Monterrey, Mexico A.6 Lessons learned from the Acabús bus rapid transit project in

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

• 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]

AREAS FOR IMPROVEMENT

ecovía did not perform as planned. It achieved daily ridership of 100,000 passengers per day—only 62.5 percent of what was forecast. Buses had limited capacity on important routes, as planners were not able to secure the feeder services of incumbent service providers into the project design. Further, ecovía’s revenues fell short by more than US$2.5 million because of a system leakage in one of the ecovía stations providing connectivity to the metro system. In this station, users transferred from the existing metro system to ecovía for free. Table A.5 shows the main lessons learned from the project.

ACABÚS (ACAPULCO, MEXICO)

Acabús reduced travel times and costs for users in Acapulco. The Acabús BRT system with exclusive lanes was developed using the “bundled private finance and operation of buses” PPP structure (Transconsult 2011). This project shows the importance of having efficient and easily accessible payment systems for revenue collection to demonstrate how design risks can affect operations.

The Metropolitan Zone of Acapulco suffered from congestion and low travel speeds (between 18 and 38 kilometers per hour). Public transportation was unregulated, oversupplied, and unplanned. Pollution, accidents, and travel costs for users were very high. The state government of Guerrero developed the BRT-Acabús system to address these problems. Acabús led to the development of a 16-kilometer route with exclusive lanes, 20 kilometers of feeder routes, 18 stations, 3 terminals, and 135 vehicles. The project had the following goals:

• establish a new, good-quality, comfortable, affordable, safe, and sustainable transportation system • Develop exclusive lanes • Reduce congestion by eliminating existing low-capacity fleet and the oversupply of vehicles • Reduce travel times, accidents, travel costs, and pollution • Carry 197,000 passengers per day.

The state government finances and maintains the infrastructure—which includes roads, stations, and terminals—amounting to US$6.7 million.A private partner built the infrastructure. The state also financed 10 percent of the rolling stock, amounting to US$2.1 million. An SPv formed by incumbent operators financed the rest of the rolling stock and operated it on a 12-year concession. The fleet operator also financed and built a parking and maintenance depot. Another operator financed, procured, and operated the fare collection systems.

Acabús has had a positive impact on Acapulco. Acabús has reduced transportation costs for users by 40 percent and travel times by 12 percent. Despite the benefits to users, the state government took on additional costs because of design changes that required an additional US$18 million in funding. Moreover, as a result of issues with the fare collection systems, the project failed to collect around US$1.6 million in five months. Table A.6 shows the main lessons learned from the project.