HEAVY RAIL/METRO Ppps

4 HEAVY RAIL/METRO PPPs

Seoul’s Metro Line 9 Bangkok’s Skytrain

The Seoul Metro Line 9 Corporation devel- Bangkok’s extraordinary levels of traffic oped, operates, and maintains the Seoul Sub- congestion suggested that demand was robust way Line 9 Section 1, a 25.5 km subway line enough to support a large, complex rail with 25 stations. The company benefits from system. But debt and equity investors in Sky- minimum revenue support from the govern- train eventually suffered considerable losses ment for the first 15 years of the 30-year when actual ridership figures fell well below concession. The other eight lines are publicly preliminary estimates. Why? Poor integration owned and operated. The Seoul Metropolitan with other modes of transport and difficult Government concessioned Line 9 to a private access to the system for users. Once these operator to increase productivity and set a problems were addressed, ridership improved. benchmark for the public operators of the other lines.

Stockholm’s Metro São Paulo’s Yellow Line (Line 4)

The Stockholm Metro ran successfully for By 2012, a critical section of São Paolo’s Yellow years under a purely public sector model. Line, built by the ViaQuatro consortium, will In 1990, Stockholm Transport awarded be 12.8 km long. The concessionaire has spent five- to ten-year operations and mainte- $450 million on equipment and rolling stock, nance contracts for its three metro rail and estimates that its total investment will lines, its light rail system, the suburban reach $2 billion during the 30-year operating railway service, and commuter rail services. contract. During the opening celebrations, This approach has allowed Stockholm officials predicted that São Paulo’s urban Metro to improve service and reduce costs rail network would reach 420 km by 2014. through competitive tendering, and to tap The Yellow Line was implemented as a PPP into private sector expertise to chart the to share development and operational risks course for the system’s next 50 years. with the private sector and to reduce the state government’s capital expenditure, allowing investment in other priority projects.

66Photo | IFC.ORG/HANDSHAKE © marksdk +2 LIGHT RAIL PPPs

Wellington’s Cable Car

The Wellington, New Zealand cable car carries around 3,000 passengers each day from the Central Business District to the university and suburbs on the steep hills above the capital city. The cable car was built with private finance by the Upland Estate Company (UEC). The cable car was completed in 1902, at an estimated cost of £17,479 (equivalent to $1.6 million today). By 1926, annual ridership was 2 million. However, by the 1940s, competition from council-run buses resulted in the purchase of the cable car by the Wellington City Council. The Council operated the cable car for 44 years until 1991, when national legislation required council-owned passenger transport services to be corporatized or privatized. This led to the forma- tion of the council-owned Wellington Cable Car Limited (WCCL). WCCL initially tendered out contracts for maintenance and operation to private firms. Serco had the operating contract from 1997 to 2007, and since 2007 WCCL has managed it. Operations and maintenance take place in-house.

Washington, D.C.’s Tram

For 100 years, streetcars were a common mode of transportation in Washington, D.C.—until the system was dismantled in 1962 as part of a switch to bus service. In the late 1990s, however, the city began considering a series of rapid bus, light rail, and streetcar projects. Plans for a 60 km eight-route tram network were unveiled in 2010 and three low-floor cars were purchased from Czech supplier Skoda-Inekon. The first two lines will be built along blighted commercial corridors. Initially, the system will be funded and owned by the District of Columbia Department of Trans- portation (DDOT), and operated by a third party. The trams will operate on-street.

In July 2012, D.C. selected a private contractor to run the first phase of its streetcar system. RATP Dev McDonald Transit Associates will be paid $4 million a year to handle the day-to-day opeations of the 2.2 miles of track along the H Street N.E. corridor for five years. The company will also oversee training and maintenance facilities. DDOT will retain ownership of the line and control fares. Construction of the line is expected to cost $50 million and open in the summer of 2013. DDOT is considering a PPP to speed up the development of the rest of the system.