expectedto offset highercar ownershiplevels. In the corridorswhere new fixed public transportfacilities were installedbetween 1997 and the project implementationdate, the flows have been assessedholding the assumptionof a simple 30 percentreduction in the road-basedpublic transportline flows at the introductionof the new rail services.This assumptionis justifiedby the fact that corridor-specificmode changesrelate to corridorswhere new light rail transit (LRT)lines wouldbe introduced,such as the LRT2 and LRT3 corridors.Hence, somereduction in bus or jeepneytraffic is expectedonce the LRT lines becomesoperational. The actuallevel of transferonto the rail serviceswill of course depend criticallyon interchangepossibilities and convenience,and on levels and integration.This factoris slightlylower than the passenger transfersto LRT Line 1 observed on its opening,but reflects the potentialfor load factor reductionson existingservices. The aboveassumptions remain relatively crude and ignorethe possibilityof trip generationwith new schemes.Moreover, no allowancefor trip redistributionwas made because of the lack of local evidence. But the congestedstate of the networkreduces the possibilityof overestimationof traffic flows. Intersectfons A metrowideproject (SMART) to replace all existingsignal equipment and to installnew signalsis under way in Manila.This projectwill includeoptimization of the signalsettings (including synchronization of somejunctions) and will be completedby the end of 2000. SMARTphasing has yet to be determined,but for the purposesof the evaluationit was assumedthat signalswould be installedand workingoptimally in the relevantcorridors before the MMURTRIPactions are undertaken.Hence, benefits from the MMURTRIPproject would be incrementaland woulddepend on geometricimprovement and improved managementof intersectionsrather than improvedsignal timing. Where management improvements alone were involved,the evaluationdepended on a demonstrationthat only very smallper vehicletime savings would be requiredto achieveeconomic viability. Peak and Off-peakPeriods Peak and off-peakperiods were modeledseparately where possible, as data was often available.Since the majorityof traffic counts were for less than 24 hours, suitablefactors were adopted to convert these to daily and annualvalues. Wherebenefits were deemedto accrue over the whole day, a factor of 1.3 was used to convertthe 14-hourcounts, obtained from the DPWH-TrafficEngineering Center, to average weekdayflows. At intersections,the analysisof time savingswas carriedout for three distincttime periods:AM peak (four hours), PM peak (four hours) and inter-peak(six hours). Aggregatebenefits were then accumulatedover the same 14-hourperiod. Othercomponents, such as pedestrianand publictransport improvements, were also evaluatedover this 14-hourperiod. In addition,an annualizationfactor of 330 was used to reflect the fact that most available traffic data relatesto an averageweekday, not an averageday. Value of Time The Departmentof PublicWorks and Highways(DPWH) and the WorldBank have differentapproaches to benefit estimation(particularly in the valuationof time). Ratherthan parallel appraisalsfor each project

- 47 - component,a simplecomparison of the two evaluationmethods was made. The assumptionsof each methodologyare discussedin detailin the relevantchapters of the MMUTIS study.The main differences betweenthe two methodologiesare the computationof vehicle operatingcosts, namelyfuel and oil consumption,spare parts, and maintenancelabor costs. Otherdifferences concem vehicle occupancy factors,vehicle use characteristics,and the value of time. Anotherdifference concems the factorsused to estimatedistribution of trip types: The DPWHmodel only considerswork trips and commutingtrips to have a value. However,World Bank practice is to assumethat peopleplace a value on all time spent traveling.Hence "leisure" trips are also includedin the evaluation. Leisure trips includeall nonworkand noncommutetrips, for example,shopping, school, and church trips. This differencemade the DPWHmodel and its coefficientsless appropriatethen the altemativesadopted by the consultantsfor the applicationin an urbancontext. Therefore,in the evaluationthe traveltime savings includedthe valuationof business traveltime, commutingtravel time,and leisuretravel time (table4.2). Commutingand leisure time were valued at 50 percentof businesstime. Localevidence indicates that this seeminglyhigh value is not unwarrantedin the Manilacontext (the averagenormally used is 25 to 30 percentof work time). Table 4.2 Valueof time (US$ and PhP per hour) Users Worktime Commutingand leisuretime US$ per hour PhP per hour US$ per hour PhP per hour Car drivers(nonprofessional) 1.77 52 0.89 26 Car passengers 1.64 48 0.82 24 High-occupancyvehicle/taxi 1.64 48 0.82 24 passengers Jeepneypassengers 1.40 41 0.70 20.5 |Buspassengers 1.40 41 0.70 20.5 Note: US$1=PhP29.3(1996) Otherassumptions Additionalassumptions were made for interestcharges, GDP growthand project life. To reflectthe current interestrate and assumptionsabout futuremovements,the evaluations assumed an interestrate of 15 percentthroughout. This rate was basedon the NationalEconomic and DevelopmentAuthority (NEDA) assumptionsof the opportunitycost of capital.Real GDP per capitawas assumed to increaseby 2 percent per annum. The value of time was assumedto increasein line with the growth in per capitaGDP. Projectlife assumptionsvary accordingto component.Traffic engineeringschemes were assumedto have a 5-yearlife, whilst most infrastructurewas assumed to have a 20-yearlife. Bridgeswere assumedto have a 30-yearlife and asphaltroad surfaceswere assumedto need significantrehabilitation after sevenyears. Costprovisions were made for the bridgeand asphaltroads assumptionswhere relevant.The evaluation excludedsome nonquantifiable benefits, such as accidentreduction or enhancedaccessibility to particular developmentareas. This exclusionshould preclude undervaluation of overall scheme benefits.

- 48 - Sensitivityanalysis / Switchingvalues of criticalitems: Methodology

Approach. The MMURTRIP Study team developed a common framework for assessing costs and benefits. In many cases the "without projects" scenario would not be the same as the actual situation, because other actions were expected to occur before project implementation. Where this was the case, subcomponents were not assessed against a "do-nothing" situation but against the most likely prior situation. Nevertheless, the various components of the MMURTRIP project, each with a range of benefits, was complex to evaluate. For example, some benefits could not be quantified, and in many situations costs are so small that, given the large number of users of the facility, the benefits for each would only have to be very small (that is, 15 percent) to achieve a satisfactory economic intemal rate of return (EIRR). Therefore, the project components that have been evaluated are those in which evaluation was simple, costs are large, or benefits are not obviouslyvery large. Themain benefitsstem from time savingsrather than vehicle operatingcost savings.On links betweenintersections, time savingswere estimatedwith referenceto changes in volume/capacityratio (the extentto whichproposed actions lead to increasedroad capacity). Timesavings at intersections(or groupsof intersections)were assessedusing the TRANSYTsuite of traffic signaldesign programs.

Whererelevant, or useful to understandthe evaluations,a top-downapproach was adoptedby estimnating the number of vehiclesthat wouldgenerate enough savings to achievea 15 percentrate of return.This approachis particularlyuseful where benefitsare very high (for example,corridor improvements along the EDSA or LRT Line 2 corridors)or where development(or traffic generationand redistribution)is expected (for example,on the MARIPASradial roads). The followingsection summarizes the evaluationof benefits of differenttypologies of project subcomponents.

Applicationto SpecificScheme Types Improvements to bus stops and off-road jeepney and FX waiting areas. The purpose of these interventions is to improve waiting conditions for passengers at the roadside and to remove the people and stopping vehicles from the carriageway. This will improve traffic flow on the section of road and reduce the risk of accidents. Benefits are computed on the basis of the total number of passengers using the facility and the estimated value each of these passengers places on the improvement. The benefits also come from the increased traffic speed once pedestrians are removed from the road. The benefits are assessed on the basis of the time saving to vehicles resulting from increased road capacity and higher travel speeds, compared with the do-nothing altemative. Intersection improvements and bus priority schemes at intersections. The purpose of these components is to improvethe flow of trafficthrough an intersectionand reduce overalldelay at the signals.The bus priority schemesare designedto use road spacemore efficiently,maximizing the passengerthroughput of the intersectionand ensuringthe attractivenessof public transport.They will also reducethe time taken for public transportvehicles to traverse eachintersection, compared with privatevehicles. The benefitsare estimatedon the basis of the reduced delayto vehiclesat the intersection."With-project"travel delays at the intersectionsare estimatedon the basis of TRANSYTsimulations, with optimal signaltimings. Co-

- 49 - ordinationof adjacentsignals is considered,where appropriate.The time savings are then convertedinto vehicleoperating cost and occupanttime savings using the Consultant'srevised model. Wheresignal coordinationis considered,scheme evaluation is performedat an "aggregate"level, over all the intersectionsinvolved. Where thejunctions are not signalised,or where traffic enforcersare used, estimates of traveldemand in the "withoutproject case cannotbe made reliably.In these cases, the top down approachis used. Sidewalk improvements, prohibition of on-street parking, and provision of off-street truck parking. The purposeof these componentsis to improvethe flow of traffic by reducingthe interactionbetween pedestriansor parked vehiclesand movingvehicles. While at intersectionsit is assumedthat these benefits are modeledin the optimizedsignal timings. Between intersections the benefitsare derivedfrom moving pedestriansoff the carriagewayand onto sidewalks,and moving car parking from the curbsidelane. This is assumedto increaseroadway capacity and increaseaverage vehicle speeds.On-site observationshave been used to estimatethe extent of the road spacethat couldbe releasedby sidewalkimprovements and preventionof parking. Benefitsare assessedon the basis of the time saving to vehiclesbrought about by the increasedroad capacity and highertravel speeds,compared with the "do-nothing"alternative.

Pedestrian bridges.Pedestrians currently cross manyroads in Metro Manilaat grade. This can be time consuming(as pedestriansare forcedto wait for a safe gap in the traffic flow) and dangerous(since traffic and pedestriansare forcedto share road space).MMURTRIP will to introducesome pedestrianbridges between intersectionsand near the Light Rail Transitstations. These will make crossing safer and eliminate the waiting. It is acknowledgedthat the actual crossingtime for the pedestrianmay be higher with the bridge, but the reductionin waitingtime will outweighthis, especiallyon wide roads with high traffic flows.The benefits of the bridgeare determinedby the numberof peoplecrossing in the vicinityof the bridge site and the extent of their wait. Givenaverage pedestrian bridge costs, a certain numberof pedestriansis required to ensure that the internalrate of return on the project wouldbe greaterthan 15 percent,at whichpoint the project couldbe justifiedin economicterms. Other benefitswill accrueto vehiculartraffic that experiencesless delay when pedestriansare removedfrom the roadway.Before decidingthe to provide a pedestrianoverbridge, alternative options have been exploredsuch as signalised at-gradecrossings, where the pedestriansignal timings are coordinatedwith those of upstreamor downstreamsignalised intersections. These can oftenbe more convenientto pedestrians,while not adding significantlyto vehiclejoumey times.However, in many casesthe benefitto pedestrianswill be outweighed by the disbenefitto public transportpassengers. Exceptionsto this rule include locationswhere public transportvehicles are stoppedanyway (bus stops,jeepney terminals), and those close to major signalised intersections. Upgradingof existingroads - The purposeof these interventionsis to improvethe flowof traffic, reduce the wear and tear on vehiclesand improveride qualityand passengercomfort. On most of the roads to be upgraded(e.g. secondaryroads), there willbe a varietyof actionsranging from pavementrehabilitation to sidewalkand public transportimprovements - in line with the overallMMIURTRIP objectives. The benefits thereforecome from a combinationof increasedspeed and reducedsurface roughness (i.e. reduced operatingcosts). Benefits are assessedby comparingvehicle operating costs and time savings in the "with scheme"and"without scheme" situations.Savings in maintenanceexpenditure are estimatedfrom average maintenancecosts for different surfacetypes and conditionsprovided by the DPWH Bureau of Maintenance. New road infrastructure.The purposeof these componentsis to providemissing links in the network, relieve alternativeroutes, and increaseaccessibility in the city.The benefits are estimatedon the basis of reducedtravel time (and operatingcosts) for the users of the route comparedwith those on the most direct

- 50 - alternative. There will also be benefits (for example, reduced congestion and travel time) for users who remain on the alternative routes. The time and vehicle operating cost savings are then used as the basis of the evaluation. EvaluationSummary of the LRT 2 Line Corridor To clarify the methodological approach used in the economic evaluation, this section outlines the detailed findings of the LRT2 Line Corridor. The section briefly spells out the evaluation approach and its inputs and presents the economic internal rate of return (EIRR) and net present value (NPV) figures for the component project, together with the benefit and cost streams. Approach. Benefits are derived from sidewalk improvements and intersection management improvements. The sidewalk improvements valued are only those along major roads in the corridor (Claro M.Recto, Legarda, R. Magsaysay and ) where extensive pedestrian infringement of the carriageway has been observed. Typically pedestrians do not impinge on the carriageway for more than about 100 meters in any one location, since they bunch around attractions such as bus stops or pedestrian bridges. The evaluation reflects this. Elsewhere sidewalk improvements are proposed to improve the quality of existing sidewalks or allow pedestrians to walk along the sidewalk rather than on frontage parking areas. Such improvements have no quantifiable benefits, although pedestrian safety will be enhanced and the general environmental improvements for pedestrians will also be important. Improvements to side roads are designed to allow better operation of the main intersections along the corridor or to allow for safe public transport interchange. However, for consistency, since traffic counts are not always available in these locations, none of these benefits was evaluated. With the existing traffic flows the corridor is at capacity, and no traffic growth was therefore assumed. This will tend to underestimate benefits because traffic generation or reassignment from other routes would be expected to accompany improved travel conditions in the corridor. Benefits from the sidewalk improvements were derived from a reduction in carriageway infringement and hence improved speeds for traffic through the road section involved. Benefits from the improved management of intersections were assessed from TRANSYT analysis of individual intersections, assuming that management actions will increase saturation flows by about 10 to 15 percent. Public transport priority measures are provided between C-3 and C-2 only. The project will be undertaken in two stages, relating to the opening of the LRT Line 2 project. Cubao to Katipunan projects will be constructed between July 2000 and June 2001 (opening in July 2001), and projects from Cubao to Recto will be built during 2001 and early 2002 (opening in April 2002). Benefits accrue from July 2001 for the Cubao to Katipunan section and from April 2002 for the Cubao to Recto section. No additional maintenance costs are incurred and the improvements are evaluated over five years.

- 51 - Results Table4.3 outlinesthe summaryof the economicevaluation and costs and benefitfor the subcomponent. Table 4.3 Cost benefitanalysis summary for the LRT 2 Corridor (PhPmillion undiscounted) Year Without With scheme Savings Total Net scheme VOC and Total cost economic VOC VOT VOC VOT VOC VOT VOT benefits

______savings ______2000 2.2 -2 2001 102.9 -103 2002 60.0 225.7 44.4 167.1 15.6 58.6 74.2 119.5 -45 2003 250.7 1608.8 172.9 737.2 77.8 331.6 409.4 409 2004 244.5 1283.5 167.4 878.6 77.1 404.9 482.0 482 2005 263.8 1288.2 180.5 881.4 83.3 406.8 490.1 490 2006 283.8 1292.8 194.1 884.1 89.7 408.7 498.4 498 2007 232.6 1059.8 133.0 605.7 99.7 454.1 553.8 554 2008 42.4 207.2 27.5 134.3 14.9 72.9 87.9 8

Summary NPV =980.8 EIRR= 142%

SensitivityAnalysis A sensitivityanalysis was performedto test the robustnessof the results as well as the appropriatenessof the approach.Again, given the differentnature of the subcomponentsand the complexityof someof them, the sensitivitytests were conductedonly for those subcomponentsin which the sensitivityanalysis was simpleto undertake,the costs are large, or the benefits are not obviouslyvery large. The sensitivitytest assumptionsused were: - The subcomponentis implementedone year earlier. : The corridoris open one year later. *Thecosts are 10 percent higherthan predicted. * The benefits total 10 percent less than expected(every year).

The individualresults for each of the sub-componentanalyzed are presentedin the MMURTRIPStudy. These resultsindicate in generala strongviability and confrm the correctnessof the approach. ProjectResults The results of the cost benefit analysis(table 4.4) showin generalhigh returns for each of the subcomponentsand for the project as a whole.Whether considering VOC savings only, or combined VOC/VOTsavings, the rate of returnis well above the 15 percentthreshold. World Bank experiencewith similartraffic managementprojects in other countriesdemonstrates that such projects consistentlyproduce high returnsbecause of the significantbenefits, particularly in term of VOT savings,and that they generate with relativelysmall investmnents.

- 52 - Table 4.4 Economicevaluation summary Cost Cost Length EIRR EIRR NpVb Component (US$ m) (PhPm) (km) (VOC) (VOCIVOT (15%) .(percent) (percent) hP) A. Traffic Management Inprovement LRT Line 2 corridor 5.5 275 12 64 142 980.8 EDSA LRT Line 3 corridor 5.7 285 18 18 155 1,025.8 Bicutaninterchange 0.6 30 n.a. 37 192 489.6 Alabanginterchange 1.7 85 n.a. 56 119 407.5 B. MARIPAS Access Improvements MarikinaBridge and Access Road 23.3 1165 n.a. 4 19 808.8 Marcos Highway 19.7 985 4.6 22 162 5,575.6 OrtigasAvenue Extension 5.2 260 6.8 133 565 7,485.7 C. Secondary Roads Program: D. Romualdez 0.2 10 1.44 8 30 96.2 Legarda 0.2 10 0.97 63 117 27.2 QuezonBoulevard 0.2 10 1.28 135 243 428.8 Pasong Tamo 2.9 145 2.42 45 57 216.1 Pedro GilJNewBanaderos 1.9 95 5.17 180 288 409.8 Tayuman 0.9 45 1.37 39 41 68.3 M. de la Fuente (Trabajo) 0.1 5 2.14 n.a 15 30.5 Jacobo Fajardo 0.1 5 1.00 n.a. 15 2.4 SSHWest/East ServiceRoad 7.3 365 27.2 95 II1 1,179.9 QuirinoHighway 6.8 340 11.8 79 248 33,145.1 10thAvenue 1.1 55 2.83 47 58 16.7 Don MarianoMarcos Ave Extension 6.9 345 1.00 35 107 692.7 AntonioArnaiz Avenue 1.0 50 2.01 n.a. 15 30.5 Sen.GilPuyat Avenue 1.6 80 5.43 99 118 19.1 Banaue Avenue 1.5 75 3.00 n.a. 15 37.5 Projecttotal 94.4 4720 69.1 37 137 53,145

a b n.a.=not applicable. Economic internal rate of return. Net present value. Note: Costs exchange rate is US$1 = PhP50 (2001) Note: The economic analysiswas done excludingtaxes.

- 53 - Annex 5: Financial Summary PHILIPPINES:Metro Manila Urban Transport Integration Project

Year Ending December31 United StatesDollar (USD)million

| Year1| Year2 | Year3 | Year4 | Year5 | Year6 | Year7 Total Financing Required ProjectCosts InvestmentCosts 10.0 13.4 35.8 27.3 10.8 0.0 0.0 RecurrentCosts 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Costs 10.0 13.4 35.8 27.3 10.8 0.0 0.0

Front-endfee 0.6 0.0 0.0 0.0 0.0 0.0 0.0

Total Financing 10.6 13.4 35.8 27.3 10.8 0.0 0.0 Financing IBRD/IDA 0.8 10.5 21.4 19.5 7.8 0.0 0.0 Government 8.5 2.9 14.4 7.8 3.0 0.0 0.0 Co-financiers-GEF 1.3 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 10.6 13.4 35.8 27.3 10.8 0.0 0.0

PhilippinePesos (PhP)million

YYear I Year2 Year3 l Year4 l Year 5 Year6 Year7 Total Financing Required ProjectCosts InvestmentCosts 500.0 670.0 1790.0 1365.0 540.0 0.0 0.0 RecurrentCosts 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Costs 500.0 670.0 1790.0 1365.0 540.0 0.0 0.0

Front-endfee 30.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Financing 530.0 670.0 1790.0 1365.0 540.0 0.0 0.0 Financing IBRD/IDA 40.0 525.0 1070.0 975.0 390.0 0.0 0.0 Government 425.0 145.0 720.0 390.0 150.0 0.0 0.0 Co-financiers-GEF 65.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 530.0 670.0 1790.0 1365.0 540.0 0.0 0.0

- 54 - Annex 6: Procurementand DisbursementArrangements PHILIPPINES:Metro ManilaUrban TransportIntegration Project

Procurement

Procurementof all works and goodsunder the projectwill followthe Guidelines-Procurementunder IBRD Loans and IDA Creditspublished by the World Bank in January 1995,and revised Januaryand August 1996, September1997, and January 1999.

Procurementof all servicesunder the projectwill followthe Guidelines-Selectionand Employmentof Consultantsby World Bank Borrowerspublished by the World Bank in January 1997 and revised September1997 and January 1999.

Procurementfor the Global EnvironmentFacility grant for the Non-MotorisedTransport component is requiredto follow all World Bankprocurement guidelines as above.

Procurementwill be undertakenby the project'simplementing agencies as follows:

- The Departmentof PublicWorks and Highways(DPWH)-Urban Roads Project Office(URPO). The DPWH-TrafficEngineering Center will manageprocurement of one packageof traffic signal equipment. e The MetropolitanManila Development Authority (MMDA). * The City of MarikinaLocal Government Unit will undertakeprocurement for the Nonmotorised Transport,GEF- financed,component of the project.

Summary of the Procurement Capacity Assessment. World Bank staff undertook a procurement assessmentof the implementingagencies. Theprocurement assessment (see projectfiles) was fully discussedand agreedwith the agenciesin May 2000. A MS Project-basedprocurement implementation schedulefor the whole project was preparedby DPWH-URPO(see project files). Overall risk assessment for the project:average risk category.

The Departmrentof Public Worksand Highways (DPWHI-)-UrbanRoads Project Office (URPO).The assessmentfound that the procurementcapacity is in the averagerisk category.The results of the assessmentindicated that althoughDPWH can be considereda professionalorganization in terms of executingprojects fundedby the World Bank,both URPO,and the TrafficEngineering Center (TEC), have only implementedlimited World Bank projectsbefore. They have implementedWorld Bank assisted projects,such as the Metro ManilaUrban Transport StrategyPlanning Project (MMUSTRAP) and the Metro ManilaUrban TransportationProject (MMUTAP)-PhaseI, and other foreign assistedprojects, and thereforeare not new to this business.For efficientimplementation, the MMvIURTRIPproject will need to strengthenthe procurementfunctions in the URPOand TEC. Formaland hands-ontraining in WorldBank procurementguidelines, policies, and procedureswill be undertakenby the procurementstaff of each of the units. It shouldbe emphasizedto all personnelinvolved that the procurementprocess to be followedfor the projectmust be in accordancewith the loan agreement,procurement side letter and World Bank procurementguidelines.

The Metropolitan Manila Development Authority (MMDA). The assessment found that the procurement capacityis in the averagerisk category.The MMDA,which will be implementinga WorldBank-funded project for the first time, has howeverimplemented numerous locally fundedtraffic-related projects and is

- 55 - becominginvolved in projects fundedby other internationalfunding institutions. Contracts presently implementedby the MMDAunder AsianDevelopment Bank and local financingare in the same cost range as those to be financedunder the MMURTRIPproject. Hence, in terms of contractamounts, MMDA staff shouldnot have difficultyimplementing this project.Based on the assessment,it is clear that the capacity of the MMDAto undertakeprocurement of the componentsof the MMURTRIPproject requiresformal and hands-ontraining in procurementguidelines. Overall, efficient implementation of the projectwill requirestrengthening of the procurementfunction in the MMDA.Such traininghas been startedby the WorldBank Manilaoffice and willbe facilitatedby the appointmentof a project advisorin the MMDA.

The City of Marikina.The assessmentfound that the procurementcapacity is in the averagerisk category. The performanceof the city governmenthas been satisfactoryin the implementationof the two Global EnvirormentFacility (GEF)grants for the project,and no difficultyis anticipatedin procurementfor the relativelysmall proposedNonmotorised Transport component of US$1.4million (the fundingauthority from GEF is US$1.26million). The maximumcontract that the city governmenthas implemented amountedto about US$1.0 million.This amountis largerthan the contractsexpected for the project, so no difficultyis expectedrelated to contractsize in the implementationof the project.

Conflictsbetween the procurementprocedures of the Governmentof the Philippinesand procedures acceptableto the WorldBank Several suchconflicts, related to nationalcompetitive bidding and procurementof consultantservices, are fully addressedin the SupplementalLetter, Representations and Assuranceson Procurementto the Loan Agreement,as well as in the ProjectImplementation Plan. The Borroweris requiredto conformwith this agreementand waive all proceduresunacceptable to the World Bank.

The followingprocedures will applyto all goodsand works contractsto be financedby the WorldBank for the above-notedproject followingthe PhilippinesNational Competitive Bidding (NCB) procedures:

a. Nationalcompetitive bidding opportunities, including those which are invitedby local government units, shall be advertisedin nationalnewspapers of generalcirculation, with sufficienttime for bidders to prepare offers,which is normally30 days, unless differentvenues and time are specificallyagreed upon by the WorldBank.

b. Foreignsuppliers and contractorsfrom eligible countrieswill be allowedto participate,if interested, withoutfirst being requiredto associateor enter into a joint venture with local firms.

c. Exceptfor major or complexworks, where prequalificationis required,prequalification of contractorsmay be conductedupon prior concurrenceof the World Bank.

d. If any bidderis deniedaccess to the biddingprocess for reasonsunrelated to its financialand technicalqualifications to performthe contract,the World Bank shall be consultedprior to suchdenial.

e. Bid submissiondeadlines, times, and locationspecified in the bidding documentswill be strictly adheredto; and bids submittedafter the specifieddate and time and locationshall be returnedunopened to the bidder.

f. The World Banks domesticor regionalpreferences will not be applied in the evaluationof bids, and other preferencesin effectin the Philippineswill not be used exceptwith the prior concurrenceof the WorldBank.

- 56 - g. Bracketingand ceilingwill not apply,unless specificallyagreed by the WorldBank in advanceof bidding.

h. Singleresponsive bids will not be rejectedwithout prior WorldBank concurrence, and rebiddingwill not be mandatorilyrequired when fewerthan three responsivebids are received.

i. Bid openingshall be opento thosewho wish to attend;and the deadlinefor submissionof bids should be the same as that for bid opening,or immediatelythereafter.

j. Suppliersand contractorswill not be requiredto purchaselocal goods or suppliesor to hire local labor,except unskilledlabor.

k. Explicitbid evaluationcriteria will be set forth in the bid documents.

1.Material modifications of contractscope and conditionsduring implementation require prior World Bank concurrence.

The Philippinesfurther assuresthat, unless otherwiseagreed to in writingby the World Bank, the following procedureswill be adheredto in respectof the procurementof all works contractsto be financedby the WorldBank for the MMURTRIPproject and procuredaccording to nationalcompetitive bidding procedures:

a. Prior registration,licensing, and/or other Goverrmentauthorization will not be a requirementfor purposesof participatingin biddingcompetitions; such registration,licensing, and/or other Govemment authorizationmay, however,be requiredfrom the selectedbidder as a prior conditionto signingthe contract.

b. All contractorswill be allowedto competefor contractsto the upper limit of their classification.

The Philippinesalso assuresthat, unless otherwiseagreed to in writing by the World Bank, the following procedureswill be adheredto in respectof the procurementof consultantservices to be fmancedby the World Bank for the MMURTRIPproject:

a. Mandatoryjoint ventureor associationwith Philippineconsulting firms will only be requiredif (i) there are sufficientnumber of capabledomestic firms availableto allow reasonablefreedom of choice for the invitedforeign firms;(ii) the desirablecontribution by either firm will not be constrainedby any prescribedmanner or extent or participation;and (iii) associationwith specifiednamed firmsselected by the borrowerwill not be required.

b. Qualifiedconsulting firms that come to the attentionof the agencyrequiring services by meansother than a specificexpression of interestin responseto an announcementof a futureproject for consulting serviceswill also be eligiblefor the shortlist.

c. When circumstanceswarrant and with prior World Bankno objection,consulting firms may be askedto continueworking on a projectbeyond the phase for which their serviceswere originally contracted.

d. Price adjustmentsin consultantcontracts will remain in effectwhether budgetary funds are available or not; in addition,there will be no ceiling on price adjustmentsunder World Bank-financedcontracts.

- 57 - e. The World Bank's StandardFormns of Contractfor Consultants' Servicesfor ComplexTime-Based Assignmentsand for Lunp Sum Remunerationshall be used for contractsfinanced by the WorldBank.

f. The "percentageof construction"cost method will not be used to determinethe compensationof World Bank-financedconsultancy services.

g. Whenconsultancy services include the provisionof vehicles,their origin shall not be restrictedto Philippinesources.

A GeneralProcurement Notice will be updatedannually in the DevelopmentBusiness. The first General ProcurementNotice was published30 April2000 in IssueNo 533. SpecificProcurement Notices for SupervisionServices were published16 May 2000 in Issue No 534 and for Civil Works on 16 December 2000 in Issue No 548.

Procurementmethods (Table A)

1. Works: about US$64.20million (PhP 3,210 million),including contingencies.

Intemationalcompetitive bidding (ICB)will be used for all civil works contractsgreater than US$2.5 millionequivalent per contract(about US$52.7 million includingcontingencies). National competitive bidding(NCB) may be used for works less than US$2.5million equivalentper contract(approximately US$10.3million for IBRD-fundedworks and US $1.4million for GEF-fundedworks) where these are localizedworks of small value and unlikelyto attractforeign contractors.Foreign contractors are, however, not excludedfrom participating.For two contractsbelow this US$2.5million limit, ICB procedureswill still apply as defined in the procurementassessment.

The followingworks contractpackages (table 1) will be procuredunder the project both by ICB and NCB procedures.

* The DPWH-URPOwill procureeight civil works packages(six ICB and two NCB packages)with a total value of about US$ 45.5 million (PhP 2275 million),plus DPWH-TECwill procureNCB packagesfor related signalinstallation with a total value of about US$ 3.9 rmillion(PhP 195 million),all equivalentto about77 percentof the total value of all civil works components. * The MMDAwill procure nine civil works packages(two ICB and sevenNCB packages)with a total value of about US$ 13.7rnillion (PhP 685 million),equivalent to about21 percentof the total value of all civil works components. * The City of Marikinawill procurefive civil works packages(five NCB packages)with a total value of about US$1.2million (PhP 60 million),equivalent to about2 percentof the total value of all civil works components.The averagecontract size is expectedto be about US$200,000each for the contracts.The contractsare split up since they will be implementedat differenttimes.

WorldBank StandardBidding Documents will be used for all works contractsas follows:

* The Procurementof Worksdocument, January 1995, revised January 1999 and revised May 2000, applicablefor contractsover US$10 mnillion,will be used for one ICB package,the Marikina Bridge and AccessRoad underthe DPWH-URPO. * The Procurementof Works: SmallerContracts document, January 1995, (with CorrigendumNo. 1

- 58 - to No. 4) will be used for all other ICB works.The same documentwill be used for all NCB works, modifiedfor NCB use. * The StandardBid EvaluationForm, ProcurementGoods or Works,April 1996, will be used for all works. * The StandardPrequalification Document for Procurementof Works, September1999 revised March 2000, will be appliedfor the one contractwith prequalification.

Prequalificationwill be used for one civil works contract,for MarikinaBridge and AccessRoad, since it is valuedover US$10 millionand consideredcomplex because of the bridgeconstruction involved. Postqualificationwill be appliedfor all other civil works contracts.

2. Goods:about US$6.40million (PhP320million), including contingencies.

The following goods contract packages will be procured under the project:

* The DPWH-URPO will procure vehicles with a total value of about US$ 100,000 and computer equipment with a total value of about US$50,000. These will be procured by National Shopping. * The MMDA will procure vehicles with a total value of about US$ 100,000 and computer equipment valued with a total value of about US$50,000. These will be procured by National Shopping.

These above packages are not grouped since they will be procured by two independent implementing agencies.

* The DPWH-TEC will procure traffic signal equipment under one contract with a total value of about US$5.9 million (PhP 295 million), under ICB procedures.

World Bank Standard Bidding Documents will be used for the goods contracts as follows:

* The World Bank's Standard Bidding Documents Supply and Installation of Equipment, November 1997, revised January 1999, will be used for the procurement of the traffic signal equipment. * The Standard Bid Evaluation Form, Procurement of Goods or Works, April 1996, will be used for all goods.

3. Services: about US$10.0 million (PhP 50 million), including contingencies.

The following consultant services will be procured under the project:

* The DPWH-URPO will procure four consultant services contracts with a total value of about US$ 6.1 million (PhP 305 million) under Quality-and-Cost-Based-Selection (QCBS) procedures. The consultants will be tasked with the following: 1. Construction supervision of DPWH-URPO components of phase I - Marikina Bridge and Access Road (ICB-3), Marcos Highway (ICB-4) Ortigas Avenue Extension (ICB-5) and D. Romualdez/Legarda/ (NCB-3). 2. Construction supervision of DPWH-URPO components of phase II - ICB-6, ICB-7, ICB-8, NCB-5. 3. Advisory services. 4. Detailed engineering design of phase II components.

- 59 - * The DPWH-TECwill procureone consultantservice contract through sole-sourceselection for a lump sum amountnot to exceedUS$50,000.

* The MMDAwill procure three consultantservices contracts with a total value of aboutUS$ 1.6 million (PhP60 million)under Qualityand Cost-BasedSelection (QCBS) procedures. The consultantswill be taskedwith the following: 1. Constructionsupervision of MMDAcomponents of phaseI - LRT Line 2 corridor(ICB-1); EDSA LRT 3 corridor (ICB-2),Pasong Tomo (NCB-4). 2. Constructionsupervision of MMDAcomponents of phase II - NCB-1, NCB-2,NCB-6, NCB-7, NCB-8, NCB-9. 3. Advisoryservices.

* The MMDAwill procure consultantservices for the InstitutionBuilding component with a total value of about US$1.1million (PhP million)under Quality and Cost-BasedSelection (QCBS) proceduresand Selectionof Individualconsultant procedures.

* The City of Marikinawill procureconsultant services contracts valued at about US$0.2million (PhP 10 million) for the NonmotorizedTransport component. There is provisionfor recruitmentof individualconsultants or sole-sourcerecruitment for the NonmotorisedTransport component. Four such consultantswill be recruitedunder separatecontracts ranging in value from US$50,000to US$100,000,with a cumulativemaximum of US$0.4 million.The selectionof individual consultantswill be based on their qualificationsfor the assignment(see sectionV of the Guidelines).Consultants may be selectedon the basis of referencesor throughcomparison of the qualificationsof peopleexpressing interest in the assignmentor approacheddirectly by the borrower.Sole-source recruitment may be appliedfor tasks that representa natural continuationof previouswork carriedout by the firn, or where only one fimnis qualifiedor has experienceof exceptionalworth for the assignment.

The WorldBank's standarddocuments will be used.

* StandardRequest for Proposals-Selectionof Consultants,July 1997 and updated April 1998 and July 1999, will be used for all consultantcontracts. All contractsabove US$200,000 will be advertisedin DevelopmentBusiness requesting expressions of interestprior to developinga shortlist. * StandardSample Form of Evaluationreport may be used for the evaluationof proposalsat the Borrower'sdiscretion.

There is provisionfor single-sourceselection for contractsless than US$ 100,000,for tasks that representa natural continuationof previouswork carried outby the firrn, or where only one firm is qualifiedor has experienceof exceptionalworth for the assignment.

4. ProjectManagement Office Engineering Overhead, Land Acquisition,and Operationsand Maintenance:about US$16.4million (PhP 820 million),including contingencies). About US$2.3million (PhP 115 million)is allocatedto cover the incrementalProject Management Office engineeringoverhead operating costs relatedto managingthe project,including staff traveland office utilities.These would be procuredaccording to normal commercialprocedures. Expenditures will be financed 100 percentby the Governmentof the Philippines.About US$13.5million (PhP 675 million)is allocatedto cover the cost of land acquisition.Land will be acquiredfor two projectcomponents and will be paid in accordancewith the relevantResettlement Action Plans. Expenditureswill be financed 100

- 60 - percent by the Government of the Philippines. About US$ 0.6 million (PhP 30 mnillion)is allocated to cover Operations and Maintenance expenditures incurred on infrastructure implemented under the project and incurred during the project implementation period. Expenditures will be financed 100 percent by the Govemrnmentof the Philippines.

Procurement arrangements for each of the components of the MMUTRTRIPproject are given in table 6. 1.

Table 6.1 Procurementarrangements and packaging(including contingencies)

Package Contract package Local Cost Cost Implementing Procurement Ratio WB No. government (millions (millions unit method Review unit of US$) of PhP) involved 1. Works ICB-1 LRT 2 Corridor /a 3.3 MMDA ICB n.a. Prior

______Small Works /b ICB-2 LRT 3 Corridor /c 3.8 MMDA ICB n.a. Prior Small Works ICB-3 Marikina Bridge and Marikina 16.3 DPWH-URPO ICB n.a. Prior

Access Roads Large Works /d _ ICB-4 Marcos Highway Marikina 8.2 DPWH-URPO ICB n.a. Prior Large Works ICB-5 Ortigas Avenue /e 2.2 DPWH-URPO ICB n.a. Prior Extension Small Works NCB-3 D. Romualdez/ Manila 0.4 DPWH-URPO NCB n.a. Prior Legarda/QuezonBlvd. Small Works NCB-4 Pasong Tamo Makati 1.5 MMDA NCB n.a. Prior Small Works NCB-1 Bicutan Paranaque 0.4 MMDA NCB n.a. Prior Small Works NCB-2 Alabang Muntinlupa 1.3 MMDA NCB n.a. Prior Small Works ICB-6 Pedro Gil/Tayuman/ Manila 2.3 DPWH-URPO ICB n.a. Prior M.dela Fuente/J. Small Works Fajardo ICB-7 South Super Highway /f 6.7 DPWH-URPO ICB n.a. Prior ______Small Works ICB-8 Quezon 5.3 DPWH-URPO ICB n.a. Prior Small Works NCB-5 10th Avenue Caloocan 1.0 DPWH-URPO NCB n.a. Prior Small Works NCB-6 Don Mariano Marcos Quezon 0.5 MMDA NCB n.a. Prior Avenue Extension Small Works NCB-7 Antonio Arnaiz Makati 0.6 MMDA NCB n.a. Prior Small Works NCB-8 Makati 1.1 MMDA NCB n.a. Prior Small Works NCB-9 Banawe Quezon 0.8 MMDA NCB n.a. Prior Small Works 6 NCB s Nonmotorized 1.0 City of NCB n.a. Prior Transport Marikina Small Works I Total works 64.2 3210 .

- 61 - 2. Goods ICB-9 Traffic signal 5.9 DPWH-TEC ICB-SIPE n.a. Prior equipment NS-1 Vehicles 0.1 DPWH-URPO National n.a. Post Shopping NS-2 Computers 0.05 DPWH-URPO National n.a. Post Shopping NS-3 Vehicles 0.1 MMDA National n.a. Post Shopping NS-4 Computers 0.05 MMDA National n.a. Post Shopping Subtotal 6.4 320 3. Services CS-IA Construction x DPWH-URPO QCBS/g 80/20 Prior supervisionphase I CS-IB Construction x MMDA QCBS 80/20 Prior supervisionphase I DE-II Detailed engineering 1.5 DPWH-URPO QCBS 80/20 Prior phase 11 CS-IIA Construction x DPWH-URPO QCBS 80/20 Prior supervisionphase 11 CS-IIB Construction x MMDA QCBS 80/20 Prior | tsupervisionphase 11 l _ AS-A Advisoryservices - 1.2 DPWH-UJRPO QCBS 80/20 Prior DPWH L_I AS-B Advisoryservices - 0.4 MMDA QCBS 80/20 Prior MMDA Various Institutionbuilding 1.0 MMDA QCBSI n.a. Prior -MMDA Individual Con. Various Nonmotorized 0.4 City of QCBS/ n.a. Prior transport l_ l_l_Marikina Individual Con. SubTotal 10.0 500 4. PMO engineering 16.4 820 overhead;land acquisition 5. Front-endFee 0.60 30 |_____ |Grand total cost 97.6 4880 Note: n.a. = not applicable. /a Local Government Units covered include Manila, San Juan, and /b Small worksrefers to SmallerContracts in the World Bank StandardBidding Documents for Procurementof Works. /c LocalGovernment Units coveredinclude Quezon City, San Juan, Mandaluyong,and Makati /d Large Works refersto World Bank StandardBidding Documents for Procurementof Works(used for contractsestimated to cost US$10million and over). /e LocalGovernment Units coveredinclude Pasig, Cainta, and Taytay. /f LocalGovernment Units coveredinclude Pasay, Paranaque, and Muntinlupa. /g QCBSrefers to the World Bank'sQuality-and Cost-Based Selection procedures for selectionof consultants.

- 62 - Annex 6 METROMANILA URBAN TRANSPORT INTEGRATION PROJECT (MMURTRIP) Procurement ImplementationSchedule

ID Task Name Duratb.n Start A|M|J JJAIS |O|NFIMIJ MA IJJAS JOIN|D|J |FMA|MJ JA IS |OINID|J IF |MIA|M|J JAS ON D IJIFIMIAIMIJ J AsoNDJFMA JASONJ F I DPWH 2107 days Thu 4127100

2 Detailed Design, Phase I 484 days Mon 6/5/00 rI

3 Construction Supervision, Phase I . 1673 days Thu 4/27/00

4 Advisory Services (DE and Monitoring) 2107 days Thu 4/27/00 - =

5 Marikina Bridge and Access Road 1644 days Fri 5/26/00

6 Marcos Highway ( to Masinag) 922 days Thu 1/17/02

7 Ortigas Avenue Extension (C-5 to Tikling) 1021 days Thu 11/23/00 * *** -*** __

8 Legarda/Quezon Blvd./D. Romualdez 555 days Thu 11/23/00

0 Detailed Design, Phase II 636 days Mon 4/2/01

10 Construction Supervision, Phase II 1041 days Thu 1/2/03'

11 Quirino Highway 798 days Tue 6/24/03

12 SSH West/East Service Roads 805 days Tue 8/26/03

13 P. Gil/Panaderos, M. dela Fuente, J. Fajardo, Tayuman 615 days Tue 11/25/03

14 10th Ave. 616 days Mon 10/27/03

15 Traffic Signalization (DPWH) 1912 days Thu 9/7/00

16 MMDA .1280 days Sun 7/1/01

17 Construction Supervision, Phase I 1072 days Sun 7/1/01 L, N N K_

18 Don Marano Marcos Avenue 523 days Wed 1/1/03

19 LRT Line 2 Corridor 708 days Mon 4/1/02

20 EDSA Corridor 708 days Tue 1/1/02

21 Pasong Tamo . 485 days Sat 8/4/01

22 Construction Supervision, Phase II 809 days Tue 10/15/02_ . . 'J .

23 Bicutan 523 days Tue 10/1/02

24 Alabang 708 days Fri 1/24/03

25 Banaue 523 days Tue 10/1/02

20 Antonio Amaiz 708 days Wed 1/1/03

27 Gil Puyat 708 days Wed 1/1/03

Proejel Projectl CQI Work.s Cossutanscy ~ Procurement Date.Wed 5123/01 TableA: ProjectCosts by ProcurementArrangements (US$ million equivalent)

Expenditure. EX category iProcuremnit Method Work;s00gory ICBa NCB ; OtherT N.B.F. Total Cost 1. Works 52.70 10.30 0.00 1.20 64.20 (37.10) (7.40) (0.00) (0.00) (44.50) 2. Goods 5.90 0.00 0.40 0.10 6.40 (5.90) (0.00) (0.30) (0.00) (6.20) 3. Services 0.00 0.00 9.80 0.20 10.00 (0.00) (0.00) (8.70) (0.00) 8.70) 4. ProjectManagement Office 0.00 0.00 16.40 0.00 16.40 EngineeringOverhead; Land (0.00) (0.00) (0.00) (0.00) (0.00) Acquisition;Operations & Maintenance 5. Front-endfee 0.00 0.00 0.60 0.00 0.60 (0.00) (0.00) (0.60) (0.00) (0.60) Total 58.60 10.30 27.20 1.50 97.60 (43.00) (7.40) (9.60) (0.00) (60.00) " Figures in parenthesisare the amountsto be financedby the BankLoan. All costs includecontingencies. 2 Includescivil works and goods to be procuredthrough national shopping, consulting services, servicesof contractedstaff of the project managementoffice, training, technicalassistance services, and (i) incrementaloperating costs of the project managementoffices relatedto managingthe project of about US$ 2.3 million, (ii) land acquisitioncosts of aboutUS$ 13.5 million and (iii) operationsand maintenancecosts of aboutUS$ 0.6 million. N.B.F = Non-BankFinanced NMT componentof US$ 1.5 million with GEF financing of USS 1.3 million equivalent.The GEF financingwill be WorldBank-Executed.

- 64 - Table Al: ConsultantSelection Arrangements (optional) (US$ millionequivalent)

SelectionMethod ConsultantServices ExpenditureCategory I QOBS QaS SFB LCS CQ Other N.BS.F. otl Cost' A. Firms 9.80 0.00 0.00 0.00 0.00 0.00 0.00 9.80 (8.70) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (8.70) B. Individuals 0.00 0.00 0.00 0.00 0.00 0.00 0.20 0.20 (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) Total 9.80 0.00 0.00 0.00 0.00 0.00 0.20 10.00

_ (8.70) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (8.70) 1\ Includingcontingencies

Note: QCBS = Quality-and Cost-BasedSelection QBS = Quality-basedSelection SFB = Selectionunder a FixedBudget LCS = Least-CostSelection CQ = SelectionBased on Consultants'Qualifications Other = Selectionof individualconsultants (per SectionV of ConsultantsGuidelines), CommercialPractices, etc. N.B.F = Non-BankFinanced NMT componentof US$ 1.5 million with GEF financingof US$ 1.3 million equivalent.The GEF financingwill be World Bank-Executed.

N.B.F. = Not Bank-financed Figures in parenthesisare the amountsto be financed by the Bank Loan.

Priorreview thresholds (Table B) 1. Works. Each civil works contract will be subject to the World Bank's prior review. Prior review for works will cover 100 percent of the combined value of works. Prior review of civil works includes bidding documents including detailed designs, cost estimates and technical specifications, evaluation reports, and draft contracts.

2. Goods. Each goods contract of more than USS 200,000 equivalent per contract will be subject to the World Bank's prior review. This will involve the review of one contract, namely that for traffic signal equipment. Prior review for goods will cover 95 percent of the combined value of goods. Prior review of goods includes bidding documents, evaluation reports, and draft contracts. There will be no prior review of the contracts for vehicles and computer equipment.

3. Services. Each consultant contract of more than US$50,000 equivalent per consultant contract and estimated to total about US$9.8 million equivalent, and each contract of firns more than US$200,000 equivalent per contract and estimated to total US$0.2 million will be subject to the World Bank's prior review. All terms of reference, request for proposals, shortlist, evaluation reports, draft negotiated contracts, sole-source contracts, contracts of a special nature for consultant services, and final contracts with substantial differences to the original draft will be subject to prior review.

- 65 - Table B: Thresholds for Procurement Methods and Prior Review

:Con77 f ftractValue;f 7001Contft4 s ubjectto ::0: ;0Threshtld ) 000X: Procurement Prior Review I ExpenditreCateor j USU(thouands) Method0*l000.. 0 (USSm¢il.os) _ 1. Works All contracts Intemationaland National 63.0 Competitive Bidding 2. Goods 200 IntemationalCompetitive 5.90 Bidding 3. Services 200 Quality CostBased 9.30 Selection

Totalvalue of contracts subject to priorreview: 90 percentof all contracts

OverallProcurement Risk Assessment

Average

Frequency of procurement supervision missions proposed: One every 6 months (includes special procurementsupervision for post-review/audits)

- 66 - Disbursement

Allocationof loanproceeds (Table C)

The World Bank financing will cover a maximum of 75 percent of the project cost net of taxes in line with financing guidelines for countries receiving IBRD financing.

Table C: Allocationof Loan Proceeds

ExpenditureCategory Amount in USSmillion FinancingPercentage 1. Works MMDA 9.40 70 percent of eligible expenditures DPWH 29.40 70 percent of eligible expenditures 2. Goods 0.00 MMDA 0.10 100 percent of foreign expenditures; 70 percent of local expenditures DPWH 5.50 100 percent of foreign expenditures; 70 percent of local expenditures 3. Services MMDA 2.50 100 percent of eligible expenditures DPWH 6.50 100 percent of eligible expenditures 4. Project Management Office 0.00 0 percent engineering overhead; land acquisition; operations and maintenance 5. Unallocated 6.00 Total Project Costs 59.40 Front-endfee 0.60 100 percent Total 60.00

Table C-1: Allocation of Global Environment Facility Grant Proceeds

Expenditure Category Amount in USS milion Financing Percentag 1. Works 0.80 80 percent of eligible expenditures 2. Goods 0.10 100 percent of foreign expenditures; 70 percent of local expenditures 3. Services 0.30 100 percent of eligible expenditures 4. Project Management Office 0.00 0 percent engineering overhead 5. Unallocated 0.10 Total 1.30 Note: The GEF Grant Agreement is expressedin SpecialDrawing Rights (SDR)of one million.The exchange rate at the time of negotiationswas 1.27227giving US$ amount of approximatelyUS$1.3 million rounded equivalent

- 67 - Use of statementsof expenditures(SOEs): The Statementof Expenditures(SOEs) method will be used. SOE limitsare for CivilWorks, US$1 million; Goods,US$200,000; and ConsultantServices, US$200,00 for Firms and US$ 50,000 for Individuals.

Specialaccount:

There will be three SpecialAccounts, two for the WorldBank Loan,(one for the DPWHand one for the MMDA), and one for the GEF grant,for the City of Marikinafor the NonmotorizedTransport component. To facilitateloan disbursements,the DPWH,MMDA, and City of Marikinawill each open and maintaina separatedollar special deposit accountin a commercialbank specificallyauthorized for this purposeby the BangkoSentral ng Pilipinas,on terms and conditionssatisfactory to the WorldBank, includingappropriate protectionagainst set-off, seizure, and attachment.The SpecialAccounts will cover the WorldBank's share of eligibleexpenditures in all disbursementcategories. Applications to replenishthe SpecialAccounts, supportedby appropriatedocumentation, will be submittedregularly by each (preferablymonthly, but not less than quarterly)or when the amountswithdrawn equal 50 percentof the initial deposit.

The DPWHSpecial Account will have an authorizedallocation amounting to US $3.0million with an initial withdrawalof US$1.5million to be withdrawnfrom the LoanAccount and depositedin the Special Account.The balance shallbe withdrawnwhen the amountsdisbursed and committedtotal US $18.0 million.

The MMDASpecial Account will have an authorizedallocation amounting to US $1.0 millionwith an initial withdrawalof US$0.6million to be withdrawnfrom the Loan Accountand depositedin the Special Account. The balanceshall be withdrawnwhen the amountsdisbursed and committedtotal US$5million.

The City of MarikinaSpecial Account will have an authorizedallocation amounting to US $100,000with an initialwithdrawal of US$100,000to be withdrawnfrom the GrantAccount and depositedin the Special Account.

Accounting, Financial Reporting and Auditing Arrangements: Financial Management Assessment. World Bank staff undertook a Financial Management Assessment of the DPWH-URPO,MMDA, and City of Marikinaas the implementingagencies. The assessment(see FinancialManagement Assessment, June 2000 in projectfiles) was fully discussedand agreedwith the agenciesin May2000. Overall the financialmanagement of the DPWH(and its ProjectManagement Office),the MlMDA,and the City of Marikinasatisfies the WorldBank minimumfinancial management requirements.Project Management Report (PMR)-based reporting will be implemented.However, the project doesnot have in placean adequateproject financial management system that can provide,with reasonableassurance, accurate and timelyinformation on the statusof the project as requiredby the World Bank for ProjectManagement Report (PMR)-baseddisbursements. PMR-baseddisbursement is targeted at a later stage in projectexecution to coincidewith the improvementof financialmanagement implemented for the DPWH as a whole under the assistanceof the NRIMPproject.

- 68 - Financial Management Action plan. Certainissues found in the FinancialManagement Systems of the agencieshave been addressedprior to WorldBank Board approvalby remedialactions as describedbelow.

FinancialManagement Action Plan - DPWH-UrbanRoads Project Office (URPO)

Issues Remedialactions 1. The Financeand Budget Sectionof the URPOis 1. The Financeand BudgetSection of the URPO staffedby engineersand there are no accountants. hired two accountants. 2. There is no documentedmanual on policiesand 2. A FinancialManagement Manual acceptableto proceduresfor financialmanagement. the WorldBank was prepared. 3. There are inherentdeficiencies in the DPWH 3. The InterimFinancial Management System used financialmanagement system under the for the NRIMP was adaptedand the URPOwas Comptrollershipand FinancialManagement made part of overallfinancial management Service. improvementunder the NRIMP.

FinancialManagement Action Plan - MetropolitanManila Development Authority (MIDA)

Issues Remedialactions 1. The financialmanagement rank and file lacks 1. The financialmanagement function, including capacitydue to inappropriatebackground and assignmentof the necessarypeople as specifiedin experience. the assessmentreport, was organised. 2. There is no documentedmanual on policiesand 2. A FinancialManagement Manual acceptable to proceduresfor financialmanagement. the WorldBank was prepared. 3. The accountingsystem is manual and financial 3. A simpleinterim computer system to handlethe reportsare delayedbecause two sets of booksare project'sseparate books of accountsas well as its maintainedand because of lack of capacity. own reports,both the regulatoryand the PMRs was installed. 4. Procurementis underthe Treasury. 4. Procurementwas made independentof finance. 5. The internalaudit functionis underthe Finance 5. Havean internalaudit functionfor the project and AdministrationService. and the MMDAas a whole reportto the Chairman of MMDAor, preferably,the Council.(This will be donesix monthsafter Loan effectiveness).

Reporting Arrangements. Even beforethe ProjectManagement Report (PMR)based disbursementsystem is effective,each implementingagency will prepare in accordancewith the WorldBank's Loan AdministrationChange Initiative handbook the followingreports: (i) summaryuses and sourcesof funds (Report 1-Aof PMR); and (ii) ProcurementMonitoring Reports (Reports 3 A, B, C, and D). Whenthe PMR disbursement-basedsystem is in force,each implementing agency will also producea reporton the use of fundsby projectactivity (Report1-B). DPWH Controllership and FinancialManagement Services will alwayshave the responsibilityof consolidatingthese reportsand producingan annualProject Balance Statement. Auditing Arrangements. The Governmentof PhilippinesCommnission on Audit will be responsiblefor annualaudit of the implementingunits' consolidatedfinancial statements, withdrawal applications and supportingStatement of Expenditures,documentation of the operationsof the SpecialAccount, and the PMRs when operational.The auditedfinancial statements will be submittedto the WorldBank within six monthsof the end of the projectfinancial year. The annualaudit will be conductedin accordancewith the requirementsof the Audit Manualfor WorldBank FinancedProjects issued by the East Asia and Pacific

- 69 - Regionof the WorldBank in July 1998. Funds Flow and Disbursement Arrangements. For loan proceeds, funds will flow, upon approval by the Departmentof Budgetand Management,from the coffersof the Bureauof Treasuryof the Departmentof Financeto the SpecialAccounts. The counterpartfund of the Governmentof the Philippineswill go to a separatebank accountand will not be mixedwith the Loan proceeds.In the DPWH,expenditures for the projectwill be paid from the Comptrollershipand FinancialManagement Service to contractors,suppliers, or consultantseither upon incurrenceor throughreplenishment, whereby the Departmentadvances the money first.The latter wouldgenerally be the mode of disbursement.

- 70 - Annex 7: ProjectProcessing Schedule PHILIPPINES:Metro ManilaUrban Transport Integration Project

ProjectSchedule Planned Actual Timetaken to preparethe project(months) 23 30 FirstBank mission (identification) 11/02/98 11/02/98 Appraisalmission departure 10/01/2000 10/05/2000 Negotiations 10/10/2000 05/15/2001 Planned Date of Effectiveness 09/01/2001

Preparedby: Departrnentof PublicWorks and Highways,Urban RoadsProject Office and TrafficEngineering Center; and MetropolitanManila Development Authority and the 12 citiesand five municipalLocal Government Units of MetroManila including the City of Marikina.The TransportSector Unit of the East Asia and the PacificRegion of the WorldBank.

Preparationassistance: A Policyand HumanResources Development (PHRD) grant of US$1.0 millionprovided by the Japanese Governmentwas used largelyfor the feasibilitystudy that developedthe projectcomponents. Detailed engineeringdesign for phaseI was fundedunder the WorldBank Loan for the HighwayManagement Project,which closedJune 30, 2000, and the FirstNational RoadsImprovement and MaintenanceProject, which becameeffective July 7, 2000.

Bank staffwho worked on the project included: Name Speciality JitendraN. Bajpai PrincipalTransport Specialist, Sector Director Sally Burninghiam SeniorTransport Engineer, Task Team Leader Rene SD. Manuel ProcurementOfficer JosephReyes OperationsOfficer - Financialspecialist MayaVillaluz OperationsOfficer - Environment Zhi Liu SeniorTransport Economist FrancescoAddis Transporteconomist Karen AlexandraHudes SeniorCounsel Carlos Escudero ChiefCounsel Hung Kim Phung SeniorDisbursement officer GlennMorgan SenoirEnvironmental Specialist, Environmental and Socialclearance ChaohuaZhang Sr. Social SectorSpecialist, Resettlement and Land Acquisitionclearance Paul Guitink SeniorTransport Specialist, Peer Reviewer KennethGwilliam EconomicAdvisor, Peer Reviewer GerhardMenckhoff Peer Reviewer ChristopherDe Serio ProgramAssistant

- 71 - Annex 8: Documents in the Project File* PHILIPPINES: Metro Manila Urban Transport Integration Project

A. Project ImplementationPlan

ProjectImplementation Plan, May 2001 ProcurementImplementation Schedule, May 2001

B. Bank StaffAssessments

ProcurementAssessment July 31, 2000 FinancialManagement Assessment July 31, 2000 WorldBank mission Aide-memoire November 2-7, 1998 WorldBank mission Aide-memoire February 16-23, 1999 WorldBank mission Aide-memoire May 10-14,and June 1-11, 1999 WorldBank mission Aide-memoire November 8-12, 1999 WorldBank mission Aide-memoire February 7, 8 and 17, 18, 2000 WorldBank missionAide-memoire May 8-12, 2000 WorldBank missionAide-memoire Appraisal October 5-13, 2000

C. Other

FeasibilityStudy for MMURTRIP,Halcrow Fox, VolumesI and II, July 1998 DetailedEngineering for MMURTRIP,Inception Report, DPWH, June 30, 2000 DetailedEngineering for MMURTRIPreport, DPWH, October 2000 EnvironmentalImpact Assessment of MMJURTRIP,EIAPO-DPWH, July 2000 ResettlementAction Plan, MarikinaBridge and AccessRoads component, April 2001 ResettlementAction Plan, Don MarianoMarcos Avenue Extension component, October 2000 PolicyFramework on Land Acquisition,Resettlement and Rehabilitation,MMURTRIP, EIAPO-DPWH, May 2001 OperationalFramework for PublicParticipation and Consultation,MMURTRIP, EIAPO-DPWH, April 2001 Projectinformation brochure in Englishand Tagalog InstitutionalPlan and Termsof Referencefor TechnicalAssistance, MMDA, December 20, 2000 MarikinaBicycle Network, Feasibility Study, December 1999, National Centerfor TransportationStudies, Philippines MarikinaBicycle Network, Inception Report, Interface for Cycling,July 8, 2000 OperationalProgram 11, GlobalEnvironment Facility GlobalEnvironment Facility (GEF)supported NMT Component- MarikinaBicycle Network. STAP Review. Metro ManilaUrban TransportationIntegration Study (MMUTIS),Final Report, DPWH,ALMEC, Philippines,March 1999 Metro ManilaAir QualityImprovement Sector Development Program, Asian DevelopmentBank Project Report,November 1998 RRP: PHI 30480 A 1997 Surveyabout Traffic,November 1997, SocialWeather Station Bulletin 97-22 *Includingelectronic files

- 72 - Annex 9: Statement of Loans and Credits PHILIPPINES:Metro Manila Urban Transport Integration Project May-2001 Differencebetween expected andactual Orginal Amountin US$ Millions disbursements ProjectID FY Purpose IBRD IDA GEF Cancel. Undisb. Orig FrmRev'd P066069 2001 LANDADMIN & MANAGEMENT 4.79 0.00 0.00 0.00 4.49 0.00 0.00 P039019 2000 FIRST NATLROADS IMPROV.IMGNT. PROJECT 150.00 0.00 0.00 0.00 140.76 9.10 0.00 P059933 2000 COASTALMARINE 0.00 0.00 1.25 0.00 1.17 0.68 0.00 P065113 2000 PH-SOCIALEXPENDITUFE MANAGEMENT 100.00 0.00 0.00 0.00 6W.01 25.03 0.00 P058842 2000 PROJECT 2750 0.00 0.00 0.00 24.82 2.82 0.00 P057598 1999 MiNDANAO RURALDEV 150.00 0.00 0.00 0.00 118.17 63.17 0.00 P056524 1999 RURALFINANCE III 300.00 0.00 0.00 0.00 200.00 2W.00 0.00 P039022 1999 BANKG SYS REF (FSAL 23.30 0.00 0.00 0.00 19.07 7.37 0.00 P048588 1999 PHIL-LGUURBAN WATER & SANITATiONPROJ 100.00 0.W0 0.00 0.00 96.40 8.57 0.00 P051386 1998 PHIL-LGUFINANCE AND DEVELOPMENTPROJECT 10.00 0.00 0.00 0.00 0.93 0.93 0.00 P004595 1998 SZOPAD SOCIALFUND 50.00 0.00 0.00 0.00 45.51 20.01 0.00 P004576 1998 COMMUNTY BASEDRESO 56.80 0.00 0.00 0.00 35.45 46.92 5.15 P004566 1998 PHIL-WATERDISTRCTS DEVELOPMENT PROJECT 19.00 0.00 0.00 0.00 15.92 5.92 0.00 P040981 1997 PH-EARLYCHILD DBE. 60.00 0.00 0.00 0.00 51.44 51.44 2.80 P004602 1997 SECONDSLBIC BAY 113.40 0.00 0.00 20.10 81.17 73.67 0.00 PD04613 1997 PH-THIRDELEMENrARY EDUCATiON 58.00 0.00 0.00 7.27 33.75 34.96 -0.36 P037079 1997 WATERRESOURCES DEVE 50.00 0.00 0.00 0.00 17.50 0.04 0.00 P004571 1996 AGRARIANREFCRM COMM 250.00 0.00 0.00 45.52 93.95 109.56 29.82 P004611 1996 TRANSGRID REIWFORCE 57.00 0.00 0.00 9.00 44.66 52.34 4.11 P004614 1996 PHIL-MANILASEWERAGE PROJECT II 150.00 0.00 0.00 0.00 8.73 5.07 0.00 P004s67 1995 RURALFINANCE 11 18.00 0.00 0.00 4.30 5.10 8.74 3.94 P004403 1994 PH-WOMENSHEALTH & SAFE MOTHERHOOD 0.00 0.00 0.00 2.00 6.08 9.95 0.00 P004568 1993 CONS.OF PRiORITYPR 0.00 70.00 0.00 20.16 15.49 38.84 10.42 PH-URBANHEALTH & NUTRiTION

Total: 1747.79 70.00 1.25 108.34 1140.60 775.16 55.89

- 73 - PHILIPPINES STATEMENT OF IFC's Held and Disbursed Portfolio May-2001 In Millions US Dollars

Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1980/82/89/90/94/95 AACT 0.00 1.70 0.00 0.00 0.00 1.70 0.00 0.00 1996 All Asia Growth 0.00 4.00 0.00 0.00 0.00 4.00 0.00 0.00 1996 All Asia Manager 0.00 0.04 0.00 0.00 0.00 0.04 0.00 0.00 1996 All Asia Venture 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 2000 Asian Hospital 14.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 BPI Philippines 22.64 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0/97/98 BataanP/E 30.00 0.00 10.00 138.00 30.00 0.00 10.00 117.25 1997 DrysdaleFood 15.00 0.00 0.00 10.00 9.60 0.00 0.00 6.40 1998 General Milling 0.00 0.65 0.00 0.00 0.00 0.65 0.00 0.00 1979/90 H&Q PV III 0.00 7.50 0.00 0.00 0.00 3.74 0.00 0.00 1998 H&QPV-I 0.00 0.61 0.00 0.00 0.00 0.61 0.00 0.00 1989 H&QPV-II 0.00 1.43 0.00 0.00 0.00 1.43 0.00 0.00 1993 1.76 0.00 0.00 0.00 1.76 0.00 0.00 0,00 1967188 Mariwasa 11.04 0.00 3.00 0.00 11.04 0.00 3.00 0.00 1970/72/00 MindanaoPower 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1993/94 Pagbilao 39.00 10.00 0.00 5.40 39.00 10.00 0.00 5.40 1993 Pilipinas Shell 0.00 1.56 0.00 0.00 0.00 1.56 0.00 0.00 1992 PlantersBank 15.00 0.00 8.71 0.00 15.00 0.00 8.71 0.00 2000 Pryce Gases 10.00 0.00 3.00 5.00 10.00 0.00 3.00 5.00 1998 STRADCOM 12.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2000 Sual Power 29.35 17.50 0.00 182.06 29.35 17.50 0.00 182.06 1995 TRP 0.00 0.05 0.00 0.00 0.00 0.05 0.00 0.00 1999 UPPC 30.00 0.00 0.00 0.00 30.00 0.00 0.0o 0.00 1999 Union Cement 1.40 5.63 0.00 1.00 1.40 5.63 0.00 1.00 1992 Walden Mgmt 0.00 0.05 0.00 0.00 0.00 0.05 0.00 0.00 1994 Walden Ventures 0.00 3.75 0.00 0.00 0.00 3.75 0.00 0.00 1994 ePlanters 0.00 0.21 0.00 0.00 0.00 0.12 0.00 0.00 2000 Total Portfolio: 231.19 54.69 24.71 341.46 177.15 50.84 24.71 317.11

ApprovalsPending Conmuitment FY Approval Company Loan Equity Quasi Partic 2000 Asian Hospital 0.00 0.00 0.00 5.00 1999 Cepalco 16.00 6.00 0.00 0.00 1998 Far East Bank II 0.00 0.00 0.00 15.00 2000 LTO Project 0.00 8.00 0.00 20.00 2000 MFI MEP 0.00 0.00 0.00 0.00 2001 Manila Tollways 46.00 0.00 0.00 0.00 1997 PT&T 30.00 0.00 5.00 30.00 Total PendingCommitment: 92.00 14.00 5.00 70.00

- 74 - Annex 10: Country at a Glance PHILIPPINES:Metro Manila Urban Transport Integration Project East Lower- POVERTY and SOCIAL Asia & middle- Philippines Pacific Income Development diamond' 1999 Population, mid-year (millions) 76.8 1.837 2,094 Life expectancy GNP per capita (Atlas method, USS) 1.020 1.000 1.200 GNP (Atlas method. USS billions) 78.0 1,833 2.513 Av*rag* annual growth, 1993-99 Population f%1 2.2 1.2 1.1 Laborforce (%) 2.7 1.3 1.2 GNP Gross per primary Most recent estimate (iabost year availbls. 1993-99) capita enrotimeni Poverty (1 of population beow national povorty line) 37 Urban population (1 of total population) 58 34 43 Life expectancy at birth (years) 69 69 69 Infant mortalit (per 1,000 live births) 32 35 33 Child malnutrition (1%of children under 51 30 22 15 Access to safe water Access to improved water source f% of poputetioni 83 84 86 Illiteracy I% of population ao 15+) 5 15 16 Gross primarv enrollmnent (%of school-age population) 117 119 114 - h,lrppnes Maie 121 114 Lower-middle-income group Female 121 116

KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1979 1989 1998 1 999 Economic ratios' GOP (USs billions) 27.4 42.6 65.5 76.6 Gross domestic investmsntUGDP 33.2 21.6 20.2 18.6 Trade Exports of goods and services/GDP 21 6 28.5 51.9 51.2 Gross domestic savings/GDP 28.1 19.8 13.6 19.6 Gross national savinqslGDP 29.7 21.1 18.6 25.1 Current account balancelGOP -5.5 -3.4 7.7 14.7 Domestic Interest cavmentslGDP 1.8 3.9 3.0 2 5 Sains Investment Total debtlGDP 48.4 67.2 73.0 68.2 avigs Total debt service/exports 24.6 25.9 10.3 10.8 Present value of debUGDP 69.2 Present value of debtlexports 90.5 Indebtedness 1979-89 19SS-99 1998 1999 19S9-03 (average annual growth) GOP 0.8 3.0 -0.8 3.2 4.3 - hilippmes GNP per capita -20 113 -2.0 1.3 2.3 Lower-middle-income group ExDorts of qoods and services 4.1 7.8 -21.0 3.6 9.3

STRUCTURE of the ECONOMY 1979 1989 1998 1999 Growth of Investment and GOP 1%) (% of GDP) 20 Aqriculture 27.4 22.7 17.4 17.7 Industrv 37.0 34.9 31.3 30.3 1D Manufacturing 25.1 24.9 21.8 21.5 o T-p Services 35.6 42.4 51.3 52.0 -1. 4 ss sr 97 Private consumption 62.5 70.6 73.1 67.4 -20 General qovernment consumption 9.4 9.5 13.2 12.9 GDi : GDP ImDorts of aoods and services 26.6 30.3 58.5 50.2

1979 89 198999 1998 1999 Growth of exports and Imports (%) (average annual growth) Agriculture 0.9 1.4 -7.3 6.2 20 Industry -1.2 3.0 -2.1 0.3 1 Manufacturing -0.3 2.7 -1.1 1.6 Services 2.6 3.8 3.5 4.1 o 54 95 w 7 Private consumption 1.9 3.9 6.9 0.4 -u General government consumption -0.2 3.5 -1.9 5.3 Gross domestic investment -4.1 3.5 -16.3 -2.9 1o20 Imports of qoods and services 2.0 8.9 -14.7 -2.8 Exports m mports Gross national product 0.6 3.7 0.2 3.5

Note: 1999 data are preliminary estimates. The diamonds show four kev indicators in the countrv tin bold) compared with its income-group averaqe, If data are missinqg the diamond will be incomplete.

- 75 - Philippines

PRICESand GOVERNMENTFINANCE 1979 1989 1998 1999 Inflation (%) DomesUc prices (% change) 15 Consumerprices .. 12.2 9.8 6.6 16 Implicit GDPdeflator 14.8 9.0 11.3 8.2 5 Govemmentfinance (% of GDP,includes current grants) o Currentrevenue .. 16.5 26.9 25.6 94 95 9g 97 98 o Currentbudget balance .. 1.0 4.5 2.7 GDPdeflator 4 0 CPI Overall surplus/deficit .. -2.1 -0.9 -2.7

TRADE 1979 1989 1998 1999 Exportand Import levels (USSmill.) (US$ milffions) Total exports (fob) 7,821 29,496 35,081 45,000 Coconutoil .. 377 Sugar 89 30.00 Manufactures .. 5,192 25,866 31,097 Total imports(c6) .. 10,419 31,848 36,276 Food .. 521 1,774 1,982 1 Fuel and energy .. 1,397 2,148 3,395 Capitalgoods .. 2,424 12,818 14,555 o 93 94 s9 Qs 97 98 99 Exportprice index (1995=100) .. 88 Import price index(1995=100) .. 86 . Exports * Imports Terms of trade (1995=100) .. 103

BALANCEof PAYMENTS 1979 1989 1998 1999 Currentaccount balanceto GDP(%) (US$ millitons) Exportsof goodsand services 5,678 10,674 43,413 47,886 1 -1 Importsof goodsand services 7,305 11,845 42,302 41,179 Resourcebalance -1,627 -1,171 1,111 6,707 10 Net income -223 -1,332 3,530 4,104 s Net currenttransfers 355 1,045 435 481 0

Currentaccount balance -1,495 -1,458 5,076 11,292 96 97 96 99

Financing items (not) 1,811 1,758 -3.717 -7.351 s Changesin net reserves -316 -300 -1,359 -3,941 -10 Memo: Reservesincluding gold (USSmillions) .. .. 10,684 14,988 Conversionrate (DEC, locallUS1 7.4 21.7 40.9 39.1

EXTERNALDEBT and RESOURCEFLOWS 1979 1989 1998 1999 (USSmillions) Compositlonof 1998debt (USSmill.) Total debt outstandingand disbursed 13,282 28,653 47,817 52,212 IBRD 731 3,492 4,311 4,040 G:7.185 A:4,311205 IDA 32 102 205 206 c:205 Total debt service 1,584 3,244 5,166 6,026 IBRD 86 536 654 642 0: 3,456 IDA 0 2 4 4 Compositionof net resourceflows Officialgrants 58 380 184 Official creditors 427 874 -6 -38 Private creditors 703 -275 419 3,991 E: 12,237 Foreigndirect investment 7 563 1,713 F: 18,855 PortfolioequitV 0 253 454 World Bank program Commitments 273 801 679 128 A- IBRD E - Bilateral Disbursements 213 465 301 163 B - IDA D -Othermultilateral F -Pnvate Principalrepayments 25 269 389 387 C - IMF G -Short-term Net flows 188 196 -88 -224 Interestpayments 61 269 268 259 Net transfers 127 -73 -356 -483

DevelopmentEconomics 915/2000

- 76 - Republic of the Philippines The total project cost is estimated at 2.9 billion pesos, The role of the local government units (LGUs) in the broken down as follows: project is critical. The LGUs will actively participate in METRO MANILA URBAN TRANSPORT ProjectCosts (in milflins( the implementationof the project,particularly in right of INTEGRATIONPROJECT (MMURTRIP) way acquisition, resettlement and enforcement of traffic WrlJd Bank Gonirnert Total US $ Pesos Pesos US 5 management schemes. LRT2 Corrida 3.1 53.2 177.5 4 4 EDSA Carida 3.2 55.5 1852 4 6 -ROMANiAVOWWANPOR

SothoirConida 20.5 351.4 1.1713 29.3 Kola vif.4kI " MARIPAS I10 27 4 51.3 2 3 The MMURTRIP has evolved from a feasibility study AE SeonndwyRoads 189 4292 1,185.6 296 supported by the World Bank in 1997. Extensive TA 13 400 1.0 consultations among national government agencies and

TOTAL 49.6 916.7 29000 72.5 lately with the LGUs of Metro Manila are on-going to further define the scope of the project. The current The Global Environment Facility (GEF) has indicated package has been approved by the Technical Board of possibility of co-financing the pilot bikeways the inter-agency Investment Coordination Commitee -v componentof the project (the GEF is supportingthe (ICC). Full approval is expected after the requirements conduct of the Feasibility Study of the proposed pilot of the ICC are addressed, namely an evidence of a bikeways project). commitment by the LGUs to the project, and a formal RI; co agreement on the implementation program defining the role of the 2 implementingagencies - the DPWH and the MMDA. The project is scheduled for MMDA Council Q Theof DepartentPubic Works ad Highways review while the Memorandumof Agreementamong (DPWH) has been tasked as overall Executing Agency DPWH, MMDA and theLG)Us isben preed. e) _ for the project. In line with its mandated role as .. metropolitan transport planning agency, the MMDA will . A. -. implement key components of the project, particularly - C thoseinvolving traffic managementimprovements. 3

At the DPWH, the Project Implementation Team composed of the Urban Roads Project Office (URPO), the Traffic Engineering Center (TEC), Bureau of Desin (BOD)ff an(EIAPO) will managl detaled For more information about the project, please contact: Asessmentpoffiemn (EaPn ) wosrcilmnag. etie design, procurement and construction. Departmentof Public Works andHighways (DPWH) Contact: Teodoro Encamacion to. At the MMDA, a project team from the Traffic Undersecretaryfor Planning f X wwam Operations Center, the Engineering Office and BonifacdoDrive, Port Area t Planning Office will be organized specifically for MetroManila, Philippines MMURTRIP implementation. Tel: 632-5274808 E Fax: 632 - 527 4105 Prjoje Stes6noCOMssliee-0 I N.D^Mnk5Me* I Metro ManilaDevelopment Authority Contact:Violeta SomeraSeva

ExecutingAgency 1 GeneralManager OPWH I OrenseSt., Makati City l Tel: 632- A Project of the Department of Public Works and OPvfti| § MbtDA Lous Fax: 632 - Highways, Metropolitan Manila Development Authority, Local Government Units and the World TheWorld Bank. Resident Mission Philippines Bank TECi u| o URPOeibon| Pl.rrri9 | 23 Floor,The Construction is expected to commence early 2001, EmeraldAvenue, Pasig City particularly those involving traffic management. Tel. (63-2)637-5855 l Detailed designs for these components will start in Fax (63-2) 637-5870 February 2000 April 2000. l I _ - _ A Secondary Roads Program to better disperse traffic To its more than 10 million inhabitants, transport over the road network and reducing congestion in congestion is the number one problem in Metro Manila. The project aims to: arterial roads. MMURTRIP will introduce pavement And for good reason: On a weekday along EDSA, rehabilitation, drainage and sidewalk improvements, vehicles travel no faster than 15 kph. People who live * demonstrate the effectiveness of traffic and construction of missing links in the following roads: outside of but work in Metro Manila experience long management measures Component Locatlon/LGU commuting time. The growing number of cars and . improve the effectiveness of larger projects such as D. Romualdez Sr City of Manila simultaneous implementation of road projects and the MRT, LRT2 and , and Legarda Cityof Manila private developments cause the severe traffic . increase road access to outer areas particularly PasongTamo Makati congestion. outside EDSA QuezonBoulevard Cityof Manila AntonioAnaiz Avenue Makati Sen. Gil PuyatAvenue Makati BanaueAvenue QuezonCity

The project will include: Quirino Highway Quezon City SouthSuper Highway Pasay,Paranaque 0 public transportimprovement measures, such as West/EastService Road Muntinlupa Major projects such as the MRT, LRT Line 2 and integrationbetween modes, improvementof PedroGil/New Panaderos Mandaluyong Skyway are being constructed to improve the transport interchange facilities and measures for introducing Tayuman City of Manila situation. However, the designs of these projects have public transport priority 10th Avenue Catoocan not fully consideredthe needs of other public transport * traffic management,both at and between M. de la Fuente(Traajo) Cityof Manila modes like jeepneys, tricycles and buses. For intersections JacoboFajardo City of Manila example, stop and drop locations, transfer points and measures for controlling inappropriate frontage waiting areas along these facilities are not taken into * ana Bicycle and pedestrian Dathways in Marikina Valley. account. Thus, chaotic traffic conditions prevail along actvi . s fnd MMURTRIP will pilot a bikeways project in Marikina to major avenues particularly around road junctions. by provideng sidepwalksrnoadsafety for pedestrians connect communities with employment centers and by povidngad sdewaksoter fciliiesLRT stations. There are more trips on foot and by To address these issues, the MMURTRIP was tricycle in Marikina than on average throughout Metro developed by an inter-agency committee under the Manila, suggesting a potential for increased non- lead of the Metro Manila Development Authority motorized transport in the area. 22% of all trips are (MMDA). Based mostly from a study funded by the Traffic management improvements along the EDSA, made on foot and 30% by tricycle compared with 20% World Bank, the project overall aim is to improve the LRT2 and corridors to and 14% respectively in Metro Manila where tricycles connectivity and capacity of the existing transport, improve street level collection and dispersal of MRT are banned along many major corridors. network in Metro Manila. and LRT2 passengers and in the expressways. Component ProjectLocationlLGU Certain components originally in the project proposal are now excludedfrom the World Bank loan package. LRT 2 Corridor- Rectoto Manila,San Juan, Quezon These include a new road link (Radial Road 3 that will MarcosHiway (Santolan) City, Mankina,Pasig pass through Pasig, Cainta and Taytay), the Sucat interchange improvements component and 3 secondary EDSA(MRT) Corridor- North QuezonCity, Mandaluyong roads, namely Don Mariano Marcos Ave. Ext., Moriones The project is targeted at public transport users who Ave.to Roxas Blvd. Makati,Pasay City and Aurora Blvd. These components can be supported make 75% of all trips in Metro Manila. These transport by a supplemental World Bank loan once the right of users belong mostly to the poverty groups. It also South Luzon Expressway: way has been secured and the affected families and represents one of a series of measures necessary to BicutanInterchange Paranaque establishments satisfactorily relocated. improve the current situation and complements the Air AlabangInterchange Muntinlupa Quality Project that is being funded by the Asian Marikina-Rizal-Pasig (MARIPAS) Access Improvements In addition, the Project will address issues such as: Development k. identified by the local govemments of Marikina City, . . I______Rizal province and Pasig City to be critical to * refining urbantransportpolicies and objectves addressing their common transport problems. These * planning and operational standards for roads, The project intends to: include the Marikina Bridge and access road, and pedestrian facilities, terminals, parking truck routes * improve the street level interchange between corridor improvements along Ortigas Ave. Ext. and * private sector participation in providing public buses, jeepneys and LRT lines, and Marcos Highway. transport services * manage traffic congestion experienced by transport users. Additional Annex 12

PHILIPPINES:Metro Manila UrbanTransport Integration Project

InstitutionalFramework for Traffic Engineeringand Transport Planning

1. Introduction

As highlighted in a recent policy study,' the planning, implementation,operation, maintenance,and regulation of city transport is a complex process encompassingnumerous modes, users, and agencies. Above all, urban transport is a highly political and visible activity. Failure to deliver an acceptable transport system is immediatelyevident to transportsystem users-symptoms such as passenger queues, traffic congestion,slow journey times, accidents,and an ugly traffic-relatedenvironment are immediately evident. Concems by users of poor-qualitytransport systems are usually high on the list of complaints againsta city administration.

Achieving an adequate balance between competingtransport modes and interests requires competent transportinstitutions working within a clearly defined frameworkof responsibilities.While there is no singleideal or model institutionalframework for traffic and transportadministration, any urbanarea should in broad terms have an organizationalframework that deals with the basic functionsof:

* Strategictransport planning - developmentof transportstrategies in the urban developmentcontext leadingto realisticpolicies, short- and long-terminvestment programs and so on. * Infrastructurefor transport- planning,design, financing, construction, and maintenanceof road, public transport,and other related infrastructure. * Publictransport - developmentof the public transportsystem, including planning, design, management,regulation, licensing, franchising, and, in some cases, operation. * Trafficoperations and management- managementof roads and road use for all vehicularand nonvehicularmodes, includingNonmotorised Transport. Traffic operations and management activitiesinclude planning, design, implementation, operation, and maintenanceof the traffic managementsystems and facilities. - Regulations- enforcementof trafficregulations, driver and vehicle licensing,vehicle testing,and so on.

These functions can be addressed in many ways. The institutional structure for any urban area is determinedby its particular political and cultural context and its size. Changes depend very much on currentinstitutional arrangements or "startingpoint" in a city. The range of organizationalarrangements is almost infinite: govemment ministries and departments,metropolitan transport authorities,public transit authorities,independent commissions, institutes, municipal departments, local/district agencies, task forces, and many other agenciesare used. Agenciesneed not, and most do not, carry out all functionsthemselves- many functionsare outsourcedwhile remainingunder the supervisionof the responsibleagency.

2. Currentresponsibilities in MetroManila

In Metro Manilamost transportplanning and traffic managementresponsibilities have been shared by the national Departmentsof Public Works and Highways(DPWH) and Transportationand Communications (DOTC),the PhilippineNational Police, local governments,and the MetropolitanManila Development

- 79 - Authority(MMDA).

The prime responsibilityof the DPWH is the constructionand maintenanceof main roads throughoutthe Philippines. In Manila, the DPWH is also chargedwith traffic engineeringfunctions. Over the years, the departmenthas built up an effective Traffic Engineering Center (TEC), which among other measures developedand operateda centrallycontrolled traffic signalsystem.

The DOTC is responsiblefor motor vehicle registration,driver licensing, and bus route franchising,in accordance with the Land Transportationand Traffic Code of 1964. The DOTC establishes national policies, enforces its regulations,and oversees public transportprovision, including rail mass transit and the settingof .

The NationalPolice are responsiblefor enforcingtraffic rules and issuingfines. The local governmentunits have overall responsibilityfor local roads, pedestrianfacilities, and bikeways;they also issue the operating permitsof pedicabsand motorizedtricycles.

The MMDA was established in 1995 and took over several functions of the earlier Metro Manila Authority. In the transport field its new responsibilitiesincluded such key aspects as traffic engineering, education,and enforcementand the formulationof policies of urban transport in general, including the provision for mass transport. Its functions are to be carried out over the entire area of Metro Manila, but the MMDA Act also specifiesthat the new functionsnot imply the "diminutionof the autonomyof the localgovernment units concerningpurely localmatters."

The past decade has seen an explosionof rail mass transit and expressway"megaprojects," which were largely financed and built by private developers.In most cases, either the DOTC or DPWH carried out some planningof the facilitiesand awardedlong-term concessions to the private sector companies.Despite its wide-rangingpowers over metropolitantransport, the MMDAhas played a minor role in planningand operationalsupervision of these megaprojects.

Governance issues in Metro Manila transport sector management

ManagingMetro Manila is at least as complexas the problemsfacing it. It is composedof 17 autonomous cities and municipalities.This autonomy allows each local governmentto respond to problems such as traffic managementbased on its own plans, priorities,and programs.

Local GovernmentUnits play a significantrole in developingthe transportand traffic environmentsin their respectiveareas. But this role is not exerciseduniformly, as local transportinvestments must respond to local needs and priorities. Some local governmentunits take on the responsibility for public transport terminals,regulating their use and providingthe necessaryinfrastructure. Others provide terminalsonly on a temporarybasis, pernitting vehiclesto use sidewalksand other road space as terninals.

The absence of a development frameworkin the past has resulted in uncoordinateddevelopment and contributedto widespreadcongestion and environmentaldegradation. Also, many inappropriateresidential, commercial,and other developmentsare allowed to proceed unchecked,which has further weakened the abilityof the authoritiesto manage the traffic situation.A 20-year Metro Manila PhysicalFramework Plan was completedin 1996, followedthree years laterby a transportplan produced by the Metro ManilaUrban TransportIntegration Study (MMUTIS).

- 80 - The recent government focus on large projects has left critical activities like traffic management and enforcement and public transport regulation lacking attention and funding. Plans and policies have normally been mode-specific, as they were sponsored by national government agencies with little regard for the development of an integrated multimodal transport system.

Because of the absence of an effective transport planning framework at the metropolitan level, the responses to Manila's traffic and transport crisis have consisted largely of stop-gap measures and opportunistic financing solutions. A number of impressive flyovers and interchanges have been built to solve traffic congestion at particular critical points with the effect in some cases of shifting the congestion to other points. The absence of comprehensive planning has resulted in sometimes insurmountable problems when elevated rail structures could no longer be fitted satisfactorily through recently built road interchanges.

Reliance on private finance for major transport investments makes thorough transport planning and coordination all the more important, lest future governments find themselves loaded with heavy contingent liabilities. A recent background paper prepared as part of the World Bank's new urban transport strategy stresses the importance of adequate preparation of rail mass transit projects and of integrated rail and urban development. With reference to Manila, this paper states:

Private sector participation focuses on the most lucrative routes, leaving less attractive ones to the public sector, which tends to lead to a "piece-by-piece"approach. Although private provision of rail services is desirable in appropriate cases, given the govemmental financial constraints, the piece-by-piece approach may result in inconsistencyor a lack of coordinationacross modes and systems,both technical and institutional(e.g., in terms of operational integration, interline transfer, fare coordination, and diseconomies of scale). The Philippine Govemmenthas used govemmentguarantees to motivate private sector lending by mitigating risks that the private sector either cannot evaluate or will not bear. These guarantees have been an integral feature of private sector participation and, in helping to solve the country's power crisis, has been extended to transport projects. The governmentmust of course be adequatelyprepared to meet contingentliabilities should they arise. Some observers have argued that such guarantees are too onerous for the government and effectively transfer the risk from the private sector back to the public sector. It may also consign the govemmentto redeeming ill-conceivedprojects. Moreover, in creating an attractive environmentfor private participationin ventures that require high capital costs, the principles of private sector risk can be eroded. When costs rise unexpectedly and ridership levels are disappointing, exacerbated further by fare increases, the govemment, which was keen to involve private capital, can in this way becomeliable for debt repayments.The private sector may realize returns on its investmentbut the governmentmay be left with an expensivescheme that does not adequatelyserve its citizens.

The Government has recognized that the inadequate planning and institutional framework are largely responsible for Manila's worsening intemal accessibility and mobility. In July 2000 it approved the conclusions of a comprehensive transport study, which endorses the MMDA's role as coordinator of metropolitan-wide transport planning and development.

3. Future role of the Metropolitan Manila DevelopmentAuthority (MMDA)

Two pillars support the expandedfunctions that the MIMDAwill carry in Manila's transportdevelopment. The first is the MMDA Act, which became effectivein 1995, and the second is the recently completed MMUTIS study. Both the World Bank and the Asian DevelopmentBank will assist in financing the strengtheningof the MMDAin two parallel lendingoperations: this proposedMMURTRIP project and the Metro Manila Air Quality ImprovementSector DevelopmentProgram assisted by Asian Development Bank funding.

-81 - As mentioned,the MMDAAct gives the MMDA wide-rangingresponsibilities for traffic engineeringand transportplanning in Metro Manila, in additionto other functionssuch as general developmentplanning, urbanrenewal, land-useplanning, solid wastemanagement, flood control,drainage, sewerage management, and abatement of environmentalpollution. The act defines MMDA's services to include "transport and traffic managementwhich includes the formulation,coordination and monitoring of policies, standards, programsand projects to rationalizethe existing transportoperations, infrastructure requirements, the use of thoroughfares,and promotionof safe and convenientmovement of persons and goods; provisionfor the mass transit system and the institution of a system to regulate road users; administration and implementationof all traffic enforcement operations, traffic engineering services and traffic education programs,including the institutionof a singleticketing system in MetropolitanManila"

With regard to street traffic, the MMDA is responsiblefor policy formulationand "shall coordinateand regulate the implementationof all programs and projects concerning traffic management, specially pertaining to enforcement, engineering and education .... " Until now, however, the centralized traffic signal systemand most other traffic engineeringfunctions have been canriedout by the TEC of the DPWV. It was agreed duringproject preparationto define a timetableprior to appraisalfor transferringthe TEC's function to the MMDA. This transfer is consistentwith a memorandumof understandingsigned by the DPWH and MMDA in 1995 stating that "[the] primary aim of the DPWH and MMDA [was] to transfer the existing TEC Operationand Maintenancefunctions and facilities of the TEC/TEAM-PMOincluding such appropriations,funds, record, equipment,or other assets and personnelas may be necessaryto sustain the operationand maintenanceof the Metro Manila Traffic Control System completed under the TEAM Projects (Phases I, II and III) except for such equipment,facilities, appropriations, funds and personnel which by mutual agreementshall be retainedby the DPWH."

4 In its chapteron project implementation,the Final Report of the MMUTISstudy confirmsthat the MMDA should be the central metropolitan agency for the implementationof the Master Plan. This chapter recommends that "transport and development planning process should be established, mega projects coordinated,public transportregulatory process improved,city officialstrained, institutionalfragmentation rectified. An adequate set of database and planning tools are also needed. An increasingly important approach to infrastructuredevelopment is the integration of transport modes and facilities as well as betweentransport and urban planningand development."

The new transport-relatedresponsibilities represent a great challenge to the MMDA's managementand staff, and it is one of the functions of multilateral institutions to provide assistance in this vital capacity-buildingprocess. The training component of this project includes technical assistance to the MMDA to build up its capacityin this regard. In addition, the Governmenthas establisheda year-by-year institutional plan, which the World Bank's supervision missions will closely monitor during project implementation.

The MMDAis also receivingassistance from the Asian DevelopmentBank of US$ 25.47 millionas part of a sectorinvestment project aimed at reducingair pollutionemanating from mobile and stationarysources in 5 Metro Manila. About 59 percent of total base costs are assigned to physical improvementsfor traffic engineeringand road rehabilitation,and 3 percent (US$2.4 million)for technical assistanceto the MMDA for traffic engineeringand managementtraining, and for public transport and traffic policy studies. The technical assistance component is expectedto commence in early 2001; the termnsof reference for the MMDA assistanceunder the MMURTRIPproject complementsthe training componentassisted by Asian DevelopmentBank funding.

- 82 - 4. Institutionalprogram and policyletter

The underlying goal of this project, which aims to improve traffic and environmentalconditions and increasethe use of public transport, is to establishand strengtheninstitutions responsible for future urban transportmanagement in Metro Manila.The projectthus addressesthe followingtwo key issues:

* How to strengthenthe MetropolitanManila Development Authority's capacity to effectivelycarry out its traffic engineeringand managementresponsibilities under the MMDAAct. * How to improvethe frameworkof overallurban transportplanning and decisionmaking,including the integrationof various public transportsystems and the developmentof investmentand policy priorities.

Regarding the first issue, the Metro Manila Air Quality Improvement Sector DevelopmentProgram supported by the Asian DevelopmentBank includes a component to strengthen the MMDA's traffic management function for 2000 to 2004. The MMURTRIPproject will complement this program by supporting capacity building for 2001 to 2005. The MMDA (in consultation with the DPWH) has developeda year-by-yearinstitutional plan, includinga descriptionof its expanding functionsand staffing requirements.

Regarding the second issue, the recentlycompleted MMUTIS study was finalized at a workshopin May 2000 and officiallyapproved by the Governmentin July 2000. Based on the findingsof the MMUTIS and earlier studies,the Govermnentis expectedto define its futuretransport strategy-including the institutional functions and coordination among key players such as the DOTC, DPWH, MMDA, and others. The Govemmentis drafting a policy letter on its intended future actionswith regard to transportinvestments and policymeasures.

Cracknell,J. 2000. Experience in Urban Traffic Managementand DemandManagement in Developing Countries,Background Paper for World Bank Urban Transport Strategy Review, prepared with funding from the U. K. Department of Intemational Development (draft). 2 Republic of the Philippines, Office of the President, Metropolitan Manila Development Authority. 1996. An Act Creating the Metro Manila Development Authority, Defining its Powers and Functions, Providing Funding therefore andfor other Purposes (R.A. 7924). (Effective June 8, 1996.) 3 PADECO Co. Ltd. 2000. Study on Urban TransportDevelopment, Draft Final Report, conducted with financial support from the Japanese Government, Tokyo, July 2000. 4 ALMEC Corporation, Pacific Consultants Intemational and Yachiyo Engineering Co., Ltd. March 1999. Metro Manila Urban Transportation Integration Study, Final Report, prepared for the Republic of the Philippines and the Japan International Cooperation Agency. S Asian DevelopmentBank. November 1998.Pr oposed Loans and TechnicalAssistance Grant,Metro Manila Air Quality ImprovementSector Development Program, Report and Recommendation of the President to the Board of Directors, Manila.

- 83 - Additional Annex13

PHILIPPINES:Metro ManilaUrban TransportIntegration Project

GlobalEnvironment Facility (GEF)-supportedNonmotorized Transport component MarikinaBicycle Network Estimateof benefitsderiving from the resultingsavings in greenhousegas emissions

Growthin population,employment, and scholasticenrollment will increaseboth inter- and intra-zonal transportdemand in the City of Marikina.The increaseddemand, coupled with increasedcar ownership, will boost greenhousegas emissionsunless alternativemeasures to controlthese emissionsare developed and successfullyimplemented at an early stage.The MarikinaBikeways Project (MBP) supportedby the GlobalEnvironment Fund (GEF)will help containthe increaseof emissionsby promotingthe shift of the newly generatedtransport demand toward less pollutingmodes. To help evaluatethe feasibilityof the project,emissions were analyzed.The objectiveof the analysiswas to estimatethe global benefitsin terms of greenhousegas emissionsreduction through the GEF project.The reductionwas computedby comparingthe levelof emissionsin two scenarios:baseline or business-as-usualand with implementationof the MarikinaBikeways Project.

Greenhousegas emissionsreduction is calculatedby applyingthe ASIF methodology. Thismethodology analyzesthe followingfour components:(i) transportationActivity (A), modal Shares (S), energyIntensity (1) of each mode,and the Fuel (F) mix of eachmode with its greenhousegas emissionscharacteristics. This applicationof the methodologydeveloped a transportsimulation model basedon traffic data from recent studiesand on a simple set of assumptionsfor the City of Marikinaand the broader metropolitan area of Manila. The simulationestimates future Activities and modal Sharesin terms of transportdemand, vehicletrips, and averagedistance by mode.The estimatesare combinedwith the relevantvalues for energy Intensityand fuel Mix of each mode.As a result, approximatelevels of transport-generatedgreenhouse gas emissionsare obtained.By varying the set of assumptionswhile simulatingthe GEF and the base case, the model allows somesensitivity analysis to assess the robustnessof the findings.The previous section describesan attemptto evaluatebenefits in terms of reduced levelsof GlobalWarming Damage (GWD),as 2 expectedin the frameworkof the globaloverlays assessment approach. This annex describesthe details of the analysis,the simulationmodel, and the underlyingassumptions. A flow diagramillustrating the factors used in the model and their relationshipsis presentedin figure 13.1.

- 84 - Figure 13.1 Flow diagram of the transport simulation model

GLOBAL WARMING COSTS [$]

l Global Wartming Potential Global Warming Damage (GWP) Equivalent Factors Equivalent Factors [Kg of pollutant =KG C02] [Kg of C02 =$

Intensity TOTAL GHG EMISSIONS and [Kg] Fuel Mix

Average Distance TripsmysMode by mode Factors by Mode

Average Travel Time by mode [h]

Average Speed Fuel Eff iciency by by mode Mode [Km/h] [Kmll]

MODAL SHARE Share [VehicleTrips by Model

Modal Split Occupancy Factors [Person Trips by Mode] _ [Person/Veh.]

TRANSPORTATION DEMAND Activity [No. of Person Trips]

Mobility Demand [Tfips/Person]

POPULATION

- 85 - 1. Forecastof TravelDemand to EstimateActivity (A)

Populationgrowth. The metropolitanarea of Manilahas been growingrapidly. Its populationof less than 2 million in 1950 increased to 5.9 million in 1980 and 9.5 million in 1995. Total population today is estimatedto be above 10 million.This increasein populationhas been coupled with an expansionof the urbanizedarea, which todayhas reachedabout 800 squarekilometers, far exceedingthe 636 square kilometersof the metropolitanadministrative area (or Metro Manila).The total populationof the broad metropolitanarea, including the adjoiningurbanized areas, is about 16 milliontoday. Populationgrowth is expectedto continueand the total populationof the wide metropolitanarea to reach 25 millionby 2015, 13 million livingin Metro Manilaand 12 millionin the adjoiningareas.

As Manilabecomes more denselypopulated, commercial developments intensify, and the living environmentdegrades further. Land use in the centralareas, once very denselyinhabited, gradually changes.Dwellers move to outer areas while commercialand businessdevelopments take their place. Manilahas experiencedthis movementsince the 1980s.The numberof trips and trip distancesincrease as more householdsopt to live outsidethe inner area, and asjobs and school are fartheraway. The City of Marikina,situated at the eastem border of Metro Manila, exhibits all the featuresof this urbanizationtrend. Its populationbetween 1980 and 1995 increasedfaster then the Metro Manilaaverage (table 1).

Table 1 - Trends in Population Area No. ('000) Avg. Growth 1995- 1995 2000 2015 2015 (%peryear) MetroManila (excl.Marikina) 9,097 9,897 12,744 1.7% AdjoiningAreas 4,914 6,212 12,550 4.8% Marikina 357 418 670 3.2% Source: NSO and City of Marikina

Trends in passenger travel demand.Population growth is associatedwith increaseddemand for mobility, both withinMarikina's administrative borders and to and from central and other districtsof Manila. Changesin the social compositionand in the car ownershipratio, which tend to levelto the valuesfor the inner urbanizedareas, contributeto further amplifythe upward trends. In 2015 the populationof the City of Marikinais expectedto be 5.1 percent of that of Metro Manila, compared with from 3.8 percent in 1996. Total travel demand for Marikina is expected to be about 6 percent of the total demand generated in the Metro Manila area, compared with only 2.8 percent in 1995. Between 1995 and 2015, the compounded effect of increased population and mobility will result in a 4.7 percent yearly growth rate of passenger travel demand generated in Marikina (table 2, expressed in passenger trips per day). These figures are based on the estimates of the Metro Manila Urban Transportation Integration Study (MMUTIS), whose databases provide detailed travel demand figures by origin and destination for the broad metropolitan area.

- 86 - Table 2 - Expected Passenger Travel Demand Area No. of PassengerTrips per Day Avg. Growth 1995-2015 ('000) (% per year) 1995 2000 2015 Metro Manila (excl. Marikina) 17,258 18,925 22,367 1.2% AdjoiningAreas 6,842 8,697 18,845 5.2% Marikina 496 710 1,274 4.7% Source: ProjectTeam Elaborationbased on MMUTISdata.

2. Modal Split (S) Assumptions and scenarios construction. In the absence of city-specific forecasts of the future distribution of transport demand between the various modes, the first key assumption is that mobility in Marikina will follow patterns similar to those experienced in the inner residential districts of Metro Manila without specific measures favoring the utilization of some modes. Modal shares will be similar to those now experienced in Metro Manila central residential areas without a project such as the Marikina Bicycles Project, which would induce a change in the mobility patterns. Consequently, two scenarios for modal distribution are simulated to evaluate the effect of the development of the project. A first scenario (baseline) envisages no significant changes in traffic management policy in the City of Marikina. A second scenario (GEF Alternative) represents a situation in which the Marikina Bikeways Project has been successfully developed, at a minimum maintaining the current share of Nonmotorized Transport traffic and likely inducing its increased use. An additional assumption is applied in the case of the GEF Alternative, to take into account the effect of the project on interzonal trips modal split. This assumption is that the more efficient intermodal connections between the bicycle and the bus/rail modes resultingfrom the development of the project will favor the use of the bus/rail modes as an alternative to the use of cars and jeepneys. Finally, to perform some sensitivity analysis and assess the robustness of the findings, three different modal compositions (Low, Medium, and High cases) resulting from more or less successful project developments are considered for the GEF Alternative. Modal composition. Essentially, the project will affect intrazonal modal split by maintaining or increasing the current shares of nonmotorized modes and reducing the modal shares of the alternative modes, particularly two-/three-wheel motorized, car, taxi, and jeepney. The project will also affect interzonal modal split with increased shares for the light rail transit and public bus modes (table 3). Vehicle occupancy factors and average trip distance and speed. The greenhouse gas emissions level is a function of vehicle trips and average trip distance. The model computes vehicle trips by mode by dividing the number of passenger trips by mode by the assumed vehicle occupancy factors for each mode. The main assumption is still held. The average trip distance is the product of the average travel speed times the average travel time. MMUTIS data were used to calculate the actual and expected figures for these averages (table 4). The main assumption is still valid, meaning that, with time, all these factors will tend to level off to the current values registered in the central residential areas.

- 87 - Table 3 - Current and assumed Modal Split Composition (% of Passenger Trips by Mode) 2000 2015 Mode Current Baseline GEF Alternative Scenario Low Medium High Private Bicycle 1.6 0.0 2.0 2.8 3.5 Motorcycle 0.7 0.7 0.7 0.7 0.7 CarlJeep/UV 17.5 20.5 19.2 18.5 16.4 Truck 2.4 2.4 2.3 2.2 2.1 Semi Public Taxi 4.9 5.4 4.9 4.8 4.7 HOV Taxi 1.6 2.2 1.7 1.5 1.2 Private Bus 2.5 2.5 2.3 2.0 1.9 Public N.M. Tricycle 0.3 0.0 1.2 1.5 2.0 M. Tricycle 11.8 7.0 6.0 6.0 6.0 Jeepney 41.9 42.9 41.5 39.3 38.3 Bus 14.9 14.4 16.2 18.2 20.2 LRT 0.0 2.0 2.0 2.5 3.0 Total 100.0 100.0 100.0 100.0 100.0 Source: Project Team Elaboration based on MMUTIS and Feasibility Study Data.

Table 4 - Vehicle Occupancy and Average Travel Speed and Time Mode 2000 2015 Vehicle Average Average Vehicle Average Average Occupancy Speed Travel Occupancy Speed Travel (PaxNeh) (Km/h) Time (h) (Pax/Veh) (Km/h) Time (h) Private Bicycle 1.0 12 0.30 1.0 13 0.53 Motorcycle 1.1 18 0.44 1.1 18 0.44 Car/JeeplUV 2.2 14 0.97 1.8 12 1.13 Truck 2.1 14 1.04 2.1 13 1.04 Semi Public Taxi 2.2 14 0.47 2.2 13 0.53 HOV Taxi 4.7 16 0.55 4.7 16 0.70 Private Bus 22.3 16 0.75 22.3 16 0.95 Public N.M Tricycle 2.5 12 0.30 2.5 13 0.47 M. Tricycle 2.5 12 0.30 2.5 12 0.30 Jeepney 15.1 11 0.72 15.1 11 0.72 Bus 46.5 11 1.30 46.5 15 1.03 Source: Project Team Elaboration based on MMUTIS and Feasibility Study D ata.

- 88 - 3. Energy Intensity (I) and Fuel Mix (F)

Assumptions on average fuel efficiency and emission factors.The greenhouse gases considered by the model are carbondioxide (CO2), methane(CH 4), nitrousoxide (N20), carbon monoxide(CO), nonmethane volatile organiccompounds (NMVOCs), and nitrogenoxides (NOx). The main effectof this latter group of gases is to contributeto increasingtropospheric ozone, an importantgreenhouse gas. Greenhousegas emissionsare related to the efficiencyof the vehicle engineand the type of fuel used. Therefore,an additionalset of assumptionsis made for the sharesof fuel/enginetype for each mode and for the average fuel efficiency.These assumptionsare based on MMUTISdata on the vehiclescirculating in Manilaand on trafficcounts conductedin Marikinaduring the executionof the MarikinaBikeways Project feasibility study. Since knowledgeof emissionfactors representative of the presenttechnology level of Asian cities is limited, to selectthe emissionfactor this analysiscollected references from the Metro Manila Report, preparedin the frameworkof the Urban Air QualityManagement Strategy in Asia (URBAIR). Averageemission factorswere selectedand used in the simulation(table 5). These factors fall in the ranges tabulatedin the 4 IntergovernmentalPanel on ClimateChange Guidelines for the inventoryof greenhousegas emissions.

Table 5 -Fuel/Engine type sharesby mode, AverageFuel Efficiencyand ErnissionFactors % of mode by Avg. Fuel Mode fuel/enginetype Efficiency Average EmissionFactors (g/Km) (Km/1) 2000 2015 2000 2015 NOx CH4 NMVOC CO N20 CO2 Private Bicycle 100% 100% 0.0 0.0 0.00 0.000 0.0 0.0 0.000 0 Motorcycle 2-stroke 90% 50% 41.7 37.5 0.05 0.100 6.5 10.0 0.001 57 4-stroke 10% 50% 19.6 17.6 0.30 0.200 3.9 20.0 0.002 120 Car/+UV Non-Catalyst 50% 10% 12.0 10.8 2.30 0.070 4.5 19.0 0.005 200 Catalyst 40% 80% 11.8 10.6 0.50 0.020 0.5 2.9 0.005 260 Diesel 10% 10% 13.7 12.3 0.70 0.005 0.2 0.7 0.010 190 Truck 100% 100% 3.3 3.0 10.00 0.060 1.9 9.0 0.030 770 Semi Public Taxi Non -Catalyst 30% 10% 12.0 10.8 2.30 0.070 4.5 19.0 0.005 200 Catalyst 70% 90% 11.8 10.6 0.50 0.020 0.5 2.9 0.005 260 HOV Taxi 100% 100% 7.4 6.7 2.90 0.080 6.1 37.0 0.006 535 Private Bus 100% 100% 7.4 6.7 2.90 0.080 6.1 37.0 0.006 535 Public N.M Tricycle 100% 100% 0.0 0.0 0.00 0.000 0.0 0.0 0.000 0 M. Tricycle 2-stroke 90% 50% 25.0 22.5 0.08 0.150 16.0 22.0 0.002 95 4-stroke 10% 50% 19.6 17.6 0.30 0.200 3.9 20.0 0.020 120 Jeepney 100% 100% 4.0 3.6 1.32 0.150 6.4 35.8 0.023 601 Bus 100% 100% 3.3 3.0 10.00 0.060 1.9 9.0 0.030 770 LRT ------

4. Calculation of Enissions

Based on the previousfigures (TravelDemand, Vehicle Occupancy factors, Average Travel Speedand Time, and AverageEmission factors) the daily emissionsassociated with each subcategory(mode, fuel, and emissionscontrol technology type) can be obtained.These can then be aggregatedto estimatetotal emissionsfrom mobile sources.

- 89 - This process can be expressed formulaically as:

Total Daily Emissions = I (Efemx Vfemx Dfem)

Where: E = Average Emission Factor V = Vehicle Trips per Day D = Average Distance Driven per Trip f fuel type (diesel, gasoline, non motorized) e emission control technology (catalyst, non catalyst), m mode (type of vehicle)

The calculation is repeated for the year 2000 current situation and for the four 2015 forecast conditions: the baseline and the three different cases (high, low, medium) under the GEF Altemative scenario. The effectiveness of a specific greenhouse gas warmningthe atmosphere depends on both its concentration and on the amount of time it remains in the atmosphere. The contribution of a greenhouse gas to global warming is measured by its global warming potential (GWP), a ratio of the global warming effect from one kilogram of a greenhouse gas relative to that from one kilogram of CO2 over a specified period of time. To estimate the combined GWP impact of greenhouse gas transport-related emissions, all mass emissions of these non-CO2 greenhouse gases are converted into an equivalent mass amount of CO2 emissions, using the GWP factors recommended by the Intergovernmental Panel on Climate Change (table 6).

Table 6 - Global Warming Potential of transport related GHGs NOx CH4 NMVOC CO N20 CO2

1 24.5 1 1 320 1 Source: IPCC Guidelinesfor N ationalGreenhouse Gas Inventories.

Table 7 below summarizes the result of the simulation and conversion. Aggregate greenhouse gas (GHG) emission is expressed in terms of Kg per day of C02 equivalent.

- 90 - Table 7 -GHG Emissions Kg per day of C0 2 equivalent 2000 2015 GHG Type Current Baseline GEF Alternative Scenario Scenario Low Medium High NOx 2,994 6,231 5.983 5,842 5,517

CH 4 2,306 4,545 4,261 4,115 3,852 NMVOC 5,516 10,368 9,599 9,279 8,670 CO 20,060 42,162 39,329 37,729 34,923 N20 4,311 8,731 8,369 8,122 7,695

C0 2 434,475 925,316 877,290 848,040 792,893 Total 469,660 997.353 944.832 913,127 853,550

5. Estimationof GlobalWarming Damages The estimate of the emissions obtained from the simulation allow computation of an estimate of the GWD expressed in monetary terms, which can be used to carry out a conventional cost-benefit analysis in the framework of a global overlay assessment approach. For the Marikina Bikeways Project, the cost of implementation is strictly compared with the incremental global benefit of greenhouse gas emission reduction in Marikina. This essentially involves comparing negative and positive project impacts in the form of monetary costs and benefits. Project benefits have to be expressed in monetary terns, as nearly as possible. To deternine the monetary values of reduced climate change damages, the GWD conversion factor was used. The GWD factor is the equivalent expected damage in US$ caused by an additional ton of

CO2 emitted. For the value of this factor there is no single figure, since the global climate has not yet given any scientifically (or consensus) based value. The Intergovernmental Panel on Climate Change considers on the basis of a 1995 study a range of values from US$2.7 to 67.5 per ton of CO2. Another 6 study suggests that higher order damages like famine and war may be considerable and should be included in the damage estimates. The studies suggest a much higher value of US$91.8 per ton of CO2 . A third, 7 more recent study suggests that "a range of US$2 to 20 per ton of CO2 seems reasonable... .most of the estimates tend, as an order of magnitude, towards US$10 per ton of CO2." This analysis considers the latter assumption. Therefore, the simulation assumes that the damage or cost of an additional kilogram of CO2 in the atmosphere is US$0.01.

To carry out the analysis, estimated values in kilograms per day of CO2 for the baseline and the other four cases are annualized and converted in monetary values through the GWD factor. The difference between the annual total cost of greenhouse gas emissions in the baseline case and in the three With Project cases (figure 13.2) is an avoided cost and therefore a benefit. Its value is then compared with the total cost of the project. In this simplified analysis the monetary values are not discounted. The following assumptions are made to perform a simplified analysis: * The total cost of the project is US$2.1 million. * The economic life of the project is 20 years (2001 to 2020). * The increase in the emissions is assumed linear for the first 15 years. * The level of emissions is then considered constant for the remaining 5 years of economic life.

- 91 - Figure 13.2 Yearly values for GWDs avoided during the economic life of the project for three scenarios.

600,000 - High Case 000,000

400,O00 MediumCase

20000 Low Case 100,00

9..99..,99,..9999..9.9.. Year

The difference between the aggregate value of the avoided GWDs and the cost of the project development in the global overlay assessment would be equal to the project benefit (table 8).

Table 8 - Comparison between Costs and Aggregate Benefits (US$)

GEFAlternativecases of Low Medium High

Aggregate Benefits of reduced emissions 2,457,983 3,941,777 6,729,980 Cost of the Project 2,100,000 2,100,000 2,100,000 Difference 357,983 1,841,777 4,629,980

Schipper, L., and Ce1ine Marie-Lilliu. 1998. Transportation and CO Emissions: Flexing the Link A Path for the World Bank Draft paper. Washington, D.C.: World Bank. 2 Halsnaes K., A. Markandya, and J. Sathaye J. 1999. Transport and the Global Environment: Global Overlays for the Transportation Sector. Draft report. Washington, D.C.: World Bank. 3 Metro Manila Report. 1997. URBAIR. World Bank Technical Paper N. 380. Washington D.C. 4 Intergovemmental Panel on Climate Change. 1996. Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories. Vol. 3, IPCC WGI Technical Support Unit, Bracknell, U.K. 5 Fankhauser, S. 1995. Valuing Climate Change: the Economic of the Greenhouse. London: Earthscan. 6 Friederich, R., P. Bickel, and W. Krewitt, eds. 1998. The External Costs of Transport. Band 46, IER, University of Stuttgart, Germany. 7 Delucchi, M. 1998. Summary of the Non Monetary Externalities of Motor Vehicle Use. Institute of transportation Studies, University of Califomia, Davis.

- 92 - Additional Annex14

PHILIPPINES:Metro Manila UrbanTransport Integration Project

Global EnvironmentFacility (GEF)-supportedNonMotorized Transport component MarikinaBicycle Network IncrementalCost Analysis

1. DevelopmentGoals and GlobalEnvironmental Objectives

Metro Manilais a massiveurban area that is made up of 17 municipalities,of which 12 are cities, and accommodatesabout 10.2million people (1997).Its populationhas grown rapidlyin recent years. By 2015 Metro Manilais expectedto becomea massiveconurbation of 13 million (MMUTIS1997). This increase in populationhas accompaniedexpansion of the urban area,which today covers about 800 square kilometers,far exceedingits administrativearea. As Metro Manilabecomes more and more densely populated,commercial developments intensify and the livingenvironment degrades further. Land use in city centers,once denselyinhabited, gradually changes. Dwellers move to outer areas while commercialand businessdevelopments take theirplace. With more householdsopting to live outside the inner area of Metro Manila, and withjobs and schools fartheraway, the numberof trips and trip distancesare expectedto increase. Moreover,economic prosperity has acceleratedmotorization and the demand for mobility,causing severe traffic congestionand seriousair pollution,particularly in the inner areas.Without effective action, these problemswill worsen over time as the area continuesto grow.Residents currently rate traffic congestionas the numberone qualityof life problem,and air pollution,mainly caused by motor vehicles,as problem numbertwo. The City of Marikina,one of the 17 municipalitiesof Metro Manila, is a rapidlygrowing municipality of about 360,000people on the easternborder of the Metro Manilaadministrative area. Marikinashows all the featuresof the urbanizationtrend describedabove. Its populationincreased from 1980 to 1995 faster pace than the Metro Manilaaverage. Marikina'sgrowth in populationis associatedwith an increased demand for mobility,both withinits administrativeborders and to central and other districts of Metro Manila. The numberof passengertrips is expectedto increasefrom the current averageof 496,000 a day to about 1,200,000a day. At the same time, changesin social compositioninfluence the car ownershipratio, which tends to level to compare with the values for the inner areas. Increaseddemand coupled with increasedcar ownershipwill boost greenhousegas (GHG)emissions unless alternativemeasures to controlthese emissionsare developedand successfullyimplemented at an early stage. Moreover,while more than 2 percentof all trips in the City of Marikinaare now by bicycle,the anticipatedincrease in traffic and pollutionwill likelycause the disappearanceof this mode of transportation.This pattern is alreadyexperienced in inner Metro Manila(and in many other Asian cities), where bicycleshave been crowdedout.

The contributionof motorizedforms of transportto globalgreenhouse gases is significant.The Philippines has ratifiedthe United NationsFramework on ClimateChange Convention and is a cosignatoryto the 1997 Kyoto Protocol.These acctions reflects the government'sstrong commitment to addressingits contribution to greenhousegas emissions.The main greenhousegases are carbon dioxide (CO2), methane(CH4), and nitrous oxides(N,O). Othersinclude carbon monoxide (CO), nonmethane volatile organiccompounds (NMVOCs),and oxides of nitrogen(NOx).

- 93 - On a global scale,motor vehiclesplay a significantrole in the emissionsof greenhousegases, with the greatestcontribution made by CO2,the greenhousegas that so far has had the greatesteffect on atmosphericchange. Road transportcontributes 15 to 20 percentof CO2 emissionsworldwide. Since the amount of CO2 resultingfrom the combustionof a givenquantity of gasolineremains constantregardless of emissioncontrols, trends in CO2emissions will directlyfollow increasesin the use of these fuels.Therefore motor vehiclescan play an even greaterrole in the enhancedgreenhouse effect in the future.("Transport and the Global Environment,"11 November1999, p. 52). Road transportalso contributes1 percent of methaneemissions worldwide. The contributionof road transportto nitrous oxideemissions is small but significant.General Motors ResearchLaboratories have concludedthat vehicularemissions of nitrousoxide are about200,000 tons worldwide,corresponding to about 3 percent of globalnitrous oxideemissions. Otheremissions of motor vehicles,nitrogen, volatile organiccompounds, and carbon monoxide,contribute to increasingtropospheric ozone, which is an importantgreenhouse gas. Thereforemotor vehiclesare indirectcontributors to global warming.Ozone in the free troposphereabove the boundarylayer (beyond 1,500meters) is steadilyincreasing on a global scale.These background levels have doubledover the last century,and global monitoringprograms have revealedthat long-termozone concentrationsare increasing by about 2 to 3 percent a year in the highertroposphere of the westernhemisphere (Volz and Kley, 1988; Ciborowski,1989). Concentrations of ozonein the troposphereare approachinglevels at which environmentaldamage occurs, furthercontributing to globalclimate change. 2. The MetroManila UrbanTransport Integration Project

With fundingfrom the WorldBank and the Governmentof the Philippines,the Metro ManilaUrban TransportIntegration Project (MMURTRIP)is being preparedto address the deterioratingurban transport situationand the resultantdetrimental environmental situation. The developmentobjective of the MMURTRIPproject is to reducecongestion and traveltime and improveenvironmental and safety conditions,particularly for public transportusers, most of whom are poor "captive" users. This objective will be achievedthrough implementing effective traffic managementmeasures along major travel corridors. Thesemeasures include improving street-level interchange among buses,jeepneys, and light rail transit (LRT)lines togetherwith increasingaccess to outer areasand improvingthe road networkhierarchy. At the sarnetime, the project aims to demonstratethe value of suchtraffic managementmeasures as cost-effectiveways to reducecongestion along the main travelcorridors, thus enhancingthe use of public transportand the efficacyof private sector-sponsored"megaprojects."

The major quantifiedbenefit of the MMURTRIPproject will be reducedcongestion and traveltime along the main travelroutes, leadingto more use of public transport.A major unquantifiedbenefit of the project will be an improvedurban environmentand increasedsafety. The projectwould provide facilitiesto safeguardpedestrians in and around LRT stations and other publictransport interchanges, where pedestriansdisrupt road traffic and are exposedto safetyhazards because of inadequatefacilities. The Govemmentof the Philippineshas pursueda combinationof megaprojectsand flyoversto solvetraffic congestion,with limitedresults. The aim of the MMURTRIPproject is to demonstratealtematives to these measures.National governmentplanners currently resist such altemativemeasures as bus lanes, concentrationon traffic management,integration of modes, and priority for public transporttrips. By demonstratingthe efficacyof these altemativesthe projecthopes to overcomethis resistance,which until now has been difficultto do becausesuch examplesdid not exist in the Philippines.Ideally the public will demand such approachesonce they see their impact.

- 94 - Moreover,the policy thrustof the projectis to bring into focus at the planningstage the need to coordinate relevantinstitutional roles, physically integrate various modes, and considerenvironmental and safety hazards.By demonstratingthe government'srole and the importanceof complementaryinvestments to enhancethe full potentialof public or privateinvestments, the project hopes to remove barriersto recognizingthe importanceof metropolitangovemance and complementarytraffic managementmeasures to realizethe potentialof public or private investments. 3. The Proposed GEF-SupportedComponent The proposedGlobal EnvironmentFacility (GEF)-supported project, or the GEF Alternative,will be implementedas a componentof the broaderMMURTRIP project. The GEF Alternativeconsists of designingand operatinga system of bicycletrails and designatedlanes for nonmotorisedtransport (NMT). Thesetrails and laneswill connectresidential conununities with schools,employment centers, the new metropolitantrain station,and other publictransport terminals, where appropriateparking facilitieswill be created.The project's development will help keep bicylcesform being crowded out of the urbanarea. Furthermore,connection to the public transportterminals will promotethe use of NMT combinedwith trains and buses for trips between Marikinaand the rest of the Manilametropolitan area. The globalbenefits of the project consistof a reductionin expectedtraffic and congestionand a consequent decreasein emissionsof greenhousegases and other pollutantscompared with those Metro Manilafaces today.An additionalindirect benefit, of no less value,will be to demonstratethe benefits and viabilityof bicyclesand nonmotorizedtransport. The projecthopes that recognitionof the sustainability,lack of pollution,and low cost of this form of transportfor commutingwill encouragethe adoptionand developmentof similarfacilities elsewhere in Metro Manilaand in the Philippines.

4. Role of the GEF Alternativein removingbarriers to the use of nonmotorizedtransport

The projectrequests GEF supportto overcomebarriers in addressingglobal emissions from motorized transportby making nonmotorisedtransport a viable alternativemeans of transportation.The primary objectiveof the GEF bicycle networkproject component is to containthe increaseof greenhousegas emissionsby maintainingthe currentshare served by nonmotorisedmodes and by shiftingsome of the new transportdemand toward less pollutingmodes. A secondaryobjective is to demonstrateand publicizethe benefitsand viabilityof bicyclesas an altemativetransport mode to encouragereplication of this pilot programin other parts of Metro Manila,elsewhere in the Philippines,and in other countries. Underthe GEF Alternative,the City of Marikinawould modify its transportdevelopment program, which currentlyfocuses exclusivelyon road expansionand improvement,to activelypromote greateruse of bicyclesand walkingas alternativesto motorisedtransport, and therebyto encouragea shift from motorisedtransport to these environmentally-friendlyoptions. The barriersto this shift are travelers' perceptionsand the realitythat bicyclesand walkingare relativelyslow, inconvenient,and sometimes unsafe transportoptions. These barriersare largelycaused by the lack of appropriatefacilities for bicyclistsand walkers. With GEF support,the projectwould overcomethese barriers by constructinga pilot networkof bicycleand pedestrianlanes and paths along well-traveledcommuter routes (adjacentto existingroads and public access areas)in low-incomeareas, installingbicycle storage facilitiesat light rail stationsto make these transportmodes safer and more convenient,and publicizingand promotingthese alternativetransport modes throughan awarenesscampaign and safetyprogram. Otherbarriers to a move to environmentally-friendlynonmotorized transport include the failure of accepted transporteconomic analysis to captureenvironmental externalities when assessingthe feasibilityof such investmentsand politicalpressure and planningmentality that encourageinvesting in expandingmotor vehicleroad capacityrather than bicyclefacilities to alleviatecongestion. Both the PhilippinesNational

- 95 - Economicand PlanningAgency (NEDA) and the WorldBank considerthat transporteconomic benefits derivefrom vehicle operatingcost savingsof existingand futuretraffic, time cost savings, and accident cost savings.Current methodologies that focus on evaluatingmotorized traffic optionsuse only vehicle operatingcost savingsand time cost savings.These analyticalmethods do not captureother transport-relatedexternalities caused by congestionand pollution. There have been severalattempts to promoteanalytical consideration of other benefits,such as social benefitsand benefitsform nonmotorisedtransport. Although most people acceptthat nonmotorized transporthas environmentalbenefits, no acceptedmethod existsto justify these benefits.The MURTRIPP project aims to developa methodologyfor calculatingthe benefits from savingsin greenhousegas emissions,to implementa bicycle network and to demonstrateits impact on motorizedtraffic levels. Becauseboth agenciesrequire a minimum15 percenteconomic rate of return (ERR) for any investment based on acceptedmethods, this viable mode of transportis excludedin many countriesand World Bank-financedprojects. The opportunityto reduceand limit the increasein greenhousegas emissionsfrom transportis thereforelost. The GEF Altemativewill help remove additionalbarriers to the use of nonmotorizedtransport and its considerationand acceptanceat planningstage. In Metro Manilaand the City of Marikinathese barriers includetravelers' perceptions and the dangerand dominanceof motorizedtransport that make bicyclesand walkingunsafe withoutappropriate facilities for bicyclistsand walkersand solutionsto traffic congestion. Under the GEF Alternative,the City of Marikinawould modifyits transportdevelopment program, which currentlyfocuses exclusivelyon road expansionand improvement,to includedeveloping appropriate facilitiesand promotinggreater use of bicyclesand walkingas alternativesto motorisedtransport. The developmentof the GEF Alternativewill help demonstratethat nonmotorizedexpansion has an impact on motorizedtraffic levels and helps limitthe increasein greenhousegas emissionswithout negatively affectinggeneralized transport costs (timeand operatingcosts) and mobility.The model developedto estimateemissions based on currentand futuretransport activities and the monitoringactivities envisaged as part of the GEF-supportedproject will help establishan alternative,more comprehensiveframework for the economicanalysis of transportoperations in generaland for transportoperations that include componentsthat supportthe expansionof nonmotorizedtransport in particular.

5. GlobalEnvironment Facility (GEF) StrategicContext

The NonmotorisedTransport Global EnvironmentFacility-supported component of MMURTRIPwas proposedby the Departmentof PublicWorks, Urban Roads ProjectOffice and subsequentlyendorsed by the mayor of the City of Marikinain a request to the WorldBank for assistancewith GEE fundingfor incrementalcost. The projectmade a strategicchoice to limit the bicycle networkintervention to one city for a demonstrationeffect. Sincepolitical commitment is crucial for the successof such initiatives,the City of Marikinawas chosen for the exceptionalcommitment to nonmotorizedtransport and related environmentalissues shownby its currentadministration. Marikina has fundedpreliminary diagnostic work on the componentand has set up a counterpartteam composedof staff of variouscity offices (Settlement, Health,Engineering, and Administrative).This team will be responsiblefor liaisonand coordinationamong the variousunits of the administrationand with consultantsand contractorsto encouragea shift from motorizedtransport to these environmentallyfriendly options.

6. IncrementalCost Analysis

The incrementalcost of achievingthe globalbenefits of the GEF Alternativeis based on developinga systemof bicycle trails and designatedlanes for nonmotorizedtransport (the GEF case) comparedto the

- 96 - base case.

Base case scenario

Althoughthe anticipatedMNMURTRIP components to be implementedin the City of Marikinatake into considerationmodal integration and environmentaland safetyhazards, they do not specificallyaddress nonmotorizedtransport. Moreover, the currentcity transportdevelopment plan doesnot includeany investmentin bikewaysor other nonmotorizedtransport facilities. Therefore, without GEF supportto remove the barriersto a transportpolicy approachin favorof nonmotorizedtransport, and developmentof adequatefacilities to encouragebicycle use, the changesdescribed in the previous sectionwill producea modal choicepattern similarto the presentmodal composition in the inner residentialdistricts of metropolitanManila. By 2015 the combinedeffect of increasedtransport demand and modalsplit changesin favorof motorized transportwill sharplyincrease congestion and pollution,and will probablyforce the disappearanceof bicyclesand other forms of nonmotorizedtransport. Car and utility vehiclestrips are forecastto increase from the actualaverage of 53,000 trips a day to more than 120,000.Walking trips are expectedto drop significantly,with more pedestrianschoosing to use semipublicmodes such as taxis or private buses and jeepneys,which will further increasetraffic congestion. In the base case scenario,the daily emissionsof greenhousegases are forecastto almostdouble, reaching about 1 milliontons of carbon dioxide (CO2). This will happeneven if the averagefuel efficiencyof the motorizedvehicle fleet improvesconsiderably and peopleuse publictransport more efficiently.

GEF case The GEF grant and the contributionof the City of Marikinawill fund the developmentof bikewaysand related facilities.The NonmotorisedTransport component in the City of Marildnawill include:

a Fifty kilometersof bikewayson existingroads and 16 kilometersof bikewaysalong the banks, connectingto the new LRT station. : Trafficcalming and pedestrianizationaround schoolsand market areas and provisionof bicycle parkingfacilities. * Streetlighting where necessaryto ensure safetyafter hours. * Publicawareness. * Bicyclesafety.

The 66-kilometerbikeway network will connectresidential communities with schools,employment centers, the new lightrail transit station,and other public transportterminals. On all sectionsand main attractorsof the bikewayssystem, road and surfacemarkings will be traced, signsplaced, and parking and safety facilitiesinstalled. A seriesof pedestrianizedareas and traffic calmingmeasures will increasethe safetyof the bikewaynetwork and help preservewalking trips. Streetlighting in some areas will improvethe safety of both cyclistsand walkers. The city administrationwill launcha public awarenesscampaign, including a monitoringcomponent. The campaign,which will begin at projectpreparation stage and continuethrough the developmentof the project,will promote the use of bicyclesand other nonmotorizedtransport and receive feedbackfrom users. A safetycampaign will sensitize motorizedvehicle drivers and encouragethem to respectbikers and other nonmotorizedtransport users. The incrementalcost of the componentis estimatedat US$1.5million, of which US$1.3million will be

- 97 - financedby the GEF grant. The City of Marikinawill providethe US$0.2million counterpartfunds. (Table 14.1).

Table 14.1 Total costsof the MetroManila Urban Transport IntegrationProject (US$ million)

1. Traffic Management Improvements 13.5 9.73. 2. MARIPAS Access Improvements 48.2 29.5 18.7 3. Secondary Roads Program 32.7 19.2 13.5 4. Non-MotorizedTransport 1.5 1.3 0.2 4.1. Bikeways (66 kilometers) 1.08 - 0.92 0.16 4.2.Trafficcalming and 0.18 - 0.14 0.04 pedestrianisation

4.3. Lighting 0.10 - 0.08 0.02 4.4. Trainingand capacity building 0.05 - 0.04 0.01 at the BPO 4.5. EducationCampaigns 0.05 - 0.04 0.01 4.6. Replication Camnaigns 0.05 - 0.04 0.01 5. InstitutionBuilding/Technical 1.1 1.0 - 0.1 Assistance Front end fee 0.60 0.6 Total Costs 97.6 60.0 1.3 36.3

The developmentof the GEF-supportedcomponent will help removebarriers to the use of bicyclesand other nomnotorizedtransport. The City administrationwill considernonmotorized transport in its transport policy and will give priority to integratingbicycles with public transportation.Nornmotorized transport users will have a safe and efficient systemfor mobilityover short and mediumdistances, and this mode of transportwill not be crowdedout. Parkingfacilities and cnnectionswith public transportterminals will promotethe use of nonmotorizedtransport combined with lightrail and bus for trips between Marikinaand the rest of the metropolitanarea. Implementationof the GEF supportedcomponent is expectedto shift the modal choicepattern away from that experiencedin the inner districtof Metro Manilaand many Asian citieswhere nonmotorizedtransport shares are decliningor disappearing.The nonmotorizedtransport modes will maintainor increasetheir quota as well as that of public transporton light rail and buses. Consequentavoidance of many car trips outside the area and many jeepneytrips over short-mediumdistances will help reducecongestion and, togetherwith other traffic calmingmeasures, make nonmotorizedtransport even more attractive,thus triggeringa virtuouscycle that will be exportableto other areas of Metro Manilaor other mediumcities in the Philippinesand abroad.

Global benefits

By 2015 the daily emissionsof greenhousegases in the GEF case scenarioare forecastto increase substantiallyless than underthe base case scenario.With some reasonableassumptions, the savingsin

- 98 - greenhousegas emissions(only for the City of Marikina)are estimatedat about 100 tons of CO2 equivalent a day. Assumingthat the projecthas an economiclife of 20 years(2001-2020) and a linearincrease of transportdemand during the first 15 years, the greenhousegas savings are estimatedat about 400,000 tons of CO2 equivalent(see annex4). Local environmental benefits

In the GEF case scenario,additional local benefit will resultfrom reducedmotor vehicle-produced pollutantsother than greenhousegases (oxidesof sulfur [SO4], lead,benzene, and ethylene),leading to lowerambient levels of pollutionin the projectarea.

Incremental cost matrix

The incrementalcost analysiscan thus be summarized(table 14.2).

Table 14.2Incremental cost matrixof the MetroManila Urban Transport Integration Project

Base case GEF case Increment Description With an increasein The actualquota of nonmotorized motorizedtraffic and transportwill be maintainedor n.a. congestion,the use of increased. nonmotorizedtransport will decline and eventually disappearby 2015.

Global None Greenhousegas emissionswill decrease environmentb by about 400,000 tons of CO, n.a. enefits equivalentduring the 20-yearlife span of the project. Local None Reducedmotor vehicle-produced environment pollutantsother than greenhousegases benefits will leadto lowerambient levels of n.a pollutionin the project area.

Indirect None Demonstrationof nonmotorized benefits transportas a sustainable,nonpolluting, and inexpensiveform of transportand as a viable altemativefor commuting will inducethe developmentof similar facilitieselsewhere in the Philippines and in other countries. Costs 0 US$ 1.5 million US$ 1.5 million

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