Project Name. PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: Greening the Rio de Janeiro Urban Rail System Add'l Financing
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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Project Name PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: Greening the Rio de Janeiro Urban Rail System Add'l Financing Region LATIN AMERICA AND CARIBBEAN Sector General transportation sector (100%) Project ID P Borrower(s) STATE OF RIO DE JANEIRO Implementing Agency CENTRAL Companhia Estadual de Engenharia de Transportes e Logística Environment Category [ ] A [] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared October Date of Appraisal October 24, 2011 (estimated) Authorization Date of Board Approval December 20, Country and Sector Background This additional finance and its parent project have its origins in two major developments at the Federal and State level: (a) the decentralization of the Rio de Janeiro Urban Trains from the Federal Government to the State of Rio de Janeiro which took place in December 1994 as part of an ongoing Bank loan (Ln BR); and (b) the decision of the new State administration which took office in January 1995, to achieve a more effective integration of all modes in the Rio de Janeiro Metropolitan Region (RJMR), to reduce subsidies to urban transport agencies and to substantially increase the participation of the private sector in the operation and investment of the sector. In 1998 the Bank assisted the State in a multisector privatization program which included the concession of the suburban rail and subway systems to a private concessionaire through the Rio de Janeiro State Reform and Privatization Project (P039197, Ln BR). A consortium named SuperVia became the concessionaire and the network is commonly known as SuperVia. State and concessionaire acquired specific investment responsibilities that translated into service improvements which are clearly defined in the concession contract. The State is responsible for renewing the train fleet, while the concessionaire has to improve the track and signaling systems, upgrade some stations, purchase some new trains also, and operate and maintain the network at a tariff which is defined in the contract and updated annually upon approval by the regulatory agency (AGETRANS). The subsequent Bank project (Rio de Janeiro Mass Transit, P043421, Ln BR) financed part of the commitments of the State in the concession agreement for the acquisition of 20 new trains and the rehabilitation of others. In 2009, a new Bank operation was approved (Rio de Janeiro Mass Transit 2 Project, P111996, Ln BR) which is financing 34 news trains. This AF is linked to this last operation. Since 1998 ridership has increased consistently as a result of the improvements in service quality, reaching 530,000 trips per workday in Equally important, the operational subsidy paid by the state to support the operations of the rail system decreased from 121 million dollars per year in 1997 to zero currently.
2 Currently, the state and local governments are advancing an agenda of transport-related projects, plans and interventions including: (i) A new PDTU, (ii) Expansion and improvements to the Metro Rio Network, (iii) Bilhete Unico Intermunicipal (BUI), (iv) Bilhete Unico Carioca (BUC), (v) Four Bus Rapid Transit (BRT) Lines, and (vi) Rationalization or Bus Services (BRS). Today, the Rio de Janeiro Metropolitan Region (RJMR) is the second largest Metropolitan Region of Brazil with 11.3 million inhabitants that on an average week day carry out 20 million trips. Of these trips about one-third of all trips are non-motorized, about one-half are on public transport (PT) modes, and the remained (about one-sixth) are on private modes. The share for private modes shares, however, is increasing at the expense of non-motorized and public transport trips. The fleet size of Sao Paulo is currently growing at 7% per year while the population is growing at 1.1% per year. This is leading to an increase in the motorization rate in the RMRJ. Suburban rail, currently operated by SuperVia, represents about 2% of all trips, less than 4% of all motorized trips, and less than 5% of all public transport trips. 2. Objectives The proposed PDOs are: (a) to improve the level of service provided to suburban rail transport users in the RJMR in a safe and cost-efficient manner; (b) to place the suburban rail transport system on a lower carbon growth path; and (c) to improve the transport management and policy framework in the Borrower s territory and in the RJMR. 3. Rationale for Bank Involvement a) The proposed additional finance and restructured Project fits squarely with the Bank s involvement with Brazil and with the State of Rio de Janeiro. The project and the revised PDO are fully consistent with the Bank s Country Partnership Strategy endorsed in May And they are consistent with the upcoming Partnership Strategy that is currently under preparation and soon to be submitted for approval by the Board. Specifically, the CPS under preparation calls for a stronger policy integration of transport, urban development, housing, and disaster risk management. The new CPS also seeks to promote low carbon growth and climate change mitigation action plans at the city level. The proposed project has elements in all of these areas. b) The proposed additional finance and its parent project are in line with the Bank s overall Transport Strategy as well as the customized sectoral strategy for Brazil, in terms of: (i) improving public transport in urban areas as a means to improve access to jobs, education and health facilities; (ii) contributing to poverty alleviation; and (iii) improving financial performance of service providers through better cost recovery and reducing dependence on public subsidies. c) This additional finance and its parent project would represent a continuation of Bank support to the overall decentralization of urban transport systems from the Federal Government to selected states, as has been the case in São Paulo, Rio de Janeiro, Ceará and Bahia. More specifically, it is a logical sequence to a long-term engagement with the State to consolidate and expand its rail-based transport systems taking care of the important issues of inter-modal integration and sensible tariff policy to recover costs and meet social objectives.
3 4. Description The proposed project comprises the following components: Component 1: Infrastructure and Equipment 1. Acquisition of an additional sixty (60) trains (EMUs) with four (4) cars each and accessories, for a total of at least 360 (in the aggregate) cars to be operated on the lines of CENTRAL s System, by the Concessionaire under the terms of the Concession Contract. 2. Design and implementation of a non-motorized transport and greening demonstration pilot program in selected stations of the CENTRAL System, through the acquisition of bicycles required therefor. Component 2: Institutional and Policy Development 1. Provision of technical assistance to SETRANS for the carrying out of additional studies on policy development, including, inter alia: (a) the design (but excluding implementation) of a sustainable transport policy for the Borrower, including measures to reduce the carbon growth path of transport and improve environmental and social sustainability; (b) the design and implementation of a strategy for the Borrower s territory and the RJMR passenger and freight transport system, to adapt to the impacts of climate change, environmental and social risks and liabilities, and natural disasters; (c) the design and implementation of a center to monitor the impact of natural disasters on the metropolitan public transport system, including those stemming from climate change impacts; (d) the design (but excluding implementation) of a strategy to improve the efficiency and to reduce the carbon footprint of the Borrower s freight system and its environmental and social risks and liabilities; (e) the carrying out of feasibility and detailed engineering studies (but excluding implementation) for potential BRT corridors in the RJMR area which are not competing with the rail-based transport; (f) the design (but excluding implementation) of a transport-related, accident-reduction policy to make the Borrower s transport system safer; (g) the design (but excluding implementation) of an updated strategy for SETRANS to carry out consultations with stakeholders to improve its transport reform planning process; (h) the carrying out of an evaluation study to assess the social, economic and environmental impact of the Project, particularly on carbon emissions; and (i) the carrying out of studies to support the implementation of Part A.2 of the Project. 2. Provision of technical assistance to CENTRAL for Project management and supervision, including the acquisition and reception of the trains (EMUs). 5. Financing Source Total Project Cost: Cofinancing: Borrower: Total Amount (US $m) 600 0
4 Total Bank Financing: IBRD IDA New Recommitted Implementation The Secretary of Transport of the State of Rio de Janeiro (SETRANS) is the main Government agency responsible for the project. CENTRAL is the implementation agency and reports to SETRANS. The Borrower is the State of Rio de Janeiro who will delegate the project implementation to CENTRAL. Project management will be located in CENTRAL through an established Project Management Implementation Group (PMIG) which will be in charge of the implementation of the project components. The PMIG will be headed by a Project Coordinator who would report directly to the Director in charge of the implementation of the project. The PMIG will be staffed with regular staff from CENTRAL and supported by project management and supervision consultants in charge of providing technical support in areas such as engineering, procurement, environment and financial management. CENTRAL has considerable experience with this PMIG unit, acquired in ongoing and/or previous Bank-financed projects. Project progress reports will be prepared by the PMIG on a semi-annual basis, consolidated in a single report and submitted to the Bank for review. 7. Sustainability The sustainability of the project results will depend on: (i) continued ownership and priority given to the urban transport sector by the State administration; (ii) timely implementation and funding of rehabilitation and maintenance interventions to keep the infrastructure and equipment in good condition; (iii) bus network optimization and control of informal vans; and (iv) maintenance and expansion of the Integrated Modal Tariffs (such as the Bilhete-Único Integrado and Billete- Único Carioca) which benefits primarily the low-income segments of the population. The State has demonstrated its ownership of the project and of the sector in the last 10 years by giving priority to investments in this area even in times of fiscal restriction. The timely implementation and funding of rehabilitation of infrastructure and equipment suffered during the periods of fiscal space restriction but even then the State provided the funds necessary to maintain the infrastructure and rolling stock or has sought mechanisms to provide the funds. 8. Lessons Learned from Past Operations in the Country/Sector The major lessons learned from previous projects in the urban transport sector are: The São Paulo urban transport projects have shown that the coordination between the different levels of government (State, Municipalities) in urban transport is fundamental for medium and long term planning and for the implementation of a truly integrated system both modal and tariff-wise.
5 The policy for the sector must be strengthened to minimize distortions resulting from inefficient physical and financial coordination between modes and to promote multimodal integration. The tariff levels should allow for significant cost recovery of working costs and must be complemented by financing mechanisms which cover the shortfall. Demand levels forecast by the borrowers should be carefully scrutinized. As the Salvador urban transport project shows, the availability of counterpart funds and of fiscal space for the project must be assured to avoid costly construction delays. The lessons learned from the first Rio de Janeiro Mass Transit loan are that counterpart funds should be minimized and that the State should assign budget priority for the project even in times of fiscal restriction to avoid costly delays in the delivery of works and rolling stock. Also, that a combination of integrated modal tariffs and new, air conditioned rolling stock increase demand substantially. Furthermore, that strong action is needed to prevent illegal transport and to rationalize bus networks. 9. Safeguard Policies (including public consultation) Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60) 10. List of Factual Technical Documents World Bank Program Document for the Rio de Janeiro Metropolitan Urban and Housing DPL (P122391), Report No Neri, M Impactos Sociais do Bilhete Unico Intermunicipal no Grande Rio. Secretaria de Transporte de Rio de Janeiro (Muncipality): O Transporte Moderno que Rio Merece Começa Agora. Power point presentation. Abril SETRANS, Rio Prefeitura da Cidade, CGPU, Maracaná Engenhao: Proposta de Intervenção Urbanística para requalificação dos Corredores Viários de conexão com os Estádios. Power point presentation. June Gouvello, C Brazil Low-carbon Country Case Study World Bank Mainstreaming Green Trucks in Brazil which is part of the Brazil Green Freight Transport Report. P World Bank Green Cities: Cities and Climate Change in Brazil,
6 Governo do Rio de Janeiro. Secretaria de Transportes. Carta Consulta. Estudio de Viabilidade Tecnico Economico e Social. February Rio Prefeitura. O Transporte Moderno que o Rio Merece. Power point presentation 11. Contact point World Bank Contact: Arturo Ardila Gomez Title: Senior Urban Transport Spec. Tel: (202) Fax: (202) aardilagomez@worldbank.org Recipient: State of Rio de Janeiro, Brazil Responsible Agency: CENTRAL Companhia Estadual de Engenharia de Transportes e Logística Contact: Jairo Favario, PMIG Coordinator Tel: (5521) Fax: (5521) jlfavario@central.rj.gov.br 12. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C Telephone: (202) Fax: (202) pic@worldbank.org Web:
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