document of the world bank · transantiago-se into autonomous entity ongoing date achieved...

Document of

The World Bank

Report No: ICR2086

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IBRD-73160)

ON A

LOAN

IN THE AMOUNT OF US$ 4.8 MILLION

TO THE

REPUBLIC OF CHILE

FOR A

SANTIAGO URBAN TRANSPORT TECHNICAL ASSISTANCE PROJECT

June 25, 2012

Sustainable Development Department

Bolivia, Chile, Ecuador, Peru and Venezuela Country Management Unit

Latin America and the Caribbean Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective May 31, 2012)

Currency Unit = CHILEAN PESO (CLP)

1.00 CLP = US$ 0,0019

US$ 1.00 = 518 CLP

FISCAL YEAR

[January 1 – December 31]

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance Strategy

CPS Country Partnership Strategy

DPL Development Policy Loan

ERR Economic Rate of Return

ESTRAUS Transport Simulation/Planning Model (Modelo de Simulación de

Transporte)

FM Financial management

GEF Global Environment Facility

GEF project GEF Air Quality and Sustainable Transport Project for Santiago

P073985

GoCH Government of Chile

ICR Implementation Completion and Results Report

MINVU Ministry of Housing and Urban Development (Ministerio de

Vivienda y Urbanismo)

MODEM Methodology for vehicle emission calculation (Metodología para

el Cálculo de Emisiones Vehiculares)

MOP Ministry of Public Works (Ministerio de Obras Públicas)

MTT Ministry of Transport and Telecommunications

MUSSA Land Use Model for Santiago (Modelo de Uso de Suelo de

Santiago)

NOx Nitrous Oxide

O-D survey Origin and destination survey

OECD Organization for Economic Co-operation and Development

PAD Project Appraisal Document

PCU Project Coordination Unit

PDO Project Development Objective

PM Particulate Matter

PTUS Santiago Urban Transport Plan 2000 - 2010 (Plan de Transporte

Urbano para Santiago)

RPP Restructuring Project Paper

Santiago DPL Santiago Urban Transport Programmatic Development Policy

Loan P082412

SECTRA Transport Planning Secretariat (Secretaría de Planificación de

Transporte)

SEISTU Urban Transport System Impact Evaluation System (Sistema de

Evaluación de Impacto sobre el Sistema de Transporte Urbano)

SEREMITT-RM Regional Service of the Transport Ministry in the Metropolitan

Region (Servicio Regional del Ministerio de Transporte y

Telecomunicaciones para la Región Metropolitana)

SERVIU Regional Service for Road and Urban Development (Servicio

Regional de Vialidad y Urbanismo)

SIVU One-stop process (Ventanilla Única) information system (Sistema

de Información Ventanilla Única)

TAL Technical Assistance Loan, here also used as synonym for the

Santiago Urban Transport Technical Assistance Project P086689

TOR Terms of reference

Transantiago Commonly used to refer to the public transport system in Santiago;

sometimes also used as a acronym for the PTUS as a whole or for

its public transport reform program

Transantiago-SE Executive Secretary of the Committee of Ministers for Urban

Transport in Metropolitan Santiago and PCU for this project

Vice President: Hasan A. Tuluy

Country Director: Susan Goldmark

Sector Manager: Aurelio Menendez

Project Team Leader: Elisabeth Goller

ICR Team Leader: Elisabeth Goller

CHILE

Santiago Urban Transport Technical Assistance Project

CONTENTS

Data Sheet

A. Basic Information

B. Key Dates

C. Ratings Summary

D. Sector and Theme Codes

E. Bank Staff

F. Results Framework Analysis

G. Ratings of Project Performance in ISRs

H. Restructuring

I. Disbursement Graph

1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 6 3. Assessment of Outcomes .......................................................................................... 10 4. Assessment of Risk to Development Outcome ......................................................... 16 5. Assessment of Bank and Borrower Performance ..................................................... 17 6. Lessons Learned ....................................................................................................... 19 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 20 Annex 1. Project Costs and Financing .......................................................................... 22 Annex 2. Outputs/Outcomes by Component ................................................................ 23 Annex 3. Economic and Financial Analysis ................................................................. 39 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 40 Annex 5. Beneficiary Survey Results ........................................................................... 42 Annex 6. Stakeholder Workshop Report and Results ................................................... 43 Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR .................... 44 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 51 Annex 9. List of Supporting Documents ...................................................................... 52 Annex 10. Status of Transantiago at the Time of ICR Preparation .............................. 53 Annex 11. Original Indicators and Degree of Achievement ........................................ 75

A. Basic Information

Country: Chile Project Name:

CL Santiago Urban

Transport Technical

Assistance Project

Project ID: P086689 L/C/TF Number(s): IBRD-73160

ICR Date: 06/25/2012 ICR Type: Core ICR

Lending Instrument: TAL Borrower: GOVERNMENT OF

CHILE

Original Total

Commitment: USD 4.80M Disbursed Amount: USD 2.37M

Revised Amount: USD 2.37M

Environmental Category: B

Implementing Agencies:

Transantiago-SE

Cofinanciers and Other External Partners:

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 10/02/2003 Effectiveness: 12/02/2005 12/02/2005

Appraisal: 03/18/2004 Restructuring(s): 10/02/2009

11/11/2011

Approval: 07/05/2005 Mid-term Review: 10/01/2007 05/23/2008

Closing: 12/31/2009 12/31/2011

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Moderately Satisfactory

Risk to Development Outcome: Low or Negligible

Bank Performance: Moderately Satisfactory

Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory

Quality of Supervision: Satisfactory Implementing

Agency/Agencies: Satisfactory

Overall Bank

Performance: Moderately Satisfactory

Overall Borrower

Performance: Moderately Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation

Performance Indicators

QAG Assessments

(if any) Rating

Potential Problem Project

at any time (Yes/No): No

Quality at Entry

(QEA): None

Problem Project at any

time (Yes/No): Yes

Quality of

Supervision (QSA): None

DO rating before

Closing/Inactive status:

Moderately

Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Central government administration 72 35

General transportation sector 25 62

Sub-national government administration 3 3

Theme Code (as % of total Bank financing)

Improving labor markets 13

Other social development 13 10

Other urban development 25 15

Pollution management and environmental health 25 15

Urban services and housing for the poor 24 60

E. Bank Staff

Positions At ICR At Approval

Vice President: Hasan A. Tuluy Pamela Cox

Country Director: Susan G. Goldmark Axel van Trotsenburg

Sector Manager: Aurelio Menendez Jose Luis Irigoyen

Project Team Leader: Elisabeth Goller Jorge M. Rebelo

ICR Team Leader: Elisabeth Goller

ICR Primary Author: Elisabeth Goller

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document)

To support the implementation, monitoring, evaluation and continuous planning of the

urban transport reform program

To strenghten the capacity and improve the procedures to mitigate potential adverse

impacts of transport infrastructure works

Revised Project Development Objectives (as approved by original approving authority) To support the Borrower in achieving an efficient and sustainable urban transport system

for Metropolitan Santiago

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : Improvement measure identified in the evaluations of Transantiago implemented

Value quantitative or Qualitative)

Improvement measure not

yet implemented

At least one

improvement

measure

implemented

Several

improvement

measures

implemented and

more improvement

measures still likely

to be implemented

Date achieved 09/03/2009 12/31/2011 12/31/2011

Comments (incl. % achievement)

Target exceeded

Indicator 2 : Information on the impact of the implementation of Transantiago on air quality

available

Value quantitative or Qualitative)

Information on the impact

of the implementation of

Transantiago on air

quality available

Information on

the impact of

the

implementatio

n of

Transantiago

on air quality

available

Information on the

impact of the

implementation of

Transantiago on air

quality available

Date achieved 09/03/2009 12/31/2009 12/31/2009


Target met

(b) Intermediate Outcome Indicator(s)


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : Preparation of an institutional framework for Transantiago

Value (quantitative or Qualitative)

Institutional framework

not yet existing

Preparation of an

institutional

framework for

Seminar on

metropolitan

transport authorities

Transantiago organized; draft law

to create a such

authority pending;

Transantiago-SE

strengthened from

an organizational

point of view;

initiative to

transform

Transantiago-SE

into autonomous

entity ongoing

Date achieved 05/11/2005 12/31/2009 04/06/2012


Target met

Indicator 2 : Design of an Action Plan to mitigate the negative effects of Transantiago on

street vendors


Action Plan to mitigate

the negative effects of

Transantiago on street

vendors not yet available

Action Plan to

mitigate the

negative

effects of

Transantiago

on street

vendors

available

Action Plan to

mitigate the

negative effects of

Transantiago on

street vendors

available and

transport related

measures

implemented

Date achieved 09/03/2009 12/31/2011 12/31/2011


Target met

Indicator 3 : Evaluation of pilot projects shows potential for public transport quality or

efficiency improvements


No pilot implemented

Evaluation of

at least one

pilot project

shows

potential for

public

transport

quality or

efficiency

improvements

Both pilot projects

showed potential

for public transport

quality or efficiency

improvements

Date achieved 09/03/2009 12/31/2011 04/06/2012


Target met

Indicator 4 : Real time information on the accrued payment obligation to operators and

respective penalties available


Real time information not

yet available

Real time

information on

the accrued

payment

obligation to

operators and

respective

penalties

available

Financial and fare

management

system improved,

but real time

information on the

accrued payment

obligation to

operators and

respective penalties

not available

Date achieved 09/03/2009 12/31/2011 04/06/2012


Target not met, but some improvements to the financial and fare management

system

Indicator 5 : Information on total revenues, expenses, deficits/surpluses and the equilibrium

fare of the system available on a daily basis


Information on total

revenues, expenses, etc.

not yet available on a

daily basis

Information on

total revenues,

expenses, etc.

available on a

daily basis

Financial and fare

management

system improved,

but information on

total revenues,

expenses, etc. not

available on a daily

basis

Date achieved 09/03/2009 12/31/2011 04/06/2012


Target not met, but some improvements to the financial and fare management

system

G. Ratings of Project Performance in ISRs

No. Date ISR Archived

DO IP Actual

Disbursements (USD millions)

1 10/20/2005 Satisfactory Satisfactory 0.00

2 01/20/2006 Satisfactory Moderately Satisfactory 0.01




6 12/12/2007 Moderately Satisfactory Moderately Satisfactory 0.51

7 03/11/2008 Moderately Satisfactory Moderately

Unsatisfactory 0.51

8 10/22/2008 Moderately

Unsatisfactory Unsatisfactory 0.51

9 04/07/2009 Moderately

Unsatisfactory Unsatisfactory 0.51

10 07/23/2009 Moderately Satisfactory Moderately

Unsatisfactory 0.51




14 06/28/2011 Moderately Satisfactory Satisfactory 1.98

15 11/26/2011 Moderately Satisfactory Satisfactory 2.28


H. Restructuring (if any)

Restructuring

Date(s)

Board

Approved

PDO Change

ISR Ratings at

Restructuring Amount

Disbursed at

Restructuring

in USD

millions

Reason for Restructuring &

Key Changes Made DO IP

10/02/2009 Y MS MU 0.51

To better align Bank assistance

with the operational and

financial challenges of the

public transport system in

Santiago. Main changes: (a)

modification of project scope;

(b) change in implementation

arrangements; (c) replacement

and fine-tuning of indicators;

(d) extension of closing date;

and (e) alignment of PDO in

PAD and Loan Agreement

11/11/2011 MS S 1.98

To cancel part of the loan funds

because they were not anymore

needed and to grant a four-

month grace period

If PDO and/or Key Outcome Targets were formally revised (approved by the original approving

body) enter ratings below:

Outcome Ratings

Against Original PDO/Targets Moderately Unsatisfactory Against Formally Revised PDO/Targets Moderately Satisfactory Overall (weighted) rating Moderately Satisfactory

I. Disbursement Profile

1

1. Project Context, Development Objectives and Design

1.0 Introduction

1. The Santiago Urban Transport Technical Assistance Loan (TAL) accompanied

the Santiago Urban Transport Programmatic Development Policy Loan (Santiago DPL –

P082412) to underpin the policy and institutional reforms envisaged to transform the

public transport system in Santiago, also known as Transantiago. The reforms were

outlined in the 2000-2010 Santiago Urban Transport Plan (PTUS) and had an

unprecedented scope and complexity for a Latin American city, applying to the city as a

whole and affecting all public transport modes. Unlike Bogota with its well-regarded

TransMilenio Bus Rapid Transit (BRT) corridors performing just over 25% of public

transport trips while operating side-by-side with a chaotic mix of traditional informal

sector buses that carry the bulk of the passenger traffic, Transantiago called for a

complete transformation of the public transport system more typical of an advanced

country of the Organization for Economic Co-operation and Development (OECD).

2. In February 2007, after a first phase of preparatory activities, the Government of

Chile (GoCH) implemented the full Transantiago reform. This meant that overnight the

GoCH changed the bus routes and stops in the city, reduced the bus fleet, integrated bus

and underground services, altered the fare structure and payment method, modified the

way bus operators operated and were remunerated, and made other changes. It led to

chaos in Santiago mainly for the following reasons: (i) the number of buses operated in

the streets was insufficient, (ii) the new route network did not provide adequate coverage

and required more transfers, (iii) the new fleet control, ticket validation and other systems

did not yet function properly, and (iv) people were not familiar with the new system.

There was also a huge delay in the construction of the segregated bus corridors, which

meant higher travel times and a need for more buses than planned. Finally, enclosed pre-

payment areas for off-board payment, which would have speeded up boarding, were not

considered. The GoCH immediately reacted and addressed these launch problems by

increasing the number of buses and services, reducing transfers, reserving street space for

bus use only, changing the fare structure and payment mechanism for operators,

constructing provisional enclosed pre-payment areas and more. For more details on the

implementation of the reform, the launch problems, and the way they were addressed see

the Implementation Completion and Results Report (ICR) of the Santiago DPL.

3. According to an independent review commissioned to complete this ICR (annex

10) in the beginning of 2012, the public transport system in Santiago had reached a stable

phase. At that time the efforts of the GoCH focused on renegotiating contracts with the

bus operators, providing them with increased responsibilities in terms of operational

decisions and making their revenues more sensitive to the number of passengers

transported. It was expected that the changes would force the operators to be more aware

of the level of service provided, carry more passengers, and fight fare evasion, therefore

reducing the financial deficit of the system. When viewed from a broad perspective and

using other Latin American systems as comparison, Transantiago provided a good level

of service for an affordable fare. However, the bus-based trips were still unreliable

2

mainly due to the increase in car use and traffic in Santiago, the service level varied in

different areas of the city, and a number of other challenges still laid ahead.

4. The troubled introduction of Transantiago directly impacted the TAL since the

GoCH shifted its focus to addressing them and nearly paralyzed project implementation

for about a year at a time when the first project activities had just started. They also

required project restructuring to realign the Bank assistance with the operational needs of

the public transport system after the launch crisis.

1.1 Context at Appraisal

Sector Background

5. Although Santiago’s transport system at appraisal was less chaotic than systems

in other large Latin American cities, it suffered from serious problems, which included

the following:

Exponential increase in car ownership and use in the period between 1977 and 2001,

putting pressure on the urban transport system through growing traffic and

congestion;

Steady and steep decrease in public transport modal share in the same period;

Deficiencies in the organization of the bus system: for instance, (i) bus operators

competed for passengers in the streets, which generated operating inefficiencies and

dangerous driving; (ii) fragmented bus ownership with few sizable companies, lack of

professional management and informality; (iii) poorly coordinated and chaotic

transport supply not adapted to demand levels and oversupply during off-peak hours,

contributing to unnecessary congestion, pollution and increased operating costs; (iv)

long bus routes, most of them crossing the city center and heavily used corridors; (v)

lack of integration between buses and the metro system, increasing travel costs and

reducing accessibility especially for the poor; and (vi) low passenger satisfaction with

the public bus system;

Limited inter-agency coordination at metropolitan level: incipient coordination

among the agencies dealing with transport and the absence of a transport coordinating

body at the metropolitan level;

High bus related accident levels: almost 25% of deaths on urban roads occurred in

accidents involving a bus; and

High air pollution levels, with transport as the major contributor to local emissions.

6. In response to these problems, the GoCH designed the PTUS, a comprehensive

and innovative multi-sector exercise comprised of 12 programs,1 of which a public

transport modernization program was by far the most important and complex one.

1 The PTUS included the following programs: (1) Public Transport Modernization focusing, among others, on (i)

replacing the informal owner-operation with gross-cost contracting to 14 relatively large operators; (ii) providing

incentives to operators to acquire high-standard low-polluting buses; (iii) redesigning the route network into a trunk and

feeder system and reducing the number of buses; (iv) introducing a unified fare system; (v) separately contracting fare

collection and a public transport management/information center to control bus flows; (vi) limiting the number of taxis,

and (vii) implementing a comprehensive infrastructure program to double the extension of the subway system and

construct segregated busways, bus stops, interchange stations, terminals, and underpasses. (2) Road Investments and

Traffic Control, including urban toll roads, allocating and managing road space to maximize social gains through traffic

3

Rationale for Bank Assistance

7. The Bank’s support to the implementation of the PTUS, and in particular its

public transport program, was expected to help address the main issues affecting

transport and mobility in Santiago. This support came in a package of three instruments:

this TAL (P086689), the Santiago DPL, and the Sustainable Transport and Air Quality

Project for Santiago financed through a Global Environment Facility grant (GEF project

P073985).

8. The TAL was made to assist in the implementation of the public transport reform

arrangements. It was meant to provide the necessary technical assistance and advice to

support this difficult process of transformation.

9. The Santiago DPL supported the public transport reform, including the

institutional, organizational and managerial transformation of the system to ensure its

continuity and sustainability. It also emphasized fostering more integrated coordination

among transport, land-use and environmental issues, including social and participatory

elements, and supporting the difficult process of reallocating scarce street space to the

exclusive use of non-motorized transport and public transport.

10. The GEF project strove to accelerate the introduction of the PTUS as a whole by

concentrating on contributing to Green House Gas (GHG) emissions abatement with

different degrees of intensity and different implementation periods.

11. In these operations, the Bank was expected to act as catalyst for knowledge

generation and transfer. It was expected to provide value added because of its long-

standing involvement in urban transport operations in Latin America and its global

experience and knowledge in the field. The Bank was also expected to learn from the

innovative experience in Santiago for the benefit of its future urban transport operations.

12. This TAL was consistent with the goals and strategic approach set out in the 2002

Country Assistance Strategy (CAS). Indeed, while supporting the PTUS, it was expected

to (a) enhance sustained economic growth and social progress; (b) foster the inclusion of

the most vulnerable groups through improved access at affordable prices and reasonable

travel times, hence contributing to socially inclusive growth; (c) improve environmental

conditions; (d) promote public-private partnerships through a concession mechanism for

public transport services; and (e) modernize the State and build its technical capacity.

1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved)

13. The PDO wording in the Project Appraisal Document (PAD) and the Loan

Agreement were different. The PDO as stated in the PAD referred to specific activities to

support the Borrower in improving Santiago’s urban transport system, i.e. ―to support the

management schemes with priority for public transport, pricing schemes, and parking restrictions. (3) Location of

schools and efficient management of school trips. (4) Promotion of New Commercial and Service Centers to reduce the

length of trips. (5) Change in Residential Land-Use Trends through, among others, mixed land-use and densification.

(6) Non-motorized Transport. (7) Immediate Actions to reduce environmental alerts. (8) Regulation of Urban Freight

Transport to rationalize freight traffic and reduce its environmental footprint. (9) Monitoring and Control. (10)

Financing. (11) Communication and Citizens’ Participation; and (12) Other Programs, including institutional aspects

and environmental aspects.

4

implementation, monitoring, evaluation and continuous planning of the urban transport

reform and to strengthen the capacity and improve the procedures to mitigate potential

adverse impacts of transport infrastructure works‖. The wording in the Loan Agreement

was more general, namely ―to support the Borrower in achieving an efficient and

sustainable urban transport system for Metropolitan Santiago‖.

14. The PDO indicators were to (i) complete a survey to assess Transantiago’s impact

on transport demand; and (ii) design a monitoring system for Transantiago’s

environmental impact.

15. The expected intermediate outcomes were the following: (i) institutionalization of

Transantiago; (ii) mitigation of negative effects of Transantiago on low-income groups;

(iii) improved road infrastructure management; (iv) Transantiago users well informed

about the system; and (v) better coordination between transport and land use planning.

The respective indicators included: (i) prepared institutional framework for Transantiago;

(ii) designed action plan with mitigation measures for low-income users; (iii) completed

road infrastructure management plan; (iv) carried out dissemination campaign for

Transantiago; and (v) proposed land use and transport planning coordination

mechanisms.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and

reasons/justification

16. As already mentioned, following the launch difficulties of Transantiago, the

project needed to be restructured to realign the Bank assistance with the new operational

challenges of the system. It took over a year to redefine the project scope because of the

limited attention paid to the TAL during the Transantiago crisis. The restructuring was

completed in 2009 and at that time the project had only disbursed US$512,000.

Essentially the restructuring called for changes in the project activities, intermediate

outcomes, and indicators. Due to the difference in the PDO wording in the PAD and the

Loan Agreement, the wording of the Loan Agreement was adopted.

17. The revised PDO indicators were the following: (i) improvement measure

identified in the evaluation of Transantiago implemented and (ii) information on

Transantiago’s impact on air quality available.

18. The revised intermediate outcomes consisted of: (i) institutionalization of

Transantiago; (ii) mitigation of negative effects of Transantiago on street vendors; (iii)

improvement in quality and/or efficiency of Transantiago; and (iv) improvement of

Transantiago’s financial/fare control and management system. The respective indicators

were revised as follows: (i) prepared institutional framework for Transantiago; (ii)

designed action plan to mitigate the negative effects of Transantiago on street vendors;

(iii) evaluation of at least one pilot project showed potential for public quality and

efficiency improvements; (iv) real time information on Transantiago’s payment

obligations available; and (v) information on the system’s revenues, expenses, etc.

available on a daily basis.

5

1.4 Main Beneficiaries

19. The primary target group included public transport users in Metropolitan

Santiago, who typically are people with lower incomes. Because of reduced externalities

from public transport, the primary target group also included people making trips to and

within the city, regardless of transport mode, and all inhabitants of the city. The

secondary beneficiaries were institutions like the Executive Secretary of the Committee

of Ministers for Urban Transport in Metropolitan Santiago (Transantiago-SE), which also

housed the Project Coordination Unit (PCU) and the Transport Planning Secretariat

(SECTRA). They benefited from capacity strengthening, improved analytical tools, better

data, and information.

1.5 Original Components (as approved)

20. The TAL had the following six components:

Component A. General Urban Transport to (i) obtain qualitative and quantitative

data on urban passenger movements; (ii) forecast urban transport demand by

incorporating socio-economic variables into ESTRAUS2

; (iii) lay the basis for

Transantiago’s long-term institutional design; and (iv) implement a road

infrastructure maintenance management system;

Component B. Public Transport to (i) obtain information to optimize fares; (ii)

design intermodal stations; (iii) design a graphic information system; (iv) obtain

information to optimize travel times; and (v) inform users of the new system;

Component C. Environment to provide regular data on air quality and noise levels

necessary to monitor and maximize the positive impacts expected from Transantiago;

Component D. Land Use to (i) update the sub-models of MUSSA3 and assess three

road pricing alternatives; (ii) promote activity concentration around transfer stations;

(iii) facilitate transport and land use planning coordination; and (iv) support the

implementation of the urban transport impact evaluation system (SEISTU) to ensure

that real estate developers pay for their negative transport externalities;

Component E. Social Aspects of Transport to (i) support a training program for

transit workers and (ii) analyze Transantiago’s impact on low-income groups; and

Component F. Mitigation of Potential Adverse Impacts of Transport

Infrastructure Works to (i) strengthen Chile’s capacity in the areas of involuntary

resettlements and (ii) harmonize environmental guidelines.

1.6 Revised Components

21. The restructuring eliminated the original Component F and changed several

project activities within the existing project components. It also ensured consistence in

substance and language between the components and project activities in the project

documents and the Loan Agreement. The revised components were the following:

2 ESTRAUS is the transport planning model of SECTRA http://www.sectra.gob.cl/metodologias_y_herramientas_de_transporte/metodologia/estraus_02.html. 3 MUSSA is a mathematical model to simulate the real estate market and make economic evaluations of the impacts

caused in the city (www.mussa.cl).

6

Component A. General Urban Transport to (i) more precisely forecast urban

transport demand by incorporating socio-economic variables into ESTRAUS and (ii)

lay the basis for Transantiago’s institutional design over the long term;

Component B. Public Transport to (i) carry out evaluations of Transantiago’s

performance and identify measures to improve the public transport system; (ii)

improve Transantiago’s financial and fare management system; and (iii) improve the

quality and /or efficiency of public transport in Metropolitan Santiago;

Component C. Environment to monitor the impact of Transantiago on air quality;

Component D. Land Use to (i) update the sub-models of MUSSA and assess three

road pricing alternatives and (ii) support the implementation of SEISTU to ensure that

real estate developers pay for their negative transport externalities;

Component E. Social Aspects of Transport to analyze Transantiago’s impact on

street vendors; and

Component F. Project Management to strengthen the PCU and to carry out project

audits.

1.7 Other significant changes

22. The modification of the project components/activities required minor changes to

the implementation arrangements, the revision of the cost allocation among components,

and a closing date extension from December 31, 2009 to December 31, 2011. The project

also had a partial loan cancellation in the amount of US$1.4 million because the

Borrower financed several project activities totally or partially with local resources. The

reasons for the Borrower to do so included the following: (i) project activities, such as the

implementation of the financial and fare management system, were included in the scope

of ongoing contracts awarded according to local procurement rules and procedures; (ii) at

the end of certain fiscal years, Transantiago-SE had local resources available to finance

larger portions of project activities than envisaged; and (iii) some project activities were

completed after the loan closing date, so the respective payments could not be made with

loan proceeds.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

23. The factors related to quality at entry that positively influenced project

implementation and outcomes included the following:

Sound technical background analyses, profound sector knowledge, participation

of multiple actors, and readiness. The project design and preparation benefited from

sound technical background analyses carried out during the preparation of the GEF

project and the Santiago DPL as well as GEF activities ongoing at the time of

appraisal. This contributed to the solid knowledge on the sector reflected in the

preparation documents. It also opened the doors to Santiago’s major urban transport

actors, who actively participated in the identification of the different project

components and activities. The terms of reference (TOR) for more than half of the

project activities were ready at appraisal. These TOR were technically sound and well

prepared.

7

Fully operational PCU by project effectiveness. Transantiago-SE was also the

implementation agency of the GEF project, which meant that the PCU was fully

operational when the project became effective and that the staff had experience with

Bank rules and procedures.

24. The factors that negatively influenced project implementation included:

Lack of flexibility in the project description. All activities supported by the project

represented high local priorities and were fully defined at the time of appraisal.

Therefore, they were described in a precise and detailed manner, leaving no flexibility

for changes. With the change in government in 2006 and even more with the launch

difficulties of Transantiago, Transantiago-SE’s priorities shifted from a more strategic

and longer term perspective, to activities with immediate impact on the public

transport system. For that reason, and given the lack of flexibility in the project

description, project restructuring became necessary.

Shortcomings in risk identification and mitigation. The comprehensive risk

assessment for this project did not anticipate the launch difficulties of Transantiago

and the shift in project priorities due to these difficulties and the change in

governments. Since these risks were not identified, no mitigation measures were

designed and applied.

Shortcomings in the results framework. The shortcoming mentioned later in

section 2.3 made the precise assessment of the project outcomes more difficult.

2.2 Implementation

25. The factors that positively influenced project implementation included the following:

Highly committed and professional PCU and Transantiago-SE staff. The

commitment and professionalism of the people who worked on project issues was

exemplary despite frequent changes in the coordinator of Transantiago-SE, two

changes in PCU coordinator, and several changes in the technical staff throughout the

life of the project. This is illustrated by the fact that despite numerous obstacles, staff

managed to successfully complete studies (such as the ones on bus depots and

terminals, as well as the impact of street markets on Transantiago) that were essential

in the proper functioning of the public transport system.

Project restructuring. Project restructuring allowed realigning the project activities

with the changed needs and priorities of the Borrower and bringing the project back

on track to achieve its PDO.

Close follow up and monitoring. The Bank team practiced a hands-on follow up,

which included strong sustained implementation support and regular follow-up

conference calls to advise and assist the Borrower and regularly check the project

implementation progress. This enabled keeping the project activities on Transantiago-

SE’s priority list, except immediately after the launch of Transantiago, when all

efforts focused on remedying the severe launch problems.

26. The factors that negatively influenced project implementation included the following:

Crisis generated by the launch of Transantiago. The need to urgently solve the

difficulties resulting from the launch of the new public transport system created an

excessive work load in Transantiago-SE, which completely absorbed its entire staff,

including the PCU staff. During close to a year of this crisis situation, limited

8

attention was paid to the TAL. This slowed down project implementation and shifted

the technical assistance needs and priorities.

Changes in authorities and Transantiago-SE’s leadership and staff. The project

spanned over three government terms, which contributed to, but was not the only

reason, for frequent changes in Transantiago-SE’s leadership and staff as well as PCU

staff. These changes had some normal negative impacts on the project

implementation pace and quality because new people needed to become familiar with

the project and with Bank procedures and rules.

Frequent changes in project activities. The changes in authorities and staff also

shifted project priorities, which led to the replacement of a considerable number of

project activities often already in an advanced bidding stage. The replacement mostly

occurred because of a shift in the priorities of the organization or the government as a

whole. In some cases, they happened because the commitment and ownership for an

activity was with an individual rather than the institution she or he belonged to. In

other cases, they stemmed from new needs that arose as the public transport system

evolved. These frequent activity changes consumed additional time and resources of

both the PCU and the Bank team.

Multiple and lengthy procedures and administrative hurdles. Bank projects in

Chile follow local and Bank review and control procedures for procurement and

contracting. In addition, because Transantiago-SE is not an autonomous entity with

legal personality, all processes were reviewed and authorized by both Transantiago-

SE and Ministry of Transport and Telecommunications (MTT), leading to the

duplication of activities and lengthy procurement and contracting processes. At times

the project also suffered from additional delays because the controllers’ office

(Contraloría) and MTT had little experience with Bank procurement procedures and

rules and the budgeting procedures to apply were not clear.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

27. M&E design. As already mentioned, the original PDO in the Loan Agreement

and in the PAD were different. Additionally, the PAD’s main text and results framework

showed one PDO, while the data sheet of the PAD included two PDOs. No indicators and

outcomes were related to the second PDO of the PAD, but it was linked to the activities

in the original Component 6. All PDOs were somewhat broad and subjective.

28. The original indicators were realistic in the light of the key project activities, but

not all of them adequately captured the level of achievement of the outcomes and the

PDO. For instance, carrying out a dissemination campaign does not necessarily mean that

the public transport users are well informed about Transantiago. Some outcomes were

also subjective, such as ―mitigating Transantiago’s negative impacts on low-income

groups‖ and the ―institutionalizing of Transantiago‖. Finally, the outcomes were mostly

related to one specific project activity only. Consequently, since the original project had

about 20 activities and only five outcomes, there were several implicit outcomes, which

contributed to the achievement of the PDO. For instance, the availability and use of new

planning tools facilitated the continuous planning of the urban transport reform program

and supported its implementation.

9

29. In the framework of project restructuring the PDO wording of the Loan

Agreement was adopted since it was considered a better reflection of the intended

objective. Several indicators and outcomes were revised to align them with the project

modifications. The revision of the results framework neither eliminated the broadness and

subjectivity of the PDO and outcomes, nor did it fix the direct causal linkages between

some outcomes and the indicators. In addition, one of the indicators that measured the

improvements in the financial and fare management system was redundant.

30. The monitoring arrangements were simple and adequate for this type of technical

assistance loan. Data collection to assess the compliance with the indicator targets was

straightforward and required commensurate efforts and resources.

31. Implementation and usage. Data was regularly collected and presented in a

progress report discussed during supervision missions. The information collected during

project implementation was mainly used to track project progress.

2.4 Safeguard and Fiduciary Compliance

32. Safeguards. Originally, the environmental category of this project was C. In the

framework of project restructuring, the Borrower decided to change the project scope to

include the execution of pilot projects, which were to be defined in the course of project

implementation. Since these pilot projects could have required small works or have had

other negative environmental or social implications, the project’s environmental category

was changed to B and the Environmental Assessment safeguard policy (OP/BP 4.01) was

triggered. Transantiago-SE prepared, and the Bank approved, simplified environmental

guidelines. These guidelines included the description of the type of works envisaged in

the pilot projects and their potential environmental impacts, the applicable environmental

framework and norms, mitigation measures, institutional responsibilities, and a checklist

for screening, among others.

33. Transantiago-SE screened all pilot projects for potential negative environmental

and social impacts. For the pilot project to test colored road surface treatments for bus

lanes, Transantiago-SE provided the Bank with an assurance from the provider of the

road treatments that they did not have any negative environmental impact. In the case of

the pilot project to install solar lighting at bus stops, Transantiago-SE produced

satisfactory evidence on environmentally sustainable recycling procedures for batteries.

No negative social issues were anticipated or arose in these pilot projects.

34. The operation did not contribute to a wider agenda of strengthening the

environmental and safeguard capacity and procedures for public transport infrastructure

works because the relevant activities were cancelled during project restructuring.

35. Financial management (FM) and procurement. Fiduciary aspects overall were

handled in a satisfactory manner even though the project registered minor shortcomings

in FM and procurement. In terms of FM, the project maintained overall satisfactory

performance and low risk. Timely and reliable interim un-audited reports have allowed

managing and monitoring project implementation. Audit reports were by and large

10

submitted on time and considered acceptable to the Bank.4

In the Independent

Procurement Review carried out in March 2009, procurement was considered moderately

satisfactory, mainly because of temporary weaknesses in internal controls and the

implementing agency’s low capacity to conduct procurement as per Bank guidelines.

This was due to a sudden departure of the then PCU head. The procurement post review

carried out at the end of 2010 considered procurement as moderately satisfactory because

of the limited amount of procurement activities carried out during the review period. The

last procurement post review at the end of 2011 considered procurement again fully

satisfactory.

2.5 Post-completion Operation/Next Phase

36. The prospects for the post-completion operation of the project vary. At the time of

ICR preparation, the pilot projects were in the process of being replicated at a large scale.

The results of most of the studies carried out under the project, such as the assessment of

the performance of the public transport system, the methodology to assess the financial

health of bus operators, the air quality monitoring exercise, and the organizational

improvement study for Transantiago-SE, were and still are likely to be extensively used.

The results and products of other activities, such as the SEISTU study did not yet find

practical applications. Similarly, some tools, such as the ESTRAUS model were and still

will be used, while others, such as the MUSSA model, still need further work to become

useful for practical applications.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

37. The relevance is rated high. The original project design was adjusted to keep the

operation fully relevant in the light of changing circumstances largely attributed to the

severe launch difficulties of Transantiago and the cutting edge nature of the reform

supported by the operation. The original and revised PDO, which are similar in

substance, remained fully consistent with the development priorities of the GoCH. The

President’s Government Program5

advocates for a ―dignified and efficient public

transport‖. In the case of Santiago, this mainly means an improvement in public transport

service quality through (i) the construction of bus corridors and lanes; (ii) ticket pre-

payment areas; (iii) an improved bus network with fewer transfers; (iv) metro system

extensions; (v) an improved institutional structure for MTT; and (vi) objective and

efficient pricing to reduce subsidies. Transantiago is among the strategic objectives of the

Transport Minister,6 who promised substantial improvements in service quality to the 2.5

million bus users in Santiago.

4 The 2006 to 2008 audit reports had qualified opinions because the accrual basis was used to register a payment. This

was corrected afterwards. The 2009 to 2010 audit reports had unqualified opinions. 5 Programa de Gobierno para el Cambio, el Futuro y la Esperanza, Chile 2010 – 2014. 6 Cuenta Pública “Cumpliendo con las Personas, Cumpliendo con la Metas”, Ministro de Transporte y

Telecomunicaciones Pedro Pablo Errázuriz Domínguez, 2011.

11

38. The PDO remained in line with the current Country Partnership Strategy (CPS)7,

which focuses on three results areas that broadly coincide with the government’s

development agenda: (i) public sector modernization; (ii) job creation and equity

improvement; and (iii) promoting sustainable investments. The project also meets the

current principles for Bank engagement in Chile, which concentrate on the provision of

technical assistance in areas in which the Bank has a comparative advantage and can

support the country’s drive to achieve its development goals. Moreover, for the Bank, this

project has been an important two-way investment, since the Transantiago experience is

highly valued among other Bank clients.

3.2 Achievement of Project Development Objectives

39. The assessment of the achievement of the PDOs presented some challenges. First,

as pointed out in section 2.3, the results framework had some shortcomings. Second, a

few outcomes were achieved by the Borrower on its own without contribution from the

project, such as ―Transantiago’s users being well informed about the new system‖, which

was accomplished through local contracts and finances. Third, according to ICR

guidelines, for projects with formally revised PDOs, the project outcome needed to be

assessed against both the original and the revised PDOs. This assessment is given below.

40. For details on project activities and outputs and their links with outcomes and the

achievement of the PDO, see annex 2. The ICR data sheet includes the revised PDO and

intermediate outcome indicators and annex 11 includes the original ones.

Original PDO and outcomes

41. The original PDO consisted of two objectives and its achievement was rated

moderately unsatisfactory. The project activities related to the objective of ―strengthening

the capacity and improving the procedures to mitigate potential adverse impacts of

transport infrastructure works‖ were cancelled and the objective was not achieved. The

second PDO of ―supporting the implementation, monitoring, evaluation and continuous

planning of the urban transport reform program‖ was partially achieved as follows (for

details see annex 2):

The project partially complied with the PDO indicators of ―designing an

environmental impact monitoring system for Transantiago‖ since it devised several

elements of such monitoring system, i.e. the methodology used to regularly monitor

Transantiago’s impact on air quality and a Web site to disseminate the results. In

addition, at the time of ICR preparation the Borrower was working to complement the

air quality monitoring system with a noise monitoring system.

The Borrower on its own and with local funds will achieve the second PDO indicator

of ―having Transantiago’s impact on transport demand assessed‖ once the origin-

destination (O-D) survey, ongoing at the time of ICR preparation, is completed.

The project also contributed to ―continuous planning of the urban transport system‖

by making transport planning instruments, such as ESTRAUS, more robust. This tool

was used to plan the extension of the metro system, among others.

7 IBRD and IFC Country Partnership Strategy for the Republic of Chile for the Period 2011-2016, January 11, 2011.

12

The Borrower, entirely with local resources,8 also ―facilitated the implementation of

the urban transport reform‖ through (i) the implementation of a broad assistance

program for public transport workers and operators affected by the launch of

Transantiago; (ii) the revision of fare levels, structures, and the fare setting

mechanism after Transantiago’s launch; and (iii) the implementation of small and

medium sized transfer stations. All these activities were cancelled from the project

scope during restructuring because they had been ongoing or carried out.

42. Two of the five original intermediate outcomes were partially achieved by the

project, two by the Borrowers, and one was not achieved. The progress in achieving the

intermediate outcomes was the following:

Intermediate outcome 1 “Institutionalization of Transantiago”: The project complied

with the indicator of ―preparing an institutional framework of Transantiago‖ and laid

the basis for the transformation of Transantiago-SE into a more autonomous and

independent institution, likely to happen in the short to medium term;

Intermediate outcome 2 “Mitigation of the negative effects of Transantiago on low-

income groups”: The project only partially complied with the indicator of ―designing

an action plan with mitigation measures for low-income users‖ because it designed an

action plan only for street vendors, one specific group of low-income people. By

implementing this action plan and making several routes changes and service

improvements as a consequence of the project-financed evaluation of Transantiago by

a group of Brazilian experts, Transantiago-SE also partially reached this outcome

since low-income users normally have no alternative to public transport and thus

benefit most from service improvements. More improvements are expected under the

renegotiated contracts with the bus operators, which came into force between March

and June 2012 and provide the necessary flexibility to do so;

Intermediate outcome 3 “Transantiago’s users being well informed about the public

transport system”: Transantiago-SE, entirely with local resources, carried out a large

number of information and communications campaigns and activities and complied

with the indicator of ―implementing dissemination campaigns‖. In the past,

Transantiago-SE did not collect information on how well its users are informed about

the system9 and several sources, including the review in annex 10, still consider user

information in buses and at stops a challenge for Transantiago. However, given (i) the

huge amount of resources spent by Transantiago-SE for information purposes,

especially if compared to the limited budget reserved by the project for information

campaigns, and the absence of any resources for information campaigns and

communications under the old public transport system; (ii) the large number of

information and communications campaigns and activities carried out by

Transantiago-SE; (iii) the manifold information sources available; and (iv) the

statistics on their use, it seems reasonable to assume that this outcome was at least

partially achieved;

8 The Bank team had a continuous policy dialogue on those issues and provided information on international practice,

especially as far as fare systems are concerned. 9 At the time of ICR preparation, Transantiago-SE was contracting a study to measure the effectiveness of their user

information campaigns.

13

Intermediate outcome 4 “Improved road infrastructure management system”:

Transantiago-SE, on its own and with local resources, created a simple road pavement

management system and so partially achieved the indicator of ―completing a Road

Infrastructure Management Plan‖ and this outcome; and.

Intermediate outcome 5 “Better coordination of transport and land use planning”:

The indicator of ―proposing a land use and transport planning mechanism‖ and the

respective outcome were not achieved.

Revised PDO and outcomes

43. After the serious launch problems outlined in the ICR of the Santiago DPL, the

public transport system underwent important changes. Despite several remaining

challenges, at the time of the preparation of this ICR, Transantiago has become one of the

best quality public transport systems in Latin America. Most notably, it managed to: (i)

provide high accessibility at a reasonable fare; (ii) fully integrate the bus and Metro

services in the city; (iii) introduce a contactless smart card with 100% penetration; (iv)

formalize and professionalize bus operations; and (v) drastically reduce the significant

externalities that Santiago used to face in terms of pollution, accidents and noise (for

details see annex 10). These achievements were huge and by far and large directly

attributable to the GoCH.

44. The project contributed within its limits of scope. It achieved and is still likely to

achieve the revised PDO of ―supporting the Borrower in achieving an efficient and

sustainable urban transport system for Metropolitan Santiago‖ with moderate

shortcomings and was considered moderately satisfactory. The achievements were the

following (for details see again annex 2):

The project exceeded the first PDO indicator and contributed and is still likely to

contribute to Transantiago’s efficiency and/or sustainability. As a result of Brazilian

experts evaluating the public transport system, Transantiago-SE implemented a few

service improvements (with more improvements expected), increased fares, applied

measures against fare evasion, and renegotiated contracts with bus operators. Among

other benefits, this led to reduced transfers for those users who benefitted from the

service improvements, enhanced network coverage, and increased operating cost

coverage. More positive impacts are expected under the renegotiated contracts with

bus operators and the implementation of the results of the study on bus depots and

terminals.

The project assessed Transantiago’s air quality impacts and complied with the second

PDO indicator of having ―information on the impact of the implementation of

Transantiago on air quality available‖. The information on Transantiago’s air quality

impacts was used to revise and make environmental standards of public transport

vehicles more stringent. These standards led and are still likely to lead to particulate

matter (PM) and Nitrogen Oxide (NOx) emission reductions.

The project developed more robust planning tools, such as ESTRAUS and MUSSA,

and the former was already used in several occasions.

45. Two of the four revised intermediate outcomes were fully and two were partially

achieved by the project:

14

Intermediate outcome 1 “Institutionalization of Transantiago”: The project complied

with the indicator of ―preparing an institutional framework of Transantiago‖ and laid

the basis for the transformation of Transantiago-SE into a more autonomous and

independent institution, likely to happen in the short to medium term;

Intermediate outcome 2 “Mitigated the negative effects of Transantiago on street

market vendors”: The project complied with the indicator of ―designing an action

plan to mitigate the negative effects on street vendors‖ and by changing bus routes

and services during operating hours of street markets to avoid interferences and

conflict situations achieved the intermediate outcome;

Intermediate outcome 3 “Improvement of the quality and/or efficiency of public

transport in Santiago”: The evaluation of both pilot projects showed a potential for

public transport quality and efficiency improvements. Therefore, the project achieved

the respective indicator and this outcome. In addition, at the time of ICR preparation,

the Borrower had taken measures to replicate the results of the pilot projects on a

large scale; and

Intermediate outcome 4 “Improvement of Transantiago’s financial/fare control and

management system”: The project did not comply with the two indicators related to

the improvement of the financial/fare control and management system. However, the

information on the financial situation of bus concessionaires obtained through the

project financed study and some initial enhancements to Transantiago’s financial and

payment system carried out with local recourses somewhat contributed to the

achievement of the intermediate outcome.

46. As shown in the table below and following the ICR guidelines, overall the

achievement of the PDO for this formally revised project was also rated moderately

satisfactory.

Calculation of Outcome Rating for Formally Revised Projects

Against

original PDO/

outcomes

Against revised/

current PDO/

outcomes

Overall Comments

1. Rating Moderately

unsatisfactory

Moderately

satisfactory

- Reasonable

improvement

after

restructuring

2. Rating value 3 4

3. Disbursement (before

and after restructuring

and at project end)

US$ 512,000 US$ 1,858,199 US$2,370,199

4. Weight (% disbursed

before/after PDO/

outcome change)

0.22%

0.78%

100%

5. Weighted value (2*4) 0.65 3.14 3.78

6. Final value (rounded) Moderately

satisfactory

3.3 Efficiency

47. Given the nature of a TAL, no economic and financial analysis was carried out at

appraisal. This type of quantitative analysis was not considered appropriate to assess

15

whether the cost of studies and other technical assistance activities was reasonable to

achieve the PDO.

48. In an ex-post perspective, it can be highlighted that the price of the studies carried

out was generally below the respective cost estimates. The studies, once contracted, were

quickly implemented and there were no cost overruns and only few contract

modifications. In the case of Components A and C, the cost overruns were due to the

inclusion of additional activities not originally budgeted. The overall project cost was

considerably lower than the appraisal and restructuring cost estimates for the following

reasons (i) lower prices paid for studies mainly in the case of Components D and E; (ii)

the fact that when preparing the restructuring cost estimates it was not yet clear how

many and what type of pilot projects would be carried out; (iii) to planned pilot projects

could finally not be carried out because the loan closed; (iv) Transantiago’s fare and

financial management system was improved but not fully redesigned; and (v) project

management and supervision was done as part of the normal operation of Transantiago-

SE and only required limited additional resources.

3.4 Justification of Overall Outcome Rating

Rating: Moderately satisfactory

49. The overall rating is moderately satisfactory. The original and revised PDO and

the revised project design remained highly relevant, the implementation of the project

appeared reasonably efficient, and the achievement of the PDO was rated moderately

satisfactory as a result of the evaluation of the original and the revised PDO.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

50. By contributing to the improvement of the public transport system conditions, the

project had positive impacts on the poor, the majority of whom use the public transport in

Santiago10

.

51. In terms of gender aspects, the evaluation of the pilot project which tested

photovoltaic lighting at bus stops showed that both women and men highly valued good

quality bus stops, but women considered the quality of bus stops more important (74.8%

of women considered it as extremely important versus 70.2% of men). When evaluating

the improvements at bus stops, women and men gave the improved lighting the highest

rating, with women providing a slightly higher score (6.1 on a scale from 1 to 7 versus 6).

Women also gave improved access a slightly higher score (5.4 versus 5.3), while men

rated improved information slightly higher (4.2 versus 4.1). When asked about the

priorities for bus stops improvements, both women and men picked safety and security,

the bus stop roof and lighting. However, women ranked safety and security highest, while

men considered the roof more important.

10 In 2010, 91% of the Metro users were low and middle class people, with 15% of users belonging to the two lowest

socioeconomic groups E and D. Information on the socio-economic group of bus users is not available. Given the

geographic coverage of the Metro system and the higher fare, its users tend to be better off than bus users.

16

(b) Institutional Change/Strengthening

(particularly with reference to impacts on longer-term capacity and institutional development)

52. One project subcomponent directly focused on institutional development for the

urban transport sector (for details and results see annex 2, Component A.2). Additionally,

it is worth highlighting that the project contributed to institutional changes in the

following way:

Financing study trips for urban transport specialists to Bogota and Spain. These study

trips were highly successful for a number of reasons pointed out in section 6 -

Lessons Learned;

Supporting the development of new tools for urban transport planning (see annex 2,

Components A and D); and

Strengthening the PCU’s capacity to carry out Bank operations.

(c) Other Unintended Outcomes and Impacts (positive or negative)

53. At the time of ICR preparation, the Ministry of Economy was drafting a law on

street market vendors and used the results of the project financed study on street market

vendors as input. It is likely that this new law will lead to the implementation of measures

to improve the general conditions of street market vendors. These measures were

proposed in the study, but their implementation is outside Transantiago-SE’s

responsibility.

54. In addition, the study on bus depots and terminal, carried out specifically for

Transantiago, led to similar studies in other cities and is likely to culminate in a change of

the legal framework on the topic.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

55. No beneficiary survey or stakeholder workshops took place.

4. Assessment of Risk to Development Outcome Rating: Low or Negligible

56. The revised PDO of the project was to support the Borrower to achieve an

efficient and sustainable urban transport system for Metropolitan Santiago. Such a system

is essential for a thriving and competitive city like Santiago, and it is highly unlikely that

the Borrower will forgo it. Such a system is also fully in line with what is spelt out in the

current Presidential and Ministerial Programs.

57. The risk that the different project outcomes will not be maintained and/or further

pursued is also low. The project helped to lay the basis for the institutional framework of

Transantiago, and strengthened Transantiago-SE. At the time of ICR preparation, there

was a political will to provide Transantiago-SE with more autonomy. The negative

impacts of Transantiago on street market vendors were mitigated. The results of the

project-financed study on this subject enable Transantiago-SE to take street markets into

account whenever making changes to routes and operating schedules. It is unlikely that

the improvements to the quality and efficiency of public transport deriving from the large

scale implementation of the pilot projects will be reversed. Additionally, the project

provided Transantiago-SE with data, information and tools that will enable them to

17

further improve the system. Finally, it is unlikely that the improvements made to

Transantiago’s financial and payment system will be reversed, especially considering that

by ICR preparation Transantiago-SE was preparing the bidding documents to further

improve the system.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Rating: Moderately Satisfactory

58. The Bank team involved in project preparation had a broad skill mix, including

various seasoned and experienced transport and urban transport specialists,

environmental and social specialists as well as safeguard and fiduciary specialists. The

preparation lasted approximately two years and was done together with the preparation of

the Santiago DPL. Frequent preparation missions were carried out and documented in the

Aide-Mémoires. The PAD is concise, but comprehensive in its coverage. It shows an in-

depth knowledge of the sector issues at the time of appraisal.

59. The technical design of the operation benefited from the Bank’s involvement in

the GEF project and in the parallel Santiago DPL. The technical preparation was

thorough. The TORs for more than half of the activities were ready at the time of

appraisal. The Bank team also adequately handled the fiduciary and safeguard aspects.

60. In hindsight, the project description was too rigid, leaving no space for changes in

the project activities. The results framework also had limitations as indicated in section

2.3 and not all risks were anticipated and mitigated (see paragraph 24). Consequently,

although the technical preparation was thoroughly carried out, due to these shortcomings,

Bank performance in terms of ensuring quality at entry was rated moderately satisfactory.

(b) Quality of Supervision

Rating: Satisfactory

61. During project supervision, the Bank team maintained an adequate skill mix,

including transport, environmental and fiduciary specialists. The team had a high level of

involvement throughout the lifetime of project implementation. Supervision missions

took place twice a year. In addition, the team was in constant contact with the PCU to

provide international experience, good practice examples and technical advice, review

and comment on TORs and project reports, and help address implementation issues.

Because of the rigid description of the project activities and the great need for flexibility

in this operation, the team showed creativity to solve implementation problems and adapt

the project activities to changed local conditions.

62. After the introduction of Transantiago, which almost completely stopped project

implementation during one year, Bank supervision was even more intensified through

monthly virtual supervisions via conference calls documented in detailed minutes. This

together with project restructuring brought project implementation under control again.

63. During the last few years of project implementation, Bank supervision put a lot of

effort in defining the pilot projects and pushing for their implementation before project

18

closure. Safeguard and fiduciary aspects throughout the project implementation period

were adequately taken into account.

64. Because of the strong involvement in and constant support to this operation, the

performance of the Bank in supervising was considered satisfactory even if the team fell

short of fixing some of the shortcomings of the results framework during restructuring.

(c) Justification of Rating for Overall Bank Performance


65. The Bank performance at entry was rated moderately satisfactory and the quality

of supervision was rated satisfactory. Therefore, the Bank’s overall performance was

considered moderately satisfactory.

5.2 Borrower Performance

(a) Government Performance


66. The GoCH involved a broad range of sector agencies in project preparation,

assigned the necessary staff and resources, and put an enabling environment into place.

Hence, the GoCH’s contribution to project preparation was adequate.

67. During project implementation, the GoCH provided more counterpart funds than

agreed upon and stuck to the institutional arrangements defined at appraisal. The GoCH

showed a high level of commitment in the creation of an efficient and high quality public

transport system and consequently to the achievement of the PDO. The commitment to

Transantiago grew even stronger after the launch of the new system, which had caused

enormous distress to users and risked government collapse. At that time, the GoCH did

everything possible to correct the launch mistakes and make Transantiago work. This

exclusive dedication to fix Transantiago’s problems affected the resource priorities within

Transantiago-SE, led to several changes of Transantiago-SE’s coordinator and key staff,

and heavily slowed down project implementation for at least a year. Once the initial

difficulties of Transantiago were overcome, the GoCH was determined to use the

restructured TAL as a tool to improve the public transport system and build capacity and

skills within Transantiago-SE.

Although the commitment of the GoCH to Transantiago was exemplary, especially after

the launch problems occurred, it temporarily and understandably distracted the attention

from the implementation of the project activities. Consequently, the overall government

performance was rated moderately satisfactory.

(b) Implementing Agency or Agencies Performance

Rating: Satisfactory

68. Transantiago-SE, SECTRA, MTT, MINVU, SERVIU, and SEREMITT-RM were

all involved in project preparation. Their technical knowledge and experience was

fundamental in preparing a technically robust and sound operation.

69. The PCU had a small, well-qualified and highly committed team in charge of both

the TAL and the GEF projects. In technical matters, the PCU was supported by technical

staff from other areas of Transantiago-SE, SECTRA, and MTT. Together they did an

exemplary job in terms of preparing TOR and technical specification and supervising the

19

studies and project activities. Study reports were thoroughly reviewed normally by at

least three people. The team provided excellent comments and high-quality technical

contributions. For most studies, they requested further analyses, which implied additional

supervision work. The team also provided valuable technical input to project

restructuring and was highly committed to the successive design of the pilot projects.

70. In safeguard and fiduciary terms, the performance of the PCU was also

satisfactory, except for minor accounting errors, not implying any accountability issues,

and some shortcomings in procurement mainly due to the temporary unfamiliarity of the

team with Bank procurement rules and procedures after the sudden departure of the head

of the PCU in 2009.

71. Given (i) the excellent technical performance of the project implementation

agencies; (ii) a largely satisfactory performance of the PCU in fiduciary and safeguard

terms; and (iii) the fact that most factors that slowed down project implementation

pointed out in section 2.2 were outside the direct control of the implementation agencies,

the performance of the implementation agencies was considered satisfactory.

(c) Justification of Rating for Overall Borrower Performance


72. Since the government’s performance was moderately satisfactory and the

performance of the implementation agencies was satisfactory, the overall Borrower

performance was rated moderately satisfactory.

6. Lessons Learned

73. The technical lessons stemming from the implementation of the urban transport

reform are outlined in detail in the ICR of the Santiago DPL. Other lessons relevant for

the design and implementation of future operations in Chile or similar operations

elsewhere are the following:

In upper-middle-income countries, especially the ones with high technical

capacity, Bank involvement in transport constitutes a true two-way investment.

The Bank involvement in the Santiago urban transport reform not only provided the

GoCH with international experiences and practices, the opportunity for a continuous

policy dialogue, and some funds, but was also an exceptional learning experience for

the Bank team. Accompanying the whole reform process, from its design to the

solution of the launch problems, was highly instructive and the lessons learned from

this experience are greatly valued among other Bank clients.

In upper-middle-income countries, access to international experiences and

flexibility are more valued than the Bank’s financial resources. To successfully

implement a Bank project in a country like Chile, the Bank’s financial resources

constitute little incentive and other elements must be in place. First, the project

activities must continuously stay highly relevant for the current business needs of the

client. This requires great flexibility in the formulation of the project activities and a

willingness to make changes or drop them and start anew. It is especially important if

a government change occurs in the early years of project implementation. Since the

TAL supported a cutting edge reform in a fast changing environment and spanned

over three government periods, this was particularly true. Flexibility is also required

20

in the application of Bank’s procurement rules and procedures to avoid imposing any

additional burden. Moreover, upper-middle-income countries highly value

international experiences and good practices. Therefore, the focus should be on

activities where the Bank can bring global knowledge.

It is difficult to design a good results framework for a TAL or an institutional

strengthening component. This operation showed that it is difficult to design a good

results framework for a TAL since institutional and capacity strengthening activities

do not easily lend themselves for precise outcome indicators. It also confirmed that it

remains a challenge to make all projects fit into the same results framework template,

which is better suited to the structure of infrastructure investments and projects with

precise physical outcomes. Consequently, particular focus needs to be placed on the

formulation of the PDO and the design of the results framework during quality

enhancement meetings not only for new projects, but also for project restructurings.

Additionally, mid-term reviews should be systematically used to critically review the

PDO and results framework and capacity strengthening should be provided.

A TAL that accompanies a Development Policy Loan (DPL) needs careful

planning. When the project was prepared, it was standard practice to have a TAL

accompanying a DPL. Nowadays DPLs without TALs are accepted. That said, the

operation confirmed that a TAL can be valuable to provide the Borrower with

resources and technical assistance to accompany a reform program. In countries

where Bank funds are additional to the general budget, it also constitutes an incentive

for sectoral agencies, which do not receive funds from a DPL. However, time and

careful planning are of essence. If the TAL and the DPL become effective together

and considering that it may take a year to contract a consulting firm, the technical

assistance will become available when the reform is on its way and the DPL is

disbursed. In Santiago this was not sufficiently factored in. Several activities meant to

prepare for the introduction of the reform were carried out by the GoCH and were

later cancelled from the project. Additionally, once the launch problems occurred, a

quick reaction was needed. With the Bank team in Washington and given our

procurement rules and procedures, such quick response was difficult.

Best practice study trips. The project-financed study trips for urban transport

specialists to Bogota and Spain were highly successful for the following reasons: (i)

thorough planning and organization of the trips (the project hired a consulting firm to

do research on the areas of interest and plan and organize the trips in close

collaboration with Transantiago-SE); (ii) participation of people that were doing the

job and likely to stay in the organization; (iii) a requirement for participants to report

back to their peers; (iv) excellent presentations to the peers with lots of photos, which

were extremely interesting also for the Bank team; and (v) the consideration of

several foreign practices, especially in the area of user information and attention, for

replication in Santiago. This could potentially be a model for the Bank’s global

knowledge capture efforts and the south to south exchanges.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies

74. The Borrower comments received on May 16 and 21, 2012 were incorporated in

the report.

21

(b) Cofinanciers

75. Not applicable.

(c) Other partners and stakeholders

76. Not applicable.

22

Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Components Appraisal

Estimate (USD

millions)

Estimate at

Restructuring

(USD

millions)

Actual/Latest

Estimate (USD

millions)

Percentage

of

Appraisal

Percentage of

Restructuring

A. General Urban Transport 1.07 0.67 0.80 75% 120%

B. Public Transport 1.81 4.26 2.34 129% 55%

C. Environment 0.23 0.12 0.43 188% 360%

D. Land Use 0.89 0.63 0.57 64% 90% E. Social Aspects of

Transport 1.00 0.23 0.21 21% 92%

F. Mitigation of Potential

Impacts 0.28 0.00

0.00 0% 0%

G. Project Management 0.50 0.08 0.02 4% 27%

Total Baseline Cost 5.78 5.99 4.37 76% 73%

Physical Contingencies 0.00 0.00 0.00 Price Contingencies 0.20 0.00 0.00 0% 0%

Total Project Costs 5.98 5.99 4.37

73%

73%

Front-end fee PPF 0.00 0.00 0.00

Front-end fee IBRD 0.02 0.012 0.012 60% 100%

Total Financing Required 6.00 6.00 4.38 73% 73%

(b) Financing

Source of Funds Type of

Cofinancing

Appraisal /

Restructuring

Estimate (USD millions)

Actual/Latest

Estimate (USD

millions)

Percentage of

Appraisal /

Restructuring

Borrower 1.20 2.01 168%

International Bank for Reconstruction

and Development 4.80 2.37 49%

6.00 4.38 73%

23

Annex 2. Outputs/Outcomes by Component Component A. General Urban Transport

Cost: US$0.8 million, which corresponds to 120% of the cost estimation revised during project restructuring

Activities carried out, outputs and outcomes Actual or likely contribution to

original indicators, intermediate

outcomes and PDO

Actual or likely contribution to

revised/current indicators,

intermediate outcomes and PDO

Current Subcomponent A.1. Carrying out an analysis and developing a socio-economic sub-model for SECTRA’s transport planning model

ESTRAUS.

This subcomponent was meant to analyze the socio-economic aspects

related to ESTRAUS and develop a tool to forecast the income,

motorization rate, and household size for Metropolitan Santiago.

The activities were carried out and the forecast tool was developed. This

tool is crucial in transport planning to more precisely forecast travel demand

since the socioeconomic characteristics of passengers determine their travel

behavior. SECTRA used the tool to plan the extension of the Santiago metro

system and to follow up on the 2006-2012 development plans for the

transport system in Metropolitan Santiago.

SECTRA will update the forecast tool with the results of the origin-

destination (O-D) survey ongoing at the time of ICR preparation.

Since the tool developed under the

project was used to plan the extension of

the Santiago metro system and to follow

up on the 2006-2012 development plans

for the transport system in Metropolitan

Santiago, this subcomponent contributed

to the original PDO of ―facilitating the

continuous planning of the urban

transport reform program‖.

Since the tool developed under the

project was used to plan the

extension of the Santiago metro

system and follow up on the 2006-

2012 development plans for the

transport system in Metropolitan

Santiago, it seems reasonable to

assume that this subcomponent

contributed to the revised PDO of

―increasing the efficiency and

sustainability of the urban transport

system‖.

Further contributions are still likely

because SECTRA will update the

tool and use it for future transport

planning in Metropolitan Santiago.

Current Subcomponent A.2. Designing of an institutional framework for Transantiago.

This project subcomponent envisaged to finance a study to analyze possible

institutional structures for Transantiago, propose a new institutional

framework, and devise an action plan to implement it.

Since the Borrower carried out an institutional analysis in-house, the project

complemented this activity by supporting the organization of an

international conference on Metropolitan Transport Authorities. Based on

the institutional analysis and the results of the conference, in 2007, the

Borrower submitted a draft law on the creation of a Metropolitan Transport

By supporting the preparation of a draft

law on the creation of a Metropolitan

Transport Authority for Santiago and

preparing the basis for organizational

improvements within Transantiago-SE

(which took place) the project complied

with the indicator target of ―preparing an

institutional framework for

Transantiago‖.

By supporting the preparation of a

draft law on the creation of a

Metropolitan Transport Authority

for Santiago and preparing the basis

for organizational improvements

within Transantiago-SE, the project

complied with the indicator target of

―preparing an institutional

framework for Transantiago‖.

24

Authority for Santiago to Congress. At the time of ICR preparation, the

draft law was still pending. In this context it is necessary to point out that

creating a Metropolitan Transport Authority is no easy process (there are

few success stories outside the developed world) since it affects different

entities that have to give up individual powers for the benefit of the greater

Metropolitan Transport Authority.

Transantiago-SE commissioned a study to restructure MTT, to which

Transantiago-SE belongs as a temporary program. The study recommended

various changes to the structure and organization of MTT as well as the

transformation of Transantiago-SE into an autonomous agency with legal

personality. The responsibilities of this new agency would be broader than

Transantiago-SE’s current responsibilities, including the role of

coordinating all public transport modes in Santiago. While the changes to

MTT and the formalization of the new responsibilities of Transantiago-SE

can be made in the short run through a ministerial resolution, the

transformation of Transantiago-SE into an autonomous agency will need to

be made official through a law. At the time of ICR preparation, the GoCH

was carrying out the preparatory activities to implement these changes.

The project also supported an organizational study that reviewed the

internal organization, processes, systems and resources of Transantiago-SE,

defined a strategy, functions, staffing and other needs, and redesigned the

business processes. The results of the study were the basis for numerous

improvements in terms of processes, procedures, management control,

project management, system architecture, and human resources. For

instance, as a consequence of the study, the process to generate performance

indicators was fully automated. The revision of the internal processes also

helped to eliminate duplications, such as in the generation of operational

indicators, which were collected by the operations unit and an external

consultant. This strengthened Transantiago-SE as an entity in charge of the

urban transport system in Santiago.

These activities also helped to lay the

groundwork to achieve the original

intermediate outcome of

―institutionalizing Transantiago‖ as an

―autonomous agency‖, which is likely to

happen in the short to medium term.

Finally, by strengthening Transantiago-

SE as an entity in charge of the urban

transport system in Santiago, the

subcomponent also contributed to the

original PDO of ―implementing,

monitoring, evaluating and continuous

planning of the urban transport reform‖.

These activities also helped to lay

the groundwork to achieve the

current intermediate outcome of

―institutionalizing Transantiago‖ as

an ―autonomous agency‖, which is

likely to happen in the short to

medium term.

Finally, by strengthening

Transantiago-SE as an entity in

charge of the urban transport system

in Santiago, it is assumed that the

subcomponent contributed to the

―efficiency and sustainability of the

Santiago’s urban transport system‖

(revised PDO).

Previous Subcomponent. Analyzing the impact of Transantiago on transport demand.

This subcomponent was expected to collect, through household panels,

qualitative and quantitative data on mobility patterns and analyze the

changes in these patterns in the light of different urban transport projects

and policies.

Although the activity was cancelled, the

O-D survey ongoing at the time of ICR

preparation is expected to provide data

and information on the impact of

Not applicable since the

subcomponent was cancelled during

project restructuring.

25

The study was cancelled and the respective resources were allocated to

more urgent activities because at the time of project restructuring the

Borrower was contracting an O-D survey with local resources. This O-D

survey was expected to collect the same data and information as the study.

The contracting of the O-D survey was delayed. At the time of ICR

preparation, the survey was still ongoing.

Transantiago on transport demand.

Therefore, the PDO indicator target of

―completing the survey to assess

Transantiago’s impact on transport

demand‖ is likely to be achieved before

the end of 2012.

This will also contribute to the original

PDO of ―monitoring, evaluating and


transport reform‖.

Previous Subcomponent. Carrying out a road infrastructure conservation and management study.

This subcomponent was expected to result in the implementation of a

planning system for urban road maintenance.

The activity was cancelled because at the time of project restructuring the

planning system was no longer a priority for the Borrower. The respective

resources were allocated to more urgent activities.

With the preparation of the Infrastructure Master Plan for Public Transport

2011–2015, which places strong emphasis on road maintenance and traffic

management measures, Transantiago-SE created a simple information

system in Excel spreadsheet format with the pavement status and

maintenance needs. The system is maintained with information received

from bus operators, the municipalities and collected by Transantiago-SE

through field visits. The system is the basis for the decisions on pavement

maintenance carried out by SERVIU.

Although the subcomponent was

cancelled, Transantiago-SE created a

simple pavement management system.

Therefore, Transantiago-SE complied

partially with the original indicator of

―completing a road infrastructure

management plan‖ and the original

intermediate outcome of ―improving

road infrastructure management‖.

This also contributed at least somewhat

to the achievement of the original PDO

of ―monitoring, evaluating and


transport reform‖.


subcomponent was cancelled during

project restructuring.

Component B. Public Transport




outcomes and PDO




Current Subcomponent B.1. Carrying out evaluations of Transantiago’s performance and identification of measures to improve the public transport

system (Previous Subcomponent: Estimation of public transport travel times and proposal for actions).

Originally this subcomponent was entitled “Estimation of public transport Transantiago-SE implemented the By implementing all assessment

26

travel times and proposal for actions‖. It envisaged the proposal of low cost,

high-impact solutions to reduce total travel times, especially in critical routes

of the public transport network. During project restructuring, the scope of

this subcomponent was expanded to include assessments of other key

variables that influence the performance of Transantiago and propose

improvement measures. This was necessary because the introduction of

Transantiago led to severe difficulties, which needed to be evaluated and

resolved.

The revised subcomponent financed an assessment by internationally

renowned Brazilian experts of the public transport system with the aim to

improve it. The main recommendations from this assessment pointed to (i)

fare increases, (ii) operational/service improvements, mainly to reduce the

excess supply, short routes and transfers, (iii) changes in the contracts with

the bus operators to create incentives to provide good quality services, and

(iv) fare evasion reduction. The assessment also made it clear that

Transantiago-SE lacked the tools to adequately monitor the service offer and

demand. As a follow up, Transantiago-SE, with their own funds, contracted

the consulting firm of the previously mentioned Brazilian experts to (i)

develop a model to assess the profitability of the bus concessions, (ii)

develop a transport model with data on load profiles, origins and destinations

obtained from ticket validation information, (iii) simulate the profitability of

the contract modifications negotiated with the bus operators, and (iv)

generate the data to plan new operational improvements.

All the recommendations of the assessment were taken into account. (i)

Between 2010 and the time of ICR preparation, bus fares increased from

CLP400 to CLP580, Metro fares during off peak hours from CLP400 to

CLP600, and Metro fares during peak hours from CLP460 to CLP660.

These fare increases reduced the operating subsidies from 49% and 47% of

the system’s total costs in January 2009 and 2010, respectively, to 35% and

37% in January 2011 and 2012, respectively.

(ii) More than 70 operational improvements to reduce transfers and overall

travel times and to optimize public transport supply were identified. A few

of these improvements to increase coverage and reduce transfers were

implemented. For instance, the creation of the direct bus service 118 from

recommendations of the assessment by the

Brazilian experts. Some of the measures,

such as the operational/service

improvements, increased network

coverage and reduced transfers.

More service improvements are planned

under the renegotiated contracts with the

bus concessionaires, which provide the

necessary flexibility to do so.

Consequently, this subcomponent

contributed and is still likely to contribute

to the original intermediate outcome of

―mitigating the negative effects of

Transantiago on low-income groups‖.

Public transport users belonging to the

lowest income groups normally have no

alternative to public transport. Therefore,

they benefit most from reductions of

transfers, increased coverage, and other

service improvements.

The conclusions of the Brazilian experts

also led to the development of tools to

monitor and evaluate the performance of

Transantiago. These tools were used to

plan the service improvements. Therefore,

it seems reasonable to assume that the

subcomponent contributed and is still

likely to contribute to the original PDO of

―monitoring, evaluating and continuous

planning of the urban transport reform‖.

recommendations of the public

transport experts, the PDO

indicator target of ―implementing

at least one improvement

measure identified in the

evaluation of Transantiago‖ has

been exceeded. Additionally,

more improvement measures are

highly likely under the

renegotiated contracts with the

bus concessionaries and as a

result of the study on bus

terminals and depots.

The improvement measures

implemented, among others, led

to reduced transfers, increased

network coverage, and improved

operating cost coverage.

Therefore, the project contributed

and is still likely to contribute to

the achievement of the revised

PDO of ―increasing the efficiency

and sustainability of the urban

transport system‖.

27

Maipú to La Florida in 2011 provides nearly 3 million annual passengers

with a direct origin-destination connection. The new direct bus service 125

from Lo Espejo y PAC to the center of Santiago decreased transfers on this

route by 38% annually. Additionally, the total length of bus routes increased

from 2,672 km in 2010 to 2,737 km in 2012 (by 2.4%), thus enhancing

network coverage. More operational improvements will be implemented in

the framework of the renegotiated contracts with the bus operators.

(iii) The contracts with bus operators were renegotiated and came into force

between March and June 2012. These contracts introduced incentives for

improved service quality (e.g. new remuneration criteria for bus operators,

which are 70% based on passengers transported and 30% based on km

provided, remuneration linked to service quality indicators and a bonus for

good service quality), gave operators a stronger role in the fight against fare

evasion, and provided the necessary flexibility to make additional

operational improvements (the results of these contract modifications are

expected to be noticeable on the ground in the beginning of the second part

of 2012 with the introduction of the new operational program and 800 new

buses). The information on the profitability of the contract modifications

with the bus operators was also fundamental in the contract renegotiations

since it enabled a reduction in the contract price.

(iv) Finally, many campaigns against fare evasion and more strict controls

were carried out. However, at the time of ICR preparation, this had not yet

led to reduced fare evasion.

The project also financed a study to evaluate the bus depot and terminal

infrastructure, its management, and prepare an integral management plan.

This study was concluded after project closure. It provided interesting

recommendations to create a stable and quality network of bus depots and

terminals and reduce the non-commercial kilometers of bus operators. At the

time of ICR preparation, Transantiago-SE set up a unit to deal with this

topic. This unit will be in charge of implementing the study

recommendations.

Current Subcomponent B.2. Improving Transantiago’s financial and fare management system through background studies and the design and

implementation of the new system.

This subcomponent was introduced during project restructuring and aimed at Not applicable since the subcomponent Transantiago-SE made some

28

improving Transantiago’s fare and financial management system. This was

expected to be done through technical assistance to analyze the financial

strength of operators and the design and implementation of a new financial

management/payment system.

The project financed a study to develop a methodology to assess the

economic and financial health of the bus operators. The methodology

enables Transantiago-SE to anticipate a critical financial situation of one or

more bus operators and avoid sudden interruptions in the public transport

supply due to an unexpected bankruptcy. This methodology was used to

develop a model to assess the profitability of bus concessions, which as

previously mentioned helped to reduce the contract price paid to bus

operators.

In the course of project implementation, Transantiago-SE contracted the

development of a technological platform for the organization as a whole.

They decided to include the design and development of this fare and

financial management system within the scope of this contract. This was

expected to provide time and cost savings and facilitate system integration.

A new financial management and payment system for feeder services was

developed. The development was brought to a halt because the contract

renegotiations with the bus operators drastically changed the remuneration

formula and eliminated the distinction between feeder and trunk services.

In the meantime, Transantiago-SE hired a consultant to make urgent short

term improvements to the fare and financial management system, which

among others consisted of protocols for data import, automation of

processes, and the traceability of manual data changes. Those improvements

made the system more reliable and stable. At the time of ICR preparation,

Transantiago-SE was preparing the bidding documents for a second study

mainly to adapt the fare and financial management system to the new

payment mechanism in the renegotiated contracts with bus operators.

In the future, it is likely that the data regarding the system’s revenues and

expenses will become available in real time. According to the renegotiated

contracts, however, data on some of the penalties or the quality bonus is only

assessed at certain intervals. Therefore, it will not be possible to make the

was introduced during project

restructuring.

initial improvements to the fare

and financial management system

and at the time of ICR

preparation was about to contract

additional services to continue

with these efforts. Despite this,

the two indicators of ―having the

availability of real time

information on payment

obligations/penalties‖ and

―information on total revenues,

expenses, deficits/ surpluses, etc.

on a daily basis‖ were not

complied with.

Nevertheless, the initial and

forthcoming improvements to the

fare and financial management

system and the information on the

financial health of operators

contributed and are still likely to

contribute to the current

intermediate outcome of

―improving its financial/fare

control and management system‖

and the current PDO of

―increasing the public transport

system’s efficiency‖.

29

information on the systems deficits/ surpluses and payment obligations

available in real time/on a daily basis.

Current Subcomponent B.3. Improving the quality and /or efficiency of public transport in Metropolitan Santiago by identifying international

experiences, designing pilot projects, implementing en evaluating them.

This subcomponent was introduced during project restructuring. It aimed at

improving the quality and/or efficiency of public transport in Santiago by

financing activities to identify international good practices in terms of public

transport improvements and apply some of them on a pilot project basis.

The project financed the identification of international good practice cases in

public transport and two highly successful study trips of urban transport

professionals from Santiago to Colombia and Spain. It also financed a visit

of an expert on urban redevelopment from Bilbao to Santiago. These visits

revealed a wealth of experiences and good practices, which culminated in

the design of several pilot projects.

Two pilot projects were completed and evaluated at the time of ICR

preparation. One pilot project tested different colored pavement surface

treatments for permanent bus lanes. It showed a 10% increase in bus speed

because private vehicles no longer invaded the bus lanes. It also helped to

select the most cost-effective pavement treatment product and application

procedure. At the time of ICR preparation, Transantiago-SE was preparing

the bidding documents to apply the colored pavement surface treatment on

50 km of permanent bus lanes. Transantiago-SE was also testing the

effectiveness of applying intermittent signs on the pavement to better signify

bus lanes which only function during certain hours of the day.

The second pilot project consisted of photovoltaic lighting installation at 263

bus stops. It showed that the equipment is resistant to vandalism and that

users highly value improved illumination (75.2% of the interviewees gave it

a rating of 6 or 7 on a scale from 1 to 7, with 7 being the best). The

evaluation also found that for 72.3% of the interviewees, the quality of bus

stops is extremely important and that illumination, the bus stop roof, security

and safety are the main features to be considered. Photovoltaic lighting is

considerably cheaper than conventional lighting if investment and operating

costs are considered. In addition, the photovoltaic illumination at 263 bus

stops leads to annual CO2 emission reductions of about 36.51 tons. At the

Not applicable since the subcomponent

was introduced during project

restructuring.

Both completed pilot projects

showed potential for public

transport quality and efficiency

improvements. Therefore, the

indicator target of ―having at least

one evaluation showing a

potential for improvements‖ was

achieved.

Since the evaluations of both

implemented pilot projects

showed potential for quality

and/or efficiency improvements

and Transantiago-SE was about

to replicate their results on a large

scale, the intermediate outcome

of ―improving the quality and/or

efficiency of the public transport

system‖ was achieved in the case

of photovoltaic lighting and will

be further achieved with the large

scale implementation of the

results of both pilots.

Similarly, this contributed and is

still likely to contribute to the

revised PDO of ―increasing the

public transport system’s

efficiency‖. Further contributions

are likely when the remaining

pilots are implemented and

replicated.

30

time of ICR preparation, Transantiago-SE signed a contract for the

installation of photovoltaic lighting at 1,000 additional bus stops.

Transantiago-SE also planned to pilot test the use of the excess energy from

the system to operate a real time information system on bus arrivals.

The third pilot project to test traffic signs with variable speed information in

school areas could not be carried out because Transantiago-SE received only

one offer in the procurement process for equipment and the respective

process had to be cancelled. There was not sufficient time left to launch the

procurement process again. Transantiago-SE will carry out the pilot project

with its own resources.

Similarly, the pilot project to test efficient driving was postponed because

the application of the colored pavement treatment and the control cameras in

bus corridors to be used for this test will only be ready in the second half of

2012.

Finally, also at the time of ICR preparation, a number of foreign practices,

especially in the area of user information and attention, were under

consideration to be replicated in Santiago.

Previous Subcomponent: Fare optimization in Transantiago during full operation.

This subcomponent envisaged to review the fare system after the

introduction of Transantiago. The study was eliminated from the project

scope because the O-D data and information on travel patterns, essential to

carry out the study as originally planned, was not expected to become

available in time to complete the study before loan closure.

Although the study was not carried out, immediately after the introduction of

the new public transport system, Transantiago-SE analyzed and revised the

fare system on its own. As a first step to cope with the crisis, Transantiago

reduced the fare level, eliminated the separate charge portion for feeder

services, deactivated the automatic fare increase mechanism, and increased

the validity time window of tickets. This time window was reduced again

later. Fare increases were no longer automatically triggered as envisaged in

the bus service concessions. Instead, since 2009, an independent ad hoc

committee has been determining fare increases based on the cost of the

system and the available subsidies. The Bank team maintained a policy

Although the subcomponent was

cancelled, Transantiago-SE adjusted its

fare system to the new circumstances on

the ground. Therefore, Transantiago-SE

contributed at least somewhat to the

achievement of the original PDO of

―facilitating the continuous planning of the

urban transport reform‖.


subcomponent was cancelled

during project restructuring.

31

dialogue on these issues and provided information on different fare systems,

especially the ones in Europe with weekly and monthly tickets.

Previous Subcomponent: Design of intermodal stations.

This subcomponent meant to prepare a design guide for small and medium

sized transfer stations. The activity was eliminated from the project scope

because the Borrower implemented small and medium sized transfer stations

before the guide was commissioned.

Although the activity was cancelled, the

Borrower implemented small and medium

sized transfer stations and gained

experience in doing so. These stations

supported the implementation of the public

transport system. Therefore, Transantiago-

SE contributed at least somewhat to the

achievement of the original PDO of

―facilitating the implementation of the

urban transport reform‖.




Previous Subcomponent: Pilot testing of Transantiago’s information system.

This subcomponent envisaged to pilot test the design specifications for

Transantiago’s graphic information system on the ground before

implementing it. When this project became effective, Transantiago-SE had

already carried out the testing with local resources. This testing consisted of

observations through researcher participation and user surveys. Therefore,

the activity envisaged under this subcomponent was eliminated from the

project scope.

Although the activity was cancelled,

Transantiago-SE tested the graphic

information system and so supported the

implementation of the public transport

system. Therefore, Transantiago-SE

contributed at least somewhat to the

original PDO of ―facilitating the

implementation of the urban transport

reform‖.




Previous Subcomponent: Transantiago’s communications plans I and II, inclusive Transantiago Express.

This subcomponent envisaged to finance information campaigns and

material to inform the public about the new public transport system. It also

envisaged the operation of a bus, called Transantiago Express, to carry out

information campaigns.

When the TAL became effective, Transantiago-SE had already contracted a

technology provider, who was in charge of the design and maintenance of

the system’s Web site, and other information activities. In addition,

Transantiago-SE created a service department, which carried out regular

communications activities, including street ad campaigns, information on

buses, in the media and on the Web site, information and complaints hotline

(call center), information on bus services at bus stops, information centers,

etc.

Transantiago-SE regularly carried out ad

campaigns, other information activities and

communications. They also devised

different tools to disseminate information

about the system. Consequently,

Transantiago-SE complied with the

―original project indicator of carrying out

the dissemination campaign for

Transantiago‖.

There is no evidence that the original

outcome of ―Transantiago’s users being

well informed about the system‖ was




32

Because of Transantiago-SE’s strong focus on communications and

information activities, the resources of the TAL to finance information

campaigns were no longer needed, and the activity was dropped from the

project scope. As for Transantiago Express, this activity was no longer part

of the communications strategy of the administration, which took over in

2006.

Transantiago-SE’s budget for communications and information activities

over the last three years was approximately US$20 million a year. Under the

old public transport system no resources were allocated to inform public

transport users.

In 2011, on a monthly basis, Transantiago-SE’s call center provided

information on routes, services, timetables and other service aspects to

approximately 20,000 to 24,000 users. Between January 2011 and February

2012, Transantiago-SE’s Web site with information on bus routes and

services received an average of 36,600 visitors.

In November 2011, Transantiago-SE launched a service to provide

information on bus arrival times at stops via cell phones

(http://web.smsbus.cl/web/). Users have two free inquiries on bus arrival

times per day. In March 2012, the system received approximately 9,600

daily inquires relating to bus arrival times. The bidding for the study to

evaluate the progress and finalize the design of the system which provides

this service started in the framework of this TAL. The bidding was

subsequently cancelled because the 2010 earthquake in Chile shifted the

country’s priorities. The system was later implemented with local resources.

achieved and the information provision in

Transantiago still needs strengthening.

However, given (i) the huge amount of

resources spent for information purposes,

(ii) the number of information and

communications campaigns and activities

carried out, (iii) the manifold information

sources available, (iv) the statistics on their

use, and (v) considering that the project

budgeted about US$1 million for

communications and information activities

and under the old system no formal

information and communications activities

took place, it seems reasonable to assume

that this outcome was at least partially

achieved.

In the same way, it seems likely that these

activities contributed to the original PDO

of ―facilitating the implementation and

continuous planning of the urban transport

reform‖.

Component C. Environment




outcomes and PDO

Actual or likely contribution

to revised/current indicators,

intermediate outcomes and

PDO

Current Subcomponent C.1. Monitoring of Transantiago’s impact on air quality in Santiago (Previous Subcomponent: Design of an information

system for the environmental monitoring of Transantiago).

http://web.smsbus.cl/web/

33

This subcomponent was originally meant to finance the design of a system to

inform the public of Transantiago’s impact on air quality and noise. In 2007, after

the new public transport system launch, Transantiago-SE had an immediate need to

inform the public about the air quality benefits of Transantiago. Therefore, the

scope of this subcomponent was changed to air quality impact monitoring instead

of designing a full environmental monitoring system.

The project financed the design of a methodology and a first study to assess

Transantiago’s impact on the air quality in Santiago. This study showed that

Transantiago was responsible for important decreases in particulate matter (PM),

Nitrogen Oxide (NOx), and soot at street level11

. In 2009, Transantiago-SE

financed the follow up study with their own resources. This study showed that the

positive impacts in terms of PM reductions continued to increase, while the

benefits in terms of NOx emissions reduction went slightly down. Transantiago-SE

created a Web page to disseminate this and other information on the environmental

performance of the system

(http://www.transportedesantiago.cl/LACIUDAD/MEDIOAMBIENTE/index.htm).

The results of the study were also extensively divulgated in the press and other

publications, especially immediately after the launch of Transantiago. In addition,

the results of these studies were used to make the environmental requirements of

public transport vehicles more stringent. The requirements are set out in the

Environmental Prevention and Clean-Up Plan (Plan de Prevención y

Descontaminación Ambiental) and in the MTT emission norms revised in 200912

.

They led to additional NOx and PM reductions. In 2011, Transantiago emitted 77.2

tons/year of PM and 4,211.7 tons/year of NOx, which was 19.9% less in PM and

1.7% less in NOx compared to 201013

.

At the time of ICR preparation, Transantiago-SE was in the process of contracting

Although the project did not design a

full environmental monitoring system

for Transantiago as envisaged by the

original PDO indicator, it devised

several elements of such a monitoring

system, i.e. the methodology used to

regularly monitor Transantiago’s

impact on air quality and the Web site

to disseminate the results. In addition,

the Borrower is likely to complement

the air quality monitoring system with

a noise monitoring system in the near

future. As such, the subcomponent

contributed and is still likely to

contribute to the original PDO of

―facilitating monitoring and evaluating

of the urban transport reform as well as

its continuous planning‖.

The project complied with the

PDO indicator of ―having

information on the impact of

the implementation of

Transantiago on air quality

available‖. Since this

information was used to make

the environmental

requirements of public

transport vehicles more

stringent, the subcomponent

contributed and is still likely to

contribute to the system’s

environmental sustainability,

and hence the achievement of

the revised PDO.

11 For instance, in 2007, after the introduction of the new system, public transport reduced its ultrafine PM (PM2.5) by 30% and the NOx levels by 50%. 12 ―Proyecto de Revisión, Reformulación y Actualización del Plan de Prevención y de Descontaminación Atmosférica para la Región Metropolitana (PPDA)‖, Comisión Nacional

del Medio Ambiente Región Metropolitana de Santiago, Santiago, January, 2009 and ―Normas de emisión de monóxido de carbono (CO), hidrocarburos totales (HCT),

hidrocarburos no metánicos (HCNM), metano (CH4), óxidos de nitrógeno (NOx) y material particulado (MP), para motores de buses de locomoción colectiva de la Ciudad de

Santiago‖, Subsecretaria de Transportes, published in the Official Gazette of March 13, 2002, modified with D.S. Nº 58/2003 (MSGP); D.S. 153/2005; and D.S. 42/2009. 13 ―Programa de Seguimiento Ambiental: Emisiones Atmosféricas del Sistema de Transportes Publico de buses de Santiago año 2010-2011‖, Secretaria de Transportes (SECTRA)

del año 2011. Este documento responde al Seguimiento del Plan de Prevención y Descontaminación de Santiago (PPDA).

http://www.transportedesantiago.cl/LACIUDAD/MEDIOAMBIENTE/index.htm

34

the third air quality impact assessment. Transantiago-SE was also planning to carry

out these studies in two to three year intervals in the future. Additionally, at that

time, the Ministry of Transport and the Ministry of Environment were preparing an

agreement to create noise maps for Santiago and other cities. For Santiago, this will

mean developing a methodology to single out Transantiago’s impact on noise

levels and to regular monitor it.

Component D. Land Use


Activities carried out, outputs and outcomes Actual or likely contribution to original

indicators, intermediate outcomes and

PDO




Current Subcomponent D.1. Updating the Land Use Model for Santiago (MUSSA)14

based on results of the 2001 O-D survey and the 2002 population

and housing census, and carrying out of a social assessment of three congestion pricing alternatives in the framework of Transantiago.

This subcomponent consisted of two parts. The first included an update of

MUSSA for Santiago together with the validation of its predictive capacity.

The second part, included simulations with MUSSA, ESTRAUS, and the

Methodology for Vehicle Emission Calculation (MODEM)15

to assess three

road pricing alternatives in the framework of Transantiago.

The planned activities were carried out. The simulation of three congestion

pricing alternatives showed that MUSSA needs further improvements to be

used for strategic transport planning. This will be done once the ESTRAUS

model has been updated with the results of the O-D survey.

By developing a tool for strategic transport

and land use planning, the project laid the

basis for better urban transport planning.

Once MUSSA is improved, it also seems

reasonable to assume that it will ―facilitate


system in the future‖ (original PDO).

By developing a tool for strategic

transport and land use planning, the

project laid the basis for better

urban transport planning. Once

MUSSA is improved, it also seems

reasonable to assume that it will

contribute to a ―more efficient and

sustainable urban transport system‖

(revised PDO).

Current Subcomponent D.2. Carrying out a study to update the graphic information system of the one-stop process (Ventanilla Única) information

system (Sistema de Información Ventanilla Única SIVU) and identify the needs to revise the legal framework to allow for the application of the Urban

Transport System Impact Evaluation System (Sistema de Evaluación de Impacto sobre el Sistema de Transporte Urbano SEISTU) and SIVU’s

functioning as means to mainstream procedures (Subcomponent entitled “Technological and legal support for the development of the “one-stop

process” (Ventanilla Única) project” in the PAD).

This subcomponent aimed at strengthening SEISTU by carrying out a study By providing the blueprint to improve By providing the blueprint to

14 MUSSA is a software and a mathematical model, that represents the urban real estate market and allow planners to forecast and simulate its economic equilibrium under

different demographic, macroeconomic and regulatory scenarios. With MUSSA, the user can simulate the real estate market for these scenarios and make economic evaluations of

the impacts caused in the city. It can interact with most transport models as to assess the impacts of land use and transport projects and policies (www.mussa.cl). 15 MODEM is a tool which uses inputs from ESTRAUS to simulate pollutant emissions from the transport system for Santiago as a whole and for single neighborhoods

(http://www.sectra.gob.cl/metodologias_y_herramientas_de_transporte/metodologia/transporte_medioambiente/estimacion_emisiones_fuentes_moviles_modem.html).

35

to improve its legal framework and information system. Only the title of the

activity was changed during project restructuring to align it with the title in

the Loan Agreement.

The study was carried out and the blueprint to strengthen SEISTU was

prepared. A working group was set up with representatives of the Ministry

of Housing, MTT and SECTRA to implement a new legal framework for

SEISTU. The activities of the working group were suspended because the

revision of the legal framework was no longer a government priority at the

time of ICR preparation.

SEISTU, the project laid the basis for

better urban transport planning. As such, it

may ―facilitate continuous planning of the

urban transport system‖ (original PDO) in

the future.

improve SEISTU, the project laid

the basis for better urban transport

planning. As such, it may

contribute to a ―more efficient and

sustainable urban transport system‖

(revised PDO) in the future.

Previous Subcomponent: Analysis of and recommendations for the urban, architectonic, and operational planning in the influence area of transfer

stations.

This subcomponent aimed at promoting the concentration of activities and

investments around transfer stations and recommending urban design

standards to foster sustainable urban development. No activity was carried

out and, in the framework of project restructuring, the subcomponent was

eliminated from the project scope because it no longer was a priority for the

government, which took over in 2006.

Since the Borrower did not carry out any

activity to promote the concentration of

activities and investments around transfer

stations and the subcomponent was

cancelled, it did not contribute to the

achievement of the original PDO.




Previous Subcomponent: Diagnostic of the transport and urban planning entities and design of instrument to facilitate inter-institutional coordination.

The objective of this subcomponent was to develop tools and procedures to

facilitate transport and land-use planning coordination. No activity was

carried out and, in the framework of project restructuring, the subcomponent

was eliminated from the project scope because it no longer was a priority

for the government, which took over in 2006.

Since the Borrower did not carry out any

activity to facilitate land-use and transport

planning coordination and the

subcomponent was cancelled, the

respective indicator was not complied with

and the subcomponent did not achieve the

original expected outcome or PDO.




Component E. Social Aspects of Transport




PDO




Current Subcomponent E.1. Assessment of the impact of Transantiago on street market vendors and preparation of a social mitigation program for

the benefit of such vendors (Previous Subcomponent: Social assessment of the impact of Transantiago on low-income groups in Metropolitan

Santiago).

This subcomponent was originally meant to assess the impact of The activity under this subcomponent was The revised indicator of ―designing

36

Transantiago on low-income groups in Metropolitan Santiago. The scope of

the subcomponent was redirected to one specific group of low-income

users, i.e. street market vendors. This change was justified by the fact that,

on the one hand, the new system considerably decreased the average fare

level and so had large positive impacts on low-income users in monetary

terms. On the other hand, in several cases, the new bus routes and services

passed in places where street markets were held and negatively affected

their operation. Therefore, Transantiago-SE needed an urgent tool to

manage and mitigate these conflict situations with street markets.

The assessment carried out under this subcomponent showed the magnitude

of the phenomenon in Santiago, where about 1,200 street markets take place

on a weekly basis. The study produced a geo-referenced database with the

size, location, operating days/hours, and other characteristics of these street

markets. It prepared an action plan for the mitigation of conflict situations

with the public transport system as well as recommendations of a more

general nature, such as in hygienic, institutional and organizational terms.

The results of the study were used to modify bus routes and bus services

during the operating hours of street markets. Knowing the location of street

markets was also useful to identify the places to carry out public

information campaigns about Transantiago, especially concerning service

changes. Finally, at the time of ICR preparation, the Ministry of Economy

was drafting a law that used the results of the project financed study of

street market vendors as input. It is likely that this new law will lead to the

implementation of measures to improve the general condition of street

market vendors, which were proposed in the study but are outside the

responsibility of Transantiago-SE.

not carried out as originally planned.

Instead of focusing on low-income users in

general, the activity only focused on one

particular group of low-income people.

Therefore, the respective indicator of

―designing an action plan with mitigation

measures for low-income users‖ was only

partially complied with. By reducing the

negative impacts of Transantiago on street

vendors, which are one specific group of

low-income people, the subcomponent

contributed somewhat to the expected

original outcome of ―mitigating the

negative effects of Transantiago on low-

income groups‖.

Finally, the information gained from the

study on street market vendors was used to

make service changes and disseminate

information on the system. Therefore, it is

reasonable to assume that this

subcomponent contributed to the

―monitoring and evaluation as well as the


system‖ (original PDO).

an action plan to mitigate the

negative effects of Transantiago on

street vendors‖ was complied with.

By using the results of the study to

modify bus routes and bus services

during the operating hours of street

markets, the expected outcome of

―mitigating the negative effects on

street market vendors‖ was also

achieved. By the same token, it

seems reasonable to assume that

the subcomponent contributed to

the ―efficiency/sustainability of the

system‖ (revised PDO).

Previous Subcomponent: Capacity building, business creation and reconversion of the transport system workers.

This subcomponent envisaged the design and implementation of a training

program for public transport workers affected by the introduction of the

new system.

The Borrower, on its own, carried out a comprehensive program to assist,

train and reconvert displaced public transport workers and operators. It

trained 254 union leaders in the preparation of business plans, 217 public

transport workers who were over 55 years old in setting up a small business,

and 480 public transport workers who were between 40 and 54 years old

The GoCH, on its own, trained and

reconverted displaced public transport

workers and operators. As such, it

contributed to the original PDO of

―facilitating the implementation of the

urban transport reform‖. The

subcomponent was cancelled from the

project scope because it became

superfluous.




37

and 129 public transport workers who were under 40 years old in acquiring

a new profession. The training courses included a living allowance for three

to four months, transport costs, reimbursements and other benefits. The

program also supported 427 drivers in obtaining and homologating driver

licenses for the new system and supported a program to help small bus

owners prepare a business plan. Finally, in addition to training and direct

benefits, the program provided information on access to general benefits,

such as unemployment benefits, health insurance, etc.

Since the GoCH had carried out a comprehensive reconversion program,

this project subcomponent became superfluous and was dropped from the

project scope.

Component F. Mitigation of Potential Adverse Impacts of Transport Infrastructure Works (component cancelled in the framework of project

restructuring)

Budgeted Cost: US$0.28 million (budget reallocated to other activities)



PDO




Previous Subcomponent F.1. Institutional capacity strengthening in the area of involuntary resettlements.

This subcomponent envisaged to strengthen the capacity of the entities

responsible for resettlement, devise tools to facilitate the execution of

involuntary resettlement, and lay the framework for a revised compensation

scheme.

The subcomponent was cancelled from the project scope because

institutional collaboration and strengthening in the area of resettlement was

carried out at local level in the Territorial Management Commission

(Comisión de Gestión Territorial). This Commission was comprised of all

actors involved in the construction of transport infrastructure in Santiago,

including SECTRA, the Ministry of Public Works (MOP), Transantiago-

SE, SEREMITT-RM, and MTT. Its aim was to harmonize MOP’s and

SERVIU’s expropriation procedures and strengthen these entities in their

implementation. This was not achieved, but SERVIU improved its

consultation procedures. A change in Chile’s resettlement laws was no

longer envisaged.

The subcomponent was cancelled and did

not contribute to the achievement of the

original PDO.




38

Previous Subcomponent F.2. Upgrading of the guidelines for environmental management plans for urban infrastructure works.

This subcomponent envisaged the revision and harmonization of the two

sets of environmental guidelines used for public infrastructure projects in

Chile. The subcomponent was cancelled from the project scope because it

was no longer a priority for the newly elected government, which took over

in 2006.

Since the subcomponent was cancelled and

the Borrower did not revise and harmonize

the two sets of environmental guidelines,

the subcomponent did not contribute to the

achievement of the original PDO.




Component F. Project Management (component envisaged in the Loan Agreement but not in the PAD and therefore formalized during project

restructuring in the RPP to ensure consistency)




PDO




Original/Revised Subcomponent F.1. Strengthening the Project Coordination Unit (PCU) to carry out its obligations under the project through the

provision of technical assistance, training, operating costs, financing and equipment, as well as through project audits.

This component aimed at strengthening the PCU through training, technical

assistance, equipment, and operating costs. It also aimed at financing the

project audits.

The component financed the participation of Transantiago-SE staff in

procurement and financial management training courses. Project audits and

operating costs were financed by the Borrower.

Not applicable. Not applicable.

39

Annex 3. Economic and Financial Analysis

Not applicable.

40

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members Names Title Unit Responsibility/

Specialty Lending Judy L. Baker Lead Economist WBIUR Poverty Specialist

Antonio Leonardo Blasco Sr Financial Management (FM)

Specialist

LCSFM FM Specialist

Margarita Rosa De Castro Illera Consultant LCSUW Safeguard Specialist

Elisabeth Goller Sr Transport. Specialist LCSTR Transport Specialist

Pierre Graftieaux Sr Transport. Specialist AFTTR Co-TTL

Jorge Rebelo Consultant LCSTR TTL

Kenneth M. Gwilliam Consultant ECSS5 Transport. Economist

Juan Lopez-Silva Consultant CESSF Environmental

Specialist

Gerhard Menckhoff Consultant LCSTR Transport. Specialist

Slobodan Mitric Consultant SASDU Transport. Specialist

Zeinab Partow Sr Country Economist AFTP1 Economist

Richard C. Podolske Consultant ECSS5 Peer Reviewer

Jitendra J. Shah Lead Environmental Specialist ECSS3 Peer Reviewer

Anna Wellenstein Country Program Coordinator SACIA Peer Reviewer

Andres Mac Gaul Senior Procurement Specialist LCSPT Procurement Specialist

Solange Van Veldhuizen Program Assistant ECSHD Program Assistant

Luz Mesa-Bartrina Senior Counsel LEGAF Senior Counsel

Supervision/ICR Natalia Cecilia Bavio Financial Management Analyst LCSFM FM Specialist

Antonio Leonardo Blasco Sr Financial Management Specialist LCSFM FM Specialist

Flavio Chaves Natural Resources Mgmt. Specialist AFTEN Environmental

Specialist

Oscar Emilio Chinea de Leon Consultant LCC7C Procurement Specialist

Elisabeth Goller Sr Transport. Specialist LCSTR TTL

Pierre Graftieaux Sr Transport. Specialist AFTTR Co-TTL

Jorge Rebelo Consultant LCSTR TTL

Delia Beatriz Grisolia Consultant LCSFM FM Specialist

Ana Maria Grofsmacht Procurement Specialist LCSPT Procurement Specialist

Juan Lopez-Silva Consultant CESSF Environmental

Specialist

Andres Mac Gaul Senior Procurement Specialist LCSPT Procurement Specialist

Alejandro Roger Solanot Sr Financial Management Specialist LCSFM FM Specialist

Francisco Rodriguez Procurement Specialist LCSPT Procurement Specialist

Ana Lucia Jimenez Financial Management Specialist LCSFM FM Specialist

Raul Tolmos Environmental Specialist LCSEN Environmental

Specialist

Paloma Lopez Diez Extended Term Temporary LCSTR Assistant

Heike Spichal Consultant LCSTR Editor

Juan Carlos Munoz Abogabir Consultant LCSTR Consultant

41

(b) Staff Time and Cost

Stage of Project Cycle Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including

travel and consultant costs)

Lending

FY05* 9.13 40.75

Total: 9.13 40.75

Supervision/ICR

FY06 6.09 32.70

FY07 7.44 34.43

FY08 10.19 43.17

FY09 17.17 81.13

FY10 20.75 86.41

FY11 15.09 65.36

FY12 11.50** 60.00**

Total: 88.23 403.20 * Project preparation started in FY04, but costs were not charged to this project (they were likely charged

to the parallel Santiago DPL).

**Estimates

42

Annex 5. Beneficiary Survey Results

No beneficiary survey was carried out.

43

Annex 6. Stakeholder Workshop Report and Results

No stakeholder workshop was held.

44

Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR

Coordinación General de Transportes de Santiago

COMPLETION REPORT

SANTIAGO URBAN TRANSPORT TECHNICAL ASSISTANCE LOAN (TAL)

N°7316-CH

BORROWER CONTRIBUTION

Coordinación General de Transportes de Santiago

May 22, 2012

1. INTRODUCTION

In tribute to the Bicentennial of Chile’s Independence, the Government of Chile

(GoCh) developed the Santiago Urban Transport Plan 2000 - 2010 (PTUS) to help

solve Santiago’s mobility problems. These problems derived from rapid economic

growth, increased car use, general mobility indicators. The Plan was meant to

achieve substantial improvements in the quality of life for Santiago’s citizens. In the

Plan the main activity was Program 1 ”Modernization and Integration of Public

Transport Services“, which ultimately culminated in the Transantiago Plan to

incorporate high levels of competitiveness, efficiency and quality in urban transport.

The GoCh requested financial and technical support from the World Bank to

implement Santiago’s public transport system (Transantiago) reform. The World

Bank approved the Santiago Urban Transport Technical Assistance Loan (TAL), which

aimed at supporting the GoCh in achieving a sustainable urban transport system for

Santiago. The TAL was accompanied by the Santiago Urban Transport Development

Policy Loan (DPL) to support policy and institutional reforms envisaged to put

Transantiago into full operation.

Due to the complexity and scope of the Transantiago Plan, it was implemented in two

stages. Between October 2005 and February 2007, Transition Phase 1 was

implemented. It marked the beginning of the operation of public transport services

through concession contracts, i.e. consisting of a corporation of transport operators

with the gradual integration of new buses with high efficiency standards. In Phase 2

of the reform scheme, which started in February 2007, new trunk and feeder

services and fare integration were introduced, among others.

Since the beginning of Phase 2, Transantiago has experienced constant adjustments

in order to become a high-quality transport system. In this way, the priorities of

Transantiago-SE changed toward activities with immediate impact on Transantiago-

SE’s management capacity and the quality and efficiency of the Transantiago Plan.

45

Consequently, in 2009, it was essential to restructure the different project

components of the TAL. This was due to changes in the original needs and priorities.

Component restructuring was directed towards new areas, which continued to be a

priority until the end of the project.

2. BACKGROUND OF TRANSANTIAGO AND THE ROLE OF THE TAL

More than five years after the implementation of Phase 2 of the Transantiago Plan, it

is possible to conclude that it was an unprecedented pioneering initiative in nature

and scope, which necessarily has a high level of risk, resulting in complex

implementation.

Today, it is possible to say with certainty that the new system is more efficient than

in was at the start and much better than the old system ("yellow buses"). In addition,

the system has achieved a level of stability and is on track to become one of the best

in the region.

For example, compared to the old system ("yellow buses"), bus accidents have been

reduced by more than 50 percent. Eighty percent of the current Transantiago fleet is

accessible to disabled people, which was not possible before. Air pollution caused by

public transport has been reduced by one third and travel times have decreased,

despite the increase in number of cars and congestion.

It is important to highlight that the system started with a little more than 200

services and has now evolved to more than 370 services. The system increased the

number of bus stops by 300 percent, 80 percent of which have shelters. The system

has more than 200 kilometers of exclusive bus lanes, corridors and bus-only lanes,

which is more than double compared to the previous system. Finally, coverage was

improved, reaching almost 12,000 kilometers, which is almost double of what was

initially offered.

In this process of implementation and constant system improvement, the TAL

provided a fundamental contribution both in its initial definition and in its role

supporting the system’s implementation.

Some activities were not implemented under the project as planned due to

unexpected circumstances. Despite this, at the moment of project closure, it became

evident that these activities were important for the system since they were carried

out with local funds. This happened for instance in the case of the information

campaigns and the design of the road infrastructure management mechanism.

Therefore, it is a good reflection that the initial project design was adequate.

As far as the support to the implementation of the Transantiago Plan is concerned,

on the one hand, project restructuring aimed at proving a better response to the

system’s changing priorities and Transantiago-SE’s organization. On the other hand,

the difficulties in the implementation of Transantiago severely affected the project,

almost paralyzing it. This meant limited implementation progress and a mismatch of

the initially defined components with the actual needs.

Moreover, the adjustments made during project restructuring paved the way for the

renegotiation of the concession contracts with bus operators. These renegotiations

46

mark the first major milestone after the start of Phase 2 in 2007. The results of

these renegotiations have already started to become visible.

The new contracts aim exclusively to achieve a quality of service that would meet the

users’ needs. Changes are meant to be incorporated gradually, with the ultimate goal

of achieving a profound system transformation. These changes aim at eliminating the

fixed payments to bus operators which force them to stop at bus stops. It also aims

to improve frequency, as well as reduce and control fare evasion. Moreover, they will

decrease the number of transfers and protect workers, including the obligation to

pay US$1 million in the form of a performance bond for labor law violations.

3. COMPLIANCE WITH THE OBJECTIVES AND MAIN ADVANCES IN THE

DIFFERENT AREAS

This project is discussed in detail in the Implementation Completion and Results

Report (ICR) prepared by the World Bank. Therefore this section only describes the

main aspects regarding compliance with the stated objectives and the main

achievements.

The difference in the degree of achievement of the project objectives and its

implementation before and after the 2009 restructuring was mainly due to the

complex circumstances related to the implementation of the Transantiago Plan and

organizational priorities. This implied a temporary reassignment of the professional

Project Coordination Unit (PCU) staff with tasks that supported the implementation of

Transantiago. It also caused important changes in direction throughout the life of the

project. As a consequence, various activities already in progress were dropped. New

activities were incorporated, not all of which could be implemented due to the timing

of the project.

There were originally defined project objectives that remained unchanged after the

restructuring. One was the need to improve the institutional structure of

Transantiago, both fundamental and strategic. The improvement needs are both

internal to the organization and external, related to its role as planning agency of a

more sustainable urban transport in Santiago. While the project’s respective

indicator was complied with and the objective was achieved, there is clearly a long

way the Ministry of Transport and Telecommunications (MTT) has to go towards

building this institution.

Moreover, the objectives in terms of a communications strategy gained greater

importance towards the project end. This is reflected in the substantial investment of

local resources in its implementation, making it a central axis of the system. In part

this responds to the lessons learned from the system’s implementation, which now

enables Transantiago-SE to better define the target audience and the messages to

communicate.

Another key component refers to the transition from one system to another, which

involves significant social impact. A lot of effort was put into a locally funded

assistance program for workers and former transport operators to integrate them

into the new system or to help them convert to other activities.

As for the sustainability of the system, significant progress was made in the

methodology that measured the impact on air quality, which has been updated with

47

local resources and has been given a permanent status through the Decontamination

Plan.

Finally, a major outstanding issue is the coordination between transport planning and

land use. This is recognized as a central focus in the overall improvement of cities.

However, since it involves actors outside Transantiago-SE and requires structural

reform, which goes beyond the transport portfolio, the related objective could not be

achieved within the framework of the project. The MTT, through the Unit for

Sustainable Transport and Urban Development, has launched a related activity aimed

at implementing this kind of improvements. A standard methodology for planning

and management with an integrated transport and urban development view was

developed, which can be replicated nationwide.

As for the objectives set during project restructuring, the most important ones relate

to the measures associated with the assessments of the Transantiago Plan. These

measures were best aligned with the project’s operational objective of supporting the

implementation of the system. The measures paved the ground for: (i) the

renegotiation of contracts with bus operators and in the future with the financial

service and technology provider (AFT); (ii) the foundations for a policy on

Transantiago’s bus terminals/depots and for legal improvements at the national

level; (iii) the implementation of pilot projects to make operational and service level

improvements, which have a high replication potential in Santiago and in the

surrounding regions; and (iv) the completion of the database for the future

construction of the financial system, which will only be possible once the new

contracts are fully operational.

Another more specific objective achieved under the project refers to interference of

transport routes and services with street markets. The study results on this subject

led to direct improvements in the system’s operation. The results enable constant

incorporation and adjustments to operational plans for bus services. In addition, the

results serve as input to the communications strategy of Transantiago. Finally, it is

the only study on the subject carried out by the public sector and is useful for other

sectors that deal with street markets.

In short, although not all objectives were fully achieved, especially in the initial stage

of the project, the experience was successful since (i) it provided great value to the

Transantiago Plan and (ii) contributions to achieve the most important objectives

have continued after project closure.

4. BANK PERFORMANCE

Since the beginning of the project, the World Bank assigned a highly qualified team

to the project. This led to a robust project design. During project implementation,

the team provided support in order to adjust the project to new priorities.

In particular, the team in charge of the project showed a high level of commitment

and was proactive, which together with the efforts of the local team led to the

successful completion of the project. This was no easy task considering the difficult

implementation of Transantiago and obstacles encountered in local processes and

institutions.

Finally, the Bank team always showed their full support in the light of difficulties

faced by the public transport system reform, the low initial implementation rate and

48

project adjustments as well as contingencies, such as the earthquake on February 27,

2010.

5. BORROWER PERFORMANCE

It is important to note that due to several Bank projects under parallel

implementation (DPL, GEF and TAL) and the decision of Transantiago-SE to give

these projects continuity despite the difficulties in implementing the Transantiago

Plan, a permanent team (PCU) with highly qualified professionals in different areas

(transport, urban planning, social, environmental and financial) was created. These

professionals also managed to obtain thorough knowledge of World Bank rules. This

experience helped to solve the difficulties encountered during the execution of the

project in a timely, creative manner and to take advantage of the opportunities that

arose in the concrete context.

Additionally, the technical support provided by institutions outside the MTT, such as

SECTRA (before it became part of the MTT) and CONAMA, was fundamental. This

helped to maintain continuity throughout the project and after its completion.

6. LESSONS LEARNED

A general lesson learned from this project experience is that while thorough technical

preparation before starting is highly relevant, the definition of the objectives and

indicators needs to be in line with what can reasonably be expected and must show a

certain degree of flexibility.

Since this was a project supporting the implementation of a reform as important and

comprehensive as the Transantiago Plan, the existing risks had to be rigorously

assessed. In light of this analysis, it was necessary to define flexible and feasible

objectives in order to adjust the project within reasonable periods of time to the

needs of the objectives it supported.

Also, the indicators associated with the objectives had to be very precise and

achievable within the scope of the project and the Implementation Agency

responsibilities. For example, on the one hand, using indicators which required the

support of actors outside the Implementing Agency was risky. On the other hand,

indicators which did not allow measuring the achievements in a concrete way left

much room for interpretation, which ultimately affected the evaluation of the project.

In operational terms, it was essential that the actors involved in the project

implementation process were adequately trained in the World Bank rules. It was also

important to ensure continuity of knowledge, making sure that at least one trained

professional always integrated the teams. In this context, it was important to

highlight the efforts related to the preparation of a more didactic and concise

operating manual, carried out in the framework of project restructuring. This

facilitated the work of the actors involved in the processes, who did not have the

required thorough knowledge.

In short, in terms of the project implementation, the following aspects are highlights:

Project objectives need to be realistic with respect to the project scope and

the responsibilities of the implementing agency, and must consider the local

institutional reality.

49

Project objectives need to be flexible so that the project can be adjusted to

meet its ultimate objective.

Indicators need to be feasible in the light of the proposed activities, the

project scope and the responsibilities of the implementing agency, and must

consider the local institutional reality.

Indicators need to be specific and measurable.

The actors involved in project implementation must continually be trained in

order to get a common understanding and thus accelerate administrative

processes. In this particular case, training needs were provided to the PCU

and the legal areas of Transantiago-SE, MTT and the Controller General’s

Office (CGR).

Continuity of knowledge and management of World Bank rules must be

ensured among the actors involved in project implementation to avoid delays

in processes due to changes in professional teams.

Finally, it is important to note that an important lesson learned in the

implementation of Transantiago-SE was the need for greater autonomy. This would

have avoided the duplication of administrative processes, which led to slower project

implementation and a high risk of outdated information regarding the immediate

needs.

7. CONCLUSIONS

Given the previous consideration and in line with what the World Bank concluded in

its ICR, the Borrower agrees with a final project rating of “Moderately Satisfactory”.

This is mainly due to the implementation difficulties before project restructuring.

Despite the difficulties encountered during project implementation, it is essential to

highlight Transantiago-SE’s commitment in providing continuity to the project. In

addition, the Bank and PCU staff played a fundamental role, demonstrating a

committed and proactive approach in achieving the proposed objectives.

Finally, the value added in the Bank’s support of initiatives with the scope and

complexity of the Transantiago Plan should be highlighted. Especially since no

comparable external benchmarks exist to derive lessons, the knowledge and

expertise of the Bank are critical.

8. FINAL COMMENTS

In 2012, Transantiago faces the consolidation of its new regulatory and contractual

structure. In June, the CGR is expected to formalize the seven concession contracts

with bus operators. Additionally, the responsibility to provide certain services will be

transferred from some of the current operators to other operators and the thousand

oldest buses will be replaced with new ones.

A complementary and vital step is the renegotiation of the current contractual

relationship between the AFT, the MTT and between the AFT and other actors in the

Transantiago system. The situation is expected to be solved in general terms in July

2012. This should lead to the first signs of improvements for users and the system in

the last quarter of 2012.

50

Consequently, 2013 will start with new contractual arrangements for Transantiago,

leading to a healthy bus industry and the ability to address the continuing challenges

of the city.

In 2013 the objective is to continue the pursuit of continuous improvements to the

services provided by the bus operators. In addition, the new integrated vision of a

public transport system will be approached in full, especially the information and

infrastructure management. This new challenge will focus on a harmonious vision of

public transport, the city and its approach from the angle of overall user experience.

This requires, for example, a new relationship with Metro, the structural backbone of

the system. It also requires collaboration with Metrotren, the interurban train

operator, to create the first interurban train service with fare and operational

integration within Transantiago.

This change process with tangible improvements in service quality will also be

accompanied by the consolidation of the organization that regulates, manages and

monitors the system, i.e. Transantiago-SE or Coordination of Transantiago

(Coordinación Transantiago). Discussions are ongoing regarding the need to create

an entity responsible for public transport in Santiago. It is expected that a proposal

to create a new institutional framework will be ready by 2013 and under

implementation in 2014.

51

Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders

There were no cofinanciers or other partners.

52

Annex 9. List of Supporting Documents

IBRD and IFC Country Partnership Strategy for the Republic of Chile for the Period

2011-2016, January 11, 2011

Project Appraisal Document and Aide Memoires of preparation and supervision missions

in IRIS

Santiago Urban Transport Project Programmatic Development Loan ICR

GEF Sustainable Transport and Air Quality for Santiago Project ICR

Programa de Gobierno para el Cambio, el Futuro y la Esperanza, Chile 2010 – 2014.

Cuenta Pública ―Cumpliendo con las Personas, Cumpliendo con la Metas‖, Ministro de

Transporte y Telecomunicaciones Pedro Pablo Errázuriz Domínguez, 2011.

―Proyecto de Revisión, Reformulación y Actualización del Plan de Prevención y de

Descontaminación Atmosférica para la Región Metropolitana (PPDA)‖, Comisión

Nacional del Medio Ambiente Región Metropolitana de Santiago, Santiago, January,

2009

―Normas de emisión de monóxido de carbono (CO), hidrocarburos totales (HCT),

hidrocarburos no metánicos (HCNM), metano (CH4), óxidos de nitrógeno (NOx) y

material particulado (MP), para motores de buses de locomoción colectiva de la Ciudad

de Santiago‖, Subsecretaria de Transportes, published in the Official Gazette of March

13, 2002, modified with D.S. Nº 58/2003 (MSGP); D.S. 153/2005; and D.S. 42/2009

Pilot on efficient lighting of bus stops, User perception survey, Service Department of

Transantiago-SE, April 2012.

Informe Financiero de Transantiago, Coordinación de Transportes de Santiago, Period

June 2007 – January 2012.

―Evaluación de infraestructura existente de terminales y depósitos de buses de

locomoción colectiva urbana de Santiago y Plan de Mejoramiento Integral‖, Study

Conclusions, March 2012.

―Programa de Seguimiento Ambiental: Emisiones Atmosféricas del Sistema de

Transportes Publico de buses de Santiago año 2010-2011‖, Secretaria de Transportes

(SECTRA), 2011.

53

Annex 10. Status of Transantiago at the Time of ICR Preparation

Transantiago, five years after its launch

Report prepared by Juan Carlos Munoz for the World Bank in 2012

1. Introduction

In this document we review the current state of Transantiago, the fully integrated public

transport system covering the whole of Santiago in Chile. The system is comprised of bus

services provided by private operators and a Metro system owned by the government.

Bus services were originally structured as a trunk and feeder network in which nine

feeder operators enjoyed the exclusive provision of services in an area of the city, while

five trunk operators enjoyed the exclusive provision of services in a set of corridors.

A private consortium led by the most important banks in Santiago and a technological

operator compose the Technological and Financial Administrator of Transantiago (AFT)

which provides the magnetic payment card, its charging network and the card validating

devices in all of the buses, and is responsible for the management of the funds gathered

through the fares.

The system captured worldwide attention after its premature implementation in February

2007, before most of the infrastructural and systems conditions required by its designers

were in operation. For a thorough revision of the design and implementation of

Transantiago we refer to Munoz et al, 2008.

Section 2 of this document summarizes the current state of Transantiago focusing on the

evolution of the services offered, the infrastructure available, performance indicators, the

main features of the contracts between the authority and the operator’s and the financial

situation of the system. Sections 3 and 4 present the main achievements and challenges of

the plan at present.

2. Current state of Transantiago

2.1 Public transport services

In this section we focus on the characteristics of the services offered, the state of the fleet

and the total number of kilometers driven. We distinguish bus services from Metro

services.

2.1.1 Buses

The tendering documents of Transantiago considered an operational fleet of only 4,600

buses. However, before the inauguration of Transantiago the government requested 1,000

extra buses, so the initial operational plans considered a fleet of 5,600 buses. The system

started with 1,375 new buses that had already been operating for the pre-launch or

transition phase. Transantiago’s inauguration in midst of the 2007 summer holidays was

extremely rough, with notorious lack of bus services citywide and unacceptably low

levels of service to users. The actual number of initially operating buses was clearly

insufficient—so during the first year of Transantiago the authorities focused on

significantly increasing the effective supply of bus services in the city. Table 1 displays

54

the kilometers driven, the number of registered fleet, and number of services offered by

the end of years 2008 to 2011, while Figure 1 displays the evolution of the monthly

commercial kilometers offered in 2009-2011.

Year Commercial

km

(million)

Number of

Fleet

Services

2007

(starting Feb 10) 371.1 4,489 223

2008 481.4 6,399 322

2009 487.2 6,572 334

2010 512.4 6,564 357

2011 483.0 6,165 370

Table 1: Evolution of public transport commercial kilometers, number of fleet

and services after Transantiago (the fleet and services reported for 2007 reflect

figures at the time Transantiago was inaugurated; they increased significantly

later during that year). (Source: Transantiago)

Figure 1. Evolution of the monthly kilometers offered from January 2009 to December 2011

Figure 1 shows an increasing trend of the kilometers offered, peaking in March 2010, the

month when the national government changed office. During most of 2010, the

government made an effort to reduce the total kilometers offered as a way to reduce the

needed subsidy to finance the system.

The current fleet of more than 6,000 buses has been in permanent renewal to gradually

displace the old style buses (actually converted lorries) inherited from the previous

system. During 2009 and 2010 a total of 1,151 new buses joined the system. By the end

of 2013, Transantiago plans to replace 1,108 extra buses. Table 2 shows the fleet

composition in terms of 160-passenger articulated buses, standard 95-passenger buses

30,000,000

32,000,000

34,000,000

36,000,000

38,000,000

40,000,000

42,000,000

44,000,000

46,000,000

48,000,000

Jan

/09

Fe

b/0

9

Mar

/09

A

pr/

09

M

ay/0

9

Jun

/09

Ju

l/0

9

Au

g/0

9 Se

p/0

9

Oct

/09

N

ov/

09

D

ec/0

9

Jan

/10

Fe

b/1

0

Mar

/10

A

pr/

10

M

ay/1

0

Jun

/10

Ju

l/1

0

Au

g/1

0 Se

p/1

0

Oct

/10

N

ov/

10

D

ec/1

0

Jan

/11

Fe

b/1

1

Mar

/11

A

pr/

11

M

ay/1

1

Jun

/11

Ju

l/1

1

Au

g/1

1 Se

p/1

1

Oct

/11

N

ov/

11

D

ec/1

1

55

and the rest of the old fleet with capacities ranging between 50 and 80 passengers (these

capacities assume a rather high 6 passengers/m2 density). The aggregated capacity of the

fleet in terms of seats/standings and the average age of the fleet are also displayed. Table

2 shows that the authority has reduced the emphasis on adding large articulated buses to

the new fleet, focusing more in renewing standard medium-sized buses.. The 2011

capacity drop is due to the extension of the Metro network which triggered a reduction in

the number of buses operating in the vicinity of the new lines.

Year Fleet Articulated Standard Rest Capacity

Avg.

Age

2008 6,399 23% 20% 58% 607,178 8.4

2009 6,572 22% 26% 52% 626,527 7.4

2010 6,564 22% 40% 38% 650,003 5.9

2011 6,165 24% 45% 31% 626,647 5.3

2012 6,167 23% 46% 31% 627,695 5.2

Table 2: Distribution of bus types and their aggregated capacity in Transantiago (Source:

Registro Nacional de Transporte Público)

The registered fleet has better environmental standards. Figure 2 shows the evolution of

the percentage of buses satisfying different (and progressively more stringent)

international environmental standards. By May 2012, 92% of the fleet was Euro III, of

which one third was also equipped with a Diesel Particulate Filter (DFP in Spanish).

Figure 2: Evolution of bus technological standards after Transantiago (Source: Registro Nacional

de Transporte Público)

Until recently, the newly added services kept most of the original trunk and feeder

structure under which the system was initially organized. These new services aimed at

reducing the average number of transfers per trip by joining and extending some services,

and relaxing the stringent exclusivity of feeder zones and corridors. However, this

flexibility could not be extended as much as desired since the original contracts were

quite rigid.

30%

10% 3% 1%

38%

37%

30% 27%

10% 9% 8%

32%

53%

65% 68%

59% 58% 58%

2% 5%

31% 33% 34%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012

EURO III + DFP

EURO III

EURO II

EURO I

56

Although the newly signed contracts do not change the services operating in Transantiago,

they eliminate the trunk and feeder logic by not distinguishing between both types of

services. Thus, it is expected that this trunk and feeder structure will become more

blurred in the future. The new contracts with bus operators shift from giving them

exclusive to preferential use of streets. With the recently negotiated contracts, some

previously trunk and feeder concessions have merged giving birth to larger firms whose

services are a mixture of feeder and trunk services. In addition, the system has shifted its

image from clear geographic areas (based on exclusive feeder concessions or trunk

operations over exclusive corridors) to assigning each operator of these new sets of

services its own brand recognition.

When Transantiago started, a significant issue was the number of times that the operators

did not provide the services that were committed or planned. A key change came when

the authority decided in mid-2007 to link payment of firms to the buses actually seen

operating in the city. As noted in Figure 3, this change had a dramatic impact increasing

the operating fleet from 4,600 to 5,800 buses in only three months.

Figure 3: Number of operating buses in Transantiago from July to December 2007

(Source: Beltran et al., 2011)

The efforts of the authority to force operators to effectively comply with the operational

program they prepared became more and more sophisticated. Indeed, several new

indicators were linked to the operators’ revenues. We now present the evolution of three

of them.

a) ICPH: this indicator measures the number of seats/standing places offered by an

operator aggregated for all its services. It is calculated as the number of buses

effectively operating every half an hour multiplied by their seating/standing

capacity, divided by the theoretical figure indicated by the operational program.

Figure 4 displays the evolution of this indicator once it was incorporated into the

contracts.

57

Figure 4. Evolution of the ICPH (Source: Beltran et al., 2011)

The indicator presents the fraction of buses expected versus actual buses operating during

a 30-minute period. However, the indicator did not capture if vehicles operated during the

full 30 minutes or only a fraction of the time. Thus, Transantiago modified the indicator

to capture the fraction of all kilometers actually driven from those expected during the

30-minute period. This new indicator, called ICPKH, was computed for every service in

every direction and was linked to the revenues received by operators. The average

percentage obtained with this indicator directly affected the revenues obtained by an

operator.

b) ICF: this indicator measures the frequency effectively fulfilled by each service in

each direction. It is calculated as the percentage of programmed bus trips

effectively offered. Figure 5 displays the evolution of this indicator once it was

incorporated into the contracts.

Figure 5. Evolution of the ICF (Source: Beltran et al., 2011)

c) ICR: this indicator measures the regularity of the services offered by each service

in each direction. The index is based on the coefficient of variation (CV) of the

58

observed headways (unfortunately measured only at the dispatching terminal).

The CV is transformed into an index of 0 (minimum) when the CV exceeds 1.5

(this is indicative that the headway variability is huge), and 1 (maximum) when

the CV is lower than 0.4 (meaning little variability across bus headways). For

values of CV between 0.4 and 1.5, the ICR decreases linearly until 0. Figure 6

displays the evolution of this indicator once it was incorporated into the contracts.

Figure 6. Evolution of the ICR (Source: Beltran et al., 2011)

As can be observed from the three graphs, the three indicators have impacted the

performance of the operators. However, in the case of ICR, this impact has been

considerably weaker. Indeed, reliability is still one of the main complaints of

Transantiago users. In addition, even though these indicators succeeded in getting the

operators to comply with the operational program, they also induced some undesirable

behaviors such as having drivers not stopping at certain stops simply to improve the

performance indicators that were part of the contracts. The authority expects that the

incentives added in new contracts (discussed later in this document) will address these

issues effectively.

2.1.2 Metro

After Transantiago was launched, Metro adapted its services to improve the level of

service offered to users. We must recall that Metro almost doubled its ridership when

Transantiago started due to several reasons: i) fare integration allowed users to take

Metro without paying a second fare, ii) information on the new bus system was

inadequate, so users opted to take Metro as the more familiar service, iii) the bus system

was providing a very poor level of service, and iv) the card payment network lacked

coverage, so Metro appeared to be the only place to load fare cards. Since 2007 the fleet

of train cars and the kilometers driven has grown as shown in Table 3. Also, a very

innovative skip-stop operation was implemented in three of the four lines during peak

periods. This operation allows the system to provide a higher level of service to

passengers, increases the capacity of the system by approximately 10% and reduces the

operational costs per kilometer. Finally, since Transantiago started, Metro has extended

its operations starting earlier and ending later in the day compared to before 2007. An

order for 108 extra train cars will start arriving by mid 2012 and should significantly

59

improve the level of comfort experienced by users during peak periods. These trains will

also be equipped with air conditioning which the current fleet lacks.

2005 2006 2007 2008 2009 2010 2011

Network length (km) 66.1 85.1 85.1 85.1 85.1 94.9 103.5

Number of stations 78 92 92 92 93 101 108

Number of train cars 636 666 751 751 751 967 967

Car kilometers

driven 51,782 71,192 94,199 105,346 106,001 119,064 131,143

Annual ridership

(million passengers) 267 331 601 642 608 621 640

Table 3: Evolution of the characteristics of Metro network, services and ridership (Source: Transantiago and

Metro)

2.2 Infrastructure

In this section we focus on the characteristics of infrastructure available for operating

Transantiago. Again, we distinguish between infrastructure for buses and Metro.

2.2.1 Buses

Transantiago was inaugurated with almost no specialized infrastructure for buses. This

lack of infrastructure had a very significant impact in increased travel times, reduced bus

productivity and capacity, increased waiting times, and eliminated the potential

advantages of a trunk and feeder system. It also damaged reliability which turned out to

be one of the main complaints of bus users. Since the inauguration of Transantiago the

number of segregated bus corridors has grown steadily as shown in Table 4. However,

the current network of high standard rolling infrastructure covers only a small fraction of

the citywide trunk network of Transantiago that is more than 1,500 kilometers long.

Year Segregated

corridors

Bus only

lanes

Exclusive streets

(peak hrs only)

2007 13 68 8

2008 16 77 31

2009 65 101 31

2010 90 101 31

2011 90 101 31

Table 4: Evolution of the infrastructure for buses (kms) (Source:

Transantiago)

The implementation of segregated corridors has been slow partly because local residents

and authorities (i.e. majors) oppose them. They perceive bus corridors delay expectations

of having a Metro line in their neighborhoods and fear significant property expropriations.

On the other hand, authorities argue that segregated corridors can only be built along

wide avenues. Thus, they have designated several lanes that were previously assigned for

mixed traffic as ―Bus only‖. The number of these lanes grew in the first two years of

Transantiago as shown in Table 4. However, these lanes have been quite ineffective since

they are too often used by private vehicles and not enough attention has been paid in

terms of priority for buses at their intersections. Twice the authority has implemented a

60

kind of automatic enforcement through photographic evidence to prevent cars from

invading bus ways, with very good results in terms of bus speed improvements. Some bus

lanes have also been painted red to make them visually clearer. However, these efforts

have been quite focused on only the most utilized corridors. Finally, Table 4 also shows

the evolution of exclusive streets for buses implemented during 2008 (these are streets

devoted exclusively for buses during peak periods only), mainly in the central business

district. Its network has not grown since then.

According to Muñoz (2012), the average speed offered by the various types of corridor

infrastructure vary significantly. Table 5 shows the average speed observed in the

morning rush hour for downtown headed services using different corridor types. The

average feeder speed is approximately 17 kilometers/hour, but varies significantly among

different areas of Santiago reaching only 11 kilometers/hour in some other zones.

Segregated corridors

and exclusive streets

Bus

only

lanes

Mixed

traffic

Speed (km/hr) 25.88 17.21 15.09

Table 5: Average speed for downtown-headed services using different

infrastructure during the morning rush hour (Source: Muñoz, 2012)

The authority has also focused on providing adequate bus stops for the system. In 2007,

Transantiago had only 3,013 roofed stops that had grown to 8,580 by 2010 (from a total

of approximately 11,000 stops). Recently, Transantiago installed solar lighting at about

300 stops in the suburbs and signed a contract for an additional 1,000 of these stops.

Additionally, 129 of the stops operate with off-bus payment areas (stations) during peak

periods. Even though the off-bus payment areas are quite effective in terms of speeding

up dwell times, reducing fare evasion and loading buses homogeneously, they were

designed to play a transient role while a more definitive solution was underway. After

five years, the more definitive stations have not yet been installed, and the current ones

contribute very little to the expected harmony between the public transport infrastructure

and the urban space.

The 2011-2015 Infrastructure Master plan for Transantiago establishes that around

US$760 million will be invested in building 86 kilometers of extra bus corridors and

improving 16 kilometers of mixed traffic ways with a high proportion of buses. It also

includes US$210 million to improve the quality the stops and of the stations with off-bus

payment systems, and US$25 million to install 700 cameras for bus priority enforcement.

2.2.2 Metro

Two extensions of existing metro lines have been inaugurated since 2007. Like the rest of

the network, these run at high frequency (intervals of less than 3 minutes during peak

periods) and quite reliably. Thus, they were very well received, even though they did not

attract as many new passengers as planned. As should be expected, Metro is clearly

experiencing a decreasing marginal ridership contribution from new lines added to the

system. However, new lines have also contributed to improving comfort by reducing the

average density inside trains in some critical areas. Table 3 shows the evolution of the

network (kilometers and stations), the size of the fleet (train cars), the annual kilometers

61

driven and the annual ridership. Last year two new lines were announced to be

inaugurated during 2016-2018, adding 37 extra kilometers to the network.

It is interesting to notice that Metro demand during the second year of Transantiago was

particularly high even though the network did not grow. Since demand later dropped to

its 2007 level, this rise and drop could be associated to the poor level of service offered

by the bus system at the beginning of Transantiago, and the lag taken for the bus demand

to recover, and for users to recognize it. Also, it could be associated to the difference in

Metro and bus fares starting in early 2009 as shown in Figure 8.

2.3 Demand

Users of Transantiago tap in to enter a bus or the Metro network, but are not required to

tap out neither in buses nor Metro (transfers within the Metro network are not registered).

The fare system allows passengers to take up to three legs to finish their trips (i.e. two

transfers at the most). The duration between the first and last taps cannot exceed two

hours. So, during two hours, passengers may make up to three single-leg trips paying a

single fare as long as they do not take Metro more than once or repeat the same bus line.

Thus, the ridership is estimated as the number of passengers entering the system paying

their fare (even if they make more than one trip). The public transit ridership (excluding

shared taxis) in Santiago dropped after Transantiago’s inauguration, by approximately

10% below the projected demand for 2007. On one hand this is due to the difficult

beginning of Transantiago, but it is also not unexpected as the country has continued

growing strongly and the car fleet in Santiago has increased by one third in five years as

shown in Table 6.

Year Cars Cars and

motorbikes

2006 918 943

2007 972 1013

2008 1027 1081

2009 1055 1113

2010 1128 1186

2011 1222 1285

Table 6: Car fleet Metropolitan Region (surrounding

Santiago) in thousands (Source: National Institute of

Statistics, INE)

Figure 7 shows the evolution of the monthly validated trip legs in bus feeder, bus trunk

and Metro services, showing a total number around 150 million trip legs. The graph also

shows the ridership that can be inferred from this information which, as is based on the

card validation of users, neglects the multiple trips that can be made within two hours and

the growing number of trips that evade the fare. High fare evasion has been observed in

bus services in several parts of the city (fare evasion in Metro is almost nonexistent) and

it has become alarmingly high according to some studies. The red curve of Figure 6

corresponds to the estimated percentage of passengers evading the bus fare which has

recently gone over 20%. The reasons for this evasion are manifold. Some people simply

do not want to pay (fares have increased by 50% in the last three years and for a

significant fraction of the population paying the fares twice on every workday represents

around 15% of their income), others enter through the back door as a convenient way to

62

enter a densely loaded bus (validators are only located at the front door), while others

may not have a facility nearby to charge their cards (the network for charging the

payment card is still insufficient in some areas of the city, particularly during some

periods). Notice that in these last two cases, evaders may pay their fare in a subsequent or

previous leg of the same trip allowing Transantiago to receive its income, but not the

evaded operator. Evasion has become a regular habit in certain areas, as the probability

of getting a fine is still so low that it pays off to evade if a user wants to minimize his/her

trip costs. The figure shows a slightly diminishing number of trips which is probably

influenced by the notoriously long student strikes that affected public schools and higher

education in Santiago through the whole second semester of 2011.

Figure 7: Evolution of feeder, trunk and metro trip legs, total trips and evasion (Source:

Transantiago)

As was mentioned, one of the main drivers of the high evasion rates is the fare. During

the first three years of Transantiago operation the fare barely changed; however, the last

two years have seen a significant increase of almost 50%. Figure 8 shows the striking

correlation between fares and evasion rates. During this period the currency fluctuated

between US$1=$450 and $650. The bus fare jumped from approximately US$0.70 when

Transantiago started to approximately US$1.15 nowadays.

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63

Figure 8: Evolution of a single bus trip fare, a single metro trip fare (peak period) and fare evasion (Source:

Transantiago)

2.4 Performance indicators

The operational performance of a public transport system as complex as Transantiago

must be characterized by many different dimensions and should consider the integrated

level of service provided by the system as a whole (Metro and buses). At least we should

consider: access times, waiting times, travel times and number of transfers. The

performance indicators of this section were obtained from Muñoz (2012), in which a

representative sample of 400 trips in Santiago was thoroughly analyzed (400 trips were

selected to provide a statistically significant estimation of the average travel time for the

whole city, however for a more disaggregated analysis the number of trips does not

guarantee the same level of statistical robustness). The background of Figure 9 displays a

histogram of the distance (measured over the network) travelled by different

Transantiago users. The same figure displays the average time spent by a traveler walking,

waiting, and riding inside the vehicle for each distance segment. According to this study,

during the morning peak, the average origin to destination distance corresponds to 11.4

kilometers, while the average walking, waiting and travelling times for Transantiago

users are 13.8, 8.2 and 28.6 minutes respectively.

8%

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64

Figure 9: Average trip conditions across all public transport users. Background: histogram of the

distance traveled; front: access time, waiting time and in-vehicle time for each distance (Source:

Muñoz, 2012)

However, not only average indicators are relevant here; the performance is strongly

linked to the reliability of these indicators across different times when the same trip is

started. Indeed, even though the average door to door travel time across all trips

corresponds to approximately 50.6 minutes, its standard deviation has been estimated as

5.9 minutes. This means that once every 20 trips, the total travel time is more than 10

minutes longer than the average.

On the other hand, travel conditions vary greatly in different areas of the city. Figure 10

shows the average total travel time for all trips within a given distance interval (the

confidence interval is 95%). This means that while some 15 kilometer long trips may take

37 minutes on average, others will take 84 minutes on average. This explains why users

have such varying experiences throughout the city, with some people considering

Transantiago a modern and efficient system, while others criticize it as slow, crowded,

infrequent, and inaccessible.

Figure 10: 95% confidence interval for average travel time across all public transport users in

Santiago (Source: Muñoz, 2012)

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More

65

The study results of Muñoz (2012) are somewhat consistent with those reported by

Observatorio de Movilidad Urbana (OMU) (2009) and presented in Table 7 in which the

travel time for road and rail trips are compared across 15 Latin-American cities. The

document is not clear regarding how these travel times are computed. The travel times

collected in 2007 and reported in the document coincide with the worst period for

Transantiago. Even under those circumstances, the system appeared to provide a better

level of service than most of the other comparable cities considered in the sample.

In a parallel study, DICTUC, a branch of the Catholic University of Chile, (2011) was

measuring the same set of trips since the beginning of Transantiago. Figure 11 displays

the evolution of their measurements during the morning peak period. The study also

includes the average travel time obtained during two different studies developed during

2001 and 2006, yielding 46.7 and 52.6 respectively.

The average level of service (access time, waiting time, travel time, number of transfers,

comfort, reliability, etc.) in the city started significantly lower than the one offered by the

previous system. However, as can be observed from Figure 11, significant improvements

were already observed by the end of 2007 that have remained quite constant since then. It

can also be observed that nowadays the level of service offered by Transantiago is better

than the one offered by the previous system, especially if the impact of the projected level

of citywide congestion is considered. Notwithstanding, overcrowding inside the vehicles

has become a recurring complaint, especially in Metro, as can be inferred from Table 3,

since the demand doubled in a single year without a corresponding capacity increase.

City Country Travel time (min)

Road Rail All

Belo Horizonte Brazil 38.1 35.0 38.1

Bogotá Colombia 72.1 0.0 72.1

Buenos Aires Argentina 37.0 39.1 37.3

Caracas Venezuela 55.3 20.0 53.0

Ciudad de México México 45.5 40.0 45.1

Curitiba Brazil 36.5 0.0 36.5

Guadalajara México 47.8 35.0 47.4

León México 52.2 0.0 52.2

Lima Peru 60.0 0.0 60.0

Montevideo Uruguay 34.7 25.0 34.7

Porto Alegre Brazil 35.2 25.0 34.8

Río de Janeiro Brazil 41.6 35.7 41.4

San José Costa

Rica 57.0 43.0 57.0

Santiago Chile 47.0 29.0 43.6

São Paulo Brazil 46.1 41.4 45.6

Table 7: Travel times in different Latin-American cities in 2007 (Source:

"Observatorio de Movilidad Urbana - CAF", 2009)

66

Figure 11: Evolution of average total travel time (walking+waiting+in-vehicle) and waiting

time for a sample of Transantiago trips (Source: DICTUC, 2011)

A very important element of the system’s bottom line performance is its evaluation by the

users. This has been a difficult battle for Transantiago since its evaluation is (almost) at

its lowest since it was inaugurated five years ago. Figure 12 shows the approval rating of

public transport issues in Chile since the inauguration of Transantiago. The graph

distinguishes individuals in Santiago from the rest of the country, but does not distinguish

users from non-users. On the other hand, Figure 13 shows the net satisfaction (defined as

the difference between approving and disapproving passengers) for frequent users of

Transantiago which is slightly higher than for the general citizen. Both graphs are

consistent, showing that approval peaked by the end of 2009, right before fares started to

increase systematically. Although the drop could be associated with the national

government election change in March 2010, it appears that its main driver was the fare

increase. Meanwhile, the level of service has remained constant (with the exception of

the period from March to September 2010 in which the volume of services dropped as

observed in Figure 1) and the fare evasion rate has grown.

Figure 12. Transantiago approval ratings among Santiago citizens (Source: Adimark, 2010; 2012)

0

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50

Jan/07 May/08 Sep/09 Feb/11 Jun/12

67

Figure 13. Net satisfaction among Transantiago’s frequent users (Source: Collect Gfk, 2011)

2.5 Contracts

It is difficult to imagine a set of contracts that have been amended as often as those of

Transantiago’s operators. Since February 2007 they have been changed 17 times, four of

them quite structural. Even though all these amendments kept the structure of the original

contracts, several of them imposed new incentives to the operators. The original contracts

aimed at providing a low risk operation in which changes in ridership had a minimal

effect in revenues captured by the firms. This reduced demand risk faced by bidding

firms helped to attract new and international operators to Transantiago and to guarantee a

very competitive bidding process. The contracts specified substantial fines and revenue

deductions for operators who did not provide the services that were agreed in the

operational plan. However, the contracts also established that once an operator

accumulated a certain (fairly low) number of fines, its contract would expire. Very soon

the authority realized that this contract was not working to its advantage, since getting rid

of the operators did not help to improve the system. Thus, the fines were useless and the

authority was unable to enforce high quality service. This proved quite catastrophic. In

the beginning it meant that the operators kept most buses at the terminals, thereby

providing very insufficient services. Even though this was solved by the contract’s first

amendment, the mismatch between the incentives of operators and the goals of the

authority remained. By mid 2011, this discrepancy materialized in the form of operators

being insensitive to passengers evading the fare or drivers skipping some bus stops in

order to reach the performance indicators associated with the operational plan (although

hard to believe, this last issue has become a quite frequent passenger complaint about

Transantiago).

The authorities and operators have recently signed a new set of contracts (they are not

amendments to previous ones) imposing a new regulatory framework that significantly

increases the impact of ridership captured by operators in their revenues. The new

contracts improve and increase the indicators that relate revenues to the quality of service

being offered. The contracts also incorporate a cap to the potential subtractions in

revenues when the effective supply of services differs from the plan or if the regularity of

-70%

-51% -51% -57% -48% -50% -51% -52% -58%

-51% -43% -46%

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68

services drops below a certain standard. In total, the operators face a higher demand risk

with the new contracts. The authorities expect that in this new scenario operators will be

more worried about the quality of service being offered and will fight fare evasion since

it affects their own pockets. The authorities are also confident that the new incentives will

not bring on-the-street wild competition for passengers, which is one of the main

achievements of Transantiago in relation to the previous system since quite few firms are

operating, service overlapping from different firms has been kept quite limited, and the

operators cannot choose their services freely.

Finally, it is worth mentioning that in this last renegotiation of contracts the authority also

tried to keep financially sustainable firms operating in the system. It did this by including

some stabilizing mechanisms for firms revenues, limiting the maximum revenue

discounts that can be applied (Transantiago can intervene with a firm that repeatedly

provides unsatisfactory service), and establishing mechanisms to adapt to unpredictable

urban and economic conditions.

Since Transantiago started, three feeder operators went bankrupt and had to leave the

system. This created a significant headache to the authorities and damaged the level of

service to users. Thus, one of the outcomes of the negotiation process was to merge

service areas under fewer and larger players.

2.6 Financial situation

Transantiago was designed to operate without subsidies and to offer a similar average

fare per trip than the previous system; however it was launched at a slightly reduced

average fare. Even though this constraint implied fewer and larger buses, this goal was

never achieved. In the first place, the operation of a formal public transport system is

considerably more expensive than an informal one, for instance, because it entails

considerably higher labor costs. Secondly, an integrated fare is more expensive to

manage. Additionally, the new system allows for more than one trip per fare within the

120-minute time window.

It soon became clear that Transantiago would need significant subsidies to operate. In

fact, the system’s annual costs have reached approximately US$1.700 million, which is

significantly higher than the costs originally planned. The government raised funds for

Transantiago with two purposes. The first was to use central funds to subsidize students

who pay only one third of the regular fare instead of recuperating the difference from the

rest of the system’s users. The second has been to employ central funds to cover

Transantiago’s operational deficit. The total subsidies are significant and have reached

over US$50 million per month (around 40% of the total costs). Figure 13 shows the

evolution of the monthly deficit expressed in US$. Furthermore, the government also

decided that every peso spent as a subsidy in Transantiago must be mirrored in some

other Chilean city. Thus, the total national subsidy for public transport is actually double

the figure required by Transantiago.

69

Figure 13: Monthly deficit (in US$) from June 2007 to January 2012

An integrated public transport system like Transantiago should be subsidized for several

reasons. On one hand, it causes significantly less congestion, pollution and accidents than

cars. On the other, subsidies allows the provision of more and more frequent services

reducing access times and waiting times for all users of the system. These efficiency

gains have been highlighted as one of the more relevant reasons justifying subsidies.

Finally, they can hardly been accused of being regressive since the large majority of

public transport users belong to the poorest sectors in the city.

3. Achievements

The main achievements of Transantiago can be listed as follows:

a) The industry has been formalized. It has moved from thousands of small operators to a

group of seven firms corresponding to only five different financial groups which are

easier to inspect, monitor and coordinate. Also, drivers now have formal contracts

which must obey labor legislation.

b) Transantiago has reduced transit externalities significantly. As shown in Figure 14,

accidents involving buses dropped by half for several reasons: drivers no longer work

insanely long shifts nor compete for passengers in the streets, vehicles are more

reliable since they are better maintained, and vehicles no longer move with their doors

open. Also, bus-based pollution and noise has reduced significantly. According to a

study developed by the Mario Molina Centre in 2009, Transantiago has contributed in

reducing the concentration of ultrathin particles (mainly associated to buses) by

cutting the number of kilometers driven and requiring buses to be equipped with

higher technological standards. For example, in Alameda, the main street in Santiago,

the concentration of ultrathin particles dropped by 25%. Environmental emergencies

are less frequent than before even though the city, its activities, and the vehicle fleet

have continued to grow.

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May/07 Sep/08 Jan/10 Jun/11

70

Figure 14: Annual number of accidents involving urban buses in Santiago (Source:

CONASET)

c) Low floor buses (80% of the fleet) equipped to handle users with reduced mobility,

fulfilled a strong need for this group.

d) Fares in the system are fully integrated. Passengers perceive the total set of public

transport services as a system and can take the most advantage out of the full network.

The introduction of the magnetic touchless card Bip! has been considered a great

success, reaching a 100% penetration among Santiago’s citizens and being one of the

few elements well evaluated by users from the beginning of the plan.

e) Metro moves twice as many passengers as before while still providing a good level of

service. The firm has proven very dynamic and innovative to deal with such a

challenge without a proportional increment in its fleet. In early 2012, it got the ―Best

Metro of the Americas‖ award.

f) Also, two social conflicts which used to happen inside buses have been eradicated:

student discrimination by drivers (since operators are paid the same by all types of

passengers) and drivers’ assaults (since new buses run cash-less).

g) Finally, the introduction of subsidies for the public transport system can also be

considered a success as long as these funds end up improving the quality of service

beyond what users can finance with their own fares, instead of financing the fares of

those users that refuse to pay.

4. Challenges

Transantiago faces, however, several challenges in different areas.

Operational

The main challenges here are the following:

a) Improve bus headway control. Regular service not only increases reliability, it also

reduces waiting times and improves comfort (Delgado et al., 2012). Unreliability in

bus service is one of the most common complaints of Transantiago.

0

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7000

2005 2006 2007 2008 2009 2010

71

b) Improve bus speeds which are quite low in several corridors of the city (Muñoz,

2012). Increasing speed reduces cycle times which in turn increase the frequency and

capacity offered. Thus, higher speeds improve travel times, waiting times and comfort.

Transantiago should expand its bus infrastructure as this has proven to increase bus

speeds significantly, as well as extend and strengthen bus priority enforcement in bus

lanes and corridors. It could also implement an extensive bus priority program at

traffic signals and formalize (using proper buses and scheduled services) its ―super

expresos‖ services which use the urban highways to join very distanced and dense city

areas. As the level of service in Transantiago varies significantly across the city, the

authorities should focus their efforts in those areas where the service is worst.

c) Fight fare evasion. This has implications that transcend the public transport system.

Evasion has become so massive in certain areas that it could affect the morals of the

city. The government is now relying on operators to fight it, but should not step back

in its own responsibility to bring evasion back to international standards.

d) Transantiago already has five years of experience. The demand patterns involved in

everyday trips are well understood. However, this knowledge has only recently been

processed and is now being used for developing operational plans or making

decisions. It seems that there is still a gap to be filled which should benefit the

unavoidable trade-off between user level of service and system costs.

Infrastructure

The government has prioritized the infrastructure for Metro over buses. Even though

Metro offers a very high level of service which will probably improve even further with

the newly added fleet (and may capture more demand to fill those trains instead of

providing more comfortable trips), it is clear that new lines will suffer from the

inescapable network effect of decreasing marginal productivity. If we add to the above

the high cost of Metro infrastructure, it is clear that Transantiago should direct investment

toward bus infrastructure, particularly BRT. Since its beginning, Transantiago has had a

bus infrastructure master plan that has been continuously delayed. The authorities should

implement this infrastructure plan, even if it implies removing some privileges for car

drivers. Congestion in the city during peak periods is reaching high levels and some areas

urgently require public transport services that could attract car owners. Bus infrastructure

is a key player in this fight. To win this battle, the corridors and lanes already built for

buses must be respected by cars. The government has started an enforcement project in a

few corridors based on automatic photo evidence and red painted bus lanes which should

be extended to the whole city. Also, very often the intersections of these bus corridors are

not well designed. This means that the interaction between buses, pedestrians, and/or cars

is so inefficient that the travel time savings gained from the high speeds experienced at

the corridor are lost.

The system started without pre-payment stations for buses. This mistake was corrected

quite quickly through a series of temporary fence-based prepayment stations operating

during peak periods only. The temporary stations were very successful in terms of

speeding up dwell times, reducing evasion and improving the boarding experience for the

72

user. However, after five years, the city has not turned this transitory infrastructure into

something definitive that could add value to the urban landscape as is observed in many

other Latin-American cities.

Another relevant issue that should be addressed is the infrastructure for pedestrians and

bikers. Every transit user has to overcome an initial and a final distance through a non

motorized mode. In Santiago, even though in most Latin American cities the situation is

worse, pedestrians are exposed to uncomfortable conditions (e.g. crowdedness at

sidewalks, poor illumination, wet sidewalks during rains, etc.).

Information

The public transport system that preceded Transantiago lacked a user information system.

Transantiago has made some progress by implementing a call center, a web-based trip

planner for users, a real-time system informing the arrival time of the next few buses to

each stop based on text messages, and some information at most stops. However, the

information provided to users at buses and stops is still notably poor. The main hurdles

here have been vandalism and bureaucracy. More devices that provide online information

about the arrival time for the coming buses should be installed at the most relevant stops

(only one of these devices has been installed and has worked very well for more than two

years). Certainly, having better infrastructure in the most visited stations would help to

implement such a system there.

Also, even though Metro is the spinal chord around which Transantiago was built, the

users perceive Metro and Transantiago as separated entities. Metro has a big

responsibility with this issue since very little of its information system has changed from

when it was a fully independent transport mode. Metro should consider that its

responsibility starts much earlier than the moment a user steps in one of its stations.

Finance

Transantiago has brought subsidies that were strongly needed to public transport.

However, the total amount of subsidies assigned has not been the result of a rational

decision, balancing the social short- and long-term benefits of these subsidies with those

that could be obtained in alternative investments. Instead, the bulk of the subsidies are

needed to prevent fares from escalating. In addition, some effort should be made to

allocate subsidies to the socioeconomic groups that need them most.

Institutions

Even though Transantiago is a fully integrated system, too many agencies are involved in

key aspects of the plan. This has often prevented important decisions from being made.

Thus, one of the main problems of Transantiago is the lack of a single authority that

could simplify the decision process by looking at the system as a whole. Such an

authority should look at all transport modes in Santiago, not just at public transport. In

the last five years, the functions of the Ministry of Transport have been strengthened, and

a permanent public transport subsidy has been approved. The next step should be a

citywide authority as those that have been successfully implemented in London, Madrid

or New York.

73

Contracts

New contracts with operators have been signed recently and their consequences are hard

to predict. However, one important concern is that the number of firms operating in

Santiago has been reduced to only seven, and relate to only five economic groups (with

one of them operating one third of the Transantiago fleet), so these firms will face the

authority with a much stronger hand. Another concern is that this situation could escalate

the consequences in already conflictive relations between driver unions and firms. Finally,

in the future, the authority should reduce the length of the contracts signed with the

operators. Their current length of more than 10 years is unnecessary long.

A second issue is the relation between the authority and the Technological and Financial

Administrator of Transantiago (AFT). The performance of this entity, controlled by the

most relevant banks in Chile, has been disappointing. The AFT has provided a very weak

charging network for the payment card, it has been very static in developing new

financial opportunities for this card that has 100% penetration in Santiago, etc. The AFT

has become an obstacle for the evolution of the system. The authority has announced that

the AFT will be next in the set of contracts to be revised.

As a final comment, Transantiago needs to earn the trust of citizens who have not

forgiven its catastrophic beginnings and its later consecutive fare increases. Transantiago

has made significant achievements, which many cities worldwide would consider almost

impossible. However, it still lacks some key elements that a public transport system

should provide; some of these elements, such as the infrastructure, have been quite well

solved in several cities in neighboring countries.

5. References

Adimark (2010) Encuesta: Evaluación Gestión del Gobierno a Enero 2010.

http://www.adimark.cl/es/estudios/documentos/Ev_Gob_Ene2010.pdf

Adimark (2012) Encuesta:Evaluación Gestión del Gobierno a Marzo 2012.

http://www.adimark.cl/es/estudios/documentos/003_ev_gob_3_mar12.pdf

Beltran, P., Gschwender, A. and Palma, C. (2011). The impact of compliance measures

on the operation of a bus system: the case of Transantiago. 12th International Conference

on Competition and Ownership in Land Passenger Transport (Thredbo12), Durban,

South Africa.

Collect GfK (2011) Transantiago Estudio Tracking Calidad de Servicio Nº 5, Junio-Julio

2011.

DICTUC (2011) Medición de Indicadores de Desempeño del Sistema de Transporte

Público de Santiago, 2007–2011. Subsecretaría de Transportes, Ministerio de Transporte

y Telecomunicaciones.

Delgado, F., J.C. Munoz and R. Giesen (2012) How much can holding and/or limiting

boarding improve transit performance? Transportation Research B (in press).

Munoz, J.C. (2012) Indicadores críticos en la percepción del nivel de servicio ofrecido a

usuarios. II Congreso Las Mejores Prácticas SIBRT en América Latina. Léon, México;

April 25-26, 2012.

http://www.adimark.cl/es/estudios/documentos/Ev_Gob_Ene2010.pdf

http://www.adimark.cl/es/estudios/documentos/003_ev_gob_3_mar12.pdf

74

Munoz, J.C., Ortúzar, J. de D. and Gschwender, A. (2008) Transantiago: the fall and rise

of a radical public transport intervention. In W Saleh and G. Sammer (eds.), Travel

Demand Management and Road User Pricing: Success, Failure and Feasibility. Chapter

9, 151-172. Ashgate Publishing Limited, Farnham.

75

Annex 11. Original Indicators and Degree of Achievement (a) PDO Indicator(s)


Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value Achieved

at Completion or

Target Years

Indicator 1 : Survey to assess Transantiago’s impact on transport demand completed

Value Quantitative or Qualitative)

Survey to assess

Transantiago’s impact on

transport demand not

carried out

Survey to assess

Transantiago’s

impact on

transport demand

completed

Origin-Destination

survey ongoing with

local resources

Date achieved 05/11/2005 12/31/2009 04/06/2012


Target likely to be met in the future with local resources

Indicator 2 : Design of a monitoring system for the environmental impacts of Transantiago

Value Quantitative or Qualitative)

No monitoring system for

the environmental

impacts of Transantiago

designed

Monitoring system

for the

environmental

impacts of

Transantiago

designed

Several elements of such a

monitoring system devised,

i.e. the methodology used

to regularly monitor

Transantiago’s impact on

air quality and the Web site

to disseminate the results;

noise monitoring system

likely to be implemented in

the near future with local

resources

Date achieved 05/11/2005 12/31/2009 04/06/2012


Target partially met

(b) Intermediate Outcome Indicator(s)


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : Preparation of an institutional framework for Transantiago

Value (Quantitative or Qualitative)

Institutional framework

not yet existing

Preparation of an

institutional

framework for

Transantiago

Seminar on

metropolitan transport

authorities organized;

draft law to create

such an authority

pending;

Transantiago-SE

strengthened from an

organizational point of

view; initiative to

76

transform

Transantiago-SE into

autonomous entity

ongoing

Date achieved 05/11/2005 12/31/2009 04/06/2012


Target met

Indicator 2 : Design of an Action Plan for the proposed mitigation measures for low-income

users, including an implementation schedule


Action Plan not yet

available Action Plan

available

Action Plan only for one

particular group of low-

income people devised,

i.e. street market vendors

Date achieved 05/11/2005 12/31/2009 04/06/2012


Target only partially met

Indicator 3 : Completion of Road Infrastructure Management Plan


No Road Infrastructure

Management Plan

Road

Infrastructure

Management Plan

completed

Transantiago-SE created

a simple pavement

management system

Date achieved 05/11/2005 12/31/2009 04/06/2012


Target partially met with local resources

Indicator 4 : Implementation of the dissemination campaign for Transantiago


No dissemination

campaign for

Transantiago

Implementation of

the dissemination

campaign for

Transantiago

Transantiago-SE

implemented many

dissemination campaigns

and communications

activities

Date achieved 05/11/2005 12/31/2009 04/06/2012


Target met with local resources

Indicator 5 : Proposal of land use and transport planning coordination


No proposal Proposal prepared No proposal

Date achieved 05/11/2005 12/31/2009 04/06/2012


Target not met