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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 64281-BR PROJECT PAPER ON A PROPOSED ADDITIONAL LOAN IN THE AMOUNT OF US$600 MILLION Public Disclosure Authorized TO THE STATE OF RIO DE JANEIRO, BRAZIL WITH THE GUARANTEE OF THE FEDERATIVE REPUBLIC OF BRAZIL FOR THE Public Disclosure Authorized UPGRADING AND GREENING THE RIO DE JANEIRO URBAN RAIL SYSTEM PROJECT (FORMER RIO DE JANEIRO MASS TRANSIT 2 PROJECT) December 22, 2011 Sustainable Development Department Brazil Country Management Unit Latin America and Caribbean Region Public Disclosure Authorized This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s Policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective June 30 2011) Currency Unit = Brazilian Real (R$) R$1.67 = US$1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AGETRANS Rio de Janeiro State Transport Regulatory Agency (Agência Reguladora de Transportes do Estado do Rio de Janeiro) AMTU-RJ Metropolitan Urban Transport Authority of Rio de Janeiro (Autoridade Metropolitana de Transporte Urbano-Rio de Janeiro) ASEP-RJ Original name of State Regulatory Agency BAU Business As Usual BNDES National Economic and Social Development Bank (Banco Nacional de Desenvolvimento Econômico e Social) BRT Bus Rapid Transit BUC Integrated Transit Fare (Bilhete Único Carioca) BUI Integrated Transit Fare (Bilhete Único Integrado) CBA Cost-Benefit Analysis CBTC Communications-Based Train Control CBTU Brazilian Urban Train Company (Companhia Brasileira de Trens Urbanos) CENTRAL State Company for Transport and Logistics Engineering (Companhia Estadual de Engenharia de Transportes e Logística) CFAA Country Financial Accountability Assessment CMU Country Management Unit CMSP São Paulo Metro Company (Companhia do Metrô de São Paulo) CNG Compressed Natural Gas CPS Country Partnership Strategy CPTM São Paulo Metropolitan Train Company (Companhia Paulista de Trens Metropolitanos) EA Environmental Assessment EHS Environment, Health and Safety EHSMS Environment, Health and Safety Management System EMP Environmental Management Plan EMU Electric Multiple Unit ESMAP Energy Sector Management Assistance Program ii FLUMITRENS Former Rio de Janeiro State suburban railway company GAC Governance and Anti-Corruption GIS Geographic Information System IBGE Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística) ICB International Competitive Bidding ICMS Circulation Tax on Goods and Services (Imposto de Circulação sobre Mercadorias e Serviços) IERR Internal Economic Rate of Return IFAC International Federation of Accountants IFR International Financial Reporting IMT Integrated Modal Tariff (Tarifa Modal Integrada) IPSAS International Public Sector Accounting Standards ISA International Standards on Auditing ISR Implementation Status and Results MCASP Accounting Manual Applicable to the Public Sector (Manual de Contabilidade Aplicada ao Setor Público) MetrôRio Rio de Janeiro Metro Private Concessionaire (also known as Metrô) MIS Management Information System MRJ Municipality of Rio de Janeiro (Município do Rio de Janeiro) NBC Brazilian Accounting Standards (Normas Brasileiras de Contabilidade) NBCASP National Accounting Standards Applicable to the Public Sector Normas Brasileiras de Contabilidade Aplicadas ao Setor Público NCB National Competitive Bidding NLTA Non Lending Technical Assistance NPV Net Present Value O-D Origin-Destination PCB Polychlorinated Biphenols PDTU Urban Transport Master Plan (Plano Diretor de Transporte Urbano) PER-RAP Preliminary Environmental Report (Relatório Ambiental Preliminar) PMIG Project Management and Implementation Group PNLT National Plan for Logistics and Transport (Plano Nacional de Logística e Transportes) RAP Resettlement Action Plan RJMR Rio de Janeiro Metropolitan Region SBD Standard Bidding Documents SCF Financial Management System (Sistema de Controle Financeiro) SEAIN Federal Secretariat for Foreign Affairs (Secretaria de Assuntos Internacionais) SETRANS Rio de Janeiro State Secretariat of Transportation (Secretaria de Estado de Transportes do Rio de Janeiro) iii SIAFEM Financial Management System for States and Municipalities (Sistema de Administração Financeira para Estados e Municípios SIG Integrated Management System (Sistema Integrado de Gestão) SIGO Integrated Budget Management System (Sistema Integrado de Gestão Orçamentária) SMA Secretariat for the Environment (Secretaria do Meio Ambiente) SRJ State of Rio de Janeiro (Estado do Rio de Janeiro) STM São Paulo Municipal Secretariat of Transportation (Secretaria de Transportes da Prefeitura do Município de São Paulo) STN National Treasury Secretariat (Secretaria do Tesouro Nacional) SuperVia Private concessionaire for the Rio de Janeiro suburban rail system since 1998 TOD Transit-Oriented Urban Development TSP Total Suspended Particles UTTP Urban Transport Transformation Project Vice President: Pamela Cox Country Director: Makhtar Diop Sector Director: Ede Ijjasz-Vasquez Sector Director: Aurelio Menendez Task Team Leader: Arturo Ardila-Gomez iv BRAZIL UPGRADING AND GREENING THE RIO DE JANEIRO URBAN RAIL SYSTEM TABLE OF CONTENTS I. INTRODUCTION ........................................................................................................................ 1 II. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING .......................... 1 III. PROPOSED CHANGES .......................................................................................................... 7 IV. APPRAISAL SUMMARY ...................................................................................................... 10 Annex 1. Revised Results Framework and Monitoring ............................................................. 20 Annex 2. Operational Risk Assessment Framework (ORAF) ................................................... 24 Annex 3. Detailed Description of Modified or New Project Activities ...................................... 29 Annex 4. Revised Estimate of Project Costs ................................................................................ 34 Annex 5. Revised Implementation Arrangements and Support ................................................ 35 Annex 6. Economic Analysis ......................................................................................................... 52 Annex 7. Sector Background, Urban Transport Planning and Context in the RJMR ........... 65 Annex 8. Methodology to Assess Reductions in Greenhouse Gas Emissions for an Urban Transport Project........................................................................................................................... 74 Annex 9. Team Members .............................................................................................................. 81 Annex 10. Maps .............................................................................................................................. 82 v BRAZIL UPGRADING AND GREENING THE RIO DE JANEIRO URBAN RAIL SYSTEM PROJECT ADDITIONAL FINANCING DATA SHEET Basic Information – Additional Financing (AF) Country Director: Makhtar Diop Sectors: General transportation sector Sector Manager/Director: Aurelio (100%) Menendez/Ede Jorge Ijjasz-Vasquez Themes: Climate change (50%); Other Team Leader: Arturo Ardila-Gomez urban development (30%); Project ID: P125630 Infrastructure services for private sector Expected Effectiveness Date: March development (20%) 30, 2012 Environmental Category: B Lending Instrument: Specific Expected Closing Date: June 30, 2017 Investment Loan Joint IFC: Additional Financing Type: Scale-Up Joint Level: and Restructuring Basic Information Original Project Project ID: P111996 Environmental Category: B Project Name: Rio de Janeiro Mass Expected Closing Date: June 30, 2017 Transit Project II Lending Instrument: Specific Joint IFC: Investment Loan Joint Level: AF Project Financing Data [ X ] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other: Proposed terms: US$ Denominated, Commitment-linked IBRD Flexible Loan with a Variable Spread, with Level Repayments on May 15 and November 15 of each year, with 5.5 years’ Grace Period and 30 years Final Maturity, with all conversion options selected and the Front End Fee and Premia for Interest Rate Caps and Collars not capitalized. AF Financing Plan (US$m) Source Total Amount (US$ m) Total Project Cost: 600 Cofinancing: Borrower: 0 Total Bank Financing: IBRD 600 IDA New Recommitted AF Estimated Disbursements (Bank FY/US$m) FY 12 13 14 15 16 17 Annual 139.9 134.7 252.6 59.3 9.8 3.7 Cumulative 139.9 274.6 527.2 586.5 596.3 600.0 vi Project Development Objective and Description Original Project Development Objective: The proposed PDO is to: a) improve the level of service provided to suburban rail transport users in the Rio de Janeiro Metropolitan Region (RJMR) in a safe and cost-efficient manner; and b) improve the transport management and policy framework in the RJMR. Revised Project Development Objective: The proposed PDOs are: (a) to improve the level of service provided to suburban rail transport users in the RJMR in a safe and cost-efficient manner; (b) to place the suburban rail transport system on a lower carbon growth path; and (c) to improve the transport management and policy framework in the Borrower’s territory and in the RJMR. Project Components:
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