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Financial Sector

Revolutionizing mobility through blockchain

Photo: Plamenj/Flickr

As digital technology continues to transform and reshape the transportation industry over the last few years, blockchain as a decentralized distributed technology has been embraced by other fields through various applications. It has found varied applications across banking, financial services, healthcare, e-governance, and voting.

Blockchain has immense potential to solve the most pressing problems of mobility where it can be used by private & public sector to securely share and integrate data across modes of transport. It paves  the path for transforming Mobility as a Service (or MaaS), where a user may access different modes of transport (three-wheelers, bus, metro, train etc.) on a single platform with seamless connectivity. It makes a paradigm shift in redefining the customer needs in terms of service, rather than the mode of transport.

The applications of blockchain in reducing the cost of financial transactions have been implemented across sectors. In India, 80% of our travel is for distances less than 5 km and most of this is through non-motorized modes of transport which may largely be served by walking, bicycle, and cycle rickshaws. In these modes the, transaction size for every ride is small (or nil). Also, people in urban and semi-urban areas tend to use multiple modes of transport to reach their destinations. In this case, it makes sense for using digital payments that are integrated across all modes of transport. But the payment systems of today charge a transaction fee of between 0.5% to 5%. This hampers the faster uptake of digital payments, especially for smaller transactions. Blockchain greatly reduces the cost per transaction as there are no intermediaries involved in the payment system, thus making small transactions of even 1 or 2 Indian rupees ($0.014 to $0.028) digitally feasible.

Sustainable Mobility for All: Changing the mindset, changing policies

Nancy Vandycke's picture
Photo: Photoviriya/Shutterstock
The global conversation on transport and mobility has evolved significantly over the past five years. Take transport and climate, for instance: although data on the carbon footprint of major transport modes had been available for a long time, it was not until COP21 in 2015 that mobility became a central part of the climate agenda. The good news is that, during that same period, the space of solutions expanded as well.  For example, data sharing is now viewed as an obvious way to promote better integration between urban transport modes in cities.

In that context, the task at hand for the Sustainable Mobility for All initiative (SuM4All) was clear: How can we work with decision-makers and the international community to transform the conversation, harness the full potential of these emerging solutions, and take on the world’s most pressing mobility issues?

To tackle these challenges, the initiative decided to focus on three essential steps.

Maximizing finance for safe and resilient roads

Daniel Pulido's picture


Around the world, roads remain the dominant mode of transport and are among the most heavily-used types of infrastructure, accounting for about 80% of the distance travelled for individuals and 50% for goods.

Despite this intensive use, the funding available for road maintenance has been inadequate, leaving roads in many countries unsafe and unfit for purpose.

To make matters worse, roads are also very vulnerable to climate and disaster risk: when El Niño hit Peru in 2017, the related flooding damaged about 18% of the Peruvian road network in just one month.

It is no surprise then that roads are the sector that will require the most financing. In fact, the G20 estimates that roads account for more than half of the $15 trillion investment gap in infrastructure through 2040.

Railways are the future—so how can countries finance them?

Martha Lawrence's picture
Photo: Kavya Bhat/Flickr
As a railway expert working for the World Bank, I engage with many client countries that are looking to expand or upgrade their railway systems. Whenever someone pitches a railway investment, my first question is always, “What are your trains going to carry?” I ask this question because it is fundamental to railway financing. 

Railways are very capital intensive and increasingly need to attract financing from the private sector to be successful. That is why the World Bank recently updated its Railway Toolkit to include more information and case studies on railway financing. Here, in a nutshell are the key lessons about railway financing from this update. 

Maximizing finance for sustainable urban mobility

Daniel Pulido's picture
Photo: ITDP Africa/Flickr

The World Bank Group (WBG) is currently implementing a new approach to development finance that will help better support our poverty reduction and shared prosperity goals. This crucial effort, dubbed Maximizing Finance for Development (MFD), seeks to leverage the private sector and optimize the use of scarce public resources to finance development projects in a way that is fiscally, environmentally, and socially sustainable.
 
There are several reasons why cities and transport planners should pay close attention to the MFD approach. First, while the need for sustainable urban mobility is greater than ever before, the available financing is nowhere near sufficient—and the financing gap only grows wider when you consider the need for climate change adaptation and mitigation. At the same time, worldwide investment commitments in transport projects with private participation have fallen in the last three years and currently stand near a 10-year low. When private investment does go to transport, it tends to be largely concentrated in higher income countries and specific subsectors like ports, airports, and roads. Finally, there is a lot of private money earning low yields and waiting to be invested in good projects. The aspiration is to try to get some of that money invested in sustainable urban mobility.

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.