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Implementation Completion Report (ICR) Review - Sao Paulo Integrated Urban Transport


  
1. Project Data:   
ICR Review Date Posted:
09/15/2005   
PROJ ID:
P006559
Appraisal
Actual
Project Name:
Sao Paulo Integrated Urban Transport
Project Costs(US $M)
 95.1  107.8
Country:
Brazil
Loan/Credit (US $M)
 45  45
Sector, Major Sect.:
Sub-national government administration, General transportation sector,
Law and justice and public administration; Transportation
Cofinancing (US $M)
 0  0
L/C Number:
L4312      
   
Board Approval (FY)
  99
Partners involved
None 
Closing Date
02/12/2002 12/31/2004
         
Evaluator: Panel Reviewer: Group Manager: Group:  
Kavita Mathur
Peter Nigel Freeman Alain A. Barbu OEDSG

2. Project Objectives and Components:

a. Objectives
This project is the first part of a two-part program. The project objectives were to:

(a) finance infrastructure and equipment that were critical to the physical integration between the two existing suburban rail systems (ex-CBTU - Companhia Brasileira de Trens Urbanos, and ex-FEPASA - Ferrovias Paulistas S.A.), and between them and the São Paulo metro system (METRO);
(b) improve the level-of-service provided by the São Paulo Metropolitan Train Company (CPTM) by enhancing the participation of the private sector in its management and operations; and
(c) contribute towards the reduction of noise and pollution from transport sources.

b. Components (or Key Conditions in the case of Adjustment Loans):
The project comprised of three components:
(i) an Infrastructure and Equipment Investment Component (appraisal cost US$85.9 million, actual cost US$98.5 million) to build a rail connection between the two CPTM suburban train systems (ex-FEPASA and ex-CBTU);
(ii) an Air Quality Component (appraisal cost US$8.1 million, actual cost US$8.3 million) to support the construction of a vehicle emissions and noise laboratory, including the necessary hardware and software, to develop the capacity for air quality modeling and emission investigation within the Environmental Technology Company (CETESB); and
(iii) an Institutional and Policy Development Component (appraisal cost US$1.1 million, actual cost US$0.95 million) to assist in carrying out the concessioning of CPTM, establishing a Regional Transport Coordination Commission (RTCC) for the São Paulo Metropolitan Region (SPMR), and preparing an integrated transport, land use, and air-quality management strategy for the SPMR.

c. Comments on Project Cost, Financing, Borrower Contribution, and Dates
The project closed after a two year and ten month delay. This was due to: (a) initial delays between loan approval and effectiveness of 24 months, mainly due to the lack of agreement between the federal and state authorities on the debt renegotiation of the State, (b) changes in the basic engineering designs for the physical works, and (c) the need to reprogram the financial resources for the counterpart funds in 2003 due to a budget restriction imposed by the Federal Government.
The Bank Loan was fully disbursed. The actual costs for this project were about 13% higher than appraisal estimates. Most of the cost overrun was in the civil works category for the renovation of old structures. Moreover, since some of the basic designs for civil works had been revised at the beginning of project implementation, the cost of engineering projects was also higher. Finally, the equipment for the noise and emission control laboratory was nearly 20% more expensive than expected at appraisal, due to the appreciation of the euro in relation to the dollar.


3. Relevance of Objectives & Design:

The objectives were fully consistent with the Bank’s 1997 Country Assistance Strategy (CAS), which supported policies and investments encouraging economic growth and social development in a context of macroeconomic stability, and put emphasis on efficient resource allocation, increased efficiency in the public sector, appropriate targeting and delivery of support systems to the poor, and improving the creditworthiness of the Brazilian states. Furthermore, the project objectives are consistent with the 2003 CAS which emphasizes equity, sustainability and competitiveness, which this project strived for through the improvement of the well-being of the low income residents of the metropolitan region, their access to employment, health, education and leisure facilities, and the improvement of the management of the operating agencies.
The objectives reflected the essential priorities of the urban transport sector in the most populated Brazilian Metropolitan Region, such as cost recovery and efficient financial management, institutional development and environmental concerns, and the integration and rationalization of the public transport system in São Paulo. The project was a follow-up on the federally-financed São Paulo Metropolitan Transport Decentralization Project (Ln. 3457-BR). Lessons from this project and a number of other urban transport projects financed by the Bank in Brazil were taken into account in the project design, in particular as far as institutional strengthening, the pace of project implementation and the availability of counterpart funding were concerned. Also, the Government of the State of São Paulo was fully committed to the project objectives.

4. Achievement of Objectives (Efficacy) :

The achievement of the objective to finance infrastructure and equipment that were critical to the physical integration between the two existing suburban rail systems, and between them and the São Paulo metro system was high. The existing suburban rail system of 279 km and the Sao Paulo Metro network of 59 km, that cater for nearly 3.5 million passengers a day, were fully integrated through the construction of the main tracks between the Roosevelt/Brás and Burra Funda Station, including signaling and traffic control facilities and equipment. The renovation, functional adaptation and modernization of two historical stations in Sao Paulo (Luz and Brás/Roosevelt), and some minor adaptation at the Barra Funda Station were also carried out. Fare integration between both systems in four main stations was achieved.
The achievement of the objective to improve the level-of-service provided by the São Paulo Metropolitan Train Company by enhancing the participation of the private sector in its management and operations was high.
  • CPTM outsourced rolling stock maintenance and electric and electronic system rehabilitation to the private sector. The rolling stock availability increased by 28%, failures of the electric/electronic system decreased by 23% and failures of signaling system decreased by 30%.
  • The minibus system was integrated with the suburban rail system. CPTM contracted the private minibus operators to transport passengers to and from the stations without additional cost. After successfully integrating the minibus system the next logical step, on which discussions have already begun, is to ensure ticket and fare integration between suburban rail, the metro, and the municipal bus system.
  • The project also provided financing for technical assistance to support the process of concessioning out CPTM’s operations and maintenance to the private sector. The feasibility study was carried out for the concessioning of CPTM's Line C together with Line 4.
  • Train frequency has increased and waiting time has been reduced. Reduction of fare evasion was carried out through the installation of new turnstiles.
  • The level-of-service improvements were also targeted at the poor.
The objective to contribute towards the reduction of noise and pollution from transport sources was substantially achieved through the shift of a considerable number of passengers from the bus to the rail system. CPTM's passenger numbers have increased by 10% since 2001. The daily number of public transport vehicles (buses, microbuses and minibuses) in the streets of Sao Paulo has decreased from 9,704 in 2000 to 7,983 in 2004, a 17.7% decline, leading to reductions in emissions, noise and congestion. Incentives for non-motorized transport were provided through the installation of bicycle racks at stations. Pedestrian passages were also constructed. At project closing, the noise and pollution control laboratory was not completed (expected completion date is July 2006).

5. Efficiency:

The ICR notes that project investments yielded a very high ex-post Economic Rate of Return (ERR) of 252% compared to the appraisal estimate of 284%. The ERRs are high because externality costs (such as improvement in air quality, reduction in accidents) have been included, which are notoriously difficult to quantify, and for that reason are often controversial. It would have been better to have separated the direct costs and benefits from the externality costs and have had ERRs with externalities and without them.
  • CPTM ridership increased from 336 million annual passengers in 2001 to 368.8 million in 2004 (10%). During the same period, CPTM staff was reduced from 6236 to 5573 (10.6%).
6. M&E Design, Implementation, & Utilization:

Adequate monitoring indicators were developed at appraisal. These indicators were monitored during project implementation and presented in the ICR.
7. Other (Safeguards, Fiduciary, Unintended Impacts--Positive & Negative):

Safeguard procedures were followed and there were no contraventions.
  • CPTM started a new express train service on Line E and deployed new trains. The new service is faster, comfortable and clean.
  • The restoration of the Luz station triggered significant additional investments in the cultural field, including the installation of the Sala São Paulo Theatre and the construction, (with private financing) of the Institute of the Portuguese Language (Museo da Língua Portuguesa).
  • The project improved the mobility of low income passengers from the suburbs of São Paulo.

  • 8. Ratings:
    ICR
    OED Review
    Reason for Disagreement/Comments
    Outcome: 
    Highly SatisfactoryHighly Satisfactory
    Institutional Dev.: 
    SubstantialSubstantial
    Sustainability: 
    Highly LikelyHighly LikelyAn important sustainability indicator is the strong interest of the private sector in CPTM's operations.
    Bank Perf.: 
    Highly SatisfactoryHighly Satisfactory
    Borrower Perf.: 
    SatisfactorySatisfactory
    Quality of ICR: 
    Satisfactory

    NOTES:
    - When insufficient information is provided by the Bank for OED to arrive at a clear rating, OED will downgrade the relevant ratings as warranted beginning July 1, 2006.
    - ICR rating values flagged with ' * ' don't comply with OP/BP 13.55, but are listed for completeness.

    9. Lessons:

    Concessioning will happen when there is bold political leadership. Therefore the Bank's role is to provide technical assistance in preparing the necessary background studies and paving the way for such possible future step through constant dialogue with the key stakeholders.
    • The project experience shows that informal transport services (such as minibuses) can be included into the formal urban transport system in a constructive manner.
    • Implementation schedules for renovating old structures should take into account unexpected utility networks (that are not mapped anywhere), removal of which may cause significant delays and higher costs.

    10. Assessment Recommended?  Yes

              Why?  The project is recommended for a field assessment to review performance after concessioning and also the progress towards fare and service integration.

    11. Comments on Quality of ICR:

    Although the ICR is too long, the quality of the ICR is Satisfactory. It is clearly written, well organized and provides a succinct analysis of the project.

    (ES-Rev4-Jul/05)
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