Scaling Up Rapid Transit: The Role of National Policy & Finance Colin K. Hughes Director of National Policy & Project Evaluation
The problems in urban transport are well-‐known everywhere.
So are many of the solu9ons.
The ques(on is, how to implement given different contexts?
Ci(es in some countries lack investment.
Ci(es in other countries make unsustainable investments.
How to implement sustainable transport depends on the country in ques(on.
1
Where has Rapid Transit Infrastructure Grown the Fastest? -‐ Global Database of Rapid Transit
2
How is Rapid Transit Infrastructure Financed? -‐ Financial Details for 130 projects
Do Na(onal Policies Help 3 Grow Rapid Transit? -‐Transport Policy Analysis in 9 countries
Year 2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
3,500
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
km of Transit
Growth of Rapid Transit in Kilometers, 1980-‐2013
3,000
Brazil
2,500
China
2,000
Colombia
France
1,500
India
Indonesia
1,000
Mexico
South Africa
500
United States
0
Rapid Transit to Resident Ra(o (RTR ra(o) Kilometers of Mass Rapid Transit
RTR =
Urban Residents
Kilometers of Mass Rapid Transit Millions of Urban Residents
Example:
BRAZIL RTR = 2013
456 km Metro + 275 km BRT 171 Million of Urban Residents
= RTR 4.3
That is to say, Brazil has 4.3 km of MRT for every million urban residents
35.00
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Km of Transit per Million Urban Residents (RTR)
Growth of Rapid Transit per Urban Resident, 1980-‐2013
30.00
25.00
Brazil
20.00
China
Colombia
France
15.00
India
Indonesia
10.00
Mexico
South Africa
5.00
United States
0.00
Year
Rapid Transit Growth in 7 Developing Countries by RTR, 1980-‐2013 Rapid Transit to Resident (RTR) Ra9o
6
5
Brazil
4
China Colombia
3
India Indonesia
2
Mexico South Africa
1
0 1993
1995
1997
1999
2001
2003
2005
2007
2009
South Africa Na(onal Transit Funding for World Cup
2011
2013
Na(onal Policy Can Grow RTR Brazil: Start of PAC program Rapid Transit to Resident (RTR) Ra9o
6
Mexico: PROTRAM implementa(on
5
Brazil
4
China Colombia
3
India Indonesia
2
Mexico South Africa
Colombia: Na(onal BRT Development Policy 1 0 1993
1995
1997
1999
2001
2003
2005
2007
2009
South Africa Na(onal Transit Funding for World Cup
The type of growth we are looking for is possible.
2011
2013
But It Isn’t Always Needed and Doesn’t Always Work Rapid Transit to Resident (RTR) Ra9o
6
France with an RTR of 30(!) Power Largely Devolved to ci9es
5
Brazil
4
China Colombia
3
India
PR CHINA: No Nat’l Policy 2
Indonesia Mexico South Africa
1
0 1993
1995
1997
1999
2001
2003
2005
2007
2009
India JNNURM and NUTP
2011
2013
Brazil China Colombia India Indonesia Mexico
2013
4
2008
2003
1998
2013
2008
2003
1998
2013
2008
2003
1998
2013
2008
2003
1998
2013
2008
2003
1998
2013
2008
2003
1998
2013
2008
2003
1998
Km of Transit per Million Urban Residents
Developing Countries’ Growth in RTR by Mode, 1998-‐2013
6 BRT
5 LRT
Metro
3
2
1
0
South Africa
How does funding for rapid transit vary? Sources of Mass Rapid Transit Funding 100% 90% 80% 70% 60%
Other Government
50%
Private
40%
GOE
30%
City/Metro Govt
20% 10% 0%
State Government Na(onal Govt *Based on a sample of 130 projects in 9 countries
High transit growth in countries where ci(es fund projects China, Colombia, France. Low transit growth in countries that have lijle or no city funding like India, South Africa, Mexico (outside DF), Indonesia
How does financing for rapid transit vary? Por9on of Capital Investment Covered by Debt Finance, by Country and Source* 70% 60% 50% 40%
Bonds State Govt Lending
30%
Export Credit Agency
20%
MDB
10% 0%
Commercial Bank Na(onal Lending *Based on a sample of 130 projects in 9 countries
So What Does Drive Rapid Transit Growth? ITDP’s Urban Transport Development Poten(al Framework*: Country
France Colombia China Mexico Brazil S. Africa USA Indonesia India
1. 4. RTR Growth: 3. Funding**: Mandate: 2. Annual km of Mass Capacity: Annual Rapid Financing: Legal or Transit added per 1 Planning, Transit Spending Avg. DebtPolitical, for million residents, Governance, per Urban Sustainable Equity Ratio 2000 - 2014 Implementation Capita Transport 0.49 0.32 0.3 0.16 0.14 0.14 0.11 0.11 0.04
48.09 10.61 22.71 3.53 11.59 0.96 18.77 0.69 2.9
~70% ~50% ~70% 33% 55% 6% ~50% 10% 32%
High Medium High Medium Medium Low Medium Low Low
High High High Medium Medium Medium Low Low Low
* This framework is preliminary ** Based on a sample of 130 projects in 9 countries
What Does Drive Rapid Transit Growth? There are 4 cri9cal elements that ci9es must be empowered with to grow their RTR: 1. Funding -‐ in the form of dedicated revenue bases for capital planning 2. Debt Finance – to leverage revenue for large up-‐front investments 3. Ins9tu9onal Capacity – Governance, Planning, Implementa(on 4. Pro-‐Transit Mandate – Poli(cal and/or Legal Ideally, ci9es would inherently have these elements (like France and China), but when they do not, na9onal policy can intervene as a stop-‐gap.
1. Funding: Access to Dedicated Revenue Streams Funding Indicator: Ann. Capital Investment in Rapid Transit per Cap. (2000-2014)
France
48.09
Funding Source City (Nat'l Pass-thru)
Revenue Reliability
Polluter Pays?
High
Yes
Payroll tax for transport, fuel tax
Notes
Colombia
10.61
National, City
Mixed
Yes
Fuel Tax for local transport, National policy to fund one-off BRT systems
China
22.71
City
Mixed
No
Municipal land sales
Mexico
3.53
National, State
Low
Yes
Fonadin funded by toll profits
Brazil
11.59
City, State
Mixed?
No
Fuel taxes cut
USA
18.77
City, State, National
High
Yes
Many local sources plus NHTF from fuel tax
S. Africa
0.96
National
Low
Yes
Fuel levies
Indonesia
0.69
State
Low
No
Fuel subsidy
India
2.9
State, National
Low
No
No fuel tax
Poten9al Role of Na9onal Policy: • Open access to bond markets, especially encouraging revenue bonds (e.g. US) • Develop na(onal development bank lending for cost-‐effec(ve transport projects (e.g.Brazil) • Encourage & strengthen capacity for PPP (e.g. Mexico)
2. Financing: Access to Debt Finance Multi-Lateral PPP/Private Development Financing Bank
Avg. Debt Equity Ratio
Bond Releases
National Bank Lending
France
~70%
Many
City (Nat'l Pas-through)
Yes
Yes
Colombia
~50%
Few
No
Some
Yes
China
~70%
Some
CDB
Yes
Yes
Mexico
33%
Few
BANOBRAS/UTTP
Yes
Some
Brazil
55%
Few
BNDES & Caixa
Some
Yes
USA
~50%
Many
City, State, National
Yes
No
S. Africa
6%
Few
No
Some
No
Indonesia
10%
Few
No
Some
No
India
32%
Few
No
Some
Yes
Poten9al Role of Na9onal Policy: • Open access to bond markets, especially encouraging revenue bonds (e.g. US) • Develop na(onal development bank lending for cost-‐effec(ve transport projects (e.g.Brazil) • Encourage & strengthen capacity for PPP (e.g. Mexico)
3. Ins(tu(onal Capacity: To Govern, Plan, Implement France Colombia China
Planning Institutions
Urban Transport Governance
Technical Capacity
Strong planning framework in place (PDU)
United metropolitan planning organizations (Department level)
strong public and private sector technical capacity
capable governance structures
strong project delivery capacity across country
very strong local governance
strong technical capacity
Weak planning institutions and relatively Relatively strong tradition of planning
Mexico
Weak planning institutions
weak and sometimes fractured transport governance
weak technical capacity
Brazil
Nascent planning institutions
Cities have strong governance
sufficient technical capacity
S. Africa
?
?
USA
Strong local planning
? semi-functional metropolitan planning
Indonesia
Weak planning institutions
weak urban governance
India
Weak planning institutions, governance, and technical capacity
weak urban governance
strong technical capacity weak technical capacity poor project designs and planning weak technical capacity some poor project designs and planning
Poten9al Role of Na9onal Policy: • Require, review, and strengthen planning ins(tu(ons (e.g. France, U.S.) • Develop metropolitan transport authori(es (e.g. US) • Develop capacity strengthening programs (e.g. Colombia)
4. Mandate For Sustainable Transport Popular Mandate
National Policy Mandate
France
Yes
Transport Sustainability requirements for financial support
Colombia
Growing support
Financial Support for Sustainable Modes
China
Yes
No
Mexico
Growing support
Financial Support for Sustainable Modes
Brazil
Growing support
Financial support and mobility law calls for improved public transport
S. Africa
Weak
Financial Support for Sustainable Modes
USA
Growing support
National financial support for transit. California has laws that require sustainable transport planning.
Indonesia
Growing support
No
Growing support
National Urban Transport Policy (weak) and JNNURM funding in support of sustainable transport.
India
Poten9al Role of Na9onal Policy: • Set sustainable transport goals and (e financing to them(e.g. France, U.S.) • Provide leadership and na(onal communica(on on importance of sustainable transport
Conclusion: Na(onal Policy for Urban Transport RTR Growth: Mass Rapid Debt Planning and Annual km of Mass Transit Funding: Access: Implementation Transit added per 1 Annual Rapid Avg. Debtmillion residents, Transit Spending Capacity Equity Ratio 2000 - 2014 per Urban Capita France Colombia China Mexico Brazil S. Africa USA Indonesia India
0.49 0.32 0.3 0.16 0.14 0.14 0.11 0.11 0.04
48.09 10.61 22.71 3.53 11.59 0.96 18.77 0.69 2.9
~70% ~50% ~70% 33% 55% 6% ~50% 10% 32%
High Medium High Medium Medium Low Medium Low Low
Sustainable Transport Mandate High High High Medium Medium Medium Low Low Low
Na9onal Policy should be tailored to really move the needle on the following issues: 1. Ci(es need dedicated funding streams and expenditures of at least $20 per capita annually 2. They need access to debt-‐finance via bonds, development banks for DER of over 50% 3. Capacity – unified governance, strong planning ins(tu(ons, and capable developers 4. They need a mandate to deliver good public transport * They need to invest transport money in cost-‐effec9ve solu(ons, under
Thank you!
Colin K. Hughes Director of National Policy & Project Evaluation
[email protected] www.itdp.org
