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Report No. PIC1992 Project Name Argentina-Buenos Aires Urban Transport Region Latin America and the Caribbean Sector Urban Transport Project ID ARPA39584 Public Disclosure Authorized Borrower Argentine Republic Implementing Agency Transport Secretariat of the Ministry of Economy and Public Works and Services Date this PID prepared March , 1996 Projected Appraisal Date September 1996 Projected Board Date April 1997 Background. The 12.4 million inhabitants of the Buenos Aires Public Disclosure Authorized Metropolitan Area (AMBA) are served by 15,000 buses belonging to 0 private companies, by a 44-km subway network, and by six suburban railway operations 900 km in length. Due to rapidly increasing car ownership, the public transport share of motorized travel declined from 75t in 1970 to 61t in 1994. The area's 2.5 million private cars are at the root of growing congestion, rising air pollution, and an increasing number of traffic accidents. As part of its Railway Restructuring Program, the National Government in 1991 issued tenders for operating concessions and the physical rehabilitation of the subway and the six suburban railways. In early 1994, 10-year concessions became effective for three suburban railway subsystems, and a 20-year concession for the subway combined with a suburban railway. With the transfer of the Roca and Mitre/Sarmiento systems in January and May 1995, respectively, the entire rail passenger system of Greater Buenos Aires is now operated by Public Disclosure Authorized the private sector. The initial results of private operation are encouraging, with steady increases in train reliability and ridership: the number of tickets sold in 1995 was 80 percent above the 1993 level for the suburban railways, and 27 percent above 1993 for the subway. Project Objectives. The overall objectives of the proposed project would be to: (a) develop an integrated urban transport (road and rail) system for the AMBA, aiming at better environmental quality, traffic safety and economic efficiency; (b) improve the service quality and coverage of mass transit to maintain its role in assuring personal mobility in the AMBA; (c) help in shaping a regulatory and financial environment within which transport investments and services are provided by the private sector; and (d) contribute to the financial obligations which the Government has assumed under the concession agreements with the private sector. Public Disclosure Authorized Project Description. The project would consist of a package of actions and investments aimed at achieving the above objectives, including: (a) support to the basic investment program of the Metrovias concession, including the rehabilitation of track, electric substations and transmission facilities, signal control, and communications for the Urquiza line and subway lines B, C, D and E; (b) rehabilitation of the subway line A which, because of expected bilateral support which did not materialize, had not been included in the concession tender; (c) improved transfer facilities and other investments aimed at better integration of the transport system; (d) a traffic safety program, combining the formulation of a broad urban traffic safety strategy with an action plan to reduce accidents at road/rail crossings; and (e) institutional strengthening, possibly through the creation of a Metropolitan Transport Commission which would be responsible for the formulation and control of common policies on pricing, regulation, financing, and project evaluation and selection; it would also support the development of a system to monitor air and noise pollution. Project Financing. A World Bank loan of $150 million is planned to support the project. This would be complemented by Government counterpart funds and potential finance arranged by the suppliers of electrical and signalling equipment for subway Line A. Project Implementation. Subject to confirmation by Government and Bank headquarters, the Metrovias concessionaire would implement its basic investment program and the rehabilitation of subway Line A. The other components would be implemented by the Secretariat of Transport and Energy, which would also be responsible for overall project coordination. Project Sustainability. The operating concessions include substantial government investments to modernize the antiquated urban rail infrastructure. The proposed project would assist with these investments and also pave the way for complementary investments by the private operators, since major improvements in infrastructure and equipment are required to sustain a significant increase in public transport patronage. Moreover, the project would address such issues as environmental quality and road safety, as the sustainable functioning of metropolitan mobility requires a comprehensive approach, within which rail passenger transport would be only one'albeit an important'factor. Lessons Learned. The proposed project would support the ongoing privatization of the railway subsector and a comprehensive approach to urban transport. Bank support for privatization is relatively new, and thus there is little experience that is directly relevant. There is, however, significant experience from the urban transport sector of Brazil and the non-urban transport sector of Argentina, from which the following lessons have been learned: (a) lack of counterpart funds is one of the primary causes of project delays; (b) effective regulatory agencies are critical to private sector participation; (c) clear institutional responsibilities greatly improve the effectiveness of implementation; and (d) any proposed investments or institutional changes should occur in the context of an overall regional transport plan. Poverty Category. N/A -2- Environmental Aspects. The project is classified as category B for environmental purposes. It is expected to reduce air pollution by: (a) diverting trips from buses and cars to the less polluting railway; and (b) introducing systematic air pollution monitoring. In addition, a focused effort is planned to reduce the serious traffic safety problem. Few adverse impacts are expected from the civil works since most investments are for the rehabilitation of existing facilities, most of them underground. Program Objective Categories. The proposed project would support private sector development by consolidating the privatization of urban transit in Buenos Aires. It would also aim to improve (public) urban management by addressing transport planning and road safety. Transport demand management and air pollution measures would pursue environmental objectives. Contact Point: Public Information Center The World Bank 1818 H Street N.W. Washington D.C. 20433 Telephone No.: (202)458-5454 Fax No.: (202)522-1500 Note: This is information on an evolving project. Certain components may not necessarily be included in the final project. - 3 -.

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