World Bank Document

cet- 3s ReportNo. 1702a-CR CostaRica ¡rrfD SanJose Urban Transport Project FILECOPY

Public Disclosure Authorized September26, 1977 Urban ProjectsDepartment

FOR OFFICIALUSE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the Worid Bank

This document hasa restricteddistribution and may be usedby recipients only in the performanceof their official duties. Its contents may not otherwise be disciosedwithout World Bankauthorization. CURRENCY EQUIVALENTS

US$1.00 = 8.6 colones US$0.12 = 1.0 colon US$116,279 = 1 million colones

MEASURES AND EQUIVALENTS

1 meter (m) = 3.28 feet (ft) 1 kilometer (km) 2 = 0.62 mile (mi) 1 square kilometer (km ) = 0.386 square miles (sq mi)

ABBREVIATIONS AND ACRONYMS

CODESA = Corporacion Costarricense de Desarrollo/Costa Rican Development Corporation CBD = Central Business District CTT = Comision Technical de Transporte/Technical Transport Commission DGV = Direccion General de Vialidad/Directorate of Highways DGTA = Direccion General de Transporte Automotor/Directorate of Automotive Transport DGP = Direccion General de Planificacion/Directorate of Planning DGT = Direccion General de Transito/Directorate of Traffic DTRP = Departamento de Transporte Remunerado de Personas/ Department of For-Hire Passenger Transport MOPT = Ministerio de Obras Publicas y Transporte/Ministry of Public Works and Transport OFIPLAN = Oficina Nacional de Planificacion y Politica Economica/ National Office of Planning and Economic Policy RECOPE = Refinadora Costarricense de Petroleo, S.A./Costa Rican Petroleum Refining Co. TOPICS = Traffic Operations Programs to Increase Capacity & Safety TRANSMESA = Transportes Metropolitanas de San Jose, S.A. f3 OFF A Un ONLY

COSTA RICA

SAN JOSE URBAN TRANSPORTPROJECT

Table of Contents

Pag* No.

SUMNARY AND CONCLUSIONS ...... i-il

I. INTRODUCTION ...... 1

II. BACKGROUND ...... 1

A. Population and Economy ...... 1 B. The San Jose Metropolitan Area.... 3 C. Transpott in San Jose , ..... 4 D. Project Rationale ...... 9

III. THE PROJECT ...... 11

A. Objectives ...... 1i B. Main Features ...... 11 G. Detailed Features ...... 12 D. Cost Estimates ...... 18 E. Financing Plan ...... 20 F. Procurement and Disbursement ...... 20 G. Accounts and Audit ...... 20 H. Implementation Schedule ...... 21 I. Pre-Implementation Public Information Program ...... 21 J. Monitoring by Goverrment ...... 21

IV. PROJECT IMPLEMENTATION ...... 22

A. Organization for Implementation ...... 22 B. Selected Implementation Activities ...... 25

V. PROJECT JUSTIFICATION ...... 26

A. Expected Benefits ...... 27 B. Risks ...... 33

VI. AGREEMENT REACRED AT NEGOTIATIONS ...... 33

This report was prepared by C. Madavo, P. Watson, A. Walters, B. Rush, and G. Morra.

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ANNEXES

1. Background Information 2. Details of TOPICS Components 3. Equipment to be Provided under the Project 4. Technical Assistance 5. Training Component 6. The Value of Land 7. Schedule of Disbursements 8. The Traffic Management Component 9. Public Transport 10. Economic Justification

CHARTS

I. ImplementationSchedule (ChartWB 17642) TI. OrganizationChart of Ministry of Public Works and Transport (Chart WB 17644) III. Proposed Organizationof Public Transport and Traffic Engineering in the DirectorateGeneral of Automotive Transport (Chart WB 17643)

MAPS

IBRD 12935 - Metropolitan Area IBRD 13010 - AdiministrativeDivisions of the San Jose MetropolitanArea COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

SUMMARY AND CONCLUSIONS i. Costa Rica has a strong record of economic development, leading to rising incomes which are relatively evenly distributed. The capital, San Jose, is the focal point of the country and is likely to retain its dominant position for the foreseeable future. Jobs are concentrated in the center of San Jose, placing heavy demands on the city's transport system. Given the growth of car ownership and use, traffic conditíons are deteriorating rapidly and show every prospect of becoming increasingly worse in the future. ii. The major objective of the proposed project is to improve travel conditions in San Jose, especially for users of public transport. The strategy for achieving this improvement reflects the Government's decision to make the best possible use of the existing transport infrastructure before embark- ing upon an extensive road building program. This includes giving priority to more efficient means of moving people, notably by public transport. iii. In the proposed project, the main improvements to the physical system consist of road widening on major arterials, where possible within existing rights-of-way. To accompany these improvements, a series of low- cost schemes was devised to increase road capacity and improve traffic flow, while giving priority to public transport and recognizing the need to provide adequately for pedestrians. Only one new section of road will be built (to connect with the Siquirres-San Jose Highway being constructed under. the Fourth Highway Project (Loan 1187-CR)). Provisions have also been made to ensure that the new facilities will be maintained and policed and to assist the Government to develop the local capacity to undertake similar projects in the future. iv. The major components of the proposed project are:

(a) Radial Routes. Improvements to radial routes in seven corridors, including one new road;

(b) Traffic Operations Program to Increase Capacity and Safety (TOPICS), including intersection improvements, sub-area improvements, dispersal schemes, pedestrian crossings, and a Central Business District (CBD) Traffic Signal System;

(c) Equipment for road maintenance, traffic management, traffic regulation enforcement, and for a bus inspection facility including a building to house the facility; - ii -

(d) Technical Assistance in the form of advisers on project management, traffic planning, public transport development, enforcement, traffic signals, and bus maintenance, and funds for a metropolitan planning study;

(e) raining; for MOPT staff in traffic engineering, bus operations and regulation, traffíc surveillance and enforcement and for bus owner/operators in management techniques. v. Total project costs are estimated at t 270.54 million (US$31.46 million), with a foreign exchange component of ¢ 141.89 million (US$16.5 míllion). The proposed loan will finance 100% of the foreign exchange cost or 52% of total costs. The funds would be lent to the Government of Costa Rica and made available to the MOPT, whích would be responsible for executing all the project components except the metropolitan planning study, which will be the responsíbility of the National Office of Planning (OFIPlan). The implementation period will be three years. vi. Procurement for road construction, widening, and rehabilitation (value US$11.5 millaon) and equipment (US$2.99 million) will be on the basis of international competitive bidding. The TOPICS program (roughly 60 schemes valued at US$1.41 million) will be carried out on the basis of local competí- tive bidding because the schemes are too small for international contracting. Government local competitive bidding procedures have been examined and found to be reasonable. vii. The Bank loan will be disbursed to cover 70% of the total costs of radials and TOPICS improvements (less land), 100% of foreign expenditure or 85% of local expenditures for equipment, 100% of foreign expenditures or 75% of total expenditures for technical assistance, 100% of foreign expenditures or 70% of total expenditures for training.

-vili. The radial route improvements included in the project were selected ín order to maximize net present values (NPV) from a range of alternatives that íncluded more and less expensive proposals. All of the components selected have high NPV's and all but one are justified on the basis of savings 1invehicle operating costs alone. The addition of time savings strengthens the economie justifications. The internal rates of return range from 21% to 70%, with an average return of 36%. Fífty-one percent of benefits accrue to public transport. ix. The CBD Traffic Signals System generates benefits in the first year of 0 5.1 (US$59) million of which 59% accrue to public transport. The first year rate of return is 26% with only vehícle operating cost savings and 44% including time savíngs. Together the radials and CBD signals system constitute 79% of total project cost and give a rate of return of 37%. x. The proposed project is suitable for a Bank loan of US$16.5 million at the prevailing interest rate for a 17 year term, including four years of grace for principal. COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

I. INTRODUCTION

1.01 The Government of Costa Rica has requested Bank assistance to finance and implement low-cost urban transport improvements in San Jose. The project results from a UNDP financed urban transport study for San Jose carried out by Alan M. Vorhees and Associates (USA) from January 1973 to July 1975. The Bank acted as executing agency. The Consultant's recommendations, which were intended to form the basis for the current project, consisted almost exclusively of expensive new road construction. On closer examination, the Bank and the Government concluded that medium term travel demand could be accommodated on the existing transport network supplemented by a few new critical links, provided that adequate traffíc management and public transport priority measures could be implemented. This became the focus of the project.

1.02 The project follows the urban transport strategy, set out in the Urban Transport Sector Policy Paper, of making the best use of existing facilities and allocating a significant portion of road capacity to public transport. The returns to the project show clearly the high payoffs, especially to public transport users, that can be obtained from the relatively low-cost improvements categorized as Transport Systems Management. The mieasures proposed under the project together with the capacity to be developed in local institutions will ensure that the need for expensive road construction can be reduced. This approach is new in Costa Rica and follows principles which are rapidly becoming accepted as the basis for modern urban transport planning and could very well serve as a model for other developing countries. The project results from an extensive dialogue between the Bank and the Government.

1.03 Specific project preparation work was financed under the Fourth Highway Project (Loan 1187-CR) and carried out by the Ministry of Public Works and Transport (MOPT) with consultancy assistance from Wilbur Smith and Asso- ciates (USA) beginning in August 1976.

1.04 Three Bank project preparation missions visited San Jose between September 1976 and April 1977. Field appraisal took place from May 30 to June 10, 1977. The mission consisted of C. Madavo (mission leader), P. Watson and A. Walters (URB), B. Rush (ECD), G. Morra (EDP), and J. Cracknell (Consul- tant).

II. BACKGROUND

A. Population and Economy

2.01 Situated between Nicaragua and Panama, Costa Rica is the second smallest country in Central America after El Salvador. The country covers - 2 -

51,000 km2 at an average population density of 36 persons per km2 . In reality, however, the spatial distribution of population reveals areas of high concentration. There are 154 persons per km2 in the central region, 17-27 persons per km2 on the Pacific side and a low 10-13 persons per km2 on the Atlantic side, including the northern region. 1/

2.02 Since 1960 when Costa Rica had one of the highest population growth rates (3.8%) in Central America, the rate has dropped and now appears to have stabilized at about 2.4% per annum. The current (1977) population of Costa Rica is estimated to be about 2,000,000, of which just over 40% live in places with a population of 5,000 or more which are classified by Government as urban. 2/ Urban population is estimated to be growing at about 5% of which about half represents migration.

2.03 In addition to the density figures cited in para. 2.01 above, the dominance of the Meseta Central (high central valley) can readily be seen from the data on city size. The 1973 census showed that the San Jose Metro- politan Agglomeration had a population of 885,000, of which the Metropolitan Area of San Jose made up about 488,000. The remainder of the agglomeration included Alajuela (96,000), Cartago (65,000), Heredia (36,000), and numerous other small towns. The next two largest cities were Puntarenas (33,256) and Limon (31,910) and only nine other cities had more than 10,000 inhabitants.

2.04 Costa Rica's economic performance has been impressive. 3/ Between 1960 and 1975 real GDP grew at an annual rate of 6.5% per annum or just over 3% per capita. GDP per capita stood at US$1,110 in 1976. Agriculture and agricultural exports have historically underpinned this economic performance although in recent years manufacturing has emerged as the fastest growing sector in the economy. San Jose is the center of the nascent industrial base, holding 40% of the country's jobs.

2.05 This impressive economic performance has taken place against a background of improving distribution of income and the Government has made sustaíned efforts to meet the basic minimum needs of its citizens in such sectors as education and health. National income distribution data show a significant improvement between 1961 and 1971, although there are indications that the middle classes are making greater gains than the poorest groups. 4/ At about 90%, Costa Rica's adult literacy rate is among the highest in the developing world. Similarly, considerable progress has been made in the field of health; life expectancy has risen from 61 years in 1960 to about 69 years today.

1/ See Annex 1, Table 1. 2/ See Annex 1, Table 2. 3/ See Basic Economic Report (Report No. 1666-CR), July, 1977 (Draft). 4/ See Annex 1, Table 3. B. The San Jose Metropolitan Area

2.06 San Jose was founded in 1723 and became the capital of Costa Rica in 1823. The city ís located in the temperate and fertile Meseta Central and 1s the country's center for government, industry, commerce, and culture. The metropolitan area is made up of several different municipalities (cantons) --the Central Canton of San Jose and the cantons of Escazu, Desamparados, Goicoechea, Alajuelita, Coronado, Tibas, Moravia, Montes de Oca, 2and Curridabat (see Map 13010). The metropolitan area covers 180 km

The Existing Situation

2.07 Physical Features. San Jose is located in a valley surrounded by mountains. The structure of the city is determined by a radial road network that converges on a strong central area. Most of the metropolitan area is suitable for construction and urban development potential is not limited by physical characteristics. The provision of transport facilities is somewhat constrained by the rivers and creeks that crisscross the city, necessitating bridges and limiting the number of permissible connections in the road network.

2.08 Population. The offical census figures 1/ show that the population grew from 182,000 in 1950 to 328,000 in 1963 and 488,000 in 1973. 2/ The 1977 population is estimated to be around 600,000. The average number of persons per family is 5.5. The average residential density is 185 persons per hectare, covering a range from 97 in Escazu to 245 in Desamparados. 3/

2.09 Employment. In 1973, about 70% of the metropolitan population were 12 years old or more and hence potentially economically active of which 49% were working, 20% percent were students, and 26% were occupied in the home. 4/ The working population was concentrated in the following sectors: communal, social and personal services, manufacturing industries, and commerce, restaurants, and hotels. 5/ The average monthly wage was q9O9 (US$106) and the average monthly family income was 11,555 (US$181).

2.10 Land Use. In 1973, only about one quarter of the available land area in San Jose was actually developed. Of this, 65% was devoted to housing, 12% to private and commercial services, 9% to industry, 10% to Government, and 6% to green space. Economic activities and employment are concentrated in the Canton Central which contains approximately half the jobs in the metropolitan area and larger proportions in the commercial and service sectors, leading to heavy demands for transport into the center.

1/ A census is carried out every ten years. The last one was in 1973. 2/ See Annex 1, Table 4. 3/ See Annex 1, Table 5. 4/ See Annex 1, Table 6. 5/ See Annex 1, Table 7. -4-

Prospects for Development

2.11 In 1963, the San Jose Metropolitan Area contained 24.6% of the population of Costa Rica and increased this share to 26% in 1973. In the absence of public policies aimed at changing this trend by diverting growth to other regions, San Jose will increase its dominant position relative to the rest of the country. It is estimated that the population of the metropolitan area will approach 900,000 by 1990. Given that the population of the largely commercial central area of San Jose is not expected to grow greatly, the population of other municipalities in the metropolitan area, especially those on the southern and western sides of the city - Desamparados, Hatillo, San Sebastian, Paso Ancho, Escazu - are expected to double or even triple by 1990.

2.12 The number of jobs in the metropolitan area is expected to grow at a little over 4.5% annually from 146,700 in 1973 to 319,700 in 1990. The Canton Central is expected to continue to contain just over half of all the jobs in the area - more than four and a half times as many workers as live in the canton. In fact, not all the workers who live in the Canton Central work there, so that even more workers will have to travel in from outside. Thus, the demand for transport between the outlying cantons and the central area will increase.

2.13 Planning Framework. Urban development in San Jose takes place in an uncontrolled environment. There is no master plan or policy statement reflecting the Government's view of what might be considered appropriate or desirable directions for urban development. Nor are there instruments, such as land use or zoning regulations, that might be used to control and direct urban growth. This means that forecasts of San Jose's potential growth patterns, especially concerning the location of new employment and population, are necessarily indicative. Therefore, it is important that current investments in urban infrastructure, including transport, be designed in such a way as to enable them to perform effectively under alternative future growth patterns. Meanwhile, a development planning framework for the metropolitan area should be formulated. The first step ;.n this process--a land use and urban growth study--is proposed under the project.

C. Transport in San Jose 1/

Infrastructure

2.14 The 800 km road network in the San Jose Metropolitan Area íncludes 470 km (almost 60% of the network) of urban streets and paved highways. The

1/ on'rof the data in this section are based on the San Jose Area Trans- portation Study. The Study area used was larger than the San Jose metropolitan area, including Heredia, Alajuela, etc. The population of the study area is a third larger than that of the metropolitan area and the travel patterns analyzed include many trips that cannot be, strictly speaking, consi :red as urban travel. However, the major problem areas from a transport point of view lie within the metropolitan area and the transport study permits their basic characteristics to be identified. remaining 40% of the network ís made up of gravel and dirt roads, mainly in the outlying parts of the area. The condition of the network is very mixed, ranging from recent and good quality pavement to badly maintained streets with crumbling shoulders and many potholes. In addition, the effective capacity of the network is limited, in physical terms, by open gutters and drainage ditches, utility poles in the roadway, and varying pavement widths and, in operational terms, by illegally parked vehicles, pedestrians forced to walk in the roadway by a lack of sidewalks, and poor traffic dis- cipline. Together, these factors severely limit the effective capacity of the existing street network.

Vehicle Fleet

2.15 The road network is used by a growing fleet of motor vehicles. About 39,000 motor cars were estimated to be in circulation in the metropolitan area in 1976 - about half of the number operatíng in the whole of Costa Rica - together with about 500 buses (excluding inter-city buses) and 1,000 taxis. The total number of motor vehicles in Cost Rica tripled between 1962 and 1972, but the number of cars grew much faster than the number of buses 1/. In 1972, the Government imposed a 100% ad valorem import duty. In addition, motorists pay annual registration fees and road taxes amounting to about 0 300 (US$35), plus e 300 (US$35) for mandatory third-party insurance. Gas- oline costs e 8.20 (US$0.95) per gallon of which 40% is tax. Assuming 12,000 miles per year and 25 miles per gallon, a motorist would pay almost 1 1,600 (US$183) per year in gasoline taxes. However, incomes continue to rise and this implies a continued growth in car ownership. It is estimated that the car fleet in the metropolitan area will grow to over 80,000 by 1990. The bus fleet is expected to grow much less and, therefore, will in future operate as a diminishing percentage of the total vehicle fleet competing for road space with a growing number of cars. Given this situation, it is essential that steps be taken to set aside part of the road network for the exclusive use of buses and to provide other appropriate priority measures, such as provision for turns at traffic signals.

Travel Patterns

2.16 Given the concentration of employment in the San Jose Central Business District and the radial nature of the road network, the key indicators of traffic performance relate to traffic conditions on the radials and in the center. Annual traffic counts show that average daily traffic entering the central area more than doubled between 1967 and 1975. 2/ A March 1977 survey of travel across a cordon around the central area (both directions) 3/ reported 995,900 daily person trips in 183,800 vehicles. Fourteen percent of the vehicles were goods vehicles. Of the passenger vehicles, 10% were buses

1/ See Annex 1, Table 8. 2/ See Annex 1, Table 9. 3/ See Annex 1, Table 10. - 6 - and carried 75% of the passengers, 8% were taxis carrying 2% of passengers, 9% were motorcycles carrying 2% of passengers, and 73% were cars carrying 21% of the passengers. Overall, about 7.5% of all trips were in the morning peak; for bus trips, the percentage was 9.5. The average vehicle occupan- cies were 43.6 for buses, 1.5 for taxis, 1.1 for motorcycles, and 1.7 for cars. These figures represent a highly inefficient use of road space and indicate the necessity to take steps to promote the use of and give priority to high occupancy vehícles during the peak period.

Traffic Performance

2.17 The above travel patterns represent peak-hour traffic flows that range from 7,000 and 12,000 passengers per corridor per hour. 1/ These flows lead to some congestion, but heavy congestion is a localized phenomenon. The center is accessible by car from the extremities of the metropolitan area in 15-20 minutes and from much of the area in considerably less. Average car speeds are between 15 and 20 kilometers per hour (kph) and only on a few central area streets do they drop below 10 kph.

2.18 In general, traffic moves tolerably well and traffic performance is reasonable. It is, however, deteriorating quite rapidly. A comparison of the latest speed and delay surveys with a limited survey carried out in 1967 shows that, in the central area, travel times have more than doubled in this period. There is every indication that, with increasing car ownership, traffic performance in the future is likely to become progressively worse.

Bus Operations

2.19 All public transport in San Jose is operated by private entrepre- neurs under Government regulation. About 240 private owners operate a fleet of close to 500 buses. Within the metropolitan area, it is estimated that this fleet travels about 70,000 vehicle-kilometers and carries about 500,000 passengers daily. In addition, about 200,000 more bus passenger trips are provided by intercity buses that terminate within the metropolitan area and by school and charter buses. Bus speeds average between 13 and 22 kph on the radial routes, lower (12 to 16 kph) in the central area. Travel times by bus range from 10 to 30 minutes. 2/ The growing level of congestion is an increasing problem for buses which are delayed more than cars. Steps should be taken to ensure the continued and even increased efficiency of bus operations so that both their ridership and their profit- ability can be maintained and the potential large modal switch towards cars minimized.

Regulation of Bus Operators

2.20 The routes to be travelled, the number of buses to be used, and the frequencies are set out in the concession granted to each private operator by the Comision Technica de Transportes (Technical Transport Commission) in the

1/ See Annex 1, Table 11. 2/ See Annex 1, Table 12. - 7 -

MOPT. Analyses of routes, capacitíes, and frequencies and recommendations for changes are generated in the Departamento de Transporte Remunerado de Personas (DTRP) in the Direccion General de Transporte Automotor (DGTA), with assistance from the Division de Transporte Publico in DGTA's Departamento de Ingeniera de Transito.

2.21 While the mechanics of issuing concessions are handled efficiently, a closer examination reveals that the system does not really work as intended. Initially, concessions were given to existing operators in 1965 and by and large re-íssued to the same operators in 1976. The latest concessions are for seven years. Even when concessions are revoked or given up, they are frequently re-issued as extensions to existing concessions, due to the difficulties and delays involved in going to bid. Thus, the degree of competition for bus lines is small.

2.22 Given this situation, it is essential that the regulatory body on a regular basis (a) review the demand conditions on existing lines and hence the need for capacity increases, and (b) monitor urban expansion to ensure that services are provided to newly urbanized areas. Neither of these tasks is currently carried out adequately. This is due partly to the lack of staff and the fragmentation of public transport units in DGTA and partly to the complexities inherent in trying to control the operations of a very large number of small enterprises. However, since concessions are issued infrequently and the degree of competition is limited even then, it is desirable that service and operating standards be closely monitored so that delinquent operators can be penalized or replaced and service standards maintained and upgraded. This necessity seems to be recognized even by the operators them- selves, who, on some routes, have banded together to hire an independent manager/dispatcher to control the number of buses provided and their headways. A more formal process should be established to monitor service standards on a regular basis and the project will start this process.

2.23 A further problem arises over the route structure which seems to be inadequate for the crosstown trips that occur with increasing frequency in current travel patterns. In addition, it is not clear that the numbers or types of buses (almost all standard size buses) operating in San Jose are well suited to the demands being placed on them by the travelling public. The capacity provided and the means of providing it (including the potential for larger or smaller buses) are reviewed only infrequently. These items will be examined during project implementation and recommendations for changes drawn up.

Fares and Subsidies

2.24 Fare studies are carried out in the Oficina Tarifaria in the MOPT Direccion General de Planificacion. Recommendations are transmitted through DTRP to the Comision Technica de Transportes. Fare studíes establish operating costs from private operator accounts and recommend fares based on operating costs plus a "fair" return (25% of operating costs). Fares are currently 0 0.40 (US$0.05) for regular routes and ¢ 0.50 (US$0.06) for longer routes or for services that use buses that are two years old or less. - 8 -

2.25 In 1976, the Oficina Tarifaria studied fares in San Jose and reported that, to continue to cover costs plus the "fair" return, bus fares should be raised by 25% (o 0.10). Public objections to the announcement of this fare increase were so intense that the Government was obliged to revoke the increase. In order to avoid making the bus operators bear this burden, the Government introduced an ad hoc subsidy. Initially, the subsidy was given for trips that were longer than 5.5 km, the rationale being that, given a flat fare, operators lost more on long trips. This subsidy cost US$350,000 in 1976; no budget provision was made for it in 1977. Mole recently, when Transportes Metropolitanas de San Jose, S.A. (TRAANSMESA)began operations, Government subsidies were channelled through it. A review of the relationship between fares and operating costs should be carried out at regular in- tervals so that the Government can base its fare policy on better inforination and evaluate more realistically the implications of yielding to political pressures not to increase fares, especially with respect to the potential long-run subsidy burden on the national budget. The project will start this regular review process.

2.26. The actions noted above as necessary to increase the efficiency of bus operations and regulation will constitute the key elements in the new work programs for the re-organized Public Transport Department of DGTA as proposed under the project. (See para 4.12 and Annex 9.)

TRANSMESA

2.27 TRANSMESA is a Government-owned subsidiary of the Corporacion Costarricense de Desarrollo (CODESA) which also controls the Refinadora Costarricense de Petroleo, S.A. (RECOPE). Using RECOPE funds (generated from gasolíne taxes) for its operating budget, TRANSMESA acts as a financial intermediary in the public transport field. Its principal activity is to buy buses in bulk and on favorable credit terms and to resell them to private bus operators. In this way, private operators can obtain cheaper buses and TRANSMESA can exercise, through contractual conditions, a degree of control over their operation and maintenance. 1/ TRANSMESA also plans to promote innovative bus services such as mini-buses, trolley buses, and other services using special vehicles for specific purposes. The mission investigated the potential danger that TRANSMESA might expand its operation and eventually take over as the public operator of bus services. The appraisal mission received assurances from both TRANSMESA and MOPT that the Governnent had no intention of allowing this to happen. Both were aware of the problems that have been observed in public bus companies in other countries. It is the judgement of the mission that the risk of TRANSMESA's becoming a public bus operator is negligible.

2.28 Given the Government's inability to raise bus fares in 1977, TRANSMESA was authorized to use RECOPE funds to take over part of the repayments that private operators had to make on their new TRANSMESA buses. The subsidy was calculated at the ¢ 0.10 attempted fare íncrease multiplied

1/ The DGTA has also performed this operation for taxis in an attempt to modernize the taxi fleet and gain better control of operations. - 9 - by the average monthly passengers carried by a bus. The subsidy is con- tractuallytied to operating conditions establishedby TRANSMESA, and can be revoked, for example, if maintenance ls not performed or if unauthorized drivers are used. The subsidy is also tied to fares and will be eliminated immediatelyupon Government action to implement the ¢ 0.10 fare increase.

D. Project Rationale

2.29 The problems arising from the existing and prospectivesituation in urban transport in San Jose and the solution whích the proposed project sets in motion can be summarized as follows. Recent growth of both population and car ownership in San Jose has resulted in deteríoratingtravel conditions and increasingtraffic congestionboth in the city center itself and on the roads leading to the center. Evidence from many other cities indicates that the effect of such traffic growth will be particularlysevere on buses, threateningthe very high current patronage of public transportin the metropolitanarea. Since incomes are likely to continue to rise, there is every prospect that the situationwill become rapidly worse. Thus, while the proposed project is designed to improve today's traffic condítions,an equally important objective of the project is to undertake actions that will pre-empt the potential deteriorationin travel conditions and, more specifically, create conditions under which San Jose's bus system can continue to operate efficientlyand prevent significantshifts to private cars.

2.30 The strategy for achieving these objectives involves, first, a series of traffic engineeringactions to increase the effective capacity of the road network and, second, the introductionof policy measures to give greater priority to high occupancyvehicles and to discourage the use of low occupancyvehicles, especially cars in central San Jose. Together with priorities for public transport, the traffic engineeringmeasures will ensure that the projected growth of car ownership and use can be accommodatedon the improved network without leading to severe congestion. In five to eight years, the car ownershíp level is expected to reach a poínt where increased road capacity that would be required can no longer be provided at low cost. If no additional road capacity is provided, severe congestionis likely unless measures are implementedto restrict the use of cars in central San Jose.

2.31 In designing the project, certain principleswere followed that are rapidly becoming accepted as the basis for modern urban transportplanning. In particular,special importancewas attached to four factors. First, given the absence of an accepted urban development strategy for San Jose and the lack of effective land use controls over the city's growth, it became important that the proposed urban transportproject should not significantlychange San Jose's growth patterns in a manner which would block future options. Second, preference was given to low-cost traffic engineeringand transportmanagement techniques to increase the effective capacity of the existing network of roads and streets. Only where sufficient capacity could not be created through these measures or when special facilities,such as bus lanes, were necessary was considerationgiven to new road construction. Third, urban transport improvementswere aimed primarily at enhancing public transport, including special facilities to give preferentialtreatment to buses and to accommodate - 10 - pedestrians in safety. Finally, the proposed projec, was viewed as the fírst step in a continuing program of urban transport monitoring and improvement based on the above principles. Therefore, the institutional changes required to create the local capacity to carry out such a program constitute an integral part of the project.

2.32 These factors resulted in the development o a ,ro-,ectaimed at improving the efficiency of the central area network, together with widening and rehabilitation of radial roads, with little new road construction. The central area improvements and the radial improvements have been designed to be compatible and to ensure that the increased flows on the radials do not lead to increased congestion in the center.

2.33 The TOPICS schemes are largely designed to reiove bottienecks where the radials enter the central area. Experience wíth TIPIC(S sehemes in the USA has shown that intersection through-put ran be Increased up to 10%, while speeds increase (and hence delays tai by up to 25%. Accidents can be reduced by 50% or more. The CBD traffíc signal system ís also expected to increase effective capacity significantLy. S,'oreover,road capacity, both on the radials and in the central area, will. 5e reser-ved for the exclusive use of buses. Together, these measures will (a) deal wíth current traffic problems by increasing capacity and removing bottler,etks and (b) create sufficient capacity to absorb the growth of traffic in the next few years. In addition, they will increase the performance of public transport significantly.

2.34 It is clear that growing traffic volumes will gradually erode the improved conditions; the rate of erosion will depencd on the growth of both population and car ownership. It is important to note that the provísion of exclusive facilities for buses means that any growtlb ,In car ownership will have a greater negative effect on the operating conditions of cars than it will have on buses. Overall, it is estimated that the network that will result from the project will provide adequate exclusive bus facílities and create enough central area and radial capacity, to postpone the need to consider large-scale investments in new roads unti i the xÍld-198Os. In the eeŽnt that conditions deteriorate more rapidly, the monitoríng program will p-. -ide advance warning and permít adequate additional measures to be planned and implemented.

2.35 This breathing space, together with the creation of local traffic management capacity, will give the Government both the time and the expertise necessary to develop the policies and measures that will be required in the future to give greater priority to high occupancy vehicles and to discourage the inefficient use of the private car. If such measures can be effectively implemented, the necessity for new road coestruction may be considerably reduced, resulting in substantial savings In urban tran ínrtinvestment. - 11 -

III. THE PROJECT

A. Oblectives

3.01 The project aims to relieve the existing and potential near term problems of moving people and goods in San Jose through:

- low-cost traffic measures aimed at increasing the effective capacity of existing transportationfacilities and, thus limiting new road constructionto critical links;

- priority measures for public transportand accommodationof pedestrianmovements; and

- technícalassistance and training to enhance Costa Rican understandingof this low-cost approach to urban transport as well as to buíld local capacity to plan, ímple- ment, and monitor further transport improvementaon an on-going basis.

B. Main Features

3.02 The project will consist of:

(a) the construction,widening and rehabilitationof roads radiating from the center of San Jose (radials);

(b) a Traffic Operations Program to Increase Capacity and Safety (TOPICS) comprising an integrated traffic light system for the Central Business District (CBD), improvements of intersections,sub-area traffic flow schemes, traffic dispersal schemes, pedestrian facilities,and a central area bus circulationplan;

(c) equipment for road maintenance,signing and marking, traffic regulation enforcement,and constructionof a bus inspection facility;

(d) technical assistancefor project management, traffíc planning,public transport promotion, traffic regulation enforeement,and road maintenance;

(e) a training program for Minístry of Public Works and Transport staff concernedwith urban transport;and

(f) a land use and urban growth study for the San Jose MetropolitanArea. - 12 -

3.03 The above components of the project will be accompanied by a number of measures designed to improve urban transport planning capacity in San Jose. These involve the reorganization and staffing of the MOPT uníts responsible for traffic management and public transport. With respect to the reorganization, it was agreed at negotiations that MOPT will, no later than September 30, 1978, establish within DGTA a Publie Transport Department, a Traffic Engineer- ing Department, and a Transport Policy Studies UTnit and carry out through such departnients and unit work programs satisfactory to the Bank in public transportation, traffic planning and engineering, and transport policy studies.

C. Detailed Features

Radial Roads

3.04 The radial road component of the project comprises:

- construction of one new radial;

- widening (addíng up to two lanes where feasible) of five radials and Avenida 2;

- rehabilitation (repaving, repairing gutters, removing obstructions within the right-of-way) of two radials.

3.05 New Tibas Radial. The new radial, referred to hereafter as the New Tibas Radial, (see Map 12935) provides an extension of the San Jose-Siquirres Highway (Fourth Híghway Project, Loan 1187-CR) southwards into San Jose. The four lane divided radial is 2.34 km long and ends at Tournon in a 0.51 km long dispersal scheme with at grade connections to the existing road system. The detailed design for the radial was done by the same consultants who designed the San Jose-Siquirres Highway and there are no problems of compatibility. However, the mission requested the Government to review the interchange designs on the New Tibas Radial as the highway network assumptions used to derive the traffic forecasts that determined the original design have changed. Specific- ally, the beltway is being re-examined and is not expected to be started before 1985, if at all. The Bank will examine these reviews as part of the process of approvíng the tender documents. No problems are foreseen.

3.06 Widening of Existing Radials. The following radial routes are to be widened (see Map 12935):

(a) San Pedro Radial (Route 2) -- 2.93 km;

(b) Dosamparados Radial (Route 4) -- 4 km;

(d) Guadalupe Radíal (Route 6) -- 2.64 km;

(e) Uruca Radial (Route 1) -- 3.76 km; and

(f) Avenida 2 -- 1 km. - 13 -

3.07 The design for each of the proposed radial improvements provides 14.6 m for four lanes of travel or 3.67 m per lane. For limited lengths, where such a width is unobtainable without excessive property acquisition, a minimum of 13 m is considered acceptable. Curbs, gutters, and drainage will be provided and appropriate sídewalks included for frontage activity along each route. To obtain a consistent carriageway width along the radials, existing river bridges on the Desamparados, San Sebastian, Guadalupe, and Uruca radials will be rebuilt. The widening program will involve the reloca- tion of just over one hundred families, of whom about sixty may be considered poor. No special arrangements are required as this number can easily be absorbed into existing Government programs. An important criterion in the selection of routes for wídeníng was the magnítude of bus flows. There- fore, peak period, curbside bus lanes will be provided along each widened route. The lanes will not incorporate physical separation (due to the problems of access to mixed frontage land use during the remainder of the day) but will rely on parking prohibition and enforcement for their success. It was agreed at negotiations that the Government shall take all necessary action to ensure permanent and consistent enforcement of the Traffíc Regula- tions in the Metropolitan Area of San Jose including enforcement of parking prohibitions and regulations limiting access of cars to lanes reserved for buses during periods of peak-hour traffic flow.

3.08 The widening of Avenida 2 is of a different character to the other radial widening projects. The proposal will form an extension of the east- west route through the San Jose city center. The project will convert the existing Avenida 2 from one-way eastbound to a two-way street. The road will operate with two lanes used for buses only. Thus, the extension of Avenida 2 will allow bus lane provision to be extended east-west across the city.

3.09 Rehabilítation of Existíng Radíals. The following radial routes will be rehabilitated (improvements within the existing right-of-way):

(a) Tibas Radial (Route 5) -- 2.70 km; and

(b) Alajuelita Radial (Route 210) -- 3.82 km.

No major changes will be made to the vertical or horizontal alignments of the roads. Rather the objective is to provide two travel lanes of 3.65 m by removing lateral obstructions, introducing minor widenings, paving shoulders where possible and necessary, improving lateral drainage, and repaving the exístíng road surface. Due to the restricted width of the routes, bus priority measures are not possible but it is intended to improve passenger waiting areas and to provide bus-bays to avoid delays to both general traffic and buses during loading at stops.

3.10 Detailed design has been completed for one radial (Desamparados). Preliminary designs exist for the remainder of the radials to be widened or improved. The Directorate of Highways (DGV) in MOPT will be responsible for finalizing all designs. These will then be reviewed by an independent engineer to ensure that sound and economical design standards are employed. It was agreed that the Government would engage such an engineer and pay him out of project loan funds. It was further agreed that the engineer's qualifications and terms of reference shall be acceptable to the Bank. - 14 -

Traffic Operations Program to Increase Capacity and Safety (TOPICS)

3.11 The TOPICS component of the project consists of:

(a) intersection improvements;

(b) sub-area traffic circulatíon improvements;

(d) pedestrian facilities;

(e) a central area bus circulation plan; and

(f) a traffic signal system for the CBD.

3.14 intersection Improvements. Sixteen intersections will be improved under the project (see Annex 2). The íntersections are located either on the fringe of the CBD area or at sites in the outer areas of the city which are not subject to improvement under the radial road component (see Map 12935). The improvements will increase capacity at low capital cost by the use of traffic lights, physical channelling, traffic signs to inform or warn drivers, turn prohibitions, and pavement markíng. In some cases, minor widening will be necessary but this will be contained within the present right-of-way to speed implementation and to avoid increased costs.

3.15 Sub-area Improvements. Sub-area improvements are defined as schemes which, whíle employing similar techniques to those adopted for intersection improvements, affect traffic circulation over a wider area than a single inter- sectíon. Seven such schemes are íncluded in the project and their locations and the key characteristics are set out in Annex 2 and Map 12935. Particular emphasis wil be placed on bus operational features in these schemes.

3.16 Dispersal Schemes. As a consequence of the implementation of the radial route widening and rehabilitation program, it will be necessary to províide for the dispersal of traffic at the edges of the central city area. I-,eseschemes will use one-way systems, traffic lights, channelization, and other measures to ensure that radial traffic flows can be absorbed into the central area road network without causing congestion. In some cases, schemes have been included within particular radial projections, such as the Tournon dispersal at the end of the New Tibas Radial and the dispersal system associated with the San Pedro and Avenida 2 radials, However, two particular dispersal projects (see Map 12935) require special consideration:

(a) The Plaza Gonzales Viquez Dispersal Scheme is located at the junetion of the to-be-widened Desamparados Radíal, the existing Zapote Radial, Calle 9, Calle 11, and other minor routes. The project provídes for one-way traffic circulation (with bus lanes) by means of widened streets, linked traffic signals, and channelization at key íntersections.

(b) The Sabana Sur Dispersal Scheme. Calle 42 on the east side of La Sabana forms a major riorth-southtraffic dís- tributor with intersections with Avenida de las Americas, - 15 -

Paseo Colon, Avenida 10 and Route 7 (Escazu Radial). Traffic conditions, already congested in peak periods, will deteriorate further in the near future following the opening of the already constructed Santa Ana Expressway. The project provides for a linked, multi- phase signal system, channelization, and turn prohibitions to provide a short-term solution.

3.17 Pedestrian Facilities. The proposed CBD Traffic Signal System (see para 3.19) will incorporate pedestrian crossing features in the central area of the city. Outside the central business district, fewer conventional traffic signals exist and it ís proposed to install clearly marked, signal controlled (pedestrian actuated) crossings at 20 important locations adjacent to schools and commercial area concentrations.

3.18 Central Area Circulation Plan. The plan will reorganize the use of certain streets currently used by general traffíc to provide peak hour bus priority routes and peak períod curbside bus lanes for east-west and north-south bus flows. Parking would be banned on bus priority routes in peak periods and, in some cases, left turns would be prohibited. The scheme also provides for 'bus only' movements on two streets (Calle 7 and Parque Morazan). The circulation plan will rely for its success on strict enforcement (see paras 3.07, 3.23 and 4.08).

3.19 CBD Traffic Signal System. The proposed traffic signal system for San Jose will provide coordinated signal control along the primary routes in the central area of the city (see Map 12935). It will control traffic signals at most of the intersections in the area bounded by Avenida 9 in the north and Avenida 14 in the south amounting to 129 signals. The system is designed to operate under coordinated fixed time control, with the capacity to select from a series of previously calculated timing plans the one most suited to prevailing conditions. The calculation of signal plans for various times of day and days of week will be based on the philosophy of minimizing delay to traffic in the network and, by use of the latest version of the program TRANSYT, signal tíming plans will be developed which give maximum advantage to buses. Emer- gency vehicle pre-emption features along designated routes in the CBD will be designed into the system. The specifications permit 27 timing program combinations and the system can be operated either electromechanically (as is common with such systems) or electronically by use of solid state control equipment. In either case, the system has sufficient flexibility to allow conversion to computer control at a later date should it prove desirable.

3.20 Detailed engineering is complete for two TOPICS schemes and specifications have been prepared for the CBD signal system. The remaining TOPICS elements are at preliminary engineering stage. DGV will be responsible for completing designs which will be reviewed in the same way as the radial designs (see para 3.10).

Equipment and Buildings

3.21 Equipment for Traffic Control. To enable DGTA to begin to promote good traffic management and driver behavior practices, the project will ínclude a program of improved signs and road markíng. The project wíll finance equipment for the manufacture of traffic signs and the application - 16 - and removal of pavement markings, as well as two special vehicles for use in traffic signal maintenance. A schedule of equipment included in the project is presented in Annex 3.

3.22 Equipment for Highway Maintenance. As part of the project, MOPT will establish a unit to carry out maintenance of highways in the metropolitan area of San Jose (para 4.05). The project includes provision for the purchase of the equipment that will be necessary to start the maintenance program. A schedule of the equipment required is presented in Annex 3.

3.23 Traffíc EnforcementEquipment. Public transportpriority treatments and other traffíc regulations (e.g., parking restrictions)to be implementedas part of this project will work only if traffic enforcement is effective. The project therefore includes traffic enforcementequipment (includingtow-trucks and radio-communicationsequípment) for the traffíc líne under DGT (para 4.08 and Annex 3).

3.24 Bus InspectionFacility and Equipment. To improve the operational and safety performance of buses, DGTA intends to increase the regularity and stringency of bus inspection. As part of the project, it is proposed to construct and equip a bus inspection station that will be capable of inspecting each bus of the metropolitanfleet once every two months. The facility will have the capacity to handle up to 350 buses per month and would consist of ten inspectionlanes, inspection píts, a paved maneuvering area, and a records office. Details of the equipment required are presented in Annex 3. It was agreed that the Government will cause the bus inspection facility to be operated by TRANSMESA and to be used solely for the purpose of bus inspection.

Technical Assistance

3.25 Technical assistance under the project (see Annex 4) is intended to assist Government with (a) the immediate tasks of coordinatingand managing project implementation;(b) start-up of traffic planning and public transport development; (e) organizing a metropolitanroad maintenance unit within the Ministry's Directorateof Highways (DGV); and (d) a metropolitan land use study. The project will fund an adviser to the Project Steering Commit- tee (see para 4.03), two advisers on traffíc planning, two advisers on public transport,and one adviser on road maintenance for a total of 9-1/2 man-years. The approach to transport advocated in this project is relatively new to Costa Rica and the aboye inputs of technical assistance are considered a minimum requirementto assist Government initiate project implementation.Funds are also included to provide 33 man-months of technicalassistance for the proposed study of land use and urban growth in San Jose. The study will form the first step in the process of establishingthe urban developmentstrategy that '-,a prerequisitefor urban transportplanning, in particular, and urban infraicructureplanning in general. Specifically,the study will survey existing land use, examine likely urban growth patterns, assess their implications for the programs of agencies responsiblefor infrastructureprovi- sion, and investigat notential methods of controllinggrowth, such as zoning controls. Most of tL- advisory services will be procured from outside Costa - 17 -

Rica. Man-months rates varying from US$6,000 to US$7,500 have been assumed in calculatingthe costs. Advisory services will be procured from individual consultantsor experts attached to consulting firma. The latter would be more expensivebecause of overheads and this explains the relativelyhigh man-month rates.

Training

3.26 To create adequate local capacity to plan and implementurban transport improvementson on-going basis, the project includes a training component (see Annex 5). The component consists of:

(a) an in-countrytraining program dealingwith traffic engineering,traffíc planning,and public transport regulationfor DGTA personnel, traffic surveillance and enforcementfor DGT personnel,and seminars in simple business management techniques for bus operators; and

(b) training abroad for selectedMOPT staff. First, six senior MOPT managerial staff would attend two to three month practical field placements in urban transport management agencies in San Juan, Puerto Rico. San Juan has recently implementeda set of transport measures similar to those planned for San Jose and the placementswould be an importantorientation for the Costa Ricans. Second, the project will finance three scholarshipsabroad in urban transportplanning and economics. To minimize leakage, only civil ser- vants with outstandingcareers in MOPT would be eligible. Third, the project will finance the developmentof university level traffic engineering courses to be taken by engineeringstudents in Costa Rica.

3.27 It was agreed that, prior to implementingthe trainingprogram, MOPT will furnish to the Bank, for its approval, a detalled descriptionof the program. The Mínistry issued a statementon training for MOPT by the Minister (see Annex 5, Attachment 1). The MOPT Training Section will be strengthenedto implementthe trainingprogram. Roughly 4-1/2 man-years of expatriate instructors1/ will be provided under the project. These will be complementedby at least equivalent inputs from the Costa Rica side. The instructorsare costed at US$6,000 per man-month. It was agreed at negotiationsthat three training instructorswill be appointed by June 30, 1978.

1/ See Annex 5, Attachment 2 for job description. - 18 -

D. Cost Estimates

3.28 Total project costs at the expected negotiationsbase date of October 1977, are estimated at ¢ 270.54 (US$31.46)million of which ¢ 141.89 (US$16.50)million is foreign exchange. Land acquisitioncosts amount to ¢ 69.66 (US$8.1)million or 26% of total costs includingcontingencies. 1/ Over 80% of the land costs are for the radial improvements,including 45% for the New Tibas Radial. The proposed loan will not cover land acquisition.

3.29 Cost estimates for the New Tibas Radial Route and the CBD Traffic Signal System are based on final designa. Except for the Desamparadosradial and two TOPICS schemes for which detailed engineeringi avaílable,estimates for the widening and rehabilitationof the radial routes, the TOPICS program, and the bus inspectionfacility are based on preliminarydesigns. Equipment costs are based on current Costa Rican prices for equivalentequipment.

3.30 Physícal contingenciesamount to 10% for the New Tibas Radial, 20% for radials to be widened and rehabilítated,and 15% for the TOPICS program (includíngthe CBD Traffic Signals System) and for the bus inspectionfacility. The 20% physical contingencyfor radíal improvementsreflects the difficulties inherent in estimatingcosts for this type of component,especially given the problems of executing the project within the existing urban fabric,with the requirementto maintain an adequate level of traffic flow during construction. Price contingenciesrepresent the mission's best estimate of required contin- gency allowances in Costa Rica and in 1977-79amount to 9% and 7.5% for civil works and equipment,respectively. For 1980 and followingyears, the rates are 8% and 7% for the respective categories. For technicalassistance and training,price contingenciesamount to 10%.

3.31 The project costs are summarizedin the next table.

1/ See Annex 6 for a detailed analysis of land costs. - 19 -

PROJECT COSTS

Colones (million) US$ (million) Local Foreign Total Local Foreign Total

Radial Routes New Tibas Radial 9.45 22.03 31.48 1.10 2.56 3.66 San Pedro Widening 2.70 6.31 9.01 0.31 0.73 1.05 DesamparadosWidening 1.76 4.11 5.87 0.20 0.48 0.68 San Sebastian Widening 2.70 6.29 8.99 0.31 0.73 1.05 Alajuelita Rehabilitation 1.83 4.27 6.10 0.21 0.50 0.71 Guadelupe Widening 2.82 6.59 9.41 0.33 0.77 1.09 Tibas Rehabilitation 1.19 2.76 3.95 0.14 0.32 0.45 Uruca Widening 6.23 14.55 20.78 0.73 1.69 2.42 Avenida 2 Widening 1.01 2.36 3.37 0.12 0.27 0.39 Subtotal 29.69 69.27 98.96 3.45 8.05 11.50 Right-of-way Cost 57.42 - 54.42 6.68 - 6.68 Total Component 87.11 69.27 156.38 10.13 8.05 18.18

TOPICS IntersectionImprovements 0.92 2.14 3.06 0.10 0.25 0.35 Sub-area Improvements 1.03 2.39 3.42 0.12 0.28 0.40 Díspersal Schemes 0.99 2.33 3.32 0.12 0.27 0.39 Pedestrian Crossings 0.54 1.25 1.79 0.06 0.15 0.21 Central Area CirculationPlan 0.16 0.37 0.53 0.02 0.04 0.06 Subtotal 3.64 8.48 12.12 0.42 0.99 1.41 Right-of-way Cost 4.29 - 4.29 0.50 - 0.50 Total Component 7.93 8.48 16.41 0.92 0.99 1.91

Equipment CBD Traffic Signal Syste 3.50 7.44 10.94 0.41 0.87 1.28 DGTA Equipment - 1.23 1.23 - 0.14 0.14 DGT Equipment - 3.59 3.59 - 0.42 0.42 Road Maintenance Equípment - 6.26 6.26 - 0.73 0.73 Bus InspectionFacility 0.98 1.81 2.79 0.11 0.21 0.32 Subtotal 4.48 20.33 24.81 0.52 2.36 2.88

Right-of-wayCost 0.91 - 0.91 0.11 - 0.11 Total Component 5.39 20.33 25.72 0.63 2.36 2.99

Technical Assistance Total Component 2.06 6.28 8.34 0.24 0.73 0.97

Training Component Total Component 1.98 4.73 6.71 0.23 0.55 0.78

Total Excluding Contingencies 104.47 109.09 213.56 12.15 12.68 24.83

Contingencies Physical Contingencies 6.21 14.32 20.53 0.72 1.67 2.39 Price Contingencies 17.97 18.48 36.45 2.09 2.15 4.24

TOTAL PROJECT 128.65 141.89 270.54 14.96 16.50 31.46 - 20 -

E. Financing Plan

3.32 The proposed Bank loan of US$16.5 million would finance 100% of foreign costs, about 52% of total project costs. The loan would be to the Government of Costa Rica.

F. Procurementand Disbursement

3.33 Contracts for the radial route construction,widening, and rehabilitation (estimatedtotal value US$11.50 million excluding contingenciesand right-of-waycosts) and for the supply and installationof the CBD Traffic Signal System and for the supply of other equipment (estimatedtotal value US$2.99 million excludingcontingencies) will be let on the basis of international competitivebidding in accordancewith Bank guidelines. In order to obtain competitivebids as well as to facilitateparticipation by local contractors,radial improvementswould be grouped in such a way that bidders would have the opportunityto bid on works for one or several radials according to the contractorscapacity. Procurementof equipmentfor signing and marking, enforcement,road maintenance,and the bus inspectionfacility will be on the basis of internationalcompetitive bidding in accordancewith Bank guidelines. Some of the equipmentmight be obtained from manufacturersin the Central American Common Market area of which Costa Rica is a member. Costa Rica has requested that such manufacturersbe granted a preference of 15% of the c.i.f. landed price or 50% of the import duties whichever is lower.

3.34 Contracts for the constructionof the TOPICS schemes will be on the basis of local competitivebidding. This is justified in view of the relativelylow contract sums involved (US$1.41million for the total program comprisingsome 60 schemes) and the techniquesand local knowledge that will have to be employed to constructsmall-scale road schemes while maintaining traffic flow in a busy urban environment. Local bidding procedures have been reviewed and found to be satisfactory.

3.35 Disbursementswill be for 70% of total expendituresfor radial improvements(excluding land) and TOPICS schemes; 100% of foreign expendí- tures or 85% of local expendituresfor. equipment; 100% of foreign expendí- tures or 75% of total expendituresfor technicalassistance, 100% of foreign expendituresor 70% of total expendituresfor training. Disbursementswould be fully documented. Savings, if any, on completionof the project should be applied to additionalTOPICS schemesmeeting Bank approval. The schedule of estimated disbursementsis shown in Annex 7.

G. Accounts and Audit

3.36 It was agreed during negotiationsthat each MOPT Directoratewill maintain separate project accounts and that the Ministry will maintain a consolidatedproject account. These accountswill be audited annually in a manner satisfactoryto the Bank and the audited accounts forwarded to the Bank not later than six months after the close of each fiscal year. - 21 -

H. ImplementationSchedule

3.37 The implementationschedule is presented in Chart 17642. Project implementationwill take approximatelythree years assuming a start date of January 1978. Care will be required in the coordinationand phasing of activities: all land acquisitionshould be completedby the end of 1978 with some of it required by mid 1978; traffic dispersal schemes should be in place prior to the completionof the radial widening rehabilitationprogram; and the supply of traffic signals on all contracts should be coordinatedto ensure compatibility.

1. Pre-ImplementationPublic InformationProgram

3.38 Certain parts of the project include innovatíonsfor San Jose, for example, changing Avenida 2 to two-way operation, introducingthe Central Area CirculationPlan to give priority to buses, establishingstrict parking bans and control of cars using bus lanes. Before implementingthese measures, the Governnent will take steps to inform the public of the proposed changes and to explain the reasons for them. The implementationof the public information program will be phased to enable appropriateadjustments to responses to any oppositíonwhich might arise.

J. Monitoring by Government

3.39 The Government will undertake a program of monitoring in San Jose (a) to provide a basis for making adjustmentsto the progrars financed under the project; (b) to improve a more detailed local understandingof the programs as a basis for designing follow-up programs; and (c) to evaluate the operationalperformance of the programs. The monitoring program will encompass three levels of activity:

(a) Functional Monitoring. This type of monitoring is aimed at providing rapid feedback to the implementingagencies on the functional and operating characteristicsof the project components,specifically the TOPICS program, the exclusive bus lanes, and CBD Traffic Signal System. For TOPICS the monitoring would include observationsand counts to determine the effectivenessof channelizationand the increase in capacity as well as measurementsof any reductions in delay and accidents. For bus lanes, running speeds would be measured together with observationson the effectivenessof provisions for right turns, access to frontage activities,and enforcement. For signals, it will be necessary to monitor flows and delays to ensure that the signal timings are correctly set. - 22 -

(b) Monitoring of Service Standards. This program will measure the changes in travel service standards for both public transport and private car users. Specific variables monitored would be travel time (in-vehicle, walking, waiting), travel cost, frequency of bus services, failure to pick up waiting passengers, etc. Some measurements will be made on a route by route, corridor by corridor basis; others, due to the interactions that are expected among the effects of different project components especially in the central area, shotuldbe monitored on the basis of a city-wide sample of trips.

(c) Macro-level Monitoring. One of the objectives of the project is to maintain the proportion of trips currently carried by public transport. Thus, it is important to monitor the modal split in San Jose, particularly for trips entering the CBD.

3.40 The advisers (see para 3.25) will assist MOPT in defining the details of the monitoring program. At negotiations, it was agreed that the Government shall, through MOPT, establish a monitoring program satisfactory to the Bank no later than December 31, 1978.

IV. PROJECT IMPLEMENTATION

A. Organization for Implementation

4;0] The Ministry of Public Works and Transport (MOPT) has overall responslbility for transport policy, programming, arid regulation in Costa Rica. Although provinces and municipalities are supposed to share respon- slblilties, especially for the maintenance of roads in their jurisdictions, they lack both financial and technical capacity. Therefore, MOPT carries 1- rthis function in practice and the bulk of the proposed urban transport ect will be carried out by the Ministry through its various units. The sol- exception will be the land use and urban growth study which will be carried out by consultants under the supervision of the National Office of Planning (OFIPLAN).

4.0Q Three units of the Ministry, called Directorates (see Chart 17644) will participate in project implementation. The Directorate of Highways (DGV) will oversee the design, contracting, and contract supervision associated with both the construction, widening, and rehabilitation of the radials and the TOPICS schemes. DGV will also carry out the program of road maintenance in the metropolitan area, including project roads. The Directorate of Automotive Transport (DGTA) will be responsible for traffic planning and management and public transport development. Traffic enforcement will be handled by the Directorate of Traffic (DGT). The Project Manager of MOPT will oversee the training program. - 23 -

4.03 To ensure coordination,the Ministry has created by Executive Decree a San Jose Urban Transport Project Committee consisting of the directors of the three directoratesreferred to above, the Dire,ttorGeneral of the Planning Dírectorate (DGP), and the Executive Director of TRANSMESA. The Chairman of the Committee is of Vice Minister rank. The Committee will oversee project implementationwhich will be the responsibilityof the Costa Rican Project Manager. The Government has requested that an expatriate adviser to the Committee be funded under the technical assistance component of the project (para 3.25). It was agreed at negotiations that the Project Manager will be hired by December 31, 1977, and that the adviser to the Committee will be appointed and installed at duty station by March 1, 1978. It was further agreed that the experience,qualifications, and terms of reference of both the manager and the adviser shall be satisfactoryto the Bank.

4.04 DGV. The Directorate of Highways (DGV) was appraised by the Bank in December 1974 under the Fourth Highway Project (Loan 1187-CR) and strengthenedthrough technical assistance for planning and design. DGV has the capacity to carry out project design, contracting,and contract supervision.

4.05 As part of this project, a new unit will be created in DGV for street maintenance in the San Jose metropolitan area. 1/ The Unit will be housed in DGV until appropriatemetropolitan government reforms are instituted at which time the Unit would be detached from MOPT. The unit will operate initially with equipment financed under the project and with manpower resources over and above those now earmarked for maintaining national roads. The unit will start small and maintain streets with high bus volumes including those improved under the project but will in time assume responsibility for maintaining all major roads in the metroplitan area. In addition, it will enter into appropriatearrangements with the Directorate of Operations for the maintenance and repair of equipment financed under the project. To help set up the unit and define its work program, a technical adviser is being funded for a two year period as part of the technical assistance component of the project. At negotiations,it was agreed that the road maintenance adviser will be appointed by June 30, 1978, and that a road maintenance unit with work program and staffíng pattern satisfactoryto the Bank will be created by September 30, 1978.

4.06 DGTA. The Directorate of Automotive Transport (DGTA)will be responsiblefor public transportdevelopment and traffic planning and engineering - two aspects crucial to the realizationof project objectives.

1/ The radial improvementswill result in a small increase in annual maintenance costs of ¢ 332,000 (US$38,600)of which ¢ 94,000 (US$10,900)is for the New Tibas Radial. This does not representa significantincrease in MOPT's q 88.4 million (US$10.3million) annual maintenancebudget. - 24 -

DGTA is not currently organized satisfactorily to carry out its responsibilities. The Consultants who prepared the project recommended that the Directorate be reorganized to consolidate the various traffic planning and public transport functions which are now scattered in the Ministry. The Consultants recommendations are shown in Chart 17643 and also discussed ín Annex 8 and Annex 9. The Government will reorganize DGTA along the lines described in para 3.03.

4.07 In addítion to the reorganization, DGTAneeds to expand and strengthen its technical staff. First, certain new staff are required to ensure the effective implementation of the project's physical components. Specifically, for the CBD Traffic Signals System, three technicians to carry out the traffic signal timing surveys and an Installation and Mainte- nance Manager are required. It was agreed at negotiations that the three technicians will be hired by January 1, 1978 and the maintenance manager by March 31, 1978. For the signing and marking program, two senior technicians are required to develop a systematic program of inspection and maintenance. It was agreed at negotiations that one will be hired by March 31, 1978, and the other by September 30, 1978. To support the advisory staff being provided under the project and to carry out basic policy studies, a Traffic and Transport Policy Studies Unit wíll be established. In addition to the expatriate advisers, the unit should contain at least two well-traíned staff members, preferably one engineer and one economist, together with adequate support staff. It was agreed at negotiations that these staff will be hired by March 31, 1978. The reorganized Directorate will also require expert support in the form of advisory services in both traffic planning and public transport (see para 3.25). This is being financed under the technical assistance component of the project as described in Annex 4. It was agreed at negotiations that the advísers, whose qualifications, experience, terms of reference and terms and conditions of employment shall be satisfactory to the Bank, will be recruited no later than September 30, 1978, and by June 30, 1978 in the case of the road maintenance adviser.

4.08 DGT. The Directorate of Traffic (DGT) is the traffic police agency which will be responsible for traffic enforcement. It is reasonably well staffed and can carry out its functions provided it is better equipped and its personnel receive on-the-job training. The project will finance additional traff lc enforcement equipment and two man-years of an adviser/trainer for the Directorate. In addition, the Government has brought DGT clearly under the Ministry of Public Works and Transport and has undertaken to provide the facilitíes, personnel, and basic equipment that DGT will require to carry out its funetion of enforcing traffic regulations.

4.09 MOPTTraining Unit. The unit responsible for training currently consísts of the unit chief plus one junior assistant. It needs strengthening. The project will attempt to achieve this in three ways. 1/ First, MOPT will

1/ See Annex 5 for detaíls. - 25 - articulate a specific training poiícy for the Ministry in the form of a statement to be issued by the Minister. The draft of the statement will be discussed at negotiations. Second, the unit will be strengthenedby the addition of several part-time Costa Rican technician/instructorsto carry out on-the- job training, supplementedby three expatriate instructors. Thirdly, the unit will coordinate the implementationof an in-countrytraining program to be financed under the project and to include (a) technical training in traffic engineering and public transportplanning and regulation for DGTA staff; (b) training for the traffic police in traffic surveillanceand enforcement;(c) training for bus operators in accounting,management, maintenance,etc. In addition, six senior MOPT staff will undergo practical training in Puerto Rico and three scholarshipswill be given for graduate study abroad. Finally, two foreign experts will be hired to develop urban transport curriculaat local universities. Staff trained abroad will sign an understandingto remain with MOPT for five years after completing their study programs. Detailed training programs will be developed by the training specialists responsiblefor each area.

4.10 OFIPLAN. The Urban and Regional Planning Division of OFIPLAN will supervise the implementation of the metropolitan urban development study. The study itself will be carried out by consultants. The division will prepare the terms of reference and choose the consultants. It was agreed at negotiations that OFIPLAN will employ consultants whose qualifications, experience, terms of reference, and terms and conditions of employmentwill be satísfactoryto the Bank.

B. Selected ImplementationActivities

Traffic Planning

4.11 In order to begin to develop plans for the traffic management actions that will be taken to follow-up and consolidatethe gains made under the project, the Traffic Planning Unit in the MOPT Department of Traffic Engineeringwill undertake a program of analysis 1/ to develop (a) a program for the expansion of exclusive bus facilities; (b) a acheme for giving priority to other high occupancy vehicles (e.g., car pools) and discouraging the inefficientuse of cars; and (c) a policy to cover parking supply and rates. The staff of the DGTA Traffic and Transport Polícy Studies Unit with assistance from expatriate advisers will assist the Traffic Planning Unit to carry out the study of measures to discourage the inefficientuse of the car, specificallywhen used by one or two persons for commuting trips. The study will examine potential measures and evaluate them in the context of the congestionproblem, their physical and operational feasibility,and the legal structure in San Jose. The specific responsibility of the Policy Studies Unit will be to evaluate long-run measures, such as taxes on ownership and road pricing, while the Traffic Planning Unit concentrates on short-run

1/ See Annex 8. - 26 - rmeasures. It was agreed that MOPT will carry out the above studies in accordance wíth terms of reference satisfactory to the Bank and that such studies

Jill be reviewed with the Bank by June 30, 1979. After reviewing the results with the Bank, the Governmentwill present to the Bank for comment by December 31, 1979 a statement of the resultíng urban transportpolicies and afford the Bank opportunity to exchange views with MOPT concerning such policies prior Lo their promulgation.

Publíc Transport

4.12 In order to increase the efficiency of both bus operations and bus regulatory procedures, the MOPT Department of Public Transport will undertake studies 1/ of (a) the adequacy of bus services, including the route structure, the capacity provided, its effect on headways and passenger delay, and the potential for innovative types of services; (b) the level of fares, with a view to developing a procedure for monitoring the relatíonship between fares and costs, and hence the necessity for or adequacy of a subsidy; (c) the structure of fares; (d) the procedures for granting concessions, including their effíciency, the time taken, and the degree of competition generated; and (e) operating specifications for buses and a bus inspection program. It was agreed that by June 30, 1979 the Gov- ernment will undertake, with the Bank, a review of the fíndings of such studies. It was further agreed that the government would prepare and submit ,o the Bank no later than December 31, 1979 proposed modifications to public transport policy and afford the Bank reasonable opportunity for comment before carrying out such policy.

4.13 Early in 1978, the Government expects to increase bus fares and eliminate the public transport subsidy. It was agreed that immediately following the fare increase, the Government will initiate a study of the effects of this policy on the urban poor, specifically addressing the afford- ability of public transport and the impact of allowing fares to cover costs on the travel patterns and to employment opportunities of the urban poor. It -was further agreed that in the event that the subsidy has not been eliminated by June 1978, the Government wíll undertake a study of the incidence, effec- ti-veness, and the potential fiscal burden of continuing the public transport s; .idy and that while this study is being undertaken, existing subsidies will be frozen and no new ones will be introduced. It was also agreed that MOPT wíll review the subsidy study with the Bank by June 30, 1979, and a timetable established by December 31, 1979 for implementingpolicy changes that may be proposed.

V. PROJECT JUSTIFICATION

5.01i The objectives of the proposed project are to increase the physical and operatíng capacíty of the San Jose urban transport system in order initially to improve current travel conditions and subsequently to prevent conditions,

1/ See Annex 9. - 27 - especíally for public transport,from deteriorating. Complementaryactions are designed to create the institutionalcapacity, in both administrativeand operational terms, that will ensure that the project is implementedexpedi- tiously, that the physical componentsare operated and maintained efficíently, and that the concepts of this project can be replicated in San Jose, in the future, using local planning and implementationcapacity.

A. Expected Benefits

5.02 The physical project components--civilworks, traffic signals, -- are justified in terms of the benefits that they are expected to generate directly or indirectly. The benefits from radial roads and from the CBD Traffic Signal System have been assessed on the basis of operating conditions (speeds, etc.). No new traffie engineeringmeasures, such as bus lanes, either on the radials or in the CBD, were taken into consideration (see para 5.09 below). The benefits include increased travel speed and smoother flowing traffic leading to inter alia reduced operating costs, travel times, air pollution, and accidents. More than half of these benefits are expected to accrue to users of public transport. The other components--the equipment for traffic planning and enforcement, highway maintenance, and bus inspection, the technical assistance, and the training-are justified because they are expected to increase road capacity and improve traffic flow, particularlyof buses in the CBD, and will enable bstter use to be made of roads and vehicles. No quantitativeanalysis of benefits has been carried out for the latter type of component. For the aain physical components,benefits were estimated in quantitativeterms and, where appropriate, an economic evaluation was performed.

Economic Evaluation: Radials

5.03 The measures of benefit resulting from new construction,widening, and rehabilitationon radial routes include the reductionsin vehicle operating costs and travel times that result from the improvements. This is not to imply that these are the only benefits. Reductions are also expected in air pollution and accidents, but due to the difficultiesinherent in estimating such benefits, they have not been included in the analysis. This means that the benefits that are measured represent a conservativeestimate of the total benefits from the project. Benefits were estimated by first forecasting traffic flows in the different corridors for 1990, interpolating flow estimates for 1977-89, and assuming that traffic would continue at 1990 levels until 2000. It is important to note that, because of the topography of San Jose and the necessity for bridges in most corridors, each corridor basically constitutesa distinct connection. Thus, interactionsand spill- overs between corridors are small. This enabled the analysis to proceed on a corridor by corridor basis taking account only of interactionson different roads in the same corridor, for example, the old route and the new route in the Tibas corridor. Travel speeds for a given alternativewere estimated on the basis of traffic flows forecasts and the capacitiesof the road for that alternativeand for an unimproved state representingwhat might be expected to happen if no investmenttook place. Time and vehicle operating costs - 28 - were derived from the speed estimates which reflect the congestion on the city streets. Benefits were then calculated by determining the savings in travel timies and vehicle operating costs for the different alternatives in each corridor as compared with the unimproved base case. These alternatives included not only the "do nothing" alternative, but also other less expensive alternatives (rehabilitation vs widening) and, where appropriate, »ore expensive alternatives (new construction Qn a different alignment vs widening). In Hatillo, two alignments of different lengths and standards were analyzed. In Desemparados, a long and a short version of new radial construction were examnined. In addition, the appraisal mission considered different alignments for the New Tibas Radial. It was, however, concluded that, given the fixed route of the Siquirres-San Jose highway and the limited options for the Tournoa dispersal system, other alignments were clearly inferior to that proposed by the consultants and the Government.

5.04 Table 5.1. shows the different alternatives that were tested for each corridor, together with their Net Present Values (NPV) (present value of benefits minus present value of costs discounted at 12%) 1/. In each case the NPV's were calcu,lated against a "do-nothing" base. The chosen alternatives are marked with an asterisk (*).

5.05 It is important that the evaluation method 2/ show not only that the chosen alternative is worthwhile compared to doing nothing but also that it is superior to more and/or less expensive projects. The aet present values show that, in cases where widening was chosen, it is clearly a better alternative than rehabilitating (for example, San Sebastian and Uruca) or constructing a a new radial (for example, Desamparados). In both cases in which new construction alternatives were considered, the new construction w~asshown to be inferior in the sense that additional benefits from new construction were not large enough to justify the additional costs.

1/ T e' ch-Qce of discount rate was based on discussions with the Ministry of Economy. - 29 -

Table 5.1. Net Present Values /1 (million 1977 Colones)

Radial and Vehicle Alternatives Operating Time Total Chosen Tested Costs Only Savings Benefits Alternative

1. New Tibas Radial and Rehabilitating Route 5 77.85 113.96 191.81 *

2. Guadalupe: Rehabilitate 18.47 9.37 27.84 Widen 16.77 16.54 33.31 *

3. San Pedro: Widen 105.53 77.56 183.09 *

4. Desamparados: Widen 105.47 70.73 176.20 * Widen and New Road (short) 89.50 83.56 173.06 Widen and New Road (long) 78.95 87.98 166.93

5. San Sebastian: Rehabilitate 55.59 42.05 97.63 Widen 68.48 63.44 131.92 *

6. Hatillo: Rehabilitate 9.69 5.11 14.80 * Rehabilitate and New Route (Calle 22) -15.90 11.01 -4.89 Rehabilitate and New Route (Calle 28/36) -14.01 8.84 -5.17

7. Uruca: Rehabilitate 45.76 36.59 82.35 Widen 95.16 95.37 190.53 *

8. Avenida 2: Widen 20.52 22.09 42.61 *

/1 Using a discount rate of 12%. - 30 -

oi.06 The chosen alternatives were those with the highest NPV's. In most cases, the chosen projects are justifíed economically on the basis of -.hicle operating cost savings alone. The addition of travel time savíngs simply serves to strengthen the justification. In the case of the Guadalupe radíal, rehabilitation is a marginally better alternative when only operating costs are considered, but widening is clearly superior if time savings are included. From a traffic point of view, the widening is required at the inner end of the radial and it would create a poor functional design to rehabilitate to almost four lanes on the outer part of the radial while leaving a two-lane bottleneck near the city center. Thus, the widening alternative was selected for the Guadalupe radial.

5t-07 The benefit-cost ratíos (excluding time savings) for these components tange from 2.33 for Avenida 2 to 18.77 for Desamparados. The Internal Rates o£ Return range from 21% for Avenida 2 to 70% for Desamparados. 1/ In general, these components perform very strongly on all the economic criteria. These results confírm the expectation that traffic engineering schemes yield high returns at relatively low cost.

5.08 Distribution of Benefits. Benefits in the form of savings in private car operating costs and travel time will accrue directly to car owners. Savings in bus travel times will accrue directly to bus passengers. Savings ín bus operating costs will accrue to bus operators. Apart from the ad hoc subsídy to bus fares referred to in para 2.25 above, fares in San Jose are set on the basis of operating costs plus a "fair" return and the bus industry is co-mpetitive. Therefore, bus operating cost savings are likely to be passed on to bus riders through avoiding fare increases and providing a more frequent, more reliable, and less crowded service. A less tangible but crucially ímportant result of this is that the current high level of bus patronage is expected to be maintained. This means that the modal shift towards cars can be reduced and, hence, increases in congestion and the concommitant deteriora-- tion in bus services can be contained. Savings in truck operating costs and drivers' time will accrue to truck operators. These reduced transport costs will be reflected in lower overall production costs.

5.,Wc?f Gíven that one of the project objectives is to improve publíc L-:1.Usport, it is important that the share of project benefits that are to be channelled to bus users can be shown to be sígnificant. For the components discussed above, 51% of all benefits accrue to bus operators and passengers. Of the total benefits to vehicles, bus opertors and passengers receive 22% of the aggregate savings in vehicle operating costs and 78% of the time savings. On corridors with heavier bus flows for which bus lanes would be províded under the project, the proportion is considerably higher. In San Pedro, for example, 47% of operating cost and 91% of time savings accrue to public transport and on Avenida 2 the proportions are

1/ Benefit-cost ratios and internal rates of return were also calculated against a do-nothing alternative. See Annex 10 for details. - 31 -

40% of operating costs and 89% of time savings. In the above analysis, it was not possible to account for the specific benefits that might be expected to result from the bus lanes. Sínce effective bus lanes will increase bus speeds even more relative to car speeds, 51% is a conservative estimate of the proportion of benefits expected to accrue to bus passengers and operators.

5.10 Sensitivity Tests. In order to test the robustness of the economic analysis of the chosen alternatives, sensitivity tests were carried out to evaluate the alternatives under the assumption that benefits had been overestimated by 10% or 25%. Table 5.2 shows the benefit-cost ratios and the internal rates of return for the chosen alternative for these assumptions and for the basic (best estimate of benefits) case. These figures show that, even if benefits have been overestimated by 25%, all the components are still economically justified. The lowest cost-benefit ratio is 1.75 and the lowest internal rate of return is 18 (both for the Avenida 2 widening) and both of these are perfectly acceptable.

Table 5.2. Sensitivity Test on Benefit Cost Ratios and Internal Rate of Return ]4

Benefit - Cost Ratio Internal Rate of Return (%) - - - Benefits ------Benefits - - - Base -10% -25% Base -10% -25%

New Tibas Radial and Rehabiíitate Route 5 2.42 2.18 1.82 22 20 18

Guadalupe Widening 2.74 2.47 2.06 28 26 23

San Pedro Widening 11.51 10.36 8.64 55 52 47

Desamparados Widening 18.77 16.89 14.07 70 66 60

San Sebastian Widening 9.80 8.82 7.35 68 64 57

Alajuelita Widening (Hatillo) 3.10 2.79 2.33 31 29 25

Uruca Widening 6.44 5.80 4.83 40 38 34

Avenida 2 Widening 2.33 2.10 1.75 21 19 18

/1 Vehícle operatíng costs only. - 32 -

Economic Evaluation: CBD Traffic Signal System

5.11 The CBD Traffíc Signal System was evaluated on the basis of a simulation of the effects of the system on 30 downtown intersections using the TRANSYT simulation model of the Transport and Road Research Laboratory (UK). These effects were then extrapolated to the 129 intersetions to be included in the system. The major benefits from the system are expected to be smoother trafiíc flows resulting in reduced operating costs and travel times and the concommitant reductions in air pollution and accidents. Since the traffic signal timing will be set to favor buses, the largest benefíts will accrue to public transport. Bus speeds are expected to rise by 11%, car speeds by 6% or 7%. For buses, the benefit estimate has been obtained by calculating the reduction that the savings in operating costs would imply for the bus fleet if today's service levels were to be maintained. In fact, competition on existing línes means that, rather than reduce the fleet, bus operators are likely to expand services and delay increases in fares. Table 5.3 shows the benefits that have been estimated for the first year of operation. Since 1977 traffic flows were used for the test and the first full year of operation will be 1979, these figures understate the benefits. Of all benefits 59% wíll accrue to bus operators and passengers. Given a capital cost of C11.5 million, these benefits give first year rates of return of 26% when only operating costs are considered and 44% when time and savings are included. Since traffíc will clearly grow in central San Jose, the returns over the life of the system will be considerably larger than this.

Table 5.3. Estimated Benefits from the CBD Traffic Signal System in the Fírst Year of Operation (« million)

Vehicle Operating Time Costs Savings Total

Cars and Trucks 1.4 0.7 2.1 Buses 1.6 1.4 3.0

Total 3.0 2.1 5.1

5.12 The overall rate of return on the quantified components--radials and the CBI, Traffic Signal System--which represent 79% of project costs, -s 37/1. - 33 -

B. Risks

5.13 Two specific risks exist that might reduce the project's effectiveness in meeting its objectives. They are described below together with the steps that have been taken to minimize the risks.

5.14 Government Capacity to Take Follow-up Actions. One of the objectives of the project is to increase Government capacity to carry out a continued program of traffic and public transport planning. There is always a risk that the Government might not develop adequate capacity to carry through the follow-up actions. The program of technical assistance and training is aimed at creating the basic capacity. Work programs and studies in these areas will be agreed at negotiations, together with a series of consultations with the Bank on the choice of new policy measures and on the appropriate implementation schedules.

5.15 Enforcement of Traffíc Regulations. The effectiveness of the exclusive bus facilities proposed under the project might well be compromised by inadequate enforcement of traffic regulations regarding parking and the use of private cars in bus lanes. The authoritíes do not have a good record in this area. The major difficulties will be catching people driving in bus lanes and removing cars parked in bus lanes. The first problem is one of policing a large number of lanes. The second is one of removing the vehicles quickly so that traffic is obstructed as little as possible. The project would provide patrol cars and motor-cycles to improve the mobility of the policy, tow-trucks to remove vehicles, and radio-communication equipment to ensure that the tow-trucks can be called upon without delay. The trainer/ adviser will develop enforcement procedures and provide instruction on enforcement techniques. In addition, the bus lane monitoring program will provide early warning of problems in this area. Above all, enforcement will be approached flexibly and Bank project supervision missions will place emphasis on assisting Government devise administrative ways of overcoming resistance to change which might occur. A key element will be public education to explain to car drivers the purpose of the bus lanes and the necessity for them to be kept clear. A system of bus lane patrols by the police will also have to be developed to ensure that a driver driving or parking in a bus lane has a high probability of being caught. Finally, should these measures prove to be inadequate, consideration will have to be given to the feasibility of introducing physical, permanent or semi-permanent separation for bus lanes, such as hemispheres or "speed bumps." It is believed that these measures will be adequate to overcome any enforcement problems.

VI. AGREEMENT REACHED AT NEGOTIATIONS

6.01 During negotiations it was agreed that:

(a) MOPT will no later than September 30, 1978 establish within DGTA a Public Transport Department, a Traffic Engineering Department, and a Transport Policy Studies - 34 -

Unit and carry out through such departments and unit work programs satisfactory to the Bank in public transportation, traffic planning and engineering, and transport policy studies (para 3.03);

(b) Government shall take all necessary action to ensure permanent and consistent enforcement of the traffic regulations in the Metropolitan Area of San Jose in- ciuding enforcement of parking prohibitions and regulations limíting access of cars to lanes reserved for buses during periods of peak hour traffic flow (para 3.07);

(e) an independent consultant engineer will review all detailed designs of radials and TOPICS to ensure that sound and economical design standards are employed (paras 3.10 and 3.20);

(d) Government will cause the bus inspection facility to be operated by TRANSMESA and to be used solely for the purpose of bus inspection (para 3.24);

(e) prior to implementi.ng the training program, MOPT will furnish to the Bank for its approval a detailed description of the program (para 3.27);

(f) MOPT Directorates will maintain separate project accounts and MOPT will maintain a consolidated project account. These accounts should be audited annually in a manner satisfactory to the Bank and forwarded to the Bank no later than six months after the close of each fiscal year (para 3.36);

(g) Government shall through MOPT establish a project monitoring program satisfactory to the Bank (para 3.40);

(h) MOPT shall appoint the following staff whose experience, qualífícations and terms of reference shall be satisfactory to the Bank: three expatriate train.ng specialísts by June 30, 1978 (para 3.27); a project manager by December 31, 1977 (para 4.03); and the adviser to the Project Committee by March 1, 1978; three technícians to carry out traffic signal training surveys by January 1, 1978; one signal InstallatCon and Maintenance Manager by March 31, 1978; two senior technícians for the sígníng and marking program by March 31, 1978 and September 30, 1978; one economist and one engineer for the Traffic and Transport Policy Studies Unit by March 31, 1978; five other advisers no later than September 30, 1978 and by June 30, 1978 in the case of the road maintenance adviser (para 4.07); - 35 -

(i) MOPT shall by September 30, 1978 create a Metropolitan Area Road Maintenance Unit with a work program and staffing plan satisfactoryto the Bank (para 4.05);

(j) OFIPlan shall engage consultantsto carry out the land use and urban growth study on terms and conditionsand under Terms of Reference acceptable to the Bank (para 4.10);

(k) MOPT will undertake traffic planning studies, in accordance with Terms of Reference acceptable to the Bank, of methods of extending further priority to buses and other high occupancyvehicles and discouragingthe inefficientuse of cars; and that the Governmentwill review these studies together with the Bank no later than June 30, 1979; based on the studies and the review, prepare a new statement of policy, to be submitted to the Bank for comment by December 31, 1979, and before its promulgationand implementation (para 4.11);

(1) MOPT will complete the first series of studies on the adequacy of bus services on major routes, current fare levels, and the fare structure and that a joint Government/Bank review of the study results will be held no later than June 30, 1979 (para 4.12). The Governxmentwill submit its proposed modifications to public transportpolicy and a timetablefor their implementationfor Bank comment no later than December 31, 1979;

(m) following the eliminationof the bus subsidy, the Government will undertake a study on the effect of this action on the urban poor or, in the event that subsidiesare not eliminated by June 1978, initiate a study of the effectiveness, incidence, and potential fiscal burden of the current subsidy policy. Existing subsidies will be frozen and no new ones introducedduring the period of the study. The study will be reviewed with the Bank by June 30, 1979, and a timetable establishedby December 31, 1979 for implementing policy changes (para 4.13) that may be proposed.

6.02 Subject to para 6.01 above, the project is suitable for a Bank loan of US$16.5 million to the Government of Costa Rica for a term of 17 years, including a grace period of four years.

Annex 1 Table 1

COSTARICA

SAN JOSE URBANTRANSPORT PROJECT Background Information

Costa Rica Total Population aiad Density by Regions (1973)

Total Land Aea Dniyprc 2 RegionRegion Population in~ kmu_ouainjtkea` Density per km2

Central 1,174,802 7,646 153.6 Pacifico Norte 178,691 10,651 16.8 Pacifico Centro 127,167 4,587 27.7 Pacifiico Sur 174,287 9,749 17.9 Norte 94,454 9,000 10.5 Atlantica 122,379 9,726 12.6

-TOTAL 1,871,780 51,359 36.4

Source: Direccion General de Estadistica y Censos. Population Census 1973. COSTARICA

SAN JOSE URBANTRANSPORT PROJECT

Urban and Rural Censal Population by Province ('000)

1963 Census 1973 Census Province Total Urban % UJrban Rural Total lirban %-U-rban Rulral

TOTAL 1,336.3 460.6 34.5 875.7 1,871.8 760.1 40.6 1,111.7

San Jose 487.7 269.9 55.3 217.8 695.2 428.0 61.6 267.2

Alajuela 240.7 44.1 18.3 196.6 326.0 81.0 24.8 245.o

Cartago 155.4 39.4 25.4 116.0 204.7 72.9 35.6 131.8

Heredia 85.1 29.2 34.3 55.9 133.9 50.7 37.9 83.2

Guanacaste 142.5 21.4 15.0 121.1 178.7 42.7 23.9 136.0

Puntarenas 156.5 34.0 21.7 122.5 218.2 45.6 20.9 172.6

Limon 68.4 22.6 33.0 45.8 115.1 39.2 34.1 75.9

1/ Urban is defined as comprisingadministrative centers of cantons.

Source: Population Census 1963 and 1973

naD Annex 1 Table 3

COSTARICA

SAN JOSE URBANITRANSPORT PROJECT

Family Income Distribution,1961 and 1971

Percent of Families Percent of Income Percent of Income (In neciles) 1961 1971

Bottom 2.6 2.1 Second 3.1 3.3 Third 3.3 4.2 Fourth 4.0 5.1 Fifth 4.8 6.2 Sixth 5.9 7.5 Seventh 7.6 9.3 Eighth 10.1 11.7 Nínth 14.6 16.2 Top 44.0 34.4

Source: 1961: United Nations Economic Commissionfor Latin America, hconomic Survey of Latin America, 1968, July 1969.

1971: Victor Hugo Cespedes S., Costa Rica: La Distribucion del Ingreso y el Consumo de Algunos Alimentos Universidad de Costa Rica, Serie Economaia y Estadistica, No. 45, 1973. ANNEX 1 Table 4

COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Metropolitan Area Population Growth (1950-1963-1973)

District 1950 1963 1973

Central 111,820 168,938 215,441

Escazu 7,141 14,250 25,026

Desamparados 8,434 21,661 57,954

Goicoechea 19,941 43,294 60,376

Alajuelita 2,733 8,748 18,843

Coronado 2,597 4,607 9,824

Tibas 10,594 23,946 35,062

Moravia 4,451 9,188 15,552

Montes de Oca 9,916 24,043 33,633

Curridabat 4,497 9,491 15,591

Metropolitan Area 182,124 328,166 487,842

Source: Direccion General de Estadistica y Censos. Population Census 1973 Annex 1 Table 5

COSTA RICA

JOSE URBAN TRANSPORT PROJECT

Number of Area Devoted /2 Distriet Inhabitants to Housing Density

Central 202,417 1,015.12 199.39 Escazu 23,487 241.69 97.00

Desamparados 54,917 223.30 245.00

Goicoechea 56,708 288.14 196.80 Alajuelita 17,743 77.52 228.88

Coronado 9,250 52.54 176.06

Tibas 32,775 149.90 218.65

Moravia 14,644 105.97 138.19

Montesde Oca 31,579 240.99 131.04 Curridabat 14,63>4 76.23 191.97

MetropolitanArea 458,154 2,471.40 185.38

/1 in hectares 7T- personaper hectare

Source: DireccionGeneral de Estadisticay Censos. PopulationCensus 1973. ANNEX 1 Table 6

COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Economic Actívity in the Metropolitan Area

Population Aged 12 Years or More 344,279

Active 169,263

--working 158,221 --not working 6,287 --looking for work first time 4,755

Inactive 175,016

--Students 69,645 --Domestic Activities 89,358 --Retired 5,896 --Others 10,117

Source: Population Census, 1973. ANNEX 1 Table 7

COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

EconomicallyActive Population by Employment Sector

Sector 1963 (%) 1973 (%)

Agriculture and Fishing 7.36 3.06

Mining and Quarrying 0.12 0.09

ManufacturingIndustry 21.80 20.76

Electricity,Gas, and Water 1.46 1.37

Construction 9.80 7.98

Commerce, Restaurants,and Hotels 19.55 19.02

Transport and Warehousing 5.20 4.97

Financial Institutions no data 5.08

Communal, Social and Personal Services 32.53 33.02

Other 2.17 4.65

Source: Population Census, 1973. COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Vehicles in Circulation, by type, 1965-1975

/1 /3 Motorcycles Auto- /2 Station Special and Simílar Year Total mobiles Trucks Jeeps Buses Wagons Equipment Equipment

-365 45,354 14,004 10,195 5,829 1,952 2,900 2,491 7,983 1966 52,496 16,526 12,287 6,919 2,058 3,709 2,617 8,370 1967 55,904 17,850 13,263 7,468 2,126 3,788 2,776 8,633 1968 60,038 19,384 14,651 8,091 2,206 3,853 2,934 8,919

1969 65,564 21,019 16,730 8,916 2,296 4,158 3,151 9,294 1970 73,395 23,834 19,555 10,037 2,402 4,358 3,460 9,749 1971 81,715 25,969 22,373 11,179 2,529 4,985 3,968 10,712 1972 90,817 28,411 24,784 12,284 2,605 5,198 4,422 13,113

1973 103,296 31,286 29,695 13,500 2,675 5,396 5,127 15,617 1974 114,841 34,270 34,401 15,249 2,795 5,626 6,500 16,000 1975/ 128,237 36,350 39,540 17,200 3,122 6,290 7,362 10,373 1976- 137,631 39,012 42,436 18,460 3,351 6,751 7,900 19,723

/1 Idcludes automobiles in public service, and private microbuses. /2 Idcludes microbuses in public service. /3 I,cludes agricultural and construction equipment. /4 Pteliminary estimates. >

Sourcé: Ministry of Public Works and Transportation. m ho bI ANNEX 1 Table 9

COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Central Cordon Average Daily Traffic (1967-1975)

Ratio Quadrant 1967 1972 1975 % 1975:1967

North 26,280 37,093 46,546 24 1.77

East 18,510 34,281 41,875 21 2.26

South 18,270 31,924 40,052 20 2.19

West 22,725 45,887 68,092 35 3.00

TOTAL 85,785 149,185 196,565 100 2.29

Source: General Directorate of Planning, MOPT. COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Persons and Vehicles by Type of Service Principal San Jose Gateways Weekday--March 1977; Expanded to 24 Hours

Average Percent Percent Percent Percent Persons Number of Passenger aLl Passenger of all per Vehicles Passengers Vehicles Vehicles Number Vehícles Vehicles Vehicle

Public Transport Metropolitan Area Buses 514,306 54.3 51.6 11,367 7.2 6.2 45.2 Interurban Buses 175,922 18.6 17.7 4,208 2,7 2.3 41.8 School Buses 11,055 1.2 1.1 355 .2 .2 31,1 Charter and Tour Buses 10,858 1.1 1.1 407 .2 .2 26.7 Subtotal--Buses 712,141 75.2 71.5 16,337 10.3 8.9 43.6 Taxi cabs 19361 2.0 1.9 12 817 8.1 7.0 1.5 Total Public Transport 731,502 77.2 73.4 29,151 18.4 15.9 25,1

Private Transport Cars, Jeeps, Station Wagons, 200,469 21.1. 20,1 ¡15,640 72.9 62.9 1.7 Motorcycles 15,738 1.7 1.6 1 3 90 87 7.6 1.1 Total Private Transport 216,207 22,8 21.7 129,530 81.6 70.5 1.7

Subtotal Passenger Transport 947,709 100.0 95.1 1.58,681 100.0 86.4 6.0 Goods Vehicles 48,220 4.9 25,144 13.6 1.9 Total All Vehicles 995,929 100.0 183,825 100.0 5.4

Source: March 1977 Vehicle and Passenger Survey, MOPT, Wilbur Smith and Associates.

CD COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Peak Hour/ Bus Passengers Expanded 24-Hour Count March 1977

Total Passengers A.M. Peak Hour P.M. Peak Hour Noon Peak Hcour Gateway (24 Hours Number % of Total Number % of Total Number % of Total

Paseo Colon 119,100 11,841 9.9 10,492 8.8 6,441 5.4

San Pedro 104,600 8,561 8.2 8,704 8.3 6,453 6.2

Desamparados 93,650 8,548 9.1 8,561 9.2 6,456 6.9

Guadalupe 83,400 7,670 9.2 6,974 8.4 5,131 6.2

San Sebastian 68,500 6,048 8.8 6,250 9.1 3,871 5.7

Vrw-a 67,300 6,449 9.6 8,102 12.0 4,497 6.7

Tibas 66,100 5,978 9.0 5,958 9.0 4,096 6.2

Alajuelita-Hatillo 59,100 5,482 9.3 5,220 8.8 4,368 7.4

Paso Ancho 17,750 1,497 8.4 1,319 7.4 1,517 8.5

^renue10-42 St. 10,600 1,057 10.0 960 9.1 626 5.9

TOTAL 690,100 63,131 9.4 62,540 9.1 43,456 6.3

/1 Highest hour ín A.M., P.M., and Midday. 72 Total of Gateways covered by 1977 Survey--excludingschool and charter buses. '.zTA Ri-CA

SAN JOSE URBAN TRANSPORT PROJECT

Average Bus Speeds and Travel Times on Selected Routes March 1977

Alajuelita San average Time and Speed Desamparados Hatillo Tíbas Sebastian Uruca San Pedro Guadalupe

A, Inner City Distance (km) 1.98 2.04 1.07 2.19 .91 1.99 2.34 Average Time (minutes) 9 10 5 9.5 3.5 10 9.5 AX,^'rageSpeed (km/hr) 13.2 12.2 12.8 13.8 15.6 11.9 14.8

B. Outer Radial Distance 3.3 2.61 1.68 1.98 2.9 2.20 2.16 Average Tíme 11 8.6 5 5.5 10 10 9.5 Average Speed 18.2 18.4 20.1 21.6 17.4 13.2 13.6

C. Total Route Dístance 1 5.31 4.65 2.75 4.17 3.81 4.19 4.50 Average Time 20 18.5 10 15.0 13.5 20 19.0 Average Speed 15.9 15.1 16.5 16.7 16.9 12.6 14.2

% of Dístance Outer Section 63 56 61 48 76 53 48

Source: Bus Rnning Time Survey, March 1977; MOPT, Wilbur Smith and Associates.

H > ANNEX 2

COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Details of TOPICS Component

1. The Traffic Operations Program to Increase Capacity and Safety (TOPICS) basically involves reorganizingparts of the road network, particularly intersectíons,to improve their operating characteristics. The works generally involve some of the following: widening the intersection,changing the way in which traffic is channelled or guided through the intersection, introducíngphysical separation of traffíc lanes, paving the intersection, providíng informationto road users through pavement markíngs or sígns, introducing or modifyíng traffíc signals, often to give bus priorities or facilitíes for pedestrians. Each intersectionís unique and, thus, demands a custom design. The elements included in the desígns for the intersection improvementsand the sub-area improvementsare shown below together wíth their locations. Also detailed below are the sites for the pedestrian crossing facilities,the elements of the dispersal schemes, and the extent of the Central Area CirculationPlan.

2. IntersectionImprovements (see Map 12935. Location desígnated by reference number). ANJNEX 2 Page 2

Type of Improvement Channelization Ref. Pavement Intersection No. Location Marking, Signs Widening Signals

1. Betania, CR 202 Calle Negritos X X X 2. Sabana Norte-Calle 42 X X X 3. Avenida 11 - Calle 10 X X 4. Calle 23 - Avenida 1 y 3 X X X 5. Clinica Moreno Canas X X X 6. Calle 8 - Avenida 9 X X 7. Calle 20 - Avenida 10 y 12 X X 8. Avenida 9 - Calle 14 X X 9. Calle 16 - entrance to Coca Cola Terminal X 10. Calle 24 and Pacific RR crossing X X X 11. Calle 10-Av. 7 (Signals included CBD plan) X X 12. Ruta 201 and Ruta 202 X X 13. Calle 14 - Av. 2 to Paseo Colon (Signals included in CBD plan) X 14. Ruta 7 - Sabana Oeste X X 15. Ruta 7 - Puente Los Anonos X 16. Ruta 1 - Rio Virilla X

3. Sub-Area Improvements (see Map 12935 for location).

Location-Name Type of Improvement

East-West Connection Spot widening circulation and signals. Parque llorazan Area Bus priority and bus only streets, signals and revised circulation. Calle 23 between RR and Ave. 9 Rehabilitation of existing road. Avenida 14-Calle 16 to Calle 18 Rehabilitation to provide two lanes. Route 214 over Maria Aguilar River Bridge crossing to províde additional lane. Calle 5-Avenida 20 to Avenida 22 New street section to complete Calle 5. Paseo Colon-Calle 14 to Calle 42 Raised island, turn storage lanes, and signal improvement. ANNEX 2 Page 3

4. Pedestrian Crossings

Location Type of Improvement

1. Ruta 104 (Pavas), Casa de San Pedro Claver Pedestrian Signal 2. Ruta 104-Avenida Rohrmoser and Calles 1 and 3 Pedestrian Signal 3. Ruta 1 - Entrance to Urbanizacion Peregrina Pedestrian Sígnal. 4. Ruta 100 - Copey de Cinco Esquinas Pedestrian Signal 5. Ruta 102 - Entrance to Urbanizacion La Florida Pedestrian Signal 6. Radial Zapote-Barrio Cordoba Pedestrian Signal 7. Ruta 212-Colegio Las Gravilias Pedestrian Signal 8. Avenida Central-Calles 0 and 1 (Desamparados) Pedestrian Signal 9. Ruta 212-Escuela Republica de Panama Pedestrian Signal 10. Ruta 100-La Concretera Pedestrian Signal 11. Ruta 5-Avenidas 8 and 10 (Tibas) Pedestrian Signal 12. Ruta 5-Avenidas 2 and 4 (Tibas) Pedestrian Signal 13. Ruta 5-Calles 4 and 6 (Tibas) Pedestrian Signal 14. Ruta 5-Calles 12 and 14 (Tibas) Pedestrian Signal 15. Ruta 102-Escuela San Blas de Moravia Pedestrian Signal 16. Radial Zapote-Clinica Dr. Carlos Duran Pedestrian Signal 17. Calle Central-Avenida 22 Pedestrian Signal 18. Avenida 3-Calle 17 Pedestrian Signal 19. Calle 17-Clinica Seguro Social Pedestrian Signal 20. Calle 19-Clinica Seguro Social Pedestrian Sígnal 21. Paseo Colon-Calle 14-Avenida Central Pedestrian Subway 22. Calle 23-Avenida 15 Pedestrian Bridge

5. Traffic Dispersal Schemes (see Map 12935 for location)

1. Plaza Gonzales Vicquez Coordinated signals, intersection widening, channelization, pedestrian signals

2. Calle 42 (Sabana Sur) Coordinated signals, channelization, turn prohibitions

6. Central Area Circulation Plan (see Map 12935 for location)

Bus Priority Lanes for East-West Flow

1. Paseo Colon from Calle 42 to Calle 14 2. Avenida 2 from Calle 14 to San Pedro Radial 3. Avenida Central from Calle 14 to Calle 6 4, Avenida 3 from Calle 6 to Calle 23 5. Calle 6 from Avenida Central to Avenida 3 6. Calle 23 from Avenida 3 to San Pedro Radial 7. Calle 14 from Paseo Colon to Avenida 2 ANNEX 2 Page 4

Bus Priority Lanes for North-South Flow

1. Calle 2 from Avenida 20 to Avenida 9 2. Calle Central from Avenida 26 to Avenida 9 3. Avenida 9 from Calle 2 to Calle Central 4. Calle 7 from Avenida 3 to Avenida 18 5. Calle 9 (and 9 bis) from Avenida 18 to Avenida 2 6. Avenida 18 from Calle 7 to Calle 9 bis

Bus Only (and Exempted Vehicles) Streets

1. Avenida 3 from Calle 5 to Calle 15 (Parque Morazan) 2. Ltnk between Calle 14 and Avenida 7 ANNEX 3

COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Equipment to be Provided Under the Project

CBD Traffic Signal System

1. The scope of the proposed traffic signal system is described in paras 3.21 to 3.24. The contract for the supply and installation of the equipment would include all the necessary traffic signals, local and master controllers, cabling, and other physical components required to provide a fully functional system.

Equipment for DGTA

2. The following equipment will be provided to DGTA for its road marking and signing Program:

Traffic Signing Manufacturing Equipment Estimated Cost ( '000) US$ ('000)

Welding/Brazing Equipment 25.4 2.95 Paint Sprayers and Accessories 19.7 2.29 Reflective Sign Material Applicator 186.7 21.71 Guillotine for Sheet Metal 26.8 3.12 Silk Screen Printing Equipment 62.8 7.30

Subtotal 321.4 37.37

Road Pavement Marking Equipment

2 Motorized Sprayers at 100 gallons capacity 311.1 36.17 2 Motorized Sprayers at 15 gallons capacity 41.5 4.83 4 Utility Trucks 165.9 19.29 2 General Purpose Vehicles 41.4 4.81 1 Machine for Marking Removal 20.7 2.41

Subtotal 580.6 67.51 ANNEX 3 Page 2

Traffic Signal Maintenance Estimated Cost ¢ ('000) US$ ('000)

2 Vehicles with telescopic hoists Subtotal 331.8 38.58

Total (excluding price contingencies) 1,233.8 143.46

Equipment for DGT

3. The following equipment will be funded under the project to increase the productivity of DGT in enforcing traffic regulatíons:

Estimated Cost ¢ ('000) US$ ('000)

Radio Communications Equipment 1,574.7 183.1 15 Patrol Jeeps (including spare parts) 781.8 90.9 25 Patrol Motorcycles (including spare parts) 855.3 99.4 5 Tow Trucks (including spare parts) 382.5 44.5

Total (excluding price contingencies) 3,594.3 417.9

Equipment for DGV

4. The following equipment for the new DGV highway maintenance unit will be funded under the project:

Estimated Cost 2 ('000) US$ ('000)

1 8/10 Ton Roller 230.5 26.8 5 12 cu. yd. Dump Trucks 2,364.5 274.9 1 Grader (with rip blade) 709.3 82.5 1 Water Tanker (2,000 gals) & pump 295.5 34.4 1 Asphalt Spreader 354.7 41.2 1 Asphalt Tanker 472.9 55.0 2 Jeeps 141.9 16.5 1 Pickup Truck 76.8 8.9 2 Heavy Trucks 295.5 34.4 1 Lowload Truck 118.2 13.7 1 Mechanical Sweeper 70.9 8.2 1 Finisher (smooth wheeled) 218.7 25.4 1 5-8 Ton Smooth Wheel Roller 177.3 20.6 1 Self-Propelled Edger 47.3 5.5 Miscellaneous equipment (compressor & road breakers, concrete mixer, vibrating plates) 646.0 79.9

Total (excluding price contingencies) 6,260.0 727.9 ANNEX 3 Page 3

Equipment for Bus InspectionFaciity

5. The following equipment for the proposed bus inspectionfacility will be financed under the project:

Estimated Cost ¢ ('000) US$ ('000)

2 Brake Pressure Dynamometers 43.0 5.0 5 Headiíght Alignment Test Units 21.5 2.5 10 Wheel Alignment Test Rigs 60.2 7.0 MiscellaneousTools 25.8 3.0

Total (excludingprice contingencies) 150.5 17.5 ANNEX 4

COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Technical Assistance

1. Technical assistance under the project is intended to assist Govern- ment with (a) the immediate tasks of coordinating and managing project implementation; (b) starting the process of traffic planning and public transport promotion in the Directorate of Automotive Transport (DGTA); and (c) organizing a metropolitan road maintenance Unit within the Directorate of Highways (DGV).

2. The project will fund one adviser to the Project Steering Committee, two advisers on traffic, two advisers on public trlnsport, one adviser on road maintenance, 1/ and expert assistance for the land use and urban growth study. The duration and man-month rates attaching to each specialist are shown in the table below. Because consulting firms and/or individuals will be asked to apply to fill the adviser positions, slightly higher man-month rates have been assumed to allow for consulting firm overheads. Firms are being asked to apply because good freelance experts are difficult to get.

3. The estimated costs of the experts will be as follows:

Colones ('000) US$ ('000) Man- Man- Man- Month Month Months Rate Total Rate Total

Adviser to Steering Committee 30 52.0 1,548 6.0 180.0 Senior Adviser--Public Transport 24 64.5 1,548 7.5 180.0 Adviser--Public Transport 12 52.0 619 6.0 72.0 Senior Adviser--Traffic 24 64.5 1,548 7.5 180.0 Adviser--Traffic 12 52.0 619 6.0 72.0 Advíser--Maintenance 12 52.0 619 6.0 72.0 Land Use Study 33 55.9 1,845 6.5 214.5

Total 147 8,346 970.5

4. It is likely that all the experts will be foreign. The foreign exchange content of the technical assistance has therefore been assumed to be 75%.

5. The two Senior Advisers will be supported by an Urban Transport Basic Policy Studies Unit to be created in DGTA. This group will have a

1/ It should be noted that the trainer/adviser (24 man-months) to be provided to DGT (see Annex 5) will spend approximately half his time advising DGT on methods, procedures, and productivity. ANNEX 4 Page 2 small professionalstaff including at least an engineer and an economist, together with an adequate support staff. Under the direction of the advisers the group will carry out studies of innovativeand longer-runurban transport policies such as road pricing techniques,with respect to their suitability for future implementationin San Jose.

A. Job Descriptionsof Advisers

Public Transport Senior Adviser

6. Qualifications: The Senior Adviser shall have had wide experience in responsibleexecutive and policy-makingpositions in the management, financing, and administrationof public transportoperations, preferably both in the actual operation of public t-ransportundertakings and in the exercise of governmentalregulation and control. Experience in the means and standards of meeting high public transport demands at minimum cost in developing countries with low private car ownership is desirable. Fluency in Spanish 1s highly desirable.

7. Duties: The Senior Public Transport Adviser shall advise and assist the Director General of DGTA in the development of public transport. He shall help DGTA units to establish policies, procedures, organizationservice standards, administrationand control of public passenger transport services withyn the San Jose metropolitanarea. Specifically,the adviser will help to:

- prescribeand review content of all public transport courses;

- conduct high-level seminars on public transportpolicy and management for MOPT staff;

- establish the scope of and conduct studies to determine the required level of public transport service;

- establish procedures,staffing requirementsand budgets for continuing surveillanceand analysis to ensure that pres- cribed service standards are consistentlyadhered to and that service is increased or diminished as changes in the volume of traffic require;

- prescribe the form and content of, and assure the filing and analysis of bus operators' financial and operating reports;

- estimate from time to time the probable costs of providing bus service and the accompanyingfares which would cover such costs; ANNEX 4 Page 3

make investigations and conduct studies on the granting, amendment, or revocation of concessions and permits;

review and evaluate the functions, staffing and procedures of the departments and divisions of DGTA concerned with public transport operations; and

promote additional public transport riding through marketing techniques and coordination of public transport information services with traffic management schemes to restrain private car use and traffic priority measures for public transport vehicles.

Adviser on Public Transport Vehicle Service Standards

8. Qualifications: The Adviser on Vehicle Servíce Standards shall have had extensive experience, at both management and funetional levels, in the maintenance, repair and servicing of all types of buses and their related facilities; in the administration of preventive maintenance and inspection procedures; in the supervision and training of maintenance personnel; in performance standards and specifications for new vehicles; and in the stocking and acquisition of parts and supplies for the maintenance and repair of all components of the transport system. Fluency in Spanish is highly desirable.

9. Duties: The Adviser on Vehicle Service Standards will work closely with the Senior Adviser on Public Transport, and will be responsible for the vehicle design and maintenance aspects of the public transport improvements program for the Metropolitan Area of San Jose. His duties will relate primarily to the functions and responsibilities of the General Director of Automotive Transport in respect to vehícle service standards, but wíll be coordinated with similar activities in other Government and quasi-governmental agencies. Specifically he will help to:

- establish standards and procedures for the maintenance, repair and servicing of buses by the bus operators, including a definitive preventive maintenance and inspection program;

- in coordination with TRANSMESA, develop design standards and performance criteria for new buses seeking to standardíze engine, chassis and body components, as far as possible, and still retain incentives for competitive bidding;

- in coordination with TRANSMESA and other organizations, develop measures to encourage the manufacture and repair of bus bodies in Costa Rica for installation on imported chassis;

- assist in the preparation of specifications and tender documents for the purchase of new buses, íncluding contractual assurances for future supplies of parts and components. ANNEX 4 Page 4

in coordinationwith TRANSMESAand other organizations, develop procedures and financingmeasures to assure the avaílabilityat reasonable cost of replacementparts and components for buses over their useful lífe, including as appropriate,facilities for local rebuilding of certain parts and components;

be responsible for the design of the bus inspection facility, for the procedures to be used therein, for equipment speci- fication, and for training of staff;

define duties and determine the qualificationsand numbers of Government Public Transport Maintenance Inspectors; implement and test training and retraining programs for such inspectors;and

assist and work with other agencies, such as TRANSMESA and INA, in the establishmentof training courses for bus maintenance personnel of both bus undertakingsand of privately- owned contract bus repair facilities.

10. Duration: One year.

Senior Adviser on Traffic Management and Engineering

11. Qualifications: The Senior Adviser shall have an engineering degree with additional qualificationsin traffic/transportationengineering and planning. He shall have a minimum of eight years experience in traffic management studies and analysis, including experience on organizationalaspects of a traffic engineering department. Fluency in Spanish is highly desirable.

12. Duties: The Senior Adviser shall advise and assist DGTA in the establishmentof improved traffic management strategiesand measures for the metropolitanarea, including:

- traffic measures to improve the flow of people and goods;

- improved programs of pavement marking and traffic signing;

- organizationand strengtheningof the traffic engineering functions of MOPT;

- policies and control measures related to on-street and off- street car parking, including evaluation of Central Business District parking study to be conductedby MOPT;

- establishmentof surveys and survey procedures as needed, for traffic count, speed delay, vehicle occupancyand other key indicators of effective traffic management; ANNEX 4 Page 5

surveillance in the training of traffíc engineering technicians;

analysis and evaluation of urban transport studies, including those of goods movements and traffic accidents to be done by MOPT;

prescribe and review content of all traffic engineering training courses; and

give high-level semínars on traffic engineering training courses to MOPT staff.

13. Duration: Two years.

Adviser on Traffic Control Systems to the General Directorate of Automotive Transport

14. Qualifications: The Adviser shall be professionally qualified as a traffic and/or electrical engineer with experience in the design, installation, and operation of urban traffic signal systems, and other traffic control systems. Fluency in Spanish is highly desirable.

15. Duties: The Adviser shall advise and assist DGTA on:

- the installation of the new traffic signal system for the central area of San Jose;

- the specifícations and installation of non-Central Business Dístrict traffic sígnals (for example, at isolated intersections or at the dispersal systems);

- the counting program to be done by DGTA to develop the timing plans in the new CBD signal system;

- the need for special pre-emption devices for public transport vehicles and/or emergency vehicles; and

- assist the Senior Adviser on Traffic Management on the implementation of other approved traffic control systems (for example, through signs and markings).

16. Duration: One year.

Senior Adviser on Road Maintenance to General Directorate of Operations, MOPT

17. Qualifications: The Adviser shall be a graduate engineer, with a minimum of ten years experience in road maintenance activities--including specific experience in performance scheduling and budgeting procedures for ANNEX 4 Page 6 highway maintenance and in general maintenance administration. Fluency in Spanish would be highly desirable.

18. Duties: The Adviser shall advise and assist the new Maintenance Unit to be established in DGV in carrying out the functions itemized below:

- set up administrative and operational procedures for the Unit;

- establish a three year work program for the Unit following consultations with the respective municipalities in the metropolitan area;

establish initial manpower and budget requirements;

- set up performance standards including manpower and equipment utilization procedures; and

- establish effective mechanism for coordinating the work of the Unit with that of other departments which operate maintenance programs.

19. Duration: One year. ANNEX 5

COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Training Component

Introduction

1. The economic and social growth of the metropolitanarea of San Jose requires the development and maintenance of efficient urban transport services for which the Government foresees an investmentof over 250 million colones ín the proposed project. This large investmentmust be accompanied by efficient human resourcesadequately trained to develop, administer,and maintain both the present and future urban transport systems. Of the present work force involved in urban transportactivities, a majority lack the necessary qualificationsor skills to enable them to carry out their assignments satisfactorily. Moreover, each of the MOPT DirectoratesGeneral connected with urban transport activities,as well as TRANSMESA, ls under-staffed. This applies particularlyto the MOPT Training Section, which, as presently organized, lacks the capability to either identify or implementneeded training programs. Moreover, although MOPT has in the past arranged for the train- íng of some of its staff engaged in urban transportoperationa, they have since been assigned elsewhere, resulting in the Ministry's loss of several qualified staff in this area.

2. The objectives of the proposed training component are to (i) improve staff productivity,operational efficiency,and the quality of service by training and upgrading some of the existing and future MOPT skílled workmen, low level supervisors,and managerial staff involved in urban transport services, and (ii) identify, train, and incorporate into the system sufficient Costa Rican personnel to continue and expand the training activitiesini- tiated as part of the project.

3. The Bank will concentrateon the training of MOPT personnel connected with urban transport services. It ls understood that the Government will complement this effort by providing appropriateresources for the training of TRANSMESApersonnel and bus drivers.

Scope of Training Component

4. The component includes training of three main categoriesof personnel:

(a) DGTA, operationalstaff from the Public TransportDepart- ment and traffic engineering techniciansfrom the Traffic EngineeringDepartment in the fíeld of public transport services and applied traffíc engineeringmethods, respectively; ANNEX 5 Page 2

(b) DGT, police inspectors in the fields of traffic surveillance and regulation enforcement;and

(c) bus-owners/managersin the field of bus operation management, including accounting,financial analysis, parts inventoryand maintenance.

Although most of the training will be carried out in Costa Rica, a few selected staff will receive training abroad in disciplines for which training cannot be provided in the country or in cases where it ís more cost-effective.

5. The training component is based on the recommendationsof a 1977 study made by Wilbur Smith Associates (Consultant-US). The MOPT and the Bank reviewed these recommendationsand agreed on an initial training program. Expatriate instructorswould be recruitedand will initially make detailed recommendationson training programs to be reviewed by both the MOPT and the Bank.

6. Once this task has been completed, the proposed expatriate instructors, in collaborationwith the technical assistance advisers and all Depart- ment Heads concerned,would prepare and implement training programs, including:

(a) In-country training (in order of priorities) for:

Personnel to be Trained

(i) DGTA: Public Transport Department

Executive and Technical Staff 33

Traffic EngineeringDepartment

Technical Staff 22

(ii) DGT: Traffic Inspectors 154

(iii) Bus-Owners 225

434

(b) Training Abroad

(i) Puerto Rico

Six senior urban transport staff from DGTA, DGV and DGT comprising two traffic operation planners, two trafficmanagement assistants,one maintenance engineer, and one traffic inspectorwould visit the ANNEX 5 Page 3

TOPICS Office of the Puerto Rican Highway Authority, the Traffic EngineeringDivision of the Municipality of San Juan, and the Department of Transportationand Public Works. Since a TOPICS program, similar to the one proposed for San Jose, has recently been success- fully completed in San Juan, it is felt that this experiencecould be transferredto MOPT staff at relatively low cost during about two to three months practical attachment. Puerto Rican authoritieshave been contacted and have indicated an agreement in principle. Furthermore,to ensure maximum benefits from this visit, detailed programs will be sought from the Puerto Rican authoritiesclearly indicating the kind of experienceand work expected to be provided. These programs would be reviewed and approved by both the MOPT and the Bank prior to the trainee- participants'departure.

(íi) United States or other suitable country

Three scholarshipswill be granted for graduate study of nine months each in urban transport engineering, planning, or economics to establishedMOPT staff. The scholarshipsare expected to be assigned to two engineersfor courses in urban traffic operations and to one economist for a course in public transport regulatoryoperations. As in the case of (b) (i) above, the academic programs would be reviewed and approved by the MOPT and the Bank before the partíci- pants' departure from Costa Rica. In addition, one or two professors from selected uníversitiesabroad, with considerableexperience ín urban transportdisciplines, would be commissionedto assist Costa Rican universí- ties in establishingrelevant courses in urban transport within existing civil engineeringfaculties.

Training Courses

7. For each of the three main categories of personnel to be trained, appropriatecourses will be prepared and supervised by an expatriateinstruc- tor, assisted by one or more of the technical assistanceadvisers. Most of the courses would be based on the curricula prepared by the consultantas follows: ANNEX 5 Page 4

8. DGTA - Public Transport Department. Management and technician courses are expected to be conducted for personnel of this department including the following: (a) Policy Overview; (b) Concessionsand Permits; (c) Fares; (d) Financial Forms; (e) FinancialAnalysis; (f) Routes and Coverage; (g) Headway Requirements; (h) Monitoring Schedules and Data; (i) Passengers Amenities; and (j) Maintenance Inspection. The proposed courses will encompass from one to six months of instruction (not necessarily consecutive)for executive staff and approximatelyone year for techniciansdepending on the qualificationsand experienceof participants.

9. DGTA - Traffic EngineeringDepartment. Curricula 1/ for a series of seven training courses have been developed for traffíc techniciansby the consultant. These curricula include:

Course 1 - Policy and Objectives Overview. General concepts and principles of traffic engineering. This course would be of interest to senior offícials and department heads, and traffic inspectors as an introductionto their own programs.

Course 2 - Expanded Overview. A course for (a) professionaland supervisorystaff and (b) both present and newly- employed traffic techniciansof all classifications.

Course 3 - Survey Analysis and Report Writing. A course coveríng the collection,analysis, presentation, and use of survey data necessary for traffic engineeringprojects.

Course 4 - Traffic Signals. A course on traffic signal systems.

Course 5 - Signs, Striping,Pavement Markings and Safety Lighting. A course on all traffic control devices (except signals) including standardizationsof signs, striping, and pavement markings.

Course 6 - Vehicle Parkin&. A course covering on and off-street parking for all types of vehicles, including the special problems of bus stops and truck loading needs.

Course 7 - Traffic Accident Analysis. A course on methods of col- lecting and analysis of accident data in the development of programs to improve safety and operation.

1/ The details of these curricula and related referencematerials are available in the Bank. ANNEX5 Page 5

The traffic engineeringtraining program requires that one or more professionally qualifíed traffic engineers shall be recruited as the present number is insufficientto meet normal operationalrequirements. The above courses are primarily directed at traffic engineers'support staff or "technicians," and are expected to require approximatelytwelve months of instruction (not necessarilyconsecutive) depending on the qualifícationsand experience of personnel.

10. DGT. Curricula 1/ for a series of four training courses have been developed by the consultant for police traffic inspectors. These include:

Course 1 - Overview. A course covering the basic concepts of the need for traffic regulation,the function of the traffic police, and office-citízenrelationshíp.

Course 2 - Traffic Laws and Enforeement. A course covering the traffic laws of Costa Rica, public transport,and truck regulations,etc.

Course 3 - Traffic Control Problems and Techniques. A course eovering driver and pedestrian characteristícs,vehicle characteristics,etc.

Course 4 - Traffic Accdent Investigations. A course covering accident investigation teehniques, reporting, and analysis.

ll. Bus-Owners. It is intended that an informational and technical assistance program be carried out for bus company management staff. This is expected to cover, inter alia, the following subjects:

(a) management and overall administration;

(b) policy and management standards;

(d) accounting procedures and uniform systems of accounting for bus operations;

(e) laws and regulations;

1/ The details of these curricula are available in the Bank. ANNEX 5 Page 6

(f) traffic control devices;

(g) methods of audit control;

(h) vehicle maintenance practices; and

(i) procurement of spare parts, etc.

The program would be carried out partly by a series of conferencesor seminars for small groups of bus undertakingsand partly by visits to individualcom- panies. It ís hoped that by providing a flexible schedule of half day classes, most of the 225 bus-owners would be willing to participate. Follow-up contacts would also be carried out.

Implementationof Training Component

12. The training program can be initiated in 1978. The followingpre- liminary steps leading to the preparation and implementationof thís program should be taken by the Government:

(a) the promulgationof a statementby the Minister of the MOPT outlining a training policy within the MOPT, with specific instructionson training to Directors General and senior staff of related agencies (Attachment1);

(b) the expansion and strengtheningof the existing MOPT Training Section by one Costa Rican training officer able to provide the necessary logistic and administrativesupport to the expatriate instructors;

(d) the early assignment of Costa Rican counterpartato the expatriate instructors. They would initially carry out a number of tasks with increasing responsibilityleading to the position of technician-instructors.

13. The full responsibilityfor the implementationof training will rest with the Project Manager who in turn will be asaisted by the Senior Adviser on Public Transport, and the Senior Adviser on Traffic Management and En- gineering. The training programa for DGTA and DGT personnel will be carried out by three full-time expatriate instructors. Details are as follows: ANNEX 5 Page 7

Expatriate Instructors (Full-Time)

(1) Traffic Engineer-Instructor DGTA - Teach courses on system (Planning) 16 months planning, routes, control devices, surveys, etc.

- Conduct 5-6 classes on (i) accident reporting and (ií) weigh scales operatíons.

(2) Traffic Engineer-Instructor DGTA - Teach courses on traffic (Operations) 16 months investigations, signing and striping, pavement markings, signalízation, safety lighting, channelization, etc.

DGT - Conduct 4-5 classes on (i) traffic control devices, (ii) parking.

Bus-Owners - Lecture on "service standards."

(3) Traffic Police-Instructor and Adviser DGT - Develop a traffic regulation 24 months enforcement program. Prepare, implement, and supervise training of traffic inspectors, including local inspectors- instructors.

Total 4 man-years

In addítion, three technical assistance advisers will conduct traíning as follows:

(1) Public Transport Senior Adviser DGTA - Assume responsibility for 4 months the content of training courses for public transport personnel and bus- owners.

- Develop and conduct, wíth the assistance of the traffic engineers- instructors, high-level policy and management seminars or courses re- quíring special expertise such as fares, regulatory processes and procedures, ANNEX 5 Page 8

the use of financial and statisticaldata for regulatory and managerial purposes, etc.

Bus-Owners - Conduct short seminars- sessions on Government policy and regulations; financial and operating statistics (cost control), etc.

(2) Adviser on Public Tranport Vehicle Service Standards DGTA - Prepare and carry out train- 3 months ing programs for maintenance inspectors.

TRANSMESA-INA- Assist in preparing courses for bus maintenanceperson- nel of both bus undertakings and of privately-ownedcon- tract bus repair facilities.

(3) Senior Adviser on Traffic Management and Engineering DGTA - Assume responsibility for 2 months the content of courses for traffic engineeringtechni- cians.

- Assist in improvingpro- fessional traffic engineers and planning staff in order to upgrade them to super- visory positions.

Total 9 man-months

The Governmentwill be required to provide the following local staff either from existing manpower or by recruitment.

Costa Rican Technician/Instructors(part-time)

DGTA - 3 Technician-Instructors DGT - 4 Inspectors-Instructors

14. The implementationof the proposed training program will require limited physical training facilities,some training equipment and didactic materials, and audio visual training aids. Although the Bank has arrived ANNEX 5 Page 9

at an estimate of the physical resources required, it will be the responsibility of the expatriate instructors and their Costa Rican counterparts to final- ize these items once the programs have been prepared and agreed.

15. The National Instítute for Apprentices (INA), established in 1965 by presidential decree, has made a significant contribution to the country's industrial growth by providing a variety of courses in basic skills. In addition, INA recruits specialists to teach any specific skills it is not equipped to handle with its permanent staff. It works closely with most Minístries and has ample physical traíning facilities. Because of its offí- c.ial relationship with the MOPT, INA could be utilized to (a) set up appropriate courses to meet some of the MOPT, as well as other agencies' needs, such as those of TRANSMESA and the bus-owners, provided that specífic objectives, curricula, and other basic data were made available to them; and (b) make available classrooms and other facilíties. The proposed training officer will determine at an early stage the extent to which INA can be of assistance to this training effort.

16. It should be emphasized that the success of the training program wíll depend largely on the commitment of the Government to implement critic- ally required policy changes in both pubiic and private agencies connected wíth urban transport services. It will also depend on how committed the Directors General are to making the necessary personnel available for training. A monitoring and evaluation system will be established within the training program to both monitor the results of training while it is being carried out and, later, to evaluate the effectiveness of programs when completed.

Cost

17. The total cost of expandíng and strengthening the capability of MOPT's existing training organization and implementing a comprehensive traín- ing program to meet the needs of urban transport personnel is estimated at US$781,000 excluding contingencies. Details are as follows:

Training Equípment, Materials and Facilities $130,000

Instructors $406,000

University Course Development $105,000

Training Abroad $140,000

$781,000

Approximately US$551,000 represents the foreign exchange component. ANNEX 5 Attachment 1

COSTA RICA

MINISTRY OF PUBLIC WORKS AND TRANSPORT (MOPT)

Policy Statement on Training

1. The economic and social growth of the MetropolitanArea of San Jose requires the developmentand maintenanceof efficient urban transport facilities. The Government foresees an investment of over Colones 250 million for the period 1978-1980,and such a large investmentmust be backed up by the recruitmentand training of staff necessary to develop, administer, and maintain the present and future urban transport system.

2. This Ministry intends to strengthen its permanent training structure and, with the assistance of existing national training institutions,plans to meet the training needs of the MOPT personnel responsible for urban transport developmentas quickly as possible.

3. The Ministry will enter into contractswith expatriate instructors who, in collaborationwith technical assistance experts, will review the existing training program and related recommendationsso as to determine the appropriate action to be taken. In addition, they will be responsiblefor the preparation,implementation, coordination and supervisionof their respective portions of the training activities required under the urban transportproject. In carrying out their duties and responsibilities,the instructorswill collaborateclosely with the MOPT Training Officer as well as the appropriate officials of INA and will report directly to the Project Manager. -

4. While, for the first two years, training activitieswill involve primarily low- and middle-levelsupervisors, it is envisaged that in the future, seminars will also be carried out for high-levelmanagement staff.

5. This Ministry will ensure, starting in 1978, that financialand physical resourceswill be made available to carry out these activities. In addition, to ensure the efficient implementationof the training effort, all senior staff and departmentheads connected with the urban transport project will be required to collaborateclosely with the expatriate instructors by making available adequate numbers of personnel to be trained as instructors,and by releasing existing and future staff, in a timely fashion, to undertake agreed training courses. ANNEX 5 Attachment 2

COSTA RICA

MINISTRY OF PUBLIC WORKS AND TRANSPORT (MOPT)

Services of Expatriate Instructors

Job Description

1. Each expatriate instructorshould be an urban transport specialist with, in addition, three to five years of pedagogical experience in this field. Moreover, he should be capable of designing and implementingtraining courses and staff development through on-the-job training.

2. His main dutíes and responsibilitiesshall include:

(a) the establishmentof training objectives and the planning of courses to meet these objectives;

(b) the preparationof training courses and materials and the day-to-day supervisionof training programs. He will, ín particular,introduce a system to enable the supervisors in charge of each department to assess the training needs of his staff;

(c) working closely with all MOPT Department Heads and other senior officers,especially DGTA and DGT, but also TRANSMESA, and Bus-Owners,so as to obtain their cooperation in staff developmentprograms;

(d) the design of an evaluation system within the training programs to both monitor the results of training while it is being carried out and, later, to evaluate the effectívenessof completed programs;

(e) the training of Costa Rican Counterpartsto take over their responsibilities;and

3. Fluency in Spanish is highly desirable. ANNEX 6

COSTA RICA

SAN JOSE URBAN PROJECT

The Value of Land 1/

Land Prices

1. The value of the land acquired for the project constitutes nearly 30% of the costs of the radials. Without allowance for contingencies, the right-of-way costs comprise two-thirds of the total local costs. And in the case of the new Tibas Radial, the expense of land acquisition far exceeds the cost of the works. The expenditure on land is so significant that, even though no land acquisition is being financed by the Bank,it is important to be sure that the cost is reasonable. In particular, there is need to ensure that the project is not the pretext for the over-rapid escalation of land values and the appropriation by landowners of windfall profit. This requires as a preliminary some analysis of the land market and the determinants of the price of land. Such is the main purpose of this annex. The annex also des- cribes the current practice with respect to land acquisition and taxes.

2. The price of land in San Jose is widely thought to be "high". This can be interpreted in a number of ways. First the price of land may be thought to be high compared with the price of land in other comparable Central American (capital) cities. Although exact comparisons are hard to make, the evidence from discussions with three realtors suggested that the price of similar urban land in Guatemala City was only about 60% of the San Jose price; in Tegucigalpa, the percentage was probably 35%; in San Salvador about 60-70%. (No comparisons were available for Panama and Managua.) Second, the price of land can be said to be high relative to the annual return. The evidence for this can be found in the very low rates of nominal return on residences rented in the private housing sector. From a sample of 23 such rented residences (which may be called higher middle class dwellings), the rate of return, net of tax and expen- ses, was 3.4%. This is comparable to the rate of return on prime property in the United States.

3. To give some idea of the price of serviced land in San Jose, one may review recent acquisitions by government. In principle, these were contracted at the market price. Values range from 9 6,000 a square meter (almost US$3 million an acre) for land acquired near the city center to about 9 1,500 a square meter (US$0.7 million an acre) at a distance of one kílometer from the city center (the intersection of Avenida Central and

1/ See Urban Land: Issues and Opportunities, Issues Paper, April 1977. Much of the detailed discussion is contained in that Issues Paper and the Annex does not reiterate the exposition in that paper. ANNEX 6 Page 2

Calle Central). Thereafter, land falls rapidly in value on the Southern radials (Alajuelita (Hatillo) and Desamparados), but on the Easterly, Westerly, and Northern radials, the decline is much slower. Thus at four kilometers from the center, values for serviced land range from 600 to 700 colones a square meter (US$0.3 to 0.35 million an acre) in the East and West to 200 to 500 colones a square meter (US$0.1 to 0.25 million) in the south.

4. The market for real property and land is virtually completely free. Transaction costs are few and property is easily subdivided and assigned. No restrictions are imposed on ownership--foreign nationals may own property in Costa Rica and have exactly the same rights as nationals and resident aliens. There are, however, some controls on rents but the evidence suggest that they have little "bite" since an owner may change the tenancy and renegotiate the rent by suitable "improvements". (It is also said to be common practice to require "key money".) Realtors were of the opinion that rent control exerted a nuisance effect but did not much affect the disposition of property or its price.

5. The demand for land is primarily determined by the expected real economic return that can be exacted from the plot, the extent to which the landholder will be able to appropriate the real economic return, and the general expectations that landowners will preserve their savings which have been invested in land. In allocating part of his portfolio to land, the investor will take into account the rate of return, net of any taxes, that he expects to accrue, and the risk of capital loss; and he will compare these returns and risks on land with similar expectations on other alternative assets.

6. One of the noteworthy features of the Costa Rican society is their abíding respect for the rights of private property. There is very lttle chance of any expropriation of property owners either through state take- over or by penal taxation, comparable to that which has occurred in many other countries. Consequently, real property is much in demand. According to realtors, a large percentage of sales involve foreigners--many from Central American Common Market countries, the United States, and certain European countries. The extraordinary stability of Costa Rica and the respect accorded to property rights and savings invested in property have a considerable scarcity value. It is not surprising that the demand is so large or that the rate of return is dríven down to values similar to or even lower than those in the United States. 1/

7. The nominal rate of return on land--the present income from land divided by the price of land--is much influenced by the expected rate of inflation as well as the availability of funds. Some data on land values

1/ This respect for property rights ensures that Costa Rica can import capital at a low cost. ANNEX 6 Page 3 are available for certain years namely 1961, 1968 and 1974. Since the status of the land, whether it has services or not, was unknown, no very firm conclusions can be drawn from the data. 1/ The likelihoodof raw land being serviced undoubtedlyraised the price of raw land through this period. Concentratingon the Guadalupe corridor (East by Northeast) where there is least likely to be any large effects from servicíng, one finds that the average increase in price from 1961 to 1968 was quite small-- about 3% per annum. Some plots near the center actually fell in price over this period, but generally the progressionwas consistent for most distances from the city center. In the second period (1968 to 1974) the rate of increase of land values was about 7% per annum, and again there was no marked dispersion in the rates of growth according to the distance.

8. Tentatively,one may conclude that the price of serviced urban land in San Jose has reflected the change in the general price level over the years 1961-74. Thus, the real price of serviced urban land has remained more or less constant over these fourteen years. In particular, there is no evidence of the very large increases in average price that are alleged to have occurred in similarly rapidly growing cities in LDCs. (Of course some plots of land have appreciated considerablymore than the 7% rate during the period 1968-71 and have attracted considerableattention from the media. Some plots, approximately0.5 km from the city center in the Easterly (San Pedro) direction have increasedby about 16-17% per annum-- but these are counterbalancedby plots in the Northern areas which have increased by only 4% per annum).

9. These data tend to be consistentwith the principles outlined in the Urban Land: Opportunitiesand Issues paper. Since land is a secure asset one would anticipate that the real rate of return would be low. It was shown above that the nominal rate of return was around 3-4%; and now, the evidence from the time series suggests that 3-4% is also an appropriate value for the real rate of return. Thus, it is likely that the present value of land reflects the current rate of inflatíonwhich is widely thought to be 6-7%.

Land for the Project

10. As far as the land to be acquired for the project is concerned, the first question that arises is the expectationof the market regarding the improvement. For economic analysis, one needs to know the opportunity cost of the land without the facilitiesproposed in the project. Taking Tibas as the most important element involving land acquisition (see Table 1)

1/ Politicas de CrecimientoUrbano, La Experienciade Costa Rica, edited by Manual J. Carvajal, Centro de Estudios Latinoamericanos,Universidad de Florida, Direccion General de Estadisticay Censos, 1977, pp. 297 et seq. It is also impossibleto derive an appropriateaverage for the urban area since the weights are not known. ANNEX 6 Page 4 it will be noted that plans for the Tibas Radial have been known for some years. The only issue has been the timing. Consequently, market values for land have long adjusted to the fact that a new highway will parallel the existing Route 5. 1/ Equally, however, prices in other areas of the city and its environs have long reflected the anticipated improvements of the other radials. Thus it is difficult to separate out this expectational element from the without-the-project value of land. However, there are one or two straws of evidence. The MOPT acquired 2.4 hectares in Tibas in 1974--the price was agreed before the great inflation in 1972-73. The average price then was e 125 per square meter, whereas in 1977 the estimated cost was e 300 per square meter. Allowing for the normal overall inflation of land values over this period, the ¢ 125 per square meter would not quite have doubled in price; but assuming that it did, one has still ¢ 50 per square meter to account for the expectational effect of the highway. Thus it seems as though at least 20% of the value can be thought of as the "expected-highway" effect. It so happens that the land that has already been acquired by the government approximates to 20% of the total currently assessed (1977) value, so that it may be assumed that the value of the land still to be acquired represents approximately not merely the financial costs but also the economic cost. 2/

11. The data for Tibas enable one to give some sort of quantitative answer to another question frequently raised in discussions on the value of land. 3/ What is the value of developed (and in this context this means serviced) plots relative to the value of similarly located but unserviced plots? The differential will then give a value, and not necessarily the cost, of the services.

1/ One minor change has taken place. Until some two or three years ago (i.e., 1974-75) it was supposed that the new highway would merely connect into the proposed Ringway. The Southerly projection beyond the route of the proposed Ringway is new--but it ís snort and cannot have any substantial effect.

2/ ¢ 2.998 million was already paid for 2.391 hectares for an average price of e 125 per square meter, now valued at ¢ 300. The total cost of land and buildings for the radial is ¢ 31.4 million.

3/ See for example Urban Land: Opportunities and Issues, 1977. ANNEX 6 Page 5

12. Fortunately,the land required for the new Tibas Radial lay in an unserviced segment of San Jose. And although the owners clearly expect that servicingof land will ultimatelybe introduced by the local authorities and the public corporationwhich distributes electricity,realtors suggest that it will be in the late 1980s when the corridor is provided with services. Consequently,the present land prices must reflect only a small fraction of the serviced value.

13. A regression of observationson 23 parcels of land, not included in the Tibas Radial, gives an equation as follows:

P - 2250 exp(-0.949d) where P is the price in colones per square meter of serviced land, d is the distance from the city center (Ávenida Central and Calle Central). The correlationcoefficient is -0.830. It will be noted that this equation is unsuitable for predictingvalues for serviced land at very short distances and can be used with confidence only for the range over 0.15 kilometers. Comparing the land values along the undevelopedTibas Radial, one fínds that the figures are about 50% lower than predicted by this equation. Allowing for the fact that some anticipatoryeffect is in the Tibas values, one may conclude that the value of serviced land is rather more than twice the value of raw unserviced land. 1/

14. A final issue with respect to the Tibas Radial is whether there has been a substantialwindfall profit and whether the money has accrued to a small number of monopoly landowners. The location of the Tibas Radial was decided by two considerations--theposition of the very expensive crossing of the Virilla river in the North and the undeveloped corridor of Tournon in the South. The choice of the Virilla river crossing is explained in the Fourth Highway Project (Loan 1187 CR) and will not be recounted here. The Southern part of the radial and the Tournon dispersal occupy the most expensive but still undeveloped land. This arose because of a law suit concerning the ownership of the estate; disputes over ownershipwere so protracted that building was inhibited. The records show,

1/ Again, it must be emphasized that this result can be applied only over the range of observationsand cannot be extrapolated. If one knew the cost of servicing land and if one knew the price which the authorities exacted for servicing, one could calculate the appropriate servicing thresholds. But these speculationsare beyond the scope of this annex and project. ANNEX 6 Page 6

however, that even in the Tournon area, ownership, which was once concentrated ín the Tournon family, is now quite widely dispersed. Furthermore, at about 0300 per square meter, the price is considerably below the price at similar distances from the center of San Jose. It can be concluded, therefore, that the Tournon acquisitionswill not result in large gains from land speculation. Similarly for the coffee lands, which comprise much of the land from the railroad (about 2.3 km from the center) to the Tibas junction (about 4 mm from center) is to be acquired at an average price of 88 colones a square meter. Again, this will bring no windfall profits since it is the sort of price that has persisted for a considerabletime for unserviced land in such close proximity to the center of San Jose. One may conclude, therefore, that the prices proposed for land for the Tibas Radial are reasonable and that there is little or no evidence of large speculativegains.

Land Value and Economic Analysis

15. For the rest of the civil works in the project, the land aspects are restricted to small acquisitionsfor widening existing highways. The government already owns the right of way for most of the widening and so acquisitionsare small. Where the existing right-of-wayis suitable for at least four lanes but where there is only a two lane highway, the rest of the right-of-wayis usually employed, and much underutilizedover most of the length for parking vehicles. The obvious question arises, however, whether one should not take into account the value of this parking which will be forgone (during the peak hour only) when the road is widened. Clearly the existing use is inefficientand the value of the parking forgone, with the exception of a few businesses, is trivial since there is ample space available on the side streets and feeder roads. There is, of course, an opposing view; it may be argued that, if the authoritieswere convinced that only a two lane road were to be provided in perpetuity,the additional land would be sold at prices appropriate for valuable frontage. Thus, the economic value of land used in the widening should reflect these prices for the total spare land.

16. In the economic evaluation,this opposing view has been rejected largely because it does not reflect the reality of the existing conditions. Widening these highways has been an imminent possibilityfor many years and, in the absence of the project, it would continue to be the most likely event at some time in the future--sayperhaps in 1990. Consequently,the alternative forgone is the present inefficientuse as an underutilizedpark- ing lot for the interveningyears. Thus in the economic evaluation,as in the financial analysis, the consequentialrestriction of parking on the radials at peak hours has not been calculatedas a cost of the project. Only new land and property to be acquired have been counted as part of the cost. ANNEX 6 Page 7

Acquisition

17. The acquisition of land by the authorities is covered by the Ley General de Caminos Publicos No. 5060 of August 22, 1972, Article 23, pp. 10-12, which was revised slightly in August 1976. The authoritieshave the power to acquire property which they decide is required for a right- of-way and, after suitable notice, the owner must surrender the property. He cannot refuse to sell to the authorities. His only recourse is to refuse the offer of compensationmade by the authorities. The money so offered is deposited in an escrow account, which does not earn interest. The offer can be accepted by the expropriatedowner by drawing an amount out of the account. Many owners, however, decide to appeal the offered compensation and such disputes are settled by an administrativetribunal. It is reported that the tribunal usually adds 30-40% to the price offered by the government,but that this process takes on average two years. Clearly if the owner were able to use his escrow account and expectationsof a suitable award as collateral in acquiring a bank loan at a rate of interest of 12% or less, it will be in his interests to appeal the decision of the authorities. Many do.

18. The principle for compensationis market value. No addition is made for the surplus value, over and above the market value, which an owner attaches to this plot, although it is possible and perhaps likely that this may emerge in the tribunal hearings. The delay in settlement and the absence of interest payments on the escrow account, however, suggest that the final outcome does not reflect the surplus value to the owner. 1/

Land Taxes

19. Costa Rica has imposed taxes on the capital value of land and buildings since 1939 whether they are occupied, or cultivated,or not. The tax is charged as an increasing percentage of the assessed value of an entity's total holding. Beginning with an exemption limit of ¢ 4,000 the tax rate rises from 0.3% to ¢ 250,000 to 1.05% on holdings exceeding e 3 million. The tax rate on unused land rises even more steeply, according to the total area of land owned by the entity; from 0.25% in the 100 to 250 hectares bracket, it rises to 2-1/2% for 5,000 hectares or more.

20. However, such rates are fierce only in theory not in fact. There is universal undervaluationof property, the extent of which was said to vary both geographicallyand with respect to the kind of property. It was suggested that domestic residences in San Jose are usually valued at about

1/ The formal recognitionof the surplus value of a property has been reflected, for example, in the Land CompensationAct, 1973 of the United Kingdom, but it is not yet a widespread practice in other countries. ANNEX 6 Page 8

40 percent of their market value. And there are many ways of avoiding the tax--by splittingholdings among members of the family, by paper transac- tions at low prices to bring down the valuation, etc. Empty land is reportedly even more underassessedmore than other assets.

The motive of the land taxation is clear; on the one hand, the Costa Rican governmentwishes to collect taxes in respect of the services supplied by the public authorities,and on the other hand, it wishes to inhibit large landholdingby the rich. To examine the extent to which the governmenthas achieved these aims would require additíonal study.

Costa Rica does not have a betterment tax per se, although an annual tax on the capital value operates along the línes of a betterment tax. The significantdífference, however, is that as unused land becomes developed, the rates of tax may fall. There is clearly a need to look further into the existing land taxes to explore the anomalies and to examine whether change would be desirable. ANNEX 6 Table 1

Financial Costs of Rights-of-Way in 1977 Colones

New Construction or Improvement Land Buildings

Hatillo - Easterly new radial 2,266,000 416,000

Hatillo - Westerly new radial 1,105,000 250,000

Desamparados short new radial 6,225,000 150,000

Desamparados - 4 lane widening 1,383,000 591,000

Tibas - new radial 26,955,000 4,403,000

San Pedro - widening 1,352,000 345,000

San Sebastian - widening 1,015,000 356,000

La Uruca - widening 1,895,000 1,468,000

Guadalupe - widening 909,000 284,000 ANNEX 7

COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Schedule of Disbursements

Disbursements for Cumulative Disbursements each Quarter at End of Quarter

(US$ Million) (US$ Million)

1977/78

March 1978 0.11 0.11

June 1978 0.69 0.80

1978/79

September 1978 1.98 2.78

December 1978 2.00 4.78

March 1979 1.90 6.68

June 1979 1.85 8.53

1979/80

Septembier 1979 1.69 10.22

December 1979 1.63 11.85

March 1980 1.27 13.12

June 1980 1.27 14.39

1980/81

September 1980 1.06 15.45

December 1980 1.05 16.50

Total 16.50 ANNEX 8

COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

The Traffic Management Component

A. Policy

1. The underlying basis of the present project in its approach to the solution of transport and travel problems in San Jose is that the medium term transport-travel demand can be accommodated on the existing transport network provided that:

- some relatively modest improvements are made to the existing highway network, supplemented by a restricted amount of new road construction; and

- adequate traffic management and public transport improvement measures can be implemented to ensure that the available capacity of the system is utilized to its maximum.

2. Nevertheless, if present patterns of urban development and present policies continue unchanged, growing population and travel demand together with increasing car ownership will lead to inadequate capacíty on both the radíals and the central city street network.

3. Thus on the understanding that maximum utilization of exísting resources, both fixed (roads, etc.) and mobile (buses), is mandatory -- a view that is accepted by the Costa Rican government -- it is essential that an pctive program of traffic management be instituted in San Jose in con- ju ction with the present project. In this context, the term 'management implies, not only operational measures of a traffic engineering character, but also administrative programs, strategies for public transport operation, and enforcement considerations.

4. Traffic management in its widest sense is the application of measures and policies dealing with the operation, regulation, and pricing of the transport system such that maximum use is made of the existing system and new investment in costly capital projects is avoided or deferred.

B. Organization Requírement

5. To enable the objective stated in para. 4 above to be achieved through the application of traffic management methods, the Consultants in the preparation of the project for appraisal have recommended a considerable ANNEX 8 Page 2 strentheníng and reorganization of DGTA, the department responsible for traffic planning in San Jose. The mission considered these recommendations reasonable and the government has indicated their general willingness to organize the Directorate in such a way that a Departamento de Ingeniera de Transito is created to carry out traffic and transport planning in the metropolitan area. The proposed department will encompass four funetional divisions (see Chart 17643):

(a) Traffic Signals Dívision which will be responsible for all aspects of traffic signal control related to the planning, design, improvement, and maintenance of all installations, including the proposed new CBD Traffic Signal System.

(b) Traffic Signs and Marking Division, which will be responsible for design, manufacture, and installation of all traffic signs and the establishment of standards.

(c) Traffic Planning and Engineering Division, which will be responsible for all planning tasks related to traffic management and engineering, including traffic circulation, parking, accident analysis, and street geometrics (ínter- section layouts).

(d) Truck Movement Control Division which will be responsible for all problems related to truck movements such as truck routes, on and off street loading problems, and weighing stations.

Additionally, a Traffic and Transport Policy Studies Unit would be created. This group would be ínvolved in the analytical aspects of traffic planning and would provide specialist advice to the other groups. The group would be oriented towards the planning aspects of traffic management and would liaise with the four operational groups or divisions who will deal mainly wíth the aspects of traffic planning involved in scheme implementation. The Policy Studies Group's major role would be to develop and evaluate forward policies, within the general policy guidelines and objectives established by Government.

6. The project will include technical aasistance in the field of traffic management planning (details presented ir Annex 4). A Senior Traffic Management Adviser is included unde: the project for a period of two years. This Adviser will be available at ¿he outset of the project both to assist in the establishment of the expanded traffic management unit and to assist in the conduct of the initíal program of work (see following section). The Senior Traffic Adviser will be located in the Policy Studies Group and thus be in a position to be aware of, and to offer advice on, the work of all four operational groups. A Traffic Signals Adviser is also included within the project. While the major tasks for this Adviser will be to assist in the rapid progression of the CBD Traffic Signals project component and the coordination of traffic signals contracts in other project ANNEX 8 Page 3 elements, he should be available, in addition, to assist in the expansion of the traffic signals division and to ensure that the expanded division is organized to meet the growing needs in this particulartechnical area.

C. Work Programs

7. The Work Programs of the existing units are relativelystraight- forward. The Signals Division will be responsiblefor the installation of the CBD Traffíc Signal system, for the signals aspects of the radial improvementand TOPICS components, for fine-tuningall siguals, and for expanding the pedestrian signal program. To carry out these tasks, the division will have to be strengthened. An Installationand Maintenance Manager plus three technicianswill be required for the implementationof the CBD Traffíc Signals System. Further staff should be added as demands on the division increase. The Signs and Markings Division will be responsible for communicatinginformation about the traffic control plan to road users, through warning and informationsigns and clear road markings. The key elements in such a program include an increase in the number of signs and markings, a more uniform system, and more rigorous maintenance. Equip- ment is being provided under the program, but additional staff will be required to devise and carry out a systematicprogram of installation, ínspection,and repair. Two senior techniciansare required to carry out this task. One should be hired immediatelyand the other within nine months.

8. The two other units are new and, hence, staffing requirements and work programs must be devised. The Consultants recommend that at full strength the Traffic Planning and EngineeringDivision should contain a staff of 21 persons. It is advisable to start with a minimum professional staff of six: one experiencedtraffic engineer, two young engineers,and three support professionals,trained in engineering,economics, or statistics. The unit should be created and the basic staff hired as soon as possible after negotiationsin order to obtain maximum benefit from the Senior Traffíc Adviser.

9. The work program of this unit will include:

(a) monitoring the effectivenessof the project in improving travel conditions;

(b) developing a program for the expansion of exclusive bus facilities;

(c) develop a scheme to give at least limited priority to other high occupancy vehicles, such as car pools and to control the use of low occupancy vehicles;

(d) carry out a study of parking supply, demand, and rates, and make recommendationsfor changes; ANNEX 8 Page 4

(e) develop a traffic circulationplan, including one-way streets, street closures, an expanded TOPICS programs, etc.;

(f) develop a program of improvementsto pedestrianfacilities, including footpaths, crossings, bus shelters, etc; and

(g) develop a program to improve traffic safety and reduce accidents.

10. Tentative terms of reference for these tasks have been provided by the consultants. (See Attachments 1, 2, and 3 for the major elements to be contained in the terms of reference for the major studies.) These draft terms of reference will be developed by the Director of the Departa- mento de Ingeniera de Transito, the Senior Traffic Adviser, and the unit head into an integratedwork program for the unit. ANNEX 8 Attachment 1 Page 1

Priority Treatmentsfor Bus Movements

1. Bus príority measures can involve three different classes of treatment:

(a) bus loading improvements,including redesignedstops and bus pull-outs,shelters, and route signing;

(b) control priorities for buses moving on mixed-traffic roads which involve such measures as special turns, contra-flow lanes, and preferentialsignal timing; and

2. The first class of improvementscan include:

(a) repaving and widening of sidewalks at bus stops, including improvementsin the curb and gutter conditions to permit easier boarding and major stops, erecting bus shelters where sidewalk wídth permits;

(b) use of alternate-blockstopping and, where necessary, recessed bus bays, particularlyat the end of routes, with special treatment for re-enteringthe roadway (possiblyeven the use of pre-emptivesignals);

(c) use of informationalsigns at bus stops to inhibit motorist violations of the bus stop and to advise passengers on route information;and

(d) placement of pedestrian bridges at major stops on wide roads where there is concern for the safety of the passengers.

3. Several control prioríty measures can be recommendedin coordination with other traffíc managementmeasures:

(a) preferentialsignal timing for those streets (or turns) which carry a large number of buses, particularlyoutside the central area system;

(b) special turn provisions for buses only or, on the con- trary, special turn prohibitionsfor other types of vehicles. (This treatment is expected to be used at Avenida 2, where turns from this street will be prohibited between Calles 9 and 14 when it is made two-way.); and ANNEX 8 Attachment 1 Page 2

(c) development of contra-flow techniques, whereby buses move against the general traffic flow on a one-way street. This requires a sufficiently wide street and large bus volumes for successful use.

4. The third class of priority treatments for buses involves the designation of all or parts of streets for the exclusive use of buses. This means that buses can operate without interference from other traffic.

5. At the present time some bus lanes have been designated (Avenida 2, for example). This idea can be strengthened by the use of special signs (preferably overhead) and bolder pavement markings. However, the success of priority treatments can only come from proper use by the bus drivers, the education of other drivers, and a strong level of enforcement, with stiff penalties for víolators.

6. Bus-only streets and rearrangement of the bus routes se that routes traverse the CDB on these bus-only streets can be introduced. The idea has merit only when bus volumes warrant their use and all the proper adjustments have been made: bus routes, stops, sígnalization, signs, parking controls, access to abutting property, and public notice.

7. A third possible treatment for roadway priority is the development of busways, which are defined as limited access, bus-only facilities. Specíal design measures are necessary and, with them, high bus capacities are possible. The major concerns include provisions for stops, securing necessary right-of- way, grade separation (or other vehicle crossing treatments), and treatments at the ends of the busway.

8. A traffic management program for San Jose involves continued investí- gations of all the places where bus priorities can be implemented via regulations, controls, and possibly construction. The application of good principles of traffic management will obviously help traffic flow -- and thereby help bus flow; but it will be particularly important to pay special attention to bus priorities in the context of proper urban growth.

9. The study team will examine a wide range of bus priority measures, including the examples set out above. Each will- he evaluated in terms of its potential for improving bus flows in San jose. taking into account successful experience elsewhere, the extent to which the solution matches the problem, and the operational and enforcement experience with the bus lanes implemented as part of the urban transport project. ANNEX 8 Attachment 2 Page 1

Parking Regulationand Control

1. In any congested city, the extent of parking regulationand control has considerableimpact on the ability of the streets to handle traffic flow. Although city streets are primarily built to move vehicles, the nature of urban developmentrequires that reasonableparking provision be made for cars, emergency vehicles, or trucks, and buses. A parking program for the central area of San Jose should be developed if more efficientuse of the streets is to be obtained. Therefore,this traffic management task is directed at the analysis of parking needs and the development of a practical set of parking controls.

2. It is clear that the present parking problem in the metropolitan area is, for the most part, situated in the CBD. Outside the CBD, development is less intense, streets are wider, and lane use is generally resí- dential in character. The intensity of commercial developmentin the CBD has generated substantialtruck parking and customer parking, which is largely carried out on the streét. No coordinatedprogram of off-streetloading or parking is evident.

3. The first step in the improvementprogram should be a detailed parking study which will include:

(a) an inventory of existing authorized curb and off-street spaces, and parking rates;

(b) a survey of the present use of both legal and illegal parking spaces;

(d) interviewswith parkers to determine their trip purpose and destinationas a pedestrian;

(e) an analysis of the potential growth of demand in the light of likely commercialdevelopment;

(f) assessmentof future requirementsfor parking spaces;

(g) assessmentof the likely impact on central area trip attractionof raising prices and/or restrictingsupply;

(h) developmentof a recommendedparking plan for the CBD; and

(i) development of guidelines and procedures for enforcement of the parking plan. ANNEX 8 Attachment 2 Page 2

The study will need to take into account the expected growth of commerce, the projected increase in traffic on CBD streets, plans for bus services in the center, and policies as to public and private vehicle usage. In a typical urban area, solutions for parking problems involve relatively severe restrictions on the use of streets for parking and the development of off-street spaces. Additional parking development in the center -- particularly for long-term or working parkers -- runs counter to the objective of discouraging private car travel in the center. Thus, the oft- street solution usually involves recommendations for private car parking putside the CBD near public transport lines and encouragement of the use of buses. San Jose should be no exception, and the present off-street spaces should be tailored (via pricing) to short-term parking so that more efficient use can be made of each space.

5. The curb parking recommendations (following the future study) will undoubtedly require additional attention to several measures which are now in operation, but not sufficiently applied:

(a) location of metered parking to encourage turnover;

(b) full time or peak-hour restrictions, where traffic needs are paramount;

(d) signing of parking regulations;

(e) clear and distinct pavement and curb markings for parking spaces of different types;

(f) facilities for residential parkíng where needed;

(g) identification of loading/unloading spaces; and

(h) a public education program to obtain rapid recognition of parking programs and regulations.

6e None of the above actions can be effective, however, without a greatly improved program of enforcement. Thus, the regulation and control of parking is a coordination effort of the traffic authorities (DGTA) and the police authorities (DGT), with the cooperation of the Municipaiíty.

7. The need for a parking plan is obvious. It must be made on the basis of sound survey data and reflect the growth patterns of the city, ín the context of traffic and car usage policies of the government. This part of the improvement program will be perhaps the most visibly effective means of achieving better use of the streets. Regardless of circulation planning (bus streets, one-way streets, etc.), without a well enforced plan of parking control, effective management of traffic is not possible. ANNEX 8 Attachment 3 Page 1

Control of Low-OccupanyVehicles

1. One of the principal objectivesof traffic management in the metropolitanarea is to give priority to bus travel thereby providing a better means of moving people. The Voorhees report 1/ expressed this objective as "To improve the quality of private vehicle street traffic in the Central Area only to the extent that existing street space for such traffic movement remains after complete satisfactionof bus needs." Therefore, it is essential that measures be examined that increase the priority given to buses, allow limited priority to other "high-occupancy"vehicles such as car pools, and discourage the inefficientuse of low occupancy vehicles, particularlycars containing only one or two people. Therefore, a wide range of measures should be examined and a package of actions developed that representsan innovative and pragmatic approach to this growing problem in San Jose. The following considerations,among others, should be given careful attention:

(a) taxes on ownership (import duties, registrationfees, etc.) are generally believed not to have a strong influence on the usage of cars at specifíc times and in specific places. The evidence in San Jose should be evaluated to confirm that this is likely to be the case;

(b) gasoline prices can be expected to continue to rise as the price of imported oil increases. This will have some effect on car usage, but previous experience indicates it will not be a major deterrent to car travel in the city;

(c) a program should be consídered to encourage the sharing of rides by private vehicle, especially on work and school trips. Priority parking spaces could be made available to car pool vehicles, or toll concessionscould be made for group riding, for example on the Autopista General Canas. In the U.S.A. many employers are now using van- pools for employees, i.e., certain employees drive colleagues to work in vans provided and maintained by their employers;

(d) some cities have used the techniquesof creating car-free zones, permitting only pedestrians,service trucks, and public transportvehicles to enter the zone. In the light of the adverse court action regarding the closure of Avenida Central, the legal implicationsof this type of measure in San Jose will need to be very carefully considered;

1/ San Jose Area TransportationStudy, Final TechnicalReport, Alan M. Voorhees and Associates,March 1976. ANNEX 8 Attachment 3 Page 2

(e) another measure to consider is the creation of an area licensing scheme, whereby entry to Central Area would require a relatively expensive license. This system requires carefuly control and enforcement but when applied to peak hours, in-bound traffic (as in Singapore) it is a very strong measure to be used when a high degree of discouragement is required, but does have the effect of dramatically reducing the use of low occupancy vehicles in a selected section of the metropolitan area. As part of the work of the Advisers under the Project, the methods and effects of this scheme will be carefully analyzed;

(f) the use of staggered work hours could be used to reduce peak hour travel. This would have the double impact of reducing car traffic and making the buses less crowded in the peak hour;

(g) since car-free zones or an area licensing scheme are likely to be too strong at present for San Jose, a CBD policy of more severe parking controls should be examined with a view to implementing them as quickly as possible:

- parking prohibitions at the curb, thus freeing a larger portion of the street for moving traffic in the peak and all day.

- an increase in parking meter rates to help discourage their use by long-term parkers.

- immediate action on the control of additional parking facilities, with a permit to be required for all off- street parking. This will have a particular effect on the use of vacant lots as interim parking areas.

- setting of a charge for off-street parking that dis- courages long-term parkers to induce workers to use public transport for all or part of their trips.

- cooperation with private enterprise in the provision of long-term parking outside the CBD, in close proximity to public transport routes.

- control on residential parking ín and near the CBD, by designating certain spaces for residential use only. This has the effect of reducing the inventory of available commercial spaces and also encourages the owner to leave his car at home where he has a space provided. ANNEX 8 Attachment 3 Page 3

The study team will have to coordinate their efforts in this area with the work to be done on the development of a parking policy for San Jose.

2. In summary, the existing controls on car ownership have the effect of keeping car ownership levels down, despite a rising economy in Costa Rica. In the program to be developed, on the basis of measures such as the ones described above, the usage of low occupancyvehicles particularlyfor trips to the CBD will also be controlled. ANNEX 9

COSTA RICA

SAN JOSE URBAN TRANSPORT PROJECT

Public Transport

1. This annex sets out the details of public transport operation in San Jose, the regulatory environment, and the actions that will be taken under the project to increase local planning and regulatory capacity.

A. Description of Public Transport Operations

2. Public transport operations in San Jose are predominantly bus operations. Taxis carry a very small percentage of total traffic and para- transit servíces do not exist. The industry is made up of about 240 private operators running about 500 buses to carry over 500,000 passengers daily (about 75% of all person trips). Ownership is highly fragmented: only half a dozen companies own more than ten buses, and well over a hundred own only one. The bus fleet is made up almost completely of standard size buses, generally a bus body on a truck chassis. About 25 different manufacturers are represented in the fleet, together with buses that defy indentification. Fifty-five percent of the fleet is less than 7 years old, 23% is 8-10 years old, and 22% is even older. In 1976, it was estimated that 43% of the fleet was in good condition, 39% was fair, and 18% was in bad condition.

3. This varied fleet operates over a route system that provides reasonably good service for the urban area. The newly urbanized areas are less- well served, as operators tend to wait for demand to build up before applying for new concessions or extensions to old ones. Nevertheless, most of the urbanized area is within 350 meters of a bus line. Most of the bus lines converge on the center of San Jose. This poses problems for crosstown trips, which amount to about half the trips entering the center. People making such trips not only have to transfer in the center, but also have to pay two fares. The Government is aware of the problem and recently gave out con- cessíons for three experimental crosstown routes.

4. Although the route coverage in San Jose is by and large adequate, some problems exist in regard to the reliability of the servíces. Service unreliability due to mechanical failure appears to be of relatively little importance since the small owner-operator has strong incentives to keep his bus in service and get out-of-service buses back into operation as quickly as possible. Nevertheless, should a breakdown occur, the small operator is unable to provide a spare bus and service is temporarily discontínued. Some service unreliability, and hence delay to passengers, comes from bunching. Given the competition on each route, buses have a tendency to ANNEX 9 Page 2

run in convoys, each trying to get to a given bus stop first. Not only does this lead to speeding and dangerous overtaking,it also is an incentive for buses to skip stops in an attempt to be first at a subsequent stop with more people. The major cause of delay to passengers,however, is inadequate capacity, leading to overcrowdingand passengers being left behind at stops. The Governnent is taking steps to expand the fleet, but wíth so many operators, it is a very large task to control the system and provide checks on operator performance--whetherheadways are being maintained,whether the operator is usíng the stipulated number of buses on his routes, etc. Steps should be taken to expand MOPT capacity, to monitor operations,and carry out effective surveillanceof operating standards.

5. Overall, it i clear that the burdens of administratíon--issuing concessions,studying routes, etc.--and of controlling service standardsare very heavy in such a competitive industry.

6. The basic principle underlying fare determinationin San Jose ls the cost of providing the service. The Government carries out studies of operating costs based on the financial statements submitted by operators. In fact, only about 35% of operators submit the required accounts, but thís constitutesenough information for fare determination. The fare studies estimate the average operating cost per passenger over several operators on a given line. To this is added a "fair" return of 25% - 18% to representa reasonable profit margin plus 7% to provide an incentive to operators to provide servíces.

7. The fare study carried out in 1976 showed that fares should be raised from ¢ 0.40 (¢ 0.50 for buses two years old or less) to ¢ 0.50 (« 0.60 for buses two years old or less). The fare increase was announced but public pressure forced the Government to revoke the increase. The Governnent has a history of finding it politically inexpedientto raise fares, wíth the results that (a) fares are low and (b) when they do increase they increase sharply which causes more political pressure. Fares were 20 centimos from 1960 to 1972. They were raised to 25 centimost in 1972, 35 centimos in 1974, and 40 centimos in 1975.

8. In spite of the fact that the Governmentbelieves fares to be too low, bus operations still appear to be highly profitable and concessions (even fractions of concessions)change hands for large sums of money. Very few operators have given up their franchises in recent years and those that have been quickly replaced by other operators willing and able to take over. However, there is some evidence--increasedovercrowding, poor maintenance standards, and an aging of the bus fleet--thatbus operator profits are being maintained at the expense of the quality of service offered to the travelling public. ANNEX 9 Page 3

B. Regulation of Public Transport Operators

Responsibilities

9. All publi.ctransport operations in Costa Rica are covered by the LEY REGULADORA DEL TRANSPORTE REMUNERADO DE PERSONAS EN VEHICULOS AUTOMOTORES (no. 3503; 2/2/68). Under this law, the state assumes the exclusive right to offer public transport services. This right can be exercised directly, through other state ínstitutions, or by giving concessions to private entre- preneursi- The Ministry of Public Works and Transport is completely responsible for all matters concerning public transport.

10. The specific executing body is the Comísion Technica de Transportes (CTT) made up of the Director of the Direccion General de Transporte Automotor (DGTA) as president, the Procurador Administrativo, and representatives of the Direccion General de Planíficacion, the Ministry of Economics, Industry, and Commerce, and the Direccion General de Transito. The Commision acts on recommendations from three units in the Ministry.

Departamento de Transporte Remunerado de Personas

11. This department in the Direccion General de Transporte Automotor acts as secretariat to the CTT and is responsible for making studies and recommendations to CTT on bus permits and concessions. Most concessions were renewed for seven years in 1976. However, it still inspects bus operations for standard of vehicles, adherence to schedules, and number of buses operating (the concession specifies the number of buses that should be used on a given line). It has 12 inspectors working in the San Jose area (plus 3 more for the rest of the country). If the inspectors find service or vehicle irregulari- ties, this department starts proceedings through the Commision. The department appears to be fairly active in this respect and most operators make the required improvements. In the last year or so, five operators lost their concessions as a result of these proceedings.

12. This department also has the responsíbility for studying new lines, the capacity on existing lines, and possible extensions, with a view to recommending the issue of bid requests for new concessions or modifications to existing ones. In fact, this cannot he done on a systematic basis due to a lack of staff and basic financial and operating data. In general, lines are only reviewed in response to requests or complaints from the public. The department also carries out passenger counts as a check on the data submitted by operators along with their financial statements.

Division de Transporte Publico

13. This division in the DGTA's Departamento de Ingeniera de Transito is responsible for public transport studies. They carry out continuing studies ANNEX 9 Page 4 of the number of buses, frequency, and capacity, as well as passenger volumes. They produce monthly estimates of bus passenger flows. They also claim to do special studies of new concessions,and extensionsin length or capacity of existing concessions.

14. While this division is concernedwith planning and the Departamento de Transporte Remuneradode Personas is concernedwith regulatory control, there is clearly an overlap of functions,although the respectiveheads do try to coordinateactivities.

Oficina Tarifaria

15. This office is located in the Direccion General de Planificacion. It acts in the name of the Direccion General de Transporte Automotor in receiving,filing, and analyzing the financial and statisticalreports and accounts that are required to be submitted by private operators. The accounts are used as a basis for fare studíes, which are carried out by the Oficina Tarifaria.

Government Policies

16. Current governmentpolicy is to favor private enterprisein the provision of public transport services. There is no sign that this policy will change. However, partly from a desire to help poor people and largely as a result of extremely strong political pressure, the governmenthas kept bus fares relativelylow. In the past, this inability to raise fares led the governmentto establish two types of subsidy. The first was for general distributionto operators on the basis of the number of passengers carríed more than 5.5 km (a total of 9 3 million (US$350,000)in 1976). More recently, the general subsidy was replaced by a subsidy program administered by TRANSMESA (see below). Government officials are aware of the fact that public transport subisidieshave a tendency to grow and becomiean onerous burden on the national budget, but they believe it will be difficult polití- cally to eliminate the subsidies in the short run (i.e., before the coming election).

TRANSMESA

17. TRANSMESA is a corporate state institutionand subsidiaryof CODESA, a similar autonomousGovernment corporation. It receives funds from the profíts of RECOPE (anotherCODESA subsidiary)on the sale of fuel. It was created in 1976 with the principal objective of modernizing and improvingpublic transport in the San Jose area. It is authorizedto indulge in a wide range of activities to meet this objective.

18. Buses. TRANSMESA sees as its first task the modernizationof the bus fleet which had become run down as a result of Government's inability ANNEX 9 Page 5 to raise fares, with the result that operators had neíther the capital nor the incentive to maintain, replace, or expand their fleets. TRANSMESA provides new buses at good prices by buying in substantial quantities and by taking advantage of supplíers' credits at favorable interest rates. Both the prices and the interest rates that can be obtained by TRANSMESA are far lower than those available to private operators. The total cost of a bus is about ¢ 225,000 which means ¢ 307,000 including interest charges over five years. However, at the time TRANSMESA was buying its first buses, the Government was making its unsuccessful attempt to raise bus fares and it was decided that the loss to the bus operators could be made up by a capital subsidy on the TRANSMESA buses. Given an average of 30,000 passengers per bus per month and a fare of 10í below the "proper" cost-based fare, it was estimated that the failure to increase fares cost the bus operator ¢ 3,000 per bus per month. Thus, TRANSMESA agreed to pay ¢ 3,000 toward the monthly repayments on the new buses it supplies. The subsidy ís paid out of TRANSMESA's budget, which comes from the profits made by RECOPE on the refining and sale of gasoline and diesel fuels. The result is a cross- subsidy from motor vehicle users to bus users. Assuming a bus life of 5.5 years (which also corresponds to the average term of suppliers' credit), the TRANSMESA subsidy is ¢ 200,000 per bus. This leaves ¢ 107,000 to be paid by the operators in 36 monthly installments (36 because TRANSMESA wants its money back during the most productive part of the bus's life).

19. The Government intends to raise bus fares early next year. When this happens and fares are properly related to costs, TRANSMESA will cease to pay the 0 3,000 subsidy. (This is written into the TRANSMESA/operator contracts.)

20. Thus, in the future, TRANSMESA will only pre-finance buses, taking advantage of its favorable bargaining position. It aims to moderníze the fleet by buying a total of 319 new buses. It will renovate 100 more and, together with about 75 that were new to start with (bought recently by private operators) this will give a modern fleet of about 500 buses. After that, TRANSMESA will buy only for replacement and for fleet expansion in response to demand increases.

21. Inspection and Maintenance. To ensure that the new vehicles will not deteriorate rapidly, TRANSMESA has a two-phase proposal for inspection and maintenance facilities. In the first phase, buses would have to be inspected regularly and operators would have to rectify faults before a vehicle could go back into service. The repairs would be carried out at private garages. In the second phase, a maintenance workshop and spares depot is proposed to do the repairs. TRANSMIESA is aware of the problems of obliging operators to use its facilities and is considering turning over the workshop, once it is established, to the operators through a joint ownersh'ip or cooperatíve arrangement. ANNEX 9 Page 6

22. Trolley Buses. The Government intends to conclude an agreement with the Russian Government for the supply of a trolley bus system to link Pavas with Central San Jose. The cost is about 0 38 million (O 55 million including local costs). TRANSMESA intends to pre-finance the system but operation would be given as a concession to a private operator. (It is likely that Fuerza y Luz would maintain the overhead network and the electrical substations.)

23. Mini-buses. TRANSMESA also intends to buy up to 150 mini-buses to be re-sold at cost to private operators. They would be used for express services from high income neighborhoodsin San Jose at a higher fare (perhaps ¢ 2). TRANSMESA is also interested in expanding this type of operation to other innovative types of public transport services, e.g., circumferential routes, articulated buses, smaller buses.

D. Public Transport Development Program

24. The physical environment for public transportwill be improved by the measures being taken under the project to widen radíals, install exclusive bus lanes, improve traffic signals, etc. The regulating and planning environmentwill be improved by the administrativecharges that will accompany the physical components,by technical assistance to the units to be created, and by agreements on the work program and policy orientation of these units.

Reorganizationwithin DGTA

25. The administrativereorganization recommended by the consultants (Wilbur Smith and Associates (USA)) are shown in Chart 17643. It involves combining the three scatteredDGTA units that deal with public transport into a new Departamentode Transporte Publico. The departmentwill contain four divisions with the following basic responsibilities.

26. Concessions and Permits. This division will carry out the functions of the current Departamento de Transporte Remunerado de Personas - issuing concessions,making recommendationson new concessionsand extensions, and continuing to act as the Secretariatto the Comision Technica de Transportes.

27. Bus Surveys and Inspection. This division will carry out surveys to determine (a) current service levels and (b) changes in demand. It will work with Concessionsand Permits to determine requirementsfor new services ANNEX 9 Page 7 and will recommend when action should be taken against delinquent operatíons. It will be equivalent to the current Division de Transporte Publíco in DGTA's Departamento de Ingenierea de Transito.

28. Financial Divísion. This division will carry out the functions of DGP's Oficina Tarifaria and will extend these functions to ensure that financial and operating reports are made available by more operators and that information is summarized, analyzed, and presented regularly to the department director. The division will also carry out regular fare studies.

29. Vehicle Service Standards and Inspections. This divisíon will establish bus service standards and devise an inspection program to check on a regular basis (at least quarterly) the fitness for service of all buses operating in San Jose. This division will act as GDTA's liaíson with TRANSMESA to establish the Bus Inspection Facility that will be set up by the Ministry under the project.

30. The department will also benefit from the Traffic and Transport Policy Study Unit that will be set up to advise the director of DGTA and from the expatriate advisors that will be provided under the project.

31. It is understood that the Government will provide adequate staff to enable the new department to perform its important functions, and especially to carry out the specific elements in its work program that are set out below.

Departmental Work Program

32. Several specific tasks should be carried out by the new department.

33. Determine Adeguacy of Bus Servíces. This involves two elements. The first is to exaine the extent to which current bus routes coincide with the origin-destination patterns of travellers, particularly with regard to cross-town trips and newly urbanized areas. The second is to examine, for each route, the relationship between bus capacity provided and demand, particularly with regard to the effect that inadequate capacity may have on headways, schedule adherence, and passenger delays. In addition, the suit- abílity of bus types used and the potential for different types of servíce - larger buses, smaller buses, express services, etc. - will be evaluated.

34. Review Fare Levels. This involves obtaining up-to-date fínancial statements from a reasonable sample of operators and carrying out a fare review to determine current operating costs and, on the basis of the "fair" return principle employed in Costa Rica, the appropriate level of fares.

35. Review Fare Structures. In addition to looking at the levels of fares, the department will examine their structure to determine whether the current (basically) flat fare should be retained. The study will take into ANNEX 9 Page 8 account the relationshipbetween distance travelled and operatingcosts, the number of people on each line travelling.differentdistances, as well as the benefits in accountingobtained from a simple system.

36. Review Procedure for Granting Concessions. The departmentwill review and evaluate the proceduresused for granting concessionswith particular respect to their efficiency, the time taken, and the degree of real competitionthat they stimulate.

37. Devise Specificationsand Establish Bus InspectionProgram. The departmentwill develop the specificationafor buses that operate in San Jose and devise an inspection program to ensure that buses meet appropriate operating standards.

38. Other Tasks. In addition, the Department will (a) review the financial statementsrequired from operators to ensure both that unnecessary data are not requestedand that good use is made of the data received; (b) examine the possibility of establishingan informationsystem to provide users with informationon routes and schedules; and (c) review the performance of the trolley bus system once it has been installed and is operating under normal conditions. Annex 10

COSTA RICA

SAN JOSE URBAN PROJECT

Economic Justification

Introduction

1. For each of seven major corridors leading into San Jose, economic analysis was used to fínd the particular road improvement, chosen from several alternatives, to be included within the project. Although previous transport studies had evaluated and apparently justified on cost-benefit grounds a beltway and a large number of new radial roads into San Jose, analysis revealed that most of the benefits alleged to flow from the new radials could be gained by much smaller expenditures on widening and rehabilitating existing highways.

2. The principles of the economic evaluation are presented in Section A. Then the following four sections correspond to the main steps in the procedure:

B. Forecast of traffic for each corridor and assignment of traffic to different road links for the years 1981 and 1990.

C. Determination of standard user costs for both vehicle operation and time at different speeds over different qualities of road.

D. Calculation of benefits for a particular alternative, determined by subtracting the projected user costs incurred on that alternative from the projected costs of confirmed use of the unimproved road.

E. Choosing the best of the proposed alternatives for each corridor. For some corridors, as many as three alternatives were evaluated, including construction of new radials within the corridor. Most alternatives had benefit-cost ratios of more than one and high internal rates of return. The best alternatives were determined on the basis of highest net present values. This test revealed that in comparison with the more modest alternatives, the marginal benefits of the more expensive alternatives were generally less than the additional costs.

3. In addition to carrying out economic analysis for road improvements, the signalization program was also evaluated in Section F. No attempt has been made to assess the training program, technical assistance, and the TOPICS Annex 10 Page 2 measures in terms of cost-benefitanalysis. This is in part because of the lack of a detailed data base (particularlyin the case of TOPICS), and partly because of the inherent difficultiesin measuring payoffs (particularlyin training and technical assistance).

A. Principles of Evaluation

(a) Benefits

4. One may convenientlyrepresent the measurement of benefits for a particular year (1990) in the form of Figure 1. The vertical axis represents the costs of a passenger car unit (pcu), while the horizontal axis represents the number of vehicle trips (pcus) for a 24-hour day. These measures are transformationsand simplificationsof the underlying quantities;the funda- mental demand is for a passenger trip of a specific length and at a particular time of day. However, for the purpose of presentation,the problems of modal choice and peaking are assumed to be constant and unalterable.

5. The two demand curves D and Dg represent the demands for the road services of the corridor in 1977 and Y990 respectively. These demand curves are drawn for a particular case - that is, where the 1990 demand curve intersects the cost curve of the improved road at a cost (C1) which is the same as the cost experiencedon the existing road in 1977. Thus it is supposed that the "improved road" is of a standard such that, with the demand of 1990, the cost conditions experiencedby traffic will be the same as they were in 1977. The rationale for this supposition,discussed in Section B, ís that the ETAMSJ study assumed constant cost conditions (at 1973, however) ín producing their forecasts and so T in Figure 1 represents the estimate of 1990 traffic on the assumption thai the particular improved road is then in situ.

6. The only evaluation which can be illustratedby the figure is whether the improved road is worthwhile compared with a do-nothing situation. In the latter case, costs, with 1990 demand, would have risen to C aandtraffic would have been constrained to T - both correspondingto the nters2ection E1. The measurement of the benefits for the year 1990 is approxímately: ANNEX 10 Page 3

FIGURE 1

Cost-flow on improved Cost-flow on road existing road

Generalizad Cost = C, ------

[Vehicle Operating \ Costi (#/pcu> C ______yI Plus time

*,1 1\~~~~~~~~~~~~

T, Te T, Vehicle trips (pcu per day)

Fig 1 = Cost and Fiow (when road ímprovement maintains same vehicle operating coat pluw time cost asin 19771 C, - Cost bofore (1977>and after (1990) improvement C. -Cost in 1990 without irnprovement (i.e., the conseauencesof a do--nothing alt.) if elasticity of dernand is zero

Ce2 Cost in 1990 without improvement but with demand curve D,e T,= 1977 traffic T2 Estimated traffic in 1990 if cost = C#

Worid Bank - 17709 Annex 10 Page 4

1/2 (Ce - C1) (T2 + Te) e2 e

This is a comparison of "with ímprovement"and "without improvement"and not before and after.

7. This consists of first the lower costs for existing traffic (i.e., traffic that would have used the highway in 1990 even though no improvements had been carried out which is representedby the value (E minus E multi- 1 ~~2 ) plied by the traffic volume The,and secondly the benefits caused by generated traffic whlch is shown by the triangle E1E2F - and is measured approximately by (E1 minus E2) multiplied by half the generated traffie T2 minus T . 1/

8. There is a general rule derived from this methodology: the higher the elasticity of demand the lower the benefits of improvement. The rationale for this seeminglyparadoxical proposition is that the higher the elasticity of demand the better the substitutesfor the corridor under consideration; and the closer the substitutesthe `less essential" is it that the corridor be improved.

9. Much depends on the appropriateassumptions about the remainder of the improvements. Since it was quite clear early in the analysis that virtually all the widening and rehabilitationwould pass the appropriatetests, the best assumptíonwas that alternativecorridors would be improved. How- ever, because of the independenceof the corrídors, this would add little to the substitutionpossibílities except in the long run. More sensitive effects might arise from the proposed beltway around San Jose. These are reviewed in Section B.

10. The problem of assigning an elasticityof demand to the corridors is of some importaneewhen the constant-costtraffle projection has to be converted to the new-road traffic projection in circumstanceswhere the new road reduces costs considerablybelow those which obtained in 1977. For the investmentsthat are included in the project, thís effect is likely to be important only in the case of the new Tibas radial. Also it is of some concern for the new roads that were examined and rejected for inclusion in the project - namely Hatillo and Desamparados.

1/ It is conceivable tbat a particular elasticíty may imply that the old facility could not conceivablyservice the traffíe. This will occur if the 1990 demand curve lies wholly to the ríght of the cost-flow curve on the old or existing road. Then one knows that the demand elastiíity must exceed the assumed value; and one can calculate the elastiícty that is implied by the old road carrying traffíe to capacíty (near G in Figure 1) and the associated speed and standard of service. Annex 10 Page 5

11. The circumstancesare illustrated in Figure 2. This is similar to Figure 1, except that the demand in 1990 does not intersect the new-road cost curve at a cost equal to that which obtained in 1977, i.e., C1. So much new capacity is created by the new constructionthat, at the forecast, constant- cost traffic (T 9) costs are well below C1. Consequently,traffic expands to T' and costs are C. 90 2 12. The appropriatemeasure for the benefits of the new road relative to a do-nothing alternativeis given by the formula:

1/2 (C - C-) (T + T- e ~2 e 90

If the forecast constant-costtrafic (T 9) be substituted for T' , the benefits will be underestimatedby the value measured by the triangte HFF'. ANNEX 10 Page 6

FIGURE 2

Old Road Cost-Flow

------e -~~~~~------New

Cost-Flow Gen. Cost / [voc plus time costs] per pcu _

e~ I 11

1 3~~~-1 --- Vehicle trips pcu per day T,7 T, T,o Tso

Fig 2 Cost and Flow (when new road reducesgeneralized cost to C, below 1977 levei C,) C, = Cost in 1977

C, = Cost in 1990 without new road with T;0 traffic C; = Cost in 1990 with new roed and with T;. traffic

CO 5 Cost in 1990 with traffic Toimplied by D09

T;0= Traffic in 1990 on new-road-cost assumption

World Bank - 17710 Annex 10 Page 7

13. The substantive question remains: how can an unknown, but non- trivial, elasticity of demand be reflected in the evaluation? There are obviously advantages in dealing with this problem if one can use a mean of the "with" and "without" traffic flows in 1990 as the appropriate traffic measure to include in the evaluation (as in the formulae above). With the fírst-run evaluation of the alternatives, it was supposed that, if the particular improvement had not been carried out, and so if costs had risen above the "constant" level, the absolute traffic increase from 1977 would be only 75% of the "constant-cost" estimate. (Cet par, this allowed for a higher elastí- city, the greater the growth of traffíe.) This arbitrary adjustment did not affect the ranking of the alternative programs in each corridor but modified somewhat all NPVs. The selected project, however, was still appropriate on these slightly lower NPVs. However, this adjustment was not further pursued, partly because of the arbitrary nature of the implied elasticities and partly because it lacked transparency.

14. One alternative way of reflecting the elasticity is to choose a single value for traffic in 1990 which, for the supposed cost conditions (either econstant-cost" or the reduced costs of the new radials), is at the lower end of the expected outcome. This then gives an adjustment in the right direction - whether it will be too much or too little remains unknown. A further consideration relates also to the assumptions in calculating the costs; as will be shown, it has been supposed, and it is believed realistically, that apeeds would not continue to fall on the existing "without" highway. They fall only to a limit of 10 kph. Thus the rise in costs would not follow the typical fluid-dynamic analogue of congestion effects; it would reflect the smoothing of traffic over the day and the discouragement of some journeys so that the speeds do not fall (and costs rise) to the extent that a simple application of flow would prediet.

(b) Discounting and the Alternatives - NPV, B/C, and ERR

15. The benefits and costs were calculated for each year, then were discounted, using the rate of 12% as the test rate of discount, to find the net present value (NPV) of benefits minus costs in 1977 constant colones. This measures in money terms the net gain from carrying through the investment compared with doing nothing.

16. Although previous "comprehensi;o transport studies" had evaluated and apparently justified on cost-benefit grounds a large number of new radial roads as well as a beltway into San Jose, 1j it was clear to the pre-appraisal and confUrmed by the appraisal mission that much of the benefits alleged to flow from the new radíals could be gained by much smaller expenditures on widening and rehabilitating existing highways. Thus the evaluation was constructed so that it explored the net benefits (NPV) from more modest improvements of widening and rehabilitation whíle, at the same time, testing the

1/ See ETAMSJ Final Report, Table VIII-4 (1976). Annex 10 Page 8 additionalnet benefits (NPV) of those new radials which clearly ranked highest in the existing assessmentsof public officials and engineers. The basic approach was therefore first to find what net benefits could be obtained by rehabilitationand widening in each of the corridors. Then, secondly, the evaluation examined what additional (or marginal) net present value could be adduced from building a new radial.

17. When compared with a do-nothing alternative,the fact that a new radial will pass with a handsome margin the cost-benefitratio, the ERR or indeed the positive NPV criterion does not imply that such investmentsare worthwhile. It means only that constructingthe new radial is better than doing nothing. To show that a new highway is better than merely widening or rehabilitatingthe existing roads one must show that, compared with widening or rehabilítation,the new radial will produce additional benefits in excess of the additional costs. Although the chosen investmentwill have a benefit-costratio greater than unity and an ERR which exceeds the test rate of discount, the B/C ratio and the ERR on the selected investment are not necessarily higher than those on the rejected alternatives. Maximization of the net present value is a sufficient condition for the best choice of project whereas the B/C and ERR tell us only the necessary condition that the projects should be consideredas better than a do-nothing. 1/

B. Traffic Forecasts

The Main Assumptions

18. The basic assumptionswhich underpin the traffic forecasts are as follows:

(1) The forecasts suppose that traffic in 1990 will enjoy the same cost conditions as those experiencedin 1977 - this is the "constant cost` assumption discussed above. This may be taken to imply (but need not necessarilyimply) that, on the one hand, for a given speed the real costs on one kilometer of travel remain the same, and, on the other hand, that, hypothetically,such road improvementsare made that the speed of travel is about the same in 1990 as in 1977. Thus the forecasts reflect the effects of population and income growth and the shift of tastes toward travel; they do not reflect the relative change in the real cost of travel.

1/ All this is consistentwith the recommendationsin CPN Investment Criteria in the Economic Analysis of Projects (June 29, 1977) Annex 10 Page 9

(2) The forecasts assume that there is so little dependence between the corridors that one can effectively treat them independently. Similarly it is assumed that the proposed ríngway, which is unlikely to be in operation before 1990, will have little effect on the forecasts for the radíals.

The Process of Estimation

19. Vehicle traffic volume for the design year 1990 was developed in 'the ETAMSJ study on the basis of 1973 traffic counts, trip rates and planning projections. The total number of vehicle movements was assigned to two different road networks:

(1) Assuming that all proposed new roads will have been built by 1990. This is referred to as the "with project" assumption.

(2) Assuming that no new roads will have been built by 1990, and that all of the future year traffic will move over the existing road system. This is referred to as the "without project" assumption.

20. Traffíc assignments were made for each assumed network on a link- by-link basis. It was pointed out in ETAMSJ reports 1/ that the traffic assignment model used for projectíng 1990 traffic volumes was based on an "all or nothing" algorithm which does not realistically reflect the actual distribution of traffíc over the old and new elements of the road system or over alternative routes. Therefore, ETAMSJ made a manual adjustment of the traffíc volumes on a corridor basis to reflect more accurately "real life" conditions. Thís adjustment related the model output more closely to the 1973 traffic counts and corrected the distributionof traffic among the various elements of the road system. This manual adjustment was done for both assignments,with or without new roads. But this was carried out for corridors and not for links. Thus four sets of forecastswere available from ETAMSJ, viz:

1. Assuming all planned new roads are built by 1990

a) All-or-nothingassignment

b) Manual adjustment of assignment to whole road system.

1/ ETAMSJ Working Paper No. 22, pages 24-28 (1973). Annex 10 Page 10

2. Assuming no new roads are built by 1990

a) All-or-nothingassignment

b) Manual adjustment of assignment to whole road system.

21. While the manually adjusted figures are not avallable on a segment or link-by-linkbasis, these can be computed readily from the adjustment factors for the corridor for each of the three major categoríes of vehicles - passenger car, truck, and bus.

22. First, there appeared little question that the manually adjusted assignnent was more realistic than the more drastic simplifications of the all-or-nothing method. Second, the "no new roads" seems the best assumption to adopt. Many projects which seemed imminent or likely in 1973 now appear as not worthwhile or long postponable.

23. Probably the most difficultpresumption to pin down is that per- taining to the proposed beltway. While it is undoubtedly true that the complete beltway - or even significantquadrants of it - would have a considerable effect on traffic generally, it is not clear whether it would result in any large change in the use of the roads to be included in the project. There would be two effects: first there would be a response in the form of more travel - including increased number and perhaps longer trips (with probably some effects on auto ownershíp).This is the response of road users to the existence of a larger amount of road space, thus one should expect an increase in the quantity of traffic generally. Secondly, there will be some diversions of route caused by the presence of the beltway. These two effects would to some extent offset one another. The beltway will increase traffic generally, but will also divert some travel from radials.

24. This offsetting effect is one reason for supposing that the evaluation of the radials will be robust with respect to the beltway. But there are two other reasons. First, the ETAMSJ Final Technical Report (Table VII - 4) shows that both the Hatillo Radial and DesamparadosRadial had benefits which were affected only by about 3% by the inclusion of all other projects - by far the largest of which was the beltway. Secondly, it appears that the costs of the beltway are considerably more than those estimated in ETAMSJ and that the project ís likely to be redesigned. This suggests that a beltway project will slip back into the 1990's and so have a very limited effect on the assessments.

Cost and Traffic Projections

25. It is important to be precise about the assumptionsunderlying these forecast traffic volumes. Chapters II and III of ETAMSJ Final Tech- nical Report describe the basis of the "operationalforecasts` in Chapter VI. These forecasts predicted the implicationsof expected changes in incomes, population,car ownership for the given conditions of travel. Essen- tially, ETAMSJ assumes that the conditions of travel - in terms of money Annex 10 Page 11 price and time and conditions of conform, etc. - remain the same as they were in 1973. This amounts to a constant "price" or "generalizedcost" assumption. Thus the predictions assume that, hypothetically,sufficíent new road capacity is built such that travel conditions remain the same as they were in 1973.

26. This methodologyassumes that there is no "feedback" on car ownership and size of the city. Clearly these will themselvesdepend on the travel conditions in the city. However, this assumptioni8, in principle, tenable provided that the particular levels of car ownership, city size, and other geo-social characteristicsare clearly understood to relate to one and only generalizedcost. If new roads are not built, the city will not expand at the same rate, or, if so many improvementsare made that the conditions of travel ameliorate considerably,then the city may expand even more rapidly and car ownershipmay increase at a greater rate than predicted.

27. To obtain a single figure for "volume," ETAMSJ calculated for the road the weighted average from the individual links. Although the road projects are all.short - averaging 4 km for the new radíals and 2-1/2 km for the old radials to be upgraded - traffic volumes vary considerably along different segments or "links" of the roadway. For analysis, therefore, it vas desirable to divide each road segment ¡ato "links" based on traffic volume changes and roadway design. While link-by-link volumes vere available only for the all-or-nothingassignment, the ETAMSJ manual adjustment factors for the entire road length can be applied to individual link sections.

28. Having selected the manually adjusted "no new roads` projections as the most desírable for economic evaluation, further analysis of each project was performed by comparing the ETAMSJ 1990 projected volume with long-term trends from 1967 to 1977, and extending these to 1990. The following year-by-year, 24-hour vehicle volume counts were used for this purpose:

(1) Basic Studies Division of DCP counts for the years 1967-72 and 1974-75;

(2) counts made for ETAMSJ for 1973; and

(3) counts made by Public Transport Division of DGTA in cooperationvith consultants for March 1977.

In general, these counts, except for 1973 ín some instances, appear to be consistent and to afford a sound basis for projection testing. In most cases the resulting trend líne is consistent within acceptable limits, índicating that the 1990 manually adjusted "no new roads" projections may be accepted as reasonable and realistic. But in some cases further review was necessary. In particular the projections were checked by examining the Evaluacion del Censo de 1973 y Proyeccion de la Poblacion por Sexo y Grupos de Edades 1950- 2000, published by the Director-Generalof the Census (June 1976). Annex 10 Page 12

29. In the Uruca and San Sebastian corridors,projected 1990 volumes were found to be substantiallylower than trend projectionsand growth estimates in populationand business activity. Further investigationshowed that in these corridors volumes for the inner segments closer to the central city area were significantlysmaller than in the next segment or link. These next segment volumes were plotted and found to be consistent with the trends projected in 1990.

30. In the Hatillo corridor there was clearly a divergencebetween trend projection on the one hand and the ETAMSJ-adjustedfigures and the estimates of the planned increase in population on the other. The main features of Ratillo are that, although there has occurred a very rapid increase in population up to the early 1970's (about 9%), the rate of growth is predicted to slow down substantiallyto about 3% from 1973 through 2000. In the central forecast, therefore,a figure of 6% for the growth of traffic from 1977 to 1990 was thought te be appropriate. Rowever, a further sensitivity test took into account a nearly 9% growth rate in order to explore the robustnessof the conclusions.

31. Perhaps the most difficult corridor to forecast is that of Tibas. One would expect that there would be an initial surge in traffic as the Fourth Highway Project is completed and that this would taper off to a lower, but still relativelyhigh, rate of growth. Trend extrapolation (which gives a rate of increase 1977-90 of 3.7%) would hardly show this pattern and, in fact, historical data largely reflect the constrictedconditions of the existing route number 5. It is clear that the new SiquirresHighway and Tibas Radial will "pull out" developmentand generate traffic along its length. Taking into account the traffic from the SiquirresHighway, it has been estimated that an 8% growth over the whole period is the best estimate for evaluation. But in view of the elasticityargument, the value of the "best" estimate has been put at 6%. In order to test sensitivity,the trend projectionrate of 3.7% has also been employed. Since a very rapid increase will occur in the early years, the assumption of a smooth trend rate of growth somewhat underestimatesthe benefits of the new radial and may give a conservativetwist to the test.

32. All of the other adjusted ETAMSJ projections,on the "no new roads" basis, appeared to be consistentwith planning projections and not markedly discreditedby trend projections;thus they were adopted in the evaluation calculations.

33. The year 1981 is assumed to be the first year of completion of each of the road projects. Traffic volumes for this year were interpolatedby moving back from the 1990 estimates at the compound rate of traffic growth for that corridor. The proportionatecomposition of the vehicle fleet (cars, trucks, buses) for 1990 was taken to be constant throughout the period of benefits. Annex 10 Page 13

C. Highway User Costs

Vehicle Operating Costs

34. In 1976, MOPT prepared a study of vehicle operating costs (VOC) on level, tangent roads for five typical classes of vehicles: automobile, pickup trucks, bus, truck, and a tractor-trailer combínation. Included in the calculations were the costs - both economic and financial - of tires, oil, and fuel, maintenance and depreciation. The results were then compared to a similar study completed at the same time, the Estudio Centro Americano de Trans- port. After differences in the calculations of tire wear and maintenance were reconciled, the two sets of figures were virtually the same.

35. In late 1974, the Louis Berger firm carried out tests in Panama to find the variation of vehicle operating costs wíth overall travel speed. The financial costs for Costa Rica - approximately three years after the Panama costs were developed - are about 20% to 30% higher than the corresponding Panama costs at comparable speeds, while the economic costs in Costa Rica are 0.74 to 0.78 times the corresponding Panama financial costs. These relationships were used to find cost curves for Costa Rica. And 1.28 was selected as the appropríate Panama/Costa Rica financial cost adjustment factor; 0.75 was used for economic costs. The equation of cost on travel time can be rewritten ín a more convenient form as a speed cost relationship illustrated in Table 1:

Table 1: SPEED-COST EQUATIONS - COSTA RICA Cost (1) per 1,000 Kilometers

Typical Vehicle Economic Cost Financial Cost

(= y = colones/1,000 kilometers)

Auto 425 + (7,310)/x 725 + (12,480)/x Píck-up 509 + (7,960)/x 646 + (19,110)/x Truck 1,426 + (16,630)/x 1,522 + (17,740)/x Bus 1,657 + (19,320)/x 1,807 + (21,070)/x Heavy truck 2,408 + (32,650)/x 2,580 + (34,980)/x

Notes: x is the overall travel speed in kilometers per hour.

1 colon = 11.63 US cents. Annex 10 Page 14

36. The costs apply to a vehicle travelling at a constant speed. However, the project is in an urban area, with vehicles frequently stopping, starting and changing speeds. It was necessary, then, to adjust driving costs from a constant speed condition to the slow-stop-goof driving on the congested roada of San Jose. As shown in the following table, the influence of congestion increases dramaticallyat lower speeds.

Table 2: IDEAL AND CONGESTION COSTS AT SELECTED SPEEDS Automobile Financial Costs

Speed KPH Speed-OperatingCosts Constant With Congestion Factor (Colonesper 1,000 kilometers)

10 945 1,973 20 819 1,349 30 715 1,141 40 634 1,037 50 575 975 60 539 933 70 525 903 80 533 881 90 564 864 100 617 850 110 692 839 120 790 829

Source: Louis Berger

Time Costs

37. The imputation of money values to savings in time raises more issues than can be resolved in this Annex. One is aware that however persuasive the argument for counting time as money, there is a marked reluctance to write in the benefits of time-savingon a dollar-for-dollarbasis comparable to the value of other "real" resources saved. This reluctance stems from (a) the fact that time saved may not be used for any useful or "productive"purpose; and (b) the time saved may be only a few minutes (this is typicallythe case for the relatively short lengths of trips in San Jose) and may be little valued by the traveller. It is difficult to ignore, therefore, the view that money imputationsof time-savingsare different from money valuations of resource-savings. Thus, throughout the analysis these two valuations have been kept separate.

38. In reviewing the evaluation it ís assumed that a particularproject component is clearly justified if it passes the appropriatetests of justification without taking time-savingsinto account. If, however, it is only by adding a value for tíme-savingsthat an investmentis justified, then one must be less certain of its desirability. Annex 10 Page 15

39. Based on 1973 census data, and adjusted for inflation, the average wage rate for the metropolitanarea in 1976 was determined to be ¢7.00 per hour. Bus drivers' wages were computed at 06.00 per hour; truck drivers' at ¢4.90.

40. Table 3 shows the time value of the driver and passengers for each of the typical vehicles. (The value of 1.36 occupants per automobile is an average of all automobile trips in the metropolitanarea; school trips, for example, show higher vehicle occupancy.) In general, passenger time is valued at 25% of the wage, giving ¢1.75 per hour.

Table 3: TIME VALUE OF VEHICLE OCCUPANTS (Colonesper hour)

Driver No. of Value of Passengers' Vehicle Wage/Value Passengers Time (¢) Total

Auto «3.50(A) 0.36 0.63 ¢4.13 Pick-up «4.90 0.50 0.88 ¢5.78 Camion ¢4.90 0.50 0.88 «5.78 Bus «6.00 50.00(B) 87.50 «93.50 T2-S2 «5.90 0.50 0.88 «6.78

Notes: (A) Auto driver's time at 50% of Study Area Average hourly wage.

(B) Based on traffic survey results (Wilbur Smith & Associates), April 1977.

41. These averages have been used for all purposes and have been assumed constant over the life of the project. This assumption does not reflect the rise in the real wage per hour of Costa Rican workers which might be expected over future years. This imparts some downward blas to the evaluation of time savings.

Time Values at Different Speeds

42. The following table converts the time values developed into time costs at different speeds. Anuex 10 Page 16

Table 4: TIME VALUES- TYPICAL VEHICLES AT DIFFERENT SPEEDS

Speed KPH Time Values Pick-ups Autos Camions Buses T2-S2 (Colonesper kilometer)

5 0.83 1.16 18.70 1.36 10 0.41 0.58 9.35 0.68 15 0.28 0.39 6.23 0.45 20 0.21 0.29 4.68 0.34 25 0.17 0.23 3.74 0.27 30 0.14 0.19 3.12 0.23 35 0.12 0.17 2.67 0.19 40 0.10 0.14 2.34 0.17 45 0.09 0.13 2.08 0.15 50 0.08 0.12 1.87 0.14 55 0.08 0.11 1.70 0.12 60 0.07 0.10 1.56 0.11 65 0.06 0.09 1.44 0.10 70 0.06 0.08 1.34 0.10 75 0.06 0.08 1.25 0.09 80 0.05 0.07 1.17 0.08 85 0.05 0.07 1.10 0.08 90 0.05 0.06 1.04 0.08

D. Calculationof Benefits

43. The ETAMSJ study had estimated existing road capacities for each radial link by link, based on a "D" service level as described in the U.S. Highway Capacity Manual. Road capacities in 1990 were derived from the observation that rehabilitationof an existing two-lane road would increase capacity by an average of 20% and adding two lanes would approxímatelydouble Annex 10 Page 17

the two-lane capacity. Ratios of volume over capacity were then calculated for all alternatives in each corridor for the years 1981 and 1990 and also for the base case, the unimproved situation, for the same years.

44. Based on work ín other cities in developíng countries (Kuala Lumpur and Guatemala City), Wilber Smith & Associates had developed a chart relating volume of traffic to capacity-of-road (V/C) ratios to average traffic speeds. Separate curves were calculated for highways with and without limited access. These gave increases in speeds, on the average, of 10 km/hr due to limited access. Regardless of the magnitude of the V/C ratio, it was assumed that speeds of PCU's would not drop below 10 kph. 1/ Thus an average speed could be found for every V/C ratio.

45. Of the five vehicle types for which VOC and time costs had been developed, three were used in the economic evaluation: autos, buses, and trucks. The costs incurred by each of these vehicles were brought together in one weighted average cost for a passenger car unit (PCU), based on a city- wide average traffic composition figures of 49% autos, 29.5% trucks, and 21.5% buses. 2/ Weighting costs separately for each corridor, based on that corridor's estímated traffic composition, would have provided greater accur- acy. Variations of the composition were calculated as part of the sensitivity testing and ín order to attribute the benefits of the project.

46. An average congestion factor was then added and, in addition, higher VOC's were also calculated for a "poor road" case. It was assumed that the exísting roads would be of poor quality for the 1981-2000 period, while the improved road would be of good quality and remain so due to the projected program of expanded maintenance.

1/ This assumption may be interpreted to mean that as congestion becomes severe there are shifts in journeys in time so that, up to some un- specified limit, more traffic can be accommodated at less desired times.

2/ These are percentages in PCU's as given in the following example for buses:

Bus trips x 3.0 (Car trips x 1) + (Truck trips x 1.6) + (Bus trips x 3.0)

In calculating costs, however, it was necessary to derive the actual number of trips per PCU for each vehicle, calculated as follows:

Bus trips (Car trips x 1) + (Truck trips x 1.6) + (Bus trips x 3.0)

Total costs for a given speed were then given by the equations (.49 x car costs) + (.84 x truck costs) + (.072 x bus costs). Buses were assumed to be travelling only 3/5 of auto and truck speed. Annex 10 Page 18

47. Finally, a total time cost for a PCU was calculated, on the same basis as VOC costs, using the fraction given by the number of trips for each vehicle type per PCU. At low speeds, the cost of time rises rapidly. Table 5 presents the final cost calculation,as developed by Wilbur Smith & Associates.

48. For a given alternative,benefits were calculated as follows:

(a) V/C ratios for each link were computed for both 1981 and 1990.

(b) VOC and time costs for each link were then determined from the V/C speed graph and speed-costchart.

(c) Costs - in colones/km/PCU¡day - for each link were then aggregatedto give a total cost per day for the specified alternative,in both 1981 and 1990. VOC and VOC plus time calculationswere calculated separately.

(d) The costs for both years were subtractedfrom the higher costs derived for the unimproved base case. The difference,providing the basic figure of benefits, was then multiplied by 287 to yield the benefits for the entire year. Maintenance costs derived for that particular alternativewere then subtracted. Benefits for the interveningyears, 1982-1989,were assumed to be in accordancewith the compound rate of growth of benefits between 1981 and 1990. Bene- fits between 1991 and 2000 were assumed to be constant at the 1990 figure.

(e) In computing capital costs, it was assumed all right- of-way acquisitionwould be completed in 1978, with 20% of the constructionbeing completed in the same year, and 40% in each of the years 1979 and 1980.

(f) Throughout the calculations,the discount rate was taken as 12%. Annex 10 Page 19

Table 5: COSTS FOR TRAFFIC (PCU's)- 1977

Total Cost Total Cost Time/km VOC/km VOC/km (PCU/000) (PCU/OOO) (PCU/000) (PCU/000) (PCU/000)

Surface G Surface P Surface G Surface P Surface G kph Congestion Congestion No Congestion Congestíon Congestion

70 906.99 1,062.64 193 429.39 869.64 713.99 930.79 1,081.34 207 425.99 874.34 723.79 60 960.19 1,105.76 225 426.10 880.76 735.19 993.84 1,133.87 245 429.73 888.87 748.84 50 1,030.80 1,170.17 270 436.74 900.17 764.80 1,082.15 1,211.37 299 447.41 912.37 783.15 40 1,146.81 1,269.90 337 461.44 932.90 809.81 1,226.68 1,344.52 385 479.01 959.52 841.68 30 1,334.10 1,446.51 449 500.06 997.51 885.10 1,481.96 1,589.46 539 524.52 1,050.46 942.96 20 1,709.61 1,814.31 673 552.63 1,141.31 1,036.61 2,517.07 2,656.57 895 584.11 1,761.57 1,622.07 10 3,250.79 3,387.86 1,347 619.10 2,040.86 1,903.77 5,004.07 4,879.50 2,694 654.37 2,310.07 2,185.50

NOTE: PCU Traffic Composition

Auto - 49Z Bus - 21.5% Truck - 29.5%

E. The Alternativesin San Jose and the Selection of the Project

49. The original conceptionof the project, as set out in the terms of referencewhich the government contracted with Wilbur Smith in 1976, was largely to build three new radials - Tibas, Hatillo-Alajuelita,and Desampar- ados. A preliminary examinationof the evidence, however, suggested that widening or rehabilitation,including removal of bottlenecks,on the existing highways may well bring in much of the benefits at a small fraction of the costs. Similarly,when considering the proposed widening, the evaluation examined also the low-investmentalternatives such as removing bottlenecks and rehabilitationof the existing highway. The options considered in addition to the "do-nothing"case for each corridor are as follows: Annex 10 Page 20

Tibas IA New four-lane highway IB Rehabílitationof existing route 5

Guadalupe Rehabilitateexisting highway Widen existing highway to four lanes throughoutwhole length

San Pedro Widen existing highway to four lanes throughoutwhole length

Desamparados Widen existing highway to four lanes throughout whole length New (short) road plus widening existing highway New (long) road plus widening existing highway

San Sebastian Rehabilitateexisting road Widen to four lanes throughoutwhole length

Hatillo Rehabilitateexisting Alajuelita highway New (westerly)alternative road plus rehabilitationof Alajuelita New (easterly)alternative road plus rehabilitationof Alajuelita

Uruca Rehabilitateexisting highway Widen to four lanes throughoutwhole length

Avenida 2 Widen 1 kilometer to eliminate a bottleneck

The reasons for the most important choices are reviewed below.

50. Tibas. The new four-lane highway has an alignment largely determined by the Fourth Highway Project road from Siquirreswhich ends a few meters north of route 102. Various alternativeswere considered and rejected. First, an examinationwas made of possible alternativealignments; but the crossíng of the Virilla River and the corridor at Tournon limit considerably the choice of alternatives,and it seemed very likely that the planned alignment was among the best. The second was to widen the existing route 5 and put a spur to join the SequirresHighway. Calculationsof the cost of acquiring the right-of-wayon route 5 suggested that the land costs alone would be in the region of 25-30 million colones and that there would be very great disturbance for a large number of frontagers. The third rejected alternative was to construct a two-lane highway as the first stage of the expansion to a four-lane road. The cost savings would have been small (circa 10%), however, largely because the expensive land would still be required. The only alternative which was thought feasible and desirablewas to review the intersections to see whether it was possible to reduce the expenditureon them. This issue is to be reviewed.

51. Desamparados. MOPT engineers and planners agreed that widening the existing highway was feasible and not expensive. This widening was desirablewhether or not a new highway is built. Two alternativenew highways were selected: the short (2.96 km) and the long (5.62 km) - they are illustratedin Map 12935, and an estimate of the costs (without contingencies) Annex 10 Page 21 is shown in Table 6 . In fact the authorities, at the instigation of previous consultants' reports, had originally considered a four-lane highway as appropriate. A review of the evidence, however, suggested that such an alternative was not worth further consideration. In this corridor the widening of the existing highway was always considered as a necessary element in the package, including a new road. Such a combination clearly dominated any list of investments including a new road without widening the existing highway. The test was first to see whether widening was worthwhile, and secondly to see whether a new road should be buílt by 1980/81 or delayed for some years.

Table 6:

ESTIMATED FINANCIAL COSTS (millions of 1977 Colones)

Length (km) Construction Right-of-Way

New Desamparados (Short) 2.96 9.73 6.23 New Desamparados (Long) 5.62 16.26 13.32

New Hatillo (Westerly) 2.54 31.80 0.58 New Hatillo (Easterly) 3.66 19.22 2.52

52. Hatíllo-Alajuelita. The discussíon of Desamparados applies broadly to the Hatillo-Alajuelita corridor also. The existing road to Alajuelita, however, is only to be rehabilitated and not widened. The alternative of wídening the road was rejected on the grounds that very considerable acquisition and destruction of buildings would be necessary - involving not merely a large financial cost (circa 025-50 million), but also causing considerable movement of families. Nevertheless, the rehabilítation of the existing Ala- juelita Highway is so obviously right that it has been included as a necessary element in the packages with new Hatíllo radials. Two new Hatillo radials were considered - a westerly route and a (forked) easterly route. The westerly route clearly dominated the eastern alternative, but the consultants (WSA) were instructed not to consider the westerly route since it would be considered politically unacceptable. However, changes in Costa Rica may eventually eliminate such objections, so the route was retained in the analysis. The costs of the new roads are shown in Table 7 . Another possibility of access in the Hatillo-Alajuelita corridor is the bridge, recently constructed by the municipality, feeding in Calle Moreno to the west of the new Hatillo radials. The upgradíng of this access was planned by the government and taken into the assessment.

The Results

53. The net present value of the alternatives, when compared with the do-nothing case, are presented in Table . These NPVs correspond to the "best" estimate of traffic and are calculated usíng a discount rate in real terms of 12%. The NPVs are shown using first only operating cost reductions as benefits, and secondly as operating cost savings and the value of savings in time. Annex 10 Table 7

Net Present Value 1/ (millionsof 1977 colones)

VEHICLE OPERATING VEHICLE OPERATING INVESTMENT COSTS ONLY COSTS PLUS TIME

Tibas 78 192

Guadalupe

Rehabilitation 18 26 Widening 17 33

San Pedro 106 248

Desamparados

Widening 105 176 New Short & W. 89 172 New Long & W. 79 167

San Sebastian

Rehabilitation 56 98 Widening 66 132

Hatillo

Rehabilitation 10 15 New Westerly & R - 16 - 5 New Easterly & R - 14 - 5

Uruca

Rehabilitation 46 82 Widening 95 191

Av. Segunda 17 37

1/ vs. do-nothing alternativeusing 12% discount rate. Annex 10 Page 22

54. A negative NPV implies that is i better to do nothing. But posí- tive NPV means only that that investmentis better than doing nothing; atill it does not follow that it is best and is desirable. The best investment in each corridor can be obtained by choosing the alternativethat maximizes the NPV. As set out in draft CPN (6/29/77) the maximizing of NPV is the only appropriatemethod of selectionwhich is valid under all circumstances.

55. Using this criterion and applying it both to VOC and VOC + T figures, one obtains, with one equivocal exception, the elements of the civíl works in the project. The exception is the widening of Guadalupe. Consider- ing the benefits measured in terms of VOC alone, one would choose merely to rehabilitaterather than widen Guadalupe. But the difference between the two figures is small (about ¢1.7 million) and if one considersVOC + T benefits, then the choice is powerfullyreversed with an excess NPV for widening of about 07 million. Thus the Guadalupewidening has been judged the best of the three alternativesand has been included in the project.

56. The difference between the chosen maximum NPV and the second best NPV is usually large and provides substantial evidence that the best alternative has been included in the project. This ís clearly the case for the rehabilitationand widening. More questions, however, may be levelled at the new radíals - and particularlyat the rejected new Desamparadosand Hatillo highways.

57. The long Desamparados ís clearly inferior to the short new radial, so the judgment may be restricted to the latter. On VOC alone the widening dominates the new radial by some 014 million of NPV, but when time is included, the dominance falls to 03.2 million of NPV. Thís evidence suggests that the new radials should not be built by 1980, and the indicationsare that a date in the mid-1980s would be near the appropriate time. However, no detailed study of the best tíming of new Desamparadoscapacity has been carried out. This issue should be analyzed further in 1980 to 1982 when new data on traffle and developmentwíll be available. It ís sufficient for present purposes to widen the existing radial.

58. For the Hatillo new radials, the issue looks much more clearly demarcated. All the NPVs for both the easterly and the preferred westerly routes are negative. Only rehabilitationis called for in the present program. However, as in the case of Desamparados,it would be wise to reopen the question of a new radial, by which time one may presume that the preferred westerly route may be no longer unacceptable,in 1980-81.

59. The main issue in the Hatillo corridor was the rate of growth of traffic. Since the capacity of the Hatillo corridor will only be increased by a relativelysmall amount by the project investments (and the improvements to Calle Morino), the effect of variations in traffic forecasts are considerable. The best forecast used in thís assessment is that of a 6% growth; and, as argued above, in view of the planners' projections of a 3.1% increase in population from 1973 to 2000, this appears to be on the high side, Annex 10 Table 8

Traffic Forecasts and NPV for Tibas and Hatillo-Alejuelita

(NPV in millions of 1977 colones)

VEHICLE OPERATING VEHICLE OPERATING COMPONENT TRAFFIC GROWTH COSTS ONLY COSTS PLUS TIME

Tibas Low (3.7%) - 6 44 Best (6.0%) 78 192 High (8.0%) 113 260

Hatillo - Alejuelita

Rehabilitation Low (4.0%) 6 10 Best (6.0%) 10 15 High (8.6%) 25 39

New Westerly & R Low (4.0%) - 20 - 13 Best (6.0%) - 16 - 9 Hígh (8.6%) 12 40

New Easterly & R Low (4.0%) - 17 - 12 Best (6.0%) - 14 - 5 High (8.6%) 11 36 Annex 10 Page 23 if anything. Nevertheless,there was a strong belief among government officials, probably generated by the very rapid (over 9%) expansion of population in Hatillo in the period 1960-72, that a new highway opening in 1980/81 would be justified. Thus is seemed necessary to examine the sensitivityof the result to increases in the rate of growth of traffic. The indifference condition,where the two NPVs with VOC + T were equal, comes at about an 8.5% growth in traffic. In order to reach the indifferencecondition with only VOC, the rate of growth of traffic would have to be much higher. Since the 8.5% over the whole period from 1977 to 1990 appears to be most unlikely, the rejection of the new Hatillo radials is thus confirmed.

60. The new Tibas radial involves a large fraction of the project spending and so it is important to check on the robustness of the tests. Again the most sensitive input is the rate of growth of traffic, which in the best estimates of Table 7 has been written at 6%. If traffic experienced a rate of growth less than 3.9%, the project would not pass the positive NPV test using only VOC as benefits - but it would clearly satisfy the condition with the inclusion of time savings (í.e., VOC + T). Such low rates of traffic growth are, excepting calamities,most unlikely for a new road connecting a major arterial. Thus the probabilityof the Tibas radial not satisfying the test is very small.

Economic Rates of Return and Benefit Cost Ratios

61. The implied economic rates of return (ERR) are shown in Table 9 Strictly, these must be defined as the ERR with respect to a do-nothing alternative. They illustrate the rate of return on the investment,gross of the 12% discount rate, compared wíth doing nothing. In the project all the investment elements have ERRs in excess of 12%. Some are extraordinarilyhigh - especially for the rehabilitationand widening. This is not surprising;much of the works involves the eliminationof bottlenecks,and so for a small expenditurelarge gains are achieved.

62. It is important to note, however, that the ERR does not enable one to choose the appropriateelements to include in the project. Indeed, the ERR is most misleading as a guide to investmentchoice. If, for example, the investmentswere chosen which maximized the ERR, one would elect merely to rehabilitateUruca and Guadalupe and not to widen them. Clearly one should not forgo the substantialnet benefits to be reaped through widening by using false guides such as the maximizationof the ERR.

63. While abjuríng ERRs as guides to decision-making,they may nevertheless be used heuristicallyto examine the consequencesof the decision. They provide an evocativemeasure similar to those commonly employed in business practice, and thus reach a wíder audience of understandingthan the somewhat esoteric principle of maximizing the NPV. Annex 10 Table 9

Internal Rates of Return (x) and Benefit Cost Ratios (discount rate 12%)

INTERNAL RATE BENEFIT-COST OF RETURN (%) RATIO COMPONENT VOC VOC + T VOC VOC + T

Tibas 22 31 2.4 4.5

Guadalupe

Rehabilitation 63 71 7.9 10.8 Widening 28 39 2.7 4.5

San Pedro 55 78 11.5 10.4

Desamp arados

Widening 70 90 18.8 30.7 Short & Widening 36 49 5.7 10.0 Long & Widening 28 39 3.6 6.5

San Sebastian

Rehabilitation >100 >100 18.4 30.6 Widening 67 98 9.5 18.0

Hatillo

Rehabilitation 31 37 3.1 4.2 New Westerly & R 4 16 0.5 1.8 New Easterly & R 3 9 0.4 0.8

Uruca

Rehabilitation 40 83 17.5 30.7 Widening 57 >100 6.4 11.9

Avenida Segunda 21 27 2.3 4.0 Annex 10 Page 24

64. Much the same is true of the benefit-costratios which are produced in Table 9. Again to be precise each should.be defined as the benefit-cost ratio when consideredwith respect to a do-nothing alternative. Choosing the investmentin each corridor that maximizes the benefit-costratio will give the wrong result in a number of cases. Alternativelyone could develop the marginal benefit-costratios for investment options in each corridor - and then the appropriatesolution would be to choose the investment which has the lowest marginal benefit-costratio in excess of unity. But since this is merely a more complicatedway of explainingthe more straightforwardprinciple of maximizing NPV, it has not been pursued.

65. All the investmentoptions in the Desamparadoscorridor - including both of the rejected new roads - have a benefit-costratio exceeding and considerably over unity. But even a benefit-costratio as high as 5.7 (VOC only) or 10 (VOC + T) does not earn a place in the selected list of projects. This is rejected because most of the beneifts can be obtained from widening, and the additionalbenefits to be reaped by building a new road (the short option) do not compensate for the additional expense. 1/

SensitivityTests

66. With the high NPVs, ERRs, and B/C ratios emerging for most of the elements of the project, it appeared that a formal concatenationof sensitivity tests would be otiose. However, for the considerationof the proposed new radials, instead of sensitivity tests it has been ascertainedat what value of the growth of traffic would the decision (not to build new Hatillo and Desamparados)be reversed. These have been reviewed above. Variations in the quantity of benefits will not much affect the marginal relationships and.the project choice is the same. Similarly only differentialsin the costs of the options will affect the choice. However, the most important investmentin the project is the new Tibas radial and since that is compared with a do-nothingalternative, it is important to see that the decision is robust. In Table 8 the three rates of growth of traffic (3.7%, 6% and 8%) are used together with a reduction in benefits of 10% and 25%. The results suggest that, nevertheless,Tibas is a worthwhile project.

67. One other sensitivitytest was carried out for the different (and perhaps changing) composition of traffic. Buses are counted as three PCU, and thus an increase of one bus is associated with a reduction of three passenger cars. Varying the bus/car composition does not much affect the savings in VOC because, for the range of speeds anticipated in the 1990s, the VOC of a bus is about 3-1/2 times that of a car. But an increase in the fraction of buses will affect time savings considerably. However, none of the possible compositionaleffects would be sufficient to upset the choice made above.

1/ It so happens that in the Demaparados (and the Hatillo-Alajuelita) corridors the appropriate choice is the highest benefit-costratio; but that is an accident. Annex 10 Page 25

F. Signalization

68. To provide an indication of the economie viability of the proposed San Jose traffic signal system, ETAMSJ developed operating and time value estimates for three alternativecontrol systems. The alternativeswere: the existing traffíe control system, a sophisticatedcomputer system, and a three-dial system similar to the system recommendedfor implementation.

69. Eighteeen time periods were selected as having sufficientlydif- ferent traffic demand patterns to require unique timing plans. The TRANSYT program was run for the existing control system and the two alternative systems for each time period. A 30-intersectionsample network was used for this analysis.

70. The TRANSYT program utilizes data inputs defining the physical roadway network and traffic volumes. The program simulates traffic behavior and calculates vehiele travel distance and network speeds which can then be related to operatingand time cost. Through an iterative process, the program will compute the traffic signal timing plan which optimizes designated operatingparameters. These criteria include the relative importance of stops and delay on designated roadway segments. 1/

71. System results, based on the three-dial compromise timing plans, were used for the remaining time periods. It was assumed that operation no worse than that afforded by them would be attainable through various combinationsof the optimum plan parameters.

72. TablelO shows a comparison between travel speeds for each time period simulatedby the TRANSYT program for both the existing signal control and the proposed three-dial program. These data are for the 30- intersectionsample network utilized by the TRANSYT program. Increases for bus speeds ranging from 8% to nearly 30% are found with improvements of over 20% being typical. Projected improvementsin travel speeds for autos/trucksrange between 5% and 16% for all time periods except during the daylight hours on Sunday. During this particular period, a decrease in travel speeds of 1% to 6% is projected for autos; however, this is accompaniedby a speed increase of nearly 20% for buses.

73. This sample of 30 intersectionsin the central area of San Jose is, however, not a random sample of the area affected by the signalization investment. The 30 intersectionscover the area where trafficwas more dense than in the rest of the area where the 99 other intersectionswere to be signalized. Although no detailed traffic flow figures were available

1/ A detailed descriptionof the TRANSYT program and the methodology used in the ETAMSJ study can be found in Chapter III and Appendix A of ETAMSJ, Stage II Final Technical Report. Annex 10 Page 26

Table 10: OVERALL TRAVEL SPEED COMPARISON 1 = Existing System (Null condition) 2 = New 3-Dial System

Autos/Trucks Buses Program Speed (km/h) % Speed (km/h) Z Number of Time Period 1 2 Change 1 2 Change

Normal Work Day

1 12.30 13.72 +11.5 8.22 10.62 +29.2 2 13.46 14.98 +11.2 8.01 9.95 +24.2 3 10.85 11.96 +10.2 7.80 9.83 +26.0 4 14.32 16.16 +12.8 8.11 10.29 +26.9 5 18.35 21.48 +17.0 9.07 10.02 +10.5

Saturday

6 13.54 15.13 +11.7 8.00 9.86 +23.2 7 12.64 13.20 + 4.4 7.92 9.56 +20.7 8 12.53 14.09 +12.4 7.60 8.22 + 8.1 9 15.45 17.49 +13.2 8.24 10.26 +24.5

Sunday

10 16.67 15.73 - 5.9 8.39 10.14 +20.8 11 16.73 16.55 - 1.0 8.49 10.15 +19.5 12 16.71 16.62 - 0.5 8.48 10.15 +19.7 13 18.27 17.84 - 2.4 8.82 10.22 +15.9 14 19.53 22.68 +16.1 8.96 10.35 +15.5

Hol1iday

15 11.49 12.20 + 6.2 7.83 9.23 +17.9 16 11.75 12.46 + 6.0 7.85 9.46 +20.5 17 10.17 10.70 + 5.2 7.70 8.88 +15.3

School Vacation

18 14.16 14.87 + 5.0 8.09 9.68 +19.6

Note: Overall travel speed derived from TRANSYT program was based on:

Overall Travel Speed = Total Vehicle Distance Travelled in Network Total Vehicle Time Spent in Network Annex 10 Page 27 for 1977 to enable the conditions for the 99 to be replicated,an analysis of the ETAMSJ figures for 1972 and 1973 showed that the gain in speed of buses was likely to be in the range of 9% to 10% with cars and trucks gain- ing about 5%. There is much uncertainty in making such an extrapolation, but it is believed that these figures are probably underestimatesof the true value. These will tend to underestimatethe benefits, so that the estimate should be looked upon as a lower limit. The average increase in speed over the whole of the central area where controlled signalizationis to be installedwill therefore be about 12% for buses and 6% to 7% for private cars and trucks.

74. Evaluating these improvementsinvolves finding the amount of bus time and bus kilometers spent in the affected area - again using the same ETAMSJ data and roughly checked by estimating the bus routes. From these figures metropolitanarea buses would spend on average about 35-40% of their time in the controlled area. In a continuous system this would mean that the annual saving in bus-time would be:

12 x 35 x 560 x 400 x 348 = 13,300,000 100 100 where 560 is an estimate of the bus fleet in 1977

0400 per day is the estimated full cost of operating a bus per day

348 is the assumed (by ANA) number of days a year the bus operates.

75. Although this estimate of the money saving of 03.3 million per annum is due to the inereasedproductivity of buses in the central area, it is based on the possibly invalid assumption that all the bus time set free could be saved. While thise seems to be the appropriate assumption for "best estimate"'purposes, one might assume more conservativelythat only part of this can be adduced as saving; another part will be frittered away in increases in idle time. Supposing that only one half of the savings are gar- nered in real gains, this would imply a benefit to buses of about ¢1.6 million per annum, in the year 1977. 1/ And on the assumption of a very low rate of growth of bus traffic of 1-1/2% per annum, this figure for bus savings alone would give a rate of return in excess of 15% per annum.

1/ To avoid misunderstanding,it must be noted that the normal method of evaluating such improvements,by finding the effects of the increased speed on operatingcosts for a given kilometrageper bus, is quite inappropriate. Such a methodologywould imply that one of the main effects of the improvementwould be to reduce the amount of time that the average bus spent in gainful employment on the highway. This is clearly wrong and can be easily illustratedby reducto ad absurdum arguments. The assumption adopted in the text is that the bus spends the same time on the road but travels further and does more work. In- terpreted in another way, one assesses the depreciationas a reduction for all kilometers travelled. Annex 10 Page 28

76. For the reduction in automobile and truck user costs, including depreciationdue to signalization,the estimate is 01.45 million - thus giving a total user cost saving of about ¢3.00 millíon for the year 1977. The time-savingscosts were calculated using the assumptionsreferred to above to give the results in the following Table.

77. The signalizationinvestment is clearly justified - indeed it is a matter of urgency - and there is no need to investigateeither sensitivity tests or alternative investmentprograms. However, the very large gains to be obtained from such modest spending does suggest that a wider application of controlled signals might be explored in any further projects in San Jose.

Table 11: ANNUAL BENEFITS FROM THE CBD SIGNAL SYSTEM (1977)

(Mililion Vehicle operating costs colones)

Autos and trucks 1.4 Buses 1.6

Savings of time

Autos and trucks 0.7 Buses 1.4

Grand total 5.1

Source: Application of TRANSYT program to 129 intersections (see Project PreparationReport No. 9, dated May 1977 by WSA). COSTA RICA SAN JOSE URBAN TRANSPORT PROJECT Implementation Schedule

1977 1978 1979 1980

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

PROJECT COMPONENT RADIAL ROUTES

1. New Tibas Radial - - __ 2. San Pedro Widening_ 3. DesemparadosWidening _ . . _ - 4. San Sebastian Widening. . 5. Alajuelita Rehabilitation 6. Guadelupe Widening. . - 7. Tibas Rehabilitation 8. Uruca Widening ...... 9. Avenida 2 Widening .... .

TOP ICS Intersection Improvements 1. Betania - Calle Negrita .... . 2. Sabana Norte - Calle 42 3. Avenida 11 - Calle 10 4. Calle 23 - Avenidas 1 & 3 .... 5. Clinica Moreno Canas 6. Calle 8 - Avenida 9 ...... 7. Calle 20 -Avenidas 10 & 12 ... 8. Avenida 9 - Calle 14 9. Calle 16 - Coca Cola Entrance . _ 10. Calle 24 - Pacific RR Crossing 11. Calle 10 - Avenida 7 .. 12. R 201 - R 202 .... 13. Calle 14 - Av. 2 - Paseo Colon ... 14. R 7 - Sabana Oeste 15. R 7 - Anonos Bridge 16. R 1 - R. Virilla Bridge

Sub Area Improvements 1. East - West Connection 2. Parque Morazan Area 3. Calle 23 4. Avenida 14 (Calles 16 to 18) 5. R214 (R.M. Aguilar Bridge) ...... 6. Calle 5 (Avenidas 20 to 22) .... 7. Paseo Colon (Calles 14 to 42)

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