URBAN TRANSPORT AUDITS. Jorge M. Rebelo
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1 file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2.htm TRANSPORTATION, URBAN AND WATER DEVELOPMENT DEPARTMENT THE WORLD BANK July 1992 Transport No. UT-2 URBAN TRANSPORT AUDITS Jorge M. Rebelo A questionnaire covering the technical, financial, economic and institutional issues affecting a country's urban transport sector can facilitate urban transport reconnaissance missions. This note presents an urban transport questionnaire which has the double objective of, first, identifying the major problems faced by a country in the provision of cost-efficient and equitable urban transport services, and second, assessing the expectations that each level of government has from potential Bank loans. The questionnaire includes a number of issues at the federal (central), state (provincial) and municipality levels which ought to be discussed with the respective authorities, operators and users in each of the several cities to be visited by a typical reconnaissance mission. The questionnaire is organized into six basic audits intended to provide a picture of the state of the urban transport sector in the country. These audits incorporate lessons learned in urban transport projects financed by the Bank. Some of these lessons emphasize aspects such as the type of institutional strengthening required to ensure project sustainability; the need to build up transport planning and traffic engineering capabilities to properly plan, design and implement traffic and highway projects; the lack of enforcement of traffic regulations and the need for a strong traffic police; inadequate road maintenance organizations at the municipal level; and restrictive bus regulatory frameworks. Recent urban transport projects have emphasized the role of the private sector in the provision of public file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2.htm (1 of 4)07/17/ :05:57 AM
2 file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2.htm transport services (mainly buses) and infrastructure management and maintenance (maintenance by contract). Despite the change in emphasis and/or geographical distribution, all urban transport projects require a minimum assessment of the market conditions regarding transport policies and regulatory regime, as well as the financial and institutional development situation. The six audits which should be undertaken at each government level are introduced next. All of them have been tried in Bank missions, in particular the traffic and operations audit. A transport policy and planning audit which identifies official urban transport strategies and policies and who is responsible for drafting, evaluating and implementing them. An example is the National Mass Transportation Plan prepared by the Brazilian Urban Transport Company (EBTU), the equivalent to the Urban Mass Transit Administration (UMTA) in the United States. In general, the States or Provinces tend to draft their own policies, often based on the national policy, but with issues which are specific to their regions. A regulatory audit which analyses, among other issues, the regulatory and administrative framework in which urban transport takes place, including the federal/state/municipality relations, the existing legislation and its constraints on the actual operations and on the decisionmaking process. Examples include the role of the private sector vs government in owning and operating systems, the ease with which operators enter the market, the existence of route regulations, and the application of tariff controls by the central government or by some Price and Tariff commission. Experience has shown that in several Bank loans (India, Brazil, Venezuela) tariff freezes have severely eroded the revenue base of the operating agencies leading them into a cycle of poor maintenance, low availability and consequent loss of ridership. An urban transport financing audit which addresses the mechanisms involved in funding urban transport infrastructure and services including bond issuing, taxes, subsidies and special funds, the financial situation of mass transit operators, and the creditworthiness of potential borrowers. In the past, this audit has been often neglected in Bank operations. For example, is there an Urban Transport Fund which derives its revenues from gasoline taxes or do the federal (central) transport funds come from general revenues? In Brazil, for example, all urban transport funds were abolished by the Constitution. In France, all employers have to pay a percentage of their payrolls to the Government for a transport fund (`versement transport') which is then allocated to the municipalities based on population and other parameters. In Venezuela, the newly created Fondo Nacional de Transporte Urbano (FONTUR) uses general revenues to finance vehicles, infrastructure and studies which comply with certain eligibility criteria. This audit looks carefully at the type of subsidies, whether they are general or targeted. In Brazil, the Federal Government instituted a targeted subsidy (`vale de transporte') which guarantees that employers must cover the difference between the cost of urban transport fares and 6 percent of the employees' salaries and then declare these costs in their income tax. In Venezuela, there are several types of general subsidies to operators, students, and military personnel. This audit also looks at cost recovery mechanisms, how tariffs are set and how solid are the accounting and financial management of operating entities. An institutional audit which examines the institutions involved in the urban transport sector (government agencies, transport operators and users associations), their role, and the flexibility to file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2.htm (2 of 4)07/17/ :05:57 AM
3 file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2.htm modify or do away with them, including the labor groups at stake such as drivers and automotive unions. Past neglect of this area has led to cases such as the Trensurb project in Brazil, where all the engineering aspects were successful but the institutional aspects were not resolved thereby preventing the project from achieving its objectives. An important issue is whether Local Coordination Agencies such as the EMTU in Recife are feasible and useful, and whether they can function as the Washington Metropolitan Area Transit Compact or the Toronto Metropolitan Council. Or will they be doomed to failure like the Caracas Metropolitan Authority, which exists on paper but never functioned? In most of its operations, the Bank recommends the establishment of some sort of coordinating agency. The issue is the sustainability of this agency and how to create an enabling environment for the agency to operate and be respected by all parties involved. An infrastructure, equipment and environmental impact audit which examines the most pressing issues in terms of infrastructure and equipment requirements. This audit should evaluate the impact on the environment, mainly air quality, noise pollution, visual intrusion and accidents of each of the existing and proposed technologies. This audit is self explanatory and Bank operations normally cover this area reasonably well except for the environment. A traffic and operations audit provides relevant data on traffic levels, operations and maintenance policies. This audit is self explanatory and Bank operations normally perform it in an adequate manner. However, more alternatives should be discussed, such as traffic restraint schemes, busways and rail-based options, which are often neglected. The questions provided in this audit are quite detailed and designed to be left with the responsible agencies once the main points have been established. This audit has been tested on several missions in the LAC region with satisfactory results. Although there is no specific sequence to be followed in the suggested audits it is recommended that the transport policy, regulatory and institutional audits be undertaken first since they might reveal structural weaknesses and distortions which need to be addressed before project design. A list of questions for each audit is provided in the annex. TO LEARN MORE Barrett, R "Institutional Building for Traffic Management". World Bank Technical Paper Number 8. Armstrong-Wright, A "Urban Transit Systems- Guidelines for Examining Options". World Bank Technical Paper Number 52. Armstrong-Wright, A., S. Thiriez "Bus Services- Reducing Costs, Raising Standards". World Bank Technical Paper Number 68. Empresa Brasileira de Transportes Urbanos "National Mass Transportation Plan". World Bank "São Paulo Metropolitan Transport Decentralization Project". Staff Appraisal Report file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2.htm (3 of 4)07/17/ :05:57 AM
4 file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2.htm No BR (March). file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2.htm (4 of 4)07/17/ :05:57 AM
5 ANNEX: Urban Transport Questionnaire AUDIT 1: TRANSPORT POLICIES AND PLANNING 1.01 Is there any reference to provision of urban transport services in the constitution of the country? Is there an urban transport policy adopted by the central government and approved by congress? If not, are the central (federal) or state governments preparing such a document? 1.02 Who is responsible for planning and formulating urban transport sector policies? 1.03 What mechanisms are used to consult with the states and municipalities to incorporate their objectives in the national urban transport policies? 1.04 What are the main urban transport sector lobbies at the central and state level and how do they influence government policy? 1.05 Which are the main planning organizations at the federal and state levels? 1.06 Is there a significant level of user participation in the planning, design and implementation of transport policies and projects? How is it implemented? 1.07 Are economic evaluations mandatory for all proposed urban transport projects considered for financing at the federal and state levels? Are those economic evaluations taken seriously? 1.08 Are environmental impact studies mandatory for urban transport projects considered for federal/ state financing? 1.09 Are there national standards for safety, air quality, visual intrusion, noise pollution which are to be complied with in major projects? 1.10 Is the number of professionals in transport planning and traffic engineering sufficient to satisfy the needs of the country? Which are the main institutions where these professionals are trained? Are their curricula adequate? AUDIT 2: REGULATORY FRAMEWORK 2.01 Is there a document describing the major regulatory policies in the sector? 2.02 Is the regulatory framework restrictive? Is it preventing the entry of new operators in the market? Are tariffs controlled? How are they updated? Is there a safety regulation for mass transit equipment and operation? file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2ax.htm (1 of 9)07/17/ :05:00 AM
6 2.03 What are the most common practices in the allocation of routes, setting of tariffs, price coordination policies? 2.04 Is there any evidence of competition among the transit operators? Is the route allocation process transparent and subject to public scrutiny? 2.05 If changes are to be introduced in the regulatory process -- such as route freedom or even total deregulation -- what is the decision making process required and how long does it take? 2.06 Who is responsible for the preparation of regulations and legislation? 2.07 Who controls mass transit terminals, the state or the private sector? If it is the private sector, is the process of concession transparent enough to allow competition among the several operators? 2.08 Is there evidence that the regulatory process is too heavy and constrictive and how does it affect operating costs? 2.09 Would a scenario of total deregulation be well accepted by the governments involved, the operators and the general public? Is it politically feasible to think about deregulating transit services? At first sight what are the reactions of the actors involved? 2.10 What proportion of the mass transit systems are owned and operated by the private sector? What, if any, is the rationale for government to be involved in the ownership and/or operations of mass transit systems? AUDIT 3: FINANCING MECHANISMS 3.01 What are the basic criteria for infrastructure pricing and investment? Are they consistent with acceptable economic principles? Is there an efficient system of road user charges? 3.02 Is there an urban transport fund? Where are its revenues derived from? 3.03 Which are the main mechanisms for financing of transit services operations and capital investment in each level of government (federal, state, municipality)? Federal, state, municipality bonds? Property taxes? Employers Tax? General Revenues? 3.04 Is there any documentation describing the basic financing facilities to each municipality? 3.05 How and when do the three branches of government get together to discuss financing of transit services? file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2ax.htm (2 of 9)07/17/ :05:00 AM
7 3.06 What percentage of the monthly salary of the minimum wage worker is used for urban transport home to work trips? 3.07 What are the existing subsidies (federal, state, municipal) to transit operations? How are they set? What is the basic economic rationale behind the subsidies? 3.08 How are operating deficits of federal, state and municipality owned operating entities covered? 3.09 How creditworthy are the states/municipalities which are interested in obtaining financing? Are they in a position to repay any loan? 3.10 Describe the agencies responsible for the allocation of finances to the urban transport sector operations and investment including, where possible, estimates of actual and budget expenditures for the recent years available. Describe the flow of funds to executing agencies and the procedures adopted for the allocation of resources to the sector in general and to the separate component parts of the urban transport system (specifically traffic management and control, public transport, road maintenance, road safety and administration) Describe the agencies responsible for collecting revenues generated within the urban transport sector. Include the nature, extent and sources of such revenues, and the procedures for collection and subsequent distribution to the relevant agencies. AUDIT 4: INSTITUTIONAL DEVELOPMENT 4.01 Which are the major public and/or private institutions involved in the provision of urban transport infrastructure, equipment and operations? Which are the main public and/or private institutions involved in the financing of urban transport? 4.02 Describe the agencies responsible for the following aspects of urban transport management at the central and State levels and in each of the cities: (a) traffic management and control (planning, design, execution, supervision, monitoring and control of improvements on changes to the road network, intersections, traffic control devices, etc.); (b) public transport facilities, services and operations including improvements on changes in infrastructure (bus lanes, etc.), route structure, frequencies of service, levels of service, fare structures, distribution of bus lines by company changes in the number, size composition and type of company providing bus services; licensing of bus vehicles and bus operation; (c) the control, supervision and monitoring of public transport operation and services and traffic flow and vehicles (inspection, licensing, etc.); file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2ax.htm (3 of 9)07/17/ :05:00 AM
8 (d) road maintenance programs including the nature, extent and frequency of such programs and the technical standards to be adopted; (e) road safety and accident prevention including the collection of accident data and the introduction of road safety measures and programs Is there a typical pattern for these institutions insofar as organization and management is concerned? What is the size of these organization and scope of their mandate? 4.04 What are the major institutional constraints perceived by the operators? And by the users? 4.05 Is there visible and effective user participation in the decision-making process? How are the users represented? How are the operators represented? 4.06 How important are the labor organizations involved in urban transport? 4.07 What are the likely effects of deregulation on labor? 4.08 Is there an effective interaction between central (federal) state and municipal institutions involved in urban transport? Is there a well-defined mandate for each of them? 4.09 Are the management practices, organizational structure and cost recovery policies of these institutions appropriate to ensure long term financial self-sufficiency? 4.10 Describe, by agency, the number, qualifications and responsibilities of staff involved in the management, design, operation, control and monitoring of the component parts of the urban transport system; where possible, provide organizational charts of each agency indicating the levels of responsibility, inter-relationships and procedures used Are Local Coordination Agencies (LCAs) encouraged and viable in metropolitan areas with more than one municipality? Are they respected by all parties involved? What type of leverage do they have do deal with the municipalities? 4.12 If LCAs are not viable, who coordinates urban transport in metropolitan areas with more than one municipality? AUDIT 5: INFRASTRUCTURE, EQUIPMENT AND ENVIRONMENTAL IMPACT Infrastructure and Equipment 5.01 What are the major infrastructure priorities for urban transport at each level of government and how file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2ax.htm (4 of 9)07/17/ :05:00 AM
9 were they prioritized? Are there technical, economic and financial evaluations of the proposed improvements? 5.02 Are low cost solutions such as pedestrian streets, intersection improvements, traffic management measures, parking policies, busways and bus route rationalization used on a consistent basis to defer costly infrastructure projects? 5.03 What is the average age of vehicles and other key items of equipment? Why? Are there local manufacturers? Are there heavy duties imposed on imported vehicles? If yes, what are their impacts on the composition of the fleet and the vehicle operating costs? 5.04 Is special financing available for acquisition of buses? How is it justified? What, if any, are the distortions caused by this special financing? 5.05 Are spare parts easily available in the market or if not, what effect has that on the day-to-day availability of vehicles? Is maintenance of vehicles efficient and reliable or is it constrained by lack of spare parts and skilled labor? 5.06 In major infrastructure projects guaranteed by the federal government what are the state and municipal obligations vis-a-vis the federal government? 5.07 What are the official policies insofar as equipment is concerned? Is it supposed to be local, or have a certain local content or can it be acquired through International Competitive Bidding? How does local equipment compare with comparable imported equipment in terms of cost and quality? 5.08 What are the stated infrastructure maintenance and rehabilitation policies in the major operating entities? Where does the money for such works come from? 5.09 Is the private sector involved in the maintenance of infrastructure and vehicles? If not, why not? What could attract private entrepreneurs to these activities? 5.10 Is there a decision on which infrastructure projects should be financed by the federal government and which should be state financed? Is there scope for Build, Operate and Transfer schemes? Are there any concessions to the private sector? 5.11 Are non motorized technologies such as bicycles and associated infrastructure considered as options for urban transport? If not, what are the reasons for their exclusion from possible solutions? Environmental Impact of Proposed Solutions 5.12 Are environmental impacts of proposed infrastructure and equipment solutions assessed in most of the major projects? file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2ax.htm (5 of 9)07/17/ :05:00 AM
10 5.13 What percentage of the present total fuel consumption of the country is used by urban transport services? 5.14 What are the alternative types of energy used in urban transport services? 5.15 What are the effects of urban transport activities in the urban environment on traffic congestion, air quality, pedestrian and overall safety, noise pollution and visual intrusion? 5.16 Are there any specific procedures to deal with the resettlement of population affected by infrastructure projects which require land expropriation? AUDIT 6: TRAFFIC AND OPERATIONS Traffic Management 6.01 Network Characteristics: from existing data, prepare a plan showing: (a) the present road network classified by traffic function, e.g., primary routes, secondary or distributor routes, access routes, etc., including one-way systems; (b) the present road network classified by road condition, e.g. paved, unpaved, good condition, poor condition, and bad condition; (c) the present road network classified by road capacity, with approximate volumetric capacity in passenger car units (pcus); (d) distribution of intersections classified by physical/traffic characteristics, e.g., at grade non-signalized, at grade signalized; and (e) proposed addition or modification to the existing road network (including new links, intersections, traffic signal systems, street lighting, drainage, etc.) classified according to status, e.g., under study, projected but not financed, projected with financing guaranteed, under construction, etc.; where possible include indicative cost estimates and summaries of purpose for proposed improvements (time horizons: next five years, next ten years) Traffic Flow Characteristics: from existing data, supplemented where appropriate by limited surveys, prepare plans showing: (a) peak hour flows on the primary road network and at critical intersections and, where appropriate, those sections of the secondary network with important/critical flow; in pcus/hour. Indicate, using file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2ax.htm (6 of 9)07/17/ :05:00 AM
11 volume/capacity ratios, sections under capacity, at-capacity, over-capacity; (b) traffic speeds, peak hour, off peak, average day (primary network); (c) journey times along principal O/D links of primary road network (if possible prepare isochrones from central area); (d) peak hour delays (average) by location (intersection or road section) on primary road network; where possible indicate extent of delay (in minutes); (e) typical distribution of flows for selected routes by hour of day, day of week, and week of year; (f) origin-destination matrices by trip purpose (work, school, commercial, leisure, etc.) and by mode if possible (private car, bus commercial vehicles, etc.) for primary network trips Vehicle Fleet Data: from existing data, prepare data concerning the size, composition, capacity, age of the vehicle fleet in each city. Where possible, supplement these data with information concerning vehicle occupancy. For environmental studies, information on fuel consumption and pollutant emissions is also desirable Vehicle Operating Cost Data: from existing data, supplemented where necessary by limited surveys, prepare tables showing: (a) vehicle operating costs by vehicle type (private car, small truck, large truck, microbus, bus motorcycle); either by variation in speed (if possible) e.g., 0 km/h (idling), to 10 km/h, 20 km/h, 40 km/ h, 60 km/h, 80 km/h, or by benchmark speed of say 40 km/h; and by road condition (if possible roughness factor cms/km). Note: vehicle operating costs would include inter aliagasoline or diesel, oil, maintenance (including spare parts, tires, etc.) and depreciation and in the case of commercial vehicles (taxis, trucks, buses) the wages of drivers, conductors, etc.; (b) basic unit cost data for gasoline (liter), oil (liter), diesel (liter), spare parts (average per vehicle per year/kilometers per year), tires, etc. including a breakdown of unit prices by foreign exchange component, local manufactured component, taxes and/or subsidies related to real production costs. Public Transport 6.05 Route Structure: from existing data, prepare plans showing: (a) the current bus route network including number of routes, route length, bus terminals and principal bus stop locations; file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2ax.htm (7 of 9)07/17/ :05:00 AM
12 (b) current bus lines classified by company, level and frequency of service (peak, off peak), capacity (passenger seating capacity) and loadings (passengers carried); (c) population areas more than 500 meters, and more than 1000 meters away from a bus route; (d) those sections of bus routes which suffer from delays caused by traffic congestion, intersections, poor road conditions, topographic conditions. Indicate average bus speeds for each section of the route Bus Fleet Characteristics: from existing data prepare information concerning the bus fleet, including the composition, size, age, capacity, availability, and ownership profiles of the fleet in each city and for the whole country Bus Ownership Characteristics: from existing data prepare information concerning the bus operators in each city including the number of companies, the number of buses per operator, the number of staff, and the ratio of staff per bus for each operator. Where possible provide profiles of typical bus operators concerning their financial operations (cost of services, revenues from fares and subsidies, borrowing capacity, etc.) and operating performance (bus maintenance, out-shedding, proportion of their bus fleet which is available for service and actually in service on an average day/week) Fare Structure: from existing data prepare information concerning fare structures in each city including estimates of total receipts from fares, (per day, or per week, or per month or per year) compared with total subsidy, and if possible, estimates of total operating costs Public Transport Proposals: prepare information concerning proposals for changes to the public transport system (changes to the route structure, fares, fleet composition, size, age, capacity) and proposed major investments in the public transport sector (bus terminals, new systems of transport, etc.) with indications as to probability of implementation (under consideration, under construction, financing being negotiated, etc.) and estimates of likely costs. Road Maintenance 6.10 Road Maintenance Programs: from existing data prepare information concerning current road maintenance programs in the country in general and for each city including routine and preventive maintenance of road pavements, sidewalks, drains, traffic control equipment (traffic signals, road signs, etc.), lane markings, street lights, bridges, bus stops, bus terminals, etc Road Maintenance Equipment: prepare information concerning the composition, age, size and capacity of road maintenance equipment (including equipment for the maintenance of traffic control equipment, lane markings and street lights) Maintenance Procedures, Staffing and Costs: prepare information concerning the procedures used for undertaking routine and preventive maintenance programs (contracting to private firms, force file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2ax.htm (8 of 9)07/17/ :05:00 AM
13 account, etc.) and indicate the costs of these programs in terms of staff, equipment and materials; where agencies responsible for maintenance use their own staff, indicate numbers and qualifications of staff involved including their employment status (permanent employees, contracted staff, etc.). How much is budgeted for routine maintenance, how much for periodic, and how much for rehabilitation? Road Safety (see also Infrastructure Note, Transport RD-9) 6.13 Accident Characteristics: from existing data, prepare profiles of accident characteristics in each of the cities, and the country in general: (a) accidents by location, frequency and severity (fatal, injury, property damage); (b) differentiate if possible, between intersection and non-intersection accidents, single and multiplevehicle accidents, those involving pedestrians and cyclists, and the types of vehicles involved. Include other available information on accident causes and characteristics Road Safety Programs: describe current and proposed road safety programs designed to avoid accidents caused by the elements outlined above. If possible, distinguish between general educational programs, police enforcement programs, and programs concerning modifications to the road network and/or traffic control Traffic Enforcement: describe present practices in traffic enforcement, the number of agents in each city, the level and sophistication of their equipment, the adequacy of their training. Describe the traffic police organization, its credibility, its power to enforce regulations and its ability to promote safety campaigns. file:///o /PUBLIC/twu_xweb/transpor/publicat/td-ut2ax.htm (9 of 9)07/17/ :05:00 AM
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