Developments in Transport in Asia and the Pacific

REVIEW OF TRANSPORT FOR SUSTAINABLE DEVELOPMENTS DEVELOPMENT AND IN TRANSPORT REGIONAL CONNECTIVITY IN ASIA AND THE PACIFIC 2015

EXECUTIVE SUMMARY

This latest biennial Review sets out system allows for better optimization in transport developments in the Asia- energy efficiency and minimization of Pacific region and serves as a mechanism harmful emissions to environment and for reporting on the provision of how an integrated transport system also transport infrastructure and services; the strengthens economic, environmental challenges remaining in regional, urban and social outcomes. The Review also and rural connectivity; and public health shows that in some subregions, such issues, such as road safety and emission as South-East Asia, the share of road pollutions. transport, a heavy polluting mode of transport, is relatively high at 55 per cent, The Review finds that regional and extremely high in some countries, connectivity has been placed high in accounting for more than 90 per cent of policy agenda of many countries in the the total transport activity. In that regard, region. This has resulted in the strong the Review highlights the benefits for demand for strengthened regional the region of an integrated intermodal transport connectivity, largely emanating transport system that uses the benefits from the desire to have smooth flow of of a seamless approach to connect and goods movements within the region that capture the comparative advantages of also provides inclusive access for the the different modes of transportation. emerging development opportunities to all countries in the region, in particular The Review shows adoption of overall those with special needs such as least policy on developing the integrated developed countries, landlocked intermodal transport systems in a number developing countries and small island of countries. Increasing investment developing states. in environmentally sound railway and intermodal transport hubs has been seen 2015 saw the adoption of the global in these countries. Many countries have mandate in the 2030 UN development made substantial efforts to upgrade their agenda and the agreement to the road connectivity networks within the Sustainable Development Goals (SDGs). region with an increase in the percentage Of the 17 goals and 169 targets, transport of higher class Asian Highway roads is specifically mentioned in four targets such as class I and II and decrease in the and indirectly in seven others. SDGs percentage of lower class Asian Highway targets for transport include the subjects roads such as class III and below. For of resilient and transborder infrastructure; the Trans-Asian Railways overall, this road safety; energy efficiency; safe, upgrading has been slow, with missing affordable, accessible, and sustainable links still remaining, which impedes the transports systems, notably by expanding use of more efficient railway for regional public transport; and increased backbone transport. investment in rural infrastructure to achieve an integrated transport network. In the context of SDG 11 on more sustainable cities, the Review reports on To achieve the SDGs, transport’s the initiatives of the cities of the region to contribution will need to focus towards stem the social and economic losses from achieving an integrated intermodal the burden of increasing congestion and transport system that provides balanced pollution caused by private vehicles. The integration of the three pillars, economic, Review acknowledges the increasing role social and environmental, of sustainable of intelligent transport systems for urban development. Integrated intermodal and inter-city mobility. transport system provides access to economic and social opportunities while accommodating the need of better living environment. The Review examines how an integrated intermodal transport

The Review recognizes the role of as rapid urbanization and the increase rural accessibility as a key component in disposable incomes, are pushing up of success in connecting production demand for private vehicles. This, in with consumption, another SDG, to turn, has resulted in several negative end hunger and promote sustainable environmental externalities. Motorization agriculture. Greater connectivity is also has negative social consequences, needed for rural and remote communities such as an increasing number of traffic in the region where around two thirds of accidents and possibly greater inequality, a billion people do not have all-weather both within urban areas and between access, and further onwards connection urban and rural areas. The key to making to the regional networks, such as the the transport sector more sustainable is Asian Highway and Trans-Asian Railway. to encourage both passenger and freight transport to shift to more sustainable The Review also reports the region’s modes of transport. For passengers, the greater interest and the need in further provision of infrastructure to facilitate improving road safety, which resulted in non-motorized transport (walking social and economic loss from road traffic and cycling) and high quality public fatalities with some 733,000 deaths on transport systems are the way forward. Asia-Pacific roads in 2013, especially in Road transport remains the dominant East and North-East Asia and the Pacific mode for freight transport, accounting subregions where their fatality levels have for an ever-increasing proportion of increased from 2010. fossil fuel consumption. Governments must consider measures to encourage more intermodal transport, which would PART I – INTRODUCTION allow shippers to take advantage of the environmental and economic efficiencies of railways, maritime transport and Asia and the Pacific region has become inland waterways and the flexibility and less dependent on its traditional markets reliability of road transport. The promotion in Europe and North America with more of railways for long-distance freight than half of its trade now conducted movement and intermodal transport and within the region. This situation calls the use of intelligent transport systems for enhancing regional connectivity. are essential for improving sustainability in Structural bottlenecks, such as poor the region. quality transport infrastructure, are hindering the potential for more trade within subregions. By strengthening cross-border overland links with their neighbours, the region can achieve a more balanced distribution of trade flows. The need for better intraregional transport systems is being addressed with several regional initiatives paving the way with the help of infrastructure-focused funds for boosting connectivity among ESCAP member States.

PART II – TRANSPORT AND SUSTAINABLE DEVELOPMENT

Sustainable development is one of the key issues facing policymakers today, a fact underlined by four of the seventeen new United Nations Sustainable Development Goals — which come into effect from 2016 — including targets that make speciﬁc reference to transport and infrastructure. Demographic trends, such PART III – INTEGRATED INTERMODAL use of radio-frequency identiﬁcation and TRANSPORT SYSTEM intelligent transport systems to track cargo and vehicles. Various “e-logistics” CHAPTER 1 - REGIONAL TRANSPORT systems, are directed at streamlining CONNECTIVITY logistics procedures and improving logistics performance.

INFRASTRUCTURE NETWORKS INTER-ISLAND SHIPPING IN THE Over the past fifty years, infrastructure PACIFIC SUBREGION networks in the ESCAP region have grown The maritime sector plays an important faster than in any other region in the world. role in many countries of the ESCAP Significant progress has been made in region, but it is especially critical for linking major production and consumption the maritime countries of the Pacific centres with intensive transport network. subregion. This subregion is heavily Governments have put a lot of effort in dependent on shipping services for the upgrading and improving the quality of domestic and international transport these networks, with the region now of cargo and passengers. Inter-island boasting world class highways, high- shipping is also central to the lives of speed railway systems and some of the Pacific islanders, often providing the busiest ports and aviation hubs in the only means of access to and from the world. In particular, progress has been smaller outer islands, as well as being a made under the frameworks of the major source of employment. Given its intergovernmental agreements on the importance, governments in the region Asian Highway, Trans-Asian Railway, have formulated a number of cooperation and dry ports. However, the region has frameworks to strengthen the maritime yet to achieve the kind of “seamless sector. The efficiency of services has also connectivity” that would allow countries been enhanced with the emergence of to make the optimal use of regional several hub ports as major transhipment infrastructure networks, and thereby bring points, resulting in relatively good down transport and logistics costs. This north-south and east-west international chapter provides an update on the status shipping connections with major trading of those networks and a number of major partners for all categories of cargo. ongoing and planned highway and railway However, a number of challenges remain, projects, while also discussing several including the poor safety record of the major dry port development projects and sector, insufficient budgets to invest in the prospects for further development. new infrastructure and lack of effective maintenance regimes for existing ports. TRANSPORT FACILITATION AND The chapter reviews policy options for LOGISTICS overcoming these challenges. Non-physical barriers to transport add to logistics costs. The facilitation CHAPTER 2 – URBAN TRANSPORT of transport and the improvement of logistics performance would enhance the competitiveness of the region’s The Asia-Pacific region is home to developing countries, particularly its more than two billion urban residents, landlocked developing countries. One representing 55 per cent of the world’s of the most effective means to facilitate urban population. Unprecedented transport is through harmonization population growth and the expansion of norms, standards, processes and of Asian cities is putting tremendous procedures, which can be accomplished pressure on urban public transport through: accession to international legal systems, while the rapid growth of private instruments; subregional facilitation vehicle ownership has led to worsening agreements; and implementation of traffic congestion and greater road facilitation models. Innovative approaches crashes, emissions and air pollution. and technologies are available to help An increasing number of poor people governments expedite cargo, crew and inhabit urban areas, as more and more vehicle processing times at borders people migrate to cities from rural areas. while allowing them to maintain control. However, Asian cities feature a colourful These include integrated check posts, array of urban transport modes, such automated customs processes, and the as para-transit, public transport, taxi services, and non-motorized transport (walking and cycling). Drawing on the CHAPTER 5 – TRANSPORT FINANCING examples from the region, some of the main policy options which would be effective in developing sustainable urban The Asia-Pacific region is facing soaring transport systems are presented. demand for transport infrastructure to support its economic development CHAPTER 3 – RURAL TRANSPORT and burgeoning population. To meet this demand, the investments required are considerable and governments are Many of the region’s poor population do exploring ways to mobilize both public not have access to safe and affordable and private financial resources. With means of transport, particularly in rural regard to public finance, governments areas where the majority of the poor live. have to consider how to mobilize greater As a result, they remain excluded from domestic resources, access new external socioeconomic activities and services, resources and improve public expenditure which could help them overcome their management. Concerning private finance, poverty. The level of rural connectivity public-private partnerships have become varies from country to country, with a key mechanism for channelling private people living in least developed countries resources for infrastructure development. having the lowest levels of access to These partnerships have a long history in all-weather roads. Access to rural roads the transport sector across the ESCAP alone, however, will not lead to sustainable region, with approximately $230 billion development results. Selected national being mobilized during the period 2000- rural road development programmes 2014 through this mechanism. Developing demonstrate innovative techniques for successful public-private partnership promoting the involvement of local people projects is, however, challenging. In and using locally sourced materials, response to the need for sustainable including some aimed at integrating other development, the region shows increase development targets, such as resilience of investment in more economical and employment generation. and environmentally sound railway infrastructure. CHAPTER 4 – ROAD SAFETY

Road safety now fully acknowledged as being important development objectives. Goal 3 of SDGs: Ensure healthy lives and promote well-being for all at all ages, includes a speciﬁc target to halve the number of global deaths and injuries from road traffic accidents by 2020. The growing epidemic of road injuries and fatalities has made traffic crashes the leading cause of death among young people (15-29 year olds) globally. In addition to the “human” cost, road crashes result in tangible economic losses to victims, their families, and nations as a whole. In response, many governments in the ESCAP region have initiated road safety policies, but statistics reveal that they have had mixed success. Effective measures are being taken to address the causes of road crashes, including safer infrastructure, more harmonized traffic signs, and behavioural factors, such as reducing speeding, drink-driving and promoting the wearing of seatbelts.

EXPLANATORY NOTES The designations employed and the The term “North and Central Asia” in this presentation of the material in this publication refers collectively to Armenia, publication do not imply the expression Azerbaijan, Georgia, Kazakhstan, of any opinion whatsoever on the Kyrgyzstan, Russian Federation, part of the Secretariat of the United Tajikistan, Turkmenistan and Uzbekistan. Nations concerning the legal status of any country, territory, city or area, The term “Paciﬁc” in this publication or of its authorities, or concerning the refers collectively to American Samoa, delimitation of its frontiers or boundaries. Australia, Cook Islands, Fiji, French Polynesia, Guam, Kiribati, Marshall The boundaries and names shown and Islands, Micronesia (Federated States the designations used on the maps in of), Nauru, New Caledonia, New Zealand, this publication do not imply official Niue, Northern Mariana Islands, Palau, endorsement or acceptance by the Papua New Guinea, Samoa, Solomon United Nations. Islands, Tonga, Tuvalu and Vanuatu.

The term “ESCAP region” and “Asia and The term “South and South-West Asia” the Pacific” in this publication refer to in this publication refers collectively to the group of countries and territories/ Afghanistan, Bangladesh, Bhutan, India, areas comprising: Afghanistan; American the Islamic Republic of Iran, Maldives, Samoa; Armenia; Australia; Azerbaijan; Nepal, Pakistan, Sri Lanka and Turkey. Bangladesh; Bhutan; Brunei Darussalam; Cambodia; China; Cook Islands; The term “South-East Asia” in this Democratic People’s Republic of Korea; publication refers collectively to Brunei Fiji; French Polynesia; Georgia; Guam; Darussalam, Cambodia, Indonesia, the Hong Kong, China; India; Indonesia; Lao People’s Democratic Republic, Iran (Islamic Republic of); Japan; Malaysia, Myanmar, the Philippines, Kazakhstan; Kiribati; Kyrgyzstan; Lao Singapore, Thailand, Timor-Leste and People’s Democratic Republic; Macao, Viet Nam. China; Malaysia; Maldives; Marshall Islands; Micronesia (Federated States Values are in United States dollars unless of); Mongolia; Myanmar; Nauru; Nepal; specified otherwise. New Caledonia; New Zealand; Niue; Northern Mariana Islands; Pakistan; The term “billion” signifies a thousand Palau; Papua New Guinea; Philippines; million. Republic of Korea; Russian Federation; Samoa; Singapore; Solomon Islands; Sri This publication has been issued without Lanka; Tajikistan; Thailand; Timor-Leste; formal editing. Tonga; Turkey; Turkmenistan; Tuvalu; Uzbekistan; Vanuatu; and Viet Nam. Mention of firm names and commercial products does not imply the The term “East and North-East Asia” in endorsement of the United Nations. this publication refers collectively to: China; Hong Kong, China; Democratic Bibliographical and other references People’s Republic of Korea; Japan; have, wherever possible, been Macao, China; Mongolia; and Republic of verified. The United Nations bears Korea. no responsibility for the functioning of links to uniform resource locators (URLs) contained in bibliographical or other references to the work of external organizations.

TABLE OF CONTENTS

Executive Summary 4 Explanation Note 9

PART I INTRODUCTION 16 1 Introduction 16 2 Transport trends 16 3 Recent initiatives related to transport 20

PART II TRANSPORT AND SUSTAINABLE DEVELOPMENT 28 1 Introduction 28 2 Transport and the three pillars of sustainable development 29 3 Shifting to more sustainable modes of transport 33 4 Determinants and implications of modal choice for freight transport 35 5 Policies to promote intermodal transport networks 39

PART III – INTEGRATED INTERMODAL TRANSPORT SYSTEM 46

CHAPTER 1 : REGIONAL TRANSPORT CONNECTIVITY 46

A. Infrastructure networks 46 1 Introduction 46 2 Asian Highway Network 47 3 Trans-Asian Railway Network 53 4 Dry port development 62

B. Transport facilitation and logistics 65 1 Introduction 65 2 Progress in the development of legal instruments 66 for facilitating international transport 3 Innovative approaches and new technologies 68 to facilitate international transport 4 Logistics development 72 5 Transport facilitation and logistics for landlocked developing countries 76

&,QWHULVODQGVKLSSLQJLQWKH3DFL¾FVXEUHJLRQ 1 Introduction 78 2 Key developments and trends 78 3 Towards developing sustainable maritime transport 82 LQWKH3DFL¾FWKDWLVVDIHDIIRUGDEOHDQGHI¾FLHQW

CHAPTER 2 : URBAN TRANSPORT 90 1 Introduction 90 2 The state of urban transportation systems in Asia 91 3 Policy options for moving towards sustainable urban mobility 97

CHAPTER 3 : RURAL TRANSPORT 102 1 Introduction 102 2 The critical role of transport in supporting rural 103 development and poverty reduction 3 Selected rural road development initiatives 104 5DLVLQJWKHSUR¾OHRIUXUDOWUDQVSRUWLQWKH 108 international development agenda

CHAPTER 4 : ROAD SAFETY 110 1 Introduction 110 5RDGVDIHW\LQWKH$VLD3DFL¾FUHJLRQ 111 0RYLQJWRZDUGV]HURURDGFUDVKHVLQWKH$VLD3DFL¾FUHJLRQ 119

CHAPTER 5 : TRANSPORT FINANCING 122 1 Introduction 122 2 Recent trends 123 3 Finance options 126 4 Factors for a successful transport public-private partnership programme 131 6XEVHFWRUVSHFL¾FLWLHV 136

Consolidated Reference List 144 Acknowledgements 156

List of boxes

Box 1.1 Declining oil prices – a Box 3.11 Different modes of threat and an opportunity transport in Asian cities

Box 1.2 Shipping Throughput in Box 3.12 Bus Rapid Transit System Top 20 Asian Ports in Ahmedabad, India

Box 3.13 Improvement of non- Box 2.1 Urban rail networks in motorized transport in Asian megacities Rajshahi, Bangladesh Box 2.2 Long-distance rail services Box 3.14 Urban transport master linking East Asia and plan in Colombo Europe Box 3.15 Direct and indirect effects Box 2.3 Development of an of improved accessibility intergrated intermodal transport system in support Box 3.16 Rural road development as part of a rural poverty of sustainable development reduction strategy of China in China Box 3.17 A comprehensive approach Box 2.4 Transport policy of India to rural road development in Cambodia Box 2.5 Transport Infrastructure Development Strategy Box 3.18 Investing in gaining 2015-2022 of Thailand knowledge about rural road infrastructure Box 3.1 Dedicated freight corridor in India Box 3.19 Demerit-Free Driver Decal of Singapore Box 3.2 From landlocked to land- Box 3.20 Eight target areas in the linked-recent developments ESCAP Regional Road in the Lao people’s Safety Goals, Targets and democratic republic Indicators Box 3.3 High-speed rail in Asia Box 3.21 Massive investments by China in transport Box 3.4 Northeast Asia Logistics Information Service Box 3.22 Perceptions of the public- Network private partnership experts in the region: results of the Box 3.5 Framework for Action on ESCAP PPP survey Transport Services Box 3.23 Overcoming land Box 3.6 The Central Pacific acquisition issues in shipping commission- Indonesia regional cooperation for improved maritime Box 3.24 The dangers of transport services overestimating traffic demand Box 3.7 Fiji Franchise Scheme Box 3.25 Learning from experience: the case of the Republic Box 3.8 Pacific Islands Domestic of Korea Ship Safety programme Box 3.26 ESCAP E-Learning Series Box 3.9 Pacific Islands Maritime Laws Box 3.27 The PPP Decree of Viet Nam Box 3.10 Greening the maritime agenda Box 3.28 It’s a profitable project... So where are the bidders? List of figures

Figure 1.1 Destinations of Figure 3.8 Vehicles in use in selected merchandise exports from Asian countries Asia and the Pacific, 2002-2014 Figure 3.9 Trends in car and motorcycle ownership in Figure 1.2 Freight transport intensity selected Asian countries by mode in percentage of total tonne-km for East and Figure 3.10 Share of urban transport in North-East Asia (2012), selected Asian cities South-East Asia (2012) and North and Central Asia Figure 3.11 Progress in reducing (2013) numbers of deaths from road crashes between 2010 Figure 1.3 Shipping throughput in top and 2013 20 Asian ports in 2014 Figure 3.12 Progress in reducing Figure 2.1 Share of energy numbers of fatalities and consumption by mode in injuries from road crashes Asia-Pacific countries Figure 3.13 Estimated fatality rate per Figure 2.2 Modal split of passenger 100,000 population in transport in 12 major cities 2013 in the Asia-Pacific region,2012 Figure 3.14 Average fatality rates per billion vehicle-km by Asian Figure 2.3 Freight transport intensity Highway class for selected countries, in million tonne- Figure 3.15 Level of enforcement for kilometres,2013 helmet wearing, speed limits and drunk-driving Figure 2.4 Suzhou – Warsaw routing transit time Figure 3.16 Transport infrastructure investments in selected Figure 3.1 Progress in upgrading Asian countries Highway roads, by class (2006, 2010 and 2014) Figure 3.17 Perception of the quality of transport Figure 3.2 Road surface conditions in infrastructure selected Asian Highway member States Figure 3.18 Road and railway (status as of May 2015) investment split in selected countries Figure 3.3 Application of electronic lock during test runs on Figure 3.19 Growth in railway Bhutan-India transit investment in selected corridor countries since 2005 Figure 3.4 World Bank Logistics Figure 3.20 Finance options Performance Index: Asia- Pacific region and world Figure 3.21 Modal split of average private investments in transport Figure 3.5 Logistics Performance infrastructure projects in Index of ESCAP Subregions the Asia-Pacific region (2000-2014) Figure 3.6 Total number of vehicles per 1,000 people for Figure 3.22 Perceptions of selected Asian countries obstacles to public-private in 2013 partnerships in the Asia- Pacific region Figure 3.7 Average vehicle speed in selected Asian cities

Figure 3.23 Road public-private Table 3.4 Top cause(s) of road partnerships projects in crashes in the ESCAP Asia and the Paciﬁc region countries (2000-2014) Table 3.5 Lives saved, and additional Figure 3.24 Geographical distribution of lives which could have been

road public-private saved, due to restraints and partnership projects motorcycle helmets in the (1990-2014) United States in 2013 Figure 3.25 Geographical distribution of rail public-private partnership projects (1990-2014) Figure 3.26 Rail public-private partnership projects in the ESCAP Region (2000-2014) Figure 3.27 Limited ﬁnancial viability for rail projects Figure 3.28 Port public-private partnership projects in the Asia-Paciﬁc region (2000-2014) Figure 3.29 Geographical distribution of port public-private partnership projects (1990-2014) Figure 3.30 Geographical distribution of airport public-private partnership projects (1990-2014)

List of tables

Table 2.1 Goals and targets relating directly to transport under the Sustainable Development Goal Table 2.2 Typical transport costs and transit times for transport between China and Europe Table 2.3 Comparative advantages and disadvantages of different transport modes Table 3.1 Capital costs of development of different mass transit systems Table 3.2 Current status of BRT systems in Asia Table 3.3 Estimated losses due to trafﬁc crashes (2010)

PART I PART INTRODUCTION INTRODUCTION 1. INTRODUCTION

Asia and the Paciﬁc continues to be the world’s largest trading region, accounting for almost 40 per cent of the world’s exports and imports.1 Despite turbulence in the global economy caused by the 2008/09 ﬁnancial crisis, many countries in the region managed to maintain positive growth. I This growth has been the result of many factors, Among others, this has partly been achieved through steps to liberalize trade taken by countries over the last twenty years, which have deepened trade and investment ties within the region, and through the development of transport infrastructure and services, which has connected newly emerging production and consumption centres across a wider range of countries.

When trade expands, demand for freight transport also grows. Maritime transport has been the backbone of international trade. Furthermore, the development of a complex web of transport and logistics networks on land has been an equally important factor sustaining the export-driven growth of many countries, with roads, railways and inland waterways playing a vital role in moving goods to and from the ports.

Part I of this review looks at some of the major international trade trends in the region that are likely to affect regional transport demand and investment in the near future. It then describes selected regional initiatives that help enhance efforts on regional connectivity and sustainable transport, including collective ﬁnancing mechanisms established to implement those initiatives. 2. TRANSPORT TRENDS $VWUDQVSRUWGHPDQGFDQEHH[SHFWHGWR LQFUHDVHLQOLQHZLWKJURZLQJWUDGHYROXPH The integration of the economies in Asia and LWLVFULWLFDOWRHQKDQFHGLVWULEXWLRQQHWZRUNV 3DFL¾FLQWRWKHJOREDOPDUNHWDQGVXSSO\ E\LPSURYLQJWKHDYDLODELOLW\DQGTXDOLW\RI FKDLQVKDVUHVXOWHGLQFRQWLQXRXVHFRQRPLF LQIUDVWUXFWXUHDQGLWVRSHUDWLRQDOFDSDFLWLHV JURZWKZLWKWKHUHJLRQµVVKDUHRIJOREDO 7KHUHJLRQµVHFRQRPLFJURZWKLVGHSHQGHQW H[SRUWVDQGLPSRUWVUHDFKLQJQHDUO\SHU RQWUDQVSRUWFRQQHFWLYLW\WRDOORZPRUH cent.2:KLOHWKHDGDJH²VXSSO\IURPWKH HI¾FLHQWDQGJUHDWHUWUDGH¿RZDVPDQ\ (DVWFRQVXPHLQWKH:HVW³KDVORQJEHHQ FRXQWULHVµHFRQRPLHVDUHKHDYLO\UHOLDQW NQRZQDVDPRGHOWKDWKDVGULYHQJURZWK RQH[SRUWVIRU¾VFDOUHYHQXHVDQGIRUHLJQ ERWKLQWKHUHJLRQDQGJOREDOO\UHFHQW¾JXUHV H[FKDQJHLQ¿RZV,QWKH$VLD3DFL¾F RQWKHSURSRUWLRQRIPHUFKDQGLVHH[SRUWHG UHJLRQWKHFRPPRGLW\H[SRUWWR*'3 IURPWKH$VLDQDQG3DFL¾FUHJLRQUHYHDOWKH UDWLRVH[FHHGVSHUFHQWLQ$]HUEDLMDQ increasing trends. %UXQHL'DUXVVDODPWKH,VODPLF5HSXEOLF RI,UDQ.D]DNKVWDQ0RQJROLD0\DQPDU 3DSXD1HZ*XLQHD7LPRU/HVWHDQG 7XUNPHQLVWDQ3 7KHH[DPSOHRIWKHH[WHQWRI

Figure 1.1 Destinations of merchandise exports from Asia and the Paciﬁc, 2002-2014

60%

50%

40%

30% Sources: ESCAP calculation based on United Nations Comtrade data from the 20% World Bank World Integrated Trade Solution (WITS) Database (http://wits. 10% worldbank.org/) (accessed 24 December 2015). Data for 2014 were sourced from 0% the IMF DOTS database (https://www.imf.org/ 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 external/pubs/cat/longres. aspx?sk=19305.0). ,\YVWLHU

Figure 1.2 Freight transport intensity by mode in percentage of total tonne-km for East and North-East Asia (2012), South- East Asia (2012) and North and Central Asia (2013)

,(:;(5+569;/,(:;(:0(:<)9,.065 569;/(5+*,5;9(3(:0(:<)9,.065 * East and North-East Asia is represented by key dominant countries; China, Japan and Republic of Korea. North and Central Asia is

represented by countries with available data: Azerbaijan; and Russian Federation. South-East Asia is represented by countries with available data: Lao People’s Democratic Republic; Myanmar; Thailand; and Viet Nam.

Note: Freight data for certain modes are missing for YHPS YVHK ^H[LY^H`Z YHPS YVHK ^H[LY^H`Z some countries. The totals WPWLSPUL JVHZ[HSZOPWWPUN WPWLSPUL JVHZ[HSZOPWWPUN for Japan and Republic of Korea are only for road, rail, and coastal shipping. For member countries of the :6<;/,(:;(:0(:<)9,.065 Association of Southeast Asian Nations (ASEAN), air transport data are missing for Thailand and Viet Nam. Road transport data are missing for Indonesia.

Sources: ESCAP calculation based on OECD online database (East and North- East Asia and North and Central Asia) (https://data. oecd.org/) and ASEAN- Japan Transport Partnership: AJTP Information Center (/ www.ajtpweb.org/statistics) ( accessed 24 December 2015). YHPS YVHK ^H[LY^H`Z HPY BOX 1.1. DECLINING OIL PRICES — A THREAT AND AN OPPORTUNITY ,QWKH$VLDQDQG3DFL¾FUHJLRQPDULWLPH WUDQVSRUWSOD\VDQLPSRUWDQWUROHLQUHJLRQDO The recent collapse in global oil prices has had an uneven impact on WUDGH+RZHYHULWVKRXOGEHQRWHGWKDWWKH countries in the Asia-Pacific region, providing major opportunities for UHJLRQKDVODQGORFNHGFRXQWULHV)RXU some while putting others under severe budgetary strain. Oil-exporting RIWKHPDUHDPRQJWKHOHDVWGHYHORSHG countries are expected to reduce government spending as the value of their oil exports falls: Malaysia and the Russian Federation, for example, set FRXQWULHVDQGWKHUHVWDUHVWLOOHFRQRPLHV their budgets based on expectations of oil prices of $100 per barrel, and LQWUDQVLWLRQWKDWGRQRWKDYHGLUHFWDFFHVV have since been forced to trim them. This is likely to affect infrastructure WRPDULWLPHWUDQVSRUW6)RUODQGORFNHG spending, including on transport; the Government of the Russian Federation GHYHORSLQJFRXQWULHVFURVVERUGHUWUDGH has already suggested social spending will be prioritized and long-term RIWHQFRPPDQGVWKHGRPLQDQWVKDUH,QGLD investment in improving transport connections will be cut. IRUH[DPSOHDFFRXQWVIRUSHUFHQWRI With the value of their exports falling, pressure has been placed on the H[SRUWVIURP1HSDO(IIRUWVWRLPSURYH currencies of oil-exporting countries. The currencies of Malaysia and the WUDQVSRUWLQIUDVWUXFWXUHLQERWKODQGORFNHG Russian Federation have depreciated considerably, despite efforts to GHYHORSLQJFRXQWULHVDQGWKHLUWUDQVLW support the currency, which include spending more than 20 per cent of their respective foreign currency reserves. Kazakhstan, which operates a fixed QHLJKERXUVZLOOHQDEOHODQGORFNHGFRXQWULHV exchange rate system, has been forced to devalue its currency. Currency WRUHDFKPDULWLPHSRUWVLQRWKHUFRXQWULHVDW depreciation could adversely affect the ability of countries to finance future ORZHUFRVWVDQGLQIDVWHUWLPHVDQGWKHUHE\ transport infrastructure projects, as their ability to enter foreign currency DOORZWKHPWRGLYHUVLI\WKHLULPSRUWDQG debt markets becomes restricted. H[SRUWPDUNHWV/DQGWUDQVSRUWVWLOOSOD\VDQ On the other hand, the fall in oil prices could have positive effects on LPSRUWDQWUROHLQFRQQHFWLQJWKHVHFRXQWULHV oil-importing countries, boosting both manufacturing and domestic WRWKHVHD$PRQJWKHRSWLRQVIRUODQG consumption; this, in turn, is likely to increase transport demand and activities. WUDQVSRUWUDLOZD\VKDYHSURYHQWREHWKH Furthermore, many oil-importing countries in the Asia-Pacific region, PRVWHFRQRPLFDO such as India and Indonesia, have significant fuel subsidy programmes. The reduction or removal of subsidies releases budgetary resources, which, in turn, could be invested in infrastructure and development. In that 7KHQHHGIRULQWUDUHJLRQDOFRQQHFWLYLW\LV regard, India recently pledged to reallocate funds towards infrastructure KLJKOLJKWHGWKURXJKWKHLQFUHDVLQJVKDUHRI investment. LQWUDUHJLRQDOWUDGH+RZHYHUGXHWRGLIIHUHQW JHRJUDSKLFDOFRQGLWLRQVLQIUDVWUXFWXUH ULVNLQKHDYLO\GHSHQGLQJRQDOLPLWHGQXPEHU VWDWXVHVDQGWUDGHSDWWHUQVWKHGHPDQGIRU RIFRPPRGLWLHVIRUUHYHQXHLVGHPRQVWUDWHGE\ WUDQVSRUWGLIIHUVIRUHDFKLQWHUVXEUHJLRQDO WKHGDPDJLQJHIIHFWVRIWKHGURSLQJOREDORLO WUDGLQJSDLUGHSHQGLQJPDLQO\RQWKH SULFHV VHH%R[ DYDLODELOLW\RIDVHUYLFHDQGLWVHI¾FLHQF\DV ZHOODVRQWUDQVSRUWFRVW $WWKHUHJLRQDOOHYHOWKH5HYLHZRI 0DULWLPH7UDQVSRUWSXEOLVKHGE\WKH &RPSUHKHQVLYHIUHLJKWGDWDDUHVFDUFH7KLV 8QLWHG1DWLRQV&RQIHUHQFHRQ7UDGHDQG VHFWLRQUHYLHZVIUHLJKWWUDQVSRUWLQWHQVLW\ 'HYHORSPHQW 81&7$' VKRZVWKDWLQ LQVXEUHJLRQVEDVHGRQDYDLODEOHGDWD VHDERUQHWUDGHYROXPHLQ$VLDZDVELOOLRQ )LJXUHVKRZVWKDWLQWKH(DVWDQG1RUWK WRQQHVORDGHGZKLFKLVQHDUO\SHUFHQWRI (DVW$VLDVXEUHJLRQODQGWUDQVSRUWLVWKH WKHWRWDOJOREDO¾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¾JXUH 0DULWLPH WUDQVSRUWDQGLWVFRQQHFWLYLW\KDYHLPSRUWDQW UROHVWRSOD\LQKHOSLQJWKHUHJLRQPHHWWKH LQFUHDVLQJGHPDQGIRUWUDQVSRUW Figure 1.3 Shipping throughput in top 20 Asian ports in 2014

( 1,000,000 TEU ) 40

. Dalian, China Tokyo, Japan Tokyo, Tianjin, China Ningbo, China Xiamen, China Yingkou, China Yingkou, Qingdao, China Shanghai, China Shenzhen, China Province of China Province Hong Kong, China Guangzhou, China Kaohsiung, Taiwan Port Klang, Malaysia Lianyunggang, China Singapore, Singapore Singapore, Tanjung Priok, Indonesia Tanjung Laern Chabang, Thailand Busan, Republic of Korea Source: Lloyd’s List Ho Chi Minh City, Viet Nam Viet Ho Chi Minh City, Intelligence (2015). Port Tanjung Pelepas, Malaysia Port Tanjung Banana Republic Images / Shutterstock.com

BOX 1.2: SHIPPING THROUGHPUT IN THE TOP 20 ASIAN PORTS 3. RECENT INITIATIVES Despite the slowdown in growth in the world’s manufacturing heartland, RELATED TO Asia still dominates the list of the top 100 container ports in the world. There are 48 Asian ports on the list of the Containerisation International Top 100 TRANSPORT Ports. Chinese ports, including Hong Kong, China and those in Taiwan Province of China, continue to dominate the list, making up no fewer than a. Selected initiatives promoting 12 of the top 20 Asian ports. The key results are presented in figure 1 (a) and (b). regional integration and connectivity Shanghai held the top spot for the fifth consecutive year, with volumes 7KHJURZWKLQWKHYROXPHDQGVKDUHRI climbing 5 per cent, from 33.6m twenty-foot equivalent units (teu) to 35.3m LQWUDUHJLRQDOWUDGHLQUHFHQW\HDUVKDV teu. The container port benefited greatly from a surge in transshipment traffic heading up the Yangtze River, the country’s main economic artery, GLFWDWHGWKHQHHGIRUEHWWHULQWUDUHJLRQDO which stretches for thousands of miles. Singapore retained second place WUDQVSRUWV\VWHPV,QUHVSRQVHWRWKLV after reporting another successful year in 2014, with volumes increasing 5.1 JRYHUQPHQWVDUHLQYHVWLQJLQWKRVHOLQNV per cent to 33.9m teu. Outside of Singapore, other ports in South-East Asia, PRUHWKDQHYHUEHIRUH$ZLGHUDQJHRI namely Ho Chi Minh City in Viet Nam, Port Tanjung Pelepas in Malaysia and Port Klang, and Laem Chabang port in Thailand were experiencing UHJLRQDODQGPXOWLODWHUDORUJDQL]DWLRQVDUH increasing volume. The transshipment hub for the Republic of China, DOVRFRPLQJWRJHWKHUWRFRQVROLGDWHHIIRUWV Busan, and the Tokyo port, also make the list. The geographical distribution WRLPSURYHWUDQVSRUWQHWZRUNV7KLVVHFWLRQ of the region’s top 20 ports is shown in figure 1.7. GHVFULEHVVHOHFWHGUHJLRQDODQGVXEUHJLRQDO Source: Lloyd’s List Intelligence (2015) LQLWLDWLYHVZKLFKFRPSOHPHQWWKHHIIRUWVRI (6&$3WRLPSURYHUHJLRQDOFRQQHFWLYLW\ 7KHGDWDFRPSLOHGIRUWKH6RXWK(DVW$VLD DQG¾QDQFLQJPHFKDQLVPVWKDWKDYHEHHQ VXEUHJLRQLVVOLJKWO\GLIIHUHQWDVLWDOVR HVWDEOLVKHGWRLQFUHDVHLQYHVWPHQWLQQHZ FRQWDLQVGDWDRQPDULWLPHWUDQVSRUWZKLFK WUDQVSRUWLQIUDVWUXFWXUH)XUWKHUGHWDLOVRQ WKHRWKHUVODFN7KH¾JXUHVKRZVDVOLJKWO\ VRPHRIWKHVHLQLWLDWLYHVDUHJLYHQLQSDUW GLIIHUHQWSDWWHUQIRUWKH6RXWK(DVW$VLD ,,,RIWKLVYROXPHZKLFKFRQWDLQVDUHYLHZ VXEUHJLRQ:KLOHWKHVKDUHRIODQGWUDQVSRUW RIWKHFXUUHQWVWDWXVRIWKH$VLDQ+LJKZD\ LVVWLOOSURPLQHQWUDLOWUDQVSRUWKDVDPXFK 7UDQV$VLDQ5DLOZD\DQG'U\3RUWQHWZRUNV VPDOOHUUROHLQWKLVVXEUHJLRQZKHQFRPSDUHG DVZHOODVUHFHQWGHYHORSPHQWVLQRWKHUPDMRU WR(DVWDQG1RUWK(DVW$VLDDQG1RUWKDQG DUHDVRIWKH(6&$3VHFUHWDULDWµVZRUN &HQWUDO$VLD

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Endnotes

1 ESCAP (2015a). 2 ESCAP (2015a). 3 ESCAP (2015b), chap. 1. 4 United Nations Conference on Trade and Development (UNCTAD) (2015). 5 Lloyd’s List Intelligence (2015). 6 The least developed landlocked countries of Asia are Afghanistan, Bhutan, the Lao People’s Democratic Republic and Nepal. The landlocked countries with economies in transition are Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan, Turkmenistan and Uzbekistan. 7 See www.unescap.org/sites/default/ﬁles/ connectivity%20policy%20dialogue%20

highlights%20final.pdf 8 Asia-Pacific Economic Cooperation, 2014 Leaders Declaration, annex D. Available from http://apec.org/Meeting-Papers/ Leaders-Declarations/2014/2014_aelm.aspx. 9 Park Geun-hye, President of the Republic of Korea President Park Geun-hye, in remarks made on 18 October 2013 at the 2013 International Conference on Global Cooperation in the Era of Eurasia. Available from www.korea.net/Government/Briefing- Room/Presidential-Speeches/ view?articleId=114334. 10 SRX is a rebranding and expansion of the old

Trans-Korea Railway concept. 11 Ashgar (2014). 12 South Asian Association for Regional Cooperation, Kathmandu Declaration. Available from www.saarc-sec.org/userfiles/ Summit%20Declarations/Kathmandu- 18thSummit26-27Nov2013.pdf. 13 Pacific Islands Forum, The Framework for Pacific Regionalism, p. 3. Available from http://www.forumsec.org.fj/pages.cfm/ strategic-partnerships-coordination/framework- for-pacific-regionalism/. 14 ADB and ADBI (2009). 15 ESCAP (2014b). 16 ESCAP (2015b). 17 PriceWaterhouseCooper (2014). 18 Asian Infrastructure Investment Bank (AIIB). 19 Reuters (2015). 20 ADB (2014a). 21 See www.theprif.org/. 22 See. www.worldbank.org/en/programs/global- Infrastructure-facility#1 23 Carsten and Blanchard (2014). 24 English.new.cn (2015).

PART II TRANSPORT AND SUSTAINABLE PART DEVELOPMENT TRANSPORT AND SUSTAINABLE DEVELOPMENT 1. INTRODUCTION II Given the success of the Millennium Development Goals in achieving a decline in global poverty and health problems by 2015, a new set of goals have been drawn up to build upon those achievements while addressing their perceved gaps and accounting for the world’s growing population. The Sustainable Development Goals deal with the challenges facing a new generation and include among its targets a number of key transport targets.

To maintain and foster the positive growth exhibited across Asia and the Paciﬁc, transport is of paramount importance as the region increasingly recognizes the need to embrace more sustainable growth. Policymakers are becoming increasingly aware of the need to integrate the three pillars of sustainable development — economic, social and environment — into their transport planning and policies. Understanding the ways in which those three pillars are interlinked in this new era will help to ensure that these policies make transport more, and not less, sustainable. Rising per capita incomes have resulted in a surge in the number of cars and motorcycles in both rural and urban areas. The resulting scourge of road traffic crashes — the main cause of death globally and the leading cause of death among the young — and their associated injuries must be tackled to mitigate the unacceptable effects on both the families of those involved and on the economies of the region's countries. Meanwhile, the population in Asia and the Paciﬁc is ageing, presenting a new set of transport challenges for the region's governments.

Ensuring the safety and long-term sustainability of transport options is essential for the current and future movement of people, goods, labour, resources, and products for consumers and for producers. With the transport sector accounting for almost a quarter of global carbon dioxide

(CO2) emissions in 2012 and the Commission for Global Road Safety referring to the deaths and injuries resulting from road traffic crashes as a “growing public health epidemic”, the arrival of the Sustainable Development Goals could not be more timely. The need to address the sustainability of the region to cater for the future health of its citizens while also providing for economic progression and social equity has never been more pressing.

Making the right choices is critical. Part II of this review presents the options available to policymakers seeking to improve the social, environmental and economic outlook of their citizens. 2.TRANSPORT AND improve social equity, health, resilience of cities, urban-rural linkages and productivity THE THREE PILLARS of rural areas”.1 More recently, in September OF SUSTAINABLE 2015, the United Nations Sustainable DEVELOPMENT Development Summit adopted 17 new Sustainable Development Goals, successors If planned and managed in a sustainable to the Millennium Development Goals, way, transport can improve the quality of life ZKLFKKDGDVLJQL¾FDQWHIIHFWRQWKHKHDOWK for people all over the world. In 2012, the and wellbeing of the world’s citizens. The United Nations Conference on Sustainable Sustainable Development Goals will come Development recognized “the importance of into effect on January 1 2016; four out of the WKHHI¾FLHQWPRYHPHQWRISHRSOHDQGJRRGV *RDOVLQFOXGHWDUJHWVWKDWPDNHVSHFL¾F and access to environmentally sound, safe reference to transport and infrastructure (table and affordable transportation as a means to 2.1), a development that recognizes the vital role in progressive, sustainable and long-term development.2

Table 2.1 Goals and targets relating directly to transport Source: General Assembly under the Sustainable Development Goal resolution 70/1.

SUSTAINABLE TARGET RELATED TO DEVELOPMENT GOAL TRANSPORT AND INFRASTRUCTURE

GOAL 2. Increase investment, including through enhanced international End hunger, achieve food security and cooperation, in rural infrastructure, agricultural research and improved nutrition and promote extension services, technology development and plant and livestock sustainable agriculture gene banks in order to enhance agricultural productive capacity in developing countries, in particular least developed countries

GOAL 3. By 2020, halve the number of global deaths and injuries from road Ensure healthy lives and promote well- [YHMÄJHJJPKLU[Z being for all at all ages

GOAL 9. Develop quality, reliable, sustainable and resilient infrastructure, Build resilient infrastructure, promote including regional and transborder infrastructure, to support economic inclusive and sustainable industrialization development and human well-being, with a focus on affordable and and foster innovation equitable access for all.

Facilitate sustainable and resilient infrastructure KL]LSVWTLU[PUKL]LSVWPUNJV\U[YPLZ[OYV\NOLUOHUJLKÄUHUJPHS technological and technical support to African countries, least developed countries, landlocked developing countries and small island developing States

GOAL 11. By 2030, provide access to safe, affordable, accessible and Make cities and human settlements sustainable transport systems for all, improving road safety, notably inclusive, safe, resilient, and sustainable by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities and older persons

Governments now face the challenging expected to move into cities. As of 2012, it task of designing effective policies to help was estimated that 46 per cent of the region’s achieve those targets. Given the tremendous population lived in urban areas.5 Between 2010 diversity of the region, each government will and 2020, the urban population across the KDYHWRWDNHLQWRFRQVLGHUDWLRQWKHVSHFL¾F ESCAP region is expected to grow by some 455 circumstances of their country. Nevertheless, million people, which equates to a 25 per cent there are several common social, economic rise in the urban population within a decade.6 and environmental issues that governments This has contributed to the proliferation of must address in order to ensure that current motorcycles and cars in Asian cities. and future transport systems are sustainable and inclusive. Rapid motorization has resulted in serious congestion, which has been estimated to cost a. Growing demand for Asian economies 2-5 per cent of GDP every transport from economic year due to lost time and higher transport growth and demographic trends costs.77KRXJKGLI¾FXOWWRTXDQWLI\EHFDXVH As shown in part I, the region has, on average, RILQVXI¾FLHQWGDWDDVWXG\FRQGXFWHGLQWKH enjoyed a positive growth trajectory over the Republic of Korea found that the costs of past decade. Increases in per-capita income congestion have been rising by more than have historically been strongly associated 8 per cent per annum since the beginning 8 with a rise in demand for transportation, most of 2000. As urbanization trends continue, notably for road vehicles and motorcycles. policymakers need to reconcile the challenge Within developing countries in the ESCAP of developing long-term transport policies for region, per capita income rose, on average, cities that are transforming rapidly in the short from $417 in 1973 to $2,834 in 2013 (as term (see also part III, chapter 2 for the issues measured in US 2005 dollars),3 fuelling on urban transport), while also seeking to the strong growth in demand witnessed for minimize pollution and its effects both locally motorcycles and cars, particularly in urban and globally. areas. Another long-term demographic change in the While motorization rates generally rise in ESCAP region is its ageing population. It is line with levels of disposable income, the SURMHFWHGWKDWWKHHOGHUO\SRSXODWLRQGH¾QHG relationship between income growth and as those aged 65 or older, will grow by 41 per vehicle ownership is not necessarily so linear. cent between 2012 and 2022, from 315 million 9 One study found rates of ownership to be to 445 million. As the transport requirements growing slowly at the lowest levels of per- of the elderly differ to those of the rest of capita income, about twice as fast as income the population, improvements in physical growth at middle-income levels, in line with access to transport infrastructure, as well as income growth at higher income levels and the adaptation of services for less-mobile then reaching saturation at the highest levels populations, will be needed. Recognizing of income.4 According to this study, China will this trend, the Governments of Japan and have 269 vehicles per 1,000 people by 2030 — the Republic of Korea have already enacted comparable to the vehicle ownership levels of legislation to make transport more accessible Japan and Western Europe in the early 1970s. for the elderly and people with disabilities by Vehicle ownership in India and Indonesia is introducing improvements, such as step-free also projected to grow nearly twice as fast as facilities in major rail and bus stations and sea 10 per-capita income, though not as quickly as in and air terminals. China. The rapid expansion of travel and tourism With the region’s economies shifting towards services in the region along with increasing industrial and service-oriented models, a number of passengers travelling by air are growing proportion of their populations are also linked to this rise in disposable incomes. ,QDLUFDUULHUVLQWKH$VLD3DFL¾F As a result of its high level of fossil fuel region recorded an increase of 5.8 per cent consumption, the transport sector accounted in passenger numbers on the previous year, for almost a quarter of total global carbon

and by 2034, the International Air Transport dioxide (CO2) emissions in 2012. In the Association (IATA) expects that nearly half of ESCAP region, road transport produces all air travel (some 2.9 billion journeys) will about 1,800 million tonnes out of a total of LQFRUSRUDWHWKH$VLD3DFL¾FUHJLRQ11 approximately 2,150 million tonnes, or 80

per cent of total CO2 emissions, followed by Another indicator of the region’s growth is aviation and rail. Transport emissions also WKDWLQWUDUHJLRQDOWRXULVP¿RZVQRZDFFRXQW include particulate matter (PM), nitrogen for a growing share of the tourism market. oxides (NOx), sulphur oxide (SOx), ozone

As intraregional travel becomes cheaper and (O3) and volatile organic compounds (VOCs), more popular, tourism is expected to become which cause damage not only to human health an increasingly important source of foreign but also to ecosystems and buildings.15 exchange earnings for many countries in the (6&$3UHJLRQSDUWLFXODUO\IRUWKH3DFL¾F Noise pollution often had been often island countries.12 overlooked as an environmental externality, but it is now more widely recognized that b. Environmental externalities continual noise pollution is harmful to physical caused by the transport sector and mental health, particularly for urban According to the International Energy Agency residents living near highways. For example, a (IEA), oil use is increasingly concentrated in 2011 World Health Organization (WHO) study just two sectors: transport and petrochemicals estimated that at least one million healthy life (IEA 2013).13 Within the ESCAP region, road \HDUVDUHORVWHYHU\\HDUIURPWUDI¾FUHODWHG 16 transport consumes approximately 83 per noise in Western Europe. Though similar cent of the petroleum products used by the VWXGLHVDUHQRWDYDLODEOHIRUWKH$VLD3DFL¾F transport sector, with aviation following at 12 region, one study in Malaysia found that SHUFHQWDQGUDLODWSHUFHQW ¾JXUH $V in the Sunway residential area near Kuala noted above, the number of private vehicles /XPSXUUHVLGXDOQRLVHIURPKLJKZD\WUDI¾F in the region is expected to increase as wages was normally in excess of 60 dBA, above the 17 and incomes rise, while road freight transport regulatory ceiling of 55 dBA. is forecast to maintain strong growth through 2035.14

Figure 2.1 Share of energy consumption by mode in Asia-Paciﬁc countries

SHARE OF ENERGY CONSUMPTION BY MODES 2012, ESCAP ( THOUSAND TON OF OIL EQUIVALENT ) Others 1.49% Aviation 12.05%

Rail 3.63%

Road 82.84%

Source: ESCAP (2015c). Residents near international airports also other low-income groups in rural areas (see suffer from annoyance, sleep disturbance part III, chapter 3 for a discussion on issues and increased stress due to the residual related to rural transport). noise of airplane take-offs and landings.18 An increasing number of airports located It should also be noted that depending on in densely populated urban areas are now the topography of the area, other modes subject to night time curfews. According to of transport can be as or more important the International Civil Aviation Organization than road transport. For people living (ICAO), only 15 out of the 241 airports in island countries, such as Indonesia, VXEMHFWWRQLJKW¿LJKWUHVWULFWLRQVDUHORFDWHG Maldives, the Philippines and those in the in Asia.19 3DFL¾FLQWHULVODQGVKLSSLQJLVWKHPDLQ means of transporting goods and people c. Poverty reduction and between islands (see part III, chapter growing inequality 1 for a discussion on the issues related In recent years, research has found that lack WRLQWHULVODQGVKLSSLQJLQWKH3DFL¾F of access to transport services excludes some Air transport is also important for those groups and individuals in Europe and the countries, as well as for people living in United States from participation in economic very remote communities, such as those and social activities.20 Less is known about found in mountainous regions. Meanwhile, the relationship between transport and inland waterways are an important transport social exclusion in Asia, but it is generally resource for people living in delta areas and recognized that people with a low income those living along rivers, canals or lakes. cannot afford to own private vehicles and As governments increasingly concentrate have less transport options than those with on the development of better road systems, higher levels of income. In that regard, the they should not neglect these other modes of persistence of poverty and the widening of transport because of their critical role in the LQFRPHLQHTXDOLW\LQWKH$VLD3DFL¾FUHJLRQ lives of the poor. DVPHDVXUHGE\WKH*LQLFRHI¾FLHQWPHDQV that some societal groups are in danger of d. Road safety becoming even less mobile in the future.21 The rapid increase in the number and severity RIURDGWUDI¾FFUDVKHVKDVOHGWKH&RPPLVVLRQ Another dimension of increasing inequality for Global Road Safety to refer to deaths and is the gap in living standards between people injuries from those events as a “growing public living in urban and rural areas. In most health epidemic”.23 As reported in the Global ORZLQFRPHFRXQWULHVLQWKH$VLD3DFL¾F 6WDWXV5HSRUWRQ5RDG6DIHW\URDGWUDI¾F region, many rural households lack access injuries are the main cause of death globally, to all-season roads; for example, only 39 per and the leading cause of death in young people cent of rural households in Bangladesh and (15-29 year olds). Globally, 90 per cent of road 30 per cent of those in Nepal are believed WUDI¾FGHDWKVRFFXULQORZDQGPLGGOHLQFRPH to have access, while about 40 per cent of countries, yet those countries have just 54 per villages in India are cut off from market cent of the world’s vehicles.24 In the ESCAP centres and the main road network in wet region, more than 733,000 lives were lost to seasons.22 Meanwhile, even those living close WUDI¾FFUDVKHVLQ7KRVHGHDWKVZHUHGXH to roads may not own any form of private to various factors, such as poor quality or poorly vehicle with which to use the road. Given PDLQWDLQHGURDGQHWZRUNVPL[HGWUDI¾FSRRU the importance of road transport in allowing URDGXVHUEHKDYLRXUVOLPLWHGWUDI¾FHQJLQHHULQJ labour mobility as well as access to health H[SHUWLVHODFNRIHQIRUFHPHQWRIWUDI¾F care, education and other social services, regulations and the rapid increase in motorcycle lack of all-season roads and reliable and use.25 affordable transport services exacerbates the disadvantages faced by poor farmers and

Vulnerable road users, such as pedestrians, 3. SHIFTING TO MORE cyclists and motorcyclists, represent some 55 SHUFHQWRIDOOURDGWUDI¾FGHDWKVLQ$VLD26 SUSTAINABLE MODES Many of the poorest income groups are OF TRANSPORT therefore bearing a disproportionate share of In recent years, sustainable transport advocates WKHEXUGHQRIWUDI¾FFUDVKHV)XUWKHUPRUH have promoted the concept of “Avoid-Shift- WUDI¾FFUDVKHVKDYHDZLGHUVRFLDOLPSDFWWKDQ Improve”, or ASI, as the basis for sustainable RQWKHYLFWLPVDORQH,QRQO\WKHSDVW¾YH transport initiatives. The United Nations years, more than 22 million families in the Climate Summit, which was held in September $VLD3DFL¾FUHJLRQKDYHEHHQVXEMHFWHGWR 2014, for example, featured many discussions a death or permanent disability from a road on the need to encourage a shift towards public crash.27 The women of families affected by transport in cities and the need for improved road crashes typically become the caregivers and more sustainable technologies for railways of disabled family members, usually having and electric vehicles.28 The ASI framework can to give up work or school to do so and be summarized as follows: thereby limiting their own chances of leading - Avoid unnecessary transport; SURGXFWLYHDQGIXO¾OOLQJOLYHV,QDGHTXDWHURDG - Shift to more sustainable modes; safety standards are threatening to undo many - Improve transport practices and of the gains made by development efforts in technologies.29 the ESCAP region (see part III, chapter 3 for the issues on road safety).

Sources: Sun and others (2014); Bureau of Transport Figure 2.2 Modal split of passenger transport in Statistics, (2014). 12 major cities in the Asia-Paciﬁc region, 201230

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BOX 2.1 URBAN RAIL NETWORKS IN ASIAN MEGACITIES

One of the main public transportation systems TOP TEN BUSIEST METROS IN THE WORLD used in megacities is the metro, or underground (MILLIONS OF PASSENGERS, 2012) rail transit services. The Asia-Pacific region has CITY ANNUAL PASSENGER TRIPS the longest network in the world, with 4,900 km of track in 50 cities, and has the top six busiest such TOKYO 3 294 networks in terms of total passenger numbers SEOUL 2 467 MOSCOW 2 464 Some cities are considering another alternative to metros or rail transit services. Tehran has both BEIJING 2 460 a metro and a bus rapid transit (BRT) system, SHANGHAI 2 269 which daily provide three million and two million passenger trips, respectively. Bus rapid transit GUANGZHOU 1 841 systems are economical compared to metros and NEW YORK CITY 1 661 subways, and easier to develop and implement. MEXICO CITY 1 609 Similar to metros, they can also handle high passenger volumes and as they use a road PARIS 1 541 designated solely for their use, long travel times HONG KONG 1 482 arising from traffic congestion can be avoided. In part III, Chapter 2 some of the BRT systems being Source: UITP (2014), planned in the ESCAP region are described.

While governments are at different stages DUHKHDYLO\XVHGLQLQPDQ\FRXQWULHV ¾JXUH of implementing measures to avoid 2.3), with rail freight the most prevalent form unnecessary transport and the private sector in Australia, the Russian Federation and in is actively investing in the development of several Central Asian economies. The share of new technologies to reduce emissions from rail freight in the Russian Federation is notably vehicles, the most immediate means of making higher than the share of road freight, with transport more sustainable is to shift demand coal, oil and oil products comprising about to more sustainable modes. 50 per cent of the country’s total rail freight.32 Similarly in Australia, the growth of iron ore $PRQJWKH$VLD3DFL¾FFRXQWULHVDQG and coal exports has fuelled the growth in territories, there are varying degrees to which rail freight transport. These goods currently governments have achieved a shift towards comprise up to 80 per cent of freight carried sustainable transport. While private vehicles along the country’s railways.33 are the dominant transport mode in cities such as Sydney, Taipei and Beijing, rail transport Road freight transport is used extensively in FRPSULVHVDVLJQL¾FDQWVKDUHRIPRUHWKDQ Azerbaijan, India, Japan, Kyrgyzstan, New one-third in Tokyo, Seoul and Osaka (box 2.1 Zealand, the Republic of Korea, Tajikistan, DQG¾JXUH 3XEOLFWUDQVSRUWLQFOXGLQJ Thailand, Turkey and Uzbekistan. In Japan, road and rail, is the dominant mode in cities both road freight and maritime freight such as Hong Kong, Seoul, Mumbai, Tokyo transport are used heavily. In the case of India, and Singapore. Notably, in Shanghai, Osaka road transport overtook rail in the early 1990s and New Delhi, the share of non-motorized and its share of freight transport has been transport is between a 40 and 50 per cent. growing ever since. With a greater level of investment being allocated to the road network The picture is also mixed for the freight in India, the quality of its rail infrastructure has sector. Worldwide, road transport is the most deteriorated, adding to the decline in the share commonly used mode, accounting for some of rail freight being used to transport freight. 34 10,500 billion tonne-kilometres, with sea transport coming in a close second at 9,750 In China, the modal split is more evenly billion tonne-kilometres.31 Rail services also balanced. When the National Trunk Highway

Figure 2.3 Freight transport intensity for selected countries, in million tonne-kilometres, 2013*

Share of freight mode ( million tonne - km ), 2013*

100%

Sources: Multiple sources, 80% including OECD (2015) and national statistics for freight data (in tonne-kilometres); 60% data are not complete for Road freight some countries, but rail and road are the main mode of 40% Rail freight freight transport, hence the Air freight exclusion of other modes of transport would not change 20% Maritime freight the conclusions derived from the graphs. The totals for Inland waterways

Australia, India and Japan are 0% Pipelines only for road and rail. The total for Turkey does not use inland

waterways. India China Japan Turkey Armenia Thailand Australia Tajikstan Viet Nam Viet Mongolia Kyrgyztan Azerbaijan

*For India, Tajikistan, Thailand Uzbekistan Kazakhstan and Viet Nam, 2012 data are New Zealand

used. For the Republic of Republic of Korea Korea, 2011 data are used. Russian Federation

project was proposed, China only had 147 km 4. DETERMINANTS of expressways. This number mushroomed to some 35,000 km of trunk highways at the AND IMPLICATIONS OF completion of the project. The country’s inland MODAL CHOICE FOR waterways and coastal services also play a FREIGHT TRANSPORT VLJQL¾FDQWUROHLQPRYHPHQWRIGRPHVWLF freight. Between 2000 and 2005, the transport Traditionally, the three main determinants of containers by inland waterways grew at of modal choice for shippers have been an annual average rate of 35 per cent, while price, speed and reliability, with the relative the transport of raw materials for industrial importance of each of these factors hinging use – mainly mineral ores and coal – more on the type of products being transported and than tripled during this period on the Yangtze their physical attributes. For example, mineral 35 River. resources, agricultural commodities, such as grains, cotton and sugar, and other heavy The determinants of modal choice differ products are well suited to transportation between passenger and freight transport. As via railways or inland waterways; non-bulk cities account for an increasingly sizeable commodities, which comprise the majority share of energy consumption and emissions, of all commodities, are mainly transported part III chapter 2 gives further details of the domestically via roads. various policy options for shifting urban transport to more sustainable modes. The If time is the critical factor, air transport remainder of this chapter focuses on the naturally remains the mode of choice. A study prospects for modal shift in freight transport. conducted in 2006 comparing the transport costs and transit times for the door-to-door transport of a 40-foot container moving between China and Western Europe, illustrates well the choices business have to make when

Table 2.2 Typical transport costs and transit times for transport between China and Europe

TRANSPORT MODE COSTS ($) TRANSIT TIMES (DAYS) SEA 3 000 28 ROAD 11 000 19 RAIL 7 500 36 Source: United States Chamber of Commerce AIR 45 000 5 (2006).

choosing a freight option (Table 2.2).36 Low- energy consumption of a 40-tonne truck is density, high-value commodities, such as about four times higher than that of a double- electronics, newspapers or perishables, are stack container train carrying the same weight, increasingly being transported by air due to the while smaller trucks consume even more time sensitivity of those products. Perishable energy.38 goods are particularly time sensitive, an H[DPSOHEHLQJWKDWIUHVK¾VKGHOD\HGLQWUDQVLW The distribution of modal shares has a direct by 48 hours in the European Union were found relation to a country’s total level of fossil- to lose between 20-25 per cent of their value.37 fuel consumption, and therefore to its level of greenhouse gas emissions. A case study

7KRXJKVLJQL¾FDQWO\FKHDSHUUDLODQG conducted on the CO2 per tonne-mile of PDULWLPHWUDQVSRUWDUHOHVV¿H[LEOHWKDQ a single container found that air transport road transport because both operate to and emits almost 1,200g of CO2 per tonne-mile, IURP¾[HGSRLQWVVWDWLRQWRVWDWLRQLQWKH followed by trucks at nearly 120g, railways case of railways and port to port in the case at 40g, and shipping at 11g of CO2 per of shipping. Road transport allows delivery tonne-mile.39 directly to the door of the customer, thereby avoiding the need to transfer operations from From the perspective of sustainable transport, road vehicles to other modes of transport. With shipping and railways are clearly less energy- containerization, road transport has become intensive per tonne-mile shipped. The two a crucial link in freight distribution. The use modes may be considered priority modes of trucks is preferred by light industries from LQWHUPRIHQHUJ\HI¾FLHQF\KRZHYHUURDG which the rapid movement of freight in small and air transport also play an important batches is the norm. role in connecting networks and facilitating trade. Table 2.3 summarizes the comparative However, based on broad acceptance that advantages and disadvantages of the different transport emissions have a negative impact transport modes used for freight transport. on the planet, governments are increasingly examining their transport sectors from an In the ESCAP region, the Ministerial environmental perspective, while looking Conference on Infrastructure in 2001 for ways to reduce their carbon footprint, requested members and associate members strengthening the case for modes other to give priority attention to “the formulation, than road transport. Railways and inland development and improvement of integrated waterways have a much lower energy intermodal international transport”. This intensity per mile transported compared to request was further articulated as the long- that of roads. For example, in China, the term regional vision of an international

integrated intermodal transport and logistics Interconnected infrastructure system in the Busan Declaration on Transport The most basic and essential component of 'HYHORSPHQWLQ,WZDVUHDI¾UPHGE\ integration is physical integration. To make the Commission in its resolution 68/4 of 23 modal interchange possible, road, railways, May 2012. This vision is poised to contribute seaports and airports systems must be to achieving sustainable development within interconnected. Interconnected infrastructure the transport sector. also refers to the provision of physical infrastructure that allows and facilitates modal The integrated intermodal transport and interchange. Such facilities may include logistics system optimizes the needs intermodal terminals or dry ports for freight of transporting goods and passengers; transport and transfer points or stations, transit minimizes consumption of energy, land and shelters, parking and ride facilities for passenger other resources; generates low emissions of transport. greenhouse gases, ozone depleting substances and other pollutants; and minimizes the Utilization of two or more modes of transport adverse social impacts arising from transport The system must utilize, based on comparative operations. It is an intermodal/multimodal advantages, the different modes of transport network of well-balanced, designed, built, through shifting from one, especially road maintained and interconnected highways, transport, to more environmentally friendly railways, inland waterways, sea ports, river mode(s) of transport. Rail transport is a ports, airports or dry ports which: considerable potential mode in this region as a number of countries have extensive railway a. At the city level, provides motorized and networks including, among others, China, non-motorized transport systems that are safe, India and the Russian Federation. Improving HI¾FLHQWUHOLDEOHIUHTXHQWDIIRUGDEOHDQG physical rail infrastructure and operational include integrating public and private systems HI¾FLHQF\RIUDLOVHUYLFHVDQGLQWURGXFLQJ and as a result, offer rapid transport times competitive pricing are major policy measures and access to all groups, including the poor, WKDWFDQLQ¿XHQFHPRGDOVKLIWWRZDUGV women, children and people with disabilities; increased use of rail.40 b. At the national level, provides access For passenger transport, non-motorized transport to and between rural areas and the deeper (NMT), such as cycling and walking, are hinterlands, and is well served an integrated considered the most environmentally friendly LQWHUFLW\WUDQVSRUWWKDWLVVDIHHI¾FLHQW mode of transport as it consumes zero fossil fuel reliable, frequent and , affordable; and causes no emission. Clearly, public transport and infrastructure for NMT need to be improved c. At the regional level has capacities to encourage passengers to give up private DSSURSULDWHWRWUDI¾FYROXPHVallowing vehicles and use public transport. VDIHHI¾FLHQWVPRRWK¿RZRISHRSOHJRRGV and transport means between and among (f¾cient operations at modal intercKanJe countries of the region and across the borders point witK minimal cost and time inYolYed RILWVVXEUHJLRQVZLWKDQHI¾FLHQWDQGXVHU Modal change can happen only if it meets friendly transport facilitation regime, allowing VKLSSHUVµORJLVWLFDOUHTXLUHPHQWVDQG¾WVLQWR unhindered and safe movement of people, their logistical chain requirements. Modal goods and transport means with other regions. choice of individual shippers is largely determined by three factors, namely transport Such a system requires balanced development cost, transport quality (including safety, of different transport modes with the following security, speed, frequency, reliability and key aspects: accessibility) and habits.41 Thus, cost and time spent at modal change points should be kept at the minimum level and must not

Table 2.3 Comparative advantages and disadvantages of different transport modes

COMPARATIVE ENERGY CO AIR ADVANTAGE / COST SPEED RELIABILITY FLEXIBILITY ACCESS CONGESTION ACCIDENT 2 DISADVANTAGE INTENSITY EMISSION POLLUTION

Moderate Moderate Very good High High High High High High High

Electric- Low Moderate Good Low Medium Minimal Low Low Low lowest Diesel - High

Low Slow Good Low Low Minimal Low Low Low Low

High Very High Very good Medium Low Minimal Low High High Low

exceed savings gained from shifting to other intermodal transport and logistics system. The modes, otherwise there will be no economic existing conventions on international transport incentive for a transport operator to use of goods focus on unimodal transport, such as intermodal transport. the United Nations Convention on the Carriage of Goods by Sea (Hamburg, 31 March 1978). In addition to integrating physical transport In the case of multimodal transport, despite infrastructure integration, formalized efforts to push forward the United Nations arrangements must be made regarding Convention on International Multimodal the operation and facilitation of the Transport of Goods, 1980, the Convention modal interchange. At the national level, failed to receive the required number of professional capacity in terms of human UDWL¾FDWLRQVWRHQWHULQWRIRUFH resources must be made to support the GHYHORSPHQWRIHI¾FLHQWODQG URDGUDLO DQG Use of new tecKnoloJ\ to enKance capacit\ land-sea intermodal transport and logistics. and operations There is an inherent complexity tied to an Uninterruptedfacilitated Eorder crossinJ integrated intermodal transport and logistics case of international freiJKt transport system, as it is multifaceted in nature and At the regional level, the need to promote a involves multiple operators from various harmonized legal regime for cross-border and transport modes. Lack of information transit transport across the region is important. connectivity among those multiple operators Regional common facilitation frameworks can potentially serve as obstacles in DVZHOODVVLPSOL¾FDWLRQDQGKDUPRQL]DWLRQ developing a smooth and transparent supply of transport documentation along all routes chain. Transport and logistics operators and across the region will yield immediate operating in an integrated intermodal transport EHQH¾WVLQWHUPVRIHI¾FLHQF\LQWLPHFRVWDQG system require full access to real-time data reliability. DQGHIIHFWLYHDQGHI¾FLHQWLQIRUPDWLRQ connectivity. In the context of passenger A uniform legal framework for integrated transport, intelligent transport systems (ITS), intermodal transport and logistics system for such as multimodal travel information and the region is also required. At the regional smart ticketing can be promoted and deployed and international levels, there is no legal WRLPSURYHHI¾FLHQF\DQGHQFRXUDJHDPRGDO framework regime in force that’s particularly shift. addresses the nature of an integrated

5. POLICIES TO 7KHVHVHUYLFHVFRQWULEXWHVLJQL¾FDQWO\WRWKH accessibility and logistics connectivity of PROMOTE INTERMODAL landlocked countries, particularly in Central TRANSPORT Asia. Some recently launched services are NETWORKS described in more detail in box 2.2.

To save on fuel consumption, reduce pollution b. Promoting intermodal transport networks and cut CO2 emissions, modal shifts towards more sustainable modes of transport are a To counter the dominance of the road sector in particularly pressing issue for countries with freight markets, several ESCAP member States DKLJKLQWHQVLW\RIURDGWUDI¾F7RHQFRXUDJH are implementing policies that encourage such shifts, policymakers have to realign the private sector to make greater use of their transport policies and strategies in an intermodal transport. In the United States, the integrated manner, taking into account the Department of Transport has initiated the use effects of policy changes on other aspects of RIZDWHUERUQHWUDI¾FWRDOOHYLDWHWKHGHQVLW\RI sustainable development. Some governments URDGKDXODJHWUDI¾FDQGWKHZHDUIRUFHGXSRQ are already taking steps towards a modal shift the highway network through the America’s in freight transport, prompting the emergence Marine Highway Corridors initiative. of a number of promising trends. Similarly, many countries in Asia have promoted a comprehensive transport policy a. Encouraging the use of SODQE\WDNLQJVLJQL¾FDQWVWHSVWRZDUGVWKH railways for long-distance promotion of intermodal transport networks. freight Boxes 2.3 to 2.5 show the transport policies of China, India and Thailand. In the ESCAP Review of Developments in 7UDQVSRUWLQ$VLDDQGWKH3DFL¾F , there ,QWHUPRGDOWUDQVSRUWE\GH¾QLWLRQLQYROYHV is a discussion on some of the reasons why the transshipment of goods from one mode a modal shift to the railways was moving to another. This transshipment may incur slowly in the ESCAP region.42 One reason was additional costs and time, which, in some because regional railways were not viewed by cases, will discourage shippers from choosing shippers as one continuous, reliable transport multi-modal routes. To incentivize modal system, but rather as a conglomerate of shift, the transport and logistics system should disparate parts. In recent years, railways have VXSSRUWWKHHI¾FLHQWDQGUHOLDEOHPRYHPHQW been countering this perception by establishing of cargo throughout. In that regard, countries ORQJGLVWDQFHIUHLJKWURXWHVZLWK¾[HG in the region need to develop intermodal schedules and guaranteed times. facilities, such as dry ports, and implement concrete measures to facilitate trade and For example, since the introduction of the transport processes. Recent progress in these Leipzig – Shenyang route by BMW in 2010, areas is described in more detail in part III, UDLOZD\VKDYHSURYHQWREHDQHI¾FLHQWDQG chapter 1. reliable alternative mode of transport within the trans-Eurasia logistics network. Along this route, rail transport is two times faster than sea transport and half of the cost of air cargo, in addition to being lower on energy consumption and emissions.43 Newly introduced services focus on the “east-west interregions” connection, namely East Asia to Europe, and the “north-south intraregion” connection, which connects Central Asia to ports situated in the Persian Gulf and the Arabian Sea.

BOX 2.2 LONG-DISTANCE RAIL SERVICES LINKING EAST ASIA AND EUROPE

YIWU, CHINA – MADRID, SPAIN trip. Significant savings in transit time have been achieved through close Dubbed the “21st century Silk Road”, this service cooperation with the Transport Development Group, a Russian customs started out in November 2014 as the first direct representative body: With the introduction of electronic documents and a rail link between Yiwu, China and Madrid, Spain. new software package, border crossings have been streamlined to only Covering more than 13,000 km, this route has two hours. become the longest freight rail link in the world. The train takes three weeks to cross China, JAPAN – EUROPE Kazakhstan, the Russian Federation, Belarus, In October 2014, DHL introduced an inter-modal service connecting Poland, Germany and France to reach Spain, Japan to Europe, using rail transport as its principal mode. Cargo is picked compared to the six weeks it would take by up anywhere in Japan by truck, loaded onto 40-foot containers and then sea. Although the locomotives have to be moved to one of four major ports: Tokyo, Nagoya, Osaka or Hakata. changed every 800 km and transported freight Containers are then transported to China by sea and onwards to Europe has to be transshipped three times because by rail. According to DHL, this new service cuts freight costs by up to 85 per of incompatible gauge sizes, rail transport is cent compared to air freight, and reduces delivery time by half compared considered by many to be less expensive, more to using solely ocean freight, down to between 10-21 days. environmentally friendly and faster than maritime transport for this specific route. YUNNAN – CENTRAL EUROPE In July 2015, the first Yunnan – Central Europe international freight train SUZHOU, CHINA – WARSAW, POLAND departed from the Wangjiaying Container Center in Kunming, China, for The first train service was introduced by the Far Rotterdam in the Netherlands. According to local newspapers, the train East Land Bridge Ltd. in September 2013. Its takes only 15 days, making it an attractive option not only for Chinese path takes it from Suzhou in China through the shippers but also for countries in South-East Asia that have transport links Russian Federation and Belarus, to Warsaw. to Kunming. The first train carried 100 containers of Yunnan coffee, an As can be seen in figure 2.4, the entire journey important export commodity of the area. takes only 14 days. Due to increasing demand, in June 2014, the frequency of service grew from Sources: Agence France-Presse (2014); China DHL (2014); its initial two times per month to a once weekly Russian Railway Logistics (2013) ; Shujuan (2015).

Source: See http://felb. Figure 2.4 Suzhou – Warsaw world/transit-time. routing transit time

PROCESS TIMELINE -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Releasing empty containers

Trucking from depot to the loading place

Export customs clearance procedure

Collecting documents and issuing railway bill

Train departure exit Suzhou

Transit China

Adapting way bill to Russian documentation

Border crossing: Manzhouli/Zabaikalsk

Train departure exit Zabaikalsk

Transit in Russia

Chaging way bill from SMGS to CIM

Border crossing: Brest/Malaszewicze

(YYP]HSH[ÄUHS[LYTPUHSPU>HYZaH^H

BOX 2.3 DEVELOPMENT OF AN INTEGRATED INTERMODAL c. Employing intelligent TRANSPORT SYSTEM IN SUPPORT OF SUSTAINABLE transport systems for “smarter” DEVELOPMENT IN CHINA freight distribution In their simplest form, ITS represents any 1. LONG-TERM DEVELOPMENT STRATEGY In its ninth Five-Year Plan (1995 to 2000), China set out to accelerate the technology applied to the transport sector development of an integrated transport system to form a number of east- in order to transfer information between west and north-south corridors with high transport capacity. This plan laid transport systems, vehicles and users. More out a transport strategy, which made the integration of transport corridors, main hubs and intermodal systems a priority. The goal of achieving recently, ITS have focused on information sustainable development in the integrated transport system was stipulated and communication technologies that connect in the following Five-Year Plan for the years 2001 to 2005, with market forces vehicles and infrastructure, as well as vehicles designated as the guiding force for achieving sustainability in setting up of to other vehicles. Wireless communications, an intelligent, integrated and high-speed passenger and freight transport system. computational technologies encompassing vehicles and sensing technologies, including The plan for the proceeding five years stated its objective as being to build video detection and loop detection, are some of a “convenient, smooth, efficient and safe integrated transport system” that would necessitate coordinated planning, the rationalized distribution the technologies that gather data from vehicles of transport infrastructure and the inter-connection of various modes of and transmit them to servers, from which they transport. As a result of this rationale, and in what essentially steered the are processed and fed back into the system. country’s transport plans for its twelfth Five-Year Plan (2011 to 2015), the The application of ITS has become more Medium- and Long-Term Development Plan of the Integrated Transport Network was drawn up in 2007 with the aim to complete 42 national widespread in freight logistics and transport transport hubs and their connecting five east-west and five north-south services as the tracking and tracing of cargo corridors, totalling 4.9 million km in length. across international supply chains has become 2. COORDINATED PLANNING OF THE INTEGRATED an integral part of services offered by logistics INTERMODAL TRANSPORT NETWORK companies. The use of ITS also allows The 2007 Medium- and Long-Term Development Plan for the Integrated truck drivers to access real-time information Transport Network outlined the action plan for China for the construction of RQWUDI¾FFRQGLWLRQVDOORZLQJWKHPWR integrated transport corridors and hubs. Each integrated transport corridor uses at least two modes of transport to form a network of routes between reduce time and fuel wasted in congestion. the country’s regional economic centres and its important industrial or Furthermore, electronic pricing and payment energy production bases. The country’s national integrated transport hubs systems are reducing the time spent at include all of its important seaports, airports, railway and highway hubs. In the plan there are also: toll booths. Chapter 1 of part III provides further information on the development of Five north-south trunk corridors: North-South Corridor along the Coast; “e-logistics” in the ESCAP region. Beijing-Shanghai Corridor; Manzhouli-Hong Kong/Macao/Taiwan Province of China Corridor; Baotou-Guangzhou Corridor; and Linhe-Fangchen Port Corridor; and

Five east-west trunk corridors: Northwest Corridor to the Sea; Qingdao- Lhasa Corridor; Landbridge Corridor; Corridor along the Changjiang River; and Shanghai-Ruili Corridor.

3. RESTRUCTURING OF NATIONAL MANAGEMENT SYSTEM FOR TRANSPORT Previously, transport in China was managed by many different agencies in a sectoral approach. These agencies were the Ministry of Railways; the Civil Aviation Administration; the Ministry of Communications for highways and waterway; city governments; and the Ministry of Construction for urban transport. In 2008, China established the Ministry of Transport, to which it allocated the former agencies’ planning, policy and standards responsibilities for highways, waterways and aviation.

Further restructuring in 2013 resulted in the Ministry of Transport also being given jurisdiction over the country’s railways, its urban transport and postal services, integrating the country’s transport management processes all under one roof.

Sources: China, (2008); China (2010); China (2011); China (2012); China (2013); China (2014), China’s Institutional Restructuring Plan (2008) _— 11th National People’s Congress.

BOX 2.4 TRANSPORT POLICY OF INDIA Freeimages.com

In India, there is an urgent need to expand existing transport strategy for the years 2012-2032, taking the country from the network capacity to meet rapidly growing passenger and start of its twelfth Five-Year Plan up to the end of its fifteenth freight demands. To significantly improve the network's overall such plan. Many infrastructure developments are planned, such productivity and efficiency, it is essential that future development as the Diamond Quadrilateral Network of High Speed Railways, be aimed at better integrating transport modes. which will connect metropolitan areas to regional townships. To promote shipping, the Government plans to subsidize the Enhancing intermodal connectivity in India presents several shipment of bulk and containerized cargo, and to develop an challenges. Roads are currently the dominant mode of online portal run by the National Informatics Centre to automate transportation, carrying almost 90 per cent of the country’s the process of subsidization. passenger traffic and 65 per cent of its freight.1 It is estimated that for 2016–2017, the modal shares of rail and road in total freight A prime example of the Government’s efforts is the Kaladan traffic will be 35 per cent and 65 per cent, respectively. At present, Multi-Modal Transit Transport Project (KMMTTP), which seeks railways carry approximately 36 per cent of the country's total to improve connectivity between India and Myanmar and freight traffic, while for the United States and China, the figures facilitate access to the sea for the landlocked states of north- are higher, at 48 per cent and 47 per cent, respectively. Railways eastern India. Launched in 2009 as part of the then government’s in the country are incurring losses to the tune of about 250 billion “Look East” policy and now being pushed under the current Indian rupee ($3.7 billion) in the passenger segment, meaning it Government’s “Act East” programme, the overall KMMTTP has to be cross-subsidized by freight earnings.2 entails the construction of the 90-km National Highway 502A from Lawngtlai town in Mizoram to the Zochachhuah village at Maritime transport plays a relatively small role for a country that the India-Myanmar border; the construction of a 140-km route has a coastline of nearly 7,500 km, with shore-side shipping from there to Paletwa town; the development of a river port at transporting only around 160 million tonnes of cargo in 2012–2013. Paletwa on the Kaladan river that will be connected through a The modal share of water transport in the movement of domestic 160-km waterway to Sittwe; and the construction of a deep water cargo in India is also low compared to in other countries, 7 per port at Sittwe to open up a sea route to the Haldia port of Kolkata, cent compared to 20 per cent in China, 24 per cent in Brazil and roughly 540 km away. Construction work on this project has more than 42 per cent in Japan. A major contributory factor that been beset by challenges, such as heavy rainfall and difficulty places a prohibitively high premium on coastal shipping is the lack in carrying out road works in the mountainous terrain. Once of connectivity of non-major ports to the road and rail networks. constructed, this route will reduce the distance between Haldia Port in Kolkata and Lawngtalia in Mizoram through the chicken The Government of India is making a substantial effort to neck corridor from 1,880 km to 930 km, thereby shortening the implement a forward-thinking transport policy and to increase cargo shipment time to Mizoram by three to four days. investment in order to modernize, expand and integrate the country's transport services. To that end, the National Transport Sources: World Bank webpage — India Transport Sector (e http:// Development Policy Committee was set up by the Government go.worldbank.org/FUE8JM6E40); The Times of India (2014); Paladhi in 2010 to oversee the development of a coherent transport (2014); India (2014); Halliday (2014).

BOX 2.5 TRANSPORT INFRASTRUCTURE DEVELOPMENT STRATEGY 2015-2022 OF THAILAND

The transport sector in Thailand accounts for 5. Enhancing Air Transport Capability: to expand the more than one third of the country’s total energy capacity of the country's airports, enabling them to consumption — equivalent to 700 billion baht (B) become regional centres for air transportation; and ($20 billion), — and is a major contributor to its air establish aviation industrial estates. pollution as well as being a factor behind a number of its environmental issues. With an average freight Work has already started on some of the high- volume of 805 million tonnes per year, the cost of priority projects, such as the mass-transit railway transportation in general has been estimated at extension and six double-track projects of existing more than 7 per cent of GDP. The majority of freight meter gauge railway lines. The completion of the movement in the country is road transport based, 10 mass transit lines is expected by 2022. The even though its relative cost is higher than that of first phase of the double track project, covering rail and water transport. The table below shows the 903 km costing approximately 129.3 billion baht, diseconomy of transport mode choice. is expected to be completed in 2018. In the next phase, eight routes will be added, expanding the length of the existing double track network by 1,629 km. According to the plan, the double track MODE SHARE COST work is expected to be completed by 2020. With (BAHT PER TON-KM) this expansion, Thailand is aiming to increase the ROAD 87.5 2.12 average speed for freight trains from 39 to 60 km/ hr, and for passenger trains from 60 to 100 km/hr. RAIL 1.4 0.95 After completion, ridership is projected to increase WATER 11.08 0.65 from 45 million person-trips per year to 75 million person-trips per year, while the share of rail freight AIR 0.02 10 as a transport mode is expected to more than triple from 1.5 per cent to 5 per cent. The strategy Source: Office of Transport and Traffic Policy and also aims to reduce the modal share of intercity car Planning, Ministry of Transport of Thailand. travel from 59 per cent to 40 per cent, and to cut oil consumption by a target saving of more than 100 billion baht per year.

In addition, the plan also provides for the construction In an effort to improve social security, economic of two new standard gauge double-track rail lines, productivity, transport safety and security while with a total length of 1,545 km. One line is intended also enhancing competitiveness and ensuring that to connect southern China and Maptaput port Thailand optimally benefits from its membership through the Lao People’s Democratic Republic for of the ASEAN Economic Community (AEC), the the purpose of transporting freight transport. The Infrastructure Development Strategy for 2015 to objective of the other one is to promote high-quality 2022 was designed with five key strategies: passenger rail travel through the introduction of high speed rail between Bangkok and Chiang Mai. 1. Inter-city Rail Network Development: to upgrade and expand rail infrastructure and the overall system with six main double-track lines expanding Sources: Information provided by Office of Transport out to link up with neighbouring countries (including and Traffic Policy and Planning, Ministry of Transport; China) at their borders; Thailand, Office of Transport and Traffic Policy and Planning, Ministry of Transport. Transport Infrastructure 2. Public Transport Network Development: to solve Development Strategy 2015-2022 . Available (in Thai) traffic congestion in the greater Bangkok region; from www.otp.go.th/images/stories/pdf/2557/8_august/ extend the mass transit railway system in Bangkok final_book_290757.pdf; Termpittayapaisith (2014). and its surrounding areas; improve the quality of service and the safety of the bus transit system; and

to improve environmental standards;

3. Enhancing Highway Competency: to link the country’s main production bases with those of neighboring countries; develop a four-lane road network linking the country’s key economic regions and border areas; construct new motorways; and develop facilities along main roads ;

4. Water Transport Network Development: to upgrade seaport facilities on the Thai Gulf and the Andaman Sea;

Endnotes

1 General Assembly resolution 66/288. (ESCAP, 2015). 2 General Assembly resolution 70/1. 22 Amos (2008). 3 ESCAP (2015c). 23 Commission for Global Road Safety (2014) 4 Dargay and others (2007). 24 WHO (2015a). 5 ESCAP (2015c). 25 ADB (2012a). 6 Ibid. 26 ESCAP Calculation based on data (WHO, 7 See www.adb.org/sectors/transport/key- 2015a) priorities/urban-transport, 27 ADB (2012a). 8 ITS International (2014). 28 For various action statements and plans by 9 ESCAP (2015c). city mayors and organizations to reduce 10 In Japan, the Law for Promoting Easily greenhouse gas emissions, including in Accessible Public Transportation transport, see the website for United Nations Infrastructure for the Elderly and Disabled Climate Summit 2014 (www.un.org/ Persons (Law No. 68), which was enacted climatechange/summit/), in 2000, calls on public officials and service 29 For a comprehensive discussion on policies providers to make stations, roads and other which promote ASI in the ESCAP region, see public facilities accessible for the elderly and ESCAP (2013) and Review of developments people with disabilities. Further steps to in transport in Asia and the Pacific, Chapter 4. improve access were also contained in the 30 Results come from travel surveys made Law 17: Law for Promoting Easily Mobility by independent agents which do not for the Aged and the Disabled, which necessarily use common, standardized was enacted in 2006. In the Republic of methodologies. Hence, the private transport Korea, the Government passed the Act on criterion gathers data from private cars, Promotion of the Transport Convenience motorbikes and other privately-held vehicles. of Mobility Disadvantaged Persons, which The public transport criterion gathers bus, included provisions to expand transportation tram and rail mode data and is used when modes and improve passenger facilities and the data on the specific mode used is not pedestrian environments for the elderly. sufficiently precise. For more information on 11 IATA (2014). the methodology see Sun and others (2014). 12 In 2013, intraregional passenger arrivals in 31 RACE2050 (2013). the Asia-Pacific region grew by 3.6 per cent, 32 Brunswick Rail (2014). compared with total global arrivals which grew 33 Australia (2014), p.3. by 3.3 per cent. ESCAP (2014a). 34 India (2014), p.4. 13 IEA (2013). 35 In 1990, the Government of China launched 14 IEA (2012). the construction of a National Trunk Highway 15 Malibach (2008). System, resulting in the growth of the length 16 WHO Regional Office for Europe (2011). of expressways from less than 150 km in 17 Yusoff and Ishak (2005). 1990 to more than 35,000 km 2007. It 18 A study published in the British Medical includes north-to-south and east-to-west Journal in 2013 suggests that exposure expressways that link major cities and to high levels of aircraft noise are associated provincial capitals. For more information see with an increased risk of stroke, coronary www.roadtraffic-technology.com/projects/ heart disease, and cardiovascular disease. For national-trunk-highway-system. more details see Hansell and others (2013). 36 Amos (2008). 19 ICAO (2013). 37 In the figure the points of origin and 20 Geurs and others (2009). destination of the containers were 21 ESCAP research has found that about 84 per hypothesized as being 100 km away from cent of the region’s population now lives in the sea ports in both China and Western countries with a Gini coefficient ranging Europe, respectively. from 33.9 (India) to 42.1 (China), based on 38 Hanssen and others (2012). the most recently available data. Meanwhile, 39 IFEU (2008). the Asia-Pacific least developed countries 40 Natural Resources Defense Council (2012). have seen an increase in the income 41 ESCAP (2011a). inequality level from 30 in the 1990s to 34.5 42 Ibid. in the 2000s, while the landlocked 43 ESCAP (2013a). developing countries have experienced an 44 Ruppik (2015). increase from 32.7 to 35.7 during the same period PART III PART lll INTEGRATED INTERMODAL CHAPTER TRANSPORT SYSTEM REGIONAL TRANSPORT CONNECTIVITY A. Infrastructure networks 1. INTRODUCTION Over the past fifty years, infrastructure networks have grown more rapidly in the Asia and the Pacific than in any other region in the world. Significant 1 progress has been made in linking major production and consumption centres with roads, railways, airports and seaports. At the same time, governments have put a lot of effort in upgrading and improving the quality of those networks, with the region now boasting world class highways and high-speed railway systems, as well as some of the busiest ports and aviation hubs in the world.

The Asia-Paciﬁc region has been at the forefront of initiatives tailored to improving the connectivity and quality of main transport arteries. It has passed legislation and provided and maintained platforms needed for countries to acquire the skills and know-how that will help them to improve their infrastructure, efficiency and competitiveness. The region, however, has yet to achieve the kind of “seamless connectivity” that would allow countries to make optimal use of regional infrastructure networks and thereby bring down transport and logistics costs.1 2 As many governments are experiencing a that are isolated from established transport squeeze on their budgets due to the high upfront routes and infrastructure. Notably, the pace capital costs associated with infrastructure RILQIUDVWUXFWXUHGHYHORSPHQWKDVQRWNHSWXS projects and the long time to plan and construct with increasing demand. them, a push in the right direction is often not enough. Many regional projects touching all While a great deal of progress has been modes of transport have been initiated through PDGHLQWKHVKDULQJRINQRZOHGJHDQGJRRG DOWHUQDWLYH¾QDQFLQJRSWLRQV3DUW,,,GHWDLOV practices, bringing about ever more tangible some of the projects to date. results in the region, there are still areas that require attention. The isolation of the ,WFDQEHDUJXHGWKDWWKHDSSURDFKHVWDNHQ 3DFL¾FLVODQGGHYHORSLQJHFRQRPLHVGLUHFWO\ by many government agencies to develop DIIHFWVWKHLUHFRQRPLHVPDNLQJWKHP and plan infrastructure projects are hindering prime candidates for development strategy progress. New transport infrastructure is attention in the coming decade. Similarly, often viewed in isolation of each other, ODQGORFNHGGHYHORSLQJFRXQWULHVDQGORZ rather than as part of a larger transportation income countries are unable to diversify their QHWZRUN3 This narrow planning perspective economies due to high transportation costs. is partly responsible for the high level of Those costs are the result of several factors, competition among the modes, with the road LQFOXGLQJDPRQJRWKHUVOLPLWHGPDUNHWVL]H and rail sectors in particular vying for the ODFNRIFRPSHWLWLRQLQWKHWUDQVSRUWVHUYLFHV VDPHWUDQVSRUWPDUNHWV)XUWKHUH[SDQVLRQRI PDUNHWORZVNLOOVLQORJLVWLFVPDQDJHPHQW WKRVHQHWZRUNVLVVWLOOQHFHVVDU\SDUWLFXODUO\ GLVWDQFHIURPLQWHUQDWLRQDOPDUNHWVDQGSRRU in developing countries and in countries quality infrastructure. Government policies

may also be inadvertently favouring less Ministerial Conference on Transport, which HI¾FLHQWPRGHVUDWKHUWKDQWDUJHWLQJWKH ZDVKHOGLQ%DQJNRNLQ0DUFK,W least costly and most sustainable intermodal mandated the promotion of regional and solutions to container and cargo haulage interregional connectivity through the between trade sources and seaports. further development of the Asian Highway DQG7UDQV$VLDQ5DLOZD\QHWZRUNVDV The importance of improving intermodal well as through dry ports. This chapter connectivity was reiterated in the Vienna UHYLHZVWKHFXUUHQWVWDWXVRIWKRVHQHWZRUNV 3URJUDPPHRI$FWLRQIRU/DQGORFNHG and provides information on selected Developing Countries for the Decade infrastructure projects that are expected WKHRXWFRPHRIWKHVHFRQG to enhance the connectivity of regional 8QLWHG1DWLRQV&RQIHUHQFHRQ/DQGORFNHG LQIUDVWUXFWXUHQHWZRUNV Developing Countries, which was held in Vienna in 2014 (see chapter 1.B Transport 2. ASIAN HIGHWAY facilitation and logistics).4 To overcome NETWORK these challenges, governments in the region are starting to focus on the integration of a. Status of the Asian GLIIHUHQWPRGDOQHWZRUNVLQSDUWLFXODUURDG and rail. However, from the perspective of Highway Network 7KH,QWHUJRYHUQPHQWDO$JUHHPHQWRQWKH ERWKFRVWHIIHFWLYHQHVVDQGHQYLURQPHQWDO $VLDQ+LJKZD\1HWZRUNIDFLOLWDWHVWKH VXVWDLQDELOLW\UDLODQGZDWHUEDVHGWUDQVSRUW coordinated planning and upgrading of RIIHUWKHEHVWWUDQVSRUWVROXWLRQVIRUORQJ highway routes of international importance, distance freight transport, as long as they are both within Asia and between Asia and FRQQHFWHGWRHI¾FLHQWLQWHUPRGDOLQWHUIDFHV neighbouring regions. Currently, the such as dry ports and container terminals at QHWZRUNFRPSULVHVNPRIURDGV seaports. Relatively new components to the in 32 member countries.7KHQHWZRUN transport itinerary, those ports and terminals H[WHQGVIURP7RN\RLQWKHHDVWWR.DSLNXOH are increasingly being seen as essential to the 7XUNH\LQWKHZHVWDQGIURP7RUS\QRYND continued emergence of intermodal transport. WKH5XVVLDQ)HGHUDWLRQLQWKHQRUWKWR Where railways exist, the road sector plays 'HQSDVDU,QGRQHVLDLQWKHVRXWK DQLPSRUWDQWUROHLQFRPSOHWLQJODVWPLOH services; where railways do not exist, the 7KH,QWHUJRYHUQPHQWDO$JUHHPHQWVHWVRXW road sector is a critical provider of transport the minimum standards for four classes of services. KLJKZD\V3ULPDU\&ODVV,&ODVV,,DQG &ODVV,,, WKHPLQLPXPGHVLUDEOHVWDQGDUG Time lost at borders has long been the bane Between 2010 and 2014, all classes of road of transport, but advances in technology are ZHUHLPSURYHGUHVXOWLQJLQ&ODVV,URDGV helping countries to share data on freight FRYHULQJURXJKO\WRSHUFHQWRIWKH itineraries and driver documentation, WRWDOQHWZRUNDQG&ODVV,,URDGVPDNLQJXS cutting deeply into waiting times. Similar 38 to 41 per cent. Meanwhile, the proportion advances are being made in the movement RI&ODVV,,,URDGVGHFOLQHGIURPPRUH of passengers, with countries sharing than 23 per cent to 19 per cent, although data to facilitate border crossings and roughly 8 per cent still remained below ,76WHFKQRORJLHVVXFKDVHOHFWURQLFWROO &ODVV,,,7,WKDVEHHQSURYHQWKDWWKHUHLV collection. This has, consequently, reduced a strong correlation between infrastructure ZDLWLQJWLPHVLPSURYHGWUDI¾FFLUFXODWLRQ designs and the number and severity of road and mitigated the environmental impact. accidents, therefore upgrading highways will

XQGRXEWHGO\PDNHWKHPPRUHVDIH 3KDVH,, RIWKH5HJLRQDO$FWLRQ (see chapter 3). 3URJUDPPHIRU7UDQVSRUW'HYHORSPHQWLQ $VLDDQGWKH3DFL¾FZDVDGRSWHGE\WKH

FIGURE 3.1 PROGRESS IN UPGRADING ASIAN HIGHWAY ROADS, BY CLASS (2006, 2010 AND 2014)

7904(9@ *3(::S*3(::SS*3(::SSS),36> *3(::SSS

Source: ESCAP (2015d)

7KHQHWZRUNµVURDGVXUIDFHFRQGLWLRQLV an important indicator of the quality of the Asian Highway because it has a direct impact on vehicle operating costs. Road surface condition data currently being collected on the Asian Highway fall into one of four categories: a) good; b) fair; c) bad; DQGG SRRU)LJXUHLQZKLFKWKHODWHVW available data for selected member countries have been plotted, shows the variations in road surface conditions in member States. 7KH,VODPLF5HSXEOLFRI,UDQ-DSDQWKH 5HSXEOLFRI.RUHD6LQJDSRUH6UL/DQNDDQG Thailand reported that more than 70 per cent of their roads were in in “good” condition. $IJKDQLVWDQDQGWKH3KLOLSSLQHVUHSRUWHG that more than one third of their Asian Highway road surfaces were in “poor” or “bad” condition. Photo: UN ESCAP Photo UN ESCAP Photo: FIGURE 3.2 ROAD SURFACE CONDITIONS IN SELECTED ASIAN HIGHWAY MEMBER STATES (STATUS AS OF MAY 2015)

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:05.(769, Source: ESCAP (2015d ) 7/0307705,: )(5.3(+,:/ (-./(50:;(5 0:3(40*9,7<)30* 9,7<)30*6-269,( 9<::0(5-,+,9(;065

,QDELGWRIXUWKHUHQKDQFHWKHHI¾FLHQF\ WKHQDWLRQDOSROLF\RI,76GHSOR\PHQWKDYH DQGVDIHW\RIWKHLUKLJKZD\QHWZRUNVVRPH already brought substantial dividends. With countries in the region are deploying new LWVDELOLW\WRPRQLWRUWUDI¾FODZYLRODWLRQV types of information and communication WKHLQVWDOODWLRQRI$7(KDVUHGXFHGWKH WHFKQRORJLHV,QWHOOLJHQWWUDQVSRUWV\VWHPV number of road accidents and fatalities while improve vehicle and infrastructure safety also bringing down the economic costs of by providing information that manages DFFLGHQWV,QWKHVL[PRQWKSHULRGSULRUWR the interactions between highway systems, the installation of the system, the number vehicles and drivers. The automatic RIDFFLGHQWVWRWDOOHGZKLOHLQWKHVL[ collection of tolls on highways also provides months following the installation the number a rich source of data for authorities to KDGGURSSHGWR,QWHUPVRIPD[LPL]LQJ analyse when planning expansion, as well WUDI¾F¿RZWKHLQWURGXFWLRQRI(7&DWWROO DVLGHQWLI\LQJEODFNVSRWVDQGSUREOHP JDWHVKDVEURXJKWWKHDYHUDJHSHUYHKLFOH DUHDV$VRILQWKH5HSXEOLFRI.RUHD SURFHVVLQJWLPHGRZQIURPVHFRQGVWR DOONPRILWVH[SUHVVZD\VDQG seconds, thereby reducing the environmental NPRIWKHFRXQWU\µVQDWLRQDOURDGVZHUH impact of road transport while processing HTXLSSHGZLWK,767KHLQVWDOODWLRQRI WUDI¾FYROXPHVIRXUWLPHVKLJKHUWKDQEHIRUH8 DXWRPDWLFWUDI¾FHQIRUFHPHQW $7( DQG HOHFWURQLFWROOFROOHFWLRQ (7& DVSDUWRI b. Selected highway projects &RVWLQJDSSUR[LPDWHO\ELOOLRQDQG )DFHGZLWKEXGJHWDU\FRQVWUDLQWVPRVW VSDQQLQJWKHSHULRGWKHSURMHFW governments in the region have made will provide an additional option for goods DWWHPSWVWRGLYHUVLI\PRGDOLWLHVIRU¾QDQFLQJ PRYLQJEHWZHHQWKH,VODPLF5HSXEOLFRI major highway projects, including through ,UDQDQG(XURSHWKURXJKWKH%ODFN6HD WKHXVHRISXEOLFSULYDWHSDUWQHUVKLSV 333V SRUWVRI3RWLDQG%DWXPL9 VHHSDUW,,,FKDSWHU ,QRUGHUWRGHULYH greater value from investments in their $)UDPHZRUN)LQDQFLQJ$JUHHPHQW transport systems, several governments are was signed between the Government also developing their highways as part of of the Republic of Armenia and the broader economic corridor development $VLDQ'HYHORSPHQW%DQN $'% RQ programmes, often with the support of 6HSWHPEHUVWLSXODWLQJDQ$'% PXOWLODWHUDOGHYHORSPHQWEDQNV FRPPLWPHQWWR¾QDQFHWKHSURMHFWLQWKH DPRXQWRI86'PLOOLRQ,Q1RYHPEHU i. Armenia North-South Road WKH(XURSHDQ,QYHVWPHQW%DQN Corridor Investment Program DSSURYHG¾QDQFLQJIRUWKHNPURDG 7KH$UPHQLD1RUWK6RXWK5RDG&RUULGRU VHFWLRQEHWZHHQ

MAP 3.1 ARMENIA NORTH-SOUTH ROAD CORRIDOR

RUSSIAN FEDERATION

Poti GEORGIA Khashuri Vale Batumi

Bavra Gumri ARMENIA AZERBAIJAN Ashtarak TURKEY Yerevan

Eraskh

Asian Highway route Goris Cities AZERBAIJAN ISLAMIC REPUBLIC The boundaries and names shown and the designations used on this map Meghri do not imply ofﬁcial endorsement or acceptance by the United Nations. OF IRAN

Photo: Madan B Regmi UN ESCAP UN ESCAP B Regmi Madan Photo:

WKHSURMHFWµVRWKHUURDGVHFWLRQVZLOODOVR A central component of the Corridor is meet international standards for safe road WKHNPKLJKZD\IURP.DVKL&KLQD FRUULGRUWUDI¾FPDQDJHPHQW0HDQZKLOH WR*ZDGDUWKURXJK.KXQMHUDE $+ ,Q WKHFRQFUHWHOLQLQJRIWKHNP$UWDVKDWWR )HEUXDU\&KLQDDQG3DNLVWDQVLJQHG $VKWDUDNVWUHWFKRIWKH1RUWK6RXWK5RDG an agreement to upgrade a section of the Corridor was completed in 2014, with NLORPHWUH.DUDNRUXP+LJKZD\ZKLFK the section expected to be commissioned FRQQHFWVWR,VODPDEDG13:RUNRQDKLJKZD\ EHIRUHWKHHQGRI11 OLQNLQJ+DYHOLDQWR7KDNRWSDUWRIWKH ,VODPDEDG5DLNRWVHFWLRQRIWKH&RUULGRUDQG ii. China-Pakistan Economic ¾QDQFHGE\&KLQDZDVLQLWLDWHGLQ'HFHPEHU 2014.14 Corridor (CPEC) (AH4) $VPHQWLRQHGLQSDUW,WKH&KLQD3DNLVWDQ (FRQRPLF&RUULGRU &3(& LVDPDMRU iii. Padma Multipurpose development initiative that will connect Bridge Project and Dhaka *ZDGDU3RUWLQVRXWKHUQ3DNLVWDQWRWKH – Chittagong Highway in QRUWKZHVWHUQDXWRQRPRXVUHJLRQRI Bangladesh Xinjiang in China. The Agreement, signed The Government of Bangladesh is pressing E\&KLQDDQG3DNLVWDQLQ0D\LQFOXGHV forward with two major projects, the a broad spectrum of projects across the 3DGPD0XOWLSXUSRVH%ULGJH3URMHFWDQG energy, transportation, and information WKHXSJUDGLQJRIWKH'KDND±&KLWWDJRQJ FRPPXQLFDWLRQVWHFKQRORJ\ ,&7 VHFWRUV +LJKZD\,QHDUO\ULYHUWUDLQLQJZRUNV ZLWKELOOLRQHDUPDUNHGIRUURDGSURMHFWV and the construction of approach roads to the and $3.7 billion for railway projects.12 3DGPD%ULGJHZHUHPRUHWKDQSHUFHQW

MAP 3.2 PADMA MULTIPURPOSE BRIDGE PROJECT AND DHAKA-CHITTAGONG HIGHWAY

Arunachal Pradesh BHUTAN NEPAL Jaigaon AH2 Siliguri AH48 Kakarbhitta Nagaon AH1 Jorabat Dimapur

AH1 Shillong

AH1 Kohima

Dawki Tamabil

AH1 Sylhet BANGLADESH INDIA INDIA AH41 AH1 AH2 AH1 Padma Multipurpose Bridge Project Dhaka Widening from 2 AH1 Daudkandi to 4 lanes highway

Jessore AH1 AH41

AH41

Kharagpur Kolkata Chittagong Mongla AH41

AH41 AH45 MYANMAR Cox's Bazar Asian Highway route AH41 Cities

The boundaries and names shown and the designations used on this map Teknaf do not imply ofﬁcial endorsement or acceptance by the United Nations.

complete.0HDQZKLOHLQ-XQHWKH SURMHFWLVDNPURDGUXQQLQJHDVWWR *RYHUQPHQWUHSRUWHGWKDWNPRUDERXW ZHVWDQGFRQQHFWLQJRIWKHFRXQWU\µV SHUFHQWRIWKHNPRIWKH'KDND° districts. Meanwhile, a detailed feasibility Chittagong Highway, had been widened from VWXG\ZDVFRPSOHWHGIRUWKHNP two to four lanes, with the widening of the .DWKPDQGX°1LMJDGK([SUHVVZD\ZKLFK remaining area to be completed by the end LQFOXGHVNPRIEULGJHVDQGPHWUHV of the year.$VWKHNH\FRUULGRUOLQNLQJWZR RIWXQQHOV$VRIWKHEHJLQQLQJRIODQG largest cities of Bangladesh, the highway acquisition had already been completed and FRPSOHPHQWVWKH*RYHUQPHQWµVSODQVWR DFRQWUDFWGRFXPHQWEDVHGRQD333PRGHO XSJUDGHWKH'KDND°&KLWWDJRQJUDLOZD\ VHH was under preparation. Once the project is Section 3 below). completed, the length of the AH42 will be UHGXFHGE\NP iV. Nepal Road Connectivity Projects V. GMS Kunming (China) - Hai ,QWKHZDNHRIWKH$SULO1HSDO Phong (Viet Nam) Transport (DUWKTXDNHWKHLPSRUWDQFHWKDWWKHURDG Corridor (AH14) transport sector plays in mountainous ,Q6HSWHPEHUWKH3ULPH0LQLVWHU countries became more evident than ever RI9LHW1DPLQDXJXUDWHGWKH1RL%DL/DR before. With various plans under way &DL+LJKZD\SDUWRIWKH*UHDWHU0HNRQJ to reconstruct damaged roads across the 6XEUHJLRQ *06 (DVWHUQ(FRQRPLF FRXQWU\ZRUNKDVDOVRUHVXPHGRQWZRRI &RUULGRUOLQNLQJ.XQPLQJLQ&KLQDWR+DL WKH*RYHUQPHQWµVSULRULW\SURMHFWVWKH0LG 3KRQJ3RUWLQ9LHW1DP176SDQQLQJ +LOO+LJKZD\SURMHFWDQGWKH.DWKPDQGX° NPWKHFRQVWUXFWLRQRIWKH1RL%DL/DR&DL 1LMJDGK([SUHVVZD\7KH0LG+LOO+LJKZD\ +LJKZD\EHJDQLQ7KH1RL%DLWR MAP 3.3 GMS KUNMING (CHINA) - HAI PHONG (VIET NAM) TRANSPORT CORRIDOR

The boundaries and names shown and the designations used on this map Kunming do not imply ofﬁcial endorsement or acceptance by the United Nations.

Asian Highway route Cities

CHINA

AH14

Lao Cai

AH14 VIET NAM

Viet Tri AH14

AH14 Hanoi Hai Phong

LAO PEOPLE'S DEMOCRATIC REPUBLIC

0HDQZKLOHZRUNLVRQJRLQJWREULQJWKH a. Status of the Trans-Asian railways of China to the borders of (i) the Railway Network /DR3HRSOHµV'HPRFUDWLF5HSXEOLFDQG LL 7KH,QWHUJRYHUQPHQWDO$JUHHPHQWRQWKH 0\DQPDUDVSDUWRIWKH7UDQV$VLDQ5DLOZD\ 7UDQV$VLDQ5DLOZD\1HWZRUNHQWHUHGLQWR QHWZRUNDQGWKH6LQJDSRUH.XQPLQJ5DLO IRUFHRQ-XQH6SDQQLQJ /LQNSURMHFWDVGHVFULEHGEHORZ NP&KLQD,QGLDDQGWKH5XVVLDQ)HGHUDWLRQ are the top three countries in terms of the &KLQD°/DR3HRSOHµV'HPRFUDWLF5HSXEOLF OHQJWKRIWKHLU7UDQV$VLDQ5DLOZD\OLQHV &DSDFLW\H[SDQVLRQRQWKH.XQPLQJ°

&KLQD°0\DQPDU:RUNRQWKH'DOL°5XLOL i. North and Central Asia line to rail connect China and Myanmar has ,Q&HQWUDO$VLDUDLOURXWHVWKDWZLOOVHUYH DOVRSURJUHVVHG&DSDFLW\H[SDQVLRQZRUN IUHLJKWPRYLQJLQERWKWKHHDVWZHVWDQG RQWKHH[LVWLQJ.XQPLQJ°*XDQWRQJOLQH QRUWKVRXWKGLUHFWLRQVDUHFXUUHQWO\EHLQJ ZDVFRPSOHWHGLQ6LPLODUZRUNRQ GHYHORSHG,Q2FWREHU.D]DNKVWDQ WKH*XDQWRQJ°'DOLVHFWLRQLVH[SHFWHGWR LQDXJXUDWHGDNPOLQHEHWZHHQ EHFRPSOHWHGLQ7KHNP'DOL° =KH]ND]JDQDQG%HLQHXZKLFKFXWDURXQG Ruili section, which will bring rail to the NPIURPWKHWUDGLWLRQDOHDVWZHVW &KLQD0\DQPDUERUGHULVH[SHFWHGWREH URXWHEHWZHHQWKH&KLQHVHERUGHUDW'RVW\N completed in 2021. $ODVKDQNRXDQGWKH&DVSLDQ6HDSRUWRI $NWDX

MAP 3.4 SELECTED RAIL PROJECTS IN CENTRAL ASIA

The boundaries and names shown and the designations used on this map do not imply ofﬁcial endorsement or acceptance by the United Nations RUSSIAN FEDERATION TAR Track Gauges 1,520 mm 1,435 mm TAR Link-planned / Under construction Astana

Non TAR railway line KAZAKHSTAN Capital Cities

Zhezkazgan !(

Beyneu Dostyk !( !( Khorgos !( !( Jinghe !( Almaty Aktau !( UZBEKISTAN Bishkek KYRGYZSTAN Baku Tashkent !( !( Osh CHINA Alyat Kashi !(

Note: The rail lines indicated in grey are currently not part of the Trans-Asian Railway network b. Selected railway projects )URP$NWDXIUHLJKWFDQEHFDUULHGHLWKHU ,WLVZLGHO\UHFRJQL]HGWKDWUDLOZD\VFDQ across the Caspian Sea to the port of Alyat play a greater role in promoting regional in Azerbaijan, or down the eastern side of LQWHJUDWLRQDQGFURVVERUGHUFRQQHFWLYLW\ the Caspian Sea along a newly opened rail 7KHFRQVWUXFWLRQRIFURVVERUGHUOLQNDJHV OLQN2SHQHGLQ'HFHPEHUWKHNP DQG²PLVVLQJOLQNV³LVSDUWLFXODUO\LPSRUWDQW UDLOOLQNFRQQHFWV8]HQLQ.D]DNVWKDQWR IRUDWWUDFWLQJORQJGLVWDQFHLQWUDUHJLRQDODQG %HUHNHW(WUHNLQ7XUNPHQLVWDQDQGWUDYHOV LQWHUUHJLRQDOIUHLJKWWRWKHUDLOZD\V,QWKLV RQZDUGWR*RUJDQLQWKH,VODPLF5HSXEOLFRI regard, the region has witnessed a renewed ,UDQ7KHELOOLRQURXWHLVDERXWNP push for railway development, particularly in shorter than the more easterly route through 6RXWKDQG6RXWK(DVW$VLD 6DUDNKVDQGLVWKHUHIRUHH[SHFWHGWR become a major transit route between Central $VLDDQGWKHVHDSRUWVRQWKH3HUVLDQ*XOI )UHLJKWWKDWLVIHUULHGWR$O\DW3RUWZLOOVRRQ DQGLQZDVJUDQWHGD¾IW\\HDU EHDEOHWRPRYHWR*HRUJLDDQG7XUNH\DORQJ concession to manage it, with the project WKH%DNX°7ELOLVL°.DUVUDLOSURMHFWWKDW VODWHGWRFRPPHQFHLQDQGWR¾QLVKLQ ZLOOFRQQHFWWKHUDLOQHWZRUNVRI*HRUJLDDQG 2022.23,IEXLOWWKHOLQHZLOOIDFLOLWDWHDFFHVV 7XUNH\$VSDUWRIWKLVSURMHFW$]HUEDLMDQ WRWKH%ODFN6HDIRUJRRGVFRPLQJIURPWKH Railways have invested heavily in ,VODPLF5HSXEOLFRI,UDQDVZHOODVEHQH¾W modernizing the section of the line between the economy of Armenia by enabling access %DNXDQG%H\RXN.HVLNDWWKHERUGHUZLWK WRWKH0LGGOH(DVWDVZHOODVSRUWVRQWKH Georgia. The Government of Georgia is also 3HUVLDQ*XOI LQFUHDVLQJFDSDFLW\RQWKHFRXQWU\µVPDLQ railway lines leading to the ports of Batumi Other countries in Central Asia are also DQG3RWLLQFOXGLQJD7ELOLVLE\SDVV WDNLQJVWHSVWRZDUGVLPSURYLQJWKHLUUHJLRQDO On the western side of the Caspian Sea, UDLOFRQQHFWLRQV.\UJ\]VWDQDQG7DMLNLVWDQ ,UDQLDQ5DLOZD\VDUHFRQWLQXLQJWRZRUN are collaborating with Afghanistan and the WRZDUGVWKHFRPSOHWLRQRIWKHNP ,VODPLF5HSXEOLFRI,UDQRQDOLQHWKDWZLOO 4D]YLQ°5DVKW°$VWDUDOLQN7KH OLQNZLWK&KLQDWKH,UDQLDQ(QJLQHHULQJ NPVHFWLRQEHWZHHQ4D]YLQDQG5DVKWLV FRPSDQ\0(75$KDVDOUHDG\FRPSOHWHGWKH H[SHFWHGWREH¾QLVKHGE\WKHHQGRI feasibility study for the section set to pass ZKLOHZRUNRQWKHNPVHFWLRQIURP WKURXJK7DMLNLVWDQDQGKDVVWDUWHGVLPLODU Rasht to Astara at the border with Azerbaijan ZRUNIRUWKH.\UJ\]VWDQVHFWLRQ24 remains subject to the resolution of funding issues.22 ii. South and South-West Asia )ROORZLQJWKHVXFFHVVIXOFRPPLVVLRQLQJRI ,Q$UPHQLDDXWKRULWLHVDUHVWLOOH\HLQJWKH WKHNPVHFWLRQRIOLQHEHWZHHQ.KDLUDWRQ FRQVWUXFWLRQRIDNPUDLOZD\OLQNLQJ DQG0D]DUL6KDULIWKH*RYHUQPHQWRI *DYDUNPHDVWRI

MAP 3.5 SELECTED RAILWAY PROJECTS AROUND THE CASPIAN AND BLACK SEAS

The boundaries and names shown and the designations used on this map do not imply ofﬁcial endorsement or acceptance by the United Nations

RUSSIAN FEDERATION KAZAKHSTAN

!( Aktau BLACK SEA !( Uzen GEORGIA

!Tbilisi CASPIAN SEA Istanbul !( AZERBAIJAN Kars !( ARMENIA !( TURKMENISTAN Ankara ! Yerevan Baku Meghri !( TAR Track Gauges !( Bereket TURKEY 1,520 mm Astara !( 1,435 mm TAR Link-planned / Under construction Rasht !( !( Non TAR railway line ISLAMIC REPUBLIC !( Gorgan Capital Cities OF IRAN Qazvin Tehran

Note: The rail lines indicated in grey are currently not part of the Trans-Asian Railway network

7RSPRVWDPRQJWKHURXWHVLVWKH ZLWK$IJKDQLVWDQIURP&KDPDQWR.DQGDKDU NPHDVWZHVWFRUULGRUZKLFKZLOOVWDUW DQGIURP3HVKDZDUWR-DODODEDG'HVSLWH DW6KLUNKDQ%DQGDURQWKHERUGHUZLWK WKHKLJKFRQVWUXFWLRQFRVWRIELOOLRQ 7DMLNLVWDQDQGWUDYHODORQJWKHQRUWKHUQSDUW the project has received renewed interest of Afghanistan to Herat, which is expected XQGHUWKH&KLQD3DNLVWDQ(FRQRPLF&RUULGRU WREHFRQQHFWHGWRWKHUDLOQHWZRUNRIWKH project. ,VODPLF5HSXEOLFRI,UDQ,QDGGLWLRQWRWKH H[LVWLQJEUDQFKOLQHIURP0D]DUL6KDULI 7KHUDLOZD\VLQ,QGLDDUHEHLQJXSJUDGHG WR+HLUDWRQ ERUGHUZLWK8]EHNLVWDQ WZR through an ongoing policy to carry out more branch lines are planned to create WUDFNGRXEOLQJJDXJHFRQYHUVLRQDQG connections with Aqina and Torghondi, both HOHFWUL¾FDWLRQ,QDGGLWLRQFRQVWUXFWLRQKDV RQWKHERUGHUZLWK7XUNPHQLVWDQ2WKHU EHJXQRQDQLQLWLDONPGRXEOHWUDFN routes in Afghanistan under discussion are a HOHFWUL¾HGVHFWLRQEHWZHHQ.DQSXUDQG UDLOOLQNIURP.XQGXVWR7RUNKDP 3DNLVWDQ .KXUMDZKLFKZLOOIRUPSDUWRIWKH(DVWHUQ YLD.DEXODQGDEUDQFKOLQHIURP3DNLVWDQ 'HGLFDWHG)UHLJKW&RUULGRUVWUHWFKLQJIURP WR6SLQ%ROGDNZLWKDIXWXUHH[WHQVLRQWR /XGKLDQDWR.RONDWD ER[ :RUNLVDOVR .DQGDKDU SURJUHVVLQJRQWKH$JDUWDOD°$NKDXUDUDLO OLQNLQFRRSHUDWLRQZLWKWKH*RYHUQPHQW 3DNLVWDQLVHPEDUNLQJRQD²1DWLRQDO RI%DQJODGHVKDVZHOODVRQWKH-LULEDP° 9LVLRQ³PDVWHUSODQZKLFKDLPV 7XSXO°,PSKDOUDLOVHFWLRQZKLFKIRUPV WRLQFUHDVHWKHFXUUHQWPDUNHWVKDUHRI WKH¾UVWSKDVHRIWKHSURMHFWWRUDLOFRQQHFW rail from 4 per cent to 20 per cent in the ZLWK0\DQPDUDW0RUHK7KH¾UVWVHFWLRQRI country, through the modernization of its WKHSURMHFWZKLFKFRYHUVWKHNPVHFWLRQ infrastructure and the refurbishment of its EHWZHHQ,PSKDODQG7XSXOLVH[SHFWHGWREH UROOLQJVWRFN The most prominent project FRPSOHWHGLQ0DUFKZKLOHWKHVHFRQG under consideration is the construction of SKDVHZKLFKFRYHUVWKHNPVHFWLRQ DNPOLQHIURP+DYHOLDQWR.KXQMUDE EHWZHHQ7XSXODQG,PSKDLVH[SHFWHGWREH WKDWZLOOOLQNZLWKWKHUDLOKHDGRI&KLQD completed in March 2018. With numerous DW.DVKJDU7KHSODQDOVRFDOOVIRUWKH EULGJHVDQGWXQQHOVWREHEXLOWWKH-LULEDP FRQVWUXFWLRQRIDNPOLQHVHFWLRQWR °7XSXO°,PSKDOSURMHFWUHSUHVHQWVDQ connect the port of Gwadar to the existing ambitious development scheme aimed at QHWZRUNDW0DVWXQJRQWKH6SH]DQG°.RK LPSURYLQJFRQQHFWLYLW\LQWKHQRUWKHDVWHUQ LWDIWDQOLQHDWDQHVWLPDWHGFRVWRI VWDWHVRI,QGLDDVZHOODVEHWZHHQ,QGLDDQG ELOOLRQDORQJZLWKWZRFURVVERUGHUVHFWLRQV WKH$6($1UHJLRQQHWZRUN27 Photo: Mathieu Verougstraete / UN ESCAP Verougstraete Mathieu Photo:

BOX 3.1 DEDICATED FREIGHT CORRIDOR IN INDIA

Indian Railways has a history of running mixed traffic, with unprofitable passenger services receiving operational priority over revenue-earning freight. In addition, instead of contributing to corporate profitability, freight revenues cross-subsidize non-remunerative passenger services. MAP 3.6 SELECTED RAILWAY PROJECTS IN INDIA AND SRI LANKA

In 2005, in a bid to create additional capacity for freight and meet customer The boundaries and names shown and the designations used on this map demand for more efficient and reliable services, Indian Railways opted to do not imply ofﬁcial endorsement or acceptance by the United Nations build two dedicated freight corridors. Bangalore TAR Track Gauges © 1,676 mm TAR Link-planned / Under construction

The Eastern Dedicated Freight Corridor will run from Ludhiana to Kolkata Capital Cities with a route length of 1,839 km. It will consist of an electrified double- track segment of 1,392 km and an electrified single-track segment of 447 km and be used to transport coal, finished steel products, food grains, INDIA cement, fertilizers, limestone and other general cargo.

The Western Dedicated Freight Corridor will run from Jawaharlal Nehru Port (JNPT), the country’s largest container port east of Mumbai, to Dadri, a container handling facility close to New Delhi. Traffic on the corridor

will mainly comprise the movement of 20 ft ISO containers from JNPT © Talaimannar and Mumbai Port to inland container facilities in northern India, such as Tughlakabad, Dadri and Dandharikalan. The rail share of container traffic on this corridor is projected to increase from 0.69 million TEUs in 2005- 2006 to 6.2 million TEUs in 2021-2022. Containers will move in double- stack configuration with electric traction. The average speed of trains will SRI LANKA increase to 70 km per hour compared with 25 km per hour currently, and © Colombo the unit cost of transport is also expected to decrease by 40 per cent. Kataragama© Once the corridor is completed, freight consignments that now take two Matara to three days to move between New Delhi and Mumbai will cover the distance in less than 24 hours. A series of logistics parks will also be built along the corridor.

Excluding the Sonnagar-Dankuni section being built under PPP 7KHUDLOZD\VLQ6UL/DQNDDUHDOVRHQMR\LQJ modalities, the $12-billion cost of the corridors is being funded by the Rail Ministry through debt and equity, with 1,133 km of the Eastern Dedicated DUHYLYDO,QWKHQRUWKRIWKHFRXQWU\,QGLDµV Freight Corridor funded by the World Bank. The Western Dedicated VWDWHRZQHGLQIUDVWUXFWXUHJURXS,5&21 Freight Corridor is being funded by Japan International Cooperation ,QWHUQDWLRQDOFRPSOHWHGWKHNP3DOODL Agency. °-DIIQDVHFWLRQLQ2FWREHUDQGWKH Phased commissioning of the two corridors is expected to start in 2018 NP-DIIQD°.DQNDVDQWKXUDLVHFWLRQLQ and to be fully completed in 2019. An analysis conducted by Indian -DQXDU\7KHWZRSURMHFWVEULQJWR Railways found that the corridors will generate 2.25 times less greenhouse FRPSOHWLRQWKHUHVWRUDWLRQRIWKHFRXQWU\µV gas emissions over a thirty-year period compared to the current transport Northern Railway under a concessionary situation. credit line of about $800 million, provided Sources: E\WKH*RYHUQPHQWRI,QGLD0HDQZKLOH Dedicated Freight Corridors Corporation of India Ltd. webpage (http://www.dfccil. gov.in/dfccil_app/About_Us.jsp); World Bank (2014d); Singh (2015). the Government of China is supporting rail GHYHORSPHQWLQWKHVRXWKRI6UL/DQND7KH NPVHFWLRQEHWZHHQ0DWDUDDQG%HOLDWWD is under construction, and, in 2014, the China 1DWLRQDO0DFKLQHU\,PSRUWDQG([SRUW &RUSRUDWLRQZDVJUDQWHGDPLOOLRQ FRQWUDFWWREXLOGWKHNPH[WHQVLRQIURP %HOLDWWDWR.DWDUDJDPD28

The Government of Bangladesh has DOVRHPEDUNHGRQDQDPELWLRXVUDLOZD\ development agenda. Two projects will

LPSURYHHDVWZHVWFRQQHFWLYLW\ D WKH ZLWKDQDGGLWLRQDOPLOOLRQWREH¾QDQFHG FRQVWUXFWLRQRIDQHZNPOLQHIURP'KDND E\WKH(XURSHDQ,QYHVWPHQW%DQN (,% WR-HVVRUHWKURXJKWKH3DGPD5LYHUDQG E DQGPLOOLRQE\WKH*RYHUQPHQWRI FRQVWUXFWLRQRIWKHNP$JDUWDOD ,QGLD ° Bangladesh. This corridor could provide $NKDXUD %DQJODGHVK UDLOVHFWLRQ7KHODWWHU DFFHVVWRWKH,QGLDQ2FHDQIRU%KXWDQ SURMHFWFRQVLVWLQJRINPRIWUDFNLQ,QGLD 1HSDODQGWKHQRUWKHDVWHUQVWDWHVRI,QGLD DQGNPRIWUDFNLQ%DQJODGHVKZLOOFRVW DVDFULWLFDOOLQNLQWKH7UDQV$VLDQ5DLOZD\ DQHVWLPDWHGPLOOLRQDQGEH¾QDQFHG QHWZRUN E\WKH*RYHUQPHQWRI,QGLD7KLVOLQNZLOO VLJQL¾FDQWO\UHGXFHWKHGLVWDQFHEHWZHHQ 'HVSLWHWKHVHLQLWLDWLYHVFURVVERUGHUUDLO $JDUWDODDQG.RONDWDIURPWKHFXUUHQW FRQQHFWLYLW\LQ6RXWKDQG6RXWK:HVW$VLD NPURXWH ZKLFKJRHVWKURXJKWKHVRFDOOHG still presents a very fragmented picture forcing ²´FKLFNHQQHFN³ WRRQO\NP WKHEXONRILQWUDUHJLRQDOWUDGHWRXVHPDULWLPH VKLSSLQJDVDUHVXOWRIZKLFKWKHEHQH¾WVRI Two other important projects are: (a) the geographical proximity remain unexploited. FRQVWUXFWLRQRIDNPOLQHIURP.XOQD7KH ,QDQDWWHPSWWRIXUWKHUGHPRQVWUDWHWKHLPSDFW WRWDOFRVWRIWKHSURMHFWLVPLOOLRQ WKDWWKHHI¾FLHQWRSHUDWLRQDOL]DWLRQRIFURVV

MAP 3.7 SELECTED RAIL PROJECTS IN SOUTH AND SOUTH-WEST ASIA

The boundaries and names shown and the designations used on this map do not imply ofﬁcial endorsement or acceptance by the United Nations TAR Track Gauges 1,676 mm Jiribam Imphal 1,000 mm Shahbazpur !( !( !( !( TAR Link-planned / Under construction Mahisasan

Capital Cities Moreh !( Tongi Akhaura !( !( !( !( Agartala Dhaka INDIA BANGLADESH MYANMAR

Kolkata !(

!( Chittagong

to the port of Mongla, including a 717m ERUGHUWUDQVSRUWOLQNDJHVFDQKDYHRQUHJLRQDO bridge over the Rupsha river; and (b) the economic integration, a policy dialogue PRGHUQL]DWLRQRIWKH&KLWWDJRQJ°'KDND RUJDQL]HGE\(6&$3LQ7HKUDQLQ'HFHPEHU FRUULGRU$ERXWSHUFHQWRIWKH VXSSRUWHGDSURSRVDOWRH[WHQGWKH PLOOLRQSURMHFWWRFRQVWUXFWWKH.XOQDWR H[LVWLQJ,VWDQEXO7HKUDQ,VODPDEDGFRQWDLQHU Mongla line will be covered by a line of VHUYLFHVWR1HZ'HOKLDQG'KDND7KHORQJ FUHGLWIURPWKH*RYHUQPHQWRI,QGLDZKLOH term plan would be to extend the corridor to WKH*RYHUQPHQWRI%DQJODGHVKZLOO¾QDQFH

BOX 3.2 FROM LANDLOCKED TO LAND-LINKED – RECENT DEVELOPMENTS IN THE LAO PEOPLE’S DEMOCRATIC REPUBLIC

Situated in the middle of the ASEAN region, the Lao People’s Democratic Republic has promoted the concept of turning rail link between Nong Khai in Thailand, which lies on the Mekong landlocked countries into “land-linking” countries. The River opposite Vientiane, and Map Ta Phut, a deep-sea port in the Government has outlined an ambitious plan to develop modern country’s s eastern seaboard industrial zone. A second phase will rail infrastructure and connect it with the networks of China, run to Bangkok, linking the Thai capital directly with Kunming via Thailand and Viet Nam. While ﬁnancial considerations have Vientiane. This could lead to the realization of a long-discussed delayed the start of construction of the $6.8-billion 417- km rail Singapore-Kunming rail link, via the Lao People’s Democratic project between the Chinese border near Luang Namtha and Republic, Thailand and Malaysia. Vientiane, the two governments have agreed to directly contribute 40 per cent of the total investment for the project with the Lao Furthermore, from Bangkok, the line would follow the westbound government responsible for 30 per cent, amounting to $840 alignment that currently stops at Namtok. From Namtok, a new million, and the Chinese government contributing 70 per cent. line will be constructed to cross into Myanmar and extend to the The remaining 60 per cent will come from private investors. industrial and logistics zone being developed in Dawei, Myanmar.

The project seems more likely to come to fruition following a Sources: Janssen (2015); Ngamsangchikit (2015). recent agreement between China and Thailand to build a 734-km

MAP 3.8 SELECTED RAIL PROJECTS IN SOUTH-EAST ASIA

Baoshan Kunming INDIA Ruili Yuxi CHINA

Mengzi

Mandalay VIET NAM

!( Boten Hanoi MYANMAR LAO PEOPLE’S

Nay Pyi Taw !( DEMOCRATIC REPUBLIC

Kyaukpyu

Vientiane Vung Ang !( Nong Khai Mu Gia

Yangon Lao Bao THAILAND Mukdahan TAR Track Gauges 1,435 mm Danang 1,000 mm 1,000/1,435 mm TAR Link-planned / Under construction Dawei Nam Tok Capital Cities Bangkok !( The boundaries and names shown and the designations used on this map do not imply ofﬁcial endorsement or acceptance by the United Nations Laem Chabang CAMBODIA

from moving beyond feasibility studies, but Republic received a further boost in the form recent interest from the Governments of RIWKHNPUDLOSURMHFWEHWZHHQ9LHQWLDQH &KLQD-DSDQDQGWKH5HSXEOLFRI.RUHDLQ and Boten, which may be funded with the LQIUDVWUXFWXUHGHYHORSPHQWLQ6RXWK(DVW support of China (see Box 3.2). Asia has spurred governments to revisit The Government of Myanmar is pursuing several major rail projects. a policy to upgrade and modernize the H[LVWLQJUDLOZD\QHWZRUNZLWKSULRULW\EHLQJ ,QWKH1DWLRQDO'HYHORSPHQWDQG JLYHQWRWKH

BOX 3.3. HIGH-SPEED RAIL IN ASIA

Over the past two decades, several governments in the ESCAP development of the country’s first dedicated high-speed region have announced plans for high-speed railways, but few corridor between Moscow and Kazan. The project includes have been able to follow through on them because of the high the development of 15 stations serving a population of about 25 costs involved. High-speed railways require their own dedicated million people. The 770-km line is expected to cut some journey tracks, and the technology used for these systems requires a times by as much as 75 per cent compared with current timings. high degree of technical competence and experience. However, steady economic growth and the need to find an alternative to In other countries, despite the high construction costs involved congested roads is reigniting prospects for high-speed rail in Asia. and the high level of technical competence required, projects are also being considered. One of the most high-profile projects In a reporting period that marked the fiftieth anniversary of the in this regard is the planned high-speed line between Singapore opening of Tokaido Shinkansen linking Tokyo and Osaka, the and Kuala Lumpur. In 2014, the prime ministers of Singapore construction of high-speed lines — or in some countries the and Malaysia signed an agreement to construct a double-track aspiration to join the high-speed club — remained upbeat. electrified 330-km line with an operating speed of 300 km/h. This line will cut travel time between the two cities to ninety minutes In March 2015, Japan inaugurated the 228-km extension of the compared to the current time of more than five hours. The project Hokuriku Shinkansen between Nagano and Kanazawa, which will be implemented using a PPP modality for which construction has reduced the travel time between Tokyo and Kanazawa and land acquisition costs could reach $8 billion. It is expected to by almost two hours to two hours and twenty-eight minutes enhance socioeconomic development along the entire corridor, from four hours and twenty minutes. In April 2015, Japan also as well as be a catalyst for other local transport schemes, such as confirmed its growing interest in developing magnetically urban rail projects in and around Kuala Lumpur. levitated trains when it pushed its MAGLEV unit to a speed of 603 km/h. This is seen as a critical step in the future construction of India is also considering high-speed development to link its the Chuo line that passes through Tokyo, Nagoya and Osaka. In heavily populated economic centres, and is turning to both late 2014, the Government of Japan approved construction of the China and Japan to acquire the necessary expertise. In 2015, 286-km section between Tokyo and Nagoya at an expected cost acting under the memorandum of understanding signed in 2014 of $38.13 billion. When the line opens in 2027, travel time between between the Governments of China and India, China Railway the two cities will be of forty minutes compared with one hour and Siyuan Survey and Design Group started work on a preliminary thirty-five minutes on the existing Tokaido Shinkansen. study of a planned 1,754-km high-speed line linking Delhi, Bhopal, Nagpur, Hyderabad and Chennai. Meanwhile, in December 2015, Overall, however, China has continued to set the pace in the area the Governments of India and Japan signed a memorandum of of high-speed development in the region. By early 2014, China understanding for the development of a 508-km high-speed line had already operated 10,000 km of high-speed lines with an between Mumbai and Ahmedabad using Japanese technology. additional 12,000 km being planned or under construction. These Early estimates put the construction cost at $14.6 billion. figures do not include a number of new passengers or mixed traffic lines with a design speed of 200 km/h. Most metropolitan High-speed rail projects have also been discussed in other regions in China are either connected or about to be connected countries of the region, most notably in Thailand for the Bangkok to lines with a speed of 200 km or above. A significant feature of – Chiang Mai route. However, governments are also weighing the these high-speed projects is the construction of stations, which costs of “high speed” construction against the more affordable have a dual role of serving as transport hubs while supporting costs of upgrading existing infrastructure to speeds of 160 urban expansion. Such stations are often built on three to five km/h to 180 km/h. The often-prohibitive cost of high-speed line levels and offer interchange between rail, road and underground was one reason why the Government of Viet Nam decided to networks. upgrade the existing North-South Rail route between Hanoi and Ho Chi Minh before building a new line. In the Republic of Korea, 2015 saw the opening of the 182-km Honam high-speed line from Osong, on the existing Seoul to Sources: Nikkei Asian Review (2015); Smith (2015); International Railway Busan line, to Gwangju. From Gwangju, trains continue another Journal (2015); Railway Gazette (2015). 76 km to Mokpo on the conventional infrastructure, which the Government plans to upgrade for 200 km/h operation in the near future. The Honam line serves cities on a north-south axis along the country’s western region and is part of the Government’s agenda to bring all of its major cities within half a day’s travel of one another. Meanwhile, in the Russian Federation where Russian Railways already operates services at up to 250 km/h on the conventional 1,520 mm gauge main line between Moscow and St Petersburg, the Government has budgeted for the

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However, in recent years, FRQVWUXFWLRQRIDNPOLQHIURP6LVRSKRQ URDGWUDI¾FFRQJHVWLRQDURXQGVHDSRUWV WR&KHXQJ3UH\WRGHYHORSWKHHDVWFHQWUDO in Sydney and Melbourne has forced DUHDRIWKHFRXQWU\DQGF DORQJWHUPSKDVH transport planning agencies to consider (post 2030), targeting the construction of a the consolidation of container handling NPOLQHIURP6QXROWR6XQJ7UHQJWR facilities in the suburbs and the diversion HYHQWXDOO\FRQQHFWZLWKWKH/DR3HRSOHµV RISRUWUHODWHGFRQWDLQHUWUDI¾FIURPURDG Democratic Republic.33 to rail, despite the relatively short rail hauls involved. 7KDLODQGKDVOLQNHGXSZLWKVHYHUDORWKHU countries that have plans for the construction To enable the emergence of a truly RIKLJKVSHHGUDLOOLQHVIRUSDVVHQJHU LQWHUPRGDOQHWZRUNWKHLQWHUIDFHEHWZHHQ transport, though previous plans to complete the different transport modes, whether road, WKHSURSRVHGKLJKVSHHGUDLOSURMHFWVLQWKH rail or port, needs to be improved. With $VLDDQG3DFL¾FUHJLRQKDYHRIWHQVWXPEOHG this in mind, governments in the region RQWKH¾QDQFLQJVLGH ER[ FROODERUDWHGXQGHUWKHDXVSLFHVRI(6&$3WR GHYHORSWKH,QWHUJRYHUQPHQWDO$JUHHPHQWRQ 4. DRY PORT 'U\3RUWV34 The aims of the agreement are DEVELOPMENT to: a) promote the international recognition of dry ports; b) facilitate infrastructure investment by attracting strong commitment a.Status of dry port from member countries and increased development ¾QDQFLQJIURPLQWHUQDWLRQDOEDQNVDQG ,QPDQ\FRXQWULHVRIWKH$VLD3DFL¾FUHJLRQ ELODWHUDOGRQRUVF GH¾QHRSHUDWLRQDO dry ports and their associated transport services for a more harmonized approach to OLQNVIXQFWLRQDVFRQGXLWVIRULQWHUQDWLRQDO the development and operation of dry ports trade between inland trade origins and in the region through enhanced collaboration GHVWLQDWLRQVDQGZLWKVHDSRUWV)RUVRPH with the private sector; and d) contribute countries, the distance between the two WRWKHGHYHORSPHQWRIDQHI¾FLHQWORJLVWLFV can be vast. This is particularly true for the industry in member countries. ODQGORFNHGFRXQWULHVRI&HQWUDO$VLDDQGIRU Mongolia, where goods being transported 'XULQJWKHVHFRQGVHVVLRQRIWKH)RUXP overseas have to travel distances of 1,000 of Asian Ministers of Transport, which NPWRPRUHWKDQNPWRUHDFKDQRXWOHW ZDVKHOGLQ%DQJNRNLQPHPEHU WRWKHVHD,Q&KLQDDQG,QGLDPDQ\LQODQG States signed the Agreement, including LQGXVWULDOFHQWUHVDUHDWOHDVWNPIURP Thailand, which deposited an instrument the nearest seaport. RIUDWL¾FDWLRQ Subsequently, four more FRXQWULHVEHFDPH3DUWLHVWRWKH$JUHHPHQW By contrast, in other countries, such as °WKH5HSXEOLFRI.RUHDWKURXJKUDWL¾FDWLRQ WKRVHRI6RXWK(DVW$VLDGLVWDQFHVEHWZHHQ (April 2014),Viet Nam through approval trade origins or destinations and seaports 2FWREHU 7DMLNLVWDQWKURXJKDSSURYDO DUHFRPSDUDWLYHO\VKRUW)RUH[DPSOHLQ 1RYHPEHU ,QGLDWKURXJKDFFHVVLRQ Thailand containers are carried by road and 'HFHPEHU DQG5XVVLDQ)HGHUDWLRQ UDLOEHWZHHQ/DHP&KDEDQJ3RUWDQG/DUG WKURXJKDSSURYDO 'HFHPEHU ±DQG trade activities, multimodal facilities, and WKUHHPRUHFRXQWULHVEHFDPHVLJQDWRULHV± warehouses for the storage, sorting and %DQJODGHVK 6HSWHPEHU 6UL/DQND VHFRQGDU\SDFNDJLQJRIJRRGVLQWUDQVLW,W 0D\ DQG7XUNH\ 'HFHPEHU is expected that within the next two years, The Agreement will come into force after the facility will process more than 200,000 HLJKWFRXQWULHVKDYHEHFRPH3DUWLHVWRLW containers. Meanwhile, the Government RI.D]DNKVWDQLVDFWLYHO\FRXUWLQJLQYHVWRUV b. Selected dry port projects IRU)(=E\RIIHULQJH[HPSWLRQVIURPWD[DQG 7KHEHQH¾WVRIGU\SRUWVDUHDOUHDG\ FXVWRPGXWLHVDQGUHQWIUHHODQGIRUXSWRWHQ recognized by governments in the region. years. ,QWKHFRQWH[WRIUHJLRQDOLQIUDVWUXFWXUH QHWZRUNVGU\SRUWVDQGLQODQGORJLVWLFV 7KH*RYHUQPHQWRI8]EHNLVWDQKDV centres give shippers the option of using rail progressed in its development of dry ports transport or inland water transport over long in the country, in particular at Angren in the or medium distances, while limiting road 7DVKNHQWUHJLRQDQG1DYRLNLORPHWUHV transport to the last miles of their planned VRXWKZHVWRI7DVKNHQW7KH1DYRLGU\SRUW WULSV%RWK&KLQDDQGWKH5XVVLDQ)HGHUDWLRQ has been developed in connection with the have established dry ports in their territories, 1DYRL)UHH,QGXVWULDO=RQH ),= FORVHWR which are also serving as terminals for the international intermodal hub at Navoi $VLD°(XURSHFRQWDLQHUWUDI¾FDORQJWKH airport, which became operational in 2009 7UDQV$VLDQ5DLOZD\ VHHSDUW,, XQGHUWKHPDQDJHPHQWRI.RUHDQ$LU7KH facilities are located along major subregional ,Q6HSWHPEHUFRQVWUXFWLRQEHJDQRQ URDGDQGUDLOURXWHVZKLFKVHUYHWKHWUDI¾F WKH.KRUJRV°(DVW*DWH)UHH(FRQRPLF FRPLQJWKURXJKWKH,/&1DYRLDPDMRU =RQH )(= RQWKH&KLQHVHERUGHU,Q international intermodal logistics centre 'HFHPEHURIWKHVDPH\HDUWKH6WDWHRZQHG based at Navoi Airport. .D]DNKVWDQ7HPLU=KRO\ .D]DNKVWDQ 5DLOZD\V UHSRUWHGWKDWWKH¾UVWSDUWRI ,Q&KLQDWKH*RYHUQPHQWµVWUDQVSRUWSROLF\ the complex was ready for operation and remains focused on the development of that trains had begun carrying containers major intermodal rail hub terminals at 18 DORQJWKHQHZUDLOZD\WUDFNV7KHDUHD inland locations, connected both to seaports LQFOXGHVWKH.KRUJRV,QWHUQDWLRQDO&HQWUH and other inland industrial centres. The IRU&URVV%RUGHU&RRSHUDWLRQFHQWUHVIRU ¾UVWRIWKRVHZDVHVWDEOLVKHGDW.XQPLQJ LQDQGWRGDWHQLQHDUHLQRSHUDWLRQ ,WLVH[SHFWHGWKDWLQWKHORQJHUWHUPDOO intermodal hubs will be connected by GRXEOHVWDFNUDLOFRQWDLQHUVHUYLFHVWKHUHE\ substantially expanding their use and reducing their unit operating costs. The use of alternative transport modes (road and LQODQGZDWHUZD\WUDQVSRUW IRUWKHOLQHKDXO movement of containers is now generally restricted to corridors that are not connected WRWKHUDLOZD\QHWZRUNRIZKLFKWKHFRUULGRU for international trade between China .XQPLQJ DQGWKH/DR3HRSOHµV'HPRFUDWLF Republic is an example.

The Government of Australia is supporting WKHGHYHORSPHQWRIWKH0RRUHEDQNSURMHFW which is estimated to cost 1.83 billion Photo: UN ESCAP photo UN ESCAP Photo:

Australian dollars ($A) (1.32 billion), with c. Prospects for future dry the majority of funding coming from the port development private sector. The primary function of the $VFRXQWULHVLQWKHUHJLRQHPEDUNRQGU\SRUW project will be to handle export and import development projects, the experiences related containers, which will be transported by to the successful operation of dry ports helps UDLOWRDQGIURP3RUW%RWDQ\DGLVWDQFHRI to promote further development of dry ports: RQO\NP:DUHKRXVLQJZLOOEHDPDMRU income earner for the new terminal, which Location: The viability of dry ports depends will ultimately have a warehousing area of on whether they are suitably located for KHFWDUHV7KHSURMHFWZLOOEHGHYHORSHG serving international trade customers and WKURXJKD333EHWZHHQWKH*RYHUQPHQWDQG minimizing total transport costs. Regardless a joint venture of two major private sector of whether the distances between dry ORJLVWLFVRSHUDWRUV 48%(DQG$XUL]RQ ports and seaports or other trade origins or destinations are short or long, dry port sites ,Q6RXWK(DVW$VLDVHYHUDOSODQVIRUWKH PXVWEHDFFHVVLEOHE\KLJKTXDOLW\UDLOZD\V development of special economic zones are and highways with direct connections to LQWKHZRUNV)RUH[DPSOHLQ0D\ VHDSRUWV)XUWKHUPRUHWKH\VKRXOGEHORFDWHG the Governments of Thailand and Cambodia within or close to industry, manufacturing expressed their commitment to move ahead or logistics precincts or zones, to lower the with a plan to set up joint special economic FRVWRIODVWPLOHGHOLYHU\E\URDGWUDQVSRUW ]RQHV 6(=V LQ6D.DHR%DQWHD\0HDQFKH\ ,QWKHFDVHRI&KLQDDQGWKH5HSXEOLFRI DQG7UDW.RK.RQJ7KHSURMHFWVZRXOGEH .RUHDYHU\ODUJHUDLOVHUYHGWHUPLQDOV supported by new transport infrastructure have been constructed in zoned areas some and services by rail and road to serve rising NPIURPFLW\FHQWUHV,Q$XVWUDOLD demand in freight and passenger movements large interstate rail hub terminals have been as well as the establishment of new border established in the middle of industry and 37 FKHFNSRLQWV GLVWULEXWLRQ]RQHVZKLOHVPDOOHUUDLODQG URDGVHUYHGWHUPLQDOVDUHEHLQJHVWDEOLVKHG 3ODQVDUHDOVRXQGHUZD\LQWKH/DR3HRSOHµV within industrial estates in major inland Democratic Republic to develop a logistics centres.39,Q,QGLD&21&25RSHUDWHVDQ SDUNLQDWWKHFRXQWU\µV6DYDQ6HQR6SHFLDO H[WHQVLYHQHWZRUNRILQODQGFRQWDLQHU (FRQRPLF=RQH 6$6(= ORFDWHGLQ GHSRWV ,&'V PRVWRIWKHPDUHOLQNHGE\ 6DYDQQDNKHWQHDUWKH6HFRQG7KDL/DR UDLOWRWKH,QGLDQ5DLOZD\QHWZRUNZLWKWKH )ULHQGVKLS%ULGJHDFURVVWKH0HNRQJ5LYHU UHVWOLQNHGE\URDG 6LWXDWHGLQ8WKXPSKRQQHDUWKH/DR3HRSOHµV 'HPRFUDWLF5HSXEOLF7KDLODQGERUGHU Private sector involvement: While private the site covers 20 hectares. According to sector ownership and operation of dry one report, two Thai companies, Double A ports is not necessarily a condition for their ORJLVWLFVDQG1DQQ/RJLVWLFVDORQJZLWKWKH sustainability, there appears be a widespread -DSDQHVH¾UP/RJLWHPDUHDOUHDG\LQYHVWLQJ acceptance that the operation of these 38 in the zone. IDFLOLWLHVFDQEHQH¾WIURPSDUWLFLSDWLRQ in their management (if not ownership) ,Q,QGLDWKHGU\SRUWGHYHORSPHQWSROLF\RI E\FRPSDQLHVZLWKORJLVWLFVH[SHUWLVH,Q WKH&RQWDLQHU&RUSRUDWLRQRI,QGLD/LPLWHG WKH5HSXEOLFRI.RUHDIRUH[DPSOH,&'V &21&25 LVWDNLQJQHZUHOHYDQFHXQGHU FXUUHQWO\RSHUDWHDW¾YHORFDWLRQVDVSDUW WKH*RYHUQPHQWµV'HOKL0XPEDL,QGXVWULDO of inland logistics depots, with broader Corridor project. This project includes the functions for the handling of domestic as construction of a dedicated freight corridor well as international cargo. All of them between Delhi and Mumbai, with a number RSHUDWHXQGHU333FRQWUDFWVZLWKSXEOLFDQG RIORJLVWLFVSDUNVDORQJWKHURXWH SULYDWHVKDUHKROGLQJVRISHUFHQWDQG per cent, respectively. The public sector partner is responsible for investing in the road and rail accesses to the terminals, while investment in infrastructure and handling equipment within the boundaries of the terminals is the responsibility of the private partners.

,Q$XVWUDOLDWKHGHYHORSPHQWRZQHUVKLS and operation of inland intermodal freight terminals are in private sector hands, with WKHH[FHSWLRQRI0RRUHEDQNWKHFRXQWU\µV largest intermodal terminal, with an annual throughput capacity of 1.7 million 7(8ZKLFKLVORFDWHGRQWKHRXWVNLUWVRI

Sydney and the development of terminals / freeimages.com rgocontainer Photo: in suburban Melbourne connected by rail VKXWWOHVHUYLFHVWRWKH3RUWRI0HOERXUQH Other government policies:,WLVLPSRUWDQW that, once established, dry ports generate a ,QWKHFDVHRIWKH/DUG.UDEDQJ,QODQG UHDVRQDEOHOHYHORISUR¾WIRUWKHLURSHUDWRUV Container Depot, the land and infrastructure while at the same time result in lower is provided by the State Railway of Thailand transport and cargo handling costs between (the owner) and the handling equipment is FDUJRRULJLQVGHVWLQDWLRQVDQGSRUWV2QH furnished by six logistics companies. Those way to reduce transport costs is to design companies lease and operate the six modules dry ports as logistics hubs, allowing for the comprising the inland container depot. FRQVROLGDWLRQRI/&/ OHVVWKDQFRQWDLQHU load) shipments. Other policies that Financial incentives:)LQDQFLDOLQFHQWLYHV accelerate the turnaround of containers in provided by governments often determine terminals can also help to reduce logistics WKHYLDELOLW\RIDQRSHUDWRUµVLQYHVWPHQW FRVWV)RUH[DPSOHWKHVSHHGZLWKZKLFK in the construction of a terminal. The most customs and other border control processes popular type of incentive in the region is the DUHFRPSOHWHGLVUH¿HFWHGLQWKHWHUPLQDO SURYLVLRQRIORZFRVWODQGRUORZODQGUHQW handling and storage costs, which are an ,Q&KLQDIRUH[DPSOHDOOWHUPLQDOODQGLV important component of total logistics costs. owned by the Government and payment for The transport components of the total cost its use is recovered in the form of land taxes, DUHUHODWHGWRORFDOGHOLYHU\DQGOLQHKDXO SD\DEOHE\WHUPLQDORSHUDWRUV%\NHHSLQJ WUDQVSRUWDQGDUHWKHUHIRUHLQ¿XHQFHGE\ land valuations low relative to prevailing PRGDOFKRLFHGHFLVLRQV SDUW,, PDUNHWUDWHVWKH*RYHUQPHQWFDQSURYLGH ODQGXVHLQFHQWLYHVWRWHUPLQDORSHUDWRUV,Q addition, if the area occupied by an operator B. Transport facilitation H[FHHGVVTXDUHPHWUHVWKDWRSHUDWRU UHFHLYHVDSHUFHQWUHGXFWLRQLQWKHUDWHRI and logistics ODQGWD[DSSOLHG2WKHUIRUPVRI¾QDQFLDO incentive which provided by governments 1. INTRODUCTION are tax (especially business or corporate ,QWHUQDWLRQDOWUDGHDQGWUDQVSRUWKDYH tax) waivers or holidays, whereby taxes are H[SDQGHGDWDUHPDUNDEOHUDWHLQWKH$VLD waived for an agreed period of time, usually 3DFL¾FUHJLRQFRQWULEXWLQJWRWKHHFRQRPLF to allow operators some time to establish growth of countries and allowing for the their businesses and generate income. GLYHUVL¾FDWLRQRIWKHLUHFRQRPLHV7KH spread of global and regional supply chains has played an important role in boosting WUDGHLQWHJUDWLRQSDUWLFXODUO\LQ1RUWK(DVW connectivity. Subregional facilitation $VLDDQG6RXWK(DVW$VLD:KLOHHFRQRPLF agreements are a valuable stepping stone DQG¾QDQFLDOFRQVLGHUDWLRQVDUHWKHPDLQ towards harmonization at regional and drivers behind this integration, government international levels. Bilateral agreements SROLFLHVKDYHKDGDVLJQL¾FDQWLQ¿XHQFH on transport also play an important role in RQWKHWUDGLQJHQYLURQPHQWDQGWKHLQ¿RZ opening of border crossings and domestic RIIRUHLJQGLUHFWLQYHVWPHQW,QSDUWLFXODU routes for international transport. JRYHUQPHQWVµHIIRUWVWRIDFLOLWDWHWUDGHDQG transport, particularly at borders, has reduced a. Subregional and transport and trade costs substantially. multilateral agreements Nonetheless, there is tremendous potential for further simplifying and harmonizing 7KH,QWHU*RYHUQPHQWDO$JUHHPHQWRIWKH the processes that handle the movement of Shanghai Cooperation Organization Member goods and passengers between countries. 6WDWHVRQWKH)DFLOLWDWLRQRI,QWHUQDWLRQDO Border crossings, for example, are still a Road Transport, formulated with technical source of unnecessary delays and costs DQG¾QDQFLDODVVLVWDQFHRI(6&$3ZDV GXHWRFRPSOLFDWHGDQGQRQVWDQGDUGL]HG signed at the annual Meeting of the SURFHGXUHVDWERUGHUVDQGWKHODFNRI Council of Heads of States of the Shanghai institutional coordination across them. Cooperation Organization, which was held in ,PSURYLQJWUDQVSRUWIDFLOLWDWLRQZRXOGDOVR Dushanbe in 2014 . All of the member States help to bring down logistics costs, which, in RIWKH6KDQJKDL&RRSHUDWLRQ2UJDQL]DWLRQ± turn, would enhance the competitiveness of &KLQD.D]DNKVWDQ.\UJ\]VWDQWKH5XVVLDQ WKHUHJLRQµVGHYHORSLQJFRXQWULHV )HGHUDWLRQ7DMLNLVWDQDQG8]EHNLVWDQ°DUH covered by the Agreement. This chapter provides a review of recent This Agreement is expected to open up more developments in transport facilitation WKDQNPRI$VLDQ+LJKZD\URXWHV DQGORJLVWLFVLQWKH$VLD3DFL¾FUHJLRQ for transport operations and services, with 6SHFL¾FDOO\SURJUHVVLQWKHGHYHORSPHQWRI the longest route stretching around 9,000 international conventions and multilateral NPIURP6DLQW3HWHUVEXUJLQWKH5XVVLDQ agreements governing transport facilitation )HGHUDWLRQWR/LDQ\XQJDQJ&KLQD,WZLOO is described, follow by a discussion of DOVRIDFLOLWDWHDFFHVVWRWKHVHDIRUODQGORFNHG WKHVWDWXVRIORJLVWLFVLQWKHUHJLRQ,QWKH Central Asia through China and the Russian chapter, new technologies that are helping )HGHUDWLRQUHYLWDOL]LQJWKHDQFLHQW6LON border agencies and the private sector to which connected China, the Russian better perform their respective roles in the )HGHUDWLRQDQGWKH&HQWUDO$VLDQFRXQWULHVWR transport chain are highlighted. Also included WKH0HGLWHUUDQHDQ6HDDQG(XURSH is a discussion on the roles of transport ,QWKH*RYHUQPHQWVRI&KLQD facilitation and logistics in enhancing the 0RQJROLDDQGWKH5XVVLDQ)HGHUDWLRQEHJDQ FRPSHWLWLYHQHVVRIODQGORFNHGGHYHORSLQJ to negotiate an agreement on international countries. road transport along the Asian Highways ZLWKVXSSRUWIURP(6&$37KHWKLUG 2. PROGRESS IN THE consultation meeting among the member DEVELOPMENT OF States, which was held in Ulaanbaatar LEGAL INSTRUMENTS IURPWR6HSWHPEHUUHDFKHG FOR FACILITATING an agreement on both interstate and transit INTERNATIONAL transport along the Asian Highway Routes TRANSPORT Nos. 3 and 4. Given the regional situation, the formulation Under the agreement, the Asian Highway and implementation of legal instruments are route No.4 (AH4) will be opened to border of essential for countries to enhance operational &KLQDZLWK3DNLVWDQ7KLVURXWHZRXOGWKHQ

be connected by bilateral and quadrilateral DOOFRQWUDFWLQJSDUWLHVZLWKWKH6HFUHWDU\ agreements with China and some Central *HQHUDORI$6($1 $VLDQFRXQWULHVDORQJWKH&KLQD3DNLVWDQ (FRQRPLF&RUULGRUIRUFRQQHFWLYLW\D 0HDQZKLOHZRUNKDVLQWHQVL¾HGRQWKH ZHVWHUQFRUULGRURIWKH6LON5RDG $6($1&XVWRPV7UDQVLW6\VWHPLQWKUHH (FRQRPLF%HOW pilot countries, Malaysia, Singapore and Thailand, with plans to start testing the :LWKWKH$6($1(FRQRPLF&RPPXQLW\ V\VWHPE\PLG41$6($1PHPEHU due to become operational in December 6WDWHVDOVRFRQWLQXHGWRZRUNWRZDUGVWKH PHPEHU6WDWHVRIWKH$VVRFLDWLRQRI $6($1)UDPHZRUN$JUHHPHQWRQ&URVV 6RXWKHDVW$VLDQ1DWLRQVRU$6($1KDYH %RUGHU7UDQVSRUWRI3DVVHQJHU &%73 ZRUNHGVWHDGLO\WRUHPRYHQRQSK\VLFDO ZKLFKLVH[SHFWHGWRIDFLOLWDWHWKHFURVV barriers at borders and to modernize their border road transport of people within the WUDGLQJHQYLURQPHQWV,QWKDWUHJDUG $6($1UHJLRQWKURXJKWKHVLPSOL¾FDWLRQ substantive progress was made towards and harmonization of transport procedures WKHHQWHULQJLQWRIRUFHRI3URWRFRORIWKH and requirements. $6($1)UDPHZRUN$JUHHPHQWRQWKH )DFLOLWDWLRQRI*RRGVLQ7UDQVLW $)$)*,7 At the national level, the National entitled the “Customs Transit System”.40 0XOWLPRGDO7UDQVSRUW/DZZDVHQDFWHG 7KH3URWRFROSURYLGHVIRUWKHIXOOHQGWR LQ0\DQPDULQ-DQXDU\ZLWKWKH end computerization of transit operations; a corresponding rules and regulations issued single electronic customs transit declaration; RQ'HFHPEHU7KLVPDUNVD DQGIUHHPRYHPHQWIRUWUXFNVDQGGULYHUV VLJQL¾FDQWVWHSWRZDUGVWKHSUDFWLFDO without the transshipment of transit goods. DSSOLFDWLRQRIWKH$6($1)UDPHZRUN 7KH3URWRFROZDVVLJQHGLQE\%UXQHL Agreement on Multimodal Transport 'DUXVVDODP&DPERGLD,QGRQHVLDWKH/DR $)$07 DQGWKH*UHDWHU0HNRQJ 3HRSOHµV'HPRFUDWLF5HSXEOLF0DOD\VLD 6XEUHJLRQ$JUHHPHQWIRU)DFLOLWDWLRQRI 0\DQPDUWKH3KLOLSSLQHV6LQJDSRUHDQG &URVVERUGHU7UDQVSRUWRI*RRGVDQG3HRSOH 9LHW1DPDQGE\7KDLODQGLQDQG of 1999 (GMS CBTA).42 will enter into force upon the deposit of LQVWUXPHQWVRIUDWL¾FDWLRQRUDFFHSWDQFHE\ ,Q1RUWKDQG&HQWUDO$VLDWKH7UHDW\RQ WKH(XUDVLDQ(FRQRPLF8QLRQHQWHUHG LQWRIRUFHRQ-DQXDU\6LJQHGE\ WKHSUHVLGHQWVRI%HODUXV.D]DNKVWDQDQG WKH5XVVLDQ)HGHUDWLRQDQGVXEVHTXHQWO\ DFFHGHGWRE\$UPHQLDDQG.\UJ\]VWDQ The Treaty includes measures to coordinate transport policy among member States, unify transport control procedures for the exterior ERUGHURIWKH8QLRQDQGLQWURGXFHDSHUPLW IUHHV\VWHPIRUWUDI¾FPRYLQJEHWZHHQWKH FRXQWULHVRIWKH8QLRQ JUDGXDOO\ZLWKDWHQ year transition period).43)XWXUHPHDVXUHV being planned include the harmonization of transport infrastructure tariffs and the VLPSOL¾FDWLRQRIWUDQVSRUWGRFXPHQWDWLRQ including abolishing permits for all road WUDQVSRUWRSHUDWLRQVDPRQJWKH(XUDVLDQ (FRQRPLF8QLRQPHPEHU6WDWHV Photo: UN ESCAP photo UN ESCAP Photo:

Several countries in South Asia are entering ,Q$SULO,QGLDDQG%DQJODGHVKUDWL¾HG into a multilateral transport agreement a coastal shipping agreement to facilitate WRIDFLOLWDWHFURVVERUGHUDQGWUDQVLW the movement of goods between the two transport. The member countries of the countries via sea routes.47 The agreement South Asian Association for Regional allows merchant ships to ply directly &RRSHUDWLRQ¾QDOL]HGWKH6$$5&0RWRU between the two countries, which will help 9HKLFOHV$JUHHPHQW3HQGLQJVLJQDWXUHWR to reduce transport costs and create more the agreement by all SAARC members, HPSOR\PHQWRSSRUWXQLWLHV,QDGGLWLRQ %DQJODGHVK%KXWDQ,QGLDDQG1HSDO the two countries have also decided to signed the Motor Vehicles Agreement for FRQVWLWXWHDMRLQWWDVNIRUFHIRUQHJRWLDWLQJD WKH5HJXODWLRQRI3DVVHQJHU3HUVRQDODQG multimodal transport agreement.48 &DUJR9HKLFXODU7UDI¾FRQ-XQH The arrangement for the implementation of 3. INNOVATIVE the agreement will be laid down through APPROACHES AND the protocols, to be negotiated separately. NEW TECHNOLOGIES ,WLVH[SHFWHGWKDWRQFHWKHDJUHHPHQWLV implemented, the transshipment of goods at TO FACILITATE border crossings in South Asia could be a INTERNATIONAL thing of the past. TRANSPORT b. Bilateral agreements Around the world, governments are China and Mongolia signed several bilateral embracing innovative approaches and agreements in August 2014, with the aim new technologies for managing and to enhance mineral trade and transportation PRQLWRULQJWUDGHDQGWUDQVSRUW¿RZV)RU OLQNVIRU0RQJROLD7KRVHUHOHYDQWWR H[DPSOHWKH:RUOG%DQNHVWLPDWHVWKDW transport include: HFRQRPLHVKDYHLPSOHPHQWHGVLQJOHZLQGRZ systems, and 88 per cent allow traders to ,QWHU*RYHUQPHQWDO$JUHHPHQWRQ7UDQVLW submit at least some of their export and DQG)UHLJKW7UDQVSRUWDWLRQWR6HDDQG%DFN import documents to customs authorities 49 through Mongolian and Chinese Territories; electronically. Many of these initiatives are ,QWHU*RYHUQPHQWDO*HQHUDO$JUHHPHQWRQ implemented in conjunction with measures to Development of Railway Transit Transport; harmonize and simplify procedures. ,QWHU*RYHUQPHQWDO0HPRUDQGXP of Understanding on Development of Railway Cooperation; Memorandum of Understanding between Ministry of Road and Transportation of Mongolia and Railway $XWKRULW\RI3HRSOHµV5HSXEOLFRI&KLQD on the renewal of the “Mongolia and China Border Railway Agreement.”44

,Q6RXWK$VLDWKH0RWRU9HKLFOH$JUHHPHQW EHWZHHQ1HSDODQG,QGLDZDVVLJQHGLQ .DWKPDQGXRQ1RYHPEHUWR IDFLOLWDWHWKHPRYHPHQWRIYHKLFXODUWUDI¾F between the two countries. Separately, ,QGLD0\DQPDUDQG7KDLODQGDUHDOVR ZRUNLQJRQDPRWRUYHKLFOHDJUHHPHQWWR facilitate cross border transport. Photo: Fedor Kormilitsyn / UN ESCAP / UN ESCAP Kormilitsyn Fedor Photo:

The impact of those efforts is becoming )HGHUDWLRQ8]EHNLVWDQDOVRDOORZVWKH HYLGHQWDWERUGHUFURVVLQJV,QUHFHQW\HDUV electronic submission of these documents. border agencies have faced the challenges of facilitating increasing volumes of trade Also in Central Asia, Azerbaijan streamlined and transport, while also monitoring those its internal customs procedures in 2014 movements to enforce control measures. ZKLOHLQ.\UJ\]VWDQWKHFXVWRPVVHUYLFHV To help border agencies optimize their FRPSOHWHGWKHUROORXWRIDXQL¾HGDXWRPDWHG methodologies for dealing with these information system in December 2013, and FRQ¿LFWLQJUHTXLUHPHQWVPDQ\FRXQWULHV VLQFH-DQXDU\DOOJRRGVKDYHEHHQ in the region are developing innovative declared only electronically; Meanwhile, approaches and new technologies. 7DMLNLVWDQKDVLQWURGXFHGDXQL¾HGDXWRPDWHG information system for customs, which a. Integrated check posts connects 72 customs posts in the country. Several countries in the region have The system processes customs declarations, LQWURGXFHGLQWHJUDWHGFKHFNSRVWV ,&3V allows the close monitoring of cargo, and DWWKHLUERUGHUFURVVLQJV,&3VSURYLGH generally improves the quality of customs facilities for the clearance of passengers control, clearance procedures, and the and cargo under one roof in the form of collection of customs duties. customs and immigration facilities, weigh bridges, security and scanning equipment, ,Q6RXWK(DVW$VLD&DPERGLDKDVLQWURGXFHG cargo inspection sheds, warehouses and cold DXWRPDWHGERUGHUFOHDUDQFHSURFHVVHVULVN storage, and health and quarantine facilities. management and coordinated inspections, To facilitate border crossings, some also and a single administrative document. These SURYLGHVSDFHIRUEDQNVDQGPRQH\FKDQJHUV measures helped Cambodia move up in the KRWHOVSDUNLQJDQGRWKHUSXEOLFXWLOLWLHV /RJLVWLFV3HUIRUPDQFH,QGH[IURPLQ 2010 to 83 in 2014.,Q)HEUXDU\ ,Q6RXWK$VLD,QGLDKDVHVWDEOLVKHG &DPERGLDDQG9LHW1DPDOVRRSHQHGD²RQH ,&3VDORQJLWVLQWHUQDWLRQDOERUGHUV The VWRSVKRS³FXVWRPVPRGHODWWKH/DR%DR ¾UVW,&3ZDVHVWDEOLVKHGDORQJWKH,QGLD° °'HQVDYDQ,QWHUQDWLRQDO%RUGHU*DWHZKLFK 3DNLVWDQERUGHUDW$WWDULQHDU$PULWVDULQ is part of the Asian Highway. $SULOIROORZHGE\WKH$NKDXUDK,&3 QHDU$JDUWDODDORQJWKH,QGLD°%DQJODGHVK ,Q6RXWKDQG6RXWK:HVW$VLDWKH,VODPLF border in November 2013. With support 5HSXEOLFRI,UDQLQWURGXFHGDQHZV\VWHP IURP,QGLD1HSDOLVDOVRFRQVWUXFWLQJ,&3V of customs clearances in October 2014. at four important border crossings: Birgunj, This system, which facilitates the electronic Bhairahawa, Biratnagar, and Nepalgunj. acceptance of declarations, is expected to 6LPLODUO\3DNLVWDQLVLQWKHSURFHVVRI shorten the customs clearance time from 21 establishing a land port authority to manage to 4 days.3DNLVWDQKDVLQWURGXFHGDIXOO\ its land ports. DXWRPDWHGZHEEDVHGRQHFXVWRPVV\VWHP for the submission of export and import b. Automation of customs GRFXPHQWVLQ/DKRUHDQG.DUDFKL processes Meanwhile, Bangladesh is using the The completion of customs formalities is a computerized Automated System for major cause of delays at border crossings, &XVWRPV'DWD $6<&8'$ LQ&KLWWDJRQJ so it stands to reason that the automation of DQG'KDND,WMRLQVRWKHUFRXQWULHVLQWKH customs processes is the most effective way $VLDQDQG3DFL¾FUHJLRQ°LQFOXGLQJDPRQJ to reduce such delays. To that end, the Russia RWKHUV$IJKDQLVWDQ)LMLWKH/DR3HRSOHµV )HGHUDWLRQLVLPSOHPHQWLQJDQHOHFWURQLF 'HPRFUDWLF5HSXEOLFWKH3KLOLSSLQHV system for submitting export and import 6DPRDWKH6RORPRQ,VODQGV6UL/DQND documents and reducing the number of 7LPRU/HVWHDQG9DQXDWX°LQ physical inspections on cargo in the Russian XVLQJ$6<&8'$WRIDFLOLWDWHFXVWRPVGDWD A growing number of economies are using management. these technologies, including: China; Hong .RQJ&KLQDDQG5HSXEOLFRI.RUHDLQ c. Trends in new technologies 1RUWK(DVW$VLDDQG0DOD\VLD6LQJDSRUH to facilitate international DQG7KDLODQGLQ6RXWK(DVW$VLD7KHLUXVH transport LVDOVREHLQJFRQVLGHUHGLQ6RXWKDQG6RXWK The objective of border agencies is to West Asia. Some bilateral and subregional identify, isolate and interdict goods and agreements contain explicit provisions for people from entering their respective WKHWUDFNLQJRIIRUHLJQYHKLFOHVDFURVVWKHLU countries that are in contravention of WHUULWRULHV)RUH[DPSOHWKH$IJKDQLVWDQ rules and regulations. Though the aims of 3DNLVWDQ7UDQVLW7UDGH$JUHHPHQWFRQWDLQV border agencies are simple, the necessary a provision for it, while a proposed motor SURFHVVHVDUHFRPSOH[,QWKHOLJKWRIWKH vehicle agreement among the countries of LQFUHDVLQJYROXPHRILQWUDDQGLQWHUUHJLRQDO SAARC also has a similar provision. trade and transport, the application of new information and communication technologies ,Q&HQWUDO$VLD.D]DNKVWDQKDVJRQHDVWHS is supporting border agencies in carrying out further by implementing a comprehensive their duties. approach to coordinating border agency FRQWUROVDQGWUDFNLQJ$FHQWUHRIRSHUDWLRQDO The main technologies used are satellite management has been established by the positioning systems, cellular communication state revenue committee of the Ministry V\VWHPVUDGLRIUHTXHQF\LGHQWL¾FDWLRQ RI)LQDQFHWRVHUYHDVDVLQJOHSRLQWIRU 5),' DQGHOHFWURQLFVHDOV&RXSOHGZLWK the remote control and monitoring of the WKH,QWHUQHWDQGFXVWRPL]HGDSSOLFDWLRQ movement of goods and vehicles by customs software, these technologies are being used DXWKRULWLHVDQGRWKHUJRYHUQPHQWDJHQFLHV± WRWUDFNFRQWDLQHUVDQGYHKLFOHV5DGLR dealing in areas, such as health, agriculture, IUHTXHQF\LGHQWL¾FDWLRQWHFKQRORJLHVDUHDOVR WUDQVSRUWDQGFRPPXQLFDWLRQV±WKDW being used in container asset management at exercise control at the border. ports and logistics terminals to identify and locate containers for the smooth operation of To promote the application of these WKHVXSSO\FKDLQ,QDGGLWLRQHOHFWURQLFVHDOV WHFKQRORJLHV(6&$3DQG$'%MRLQWO\ HPEHGGHGZLWK5),'FKLSVDOORZDJHQFLHV conducted a feasibility study on the pilot to determine in real time whether a container LPSOHPHQWDWLRQRI(6&$3µV6HFXUH&URVV has been subject to tampering. They can also help to detect changes in pressure, humidity, temperature, and carbon dioxide levels.

9HKLFOHFRQWDLQHUWUDFNLQJLVSDUWLFXODUO\ useful for securing the movement of goods and vehicles that are in transit. Control authorities in many countries are concerned about the potential diversion of goods and the associated loss of revenue, as well as the smuggling of prohibited goods. With FRQWDLQHUDQGYHKLFOHWUDFNLQJV\VWHPV FRQWURODXWKRULWLHVFDQIHHOPRUHFRQ¾GHQW about the movement of foreign vehicles in their territories. Photo: UN ESCAP photo UN ESCAP Photo: FIGURE 3.3 APPLICATION OF ELECTRONIC LOCK DURING TEST RUNS ON BHUTAN-INDIA TRANSIT CORRIDOR Photo: Yuwei Li / UN ESCAP Yuwei Photo: Photo: Yuwei Li / UN ESCAP Yuwei Photo:

Source: ESCAP

%RUGHU7UDQVSRUW0RGHODORQJWKH%KXWDQ systems, port and terminal management ,QGLDWUDQVLWFRUULGRULQ ¾JXUH systems, and border crossing management 3.3). The recommendations of the study systems. Those technologies can give are currently being considered by the FRQWURODXWKRULWLHVJUHDWHUFRQ¾GHQFHDQG Governments of both countries. VHFXULW\LQPDQDJLQJFURVVERUGHU¿RZVRI IUHLJKWDQGYHKLFOHV+RZHYHUIXUWKHUZRUN 7KHXVHRI,76IRUIUHLJKWWUDQVSRUWLV is required to establish global technical expected to expand in many directions. standards, such as for electronic seals and 7UHPHQGRXVVFRSHH[LVWVIRUWKHXVHRI,76 application software, in order to be able to in other elements of freight management, use these technologies across borders. including transport asset management 4. LOGISTICS ,QWKHDEVHQFHRIFRPSDUDEOHGDWDWKH:RUOG DEVELOPMENT %DQNFUHDWHGWKHSHUFHSWLRQEDVHG/RJLVWLFV 3HUIRUPDQFH,QGH[ /3, ZKLFKDVVHVVHV FRXQWULHVµSHUIRUPDQFHVLQVL[PDLQDUHDV /RJLVWLFVLVGH¾QHGDV²WKHSDUWRIWKH QDPHO\HI¾FLHQF\RIFXVWRPVDQGERUGHU supply chain process that plans, implements, management clearance, quality of trade and DQGFRQWUROVWKHLUHI¾FLHQWHIIHFWLYH¿RZ transport infrastructure, ease of arranging and storage of goods, services, and related competitively priced shipments, competence information from the point of origin to DQGTXDOLW\RIORJLVWLFVVHUYLFHV±WUXFNLQJ the point of consumption in order to meet IRUZDUGLQJDQGFXVWRPVEURNHUDJHDELOLW\ FRQVXPHUVµUHTXLUHPHQWV³DQGDVVXFKLV WRWUDFNDQGWUDFHFRQVLJQPHQWVDQGWKH an integral part of all trade movements. frequency with which shipments reach &RXQWU\OHYHOGDWDRQORJLVWLFVFRVWVDUH consignees within scheduled or expected YHU\OLPLWHGLQWKH$VLD3DFL¾FUHJLRQ GHOLYHU\WLPHV%DVHGRQ/3,WKHORJLVWLFV Nevertheless, some studies have provided SHUIRUPDQFHRIWKH$VLD3DFL¾FUHJLRQDV estimates of logistics costs in emerging a whole was almost on par with the world HFRQRPLHV(VWLPDWHVIRU&KLQDLQDQG DYHUDJHLQVFRULQJSRLQWVRXWRI Thailand in 2009 were 18 and 19 per cent ¾JXUH RIWKHLUQDWLRQDO*'3UHVSHFWLYHO\ZKLOHD HVWLPDWHIRU5HSXEOLFRI.RUHDZDV SHUFHQWRI*'3

FIGURE 3.4 WORLD BANK LOGISTICS PERFORMANCE INDEX: ASIA- PACIFIC REGION AND WORLD AVERAGE

,:*(7(]LYHNL >VYSK(]LYHNL

Source: ESCAP Calculation based on data from World Bank, Logistics Performance Index, (http://lpi.worldbank. org/international/global). .

+RZHYHUWKHDYHUDJH/3,VFRUHIRU$VLDDQG and the promotion of relevant technologies to WKH3DFL¾FLVVWLOOFRQVLGHUDEO\ORZHUWKDQIRU facilitate transport and logistics. 1RUWK$PHULFD DQGWKH(XURSHDQ8QLRQ )XUWKHUPRUHDV¾JXUHLOOXVWUDWHV As the growth rates of many countries in the there are substantial differences between region continue to slow, governments must VXEUHJLRQV(DVWDQG1RUWK(DVW$VLDVFRUHG VHHNQHZZD\VWRHQKDQFHWKHLU

FIGURE 3.5 LOGISTICS PERFORMANCE INDEX OF ESCAP SUBREGIONS

5VY[OHUK :V\[OHUK :V\[O,HZ[ 7HJPMPJ ,HZ[HUK *LU[YHS(ZPH :V\[O>LZ[(ZPH (ZPH 5VY[O,HZ[(ZPH

Source: ESCAP Calculation based on data from World Bank, Logistics Performance Index, (http://lpi.worldbank. org/international/global)

SRLQWVLQORJLVWLFVSHUIRUPDQFHZKLFKLV competitiveness. Without reliable logistics FRPSDUDEOHWRWKH(XURSHDQ8QLRQZKLOHWKH infrastructure, companies need to adopt more worst performing logistics sector was found costly shipments or higher inventories and LQ1RUWKDQG&HQWUDO$VLDZLWKD/3,VFRUH DEDQGRQORZHUFRVWMXVWLQWLPHSURGXFWLRQ RI ,QVRPH$VLD3DFL¾FFRXQWULHVGHOD\VDQG unexpected costs, such as informal payments, Many different factors affect logistics contribute to poor logistics performances. costs, including, among them, geographical situation, logistics infrastructure, political One way in which the logistics industry and economic stability, regulatory FDQEHFRPHPRUHHI¾FLHQWLVWRGLYHUVLW\ IUDPHZRUNVLQWHUHVWUDWHVDQGHQHUJ\SULFHV VHUYLFHV$UHFHQWVWXG\E\WKH(6&$3 WKDWDIIHFWORJLVWLFVFRVWV%DVHGRQWKLV/3, secretariat found that some logistics service results should be interpreted with caution. providers were increasingly involved in a Some factors, such as geography, or political range of more sophisticated services within and economic stability, are perhaps beyond the supply chains, offering services beyond WKHLQ¿XHQFHRISXEOLFSROLF\+RZHYHU their traditional boundaries of moving goods governments have tremendous leverage DQGFXVWRPVEURNHUDJH([DPSOHVLQFOXGH over other factors, such as the regulatory IUDPHZRUNVJRYHUQLQJWUDGHDQGWUDQVSRUW across borders, infrastructure development $VVHPEO\ some providers offer assembly plays an important role in integrating supply DFWLYLWLHVIRUERWKORZHQGDVVHPEO\ VXFK FKDLQVDQGGLVWULEXWLRQV\VWHPV)RUPDQ\ DVNLWWLQJ DQGKLJKHQGDVVHPEO\ VXFKDV countries, the ultimate goal is to realize DVVHPEO\RI¾QDOSURGXFWEDVHGRQVWRUH one comprehensive logistics information UHTXLUHPHQWV 7KHVHDFWLYLWLHVFDQWDNHSODFH V\VWHP$OVRNQRZQDV²HORJLVWLFV³V\VWHPV at client premises or at the warehouses of they serve as interfaces for fast, accurate logistics service providers; and reliable data exchange and associated 6XSSO\FKDLQ/RJLVWLFVVHUYLFHSURYLGHUV PDQLSXODWLRQ,GHDOO\QDWLRQDOHORJLVWLFV increasingly offer services from the systems should be able to communicate perspective of the supply chain rather than with each other, thereby helping to integrate transport. This includes supply chain design, FURVVERUGHUVXSSO\FKDLQV management and operations, operating as a lead logistics provider with procurement +DYLQJDOUHDG\PDGHVLJQL¾FDQWDGYDQFHV responsibilities and inventory management; in logistics information systems in their 4XDOLW\FRQWURO/RJLVWLFVVHUYLFH UHVSHFWLYHFRXQWULHV&KLQD-DSDQDQGWKH providers may provide technical testing, 5HSXEOLFRI.RUHDUHFRJQL]HGWKDWWUDGH localization, and quality inspection between among could be better managed if VHUYLFHVHLWKHUDVLQSODQWVHUYLFHVRUDWWKH they had a common platform which allowed warehouse; their logistics systems to communicate with )LQDQFLDOVHUYLFHV Some providers can each other. This led to the establishment of supply collateral management services and 1($/1(7RUWKH1RUWKHDVW$VLD/RJLVWLFV DFWDVLQVXUDQFHEURNHUVIRUWKHLUFOLHQWVXSRQ ,QIRUPDWLRQ6HUYLFHZKLFKSURYLGHVD request; standardized query interface for supply &XVWRPHUVHUYLFHV/RJLVWLFVVHUYLFH chain partners in all three countries to obtain providers may assume responsibility of logistics status data through their national VXFKEDFNHQGFXVWRPHUVHUYLFHDFWLYLWLHV logistics systems (box 3.4). as returns and repairs, operation of call centres (particularly relating to warranty and technical support), and provide reverse logistics services.

The increased complexity of supply chains and distribution systems requires logistics service providers to have the appropriate W\SHVRIVNLOOVDQGFRPSHWHQFLHVWRPDQDJH WKHP6RPHJRYHUQPHQWVDUHZRUNLQJ closely with the private sector to raise the TXDOLW\RIWKHLUORJLVWLFVLQGXVWULHV,QDQ effort to improve quality and competence, the Government in Malaysia is providing training programmes to increase the human resource capacity of the logistics sector. ,QWKH5HSXEOLFRI.RUHDORJLVWLFVVHUYLFH providers who meet certain industrial criteria FDQDSSO\IRUWKH²/RJLVWLFV&RPSDQ\ &HUWL¾FDWLRQ³DV\PERORITXDOLW\WKDW assures customers of a certain standard of service.

,QDGGLWLRQWRWKHKXPDQUHVRXUFHDVSHFWV of successful logistics sectors, technology Photo: UN ESCAP photo UN ESCAP Photo: BOX 3.4 NORTHEAST ASIA LOGISTICS INFORMATION SERVICE NETWORK

The Northeast Asia Logistics Information Service Container Network (NEAL-NET) was established at the third terminal China-Japan-Korea Ministerial Conference on Road Transport Colins Transport and Logistics in 2010, as a mechanism company to improve trade facilitation through seamless Marine Radio supply chains and high-quality logistics. NEAL-NET Web Camera EPCIS members include a wide range of stakeholders: ports; logistics service providers; transporters of all modes; government agencies; and other institutions. SPIDC (Korea) EPCIS NEAL-NET connects the information systems NEAL-NET LOGINK, COLINS and SPI-DC from China, Japan Logink and the Republic of Korea, respectively. (China) EPCIS

LOGINK (China) Source: JILS Report, 2014: Coordination of logistics The national transportation logistics public information system, efficient control of distribution in the information platform (LOGINK) for China comprises visibility of the supply chain a national interchange hub linked to thirty-two provincial interchange nodes to form a network traffic camera streams are broadcast from more than across China. Users include both public and private fifty port districts to facilitate logistics management stakeholders, such as transport authorities, customs planning. and quarantine authorities, logistics companies and other information service providers. Data are also transmitted to NEAL-NET through Electronic Product Code Information Services The platform’s core functions are a data interchange (EPCIS) to enable information sharing and service and a “service call” service. The data traceability with China and the Republic of Korea interchange service allows registered supply chain (see figure). partners to share business data and transmit electronic documents through a secure platform. Port-MIS and SP-IDC (Republic of Korea) The “service call” service enables registered logistics Port-MIS is an integrated information system service users and providers to find each other through designed to support and facilitate seamless port LOGINK. Users can request logistics information or logistics activities. The system, which is accessible services and receive responses through the server. from any location through the Internet, currently covers 31 international ports in the Republic of Korea. This open information channel enables the better utilization of logistics service resources and As it is connected with customs, immigration and increases overall efficiency. Third-party stakeholders quarantine offices, Port-MIS supports e-document within the supply chain can also provide other value- submission and processes applications instantly. The added services through the LOGINK interchange system also allows ports to better manage vessel and network, such as shipment tracking, vehicle access container traffic by streamlining berth management, and departure management, and the resolution organizing cargo/container movement and allowing of inquiries for vessel schedules and customs for more transparent handling of hazardous goods. inspection information. The system enables the automated calculation of facility usage and handling fees, including berthing, COLINS (Japan) anchorage and discharge handling fees. The Container Logistics Information Service (COLINS) was set up in 2009 to enhance ports’ Meanwhile, the Shipping and Port Integrated services and provide an efficient logistics network Data Center (SI-IDC) offers easy public access in Japan. Users of COLINS include, among others, to information generated on Port-MIS, allowing container terminal operators, shippers, freight stakeholders to obtain maritime logistics information forwarders and land transport service providers. and statistics, such as cargo volume, container throughput and vessel schedules. Port authorities in The programme combines information from three four main ports, namely Busan, Incheon, Ulsan and databases — vessel schedules, export container Yeosu/Gwangyang, participate in the system, while status, and import container and cargo availability users include logistics service providers, shipping status — and can be accessed via the Internet from companies and agencies, terminals, members of computers and cellular phones. Vessel schedule academia and the general public. Since 2011, the data are updated every 60 minutes while the other system has been sharing logistics information data are updated every 10 minutes. In addition, live through NEAL-NET with China and Japan.

7KH1($/1(7ZHEVLWHDOORZVDOO challenges they face, the second United XVHUVLQFOXGLQJVPDOODQGPHGLXPVL]HG 1DWLRQV&RQIHUHQFHRQ/DQGORFNHG enterprises, to easily request data online Developing Countries, which was held °VXFKDVFRQWDLQHUYHVVHODUULYDODQG LQ9LHQQDIURPWR1RYHPEHU departure times and container movements DGRSWHGWKH9LHQQD3URJUDPPHRI$FWLRQ ±WRKHOSZLWKRSHUDWLRQDOSODQQLQJ6RPH IRU/DQGORFNHG'HYHORSLQJ&RXQWULHVIRU larger companies have developed their own WKH'HFDGH0RUHKROLVWLFDQG interfaces to connect their internal systems to UHVXOWVRULHQWHGWKDQWKH$OPDW\3URJUDPPH 1($/1(7:KLOHDWSUHVHQW1($/1(7 of Action , which preceded it, the Vienna mainly focuses on maritime transport, it is 3URJUDPPHRI$FWLRQLGHQWL¾HVWKHIROORZLQJ expected that it will be extended to other six areas as priorities for action: modes in the near future. Priority 1. Fundamental transit policy: 5. TRANSPORT 7KH9LHQQD3URJUDPPHRI$FWRQXUJHV FACILITATION AND ODQGORFNHGGHYHORSLQJFRXQWULHVDQGWUDQVLW FRXQWLHVWRZRUNWRJHWKHUWRKDUPRQL]H LOGISTICS FOR simplify and standardize rules and LANDLOCKED DEVELOPING documentation, drawing on the relevant COUNTRIES LQWHUQDWLRQDOFRQYHQWLRQVUHJLRQDO subregional and bilateral agreements on 7KHVLPSOL¾FDWLRQDQGKDUPRQL]DWLRQRI WUDQVLWWUDQVSRUWIDFLOLWDWLRQ7KUHHVSHFL¾F border crossing processes will help to REMHFWLYHVKDYHEHHQLGHQWL¾HG¾UVWWR bring down logistics costs and shorten reduce transit time along transit corridors, transit times, which, in turn, will help ZLWKWKHDLPRIDWWDLQLQJDVSHHGRI LPSURYHWKHFRPSHWLWLYHQHVVRIODQGORFNHG NLORPHWUHVSHUKRXUVVHFRQGO\WRUHGXFH developing countries disadvantaged by their time spent at border crossings; and thirdly, geographical situation dictating that trade WRHQKDQFHWKHHI¾FLHQF\RILQWHUPRGDO PXVWWDNHSODFHDFURVVPXOWLSOHERUGHUV7KLV WUDQVIHUVIURPSRUWWRUDLOURDGDQGYLFH is why transit policy issues remain central versa. WRWKH9LHQQD3URJUDPPHRI$FWLRQIRU /DQGORFNHG'HYHORSLQJ&RXQWULHVIRUWKH Priority 2. Infrastructure maintenance 'HFDGH and development:7KH9LHQQD3URJUDPPH of Action reiterates the importance of ,QUHFHQW\HDUVWKHVSHFLDOFKDUDFWHULVWLFVRI infrastructure to support the development ODQGORFNHGGHYHORSLQJFRXQWULHVKDYHEHHQ RIODQGORFNHGGHYHORSLQJFRXQWULHV,QWKDW recognized by the international community UHJDUGLWFDOOVRQODQGORFNHGGHYHORSLQJ as a potential barrier to their economic and countries and transit countries to develop social development. According to a recent comprehensive national policies for United Nations document, the share of infrastructure development and maintenance ODQGORFNHGGHYHORSLQJFRXQWULHVLQJOREDO for all modes of transport, particularly exports was estimated at only 1.2 per cent railways, as well as for intermodal facilities in 2014, compared with 33 per cent for all VXFKDVGU\SRUWV,&'VWUDQVVKLSPHQW developing economies (excluding China), facilities, and international logistics hubs. ZKLOHWKH:RUOG%DQN/RJLVWLFV ,WDOVRXQGHUVFRUHVWKHQHHGWRLQYROYHWKH 3HUIRUPDQFH,QGH[IRXQGODQGORFNHG private sector in infrastructure development. developing countries to have an overall 8QOLNHWKH$OPDW\3URJUDPPHRI$FWLRQWKH performance score of 2.49, compared with 9LHQQD3URJUDPPHRI$FWLRQDOVRFDOOVIRU IRUWUDQVLWGHYHORSLQJFRXQWULHV the development of energy and information and communication technology infrastructure 7RKHOSODQGORFNHGGHYHORSLQJFRXQWULHV ,&7 LQFOXGLQJWKHXVHRI,&7IRUWUDQVLW overcome some of the development transport, customs and border facilities.

Priority 3. International trade and trade transport system, enhance their productive facilitation: 7RKHOSODQGORFNHGGHYHORSLQJ FDSDFLWLHVDQGZRUNWRZDUGVWKHVWUXFWXUDO countries participate more in global WUDQVIRUPDWLRQRIWKHLUHFRQRPLHV2I¾FLDO value chains, those countries are urged to development assistance, aid for trade, and streamline and harmonize their customs 6RXWK6RXWKFRRSHUDWLRQDUHDOOLPSRUWDQW and border procedures. This would help for supplementing and complementing the enhance the competitiveness of exports from HIIRUWVRIODQGORFNHGGHYHORSLQJFRXQWULHV ODQGORFNHGGHYHORSFRXQWULHV7KH9LHQQD 3URJUDPPHRI$FWLRQDOVRHQFRXUDJHV C. Inter-island shipping in ODQGORFNHGGHYHORSLQJFRXQWULHVWRGLYHUVLI\ WKHLUH[SRUWPDUNHWVWRUHGXFHWKHLU the Paciﬁc subregion YXOQHUDELOLW\WRJOREDOHFRQRPLFVKRFNV including by expanding their services sectors. 1. INTRODUCTION The maritime sector plays an important Priority 4. Regional integration and UROHLQPDQ\FRXQWULHVRIWKH(6&$3 cooperation: The implementation of the region, but it is fundamental to the maritime \HDU$OPDW\3URJUDPPHRI$FWLRQ FRXQWULHVDQGWHUULWRULHVLQWKH3DFL¾FDVWKLV showed that in addition to transit transport, subregion is heavily dependent on shipping trade and trade facilitation, there is a need services for the domestic and international for cooperation on a wider range of issues, WUDQVSRUWRIFDUJRDQGSDVVHQJHUV,QWHU such as foreign direct investment, research island shipping is also central to the lives of and development, common policies for 3DFL¾FLVODQGHUVRIWHQSURYLGLQJWKHRQO\ rapid industrial development and regional means of access to and from the smaller connectivity. This priority area, therefore, outer islands. The sector is also a major covers other issues that can contribute to VRXUFHRIHPSOR\PHQWIRU3DFL¾FLVODQGHUV regional integration, such as regional trade FRQWULEXWLQJVLJQL¾FDQWO\WRWKHLUHFRQRPLHV agreements and customs guarantee systems, and supporting families and communities. WRKHOSODQGORFNHGGHYHORSLQJFRXQWULHV Most government administrations and deal with the barriers to their sustainable business activities are directly or indirectly economic growth. OLQNHGWRWKHVHFWRUDWHOOLQJVLJQRILWV importance. Priority 5. Structural economic transformation: This also is a new priority, The maritime sector is accorded prominent ZKLFKLVDLPHGDWKHOSLQJODQGORFNHG SROLWLFDOVWDWXVLQWKHVXEUHJLRQUH¿HFWHG developing countries diversify their in the periodic meetings of ministers of economies, as well raise productivity transport, which set strategic directions OHYHOV6SHFL¾FDOO\WKH9LHQQD3URJUDPPH for the development of the sector and RI$FWLRQFDOOVRQODQGORFNHGGHYHORSLQJ guide national and regional efforts and countries to increase their manufacturing GHYHORSPHQWSDUWQHUVµLQYROYHPHQW0RVW base and thereby contribute to regional and recently, the Denarau Communiqué, which JOREDOYDOXHFKDLQV3URPRWLQJVFLHQFH ZDVLVVXHGE\WKH6HFRQG3DFL¾F5HJLRQDO technology, innovation as well as the private (QHUJ\DQG7UDQVSRUW0LQLVWHUVµPHHWLQJ sector in those countries is imperative for the held from 21 March to 4 April in Nadi, structural transformation of their economies. )LMLUHDI¾UPHGWKH)UDPHZRUNIRU$FWLRQ on Transport Services for the further Priority 6. Means of implementation: This GHYHORSPHQWRIWUDQVSRUWLQWKH3DFL¾F priority reiterates the fact that ultimately ER[ *RYHUQPHQWVKDYHDOVRSXW development is the primary responsibility other important sectoral communications of a country itself. At the same time, it calls LQSODFHVXFKDVWKH)RUXP3ULQFLSOHVRQ upon development partners to support the 5HJLRQDO7UDQVSRUW6HUYLFHVWKH)UDPHZRUN HIIRUWVRIODQGORFNHGGHYHORSLQJFRXQWULHV IRU3DFL¾F5HJLRQDOLVPDQGWKH:DLKHNH to establish and maintain an effective transit Declaration. BOX 3.5 FRAMEWORK FOR ACTION ON TRANSPORT SERVICES

The Framework for Action on Transport Services acknowledges that national transport policies and plans are the principal means for achieving improved transport services. The Framework outlines seven themes for action to improve regional transport services, namely:

1. Leadership, governance, coordination and partnerships; 2. Capacity development, policy, planning and regulatory frameworks; 3. Transport safety and security; 4. Improved access; 5. Environmental impact, technology and energy; 6. Transport data, information and knowledge; and 7. Sustainability, monitoring and evaluation.

'HVSLWHLWVSUHHPLQHQFHDQGUHFHQWSURJUHVV a. International shipping LQLPSURYLQJWKHVHFWRUµVHI¾FLHQF\OLPLWHG 5H¿HFWLQJZRUOGZLGHWUHQGVWKHPDULWLPH DZDUHQHVVRQWKHGHYHORSPHQWIDFLOLWDWLQJ VHFWRURIWKH3DFL¾FLVODQGGHYHORSLQJ role beyond maritime sector professionals economies has had some success in exists. National sector development plans transitioning to containerized shipping. have been prepared. They are now pending Services are being consolidated as a until they are translated, which will not be consequence of the merger of shipping lines, completed until adequate resources are WKHHPHUJHQFHRIKXESRUWVDQGVORWVKDULQJ DOORFDWHGIRUWKHSURFHVV)UHVKSURDFWLYH arrangements. As a result, there are relatively approaches are needed to address the JRRGQRUWKVRXWKDQGHDVWZHVWLQWHUQDWLRQDO VHFWRUµVUHTXLUHPHQWVVRWKDWWKH3DFL¾F shipping connections with major trading island developing economies can reach their partners for all categories of cargo. WUXHSRWHQWLDOLQWUDGH¾VKHULHVDQGFUXLVH tourism, and improve the sustainability of ,PSURYHPHQWVLQLQWHUQDWLRQDODQG their maritime environment. intraregional shipping services have been achieved in part through regional approaches, 2. KEY DEVELOPMENTS such as the formation of shipping AND TRENDS commissions, including the Micronesian Shipping Commission and more recently, 7KHPDULWLPHVHFWRURIWKH3DFL¾FLVODQG WKH&HQWUDO3DFL¾F6KLSSLQJ&RPPLVVLRQ developing economies is very dynamic ER[ 7KHVHFRRSHUDWLYHHIIRUWVKDYH and has evolved in response to local and made progress in addressing the perennial international industry trends and emerging challenge of irregular, uncertain and very LVVXHV6RPHNH\GHYHORSPHQWVDQGWUHQGV costly shipping services, especially for the are elaborated below. smaller island developing States.

BOX 3.6 THE CENTRAL PACIFIC SHIPPING access to social services, it also adversely COMMISSION— REGIONAL COOPERATION DIIHFWVLQFRPHJHQHUDWLRQSURVSHFWVIRURXWHU FOR IMPROVED MARITIME TRANSPORT SERVICES island residents, who rely on regular access WRORFDODQGJOREDOPDUNHWVWRUHDOL]HVXFK The Central Pacific Shipping commission is an opportunities. intergovernmental organization, which regulates shipping in Kiribati, Marshall Islands, Nauru and Tuvalu, $PLGVXFKFKDOOHQJHVPRVW3DFL¾FLVODQG whereby shipping lines are granted entry assurance developing economies support domestic certificates to serve particular shipping routes at predetermined freight rates for five years. Although services through public service obligations only a limited time has passed since the formation 362 SDUWLFXODUO\IRUXQHFRQRPLFDOURXWHV of the Commission in 2014, its member countries WRWKHLUVPDOORXWHULVODQGV7KLVWDNHVWKH are already beginning to see positive results. The form of franchise or subsidy schemes for membership of Kiribati and Tuvalu in the Commission has resulted in more reliable international shipping shipping services along routes that are services via Fiji. Service is now reliable; freight rates otherwise not commercially viable. The have stabilized, but they are still very high due in part provision of domestic shipping services are to long and thin routes, the high operating costs of a in the form of public provision in Tuvalu ship, small markets and limited exports. DQGWKH)HGHUDWHG6WDWHVRI0LFURQHVLD fully privatized services in Vanuatu and 7KHHI¾FLHQF\RIVHUYLFHVKDVDOVREHHQ )LMLDQG6WDWHRZQHGHQWHUSULVHV 62(V LQ enhanced with the emergence of several hub 0DUVKDOO,VODQGV7RQJDDQG6DPRDZLWK ports as major transhipment points. Some limited private sector involvement in most RIWKHPDUHZHOOHVWDEOLVKHGKXESRUWV FRXQWULHV,Q7RQJDFKXUFKDQGFRPPXQLW\ while others are building a reputation as hub associations also operate domestic vessels. ports as they increase their transhipment DFWLYLWLHV7KHVHLQFOXGH$XFNODQG1HZ The franchising of domestic shipping =HDODQG IRUWKH6RXWK3DFL¾F DQG*XDP routes involves private shipping companies IRU0LFURQHVLD ,QDGGLWLRQDQXPEHURI competitively bidding for subsidies to location have emerged as subregional hub provide shipping services on uneconomical SRUWVQDPHO\)LML1HZ&DOHGRQLD)UHQFK routes. Operators are required to provide a 3RO\QHVLDDQGPRUHUHFHQWO\6RORPRQ VSHFL¾HGQXPEHURIYR\DJHVRQWKRVHURXWHV ,VODQGVDQGWKH0DUVKDOO,VODQGV$VDUHVXOW during the contract period, in addition to most trade from Tuvalu, Samoa and Tonga IXO¾OOLQJVDIHW\DQGTXDOLW\UHTXLUHPHQWV QRZGHSHQGVRQWUDQVKLSPHQWWKURXJK)LML The level of subsidy to bidders is based and commodities from Tonga are transhipped on a cost model developed for each route, through Samoa. and is typically the difference between the passenger and cargo revenues and the b. Domestic inter-island RSHUDWLQJFRVWSHUYR\DJH([DPSOHVRIVXFK shipping schemes implemented in the region include 0RVW3DFL¾FLVODQGGHYHORSLQJHFRQRPLHV WKH'RPHVWLF0DULWLPH6XSSRUW3URMHFWLQ are archipelagic States comprising widely 6RORPRQ,VODQGVWKHVKLSSLQJVHUYLFHWRWKH scattered islands. Outer islands are often Niuas, the most remote islands of Tonga, far from the main islands, with voyages WKH,QWHULVODQG6KLSSLQJ6XSSRUW3URMHFWLQ to most outer islands involving thin 9DQXDWXDQGWKH)LML)UDQFKLVH6FKHPH SDVVHQJHUDQGFDUJRWUDI¾FFRXSOHGZLWK (box 3.7). limited maritime infrastructure, poor domestic shipping safety and dangerous FKDQQHOV8QSUR¾WDEOHURXWHVUHPDLQODUJHO\ underserviced, as commercially minded private sector providers naturally gravitate WRZDUGVSUR¾WDEOHURXWHV7KLVGRHVQRW only has an impact on food security and

BOX 3.7 FIJI FRANCHISE SCHEME

The Fiji Franchise Scheme is recognized as a subregional model uneconomical routes based on a least-cost tender process. Vessels that other countries facing similar challenges could replicate and are required to meet safety standards and provide facilities to tailor to their local context. In the case of Fiji, some of the scheme’s reduce barriers for women to use. SCS involves appointing people success factors are the following: the high level of national political on each island and tasking them with promoting and aggregating commitment; cost modelling and a consultative approach for tender demand and communicating the need for voyages to private-sector assessment; annual contract reviews; the placement of observers vessel operators. The SSS improves the transparency of subsidy on tendered vessels to monitor compliance with and report on arrangements, while SCS empowers residents of outer islands. safety and shipping conditions during voyages; the enforcement of penalties; feedback on performance obtained through customer Although they have been implemented with varying levels of satisfaction surveys; and periodic reviews of the scheme to success, these schemes have been largely effective in improving improve its effectiveness. These have promoted accountability and access to, and the affordability of, shipping services to outer islands, transparency. with evidence of positive impacts on trade development. They also offer valuable experiences and lessons for other countries in the Other countries, including Vanuatu, are in the early stages of subregion. introducing a shipping support scheme (SSS) similar to the shipping franchise scheme in Fiji and in addition to a shipping coordinator schemes (SCSs). SSS provides subsidies for servicing

However, there is still a tremendous BOX 3.8 PACIFIC ISLANDS DOMESTIC SHIP ²VKLSSLQJVDIHW\FXOWXUHGH¾FLW³LQWKH3DFL¾F SAFETY PROGRAMME island developing economies. Countries still largely rely on unsafe, poorly designed Funded by the Australian Department of Foreign Affairs and Trade (DFAT) and managed by SPC, the DQGVHFRQGKDQGVKLSVZKLFKDUHSRRUO\ Pacific Islands Domestic Ship Safety programme was PDLQWDLQHG0RVWFRXQWULHVODFNDGHTXDWH introduced in 2010, triggered by two tragic marine maintenance and shipyard facilities to accidents, in Tonga and in Kiribati, which occurred accommodate the majority of domestic almost simultaneously in 2009. The programme aims to improve domestic shipping safety through the vessels, and have limited search and rescue strengthening of safety management systems and FDSDELOLWLHV)XUWKHUPRUHRYHUFURZGLQJRI the implementation of SOPs by domestic shipping YHVVHOVDQGWKHODFNRIXSGDWHGVKLSVXUYH\V companies on board their domestic fleet, along DQGFUHZFHUWL¾FDWLRQIXUWKHUMHRSDUGL]HWKH with the development of a safety programme that safety of ships. could be exported to other Pacific island developing economies on request.

A lot of effort has been placed on ensuring The Secretariat of the Pacific Community that vessels comply with basic safety implemented a 12-month pilot project in Kiribati and standards, and today, national authorities Tonga in 2010. As of June 2015, a total of 17 domestic ships in both countries were considered under this do not hesitate to order the detention of programme; eight have successfully developed and vessels pending compliance with regulations. implemented approved SOPs. This programme was A concrete example of such efforts is extended to the Marshall Islands and Vanuatu in WKH3DFL¾F,VODQGV'RPHVWLF6KLS6DIHW\ 2013 and to Solomon Islands in 2014. Four domestic 3URJUDPPHSLORWHGLQLWLDOO\LQ7RQJD ships in the Marshall Islands were considered to have commenced development of their SOPs and DQG.LULEDWLLQDQGQRZH[WHQGHG more ships from Vanuatu and Solomon Islands are WRVHYHUDORWKHU3DFL¾FLVODQGGHYHORSLQJ expected to have their SOPs developed in 2015. A economies (see box 3.8 and below). This is total of seven SOP initial audits and three follow- part of a holistic approach towards creating up audits have been conducted in these countries between 2010 and 2015. a sustainable maritime safety culture in the 3DFL¾FHQVKULQHGLQWKH3DFL¾F)RUXPRQ 'RPHVWLF)HUU\6DIHW\$FWLRQ3ODQ

c. Declining seafaring to allow for berthing of larger vessels and 6HDIDULQJUHPDLQVDYLWDOLQGXVWU\IRU3DFL¾F PXOWLSOHYHVVHOVDWDWLPHUDLVHHI¾FLHQF\RI island developing economies, providing port services and improve safety standards. employment and contributing to national LQFRPH,Q.LULEDWLIRULQVWDQFHVHDIDULQJ ,QYHVWPHQWUHODWHGWRSRUWVKDVWHQGHGWR is by far the most important source of favour wharves, pavement expansions and SULYDWHVHFWRUHPSOR\PHQWZLWKUHPLWWDQFHV equipment replacement, with little or no FRQWULEXWLQJWRDERXWSHUFHQWRI*'3 investment in ancillary infrastructure, such However, the recent global trend in the as roads and passenger and cargo facilities. industry has been an oversupply of ratings ,QIUDVWUXFWXUHLPSURYHPHQWVKDYHQRWEHHQ WKHKLJKHVWOHYHOFHUWL¾HGE\PDULWLPH accompanied by preventive maintenance WUDLQLQJLQVWLWXWLRQVLQPRVW3DFL¾FLVODQG programmes, scheduled dredging, or plans developing economies) and an undersupply for future equipment replacement. This has RIFHUWL¾HGRI¾FHUV KLJKHULQGXVWU\ UHVXOWHGLQDEDFNORJRIGUHGJLQJDJHLQJ TXDOL¾FDWLRQVDUHQRWRIIHUHGE\PRVW pilot boats, poor maintenance of facilities PDULWLPHWUDLQLQJLQVWLWXWLRQVLQWKH3DFL¾F and assets, and poor access roads. These island developing economies), as well as ongoing maintenance concerns undermine growing competition in the industry around the impact and sustainability of recent labour costs, discipline, and adaptability. infrastructure investments, an issue that is These have contributed to the decline in further discussed below. GHPDQGIRUVHDIDUHUVIURPVHYHUDO3DFL¾F island developing economies. Recognizing the importance of the maritime VHFWRUWRWKHRYHUDOOGHYHORSPHQWRI3DFL¾F )RUH[DPSOHWKHQXPEHURI.LULEDWLDQG island developing economies, donors and Tuvaluan seafarers employed on merchant development partners continue to support vessels has fallen in the last decade, with the development of this sector. The support both seafarer wages and remittances ranges from helping to fund the acquisition GHFOLQLQJTXLWHVLJQL¾FDQWO\7KLVKDV of port infrastructure to the procurement implications for the seafarer competitiveness of vessels for domestic shipping services. DQGTXDOLW\VWDQGDUGVRI3DFL¾FLVODQG A notable development in 2008 was the developing economies, requiring changes in HVWDEOLVKPHQWRIWKH3DFL¾F5HJLRQDO the maritime training institutions to allow ,QIUDVWUXFWXUH)DFLOLW\ZKLFKLVDPXOWL for greater responsiveness to emerging partner investment coordination mechanism LVVXHVWUHQGV7KH3DFL¾FLVODQGGHYHORSLQJ to improve coordination and delivery of economies are evaluating options for revive RI¾FLDOGHYHORSPHQWDVVLVWDQFHWRWKH seafaring; these should be coordinated across infrastructure sector in the subregion. FRXQWULHVDQGLQFOXGHJUHDWHUSULYDWHVHFWRU involvement and regional approaches. d. Improvements in port infrastructure 7KHPDLQLQWHUQDWLRQDOSRUWVLQWKH3DFL¾F DUHFRPSOLDQWZLWKWKH,QWHUQDWLRQDO6KLS DQG3RUW)DFLOLW\6HFXULW\&RGHDQG KDYHEHQH¾WHGIURPPDMRULQIUDVWUXFWXUH improvements within the last decade. )RULQVWDQFH&RRN,VODQGVWKH)HGHUDWHG 6WDWHVRI0LFURQHVLD)LML.LULEDWL7RQJD 6RORPRQ,VODQGV6DPRDDQG9DQXDWXKDYH HPEDUNHGPDMRULQIUDVWUXFWXUHGHYHORSPHQWV to amongst others, increase the port capacity Oddbjorn Monsen / UN photo Photo: 3. TOWARDS DEVELOPING SUSTAINABLE MARITIME TRANSPORT IN THE PACIFIC THAT IS SAFE, AFFORDABLE AND EFFICIENT

7KHPDULWLPHVHFWRUµVYLWDOUROHLQWKH region necessitates the promotion maritime transport systems that are safe, affordable, HI¾FLHQWDQGVXVWDLQDEOH7KHVHV\VWHPV should be central to national development objectives and strategies and comply with international conventions and standards, including ensuring the safety of passengers and cargo while transiting port facilities and on vessels. They should also facilitate the timely movement of ships at least cost and enable reliable service delivery. Achieving those goals depends on directing greater DWWHQWLRQWRVHYHUDONH\DUHDV a. Consolidating legal frameworks ,QWHUQDWLRQDOPDULWLPHFRQYHQWLRQVUHJXODWH legislation where gaps existed. Sectoral laws the maritime industry and facilitate trade and regulations are also now available online DPRQJFRXQWULHV,WLVWKHUHIRUHHVVHQWLDO LQPRVW3DFL¾FLVODQGGHYHORSLQJHFRQRPLHV WKDW3DFL¾FLVODQGGHYHORSLQJHFRQRPLHV develop a global approach towards BOX 3.9 PACIFIC ISLANDS MARITIME LAWS international organization memberships, DQGUDWL¾FDWLRQDQGLPSOHPHQWDWLRQRINH\ Paciﬁc Islands Maritime Laws (PIMLaws) are PDULWLPHLQVWXPHQWV0RVW3DFL¾FLVODQG a set of up-to-date generic instruments that developing economies are party to the are consistent with international maritime 8QLWHG1DWLRQV&RQYHQWLRQRQWKH/DZRI conventions and customary laws and can easily be incorporated into the national legal systems WKH6HDDQGDUHPHPEHUVRIWKH,QWHUQDWLRQDO of Paciﬁc island developing economies.. Several 0DULWLPH2UJDQL]DWLRQ ,02 EXWPDQ\ sections can be updated as maritime conventions still experience challenges in translating are amended or as practices change. PIMLaws international conventions into domestic have been developed to cover non-convention OHJLVODWLRQ7KH\DOVRODFNLPSOHPHQWDWLRQ vessels less than 500 GT, and small vessels under 15 metres — areas not covered by international and enforcement capacity. maritime conventions.

3DFL¾F,VODQGV0DULWLPH/DZV 3,0/DZV These laws are generally seen as a very efficient have been developed to address this mechanism for allowing Paciﬁc island developing economies to update their legislation and challenge (box 3.9). They particularly have regulations. Continuous and ongoing review of assisted the small island States, including PIMLaws helps these economies remain current .LULEDWLDQG7XYDOXWRDGDSWQDWLRQDO with international standards. legislation in a timely manner. Countries, such as Samoa and Tonga, have used sections RIWKH3,0/DZVWRVXSSOHPHQWWKHLUQDWLRQDO

Maritime policy formulation is a prerequisite National governments and their development for achieving the effective implementation partners are also trying to improve the of international instruments and the enacting FRRUGLQDWLRQRIGRQRUDLGDQGPDNHLWPRUH national regulations, including for domestic HIIHFWLYH)RUH[DPSOHPRVW3DFL¾FLVODQG VKLSSLQJ7KH*RYHUQPHQWVRI3DFL¾FLVODQG developing economies have successfully developing economies, therefore, need to FRPSOHWHGSXEOLFH[SHQGLWXUHDQG¾QDQFLDO adopt coherent maritime transport policies accountability assessments, which have WRVXSSRUWSODQQLQJDQGGHFLVLRQPDNLQJ enabled national plans to be used as a basis from which relevant legislative actions for budget support programmes, using can be developed and promulgated. This QDWLRQDO¾QDQFLDODQGSURFXUHPHQWV\VWHPV would support a sustainable maritime safety ,QVRPHLQVWDQFHVVXFKDVLQ6DPRDDQG culture and environmental stewardship in Vanuatu, extra capacity has been accorded WKH3DFL¾FLVODQGGHYHORSLQJHFRQRPLHV to coordination responsibilities, often with and allow States to meet their obligations dedicated staff appointed in ministries of DQGUHVSRQVLELOLWLHVDV¿DJSRUWDQGFRDVWDO ¾QDQFH States under the relevant international maritime instruments. Despite recent progress, however, subsector (maritime) policies and plans still remain b. Strengthening sector DEVHQWRURXWGDWHGLQVHYHUDO3DFL¾FLVODQG development planning developing economies, and in practice, the 3DFL¾FLVODQGGHYHORSLQJHFRQRPLHV sector still receives relatively low levels of have made progress in preparing national attention in national agendas and budgetary development plans or strategies and allocations. This has led to an ad hoc associated transport sector investment approach towards maritime development in plans, which were mostly formulated with WKRVHFRXQWULHVDQGXQGHUPLQHVWKHVHFWRUµV the assistance of development partners, ability to effectively lobby for greater following generally consultative approaches. national attention and funding. Governments Those plans outline clear development PXVWPRYHIRUZDUGLQ¾QGLQJZD\VWR objectives for the transport sector. ¾QDQFHPDLQWHQDQFHSURJUDPPHVHTXLSPHQW UHSODFHPHQWDQGWKHUHWUR¾WWLQJRISRUWVWR One such plan belongs to the Government withstand climate change impacts. Ageing RI6DPRD7KHFRXQWU\µVYLVLRQLQLWV ports need to be expanded to include modern 7UDQVSRUW6HFWRU3ODQ 763 port facilities, such as biosecurity and waste is to ensure a “sustainable, reception, and to cater to larger cargo and safe, secure and environmentally responsible cruise ships calling due to the consolidation WUDQVSRUWQHWZRUNWKDWVXSSRUWV6DPRDµV of services. economic and social development and contributes to improving the quality of life for all Samoans” (Government of Samoa, 7UDQVSRUW6HFWRU3ODQ 7KH National Sustainable Development Strategy 7H.DNHHJD,, RI7XYDOXKDVDFOHDU focus on the infrastructure sector and how it relates to achieving the vision and objectives for sustainable growth in the country. Having a clear maritime sector plan helps governments to mainstream other sustainable development goals, including social and environmental targets (box 3.10).

BOX 3.10 GREENING THE MARITIME AGENDA

To minimize the negative impact of the maritime sector on the terminals, and to facilitate negotiations on a regional scale. environment and to reduce the dependence of Pacific island At the same time, Pacific island developing economies are developing economies on fossil fuels, their maritime policies at the forefront of the battle against climate change. Baseline should aim to avoid inefficient transport and operations, shift studies on port energy efficiency and resilience to damage towards cleaner modes of transport that are more energy due to rising sea levels and cyclones need to be undertaken efficient, and improve infrastructure and operations for to protect these key national assets. Given the global nature energy efficiency and the reduction of fuel consumption and of these issues, however, the strengthening of development emissions. Concerted actions should target data collection partnerships for supporting means of implementation, as and research into fuel supply chains upon which Pacific island captured in the Framework for Pacific Regionalism and developing economies are completely reliant, in order to Outcomes of the Third International Conference on Small improve chain management and reduce duplication. These Island Developing State (SAMOA Pathway), is important economies could also work together to create opportunities for more targeted climate adaptation and sustainable for shared infrastructure and dedicated development in the Pacific. c. Private sector involvement operation and maintenance. Service needs, The private sector could be an important such as port dredging, could be provided DOO\LQJRYHUQPHQWVµHIIRUWVWRGLUHFW by the private sector at the regional level, more resources into the maritime sector. offering economies of scale. The formulation Already, an integral component of RIVSHFL¾FSODQVLQFOXVLYHRI¾VFDOLQFHQWLYHV structural reforms being implemented in DQGLPSURYLQJDFFHVVWR¾QDQFLQJLVFUXFLDO 3DFL¾FLVODQGGHYHORSLQJHFRQRPLHVLVWKH IRU3DFL¾FLVODQGGHYHORSLQJHFRQRPLHVWR IDFLOLWDWLRQRISULYDWHVHFWRULQYROYHPHQW maximize the potential of the private sector in employment creation, small business and should be accorded high priority. development, tourism, and trade. Budgetary DQG¾VFDOOLPLWDWLRQVJLYHDIXUWKHUUDWLRQDOH *LYHQWKHLU¾QDQFLDODQGUHJXODWRU\ IRULQFUHDVLQJOHYHOVRISULYDWHVHFWRU FRQVWUDLQWVLWLVOLNHO\WKDWSULYDWHVHFWRU involvement in those countries. SDUWLFLSDWLRQZLOOWDNHGLIIHUHQWIRUPVLQ GLIIHUHQWFRXQWULHV)RULQVWDQFHLQ7XYDOX ,QWKDWUHJDUGVHYHUDO3DFL¾F*RYHUQPHQWV SULYDWHVHFWRUSDUWLFLSDWLRQPD\FRQWLQXH have articulated the need for supportive to be limited because of poor access to strategies and action plans for incorporating ¾QDQFLQJZKLFKLVWKHUHVXOWRIODFNRI SULYDWHVHFWRULQYHVWPHQWVLQWKHPDULWLPH adequate collateral. On the other hand, in sector, and a number of them have improved 3DFL¾FLVODQGGHYHORSLQJHFRQRPLHVLQWKH their procurement systems by transferring 1RUWK3DFL¾FVXFKDV6DPRD7RQJDDQG IXQFWLRQVWUDGLWLRQDOO\XQGHUWDNHQE\WKH Vanuatu, where the private sector has been FHQWUDOJRYHUQPHQWRU62(VWRWKHSULYDWH LQYROYHGLQVWHYHGRULQJSRUWHI¾FLHQF\KDV VHFWRU

- Life-cycle costing:)XWXUHRSHUDWLRQV - Conforming to international norms: and maintenance liabilities associated with ,QWHUQDWLRQDOREOLJDWLRQVVXFKDVDGKHUHQFH infrastructure acquisition should be estimated WRWKH,QWHUQDWLRQDO6KLSSLQJDQG3RUW RYHUWKHZKROHOLIHF\FOHRIWKHDVVHWVWR )DFLOLW\6HFXULW\&RGHFDQEHDFDWDO\VW determine the affordability of planned for improving the maintenance culture, as investments. These should be aligned countries would want to avert sanctions, such DVEHLQJEODFNOLVWHG Due to the wide range of causal factors, DQGRUSRWHQWLDOUHJLRQDOKXESRUWVLQFOXGLQJ LPSURYLQJVXVWDLQDELOLW\LQ3DFL¾FLVODQG by investing in appropriate infrastructure developing economies will be a complex WRVXSSRUWKDQGOHPDMRUWUDQVVKLSPHQW PDWWHUZKLFKZLOOWDNHSODFHRYHUWLPH RSHUDWLRQVHI¾FLHQWSRUWFOHDUDQFHDQG requiring ongoing commitment from national information technology systems, the ²VWURQJSROLWLFDOZLOO³DQGVWDNHKROGHU procurement of sophisticated stevedoring FRQVXOWDWLRQV DQGLQWHUQDWLRQDOVWDNHKROGHUV equipment, and the more advanced training RIVWHYHGRUHV0HDQZKLOHSRUWVODFNLQJWKH e. Strategic hub ports LQKHUHQWDGYDQWDJHVRUGRQRWPHHWVSHFL¾F development minimal requirements to assume the role of $VQRWHGLQWKHLQWURGXFWLRQWKHHI¾FLHQF\ hub ports should concentrate on maximizing RIVKLSSLQJVHUYLFHVLQWKH3DFL¾FVXEUHJLRQ WKHHI¾FLHQF\RIWKHLUIHHGHUVHUYLFHV has improved in part due to the emergence of subregional hub and transhipment ports. f. Improving domestic ,QDKXEDQGVSRNHV\VWHPVKLSSLQJOLQHV shipping safety and call into a major port within a country or arrangements region (selected transhipment centre), “a Maritime safety has become a serious issue hub”, rather than at several ports in the because of the increase in the number of same vicinity; feeder shipping services then VKLSVWUDYHUVLQJWKHVHDVRIWKH3DFL¾F tranship cargo to and from smaller ports in Several major ferry accidents, including neighbouring countries. VRPHZLWKVLJQL¾FDQWORVVRIOLIHKDYH EHHQUHFRUGHGLQWKH3DFL¾FZLWKLQWKHODVW Understandably, many ports desire to become decade, while an even greater number of VXEUHJLRQDOKXEVIRUWKH3DFL¾F+RZHYHU VPDOOHUVFDOHIHUU\DFFLGHQWVDQGYHVVHOV WKHHI¾FLHQF\JDLQVRIVXFKV\VWHPVDULVH lost at sea go unreported annually. Several from the fact that there are only a few hubs, of the accidents involved situations that ZLWKVHYHUDOVHFRQGDU\ VPDOOHU SRUWVOLQNHG could very well have been avoided, such as WRWKHVHKXEV,QWKDWUHJDUGQRWHYHU\SRUW YHVVHORYHUORDGLQJWKHDEVHQFHRIOLIHVDYLQJ can become a hub, and so collectively, equipment on board, erroneous cargo and 3DFL¾FLVODQGGHYHORSLQJHFRQRPLHVQHHGWR passenger manifests, and poorly maintained strategically identify and develop existing vessels. Photo: UN ESCAP photo UN ESCAP Photo:

5HFHQWHIIRUWVVXFKDVWKH3DFL¾F)RUXP The subregion has made great strides RQ'RPHVWLF)HUU\6DIHW\DQGWKH recently in improving maritime data 6XYD$FWLRQ3ODQKDYHEURXJKWWKHLVVXH collection and analysis, through the creation of maritime safety to the forefront of of a regional transport data repository. national and regional maritime agendas. National governments have also made These regional efforts have managed to progress in developing and incorporating LQ¿XHQFHWKHJOREDODJHQGDRQGRPHVWLF maritime statistics into national statistics ferry safety, including by informing the systems. These efforts are laudable and need “Manila Statement”, which was adopted by to be consolidated. ,02LQ$SULO7KHVWDWHPHQWSURYLGHV guidelines on the safe operation of coastal DQGLQWHULVODQGSDVVHQJHUVKLSVQRWHQJDJHG in international voyages. Regional initiatives, VXFKDVWKH3DFL¾F,VODQG'RPHVWLF6KLS 6DIHW\3URJUDPPHSURYLGHVWUDLQLQJVRQ the development and enforcement of safety management systems, standard operating SURFHGXUHV 623V ULVNDVVHVVPHQW and management, and enforcement to vessel operators, regulators and maritime administrators.

Regional ship to shore projects also provide supporting infrastructure, such as aids to navigation to improve vessel safety, and also passenger transfer from the ship to the VKRUH,QSDUWQHUVKLSZLWKWKH6HFUHWDULDWRI WKH3DFL¾F&RPPXQLW\ 63& ,02KDVEHHQ IXUWKHUDVVLVWLQJ3DFL¾FLVODQGGHYHORSLQJ HFRQRPLHVLQPDNLQJWKHLUGRPHVWLFYHVVHOV safer through legislative and enforcement enhancements.

The need to engender a safety culture in this subregion cannot be overemphasized. Addressing domestic shipping safety requires concerted efforts of governments, maritime administrators and associated actors, ship inspectors, surveyors, vessel owners, operators, and crew, maritime education and training institutions, and passengers, the public and civil society. These efforts, however, should be complemented with FLWL]HQµVHPSRZHUPHQWWRKHOSSHRSOH better understand their entitlement to safe transport and the safety standards required of operators, and in turn, demand greater accountability from private and public sector providers.

Endnotes

Railway Authorities, Tehran, 17-18 May 2015. 1 ESCAP (2012a), chap. 3. 25 Government of Pakistan, statement at 12th 2 ESCAP (2014b). Meeting of Heads of ECO Railway Authorities, 3 China is an exception, as the Government Tehran, 17-18 May 2015. has a large-scale development plan for a 26 See also the China Pakistan Economic comprehensive intermodal rail network. This Corridor in part I. is involves the development of major 27 The Times of India (2014). intermodal rail hub terminals at 18 inland 28 Railway Technology (2014). locations, connected to seaports and to other 29 Sharma, Kiran (2015). inland industrial centres. For a map and 30 Barrow (2014a). further details, see ESCAP (2013), chap.1. 31 Barrow (2014b). 4 General Assembly resolution 69/137. 32 Myanmar Railway statement to the 36th 5 E/ESCAP/68/9. ASEAN Railways CEOs’ Conference, Hanoi, 6 ESCAP (2015d). 17-21 November 2014. 7 According to the 2015 updates to the Asian 33 Government of Cambodia statement to the Highway Database, 1,928 km in Myanmar, 36th ASEAN Railways CEO Conference, 1,461 km in Afghanistan, 1,138 km in Hanoi, 17-21 November 2014. Pakistan and 914 km of roads in Tajikistan 34 ESCAP resolution 69/7, annex. did not meet the minimum desirable 35 Armenia, Cambodia, China, Indonesia, standards. For more details see ESCAP Islamic Republic of Iran, Lao People’s (2015d) Democratic Republic, Mongolia, Myanmar, 8 Korea Transport Institute (2012), pp. 275- Nepal, Republic of Korea, Russian 277. Federation, Tajikistan, Thailand (also became 9 This initiative is being co-financed by ADB, Party), Viet Nam. the Neighbourhood Investment Facility, the 36 Kalymov (2014). European Investment Bank, the Eurasian 37 Therparat (2013). Development Bank, and the European 38 Spectrum (2015). Bank for Reconstruction and Development 39 Examples from Australia are Albury/Wondonga (for the Bagratashen Border-Crossing on the New South Wales/Victoria border; Bridge). Additional information is available Griffith in southern New South Wales; and from http://northsouth.am/en Toowoomba in southern Queensland. 10 EIB (2013). 40 The ASEAN Framework Agreement on the 11 Arka News (2015). Facilitation of Goods in Transit, which was 12 Zahara-Malik (2014). signed on 16 December 1998, provides an 13 Associated Press (2014). arrangement for facilitating transit transport 14 The Economic Times (2014). among ASEAN countries. 15 See http://www.bba.gov.bd/category/ongoing- 41 Irzanto (2015) . projects/. 42 Hla, (2015). 16 Faruk (2015). 43 Presentation made by the Ministry of 17 Vietnam Plus (2014). Transport of the Russian Federation at the 18 ADB (2014a). Second Meeting of Regional Network of 19 Country paper for Cambodia presented Legal and Technical Experts on Transport at 17th meeting of the Special Working Group Facilitation, Incheon, 25-26 March 2015. on the Singapore-Kunming Rail Link project, 44 See www.infomongolia.com/ct/ci/8257. Medan, Indonesia, 24-25 August 2015. 45 Presentation made by the Ministry of Physical 20 Country papers for Thailand presented at Infrastructure and Transport of Nepal at 17th meeting of the Special Working Group the Second Meeting of Regional Network of on the Singapore-Kunming Rail Link project, Legal and Technical Experts on Transport Medan, Indonesia, 24-25 August 2015. Facilitation, Incheon, Republic of Korea 21 Country papers for China presented at 17th 25-26 March 2015. Available from www. meeting of the Special Working Group on unescap.org/sites/default/files/4%20-%20 the Singapore-Kunming Rail Link project, Overview%20of%20bilateral%20 Medan, Indonesia, 24-25 August 2015. agreements%20on%20international%20 22 Report of 12th Meeting of Heads of ECO road%20transport%20-%20Nepal.pdf Railway Authorities, Tehran, 17-18 May 2015 46 For more details see http://sasec.asia/index. 23 Asbarez (2014). php?page=event&eid=145&url=meeting- transport-secretaries-india-myanmar-thailand. 24 Report of 12th Meeting of Heads of ECO 47 National News Agency of Bangladesh (2015). on%20Domestic%20Ship%20Safety_FINAL. 48 Chaudhury (2015). pdf 49 World Bank (2015b). 67 See www.mwti.gov.ws/downloads/TSP/ 50 Indo-Asian News Service (2013). Volume%20II.pdf. 51 Nepali Economy (2014). 68 Some of the relevant factors that need to 52 Presentation by the State Customs be considered for a hub port include: direct Service of Kyrgyzstan. Available from http:// location or proximity to a major sea lane/ www.eurasiancommission.org/ru/act/ shipping route; an established network of tam_sotr/dep_tamoj_infr/SiteAssets/% neighbouring feeder ports; ability to D0%9F%D1%80%D0%B5%D0%B7% accommodate large vessels (deep water, D0%B5%D0%BD%D1%82%D0%B0%D1% advanced equipment) and/or availability of 86%D0%B8%D0%B8%20%D0 space for port infrastructure and facility %BA%D1%80%D1%83%D0%B3 expansion; efficient cargo handling, such %D0%BB%D0%BE%D0%B3%D0%BE%20 as quick vessel turnaround time, and other %D1%81%D1%82%D0%BE% port and customs services; intermodal D0%BB%D0%B0%2%D0%B2%D1%8B transport infrastructure (good access to air %D1%81%D1%82%D0%B0%D0%B2% and road distribution networks); and D0%BA%D0%B8%20%D0%A2%D0% availability of ancillary and transhipment B0%D0%BC%D0%BE%D0% D1%8F%20 facilities; and reasonable port tariffs. %D1%81%D0%BB%D1%83%D0%B6%D0 %B1%D0%B0-2014/%D0%93%D0%A2% D0%A1%20%D0%BF%D1%80%D0% B8%20%D0%9F%D0%9A%D0%A0.pdf 53 Nhem (2014). 54 The Voice of Vietnam (2015). 55 Presentation made by the Government of the Islamic Republic of Iran during the fourth session of the Committee on Transport Bangkok, 15-17 October 2014. 56 World Bank (2015a). 57 ESCAP (2012b). 58 For an example of a border crossing management information system (BCMIS) and how to structure it, see the ESCAP Model for Integrated Control at Border Crossings. Available from www.unescap.org/resources/ model-integrated-controls-border-crossings 59 Currently there are no global standards for frequencies and technical specifications for electronic seals. ISO 18185 defines an eSeal as a “read-only, non-reusable freight container seal conforming to the high security seal defined in ISO/PAS 17712 and conforming to ISO 18185 or revision thereof that electronically evidences tampering or intrusion through the container door”. 60 De Souza and others ( 2007). 61 Rantasila (2013). Please note that the author cautions that, comparisons of costs should be treated with caution as research methodology and data definitions may vary across studies. 62 The Logistics Performance Index is based on a survey of logistics professionals who are asked questions about the foreign countries in which they operate. For more information, see http://lpi.worldbank.org/. 63 ESCAP (2013b). 64 General Assembly resolution 69/137. 65 A/70/305. 66 See www.imo.org/en/OurWork/ TechnicalCooperation/TCActivities/Documents/ Action%20Plan%20Pacific%20Forum%20 PART III PART lll INTEGRATED INTERMODAL CHAPTER TRANSPORT SYSTEM URBAN TRANSPORT 1. INTRODUCTION The Asia-Pacific region is home to more than two billion urban residents, representing 55 per cent of the world’s urban population — a figure set to rise to 64 per cent by 2050.1 Unprecedented population growth and the expansion of Asian cities are putting tremendous pressure on urban 2 transport systems, while the rapid growth of private vehicle ownership has led to worsening traffic congestion, increasing fossil fuel consumption, and greater road traffic crashes, car emissions and air pollution.

The negative externalities associated with urban road traffic are a burden on economies, which result in a lower quality of life for residents. The municipal authorities of many Asian cities are ﬁnding it difficult to counter these trends, a situation made more difficult by the proportion of urban residents living in slums, estimated to be 28 per cent in East Asia, 31 per cent in South-East Asia and 35 per cent in South Asia in 2012.2 With such large numbers of poor people, governments must strive to provide not only environmentally sustainable transport, but also socially inclusive transport systems that meet the mobility needs of the people.

Much attention is given worldwide to to harness their potential. Non-motorized addressing urban mobility in larger cities, transport is key, with the channelling of including in Asia, which, in 2014, was the more resources into cycle lanes, pedestrian location of 17 of the world’s 28 megacities. pathways and the enforcement of safety gear +RZHYHUWKHPDMRULW\RIWKH$VLDDQG3DFL¾F usage among cyclists remaining an absolute region’s urban population lives in rapidly priority. These measures represent the growing small and medium-sized cities and profundity of just how easy it is to achieve towns, while more than half of the region’s sustainable mobility in urban environments. urban residents (54.4 per cent) live in smaller cities with fewer than 500,000 people.3 Electric-powered transport solutions are These secondary and medium-sized cities are prevalent throughout the transport spectrum. destined to follow the same unsustainable Currently, the implementation of them is patterns of growth if more effective often costly, but policymakers must plan strategies for integrated and sustainable for their imminent reduction in price and land use and transportation planning are eventual implementation. In the meantime, not developed.4 Given that they are in early rail services and metro and bus rapid transit stages of development, these cities offer the systems represent the cutting edge of best opportunities to plan and implement sustainable transport options available in innovative urban transport policies and urban environments. While these systems strategies. take a long time to design and implement, their long-run feasibility far outstrips that There are many feasible options to consider of other less sustainable options. There are towards achieving a sustainable future. many ways in which such projects can reach It is up to the governments of the region fruition. 2. THE STATE OF URBAN a. Motorization TRANSPORTATION While vehicle ownership has risen across the SYSTEMS IN ASIA $VLD3DFL¾FUHJLRQDFORVHUORRNDWDYDLODEOH Asian cities feature a wide array of urban GDWDIRUGHSLFWHGDVLQ¾JXUHVKRZV transport modes and systems, such as para- that it ranges from below 200 vehicles per transit, public transport, taxi services, private 1,000 of population for many developing vehicles, and walking and cycling (box 3.11). FRXQWULHVWREHWZHHQDQGSHULQ Public transport systems include public more developed economies, such as Australia, bus services, BRT systems, subways, urban Japan and New Zealand. The main growth rails, monorails, elevated rails (skytrains), countries in the region in vehicle ownership and cable cars. Para-transit takes various are Azerbaijan, Brunei Darussalam, China, forms, including vans, tricycles, motorcycle Georgia, Indonesia, the Islamic Republic of taxis, and boats (water transport). While the Iran, Kazakhstan, the Russian Federation agglomeration of those services may seem and Thailand. Meanwhile, Afghanistan, to be promising, the biggest challenge facing Bangladesh, India, Pakistan and the Philippines many cities is the increasing popularity of have a markedly lower per capita vehicle private vehicles. Private motor vehicles support ownership, but the car ownership levels in their personal mobility, but the rapid growth in FLWLHVDUHVLJQL¾FDQWO\KLJKHUWKDQWKHUHJLRQµV the number of vehicles is further aggravating national averages, a product of the wide income already congested urban roads and inhibiting GLVSDULW\LQ$VLDDQGWKH3DFL¾F the smooth operation of road-based public transportation systems, such as public buses.

FIGURE 3.6 TOTAL NUMBER OF VEHICLES PER 1,000 PEOPLE FOR SELECTED ASIAN COUNTRIES IN 2013 ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ 5V6M]LOPJSLZWLYWVW 05+0( */05( 1(7(5 ;<,2,@ .,69.0( =0,;5(4 7(20:;(5 ;/(03(5+ 4(3(@:0( :903(52( 05+65,:0( (<:;9(30( :05.(769, 7/0307705,: (A,9)(01(5 2@9.@A:;(5 2(A(2/:;(5 )(5.3(+,:/ (-./(50:;(5 5,>A,(3(5+ 9,7<)30*6-269,( 9<::0(5-,+,9(;065 )9<5,0+(9<::(3(4 Source: See www.oica.net/ category/vehicles-in-use/. 0:3(40*9,7<)30*6-09(5 7KHVHWUHQGVKDYHUHVXOWHGLQJUHDWHUWUDI¾F While there has been steady growth in congestion and increased air pollution, motorization on the roads of many countries greenhouse gas emissions and energy wastage. LQWKHUHJLRQ ¾JXUH LQUHFHQW\HDUV Figure 3.7 shows the average vehicle speed growth of vehicle ownership has slowed in compiled from various sources in selected some countries, including, among them, Japan, Asian cities. They vary from between 7 km/hr Kazakhstan, Pakistan, the Russian Federation, (Manila, Philippines) to 17 km/hr (Guangzhou, Singapore and Sri Lanka. Notably, growth in China). These speeds give a clear picture of motorized vehicle ownership remains very WKHURDGWUDI¾FHI¾FLHQF\LQFLWLHVZLWKSROLF\ much prevalent in China, India and Indonesia. PHDVXUHVWRLPSURYHWUDI¾FPDQDJHPHQW including those aimed at reducing the number A characteristic of motorization unique to many of motor vehicles on the roads, becoming all Asian countries is the prevalence of the more necessary.

FIGURE 3.7 AVERAGE VEHICLE SPEED IN SELECTED ASIAN CITIES

ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ (=,9(.,:7,,+24/9

05+0( Source: Compiled from various */05( */05( */05( sources 4(503( ),0105. 1(2(9;( ;/(03(5+ )(5.262 05+65,:0( :/(5./(0 7/0307705,: )(5.(369, .<(5.A/6<

FIGURE 3.8 VEHICLES IN USE IN SELECTED ASIAN COUNTRIES

*/05( 05+0( ;/(03(5+ 5,>A,(3(5+ 2@9.@A:;(5 1(7(5 (<:;9(30( 0:3(40*9,7<)30* 7/0307705,: (A,9)(0+1(5 9<::0(5 05+65,:0( 6-09(5 7(20:;(5 .,69.0( -,+,9(;065 4(3(@:0( ;<92,@ 2(A(2/:;(5 )(5.3(+,:/ 9,7<)30*6- :903(52( 269,( =0,;5(4 :05.(769, (-./(50:;(5

=LOPJSLZPU\ZL;OV\ZHUKZ =LOPJSLZPU\ZL4PSSPVUZ

Source: See www.oica.net/ category/vehicles-in-use/.

FIGURE 3.9 TRENDS IN CAR AND MOTORCYCLE OWNERSHIP IN SELECTED ASIAN COUNTRIES

1(7(5 ;/(03(5+ 1(7(5 ;/(03(5+ 4(3(@:0( 05+65,:0( 4(3(@:0( 05+65,:0( 9,7<)30*6- =0,;5(4 9,7<)30*6- */05( 269,( 05+0( 269,( 05+0(

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PRWRUF\FOHV$VLQGLFDWHGLQ¾JXUHWKHUH b. Public transport services Source: Acharya, 2013 is a high level of motorcycle ownership in 0DQ\RIWKHPDMRUFLWLHVRIWKH$VLDDQG3DFL¾F South-East Asian countries, such as Indonesia, Region – Hong Kong, China; Seoul; Tokyo; and Malaysia, Thailand and, Viet Nam.5 In some Singapore successfully operate urban public countries, it is common for people to use transport systems that are exemplary to most motorcycles for intercity trips of distances other cities that are in the process of designing more than 200 km, potentially a sign of public and developing their own systems. Figure 3.10 WUDQVSRUWVHUYLFHVODFNLQJLQERWKHI¾FDF\DQG shows the modal share of public transport in options. For many urban residents for whom selected cities. Some examples are 81 per cent cars may still be unaffordable, motorcycle LQ+RQJ.RQJ&KLQDSHUFHQWLQ6HRXO ownership is seen as a step up the ladder of Republic of Korea; 53 per cent in Mumbai, India; private personal mobility. 34 per cent in Bangalore, India and 30 per cent in Ahmedabad, India. Photo: Sergil Rudiluk / Shutterstock.com Sergil Photo: BOX 3.11 DIFFERENT MODES OF TRANSPORT IN ASIAN CITIES

WALKING AND CYCLING: Walking and cycling can be done at a relatively low cost and do not consume any fuels or emit pollution. Collectively known as non-motorized transport or NMT, they are a popular mode of transport in Asia, with a modal share estimated to be between 21 to 63 per cent across various cities. To promote NMT, more attention must be placed on integrating these forms of transport into public transport systems, including the planning and construction of safe non-motorized transport infrastructure.

PRIVATE VEHICLES: As economies have grown in the region, the number of private vehicles and two-wheelers on the roads, particularly motor scooters and motorcycles, has increased accordingly. Private motorized vehicles are

becoming the preferred form of urban transport in Asian / UN ESCAP Verougstraete Mathieu Photo: cities. Transport by private vehicles is not a sustainable mode of urban mobility when their numbers outpace the TAXI SERVICES: capacity of roads. Even though new IT applications are Automobile taxis are ubiquitous in major Asian cities. emerging that facilitate shared car driving and carpooling, If poorly regulated, however, taxis can exacerbate private vehicles still take up space that could be used by traffic congestion and add to air pollution. Taxi services, public transport vehicles. therefore, need to be better integrated into overall urban transportation planning. One way of doing this is by MASS RAPID TRANSIT SYSTEMS: planning and building appropriate infrastructure, such as The most common urban public transportation systems designated taxi stands and taxi stops. used in Asia are public buses and metro systems, urban rails, elevated rails and monorails. The type of public WATER TRANSPORT: transportation system in use depends on the size and In some cities, water transport along canals and rivers wealth of the city. In 2014, some 157 cities around the forms part of the overall transportation system. In world had a metro system in operation and 54 of those Bangkok, for example, canal boats provide a relatively were in Asia. In recent years, BRT have gained popularity cheap and reliable service into the central part of the city in Asia. Such systems are currently in operation in 39 and there are both regular and express boat services Asian cities, with a number of other cities planning their along the Chao Praya River, which is integrated with the implementation. Bangkok rapid transit system (the skytrain).

PARA-TRANSIT ROPEWAYS AND CABLE CARS: (INFORMAL TRANSPORT): Ropeways and cable cars are gaining popularity in several Para-transit is a popular form of urban transport in many major South American cities, such as Rio de Janeiro, Asian cities, in some cases accounting for more than Brazil, and Bogota. In the Asian context, ropeways and half of all motorized trips. Many forms of para-transit cable-cars operate mainly in tourist areas and public extend to inner-city areas, where narrow lanes and parks in China, Hong Kong, China; Japan; Georgia; low population densities put their services beyond the Malaysia; Nepal; Singapore and Viet Nam. The use of reach of the main public transport systems. Examples ropeways and cable cars as a public transport option include motorcycle taxis in Bangkok; auto-rickshaws should be further explored, especially in Asian cities with and tuk-tuks in Bangladesh, Cambodia, India, Thailand, mountainous terrains. Pakistan, and the Lao People’s Democratic Republic; rickshaws in Dhaka, New Delhi and Mumbai; pick-ups Source : UN-HABITAT(2013), pp.16-17, 25-26, and 29; UITP(2014) in Myanmar; eJeepneys in the Philippines; and microbuses and electric tempos in Kathmandu. Mini buses and microbuses are the mode of transport for 5-10 per cent of all trips in Indonesia and Thailand. Notably, the informal transport sector provides many employment opportunities to migrant people, making up close to 15 per cent of total employment in developing countries.

FIGURE 3.10 SHARE OF URBAN TRANSPORT IN SELECTED ASIAN CITIES

:05.(769, 790=(;,;9(5:769;46+, 7<)30*;9(5:769;46+, :/(5./(0 56546;690A,+;9(5:769;

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The relatively high share of public transport uphill struggle to maintain public transport’s XVHUVLQPDQ\RIWKHVHFLWLHVUH¿HFWVLQSDUW modal share, with it declining in some cities. the fact that many urban dwellers depend on Consequently, the upgrading of existing public public transport because they cannot afford transport systems and the introduction of newer, private vehicle ownership. The following cities: PRUHHI¾FLHQWV\VWHPVDUHXUJHQWO\QHHGHGWR Shanghai, China; Osaka, Japan; and New Delhi, compete with increased private vehicle use. It India retain a high share of non-motorized appears that a major barrier to this are the high transport. capital costs that modern mass transit systems incur, which, in turn, act as hindrances to the Despite efforts, municipal authorities face an conception of such systems (table 3.1).

TABLE 3.1 CAPITAL COSTS OF DEVELOPMENT OF DIFFERENT MASS TRANSIT SYSTEMS

*0;@ ;@7, 3,5.;/ *6:;7,924 6-:@:;,4 24 403 24

1(5(4(9. BRT 82 2.4 AHMEDABAD

2<(3(3<47,9ELEVATED RAIL 29 50.0 ( PUTRA )

2<(3(3<47,9MONORAIL 8.6 38.1 Monorail

)(5.262 ELEVATED RAIL 23.7 72.5 ( BTS )

),0105. METRO RAIL 11.3 62.0 Metro

:/(5./(0 METRO RAIL 87.2 62.0 Metro

)(5.262 METRO RAIL 20 142.9 MRTA Source: Wright and Hook, 2007 and D. Hidalgo and A. Carrigan, /65.265. METRO RAIL 82 220 2010 Subway

TABLE 3.2 CURRENT STATUS OF BRT SYSTEMS IN ASIA

,*65640,: 7(::,5.,9: 5<4),96-3,5.;/ 7,9+(@ *0;0,: 24

*/05( 3 985 250 ( 46.45% )19 ( 48.71% ) 592 ( 43.08% )

05+0( 423 372 ( 4.93% ) 8 ( 20.51% ) 168 ( 12.22% )

05+65,:0( 370 000 ( 4.31% ) 1 ( 2.56% ) 207 ( 15.04% )

09(5 2 000 000 ( 23.31% ) 2 ( 5.12% ) 148 ( 10.75% ) 0:3(40* 9,7<)30*6-

1(7(5 9 000 ( 0.1% ) 2 ( 5.12% ) 29 ( 2.07% )

7(20:;(5 130 000 ( 1.51% ) 1 ( 2.56% ) 26 ( 1.89% )

9,7<)30* 400 000 ( 4.66% ) 1 ( 2.56% ) 43 ( 3.12% ) 6-269,(

;(0>(5 1 252 000 ( 14.59% ) 3 ( 7.69% ) 107 ( 7.77% ) 796=05*,6- */05( Source: Global BRT Data. Available from http://brtda ;/(03(5+ 10 000 ( 0.11% ) 1 ( 2.59% ) 15 ( 1.11% ) ta.org/ (accessed 10 December 2015). ;6;(3

%57DUHVLJQL¾FDQWO\FKHDSHUWKDQRWKHUPDVV c. Non-motorized transport transit options. As a result, such systems are $VLJQL¾FDQWSURSRUWLRQRIWKHSRSXODWLRQLQ now emerging as a popular mass urban transit Asia still depends on walking and bicycling. PRGHLQPDQ\$VLDQFLWLHV6RPH$VLDQ 7KLVLVUH¿HFWHGLQ¾JXUHZKLFKVKRZV cities are currently operating 1,375 km of BRT a relatively high modal share for walking and routes, carrying 8.5 million passengers per day. cycling in many cities, such as Guangzhou, Box 3.12 provides details of the Janmarg, a &KLQD SHUFHQW DQG%DQJDORUH,QGLD BRT system which was successfully launched (42 per cent). In some cities, people choose LQ$KPHGDEDG,QGLDLQ NMT because of their low incomes. This is a common global trend among the urban poor. It is also a trend in many developed countries, BOX 3.12 BUS RAPID TRANSIT SYSTEM IN AHMEDABAD, INDIA

The Indian city of Ahmedabad launched the Janmarg, a BRT system with 12 km of network, in October 2009. The city authorities have subsequently expanded the network, taking it to its present length of 82 km. Today, the system carries more than 150,000 passengers per day on 150 buses, with average travel speeds of 26 km/h.

The system was implemented by the Municipal Corporation of Ahmedabad in partnership with CEPT University (Center for Environmental Planning and Technology) as its technical partner. The project was delivered through a network approach and with public consultations using participatory processes.

The “Janmarg”, meaning “People’s Way”, has provided a sustainable mobility option to the people of Ahmedabad and has successfully transformed the Picture source: S. M. Shivananda Swamy urban cityscape along the corridor. It has also expanded labour market opportunities to the urban poor and improved the quality of the city’s air, thereby becoming a sustainable urban transport model for other cities in the region to emulate.

BOX 3.13 IMPROVEMENT OF NON-MOTORIZED VXSSRUWWKLVSROLF\SHUFHQWRIWKHWUDQVSRUW TRANSPORT IN RAJSHAHI, BANGLADESH budget of the Chennai City Corporation is to be allocated to the construction and maintenance of NMT infrastructure.8 Other examples include the construction of skywalks to link several stations along the Bangkok mass transit system (the Skytrain), and the Walk2Ride initiative in Singapore, which aims to make transport modes more accessible. Bike-share systems, car-free zones and car-free days have also been introduced in several Asian cities to encourage the use of NMT.

3. POLICY OPTIONS FOR MOVING TOWARDS An improved footpath along a city road. Source: Rajashahi city SUSTAINABLE URBAN MOBILITY Rajshahi, a city in Bangladesh with a population of 950,000, has been Despite increasing evidence that current urban laying down NMT infrastructure on its streets. Examples include pedestrian footpaths, such as the one shown below, and cycle tracks, as well as initiatives transport systems require a major overhaul, to green the city to improve the environment. many Asian cities are still following the conventional unimodal approach to transport with many of them recently hailing its health planning. If these cities are to become EHQH¾WV*RYHUQPHQWVDUHLQFUHDVLQJO\SURPRWLQJ sustainable, all levels of government should the use of NMT as a policy strategy to reduce evaluate existing policies and strategies, WUDI¾FFRQJHVWLRQERRVWLQJWKHYLDELOLW\RI107 identify policy gaps and adopt innovative for wider swathes of population. strategies and polices to improve mobility and accessibility. The region already holds a wealth While the cost of NMT is relatively low for of knowledge and best practices in these areas WUDYHOOHUVVDIHDQGHI¾FLHQW107V\VWHPVVWLOO from which governments can draw. The most require investment in the necessary infrastructure, essential parts are outlined below. especially if such modes are to offer an attractive alternative to motorized modes. Non-motorized a. Integrated urban transport transport infrastructure, such as walkways, and land use planning sidewalks, cycleways and pedestrian zones need A comprehensive sustainable and inclusive urban to be carefully designed with the safety of users transport policy should be a part of each country’s in mind. One way to boost road safety is through overall national sustainable transport programme. the provision of segregated infrastructure for 0DQ\FRXQWULHVLQ$VLDDQGWKH3DFL¾FODFNWKH bicyclists and pedestrians, such as bicycle lanes, strategic urban transport polices that ensure the sidewalks, and bicycle and pedestrian bridges. mobility of people rather than just vehicles. It is Box 3.13 furnishes the example of Rajshahi, advisable, that authorities adopt and implement Bangladesh, where the mayor was instrumental in comprehensive urban transport policies at the constructing new pathways and cycle lanes across municipal and national levels rather than revert the city. to the ad hoc approaches so commonly used for solving urban transportation issues. $FFRUGLQJWRRQHUHSRUWVRPHFRXQWULHV in the region have initiated either national or Integrated transport master plans should be subnational policies to promote the use of non- developed with future urban growth and motorized modes of transport, namely walking expansion in mind. In that regard, short, medium and cycling.7 Chennai, a city in southern India, and long-term transportation plans need to be has recently adopted a progressive policy that developed and implemented. makes walking and cycling a policy priority. To The integration of all modes of transport BOX 3.14 URBAN TRANSPORT MASTER PLAN IN COLOMBO required is achievable in a number of ways: (a) physical integration between modes, to facilitate a smooth transfer of passengers and goods from one mode to another; (b) operational integration to facilitate the functioning of physically linked modes; and (c) service integration, such as common/ combined fare ticketing systems. This is particularly important in the context of Asian cities, where most public transport users rely on a combination of modes to get from their origin to their destination. Asian cities need to develop more public transport coridors and apply principles of transit oriented development. Box 3.14 describes an example The Ministry of Transport of Sri Lanka has developed a comprehensive of comprehensive urban transport master urban transportation plan for Colombo and its suburbs, which aims to planning, which was developed for Colombo. promote public transport modes, alleviate traffic congestion and reduce traffic pollution and accidents. The plan, named “CoMTrans”, includes a city road development plan, modernization of the railway system, monorail b. Improved transport demand development, the introduction of a BRT system, improvements to the management public bus system, traffic management and the development of transport interchange facilities, pedestrian paths and bicycle paths. CoMTrans is Transport demand management measures can planned for implementation over the period 2015 to 2035. It is divided into LPSURYHWKHRSHUDWLRQDOHI¾FLHQF\RIWUDQVSRUW short, intermediate and long-term development plans. The estimated cost V\VWHPVOLPLWWUDI¾FFRQJHVWLRQDQGLPSURYH for the plan’s implementation is Sri Lankan Rs. 2,780 billion (circa $20 billion). WUDI¾F¿RZVLQXUEDQDUHDV,QRUGHUWRUHGXFH Source: Perera (2014) dependency on private transport modes, policies to promote public transport modes are essential. Public transport is especially working and have self-contained recreational important for the urban poor, as they tend to and shopping facilities nearby, thereby experience reduced mobility and reside far reducing the need to travel. Tianjin Eco-city distances from their places of work.10 in China, for example, is being planned as one such compact city. It is comprised of land uses At the same time, policies are also needed to and physical infrastructure for the promotion of 12 discourage the use of private vehicles. Such public transport, walking and cycling. policies include: the elimination of subsidies for private cars and taxis; parking restrictions c. Promoting the use of old – and pricing; congestion charging; area licensing and new – vehicle technologies schemes; electronic road pricing; car sharing; In recent years, hybrid and electric vehicles and the designation of high-occupancy lanes. have appeared in many transport markets in While the existence of such schemes is critical the region as an alternative to gasoline-only to the sustainability plans of many countries, it cars. However, as exciting these technologies is only the fostering and policing of such plans may be, their sustainability depends on the that can really make a difference. In Singapore, sources of electricity used for charging. If the for example, the introduction of electronic road electricity is generated from coal burning, SULFLQJUHGXFHGWRWDOWUDI¾FZLWKLQDFRUGRQ electric vehicles can be more polluting than area by 14 per cent and increased travel speed petroleum-fuelled vehicles. Furthermore, the by 22 per cent.11 use of such vehicles does not lessen the number of vehicles clogging congested urban roads. One regional trend that is gaining momentum is the promotion of “compact cities”, or cities that are designed with a focus on living and

Photo: Mathieu Verougstraete / UN ESCAP Verougstraete Mathieu Photo:

A modern, popular trend in mitigating urban supporting their efforts through incentives, congestion has been a move towards electric such as tax allowances that provide innovators buses and para-transit modes, which are with business environments more hospitable to EHQH¾FLDODVWKH\FDQUHGXFHFRQJHVWLRQDVZHOO WKHGHYHORSPHQWRIFOHDQHUPRUHIXHOHI¾FLHQW as curb fossil fuel combustion and emissions. engines. The Lao People’s Democratic Republic is experimenting with electric public buses in Alternative fuels, such as the biofuels, namely Luang Prabang; Nepal is using battery-operated FRPSUHVVHGQDWXUDOJDV &1* DQGOLTXH¾HG para-transit tempos (three wheelers); Bhutan petroleum gas (LNG) are also increasingly has recently begun to promote electric cars being used throughout the region, though their in Thimphu. In this vein, the Philippines has attractiveness has fallen in recent years due to launched the electric eJeepney, public electric the decline in global oil prices. In the region, minibuses that not only provide mobility but Thailand is promoting the use of gasohol by also raise awareness of the importance of reducing the price of the fuel and increasing its sustainability.13 availability at fuel pumps in Bangkok. Further expansion of these fuels requires policies to In this regard, it was noted that the Urban VDIHO\UHWUR¾WYHKLFOHVWRUXQRQVXFKIXHOVDV Electric Mobility Initiative, discussed during well as substantial investment in distribution the United Nations Climate Summit, held in systems and pumps. New York on 23 September 2014, aimed to boost the share of electric vehicles to 30 per d. Intelligent Transport Systems 14 cent of urban travel by 2030. This would The use of intelligent transport systems, or ITS, require substantial investment in appropriate are nothing new — they have been around for electric-charging infrastructure. As it is the WKHEHVWSDUWRIDGHFDGH7KHLULQ¿XHQFHLV private sector that usually drives technological now widespread, having become increasingly innovation, governments should consider common to urban transport systems around the

Photo: Yuwei Li / UNESCAP Yuwei Photo: world. ITS have helped to improve safety Common ticketing systems and prepaid on highways by communicating vehicle cards can make travelling more convenient information and highway conditions and as well as reduce travel time by facilitating connecting drivers. In Asia, the three most transferring between modes. Many cities are common ITS applications are: electronic toll using integrated ticketing on public transport. payments and pricing (which can be varied, In Beijing, one card is used for the metro, according to the time of day and congestion light rail and all buses. In Tokyo, rechargeable OHYHOV FRRUGLQDWHGOLQNHGWUDI¾FVLJQDOV smart cards called “Suica” and “Pasmo” can and the provision of real-time information to be used on the overland trains, urban subways drivers and travellers. Countries, including and buses. In the Republic of Korea, the new China, Malaysia, Japan, the Republic of “One Card All Pass” can be used for all public Korea, the Russian Federation, Singapore and transport modes, including buses, the metro, the Thailand, use such technologies to enhance railway and the expressway, across the nation, WUDI¾FRSHUDWLRQVDQGVDIHW\,QSDUWLFXODUWKH while in Seoul, the “T-money” and “Cash DSSOLFDWLRQRIDQDXWRPDWLFWUDI¾FHQIRUFHPHQW Bee” cards provide commuters with similar system in the Republic of Korea on its entire freedoms. With the advantages of these systems highway network has resulted in a reduction in already proven, Thailand is also formulating a URDGWUDI¾FFUDVKHVIURPWRLQRQO\D common ticketing system for public transport six-month period. in Bangkok.

Intelligent transport systems also assist travellers in making informed choices about public transport, telecommuting or driving outside peak hours.15 They enable commuters to plan their trips and avoid unnecessary journeys and congested routes. They also allow for the better coordination of public transport modes and online timetables, thereby enhancing the HI¾FLHQF\RIWKHRSHUDWLRQVDQGVHUYLFHV

Endnotes

1 ESCAP (2014c). 2 UN HABITAT (2012). 3 ESCAP (2014c). 4 ESCAP (2011b). 5 Acharya (2013). 6 UN-HABITAT (2013), p.6. 7 WHO (2013). 8 Dilip (2014). 9 Global Accessibility News (2013). 10 UN-HABITAT and ESCAP (2010). 11 GIZ and Beijing Transportation Research Center (2012). 12 See www.tianjinecocity.gov.sg/bg_masterplan. htm 13 Garcia (2015). 14 See www.un.org/climatechange/summit/wp- content/uploads/sites/2/2014/09/ TRANSPORT-Action-Plan-UEMI.pdf 15 Ito (2013). 16 Booz and Co. (2009).

PART III PART lll INTEGRATED INTERMODAL CHAPTER TRANSPORT SYSTEM RURAL TRANSPORT 1. INTRODUCTION Most of the region’s poor do not have access to safe and affordable means of transport. This deﬁcit is particularly acute in rural areas, where a large proportion of the inhabitants have to travel a long distance to reach a road or railway. Transport infrastructure and services play a critical role in 3 reducing rural poverty, in addition to facilitating access to schools, medical clinics, hospitals, cultural and religious institutions, and other facilities. There are many ways in which transport has enabled, or hindered, the drive to reduce poverty.1

As the urban centres in the Asia-Pacific region become increasingly well connected, the conspicuous intraregional disparity in citizens’ mobility has spurred a campaign to provide rural residents with all-season roads. For agrarian producers, improved market access can result in increased surpluses because of higher producer prices, lower production and transport costs, reduced spoilage in the marketing chain, higher value crop substitution and better market information. Thus, transport infrastructure and services in rural areas have a major impact on food prices and on food security.2 They also provide physical access to markets and employment while opening up previously closed markets to competition.

The Sustainable Development Goals point directly to a number of ways in which transport is pivotal in the quality of life of the world’s residents, and as populations grow, investment in development initiatives is becoming more important. Many rural infrastructure projects backed by governments and international ﬁnancial institutions have been implemented in the region. The resulting rural roads have stimulated socioeconomic development and the projects themselves have provided essential information on the types of measurements and criteria needed to evaluate, plan, streamline and prioritize future rural projects. In addition, valuable insights have emerged, such as the need to engage with local residents in every project phase in order to ensure the sustainability of construction work, ease monetary obligations on local municipalities and provide extra income for residents in the long run.

2. THE CRITICAL ROLE poor.8 This points to the issue of road quality, OF TRANSPORT IN and the importance of having effective SUPPORTING RURAL PDLQWHQDQFHUHJLPHVWRHQVXUHWKHEHQH¾WVRI rural access are realized beyond the lifetime DEVELOPMENT AND of road construction projects.9 POVERTY REDUCTION An estimated 700 million people in the Asia- Rural road projects are likely to have both 3DFL¾F5HJLRQRUDERXWSHUFHQWRIWKHUXUDO direct and indirect effects, many of which are population, lack direct access to an all-season not captured in academic studies.10 A project’s road. The level of rural connectivity varies direct effects are usually gauged by measuring greatly among countries. ADB reported that changes in travel time, fuel and maintenance LQSHUFHQWRIWKHPLOOLRQSHRSOH costs, vehicle-load capacity and seasonality and living in Nepal had to walk least two hours GHOLYHU\GHOD\V,WLVPRUHGLI¾FXOWWRDGHTXDWHO\ from the nearest all-season road to their home, measure the indirect effects, which result ZKLOHLQDSSUR[LPDWHO\RQHTXDUWHURI from such changes as the reorganization of rural habitants in India were reportedly not production, land use and market areas, usually connected to all-season roads. In comparison, in response to the direct effects. For example, rural populations in most East and South-East one of the unexpected indirect effects of a road Asian countries appear to have better rural project in rural Philippines was the collapse of connectivity, with the exception of some of WKHORFDO¾VKLQJROLJRSRO\ZKLFKHQDEOHGPRUH the least developed countries, such as the Lao SHRSOHWRSDUWDNHLQ¾VKLQJ ER[ People’s Democratic Republic and Myanmar. An increasing body of research shows BOX 3.15 DIRECT AND INDIRECT EFFECTS that having access to all-season roads can OF IMPROVED ACCESSIBILITY contribute to poverty reduction. In India, the World Bank found that expenditure A study on the influence of a 63-km road project on roads had the largest impact on rural connecting Dinahican fishing village in the Philippines poverty compared with other types of public concluded that a significant array of benefits can be achieved by providing road access. The area has a expenditure.6 Another study, which was long history of being peripheral due to poor transport conducted in the Lao People’s Democratic conditions and low accessibility. It is far from its major Republic, indicated that having access to all- market, Manila (155 km). As part of the same project, season roads reduced the incidence of rural the improvement of the Famy – Infanta road, which SRYHUW\VLJQL¾FDQWO\7KLVZDVVXSSRUWHG involved the road being paved with asphalt and its condition improving from bad/very bad to good, E\WKH¾QGLQJWKDWDERXWSHUFHQWRIWKH was found to have had distinctive direct and indirect decline in rural poverty incidence during effects, including: certain periods can be attributed to improved road access alone.7 The results of the Direct effects • Fuel consumption declined, on average, UHVHDUFKFRQ¾UPHGWKDWDFFHVVWRURDGVGRHV by 35 per cent; reduce poverty with the level of the impact • Maintenance costs were reduced by 44 depending on the areas in which the road is per cent; located and the quality of road. • Travel time was reduced by 40 per cent, and delays almost disappeared; • The road became passable for all vehicle In Indonesia, another study indicated that the types throughout the year. contribution of provincial economic growth to poverty reduction differed depending on Indirect effects the quality of roads: every 1 per cent increase • Uncompetitive production system of a fishing oligopoly collapsed; in provincial GDP was found to correlate • Fishing sector-related groups experienced ZLWKDGHFOLQHLQSRYHUW\LQFLGHQFHRI a considerable increase in income; per cent in “good-road” provinces and 0.09 • Work opportunities rose sharply. per cent in “bad-road” provinces. The study also found that provincial roads improved Source: Olsson (2009). wage and employment prospects for the Having access to rural roads may not, in BOX 3.16 RURAL ROAD DEVELOPMENT AS PART OF A RURAL itself, lead to sustainable development POVERTY REDUCTION STRATEGY OF CHINA results. In that regard, the success of China in reducing rural poverty can serve as an According to the National Bureau of Statistics of China, in 1978, some 250 example of how public policies need to million people were living under the extreme poverty line in rural areas. To address this crisis, the Government pursued a series of targeted poverty be comprehensive and multisectoral to reduction programmes in selected regions and districts from 1978 PDNHDVXVWDLQDEOHLPSDFW ER[ 7KLV onwards. These programmes focused on the expansion of farmland, experience suggests that additional inputs investment in basic infrastructure, such as roads and drinking water for and policies that focus less on the catalytic people and livestock and the construction of health and educational facilities to raise the income of the poor. Between 2002 and 2010 alone, and more on the complementary role of about 950,000 km of roads were constructed in the 592 counties rural roads in supporting socioeconomic that were targeted under the national development-oriented poverty development may be required. reduction programme.

This is particularly true in locations where Partly as a result of those efforts, the number of poor people in China declined from 250 million in 1978 to 125 million in 1985, and by a further 45 rural road development is expected to million people to 80 million by 1993. The factors behind the Government’s support agricultural development. It is remarkable success is that it has pursued poverty-focused policies over generally accepted that inferior transport a long time frame (since 1978); it had specific measurable goals and a access hinders the ability of poor farmers large cadre of government officials working towards achieving them; and it targeted specific poor rural areas. With more than 88 per cent to move beyond subsistence farming. of villages having access to roads as of 2010, the goal of 100 per cent However, it is not only the availability access for all villages is likely to be realized in the near future. of roads which open up opportunities for market development. The ability of farmers Source: NPC (2015); China (2011). to respond to market opportunities depends on non-price factors, including rural roads, and maintained to ensure year-round access and on institutions and support services, such to marginalized districts and villages with 11 DVUXUDO¾QDQFHLQLWLDWLYHV Projects that greater employment opportunities available are intended to generate economic growth for the local inhabitants by using labour- and social welfare may therefore need to be based community methods for a private linked to a range of additional cross-sectoral sector-led approach for all works in order investments. to build the capacity to manage, deliver and maintain public transportation facilities 3. SELECTED RURAL through on-the- job capacity development. ROAD DEVELOPMENT Part of NRAP, the Afghanistan Rural Access INITIATIVES 3URMHFW $5$3 LVEHLQJLPSOHPHQWHGRYHU D¾YH\HDUSURMHFWOLIHDQGLVVODWHGWREH Over the past few years, a number of major FRPSOHWHGRQ6HSWHPEHU:LWK rural road development projects have been ¾QDQFLQJRIDERXWPLOOLRQWKLVSURMHFW launched. A notable trend has been the DLPVWRHQVXUHWKDWUXUDOFRPPXQLWLHVEHQH¾W increase in the number of projects that focus from all-season road access to basic services on local community involvement, including and facilities.12 through labour-based approaches for construction. A selection of those projects are described below.

Afghanistan: Following years of war, the Government of Afghanistan started the National Rural Access Programme 15$3 WRSURYLGH\HDUURXQGDFFHVVWR basic services and facilities in rural areas. Under the programme, essential rural infrastructure is rehabilitated, reconstructed BOX 3.17 A COMPREHENSIVE APPROACH TO RURAL ROAD DEVELOPMENT IN CAMBODIA

In 2014, a collaboration of development partners • Extending the community-based rural road initiated the second phase of the ADB-sponsored safety programmes of the earlier project, as well as Rural Roads Improvement Project in Cambodia. an axle-loading control programme to address the Approved initially in 2010, the project aims to upgrade problem of overloading, as the improved roads may more than 1,031 km of rural roads from gravel roads increase average speeds; to a paved condition in nine provinces. The next • Project management support to strengthen phase of the $118 million package is supported the capacity of the Ministry of Rural Development by a combination of loans and grants from the • Connectivity improvements for Mekong Governments of the Republic of Korea and Australia, river islands, including the rehabilitation of roads and and the Nordic Development Fund. The Government jetties within a five-island cluster in the Mekong River. of Cambodia will finance $11.16 million of the project. It is hoped that by improving access to markets, jobs Unlike other rural road programmes, the Rural Roads and social services, this project will help raise the living Improvement Project II is comprised of a variety of standards of the rural poor who live in these provinces. components to ensure that the project is sustainable in all senses of the word, including: Source: ADB (2014d); See www.ndf.fi/project/rural-roads- improvement-project-ii-rrip-ii-ndf-c63 • Improvement of about 1,200 km of rural roads to a climate-resilient paved condition, including green planning/planting in the nine provinces; • Strengthening of rural road asset management through a strong capacity-building programme;

Cambodia: With many donors funding various rural road projects over many years, the Government of Cambodia developed a strategic plan for rural roads in 2007 with the support of the South-East Asia Community $FFHVV3URMHFW 6($&$3 ER[ 7R implement this strategy, the Government of Cambodia developed the Rural Roads Improvement project. This project has recently embarked on its second phase, which aims to rehabilitate roughly 1,000 km of rural roads in nine provinces with the objective to provide year-round access to markets. This phase also includes other components designed to make the project both socially and environmentally more

VXVWDLQDEOH ER[ anan / Shutterstock.com Photo: China:$VQRWHGLQER[WKH Government of China has a long history of implementing poverty-reduction programmes that have concentrated on rural roads and other basic infrastructure development. The country is expected to extend its road QHWZRUNLQUXUDODUHDVWRPLOOLRQNP E\WKHHQGRIUHDFKLQJSHUFHQWRI WKHFRXQWU\µVWRZQVDQGSHUFHQWRILWV villages. During its twelfth Five-Year-Plan SHULRG &KLQDZLOOFRPSOHWH or renovate about 1 million km of roads in UXUDODUHDVDQGFRQQHFWYLOODJHV7KH FRXQWU\LVLQYHVWLQJELOOLRQ&KLQHVH \XDQ 50% ELOOLRQ RQUXUDOURDG

construction. Notably, this project has Apart / Shutterstock.com View Photo: provided more than 2.9 million jobs for rural migrant workers and helped the poorest BOX 3.18 INVESTING IN GAINING KNOWLEDGE 60 per cent of the population in the project ABOUT RURAL ROAD INFRASTRUCTURE areas. Examples of some of the projects include the Gansu Rural-Urban Integration Project, which involves the construction and The South-East Asia Community Access project (SEACAP) was a research-based project led by the Department for International repair of rural roads and bridges, connecting Development of the United Kingdom and co-financed by YLOODJHV,WLVHVWLPDWHGWKDWWKLVSURMHFW the Asian Development Bank, the World Bank, the European ZLOOEHQH¾WVRPHSHRSOH$QRWKHU Union, and the United Nations Office for Project Services project is the Guiyang Rural Roads Project, (UNOPS). Implemented between 2004 and 2009, the project goal was “sustainable access (to health, education and trade) which entails upgrading or rehabilitating for rural communities, creating pro-poor growth. The project’s DERXWNPRIUXUDOURDGVWKDWSDVVWKURXJK target countries were Cambodia, the Lao People’s Democratic YLOODJHVZKHUHPRUHWKDQSHRSOH Republic, Sri Lanka and Viet Nam. live. An example of the work is in Yunnan To do this, the project funded applied research on sustainable province where high-quality rural roads construction and maintenance approaches, including innovative have been constructed using local rocksets techniques in road surfaces and the stabilization of slopes. For by local people trained in constructing example, one research project identified ways to turn Mekong and maintaining low volume roads. delta clay into useful road-building materials by baking it into hard Information and experiences associated with bricks and using waste rice husk as fuel. The project enlisted the support of local universities and research institutes to conduct these projects have provided input for the this research and to provide training for government officials and thirteenth Five-Year Plan. local communities in using these new techniques.

India: To provide rural accessibility for the In addition, the project worked closely with implementing agencies and extended support to help them adopt improved techniques. PLOOLRQSHRSOHLQWKHFRXQWU\ZKRODFNHG To that end, ninety dissemination and mainstreaming events were access to paved roads, the Government of organized for infrastructure professionals and policymakers. As India launched in 2000 the national Pradhan a result, the project influenced national governments and major 0DQWUL*UDP6DGDN

NPKDVEHHQFRPSOHWHG2YHUDOO Pakistan: The Multi-Donor Trust Fund is LQKDELWDQWVDUHH[SHFWHGWREHQH¾W ¾QDQFLQJWKH(PHUJHQF\5RDGV5HFRYHU\ from the programme. The programme has Projects in Khyber – Pakhtunkhwa Province DOORFDWHGVLJQL¾FDQWUHVRXUFHVIRUWHFKQLFDO and the Emergency Rural Roads Project in assistance to help build the capacity of the Federally Administered Tribal Areas. the rural roads agencies, especially in the These projects aim to improve access and ongoing management of assets and the mobility through the construction of rural sustainable maintenance of roads. roads for the people living near existing road corridors. Nepal: Recognizing that the mountainous and remote areas of the country were in need Sri Lanka: The “Maga Neguma” Rural of practical measures to overcome barriers Road Development Programme was initiated to road access, the Government of Nepal LQWRXSJUDGHURDGVWRDQRSHUDEOH launched the Rural Access Programme level for motor vehicles.16 The Government 5$3 LQThe main feature of designed the programme in cooperation RAP has been the construction of tracks, with local community-based organizations trails and roads using labour-intensive, In 2010, the Rural Development Authority environmentally sound and climate resilient began to promote the use of pre-cast concrete methods. This approach has ensured that the block paving in order to maintain the quality programme has also generated employment of the roads as well as to provide easy access for people, particularly women, living in even after the laying of a utility service. local communities, thereby providing an The “Maga Neguma” programme was still DGGLWLRQDOVRXUFHRILQFRPH5$3ZKLFK UXQQLQJLQDORQJZLWKWKH&RQQHFWLQJ ZDVODXQFKHGLQLQYROYHVEXLOGLQJ Village Project and a number of other smaller rural roads in the poorest districts in SURMHFWVWKDWVSHFL¾FDOO\WDUJHWUXUDODUHDV western Nepal and developing road project management and engineering expertise in both the public and private sectors. Photo: Madan Badhu Regmi / UNESCAP Regmi Badhu Madan Photo:

Photo: Daniel / Shutterstock.com Daniel Photo:

4. RAISING THE PROFILE Another critical obstacle to raising the OF RURAL TRANSPORT SUR¾OHRIUXUDOWUDQVSRUWLQWKHGHYHORSPHQW IN THE INTERNATIONAL agenda has been the challenges posed by measurement. For example, recognizing DEVELOPMENT AGENDA that physical isolation may be contributing to poverty in the rural areas of developing While there seems to be a growing consensus countries, the World Bank developed the that roads need to be taken into consideration 5XUDO$FFHVV,QGH[ 5$, LQZKLFK when designing rural development calculates the percentage of the rural projects, infrastructure in rural areas is still SRSXODWLRQWKDWOLYHVZLWKLQNP W\SLFDOO\ underfunded by multilateral and bilateral HTXLYDOHQWWRDZDONRIPLQXWHV RIDQ donors as well as by governments. Part all-season road.19 of the challenge is that current systems of assessing the feasibility of rural transport projects, in which a minimum monetary rate of return is required, sometimes overlook WKHRWKHUSRWHQWLDOO\LPSRUWDQWEHQH¾WVWR which monetary values cannot be assigned. Research has also found that it also takes WLPHIRUWKHEHQH¾WVRIQHZUXUDOURDG projects to be realized.17 18 Endnotes

1 For a more detailed discussion on the contribution of transport to the Millennium Development Goals, see E/ESCAP/MCT.2/9. 2 E/ESCAP/CTR/2. 3 World Bank (2014b). 4 See http://web.worldbank.org/WBSITE/ EXTERNAL/EXTABOUTUS/IDA/0,,contentMD K:21322050~menuPK:4753060~pagePK:5 1236175~piPK:437394~theSite PK:73154,00.html 5 The most recent Rural Access Index data from the World Bank can be found at: www.worldbank.org/transport/ transportresults/headline/rural-access/rai- updated-modelbasedscores5-20070305.pdf, 6 The study found that for every 1 million Indian rupees ($22,000) invested in rural roads, 163 people were lifted out of poverty (World Bank, 2009b). 7 The paper used a general equilibrium modelling approach in which road improvement was modelled as a reduction in transport costs, and simulates the effects of the changes to transport costs on real GDP, rural poverty incidence and total poverty incidence (Warr, 2005). 8 Kwon, E. K. (2000). 9 For a discussion on the importance of road maintenance, see (ESCAP 2013a). 10 For a more detailed discussion on the direct and indirect effects of improved accessibility, see United Nations Centre for Regional Development (2014). 11 Kingombe (2012). 12 See http://mrrd.gov.af/en/page/69/218 and http://mof.gov.af/en/page/481/427 13 Xinhua (2015). 14 ADB (2014c). 15 See www.rapnepal.com/home 16 See www.mohsl.gov.lk/web/index. php?option=com_content&view=article&id=5 4&Itemid=61&lang=en 17 O’Neill and Greening (2010). The beneﬁts from increased transport research capacity in developing countries. Prepared for 1st AFCAP Practitioners Conference, Addis Ababa, 23-25 November. Available from http://r4d.dﬁd.gov.uk/PDF/Outputs/AfCap/ ONeill-paper.pdf 18 Van de Walle (2008). 19 Roberts and others (2006).

PART III PART lll INTEGRATED INTERMODAL CHAPTER TRANSPORT SYSTEM ROAD SAFETY 1. INTRODUCTION The provision of high-quality roads has been shown time and again to improve people’s lives. As we move into an era of more sustainable transport, policymakers are placing increasing emphasis on the mitigation of transport’s negative social and environmental impacts when planning 4 for a cleaner, more productive and efficient future. However, there are externalities more immediate in nature that require rigorous attention and planning.

Many governments in the Asia-Paciﬁc region are grappling with the challenge of ensuring that their transport programmes result in safe mobility. Transport safety, and road safety in particular, has moved to the forefront of the international development agenda because of the growing epidemic of road crashes. Road traffic injuries have become the leading cause of death globally, and the major cause of death among young people (15-29 year olds).1 90 per cent of road traffic deaths occur in low-and middle-income countries, yet these countries have just 54 per cent of the world’s vehicles.2 According to the Global Status Report on Road Safety 2015, more than half of the world’s 1.25 million road crash fatalities in 2013 occurred in the ESCAP region.3 With motorization rates expected to continue to grow in many of the region’s emerging economies, one of the targets of Goal 3 of the Sustainable Development Goals is to halve global deaths and injuries from road traffic crashes by the year 2020. In addition to that target, the importance of improving road safety in achieving inclusive, safe, resilient and sustainable cities and human settlements is emphasized in Goal 11. Many options are available to make this happen. Whether through road quality assurance or strict law enforcement, public education schemes or the use of ITS, it is vital that policymakers exhaust all routes available to them while addressing this exigency.

2. ROAD SAFETY IN THE ASIA-PACIFIC REGION

a. Current status of road safety in Asia and the Paciﬁc In recent years, there has been mixed progress in tackling road safety issues in Asia and the 3DFL¾F)LJXUHVKRZSURJUHVVLQUHGXFLQJ the number of death from road crashes in (6&$3VXEUHJLRQVEHWZHHQDQG based on estimates from the Global Status 5HSRUWRQ5RDG6DIHW\$FFRUGLQJWRWKH UHSRUWLQWKH$VLD3DFL¾FUHJLRQURDGIDFLOLWLHV KDYHGHFOLQHGLQFRXQWULHV$IJKDQLVWDQ $UPHQLD$XVWUDOLD$]HUEDLMDQ&KLQD)LML *HRUJLD,QGLD,QGRQHVLD,UDQ ,VODPLF 5HSXEOLFRI -DSDQ.LULEDWL/DR3HRSOHµV 'HPRFUDWLF5HSXEOLF0DUVKDOO,VODQGV1HSDO 1HZ=HDODQG3DNLVWDQ3DODX5HSXEOLFRI .RUHD6LQJDSRUH7KDLODQG7LPRU/HVWH DQG7XUNH\7KLVLQGLFDWHVWKDWURDGVDIHW\ LPSURYHPHQWLVSRVVLEOH

FIGURE 3.11 PROGRESS IN REDUCING NUMBER OF DEATHS FROM ROAD CRASHES BETWEEN 2010 AND 2013

796.9,::05,:*(7:<)9,.065:

7(*0-0*

569;/(5+ *,5;9(3(:0( :6<;/(5+ :6<;/>,:;(:0( :6<;/,(:;(:0( ,(:;(5+ 569;/,(:;(:0(

5<4),96-*6<5;90,:>0;/+,*9,(:05.5<4),96-+,(;/: 5<4),96-*6<5;90,:>0;/05*9,(:05.5<4),96-+,(;/:

Source: ESCAP calculations based on data from WHO (2015a).

FIGURE 3.12 PROGRESS IN REDUCING NUMBER OF FATALITIES AND INJURIES FROM ROAD CRASHES

*/(5.,:0596(+;9(--0*+,(;/)@:<)9,.065(5+

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ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ 569;/(5+*,5;9(3(:0(ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ

:6<;/(5+:6<;/>,:;(:0(

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0HDQZKLOH¾JXUHUHYHDOVWKDWWKHRYHUDOO performance of the ESCAP region in reducing In addition to the human toll, road crashes URDGIDWDOLWLHVLVDOVRLPSURYLQJ7KHQXPEHURI result in tangible economic losses to the estimated fatalities in the region declined from victims, their families and their respective PRUHWKDQLQWRDSSUR[LPDWHO\ FRXQWULHVDVDZKROH'UDZLQJRQDUDQJHRI LQDSHUFHQWUHGXFWLRQ sources, the ESCAP secretariat estimated the $FORVHUORRNDW¾JXUHVKRZVWKDWLQWKH cost of road crashes as a percentage of GDP 6RXWKDQG6RXWK:HVW$VLD(DVWDQG1RUWK WDEOH ZLWKWKHUHVXOWVUDQJLQJIURP East Asia and South-East Asia subregions, EHWZHHQDQGSHUFHQW&DPERGLD the overall reduction of fatalities declined by ,QGLD,QGRQHVLDDQG7KDLODQGDUHDPRQJWKH SHUFHQWSHUFHQWDQGSHUFHQW countries experiencing the highest percentage UHVSHFWLYHO\ ORVVRI*'3IURPURDGFUDVKHVZKLOH1HZ =HDODQGKDVWKHORZHVWDWRQO\SHUFHQW )LJXUHSURYLGHVDVXPPDU\RIWKH HVWLPDWHGIDWDOLW\UDWHSHUSRSXODWLRQ When converted into monetary terms, the LQ7KHUHJLRQµVDYHUDJHUDWHZDVDW economic cost of road crashes in the Asia- ZLWK7KDLODQGWKH,VODPLF5HSXEOLFRI,UDQ 3DFL¾FUHJLRQLVHVWLPDWHGDWEHWZHHQ 9LHWQDP.D]DNKVWDQDQG0DOD\VLDWRSSLQJ ELOOLRQDQGELOOLRQ According to the WKHOLVWDWDQG Road Safety Action Plan published by the UHVSHFWLYHO\ $'%URDGFUDVKHVDUHFRVWLQJWKH%DQNµV developing member countries more than the total development aid received annually in the UHJLRQDFOHDUO\XQVXVWDLQDEOHVFHQDULR

FIGURE 3.13 ESTIMATED FATALITY RATE PER 100,000 POPULATION IN 2013.

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TABLE 3.3 ESTIMATED LOSSES DUE TO TRAFFIC CRASHES (2010)

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b. Addressing the causes of road traffic crashes 'DWDEDVH $+'% VKRZVWKDWDYHUDJHIDWDOLW\ 7KH*OREDO3ODQIRUWKH'HFDGHRI$FWLRQIRU UDWHVIHOORQ&ODVV,,,DQG,,,URDGVEHWZHHQ 5RDG6DIHW\GHYHORSHGE\WKH81 DQG ¾JXUH 5RDG6DIHW\&ROODERUDWLRQKDYHLGHQWL¾HG ¾YHNH\SLOODUVLPSURYLQJURDGVDIHW\7KHVH +RZHYHULWDOVRLQGLFDWHVWKDWWKHSULPDU\ ¾YHSLOODUVLQFOXGHURDGVDIHW\PDQDJHPHQW FODVV$VLDQ+LJKZD\URDGVKDYHWKHEHVWVDIHW\ safer roads and mobility, safer vehicles, safer UHFRUGDWIDWDOLWLHVSHUELOOLRQYHKLFOHNP URDGXVHUVSRVWFUDVKUHVSRQVH7KHIROORZLQJ ZLWKURDGVEHORZ&ODVV,,,KDYLQJWKHZRUVWDW VHFWLRQKLJKOLJKWVVRPHRIWKHNH\PDLQLVVXHV IDWDOLWLHVSHUELOOLRQYHKLFOHNP7KLV suggests that the upgrading of roads across i. Infrastructure design all classes, especially to meet the minimum 7KHTXDOLW\RIURDGVSOD\VDVLJQL¾FDQWUROH UHTXLUHGVWDQGDUGVIRU&ODVV,,,LVOLNHO\WR LQFUDVKLQFLGHQFH6WXGLHVVKRZDVWURQJ result in a reduction in fatalities on the Asian FRUUHODWLRQEHWZHHQLQIUDVWUXFWXUHGHVLJQDQG +LJKZD\QHWZRUN ERWKWKHQXPEHUDQGVHYHULW\RIURDGFUDVKHV %DVHGRQGDWDFRYHULQJURXJKO\NP In many developing countries, pedestrians RIWKH$VLDQ+LJKZD\WKH$VLDQ+LJKZD\ DQGQRQPRWRUL]HGWUDQVSRUWXVHUVDUHDWD FIGURE 3.14 AVERAGE FATALITY RATES PER BILLION VEHICLE-KM BY ASIAN HIGHWAY CLASS

7904(9@ S SSSSS),36>SSS

Source: Based on information in the Asian Highway Database (see endnote).

VLJQL¾FDQWULVNRIURDGFUDVKHVGXHWRWKHSRRU ,QWHOOLJHQW7UDQVSRUW6\VWHPVFDQDOVREH TXDOLW\RILQIUDVWUXFWXUH$FFRUGLQJWR:+2 XVHIXOLQVLGHYHKLFOHVSURYLGLQJGULYHUVZLWK PRUHWKDQSHUFHQWRIURDGWUDI¾FIDWDOLWLHV URDGVSHFL¾FUHDOWLPHWUDI¾FDQQRXQFHPHQWV LQORZDQGPHGLXPLQFRPHFRXQWULHVLQYROYH relayed to their radios from local infrastructure SHGHVWULDQVDQGF\FOLVWV7RUHGXFHWKLVULVN WUDQVPLWWHUVDORQJZLWKDQHYHULQFUHDVLQJ governments must make a greater effort to DUUD\RILQYHKLFOHVDIHW\IHDWXUHV incorporate pedestrians and cyclists into LQIUDVWUXFWXUHGHVLJQDQGODQGXVHSODQQLQJ ii. Human risk factors $QRWKHUSURYHQZD\RILPSURYLQJURDGVDIHW\ 7KH:RUOG+HDOWK2UJDQL]DWLRQKDVLGHQWL¾HG LVWRLQFRUSRUDWH,76LQWRFRXQWULHVµQDWLRQDO ¾YHNH\ULVNIDFWRUVLQURDGVDIHW\VSHHGLQJ URDGV\VWHPVSDUWLFXODUO\RQH[SUHVVZD\VDQG GULQNGULYLQJDQGQRWZHDULQJRUXVLQJ KLJKZD\V7RROVVXFKDVYDULDEOHPHVVDJH KHOPHWVVHDWEHOWVDQGFKLOGUHVWUDLQWV)RU VLJQVFDQZDUQGULYHUVRILQFLGHQWVRUEDG the ESCAP region, speeding, reckless driving ZHDWKHUXSDKHDGWRKHOSWKHPUHGXFHVSHHGV DQGGULQNGULYLQJKDYHEHHQLGHQWL¾HGDVWKH DQGDYRLGFUDVKHVZKLOHDXWRPDWLFWUDI¾F WRSFDXVHVRIWUDI¾FFUDVKHV WDEOH )RU HQIRUFHPHQWKDVEHHQSURYHQ VHHWKHXVDJHRI %KXWDQ%UXQHL'DUXVVDODP*HRUJLD7DMLNLVWDQ LWE\WKH5HSXEOLFRI.RUHD3DUW,,,&KDSWHU DQG7KDLODQGVSHHGLQJZDVLGHQWL¾HGDVWKH WRLQGXFHDVLJQL¾FDQWGURSLQURDGFUDVKHVLQD WRSFDXVHRIURDGFUDVKHV'ULQNGULYLQJZDV VKRUWSHULRGRIWLPH LGHQWL¾HGDVPDMRUFDXVHVRIURDGFUDVKHVLQ %KXWDQWKH/DR3HRSOHµV'HPRFUDWLF5HSXEOLF DQGWKH5XVVLDQ)HGHUDWLRQ TABLE 3.4 TOP CAUSE(S) OF ROAD CRASHES IN THE ESCAP REGION COUNTRIES

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0RVWFRXQWULHVKDYHDGRSWHGQDWLRQDO speed can reduce the number of fatal crashes by legislation to tackle the issues of speeding, DVPXFKDVSHUFHQW GULQNGULYLQJDQGWKHZHDULQJRIKHOPHWVDQG VHDWEHOWVZKLOHWKHUHDUHVWLOOYHU\IHZVSHFL¾F Drink-driving:$FFRUGLQJWR:+2WKH ODZVUHJDUGLQJFKLOGUHVWUDLQWV7KHVHLVVXHV FUDVKULVNRIDSHUVRQGULYLQJZLWKDEORRG DUHGHVFULEHGEHORZLQPRUHGHWDLO DOFRKROFRQFHQWUDWLRQ %$& RIJGOLV DSSUR[LPDWHO\¾YHWLPHVKLJKHUWKDQWKDW Speed limit:0RVWFRXQWULHVLQWKHUHJLRQKDYH RIVRPHRQHZLWKD%$&OHYHORI]HUR enacted national speed limits, but compliance )XUWKHUPRUHLQH[SHULHQFHG\RXQJDGXOWV OHYHOVYDU\VLJQL¾FDQWO\)RUH[DPSOHDVSRW GULYLQJZLWKD%$&OHYHORIJGODUHPRUH speed study conducted in Brunei Darussalam WKDQWZLFHDVOLNHO\WRKDYHDURDGWUDI¾FFUDVK IRXQGWKDWSHUFHQWRIYHKLFOHVRQWKH-OQ WKDQPRUHH[SHULHQFHGGULYHUV$VDUHVXOWWKH .HEDQJVDDQ+LJKZD\ZHUHH[FHHGLQJWKH GUXQNGULYLQJODZVRI$IJKDQLVWDQ$]HUEDLMDQ VSHHGOLPLWRINPKZLWKWKHKLJKHVWVSHHG WKH'HPRFUDWLF3HRSOHµV5HSXEOLFRI.RUHD GHWHFWHGUHJLVWHULQJNPK2QDYHUDJH WKH5XVVLDQ)HGHUDWLRQDQG8]EHNLVWDQDOO VSHHGOLPLWVLQWKHUHJLRQZHUHIRXQGWREH OLPLW%$&WR]HURWKDWLVQREORRGDOFRKRO NPKIRUKLJKHUVSHHGURDGVNPK FRQFHQWUDWLRQZKLOHGULYLQJ2WKHUFRXQWULHV IRUUXUDOURDGVDQGNPKIRUXUEDQURDGV are also strengthening their efforts to enforce 0HDVXUHVIRUOLPLWLQJVSHHGFDQFRQWULEXWH GULYLQJXQGHUWKHLQ¿XHQFH '8, ODZV)RU VLJQL¾FDQWO\WRUHGXFLQJFUDVKHVDUHFHQW:+2 H[DPSOHWKH/DQG7UDQVSRUW2I¾FHRIWKH VWXG\VKRZHGWKDWDSHUFHQWFXWLQDYHUDJH 3KLOLSSLQHVDQQRXQFHGWKDWIURP0DUFK

Photo: View Apart 2 / Shutterstock.com View Photo:

VRPHEUHDWKDO\VHUXQLWVZRXOGEHLQSODFH iii. Enforcement and awareness- for enforcing its Anti-Drunk and Drugged raising 'ULYLQJ$FW 5HSXEOLF$FW RI 2QHRIWKHPDLQFKDOOHQJHVIDFLQJDOOFRXQWULHV LVWKHHQIRUFHPHQWRIODZV:KLOHPRVW Helmets: Based on information available from countries have adopted national legislation WKH*OREDO6WDWXV5HSRUWRQ5RDG6DIHW\ to tackle the key human risk factors, such as motorcycle helmet usage rates for different VSHHGLQJGUXQNGULYLQJKHOPHWZHDULQJDQG FRXQWULHVYDU\IURPWRSHUFHQW,Q seat belt usage, the level of enforcement varies $VLDDQGWKH3DFL¾F$XVWUDOLD0DOD\VLDWKH VLJQL¾FDQWO\EHWZHHQWKHP)LJXUHVKRZV 0DUVKDOO,VODQGV7RQJDDQG9LHW1DPKDYH the divergence in the levels of enforcement for WKHKLJKHVWXVDJHUDWHVRIQHDUO\SHUFHQW KHOPHWZHDULQJVSHHGOLPLWVDQGGUXQNGULYLQJ Helmet usage in urban areas is typically higher based on a perception-based survey on a scale than in rural areas, most likely due to differing RI]HUR QRWHIIHFWLYH WR KLJKO\HIIHFWLYH OHYHOVRIHQIRUFHPHQW7KHKHOPHWZHDULQJUDWH 6WULFWHQIRUFHPHQWJHQHUDOO\UHTXLUHVUHVRXUFHV of motorcycle drivers is also much higher than ERWK¾QDQFLDODQGKXPDQ+RZHYHULWGRHVQµW WKDWRISDVVHQJHUV,Q7KDLODQGIRUH[DPSOH DOZD\VFKDQJHWKHSHUFHSWLRQRIURDGXVHUV VWXGLHVKDYHIRXQGWKDWRQO\SHUFHQWRI While it may lead to the fear of being arrested UXUDOPRWRUF\FOHSDVVHQJHUVZHDUKHOPHWVDV and punished, strict enforcement does not FRPSDUHGWRSHUFHQWRIXUEDQPRWRUF\FOH QHFHVVDULO\OHDGWRWKHIHDURIURDGLQMXULHVDQG GULYHUV Another serious problem is that IDWDOLWLHV RQO\FRXQWULHVLQWKH(6&$3UHJLRQKDYH UHTXLUHPHQWVIRUPLQLPXPKHOPHWVWDQGDUGV 7KH*RYHUQPHQWRIWKH8QLWHG6WDWHVRI $FFRUGLQJWR:+2ZHDULQJDJRRGTXDOLW\ America annually publishes statistics on the helmet can reduce the risk of death from a number of lives saved due to various road URDGFUDVKE\SHUFHQWDQGWKHULVNRIVHYHUH VDIHW\PHDVXUHV WDEOH 7KHGDWDVKRZ LQMXU\E\PRUHWKDQSHUFHQW 7KHVHLVVXHV IRUH[DPSOHWKDWLQWKHXVHRIVHDW are particularly pressing in South Asia and belts in passenger vehicles saved more than 6RXWK(DVW$VLDZKHUHWZRDQGWKUHHZKHHOHUV OLYHVZKLOHWKHXVHRIFKLOGUHVWUDLQWV DFFRXQWIRUWRSHUFHQWRIWRWDOURDG VDYHGPRUHWKDQOLYHV)DFWXDOGDWD WUDI¾FIDWDOLWLHV such as these, can help persuade drivers to “self-enforce” the legislation put in place by JRYHUQPHQWV FIGURE 3.15 LEVEL OF ENFORCEMENT FOR HELMET WEARING, SPEED LIMITS AND DRUNK-DRIVING

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TABLE 3.5 LIVES SAVED, AND ADDITIONAL LIVES WHICH COULD HAVE BEEN SAVED, DUE TO RESTRAINTS AND MOTORCYCLE HELMETS IN THE UNITED STATES IN 2013

30=,::(=,+ 30=,::(=,+ 30=,::(=,+ (++0;065(330=,:;/(;>6<3+ (., (., (33(.,: /(=,),,5:(=,+ @6<5.,9 63+,9 (;7,9*,5;<:,

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Source: Adapted from United States (2015).

BOX 3.19 DEMERIT-FREE DRIVER DECAL OF SINGAPORE

Another example of an effective self- enforcement campaign is currently being LPSOHPHQWHGLQ6LQJDSRUH7KHFRXQWU\µV demerit-free driver car decal has raised DZDUHQHVVDPRQJPRWRULVWVDQGWKHV\VWHPRI recognition it has put in place has motivated drivers to maintain a demerit free record ER[

3. MOVING TOWARDS ZERO ROAD CRASHES IN THE ASIA-PACIFIC REGION

0DQ\(6&$3PHPEHUFRXQWULHVKDYH developed comprehensive national road safety In a drive to promote road safety awareness and culture, traffic police in Singapore, in partnership with the Road Safety Council and Shell SODQVZLWKPHDVXUDEOHJRDOVLQOLQHZLWKWKH Singapore, launched a commendation initiative to recognize all licensed Decade of Action for Road Safety and the motorists who have maintained a demerit-free record in the past five (6&$3*RDOV7DUJHWVDQG,QGLFDWRUVIRU years. Each motorist received a commendation letter from the traffic ,QFOXVLYHDQG6XVWDLQDEOH'HYHORSPHQW7KHVH police, and was able to redeem his/her letter for a “badge of honor” decal at Shell gas stations. Motorists seen at Shell with the decals are JRDOVWDUJHWVDQGLQGLFDWRUVZHUHDGRSWHGDV eligible to win vouchers and other exclusive gifts. More than 1.2 million DIROORZXSWRWKH0LQLVWHULDO'HFODUDWLRQRQ Singaporean motorists have been recognized for their responsible ,PSURYLQJ5RDG6DIHW\LQ$VLDDQGWKH3DFL¾F driving behaviour by this initiative. ZKLFKDLPHGWRVDYHOLYHVDQGSUHYHQW Sources: DFRPPHQVXUDWHQXPEHURIVHULRXVLQMXULHVLQ Cheong (2015); Maiden (2015); WKHUHJLRQRYHUWKHSHULRGWR ER[ See http://web-dev2.shell.com.sg/products-services/ :KLOHSURJUHVVKDVEHHQZLWQHVVHGLQ on-the-road/promotions/attention-demerit-free- motorists.html (accessed December 2015). many countries, most countries in the region have yet to achieve the eight targets in the Photo: UN ESCAP Photo:

'HFODUDWLRQ$VPDUNVWKHHQGRIWKH BOX 3.20 EIGHT TARGET AREAS IN PDQGDWHIRUWKH0LQLVWHULDO'HFODUDWLRQRQ THE ESCAP REGIONAL ROAD SAFETY GOALS, TARGETS AND INDICATORS ,PSURYLQJ5RDG6DIHW\LQ$VLDDQGWKH3DFL¾F JRYHUQPHQWVPD\ZLVKWRFRQVLGHUUHQHZLQJ a. Making road safety a policy priority; their commitment to the various goals, targets b. Making roads safer for vulnerable road DQGLQGLFDWRUVGHHPHGLPSRUWDQWIRUWKHUHJLRQ users, including children, senior citizens, %XWDVQRWHGDERYHWKHVHJRDOVZLOOQRWEH pedestrians, non-motorized vehicle DFKLHYDEOHZLWKRXWLGHQWLI\LQJLQQRYDWLYHZD\V users, motorcyclists, and persons with WRHQIRUFHURDGVDIHW\OHJLVODWLRQ disabilities; c. Making roads safer and reducing the severity Education is paramount, and in this regard, of crashes (building “forgiving roads”); JRYHUQPHQWVFRXOGZLQSXEOLFVXSSRUWE\ d. Making vehicles safer and encouraging strengthening their statistical capacities in responsible vehicle advertising; e. Improving national and regional collecting and monitoring road safety data, road safety systems, management and using this information to educate people and enforcement; at all stages of life, especially schoolchildren f. Improving cooperation and fostering and the young, about the importance of road partnerships; safety and the effects that it can have on their g. Developing the Asian Highway as a model for road safety; OLYHVDQGWKHOLYHVRIRWKHUV h. Providing effective education on road safety awareness to the public, young people and drivers.

Endnotes

1 WHO (2015a). 2 ibid 3 ibid 4 The sum of estimated GDP lost in per cent in 2010, multiplied by 2010 GDP. 5 ADB (2012a). 6 For further information see E/ESCAP/ AHWG(6)/1. 7 For 2014 data, the fatality rates in the figure are based on reported fatalities on 32.18 per cent of the length of the Asian Highway network (41,580 km in 24 countries), for which the required data were available as of June 2015. For 2010 data, the fatality rates are based on reported fatalities on 24.1 per cent of the length of the Asian Highway network (34,370 km in 23 countries). 8 WHO (2013). 9 ibid 10 See /www.unescap.org/sites/default/ files/2.7.Brunei-1.pdf. 11 See www.who.int/features/factfiles/roadsafety/ facts/en/index3.html. 12 Blood alcohol concentration, or BAC, limit refers to the maximum level of alcohol legally acceptable in the blood of a driver on the road. WHO (2013). 13 Tipan (2015). 14 Poon and others (2010). 15 WHO (2015b). Road traffic injuries. Fact sheet no. 535.Available from www.who.int/ mediacentre/factsheets/fs358/en/. 16 WHO (2013). 17 As part of the WHO Global Status Report on Road Safety 2015, respondents to a survey were asked to rate, as individuals, the effectiveness of enforcement of the road safety legislation covering these issues based on their professional opinion or perception. The group of respondents then reached consensus on an enforcement score, ranging from 0 (not effective) to 10 (highly effective). It is, therefore, a subjective perception-based indicator. 18 United States (2015). 19 See E/ESCAP/MCT

PART III PART lll INTEGRATED INTERMODAL CHAPTER TRANSPORT SYSTEM TRANSPORT FINANCING 1. INTRODUCTION In determining whether to invest in transport infrastructure, governments have to take into account the three pillars of sustainable development — economic, social and environment. Selection criteria for infrastructure investment cannot focus exclusively on economic benefits and have to 5 consider social and environmental impacts. The preceding chapters highlighted that the provision of high-quality infrastructure can foster economic integration, improve people’s lives and contribute to alleviate poverty. However, enhancing transport infrastructure requires significant investments and governments need to decide how best to allocate limited resources while ensuring public finance sustainability.

Transport financing is challenging as Asia and the Pacific is facing soaring demand for transport infrastructure to support its burgeoning population and economic development. As the region continues to grow, the need to find viable solutions to ensure the freedom of movement of the people and goods necessary for an economic zone of its size become all the more pressing.

With car ownership levels rising and the region’s urban population expected to grow by 0.7 million every week until 2050, the existing level of congestion already very costly to the economies will only worsen. ¹ This rapid urbanization is creating a demand for sustainable, integrated public transport systems well beyond the capacities of those currently in operation. The region’s transport hubs, its seaports, airports and its networks of roads, railways and waterways, are also under pressure because of growing intra- and interregional trade.

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FIGURE 3.16 TRANSPORT INFRASTRUCTURE INVESTMENTS IN SELECTED COUNTRIES

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Source: OECD-ITF data estimates (*data do not include private spending for India and Japan)

2YHUDOOWKHUHLVQRUXOHUHJDUGLQJDQLGHDOOHYHO BOX 3.21 MASSIVE INVESTMENTS BY CHINA IN TRANSPORT RILQYHVWPHQWLQWUDQVSRUWDVLWGHSHQGVKHDYLO\ RQWKHH[LVWLQJVWRFNRILQIUDVWUXFWXUH7KH Transport investment in China reached a record level REVHUYHGOHYHOVQHYHUWKHOHVVGHPRQVWUDWHWKH in 2014 with about $400 billion invested in roads, KLJKSULRULW\DVVLJQHGWRWUDQVSRUWLQWKHUHJLRQ railways, airports and waterways. As a result of those investments, the road network was lengthened by 7KHTXDOLW\RIWUDQVSRUWLQIUDVWUXFWXUHLQPXFK about 90,000 km — some 7,450 km of which were expressways — and 230,000 km of rural roads were RIWKHUHJLRQLVVWLOOSHUFHLYHGWREHUHODWLYHO\ renovated. About 8,000 km were also added to the rail ORZ ¾JXUH DQGJUHDWHULQYHVWPHQW network and eight new airports were built. In the port ZLOOEHUHTXLUHGWRPHHWIXWXUHGHPDQGIRU sector, 631 new berths came about in this fresh wave WUDQVSRUWVHUYLFHVDQGWRDGGUHVVWKHQHHGVRI of investment. WKHLUFLWL]HQVDQGEXVLQHVVHV$UHSRUWIURP

Source: Xinhua (2014) 0F.LQVH\HVWLPDWHVWKDWFRXQWULHVLQ6RXWK (DVW$VLDZLOOKDYHWRLQFUHDVHE\DIDFWRURI Photo: Mathieu Verougstraete / UN ESCAP Verougstraete Mathieu Photo:

FIGURE 3.17. PERCEPTION OF THE QUALITY OF TRANSPORT INFRASTRUCTURE (7 = EXTENSIVE AND EFFICIENT/AMONG THE BEST IN THE WORLD; 1 = EXTREMELY UNDERDEVELOPED/AMONG THE WORST IN THE WORLD)

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FIGURE 3.18 ROAD AND RAILWAY INVESTMENT SPLIT IN SELECTED COUNTRIES (LIGHT COLOURS REPRESENT RAIL INVESTMENT SHARE AND DARK COLOURS ROAD EXPENDITURE)

Source: ESCAP calculation (<:;9(30(1(7(59,7<)30*6-269,(;<92,@*/05(05+0(9<::0(5 -,+,9(;065 based on OECD-ITF data estimates and data from the Transport Ministry of China website - (OECD-ITF data do not include private spending for India and Japan).

FIGURE 3.19 GROWTH IN RAILWAY INVESTMENT IN SELECTED

COUNTRIES SINCE 2005 ƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳƳ

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Source: ESCAP calculation based on OECD-ITF data estimates and data from the Ministry of Transport of China website (data at constant prices have been used).

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Source: ESCAP / Remark: To obtain funds though project financing, a party wishing to realize an infrastructure project establishes a dedicated project company known as a special purpose vehicle — or SPV — to acquire financing and implement project activities. This legally isolates the parent organization from direct exposure to the financial risks associated with a project. With corporate finance, the same party will finance the project directly from its balance sheet.

&RXQWULHVDOVRQHHGWRGHFLGHZKRVKRXOGEH Accessing external resources: ,QVRPH SD\LQJIRUWKHLQIUDVWUXFWXUH,QWKLVUHVSHFW FRXQWULHVGHPDQGIRULQIUDVWUXFWXUHVLPSO\ HIIRUWVFRXOGEHPDGHWRIXUWKHUOLQNXVHU H[FHHGV¾QDQFLQJUHVRXUFHVDYDLODEOH FKDUJHVIHHVDQGOHYLHVWRLQIUDVWUXFWXUH GRPHVWLFDOO\PHDQLQJWKDWIRUHLJQERUURZLQJLV FRQVWUXFWLRQDQGPDLQWHQDQFH)RUH[DPSOH UHTXLUHG7KHVHFRXQWULHVFRXOGEHQH¾WIURPWKH WKLVFDQEHGRQHWKURXJKWKHHVWDEOLVKPHQW H[LVWLQJ0'%VDQGLQLWLDWLYHVUHFHQWO\ODXQFKHG RIGHGLFDWHGURDGIXQGVWKDWJRYHUQPHQWVLQ PDQ\FRXQWULHVKDYHVHWXSDVDVXVWDLQDEOH ZLWKWKHDLPWRERRVWWKH¾QDQFLQJDYDLODEOHIRU PHFKDQLVPIRU¾QDQFLQJWKHQHHGVRIWKHLUURDG LQIUDVWUXFWXUHVXFKDVWKH$,,%)RUUHJLRQDO VHFWRUV SURMHFWVLQWUDUHJLRQDOFRRSHUDWLRQWKURXJK ELODWHUDOORDQVDQGJUDQWVVKRXOGDOVRFRQWLQXH a. Public Finance WREHDNH\VRXUFHRI¾QDQFLQJ ,WLVH[SHFWHGWKDWWUDQVSRUWLQIUDVWUXFWXUH GHYHORSPHQWVKRXOGXVXDOO\UHPDLQ¾QDQFHG Improving public expenditure management: IURPWKHSXEOLFSXUVH:KLOHGLVFXVVLRQRI $GGUHVVLQJWKHLQIUDVWUXFWXUHJDSVLVQRW SXEOLF¾QDQFHPDQDJHPHQWJRHVEH\RQG RQO\DERXWLQYHVWLQJPRUHLWLVDOVRDERXW WKHVFRSHRIDWUDQVSRUWUHYLHZSXEOLFDWLRQ LQYHVWLQJEHWWHU/DUJHVDYLQJVFDQEHPDGHE\ FRQVLGHUDWLRQRIWKHIROORZLQJRSWLRQVLV LPSURYLQJWKHSODQQLQJGHOLYHU\DQGRSHUDWLRQ QRQHWKHOHVVLQYDOXDEOH RILQIUDVWUXFWXUHSURMHFWV,QDVWXG\IURP 0F.LQVH\LWLVHVWLPDWHGWKDWWKHSURGXFWLYLW\ Mobilizing domestic resources:*RYHUQPHQWV RILQIUDVWUXFWXUHLQYHVWPHQWFRXOGEHLQFUHDVHG FDQUDLVHPRUHUHVRXUFHVE\VWUHQJWKHQLQJWD[ WRDFKLHYHVDYLQJVRISHUFHQWLISURYHQEHVW UHYHQXHV7KHUHLVVLJQL¾FDQWSRWHQWLDOIRUWKLV SUDFWLFHVZHUHWREHDGRSWHG7KLVFRXOGEH LQWKH$VLD3DFL¾FUHJLRQDVWKHFROOHFWLRQ DFKLHYHGIRUH[DPSOHE\LPSURYLQJSURMHFW RIWD[UHYHQXHVUHPDLQVORZFRPSDUHGWR VHOHFWLRQVWUHDPOLQLQJGHOLYHU\RSWLPL]LQJ RWKHUGHYHORSLQJUHJLRQV*RYHUQPHQWVFRXOG PDLQWHQDQFHDQGPDQDJLQJGHPDQG7KHVH DOVRFUHDWH¾VFDOVSDFHE\PDNLQJH[LVWLQJ SURGXFWLYLW\JDLQVDUHRIWHQDVVRFLDWHG LQYHVWPHQWVPRUHHI¾FLHQWDQGE\UHSULRULWL]LQJ ZLWKSULYDWHLQYROYHPHQWLQLQIUDVWUXFWXUH WKHLUFXUUHQWH[SHQGLWXUHV)RUH[DPSOH GHYHORSPHQWZKLFKLVGLVFXVVHGEHORZ UHPRYLQJRUUHGXFLQJIXHOVXEVLGLHVFRXOGIUHH XSVLJQL¾FDQWUHVRXUFHVIRUFDSLWDOLQYHVWPHQW b. Private Finance HYHQWKRXJKVXFKDPHDVXUHZRXOGIDFHVWURQJ 3XEOLFSULYDWHSDUWQHUVKLSVKDYHEHFRPHDNH\ RSSRVLWLRQLQPDQ\FRXQWULHV PHFKDQLVPIRUFKDQQHOOLQJSULYDWHUHVRXUFHV IRULQIUDVWUXFWXUHGHYHORSPHQWWKHUHVHHPV Photo: Kubat Sydykov- World Bank World Sydykov- Kubat Photo: BOX 3.22 PERCEPTIONS OF THE PUBLIC—PRIVATE PARTNERSHIP EXPERTS IN THE REGION: RESULTS OF THE ESCAP PPP SURVEY

At the Asia-Pacific Forum on Public-Private Partnerships for Transport Infrastructure Development, which was held in Bangkok on 21 and 22 January 2015, the ESCAP secretariat conducted a survey of more than 50 PPP experts from government agencies and the private sector in attendance from more than 20 countries.

The results of the survey revealed a number of interesting views. Almost unanimously, respondents said that PPPs can have an added value compared to the traditional procurement of public infrastructure (98 per cent). A substantial number said that their main reason for considering PPPs was to access additional funding resources. Based on this, it appears that less priority had been placed on other benefits, such as efficiency gains and risk allocation.

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The majority of respondents viewed PPPs as a complicated procurement mechanism that should be considered carefully (63 per cent). Among some of the problems identified for road PPPs, in particular, respondents highlighted land acquisition issues and demand risk, namely inaccuracy of traffic forecasts, as being the most troublesome.

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Photo: Banana Republic images / Shutterstock.com images Banana Republic Photo:

FIGURE 3.21 MODAL SPLIT OF PRIVATE INVESTMENTS IN TRANSPORT INFRASTRUCTURE PROJECTS IN THE ASIA-PACIFIC REGION (2000-2014)

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Source: ESCAP estimates based on World Bank Private Participation in 96(+: Infrastructure (PPI) Database 9(03: (http://ppi.worldbank. org/); Infrastructure Australia website (http:// infrastructureaustralia.gov. au/ ) and data from Ministry of Strategy and Finance of the Republic of Korea.

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)LQDQFLDOPDUNHWVKDYHDOVREHHQXVHGWR Land acquisition has been a major obstacle for PPPs in Indonesia. To address this issue, a law on land procurement for public infrastructure ¾QDQFHLQIUDVWUXFWXUHGHYHORSPHQWLQWKH was enacted in 2012 to shorten the time required for acquiring land to a 5HSXEOLFRI.RUHD)RUH[DPSOHWKHOLVWHG maximum of two years. Three amendments have already been made to 0DFTXDULH.RUHD,QIUDVWUXFWXUH)XQG this regulation to further facilitate the land acquisition process. Among the ZKLFKZDVVHWXSLQKDVFRQWULEXWHG main changes, the following objectives have been pursued: WRRQHSRUWDQGURDGSURMHFWVWKURXJK - To provide for the compulsory purchase of property for both existing HTXLW\VXERUGLQDWHGGHEWDQGVHQLRUGHEWV and new public infrastructure projects; )ROORZLQJWKHVDPHPRGHODSSUR[LPDWHO\ - To allow the private sector to finance land acquisition to speed -up the PLOOLRQIRUHTXLW\LQYHVWPHQWVLQ process (removing the need to wait for state budget disbursements). LQIUDVWUXFWXUHSURMHFWVDQGEXVLQHVVHVLQWKH Despite some progress, issues remain because of the lack of proper 3KLOLSSLQHVKDYHEHHQPRELOL]HGWKURXJKWKH land registration in many sparsely populated areas. People willing to XQOLVWHG3KLOLSSLQH,QYHVWPHQW$OOLDQFHIRU claim unregistered land for infrastructure projects have to compensate ,QIUDVWUXFWXUHIXQGFUHDWHGLQ those that have cultivated or occupied it for a number of years. While the principle is fair, it creates practical difficulties. For instance, it might be difficult to determine who has to be compensated in the absence of clear $WWKHUHJLRQDOOHYHOWKH$6($1 evidence. People might also be tempted to take advantage of upcoming ,QIUDVWUXFWXUH)XQGZDVODXQFKHGLQWR infrastructure projects by claiming property rights they might not have. DGGUHVVWKHUHJLRQµVLQIUDVWUXFWXUHQHHGV Defining the appropriate compensation package could also be difficult in :KLOHWKHIXQGZDVLQLWLDOO\VHWXSWRSURYLGH the absence of well-developed land markets. ORDQVIURPLWVRZQUHVRXUFHVLWLVH[SHFWHG Sources: Natahadibrata (2015); Pardede (2015); Jaggs (2015). WKDWLWZLOOLVVXHGHEWLQWKHFRPLQJ\HDUV WRLQFUHDVHWKHUHVRXUFHVDYDLODEOHIRU LQIUDVWUXFWXUH¾QDQFLQJ&HQWUDOEDQNVZLOOEH DEOHWRSXUFKDVHWKRVHGHEWVWKHUHE\RIIHULQJ a. Tackling land DQHZDYHQXHIRULQYHVWLQJIRUHLJQH[FKDQJH acquisition issues UHVHUYHV,QDVLPLODUYHLQWKHELOOLRQ :KHQDVNHGDERXW333VIRUURDG 6LON5RDG)XQGZKLFKZDVODXQFKHGE\ GHYHORSPHQWLQWKHLUUHVSHFWLYHFRXQWULHV &KLQDLQVKRXOGH[SDQGUHVRXUFHVIRU WKHH[SHUWVLGHQWL¾HGODQGDFTXLVLWLRQDVWKH LQIUDVWUXFWXUHSURMHFWVWKDWDLPWRVWUHQJWKHQ VLQJOHJUHDWHVWFKDOOHQJHWRWKHVXFFHVVRIURDG FRQQHFWLYLW\DFURVV$VLD 333SURMHFWV7KLVLVDQLVVXHIRUDOOLQIUDVWUXFWXUH SURMHFWVQRWRQO\333V$FFRUGLQJWRDQLQGXVWU\ 4. 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Allocating demand risk BOX 3.24 THE DANGERS OF OVERESTIMATING TRAFFIC DEMAND adequately 'HPDQGULVNUHIHUVWRWKHULVNWKDWWKHQXPEHU RIXVHUVPD\EHORZHUWKDQDQWLFLSDWHG Similar to many transport infrastructure projects, UHVXOWLQJLQORZHUUHYHQXHVIRUWKHSULYDWH PPPs are susceptible to inaccurate traffic projections (or too-aggressive bidding), which leads to the RSHUDWRUVDQGHYHQWXDOO\¾QDQFLDOGLVWUHVV collection of tolls insufficient to cover the cost of the 8QIRUWXQDWHO\WKHIRUHFDVWLQJRIWUDI¾F private operator. In Australia, several high-profile GHPDQGKDVSURYHQWREHODUJHO\LQDFFXUDWH road projects, such as the Lane Cove and Cross City LQSDUWLFXODUIRUQHZLQIUDVWUXFWXUHRU tunnels in Sydney or the Airport link and CLEM7 tunnel in Brisbane have gone into administration in recent ²JUHHQ¾HOG³SURMHFWV7KLVKDVIRULQVWDQFH past. A 2010 study found that traffic on 5 of the 14 EHHQH[SHULHQFHGLQ$XVWUDOLD ER[ 6XFK Australian toll roads to be 45 per cent below forecasts. LQDFFXUDWHIRUHFDVWLQJFDQOHDGWRWKH¾QDQFLDO This triggered lawsuits against traffic forecasters for UXLQRIFRPSDQLHVDQGDORVVRIFRQ¾GHQFH poor performance. While these projects failed from DPRQJLQYHVWRUV the perspective of the private investors, the cost for the government was limited, and much less than what it would have been if financed through traditional Availability payments procurement. In that respect, PPP structures can be ,QVRPHFRXQWULHVWKHDYDLODELOLW\SD\PHQW seen to have played their expected role by protecting PRGHOKDVEHHQXVHGWRRYHUFRPHGHPDQG the public purse from the demand risk. ULVN,QWKLVPRGHOWKH6WDWHVHWVDQGUHWDLQVDOO Source: Allen and Overy (2015). 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BOX 3.25 LEARNING FROM EXPERIENCE: THE CASE OF THE REPUBLIC OF KOREA

The Republic of Korea is one of the region’s pioneers As its guarantees have no immediate cost to in using PPPs for transport infrastructure. In the early government, there is a risk that those guarantees days of its PPP programme, it actively provided a are granted in order to simply get the project done, minimum revenue guarantee, but decided to phase without due consideration for the long-term impact this approach out because of the growing financial on public finance. There is need to carefully consider burden associated with it. Although it was fully those guarantees at the upfront stage by recognizing stopped in 2009, the system still costs around $0.5 and analysing their potential fiscal liabilities. The - $1.2 billion per year and is expected to weigh on the Republic of Korea has adopted accrual-basis national budget until 2040. accounting to reflect PPP commitments and incorporate future payment for PPPs into a medium- Subsequently, a risk-sharing structure was term expenditure framework to ensure the long-term introduced, through which the government ensures budget affordability. that the operational revenues of the PPP allow for a return at least equivalent to the government bond’s Sources: Kim (2015); ESCAP (2013). rate. Meanwhile, a mechanism for reimbursements to the government is in place if revenues for the private sector grow beyond a specified threshold in the subsequent years of operation. To ensure financial sustainability into the future, the Republic of Korea has also set a fiscal rule to limit annual government payments related to PPPs to less than 2 per cent of total government expenditure.

c. Making public-private SULYDWHRSHUDWRUH[SHFWVWRJHQHUDWHSHUFHQW partnership projects RILWVUHYHQXHVWKURXJKUHDOHVWDWHGHYHORSPHQW ﬁnancially viable DWGHSRWVDQGVWDWLRQV$QRWKHUW\SHRIODQG YDOXHFDSWXUHPHFKDQLVPLVWRFKDUJHDOHY\RQ SURSHUWLHVWKDWDUHEHQH¾WLQJGLUHFWO\IURPWKH Capital grants WUDQVSRUWLQIUDVWUXFWXUHSURMHFW7KLVLVFXUUHQWO\ $VDUHVXOWRIWKHKLJKXSIURQWFDSLWDOFRVWV EHLQJGRQHLQWKHOLJKWUDLO*ROG&RDVWSURMHFWLQ LQYROYHGLQUDLOZD\LQIUDVWUXFWXUHVRPH $XVWUDOLD JRYHUQPHQWVKDYHXVHGSXEOLFUHVRXUFHV WR¾QDQFHFLYLOZRUNVOLPLWLQJSULYDWH LQYHVWPHQWVWRHOHFWULFDODQGPHFKDQLFDO d. Building capacity for public- V\VWHPVVXFKDVUROOLQJVWRFNVLJQDOLQJ private partnership project V\VWHPVDQGIDUHFROOHFWLRQPHFKDQLVPVZKLFK development W\SLFDOO\UHSUHVHQWDSSUR[LPDWHO\WRSHU 7KHUHLVDJURZLQJFRQVHQVXVWKDWWKHODFNRI FHQWRIWRWDOSURMHFWFRVWV7KLVLVDSRSXODU EDQNDEOHSURMHFWVLVKROGLQJEDFNWKHH[SDQVLRQRI PRGHOWKDWKDVEHHQXVHGIRUWKHGHYHORSPHQW 333VLQWKHUHJLRQDQGQRWWKHODFNRI¾QDQFLQJ RIPHWUROLQHVLQ%HLMLQJ /LQHVDQG 7KLVZDVUHDI¾UPHGE\WKH(6&$33336XUYH\ DQGIRUWKH057%OXH/LQHLQ%DQJNRN LQZKLFKOLPLWHGNQRZOHGJHDQGFDSDFLW\UHODWHG WR333VZDVLGHQWL¾HGDVDPDMRUREVWDFOHWR333 Land capture mechanisms GHYHORSPHQWLQWKHUHVSRQGHQWVµFRXQWULHV VHH 7RLPSURYHWKH¾QDQFLDOYLDELOLW\RIWUDQVSRUW ¾JXUHDQGER[ LQIUDVWUXFWXUHSURMHFWVLWLVFULWLFDOWRH[SORLW HYHU\SRVVLEOHVRXUFHRIUHYHQXHWKDWFDQDULVH :KLOHEXLOGLQJFDSDFLW\IRUJRYHUQPHQWRI¾FLDOV IURPWKHGHYHORSPHQWRIWKHLQIUDVWUXFWXUH LVHVVHQWLDOSXEOLFDXWKRULWLHVVWLOOQHHGWKHVXSSRUW ,QSDUWLFXODUODQGFDSWXUHPHFKDQLVPV RIFRQVXOWDQWVZKHQSUHSDULQJDQGWHQGHULQJIRU SUHVHQWDKLJKO\YLDEOHPHDQVRI¾QDQFLQJWKH 333SURMHFWV3URMHFWSUHSDUDWLRQIDFLOLWLHVWKDW LQIUDVWUXFWXUHRIPDVVWUDQVLWV\VWHPV7KHVH HQDEOHJRYHUQPHQWVWRDFFHVVH[SHUWLVHWKH\PD\ PHFKDQLVPVUHFRXSSDUWRIWKHLQIUDVWUXFWXUH ODFNLQWHUQDOO\KDYHEHHQHVWDEOLVKHGDOODURXQG FRVWVE\²FDSWXULQJ³WKHYDOXHDGGHGWRUHDO WKHZRUOG$UHJLRQDOH[DPSOHLVWKH$VLD3DFL¾F HVWDWHZKLFKXVXDOO\IROORZVWKHGHYHORSPHQW 3URMHFW3UHSDUDWLRQ)DFLOLW\ZKLFKZDVHVWDEOLVKHG RIPDVVWUDQVLWV\VWHPV LQE\$'%DQGWKH$6($1,QIUDVWUXFWXUH &HQWUHRI([FHOOHQFHEDVHGLQ6LQJDSRUH7KHVH 7KHPRVWZHOONQRZQH[DPSOHH[LVWVLQ+RQJ IDFLOLWLHVFDQKHOSFRXQWULHVWRGHYHORS²SURSHUO\ .RQJ&KLQDZKHUHODQGFDSWXUHPHFKDQLVPV SUHSDUHGSURMHFWV³WKDWDUHOLNHO\WREHVXFFHVVIXO KDYHFRQWULEXWHGWRWKHGHYHORSPHQWRID $VLPLODULQLWLDWLYHLVWKH*OREDO,QIUDVWUXFWXUH ZRUOGFODVVPDVVWUDQVLWV\VWHPZLWKRQO\ )DFLOLW\ *,) ZKLFKEHFDPHRSHUDWLRQDOLQ OLPLWHGSXEOLF¾QDQFLDOLQSXW2YHUD¾IWHHQ $SULO:LWKDQLQLWLDOFDSLWDOL]DWLRQRI \HDUSHULRG WR UHYHQXHVJHQHUDWHG PLOOLRQWKLVJOREDORSHQSODWIRUPDLPVWRIDFLOLWDWH IURPFRGHYHORSLQJDQGVHOOLQJSURSHUWLHV WKHSUHSDUDWLRQDQGVWUXFWXULQJRIFRPSOH[ DERYHUDLOZD\VWDWLRQVDQGGHSRWVDVZHOO LQIUDVWUXFWXUH333V DVODQGDGMDFHQWWRWKHUDLOZD\WUDFNVKDYH DPRXQWHGWRWZLFHWKHPRQH\VSHQWRQUDLOZD\ 5HFRJQL]LQJWKDW333SURMHFWVUHTXLUHVSHFL¾F OLQHFRQVWUXFWLRQ H[SHUWLVHPDQ\FRXQWULHVKDYHDOVRHVWDEOLVKHG GHGLFDWHGLQVWLWXWLRQVRIWHQFDOOHG333XQLWVWR &LWLHVLQ,QGLDDQGRWKHUSDUWVRI&KLQDKDYH GULYHWKHFRXQWU\µV333SURJUDPPHDQGVXSSRUW VWDUWHGWRLPSOHPHQWODQGFDSWXUHPHFKDQLVPV JRYHUQPHQWFRQWUDFWLQJDJHQFLHVZLWKWKHLU333 IRUWKHLULQIUDVWUXFWXUHSURMHFWV)RUH[DPSOH SURMHFWV)RUH[DPSOHWKH*RYHUQPHQWRI&KLQD WKHVWDWHJRYHUQPHQWLQ+\GHUDEDGLV HVWDEOLVKHGWKH&KLQD333&HQWHUXQGHUWKH GHYHORSLQJDNPHOHYDWHGUDLOV\VWHP 0LQLVWU\RI)LQDQFHLQ7KLV&HQWHULVLQ WKURXJKD333DUUDQJHPHQWZKLFKLVH[SHFWHG FKDUJHRISURPRWLQJDQDPELWLRXVSURJUDPPHRI WREHRSHUDWLRQDOLQ,QWKLVSURMHFWWKH SLORWSURMHFWVFRVWLQJDQHVWLPDWHGELOOLRQ

FIGURE 3.22 PERCEPTIONS OF OBSTACLES TO PUBLIC- PRIVATE PARTNERSHIPS IN THE ASIA-PACIFIC REGION

3040;,+256>3,+.,(5+ *(7(*0;@9,3(;,+;6777Z

3(*26-7630;0*(3 >03379646;05.777Z

<5-(=69()3,3,.(3,5=09654,5; ():,5*,6-*3,(99<3,:

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Source: ESCAP PPP survey

BOX 3.26 ESCAP E-LEARNING SERIES

To assist governments in building PPP capacities, the — www.unescap.org/our-work/transport/financing-and- ESCAP secretariat developed and launched a new private-sector-participation/public-private-partnership- E-Learning series on PPPs in 2015. Consisting of six course — and will include a certification programme in the near future. modules that cover various major areas related to PPPs, the E-Learning series contains essential knowledge for policymakers considering the PPP route. The course can be accessed for free on the ESCAP website

e. Streamlining procedures RQDGPLQLVWUDWLYHDSSURYDOVIRULPSOHPHQWLQJ /HQJWK\DGPLQLVWUDWLYHSURFHGXUHVGLVFRXUDJH DJUHHGWDULIIUHYLVLRQV7KLVDOVRUHGXFHVWKH SULYDWHVHFWRULQYHVWPHQWLQDQ\DUHD,QVRPH UHJXODWRU\ULVNZKLFKLVRIWHQDFRQFHUQWR FRXQWULHVIRUH[DPSOHLQIUDVWUXFWXUHSURMHFWV SULYDWHLQYHVWRUV PD\UHTXLUHPRUHWKDQSHUPLWVLQYROYLQJ LQH[FHVVRIDJHQFLHVDWGLIIHUHQWOHYHOVRI f. Applying good governance JRYHUQPHQW VRPHWLPHVFRQ¿LFWLQJ ,QYHVWRUV principles QHHGWREHUHDVVXUHGWKDWWKHLUPRQH\ZRQµ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¾HVDQGFODUL¾HV333SURFHGXUHV ER[ RZQHGHQWHUSULVHV 62(V LQRUGHUWRDYRLGWKH FURZGLQJRXWRISULYDWHELGGHUV

7RDVVLVWFRXQWULHVZLWKWKHGHVLJQRIUHODWHGODZV 5. SUBSECTOR DQGUHJXODWLRQVWKH:RUOG%DQNKDVGHYHORSHG SPECIFICITIES WKH²3XEOLF3ULYDWH3DUWQHUVKLSLQ,QIUDVWUXFWXUH (DFKWUDQVSRUWVXEVHFWRUKDVLWVRZQSDUWLFXODU 5HVRXUFH&HQWHU 333,5& ³ZKLFKSURYLGHV FKDUDFWHULVWLFV7KHUHIRUHPRELOL]LQJSULYDWH HDV\DFFHVVWRDQDUUD\RIVDPSOHOHJDOPDWHULDOV LQYHVWPHQWUHTXLUHVDWKRURXJKXQGHUVWDQGLQJ RIWKHVSHFL¾FLWLHVRIHDFKPRGH3URMHFWULVNV 'XULQJWKHLPSOHPHQWDWLRQRISURMHFWVPHDVXUHV QHHGWREHDOORFDWHGLQDPDQQHUWKDWPDNHVGHDOV FDQDOVREHSXWLQSODFHWRHOLPLQDWHXQQHFHVVDU\ DWWUDFWLYHZLWKRXWFRPSURPLVLQJWKHSULQFLSOHRI UHGWDSH)RUH[DPSOHLWLVSRVVLEOHWRLQFOXGH ULVNWUDQVIHUWKDWLQFHQWLYL]HVWKHSULYDWHVHFWRUWR DWDULIIIRUPXODLQWKHFRQWUDFWWRDYRLGUHO\LQJ LQQRYDWHDQGSHUIRUPHI¾FLHQWO\

BOX 3.27 THE PPP DECREE OF VIET NAM

To facilitate the development of PPP projects, Viet Nam has promulgated a new PPP Decree that entered into force in April 2015. This new Decree:

• Provides greater guidance for project preparation and implementation; • Removes the limit on State support for individual projects (previously capped at 30 per cent); • Gives projects greater flexibility for viability gap funding (including through capital expenditure (capex) grants and availability payments); • Allows funding for project preparation, including through a project development facility.

The Decree permits the use of foreign governing law and foreign arbitration, and recognizes unsolicited proposals. It also clarifies the process regarding step-in rights for lenders, defined by the World Bank as “rights given to lenders to take control of the infrastructure project where the project company is not performing”. This is an important issue for securing the financing of projects by banks

Sources: Hogan Lovells (2015); Frontier Law and Advisory (2015); PPPIRC (2013).

a. Roads BOX 3.28 IT’S A PROFITABLE PROJECT … SO WHERE ARE THE BIDDERS? 7KHURDGVHFWRUKDVWKHODUJHVWWUDFNUHFRUGRI 333VZLWKPRUHWKDQ¾YHKXQGUHGSURMHFWV To achieve “value-for-money”, a competitive KDYLQJEHHQXQGHUWDNHQLQWKH$VLD3DFL¾F tendering process is required to ensure that UHJLRQVLQFH7KH(6&$33336XUYH\ the government is paying the right price for its VKRZHGWKDWSHUFHQWRIWKHUHVSRQGHQWV infrastructure. Attracting bidders, however, is not EHOLHYHGWKDW333VZHUHQHHGHGWKHPRVWLQWKLV an easy task, as only a limited number of private companies have the technical and financial VHFWRUIROORZHGE\WKHUDLOVHFWRUZKLFKZDV capacity to enter into long-term contracts for VSHFL¾HGE\SHUFHQWRIWKHUHVSRQGHQWV developing large-scale infrastructure projects. +RZHYHUUHFHQWWUHQGVLQWKHUHJLRQUHYHDO DPL[HGSLFWXUHUHJDUGLQJWKHXVHRI333 As a result, several PPP projects in the region VFKHPHVIRUURDGGHYHORSPHQW have received a limited number of bidders. In the Republic of Korea, historical data show that some 70 per cent of PPP projects were awarded ,QWKHUHZDVDVORZGRZQLQWKH to a sole bidder, with only 30 per cent involving QXPEHURIQHZ333SURMHFWVLQWKHUHJLRQ7KLV more than one bidder. Another example is in ZDVSDUWLFXODUO\QRWLFHDEOHLQ,QGLDZKLFKKDV the Philippines: the $1.4-billion Manila Light Rail Transit Line (LRT 1) Cavite Extension project EHHQWKHODUJHVWPDUNHWLQ$VLDDQGWKH3DFL¾F had to undergo two rounds of tendering before IRUURDGSURMHFWV/LNHZLVH$XVWUDOLDDQRWKHU receiving a single bid. The contract was eventually PDMRU333PDUNHWLVUHYLVLQJLWVDSSURDFKLQ signed in 2014. The first bidding process failed WKHOLJKWRIGLI¾FXOWLHVHQFRXQWHUHGZLWKSDVW due to uncertainties related to a real estate tax. SURMHFWV In the second bidding, the government agreed to bear the cost of this real estate tax and to provide a two-year guarantee for the line’s +RZHYHUQHZ333PDUNHWVDUHVHFXULQJ existing structure that the concessionaire has WKHLU¾UVWPDMRUURDGGHDOV,QWKH to operate in addition to the planned expansion. 1HZ=HDODQG7UDQVSRUW$JHQF\VLJQHGD This illustrates the importance of confirming the interest of the market prior to the launch of \HDUFRQWUDFWIRUWKH7UDQVPLVVLRQ*XOO\ the tendering process, and of carefully drafting SURMHFWDNPIRXUODQHPRWRUZD\,QWKH tender documents to limit uncertainties that VDPH\HDUWKH1DWLRQDO+LJKZD\$XWKRULW\RI might scare investors away. 3DNLVWDQVLJQHGLWVODUJHVW333FRQWUDFW WRGDWHZRUWKPRUHWKDQPLOOLRQIRUWKH Source: Kim and Kim (2011). /DKRUH,VODPDEDG0RWRUZD\ 0 RQ$VLDQ

FIGURE 3.23 ROAD PUBLIC-PRIVATE PARTNERSHIPS PROJECTS IN ASIA AND THE PACIFIC (2000-2014)

)033065:<:+

,:*(7*V\U[YPLZL_JS0UKPH 0UKPH

+LJKZD\URXWH$+,QWKH3KLOLSSLQHV Urban rail projects WKHELOOLRQ&DYLWH°/DJXQD([SUHVVZD\ *LYHQWKHLUKLJKFDSDFLW\DQGUHODWLYHO\ORZ &$/$; SURMHFWZKLFKZDVVLJQHGLQ ODQGUHTXLUHPHQWVXUEDQUDLOWUDQVLWV\VWHPV FRQVWLWXWHVDQRWKHUPLOHVWRQHLQWKHJURZLQJ DUHSDUWLFXODUO\VXLWDEOHRSWLRQVIRUWDFNOLQJ 333SLSHOLQHEHLQJLPSOHPHQWHGLQWKH WKHUHJLRQµVXUEDQPRELOLW\FKDOOHQJHV FRXQWU\ 8QIRUWXQDWHO\UDLOSURMHFWVVXIIHUIURPD OLPLWHG¾QDQFLDOYLDELOLW\DVLOOXVWUDWHGLQ 3XEOLFSULYDWHSDUWQHUVKLSPHFKDQLVPVDUHDOVR ¾JXUH&DSLWDOLQYHVWPHQWFRVWVDUH EHLQJFRQVLGHUHGIRUURDGGHYHORSPHQWSURMHFWV H[WHQVLYHDQGFDQUDUHO\EHUHFRXSHGVROHO\E\ LQRWKHUFRXQWULHVLQWKHUHJLRQ)RUH[DPSOHLQ FKDUJLQJXVHUV'LUHFWSXEOLFVXSSRUWRIWHQLQ 0RQJROLDDFRQFHVVLRQDJUHHPHQWZDVVLJQHG WKHIRUPRIVXEVLGLHVRUWKHJHQHUDWLRQRI LQIRUWKHFRQVWUXFWLRQRIWKHNP $OWDQEXODJ8ODDQEDDWDU=DPLLQ8XGKLJKZD\

FIGURE 3.24 GEOGRAPHICAL DISTRIBUTION OF ROAD PUBLIC-PRIVATE PARTNERSHIP PROJECTS (1990-2014)

6;/,9,:*(7 *6<5;90,: ;<92,@ 9<::0(5 -,+,9(;065 4(3(@:0(

(<:;9(30( 05+0( Source: ESCAP estimates based on World Bank Private Participation in */05( Infrastructure (PPI) Database (http://ppi.worldbank. org/); Infrastructure Australia website (http:// 9,7<)30*6- infrastructureaustralia.gov.au/ 269,( ) and data from the Ministry of Strategy and Finance of the Republic of Korea.

SURMHFWZKLFKLVDOVRSDUWRI$VLDQ+LJKZD\ UHYHQXHIURPRWKHULQGLUHFWVRXUFHVVXFKDV URXWH$+382QDSLORWEDVLVWKH/DR3HRSOHµV ODQGYDOXHFDSWXUHDUHUHTXLUHGWRPDNHWKHVH 'HPRFUDWLF5HSXEOLFLVFRQVLGHULQJWKH SURMHFWV¾QDQFLDOO\DWWUDFWLYHWRLQYHVWRUV XSJUDGLQJRILWV1DWLRQDO+LJKZD\ 15 WKURXJK333DUUDQJHPHQWV Rail freight )UHLJKWFDUULDJHLVXVXDOO\PRUHSUR¾WDEOHWKDQ b. Railways SDVVHQJHUWUDQVSRUWDQGWKHUHIRUHPRUHOLNHO\ &RPSDUHGWRURDGSURMHFWVWKHQXPEHURI WRDWWUDFWSULYDWHLQWHUHVW5DLOLVSDUWLFXODUO\ 333VLQWKHUDLOVHFWRULVUHODWLYHO\OLPLWHG FRVWFRPSHWLWLYHRYHUPHGLXPGLVWDQFHV ZLWKOHVVWKDQ¾IW\SURMHFWVKDYLQJUHDFKHG NP DQGZHOOVXLWHGIRUWUDQVSRUWLQJKHDY\ ¾QDQFLDOFORVHLQWKH$VLD3DFL¾FUHJLRQVLQFH JRRGVVXFKDVPLQLQJSURGXFWV2QWKDWEDVLV ¾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

FIGURE 3.25 GEOGRAPHICAL DISTRIBUTION OF RAIL PUBLIC-PRIVATE PARTNERSHIP PROJECTS (1990-2014)

6;/,9,:*(7 *6<5;90,: 4(3(@:0( ;/(03(5+

7/0307705,:

9,7<)30* 6-269,( 05+0( Source: ESCAP estimates based on World Bank Private Participation in Infrastructure (PPI) Database (http://ppi.worldbank. org/); Infrastructure Australia website (http:// (<:;9(30( infrastructureaustralia.gov. au/ ) and data from Ministry of */05( Strategy and Finance of the Republic of Korea.

FIGURE 3.26 RAIL PUBLIC-PRIVATE PARTNERSHIP FIGURE 3.27 LIMITED FINANCIAL PROJECTS IN THE ESCAP REGION (2000-2014) VIABILITY FOR RAIL PROJECTS

(TVY[PaH[PVUVM *P]PS>VYRZ

.V]LYUTLU[ :\IZPK` (TVY[PaH[PVUVM ,SLJ[YPJHS 4LJOHUPJHS :`Z[LT (K]LY[PaPUN 6 4*VZ[Z :THSS:OVWZ :VJPHSS` )PSSPVU<:KVSSHYZ (JJLW[HISL *VTWL[P[P]L-HYL

Source: Adapted from IFC (2012)

FIGURE 3.28 PORT PUBLIC-PRIVATE-PARTNERSHIP c. Ports PROJECTS IN THE ASIA-PACIFIC REGION (2000-2014) 3XEOLFSULYDWHSDUWQHUVKLSVKDYHDVROLGWUDFN UHFRUGIRUSRUWLQIUDVWUXFWXUHGHYHORSPHQW ZLWKWKHLPSOHPHQWDWLRQRIDURXQG333 SRUWSURMHFWVLQ(6&$3FRXQWULHVVLQFH +RZHYHUSRUWGHYHORSPHQWDFWLYLWLHV KDYHGHFUHDVHGLQLQWHQVLW\IROORZLQJWKHJOREDO )033065<:+ ¾QDQFLDOFULVLV

FIGURE 3.29 GEOGRAPHICAL DISTRIBUTION OF PORT PUBLIC-PRIVATE PARTNERSHIP PROJECTS (1990-2014)

6;/,9,:*(7 *6<5;90,: 4(3(@:0(

7(20:;(5

;<92,@

9,7<)30* 6-269,( Source: ESCAP estimates based on World Bank Private Participation in Infrastructure (PPI) Database (http://ppi.worldbank. org/); Infrastructure */05( Australia website (http:// 05+0( infrastructureaustralia.gov. au/ ) and data from Ministry of Strategy and Finance of the Republic of Korea.

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Endnotes expected to be open by the end of 2016. See railway-technology.com(2015). 27 Verougstraete and Zeng (2014). 1 United Nations (2014). 28 Suzuki and other (2015),

2 World Bank (2015c) 29 See http://gcrtlessonslearned.com.au/ 3 “Missing links” are defined as the absence workspace/assets/uploads/files/gcrt-lessons- of continuous rail infrastructure between learned-executive-4f9f68c6a1d84.pdf. the railway networks of neighbouring 30 Yangpeng (2014). countries or the absence of continuous 31 Roesly (2015). railway infrastructure within one country, 32 A report from McKinsey estimated that often due to local geography. streamlined procedure – notably for land 4 World Bank (2015d) acquisition – could reduce by 15 per cent the 5 IATA (2013). cost of public infrastructure while 6 ADB and ADBI (2009). accelerating public service delivery. For 7 OECD and ITF (2015). further details see Dobbs (2013). 8 Woetzel and others (2014). 33 Allen & Overy (2015). 9 ESCAP (2014d). 34 These costs can be substantial: from 0.5 10 Dobbs and others (2013). - 1.2 percent of project capital value in 11 ESCAP estimates based on World Bank Australia (KPMG, 2010). Some countries Private Participation in Infrastructure (PPI) have also introduced mechanisms to Database (http://ppi.worldbank. compensate losing bidders through a fee org/); Infrastructure Australia website (http:// charged from the winning bidder thereby infrastructureaustralia.gov.au/ ) and data from encouraging greater participation. See KMPG the Ministry of Strategy and Finance of the (2014). Republic of Korea. 35 ESCAP PPP Survey. 12 See http://lexicon.ft.com/Term?term=sukuk- 36 See http://nha.gov.pk (Islamic-bonds), 37 See http://ppp.gov.ph/?ppp_projects=cavite- 13 Raghu and Kaiser (2012). laguna-expressway. 14 PWC (2013). 38 Ub Post (2015). 15 See www.cgif-abmi.org/about/overview. 39 Lao-Asie Consultants Group (2013). 16 See www.macquarie.com/mgl/mkif/en/about- 40 According to a recent survey from the mkif Economist Intelligence Unit, 64 per cent 17 See www.mirafunds.com/our-funds/pinai# of respondents in the Asia-Pacific region 18 ADB (2012b). consider that greater use of PPPs is one of 19 Gupta and others (2009). the top factors for improving urban 20 See https://www.treasury.qld.gov.au/projects- infrastructure and services. This is the highest infrastructure/projects/toowoomba-second- percentage in comparison with the world’s range-crossing/index.php. other regions (The Economist Intelligence 21 Pyrkalo (2014). Unit (2015). 22 For this project, the Government retains 41 Adapted from IFC (2012). the revenues collected and pays the 42 Several other rail projects in India have concessionaire an amount to cover its costs, followed the same approach. See www. provided that the agreed standards are met, pipavavrailway.com/. such as the services to the timetable, 43 See www.aarail.com.au/railway/the-project/. cleanliness and maintenance of rolling stock 44 Mathur (2012). and maintenance of the infrastructure. See 45 See http://ppp.worldbank.org/public-private- Verougstaete and Enders (2014). partnership/sector/transportation/ports. 23 See www.treasury.nsw.gov.au/ppp/nsw_ 46 See http://www.unescap.org/sites/default/ projects/projects_which_have_been_awarded/ files/4%20-%20Panel%201%20 %20 rail/main_works_ppp_of_the_cbd_and_south- PPP%20port%20development%20in%20 east_light_rail_project. Korea.pdf. 24 Although it was fully stopped in 2009, the 47 Kim and others (2011). system still costs around $0.5 - $1.2 billion 48 World Bank (2013). per year and is expected to weigh on the 49 Verougstraete and others (2015). national budget till 2040 (Kim, Kang-Soo 50 De La Maza (2013). (2015)). 51 Mullins (2014). 25 Allen and Overy (2012). 52 Allen and Overy (2012). 26 A 30-year concession agreement was signed 53 Clifford Chance (2014). in February 2015 for Line 16, which is Consolidated Reference List

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ACKNOWLEDGEMENTS

The Review of Developments in Transport in Asia and the Paciﬁc 2015 was prepared under the guidance of Yuwei Li, Director, Transport Division of the Economic and Social Commission for Asia and the Paciﬁc.

The core team of authors comprised Bekhzod Rakhmatov, Edouard Chong, Fedor Kormilitsyn, Ishtiaque Ahmed, Madan Bandhu Regmi, Mathieu Verougstraete, Peter O’Neill, Pierre Chartier, Sandeep Raj Jain, Shreya Kumra, and Thanattaporn Rasamit of the Transport Division; Sanjesh Naidu of the ESCAP Paciﬁc Office; and Delton Jones, Thierry Nervale and Uchenna Onuzo of the Secretariat of the Paciﬁc Community.

Valuable advice and inputs were extended by Fuyo Jenny Yamamoto and Joy Blessilda Sinay.

The manuscript was edited by Alan Cooper and Charles Toby Pearce.

The Review beneﬁted from extensive comments and suggestions from Mr. Gerald Ollivier, Mr. Ko Sakamoto, Ms. Laura Altinger Zaha, Ms. Mia Mikic and Mr. Salvador T. Pena.

The administrative processing necessary for the issuance of the Review was completed by Srisakul Kanjanabus.

Valuable support was also provided by several interns of the Transport Division: Chonlawit Sirikupt, Sun Runke, Theo Sands, and Yang Xueli.

The graphic concept, design and layout were created by Oum Bhumichitra and the printing services were provided by Advanced Printing Service Co., Ltd.