Syndicate content

Peru

The need to improve transport impact evaluations to better target the Bottom 40%

Julie Babinard's picture
In line with the World Bank’s overarching new goals to decrease extreme poverty to 3 % of the world's population by 2030 and to raise the income of the bottom 40% in every country, what can the transport sector do to provide development opportunities such as access to employment and services to the poorest?

Estimating the direct and indirect benefits of transport projects remains difficult. Only a handful of rigorous impact evaluations have been done as the methodologies are technically and financially demanding. There are also differences between the impact of rural and urban projects that need to be carefully anticipated and evaluated.

Can we simplify the methodologies?

Despite the Bank’s rich experience with transport development projects, it remains quite difficult to fully capture the direct and indirect effects of improved transport connectivity and mobility on poverty outcomes. There are many statistical problems that come with impact evaluation. Chief among them, surveys must be carefully designed to avoid some of the pitfalls that usually hinder the evaluation of transport projects (sample bias, timeline, direct vs. indirect effects, issues with control group selection, etc.).

Impact evaluation typically requires comparing groups that have similar characteristics but one is located in the area of a project (treatment group), therefore it is likely to be affected by the project implementation, while the other group is not (control group). Ideally, both groups must be randomly selected and sufficiently large to minimize sample bias. In the majority of road transport projects, the reality is that it is difficult to identify control groups to properly evaluate the direct and indirect impact of road transport improvements. Also, road projects take a long time to be implemented and it is difficult to monitor the effects for the duration of a project on both control and treatment groups. Statistical and econometric tools can be used to compensate for methodological shortcomings but they still require the use of significant resources and knowhow to be done in a systematic and successful manner.

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.

Building Metros in Latin America: Not all projects are created equal, but they all need strong institutions

Daniel Pulido's picture
Follow the author on Twitter: @danpulido
 

Construction of the Quito Metro
Representatives from international and local commercial and development banks convened in Bogota, Colombia at the end of March for the Second International Workshop to discuss the First Line of the Bogota Metro. Bogota is currently undertaking the engineering studies required to develop the metro project but the key question remains:  how to develop it in a manner that reduces costs, mitigates risks and maximizes benefits for users? Together with other Bank colleagues, I was invited to the workshop to discuss the procurement and financing models adopted in other urban rail projects in Latin America (see workshop presentations here). My main take away from the discussions is that although there is no such thing as a single recipe for success, there is one widely recognized essential ingredient: strong government institutions with the sufficient managerial and technical capacity to prepare, manage and supervise these complex projects.

The 10-Cent GPS

Holly Krambeck's picture

We know that technology is not a panacea, that gadgetry and software are not always the right solutions for our transport problems. But how do we know – really know -- when technology is truly the wrong way to go – when, say, using an old-fashioned compass is genuinely better than a GPS?

Thanks to blogger Sebastiao Ferreira, writing for MIT’s CoLab Radio, I have learned about an intriguing phenomenon in Lima, where entrepreneur data collectors, named dateros, stand with clipboards along frequented informal microbus routes, collecting data on headways, passenger counts, and vehicle occupancy levels. The microbus drivers pay dateros about 10-cents per instant update, and they use the information to adjust their driving speed.  For example, if there is a full bus only a minute ahead of the driver’s vehicle, the driver will slow down, hoping to collect more passengers further down the route. In informal transit systems, where drivers’ incomes are directly tied to passenger counts, paying dateros is a good investment (Photo from MIT CoLab Radio).

If you think about it, use of dateros could be more efficient than traditional schedule or GPS-based dispatch, because the headways are dynamically and continuously updated to optimize the number of passengers transported at any given time of day.  According to Jeff Warren (a DIY cartography pioneer), the dateros have been praised as the “natural database, an ‘informal bank’ of transportation optimization data.”

Does this little-known practice call into question our traditional prescription for high-tech solutions to bus dispatch?