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Sustainible Urban Transport Financing from the Sidewalk to the Subway

Created Mar 01 2017, 11:55 AM by UT CoPTeam
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In many cities in developing countries, urban transport is characterized by severe


congestion and low-quality public transport. While a majority of trips is made by


public transport, trips take a long time. Meanwhile, with only a minority of trips


made by private vehicles, streets are congested and roads in poor condition. This


congestion and poor road quality are affecting economic development and further


hurt public transport—typically used by the poor and less affluent—as buses


also need to use the congested lanes. In addition, the urban development pattern


is further hurting the poor as they live farther away from job centers, and their


neighborhoods are frequently developed informally with precarious road networks,


sidewalks, and other urban infrastructure. The low quality of these public


transport systems, the relatively small scale of the transit networks, and the poor


condition of roads and sidewalks indicate that these urban transport systems do


not have the financial resources to cover all costs, including capital investments


and operation and maintenance expenses. This large and increasing financing gap


for urban transport is currently seen as the main difficulty faced by cities trying


to improve their transport systems.


Indeed—as described in more detail in chapter 1—many cities in developing


countries are stuck in an “underfunding trap” for urban transport. In these cities,


the up-front investments that are needed for new transport infrastructure are


huge, while revenue from their still small-scale and perhaps even poor-quality


systems and other sources is insufficient to cover maintenance and operation


expenses, let alone new investment projects. The urban transport financing gap


in these cities is further widened by the implicit subsidies for the use of private


cars, which represent only a minority of trips but contribute huge costs in terms


of congestion, sprawl, accidents, and pollution. While cars generate more costs


than benefits and public transport actually generates more benefits than costs,


explicit subsidies for public transport are subject to political controversy, while


the implicit subsidies for cars are not. Current literature presents several strategies


for cities to address this urban transport financing gap, but individual strategies


only partially address its complex causes.


In this book, an analytical framework is proposed and applied to support comprehensive


financing for urban transport systems, especially for cities in developing


countries that need to close a growing financing gap.


Based on the concept of


“Who Benefits Pays,” the framework presents a standardized approach for


analyzing and assessing available financing mechanisms based on beneficiaries

(general public or direct and indirect beneficiaries), funding periodicity, and financial and

transport sustainability. The book also uses the concept of making wise investments,

which are investments that can decrease the funding gap by adding benefits


and reducing expenditures, especially over time.










The authors would like to thank the World Bank for providing the initial funds


to write this book. Also, we thank peer reviewers Shomik Raj Mehndiratta and


Victor M. Vergara for their careful review and comments, as well as anonymous


reviewers at the World Conference on Transport Research and the Latin


American Congress on Urban Public Transport (CLATPU), who provided comments


on earlier drafts. Leonardo Canon, Harvey Scorcia, and Anita Shrestha


provided support, comments, and suggestions as the research effort evolved.


Invaluable editorial assistance was provided by Anna van der Heijden. Aurelio


Menendez, Indu John-Abraham, Maria Dolores Arribas-Banos, Thierry Desclos,


Om Prakash Agarwal, Nancy Vandycke, Sara Sultan, Alejandro Hoyos, Kirti Devi,


and Luciana Silva also supported this effort. Financial support for the finalization


of this book was provided by PPIAF, which is a multidonor trust fund that


provides technical assistance to governments in developing countries to develop


enabling environments and to facilitate private investment in infrastructure. For


more information on PPIAF visit: http://ppiaf.org.