144 | Public-Private Partnerships in Urban Bus Systems
TABLE A.2 Lessons
learned from the Transantiago bus rapid transit project in Santiago, Chile
BEST PRACTICES
AREAS FOR IMPROVEMENT
• Transantiago is part of an integrated transportation system with the metro. [operation risk] • Transantiago has a qualified team of professionals managing the system. [operation risk] • Operators and routes are differentiated by bus colors to make it easier for users to identify which bus to take. [operation risk] • Each concessionaire developed an operation plan according to the service standards set out in the contract, which was then validated by the public authority. [operation risk] • Operators must develop and follow a fleet maintenance plan, and their workshops need to be ISO9000 certified. [maintenance risk] • The government paid operators a fee per kilometer determined by the technology used and the type of bus to incentivize the use of better technologies. [operation risk] • The government can penalize operators up to 10 percent of the revenue if they do not meet service quality goals. [operation risk] • Operators are required to have financial statements independently audited. [financing risk] • The government incorporated incumbents in the planning and operation of the new system and created a special-purpose vehicle to bring them in as partners. [operation risk] [political and social risk] • A mechanism to modify payments to operators and tariffs if revenues fall short of or exceed expectations is a good way of sharing upside and downside revenue risks. [operation risk] • Buses are accessible to disabled people thanks to ramps, wheelchair spaces, and braille and sound signaling. [political and social risk] • In June 2018 the Government of Chile passed a fare evasion law to penalize people who do not pay the public transportation fare. Potential penalties are the suspension of driver’s licenses or other benefit cards and fines (Transantiago 2018). [operation risk] [financing risk] • Transantiago is beginning to replace buses that are 12 years old or more. The 3,000 new buses will be more energy efficient and have wi-fi, padded seats, and security cameras (Santiago Times 2018). [operation risk] [political and social risk]
• Operations began before all components of the project and operators were ready (the entire fleet must be ready to operate). [interface risk] • The contract did not include effective incentive and penalty mechanisms, which meant that operators were covering the demand without receiving the incentives, affecting their finances. [operation risk] • Not all stations and only 20 percent of the buses had fare collection systems, which created risks. [operation risk] • The contract did not include methods to renew or revoke concessions. [political and social risk] • The government did not conduct a feasibility study, and subsequent demand studies were inaccurate. [design risk] • Communicating effectively with citizens is essential to gather support. The likelihood of success will increase when the government has a clear strategy and conducts a good public campaign, which can be strengthened by establishing an information system to keep people up to date. [political and social risk] • The project failed to collect enough revenue to cover the costs of the project, resulting in the government spending more than US$4 billion to close the gap. [operation risk] • Transantiago had to pay the metro system to use its intermodal stations, at costs that may have been reduced with better planning. [planning risk] [operation risk]
Source: World Bank.
TRANSMILENIO (BOGOTÁ, COLOMBIA) TransMilenio improved service quality and set a new standard for BRT projects in Bogotá (Rodríguez Hernández n.d.). TransMilenio was developed using the “bundled private finance and operation of buses” PPP structure. This case describes how the government could have benefited further by transferring additional functions and risks to the private sector.
Before the development of TransMilenio, Bogotá faced challenges like other congested cities globally, and planners looked for ways to improve mobility, reduce air pollution, and improve the use of public space. Bogotá’s public transportation system was outdated and inefficient. Its quality of service was poor, road infrastructure was insufficient, operators were not accountable to customers, and labor was not regulated. The Municipality of Bogotá developed TransMilenio, a BRT system, to tackle the city’s public transportation and traffic problems. Phase I of the project led to the development of three routes
