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Colombia

An Evaluation of Bogota’s Pro-Poor Transport Subsidies— How effective are they?

Camila Rodriguez's picture

Public transport is an important mode of transport, especially for low-income populations. Cities, however, struggle to provide public transport services for fares that are both affordable and financially sustainable. Since meeting both goals is quite difficult, transport systems either end up relying on high levels of subsidies or charging transit fares that are too expensive for the city’s poor.

To tackle this challenge, the World Bank in 2013 supported the city authorities of Bogotá, Colombia, in designing a pro-poor transport subsidy scheme that would help low-income populations have access to more affordable public transport. In Bogotá fares for its new public transit system are set higher -closer to cost-recovery levels-, than in other cities that provide greater public subsidies to their operators. Despite having more sustainable fares, Bogotá risks excluding people from its transport services—in fact, households in the poorest areas of the city spend a greater percentage of their income on transport, between 16% to 27%, compared to a maximum of 4% in areas that are relatively richer.

Picking up the Glove on Road Safety

Verónica Raffo's picture
I was part of the World Bank delegation that participated in the 2nd Global High Level Conference on Road Safety, held in Brasilia on November 18-19. 
 
I arrived with high expectations on what this event could mean in terms of re-launching international efforts to fight against this global epidemic that kills 1.25 million people, and maims another 50 million, every year.
 
For the road safety community, the Brasilia conference was a crucial moment to take stock of what has been achieved so far, and rethink the strategy towards the future so the international community can scale up action and funding to meet the UN Decade of Action  targets and the respective SDG targets on road safety.
 
In these first five years of the Decade of Action (2010-2020), the initial objective, namely stabilizing road deaths, has been achieved: global road deaths (per year) have plateaued since 2007, as shown by the WHO latest report. We  should note, however, that among the largest contributors of road deaths (China, India, Brazil, among others) there is significant potential for under-reporting.
 
In any case, we are still far away from the objective at the heart of these international commitments: reducing road deaths by half by the end of the decade.  And we should also note that 90% of these deaths continue to happen in low and middle-income countries, affecting the youngest and most vulnerable.
Streets in Bogota / Photo: Carlos Felipe Pardo, Flickr.

Colombia says "Yipi" for public transit

Leonardo Canon Rubiano's picture
As many Colombian cities struggle to keep public transit ridership levels, one city is innovating using technology, gender-sensitive employment, and ideas from Asia to curb the “mototaxiing revolution” and restore ridership loss.
Moto-taxis in Sincelejo, Colombia. Photos: Leonardo Canon

An increasing “motorbike revolution” – represented by spectacular increase in motorbike motorization and reliance on door-to-door motorized services – has changed the rules of the game and cannot be obviated in transport systems.

Flicking through the Uber website, we found that the company used to offer an “UberMoto” service in Paris from 2012 to 2013. Meanwhile, on the other side of the Atlantic, the local Colombian newspaper headlines discuss the legislation forbidding male passengers on motorcycles in a number of cities in an effort to curb moto-taxis.

The impact of motorbikes cannot be ignored. Purchase of motorbikes and operation of moto-taxis have been identified as key drivers for a modal shift from public transit to private vehicles in many places around the world, including Colombia. The nationwide phenomenon of moto-taxis has revolutionized mobility in small and medium-size Colombian cities, and has become a source of income for many.

Bogota: TransMilenio’s overcrowding problem and a professor's solution

Jean Paul Vélez's picture
Also available in: Español
 
Follow the authors on Twitter: @jpvelez78@canonleonardo and @ScorciaH
 
Why TransMilenio isn't working (Spanish)

A few weeks ago, a video entitled “Why doesn’t TransMilenio work?” created a huge buzz among the residents of Bogota. The graphically impeccable video, produced by local Colombian firm Magic Markers, proposes solutions for addressing the systematic overcrowding problem faced by the city’s Bus Rapid Transit (BRT) system known as ‘TransMilenio’. It is based on research conducted in 2012 by a university professor, Guillermo Ramirez, and his students. The video has been watched on YouTube over 700,000 times and has been discussed by important national media outlets. 

As urban transport experts and Bogotanos interested to see TransMilenio improved, we wrote a blog post in Spanish breaking down the video between the points with which we agree and the points with which we disagree, and circulated it in social media to further promote the debate. We are now sharing that blog post in English as we believe it offers some interesting discussion points about the challenges of high capacity BRT operations that are relevant in a broader context.

Ahorro Pensional para Proyectos: ¿Un nuevo significado para las APP en América Latina?

Daniel Pulido's picture
Also available in: English
Siga al autor en Twitter: @danpulido
 
Los proyectos de infraestructura implementados a través de asociaciones público-privadas (APP) han sido tradicionalmente financiados por los bancos. Sin embargo, en la medida en que el dinero a largo plazo de estas instituciones financieras se ha vuelto más difícil de conseguir y más costoso y los activos de los fondos de pensiones y otros inversionistas institucionales han seguido aumentando, el interés por atraer el gran acervo de capital que estos últimos manejan ha crecido rápidamente. En un contexto de bajos rendimientos para los bonos, los fondos de pensiones están buscando oportunidades atractivas de inversión a largo plazo para diversificar sus tenencias y cumplir con sus obligaciones de pago de largo plazo. Tras darse cuenta de la oportunidad que existe para acercar la oferta y la demanda de financiación, los Gobiernos y los inversionistas en los países desarrollados y en desarrollo han dirigido su atención hacia los “bonos de proyectos”, instrumentos de deuda emitidos por empresas en los mercados de capitales como una manera de financiar inversiones en infraestructura.

Estos “bonos de proyectos” están principalmente dirigidos a inversionistas institucionales —incluidos fondos de pensiones— y han generado un gran interés entre banqueros de inversión, firmas de abogados e inversionistas. Todo este bombo plantea una serie de preguntas: ¿Están los "bonos de proyectos" realmente a la altura de las expectativas? ¿Pueden los Gobiernos depender de los ahorros pensionales para financiar proyectos (¡un nuevo significado para la sigla APP!)? ¿Qué necesitamos hacer para convertir a los fondos de pensiones en una fuente de financiamiento significativa y así terminar con el déficit de inversión en el sector de infraestructura?

Pensioners Paying for Projects: A new meaning for PPP in Latin America?

Daniel Pulido's picture
Also available in: Español
Follow the author on Twitter: @danpulido
 
Public-Private Partnership (PPP) projects in infrastructure have traditionally been financed by banks. However, interest in new funding sources is increasing as long-term money from banks has become more difficult and expensive to get, while the assets held by pension funds and other institutional investors have continued to soar. In a context of low bond yields, pension funds are looking for attractive long-term investment opportunities to diversify their holdings and meet their long-term payment obligations. Realizing an opportunity to match supply and demand, governments and investors in the developed and developing world have turned their attention to Project Bonds, debt instruments issued by PPP project companies in the capital markets as a way to fund infrastructure investments.

These “Project Bonds” mostly target institutional investors - including pension funds, and have generated a great deal of interest among investment bankers, lawyers and investors. All this hype raises a number of questions: Are these “Project Bonds” really living up to expectations? Can governments really rely on Pensioners Paying for Projects (a newfound meaning for PPPs!)? What do we need to do to turn these instruments into a significant source of financing and close the infrastructure investment gap?

How should a city administration respond to the shared cab phenomenon?

Shomik Mehndiratta's picture
Follow the authors on Twitter: @shomik_raj and @cataochoa
 
Smartphone apps are bringing massive changes to the taxi industry in ways that urban transport has not seen in a long while. From the US to China and Latin America (Bogota, Mexico), taxi alternative services have attained an impressive level of penetration in a short amount of time, often with great controversy. Indeed, many cities across the world are struggling with what to make of these services and how to regulate them.

While we have not been significantly involved with such services thus far, a recently appointed mobility secretary in a big Latin American city has asked us for support on developing an approach to the shared taxi industry, as part of a "Smart Mobility" strategy for the city. In that context, we wanted to start a conversation on optimal strategies for cities to be able to welcome and foster such innovations, while still capitalizing on the opportunity to create value for its citizens.

Replacing the car with a smartphone… Mobility in the shared economy

Shomik Mehndiratta's picture
Follow the author on Twitter: @shomik_raj
 

Photo: Sam Kittner / Capital Bikeshare
The sharing economy has been around for a long time. But recent technological advances like the development of real-time transactions through smartphones and credit cards have taken the potential of the shared economy to a whole new level, and opened the door for substantial changes in the way we think about urban mobility.

Recently, I was invited to join a panel on the sharing economy moderated by Prof. Susan Shaheen at UC Berkeley, focusing more specifically on shared mobility.

The panel acknowledged that shared mobility is already transforming the mobility landscape globally, but could go a lot further in increasing the sustainability of urban mobility systems. The panel identified a number of key research gaps that we need to pay close attention to if we want to create a policy environment that is conducive to mobility innovations. Three that I want to highlight are:
 
  • Supporting open data and open-source ecosystems is critical considering the tremendous potential of open-source software and data-sharing for improving transport planning, facilitating management and providing a better experience for transport users (for more detail, please see my previous blog on how the transport sector in Mexico is being transformed by open data)
  • Looking into shared-economy solutions for those at the bottom of the pyramid – solutions that don’t require credit cards and smartphones as prerequisites (see this blog on the bike-share system in Buenos Aires for a good example)
  • The world of driverless cars is coming – which, depending on how policy responds to it, could spell really good or really bad news for the environment: if such technology is used primarily in shared mobility scenarios, it could greatly reduce the environmental cost of motorized transport; on the other hand, the possibility of “empty trips” with zero-occupancy cars could exacerbate the worst elements of automobility (see Robin Chase’s blog in The Atlantic Cities for a great discussion on this). That is why it is critical to create a policy environment that appropriately prices the ‘bads’ of congestion, accidents and emissions while steering the world of driverless cars towards sharing and resource conservation.

"¿Me lleva por 1000 pesos?" – Subsidios al transporte público para los pobres

Camila Rodriguez's picture
En nuestra revisión del proceso de modernización del transporte público en Bogotá, hemos leído una gran cantidad de análisis técnicos de los modelos de negocio, riesgos e incentivos en los contratos, temas operacionales, pero esta súplica por un pasaje reducido, "¿me lleva por 1000 pesos" ( la tarifa normal es de 1400 pesos) que aproximadamente el 23% de los pasajeros de los buses en Bogotá a veces le pide al con

“Will you take me for a 1,000 pesos?”— Making sure public transport subsidies really target the poor

Camila Rodriguez's picture
Also available in: Español

Follow the authors on Twitter: @TweetingCamila and @shomik_raj
 

A commuter in Bogotá, Colombia
(World Bank)
When analyzing the modernization of Bogota’s extensive bus system, we read a lot of technical analyses on public transport business models, risks, incentives, etc. But in a city where 11,6% of the population lives below the poverty line, social reality trumps all theoretical studies. In a new report entitled The promise and challenges of integrating public transportation in Bogotá, experts from Embarq estimate that as many as 23% of bus users sometimes plea for discounted rides, asking the bus driver: “Will you take me for 1,000 pesos?”

This situation points to one of the toughest challenges faced by public transport systems: how to reconcile financial sustainability and social inclusion? On the one hand, if fares do not cover operational costs, systems need subsidies to survive, which can pose serious financial and political risks. In some cases, transport systems operating with inadequate financial resources may experience system deterioration, safety problems and service curtailment. On the other hand, if fares are set to reflect the real price of transport services so that operators can recoup their costs without subsidies, then the poor are often priced out. This is exactly the problem that Bogotá is currently struggling with, despite its well-deserved reputation for innovation and excellence in public transport: fares of its state-of-the-art Transmilenio Bus Rapid Transit (BRT) system are pegged at cost-recovery levels that may price out many of the city’s poorest. Recent studies show that the lowest income households in Bogotá (socioeconomic strata 1, 2, 3 according to the local classification) are already devoting 20-30% of their total income to transportation, spending more than US$2 daily.  The situation may be even worse when Bogota’s city-wide public transit reform (the Integrated Public Transport System or SITP) is fully implemented, as bus drivers, with the adoption of smart cards, may no longer be able to offer unofficial discounts to passengers at their discretion, a common practice in the traditional system.

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