IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD AR; IBRD AR) ON A LOAN IN THE AMOUNT OF US$200 MILLION EQUIVALENT

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD AR; IBRD AR) ON A LOAN IN THE AMOUNT OF US$200 MILLION EQUIVALENT AND AN ADDITIONAL FINANCING LOAN IN THE AMOUNT OF US$100 MILLION EQUIVALENT TO THE ARGENTINE REPUBLIC FOR A BUENOS AIRES URBAN TRANSPORT PROJECT May 21, 2012 Sustainable Development Department Argentina, Paraguay and Uruguay Country Management Unit Latin America and Caribbean Region Report No: ICR2357

2 CURRENCY EQUIVALENTS Exchange Rate Effective June 30, 2011 Currency Unit = Argentina Peso AR $1.00 = US$0.233 US$ 1.00 = AR $4.287 FISCAL YEAR January 1 December 31 AF AMBA ATAM CAS CNRT CPPR ESMM FM GoA IEG M&E NPV O-D Survey PAD/SAR PDO PLATAMBA PRE-ATAM PTUBA PTUMA QAG QALP QSA MTR NPV PIP PIU SOPyT SUBE TUAMBA UEP ABBREVIATIONS AND ACRONYMS Additional Financing Metropolitan Area of Buenos Aires Metropolitan Area Transit Authority Country Assistance Strategy Comisión Nacional de Regulación del Transport de Argentina Country Portfolio Performance Review Environmental and Social Management Manual Financial Management Government of Argentina Independent Evaluation Group Monitoring and Evaluation Net Present Value Origin-Destination Survey Project Appraisal Document / Staff Appraisal Report Project Development Objective Core planning agency of the AMBA Working Group Apoyo a la creación de la Autoridad de Transporte del Area Metropolitana Buenos Aires Urban Transport Project Urban Transport in Metropolitan Areas Project Quality Assessment Group (World Bank) Quality Assessment of Lending Portfolio (2008) (by QAG) Quality of Supervision Assessment (by QAG) Mid-term Review Net Present Value Portfolio Improvement Program Project Implementation Unit Ministry of Economy and Public Works and Services Sistema Único de Boleto Eletrónico Transport Planning Unit Project Implementing Agency Vice President: Country Director: Sector Manager: Project Team Leader: ICR Team Leader: Hasan Tuluy Penelope Brook Aurelio Menendez Shomik Mehndiratta Maria Catalina Ochoa

3 ARGENTINA BUENOS AIRES URBAN TRANSPORT PROJECT CONTENTS Data Sheet..i A. Basic Information i B. Key Dates i C. Ratings Summary.i D. Sector and Theme Codes...ii E. Bank Staff...ii F. Results Framework Analysis...iii G. Ratings of Project Performance in ISRs.viii H. Restructuring..viii I. Disbursement Graph.ix 1. Project Context, Development Objectives and Design Key Factors Affecting Implementation and Outcomes Assessment of Outcomes Assessment of Risk to Development Outcome Assessment of Bank and Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners.20 Annex 1. Project Costs and Financing...21 Annex 2. Outputs by Component..22 Annex 3. Economic and Financial Analysis..32 Annex 4. Bank Lending and Implementation Support/Supervision Processes..33 Annex 5. Beneficiary Survey Result (not applicable) Annex 6. Stakeholder Workshop Report and Results (not applicable) Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR..35 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders (not applicable) Annex 9. List of Supporting Documents...40 MAP

4

5 A. Basic Information Country: Argentina Project ID: P039584, P (AF) ICR Date: 5/21/2012 Lending Instrument: SIL Original total commitment:us$200, (Original Loan); US$100, (Additional Financing Loan) Project name: Buenos Aires Urban Transport Project Loan Number(s): 4163-AR, 7442-AR ICR Type: Core ICR Borrower: Argentine Republic Disbursed amount: US$299,956, Environmental category: B Implementing Agencies: Metrovías (Component 1) Secretariat of Public Works and Transport (all other Components) Cofinanciers and Other External Partners: None B. Key Dates Process Date Process Original Date Revised/Actual Date(s) Concept review: 2/23/1995 Effectiveness: 3/18/1998 Appraisal: 10/15/1996 Restructuring(s): 10/16/ /37/2007 5/10/2010 Approval: 5/15/1997 Mid-term Review: 11/13/2000 Closing: 12/31/2003 6/30/2011 C. Ratings Summary C.1 Performance Rating by ICR Outcome: Risk to Development Outcome Bank Performance: Borrower Performance: Moderately Satisfactory Significant Moderately Satisfactory Moderately Satisfactory C. 2 Detailed Ratings of Bank and Borrower Performance Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Moderately Satisfactory Quality of Supervision: Moderately Satisfactory Implementation Agency/Agencies: Satisfactory Overall Bank Performance: Moderately Satisfactory Overall Borrower Performance: Moderately Satisfactory i

6 C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments (if Indicators Performance any) Potential Problem Project at any time (Yes/No): Problem Project at any time (Yes/No): DO rating before Closing/Inactive status: No Yes ( ) Satisfactory D. Sector and Theme Codes Quality at Entry (QEA): Satisfactory Quality of Supervision (QSA-2002): Rating Highly Satisfactory Satisfactory 4.1 D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration General transportation sector Theme Code (as % of total Bank financing) Other urban development Pollution management and environmental health E. Bank Staff Positions At ICR At Approval Vice President: Hasan Tuluy Shahid Javed Burki Country Director: Penelope Brook Gobind T. Nankani Sector Manager: Aurelio Menendez Asif Faiz Project Team Leader: Shomik Mehndiratta Gerhard Menckhoff ICR Team Leader: Maria Catalina Ochoa ICR Primary Author: Denise Kassab ii

7 F. Results Framework Analysis Project Development Objective (a) support the private-public partnership in improving the service quality and coverage of mass transit; (b) support the infrastructure improvements defined in the concession agreement between the Government and the private sector; (c) assist in improving the conditions of traffic safety and environmental quality; and (d) help in developing an integrated urban transport (road and rail) system for the AMBA. Revised Project Development Objective As a result of the scaling up of the Project, a fifth development objective was added; to help in developing integrated urban transport strategies in Argentina s largest Metropolitan Areas. (a) PDO Indicator(s) from Project Appraisal Document Baseline Values from Project Outcome Indicators/Date of Value (from approval documents). PDO Indicator 1: - On-time performance of Urquiza line >98%. - Number of train cancellations < 2% of the planned - Subway/Urquiza ridership up by the contractual amounts (defined in the concession agreement). - Subway/Urquiza car-km increases as governed by the concession agreement. - Subway service interruptions down to the levels specified in the concession agreement. Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Values Achieved at Completion or Target Years PDO1. Support the private-public partnership in improving the service quality and coverage of mass transit. - On time - On time performance performance of of Urquiza line 97% Urquiza line 98% (1997) (2011) - Number of train - Number of train cancellations - On-time performance cancellations Urquiza line 1,287 of Urquiza line Urquiza line 534 (1997) >98%. (2011) - Subway ridership - Number of train - Subway ridership 956,000 (1997) cancellations < 2% 856,000 (2011) - Urquiza ridership of the planned - Urquiza ridership 67,000 (1997) No revisions were Subway/Urquiza 58,000 (2011) - Subway/ car-km made ridership up by the - Subway/ car-km 30.3million (1997) contractual amounts 36.2 million (2011) - Urquiza/ car-km Subway/Urquiza carkm increases million (2011) - Urquiza/ car-km million (1997) - Subway Service - Subway service - Subway Service interruptions 377 interruptions down interruptions 719 (1997) (2011) - Urquiza Service - Urquiza Service interruptions interruptions534 1,287(1997) (2011) Date achieved May 15, 1997 December, 2010 iii

8 Comments (incl. % achievement) PDO Indicator 2: - Successful disbursement of the Loan related to Line A and Metrovías concession. The support provided to the metro concessionaire at the beginning of the project meant that the Government complied with its obligations according to the concession agreement, contributing to the stable continuity of the concession. This indicator was extremely ambitious and required completion and coordination of activities between the concessionaire, the Argentina Government and the Bank. (50% achievement) PDO2. Contribute to the financial obligations which the Government has assumed under the concession agreements with the private sector. - Loan related to - Disbursement of Line A and - 0% of Loan No revisions were Loan Metrovías disbursed. made concession was 100% disbursed. Date achieved May 15, 1997 June 17, 2011 Line A was fully rehabilitated. In the absence of the project, Line A would have stopped Comments functioning for an extended period until the antiquated electrical systems could have been restored (incl. % in some manner. These investments reflect some of the most significant investments made in the achievement) system in many years. (100% achievement) PDO Indicator 3: To assist in improving the conditions of traffic safety and environmental quality - The related number of fatalities in the - Decrease in - 25% decrease in - 14 fatalities reported suburban railway suburban railway - 25% decrease in fatalities (no in 1998 decreased 43%. number of fatalities fatalities revisions made) - Air pollution not - The air pollution by 25% - Start monitoring of - Air pollution monitored monitoring system - Start monitoring of air pollution in the monitoring is being monitored air pollution in the city of BA temporarily dropped since 2009 by the city of BA City of Buenos Aires. Date achieved June 17, 2011; 2009 Comments (incl. % achievement) PDO Indicator 4: - Conversion of the UEP into a formal planning and management agency - Conversion of the Steering Committee into a permanent body responsible for metropolitan transport policy. - Increased professional capacity in planning agency. Indicator extremely successful in improving conditions of traffic safety and environmental quality in the Metropolitan Area. Although the air pollution monitoring was temporarily dropped, the city did begin to monitor air pollution in The impact of grade separations on safety was tremendous with significant decline in fatalities as well as injuries and accidents. The improvements around stations transformed the quality of access to stations. Access was improved for all passengers, particularly the vulnerable populations. (100% achievement). To help in developing an integrated urban transport (road and rail) system for the AMBA - No formal planning and management agency in place. - No permanent body responsible for metropolitan transport policy in place. - Lack of professional capacity in planning agency. - No transport study established to see defined increase in the use of transport - Conversion of the UEP into a formal planning and management agency - Conversion of the Steering Committee into a permanent body responsible for metropolitan transport policy. - Increased professional capacity in planning agency. - Defined increase in the use of public - Transport study was cancelled in 2000 which affected the collection of data to define increased use of public transport by car-owning population and the defined increase in transfers between public transport modes. - The UEP was converted into a formal planning agency (PLATAMBA). - The conversion of the Steering Committee into a permanent body responsible for metropolitan transport policy was not finalized under this project. The Transport iv

9 - Defined increase in the use of public transport by carowning population (to be established by the transport study). - Defined increase in transfers between public transport modes (to be established by the transport study). by car-owning population. - No transport study established to see defined increase in transfers between public transport modes transport by carowning population (to be established by the transport study). - Defined increase in transfers between public transport modes (to be established by the transport study). Secretariat was deemed an appropriate entity to ensure that objectives of sustainability and control were met professional staff of the Transport Secretariat received training which increased institutional capacity in planning agency. Date achieved 1997 June 17, 2011 The project was very successful in developing a series of tools and data that are instrumental for sustainable integrated rational long-term transport planning in the Metropolitan area. In addition, the technical element of the project management unit (UEP) became the formal planning and Comments (incl. % achievement) management agency called PLATAMBA, now staffed by approximately 30 professionals trained as a part of this project. This agency is the Federal Government s primary support for transport issues both in the AMBA and in the country. Despite the fact that a permanent body was not created to coordinate the metropolitan transport policy, the capacity building impact of this indicator was extremely successful. Nevertheless, the transport study was not completed at the time of the original loan and part of the indicators could not be quantified. (70% achievement.) PDO Indicator 5: To help in developing integrated urban transport strategies in Argentina s largest Metropolitan Areas. Adoption of consistent and coherent urban transport strategies in such cities as Rosario, Cordoba, Posadas, Tucuman and Mendoza Zero transport strategies in other Metropolitan cities. Adoption of strategies No formal revisions made. Supported and developed transport planning and urban transport projects in the other Metropolitan areas. All studies were completed. Date Achieved The project supported and developed transport planning and urban transport projects with a Comments common vision in other Metropolitan areas. The success of this project led to continuation and (incl. % expansion of these rational planning activities through the PTUMA project, approved in achievement) (75% achievement). v

10 (b) Intermediate Outcome Indicator(s) - from Project Appraisal Document IO Indicator 1 Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Values Achieved at Completion or Target Years PDO1. Support the private-public partnership in improving the service quality and coverage of mass transit. Complete 0% and declining Rehabilitation of 100% 100% 100% Line A Implementation of the Basic Investment Program (1996- Not implemented Implemented Implemented Implemented 1999) 1 Date achieved May 15, 1997 June 17, 2011 Comments (incl. % achievement) Line A was fully rehabilitated, Loan was fully disbursed. (100% achievement) IO Indicator 2 PDO2. Contribute to the financial obligations which the Government has assumed under the concession agreements with the private sector. Disbursement of Bank loan 0% 100% 100% 100% Successful continuance of Metrovías concession Implementation of the Basic Investment Program ( ) In progress Successfully continued Successfully continued Successfully continued Not implemented Implemented Implemented Implemented Date achieved May 15, ; June 17, 2011 Comments (incl. % achievement) The Metrovias concession was successfully continued. Program was fully implemented. 100% achievement. IO Indicator 3: PDO3. To assist in improving the conditions of traffic safety and environment quality Complete Air Not completed Monitoring Study and Temporarily dropped Monitored since Completed implement its during crisis 2009 recommendations Construction of road/rail grade separations Zero Installation of automatic barriers on 8-12 road/rail at grade crossings Zero 8-12 Temporarily dropped during crisis Grade-crossings were prioritized over automatic barriers. Zero barriers were installed. Improving rail/bus transfer conditions in Zero stations 3-5 stations Date achieved May 15, 1997 June 17, Implementation of basic investment program applies to both PDO1 and PDO2. In the original results framework this indicator was not discriminated by PDO. vi

11 Comments (incl. % achievement) Despite the fact that the air monitoring output was temporarily dropped, the city did begin monitoring air quality in grade separations were completed which dramatically increased safety in the metropolitan area, evidenced by a significant decrease in number of accidents, injuries and fatalities. The completion of the grade separations was prioritized over the installation of automatic barriers as a result of higher than expected costs in order to improve safety. Improvements to transfer conditions in over 25 stations were completed which significantly enhanced safety and environmental quality. This was likely the first Bank project to make the link between transport and urban development and its impact on passenger accessibility. 75% outputs achieved. To help in developing an integrated urban transport (road and rail) system for the AMBA IO Indicator 4: Completion of the OD Surveys not OD Surveys AMBA O-D Surveys completed / Transport completed / Transport Completed Completed and transport study study not completed study completed Date Achieved 1997 June 17, 2011 The OD Surveys and Transport survey commissioned as part of the original project were Comments cancelled however the studies were commenced as part of the AF loan. A series of studies were (incl. % achievement) completed during the AF loan. 50% achieved. IO Indicator 5: To help in developing an integrated urban transport (road and rail) system in Argentina s largest Metropolitan cities. Completion of studies Zero studies No formal revisions Studies completed completed made Studies completed Date Achieved 2007 June 2011 Comments (incl. % achievement) Extensive data collection, preparation of transport models and subsequent consultation and definition of transport long term plans was successful. Studies were completed. 100% achieved. vii

12 G. Ratings of Project Performance in ISRs No. Date ISR Actual Disbursements DO IP Archived (USD millions) 1 07/08/1997 Satisfactory Satisfactory /23/1997 Satisfactory Satisfactory /27/1998 Satisfactory Satisfactory /04/1998 Satisfactory Satisfactory /30/1999 Satisfactory Satisfactory /02/1999 Satisfactory Satisfactory /04/2000 Satisfactory Satisfactory /12/2000 Unsatisfactory Unsatisfactory /20/2001 Unsatisfactory Unsatisfactory /29/2001 Unsatisfactory Unsatisfactory /14/2002 Unsatisfactory Unsatisfactory /28/2002 Unsatisfactory Unsatisfactory /26/2002 Unsatisfactory Unsatisfactory /10/2003 Unsatisfactory Unsatisfactory /02/2003 Unsatisfactory Unsatisfactory /24/2003 Unsatisfactory Unsatisfactory /01/2003 Unsatisfactory Unsatisfactory /07/2004 Satisfactory Satisfactory /30/2004 Satisfactory Satisfactory /29/2005 Moderately Satisfactory Satisfactory /14/2005 Satisfactory Satisfactory /28/2005 Satisfactory Satisfactory /12/2006 Satisfactory Highly Satisfactory /04/2006 Satisfactory Highly Satisfactory Additional Finance (Feb 2007) 25 05/08/2007 Satisfactory Highly Satisfactory /04/2007 Satisfactory Satisfactory /30/2008 Satisfactory Satisfactory /24/2008 Satisfactory Satisfactory /15/2009 Satisfactory Satisfactory /19/2009 Satisfactory Moderately Satisfactory /22/2010 Satisfactory Moderately Satisfactory /28/2010 Satisfactory Moderately Satisfactory /29/2011 Satisfactory Moderately Satisfactory H. Restructuring Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO IP Amount Disbursed at Restructuring in USD millions Reason for Restructuring & Key Changes Made 10/16/2002 N U U Partial US$50m was reallocated to viii

13 Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO IP Amount Disbursed at Restructuring in USD millions 03/27/2007 N S HS /10/2010 N S MS Reason for Restructuring & Key Changes Made support the Health Emergency Program. Approval of Additional Financing Loan primarily to cover financing gap from reallocation in 2002 Level 2 Restructuring approved to extend the closing date of the project from June 30, 2010 to June 30, 2011 If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings below: Outcome Ratings Against Original PDO/Targets Against Formally Revised PDO/Targets Overall (weighted) rating Moderately Satisfactory Moderately Satisfactory Moderately Satisfactory I. Disbursement Profile ix

14

15 1. Project Context, Development Objectives and Design Context at Appraisal 1. The macroeconomic context: calm between crises. The project was appraised in October 1996, six years after Argentina adopted the Convertibility Plan, an economic program which had brought a period of economic growth and macroeconomic stability to Argentina s economy. From extreme hyperinflation and widespread instability in 1990, the country was in the midst of a period of stable growth. While this period brought economic growth, sharp decline in inflation and reduced poverty, the stability did not last long. By the end of the 1990s, the combination of a fixed exchange rate, capital inflows, high fiscal spending and borrowing, appreciation of the currency due to internal and external factors and the resulting loss of competitiveness led to a prolonged recession with high unemployment, which ended up with the severe crisis in Real GDP declined by 18.4 percent between 1998 and This volatile and fundamentally changing macroeconomic landscape with the project being appraised in a period of calm between two severe financial crises framed the constraints and possibilities of this project. 2. Buenos Aires was and remains the most important urban center in Argentina. The project was located primarily in the Metropolitan Area of Buenos Aires (AMBA), the center of the main economic, commercial and industrial activities of the country. The AMBA consists of the federal capital and 42 other municipalities, covering an area of over 16,000 km². At the time of project approval, some of the suburban municipalities were growing at a rate of 17 percent per year. In 2007, 38 percent of Argentina s population (approximately 13 million people) was concentrated in the AMBA. 3. By the early 1990s the public transport system in the AMBA had deteriorated to a crisis state. Although the greater Buenos Aires had one of the most extensive public transport networks in the world including 840 km of suburban rail (carrying 1.5 million passengers daily) operating across the metropolitan area, 42 km of subway operating within the city of Buenos Aires (carrying 1 million passengers a day) and an extensive bus network operating 15,000 buses (carrying 7.5 million passengers) years of under investment had taken their toll from the 1970s onwards. While the number of private cars had been increasing, the deterioration of the subway and suburban rail services led to sharp declines in the number of people using public transportation. Between 1970 and 1991, as the population of the metropolitan area rose from 8.4 to 10.9 million people, both the subway and the suburban railways lost nearly half their ridership. Due to the sharp increase in automobile traffic in the city of Buenos Aires and corresponding rising air pollution and traffic accidents, the National Congress announced a state of traffic emergency for the city of Buenos Aires in 1994 and created a special committee comprised of representatives of the Transport Secretariat and the Municipality of Buenos Aires. Consequently, strengthening public transportation became a crucial priority in reducing the social costs generated by travel delays, traffic accidents, fuel consumption and health problems from air pollution. It was also clear that the subway and suburban railways had a strong potential for alleviating many traffic-related problems in the AMBA. 4. Private concessions were a key element of the Government s infrastructure and transport sector strategy. In 1989 the Government passed the State Reform and Public Enterprise Restructuring Law (Ley Reforma del Estado) which laid the foundation for a major reform program in the public sector. It declared subject to privatization many public enterprises and services, which among others included surface and underground railway services which were operating at substantial losses. By 1

16 1996, Argentina had gone further than almost any developing country in privatizing infrastructure services. The Bank was largely supportive of this strategy and, with World Bank Group assistance, ten infrastructure sub-sectors were restructured and privatized during Privatizations included obligations for private investments that improved service to customers and turned loss-making state agencies into well managed profitable firms. Nevertheless, developing transparent, workable regulatory frameworks to facilitate private financing and management of infrastructure services at sub-national levels was still a challenge. 5. In the transport sector, the Argentine Government decided in 1991 to concession both Ferrocarriles Argentinos (the inter-urban and suburban passenger rail system) and the Subterraneos de Buenos Aires (the subway) to private operators. The privatization program included six inter-urban rail packages and seven suburban packages in the AMBA which included the subway system. The privatization of a railway system of this magnitude was unprecedented, more so since five of the seven concessions offered to transform the subsidy into an operating fee payment later on in the concession. 6. A concession package was awarded to Metrovías in January 1994 which involved the rehabilitation and operation, over a period of 20 years, of the subway network and the Urquiza suburban railway which connects with it 2. The rehabilitation of Line A of the subway network was left out of the concession process due to legal problems and this Line was to be rehabilitated on the Government s account. This Project therefore consisted of the investments necessary for the Government to meet that obligation. If the investment were not to be made, the entire concession would be at risk. Although most of the much-needed investment in infrastructure was expected to be made by the concessionaire, the process still left a considerable amount of public investment to be made. 3 The appraisal analysis reflected an assessment that without investment, Line A would collapse within a period of 5 years (as discussed later this turned out to be prophetic) leading to significantly inferior outcomes for users (who would have to travel on buses adding to already congested roads) and nonusers (especially all current users of the corridor). 7. By May 1995, almost the entire passenger rail system of the AMBA was operated by the private sector. The initial results were encouraging and were largely attributed to improved service quality and lower levels of fare evasion. In 1996 the suburban passenger volumes were 95 percent above the level of 1993, and subway ridership had increased by 37 percent. Traffic gains were also fostered by improvements in service reliability and security, particularly at stations. One key aspect of this privatization was that consumers did not have to pay higher prices for this quality improvement. Supervision of the concession was managed by the Federal Government through a specialized oversight agency, the Comisión Nacional de Regulación del Transport de Argentina (CNRT). Both the supervision and the concession were operating as envisioned. 8. The complex multi-jurisdictional administrative framework is a key institutional challenge for the sector in AMBA. One of the sources of inefficiency in the AMBA transport system was the lack 2 The suburban Urquiza line was part of the subway concession package for technical reasons. Both systems shared the same track gauge which differed from the rest of the network. 3 The Government defined a minimum level of service to be provided by the concessionaire, and a fare structure for each line. Concessionaires had therefore a strong incentive to exceed these service standards in order to claim a fare increase. A key design feature in concessioning the suburban railways and the subway was that a monthly payment would be made to the successful bidder for each service corridor over the terms of the concession contract. Moreover, the Government defined a plan of investments (track renewal, rolling stock, signaling, telecommunications, electric systems, shops, etc) to be implemented in each line concessioned. 2

17 of coordination and planning among the various jurisdictions and among the agencies responsible for road management and public transport provision. Transportation in the AMBA was subject to the regulatory and fiscal policies of the national, provincial and municipal governments. The AMBA comprises the Municipality of Buenos Aires and 42 other municipalities in the Province of Buenos Aires, which shared responsibilities for transport provision with some executive agencies of the National Government. The lack of coordination among the several different actors responsible for urban/suburban transport in Buenos Aires led to overlapping responsibilities, contradictions, poor decisions and areas for which no one was responsible. A key challenge was to therefore support an effective planning and implementation of traffic management, coordination of road traffic and public transport policy implementation, and to support efforts to deal with the safety and environmental problems associated with metropolitan transport. 1.1 Original Project Development Objectives (PDO) and Key Indicators: 9. The original PDOs and key indicators (as approved in the PAD in April 1997) were: PDO1. To support the private-public partnership in improving the service quality and coverage of mass transit; On-time performance of Urquiza-line > 98%. Number of train cancellations < 2% of planned. Subway/Urquiza ridership up by the contractual amounts (defined in the concession agreement). Subway-Urquiza car-km increases as governed by the concession agreement. Subway service interruptions down to the levels specified in the concession agreement. PDO2 To support the infrastructure improvements defined in the concession agreement between the Government and the private sector; through Successful disbursement of the Loan related to Line A and Metrovías concession. PDO3. To assist in improving the conditions of traffic safety and environmental quality; through Decrease in the suburban railway related number of fatalities by 25 percent. Start monitoring of air pollution in the city of BA. PDO4. To help in developing an integrated urban transport (road and rail) system for the AMBA; through Conversion of the UEP into a formal planning and management agency 4. Conversion of the Steering Committee 5 into a permanent body responsible for metropolitan transport policy. Increased professional capacity in planning agency. Defined increase in the use of public transport by car-owning population (to be established in the transport study). 4 It was intended to be a planning and management agency for all urban areas in Argentina. 5 At appraisal the Government expected to create an inter agency steering committee, with a view to strengthen metropolitan transport planning on a permanent basis, and to become the permanent body responsible for transport policy. 3

18 Defined increase in transfers between public transport modes (to be established by the transport study). 1.2 Revised PDO and Key Indicators 10. An additional development objective was added to scale up the project following the Additional Financing Loan: PDO5. To help in developing integrated urban transport strategies in Argentina s largest Metropolitan Areas in order to expand the development impact of the project to other cities in Argentina (other than the Buenos Aires Metropolitan Area). The Key Indicator for the PDO was the adoption of consistent and coherent urban transport strategies in such cities as Rosario, Cordoba, Posadas, Tucuman and Mendoza. 1.3 Main Beneficiaries 11. The beneficiaries were: (i) the system users, residents of the Buenos Aires Metropolitan Area, particularly the low-income population who live in the suburban area and who rely on public transport and who benefit from a safer and upgraded rail system; (ii) all of the stakeholders in the private-public concession agreements including passengers, government and the operators to be both supported and strengthened as a result of this project; and (iii) the non-users of the system, all residents of the AMBA benefit from the improved governance, the safety and environmental enhancements to be facilitated by the project. A positive environmental impact was expected through the reduction of fossil fuel consumption and motor-vehicle related emissions, the introduction of an air pollution monitoring system and the reduction in road congestion with consequent improvement in air quality and noise pollution. 12. The additional financing brought a fifth additional development objective to adopt consistent and coherent urban transport strategies in five cities of the interior. Therefore, urban residents from other metropolitan areas were relevant beneficiaries as well. 1.5 Original Components: 13. The project was comprised of the following project components as per the Project Appraisal Document and Loan Agreement (December 10, 1997): Component 1.Buenos Aires Subway Infrastructure Improvement (US$134 million): Finance the rail equipment and infrastructure which are critical for the upgrading of public transport services. This component had two key subcomponents. The first was to finance $50m of $142.6m in payments due by the Government to the concessionaire of the subway in the period as part of the concession agreement to partially finance investments in the rehabilitation of the subway system. The other was to finance the rehabilitation of the publicly operated Subway Linea A tracks, stations, communications, signaling and electric systems also an obligation of the Argentine government under the terms of the concession agreement for the rest of the subway system; Component 2. Urban Transport System Integration (US$18 million): Promote the integration of the transport s system by upgrading transfer stations among rail lines, building better transfer facilities between rail and road-based transport, and generally improving road access to rail stations. This 4

19 component included the construction of transfer stations at select key sites and accessibility enhancements to a number of suburban rail stations; Component 3. Traffic Safety Enhancement and Environmental Monitoring (US$32 million): Improve traffic safety and environmental conditions through the construction of grade separations at high-volume road/rail crossings, the enhancement of controls at road-rail grade crossings, the development of a complementary program of road safety actions, and the introduction of systematic air pollution monitoring; and Component 4. Institutional Strengthening (US$16 million): Strengthen the institutional framework which would ensure the continued operation of an economically and environmentally sustainable transport system in the metropolitan area. This component included a number of technical studies and investments to support the development of a core planning agency that could become the kernel for an eventual metropolitan transport authority for the AMBA Revised Components: 14. Components were revised when the World Bank Board approved the additional financing loan (see below). During the crisis, US$50m of the loan were diverted to finance the health and nutrition components of Argentina s social emergency program. 7 Consequently the following activities were cancelled: (i) environmental monitoring; and (ii) two of the three planned transfer centers. This project was not alone. Other infrastructure projects in the Argentina portfolio were also restructured to attend to the emergency. This decision was fully endorsed by the project and country team. The Additional Financing Loan later allowed for the increase in funding levels in the original components in order to cover financing gaps caused by a combination of inflation and the aforementioned reallocation, and to reinstate some of the activities cancelled during the crisis. Furthermore, additional sites were added for access (as part of Component 2) and grade-separations (as part of Component 3). Component 5. Planning in cities of the interior. One additional component was added, which focused on the planning of studies in a selection of cities in the interior of the country. 1.7 Other significant changes: 15. Extensions of closing date. The closing date of the original project was extended on three occasions. In 2002 the closing date was extended for 2 years as part of restructuring the project after the 2001 crisis (see paragraph 26). Subsequently, in mid-2005 (with more than $150m of the $200m loan disbursed) recognizing that the project was performing at a high level and despite the difficult context, a one year extension of the closing date (to December 2006) was granted to accommodate delays in the execution of two contracts due to complicated technical issues (in Linea A) and consultation-related delays in a grade-crossing contract. Throughout 2005 and 2006, implementation progress (IP) was excellent and IP was rated Highly Satisfactory. A final 6 month extension of the closing date through June 30, 2007 was approved in November 2006 primarily to enable the completion of the complex Line 1 contracts. 6 The core (formal) planning agency refers to PLATAMBA 7 This component was rated Satisfactory in ISRs throughout project implementation. 5

20 16. Additional financing. A three year Additional Financing Loan was approved by the Board on March 27, 2007 for US$100 million aimed to finance costs associated with: (i) covering the financing gap derived from the reallocation of loan resources during the crisis (paragraphs 14 and 15), and to cover unanticipated higher costs for civil works; (ii) financing implementation of modified project activities as part of a partial project restructuring, including new technical assistance to cities other than Buenos Aires to prioritize and design urban transport projects; and (iii) financing the implementation of additional activities to scale up the project s impact and development effectiveness, including 6 additional road/rail separated crossings in the AMBA. 17. Extension to the additional financing. By May 2009, the PDOs were largely on track. Outputs and disbursements of the Additional Financing Loan were also on track. However, some implementation delays were registered in 2009 due to a combination of internal procurement procedures which extended beyond the scope of the PIU and some delays related to getting consensus with communities on designs for grade crossings. The closing date for the Additional Financing was extended for one year from June 2010 to June 2011 to accommodate these delays. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design, and Quality at Entry: 18. The project was prepared within a context of the Bank s ongoing dialogue with the Borrower and fully aligned with the World Bank Group s Country Assistance Strategy discussed by the Board on May 4, 1995 which sought to: (a) consolidate and deepen structural reforms; (b) reduce poverty and develop human resources; and (c) rebuild the greatly deteriorated infrastructure base. These priorities were all immediately relevant to the urban transport sector, and the project directly addressed these objectives by supporting reforms in the AMBA s urban transport sector and by financing the rehabilitation of longneglected transport infrastructure. 19. An innovative and comprehensive approach. While there was no recent history of Bank investments in Argentina s urban transport sector, in many ways the project design epitomized best practice in the manner it reflected the lessons and learning from other sectoral interventions in the region. The focus on supporting rehabilitating and upgrading existing urban rail services built on a successful history of similar interventions in Brazil, where a very successful high impact set of investments in São Paulo and Rio de Janeiro were showcasing the potential for high returns from rehabilitation of existing urban rail infrastructure. In addition, the project complemented an ongoing structural transformation in the sector oriented around concessions by supporting Government to fulfill its related investment commitments. 20. Strong focus on institutions and capacity building. The project s strong focus on capacity building and institutional strengthening also reflected the lessons from sectoral experience in the region. Bank experience across the region and elsewhere had indicated the need for continuous and long-term engagement to build capacity, support the development of planning tools and institutionalize the planning process. The project s strong focus on these elements financing a series of tools, studies and training programs to support planning is best practice and has been a transformational feature of the Bank s intervention. 6

21 21. Risks. No formal risk framework was in place at the time the original project was appraised. While the PAD highlighted a range of risks, mostly associated with investment projects namely time and cost overruns the risk of a financial crisis and extreme macroeconomic instability was not anticipated or highlighted. In light of what actually transpired, the value of a formal risk assessment framework that would systematically incorporate broader country and sectoral issues (such as today s Operational Risk Assessment Framework instrument) is clear. However, the project team was not alone in failing to anticipate the worst crisis in Argentina s history. At appraisal Argentina was considered an international showcase for its ability to put an earlier decade of macroeconomic instability behind it, and there were few inklings of what lay ahead. In addition, both the original project as well as the AF Loan could perhaps have been more sensitive to the risk that the institutional objectives of having a fully established multijurisdictional transport planning agency in place would depend largely on the political process, outside the Project s scope. 22. Adequate and extensive participatory process. The project design included an extensive focus on consultation and participation. It should be noted that, in this respect, this project was a leader in the pioneering of many participatory practices that have since been institutionalized across the Bank, but at the time were not mandatory and reflected global good practice. The planning process for Component Two which dealt with upgrade of stations and rail crossings, was thoroughly participatory in nature. Rather than selling pre-selected subprojects, consultations conceived the possibility of public rejection of individual subprojects and their replacement by others. Project preparation included environmental screening for proposed road crossings, a more in-depth Environmental Assessment and the design of a Community Consultation Methodology. A detailed Resettlement Policy Framework for cases of displacement by the grade separation subprojects was formulated, with clear rules for the minimization of disturbance and for full compensation in case of damage. Further details of the consultation process can be found in Section 2.4 under Safeguards Compliance. 23. Quality Assurance Group (QAG) Assessments. The project was assessed by three different QAG panels during its lifetime. A Quality at Entry Assessment (QEA1) rated the soundness of project design, the appropriateness of the project and the strength of Borrower ownership all as Satisfactory. Realism and quality of the Project Implementation Plan was rated Highly Satisfactory. A separate Quality of Supervision Assessment (QSA5) also determined that the project was ready for implementation. Finally, a Quality Assessment of Lending Portfolio-1 (QALP-1) in 2008 assessed the additional financing and found it to be the correct choice of instrument that appropriately responded to factors such as good performance of the project and responsiveness to client needs. This assessment found that the project specifically addressed identified sector issues, and arrangements to deal with country risks; that policy constraints were addressed within the timeframe; and that institutional, environmental, social and financial aspects adequately built on the original project. However, this assessment identified that the outcomes expected from PDO 4 (to help in developing an integrated urban transport system for the AMBA) which related to institutional change were somewhat ambitious given the progress thus far and expected actions outlined in the AF. 2.2 Implementation: 24. Good progress before the crisis. The project became effective on March 18, 1998, 10 months after signing, once the project implementation unit (PIU) was established. Project implementation commenced and accelerated between late 1998 and the beginning of 2000, by which time US$74m (or 37%) of the original loan had been disbursed The Project s Development Objective (DO) and 7

22 Implementation Progress (IP) ratings were classified as Satisfactory from the time of Board Approval (May 1997) up until December By early 2000, most of the civil works contracts and other measures were well underway prior to the onset of the crisis. 25. The project was severely affected by the recession starting in In 2000 budget pressures quickly mounted and the Government budget allocation for the year was only 22% of the amount needed (US$19.6m of US$90m) to carry out scheduled works. Track renewal and station rehabilitation contracts came to a standstill. All crossing schemes were stopped. The Greater Buenos Aires Urban Transport Study was rescinded after months of disputes between the Consultants and the Transport Secretariat. Amidst this, the Mid-term Review of the Project took place in November While several options to restructure and restart the project were discussed, no agreement was reached, and the DO and IP were downgraded to Unsatisfactory in late The crisis. In 2001, the budget allocation for this project was eliminated altogether, and all project components were brought to a standstill. The country found itself in desperate need of liquidity, and all investment implementation came to halt. Economic growth was negative for three consecutive years. In December 2001, Argentina suspended payments on its external debt and restricted deposit withdrawals. In January 2002, the country abandoned its peg to the U.S. Dollar. Reflecting continuing uncertainty over financial conditions, interest rates continued to rise and the currency depreciated significantly against the U.S. Dollar. This crisis led to frequent changes in political leadership which led to paralysis at the political and leadership level. In this period starting late 2000, though several alternatives were discussed to allow elements of the project to proceed - including as part of an Argentina Portfolio Review in November none of these attempts succeeded until late Restructuring. On October , the project was finally restructured. As part of the restructuring US$50m of the loan was reallocated to other programs (see paragraphs 14 and 15). The Restructuring reflected an agreement on an Implementation Plan and a Procurement Plan going forward. It also included the first extension of the project, for 2 years (from December 31, 2003 to December 31, 2005) in order to complete the stalled works. Implementation regained strength after this restructuring, particularly after May 2003 when the incoming Administration assigned a high priority to completing the Project and resolving issues which had previously paralyzed its execution (such as contract renegotiation see paragraph 34). The project was upgraded to Satisfactory status for both IP and DO in May 2004 reflecting improvements in performance and stable political commitment. The key institutional and policy issues advanced under this project would be carried over under the Argentina Urban Transport in Metropolitan Areas PTUMA-APL (P095485) that was approved by the Board on October 20, The PTUMA APL picked up the metropolitan coordination agenda and the Federal Government agreed to make the creation of the metropolitan agency a trigger for PTUMA APL Monitoring and Evaluation (M&E) Design, Implementation and Utilization: 28. M&E System Design. The M&E system of the original project was appropriately designed to measure the achievement of the development objectives of the original design through a combination of output indicators and outcome indicators. These indicators were appropriate. The project development objectives were relevant to the situation of urban transport in Buenos Aires at the time. However, with the exception of indicators that related to compliance with the concession agreements, no baseline values of the indicators were provided at the time this was not unusual for that time (there was no 8

23 mandatory Results Framework in place at the time of Board Approval of the original Project). Due to the delays in project implementation, the Bank Team relied mostly on output indicators to assess progress. 2.4 Safeguard and Fiduciary Compliance: 29. Safeguards Policies at Preparation. The project was appropriately designated as an Environmental Category B. Two Safeguards policies were triggered under the original loan: Environmental Assessment (OP4.01) and Involuntary Resettlement (OP4.12). A third Safeguards policy was triggered upon the approval of the Additional Financing Loan, Physical Cultural Resources 8 (OP4.11). An Environmental and Social Management Manual (ESMM) prepared at appraisal of the Additional Financing Loan provided adequate and detailed prevention, mitigation and compensation measures to address the potential impacts identified during sub-project preparation, implementation and operation. In the case of Subway Line A, special measures were prepared to address the potential impacts on stations that had been declared historical heritage. A Resettlement Policy Framework was prepared at appraisal stage and was part of the ESMM. 30. Safeguards Policies at Implementation. Safeguards compliance was rated Satisfactory throughout the entire implementation of the project with a brief downgrade to Moderately Satisfactory in This was due to the fact that it was not possible to carry out one of the railway underpasses due to a discussion with a few members of the community over potential water flow problems and the similarly long period and large amount of resources allocated to additional environmental and hydrological studies. This experience highlights the challenges of developing and implementing projects which, even though they may have significant overall merit and societal value, cause disruption to a few. With the exception of this experience, there were no significant issues related to safeguards policies during implementation. 31. Consultations were carried out appropriately and in accordance with Bank policy. Social development issues were incorporated into project design and implementation at every level. A Social Development Specialist in the Bank s Country Office worked closely with the local communities to protect the safety of the people where road bridges over the railway were proposed to be constructed as part of the project. The Bank Team used the railway safety issue to encourage participation of the local communities in the project. 32. The use of such consultation was evidenced on how the project handled a specific case of compensation in the AMBA. In 2004, a letter was received by the Bank from a group of citizens living in the vicinity of the project (Ituzaingó) who voiced concerns regarding the availability of information, the environmental management plan and the level of the compensations paid to mitigate negative impacts. The Municipality explained the measures which were being taken to address these issues (many beyond than what was required by the Bank) and agreed to publish an advertisement in the local press to inform citizens that claims were being answered on a daily basis at the Municipality and to keep the community informed as the works progressed. The explanations provided by both the PIU and the Municipality were handled properly, and this process was monitored carefully. Complaints were 8 During the implementation of Line A rehabilitation, there was recognition that the old subway line was a form of valuable cultural heritage, and it was treated as such. The project was pioneering in the manner with which it dealt with a metro line as heritage (among other measures it is possible to ride in restored old 19th century trains on weekends (see paragraph 52) and when the AF was appraised, it triggered OP4.11 on account of this component. This OP only came into effect in

24 analyzed and assessed in accordance with the social framework in place for the project. 9 It is important to note that most initial consultations took place several years prior to the full execution of the project (due to the standstill which resulted from the crisis). This experience highlights the continuous nature of consultations needed to ensure that the process is truly participatory from beginning to end. 33. Procurement arrangements were generally well designed and supervised. Procurement arrangements for the project approved in 1997 were appropriate. The project showcased an unusual level of innovation in the application of Bank procurement guidelines. Metrovías, a private company selected through a competitive process was allowed to use its own commercial procurement procedures for some contracts financed by the Bank: as part of Component 1 loan proceeds were used to finance Government payments towards investments to be made by the concessionaire, and the concessionaire used its own procurement rules to complete the investments. The Bank made payments against indicators of output. 34. After the crisis, the Bank played a constructive and significant role in supporting a difficult price renegotiation process for contracts let before the crisis. On the flip side, a procurement assessment was undertaken for the period between April and October 2007 in response to significant delays in procurement processes linked to administrative bottlenecks regarding Government processes outside of the PIU which required multiple, repetitive approvals. A Country Portfolio Performance Review (CPPR) of the Argentina Portfolio took place in June 2009 whereby delays in procurement processes were identified as a cross-cutting issue affecting portfolio implementation in the country as a whole. This procurement delay was also flagged in the QALP-1 in The need to bid or re-bid some lots under Component A and to advance some of the works under Component B also represented a challenge for their completion by the closing date of the project. In 2009, due to delays in procurement processes, the IP rating was slightly downgraded to Moderately Satisfactory and despite the preparation of an Action Plan, the rating remained Moderately Satisfactory until the project closing date. 35. Financial Management (FM) aspects were in compliance with Bank policy. The initial Highly Satisfactory progress was brought to a standstill during the economic crisis, getting back on track once the project regained its pace of implementation. In the period between 2003 and 2007, the PIU was issued qualified opinions and numerous recurring observations relating to internal control weaknesses and delays in the full implementation of the UEPEX, thereby creating opportunities for accounting entries and assignation errors. However, the Bank assessment found these errors not to be material, and the FM assessment of the AF in 2007 determined the overall financial management risk to be modest. However, in 2009 the FM assessment of the UEP performance was downgraded to Moderately Satisfactory due to lack in rigor in some tasks. The PIU complied with the Action Plan agreed to in order to improve FM performance. Overall, the PIU and FM arrangements, with few staff rotations, remained effective and functional during the 13 year implementation span. 2.5 Post-completion Operation/Next Phase: 9 The Esteban Echeverria underpass EIA (subproject of Component B) underwent consultations and several months later some neighbors presented criticisms of the EIA, the subproject s location (impact on a public park space) and the consultation process. The Bank agreed that the EIA needed improvement and the PIU ensured all processes were carried out adequately and criticisms of the EIA were evaluated. Ultimately this subcomponent was cancelled in large part because no satisfactory solution could be found agreeable to all stakeholders. 10

25 36. All the major works financed by the project have been successfully completed and are in operation. Line A has been successfully rehabilitated and reflects a major upgrade and one of the most significant investments in the quality of public transport in Buenos Aires during this period. The gradeseparated crossings and improvements have been completed (in a few cases works were completed after the closing date of the AF loan in those cases some were partially financed by PTUMA, but in all cases supervision of the works continued), inaugurated and are now successfully in operation. 37. One of the most significant and lasting impacts of the project has been the enhancement in the technical capacity for planning and policy analysis. The combination of a very successful set of studies, tools and capacity building efforts (see below) has created two complementary units one with a high capacity for executing works and the other with an impressive ability to support planning and policy development (the PLATAMBA office set up and initially supported by the project). 38. While the Bank continues to support what remains a rich agenda with significant investment needs and complicated policy/institutional aspects with a new project (PTUMA) it is worth highlighting the important role that the PLATAMBA office is playing. This office now staffed by approximately 30 trained transport professionals (trained as part of the Additional Financing Loan) is the Federal Government s primary support for transport issues both in the AMBA and in the rest of the country. This is the office that is implementing the ambitious and thus-far very successful electronic fare card project (SUBE) which is seen as the vehicle for future reforms in the sector. 39. Nevertheless, there are at least three major issues that need to be highlighted in the context of future sustainability of urban transport in the AMBA: (i) (ii) the need to establish a metropolitan transport authority with some statutory power to facilitate inter-jurisdictional concerns. In this respect the PLATAMBA office set up as part of the Project and supported by the project is expected to be the kernel for such an agency; address the issue of operator subsidies, which were instituted after the crisis to keep transport costs low but now need to be dismantled 10. The current Federal Government (which has financed these subsidies since the crisis) has recently stated that dismantling this system of subsidies (which also extended to water and energy sectors) is now a near term priority. The challenge will be to dismantle this system in a manner that minimizes social disruption, provides support to the most vulnerable users, reinforces efficiency and service incentives for operators (who now recover close to three quarters of their revenue from subsidies) and frees up funds urgently needed for infrastructure investments. The instruments financed by PTUBA have established the analytical foundation for forthcoming urban transport subsidy reform; and 10 The subsidies were a result of the Government s strategy to keep fares affordable in the aftermath of the crisis within the structure of the concessions that regulated the operations of the urban transport system. While the low fares were undoubtedly a helpful element of the social safety net in the immediate aftermath of the crisis, the policy affected the incentives for efficiency in the concession agreements. In the subsequent years, the low fares became politically difficult to address and the aggregate level of subsidies kept rising. The PTUBA Additional Financing Project Paper flagged the subsidy as an important emerging concern for the sector, but noted that the issue was still too politically sensitive to be discussed. At the time the new operation PTUMA was appraised, the issue was already considered critical to sector sustainability and was discussed at length in the PAD. Due to the very political and sensitive nature of the debate, Bank support in this context was focused on creating the technical tools data, models, surveys that would help government effectively design and implement reforms of the subsidy regime once the political economy facilitated it. 11

26 (iii) the future of the concessions. The concessions for both the subway and suburban rail systems were renegotiated after the crisis, but are still in place and will only start terminating in Though no definite statements have been made for post-concession management arrangements, future sustainability will require the development of a robust regulatory and management regime that has the incentives for careful and efficient management and can facilitate new investments in the system. At this point in time, there would be value in a comprehensive assessment of the concession experience with a forward-looking view for future arrangements These are all difficult long-term problems that are inherently political in nature. While outside agencies such as the Bank, with the technical/investment support that it can provide, can support building blocks to help policy makers design solutions, lasting solutions to these issues lie ultimately at the political and governmental level. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation: 41. The objectives remained relevant according to the Bank s priorities in Argentina. Urban mobility and a focus on public transport through improved infrastructure as a means to support multiple goals of urban congestion, air pollution, greenhouse gas pollutants and provide mobility and access for the low-income passengers has remained a core element of the Bank s sectoral strategy. 42. The PDO remained valid throughout the life of the project and did not require adjustment to accommodate changing Government priorities in response to a shifting macroeconomic context. Despite the standstill during the crisis, the Borrower remained committed to the PDOs of the project. A fifth PDO was added at the time of approval of the Additional Financing Loan which required that planning studies similar to those being undertaken in the AMBA be expanded to other Metropolitan areas in the country. 43. The Project Design also remained relevant. It allowed the advancement of a significant and complicated policy agenda around a targeted set of investments. As a result the design remained relevant in the face of significant deterioration of the macroeconomic and fiscal environment. 3.2 Achievement of Project Development Objectives: 44. The achievement of the overall PDOs is considered Moderately Satisfactory based on the fact that out of the five indicators, three have been generally achieved and two have been partially achieved. A detailed assessment of outcomes and outputs related to all five PDOs can be found in Annex 2. Briefly, Assessment of PDOs achievement resulted from measuring attainment of PDOs against the outcome indicators defined in the project s result framework and project outputs, with one 11 The project had few dealings with the concession beyond supporting the Government s share of the capital works in the initial years of implementation. The project was not designed for/did not envision a close supervision of the concession agreements. The CNRT, a federal government agency was responsible for controlling and regulating the concessions prior to Bank s involvement. Institutions for supervision of the concessions were assessed at appraisal and deemed to be reasonably effective. 12

27 exception (the case of PDO3). In the case of PDO3 (assist in improving the conditions of traffic safety and environmental quality) the outcomes and outputs specified in the PAD (which have been attained) have been supplemented with an assessment of difficult-to-measure aspects of the environmental quality impacts of the improvements in intermodal and station access. Successful completion of works led to completion of outputs and subsequently the attainment of outcomes in the case of PDO1 (support the private-public partnership in improving the service quality and coverage of mass transit), PDO 2 (support the infrastructure improvements defined in the concession agreement between the Government and the private sector) and PDO3. In the case of PDO1, the impacts of the project are very substantial and significant Annex 2 presents evidence that without this project the service quality and coverage of mass transit in Buenos Aires would have seriously deteriorated. However, some of the performance outcomes (mainly those related to demand targets) on the rail system were not met in general system wide ridership (on elements of the system affected by the project and those outside it) fell considerably at the time of the 2001 crisis and has not yet fully recovered. There were delays in the implementation of Line A in part due to the crisis and in part due to technical complexities. Although these delays did not materially affect benefits 12 outcomes for PDO1 are considered only partially achieved in light of the mixed performance data. Successful and timely completion of works implemented by the concessionaire, lead to timely disbursement of the related Bank loan component and PDO2 is judged to be fully achieved. In the case of PDO3 the targeted safety outcomes were achieved with the completion of the grade-crossing outputs, and the investments in public transport transfer and access facilities materially improved the environmental quality of the public transport system in the AMBA. PDO 3 was considered achieved. The capacity building and institutional change outcomes targeted in PDO 4 (help in developing an integrated urban transport system for the AMBA) were only partially achieved. Specifically, the project contributed to significant enhancements in capacity both for implementation of works and technical planning. However, the goal of creating a permanent body responsible for metropolitan transport policy was not achieved and has become a part of the agenda for the ongoing PTUMA project (see para 39). Planning and project-related studies under PDO5 have been completed or are close to completion in the cities outside Buenos Aires. The city of Rosario, in particular has adopted a comprehensive sustainable transport strategy. In the other cities, work is progressing adequately and is being supported by the ongoing project (PTUMA). Though there has been some delay, progress is satisfactory and there is no reason to believe that the minor delays will have any material impact on attainment of the objective. The PDO is considered achieved. Please refer to Annex 2 for detailed individual discussion and assessment of each PDO. 3.3 Efficiency: 12 The works were completed while Line A was still functioning (though as is discussed in Annex 2, the timing of the project was opportune the old electric systems broke down just as the new systems came on-line and any further delay in the Line A works would have had significantly negative impact). 13

28 45. At the time of appraisal, an economic analysis was conducted to assess the rehabilitation of Line A and the initially selected grade-separated crossings. In the case of Line A, the analysis conducted a cost-benefit analysis of the entire concession process (under the assumption that without the Line A rehabilitation which was already a Government commitment in the concession process- the entire process would be at risk) as well as a stand-alone assessment of the Line A rehabilitation by itself. The analysis suggested large economic benefits (NPV >US$340m under a variety of scenarios) for the Line A rehabilitation by itself and significant additional benefits related to preserving the concession. For the purposes of the ICR, the cost-effectiveness of the Line A rehabilitation as a stand-alone project are simulated, incorporating the increased costs and delays in implementation. The benefits are assumed to remain unchanged from appraisal. This is a conservative/realistic assumption because key variables driving the benefit calculations (the assumption regarding the timing of the collapse of the original infrastructure which did indeed collapse approximately 5 years after the project commenced, and levels of traffic in 2010 are about the same as at appraisal) have been realized. The analysis suggests that although the delays and cost increases lowered the efficiency of the Line A investments to a certain extent, the investments remain efficient with NPV s over US$300m. 46. In the case of the grade-separated crossings, each crossing was justified on the basis of a standardized economic analysis conducted as part of the feasibility analysis on an ongoing analysis. In general the costs of the crossings and traffic volumes were in-line with the costs estimated during the feasibility study. Additionally, the data on safety outcomes clearly indicate the high impact of these relatively small investments. The efficiency of these crossings is rated adequate/satisfactory. 3.4 Justification of Overall Outcome Rating: Rating: Moderately Satisfactory. 47. Of the five indicators, three have been considered achieved and two as partially achieved. Although the project was completed with adequate efficiency, there was considerable implementation delay in achieving the results. The original loan was initially expected to be completed by 2003 but was actually completed only in While this is not in itself unusual for large infrastructure projects in any circumstances and less so given the magnitude of Argentina s recession and economic crisis in the midst of the project, IEG guidelines suggest that the delays could call for a reduction in overall project rating. 48. This rating is based on the combination of the project relevance, achievement of the objectives and the achieved project efficiency. 3.5 Overarching Themes, Other Outcomes and Impacts: (a) Poverty Impacts, Gender Aspects, and Social Development 49. Although no surveys were conducted to document on specific poverty, gender or social development impacts, the main beneficiaries of the project were low-income households on the urban periphery that benefited from integration and safer transport service into the city. (b) Institutional Change/Strengthening: 14

29 50. One project focus was to strengthen the Government s role in partnering with the private sector, made more important by the onset of the crisis. The Bank focused on sustainability in institutions, working on strengthening technical capacity in planning and its expansion through training. The Bank also worked steadily to develop consensus on a metropolitan transport authority and engaged in a dialogue on how to address non-viability of subsidies. The perspectives of a follow-on PTUBA (which developed into the PTUMA project) provided a sufficiently long-term framework for sustainability. 51. During project implementation, the PIU trained 30 young professionals of the Transport Secretariat in the area of transport and project management which was also a major achievement. As implementation of the PTUMA project takes place, these young professionals will strengthen their experience in this area and will contribute to the consolidation of rational transport planning in Argentina. Indeed, 50 percent of the staff at the PIU is made up of the young professionals trained under PTUBA. Due to the multidisciplinary nature of the capacity building program, these young professionals have become the leaders in the different areas required for such an agency to develop and strengthen. One example can be seen in the training of a young professional in the transport modeling field, such expertise was non-existent in Government prior to this project. (c) Other Unintended Outcomes and Impacts (positive and negative): 52. There are several positive outcomes related to project activities that are not fully accounted for under the results framework and two in particular are worth highlighting: a. The role the project played in the Government s crisis recovery strategy, supporting critical investments, generating local jobs and injecting liquidity into the economy. b. The cultural heritage value created in the Line A rehabilitation. The recognition that an early 20th century subway line could have cultural heritage value was first recognized by elements of Argentine civil society; but the project reacted to this recognition in a very commendable manner that created significant value. Working with civil society groups, a conservation plan was identified and implemented for elements of the old line particularly the coaches. Today it is still possible to ride on restored train cars dated from 1913 on Line A on weekends. This subway line, both modern and traditional, is now an integral element of the identity of the city of Buenos Aires. c. The project has an additional important attribute: the manner in which the Project facilitated an effective response to the needs of the post-crisis economic environment. In 2003, as Argentina was looking to get back on its feet, the urgent need was to inject liquidity and jobs into the economy. The project played a material role in supporting this process and was unusually flexible in its ability to respond appropriately to a crisis scenario. The grade crossings and works around stations in particular could be prepared and implemented quickly, and they were able to support important infrastructure needs while generating critically needed short-term local employment Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops: 13 Other Bank projects in Brazil, for instance, were forced to scale down dramatically through cancellations as a result of being similarly affected by the economic crisis. 15

30 Not applicable. 4. Assessment of Risk to Development Outcome Rating: Significant 53. As discussed above, the development outcomes of the project have been achieved satisfactorily. All of the investments financed by the project are now operating in a satisfactory manner. The urban rail concession has survived despite the economic crisis. The improvements in the suburban rail system, in the form of station improvements, the Moreno transfer station and the crossings, have significantly contributed to improving the quality of suburban rail in the AMBA. That said, as discussed in Section 2.5, some key issues need to be addressed to ensure long-term sustainability of Buenos Aires s public transport system. Given the concerns related to inter-jurisdictional coordination and the challenges ahead related to dismantling the public transport subsidy regime in a non-disruptive manner, the risk to development outcome is rated as Significant. 5. Assessment of Bank and Borrower Performance 5.1 Bank (a) Bank Performance in Ensuring Quality at Entry: Rating: Satisfactory 54. The project was well prepared and Bank performance in ensuring quality at entry was rated satisfactory. The rationale for this assessment is summarized below: 55. The project was rated satisfactory for well designed and well prepared. The QAG Quality at Entry Assessment (QEA1) rated the appropriateness of the project and strength of Borrower s ownership as satisfactory. This rating was supported at the Quality of Supervision Assessment (QSA5). The Realism and quality of the Project Implementation Plan was rated Highly Satisfactory by QEA1 and the QSA5 agreed that the project was ready for implementation. Indeed, the QSA5 argues that the problems encountered during implementation could not have been identified at entry. The manner in which the Project pioneered participatory techniques before a formal Safeguards driven mandatory regime was in place is commendable. Equally commendable and innovative is the manner in which the Bank supported the Metrovías concession financing activities procured by a competitively chosen concessionaire using their own procurement methods. (b) Quality of Supervision (including of fiduciary and safeguards policies): Rating: Moderately Satisfactory The Team did a moderately satisfactory job as evidenced by actions such as: 56. Timely and frequent supervision missions during the implementation stage accompanied by timely communication between the project Team and Bank Management (as evidenced by 33 Implementation Status and Results Reports (ISRs) filed in the period). Once the project came to a halt, the Team downgraded the project to problem status in a timely fashion and sought senior management s assistance in dealing with it in the context of the overall portfolio problems experienced within Argentina. The attention of the supervision effort was very well focused on resolving the budget problem which was stalling implementation. Various meetings were held between the Bank and high 16

31 level officials from the Federal Government and Buenos Aires City to resolve key issues. There seemed to be strong buy-in at the meetings but unfortunately no actions were carried out later by the Government due to the political and economic context. The Task Team showed patience and persistence in trying to get the Government parties to comply with their commitments. Most actions agreed to in the MTR were not carried out due to the country s worsening economic crisis. The Bank Team effectively used the Portfolio Improvement Program (PIP) to elevate the project implementation issues into the Bank-Argentina country dialogue and to press for a solution to the budget problem at the highest levels. 57. The Bank carried out prompt and sound identification and assessment of implementation problems as well as provision of high-quality advice and solutions to the Borrower to address the implementation problems. 58. The proactive, flexible and responsive nature of the Bank s supervision, especially during the project standstill was particularly important. Team continuity, careful attention and support from management, responsiveness to technical issues, thorough and cautious approach to governance and risks, the continued focus on sustainability and long term objectives were all factors which contributed to successful implementation and supervision. The evidence suggests that in the aftermath of the crisis, the Bank team stayed engaged, flexible and proactive. It is to the credit of all parties concerned, the Bank team, the Government and the implementing agency, that as soon as political stability returned to Argentina after the crisis, the project restarted implementation and indeed played a critical role in supporting both the economy and the transport system of greater Buenos Aires to weather the crisis. 59. Depth of country and sector knowledge allowed the Team to weather the project even in an extraordinarily adverse fiscal environment. The Bank was consistently guided by the simple but appropriate vision of the improvements in mass transport efficiency and security, including through expanding the dialogue on subsidy policies. 60. The Country Management Unit (CMU) actively supported the Team with communications with relevant ministries and helped secure the agreement of the Government to the Team s proposal to increase the financing percentage. 61. Timely and diligent attention to fiduciary and safeguards issues through the project implementation period took place. 62. QALP Quality of Implementation stated the appropriate management focus on longterm development goals and sector vision and the continuity of management and persistent commitment to sector development objectives. 63. QAG Assessment: The Bank s efforts were recognized during the Quality of Supervision Assessment (QSA5) by QAG. It was acknowledged that the project encountered extremely difficult implementation problems exacerbated by poor public sector management and continuous changes to project management. The Bank worked throughout the fiscal and economic crisis to keep the project on track by seeking innovative and flexible solutions to deal with the inability and unwillingness of the Government to allocate even minimal funds for project implementation. The assessment ranked Focus on Development Effectiveness as Highly Satisfactory; the Supervision of Fiduciary/Safeguards 17

32 aspects as Satisfactory; the Adequacy of Supervision Inputs and Processes as Highly Satisfactory; and Realism of Project Performance Ratings as Satisfactory. 64. Nevertheless, it can be argued that the team had several opportunities to revise certain weaknesses in the project s results framework, for example: (i) add baseline data missing in 3 out of 13 indicators, (ii) update progress on system performance indicators, and (iii) add specific indicators for PDO5. In addition, the Additional Finance provided a good opportunity for these revisions yet they were not carried out. (c) Justification of Rating for Overall Bank Performance: Rating: Moderately Satisfactory 65. Despite an overall satisfactory quality of entry, an evident shortcoming in the second half of the project implementation span was the team s missed opportunities to carry out multiple restructurings in order to revise the results framework. For these reasons the rating is revised downwards to Moderately Satisfactory. 5.2 Borrower Performance (a) Government Performance: Rating: Moderately Satisfactory 66. In terms of design, the project was well aligned with Government s key priorities of the concession process and related public-sector investments in the transport system, and reflected a comprehensive view towards improving the performance of the sector. 67. In terms of implementation, the Government offered strong and consistent support to most elements of the project implementation except for the period immediately before and after the crisis. Given the circumstances, this is not unreasonable. Nevertheless, implementation progress post-2004 was in great part affected by procurement internal procedures from 2009 until project closure in June 2011 which extended beyond the scope of the Implementing Agency. These delays were identified in 2009 as a cross-cutting issue affecting portfolio implementation. In addition, there were significant delays in effectiveness for both loans, which is assessed as a systemic issue across the Argentina portfolio. (b) Implementing Agency Performance: Rating: Satisfactory 68. The consistent Satisfactory ratings during the first three quarters of the project for safeguards, procurement and financial management clearly indicate the consistent and high quality performance of the UEP during the early years. Implementation pace and quality were also consistently high except for the period immediately before and after the crisis (when issues were outside the control of the UEP). 18

33 The UEP did a good job in helping to resuscitate the project after the new administration offered political support starting May This required a combination of political tact, commitment and persistence that is particularly worth noting. 69. The PIU was able to coordinate and monitor all activities related to the project. It also established and implemented a permanent system to link project activities with municipalities and concessionaires. In addition, it took the necessary actions to ensure compliance with Bank requirements in all aspects of the project, prepared periodic reports to the Bank as required and managed all project accounting activities, including special account, disbursements and auditing reports. The focus of the project on sector planning, institutional architecture and subsidy required a high expertise and institutional capacity which was fairly constrained. This was adequately strengthened under the project s young professional program which required significant effort and commitment on the PIU side. (c) Justification of Rating for Overall Borrower Performance: Rating: Moderately Satisfactory 70. The overall Borrower performance is rated moderately satisfactory, based on the combined performance of Government and the Implementing Agency. While the consequences of Argentina s major economic crisis led to the stalling of implementation for 3 years, the Federal Government and the Buenos Aires authorities continued to hold to the project development objectives and provided the momentum for additional financing, increasing the proportion of counterpart funding. The Government demonstrated commitment to the PDOs by increased Government financing, and the focus on long-term development goals. The post-crisis scenario was very positive, with strong disbursements and a strong determination to catch up and implement the project, evidenced by the demand for the Additional Financing Loan. Nevertheless, despite periods of strong commitment and an overall satisfactory rating for safeguards in particular, the procurement and financial management constraints reported from 2009 onwards led to the downgrade to moderately satisfactory not only for both FM and procurement but also for the overall implementation progress rating. Given that the downgrade was caused by issues that were primarily outside the control of the UEP, the implementing agency performance is kept as Satisfactory while the Government performance at Moderately Satisfactory Lessons Learned The following lessons emerge from the analysis of the project done in this ICR 71. Importance of flexibility in project design in view of unexpected outcomes. The PTUBA project illustrates why it is critical to introduce flexibility in the design of a project so that in an event of a crisis the project can survive and support a government recovery strategy. The flexibility in the PTUBA project stemmed from a sound understanding that the project had to accompany heavy infrastructure components with numerous small scale works. Immediately after the crisis the relatively small scale works resulted in a quick way to respond to a post-crises economic environment by injecting liquidity and local jobs into the economy. 14 In line with IEG Guidelines, the difference in rating between Government (MS) and Implementing Agency (S) brings the overall Bororwer performance rating to Moderately Satisfactory. 19

34 72. Design of additional finance instrument, with its maximum three year period, in countries with consistent delays in loan effectiveness might need reconsideration. Such loans still need to traverse the same bureaucratic procedures in country as a regular SIL. One option may be to consider a longer term for the AF instrument though this project was one of the first AFs extending beyond three years more experience with AF has led to other similar experience. Alternatively a separate follow-on operation could have been considered. 73. Institutional integration agendas are difficult, political and time-consuming. Metropolitan Transport Agencies are highly political and it remains a challenge to support such ambitious institutional agendas within the constraints of the Bank s instruments for investment loans. A lesson learned for transport operations is to more explicitly recognize the limitations of project implementers and overall Bank instruments to catalyze such complex institutional reform. Additional lessons learned from PTUBA are twofold: first, even in the absence of political will to lock-in multijurisdictional agreements, the creation and collection of data and planning tools can be a valuable foundation for future planning coordination; and second even though at appraisal the political environment might seem beneficial for institutional change, project design should conservatively assess the risk of drastic political changes. 74. Capacity building. Consolidation of transport reforms cannot be sustained without building capacity for future generations of transport leaders. In the case of Argentina, there has been a virtual absence of academic programs in educational institutions to develop a pool of professionally qualified manpower for undertaking such urban transport planning. The existent educational curriculum was tightly compartmentalized along academic disciplines, with no interdisciplinary programs in existence. These limited the availability of skills that could conceptualize urban mobility in a comprehensive manner. PTUBA illustrates how this challenge can be tackled effectively and sustained over time in Bank projects. 75. Transformative complementary approaches in urban transport. Other lessons that are confirmed with the implementation of PTUBA are: that small scale accessibility projects can significantly improve the mobility of public transit users, that public consultations can have a significant impact in project design and community ownership, and that rational transport planning is paramount for efficiency of resource allocation which can only be assessed when information is available. 76. Importance of continuous consultation. As mentioned in the consultation section of this ICR, participatory process need not only take place at appraisal or at the onset of a project. Lessons from this project show that projects can benefit from consultations carried out continuously throughout project implementation. 77. Client-focused application of the Bank s procurement policy can add a lot of value. The innovative manner in which the Bank s procurement guidelines were adapted to the actual situation of the Metrovías context was exceptional. The experience indicates the possibility for, and value created by the Bank focusing its Procurement Guidelines to the actual needs and circumstances of the client, adapting them pragmatically to the situation on the ground, all of which can allow the Bank to engage and contribute to broader reform agendas. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies: A summary of the Borrower s report is included in Annex 7. 20

35 (b) Cofinanciers: Not Applicable. (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society): Not Applicable. 21

36 ANNEXES Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ million equivalent) Original Loan Components Appraisal Estimate (US$ million) Actual /Latest Estimate (US$ million) 1.Metrovías Concession % 2.Rehabilitation of Subway Line A % 3.Transport System Integration % 4. Environmental Monitoring and Traffic Safety Percentage of Appraisal % 5. Institutional Framework % 6. Project Administration % 7. Med Drugs, Milk* % 8. Med Drugs, Vaccines* % Total Baseline Cost % Physical Contingencies 39.0 Taxes 35.8 Total Project Costs % Project Preparation Facility (PPF) Front-end fee (IBRD only) Total Financing Required *Reallocation to support social emergency program during financial crisis in Additional Financing Loan Components Appraisal Estimate (US$ million) Actual /Latest Estimate (US$ million) 1.Metrovías Concession Percentage of Appraisal 0.00% 2.Rehabilitation of Subway Line A % 3.Transport System Integration % 4. Environmental Monitoring and Traffic Safety % 5. Institutional Framework % 6. Project Administration % Total Baseline Cost % Physical Contingencies 10.9 Financial Contingencies 20.3 Total Project Costs % 22

37 (b) Financing (Original Loan and AF loan) Source of Funds Type of Financing Appraisal Estimate (US$ million) Actual/Latest Estimate (US$ million) Percentage of Appraisal Government % IBRD

38 Annex 2. Outcomes by PDO and Outputs by Component PDO 1. To support the private-public partnership in improving the service quality and coverage of mass transit; Partially achieved 78. PDO 1 indicators were designed to quantify the impact of the specific infrastructure improvements. Given the focus of the project on supporting investments in the subway 15 the ideal indicators would probably focus only on the subway. 16 In terms of the subway, the available data suggests that while all of the output indicators have indeed been met, the achievements in terms of outcomes show mixed results. Most of the supply-oriented performance targets have been met (increases in car-km, reliability), though the demand-side targets have not been met. This has little to do with the project ridership across the Buenos Aires public transport system fell by over 10 percent at the time of the 2001 crisis and in many cases ridership levels have not yet returned to pre-crisis levels. 79. However, the most important measure of the impact of the project had to do with rehabilitation of Line A. The key output related to this PDO was the rehabilitation of subway Line A, which was fully completed, though with delays. These impressive works completed while the subway was still operating saved Line A from certain decay: in 2007, at a time when the new electrical systems for Line A were in testing and weeks away from commissioning, the existing antique electrical systems collapsed (Figure 1a and 1b show pictures of the old and new systems). In addition, it is worth highlighting that Line A is a part of the city s historical heritage. It is the oldest line in the network with antique systems. Its renovation necessitated substantial expert care and dedication since the major engineering required attention to facilities (electric and signaling networks) that are no longer in use anywhere in the world. Figure 1a and 1b Before and after of electrical systems of Line A 15 Line A of the subway as well as the Bank support to Metriovías concession explicitly supported investments on the subway system, though the Metrovíasa concession covers both the subway and Urquiza and therefore the results indicator covered both. 16 Data available for the Urquiza line suggests that key indicators were met: on-time arrivals of the Urquiza line was maintained at 98% and the number of train cancellations was at 1% (less than the 2% planned). Ridership decreased in the Urquiza line by 5.84% over the twelve year period (from million in 1998 to million in 2010) but this is not outof-line with overall trends in the economy and system ridership as a result of the crisis. 24

39 80. In order to respond to this crisis, testing and commissioning for the new systems was accelerated over the weekend and the systems were successfully commissioned without any systems delays or adverse impacts to the public. In the absence of the project there is no doubt that Line A would have stopped functioning at that time for an extended period until the antiquated electrical systems could have been restored in some manner. The level of disruption to the city would have been significant and the economic analysis for the Line A investment presented in the PAD provides some sense of the impact: high levels of delay and unacceptable levels of on-road congestion as passengers would have had to transfer to buses traveling on the surface. That the counterfactual (of not rehabilitating Line A) was nearly realized helps to focus on the significant impact of the project in terms of service quality and coverage of mass transit. Indeed, a case could be made that the DO related to improving the service quality and coverage of mass transit has been fully achieved given the significant impact of the Line A improvements which were made in a very difficult economic environment but a partially achieved rating has been chosen given the delays (the delays were partly due to the crisis and partly due to procurement and complex technical implementation issues) and the mixed performance data. Objectives Outputs Assumptions Impacts* Achievement/ Completion Support the private-public partnership in improving the service quality and coverage of mass transit Implementation of the Basic Investment Program ( ) Successful continuance of Metrovías concession Complete Rehabilitation of Line A. Timely availability of counterpart funds Efficient regulation and conflict resolution system Metrovías to continue with the concession Government to honor the contractual agreement with Metrovías in a timely manner On time performance of Urquiza line >98% Number of train cancellations < 2% of the planned Metrovías Concession was successfully continued. The Implementation of the Basic Investment Program ( ) was 100% disbursed. On time performance of Urquiza line 98% (2011) Number of train cancellations Urquiza line 534 (2011) Subway/Urquiza ridership up by the contractual amounts (defined in concession agreement) Subway/Urquiza carkm increases as governed by the concession agreement. Subway service interruptions down to the levels Subway ridership 856,000 (2011) Urquiza ridership 58,000 (2011) Subway/ car-km 36.2 million (2011) Urquiza/ car-km 8.72 million (2011) Subway Service interruptions 719 (2011) 25

40 specified in the concession agreement Urquiza Service interruptions 534 (2011) *The Impact column could be renamed today as Outcome Indicators. At the time of appraisal there was no mandatory Results Framework in place. For the purpose of this ICR, Impacts are therefore treated as the Outcome Indicators. **No baseline data available 81. PDO 2. To support the infrastructure improvements defined in the concession agreement between the Government and the private sector; Fully achieved 82. PDO 2 indicators were designed to reflect successful completion of capital investments envisioned as part of the concession the disbursements of the Loan proceeds in a timely manner would reflect that the Argentine Government had paid its share of the payments to the concessionaire as required and that the concessionaire had completed the required investments as agreed (since Bank payments were made only once investments were complete). This indicator was extremely ambitious and required completion and coordination of activities between the concessionaire, the Argentine Gand the Bank (non-trivial coordination given the innovative use of the concessionaire s own procurement processes for the works). In terms of outputs, the key output related to this PDO was the support provided to the metro concessionaire in the period The Bank support for this component required a high level of innovation unusual in the general context of the Bank s procurement systems. Consequently, this PDO was achieved on time by 1999 by which time the loan had disbursed US$50m towards payments to Metrovías for the period ; the Government had paid all its obligations to Metrovías during this period; and Metrovías had fully completed its investment obligations for this period. 83. Bank support for privatization was a relatively new approach at the time the project was approved. There was little experience that was directly relevant to the project. What was understood from significant experience from the urban transport sector in Brazil and the overall transport sector in Argentina was that supporting governments in guaranteeing availability of counterpart funds for meeting concession agreements is crucial to ensure concession sustainability and to reach project outcomes. That this ambitious indicator was fully achieved is a testimony to the success of this objective. 84. Finally, it is clear that PDO1 and PDO2 were very interlinked. The lack of a functioning Line A, would have caused the entire transport system to collapse, and would have put the concession at high risk. Line A is one out of 6 lines in the subway system and accounts for approximately 20% of the metro trips in the system. It also runs central to the City of Buenos Aires and connects to the historic downtown. Objectives Outputs Assumptions Impacts* Achievement/ Completion 2. Contribute Disbursement Timely Successful Loan related to to the financial obligations which the Government of Bank Loan availability of counterpart funds disbursement of the Loan related to Line A and Metrovías concession Line A and Metrovías concession was 100% disbursed. has assumed under Efficient the concession agreements with the private sector regulation and conflict resolution system Metrovías 26

41 to continue with the concession Government to honor the contractual agreement with Metrovías in a timely manner *The Impact column could be renamed today as Outcome Indicators. At the time of appraisal there was no mandatory Results Framework in place. For the purpose of this ICR, Impacts are therefore treated as the Outcome Indicators. 85. PDO 3. To assist in improving the conditions of traffic safety and environmental quality; Achieved 86. By any measure, the project was successful in improving safety and environmental quality in the Buenos Aires metropolitan area. In terms of project outputs, the project achieved (i) construction of 12 grade-separated crossings prioritized to improve safety; (ii) construction of a major transfer center in Moreno; and (iii) improvements in the access facilities around more than 25 stations. Although some outputs were temporarily dropped, such as the air quality studies, the other transfer stations and the automatic barriers, in the aftermath of the crisis (devaluation, US$50m of the loan diverted, costs increasing over time), the most relevant ones were picked up and completed as resources became available. 87. The impact of the grade-separated crossings on safety can be measured concretely in terms of quantifiable indicators. The PAD listed a 25 percent decrease in fatalities on the suburban rail system. During the same period, actual casualties declined from 5 in 1998 to zero in Moreover the numbers of events in which people were injured (either by being struck by a train or by falling off from the trains decreased dramatically from 1,017 in 1998 to 80 in Finally, the number of injured people decreased significantly from 638 in 1998 to 79 in 2010, representing a significant decrease. Moreover, the number of accidents (being run-over by a train) decreased from 15 at appraisal (and 24 one year after appraisal) to 9 in 2010 and the number of injured passengers being run over by a train went from 15 in 1998 to 1 in All these indicators together perhaps more so than any single indicator of fatalities 17 - clearly indicate the significant impact of the grade-crossings on the safety and the highly satisfactory impact of this subcomponent. The grade-crossings were significantly more expensive to construct than estimated at appraisal, and were prioritized over automatic barriers. The results suggest that this was an appropriate prioritization. 88. Despite significant improvements on safety in the railway and subway lines financed by this project, (the most unsafe crossings were selected by this project), it is important to acknowledge the recent accidents which took place in the Once station of the Sarmiento Line. These accidents are a reflection of the lack of investments in certain pockets of the suburban railway system. 89. The impact of improvements in urban environmental quality is a multi-dimensional attribute which remains difficult to measure with any small set of indicators. Certainly, the indicator in the PAD that air pollution monitoring in BA is started which would not in itself 17 Annual system-wide fatalities are not always perfect indicators: fatalities are relatively rare events with high variance such that even single events (such as a collision between a train and a bus at an at-grade crossing) can cause many deaths that can skew a fatality measure. 27

42 satisfactorily explain the impact of investments such as transfer centers and enhancements to access around stations. These investments improve the environmental quality of the public transport experience by improving the environmental quality inter alia the safety, the security, the waste management, the air pollution of access and transfer facilities improving convenience, comfort, security and ultimately quality of life. As it was, the environmental monitoring component was cancelled as part of the mid-term review though the outcome indicator related to air quality monitoring was indeed met: the city started monitoring air quality in 2009 after the most severe elements of the economic crisis had receded. In addition, the investments in the Moreno transfer station and the station access improvements have had a transformative impact which needs to be recognized (see Figures 2a,2b and 2c). The transfer center in Moreno is an emblematic investment that not only significantly enhanced safety and environmental quality in the station area but transformed the Moreno municipality. The municipality used this intervention, which was one of the most significant public investments in the Municipality in many years, as an opportunity to facilitate a significant upgrade of the blighted urban downtown complementing the transfer station investment with investments in adjacent public facilities, zoning changes and business attraction. Figure 2a, 2b, and 2c Before (top two) and after (bottom) pictures of Moreno Transfer Station financed with PTUBA Project 28

43 90. The improvements around stations street lights, paving access facilities and improvements to bus stations at suburban rail stations across the AMBA were simple but no less transformative. These small investments transformed the quality of access to stations: the street lighting, investments in greenery and paving transformed potentially dangerous locations into attractive urban environments where the community came together. Access was improved for all passengers but particularly so for vulnerable populations: the lighting and presence of the community enhanced safety and convenience for women; the improvements in the urban design made the facilities accessible for the disabled population; children in the community got access to (often rare) public space. For these and other reasons (these small scale projects could be quickly implemented immediately injecting money and jobs into the local economy), these station improvements were quickly recognized as one of the most important contributions of PTUBA. 91. The station improvement program was expanded substantially as part of the Additional Financing loan: scaled up from 3-5 stations in the original loan to over 25 by closing date and is now a key element of the Bank s urban transport strategy. Furthermore this program has been expanded again in the new ongoing project (PTUMA Ln AR) and may ultimately finance up to 80 station improvements in total. This is likely the first Bank project that makes the link between transport and urban development and its impact on passenger accessibility. Indeed, station improvement has become a significant goal in terms of smart growth and transit oriented development. The approach of these improvements is now being replicated in other projects across the LCR transport portfolio including a PHRD 18 -financed project in Lima, Peru that focuses on mainstreaming accessibility for the disabled by enhancing the environmental quality of access to mass transit stations. It is regrettable that no adequate outcome indicators can be identified (not at appraisal and not at this time) to appropriately reflect the multi-faceted impacts of these simple but critical station improvements. Indeed, if such an indicator (set of indicators) could be identified and would have been mentioned in the PAD, this 18 PHRD Japan Policy and Human Resources Development Fund. 29