Model 1: Bundled private finance and operation of buses

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Examples of Urban Bus Project Structures

This chapter presents and discusses examples of private sector participation in urban bus systems. Each model is structured differently with regard to the allocation of responsibility for each function and component, the allocation of direct and indirect risks, and how it may be adapted to the local context and specific project objectives.

Planners may use these models as a starting point when considering how best to structure their particular project. It is recommended that every element of any model be adapted to the local context, using the guidance set out in this analytical framework. This chapter outlines four models:

• Bundled private finance and operation of buses • Unbundled private finance and operation of buses • Private finance of infrastructure and buses (bundled or unbundled) • Private finance and operation of electric buses.

This chapter also shows how multilateral development banks (MDBs) may participate in a transaction, noting avenues for technical assistance, investment financing, and credit enhancement mechanisms. Not all the MDB instruments outlined here will be available in every market. However, the principles and justification for including these instruments in a project remain unchanged: responsibilities and risks must be allocated to the party best suited to manage and mitigate them. In many markets that would benefit from this guidance, MBDs are the parties best placed to take on the roles described below.1

MODEL 1: BUNDLED PRIVATE FINANCE AND OPERATION OF BUSES

This is the model typically used for bus rapid transit (BRT) projects. In this model, if infrastructure is included, the public transportation authority (PTA) plans the system and finances and builds the roads, stations, and maintenance and parking depots. The PTA also procures the contracts and monitors system operations. One private operator (or several) is responsible for financing,