148 | Public-Private Partnerships in Urban Bus Systems
included two metro lines. Ecovía led to the development of a 30-kilometer BRT route, 39 stops, 2 terminals, 2 intermodal stations, and a fleet of 80 vehicles, each with a capacity for 80 passengers. The project had five main aims: • • • • •
Modernize the city’s transportation system Decrease travel time by 50 percent Reduce emissions by 5 percent Create a model that can be replicated in other parts of the state Carry 160,000 passengers per day.
The federal and state governments financed 68.5 percent of Ecovía’s infrastructure, which included stations, terminals, and roads. A private consortium financed, constructed, and operated the system’s stations. The same consortium financed and procured fare collection systems. One bundled operator financed and operated the rolling stock on a 20-year concession. BANOBRAS, Mexico’s national development bank, provided the credit to acquire the rolling stock. A third private partner supplied natural gas for the buses, and a fourth partner commercialized it through service stations. Unlike other bus projects in the region, a private partner was responsible for revenue management through a trust fund (escrow account).
TABLE A.5 Lessons
learned from the Ecovía bus rapid transit project in Monterrey, Mexico
BEST PRACTICES
AREAS FOR IMPROVEMENT
• The competitive procurement of infrastructure gave certainty to bidders and reduced political influence on the choice of partner. [operation risk] [planning risk] • Independent companies validated technical studies to confirm demand, route, and size of fleet. [design risk] [design risk] • The government incorporated incumbents in the planning and operations of new systems and benefited from including them as partners in the project via a specialpurpose vehicle. [operation risk] [planning risk] • Putting up the concession as collateral to banks is an effective measure for derisking the operators’ debt and reducing the cost of capital. [financing risk] • Payment systems were placed in easily accessible sites, including OXXO (the best-known convenience store in the country) as well as all stations and points in the feeder routes. [financing risk] [operation risk] • An integrated tariff allowed passengers to use the metro, buses, and feeder systems. [financing risk-fare evasion] [operation risk-demand] • The government established a fund capitalized by revenues acquired during the grace period for repaying loans for the acquisition of new buses. [operation risk] • Financing of the fleet was negotiated using low-demand estimates, diminishing the possibility of a default on the payments. [operation risk] • Smart traffic lights gave priority to buses in exclusive lanes to reduce travel times. [operation risk] • Tariffs are reviewed monthly. [operation risk] • Buses use natural gas, and fuel provision was included in the contract. [operation risk] • The project established a contingency fund with Mex$12 million. [operation risk]
• Sound analysis of the fiscal burden and costs to the government could have prevented cost overruns and the transfer of financing to a private partner midway through construction. [design risk] [construction risk] [financing risk] • The demand projections developed by the government were not accurate and could have been improved by the use of qualified and independent parties. [design risk] [operation risk] • The project did not adequately integrate the feeder system, which restricted demand. [planning risk] [operation risk] • The provision of infrastructure was greatly delayed and could have been improved through better planning, analysis, and contract design. [planning risk] [construction risk] • Buses operated for a year without monitoring systems, which was a government responsibility, and the lack of monitoring affected private partner revenue collection. [planning risk] [design risk] [operations risk] • Operators could not acquire parts to repair and maintain buses, which could have been prevented with an improved contract design that would have required the party responsible for maintenance to have an inventory of replacement parts or face penalties for maintenance delays. [maintenance risk] [operation risk] • The government did not maintain infrastructure. [maintenance risk] [operation risk] • The contract did not include changes in legal provisions to allow for adjustments of payment mechanisms following regulatory or legal changes. [political and social risk] • The system might consider ways to integrate tariffs better between the metro and buses to reduce the number of people who pay for only one service. [financing risk] [operation risk]
Source: World Bank.
