Document of The World Bank

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No: 28926-CO

PROJECT APPRAISAL DOCUMENT

ON A Public Disclosure Authorized

PROPOSED LOAN

IN THE AMOUNT OF US$250.0 MILLION

TO THE

REPUBLIC OF COLOMBIA

FOR THE INTEGRATED MASS TRANSIT SYSTEMS PROJECT Public Disclosure Authorized

May 14,2004

Finance, Private Sector and Infrastructure Department Colombia and Mexico Country Management Unit Latin America and Caribbean Regional Office

Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their pffcial duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS

(Exchange Rate Effective 03/18/04)

Currency Unit = Colombian peso CO$2648.8 = US$1

FISCAL YEAR

January 1 - December 3 1

ABBREVIATIONS AND ACRONYMS

AMCO Metropolitan Area of Center-West ICB International Competitive Bidding APL Adaptable Program Lending IDB Inter-American Development Bank IDU Urban Development Institute BRTS 1~

Bogota )P )P ID Project Information Document -DNP ~~ ECOPETROL Colombian Petroleum Company QAT Quality Assurance Team EIA Environmental Impact Assessment QBS Quality Based Selection EMP Environmental Management Plan QCBS Quality and cost based selection

International Bank for Reconstruction and i'""" ID evelopment

Vice President: David De Ferranti Country ManagedDirector: Isabel Guerrero Sector Manager: Jose Luis Irigoyen Task Team Leader: Mauricio Cuellar FOR OJ?FlCIALUSE ONLY COLOMBIA CO National Urban Transport

CONTENTS

Page

A. STRATEGIC CONTEXT AND RATIONALE ...... 1 1. Country and sector issues ...... 1 2. Rationale for Bank involvement ...... 2 3. Higher level objectives to which the project contributes ...... 3 B. PROJECT DESCRIPTION ...... 3 1. Lending instrument ...... 3 2. Project development objective and key indicators ...... 3 3. Project components ...... 4 4. Lessons learned and reflected in the project design ...... 5. Alternatives considered and reasons for rejection...... C. IMPLEMENTATION...... 1. Partnership arrangements ...... 2. Institutional and implementation arrangements ...... 7 3. Monitoring and evaluation of outcomes/results ...... 4. Sustainability ...... 5. Critical risks and possible controversial aspects ...... 6. Loadcredit conditions and covenants ...... 10 D. APPRAISAL SUMMARY 1. Economic and financial analyses ...... 2. Technical ...... 1 1 3. Fiduciary ...... 4. Social ...... 13 5. Environment. 6. Safeguard policies...... 15 7. Policy Exceptions and Readiness ...... 18

Annex I:Country and Sector or Program Background...... 19 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ...... 26 Annex 3: Results Framework and Monitoring...... 27 Annex 4: Detailed Project Description ...... 38

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. __

COLOMBIA

INTEGRATED MASS TRANSIT SYSTEMS

PROJECT APPRAISAL DOCUMENT

LATIN AMERICA AND CARIBBEAN

LCSFT

Date: May 14,2004 Team Leader: Mauricio Cuellar Country Director: Isabel M. Guerrero Sectors: General transportation sector Sector MangedDirector: Danny M. Leipziger (90%);Central government administration (5 %);Sub-national government administration (5%) Themes: Access to urban services for the poor (P);Infrastructure services for private sector development (P);Municipal governance and institution building (P);Pollution management and environmental health (S);Other urban development (S) Project ID: PO82466 Environmental screening category: Partial Assessment Lending Instrument: Specific Investment yoan Safeguard screening category: Limited impact

[XI Loan [ ]Credit [ ] Grant [ ]Guarantee [ ]Other:

For Loans/Credits/Others: Total Bank financing (US$m.): 250.00

BORROWER 214.00 0.00 214.00 INTERNATIONAL BANK FOR 147.00 103 .OO 250.00 RECONSTRUCTION AND DEVELOPMENT Total: 361.00 103 .OO 464.00

Borrower: Republic of Colombia Ministerio de Hacienda y Credito Publico Carrera 7A No. 6-45 Bogota, D.C. Colombia Tel: (57 1) 297 13 10 /sponsible Agency:

National Planning Department Ministry of Transport Calle 26 No. 13 - 19 Edificio Fonade Av. El Dorado CAN Pisos Mezz a1 19-25 y 34-3 Bogota, D.C. Bogota Colombia Colombia Tel: (57-1) 324-0800 Tel: (57-1) 596-0300 [email protected]

Estimated disbursements (Bank FY/USSm) FY 2005 2006 2007 2008 2009 Annual 29.00 59.00 80.00 75 .OO 7.00

Cumulative~ 29.00 88.00 168.00 243.00 250.00 Project implementation period: Start September 30,2004 End: September 30, 2008 Expected effectiveness date: September 30, 2004 Expected closing date: March 31, 2009

Does the project depart from the CAS in content or other significant respects? [ ]Yes [XINO Re$ PAD A.3 Does the project require any exceptions from Bank policies? Re$ PAD D. 7 [XIYes [ ]No Have these been approved by Bank management? [XIYes [ ]No Is approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated “substantial” or “high”? [XIYes [ ]No Re$ PAD C.5 Does the project meet the Regional criteria for readiness for implementation? [XIYes [ ]No Re$ PAD D. 7 Project development objective Re$ PAD B.2, Technical Annex 3 The overall objective of the project is to improve long-term sustainability, efficiency and quality of urban transport in selected cities by assisting the Government of Colombia (GOC) in the implementation of the National Urban Transport Program. The specific objectives are to: (i) implement high quality Bus Rapid Transit Systems (BRTs) in selected cities; (ii)improve accessibility to the poor through fare integration and; (iii)build greater institutional capacity at the national level to formulate urban transport policies and strategies (regulatory, operational, economic, environmental and social aspects), and at the local level for urban transport planning and traffic management.

Project description [one-sentence summary of each component] Re$ PAD B.3.a, Technical Annex 4 Component 1- Capacity Building (US$2.3 million): This component will provide technical assistance and policy advice to GOC and participating municipal governments. Component 2- BRTS Development (US$459.2 million, US247 .7 million IBRD): 1) Construction of about 5 7 kilometers of segregated transportation corridors in Participating Cities, including, among others: (a) construction of segregated busways; (b) repaving of mixed- traffic lanes adjacent to new busways; (c) construction and installation of bus stations and I terminals; and (d) paving of feeder roads, and 2) Construction of about 20 kilometers of segregated corridors in the NQS Line of the Bogota Transmilenio, S.A., including, among other: (a) construction of segregated busways; and (b) repaving ofmixed-traffic lanes adjacent to new busways.

Which safeguard policies are triggered, if any? Re$ PAD 0.6, Technical Annex 10 Environmental Assessment (OPIBPIGP 4.01) Natural Habitats (OP/BP 4.04) Cultural Property (OPN 11.03, being revised as OP 4.1 1) Involuntary Resettlement (OP/BP 4.12)

Significant, non-standard conditions, if any, for: Re$ PAD C. 7 Board presentation: NONE

Loadcredit effectiveness: Effectiveness Conditions (i)the Operational Manual has been issued by the Borrower, through DNP, and approved by the Bank; (ii)the terms ofreference for the hiring of the independent auditors have been prepared by the Borrower, through DNP, and have been approved by the Bank; (iii)the PCU has been fully staffed and is operational including among others a Financial Officer, Procurement Specialist and Resettlement Expert; (iv) the financial management system for the Project has been established;

Covenants applicable to project implementation: Subsidiary Agreements The borrower, through the DNP (later MOT): a) will assure the fulfillment, by the executing agencies, ofthe obligations and procedures established in the Subsidiary Agreements and Project Operational Manual, including the fiduciary procedures and the information supply for implementation and follow up of the BRTS' execution, and; b) will not modify Subsidiary Agreements without Bank's no-objection.

Monitoring and evaluation ofNUTP The Borrower, through DNP (later MOT), shall (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis the execution of the Project and the NUTP and the achievement of their objectives set forth in the Implementation letter; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, each December 15 during Project implementation, starting with the report due not later than December 15, 2005, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the calendar semester preceding the date of presentation of the report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement oi the objectives thereof during the following calendar semester; (c) review with the Bank, bq December 15 ofeach year of Project implementation, or such later date as the Bank shall agree. starting in year 2005, the pertinent reports referred to in paragraph (b) of this Section, and. thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of said reports and the Bank's views on the matter; and d) carry out an in-depth review (the Mid-Term Review) jointly with the Bank, by July 26, 2006 or such later date as the Bank shall agree, on the progress achieved in the implementation ofthe Project.

The Borrower, through DNP (later MOT), will prepare, under terms of reference satisfactory to the Bank, an assessment of the impact of NUTP in terms of improved mobility to users, accessibility and affordability to the poor, and strengthening of both policy and institutions. In order to do so, the borrower will finalized the construction of a base line not later than six months after the effectiveness. The Technical Committee and participating cities will present the results at the annual review to be held in 2006 (the mid-term review) and in 2008 (project-end). A. STRATEGIC CONTEXT AND RATIONALE

1. Country and sector issues

Like most Latin American countries in the last few decades, Colombia has experienced a sharp increase in population within its urban centers due to several economic and social factors. In addition, Colombia has also experienced several decades of armed conflict, which have displaced approximately 2.5 million people from rural to urban areas. Fifty percent of this displaced population has been relocated to Colombia’s four largest cities. As a result 75 percent of the total population of Colombia now lives in cities. This concentration process has moved poverty issues away from rural areas and into the cities, as it is now estimated that two thirds of the Colombian population living below the poverty line is located in urban areas. (World Bank Colombia Poverty Report. 2002).

Colombia’s largest urban agglomeration is the city of Bogotk with an estimated population of 6.5 million, followed by Medellin and its metropolitan area with close to 3 million, and Cali and Barranquilla, each having close to 2 million. Pereira, Bucaramanga and Cartagena follow with populations ranging between 700,000 and 1 million. Given the present and foreseeable demographic trends and the fact that cities are becoming pillars of productivity and economic growth as well as concentrations of poverty related issues, the government has come to consider urban policies as a major component of the national development strategy.

A large proportion of the urban poor do not have access to reliable and affordable transportation, and as a result, remain excluded from employment opportunities, health facilities and interaction with the broader community. A transport system able to provide efficient mobility and accessibility for all inhabitants in the city is a powerful tool to promote growth, alleviate poverty and achieve social and political integration, while improving environmental conditions and triggering an upgrade of public space. Improving the quality of life in urban areas is expected to contribute to building a more equitable society.

Colombian urban transport issues:

High dependency on public trunsportation systems by the poor. In Colombian cities three out of four persons use public transportation to travel to work, study or leisure. Most of these people live in the low- income neighborhoods of Colombia’s cities. The poor spend around 25 percent of their household income on public transportation, which is high relative to regional standards. Despite this, urban infrastructure has been used inefficiently, as it has traditionally favored the use of private vehicles, which use 80 percent of the space but only mobilize 25 percent of the people traveling within the city.

Poor quality ofpublic trunsport systems. Bus transportation in Colombian cities is of low quality and low operating speed, resulting in excessive travel times, high levels of congestion, high accident rates and elevated levels of air and noise pollution. In the main transport corridors of the largest cities, the average speed, at peak.hours, is less than 10 km/hr, significantly lower than international benchmarks (around 20 Whr). This negatively affects the cities’ productivity, increases the emissions of air pollutants, and raises the level of exposure to those pollutants by the affected population. In terms of safety, according to the Road Prevention Fund (Fond0 de Prevencidn Vial), nearly 40 percent of all traffic accidents involve public transport vehicles.

Inadequate regulatory frumework. The current regulatory framework has failed to improve the quality of service and has not contained the cost of service provision. In most cities, municipal authorities grant permits to private enterprises allowing them to operate assigned routes. These companies do not own the buses they operate and their revenues rely on the number of buses they affiliate to operate the system: the

1 more buses, the higher the profits, resulting in an oversupply of about 50 percent of the needed seats. Bus owners pay a fixed rent to the affiliated company, which implies that their profit is directly proportional to the number of passengers they serve, generating what is commonly known as the “penny war” (guerra del centavo). Consequently, the bus operation system is a de facto unregulated system that promotes competition in the market (picking up passengers in the streets) and not for the market (for the routes that will provide the service under pre-established parameters).

Lack of institutional capacity to deal with the above issues. There is weak institutional capacity at the national and municipal levels to formulate and coordinate policies aimed at improving transport planning and traffic management. In some cases, there is duplication of functions and responsibilities among several authorities. In general, operating licenses for transport companies are given without technical criteria to adhere to, and political interests and corruption prevail.

In order to address these problems, the Government of Colombia (GOC) has already co-financed the infrastructure of Bogota’s Integrated Mass Transit Systein ‘TransMilenio’. TransMilenio is a Bus Rapid Transit System (BRTS), which has had a great impact in solving the above issues by using the new infrastructure to define a new regulatory framework that has eliminated the “penny war” and created the right capabilities within the local government to enforce this new regulatory framework (see Annex 16).

Due to TransMilenio’s substantial impact and despite great fiscal constraints, GOC has found fiscal space to consolidate the initially ad-hoc intervention in BogotB’s first phase into a National Urban Transport Program (NUTP). The NUTP is an open-ended program that envisages GOC’s annual transfers until 2016 for the expansion within Bogota and into the cities targeted under the National Development Plan (NDP), namely: Cali, Pereira, Cartagena, Soacha, Bucaramanga, Barranquilla and Medellin.

The overall purpose of the program is to improve quality of life and increase urban productivity in those Colombian cities, and its design aims at: (i)improving the efficiency and safety of public urban passenger transport services; (ii)providing reliable accessibility to the poor; (iii)enhancing private sector involvement in service provision; (iv) reducing air pollution and greenhouse gases -GHG- emissions; and (v) driving comprehensive urban development processes.

The NUTP represents a concrete effort between GOC and the cities, in which GOC will co-finance up to 70 percent of the cost of the infrastructure needed for the implementation of integrated BRTS under a policy framework that addresses the above mentioned sector issues, within the limitations of the current fiscal situation (annex 1 provides further details on the scope and building principles of the NUTP).

2. Rationale for Bank involvement

The Bank has extensive experience in supporting urban transport projects in the region. For example, in Brazil, Peru and Chile, Bank projects supported implementing segregated bus lanes to improve the speed and overall quality of service. In Bogota the Bank partially financed the construction of the first phase of TransMilenio under Loan 4021-CO (Bogota Urban Transport Project)), and is supporting the second phase for the improvement of the feeder routes of the system under Project Loan 7162-CO (Bogotk Urban Services). These two projects reflect the strategic role of the Bank in the implementation of the BRTS in Bogota. The experience gained in this sector will be key in assisting GOC and the cities to improve the urban transport systems.

Bank involvement can enhance: (i)the structuring of transport systems which provide direct benefits to low income groups through appropriate system design and fare integration arrangements; (ii)the institutional strengthening of local urban transport authorities; (iii)the enhancement of safeguards for the

2 management of employnient loss, the mitigation of social impacts and environmental protection during the execution of the civil works; and (iv) the integration and coordination between transport, land-use and environmental policies.

3. Higher level objectives to which the Project contributes

The proposed Project is consistent with the Country Assistance Strategy (CAS) discussed by the Board on January 16, 2003. The CAS recognizes that to assist Colombia’s quest for peace, it is necessary to achieve fast and sustainable growth. To reach such a goal the CAS gives high priority to the promotion of competitiveness in the productive sector and to the improvement of access to high quality basic public infrastructure services for the least privileged segments of the population.

BRTSs are expected to foster productivity and competitiveness in participating cities, provide better services to the poor, and improve the quality of life in urban areas. A more reliable and quick public transport system is expected to address the low level of mobility of the poor, by reducing their exclusion through improved access to services and opportunities at affordable prices and reasonable travel times, hence contributing to a more socially inclusive growth pattern.

B. PROJECT DESCRIPTION

1. Lending instrument

The GOC has requested a specific investment loan for $250 million to finance the proposed Integrated Mass Transit Systems Project’. The loan will finance a time slice of GOC’s transfers to cities to enable them to construct and implement Integrated Mass Transit Systems or BRTSs. The loan will also finance the strengthening of the institutional capacity, both at the national and local level, to support the NUTP. The loan would be disbursed over 4 years (2004 -2008) and since the implementation of the NUTP will continue beyond 2008, it is likely that GOC will request the Bank to provide a follow-on operation to continue supporting the program.

2. Project development objective and key indicators

The Project will support GOC implementation of the NUTP. The development objectives of the Project are to: i)develop high quality and sustainable BRTSs in selected medium and large cities to improve mobility along the most strategic mass transit corridors; ii) improve accessibility for the poor through feeder services and fare integration; and (iii)build greater institutional capacity at the national level in order to formulate integrated urban transport policies, and at the local level in order to improve urban transport planning and traffic management.

The proposed Project would: i)further expand BRTS schemes in Bogota; ii)introduce BRTS in medium and large size cities, replicating the experience of Bogota but tailoring it to specific conditions of those selected cities; and iiij consolidate the initially ad-hoc intervention of GOC in Bogota’s first phase into the NUTP. To achieve these objectives the Project relies on an effective public-private partnership for developing sustainable BRTSs in which the roles are assigned as follows: (i)the public sector finances and builds segregated busways and other related infrastructure through co-financing arrangement between

The Borrower informed the Bank during negotiations that the Borrower’s Inter-Parlamentary Commission (IC) authorized Negotiations of the Loan for this Project using a different name. Hence, the Bank and the Borrower agreed to change the name from National Urban Transport Project to “Integrated Mass Transit Systems Project”(the name used by the IC) in the Project Appraisal Document (PAD) and in the legal documents accordingly.

3 municipal and central government; (ii)private sector operators provide the buses and operate a trunk- feeder system under a concession contract granted by the municipality; and (iii)each participating city creates a public agency to plan, regulate and control the operation of the BRTS and sets the user tariff that will ensure the sustainability of the system without operational subsidies. Annex 1 presents a more comprehensive description of the policy around the NUTP.

Key performance indicators:

Improved mobility and quality of public transport services in strategic transit corridors as measured by:

a) Reduction in generalized door-to-door travel cost (fare, time) to users; b) Percentage of people rating the system as being better than the previous system.

Improved accessibility to low-income populations as noted by:

a) Increased use by the poor (two poorest quintiles) of public transport services along the area of influence of the planned corridors, with respect to the baseline without the mass transit system, both in absolute (number of passenger) and relative terms (as percentage of total number of passengers).

Enhanced institutional capacity for urban transport policy formulation and system development, measured by:

a) At the local level, system occupation per square meter below a given threshold while maintaining no subsidies; b) At the national level, at least three BRTS schemes operating successfully in participating cities and GOC systematically monitoring program performance and its impact, in line with the requirements of the National Economic and Social Council (CONPES) documents on Poli'ticu Nacional de Transporte Masivo. Annex 3 provides detail information on the key performance indicators.

3. Project components

Component 1- Capacity Building (US2.3 million): This component will provide technical assistance and policy advice to GOC and participating municipal governments . The description of this component follows:

Part A: Implementing Capacity Building

1. Strengthening the GOC's capacity to formulate national urban transport programs and strateges, through, among others: (a) the definition of a national urban transport institutional map; (b) the formulation of a transport sector policy; (c) the definition of operational, regulatory, institutional, environmental, social and road safety strategies within the urban transport and urban development context; and (d) the identification of appropriate mass transit solutions to improve transport and to improve traff'ic management. 2. Improvement of the institutional capacity of transportation entities of Participating Cities to ensure adequate implementation of BRTS, through, among others: (a) the provision of equipment and training; (b) the setup of an operational structure able to program, monitor and

4 administer public transportation services; and (c) the implementation of twinning arrangements between BRTS and BogotB TransMilenio S.A. 3. Strengthening of the operational capacity of participating cities with respect to the implementation of urban development and transport strategies. 4. Provision of support for overall Project coordination, evaluation, supervision and implementation, including, among other:

(a) the strengthening of the capacity of the PCU to comply with its responsibilities; (b) the carrying out of audits; (c) the carrying out of Project studies, including, among others, performance reviews and impact evaluations; and (d) the design and implementation of a program to monitor and evaluate the carrying out of the Project.

Component 2- BRTS Development (US$459.2 million, US$247.7 million IBRD):

Part B: BRTS Development

1. Construction of about 57 lulometers of segregated transportation corridors in Participating Cities, including, among others: (a) construction of segregated busways; (b) repaving of mixed-traffic lanes adjacent to new busways; (c) construction and installation of bus stations and terminals; and (d) paving of feeder roads. 2. Construction of about 20 lulometers of segregated corridors in the NQS Line in Bogota, including, among other: (a) construction of segregated busways; and (b) repaving of mixed- traffic lanes adjacent to new busways. 3. Definition of a new regulatory framework for the implementation of BRTS in Participating Cities. 4. Resettlement of Affected Persons in connection with the carrying out of Parts B. 1 and B.2 of the Project. 5. Design and implementation of EMPs for the carrying out of Parts B.l andor B.2 of the Project.

4. Lessons learned and reflected in the project design

There is a role for the national governments in the implementation of urban transport reforms. Reforms in the sector normally require large investments and complex technical decisions. Given that municipalities lack both financial and technical resources, GOC’s participation becomes crucial in promoting reforms at the municipal level.

Reliablejunds are key to implement long-term reform. Urban transport financing should be seen as an “integrated whole”*, justifying the use of taxes on auto users to provide a reliable and necessary source of funds to implement public transport projects. In the case of Colombian cities, the gasoline surtax, mostly paid by cars users, is providing about 34 percent of total NUTP cost and, more importantly, is helping the municipalities to leverage funds from GOC.

The regulatory framework iJy key in advancing sound reform. Within the different planning stages for urban transport reforms, most of the attention goes to the technical aspects of the projects (engineering designs, technology, equipment, etc.), neglecting the regulatory design of the operation. Given the crucial

Cities on the Move, A world Bank Urban Transport Strategy.

5 role of the private sector in the operation of urban transport systems, the planning process should concentrate more on the definition of several policies and processes that regulate the public-private partnership. Efforts should focus on improving the regulatory framework to encourage efficient and competitive bus operations.

Implementation strategy should have both high political involvement and strong technical support. Of the several lessons that arise from the successful implementation of TransMilenio, two are particularly critical. The first is that the implementation of such an initiative requires visionary leadership, leadership that is willing to take risks and remains closely involved throughout the process. The second is that there is the need to create high-performance implementing agencies with strong technical capacity to design, plan, control and regulate the BRTS.

Transport Projects could have significant urban impact. Another lesson resulting from the TransMilenio experience is that the Project cannot be limited solely to the construction of BRTS. Instead, other complementary actions should be implemented to guarantee the completion of the urban transport strategy within a comprehensive framework (reorganizing routes, implementing traffic management measures, developing measures to reduce the existing fleet, developing sense of community, etc.). This demonstrates that the value added of the TransMilenio Project goes far beyond the transport operation along the main corridors.

5. Alternatives considered and reasons for rejection

Mass transit solution: Metros. In the past, following the experience of Medellin, Bogota and Cali argued in favor of a metro system that would require very large subsidies from the central government. The successful example of TransMilenio proved that BRTS is as an affordable, cost-effective solution.

Financing BRTS infrastructure entirely by municipalities and GOC on lending. Under this alternative municipalities would be in charge of financing the infrastructure, and the GOC could have had the Bank loan to assist them in defraying those costs. This was rejected for two reasons: first, municipalities lack the financial capacity to undertake the interventions on their own andor provide the necessary guarantee to the central government for repaying. Second, the GOC's partial and phased contribution provides the right incentive for municipalities to'focus on sound and long-term policy interventions.

Channeling ull GOC 's financial contributions to participating cities entirely during BRTS construction period. BRTS construction period in a given city takes between 12 and 18 months. Committing GOC funds to finance all the BRTS planned in such a period would demand funds well beyond the fiscal envelop assigned to the NUTP and force a delay in the implementation of the proposed interventions in certain cities. Despite the fact that this alternative would lower financial costs, it was rejected in favor of a phased financing arrangement in which GOC's contribution is distributed over a number of years beyond the construction period (2-5 years). This financing scheme will enable GOC to implement the program within the fiscal space assigned to the program while increasing its leverage.

Selecting appropriate Bank instruments to Jinance the GOC transfers. The Project will promote institutional building and policy reform in the urban sector. However, despite this high reform content of the program, the alternative of a Sector Adjustment Loan (SECAL) focused on those reforms was rejected due to the catalyzing role of the infrastructure assets that need to be created to implement and sustain the program. On the other hand, while the possibility of a follow-on loan to continue supporting the program exists, an Adaptable Program Lending (APL) approach was rejected during the Project preparation phase. At that stage, it was considered that the APL, through the definition of the triggers, would most likely reduce flexibility in responding to the program needs.

6 C. IMPLEMENTATION

1. Partnership arrangements

The NUTP is an ambitious program in terms of scope and funding requirements; and, therefore, its implementation will take more than a decade. The support to the BRTS in Bogota has already demanded transfers from GOC of about US$120 millions over the past 4 years. With the structuring of the NUTP under the National Development Plan and its expansion to new cities, those transfers will increase to about US$1.6 billion over the next 12 years. GOC has requested IBRD, Interamerican Development Bank (IDB) and the Andean Finance Corporation (CAF) to participate in the financing of its contributions under independent parallel arrangements. IDB will support the BRTS in Cali, while CAF will support the Suba corridor in Bogota. IBRD will play a broader role in supporting the program by providing technical assistance for institutional building as well as the development of BRTS in Bogota, Pereira, and other cities included under the program.

2. Institutional and implementation arrangements

Znstitutionul set up und Policy ji-amework jor NUTP Building on legislation3 passed in 1996, two CONPES4 documents approved in 2002 and 2003 have established the policy and institutional framework for the NUTP. These policy documents: i)define policy goals, strategies and expected outcomes; ii)set a . Technical Committee to monitor and evaluate execution of the NUTP and performance of the BRTS, iii) create the capacity building program; and iv) establish criteria for securing the financing for the BRTS by cities and the GOC.

A CONPES document, issued by GOC for each participating city, will detail the specific conditions and arrangements for BRTS intervention in that particular city. This document will provide the, basis for the Subsidiary Agreement to be signed by GOC, through the Ministry of Finance and the city. It is through the Subsidiary Agreement that the scope of the intervention, the financial structure and the obligations of the respective parties are formally established. In particular, the agreement: i) assigns overall responsibility for undertaking and financing any potential cost overrun and/or operational deficit of the BRTS to the participating city; ii) defines the schedule of GOC financial commitments by year, previously approved by CONFIS and recorded as future budgetary commitments (vigencius futurus) for proper fiscal accounting; iii)instructs the city to budget the funds to cover any cost overrun once they are identified; iv) establishes a trust fund to managed both GOC and city contributions for infrastructure; v) mandates the signing of a contract between the GOC and the city, in which the city gives control of the Board of Directors of the BRTS agency to the GOC during the time slice of the contributions; and vi) makes mandatory the use of fiduciary procedures of the Multilateral Organizations involved in the Project.

Once all these conditions are met, GOC will request the Bank to include the respective participating city BRTS to be finance by the loan, following the procedures stated in the Operational Manual (see Annex 6).

The current status of BRTS schemes to be supported by the Bank project is as follows: implementation of the BRTS in Bogota (TransMilenio North Quito South corridor) is underway; the Subsidiary Agreement

Law 86 1989 reformed by Law 310 1996 allows the GOC to co-finance infrastructure for mass transit systems in Colombian cities Documents 3167 “Politica para mejorar el transporte urbano de pasajeros” May 2002 and 3260 “Politica Nacional de Transporte Urbano y Masivo” December 2003.

7 of the planned intervention in Pereira and Cartagena has been signed; and preparatory studies for planned interventions in Soacha, Barranquilla, Bucaramanga and Medellin are well advanced.

Executing agencies DNP, functioning as the Technical Secretariat of the Technical Committee, will initially have overall responsibility for the execution of the Project, will provide technical support to the NUTP and will be responsible for monitoring and evaluating program implementation. The other members of the Technical Committee are the Ministry of Finance (MHCP), in charge of financial management of resources, and the Ministry of Transport (MOT), which has responsibility for the sector. During negotiations GOC informed the Bank that it has been decided to transfer the responsibility of the execution of the Project to the Ministry of Transport (MOT) in the short term. Therefore, upon compliance in a manner satisfactory to the Bank, with the conditions set forth in Annex 1 to the Implementation Letter, the Borrower shall carry out the Project, through MOT.

The BRTS agencies in the participating cities will be the executing agencies of the BRTS Development Component. Some cities will rely on specialized municipal works agencies (i.e. IDU in the case of Bogota and Soacha) to carry out the construction of the BRTS infrastructure. For the technical assistance component, DNP , (later MOT) will be in charge of managing the procurement of goods and consultant services.

3. Monitoring and evaluation of outcomeskesults

The national urban transport policy entrusted to the Technical Committee the responsibility of monitoring and evaluating the implementation and outcomes of the NUTP (see Annex 6). The various responsibilities assigned to this Committee fall into two categories: i)verification of entry and eligibility conditions, and their compliance throughout Project implementation; and ii) monitoring of the BRTS’ performance and evaluation of its outcomes.

To ensure the monitoring and evaluation, the Committee will gather required information to evaluate the key performance indicators and collect other relevant information for policy evaluation (see detail list of additional information in Annex 3). The Committee will then report to the Bank all relevant information. Data collection will be a shared responsibility between BRTS agencies and the DNP (later MOT). BRTS agencies will collect data related mostly to their own operations. In order to build the technical capabilities, the Project design contemplates that the TA will include the design of the monitoring system of those agencies (see Annex 4) and the measuring of the indicators.

The information on key performance indicators, not reported by the BRTS agencies, will be provided through surveys and field studies directly contracted by the NUTP technical assistance-implementing agency. A description of the required surveys and field studies is presented in Annex 3.

Implementation reports with the available information will be submitted to the Bank through DNP (later MOT), each December 15 starting in 2005. These reports will also include an analysis and measures to be taken by GOC andor the implementing agencies to solve outstanding issues in Project development.

4. Sustainability

The sustainability of the Project is predicated on the basis of the following grounds:

Institutional support: There is a specific evidence of political support at both the national and local level. City Councils in Bogota, Pereira and Cartagena have approved the required funding and the remaining participating cities are preparing the funding requirements for City Council approval.

8 Ownership and sustainable commitment ut the higher government level. Municipalities and the central government are well aware of the high visibility of the proposed interventions and have a clear understanding of the reforms required to put the system into operation, by involving all the key stakeholders (affiliated companies, bus owners, bus drivers, potential new operators, financial institutions and commercial sector).

Financial viability of the BRTS derives from: i) a policy decision to subsidize the infrastructure with identified public sources (gasoline surtax) to keep tariffs at an affordable level; ii) current tariff design covers operational cost; and iii)GOC has approved budgetary commitments for this program.

Existence of local “Know How”: The successful experience of TransMilenio has proved that there is a sustainable institutional arrangement for the provision of urban transport services. This “know how’, was developed in Colombia and will be valuable to participating cities in the building of operational capacity.

5. Critical risks and possible controversial aspects

I Risk I Risk 1 Risk Mitigation- Measure I 1 Rating 1 From Outr>utsto Obiective Poor service performance of the BRTS S The Project provides TA to further strengthen resulting from: (i) the inability of BRTS institutional capacity at the local level in order to implementing agencies to enforce contracts, design the concession and reorganize the actual regulation and control the system; (ii)private routes. The bus concession scheme should operators fail to meet quality standards; and provide strong incentives for good performance, (iii) excessive competition and predatory practices by unregulated competing services.

Access of urban poor to BRTS constrained M The proposed fares for the BRTS will consider the by: (i)unaffordable bus fares or excessive ability of the poor to pay and they are targeted to travel costs; (ii) lack of feeder service be set at about 90-100% of the current bus fare. provision due to financial constraints. The BRTS includes the provision of feeder bus routes to serve targeted poor neighborhoods under an integrated flat fare system to ensure the poor have access to the improved system.

IFrom Components to Outputs back of political support of local authorities H Eligibility conditions to participate in the NUTP to implement the : BRTS project. force municipal authorities to take decisions supporting the Project. Municipalities not complying with such requirements will not be able to sign the respective Subsidiary Agreement with GOC. Participation of a critical mass of cities (at least three: BogotB, Pereira and Cartagena) has been secured.

9 BRTS’ implementing agencies unable to: (i) S Through the Subsidiary Agreement, GOC and the finalize arrangements for execution and city will allocate the required resources to the financing of BRTS’ infrastructure; and (ii) Project. Given the reliability of such sources it is concession BRTS‘ routes to private operators. expected that commercial banks will be keen tc finance the projects. In some cities local bu5 operators are already getting prepared tc participate in the bidding processes. Concession ol BRTS operation is a required condition foi national funding. Private operators unable to organize S The experience of TransMilenio operators serves themselves or unwilling to participate in the as a positive incentive for local operators tc Project due to the fear of changing the support and participate in the Project. The existing business structure. presence of local operators is a condition foi Project implementation.

Overall Risk Rating S

6. Loadcredit conditions and covenants a. Effectiveness Conditions

(i)the Operational Manual has been issued by the Borrower, through DNP, and approved by the Bank; (ii)the terms of reference for the hiring of the independent auditors have been prepared by the Borrower, through DNP, and have been approved by the Bank; (iii)the PCU has been fully staffed and is operational including among others a Financial Officer, Procurement Specialist and Resettlement Expert; (iv) the financial management system for the Project has been established; b. Subsidiary Agreements

The borrower, through the DNP (later MOT): a) will assure the fulfillment, by the executing agencies, of the obligations and procedures established in the Subsidiary Agreements and Project Operational Manual, including the fiduciary procedures and the information supply for implementation and follow up of the BRTS’ execution, and; b) wi,ll not modify Subsidiary Agreements without Bank’s no-objection. c, Monitoring and evaluation of NUTP

The Borrower, through DNP (later MOT), shall (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis the execution of the Project and the NUTP and the achievement of their objectives set forth in the Implementation letter; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank, each December 15 during Project implementation, starting with the report due not later than December 15, 2005, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the calendar semester preceding the date of presentation of the report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the following calendar semester; (c) review with the Bank, by December 15 of each year of Project implementation, or such later date as the Bank shall agree, starting in year 2005, the pertinent reports referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of said reports and

10 the Bank's views on the matter; and d) carry out an in-depth review (the Mid-Term Review) jointly with the Bank, by July 26, 2006 or such later date as the Bank shall agree, on the progress achieved in the implementation ofthe Project.

The Borrower, through DNP (later MOT), will prepare, under terms of reference satisfactory to the Bank, an assessment of the impact of NUTP in terms of improved mobility to users, accessibility and affordability to the poor, and strengthening of both policy and institutions. In order to do so, the borrower will finalized the construction of a base line not later than six months after the effectiveness. The Technical Committee and participating cities will present the results at the annual review to be held in 2006 (the mid-term review) and in 2008 (project-end).

D. APPRAISAL SUMMARY

1. Economic and financial analysis

A standard cost-benefit analysis was performed for the initial projects involved in the loan (Bogota NQS, Cartagena and Pereira), including all public and private costs for BRTS implementation and operation. Estimated benefits include travel time and cost savings for both BRTS users and private vehicle commuters using parallel niixed traffic lanes, efficiency improvement in transit operations with physical destruction of obsolete units, as well as modal shift, trip generation, accident reduction and pollution abatements. Most benefits resulted from savings in operation costs due to the removal and scrapping of obsolete buses. Another important source of social benefits are the travel time savings to users, calculated through transportation planning models and using a value of time set at US$0.75/hour.

Project evaluation indicators are summarized as follows (see Annex 9 for more detail):

Project Net Present Value 12% Socio-Economxnternal BenefitKOst Ratio US$ Million Rate of Return Bogota TransMilenio NQS 163,7 2 1.40% 1.45 artagena ranscaribe 54.9 20.33% 1.26 Pereira-Dosquebradas Megabus 12.8 16.45% 1.13

TOTAL 225.6 20.56% 1.345

2. Technical

The proposed BRTS projects present no major technical difficulties in their design, construction or supervision. The required civil works will most likely consist of the construction of segregated busways, stations and terminals, as well as the pedestrian infrastructure needed to access trunk-line stations. These works will use standard construction procedures, available materials and machinery. The alignment of the segregated busways, its insertion into the urban structure, and its relation to the existing road network will be incorporated in the design. In principle, the location of the busways will be in the center of major arterial roads. The terminals are located at each end of the busways and have especially designed areas for pedestrian and bus activity. During the construction period, a supervisor with specialized consultant firms will be contracted to control the quality of the works.

11 3. Fiduciary

3.1 Procurement issues

The latest Country Procurement Assessment Report was done in 2000. For the TA component, DNP has extensive experience in procurement of consultant services due to the implementation of the Regulatory Reform Technical Assistance and other Bank projects. Therefore, no procurement problems are expected within this component. A capacity assessment will be conducted to MOT before it takes the management ofthe Project.

For the BRTS Development component, the municipal civil work agency or the BRTS implementing agency, depending of the decisions made by each participating city, will be in charge of the procurement of works, goods and consulting services financed under the proposed Project. The number of contracts to be issued in each city is small, and a threshold of US$5 million and US$250,000 will be applied to International Competitive Bidding (ICB) for works and goods, respectively. The contracts for the supervision during the construction will be awarded under QCBS procedures. Those agencies have no experienced handling Bank procurement procedures, and it will be necessary to train local staff in Bank procedures and to closely monitor each bidding process.

For the BRTS Bogota NQS corridor work, contracts have been awarded prior to considering the inclusion of such investments in the loan. On January 28th 2004 OPRC approved case number 517 extending a waiver of the US$Smillion maximum threshold applicable to National Competitive Bidding process (NCBs) in Colombia to enable the financing with Loan proceeds of 5 contracts signed by IDU’. The waiver will only apply for the five lots procured for the Bogota NQS corridor, but not for BRTS in other cities, which should be procured under Bank procedures.

3.2 Financial Management (FM) issues

Financial Management design and oversight are complicated due to a number of factors. These include: (i)the financial plan for the Project, under which expenditures take place over a short period of time - most within the first half of the Project implementation timeline - but national and municipal budget allocations are spread out over many years, extending beyond the projected closing date; and (ii)the involvement of various cities, most through newly-created (BRTS) entities. These issues have been considered in the FM design of the Project (see Annex 7 for a complete discussion of financial management and disbursements).

In order to facilitate project implementation within an appropriate fiduciary framework, Bank financing for this project includes financing of transfers to municipalities. This mechanism, similar to that employed in some Sector-wide Approaches (SWAPS), requires a particular emphasis on the fiduciary arrangements in place for the recipients of the transfers (in this case, the municipal BRT entities), who must report on the use of these funds as well as on the funds, which they provide, to the program. While the disbursement mechanism does in some way resemble that of a SWAP operation, this operation is not considered to be a SWAp, for the following reasons:

1) It does not have a diversity of multiple donors;

Contract #lo5 signed with Societal de Futuras Concesiones Urbanas S.A.; Contract #lo6 signed With Sociedad Concesionaria Metrodistnto S A; Contract # 179 singed with Consorcio Troncal NQS Sur; Contract # 180 signed with TransMilenioNQS Sur S.A. and Contract # 242 signed with TransMilenio del Sur S.A.

12 2) It is not a Borrower’s-managed approach by which development partners support a country led program;

3) Project preparation and future implementation did not and does not include uniform implementation structures and procedures of several partners (i.e. joint appraisals, programming, review, and monitoring and evaluation);

4) There is no pooling of funds (i.e. pooling of donor and govemment funds for disbursement through jointly agreed channels funds);

5) The Borrower under this Project will not use its fiduciary systems; and

6) The Borrower will use and follow Bank’s policies and procedures (Le. intev diu, for procurement, hiring of consultants, and safeguard policies).

Moreover, eligibility of expenditures under Transfers will be determined through the equivalent to Statements of Expenditures (SOEs) that in this Project are called Statements of Transfers (SOT). Also progress reports and audits will be requested from entities receiving said Transfers to show, to the satisfaction of the Bank, how the money was ultimately spent. To make sure that the Borrower complies with these requirements, the Loan Agreement for the Project envisages conditions of disbursements tied to the disbursements of said Transfers.

This project incorporates certain features of the Expenditure Eligibility Policy approved by the Bank’s Board of Directors on April 13, 2004. The application of this new policy to this project is consistent with the Colombia Country Financing parameters that have been approved by the LCR Regional Vice President.

4. Social a. What are the opportunities, constraints, impacts and risks arising out of the socio-cultural and political context?

The Project will improve the standard of living of the population of Colombia’s main cities. Urban public transport users will have access to a safe and improved transit system. The BRTS will also allow the use of mass transit to the disabled population, in the case of TransMilenio in Bogota, 1 percent of the users of the system are disabled people. Currently, disabled people cannot use mass transit, given the characteristics of the system.

The implementation of Component 2, BRTS Development, will cause involuntary displacement in some cities. For this reason, a Resettlement Framework was developed according to Bank Operational Policy 4.12 (see Annex 10). All participating cities are aware of the Resettlement Policy of the Bank, and the local authorities as well as the responsible institutions are willing to adhere to this. Based on this Framework, each city will design Resettlement Plans before the bidding process for the construction of corridors. This resettlement framework will be a new practice for some cities. Under Component 1, “Implementation Capacity Building,” DNP (later MOT) will provide TA on this matter through consultants. This assistance will include preparation of guidelines, technical workshops, and assistance during preparation and implementation of resettlement plans. DNP (later MOT) will also review each

13 Resettlement Plan, will send it to the Bank for no-objection and will follow up its implementation. Prior to project implementation, a Social Management Plan will be prepared by each city in order to inform the communities about the Project and its impacts, and also to mitigate any adverse social impact caused by the works. At the end of the Project, GOC will publish methodologies and results of resettlement in each city and a guideline for resettlement in urban transport projects based on the lessons learned in this Project.

In the case of Bogota, IDU initiated the construction of the Bogota NQS TransMilenio corridor before these investments were included into the Project. IDU has already acquired more than 50 percent of the affected properties and the displaced population has resettled on their own. IDU could not apply the resettlement standards of Bank's policy because at that time the Bank was not involved in this BRTS. Currently, IDU is interested in applying Bank's Policy, recognizing important advantages in using it in terms of equity and facilitation of project implementation. Therefore, IDU is preparing an Action Plan to apply corrective measures for people that have already been displaced, and to apply the standards of the Resettlement Framework for people to be displaced.

b. How have key stakeholders (civil society, business, public sector, social, or other non-governmental groups or individuals whose participation can positively or negatively affect Project outcomes) participated in Project preparation, and how will they be involved in implementation, monitoring and evaluation?

The participation of the existing transport companies and operators in the new system is strongly promoted. To enforce this participation a fundamental change in the structure of the companies/operators is needed to consolidate non-competitive enterprises into large operating companies, loohng for a "win- win" scheme, which allows the mitigation of resistance from private bus operators.

c. Are any of the following social issues important in the Project? If so, how? Differential access to Project benefits.

Although the proposed Project will have effects on different groups of the population the Project aims to address mainly the needs of low-income users, i.e. primary public transport passengers. Such users will benefit especially from increased accessibility, lower travel times, and improved safety conditions. These users, of whom approximately 70 percent come from the lowest income areas of the cities, will also experience a reduction in the costs of transportation due to the tariff integration provided by the system. On average, 25 percent of total income is currently allocated to transportation costs. With tariff integration (trunk-feeder integration), this percentage is expected to decline to 18 percent for those users who have to make transfers. More generally, the population at large will experience enhanced overall urban mobility and improved environmental conditions, through the relief of traffic congestion, reduction of accidents and air pollution. With the implementation of the BRTS the cities will promote the renewal of the existing bus fleet, reduction of the bus over-supply, introduction of cleaner fuels, reduction of inefficient routes, and an increase in the operational speed of the transport system. Other potential beneficiaries are the residents and businesses along the corridors, which are likely to see an increase in property value by having better accessibility and improved mobility options.

Positions of expected winners and losers:

One of the main issues to be solved by the proposed Project is the current disarray of the business structure in the public transport industry. For the operation of BRTS, fundamental changes in the current bus operational scheme must be carried out. As in the TransMilenio system, the participation of the existing transport companies and operators in the new system will be promoted.

14 5. Environment

Are any of the following environmental issues important in the Project? If so: (i) how are they integrated in the Project to enhance its environmental benefits; and (ii)how will the main environmental benefits be monitored?

0 Establishing policy, regulatory and institutional frameworks for environmentally sustainable growth and resource management, particularly in sectors that potentially affect the environment:

The public transport system will be restructured in all participating cities as a result of developing BRTS. The actions required for enabling BRTS will generate long term environmental benefits, in addition to economic savings resulting from increased accessibility and reduced travel time and costs. These benefits will mainly arise from a decrease in fuel consumption, and in the energy intensity of travel; less and more efficient buses carrying more people will reduce significantly the use of fuel per passenger, implying less emissions of air pollutants and greenhouse gases. Exposure to air pollutants will also be lowered as travel time decrease.

Existing high polluting buses and mini-buses will be replaced by newer vehicles, mostly new articulated buses in all trunk lanes. At the end, the overall fleet size will be reduced as a result of achieved transport efficiency, where only the minimum needed number of buses will be allowed to circulate, as part of a cost-saving strategy from the new BRTS, complemented by scrapping regulation. Also, as the transport system becomes more efficient, congestion levels will be reduced, contributing even further to the reductions in emissions of air pollutants, as increased average speeds will allow for more efficient combustion. Finally, upgrading existing urban roads to make space for BRTS in participating cities will generally involve urban space improvements in the form of bikeways, upgraded pavements and adjacent green areas.

0 Protecting people’s health from environmental risks and pollution:

Emission reductions imply less health related costs; there is direct correlation between the reduction of medical treatments and labor absenteeism. Reduction of heath problems includes respiratory illnesses, and affection to the central nervous systems, normally stronger in children and the elderly. The Project will certainly contribute to improve air quality in all participating cities. Also, safety will be enhanced as a result of Project implementation; passengers will only be allowed to enter the system on points safely away from cars to mitigate risk of conflict. Disabled people will have special devices to allow them use the system. In addition, the country is in the process of improving fuels, reducing substantially the sulfur content in refined diesel and gasoline, which would enable the introduction of vehicles complying with better emission standards.

0 Monitoring:

The TA component will help develop tools and mechanisms at the national and local level to adequately monitor not only the BRTS’s transport efficiency, but also the environmental and safety performance of the Project. Baseline scenarios for emissions, noise, and safety will be established, and periodical monitoring will enable a close and timely evaluation of the system.

6. Safeguard policies a. What is the safeguard-screening category ofthe Project? (SI, S2, S3, SF)

15 s2

b. What is the environmental screening category of the Project? (A, B, C, FI)

B- Partial Assessment

c. If applicable, what are the key safeguard policy issues raised by the Project?

The Project triggers OP4.01 on Environmental Assessment; OP4.04 on Natural Habitats; OP4.12 on Resettlements; and OPN 1 1.03 on Cultural Property.

Overall, the Project will generate long-term positive impacts, as access and road safety is improved, urban space enhanced, and emissions and exposure to air pollutants reduced. However, there are potential environmental effects linked to the upgrade and re-alignment of existing roads. The works will include limited land acquisition and resettlements. The overall impacts on environment are expected to be minor and confined to the construction period.

OP4.0 1 is triggered due to potential adverse environmental impacts associated with construction, in particular with regard to: (a) management of materials and waste; (b) restriction of traffic flows and access to homes and businesses; (c) increased noise and emission of pollutants; (d) management of work camp sites; (e) impact on green areas; and (0 interference with urban infrastructure (phone lines, piping, electricity wires, sewage).

OP4.04 is triggered due to potential impact on nearby wetlands in Barranquilla and Soacha, in particular during the construction period.

OPN 1 1.03 is triggered to potential impact on cultural heritage, as there is potential for chance finds when upgrading some ofthe roads in any of the cities.

OP4.12 is triggered due to involuntary resettlements in some cities, despite the positive social impacts of the Project for the urban population.

d. If applicable, what are the main results of any safeguard policy related studies, and how have they been incorporated into the Project?

Concept design studies for all potential participating cities already considered the environmental and resettlement dimensions. Considering the relatively low environmental impact associated to the Project, and that the environmental impacts were associated with upgrading existing roads, it was decided during Project preparation that Guidelines for the design, construction, and monitoring of urban infrastructure projects would be needed. The guidelines are aimed at setting measures to mitigate environmental risks associated to the construction phase of the projects. Impacts not averted at the design stage would be mitigated at the construction stage with the existence of adequate Environmental Management Plans (EMP). These will mitigate environmental risks associated to OP4.01 (construction impact); OP4.04 (nearby wetlands); and OPN 11.03 (heritage and historic chance finds). The Guidelines were woduced, based on the existing guidelines and Procedures at IDU, and in coordination with the Ministry of Environment, DNP, and the participating cities.

Basing on the Guidelines mentioned above, EMPs will be required for each city to mitigate the potential environmental impact on the Project sites and surrounding areas during construction. The EMPs will be carried out either by the same contractors in charge of developing the final infrastructure designs, or as

16 separate studies for each city, in close coordination with the specific designs. Considering that the participating cities would be at different levels of preparedness, it was agreed that one of the cities' EMP would be prepared and submitted for Quality Assurance Team's (QAT) review before appraisal. Pereira, being the first city, prepared and submitted EMPs for the 6 segments to be built under the Proiect. Also, as Bogota has been added to the Proiect. the EA for the corridor NOS was evaluated before appraisal.

To mitigate the social impact of involuntary resettlements, a Resettlement Framework Policv was developed, under the coordination of DNP and with the participation of candidate cities. Each city will develop a Census and Socioeconomic Study of people to be resettled, and Resettlement Plans, before the bidding process starts. In the case of Bogoth, an Action Plan to assist the people displaced and to be displaced was developed in appraisal. The Action Plan for people to be displaced will be consistent with the Resettlement Framework. The activities for the people already displaced will be designed based on the results of an assessment of the impacts caused by displacement. e. What is the borrower's capacity to implement the safeguard policies recommendations, and if the capacity is insufficient, how will this capacity be brought to the required level?

Environment As a principle, all EMPs will be implemented by the contractors in charge of the civil works, and its compliance will be ensured through the bidding documents and legal contracts. With the exception of Bogota-Soacha, where IDU has a very good environmental capacity and where there is experience in dealing with civil works required to implement TransMilenio, other cities have relatively low capacity to approve the EMPs required as a general condition for the projects. DNP (later MOT) will be the agency in charge of monitoring implementation of all projects, but its capacity to follow up EMPs needs to be re-strengthened. To mitigate the risk, during Project implementation all EMPs should be sent to the Bank for no objection. Complementarily, the Technical Assistance component will help build the needed capacity at the city level. The Subsidiary Agreements will include provisions for ensuring that the EMPs are fully complied with, and that their implementation is properly monitored and evaluated. All bidding documents for the infrastructure works will include not only the EMP, but also a Manual for monitoring their implementation.

Resettlement Under Component 1, DNP (Later MOT) will provide TA to formulate resettlement plans according to the resettlement framework approved by the Bank. DNP (Later MOT) will prepare technical guidelines in this matter and will promote workshops, and specific training. DNP (Later MOT) will also review each Resettlement Plan, will send it to the Bank for no-objection, and will follow up its implementation. . Each study will follow up the indications of a Resettlement Plan framework prepared according to Bank Policy 4.12, which indicates that a Resettlement Plan will be approved by the Bank and adopted by each local entity.

What type of consultations has been conducted related to safeguard issues? How did these consultations influence Project design'?

A Consultative Workshop on Safeguards took place during preparation, with the participation of representatives from all candidate cities, the DNP, the Ministries of Environment and Transport, and from the Bank's regional safeguard team. At the workshop, the Bank safeguard policies were made clear to all participating, as well as their application to the Project. Agreement on next steps for preparing the Project, and on environmental and social requirements for implementation were agreed at the workshop.

Stakeholders have been consulted by both the regional authorities and the consultants in charge of developing the concept designs. The terms of reference (TORS) for the EMPs will include consultations with stakeholders so that their opinions can be incorporated as early as the design phase. The

17 Resettlement Framework includes information and consultation activities for population to be resettled. These activities will be carried out during the preparation and implementation of each Resettlement Plan g. When were the safeguard studies made available at the InfoShop?

The EMP for Pereira, the Environmental Guidelines, the EA for NQS (Bogota), and the Resettlement Framework were available on March 19th, 2004. h. When and where were safeguard studies made available in the cooperating country?

On March 19th, 2004

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.0 1) [x 1 [I Natural Habitats (OP/BP 4.04) [x I 11 Pest Management (OP 4.09) [I [I Cultural Property (OPN 1 1.03, being revised as OP 4.1 1) [ XI 11 Involuntary Resettlement (OP/BP 4.12) [x 1 [I Indigenous Peoples (OD 4.20, being revised as OP 4.10) [I [I Forests (OP/BP 4.36) [I [I Safety of Dams (OP/BP 4.37) [I [I Projects in Disputed Areas (OP/BP/GP 7.60) [I [I Projects on International Waterways (OP/BP/GP 7.50) [I [I

7. Policy Exceptions and Readiness a. Does the Project require any exceptions from Bank policies? If so, what are they and how are they j us t ifi ed?

Yes.

For the BRTS Bogota NQS corridor work, contracts have been awarded prior to considering the inclusion of such investments in the loan. On January 28" 2004 OPRC approved case number 517 extending a waiver of the US$Smillion maximum threshold applicable to National Competitive Bidding process (NCBs) in Colombia to enable the financing with Loan proceeds of 5 contracts signed by IDU6.The waiver will only apply for the five lots procured for the Bogoth NQS corridor, but not for BRTS in other cities, which should be procured under Bank procedures. b. Have these been approved by Bank management?

Yes c. Is approval for any policy exception sought from the Board?

No

' Contract #lo5 signed with Sociedad de Futuras Concesiones Urbanas S.A.; Contract #lo6 signed with Sociedad Concesionaria Metrodistnto S A ; Contract # 179 singed with Consorcio Troncal NQS Sur ; Contract # 180 signed with TransMilenioNQS Sur S.A. and Contract # 242 signed with TransMilenio del Sur S.A.

18 Annex 1: Country and Sector or Program Background COLOMBIA: CO Integrated Mass Transit Systems

While urban population has grown in many developing countries due to social and economic reasons, Colombia has had a higher comparative rate due to the long lasting civil conflict that has displaced more than 2.5 million people in the last two decades from the rural areas to the main cities. As conflict worsened in the late 1990’s, displacement to the cities has increased even further than before.

As a result Colombia has been transformed into a country with high urban population and with several large and medium size cities. While the urbanization rate is high (75%), the capital city, Bogot6, accounts for 17 percent of the population only; a low share comparing with other Latin American cities (Lima 34%, Buenos Aires 35% and Santiago 33%). There are 5 cities in the country with population of one million or more, and 10 cities with more than 500.000 inhabitants.

On the poverty side, indicators have worsened in the last years due to the economic down fall and today two thirds of the people living below poverty line live in urban areas. According to the Colombian Poverty Report 200 1, the recession of the late 90’s not only increased the number of urban poor but the poor also became poorer.

Today, the inhabitants of the periphery have increased the pressure on government to provide accessibility to downtown jobs and services. An inclusive transportation system, that provides low cost and fast mobility for low-income areas, is crucial for the design of a poverty reduction strategy.

Transportation systems in Colombian cities:

Urban Transport in Colombia is mostly based on public transport. Car ownership is very low: only 25 percent of the households own a motor vehicle and only 14 percent of commuters use private cars on a daily basis. In the 1990’s the number of private vehicles increased by 125 percent, due to a sharp reduction in import tariffs (deregulation policies), however still today, 75 percent of the population relay on public transportation.

Traditional policies to address urban transport problems have been based on infrastructure provision (new roads, more capacity of the existing roads, and overpasses) This not only implies high expenses, but also benefits the car-owners, while neglecting 80 percent of the population that uses public transportation.

The population, which is unable to afford a car, has been left with the only alternative of using low quality, slow, dangerous and polluting bus services. In the main transport corridors of the largest cities, the average speed, in peak hours, is less than 10 kidhr, significantly lower than international benchmarks (around 20 km/hr). This negatively affects the city’s productivity, increases emissions of air pollutants, and generates an incentive to private car commuting, which is worsening the problem even further.

The current business scheme in the public transport industry in Colombia, promotes competition in the market (maximizing the number of passengers picked up by a single unit) and not for the market (this means, for the routes that will provide the service under pre-established parameters). The local authority grants permits to transport companies enabling them to operate routes, but these companies do not exercise enough control over their buses during the phase of provision of services. The revenue of these companies depends on the number of buses they affiliate. The owner of those affiliated vehicles receives a fixed rent from the bus drivers, who earn money according to the number of passengers they serve, generating what is commonly known as the “penny war” (perm del centavo).

19 The penny war has promo’ted an oversupply of seats (around 50%)’ increasing the system’s overall operating cost and reducing the profitability of the business. Operators therefore have no incentives for new investments, which leads to an increase in the average age of the fleet and eliminates capital accumulation.

In addition, local traffic and transport authorities are often weak and do not have adequate tools for planning and managing the sector. During the 90’s the decentralization process in Colombia was deepening and National Government involvement in urban transport issues was abandoned. Only regulatory activities, such as the mechanisms to authorize companies, define fares and authorize vehicles, have remained at the national level. Municipalities have struggled to find their own solutions but they lack the financial and technical resources to produced feasible and affordable solutions tailored to their own needs. The existing regulatory framework also hinders innovative solutions for the traditional transport service provision.

The overall transport cost for society and particularly for the poor is significant. The time lost every year in congestion represents 3.4[DHGl]% of society’s income. Congestion increases fuel consumption and the level of emissions.

It is expected that urbanization and motorization will deepen commuting problems generating new demand for services and public transportation. Rising congestion and time used in commuting have already become one of the main issues in the agenda of elected mayors. Realizing these issues, GOC has recently taken steps to focus more on these agglomerated areas, through actions and legal measures regarding the decentralization process, city-planning processes and specific sector policies.

The National Urban Transport Program -NUTP

Background

GOC involvement in urban transportation projects started with the experience of the Medellin Metro at the beginning of the 80’s’ where GOC guaranteed the city’s debt to build the infrastructure. After 12 years of financial and legal problems, the Metro was inaugurated in 1994 resulting in an investment of approximately US$3 .O billion. Today the Metro transports daily around 500.000 passengers.

After the experience of Medellin, in 1998 GOC and the city of BogotS, abandoned the idea of building a rail-based metro and agreed to co-finance a Bus Rapid Transit System. The objective was a long term agreement that encompasses financial commitments of about US$1.2 billion up to the year 2016, to develop a system in the city that forecasts to reach 100 percent of the city’s public transportation demand in that year.

At the end of 2000, the first phase of BogotS’s BRTS, TransMilenio started operations deriving in investments of about US$400 million dollars, US$lOO million of them covered by the private bus operators. In three years it reached a daily demand of 700.000 passengers or 15 percent of the total public transportation trips.

Considering the success of TransMilenio, which addresses most sector issues, the previous GOC administration re-negotiated a prior agreement to fund a rail based system in Cali and defined GOC’s financial commitments for about $241 million dollars up to the year 2007 to develop the first phase of a BRTS in Cali.

20 When the new administration came to office in late 2002, GOC had already transferred US$120 million to Bogota for the first phase of TransMilenio and US$6 million to Cali for the implementations of the BRTS. With this background, the government decided to formalize Bogota and Cali’s arrangements into a program that will also include other large and medium sized cities in Colombia. Therefore, GOC included a fiscal envelop for the National Urban Transportation Program (NUTP) in its National Development Plan and a later CONPES document in 2003, further detailing the scope of the program.

The NUTP

The overall purpose of the NUTP is to improve long-term sustainability, efficiency and quality of urban transport in selected cities. The NUTP represents a concrete effort between GOC and participating cities, in which GOC will co-finance up to 70 percent of the cost of the infrastructure needed for the implementation of integrated BRTS under a policy framework that addresses the sector issues within the limitations of the current fiscal situation.

GOC has reserved a total fiscal envelop between 2004 and 2007 of about US$688 million, that includes about US$500 million for previously approved commitments (vigencias futuras) for Bogota and Cali, and about US$l80 for new projects in 6 candidate cities which are Pereira, Cartagena, Soacha, Bucaramanga, Barranquilla, Cali and Medellin. Currently, US$62 million out of the US$l80 million have already been committed to Pereira and Cartagena through the approval of “vigencias futuras”.

While CAF and IDB’s operations will finance GOC transfers for specific projects (Bogota’s Suba project and Cali, respectively), the proposed IBRD loan will have a broader and more flexible scope, financing the 2004 - 2008 “vigenciasfuturas” of the GOC contributions to the NUTP. Since the implementation of the NUTP will go beyond 2008, which is the intended closing date of the proposed Project, it is likely that the GOC will request the Bank to provide a follow on operation to continue supporting the program.

The chart summarized the cost of the program as of today.

21 i

i Participating city BRTS hnicipalia ~ GOC somm nents b source Total nfra and GOC TBD GOC inan cos’ -BRt ___IDB CAF Budget 2008 - 2015

ICompleted 1999 - 2002 Bogota phase 1 + kmericas 500 382.5 0 0 0 117.5 0 117.5

- Suba 135 50 0 0 85 0 0 85.0 - NQS 400 200 150 0 0 0 50 200.0 Pereira 32.7 11.2 21.5 0 0 0 0 21.5 Cartagena 82.0 35.3 1.6.7 0 0 0 0 46.7 Soacha 23.3 7 3.3 0 0 0 13.0 16.3 40.7 12.2 28.5 0 0 0 0 28.5 61.1 18.3 0.0 0 0 0 43 42.8 60.0 18.3 0.0 0 0 0 42 42.0 345.0 104 0.0 200 0 41 0 241 .O 934.9 41.8 0.0 0 65 0 828.1 893.1

/Total , 2614.7 880.6 -,50.l 200.0- 150.0 158.5 975.9 1734.4

The institutional and policy frameworks:

The institutional and policy frameworks of the NUTP have been described by two CONPES documents that have defined: i)policy goals, strategies and expected outcomes, setting a Technical Committee to monitor and evaluate execution of the NUTP and performance of the BRTS; ii)the responsibilities of the key participants (Ministry of Finance, DNP and participating cities); iii) the criteria for securing the financing of the BRTS by the cities and GOC, and requirements for the flow of funds; and iv) specific conditions for GOC participation, including eligibility criteria to be met by cities and BRTS. The CONPES document of 2002 entrusts to the DNP the execution and supervision (involving participating cities) of the preparatory studies for the design and the financial structuring of the BRTS projects.

The CONPES documents also define the Program’s strategy as to: i) Financing infrastructure of the BRTS in selected cities; ii)strengthening institutional capacity at local and national level in order to plan and operate urban transport systems; iii) establishing an eligibility criteria for GOC participation; iv) maximizing the impact on urban quality of life, and social benefits; v) fostering civil society participation; and vii) implementing follow up mechanisms. a) Financing infrastructure of BRTS:

For GOC, the implementation of the BRTS will be a building block to: i)Eliminate the “penny war” through a better reward system that integrates the operators into actual companies with bus ownership, rather than firms that only affiliate buses; ii) Reduce the excessive bus fleet currently operating in the main cities; iii)Operate the system on high capacity buses using low polluting technologes; iv) Increase average speed in the corridors through physical segregation of bus lanes and general traffic, implementation of stations and electronic fare collection systems; v) Integrate, physically, operationally

22 and tariff wise, a large share of city routes, sometimes even with buses out of the BRTS; vi) Reorganize the existing routes to make them complementary to the new BRTS; vii) Promote a comprehensive urban development strategy, particularly in the management of public spaces, and vii) Coordinate among local agencies.

GOC envisages that the BRTS would be privately operated and should seek the minimization of the public expenditures. Private parties are expected to carry the cost of the buses and its operation; fare collection systems; administrative expenditures of the public agency in charge of planning, developing and controlling the BRTS; infrastructure maintenance; reduction of excessive bus fleet; and some components of the infrastructure for future system expansion. All these investments will be covered through user fares, publicity, real state business or any other sources of revenues, but not through government subsidies.

Public Funds for the infrastructure will come from both the national and local governments. The fact that both have fiscal constrains restricts the possibilities of BRTS expansion in the short term. For that reason a bridge financing will be used and interest during construction will be considered as part of the project cost. To structure the bridge financing, the national and the local Governments will use a budgetary mechanism to commit resources over several years called vigenciasJ&mzs. By using this mechanism the disbursement of public funds will be programmed to occur during a period of time that goes beyond the construction phase when all infrastructure investments will take place. GOC has defined that the Municipalities will be responsible to find the bridge financing, either through commercial banks or through contractors. In any case, as stated in the program, GOC funds disbursements will, be tied to the successful implementation of the BRT system in each city. This bridge financing should have the same cost of capital than the one that the Nation normally gets.

The funds provided by GOC should be spent only on the approved Project. The funds provided by municipalities should be 100 percent reliable and should have legal certification (gasoline tax, with destination to the BRTS approved by the city council as well as other existing funds). The development of the Project should not jeopardize the financial situation of the municipality; it should follow the National regulatory framework on expenditure ceilings for municipalities and should not violate any previous Subsidiary Agreement with GOC.

GOC will not assume or guarantee any design, building or operational risk and will not cover any additional cost different to what was established in the CONPES document that approves central government participation in each project. Each municipality will establish the adjustment mechanisms in order to maintain the viability of the Project when cost assumptions do not occur as foreseen. GOC will provide technical assistance to municipalities in order to better assess project finance. No operational subsidies will be considered for the BRTSs.

b) Requirements for GOC participation (eligibility criteria):

GOC has established several policy guidelines to define its participation in a given city. Criteria includes infrastructure, operational, institutional and financial requirements:

Infrastructure: i)building high capacity segregated corridors or mixed use according to the demand; ii) building adequate bus stops or stations; and iii) building integration terminals adequate to transfer between trunk line and feeder buses.

Operational: i) operation through high capacity new buses based on clean technologies; ii) inclusion of mechanisms to reduce the bus oversupply; iii) modification andor cancellation of existing routes in line with the design of the system; and iv) fare integration including routes outside of the BRTS.

23 Institutional: i)private sector participation; ii)new structure of the firms providing transport services; iii) operation and commercial risk assignment to private operators; iv) design of legal mechanisms in order to have an autonomous, safe and independent fund management using trust funds; v) implementation of mechanisms to incorporate land use changes in zoning plans; vi) coordination mechanisms within the local agencies; vii) use of special procurement procedures when the multilateral finance institutions are involved; viii) information to the community throughout the process; and viii) permanent involvement of the Technical Committee (formed by delegates of DNP, MHCP and MT).

Financial: i) fulfill rules and regulations regarding fiscal responsibility of local administrations; ii) preserve the fiscal responsibility status; iii) assign risks according to national rules and regulations; and iv) adopt the legal mechanisms to guarantee fare actualization (without political interference).

c) Maximization of impact on urban quality of life and social benefits:

The implementation of the BRTS will seek to reduce accidents, improve street security, recover public spaces and increase citizen’s culture. In order to achieve this, municipalities will implement traffic measures such as improvement of traffic lights; reorganization of streets directions; establishment of parking zones and schedules of loading and unloading; building and reconstruction of sidewalks, and restriction of some commercial streets for pedestrian use only.

Additionally, municipalities will build infrastructure to facilitate the integration between the BRTS and other transportation modes such as bicycles and pedestrians. Finally, to reduce emissions GOC will promote the usage of clean technologies as long as they don’t have a significant impact on operation cost.

Competitive bidding will be applied to allocate bus operation and fare collection contracts. Selection criteria will include economic factors (minimum 35%) as well as local experience, especially of bus owners in an effort to mitigate eventual displacement. Mechanism of external auditing will be applied to guarantee transparency and maximum participation of stakeholders.

Additionally, in order to provide capital access to the current operators, GOC will promote the usage of funds previously allocated to generate equipment replacement as part of the equity of the new enterprises. Finally, there will be support for programs seelung to re-integrate displaced operators to the labor market.

d) Fostering civil society participation:

The system will include surveys in order to find out if the system satisfies the users. The agencies in charge of the BRTS will implement evaluation programs on the quality of service, including parameters of safety, speed and comfort. Additionally, the agencies will have to implement user attention offices and will have to steadily provide information regarding their activities to civil society.

e) Implementation of follow up mechanisms:

With the purpose of keeping continuous track of the advance of the projects and the operation of the systems, GOC will establish a Technical Committee. This committee will be in charge of: 1) coordinating and certifying the fulfillment of the policy requirements by the municipalities; 2) permanent tracking of the financial situation of the municipalities; 3) guaranteeing the follow up of the technical agreements in each case and finally; and 4) analyzing all of the information provided by the trust funds and proposing measures for the right management of the resources.

24 Expected Policy Impact

GOC has included clear indicators to measure the success of its program, these being: to reach 50 percent of total public mode trips in participating cities; increase average speeds in the corridors (20% to 35%); 30 percent reduction in operational costs; 80 percent reduction in car accidents; 40 percent reduction in hold ups, 50 percent CO emissions reduction; between 30 percent and 45 percent reduction in Nox and 35 percent reduction in organic components. Additional positive impacts are: creation of 146.000 new employments (mainly during construction), recovery of public spaces; institutional improvements in the transport sector; the generation of new business opportunities and real state activities, and finally, generation of new sources of funds for the municipalities.

To guarantee this impact, GOC has foreseen that a Technical Committee will be in charge of monitoring the implementation of the BRTS and the overall progress of the NUTP.

25 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies COLOMBIA: CO Integrated Mass Transit Systems

The proposed Project aims at improving long-term sustainability, efficiency and quality of urban transport in selected cities by assisting GOC in the implementation of the National Urban Transport Program. The Bogota Urban Transport Project (Loan 4021-C0), which financed part of the construction of the first phase of TransMilenio, was closed and rated highly satisfactory in August 2002. This Project created the platform for the National Urban Transport Project, showing the possibility of implementing cost-effective urban transit systems and to reform the existing inefficient public urban transport structure. The Bogota Urban Transport Project will serve as a successful experience to be implemented in other selected cities.

Bogoth Urban Transport Project facilitated the access of public transport to areas containing low-income population by financing design, work and supervision of access roads to those neighborhoods. In connection, Bogota Urban Services Project (Loan 7 162-CO) will ensure to provide efficient delivery of transport services throughout the city of Bogota by constructing bus-lanes, upgrading and rehabilitating feeder roads to connect marginal neighborhood, “barrios, ” to the trunk system. The Project will provide institutional strengthening by continuing the support provided initially by Bogota Urban Transport Project, to the Borrower’s institutions in charge of planning, managing and maintaining transport infrastructure, that could also be replicated through the proposed Project.

Conceptual designs and project financial, legal and operational structuring of the BRTS are being financed by the Regulatory Reform Technical Assistance Project (Loan 4138-CO). The loan is also providing fundamental technical support for the preparation of the National Urban Transport Program.

26 Annex 3: Results Framework and Monitoring COLOMBIA: CO Integrated Mass Transit Systems

Results Framework

Hierarchy of Objectives Key Performance Data Collection Strategy Indicators Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission] Achieve rapid and sustainable

The new urban transport system increases urban mobility, contributing to urbar productivity

- Strategy for and development Creation ofnew operating Supervision Mission Reports The new urban transport ofthe private sector firms ofthe BRTS Reports oflocal agencies scheme is accepted by the locz authorities, municipal council: the transport operators and other interest groups

Low income people become Share the fruits ofgrowth: Poor neighborhoods covered usersurveys regular users ofthe BRTS Inclusion and enhancement of by the BRTS Supervision Mission (in the capacities (empowerment) mid term and by project closure) All the participating agencies Building ofan efficient, Implementation ofoperational Reports of local agencies have the sufficient capacities i responsible and transparent and administrative manuals order to sustain and extend tht government objectives of the project Contracting based on transparent and open procedures

Global Objective: Outcome / Impact Indicators: Project reports: (from Objective to Goal) nprove the efficiency, quality 3 BRTS implemented in the Supervision Mission reports Local governments find the nd sustainability ofthe urban participating cities Local agencies reports development of BRTS a msport in the long term User surveys strategy for urban irough the improvement ofthe development. iobility and accessibility of the Citizens assume BRTS project: oorest urban areas in order to as theirs and use the massive nprove the urban productivity transport systems in an nd the quality oflife in the anticipated way ities Private operators ofthe BRTS participate in the new urban transport strategies BRTS are efficient, self sustainable and do not require operational subsidies Output from each Output Indicators: Project reports: (from Outputs to Objective) . Component: Implementing agencies in System occupation per square Periodic monitoring reports Implementing agencies have ondition to provide service meter below a given threshold Reports oflocal agencies. User the capacity to regulate and

27 rocedures and processes) Ihile maintaining no subsidies Surveys tntrol the provision ofthe :wice. P ercentage ofpeople rating the ystem as being better than the valuation, monitoring and nor system semination systems itablished

reater accessibility to the pool icreased use ofpublic Periodic monitoring reports he tariff is kept on an 'ansport services by the poor Users surveys xeptable level. wo poorest quintiles) along Reports by local agencies. I"I le planned corridors, with he BRTS are affordable for :spect to the base line without IW income users ie mass transit system, both in bsolute (number ofpassenger) nd relative terms (as ercentage oftotal number of assenger).

. BRTS under operation .eduction in generalized door Periodic monitoring reports he business arrangement and door travel cost (fare, time) Users surveys Le project implementation is ) users before and after the Reports by local agencies. mvenient for all the parties roject bperators obtain financing of quipment

Inputs: (budget for each Project reports: (from Components to component) Outputs)

JS $2.3 M Supervision Mission reports 'articipation ofdifferent Periodic monitoring reports gencies linked to urban Local agencies reports slanning, environment and ransport

'echnical assistance to the ities

plementation ofurban

. BRTS Development

Supervision Mission reports 59.2M (IBRD 247.7 M) Periodic monitoring reports 'olitical will Local agencies reports heation of the BRTS mplementation agency ;inancing ofthe infi-astructurc

28 6 B ? 2 2 b b 5 5

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35 &

t- e5 c2 Project Monitoring and Evaluation

The Project will be monitored through Key Performance Indicators, General Summary Indicators and Detailed System Follow-up Reports. Key Performance Indicators are intended to measure the most important results expected from the NUTP. General Summary Indicators are intended to show a synopsis of relevant project characteristics and outcomes. Detailed System Follow-up reports are comprehensive characterizations of the mass rapid transit systems, with a special focus on their impacts.

Key Performance Indicators i) Improved mobility and quality of public transport services in strategies mass transit corridors as measured by:

a) Reduction in total travel time cost from origin and destination:

To measure this, the average generalized cost for a sample of origins and destinations within the area of influence of the Project will be measured with and without Project. A field study will be conducted measuring the travel time and travel cost for a sample of origins and destinations. This sample should be representative (around 300 0-D pairs) of the travel patterns according to the origin and destination available information. Generalized cost includes walkmg, waiting, in-vehicle and transfer times and out of pocket cost. Times are transformed into cost units using value of time (e.g. US$ 0.75/hour for all trips purposes and types of users, in order not to have any bias derived from higher income population using the mass transit system).

Estimated cost per measurement is US$3,000. It is expected to have four measurements per city (1 before and 3 yearly surveys after implementation). If 5 cities become part of the program total monitoring cost for this performance indicator will be US$60,000.

The Project will be considered successful in this dimension if the generalized cost with Project is at least 10 percent less than the generalized cost without Project.

b) Percentage of people rating the system as being better than the previous system:

To monitor this indicator user surveys will be applied to mass transit system users asking whether or not the system is better than the traditional public transportation service. A representative sample will consist in about 2,000 on board surveys categorized by income and origin (north, center, and south) applied during the morning peak.

Estimated cost per survey is US$lO,OOO. It is expected to have four measurements per city (1 before and 3 yearly surveys after implementation). If 5 cities become part of the program total monitoring cost for this performance indicator will be US$200,000.

The system will be considered successful in this dimension if the percentage of people rating the system as being better than traditional service is above 80 percent.

31 ii) Improved accessibility to low income population as noted by:

a) Increased use by the poor (two poorest quintiles) of public transport services along the area of influence of the planned corridors, with respect to the base line without the mass transit system, both in absolute (number of passenger) and relative terms (as percentage of total number of passengers).

To measure this, the total number of people from strata 1 and 2 (average income US$8 per day) using public transport in the area of influence of the mass transit system will be measured with and without the Project. This number will be divided by the total number of public transport riders.

These numbers will be the result of a household survey conducted in the area of influence of the mass transit system conducted before and after system implementation. The survey will determine the number of trips per family in all modes (wallung, biking, public transport, other) and will be applied to households in the travel zones within 500 meters of a system station or feeder line bus stop according to the transport demand models used in each city to estimate ridership.

At least 2,000 surveys will be applied in each city and each period, divided in three categories: high income (6 and 5), middle income (4 and 3), low income (2 and 1) in three different zones of the city (north, center and south). Extrapolation of the survey will allow finding the total number of trips in public transport and the total number of trips by population in strata 1 and 2. The indicator will be trips by strata 1 and 2 divided by total trips in public transport. Estimated cost per survey is US $20,000. It is expected to have four measurements per city (1 before and 3 yearly surveys after implementation). If 5 cities become part of the program total monitoring cost for this performance indicator will be US $400,000.

The Project will be considered successful in this dimension if the percentage with Project is higher than the percentage without Project. iii)Enhanced Institutional capacity for urban transport policy formulation and system development, measured by:

a) At the local level: System occupation and sustainability.

To measure this, the total number of passengers in the heaviest loaded section and the peak hour will be estimated (using visual occupation surveys andor data from the fare collection system if applicable). The number of seated passengers will be discounted and the resulting figure will be divided by the area available for standees, this is nuinber of passengers per unit area (square meter). The number should be below 7 for Bogota (NQS) and 6 for other cities.

The visual occupation survey will be performed once a year by consultants retained by the National Planning Department. Estimated cost per measurement is US$400 (3 hours boarding-alighting, 3 hours visual occupation, plus supervision and data analysis). It is expected to have three measurements per city (3 yearly field studies after implementation). If 5 cities become part of the program, total monitoring cost for this indicator will be US$ 2,000. It is preferable to have an independent field study rather than having information provided by the monitored agencies.

Sustainability will be measured by the amount of operational subsidies paid by the cities to the private providers. It is expected, according to the national policy that there will be no operational subsidy. Hence the system will be considered successful if it has an occupation below a given threshold and it does not have operational subsidies.

32 b) At the National level: At least three systems are implemented with assistance of this loan under NUTP

General Summary Indicators

Will be reported by the implementation agencies on a yearly basis (August). The purpose of these indicators is to provide general information about the characteristics and main impacts of the BRT systems. It is important to have planning targets for each one of the indicators, hence a report of the expected outcomes and impacts will be provided by the implementing agencies to the NUTP Committee before August 2004 for each one of the eligible

Type of Indicator Indicator Measurement (units) Scope, physical goals Length of trunk lines Total Kilometers Lane Kilometers Length feeder lines Kilometers Number ofstations and terminals Units Number oftrunk line buses by type Units Number of feeder buses by type Units Impact, operational efficiency of Number ofsubstituted buses Units the transport system (operational Trunk bus substitution factor (obsolete Factor greater than 1 savings for the community as a busesltrunk buses) whole proxy) Feeder bus substitution factor (obsolete Factor greater than 1 buseslfeeder buses) Impact, change in commercial Change in commercial speed in the trunk line kdhour speed for public transport in the corridors (commercial speed without Project trunk line corridors (user travel minus commercial speed with Project) time savings proxy) Impact, operational efficiency Passenger per kilometer index (total number ofpaid passengers divided by the number of kilometers served) Impact, private vehicle users Percentage of users that report having access % attraction to public transit to private vehicle that use the mass transit system Impact, system coverage in low Line kilometers of trunk and feeder lines in km income areas areas classed as stratum 1 and 2 Percent of total system mileage in stratum 1 and 2 (kilometers in stratum 1 and 2 divided % by total kilometers ofthe system -trunk and feeder) Impact, generation of employment Employment during construction Number ofJobs (full time employment) during Netjobs generated for system operation a year (permanent jobs resulting fiom system Number of Permanent implementation -drivers, fare collector, Jobs (full time supervisors, maintenance, cleaning, security, employment) etc., minus the jobs displaced -people operating scratch vehicles)

Detailed System Planning and Follow-up Reports

The development ofbus rapid transit system is an evolutionary process that currently has limited information as long as only few projects have been completed. Despite the fact that bus priority schemes have been in place for many years in several cities, especially in Brazil, acknowledging that buses are a real low cost and high impact alternative is a recent trend. Hence, it is very important to get and report information that makes it easier to design bus rapid transit systems and make comparison with other mass transit alternatives. Additionally it is very important to have comparisons between planning and actual implementation, to be able to identify areas that may need strengthening. A list of ideal elements that are considered relevant at the Project and Implementation stages is 33 presented. Provided that resources are available this information would be gathered and reported by the local agencies in charge of system development (TRANSMILENIO S.A., MEGABUS S.A., TRANSCARBE S.A., other) on a yearly basis and could be supervised by the GOC through NUTP Committee with the support of the National Planning Department.

A. General Characteristics of the Urban Area (overall information useful for understanding the urban framework where the system is implemented)

1. City/Metropolitan Area 2. Total Population by Socioeconomic Strata 3. Urban Area (km2) 4. Density (People/km2) 5. Total motorized trips and total public transport trips 6. Implementation phase: Initial, Expansion of existing system first implemented in <> year

B. System Description (very detailed characterization of the system including infrastructure and equipment)

7. Infrastructure a. Exclusive single carriageway (line km, width, lane-km) b. Exclusive double carriageway (line km, width, lane-km)

C. Priority (non-exclusive) carriageway (line km, width, lane-km) d. Number of single stations -no integration with feeders (length, number of buses able to dock simultaneously, width -passenger area; by station type) e. Bus overtaking at stations (number of single with bus overtaking over total number of single stations) f. Number of intermediate stations with integration with feeder buses (total area, number of platforms, platform length for trunk buses, platform length for feeder buses, mechanism to transfer -paid area, non paid with virtual integration -list each station)

g. Number of terminal stations with integration with feeder and regional buses (total area, number of platforms, platform length for trunk buses, platform length for feeder buses, mechanism to transfer -direct, overpass, tunnel -list each station) h. Number of bus depots (total area, number of parking spaces by bus type -list each depot)

1. Feeder services length (line km and lane-km, number of bus stops, bus stops spacing) j. Land acquisition: number and total area ofplots acquired for infrastructure development for the mass transit system 8. Infrastructure costs

* a. Trunk corridors (US$2003, US$2003/lane-km) b. Single Stations (US$ 2003, US$2003/station) c. Intermediate and Terminal Integration Stations (US$ 2003, US$2003/integration station) d. Depots infrastructure (US$2003, US$2003/depot, US$2003/parlung space) e. Land acquisition (US$ 2003, US$/m2)

34 f. Other costs - Project preparation, designs, etc. (US$ 2003) g. Total costs (US$ 2003, US$/km) 9. Bus Fleet a, Number of trunk buses by type (articulated, large, conventional) b. Number of feeder buses by type (large, conventional, small, micro) c. Substitution factor for trunk and feeder buses, number of substitutedbuses d. Estimated cost trunk line buses (includes substitution) e. Estimated cost feeder buses (includes substitution and used buses) 10. Fare collection system a. System type (manual, electronic with or without contact) b. Number of entry points to the system, number of selling booths (inside and outside the stations), number of one direction turnstiles, number of two direction turnstiles, number of turnstiles for people with disabilities -wheelchair access)

C. Estimated volume of payment media (tickets, cards) by type d. Estimated cost of implementation of fare collection system 1 1. Control system a. System type (voice, data, combined, with or without automatic vehicle location, with or without advanced programming and real time control -operation aid system) b. Workplaces in control centre (buses por puesto de trabajo) c. Workplaces for on road or terminal control d. Estimated control center cost -hardware and software plus locale adaptation and communications (US$2003, US$2003/bus, US$2003/passenger)

C. Implementation Mechanisms (description of the operations contractual scheme, number of contracts and details of those contracts)

12. Private participation a. Concession contracts for operations (average estimated investment per contract, length, payment mechanism -per kilometer, per passenger, share of total income; segregate between operation (trunk, feeder, fare collection) and infrastructure contracts) b. Acquisition and outsourcing contracts (list, cost) c. Number of shareholders of concession contracts (total and small bus owners)

D. Outputs (detailed characteristics of the planned and actual operations)

13. System Performance a. Total demand (average passengers/workday, passengedyear) b. Feeder service (average passengers/workday, passenger/year, % of total)

C. Regional buses -if applicable ((average passengers/workday, passengedyear, % of total)

35 d. Bicycle integration (average passengersiworkday, passengeriyear, % of total) e. Capacity according to bus operational planning (passengerihourldirectionmaximum and average workday] f. Usage according to frequency and occupation studies (passenger/hour/direction maximum observed and average workday observed)

g. Number of trunk services (routes) by type of day (workday, Saturday, Sunday and Holiday) h. Total kilometers planned by type of day (workday, Saturday, Sunday and Holiday) i. Average hlometers per trunk bus (workday, year) J. Number of feeder services (routes) by type of day (workday, Saturday, Sunday and Holiday) k. Average lalometers per feeder bus (workday, year) 1. Coverage area (area within 500 m of trunk stations and feeder bus stops) m. Commercial speed trunk services (by type of service local, express) n. Trunk line frequency (by type of service, peak, off-peak)

0. Commercial speed feeder services

P. Feeder line frequencies (by service, peak, of€-peak) 9. Average travel distance per passenger (integrated, non integrated) r. Average time spent per passenger (integrated, non integrated)

E. Results (Performance of the system in terms of planned and actual reductions in travel time, travel cost, transit provision cost, accidents, pollution, safety, accessibility, usage by poor population, generation of employment, modal shift and modal integration, and urban development; most of the system impacts are included in the socio-economic evaluation, it is worthwhile to confront expected with actual results)

14. Impacts a. Travel time (estimation of the average minutes saved per passenger as a result of system implementation, total and divided by socio-economic strata; estimation of average minutes saved for users of mixed traffic lanes) b. Travel cost (estimation of the average cost for passengers and users of mixed traffic lanes, total and divided by socio-economic strata) c. Transit provision cost (estimation of the average transit provision cost savings resulting from scratching vehicles and implementing efficient operations) d. Accidents (number of accidents with fatalities, with injuries, simple crashes, number of fatalities, number of injured; by year, before and alter system implementation) e. Pollution (measurements CO, NOx, COV on average in workday, before and alter system implementation in monitoring stations located close to the mass transit system; estimates of net emissions with and without system implementation)

f. ' Personal safety (muggings and homicides reported in the area of influence of the mass transit system with and without system implementation)

g. Attention to vulnerable population (preferably through user surveys in the traditional and mass transit public transport systems) i. Users with disabilities (motor, visual, hearing impaired; wheel chairs)

36 ii. Users above 55 years iii. Users below 15 years iv. Users belonging to strata 1 and 2 h. Coverage in low income areas i. Kilometers of trunk line and feeder lines in areas classed as strata 1 and 2 and as a proportion of the system total ii. Coverage (area of influence 500m) in areas classed as strata 1 and 2, and as a proportion of the system total ... 111. Average travel time for population in strata 1 and 2 iv. Average travel cost for population in strata 1 and 2 v. Estimated cost savings for population in strata 1 and 2 (total and average per passenger) f. Generation of employment a.2.1 Number of construction employments (temporary) a.2.2 Number of permanent employments (drivers, fare collectors, maintenance, supervision, guides, etc.) a.2.3 Number of estimated displaced employments resulting from system implementation

i. Modal shift and modal integration i. Users leaving their own vehicle and using the mass transit system (total workday, percent of total users) ii. Users accessing by foot (total workday, percent of total users) iii. Users accessing by bicycle (total workday, percent of total users) iv. Users accessing by individual public transport -taxi (total workday, percent of total users) v. Users accessing by public transportation, different than the mass transit system (total workday, percent of total users) j. Urban Development i. Real state development projects in the area of influence of the mass transit system (census along the system) ii. Land value changes along the mass transit system corridors (according to real state chamber -Lonja de Propiedad Raiz)

37 Annex 4: Detailed Project Description COLOMBIA: CO Integrated Mass Transit Systems

The Project will finance GOC’s participation in the development of BRTS in eligible cities. The proposed public transport system based on BRT technology is cost effective and provides a service of similar quality to other transport systems such as light trains or metros. However, compared to these systems, the costs of BRTS are significantly lower. The BRTS to be implemented in the cities consists of a trunk-and- feeder bus system, in which the trunk lines will operate on segregated busways according to the conceptual design of each specific city (this infrastructure cannot be used by any other vehicle). In general, in Trunk lines, diesel/CNG buses with a capacity of 160 passengers will be operated (Cartagena and Barranquilla will have gas buses), and conventional buses will be used in feeder routes. Passengers will pay on the entry to the stations (stops), terminals or on feeder buses. The usage of a “closed system” will allow interchange between trunk buses and feeders with the payment of a single fare. Feeder buses will serve terminals located at the ends of the busways and selected stations along the trunk lines.

Under the proposed Project, these issues are going to be addressed through the implementation of operational and financial schemes aimed to create a real public-private partnership in which each party assumes responsibilities and risks. In this sense, the proposed scheme anticipates that the infrastructure (bus corridors, stations, terminals, accesses, etc) will be financed with public funds, and the rolling stock (buses) and fare collection will be provided by the private sector. The ratio of public-private initial financing would be around 65%-35%. BRTS operation will be provided by the private sector worhng under strict controls included in the concession contracts. The bus operators will be comprised of local transporters associated with investors, who will own and operate the buses, and hire the drivers and maintenance personnel- for both, trunk and feeder routes. The system will be awarded through concession contracts following competitive and open bidding processes. Payments to operators under the contract will be related to route hlometers served by each trunk line bus service operator. The operation costs will be covered through the fares, implying that there will be no subsidies for the operation of the systems. Bus operators (private sector) will be assuming full commercial risk. The rules and regulations between the two parties are going to be clearly established in a contract stating the responsibilities and obligations of each one. The participation of both public and private sector guarantees the financing of the systems and makes its implementation sustainable.

BRTS should also provide access to all users in a safe way. Passenger access to and from bus stations will vary depending on the location of the stations and the availability of space. However, passengers will only be allowed to enter the system on specific points safely away from cars. Disabled people will have special devices to allow them to use the system.

While the scope will vary depending on local conditions, implementing BRTS under the Project would entail: i)definition of a new regulatory framework; ii)establishment of new private operation enterprises, susceptible of being controlled and regulated by new strong and capable local authorities; iii) operational savings through the reduction of the oversupply, that allow private investors to do the acquisition of a high capacity modern bus fleet finance through tariffs; and iv) infrastructure financed with public funds coming from the GOC and the municipalities.

Project components

A detailed description of Project’s components is the following:

Project Component 1: Implementation Capacity Building - US$2.3 million

38 This component will provide technical assistance and policy advise to GOC and participating cities and is aimed to provide support for the implementation and beginning of the operation, strengthen GOC agencies in charge of promoting mass transit projects, and to the cities in tahng advantages of the urban, environmental and social benefits coming from the implementation of an organized mass transit system.

The TA component has to be cost-effective, tahng advantage of the economies of scale generates by the fact that these transport systems will be implemented almost at the same time in the different selected cities. For example, the same framework for all the projects could be established in the definition of the organizational structure and manual of functions, and the provision of the software to program and supervise the operation of the system. Also, sharing experiences between cities in workshops will be another strategy to develop technical capacity.

Another strategy of this component is to make use of the experience of TransMilenio in Bogota and replicate this experience, tahng into account the specificities of each city, to the other BRTS projects. Twining arrangement with TransMilenio S.A. will be done to replicate procedures and to define the most suitable organization for the management and control of the BRTS in each city.

Among the different levels, the TA component will include the following:

At the National level this component will develop the capacity of the DNP and Ministry of Transport to convert them into advisory unit of the cities in the implementation of mass transit systems. It will also ensure the compliance with the Subsidiary Agreements signed by the GOC and the participating cities and the fulfillment of the objectives. The tasks will be the: (i)definition of a national urban transport institutional map; (ii)formulation of a sector policy and the definition of operational, regulatory, institutional, environmental, social and road safety strategies within the urban transport and urban development context; (iii)creation of a data collection system of the operation of the BRTS; (iv) monitoring of the Subsidiary Agreements with the municipalities; (v) evaluation of BRTS in other cities, improvement of traffic management and the institutional strengthening of local authorities, including the concept design, and the financial and technical structuring of BRTS in new selected cities.

At the Local level, the component seeks to improve the institutional capacity of the participating cities to ensure adequate implementation of the BRTS by supporting the creation andor institutional strengthening of the Project’s implementing agencies (BRTSs Agencies), including technical support to the these agencies for the decision-making process and follow up of the implementation of the transport system. For this sub-component the twining arrangement with TransMilenio S.A.) could be a very cost-effective strategy. The tasks will be: (i)transport planning; (ii)supervision of the construction of infrastructure; (iii)legal advisory services in structuring the concession contracts for the operation; (iv) financial aspects of the concessions contracts; and (v) support in the negotiations with the operators.

To the local transit authority technical assistance will be given for the restructuring of the existing public transport route system in each city. It will include also the capacity development for the successful beginning of the operation of the new BRTS. This sub-component will take advantage of the economy of scale coming from the simultaneity of the implementation of the BRTS and by contracting consultants whose products will be useful for all the cities. The tasks will be: (i)definition of the organizational structure and manual of functions; (ii)preparation of administrative procedures manual; (iii)definition of the regulation of the operation; (iv) establishment of software for the supervision of the operation; (v) impact mitigation to operators; and (vi) staff training

At the Local level, greater technical and operational capabilities will be developed by the cities to implement urban development and transport strategies in areas such as land use developments, road safety, traffic management, and environmental and social management. The development of a Strategic

39 Environmental Assessment and the identification of possible projects that can maximize the urban impact of the proposed corridors will also be included. The tasks will be: (i)definition of a framework for strategic environmental assessment; (ii)identification of opportunities for urban improvement throughout the proposed corridors; and (iii)development of road safety initiatives with the support of Fondo de Prevencidn Vial.

Component 2- BRTS Development US$459.2 million (IBRD US$247.7 million): This major component will support the development and implementation of BRTS and feeder routes in selected medium and large-sized cities according with the eligibility conditions, it is estimated that approximately 77 km of segregated corridors will be built in the participating cities. Candidate cities being targeted for the Project include Pereira (17 km), Barranquilla (10 km), Cartagena (12 km), Soacha (5 km), Bucaramanga (9 km), Medellin (9 km), and the NQS-Corridor of the Bogota TransMilenio BRTS (15 km).

With the exception of the NQS-Corridor of the Bogota TransMileiiio BRTS, in which the loan will finance exclusively five construction contracts7 according to the OPRC waiver, for the other BRTS, the loan will finance GOC participation including: construction of segregated busways, repaving of mixed- traffic lanes adjacent to the new busways, bus stations and terminals, control center to monitor and direct operations on the busways, supervision of the construction contracts, paving and other improvement of feeder roads.

’Contract #lo5 signed with Sociedad de Futuras Concesiones Urbanas S.A.; Contract #lo6 signed with Sociedad Concesionaria Metrodistrito S A; Contract # 179 singed with Consorcio Troncal NQS Sur; Contract # 180 signed with TransMilenioNQS Sur S.A. and Contract # 242 signed with TransMilenio del Sur S.A.

40 Annex 5: Project Costs COLOMBIA: CO Integrated Mass Transit Systems

Project Cost By Local Foreign Total Component and/or US $million US $million US $million Activity 1. Implementing Capacity 1.68 0.62 2.30 Building 2. BRTS Development - Bogotii 207.9 59.7 267.6 - Pereira 15.5 4.4 19.9 - Cartagena 44.1 12.7 56.8 - Other Cities 37.2 10.7 47.8 Total Baseline Cost 306.4 88.1 394.4 Physical Contingencies 19.8 5.6 25.4 Price Contingencies 32.4 9.3 41.7 Total Project Costs 358.6 103.0 461.5 Front-end Fee 0.0 0.0 2.5 Total Financing Required 358.6 103.0 464.0

Project Cost By Bank Counterpart Total US % of Bank Component and/or Financing US funds $million financing Activity $million US$million

1. Implementing Capacity 2.3 0.0 2.3 1.o Building 2. BRTS Development - Bogota 150.0 163.0 3 13.0 0.4 - Pereira 16.4 6.9 23.1 0.7 - Cartagena 45.8 20.7 66.5 0.7 - Other Cities 35.5 21.2 56.7 0.6 Total Baseline Cost 250.0 21 1.8 461.5 0.5 Front-end Fee 0.0 2.5 2.5 1.o Total Financing Required 250.0 214.3 464.0 0.5

41 Annex 6: Implementation Arrangements COLOMBIA: CO Integrated Mass Transit Systems

Building on legislation* past in 1996, two CONPES documents approved in 2002 and 2003 have established the policy and institutional framework for the NUTP. These policy documents: i)defines policy goals, strategies and expected outcomes; ii) sets a Technical Committee to monitor and evaluate execution of the NUTP and performance of the BRTS; iii)creates the capacity building program; and iv) establishes the criteria for securing the financing for of the BRTS by the cities and the GOC.

For a given city, the implementation arrangements begn with the preparation of the conceptual design of each Project (including technical, urban, environmental and social aspects, the evaluation of the financial capacity of the municipality, and the institutional assessment of the local participating entities) and the verification of technical and financial eligibility conditions. After this initial identification stage is satisfied, detailed designs and project structuring begin (operational, financial and technical aspects of the system). The CONPES document of 2002 entrusts to DNP the execution and supervision (involving participating cities) of the preparatory studies for design and financial structuring of the BRTS projects. When detailed information becomes available, the scope and financial requirements of the project are defined and the appraisal of the Project is submitted for approval to the Government. During this phase, after city council approval, the municipalities will create through “escritura publica” the implementing agency in charge of planning control and developing of the BRTS.

A CONPES document, issued by GOC for each participating city, will detail the specific conditions and arrangements for BRTS intervention in that particular city. This document will provide the basis for the Subsidiary Agreement to be signed by GOC, through the Ministry of Finance and the city. It is through the Subsidiary Agreement that the scope of the intervention, the financial structure and the obligations of the respective parties are formally established. In particular, the agreement: i) assigns overall responsibility for undertaking and financing any potential cost overrun and/or operational deficit of the BRTS to the participating city; ii) defines the schedule of GOC financial commitments by year, previously approved by CONFIS and recorded as future budgetary commitments (vigencius futuras) for proper fiscal accounting; iii)instructs the city to budget the funds to cover any cost overrun once they are identified; iv) establishes a trust fund to managed both GOC and city contributions for infrastructure; v) mandates the signing of a contract between the GOC and the city, in which the city gives control of the Board of Directors of the BRTS agency to the GOC during the time slice of the contributions; and vi) makes mandatory use of fiduciary procedures of the Multilateral Organizations involved in the Project.

Once all these conditions are met, GOC will request the Bank to include the respective participating city BRTS to be finance by the loan, following the procedures stated in the Operational Manual (see Annex 6). Prior to requesting the Bank to finance a BRTS, the Borrower through DNP (later MOT) will submit to the Bank for review:

(a) satisfactory evidence that the benefited city and BRTS have met the conditions for eligibility spelled out in the Project Operational Manual. These conditions include: (i)the Borrower, through DNP, has furnished to the Bank the economic analysis of the proposed BRTS with an economic rate of return greater than 12percent, and satisfactory environmental management (EMP) and resettlement action (RAP) plans prepared in line with the respective frameworks agreed upon with the Bank; (ii)the participating city, through its Council, has approved the BRTS in its Plan de Ordenamiento Territorial and the municipal development plan, and has issued the decrees/accords creating the BRTS agency and earmarking local funds from gasoline surcharges or other sources sufficient to cover the financial plan

* Law 86 1989 reformed by Law 3 10 1996 allows the GOC to co-finance infrastructure for mass transit systems in Colombian cities

42 agreed with GOC; (iii)the participating city and the Borrower have signed a Subsidiary Agreement satisfactory to the Bank, establishing among other, the co-financing, fiduciary, safeguard and reporting arrangements for implementation and monitoring of the BRTS; (iv) the Bank has satisfactorily appraised the capacity of the municipal agencies involved to undertake procurement and financial management in line with the requirements of the Project Operational Manual. b) for consecutive expenditures, certification that the parties are fulfilling their obligations under the co-financing agreement.

The current status ofBRTS schemes to be supported by the Bank project is as follows: implementation of the BRTS in Bogotk (TransMilenio NQS corridor) is undeiway; the Subsidiary Agreement of the planned intervention in Pereira and Cartagena have been signed; and preparatory studies for planned interventions in Soacha, Barranquilla, Bucaramanga and Medellin are well advanced.

Executing ugencies DNP functioning as the Technical Secretariat of the Technical Committee, will initially have overall responsibility for the execution of the Project, will provide technical support to the NUTP and will be responsible for monitoring and evaluating program implementation. The other members of the Technical Committee are the Ministry of Finance (MHCP), in charge of financial management of resources, and the Ministry of Transport (MOT), which has responsibility for the sector. During negotiations GOC informed the Bank that it has been decided to pass the responsibility of the execution of the Project to the Ministry of Transport (MOT) in the short term. Therefore, upon compliance in a manner satisfactory to the Bank, with the conditions set forth in Annex 1 to the Implementation Letter, the Borrower shall carry out the Project, through MOT

The BRTS agencies in the participating cities will be the executing agencies of the BRTS Development Component. Some cities will rely on specialized municipal works agencies (i.e. TDU in the case of Bogota and Soacha) to carry out the construction of the BRTS infrastructure. For the technical assistance component, DNP, (later MOT) will be in charge of managing the procurement of goods and consultant services.

With this institutional arrangement the GOC will promote the leadership of the municipality in the planning, execution and control of the system, while levering its role as policy regulator, through participation in the Board of Directors of the agencies in charge of system development and control (BRTS agencies) and with the establishment of a Technical Committee in charge of trackmg the implementation process and the operational standards.

Is through the Technical Committee that the GOC: a) will request from the executing agencies the preparation and presentation, within three months of establishment (or prior to disbursement for those already created), of the financial sustainability and operational plans for the implementation and management of BRTS, indicating among others the organizational structure, staffing levels and functions, institutional strengthening measures andor twining arrangements adopted to ensure the agency has the capacity to plan and regulate the provision of the public transport services and equally includes the boundaries that will determine the advancement of the project according to the follow up system of the DNP; and b) will verify the adoption and verification of the corrective measures every time when important deviations will be detected causing alerts in the follow up system.

DNP (Later MOP) a) will prepare for the Bank the institutional, financial and operational plans to which we refer in the previous paragraph, first time and the subsequent updates within 30 days after the approval by the governing boards; and b) in case of significant failure to fulfil the co-financing agreement’s obligations by the municipality, will notify the Bank within 30 days of the application of established remedies in the respective agreement.

43 The following chart summarized the institutional arrangement of the NUTP:

DNP Ministry of Transportation Carries out preparatoq studies Committee - Prepare CONPES documents Came out techcal assistance for each participating city component Leads Technical Committee for Participate in BRTS’s boards monitoring and evaluation Participates m the Technical / comttee I/ Coordmates the Program

Signs the Financial Agreement I- Defmes responsibilities of the parties I nL-~--I-L.-,2-4-DDTC 1 Defines flow of fund and its destination

BRTS Agency Participant City Carries out operational plan for development implementation of Requests city council BRTS and rationalizationof existing approval for BRTS and the bus routes Earmarkingof city funds .Procures civil works contracts for Sets up the BRTS agency BRTS Transfers funds to the .Awards and regulates bus operators construction of a trust fund and fare collector concessions .Plans, implements and controls the operation of the BRTS *Sets up the trust find to receive GOC transfers Reports to DNP the performance of the system

44 Annex 7: Financial Management and Disbursement Arrangements COLOMBIA: CO Integrated Mass Transit Systems

Financial Management

Country Issues. A Country Financial Accountability Assessment (CFAA) for Colombia is currently being carried out and is expected to be completed by June 2004. The critical issues affecting projects include; the tight fiscal situation, budget and administrative processes that can cause delays in implementation, and the national chart of accounts which extends to sub-national levels of government. At the project level, the Bank is currently engaged with the government to improve project’s financial management by: (i)improving the operation of Special Accounts held in the central bank; (ii)decreasing the incentives to employ international cooperation agencies to manage Project funds; and (iii)improving and streamlining the accounting and reporting requirements, established in November, 2002 between the Bank and the country’s Accountant General and Auditor General’s office.

Overview. Financial management design and oversight are complicated due to a number of factors. One important factor is the financing scheme for the Project, under which expenditures take place over a short period of time - most within the first half of project implementation - but national and municipal budget allocations are spread over many years, extending beyond the project’s closing date. The involvement of various cities, most through newly created “TransMilenio type” transport entities, also presents a challenge.

FMAssessment. The FM assessment took into account the challenges referred to above It ensured that project design allows for an appropriate level of transparency, facilitated oversight and control, and supported smooth implementation. The conclusions of the FM assessment are that: (i)FM design is adequate and can be applied generally to any city entering the program; (ii)principal FM risk lies in the fact that almost all project funds will be managed within the involved municipalities, none of which (besides Bogota) have experience with Bank projects; (iii)the FM arrangements for Bogota are sufficient but should be closely supervised given the large amount of implementation over a short period of time; (iv) other cities that enter the program should be assessed as they enter. Regarding this point, an initial FM assessment for Pereira considered their arrangements to still be in the preliminary stage, thus requiring a follow-up review at, or shortly after project appraisal; and (v) at the level of the MHCP, the implementation arrangement is yet to be established. It is critical that it is established soon, and that it includes a public accountant to manage project financial affairs, including overall project reporting (see below).

Flow of Funds and Information. As shown at the end of this Annex, a number of entities will be involved in project implementation, oversight, and financial management. Ultimately, the vast majority (more than 90%) of project expenditures will be carried out at the Municipal level, with the BRTS entities having the principal responsibility for financial management.

For the municipal-level components, the national government’s portion, based on the vigencias futuvas (budgets spread over many years), will be transferred to the TransMilenio-type agency through monthly budget allocations. These funds, along with those of the two municipal-level sources of funds - the gasoline surtax and any commercial bank borrowing - will be deposited in separate accounts held by a financial agency (“fiducia” similar to a trust funds unit) within a commercial bank. These three accounts will be used to make the payments for the works, goods, and consultants employed under the BRTSs.

45 For the TA component, consultants will be contracted and paid either via the Special Account or through an international cooperation agency. DNP will be responsible for implementing this component, and for preparing the information required for in MHCP to submit the Statements of Expenditure to the Bank.

Information Systems. Except in the case of the Bogota component, the Project will require new information systems to be established: (i)in the Technical Secretariat formed for the NUTP; and (ii) within the newly-created entities in the municipalities. The Technical Secretariat’s information system will attempt to draw on recent efforts to incorporate project accounting within the national government’s integrated financial management system (SIIF). However, if this is not possible, an alternative, project- specific system may be required.

Written Procedures. Project financial procedures will be documented in an Operational Manual, which will define the roles and responsibilities of the Technical Secretariat and the municipalities. This manual should be submitted to the Bank for effectiveness and should include, among other financial procedures: (i)accounting policies and procedures, including basis of accounting and chart of accounts; (ii)the reporting requirements from the municipalities to the Technical Secretariat; (iii)formats of the consolidated Financial Monitoring Reports for the program; (iv) internal controls including criteria and procedures for processing payments and transfers; (v) records management; and (vi) audit arrangements.

Financial Reporting. The Technical Secretariat will prepare quarterly Financial Monitoring Reports (FMRs) in accordance with Colombia’s Resolucion 380, which specifies accounting and report formats for all Bank-financed projects. The preparation of these reports will rely heavily on the information provided by the municipalities, who will be managing most project funds, as well as handling most Project (especially civil works) procurement and monitoring. The Technical Secretariat will therefore need to agree on the format of reporting from the municipalities, so that it can prepare consolidated reports for project management and distribution to the various stakeholders, including national control entities and the Bank.

Audit. The financial statements of the Project will be audited annually by an auditor acceptable to the Bank. This audit will take into consideration the annual financial review (similar to an audit) of each TransMilenio-type entity, carried out by a revisorfiscal, which is an audit firm selected by the entity’s shareholders.

Financial Management Action Plan. The FM action plan appears below, following section on Disbursements. The priority items are the establishment of the institutional arrangements in MHCP and the documentation and agreement on audit and internal reporting procedures.

Disbursements

Eligibility Pilot. The Project incorporates the Bank‘s new policy, which changed the rules regarding expenditure eligibility. This policy, approved by the Bank‘s Board on April 13, 2004, provides greater flexibility for the Bank to finance some types of expenditures, which previously had been considered ineligible. These items include taxes and recurrent costs. For this Project, the most important features of the new policy are the financing of interest during construction and taxes, as the sum of both of these costs represents a significant amount of the municipal subprojects.

Special Account. The MHCP will manage a Special Account in the government’s central bank, in accordance with applicable Bank procedures. The account will have an authorized allocation of US$25

46 million, or 10 percent of the loan amount;' however, the MHCP will be expected to only request the amount required for planned cash needs for a six-month period.

Disbursement Mechanisms and Documentation. The Bank will disburse to the national government based on periodic disbursement applications sent by the Technical Secretariat. The following describes the disbursement approach for the main activities:

For the BRTSs, Bank financing will be based on the transfers made from the national government to the participating municipalities. These transfers will be made directly from the Special Account to the TM- type entities. The BRTSs will be primarily to finance works, but also goods (stations) and services (works supervision); in the case of Bogota, the transfers will be solely to finance a portion of the five construction contracts that had already been signed and of appraised.9 Bank disbursement records will segregate the Bogota project in order to facilitate project supervision and audit. The Bank loan will finance 100 percent of the transfers to municipalities, which given the counterpart contributions at the municipal level, and the atypical financing arrangements (through vigencias futurus - see next paragraph) of this operation, will represent less than 50 percent of the total cost of these local BRTSs." This total cost includes taxes and interest during construction, both of which are eligible for financing as part of the Eligibility pilot (see above). Expenditures considered ineligible for financing (such as interest after construction or land purchases) represent a small portion of overall BRTS costs. Counterpart funding is therefore clearly sufficient to be considered to cover all of these ineligible expenditures as well as a substantial percentage of the costs financed partially by the Bank.

For the TA component, disbursements will follow traditional Bank procedures. Consultants will be paid from the Special Account, and traditional disbursement documentation (SOEs or Summary Sheets) will have to be submitted for the SA to be replenished. Alternatively, the Bank or the government (via the Special Account) may advance funds to an international cooperation agency, which would: (i)contract the consultants andor make payments to them; and (ii)facilitate the preparation of the relevant disbursement documentation for this component.

For other national-level or cross-municipality activities, disbursements will also follow traditional procedures.

Retroactive Expenditures. The Project will be eligible for retroactive reimbursement of expenditures totaling up to 10 percent of the loan amount,'' incurred after March 26 but before the signing of the loan agreement. Most of these expenditures are expected to be related to the Bogota BRTS.

Use of Statements of Expenditure. Loan withdrawal applications will be supported by SOEs for all expenditures not requiring the Bank's prior review. For the transfer components the borrower will present to the Bank, statements of transfers, for which format is being agreed between the Bank and the Borrower. As stated above, the Bogota contracts generally fall above the prior review limits and thus will require more documentation. The Technical Secretariat will be expected to accumulate this information and prepare the consolidated withdrawal applications showing expenditures on the Bogota contracts, transfers to the other municipalities, consultant expenditures, and any other claims.

* The loan agreement may specify a lower initial allocation, applicable until loan disbursements reach a certain level. The transfers made from the national government to Bogoth for the Bank project will be specifically segregated in the government's budget, to distinguish these (Bank-financed) amounts from those used to finance other Transmilenio contracts. loBank financing for the BRTSs, will be limited by the amount of the vigencias futuras (budget) that may have been allocated by the national government in a given year. Since these budgets are spread oyer many years, going beyond the implementation of the project, the national contribution during the project's life will be less than it would be under normal budget arrangements. It is not expected that the amounts requested will exceed 10% ofthe loan amount.

47 * Financial Management Action Plan

48 49 Annex 8: Procurement COLOMBIA: CO Integrated Mass Transit Systems

A. General

Procurement for the proposed Project would be carried out in accordance with the World Bank’s “Guidelines: Procurement Under IBRD Loans and IDA Credits” dated May 2004; and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated May 2004, and the provisions stipulated in the Legal Agreement. For each contract to be financed by the Loadcredit, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank project team in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

Procurement of Works: Works contracts procured under this Project and financed fully or partially by the Bank will include the construction of the BRTS and other eligible infrastructure works.

Civil Works estimated to cost US$ 5,000,000 (equivalent) or above per contract should be procured following International Competitive Bidding (ICB) procedures. Civil works contracts estimated to cost below US$ 5,000,000 equivalent should be procured through National Competitive Bidding (NCB) procedures (with the exception of the Bogota civil works contracts already procured as explained below). Any other works contracts not financed fully or partially by the loan would be procured following the local law procedures. The procurement will be done using the Bank‘s Standard Bidding Documents (SBD) for all ICB and National SBD agreed with (or satisfactory to) the Bank.

Small civil works contracts estimated to cost less than $350,000 equivalent per contract, may be procured via shopping under lump-sum, fixed-price contracts awarded on the basis of quotations obtained from at least three qualified domestic contractors in response to a written invitation. The invitation shall include a detailed description of the works, including basic specifications, the required completion date, and a basic form of agreement acceptable to the Bank, and relevant drawings, where applicable. The award shall be made to the contractor who offers the lowest price quotation for the required work, and who has the experience and resources to complete the contract successfully.

Any works contract not financed fully or partially by the loan may be procured following the local law procedures.

OPRC Waiver for financing civil works contracts in Bogoth: GOC had requested the Bank to finance its contribution to the Program, initially for six new cities joining the program. During preparation GOC requested the Bank to also include in the Project the financing of the NQS TransMilenio corridor in Bogota. It was necessary to seek a waiver from OPRC of the bidding processes carried out by the “Znstituto de Desurvollo Urhano” IDU, to enable Bank financing of this investments, tahng into account that the contracts for works (five in total) have been awarded prior to considering the inclusion of such investments in the proposed Project.

The inclusion of the NQS BRT corridor under the Bank’s project was agreed by Bank’s management, based on the following reasons: (i)to respond to the need of a fiscally constrained client; (ii)to reduce project risk by having an experienced Bogota agency undertake a sizeable portion of the Project; (iii)to enhance policy dialogue during project design and implementation.

50 OPRC found that the bidding process conducted by IDU intended to have international bidders and used all available means to bring them to the process, including wide promotion and special clauses in the bidding documents (e.g., no discrimination of foreign bidders, no prior registration requirements). Unfortunately, country factors may have constrained the government's capacity to attract foreign participants. The bid evaluation was performed in a transparent manner and there were no complains. Therefore, the OPRC agreed to consider the bidding process of the NQS corridor as a National Competitive Bidding process, and to grant a waiver of the US$5 million maximum threshold applicable to NCBs in Colombia (case number 517). The waiver will only apply for the five12 lots procured for the Bogotd NQS corridor, but not for BRTS in other cities, which will be procured under the proposed Project. For the following bids, the project team will have to work with procurement specialists and the implementation units to prepare bidding documents, that do not include point-based evaluation or selection factors different than economic factors.

Procurement of Goods: Goods under this Project financed fully or partially by the Bank will include: software and hardware for the BRTS center of control system and eligible goods and equipment.

Goods contracts estimated to cost US$250,000 and up will be procured under ICB procedures; contracts estimated to cost more than US$50,000 equivalent but less than US$250,000 equivalent, may be procured using National Competitive Bidding (NCB) procedures and standard bidding documents previously agreed with the Bank. Under this method, all the special provisions agreed with the Colombian Government for procurement under Bank-financed loans, grants and credits will apply. The procurement will be done using Bank's Standard Bidding Documents for all ICB and National Standard Bidding Documents agreed with (or satisfactory to) the Bank.

Contracts for goods which cannot be grouped into larger bidding packages and estimated to cost less than US$50,000 per contract may be procured using shopping (NationaUInternational) procedures based on a model request for quotations satisfactory to the Bank

For National Competitive Bidding of works and goods contracts, the following special provisions will be applied:

Goods estimated to cost less than US$250,000 equivalent per contract may be procured under contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines. Works estimated to cost less than US$5,000,000 equivalent per contract may be procured under contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines. Before issuing any invitation to bid, the Borrower shall prepare and furnish or cause to be prepared and furnished to the Bank for approval, appropriate model bidding documents. Once approved by the Bank, the Borrower shall use, or cause to be used, said model bidding documents, as approved for bidding under the Project. Any change or departure from the model approved shall require Bank's prior approval. All bidders, irrespective of whether they are foreigners or Colombians, will be treated equally and, particularly, no preference will be granted to any bidder or group of bidders for bid evaluation purposes. Bidders shall be allowed to submit their bids by hand or through the post office or private mailing services. There shall not be any requirement for any bidder to show evidence of the bidder's registration in any public registry, chamber of commerce or similar entity, whether in Colombia or elsewhere, or to appoint a representative domiciled in Colombia, unless and until such bidder is awarded the corresponding contract. Bids shall be opened in a public meeting to which bidders and their representatives shall be allowed to attend if they so wish. Date, time and place for the opening meeting shall be set forth in the bidding documents. Bid opening shall

Contract #I05 signed with Sociedad de Futuras Concesiones Urbanas S.A.; Contract #lo6 signed with Sociedad Concesionaria Metrodistrito S A; Contract # 179 singed with Consorcio Troncal NQS Sur; Contract # 180 signed with TransMilenioNQS Sur S.A. and Contract # 242 signed with TransMilenio del Sur S.A.

51 coincide with, or take place promptly after, the final date and time of the period for bid submission stipulated in the bidding documents. Each bid shall be evaluated and the corresponding contract awarded to the responsive bidder who meets appropriate technical and financial standards of capability and whose bid has been determined to be the lowest evaluated bid. Such determination shall be made exclusively on the basis of the specifications, conditions and evaluation criteria stipulated in the bidding documents. If any factor additional to the amount or amounts of each bid is to be considered in bid evaluation, such factor or factors and the quantified manner on which they will be applied for purposes of determining the lowest evaluated bid shall be precisely stipulated in the bidding documents. For purposes of bid evaluation and comparison, the only bid amount or amounts to be used as a factor shall be the bid amount or amounts as quoted in the corresponding bid, including correction of arithmetic errors.

The provisions ofparagraph 2.46 of the Guidelines shall fully apply and, more specifically, bids shall not be disclosed to persons other than the persons officially charged with the task of comparing and/or evaluating the bids while they are performing their official duties, without the corresponding bidder’s written authorization. Moreover, bidders shall not be required to provide such authorization as a condition to be entitled to bid. This confidentiality requirement shall apply until the award of contract is notified to the successful bidder. Thereafter, confidentiality of the bids shall be limited to those bid portions for which confidentiality has been specifically requested by the bidder in question.

Selection of Consultants Firms Consultants contracts with firms will include eligible support and Project related studies, design and supervision; training services, and specialized technical expertise and advisory.

Firms shall be selected for contracts financed under Bank financing using Bank Standard Request for Proposals and related formats.

Most contracts for firms are expected to be procured using Quality Based Selection Method. Consultant assignments of specific types, as agreed previously with the Bank in the Procurement Plan, may be procured with the use of the following selection methods: (i)Quality Based selection (QBS); (ii) Selection under a Fixed Budget (SFB); (iii)Least Cost Selection (LCS); (iv) Selection Based on Consultants’ Qualifications (CQ), for contracts estimated to cost below US $ 100,000 equivalent; and, exceptionally, with Bank’s prior No Objection, (v) Single Source Selection (SSS).

Individual Consultants.

Individual consultants will be hired to provide project support and specialized advisory services, after being selected in accordance with the provisions of paragraphs 5.1 through 5.3 of the Consultant Guidelines, or may be selected on a sole source basis in accordance with paragraph 5.4 of the Consultant Guidelines (with prior No Objection by the Bank).

Training, The plan and budget for training and workshop activities will be reviewed and approved by the Bank at least annually.

Operational Costs: To be determined during appraisal.

52 B. Assessment of the cauacitv to imulement urocurement Procurement CaDacitv Assessment of the Imulementation Agencies resuonsible for conducting procurement:

A central Coordination Unit for the Project will be set up at the premises of the Ministry of Transport (MITRANS) and amidst its functions it will supervise the procurement activities financed under Bank procurement procedures in the participating cities, and also will procure some goods and consulting services for the “centralized” needs of the Project. Its procurement capacity has to be evaluated before the Project starts.

An assessment of the capacity of one of the identified Implementing Agencies (in the city of Pereira) to conduct procurement actions for the Project has been carried out by JosC M. Martinez, Procurement Specialist, during the pre-appraisal stage. The assessment reviewed the organizational structure and their staff preparation for implementing the Project.

Currently only IDU for Bogota, and MEGABUS for Pereira can be assessed. The proposed Implementation Agency for Cartagena is not ready yet to be assessed due to the reorganization of the proposed implementation agency TRANSCARIBE/EDURBE. The participation of other cities in the Project will be confirmed later on, and their agencies then will be evaluated. However, the criteria used to assess MEGABUS in Pereira sets the framework for the procurement capacity assessment of Cartagena and the remaining cities, when identified and approved.

Bogotsi. IDU is the government agency that has been executing the procurement of the contracts for the NQS corridor in Bogota and also responsible for the procurement under the Bogota Urban Transport Project (Loan 4021-CO and 7162-C0), with a high technical and administrative level. It could be possible that the IDU will be the agency that will execute the extension of TransMilenio to the municipality of Soacha. When Soacha is ready to join the Project, a procurement capacity assessment will be done to IDU or the agency, which will execute this BRTS.

Pereira. The implementing agency (Transmilenio-type entity) is MEGABUS, and the BRTS will include a segment in the neighboring city of Dosquebradas. In terms of organization, MEGABUS, a local government agency with authority to deal with procurement issues in both cities, will be expanded and strengthened, so to become the Executing Agency and take over management and implementation responsibilities in the Pereira-Dosquebradas BRTS. In principle, it is expected a total of 3 civil works tenders, 2 goods tenders and 3 works supervision consultants contracts financed under the Loan. MEGABUS does not have direct experience in procurement under Bank Guidelines, but the Agency’s Director, its Lawyer and some MEGABUS engineers and staff do have extensive experience in procurement of civil works contracts under the Colombian Law.

Recommendations. In order to mitigate the risk posed by the fact that MEGABUS does not have direct experience in Bank-funded procurement operations, it is proposed to start intensively training relevant MEGABUS staff expected to be involved in procurement of civil works, goods and consulting services on Bank procurement procedures before the Project starts, thus reducing the risk of failure in procurement-related activities. In order to facilitate a better understanding of procurement operations, an Operations Manual with a Procurement Section will be prepared by the Borrower and reviewed and cleared by the Bank. Also, it is important to start information dissemination campaigns and seminars addressed to local business and political leaders aiming at clarifying procedures and requirements under Bank-financed procurement, specifically explaining that (i)there are many ways in which local bidders can associate amid themselves or/and with national and international bidders, and (ii)procurement packages will not have local preferences and cannot be artificially formed to ensure local participation while discouraging potential participation of national and foreign bidders.

53 Both the proposed high-risk category and the resulting procurement thresholds are subject to revision once the Bank determines that the required procurement capacity has been built in the MEGABUS.

The Bank and MEGABUS discussed alternatives to address these risks: (i)an early procurement training program for MEGABUS staff involved in procurement activities; (ii)to ensure direct consultation on procurement matters as part of the supervision missions or with the Project Team through the TTL (email); (iii)improving the existing monitoring and control system of the procurement actions.

C. Procurement Plan

A detailed procurement plan has been prepared for the city of Pereira, which is the most advanced city in the preparation of the Bus Rapid Transit Systems (BTRS). During project implementation the procurement plan for each BRTS will be defined according to the stage of preparation it has. Detailed Procurement Plans for each city as well as updates, should be reviewed and agreed with the Bank for identifiable procurement as the cities will be joining the Project and their data will become available.

D. Frequency of Procurement Supervision

The capacity assessment of the Implementing Agency reviewed has recommended at least one supervision mission annually to both provide direct consultation on procurement matters and carry out post review ofprocurement actions.

54 Attachement 1

Details of the Procurement Arrangement involving international competition.

0

1. Goods and Works and non-consulting services.

(a) List of contract Packages that will be procured following ICB and Direct contracting:

1 2 3 4 5 6 7 8 9

Ref. Contract P-Q Domestic Review Expected Comments No. Preferenc byBank Bid- e (Prior / Opening (yeslno) Post) Date Pereira civil No No Prior 3 packages works I I with slices Cartagena 57.4 ICB No No Prior Several civil works packages Bucaramanga 15.0 ICB No No Prior Several civil works packages Barranquilla 30.0 ICB No No Prior Several civil works packages Soacha civil 16.3 ICB No No Prior Several works packages Medellin No No Prior Several civil works packages Pereira goods No No Prior 1 package

-- I I Cartagena 16.0 ICB No No Prior I I Several goods packages Bucarainanga 8.0 ICB No No Prior Several goods packages Barranquilla 12.0 ICB No No Prior Several civil works Soacha 4.7 ICB No No Prior Several packages Medellin 12.0 ICB No No Prior Several nackanes

(b) ICB Contracts estimated to cost above $5,000,000 for civil works and above $250,000 for goods, as well as all any Direct contracting will be subject to prior review by the Bank.

55 2. Consulting Services.

(a) List ofConsulting Assignments with short-list of international firms.

1 2 3 4 5

Ref. No. Description of Estimated Selection Review Expected Comments Assignment Method by Bank Proposals cost (Prior I Submission Post) Date Supervision $2.2 million QCBS Prior 1 Three contracts construction BRT Pereira Supervision $5.7 million QCBS Prior Four contracts construction BRT Cartagena Supervision $1.5 million QCB S Prior Two Contracts Construction Bucaramanga Supervision $3.0 million QCBS Prior Four Contracts Construction Barranquilla Supervision $1.6 million QCBS Prior Two Contracts Construction

Soacha ~ Supervision $4.0 million QCBS Prior Four Contracts Construction Medellin

(b) Consultancy services by firms estimated to cost above $100,000 per contract and Single Source selection of firms will be subject to prior review by the Bank. Consultancy' services by individual consultants estimated to cost above $50,000 per contract and any Single Source selection of individual consultants will be subject to prior review by the Bank.

(c) Short lists composed entirely of national consultants: Short lists of consultants for services estimated to cost less than $350,000 equivalent per contract, may be composed entirely ofnational consultants in accordance with the provisions ofparagraph 2.7 of the Consultant Guidelines.

56 Annex 9: Economic and Financial Analysis COLOMBIA: CO Integrated Mass Transit Systems

Economic Analysis

This annex provides information on the detailed analysis performed for the SITMs of the cities of Bogota (TransMilenio NQS), Pereira-Dosquebradas (Megabus) and Cartagena (Transcaribe). Currently data is not readily available for other eligible cities (Barranquilla, Medellin, Bucaramanga, Soacha). Similar analysis will be performed to these cities prior to their inclusion in the loan on a first come first served basis. The document includes a general methodology, data used and results. An analysis of delay in project implementation is also presented.

1. Methodology

Evaluation was performed using cost-benefit analysis for each one of the projects in the program. Economic equivalent of costs and benefits was estimated by comparing the situation with and without Project. Most information was provided by the National Planning Department, and comes from the conceptual design of each project.

The following costs are identified, divided into public and private:

PUBLIC COSTS Studies and Project preparation Infrastructure Construction andor Rehabilitation Infrastructure Maintenance Control Center Implementation Control Center Operation Public Authority Costs PRIVATE COSTS Bus Acquisition Bus Operation Equipment for Bus Depots and Shops Bus Companies Operation Fare Collection Capital Costs Fare Collection Operation

The following shadow price indexes are used to transform market prices (financial) to economic prices, in order not to double count internal transfers among economic sectors (taxes, tariffs, subsidies) and to correct market imperfections in labor and use of foreign currency.

57 Item Shadow Price Index Engineering design 0.6800 Road Infrastructure 0.8395 Stations 0.9500 Depots and terminals 0.8395 Pedestrian overpasses 0.8395 Maintenance 0.8395 Land Acquisition 1.oooo Trained labor 0.6800 Source: PAD Proyecto de Servicios Urbanos para Bogota, 2003, Anexo 3

Benefits are identified for users and non-users of the mass transit systems:

ISOCTO-ECONOMIC BENEFITS Travel time savings in the Mass Transit System Travel time savings for private vehicles on mixed lanes Operation cost savings from substituted vehicles Operation costs savings for private vehicles on mixed lanes Generalized costs savings due to modal shifts Welfare increases due to generated trips Accident cost savings Air pollution cost savings

Savings are the result of comparing the future situation with Project versus the expected situation without Project. The expected situation without Project considers an increase in travel time and travel costs of 1 percent a year, due to congestion derived from increased motorization. This figure corresponds to a loss in average speed of 0.2 ludh per year. An elasticity of 1.OO of travel time and travel cost is assumed. Travel demand is estimated to grow 2 percent a year.

Travel time savings in the mass transit system come from transport models transformed in economic figures through the social value of time (US$O.75/hour). This figure considers that 70 percent of the users have an income of US$212/month, and 30 percent of the users have an income of US$788/month, and that user value time at 40 percent of the income. The same social value of time is used for all projects; despite there might be differences in average income among cities. In this way economic indicators do not show any preference for projects in cities with higher average income.

Travel time savings for private vehicles on mixed lanes are the result of the segregation between general traffic and transit. Better traffic conditions also result in higher speed and hence, operation savings. Travel time losses due to congestion during construction of the infrastructure are also estimated.

Operation cost savings from substituted vehicles are estimated using current operational cost figures for the vehicles that are replaced by the vehicles of the new transit system. Current system has inadequate operation conditions (obsolete fleet, bad maintenance, excessive number of lulometers per day), and some of the vehicles are replaced by the trunk and feeder buses of the mass transit system. The equivalent costs of operating such vehicles are savings for the society. Rate of substitution depends on the possibilities of each city.

Generalized cost savings due to modal shifts come from the'diversion of passengers from individual automobiles to mass transit. Travel time and cost is reduced as has been already observed in the

58 TransMilenio System in Bogotd. In this evaluation it is estimated that 5 percent of the system riders come from private vehicles.

Welfare increases due to generated trim are the result of the greater mobility opportunities provided by the transit systems. In this evaluation it is estimated that 3.5 percent of the system riders are trips not made under current conditions. Travel time and travel cost savings of generated trips are half of those obtained by existing trips (area under the supply curve).

Accident cost savings are a consequence of better traffic conditions and improved incentives to bus operators. Economic equivalent comes from insurance averages: US$12,000 per disabling injury, US$42,000 per fatality, and US$1,200 per accident with property damage only. Reduction in each city depends on the local conditions.

Air pollution cost savings are a result of new and more efficient vehicles, with fewer lulometers run per unit. Emission tables adapted to Colombia are used to estimate the change in conditions. Economic equivalents are estimated in US$0.714/Ton of Carbon Oxides, US$103.92/Ton of Nitrogen Oxides and US$8 1.79/Ton of Hydrocarbon Volatile Conipounds.

2. Data

The following is a general description of the projects:

BogotB Pereira DQ Cartagena Component TransMilenio NQS Megabus Transcaribe Trunk roads 19.3 km 16.7 km 25.75 km Stations 22 37 23 Terminals 1 2 1 Depots 1 2 Not established Non at grade intersections 8 No information None Pedestrian overpasses 25 6 Not established Piers for Acuatic Control Center Control Center Transport Other Contact-less Fare Contact-less Fare Control Center; Collection System Collection System Contact-less Fare Collection System 148 Trunk line Buses 100 (articulated) 56 articulated (90 articulated, 58 conventional) Feeder Buses 30 87 feeders 335 Expected initial year of 2005 2005 2006 operation Expected Demand first year of 240,000 77,000 130,000 operation (passengersiworkday)

59 Estimated public costs in US$ Million are:

Bogota Pereira DQ Cartagena Public Costs TransMilenio NQS Megabus Transcaribe Project Preparation Conceptual Design 2.64 0.29 0.29 Technical, Legal and Financial Studies 0.59 0.25 0.25 Other preparation costs 0.00 0.36 0.36 Infrastructure Construction and Rehabilitation 269.89 24.56 17.38 Infrastructure Maintenance (annual) 7.61 0.21 1.37 Control Center Capital Costs 2.22 0.58 1.48 Control Center Operation (annual) 0.31 0.09 0.09 Public Authority Operation (annual) 0.48 1.03 1.03 Investment 0.15 0.3 1 0.3 1 Sources: DNP (CONPES), Conceptual Designs, Information from TRANSMILENIO S.A., Estimations D. Hidalgo

The following data is used for the estimation of private capital and operation cost of buses (including replacement of obsolete units):

Bogota TransMilenio Pereira DQ Cartagena Item NQS Megabus Transcaribe Articulated Buses Units 100 56 90 Large Buses (Padron) Units 0 0 58 Feeder Buses Units 30 87 335 Substitution Articulated Buses Per trunk bus 8.90 6.00 6.20 Substitution Large Buses 0.00 0.00 6.20 Substitution Feeder Buses Per feeder bus 3.00 1.50 0.00 Substituted Buses Units 980 46 7 918 Mileage Articulated Buses kmiyearibus 86,710 71,322 71,322 Mileage Large Buses kmiyearlbus 0 0 7 1,322 Mileage Feeder Buses kmiyearibus 86,710 54,427 54,427 Mileage Current Buses kmiyearibus 90,000 53,222 53,343 Cost per Km Trunk $km 2,419 2,140 2,140 Cost per Km Feeder $Am 2,154 8 70 974 Cost Km Current $Am 1,424 974 974 Articulated bus cost Col$2003ibus 610,626,320 610,626,320 610,626,320 Feeder bus cost Col$2003ibus 246,105,469 246,105,469 549,631,573 New buses for feeder services 1 Yes. 0 No 1 1 0 Cost substituted units Col$2003ibus 20,000,000 20,000,000 20,000,000 Sources: DNP (CONPES), Conceptual Designs, Information from TRANSMILENIO S.A., Estimations D. Hidalgo

60 3. Benefits

Sources: DNP (CONPES), Conceptual Designs, Engineering Designs (NQS), Information from TRANSMILENIO S.A., Estimations D. Hidalgo

Additionally there are losses during construction due to congestion during system implementation equivalent to US$2,371,43 1 in Bogota and US$ 1,899,931 in Pereira and Cartagena.

4. Results

The following table summarizes the estimated present value of the Project Costs and Benefits (12% US$ Million):

Pereira DQ Cartagena Bogota TransMilenio NQS Megabus Transcaribe costs Project Preparation 2.20 0.61 0.6 1 Ini?astructure Construction and Rehabilitation 202.30 21.57 66.16 Infrastructure Maintenance 42.03 1.16 7.58 Control Center Capital Costs 1.88 0.49 1.26 Control Center Operation 1.39 0.39 0.39 Public Authority 3.27 6.98 6.98 Bus Acquisition 30.04 24.55 38.26 Bus Operation 62.80 30.96 74.84 Equipment for Bus Depots and Shops 2.60 1.91 3.10 Bus Companies Operation 5.80 5.80 5.80 Fare Collection Capital Costs 4.73 2.39 1.90 Fare Collcction Operation 7.56 3.81 3.03

61 Pereira DQ Cartagena Bogota TransMilenio NQS Megabus Transcaribe Total Costs 366.60 100.61 209.89 Socio-economic benefits Travel time savings in the Mass Transit System 87.23 20.79 89.27 Travel time savings for private vehicles on mixed 12.51 3.81 13.15 lanes Travel time losses during construction -2.12 -1.70 -1.70 Operation cost savings from substituted vehicles 343.88 66.91 131.38 Operation costs savings for private vehicles on 5.49 2.74 2.74 mixed lanes Generalized costs savings due to modal shifts 47.79 14.54 24.56 Welfare increase due to generated trips 4.66 1.21 2.29 Accident cost savings 18.71 4.02 1.16 Air pollution cost savings 12.18 1.12 1.99 Total Benefits 530.33 113.45 264.83 Net Present Value 12% (Benefits - Costs) 163.74 12.84 54.94 Internal Rate of Return 21.4OYo 16.45% 20.33% BenefitKOst ratio 1.447 1.128 1.262

Evaluation for other cities will be performed using the same methodology. Projects will be eligible if the NPV using 12 percent discount rate is greater than 0 (ERR greater than 12%).

5. Analysis of Project Displacement Over Time

SITM Projects financed with the loan are expected to start operations between 2005 (Bogoth and Pereira) and 2006 (Cartagena). They will be partially financed by loans to the municipality from banks or constructors, which will be paid back using future budget authorizations (vigencius futurus). It is not possible to assign total budget required by the projects for construction in the first year due to spending limits both at the local and national levels.

In case this mechanism is not adopted, municipalities will be required to cap the capital investment to the available funds. In this case projects will be delayed four to five years. This is, instead of developing the infrastructure in one year, construction will take four to five years, and benefits will only be received by the community at the end of the construction period. There will also be losses due to congestion during the construction years.

This reduces de positive impact of systems’ implementation (net value, benefit cost ratio, internal rate of return). The impact of displacing investment (not using bridge financing of future budgets -vigencius futurus) is estimated as follows:

62 Initial Year of Operation 2005 2008 2009 Net Present Value 12% US$ Million 225.63 112.31 83.65 Reductionwith respect to 2005 50.2% 62.9% Present Value Public Costs 12% USS Million 358.34 297.23 279.26 Reduction with respect to 2005 17.1% 22.1% Present Value Private Costs 12% US$ Million 296.27 210.88 188.29 Reductionwith respect to 2005 28.8% 36.4% Present Value Social Benefits 12% USS Million 880.24 620.42 551.19 Reductionwith respect to 2005 29.5% 37.4% BenefitKOst Ratio 1.345 1.221 1.179 Reductionwith respect to 2005 9.2% 12.3% Socio Economic Rate of Return 20.6% 15.3% 13.8% Reductionwith respect to 2005 25.8% 32.7%

The displacement in the investments causes reduction in all the project indicators. Net present value is reduced 50 percent (US$ 1 13 Million) if operation only begins in 2008 and 63 percent (US$142 Million) if operation only begins in 2009. Benefit cost ratio is reduced to 1.22 and 1.18 while Socio economic rate of return goes to 15.3 percent and 13.8 percent, respectively (more than 1% loss per year of delay). This also jeopardizes the strategy of generating employment in the construction industry and improving the quality of life of poor communities in the short term.

6. Sensitivity Analysis

6.1. Sensitivity Analysis Bogotsi

NPV 12% Change NPV vs. Base US$ Million TIRE Case Base 163.7 2 1.40% Demand growth 1% 140.7 20.53% -14.08% Demand gowth 0% 119.2 19.64% -27.18% Demand and congestion gowth 0% 101.0 18.79% -38.34% Value oftime -10% 153.4 20.85% -6.30% Value of time -20% 143.1 20.30% -12.61% Substitution rate -10% 128.3 19.48% -21.66% Substitutionrate +lo% 199.2 23.28% 21.66% Other benefits -10% 152.7 20.81% -6.71% Other benefits -100% 64.5 15.86% -60.60% Public costs +lo% 138.4 19.41% -15.46% Total costs +IO% 127.1 18.77% -22.39%

63 6.2. Sensitivity Analysis Pereira-Dosquebradas

NPV 12% Change NPV vs. Base US$ Million TIRE Case Base 12.8 16.45% Demand growth IYO 9.6 15.56% -25.52% Demand growth 0% 7.2 14.82% -43.63% Demand and congestion growth 0% 4.4 13.85% -65.75% Value oftime -10% 10.5 15.67% -18.40% Value of time -20% 8.1 14.88% -36.80% Substitution rate -10% 6.0 14.14% -52.95% Substitution rate +lo% 19.6 18.67% 52.95% Other benefits -10%) 10.2 15.57% -20.49% Other benefits -100% -10.0 8.13% -178.06% Public costs -10% 9.7 15.24% -24.29% . Total costs -I0% 2.8 12.91% -78.35% No new feeder buses 2.1 12.86% -83.74%

6.3. Sensitivity Analysis Cartagena

NPV (12%) Change NPV vs. Base US$ Million TIRE Case Base 54.9 20.33% Demand growth 1% 46.2 19.45% -15.89% Demand growth 0% 38.5 18.58% -29.99% Demand and congestion growth 0% 31.1 17.65% -43.40% Value of time -10% 44.7 18.87% -18.60% Value of time -20% 34.5 17.38% -37.20% Substitution rate -10% 41.7 18.43% -24.04% Substitution rate +lo% 68.1 22.1 9% 24.04% Other benefits -10% 50.4 19.68% -8.25% Other benefits -100% 9.6 13.56% -82.48% Public costs +lo% 47.5 18.85% - 13.5 0% Total costs +LO% 34.8 16.95% -36.60%

64 Annex 10: Safeguard Policy Issues COLOMBIA: CO Integrated Mass Transit Systems

Backmound

Project Development Objectives

The World Bank is financing an urban transport investment project to: (i)develop high quality and sustainable Bus Rapid Transit Systems in selected medium and large cities in Colombia to improve mobility along the most strategic mass transit corridors; ii) improve accessibility to the poor through feeder services and fare integration and; (iii)build greater institutional capacity at the national level in order to formulate integrated urban transport policies, and at the local level in order to improve urban transport planning and traffic management. The Project will support the financing of the National Urban Transport Program (NUTP), which main goal is to improve long-term sustainability, efficiency and quality of urban transport in Colombian cities in a multi year program lasting up till 2015.

Specifically, the proposed Project builds on the successful experience of Bogota’s TransMilenio, and it will contribute to: i)further expand BRTS schemes in Bogota; ii)introduce BRTS in medium and large size cities, replicating the experience of Bogota but tailoring it to specific conditions of those selected cities; and iii)consolidate the initially ad-hoc intervention of the GOC in Bogota’s first phase into the NUTP. To achieve the objective the Project relies on an effective public-private partnership for developing sustainable BRTSs in which the roles are assigned as follows: (i)the public sector finances and builds segregated bus ways and other related infrastructure through co-financing arrangement between municipal and central government; (ii)private sector operators provide the buses and operate a trunk-feeder system under a concession contract granted by the municipality; and (iii)each selected city creates a public agency to plan, regulate and control the operation of the BRTS and sets the user tariff that will ensure the sustainability of the system without operational subsidies.

While CAF and IDB’s operations will finance GOC transfers for specific projects (BogotB’s Suba project and Cali, respectively), the proposed IBRD loan, will have a broader and more flexible scope, financing the 2004 - 2008 “vigenciusfutuuus” of the GOC contributions to the NUTP. Since the implementation of the NUTP will go beyond 2008, which is the intended closing date of the proposed Project, it is likely that the GOC will request the Bank to provide a follow up operation to continue supporting the program.

Project Components

The Project will have two major components: (1) A Technical Assistance Component; and (2) an Investment Component. Under the Technical Assistance Component (Total cost: US$3.5 million; IRDB US$3.5 million), at the National level, the Project will support the government’s efforts to formulate national urban transport programs and strategies to improve public transport services in Colombian cities. This would include activities aimed at: (i)defining a national urban transport institutional map; (ii) formulating sector policy and the definition of operational, regulatory, institutional, environmental, social and road safety strategies within the urban transport and urban development context; and (iii)identifying appropriate mass transit solutions to improve transport in other Colombian cities and to improve traffic management and the institutional strengthening of local authorities. This component includes the concept design of the projects as u7ell as the financial and technical structuring of BRTS operations in new selected cities.

At the Local level, the component seeks to: improve the institutional capacity of the participating cities to ensure adequate implementation of the BRTS by supporting the creation andor institutional strengthening

65 of the project’s implementing agencies. The component also includes the definition of institutional organization, technical assistance, equipment and training. Also, the development of greater technical and operational capabilities of the cities to implement urban development and transport strategies in areas such as land use developments, road safety, traffic management, and environmental and social issues related to urban transport projects (environmental management plans, resettlement plans, etc.).

Under the Investment Component (Total Cost US$464.7 million; IRDB US$244 million), the Project will co-finance the development and implementation of BRTS and feeder routes in selected medium and large cities according with the eligibility conditions (see Annex 1). This means that the participation of all candidate cities is not certain, as key criteria and conditions have to be firstly met. It is estimated that approximately 77 km of segregated corridors will be built in the participating cities. Candidate cities being targeted for the Project include Pereira (1 7 km), Barranquilla (1 5 km), Cartagena (12 km), Soacha (5 km), Bucaramanga (9 km), Medellin (14 km), and the NQS-Corridor of the Bogoth TransMilenio BRTS (20 km).

With the exception of the NQS-Corridor of the Bogota TransMilenio BRTS, in which the loan will finance exclusively five construction contracts according to the OPRC waiver, for the other BRTS the loan will finance GOC participation including (i)construction of segregated busways; (ii)repaving of mixed-traffic lanes adjacent to the new busways; (iii)bus stations and terminals; (iv) control center to monitor and direct operations on the busways; (v) supervision of the construction contracts; and (vi) paving and other improvement of feeder roads.

EnvironmentalAssessment

This Annex summarizes the findings of a number of environmental studies and analyses done during project preparation, including the: i) Development of Guidelines for the Design, Environmental Management, and Monitoring and Evaluation of urban infrastructure projects, drawing from the existing guidelines at the Institute for Urban Development of Bogota -IDU (see Appendix 10.a); and (ii)the Environmental Management Plan for the project of Pereira, coordinated by AMCO (Metropolitan Area Coordinating Office).

Both the Environmental Guidelines for Urban Infrastructure Projects and the Environmental Management Plan for Pereira will be disclosed.

Long Term Environmental and Social Impacts

NUTP is expected to provide net environmental benefits in the long run, derived from a cleaner, more modem and more energy-efficient transport system, with improved accessibility, and lower emissions of air pollutants and greenhouse gases. In addition, the modernization of public transport will bring lower congestion and increased safety for all transport users. Lower emissions of air pollutants and GHG will result from a more efficient use of the transport fleet, which will be further achieved with better technologies and fuels; a good and reliable public transport service will not only help access to work, leisure, and housing, but will enable modal shift from private cars and motorcycles. Provision of good non-motorized transport facilities as safe and convenient bikeways and pedestrian space will also contribute to lower the energy intensity of transport. NUTP implementation will include upgrading of existing urban roads to enable an integrated system of segregated trunk and mixed-traffic feeder routes, which in most cases will also result in urban space improvements in the form of upgraded pavements and adjacent green areas. Reducing pollutant emissions in Bogota directly impacts the quality of life of its citizens.

66 The Project will improve the standards of life of the population of the main cities of Colombia. Due to the implementation of BRTS, and the fare integration, families will spend less of their income on transportation. Additionally, the urban public transport users will have access to a safe and improved transport system. Families will be able to use the money and time that they currently spend in transport to satisfy other needs. The BRTS will also allow the use of mass transportation to the disabled population.

Environmental Baseline

The Project’s potential area of influence varies from city to city. In Bogota, the Project will co-finance part of the expansion of the existing BRTS TRANSMILENIO, and its coverage will be limited to the 20 km of the Norte Quito Sur corridor. In the medium cities the area of influence will normally be associated with the existing main transport corridors. That is the case of the 30 de Agosto Avenue in Pereira; the Pedro de Heredia Avenue in Cartagena; or the Murillo Avenue in Barranquilla. In all cases, most works will involve upgrading of existing roads, which are typically used for a combination of public and private travel, hosting the main bus routes. These are consolidated areas around which a large part of the population’s activity takes place.

Like most of Latin American countries in the last decades, Colombia has experienced a high population increase in urban centers due to several economic and social factors. In addition, Colombia has also experienced several decades of armed conflict that has displaced approximately 2.5 million people from rural to urban areas, of which 50 percent have been located in the four largest cities. As a result today 75 percent of the total population of Colombia live in cities. This concentration process has moved poverty issues away from rural areas into the cities, as it is now estimated that two thirds of the Colombian population living below the poverty line is located in urban areas. Colombia’s largest urban agglomeration is the city of Bogota with an estimated population of 6.5 million, followed by Medellin and its metropolitan area close to 3 million, and Cali and Barranquilla, each having close to 2 million. Pereira, Bucaramanga and Cartagena follow with a populations ranging between 700 thousand and 1 million inhabitants.

There is a high dependency on public transport in all cities, as an average 75 percent of people utilize public transportation. At the same time, the public transport systems in Colombian cities tend to be of low quality, low operating speed, high levels of congestion, high levels of criminality, high accident rates and elevated levels of air and noise pollution.

The relatively high levels of emissions and concentrations of airborne pollutants affect health and quality of life. Ozone, CO, and PMlo are the pollutants of most concern in Bogota, as their concentrations exceed air quality standards. Besides their direct effect on health, PM10, NO, and SO, are major precursors for the formation of PM2.5, which inflicts serious health impacts, including increased morbidity and mortality; and NO, and VOCs are also precursors for ozone formation, which has in it serious local social costs, while contributing to global warming.

Transportation is a major source of GHG, mostly in the form of COZ, emitted as a direct result of fossil fuel combustion; in Bogota, these emissions are mostly associated to the use of gasoline and diesel. Thus, measures aimed at improving efficiency of transport flows, at promoting modal shifts to non-motorized, or to less energy intensive modes of transport, will not only help address local air pollution but will also reduce GHG emissions.

Safeguard Policies triggered

No significant or irreversible impacts are expected.

67 OP4.01 Environmental Assessment. The policv OP4.01 is triggered due to the potential adverse environmental impacts associated to the construction phase of the Project, related to (a) management of materials and waste; (b) restriction of traffic flows and access to homes and businesses; (c) increased noise and emission of pollutants; (d) management of work camp sites; and (e) interference with urban infrastructure (phone lines, piping, electricity wires, sewage).

Environmental Guidelines To facilitate the development of EMP for each participating city, and ensure quality and consistency, Guidelines for Design, EMP, and Monitoring or urban infrastructure projects were developed during project preparation, using the existing Guidelines at TDU as a basis. (see Appendix 10.1). The guidelines include programs for (i)camp site management; (ii) archeological and heritage chance finds; (iii) management of borrow materials and sites; (iv) management of wastes and disposal; (v) traffic management; (vi) public participation; (vii) management of green areas; (viii) risk and occupational health and safety; (ix) management of drainage, pavements and concrete structures; (x) management of chemicals, liquid waste, oils, and fuels; (xi) water management; (xii) management of equipment and machinery; and (xiii) control of emissions and noise. The DNP was in charge of coordinating the development of the guidelines in association with the Ministry of Environment. For the case of Bogota, IDU’s guidelines will be used.

Environmental Management Plans

Environmental Management Plans will be required for each city to mitigate the potential environmental impact on the Project sites and surrounding areas during construction, will be addressed to all infrastructure works (trunk lanes, transfer stations, and bus stops), and will be aimed at integrating environmental criteria into the design phase. All potential impacts that cannot be averted in the design will have to be mitigated through EMPs. The EMPs will be carried out either by the same contractors in charge of developing the final infrastructure designs, or as separate studies for each city, in close coordination with the specific designs. The EMPs will follow the guidelines developed during preparation to ensure consistency amongst cities. DNP will ensure that an EMP is prepared for each city and the environmental authority at each metropolitan area will be in charge of leading the contracting and supervision of their studies.

The Subsidiary Agreements will include provisions for ensuring that the EMPs are fully complied with, and that their implementation is properly monitored and evaluated. All bidding documents for the infrastructure works will require not only the EMP, but also plans for monitoring their implementation. Pereira has already prepared its EMP and has submitted it for Bank’s review. The Environmental Management Plan for Pereira is summarized in Appendix 10.2.

OP4.12 Involuntavy Resettlements. The project intervention triggers OP 4.12, the Resettlement Policy. Despite the positive social impacts of the Project for the urban population, the Project will cause involuntary displacement in some cities. For the above reason, a Resettlement Framework will be developed according to the Bank Operational Policy 4.12. All the cities are aware of the Resettlement Policy of the Bank, and the local authorities as well as the responsible institutions are willing to adhere to the Resettlement Framework. Based on this Framework, each city will design Resettlement Plans before the bidding process for the construction of the corridors.

OP 4.04 on Natural Habitats, and OPN 1 1.03 on Cultural Property get triggered due to potential impact on wetlands in Barranquilla and Soacha; and to potential impact on cultural heritage in Cartagena. In the first case, the BRTS passes nearby body waters of important natural ecosystems. In the second case, there is potential for chance finds when upgrading some of the roads in Cartagena. In both cases the Project is not inflicting direct impact, but the construction works pose potential adverse impacts. To mitigate them,

68 the Environmental guidelines for the Design, Construction, and Monitoring of Infrastructure Projects prepared already have the right provisions for Environmental Management Plans.

Conlpliance with Environmental and Social Safeguards- SUMMARY

The net environmental impacts from implementing NUTP will be positive, with substantial impacts on air quality and safety. The potential adverse impacts are related with the construction phase of the BRTS. The Project is a SIL Category B operation. The following matrix summarizes the compliance with the Safeguard Policies, and it is consistent with the Concept Review meeting.

Potential Impact Safeguard Policies I Disclosure requirement Next Steps triggered Environment )P4.01 is triggered Guidelines for the desigr )evelop EMP foi managemer ach participating ity

nvironmental Managemer Plan for Pereira

EA for Bogota (NQS) E Involuntary lP4.12 is triggered Resettlement Policy Develop Resettlement Framework Resettlement Plans for each city Action Plan for updating RP for Bogota (NQS)

Natural Habitats lP4.04 is triggered Guidelines for the design, Develop EMP for environmental management each participating plans, and monitoring of city, with special urban infrastructure works attention to the (See Manual summarized at projects of Soacha, appendix) and Barranquilla

Cultural Property )PN 11.03 is triggered Guidelines for the design, Develop EMP for environmental management each participating plans, and monitoring of city, special urban infrastructure works attention to the (See Manual summarized at project of Cartagen; appendix).

69 Public Consultation and Disclosure

A Consultative Workshop on Safeguards took place during preparation, with the participation of representatives from all candidate cities, from DNP, the Ministries of Environment, and Transport, and from the Bank’s regional safeguard team. At the workshop, the Bank safeguard policies were made clear to all participating, as well as their application to the Project. Agreement on next steps for preparing the Project, and on environmental and social requirements for implementation were agreed at the workshop.

The Project development has included in-depth interviews and consultation with stakeholders. Considered stakeholders included bus service operators and associations, and NGOs. Representatives from governmental agencies were consulted on a regular basis. At the national level, DNP is disseminating the CONPES (document providing legal and budgetary support to NTUP) for NTUP and the different cities at its institutional page: http://www.dnu.gov.co. The Projects have been posted in the institutional websites of the different managing agencies (created with similar role and mission of TransMilenio), or municipal administrations. In the case of Pereira, it is presented at the official website of Pereira’s municipal government: http://www.uereira.gov.co/webvision/planes contenido transuorte masivo.isu.

Disclosure varies according to the maturity of the city projects. For Bogota and Soacha, where IDU will be the implementing agency, the Guidelines have been long disclosed and are made available. IDU has a website on general environmental and social policies and requirements for (http://www.idu.nov.co/entidad/aestion ambiental.htm). There, all contractors’ environmental obligations are spelled out, and guidelines to develop Environmental Management Plans are clearly presented. The website has also additional environmental and risk prevention information to inform not only investors but the general public, as well as public forum space. DAMA has also additional guidelines for environmental licenses and permits associated with the civil works at http://w.dama.gov.co/. Disclosure of the Environmental Guidelines and Environmental Management Plans will be done through the institutional websites of the recently created managing agencies and through DNP.

Institutional Cauacitv to implement and monitor EMP

As a principle, all EMPs will be implemented by the contractors in charge of the civil works, and its compliance will be ensured through the bidding documents and legal contracts. With the exception of Bogota-Soacha, the other cities have relatively low capacity to approve the EMPs required as a general condition for the projects. DNP will be the agency in charge of monitoring implementation of all projects, but its capacity to follow up EMPs needs to be re-strengthened. To mitigate the risk, during project implementation all EMPs should be sent to the Bank for no objection. Complementarily, the Technical Assistance component will help build the needed capacity at the city level.

70 Appendix 10.1

General Guidelines for the Design, Construction and Follow up of the Urban Transport Project of Colombia.

Introduction

The National Department of Planning (DNP) and the Ministry of Environment, Housing and Territorial have issued environmental guidelines to be applied to urban transport projects, based on the following environmental practices and guidelines: Guidelines for Environmental Management for Development of Urban Infrastructure (2003), developed by IDU and DAMA; Environmental Guidelines for the Design of Urban Infrastructure Projects, developed by IDU, DAMA, and the Botanical Garden of BogotS; the Manual for Environmental Guidelines and Practice by INVIAS; the Manual for Environmental Monitoring of Projects by IDU; the Sectoral Environmental Guidelines from the Ministry of Environment, Housing and Urban Development; and the Manual for Environmental Management, Citizen Participation, and Land Development developed and used by Chile’s Ministry of Public Works.

This document must be part of the contractual covenants, together with the Environmental Management Plans for the civil works. Not complying with it should generate potential economic penalties.

Objective

The objective of these guidelines is to optimize the environmental management of construction activities related to infrastructure for Bus Rapid Transit Systems (BRTS) in Colombia, providing guidance to (i) improve planning, design, construction and follow-up of civil works; (ii)facilitate the development of environmental studies; (iii)establish environmental management guidelines; (iv) unify criteria for monitoring and evaluation; (v) strengthen environmental practice; (vi) optimize resources; and (vii) mitigate environmental impact.

Environmental Guidelines for the Design

The following table shows the main potential environmental impact resulting from building BRTS projects, to be considered at the design stage.

71 ~___~ /Generation and or acceleration of erosive process and instability oss of organic layer

ges in the natural drainage system

ference and effectuation of the utility services operation xio-economic and ultural Dimension entation of the accidentally rate ctation over the safety and goods of the vulnerable population on the project

ing of urban perspective not under study

Sources: MAVDT, IDU, DNA, INVIAS.

The following table provides elements to be considered when designing BRTS, according to environmental objectives and type of intervention.

1 = corridors 2 = intermediate stations 3 = main (head) stations 4 = maintenance workshops

72 aintain permeable surfaces,

Slope, surfaces and drainage management, etter Soil Slope and structures adequately, I/ Selection of vegetation cover. Respect natural water streams: Avoid to conduct activities near natural water streams. If it is a case that these take place, all precautions must be take in to Cleaner and more water &count to avoid pollution, for the future void rectifications on water streams, specially when is the base of a natural stream drain, !Maintain permeable surface drainage, complimented with i adequate drainages along the way. Minimize Conflicts with water bodies, by inadequate location,

Storms water storage systems,

Pollution control against oil spills and lubricants: Storm, domestic and drainage water. Control and forecast atmospheric emissions on the source: Introduction of clean fuels and efficient combustion processes,

leaner air and less noise educe noise at station floors,

Through the implementation of protective measures protect the neighbors from the actions of traffic, Identify, respect and enrich, if its necessary local biodiversity,

Find protection and enrichment of the biodiversity at the corridor and surrounding sites,

Propose conservation and protection measures of the biodiversity in urban areas during the construction of the urban ore Biodiversity transport systems, enriching vegetative cover and the availability of habitat, I Plant of native species along the routes of the transport systems. Avoid to the maximum extent the use and temporarily occupation of green areas,

Compensate green areas intervened by the construction.

Pstablish association of attractive species.

73 Protection of strategic Inventory and evaluation of possible inventories. I ecosystems Inventory and evaluation ofpossible impacts, of the esign of protection measures, Fistorical Heritage I

ore and better public It must be planned the use of green areas and pu8blic areas,

ore and better public

important ecological

ake advantages of the native vegetative species, etter urban Landscape Increase the visual quality and the scenic value of the surrounding vegetation,

e occupying an

nalyze and forecast drainage management,

ess natural risks

nalyze seismic risks,

Ian maintenance and repairmen of infrastructure.

74 Require signals, facilities, including signals hits,

Lees Technological Detailed analysis of possible risks and mitigation alternatives, Risks Plan sufficient budget, .

Avoid interferences with signals and communication systems of the operator. Have control on substances and hazard material. Apply regulations for storage, dispose and use hazardous materials, as domestic waste. lubricants, fuels, additives, batteries, etc.

Environmental Management Plan

In order to mitigate the environmental impacts of the project, 2 1 environmental management programs have been designated for several activities of the project. Every program, addresses regulatory framework, impacts to be mitigated, and management’s measures. The programs are as follows.

Progrum 1: munugement and disposal of solid wuste fi-om construction activities This program will define the general environmental management framework for the disposal, selection and classification, of solid waste resulted from digging and structural definitions. The impact that will be mitigated will be atmospheric pollution and noise, solids entering the drainage system, pedestrian inconveniences on the impacted area during construction, loss of vegetative cover, landscape alteration and land slides, intervention of sensitive hydrological zones. These guidelines will be applied on to intervened areas, demolitions, digging and construction on Annexes areas.

1. Management Measures

- Defines the procedures to manage and dispose construction waste. Establishing mechanisms to select temporal storage sites; - Defines activities to select areas for storage of recyclable digging material, including the design of measures to avoid degradation by the action of wind and water; - Defines criterion to avoid the use on green areas for waste disposals; - Prohibits the disposal of debris on Hydrological sensitive areas; - Informs that all vehicles need to comply with regulation 54 1/94 from the Ministry of Environment anc they only will be allowed to circulate for their activities on the schedule previously approved; - The disposal of debris from construction activities will only be located at the previously authorized sites; - Vegetative inaterial and debris from tree elimination and relocation should be separated according to its size and general characteristics; - Vegetative cover should be retired from worlung area, vegetation as grass could be reused on site afte construction work have been finished; - Soil and other vegetative material can be deposited on areas where is needed to recover the landscape and the lost of vegetative aspects; - For complementary measures, see programs 3, 11, 12, 13.

75 Program No. 2: Storage and management of construction material

This program aims at setting guidelines on activities to dispose and manage sand, rocks and other construction material used on the implementation of this project. The impact identified on this program is: atmospheric pollution and noise, solids entering the drainage system, pedestrian inconveniences, and occupation of public space.

~ 2. Management Measures

- Establishes measures for construction material as sand, rocks, asphalt, and other derivates from clay used at the construction site; - Establishes provisions for management of asphalt and concrete. Measures as to manage the concrete over steel plates, and provisions in case of spills. The use of wood structures is restricted; - Establishes provisions to use hot asphalt to cover gaps in concrete; - Establishes provisions to manage sand, rocks, aggregates and bricks; - Establishes temporary locations for the storage of construction material to avoid its wash to drainage systems; - In case of the construction material be provided by a public company, this material should be deposited at the front of the construction site; - The vehicles used to work on the Project must use cover at all times while workmg at the construction site; - In case of not having an adequate site for temporal construction material storage, in an exceptional mode green areas would be authorized to be used; - As complementary measures, see programs 8,9.

Program 3: Management of Temporary office locations and construction site This component sets guidelines for site camp and storage location. The impacts to be mitigated are related to the construction and operation of the site camp, as the removal of vegetative cover, temporal changes on the use of soil, gases and particles emission, noise, domestic waste water generation, fine particles and lubricants to water streams and drainage system, landscape variation, industrial and domestic solid waste, change of day to day activities to householders, utilities demand, and increase on the risk of accidents.

3. Management Measures

- Generates guidelines for the location of the site camp and existing locations, the site camp, should be located at green areas, public spaces, only when is strictly necessary; - The temp site camp must be well illuminated, have external vigilance, and the contractor should request local utility services permission to use its services; - The temporary site camp, must have on its own an area for bathroom in the proportion of 1 for each 15 workers; - Recipients for solid waste management must be located at the temporary site camp, identifying its sources with different colors; - Every temporary site camp must show preventive signs to avoid accidents as a measure of safety. Also every site, must have fire extinguishers; - For complementary measures, see programs 4,6, 11, 12, 13, 17, 18.

Program 4: Management of equipment, machinerv and Transport This program defines general guidelines for equipment to be use at the construction project. Major impacts will be caused by the operation of the equipnients. Impacts as noise, gases and particles, oil and grease spills, traffic alternations, increase on the risk of accidents, water pollution, vibration o surrounding areas, deterioration on surrounding vegetation, are expected. 4. Management Measures

- Establishes measures to work around hospitals, schools, and libraries, the schedule of work will be 2 hours of work, and two hours of suspension of activities; - Inforins that equipment maintenance will be a key element to mitigate air and noise emissions; - Informs that equipment and machinery washing activities must not be done at camp sites; - Recommends to use at the construction site, equipment recently built in order to comply with the law769102 for emissions; - Gives recommendation for loading and unloading equipments, these must be in stop position; - Recommends that, when works are conducted during night shift, equipment that produces levels of noise above the required regulation of the neighborhood or area can not be use; - As complementary measures, see programs 1,2, 5,6, 8 ,9.

Program 5: Air Oualitv This program aims at establishing necessary controls to reduce the emission of particulate matter, polluted gases and noise. The major impact to mitigate with this program is: augmentation of the level of noise, particulate matter, gases (CO, Sox, Nox, C02).

5. Management measures

- Establishes conditions for the camp site; - Requires a program to moist the ground on dry seasons; - Requires that the speed of the machinery and equipment at the construction site, should not exceed 20 kdH; - Suggest that the load must be well accommodated in to the transport systems; - Requires that equipment not being used, should be turn off while stopped; - Establishes conditions to manage materials at the construction site, as covers and moisture providers; - Requires at the construction site, burning waste is prohibited; - Requires the contractor to be responsible to manage and control any emission source that arises from the construction activity; - Establishes guidelines to manage noise on sensitive areas, as hospitals, schools, etc. This includes night work activities; - For complementary measures, see programs 1,2, 4, 7,8, 10.

Program 6: management of Liauid waste, flammables, Oils and lubricants, and chemical substances. This program aims at managing oil, flammable substances, and lubricants. Its impacts are, liquid waste to water streams and sewage systems, pollution of surface water, odors, soils, work accidents and professional health problems.

6. Management Measures

- Establishes provision that prohibits the washing and repairmen of equipment and machinery at the camp site; - Establishes measures to manage oils and lubricants; - Establishes measures to manage sludge for construction activities; - Establishes measures to manage chemical substances; - As complementary measures, see programs 3,4, 5, 6,18.

77 Program 7: Camp Site cleaning status This program is aimed at having before and after the construction activities, clean conditions at the campsite. The impacts to be mitigated with this program are: air quality, solid waste to drainage system, landscape affectation.

7. Management Measures

- Establishes provisions for waste collection and management. This elements must be located at least every 200 mts; - Requires per every 1.000mts and every camp site have a team to do cleaning at the construction facilities; - Requires that recycling material must be storage separated; - For complementary measures, see programs 1, 2, 3.

Program 8: Manapement of traffic changes and flow of traffic This program aims at managing traffic conditions at the area impacted with the construction works. The impacts are as follows: alternation of the landscape, modification on daily behavior of the community, pollution from atmospheric emissions, increase of accidents, increase in particle concentration and gases.

8. Management Measures

- Establishes projects and programs to manage traffic on the direct and undirected affected areas; - Establishes an information campaign, including maps and graphs; - Suggests traffic management measures throughout the impacted area with construction works; - Requires the access to police station, fire department, health care centers, hospitals, and military locations, must be cleared and uninterrupted; - Establishes areas for pedestrian to mobilize during traffic intervention; - For complementary measures, see programs 1,2,9, 18.

Program 9: Signaling This program aims at placed signs on roads that are under construction. The impacts of this activity are alteration of vehicular and pedestrian flow, increase in accidents and change on the behavior of the community.

9. Management Measures

- Establishes provisions for signaling the work area; - Establishes a system with elements to mange and control the traffic and the protection of civil works on urban areas; - Establishes the different types of elements that must be used in the area of construction to manage traffic and construction activities; - Establishes signs in temporary closed streets; - For complementary measures, see programs 1, 2,3,4,8, 10, 18.

Program 10: Construction works insulation This program aims at insulating construction areas to avoid the intromission of unwanted personal on the site. The impacts to mitigate are; accidents, visual contamination, solid waste management, robbery and other related activities.

78 10. Management Measures

- Establish provision for the installation of a plastic barrier (Green Color ) to avoid the intromission of people and other elements within the construction area; - For complementary measures, see programs 1, 2,9.

Program 1 1: Ground management This program aims at protecting the soil on the direct influence area of the Project. The major impacts are erosion and change in land use patterns.

1 1. Management Measures

- Establishes rules for equipment mobilization within the project area; - Requires that the loss of soil must be restricted at the construction site; - Requires that solid waste management at the construction site should be restricted and temporary; - Establishes that liquid waste should not be send to water streams and drainage systems; - Establishes activities in case of having an oil and solid waste spill; - Establishes activities when removing the vegetative layer; - For complementary measures, see programs 1, 2,3, 6, 12, 13, 14, 16, 18.

This program aims at having adequate management of liquid waste coming from campsites location and other sources. Also to prevent and mitigate the affectation of the drain receptors systems during construction activities of the Project. The impacts to be mitigated are: alteration of the water quality, by oil, lubricants, solid waste, others.

12. Management Measures

- Establishes procedures for handling water streams near the construction site; - Establishes procedures for handling digging material, and to avoid it spills in to water streams and drainage systems; - Establishes procedures to handle waste at all site camp locations; - Establishes measures to have on every camp site an adequate system to collect and manage water and liquid wastes; - Establishes provisions for temporal mechanical shops and management of waste of these facilities; - Establishes requirements to prohibit the washing of vehicles at camp site; - Establishes requirements to manage surface waters at the construction site, including construction and maintenance of drainage channels. It is required to apply Decree 1541 de 1978; - For complementary measures, see programs 1,2,3,4,6,7.

Program 13: Management of Vegetation This program aims at reducing the impact of surrounding vegetation at the construction site. The impacts to be mitigated are: vegetation and habitat, soil alteration, landscape alteration, fauna and flora.

13. Management Measures

- Establishes environmental requirements for the removal and eradication of tree vegetation; - Establishes procedures to remove and replant trees and vegetation; - Establish procedures to activities of management of organic cover; - For complementary measures, see programs 1,2,7, 9, 10, 11, 16.

79 Program 14: Comuensatoni Tree and Vegetation Replant The objective of the component is to compensate the lost of vegetation at the construction site. The impacts to be mitigated with this program are related to the loss of vegetal cover and the loss of trees due to construction activities.

14. Management Measures

- Establishes procedures to manage the cut and replant activities for new and replaced vegetation, including the identification of areas selected for compensation; - Establishes measures for maintenance of the compensated vegetation and its adaptation of the new environment; - For complementary measures, see program 13.

Program 15: Management of Archeological and Historical Sites This program aims at establishing basic guidelines to mitigate the impact over Archeological and Historical heritage at the construction site. The impacts identified for this activity are: the destruction or alteration of the cultural and archeological heritage, and the lost of cultural identity.

Program 16: Landscape management This program aims at achieving adequate management of the landscape at the construction site. The impacts are associated to the alternation of the visual of the site, and the quality of the landscape.

16. Management Measures

Establishes measures to manage in the most appropriate manner the landscape; Establishes criteria to include at the design stage measures to less affect the surrounding landscape; For complementary measures, see programs 11,12,13,14.

Program 17: Occuuational health and industrial safety This program aims at protecting construction workers, surrounding affected people, minimize the occurrence of accidents, define the operative mechanisms, improve the quality of life and work environment at the construction site.

17. Management Measures

- Establishes requirements for the implementation of a program on preventive medicine; - Establishes guidelines for the development of a program for hygiene and industrial safety; - For complementary measures, see programs 3,4,6,7,18.

Program 18: Contingency Plan This plan does not have to be specific. The contractor must design a plan, which includes at least the following aspects: prevention, structure, operative, specific, and has a broad coverage. This program also requires, a plan for risk and vulnerability, plan of action and other aspects to be taken in to account.

Program 19: Restitution of affected locations This programs aims at mitigating the effects of the construction activities at the surrounding areas of the construction sites.

19. Management measures

80 - Defines planning and work activities to be implemented in conflictive zones; - Defines requirements for geomorphologic restoration; - Defines requirements for public space; - Proposes measures to mitigate the risks and complains for the affected population; - For complementary measures, see programs 1,2,4,6,7,8,9.

20. Management Measures

- Identify and analyze measures to communicate in the most effective manner with the affected community; - Describes the mechanism to be used by the contractor to communicate changes and developments of the works to the community; - For complementary measures, see programs 7,8,9,21.

Program 2 1: Citizens participation Citizen participation is a key element for the success of any type of projects. This mechanism used by communities to conduct its supervision, assume its role and take advantages of the benefits of the Project. The objective of this participation is to have a broad participation of the involved and affected communities.

2 1. Management measures

- Establishes the identification of formal mechanisms to communicate and to promote information exchange between interested parties; - Establishes the mechanisms for conflict resolution between communities and the site developer; - For complementary measures, see programs 7,8,9,2 1.

Environmental Follow UP

These guidelines provide mechanisms and questionnaire formats to conduct the environmental follow up of the activities contained on the above programs. There are two stages: Environmental auditing; and supervision of environmental compliance. The guidelines make a description of the activities by the supervisor or auditor who will be in charge of monitoring EMP implementation, as well as the amount and type or report that the supervisor needs to present. Formats for every activity must be completed by the auditor and reported every agreed time to the construction authorities.

81 Appendix 10.2

Environmental Management Plan for the construction of the Bus Rapid Transit System for Pereira and Dosquebradas

BACKGROUND

The Project will cover 2 municipalities, Pereira and Dosquebradas, forming a transport corridor that initiates at the Parque Cuba, goes along Avenida 30 de Agosto, continues around Parque Olaya to get to Avenida del Ferrocarril, crosses the Viaducto, continues on Avenida Simon Bolivar and ends at Paiios OMNES in Dosquebradas. Also, it will have a downtown circuit on Carrera 6" between calles 12 and 24; Carrera 7" between calles 24 and Turin; Carrera 8" between Turin and calle 24; Carrera 10 between calles 24 and 10; Carrera 9 bis between calle 10" and Avenida del Ferrocarril, calle 13 between Carreras 6" and IO"; Calle 10" from Carrera 10" and 9 bis; Calle 24 between Carreras 6" and 7"; Calle 24 between Carreras 8" and 10".

The Project will operate on articulated buses in exclusive lanes in most of the corridors, and will include 2 terminals to interconnect with feeding and main routes, and bus stops. Feeding routes will be served by 30-40 passenger buses. Articulated buses will have a capacity of 160 passengers. There will be an integrated fare system to achieve transport cost reductions. The Project aims at achieving a new image of public transport with a safe, reliable, efficient, and rapid bus system. The new system, MEGABUS, will generate about 3,000 employments. The road upgrades required include (i)bus lane widening and rehabilitation; and (ii)widening of adjacent pavements, except in the downtown circuits. Also 40 bus stops located about every 500m from one another in the central separators; 2 terminal stations; bus storage and garages. See graph below for the location of routes, bus stops, and terminals.

The Project was divided in 6 segments. Following is a summary description of the main civil works involved in each:

(i)Parque de Cuba - San Fernando; widening and demolishing of affected properties. (ii)San Fernando - Puente Avenida Las Americas; new bridge over River Consota and elevated passway over Avenida Las Americas. (iii)Avenida San Mateo y Serpentin; In Avenida San Mateo, modifying basin flow of creek La Dulcera, to build the structure to support the new elevated passway over Avenida Las Americas. In Serpentin, some minor repairs, and geometry corrections. (iv) Round Point de Cuba - Avenida 30 de Agosto - Viaducto; widening of both lanes, modification of median strips; and widening of Turin elevated passway (bridge). (v) Viaducto - Avenida Sim6n Bolivar - Paiios OMNES; lanes widening, and modification of median strips. And widening of bridges over creeks Frailes, La Vibora, and Caiiaveral to build wide pavements. (vi) Downtown; upgrade of paving structure on BRTS lane.

The following graphs illustrate the segments and location of main interventions:

82 UBICACIbN DEL CORREDOR VIAL DEL TRAM0 ROUND POINT DE CUBA - AVENIDA 30 DE AGOSTO - VIADUCTO, DEL SITMMEGABdS, DENTRO DE LA CIUDAD DE PEREIRA

I VIADUCTO I

- CORREDOR VIAL

lBICACIO\ DELCORREDOR \ 14LDELTR\\lOA\ [\ID4 S4\ \MTEO \ SERPE\TI\ DEL SIT\I \IEG \BL C, DE\TRO DE LA cn~i~DE PEREIR~

ROUND POINT DE AV. 30 DE AGOSTO I CUBA 1 I

- Corredor vial

83 lJBICACI6NDEL CORREDOR VIAL DELTRAMO SAN FERhANDO - PUEhTE AVENIDA LAS AMERICAS DEL SlTM MEGABUS, DENTRO DE LA CIUDAD DE PEREIRA

1 Av 30rfeAgosto I

- Corredor vial

UBICACIOX DEL CORREDOR VIAL DEL TRAM0 PARQUE DE CUBA - SAN FERNANDO DEL SITM MEGAB~S,DEPUTRO DE LA CIUDAD DE PEREIRA

- Corredor vial

84 CORREDOK WAL

85 SUMMARY OF IMPACTS

The Project has relatively low potential environmental impacts, mostly related to the construction phase. And all of them can be adequately mitigated. The area of influence is a consolidated urban zone, highly changed by human activity and with very few natural environment left. Potential adverse environmental impact, additional to the impact from the construction period (Le. camp sites, wastes, noise and air pollution, traffic, water flows, service infrastructure, borrow materials and areas, soil stability, heritage chance finds) can be summarized as follows:

(i)Parque de Cuba - San Fernando. First, loss of existing vegetal cover in Avenida de Cuba, both at the side green areas (where there will be lane widening) and in the median strip (where bus stops will be located); most affected trees are in very bad condition as they are not proper species for urban environment and due to aggressive pruning. Second, there will be involuntary resettlements, as there will be some houses that will need to be demolished;

(ii)San Fernando - Puente Avenida Las Americas. Involuntary resettlement of people at barrios Brisas del Consota and La Playita;

(iii)Avenida San Mateo - Serpentin. Rectification of La Dulcera creek bed on a lOOm stretch, which will partially affect a close bird habitat. Some isolated trees and some grass will also be eradicated. In the Serpentin area the environmental impact is very low; this is a temporal project while San Mateo is constructed;

(iv) Round Point Cuba - Avenida 30 de Agosto - Viaducto. Forest specimens located in the median strip; and side green areas where widening of lanes and pavements is required, will be eradicated. Also at the places where the bus stops are to be located;

(v) Downtown area. Some forest specimens will be eradicated, and some partial affection of properties is expected;

(vi) Viaducto - Avenida Sim6n Bolivar - Paiios OMNES. Also, here the impact will be associated to the eradication of forest specimens and green areas.

86 MITIGATION MEASURES

The following table summarizes the main mitigation measures included in the EMP:

.Program for OP$1,594 rastes, borrow oise ust be protected against dispersion by wind and water iillion iaterials, igging and demolishing only during daytime scavations, se of water to moist work sites twice a day nd demolitions achinery with noise control devices

ito water streams e outside work area

ehicles transporting wastes, incl. Standards

collection of waste material after digging and g and prompt transport to disposal sites

aterial removed to be reutilized ite not to be used in deep pilot structures

n to affected community stretches of 100 m to be affected at a time to avoid

87 IWastes, and effect /Concrete mix over metal sheets into water streams not be used for concrete melting te cleaning of equipment material to be used as waste s to follow specifications of program 1

lOP$135 iillion

ty and contingency must be available

:OP$42.7 porous materials such as brick, concrete nillion

tect sinks with adequate materials iodical cleaning of sinks per disposal and handling of liquid waste ctices for handling rainfall water

ation must be as far as possible from sed to avoid dispersion 20P$460 nillion

88 Social conflict Sowing, planting, and replanting coordinated with CARDER kregional environmental agency) and IMPAR for trees Plan for avoiding potential stealing Landscape Inventory of forest specimens before start and identification of site

. Program for Noise, vibration, Good maintenance of engines, mechanical component, and tires iA quipment and and air pollution Diesel engine vehicles must have exhaust at min. 3 m height icluded in lachi nery Use of modern vehicles and machinery ivil works Emissions checlung and control devices osts Night shifts according to noise levels Works close to schools, libraries, and hospitals must limit to maximum alternating periods of 2 hours, to be concerted with affected

Contamination due Maintenance and service in authorized centers to spillage of fuels and oils

Alteration of Same vehicle and people transit Increase in Adequate gear and noise protection devices accidents risk Loss and Same deterioration of vegetal cover Pictures of sites before and after :OP$l05 Protect green areas as per P-9 Location in existing lots of properties, avoid roads use Restoration of camp site after construction Noise and air Adequate cover of materials pollution Proper storage areas Access pathways for material s’ transport Liquid wastes, oil Connection to local sewage and fuels into Proper labeling, handling, and storage of residuals, chemicals sewage network

89 elated illnesses

aintain adequate moisture to avoid particle

uate measures for covering and handling demolitions are prohibited in open spaces

id storage of organic material

lcommunity . Program for blteration of hdequate signaling practices and procedures bOP$662 ignaling vehicle and people of signs and labels illion transit people transit under safe conditions storage of materials and waste in front of work sites

ood illumination traffic management

afety -training of equipment and vehicle operators Work medicine program -Exams and tests -Emergency practices Hygiene and industrial safety program -Sport activities -Good equipment maintenance -Safety gear and equipment

90 JA

:OP$335 iillion

The EMP also includes Contingency Plans, and Monitoring Plans.

91 Annex 11: Project Preparation and Supervision COLOMBIA: CO Integrated Mass Transit Systems

Planned~~ ~~~ Actual PCN review 09/04/2003 09/04/2003 Initial PID to PIC 09/17/2003 09/10/2003 Initial ISDS to PIC 09/ 17/2003 Appraisal 03/12/2004 03/23/2004 Negotiations 04130/2004 04/29/2004 BoardRVP approval 05/27/2004 06/10/2004 Planned date of effectiveness 09/30/2004 09/3 0/2004 Planned date of mid-term 07/26/2006 07/26/2006 review Planned closing date 03/3 1/2009 03/3 1/2009

Key institutions responsible for preparation of the Project: National Planning Department - Departamento Nacional de Planeacion (DNP) Ministry of Finance - Ministerio de Hacienda y CrCdito PLiblico (MNCP)

Bank staff and consultants who worked on the Project included:

Name Title Unit Mauricio Cuellar Task Team Leader! Transport LCSFT

I Eduardo Bayon I Consultant 92 Bank funds expended to dale on Project preparation: Bank resources: US$207’538.13 Trust funds: us$o.oo Total: US$207’S38.13

Estimated Approval and Supervision costs: Remaining costs to approval: US$60’000.00 Estimated annual supervision cost: US$83’900.00

93 Annex 12: Documents in the Project File COLOMBIA: CO Integrated Mass Transit Systems

A. Project Implementation Plan

Subsidiary Agreement of the Metropolitan Area (Pereira - Dosquebradas) for the BRT System

B. Bank Staff Assessments

OPRC Case Recommendation and Review Report, January 2004 Jose Martinez - Procurement Capacity Assessment, February 2004 Daniel Boyce - Financial Management Capacity Assessment Juan Lopez - Environmental Assessment BTOR - Quality Assurance Team (QAT) - Client Safeguard Training Workshop, Environmental and Social Aspects of the Colombia Urban Transport Project

C. Other

World Bank - Aide Memoire and BTOR of Identification and Preparation Mission, February 2003, March 2003, September 2003

World Bank - Minutes of PCD Review Meeting - October 2003

Diario Oficial. Aiio CXXXII, No. 42853. 12 Agosto, 1996. Pag. 1 - Ley 310 de 1996 (Agosto 6) por medio de la cual se modifica la Ley 86 de 1989.

Diario Oficial. Aiio CXXXIIT, No. 43205, 31 de Diciembre, 1997. Pag 41 - Decreto Nuniero 3109 de 1997 (Diciembre 30) por el cual se reglamenta la habilitation, la prestacion del servicio publico de transporte masivo de pasajeros y la utilizacion de 10s recursos de la Nacion.

Contrato No. 017 de 2003, de concesion para la prestacion del Servicio Publico de Transporte Terrestre masivo urban0 de pasajeros en el Sistema TransMilenio, suscrito entre la empresa de transporte del Tercer Milenio, S.A. " Transmilenio, S.A." y SI 02 S.A.

DNP - Documento CONPES 3220, Sistema Integrado del Servicio PLiblico Urbano de Transporte Masivo de Pasajeros del Area Metropolitana del Centro Occidente

DNP - Documento CONPES 3167, Politica para mejorar el Servicio de Transporte Publico Urbano de Pasajeros

DNP - Documento CONPES 3259, Sistema Integrado del Servicio Publico Urbano de Transporte Masivo de Pasajeros del Distrito de Cartagena - Transcaribe

DNP - Documento CONPES 3260, Politica Nacional de Transporte Urbano y Masivo, version aprobada Diciembre 15, 2003

IDU - Presentacion Poder point del Esquema Concesiones Troncales, NQS y SUBA

IDU - Presentation Power point Adecuacion a1 Sistema TransMilenio de la Troncal Norte Quito Sur, Carrera Sector Norte (Junio 2003)

94 DNP - Presentacidn Power point CONPES, Politica Nacional para el Desarrollo de sistemas Integrados de Transporte Masivo - SITM (Abril2003)

CNP - Presentacibn Power point - Sistemas Integrados de Transporte Masivo SITM

Literature:

GWILLIAM Ken. - Cities on the move: a World Bank Urban Transport Strategy Review. - The World Bank, 2002.

TRANSMILENIO, S.A. - Instituto de Desarrollo Urban0 - Plan Marco Sistema TransMilenio, Noviembre de 2003.

95 Annex 13: Statement of Loans and Credits COLOMBIA: CO Integrated Mass Transit Systems

~ Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d PO77757 2004 CO: CUND,MARCA EDUCATION 15.00 0.00 0.00 0.00 0.00 15.00 0.00 0.00 QUALlTY IMPROVE PO74138 2003 CO-Higher Education - Improving 200.00 0.00 0.00 0.00 0.00 191.01 9.50 0.00 Access PO74726 2003 Colombia-Bogota Urban Services 100.00 0.00 0.00 0.00 0.00 94.29 2.62 0.00 Project PO57369 2002 CO Judicial Resolution Improvement 5.00 0.00 0.00 0.00 0.00 3.76 1.96 0.00 Prj . PO57692 2002 CO 2nd Magdalena Medio Project 5.00 0.00 0.00 0.00 0.00 1.oo 0.34 0.00 (LE) PO65937 2002 CO WATER SECTOR REF 40.00 0.00 0.00 0.00 0.00 36.70 18.95 0.00 ASSISTANCE PROJECT PO41642 2002 CO PRODUCTIVE PARTNERSHIPS 32.00 0.00 0.00 0.00 10.00 18.09 -3.91 -0.34 PO69964 2001 CO- Human Capital Prot.- Cash 150.00 0.00 0.00 0.00 0.00 87.96 -62.04 0.00 Transfers PO40109 2001 CO PUBLIC FINANC. 35.47 0.00 0.00 0.00 0.00 30.09 -5.38 0.00 MANAGEMENT PROJECT I1 PO63317 2001 GEF CO-HIGH ANDES 0.00 0.00 0.00 15.00 0.00 13.53 6.98 0.00 PO44140 2000 CO CARTAGENA WTR SUPPLY & 85.00 0.00 0.00 0.00 0.00 57.89 50.14 0.00 SEWERAGE ENV. PO68762 2000 CO- COMMUNITY WORKS 100.00 0.00 0.00 0.00 0.00 72.98 72.98 0.00 (MANOS A LA OBRA) PO57326 2000 CO SIERRA NEVADA 5.00 0.00 0.00 0.00 0.00 2.26 1.02 0.00 SUSTAINABLE DEVELOPMEN PO50578 2000 CO RURAL EDUCATION 20.00 0.00 0.00 0.00 0.00 15.19 13.61 0.00 PO06861 1998 CO URBAN INFRASTRUCTURE 75.00 0.00 0.00 0.00 26.00 6.10 32.10 -4.23 PO06891 1998 CO ANTIOQUIA EDUCATION 40.00 0.00 0.00 0.00 0.00 3.66 3.66 3.66 PO53243 1998 CO PEASANT ENTERPRISE ZONES 5.00 0.00 0.00 0.00 0.00 1.21 1.21 1.07 (LE) PO06884 1997 CO FINANCIAL MARKETS 15.00 0.00 0.00 0.00 5.50 1.47 6.97 1.47 DEVELOPMENT PO40102 1997 CO REG.REF.TA 12.50 0.00 0.00 0.00 0.00 2.52 2.52 0.00 PO06894 1996 CO SANTAFE T (Waterisupply) 145.00 0.00 0.00 0.00 0.00 23.73 23.73 0.00 PO06880 1995 COAGRICULTURETECHNOLO 51.00 0.00 0.00 0.00 3.50 0.17 3.67 -11.03 Total: 1,135.97 0.00 0.00 15.00 45.00 678.61 180.63 - 9.40

COLOMBIA STATEMENT OF IFC’s Held and Disbursed Portfolio In Millions of US Dollars

Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2002 BCSC 0.00 . 7.00 0.00 0.00 0.00 7.00 0.00 0.00 2002 Bavaria 70.00 0.00 30.00 145.00 70.00 0.00 30.00 145.00 1969/85/88/93/95 CF del Valle 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2001 CHMC 3.21 9.68 0.00 0.00 0.93 4.02 0.00 0.00 1974101 Cementos Caribe 4.05 0.00 10.00 10.36 4.05 0.00 10.00 10.36 1963!68/69190 Coltejer 6.02 0.00 0.00 0.00 6.02 0.00 0.00 0.00 199999 Corfinsura 25.00 0.00 25.00 0.00 0.00 0.00 25.00 0.00 2002 Inversura 0.00 15.00 0.00 0.00 0.00 15.00 0.00 0.00 2002 Omimex Oil 30.00 0.00 5.00 0.00 10.70 0.00 5.00 0.00 1987 PRODESAL 0.00 0.59 0.00 0.00 0.00 0.59 0.00 0.00 1977/89!92:94196 Promigas 3.75 0.00 0.00 4.17 3.75 0.00 0.00 4.17 0194195 Pronlisan 0.00 0.20 0.00 0.00 0.00 0.20 0.00 0.00 2002 Proteccion 0.00 10.00 0.00 0.00 0.00 10.00 0.00 0.00 1996 Proyectos 0.00 5.00 0.00 0.00 0.00 5.00 0.00 0.00 2002 S IG 25.29 0.00 50.00 0.00 25.29 0.00 50.00 0.00 1999 Surenting 0.00 5.10 0.00 0.00 0.00 2.50 0.00 0.00 2001 Tolcemento 3.33 0.00 0.00 7.11 0.00 0.00 0.00 0.00 Total portfilio: 170.65 52.57 120.00 166.64 120.74 44.31 120.00 159.53 96 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 2001 CHMC 0.00 0.02 0.00 0.00 2004 Caribbean Coal 0.03 0.00 0.00 0.00 2004 Cartones America 0.02 0.00 0.00 0.00 2003 DAVIVIENDA I 0.00 0.00 0.01 0.00 Total pending commitment: 0.05 0.02 0.01 0.00

97 Annex 14: Country at a Glance COLOMBIA: CO Integrated Mass Transit Svstems

Latin Lower- POVERTY and SOCIAL America middle- Colombia B Carib. income Development diamond^ 2002 Population, m id-year (millions) 43.7 527 2,411 Life expectancy GNI per capita (Atlas method, US$) 1,830 3,280 1,390 GNI (Atlas method, US$ billions) 80.1 1,727 3,352 Average annual growth, 1996-02 T Population I%) 1.8 1.5 1 .o Gross Labor force (%) 2.6 2.2 1.2 primary Most recent estimate (latest year available, 1996-02) capita Poverty (% of population below nationalpoverty line) Urban population (% of total population) 76 76 49 i Life expectancy at birth (years) I 72 71 69 Infant mortality (per 1,000 live births) 19 27 30 Child malnutrition I% of children under 5) 7 9 11 Access to imoroved water source Access to an improved water source (% ofpopulabon) 91 86 81 Illiteracy (% ofpopulation age 15+) 8 11 13 Gross primary enrollment I% ofschool-age population) 112 130 111 -Colombia Male 113 131 111 -Lower-middle-income arouR Female 112 128 110

KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1982 1992 2001 2002 Economic ratios' GDP (US$ billions) 39.0 49.2 82.4 82.2 Gross domestic investmentiGD P 20.5 16.7 14.9 Trade Exports of goods and servicesiGDP 10.9 17.7 19.4 Gross domestic savingsiGDP 16.3 18.7 15.3 Gross national savingsiGDP 13.6 18.4 14.3 Current account balancelG DP -8.4 1.8 -2.2 -2.2 Domestic Investment Interest paymentsiGDP 1.8 2.6 3.0 2.4 savings Total debtiGDP 26.4 35.1 44.5 Total debt serviceiexports 27.8 38.8 36.1 Present value of debtiGDP 45 6 Present value of debtiexports 215.5 Indebtedness 1982-92 1992-02 2001 2002 2002-06 (average annual growth) Colombia+ - GDP 4.0 2.0 1.4 1.5 0.4 Lower-middle-income orouI) GDP per capita 1.9 0.1 -0.3 -0.1 -1.1 II- I1

STRUCTURE of the ECONOMY 1982 1992 2001 2002 [Growth of investment and GDP (Oh) 1 (% of GDP) 20 Agriculture 19.3 15.8 13.0 Industry 31.8 35.0 29.9 Manufacturing 21.8 19.8 16.3 Services 48.9 49.3 57.1 -40 Private consumption 72.8 71.8 63.6 General government consumption 10.9 9.5 21.1 -GDI -GDP Imports of goods and services 15.2 15.8 19.0 I 1982-92 1992-02 2001 2o02 Growth of exports and imports (%) (average annual growth) Agriculture 3.5 -1.4 0.1 2o T Industry 5 .O 0.7 -0.1 Manufacturing 4.2 -2.1 -0.8 Services 3.5 3.4 2.1 Private consumption 2.9 1.5 1.9 .20 -- General government consumption 4.8 9.6 0.3 .. -30 1 Gross domestic investment 1 .o -2.9 9.6 -Expoiis &Imports Imports of goods and services 2.9 3.1 11.2 I *The diamonds show four kev indicators in the cauntrv (in bold) comoared with its income-arouo averaae. If data are missina. the diamond will be incomnlete

98 Colombia

PRICES and GOVERNMENT FINANCE 1982 1992 2001 2002 1 Inflation (Oh) Domestic prices 1 (%change) Consumer prices ’ 24.6 25.1 6.5 6.0 Implicit GDP deflator 24.8 23.6 7.6 7.0

Governmenf finance (“A of GDP, includes current grants) Current revenue 13.7 13.3 13.6 97 98 99 00 01 3.0 -5.0 -3.7 Current budget balance -GDP deflator -CPI Overall surplusideficit -1.9 -6.1 -4.6

TRADE 2002 1982 1992 2001 Export and import levels (US$ mill.) (US$ millions) To tal exports (fob) 3,264 7,263 12,309 11,903 Coffee 1,562 1,259 764 991 !o.ooo T Petroleum 2 15 1,396 3,083 3,037 15.000 Manufactures 837 2,272 5,606 6,156 10.000 To tal im PO rts (cif) 5,478 6,627 12,834 13,026 303 450 1,578 1,161 Food 5,000 Fueland energy 659 344 189 233 Capitalgoods 2,048 2,255 4,468 4,528 n 96 97 98 49 00 01 02 Export price index (895=100) 9 63 243 import price index (1995=100) 8 69 209 nExports Imports Terms of trade (7995=100) 115 91 116

BALANCE of PAYMENTS 2002 1982 1992 2001 Current account balance to GDP (%) (US$ millions) Exports of goods and services 4,785 9,257 14,932 l4,439 Imports of goods and services 7,052 8,262 15,840 16,077 ‘T Resource balance -2,267 994 -908 -1,639

Net income -1,184 -1,852 -2,975 -2,525 N et current transfers 17 1 1,734 2,094 2,335 Current account balance -3,280 876 -1,789 -1,828 Financing items (net) 2,930 450 2,956 1,323 Changes in net reserves 350 -1,326 -1,166 505

Memo: Reserves including gold (US$ millions) 10,245 10,649 Conversion rate (DEC,local/US$) 64.1 681.0 2.299.8 2,504.2

EXTERNAL DEBT and RESOURCE FLOWS 1982 1992 2001 2002 (US$ millions) :omposition of 2001 debt (US$ mill.) Total debt outstanding and disbursed 10,306 17,277 36,699 IB RD 1,346 3,195 2,006 A:2,006 G: B:? ID A 20 13 7 3,738 Total debt service 1,491 4,008 6,297 IB RD 187 959 365 ID A 1 1 1 Composition of net resource flows Official grants 12 89 86 Official credit0 rs 403 -4 13 1,083 Private creditors 856 - 12 1,312 Foreign direct investment 366 729 2,328 Portfolio equity 0 0 -4 3 F: World Bank program 24,369 Commitments 738 466 636 2 - IBRD E - Bilateral Disbursements 277 262 368 3 - IDA D - Other multilateral F - Private Principal repayments 93 681 233 2-IMF G - Short-teri

99 Annex 15: Poverty Impact Assessment COLOMBIA: CO Integrated Mass Transit Systems

Fighting Poverty with BRTS: Experience of Bogoth’s TransMilenio and lessons for other cities.

Summary

Bogota’s urban poor, with an average income of US$5.63 per day, represent 44 percent of the population, and the number is increasing due to a high unemployment rate (17.4%), which slows down overall economic growth and increases migration from the country side. Most of the urban poor live in the periphery and have deficient transport infrastructure and transit services.

The TransMilenio BRT system is helping in the strategy of poverty alleviation. It provides an adequate access from the periphery to working places, which includes provision of pedestrian and bicycle facilities, and improvement of labor conditions through formalization of unregulated services. Phase I implementation (41 km busways and 305 km feeder lines) allowed 59 traditional companies to participate in the provision of the system (out of 64), and included US$7.5 million in payment to small owners to scrap obsolete buses. Phase I1 (40 km busways and 200 km feeder lines) bidding processes included higher points to companies with large participation of small owners. A total of 6,835 small owners are shareholders of the concessionaries. Total payment for scrapped buses to small owners is estimated being US$ 1 1.7 million.

Usage by low-income population has increased over time due the to expansion of feeder routes in the periphery; 37 percent of the daily riders (278,000 trips per day) are people in strata 1 and 2 (income US$5.63/day). They have benefited through high travel time savings (16 minutes per trip), and travel cost reductions (US$0,60 per day due to fare integration). Additionally traffic accidents and air pollution have been reduced, and feeling of pride and belonging, has increased.

Catchment area for the TransMilenio System (Phases Iand 11) involves 2,463,746 persons in strata 1 and 2, this is 85 percent of the total population belonging to this strata. Access opportunities to jobs have greatly increased, as the system covers the main areas of employment (central zone, main commercial area, financial district and part of the industrial zone).

Introduction There are some specific transport policies that help fighting poverty and improve living standards of the people in the developing cities. This Annex shows how the City of Bogota has implemented this type of policies, especially with the TransMilenio BRT System, and indicates some impacts on the poor. This has helped to find lessons for other cities. The expected impact on poverty for TransMilenio Phase I1 (including NQS line) and Pereira BRT projects are presented in the final two sections.

Poverty in Bogoth Like any major city in a developing country, poverty is a serious concern in Bogota. A recent document prepared by the program ‘‘Bogotk iC6mo Vam~s?”’~indicates that the city had a great improvement over the last decade, but still has very important challenges in overcoming poverty and reducing social exclusion. The main socioeconomic indicators that allow a poverty profile for the city of Bogota are14:

l3 “La Pobreza en BogotB” Casa Edtorial El Tiempo-Fundacion Corona-Camara de Comercio de Bogota, Agosto 20 de 2003, available in htt~://eltiemoo.terra.com.co/PROYECTOS/RELCOMIRESCON/ BOTCOM/home/ARCHIVO/ARCHIVO-123 3 060-O.odf l4Compiled by the referred study &om various sources, including the District Departments of Planning and Welfare, and Secretary ofFinance, as well as the National Department of Statistics among others. 100 Stratum l-2I5 US$5.63/day 43,73% 1 2002 1 Stratum 3-4 50,02% I 2002 I US$13.17/day Stratum 5-6 5,25% 2002

The geographic distribution of socioeconomic strata is presented in Figure 1. Poor families (Stratum 1 - average income US$4.2/day in red and Stratum 2-average income US$5.9/day in light yellow) are mostly located in the periphery, especially in the south and western areas of the city. Extreme poverty (Stratum 1-red) is concentrated in certain areas to the south, southwest, west and northeast of the city.

The city is divided into 20 localities for administrative purposes. Nine of them concentrate 93 percent of the urban poor: Ciudad Bolivar (south), Bosa (south-west), San Cristobal (south-east), Kennedy (south- west), Suba (north-west) Usme (south), Rafael Uribe Uribe (south-east), Tunjuelito (south) and Engativa (west).

Despite the efforts of the local administration to increase coverage of utilities, education and health and improving urban physical infrastructure over the last decade, poverty is increasing due to external factors. The national economic situation has strong impacts on income and employment, and it is shown in the deterioration of poverty indexes.

l5Stratum is a socio-economic classification related to income and quality of housing for fiscal and utility pricing (cross-subsidy) purposes. Stratum 1 is the lowest and Stratum 6 the highest 16 Index related to hunlan capital, material goods, surrounding infrastructure, and social capital, calculated by the National Planning Department using thc Households Survey by DANE l7Calculated by Secretary ofFinance Includes life expectancy, alphabetization, GDP per capita; DNP based on DANE l9 Similar to human devclopment index, for women only Population not able to acquire a normal basket of goods, DNP based on Households Survey by DANE Population not able to acquire a minimum basket of goods for survival, DNP based on DANE 22 Indicator of wealth distribution, higher means more concentration in the richest portion of the population, DNP based on DANE 23 DANE 101 Engativa

Tx

Figure 1. Socioeconomic Strata Distribution Source: DAPD

The perception of the people on the economic situation is also in decline. According to the survey of “Bogota iC6mo Vamos?” families reported that economic situation was deteriorating between 200 1 and 2002 (48% worst, 35% same, 16% better).

Another external condition had impact on poverty is the increase of displaced families in the city, due to violence in the country side. CODHES24estimates that 480,000 displaced people have settled in Bogota since 1985. A specialized unit of the local admini~tration~~provided assistance to 8,362 displaced families (35,000-t individuals) between May 1999 and August 2002.

Accessibility has not been recognized as an important issue in poverty studies and indexes. The document cited before only reports on accessibility in an indirect way through an indicator of paved roads within the

24 Consultoria para 10s Derechos Humanos y el Desplazamiento, data since 1985 25 Unidad de Atencion Integral a la Poblacion Desplazada del Distrito Capital - UAID 102 community. This indicator is a proxy for the quality of accessibility but does not reflect actual travel time and cost, as well as access to urban opportunities of work, social services and recreation. Paved access was provided to 82 percent of the city, but only 69 percent to the poor communities (stratum 1 and 2)26, according to the survey by “Bogota iC6mo Vamos?”. Additionally, the Institute of Urban Development reported that, 17 percent of the road network was in good shape, 25 percent was fair and 58 percent was damaged by the end of 2002.

Transport Policy in Bogota (The TransMilenio BRT System)

Starting January 199827the city of Bogota designed and implemented a sustainable transport strategy based on non-motorized transportation, automobile use restriction and bus transit improvements. The main aspects of this strategy have continued under succeeding administrations2*. The most relevant and visible aspect of the strategy has been the initial implementation and further expansion of the TransMilenio BRTS, which shows respect for diversity, low cost and sustainability as key principles, which directly impact the urban poor.

The Bogota strategy, especially TransMilenio BRT, embraces many aspects of the recommended policies to help the poor to be included in “Sustainable Transport: Priorities for Policy Reform”29:

1. Provide Adequate Public Transport to Places of Employment

TransMilenio BRT was designed and implemented to reduce travel time and cost of city dwellers, especially those living in the periphery. The system was introduced in the most dense south-north public transportation corridor (Avenida Caracas) with extensions to the north (Autopista Norte), and northwest (Calle 80). The intention was to provide improved mobility to public transportation commuters, which usually belong to medium and low-income communities. A public transportation origin-destination matrix was used to determine the priority corridors and feeder areas. Feeder areas are only located in the periphery, where stratum 1, 2 and 3 are located. In this way, the system provides access to employment opportunities to some of the poorest areas in the city.

Attention to the poor is not provided through operations subsidized externally, there is an internal cross subsidy from short trips to long trips through a flat fare structure that includes feeder services (full fare integration). The system was financially structured in such a way that the initial fare was the same charged by the highest quality public transit service (the “executive service” at US$0,35). This fare reflects all the operational costs and equipment capital costs of the system agents and is updated according to contract formula. If the city authority is willing to keep low fares, it is needed to come up with a budget to do so. Given that there is no fiscal space for this type of subsidy, revenue to cost ratios needs to be balanced at all times.

There is a periodic competition for non-exclusive concession contracts for trunk services, feeder areas and fare collection. It is required to provide service measured served on kdometers given certain levels of service (minimum frequency, maximum occupation). In this way, the system can balance supply and demand on a dynamic way, by providing an adequate combination of cost, coverage and service quality.

The institutional framework is set up in such a way that the public sector is concerned on maximizing service quality and the private sector on maximizing revenues, but each one has the right incentives in binding contracts. The public institution in charge of planning, developing and controlling the system was set up to a fairly and effectively administration of the tendering and financing arrangements. All these elements constitute an adequate scheme to serve the poor, while keeping a financially sustainable service.

26 Annual survey by “Bogota iC6mo Vamos?“ 2002 27 Mayor Enrique PeAalosa, see City Development Plan 1998-200 1 “Por la Bogota que Queremos” 28 Mayor Antanas Mockus, see City Development Plan 2001’2004 “Bogota para Vivir: Todos del Mismo Lado”, and camping program of Mayor Luis Garzon (2004-2008) 29 http:llwww.worldbank. orgltransportlpol-ecodtsr. htm 103 2. Eliminate impediments to non-motorized transportation

The BRT system implementation includes provision of pedestrian facilities (safe crossing, including not at grade; sidewalks and plazas) as well as bicycle facilities (bikeways and parking spaces in selected stations). The facilities for non-motorized transportation are aimed to segregate flows, minimizing conflicts with autoinobiles and between pedestrians and bike riders.

Non-motorized transportation has also been important in the overall mobility strategy, with construction of pedestrian and bicycle infrastructure, and activities like the Car Free Day. These policies benefit specially the poor, which have safer and better accessibility at a low cost, while reducing the need for less efficient motorized modes.

3. Mobilize the potential of the informal sector

Transit provision in the city of Bogota was unregulated, control of permits was not practical and many services were and still are provided informally. While this scheme allowed relatively low-cost fares and provided opportunities for informal employment, it comprised several inefficiencies. Competition in the market (to pick up every passenger) resulted in high accident rates and uncomfortable rides. Inadequate incentives lead to overcapitalization (more vehicles than required) with strong effects on congestion and pollution.

Hence, the city, rather than maintaining informality, decided to change incentives to provide high quality, low cost, and sustainable services by formalizing service provision using the right incentives. More effective control over informal services was also introduced, to improve safetyness, and reduce congestion and pollution.

The effort to formalize informal service providers included incentives for small owners to participate with stock in the firms providing services in the TransMilenio system. Better labor conditions, with social benefits established in by law, also benefit drivers and support personnel, many of them formerly engaged in long journeys without formal employment.

As indicated above, mitigation measures have been placed to involve traditional service providers. Phase I resulted in the participation of 59 out of 63 traditional bus companies in four new mass transit corporations (trunk line), and five feeder bus consortiums. Some of these companies (two of the trunk line, and four of the feeder bus consortiums) gave priority to existing drivers of traditional services when retaining personnel.

Impacts on the Poor of the TransMilenio System (Phase I,1998-2002)

Direct impacts on the poor are associated with travel time and travel cost savings and job accessibility. Indirect impacts are associated with accident and pollution reductions and increase in the feeling of pride and belonging.

TransMilenio was serving an average of 750,000 tripslworkday in the second semester 2003. Saturday service is 70 percent of week day, and Sundays and Holidays 50 percent. The TransMilenio user profile as reported by the latest available survey by TRANSMILENIO S.A. (November 200330)is the following:

j02640 interviews by “Market Team” Investigaciones for TRANSMILENIO S.A. 104 The socioeconomic distribution of riders is:

This indicates that TransMilenio users do not exactly reflect the socio-economic d.istribution of the city; employees and students belonging to stratum 3 constitute most of the rides. Nevertheless, there has been an important increase in usage by strata 1 and 2 over the first three years of operation, from 17 percent to 37 percent (278,000 work day trips). Hence, impacts of the BRT system implementation to the poor are very important, especially on the medium and long term as a result of improved accessibility to the periphery.

1. Travel Time Inipacts

A study made by Tito Yepes from LCSFP-World Bank (see presentation in appendix 1) with data from TRANSMILENIO S.A., DAPD and the Household Surveys by DANE, shows that the implementation of the system resulted in higher travel time savings for poor people that the rest of the population (Figure 2). Users of stratum 1 save 18 minutes per trip, while users of stratum 4 save 10 minutes per trip (80% more savings).

31 TRANSMILENIO S.A., Encuesta de Mercadeo y Satisfacci6n de Usuarios, 12 de Octubre de 2001, 1080 interviews. 105 UBICACIO\ DEL CORREDOR VIAL DEL TRAMO: PARQUE DE CUBA -SAY PERYANDO DEL SITM MEGAB~S,DE~TRO DE LA CIUDAD DE PEREIRA

- Corredor vial

0 FIGURE2. TRAVELTIME BEFORE AND AFTER TRANSMILENIOBY SOCIOECONOMIC STRATUM

(Source: Yepes, 2003 with dntafronz TRANSMILENIO S.A.)

Total travel time savings in the TransMilenio System Phase Iare estimated in 136.750 hourdday. Travel time savings for strata 1 and 2 are estimated in 32.250 hourslday (23,6%).

2. Travel Cost Impacts

The integrated fare structure resulted in lower travel costs for people in the periphery with access to the TransMilenio System. By the second semester 2003, 5 1 percent of the trips were integrated (use feeders either at the beginning or the end of the trip); this is close to 382,000 trips per weekday. Many of these trips formerly required two public transport vehicles to complete a trip from origin to destination, with payment in each bus of about US$0,30. Total daily savings for these users is then US$0,60, which represents 14 percent of the average daily income of a person in stratum 1 and 10 percent of the average daily income of a person in stratum 2. These savings are now available for other household expenses (housing, food, health, education, recreation).

3. Job Accessibility

The TransMilenio system was planned according to the existing origin-destination matrix32. Since this matrix is for actual trips (mostly work and study trips) this has been reflected on the usage across different strata. There has been a very important decrease in travel time for the periphery (Figure 3) and job opportunities became accessible to more people, especially to the poor.

32 Initially surveyed in a study by the Japan International Cooperation Agency in 1995, updated through the operational design studies by Steer Davies Gleave in 1998 106 Average Commuting Time 1999 Average Commuting Time 2002

Improvements in accessibility 1999-2002

Means higher X change

Figu ? 3. Spatial Improvements in A cessibility 1999-2002 (Source, Yepes 2063 with data from TRANSMILENIO S.A.)

It is important to highlight that, even job opportunities became closer, education, opportunities are being affected and unfortunately in the short tem, poor areas will have comparatively low education levels (Figure 4).

Another factor hindering the effect of accessibility is rural migration. Settlement of displaced people due to violence in the countryside concentrates in the poorest communities of Ciudad Bolivar and Bosa. Skills and education of these migrants do not match the job market needs, and usually they end up informally employed or not employed at all.

107 Average Years of Education

0 FIGURE 4. AVERAGEYEARS OF EDUCATION

Source: Yepes, 2003, with data of the Household Survey by DANE)

4. Indirect Impacts

Traffic accident and pollution reduction due to the mobility strategy implementation, and especially by the TransMilenio BRT System also benefit the poor.

Traffic accidents are declining in the city. The Secretary of Government33reported a 6.9 percent reduction from 2002 to 2001 with 297 cases in 2002. Most of the deaths are affecting pedestrians (63%), followed by passengers of motor vehicles (12%) and cyclists (1 1%). There is no socio-economic breakdown of these figures, but most pedestrian and cyclist victims of traffic accidents are poor.

TransMilenio has been a great contributor to accident reduction. Only 8 traffic accident deaths were registered in 2002 in the TransMilenio corridors, from a previous figure of 66 in 1998 (88% reduction); one of the deceased was a passenger, the other was pedestrians and bicyclists. Weekly crashes went down from 26 to 5 and injuries from 18 to 4.

Emissions have been reduced, decreasing the vulnerability of city inhabitants to particularly the poor, to respiratory deceases. The number of kilometers run per passenger went from 1,0 in the traditional system to 5,3 in the TransMilenio trunk services. A total of 1,500 old buses were scrapped and replaced with 470 articulated buses and 235 conventional buses (with Euro I1 Diesel technology). Reduction of contaminants is evident in the TransMilenio corridors; nevertheless the total level of pollutants, especially particulate matter, has not been impacted substantially yet34.

5. Sentiment of Pride and Belonging

Emotional aspects have been recognized as important development drivers. The sentiments of pride and belonging have increased substantially as a result of physical improvements and community activities (car free days, weekend road closings for bikeways, summer festival, free cultural events in public spaces, Christmas lights and bike-nights, among many others). The mobility strategy has been relevant in

33 http:llwww.suivd.gov.colBoletin/sitio-boletines/l bol.htm 34 See data from the Air Quality Network 1998-2002 available at www.dama.gov.co 108 improving the attitude of the city dwellers by providing respectful high quality infrastructure for pedestrian, bikers and transit users. Fast, safe and convenient transit service also increases pride and sense of belonging.

“Bogota LComo Vamos?” annual survey shows a steady increase in pride, from an average rating of 3,72 in 2000 to 3,79 in 2002; 37 percent of the persons answering the survey report being very proud of Bogota in 2002 as opposed to 26 percent in 2000. Mobility is recognized as the 7th biggest problem (unemployment being the first) in 2002; it was the second in 1998 after safety.

TransMilenio receives an average rating of 4,05, while traditional transit services receive average ratings from 3,l to 3,4. High quality vehicles, cleanness, safety and adequate driving are the top reasons for good ratings to the BRT System. Complaints come from overload on the peak periods, lack of coverage for all the city, and bad personal attention and delays (card acquisition), mainly.

TransMilenio perception was extremely positive during the first months of operation (above 90% rated the system as being good or very good), as people compared the new system with the traditional services. Ratings have declined, but still are very high (above 70% rated the system as being good or very good). The challenge for TransMilenio administrators is to increase the level of acceptance of the users by continuously improving service provision.

TransMilenio rapidly became an icon for the city for its innovation and service. Cultural change was not only the result of system implementation; there were activities aimed to promote the system and educate the users, through mass media campaigns (specially in local radio heard by middle and low income households), community education (neighborhood centers, schools) and guides at the stations.

Lessons for other cities

The Bogota transport policy, specifically the implementation of the TransMilenio BRT System, has clear equity and poverty alleviation elements that have resulted in positive impacts on poor segments of the population. The main lessons of the process are summarized as follows:

Act on several elements of sustainable transportation at the same time: Non-motorized transportation (pedestrian, bicycles); restriction to indiscriminate use of automobiles; and integrated BRTS. Create awareness on the transport system that the city deserves for current and future generations. Promote cultural changes with education procedures; and generate sense of belonging and pride. Incorporate improved accessibility to the periphery, using a flat fare structure. Generate mechanisms to mitigate negative effects on certain sectors of the society. Create methods to facilitate the participation of transit vehicle owners and transportation companies and displaced population due to road widening. Incorporate the adequate institutional and management mechanisms. Coordination mechanisms with the several local and national agencies; contract knowledgeable consultants in order to solve how (technical, financial, legal and management issues) to achieve quality and credibility and facilitate the participation of national and international investors; and form a local team working with the consultants to generate knowledge and technology transfer. Review and get to know other cities’ experiences. Visit other cities with sustainable transportation programs, especially BRT, adapting to local conditions and not repeating negative elements. Do not save on projects’ preparation; make detailed studies based towards implementation, especially to estimate demand and costs. Have a very responsible financial planning (good cost estimates and finding definitions).

109 Bogota experience could not be transferred directly to other cities without careful adaptation to local conditions; nevertheless there are some universal principles:

Put equity as the driver force of the change process (benefiting the community at large is more important than catering for the needs of minority groups of the society); have a continuous process with clear objectives and strategies from the beginning; (c) generate coordination mechanisms and institutional arrangements; (d) dedicate sufficient technical and financial resources for project preparation and execution; (e) include stakeholders in the process; (f) think long term, with specific short term actions that have immediate demonstrative effects; (g) assure financial sustainability, using measures that reinforce the principles even if they are unpopular (e.g. gasoline taxes, value capture, private vehicle restrictions); (h) leave the operation to the private sector, but with adequate incentives (performance based contracts with periodic competition).

Impact on the Poor of TransMilenio BRT Phase 2 (NQS)

The extension of the TransMilenio BRT system will increase coverage especially in medium and low- income areas. Figure 5 shows the trunk lines of the system after completion of Phase I1 with the socioeconomic distribution of wealth.

Spatial Distribution of Wealth

-.I Phase1

--**m- Phase II Americas-Suba

I”w. 5 Phase II NQS

6 I”345Public Sewices Billing Strata i

Figure 5. TransMilenio BRT System Trunk Lines and Distribution of Wealth (Source: Adapted from Yepes, 2003)

Area of catchments for NQS trunk line is extended to the whole system. Origins in the vicinity of NQS are able to reach destinations in all the other trunk lines and feeder service areas. Origins in the other trunk lines and feeder service areas are also able to reach destinations in the vicinity of NQS. According to this, the potential users in the catchments area are 2,463,746 persons belonging to strata 1 and 2, that is 85 percent of the total population belonging to these strata.

110 The NQS trunk line greatly improves the number of potential users from the lowest strata. Phase Ioffers potential service to 1,145,400 (39%), and Phase I1 (Americas-Suba) to 1,861,186 (64%). Detail geographical coverage by Locality is presented in the following table.

1 Phase I1(Americas- I Phase I1 I

The only locality, not covered by the system expansion with high participation of strata 1 and 2, is San Crist6bal. It is worth to mention that not all the potential users will be actual riders of the BRT System; nevertheless, the additional accessibility provided by the system may benefit a large proportion of this population, as long as the generalized cost of travel (time and out of pocket expenses) are better than available alternatives.

Figure 6 shows the concentration of destinations according to the Origin-Destination Matrix. It is clear that most of the more important destinations are in the area of influence of the system.

Destinations

Figure 6. TransMilenio BRT System Trunk Lines and Trip Destinations (Source: Adapted from Yepes, 2003)

111 Annex 16: TransMilenio at Glance COLOMBIA: CO Integrated Mass Transit Systems

Bogota’s TransMilenio is the first Bus Rapid Transit System in Colombia. It has been recognized as an outstanding example for the implementation of high-capacity and low-cost transport solutions, under urban and environmental sustainability with social justice3’. The system’s first phase was completed between 1998 and 2002, and a second phase is under implementation until year 2005. Expansion will continue as local and national grants and local funds have been earmarked until year 20 16.

The TransMilenio System is part of the mobility strategy set forth by the local administration to overcome the city’s outstanding transportation problems in and effective and progressive way’6. Its design and implementation follow principles of respect to life, human diversity, and people’s travel time, while pursuing high quality, consistency and financial feasibility. The system comprises specialized infrastructure for bus rapid transit, organized trunk and feeder bus operations, an advanced fare collection system, and a new public authority in charge of planning, developing and controlling system’s operation^^^. The most relevant characteristics of the TransMilenio BRT System are presented in the following table:

Zxclusive bus lanes (km.) 41 43 Teeder lines (km.) 309 200 Stations 61 55 htegration facilities 8 5 4rticulated Buses 470 335 7eeder Buses 24 1 172 ’assengers per weekday 750,000 650,000 7eeder service participation 5 1% 50% Zitywide transport share 16% 14% Vlaximum load (paxlhourldirection) 3 5,000 30,000 rrunk routes 12 (3 local, 9 express) 10 (3 local, 7 express) 7eeder routes 39 28 infrastructure Cost (Public Capital US$ 240 Million US$530 Million [nvestment) US$5.85/km. US$12.33/km. Zquipment Costs (Private Capital US$ 100 Million US$85 Million ,nvestinent US$2.43 MWkm. US$ 1.98 MMh.

TransMilenio System implementation is based on a very clear definition of the role and management mechanisms of the public sector and an effective participation of the local private sector, in an effort to transform the traditional public transportation industry in Bogota.

The implementation process included detailed preparation of the technical, financial, legal and institutional component; the creation of a local public authority in charge of the system (TRANSMILENIO S.A.); a great deal of work to make possible the traditional local transport industry participation; effective bidding processes for infrastructure development and fast construction; successful

35 See for example “Cities on the Move: A World Bank Urban Transport Strategy Review”; ‘‘Sustainable urbanisation: bridging the green and brown agendas” UN-Habitat- Development Planning Unit -University College London; “Stockholm Partnerships for Sustainable Cities”, awards 2002 in http://www.partnerships.stcckholm.se/. 36 The system idea was first proposed and implemented by Mayor Enrique Peiialosa (1998-2000); sustainable transport concepts have been followed by Mayor Antanas Mockus (2001-2003) and Mayor Luis Garzon (2004-2008). 37 See www.Transmilenio.ciov.co 112 private participation processes for the operations components (trunk and feeder bus operators, fare collection system contractors, and control center developers); obtaining local and national funds for system expansion and maintenance, and a citizen appropriation process as well as promotion of cultural changes in the commuting habits of the people of Bogota.

Despite its complexity and the fact that many public and private agents were part of the process, Phase 1 only took 35 months from idea to initial commissioning (this includes 12 months for preparation and retaining consulting services for operational design and project structuring). Total implementation time for Phase 1 took 54 months. Phase 2 would take 5 years to be fully implemented, with the first 12 km in year 3 (Americas Trunkway, which started operations in December 2003). All this was possible due to the strong political will of the city mayors, financial support from the national and local government, the technical and result oriented team formed to develop the projects, the right definition of elements of the financial structure, and the effective participation of traditional public transportation companies.

Both trunk and feeder services are provided by private operators, paid and controlled according to rules and regulations established in binding contracts. Fare box collection is also conceded to private operators, in charge of implementing and operating the fare collection system. Revenues from the fares are deposited daily in a trust fund, which distributes it to the system agents according to the contract clauses. To control, the public company in charge of the system operates an advanced control center, supported in information technologies (automatic vehicle location, voice and data communications, and on line control).

Some salient elements in the Bogota experience include, among others:

Transforming the economic structure of transit provision through adequate incentives. Open, competitive and transparent bidding processes of all the system components (infrastructure, buses, fare collection systems, control center, and additional elements). Involvement of private operators formed from the traditional urban transport industry, including companies and vehicle owners. Strengthening ofthe private service providers through association of small companies in larger economic units, capitalization, direct ownership of the bus fleet, improvement in the labor conditions of drivers and support personnel. Unification of fare collection under a single treasury, which generates predictable cash flow allowing financial planning and management of the private agents. Inclusion of advanced technologies for buses, fare collection and operations control. High quality and efficient service, with intrinsic mechanisms that promote continued improvement. Elevated social impact in reducing user travel time, traffic accidents and pollution, as well as substantial urban improvements along the system corridors and feeder zones. Priority attention to areas with medium and low income, generating travel cost savings for inhabitants in surrounding zones as well as access to employment, education, health, social services and recreation opportunities.

The Bogota experience is a development of the bus systems implemented in Brazil (Curitiba, Goiania, Blumenau, Brasilia) and Ecuador (Quito), and from the contractual schemes for private provision of bus services in Chile and Argentina. The Bogota System generates advancements in risk assignment and mitigation for concessions in public transport; implementation of real time control for buses; implementation of modern planning and scheduling systems; and use of advanced fare collection technologies. The experience accumulated in TransMilenio planning, implementation, follow up and expansion can be very useful in designing BRT systems in other developing cities.

113 Annex 17: Pereira’s Mass Transit System Project COLOMBIA: CO Integrated Mass Transit Systems

Pereira is the gth largest city in Colombia and is the capital of the province of Risaralda. It is located 359 km west of Bogota in the valley of the Otun river, Pereira has around 500.000 inhabitants. Along with its neighbor municipalities, Dos Quebradas and La Virginia, Pereira forms the “Area Metropolitana de Centro Occidente” (AMCO) of more than 700.000 inhabitants. Around 35 percent of the urban population is categorized in strata 1 and 2 (Average income US$8 per day).

The AMCO has sharply increased its economic and demographic growth in the last two decades. Population wise, the city has grown at a rate of 2.94 percent since the beginning of the eighties, while the city perimeter has not change significantly. Therefore, city density has highly increased in the last decade reaching around 180 inhabitants per hectare, a high standard for Latin America (Lima 100, Caracas 178 Qutio 57).

Population and urban growth have increased the pressure on the public transportation system, generating longer travel distances and times. Speed has reduced to 5 km per hour in the most congested areas. At the same time, transit services have decreasing quality (average waiting time is between 9 and 12 min). Low- income population is settled mostly in the periphery, suffering the most with bad quality transit services.

Pereira’s transportation service provision shows similar characteristics than other cities in Latin America, very much the same exhibited by Bogota before TransMilenio implementation. The organization of the transportation system, based on individual operators affiliated to transport companies, is very informal and chaotic. There are more than 500.000 daily trips, 66 percent of them in public transportation. There are approximately 57 different routes without any type of hierarchy and many of them overlap in downtown streets. The average length of the routes is 28 km, which is surprising giving the fact that the City is only 15 km long. Bus fleet, owned by individuals rather than transit companies, consists of 1069 buses with capacity between 30 and 60 passengers and with an average age of 17 years. There is an estimated oversupply of seats of around 40 percent and current operators carry 2 passengers per kilometers served (TransMilenio trunk buses carry over 5 passengers per kilometer served).

Population and local economy is expected to continue growing. Nevertheless, supply of physical infrastructure and urban expansion is restricted due to geographical restrictions. Hence, congestion and deterioration of transit services is expected in the short term. The proposed mass transit project is intended to address these issues.

INTEGRATEDMASSTRANSIT SYSTEM (SITM MEGABUS) FOR THE AMCO

Modeled after Bogota’s TransMilenio, the proposed system will imply a complete physical and institutional reorganization of the actual service. The system foresees a public-private partnership in which the provision, operation and maintenance of the equipment (and perhaps a small share of the infrastructure) will be in charge of the private operators while public funds will finance the most of the infrastructure provision and maintenance. Planning and system regulation will remain a responsibility of the local government, through a newly created MEGABUS company. Nevertheless, the rules and regulations of the new system will completely change the incentives for service provision and will be instrumented through binding contracts rather than general permits and decrees.

The following table summarizes the system characteristics

114 Component Subcomponent Description

Infrastructure Trunk roads 16.7 km Stations 37 Terminals 2 Depots 2 Non at grade intersections No information Pedestrian overpasses 6 Control Center, Other Contact-less Fare Collection Syste Bus Operations Trunk line Buses 56 articulated Feeder Buses 87 feeders

THEINFRASTRUCTURE

The system encompasses 16 km of longitudinally segregated busways for trunk line services, using various existing corridors in Pereira. Most length of the busways will be exclusive, but short sections in the CBD where there is not enough road section to provide full segregation. Buses will use central lane and median stations as much as possible, to minimize conflicts with general traffic. Segregated corridors will have one lane per direction with an additional lane in each bus stop in order to have express buses overtaking local-service buses.

The main corridor runs in the east-west direction along avenues 30 de Agosto, Ferrocarril and Cuba and provides access to the airport. As shown in the Pereira map the busway will almost go through the whole city, giving access to almost 48 percent of the population.

Passenger’s access will be possible through 37 dedicated stations, separated 450 meters on average. To maximize commercial bus speeds and throughput capacity, fares will be paid before entering the stations, which will have high platform (90 cm) allowing level boarding. Stations will be located mostly in the median of the street and some in the left sidewalk (one way streets).

Feeder routes will transport passengers to two integration terminals providing easy transfer to the trunk system and serving around 50 percent of total users, mostly low income in growth areas at AMCO’s edges. Feeders will provide service in specific locations, especially Cuba (medium and low income population) and Dosquebradas (low income and industrial zone). Each lntegration terminal will bave around 6.700 square meters and will be located one in the South Western extreme of the AMCO in the Cuba sector and the other one in Northeastern at the Administrative Municipal Center. All the stations will be accessible to handicapped, elderly, very young and pregnant women.

Infrastructure also includes components to improve accessibility and the urban environment around stations such as 3.8 to 4 meters wide sidewalks, 6 pedestrian bridges and horizontal and vertical signaling system infrastructure also includes 2 depots with maintenance facilities for trunk and feeder service buses. It is envisioned that plot acquisition and depots construction will be included in the operations concessions.

Given the size of the operation the implementation of an advanced control center have not been included in the implementation plans.

The Service

The system will include 56 articulated buses based on clean technologies for 5 trunk routes and 87 small buses for 23 feeder routes. There will also be complementary routes, serving unattended demand within the area of influence of the project in highly active sectors such as

115 Ticket fare is expected to be at the same level of the current service and in any case no more than US$ 0.3 per trip. Current design guarantees the physical, operational and fare integration between trunk and feeder routes and operational integration with complementary routes. Tariff integration with the later would be also possible one year after first trunk-line implementation.

Total expected daily demand is 150,800 reaching 30 percent of daily total trips for the trunk-feeder system and 90 percent including the complementary system. cost

The estimated capital cost of the project is US$ 51.29 Million. Public investment is estimated in US$ 24.56 (47.8% of the system total) for infrastructure implementation and project preparation. Private capital investment, to be paid with user fares using a 12-year concession, is estimated in US$ 26.73 (52.2%) for buses (trunk and feeder), fare collection system and depots areas and construction. It is expected to have two bus operators (combined trunk and feeder) and fare collection system concessionary.

Capital cost breakout is:

I US$ Million % Source jInfrastructure 25,46 46.1 Yo Public Depots 1.95 3.7% Private (fares) Trunk Buses 12.21 22.9% Private (fares) eeder Buses 7.65 14.4% Private (fares) Fare Collection 5.97 11.2% Private (fares) jProject Preparation 0.90 1.7% Public lTotal 53.24 100%

In addition there will be financial costs for infrastructure implementation. Financial costs are due to bridge financing the difference between available budget and infrastructure capital costs. Financial costs are estimated in US$ 8.08 million. Total public costs will be US$ 32.64, 66 percent of which will be paid by the GOC, 41 percent by the municipality of Pereira and 3 percent by the municipality of Dosquebradas. Local funds come from a gasoline surcharge.

Operational costs are estimated in US$ 7.9 million annually, of which US$ 1.3 million is public (16.8%) and US$ 6.6 million will be private (83.2%). These costs will be covered with user fares (including the share for the public company MEGABUS).

116 The following table summarizes the estimated net present value of the Project costs:

Net Present Value 12% Participation costs US$ Million Project Preparation 0.61 0.6% Infrastructure Construction and Rehabilitation 21.57 21.4% Infrastructure Maintenance 1.16 I.2% Control Center Capital Costs 0.49 0.5% Control Center Operation 0.39 0.4% Public Authority 6.98 6.9% Bus Acquisition 24.55 24.4% Bus Operation 30.96 30.8% Equipment for Bus Depots and Shops 1.91 1.9% Bus Companies Operation 5.80 5.8% Fare Collection Capital Costs 2.39 2.4% Fare Collection Operation 3.81 3.8% Total 100.61 100.0%

Implementation

Project is currently under implementation. The National Council for Economic and Social Policy approved the nation’s participation in April 2003. The bidding process for the bus operation started in December 2003, and the bidding process for infrastructure components will start in the first semester of 2004. Resources from the national and local governments are already committed trough future budget authorizations (vigenciasfutuvns), The system is expected to be in operation in 2005.

Expected Benefits and net socio-economic evaluation Benefits come from user travel time savings, mixed traffic travel time and cost savings, public transport operation cost reduction, savings due to modal shift, increased welfare coming from generated trips, traffic accident reductions and pollution abatement. Economic equivalent of these benefits is as follows:

117 etative 2%; congestion

5% of the demand

The estimated net present value ofthe project benefits is:

Net Present Value 12% Socio-economic benefits Participation US%Million ravel time savings in the Mass Transit System p0.79 11 8.3% ravel time savings for Drivate vehicles on mixed lanes b.81 .4% - 1b Travel time losses during construction -I.70 11.5% heration cost savings from substituted vehicles 66.91 /59.0% Operation costs savings for private vehicles on mixed lanes 2.74 2.4% Generalized costs savings due to modal shifts 14.54 12.8% Welfare increase due to generated trips 1.21 1.1% Accident cost savings 4.02 3.5% ir pollution cost savings 11.12 11 .O% 1113.45 /100% i

Summary evaluation indicators for Pereira:

Present Value 12% Private Costs 69.42 Present Value 12 % socio-economic benefits 113.45 Net Present Value 12% (Benefits - Costs) 12.84 Intemal Rate ofRetum 16.45% BenefitKOst ratio 1.128

The Project is acceptable from the socio-economic point of view; it generates more benefits than all the estimated costs. The net present value using a 12 percent rate ofdiscount is US$12.84 million, the socio- economic internal rate ofreturn is 16.5 percent and the benefit to cost ratio is 1.128 (above one).

Additionally the project is expected to generate around 1,200 permanent direct jobs and 1,600 indirect jobs, as well as 4,000 jobs during construction. Also the project will have distributional effects as low- income population might reduce expenses associated with transportation for low-income population ( 18 percent reduction).

118 A sensitivity analysis is performed to highlight the most important effects:

Change NPV vs. NPV 1294 TIRE Base Case Base 12.8 16.45% Demand growth 1% 9.6 15.56% -25.52% Demand growth 0% 7.2 14.82% -43.63 Yo Demand and congestion growth 0% 4.4 13.85% -65.75% Value of time - 10% 10.5 15.67% -18.40% Value of time -20% 8.1 14.88% -36.80% Substitution rate - 10% 6.0 14.14% -52.95% Substitution rate +lo% 19.6 18.67% 52.95% Other benefits -10% 10.2 15.57% -20.49% Other benefits -1 00% -10.0 8.13% -178.06% Public costs -1 0% 9.7 15.24% -24.29% Total costs -10% 2.8 12.9 1Yo -78.35% No new feeder buses 2.1 12.86% -83.74%

In conclusion the project has favorable indicators under the assumptions made and data provided. Changes in key variables have a very important impact on the results, in few cases reducing the return to unacceptable levels for projects in Colombia (12%).

Demand growth and congestion assumptions do not have important impact on project evaluation. Value of time has more than proportional impact on the project evaluation indicators. Even though, travel timesavings might be small per user (around 5 minutes), they are relevant in travel journey (20%).

The most important contribution is made by the rate of substitution for existing buses (about 60% of the socioeconomic benefits). It is recommended to seek substitution rate maximization and effective controls, so the substitution is actually completed.

The other benefits are calculated on the conservative side and help the overall evaluation. Benefits from modal shift can be increased by public policy decisions (e.g. vehicle restrictions using plate numbers, more taxes on fuel consumption, urban tolls). The benefits for private vehicle users are small but relevant. They are higher than the losses during construction.

Impacts on poverty

Pereira’s low-income population is concentrated in the city center and in the outskirts of the urban area. Dosquebradas does not have strata 5 and 6. Its low-income population is concentrated in the border with Pereira, and the north east of the urban area. According to information provided by the Municipalities of Pereira and Dosquebradas (Secretary and Office of Municipal Planning), 42 percent of the population is classified in Strata Iand 2 (Average Income US$8/day), mainly in the communities of Centro, Rio Ohin (north), San Joaquin (south-east), Cuba (south-east), and Comunas I and 2 of Dosquebradas (border with Pereira).

119 Population Influence Share Stratum 1&2 Influence 1&2 Share PEREIRA 01 VILLA SANTANA 17,324 0 0.0% 17,324 0 0.0% 02 RIOOTUN 45,982 37,952 82.5% 18,499 11,350 6 1.4% 03 CENTRO 44,161 44,161 100.0% 820 820 100.0% 04 VILLAVlCENCIO 18,990 11,870 62.5% 490 120 24.5Yo 05 ORIENTE 17,017 2,404 14.1% 6,878 1,428 20.8% 06 UNIVERSIDAD 11,606 3,687 3 1.8% 788 54 6.9% 07 BOSTON 29,338 8,986 30.6% 7,058 688 9.7% 08 JARDIN 11,108 4,381 39.4% 59 0 0.0% 09 CUBA 25,850 25,850 100.0% 7,159 7,159 100.0% 10 CONSOTA 19,732 19,732 100.0% 16,263 16,263 100.0% 11 OLIMPICA 17,709 17,709 100.0% 0 0 12 FERROCARRIL 9,985 5,617 56.3% 8,920 4,552 51.0% 13 SANJOAQUIN 26,120 26,120 100.0% 17,042 17,042 100.0% 14 PERLA DEL OTUN 12,005 12,005 100.0% 10,779 10,779 100.0% 15 ELOSO 18,047 18,047 100.0% 9,034 9,034 100.0% 16 SANNICOLAS 9,571 0 0.0% 5,900 0 0.0% 17 ELROCIO 2,002 0 0.0% 2,002 4,506 225.1% 18 DELCAFE 13,521 0 0.0% 10,700 0 0.0%

19 ELPOBLADO 15,846 0 0.0% 4,367 0 - 0.0% Subtotal Pereira 365,915 238,521 65.2% 144,083 83,795 58.2% DOSQUEBRADAS COMLJNA 1 16,033 0 0.0% 16,033 0 0.0% COMUNA 2 28,447 28,447 100.0% 20,744 20,744 100.0% COMUNA 3 15,952 15,952 100.0% 8,680 8,680 100.0% COMUNA 4 10.964 10,964 100.0% 218 218 100.0% COMUNA 5 15,887 15,887 100.0% 1,812 1,812 100.0% COMLJNA 6 17,408 17,408 100.0% 8,952 8,952 100.0% COMUNA 7 14,887 14,887 100.0% 1,936 1,936 100.0% COMUNA 8 15,732 15,732 100.0% 5,492 5,492 100.0% COMUNA 9 17,463 0 0.0% 14,982 0 0.0% COMUNA 10 21,398 0 0.0% 4,019 0 0.0% COMUNA 11 10,338 0 0.0% 1,624 0 0.0% Subtotal Dosquebradas 184,509 119,277 64.6% 84,492 47,834 56.6% TOTAL 550,424 357,798 65.0% 228,575 131,629 57.6% Source: Data provided by the Secretary ofPlanning Pereira, and Ofice of Planning Dosquebradas, calculations by D. Hidalgo

The catchments area of the SITM covers 65% of the urban population of Pereira and Dosquebradas and 58% of the population in Strata 1 and 2. Around 37% of the total passengers of the SITM are expected to belong to strata 1 and 2.

The system will provide travel time and cost savings to low-income population, and most important, accessibility to jobs and social services. Journey times are currently 45 minutes from the outskirts to the city center, with very long waiting (around 10 minutes). The implementation of the SITM is expected to reduce average waiting times to 2 minutes in the peak hour and 5 minutes off peak. Travel speed will also be increased, reducing the journey in 6 minutes (average). Hence, for low-income population living in the outslurts and working in the city center travel times are expected to be reduced to 3 1 minutes (by 3 1%) mainly benefiting low-income population. Travel costs are also expected to decrease. A flat fare will reduce average travel cost from COP 770 to COP 750 (2.6%).

Benefits for low-income population will also be derived from accident reduction, pollution abatement and better quality jobs (drivers will have 8 hour journeys and benefits).

120 MAP SECTION