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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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Introduction

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.

 

 

 

 

 

 

 

 

Acknowledgements

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.