Document of The World Bank FOR OFFICIAL USE ONLY Report No: 50467-AR PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$150 MILLION TO THE ARGENTINE REPUBLIC FOR A METROPOLITAN AREAS URBAN TRANSPORT PROJECT (PTUMA) IN SUPPORT OF THE FIRST PHASE OF A METROPOLITAN AREAS URBAN TRANSPORT PROGRAM September 18, 2009 Sustainable Development Department Argentina, Chile Paraguay, Uruguay Country Management Unit Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective September 10th, 2009) Currency Unit = AR Peso AR$1.00 = US$0.26 US$1.00 = AR$ 3.84 FISCAL YEAR January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS AADT Annual Average Daily Traffic AFP Public auto- transport for passengers AGN Argentine Supreme Auditing Institution (Auditoría General de la Nación) AMBA Buenos Aires Metropolitan Area (Area Metropolitana de Buenos Aires) APL Adaptable Program Loan BNA Banco de la Nacion Argentina BRT Bus Rapid Transit CAS Country Assistance Strategy CAP Community Health Centers CCP Compensaciones Complementarias Provinciales CDCT Coeficiente de Distribución de Compensaciones Tarifarias CFAA Country Financial Accountablility Assessment CNG Compressed Natural Gas CNRT National Transport Regulatory Commission CMU Country Management Unit CPS Country Partnership Strategy CQS Selection Based on Consultants Qualifications CREMA Performance-based Rehabilitation and Maintenance Contracts (Contrato de Rehabilitación y Mantenimiento por Resultados) DA Designated Account DNV National Directorate of Highways (Dirección Nacional de Vialidad) DPV Provincial Road Agency (Dirección Provincial de Vialidad) EA Environmental Assesssment EIA Environmental Impact Assessment ESMP Environmental and Social Management Plan ESMM Environmental and Social Management Manual ERR Economic Rate of Return FAP Fiduciary Action Plan FM Financial Management FRL Federal Fiscal Responsibility Law (Régimen Federal de Responsabilidad Fiscal) GDP Gross Domestic Product GGP Gross Geographic Product GMMA Greater Mendoza Metropolitan Area FOR OFFICIAL USE ONLY GoA Government of Argentina GoP Government of the Province HDM Highway Design and Maintenance Standards Model IBRD International Bank for Reconstruction and Development IAUs Internal Audit Units IFPA Interim Financial Performance Assessment IIRSA Initiative for the Integration of Regional Infrastructure in South America INDEC National Institute of Social and Population Statistics (Instituto Nacional de Estadísticas y Censos) IPSAS International Public Sector Accounting Standards IRI International Roughness Index IFR Interim Financial Report IPR Intellectual Property Rights IUFR Interim Unaudited Financial Report LA Loan Agreement LCS Least Cost Based Selection M&E Monitoring and Evaluation MIS Management Information System MoUs Memorandums of Understanding MRBA Metropolitan Region of Buenos Aires MRM Modified Rational Method MTA Metropolitan Transport Agency for Buenos Aires NFPS Non financial Provincial Public Sector NGO Non-governmental Organizations NPA National Public Administration NPV Net Present Value OCCOVI Concessioned Roads Regulatory Agency (Organo de Control de Concesiones Viales) OM Operational Manual PCA Portland Cement Association PCN Project Concept Note PIU Project Implementation Unit (Unidad de Ejecución del Proyecto) PFM Public Financial Management PFO Fiscal Financing Programs (Programa de Financiamiento Ordenado) PLATAMBA Buenos Aires Transport Planning Team of the National Government Secretariat of Transport PRP Provincial Road Infrastructure Project PTUBA Buenos Aires Urban Transport Project (Proyecto de Transporte Urbano de Buenos Aires) PTUBA-AF Buenos Aires Urban Transport Project Additional Financing PTUMA Metropolitan Areas Urban Transport Project (Proyecto de Transporte Urbano de Areas Metropolitanas) QBS Quality Based Selection QCBS Quality and Cost Based Selection RAP Resettlement Action Plan RCC Complementary Compensation Scheme (Regimen de Compensaciones Complementarias) REFOP Road Transport Professional Development System ( Sistema de Fomento de la This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. Profesionalización del Transporte Automotor) RPF Resettlement Policy Framework SEA Strategic Environmental Assessment SBD Standard Bidding Document SEPA Procurement Plan Execution System (Sistema de Ejecución de Planes de Adquisición) SIDIF National Integrated Financial Management System SIGEN General Syndicate of the Nation SIL Specific Investment Loan SIPAF Provincial Integrated Financial Management System SISTAU Integrated Motorized Transport System (Sistema Integrado de Transporte Automotor) SISVIAL Sistema Integrado Vial SISCOTA Sistema Integrado de Compensaciones Automotor SIT Fund Fondo Fiduciario para el Sistema de Infraestructura de Transporte SITRANS Sistema Integrado de Transporte Terrestre SPIFE Undersecretary of Investment Projects and External Financing SOEs Statement of Expenses SOT Secretariat of Transport SSS Single-source based selection SUBE Sistema Unico de Boleto Electronico TIS Transport Integrated System TORs Terms of Reference Vice President: Pamela Cox Country Manager/Director: Pedro Alba Sector Director: Laura Tuck Sector Manager: Aurelio Menendez Sector Leader: Franz Drees-Gross Task Team Leader: Andres G. Pizarro METROPOLITAN AREAS URBAN TRANSPORT PROJECT CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ......................................................... 1 A. Country and Sector Issues ............................................................................................. 1 B. Rationale for Bank Involvement .................................................................................... 6 C. Higher Level Objectives to which the Project Contributes ........................................... 7 II. PROJECT DESCRIPTION ......................................................................................... 7 A. Lending Instrument........................................................................................................ 7 B. Program Objective and Phases....................................................................................... 8 C. Project Development Objective and Key Indicators.................................................... 10 D. Project Components ..................................................................................................... 11 E. Lessons Learned and Reflected in the Project Design ................................................. 16 F. Alternatives Considered and Reasons for Rejection .................................................... 18 III. IMPLEMENTATION ................................................................................................ 19 A. Partnership Arrangements (if applicable) .................................................................... 19 B. Institutional and Implementation Arrangements ......................................................... 19 C. Monitoring and Evaluation of Outcomes/Results ........................................................ 20 D. Sustainability ............................................................................................................... 20 E. Critical Risks and Possible Controversial Aspects ...................................................... 21 F. Loan /Credit Conditions and Covenants ..................................................................... 24 IV. APPRAISAL SUMMARY ......................................................................................... 25 A. Economic and Financial Analyses ............................................................................... 25 B. Technical ...................................................................................................................... 26 C. Fiduciary ...................................................................................................................... 27 D. Social ........................................................................................................................... 28 E. Environment ................................................................................................................. 28 F. Safeguard Policies ........................................................................................................ 29 G. Policy Exceptions and Readiness ................................................................................ 31 i Annex 1. Country and Sector or Program Background ................................................. 32 Annex 2. Major Related Projects Financed by the Bank and/or Other Agencies ........ 61 Annex 3: Results Framework and Monitoring ................................................................ 63 Annex 4: Detailed Project Description ............................................................................. 69 Annex 5: Project Costs ....................................................................................................... 78 Annex 6: Implementation Arrangements ......................................................................... 82 Annex 7. Financial Management and Disbursement Arrangements ............................. 87 Annex 8. Procurement Arrangements .............................................................................. 95 Annex 9. Economic and Financial Analysis ................................................................... 103 Annex 10. Safeguard Policy Issues .................................................................................. 112 Annex 11. Project Preparation and Supervision ........................................................... 138 Annex 12. Documents in the Project File ....................................................................... 139 Annex 13. Statement of Loans and Credits .................................................................... 142 Annex 14. Country at a Glance ....................................................................................... 145 Annex 15: Maps IBRD NOS. 37157, 37184, 37183 ........................................................ 147 ii ARGENTINA METROPOLITAN AREAS URBAN TRANSPORT PROJECT APPRAISAL DOCUMENT LATIN AMERICA AND CARIBBEAN LCSTR Date: September 18, 2009 Team Leader: Andres G. Pizarro Country Director: Pedro Alba Sectors: General Transportation Sector Sector Manager/Director: Aurelio Menendez (80%);Public Administration- Transportation (20%) Themes: Access to Urban Services and Housing (50%);Other Public Sector Governance (20%);Economic Statistics, Modeling and Forecasting (15%);Municipal Governance and Institution Building (10%);Land Administration and Management (5%) Project ID: P095485 Environmental Category: Partial Assessment Lending Instrument: Adaptable Program Loan Program Financing Data Indicative Financing Plan Estimated Implementation Period Source IBRD % Local % Total Effectiveness Closing Borrower US$ m US$ m US$ m date date APL 1 150.00 80 37.60 20 187.60 March 1st February 37.60 Loan 2010 29th 2016 st APL 2 250.00 80 62.50 20 312.50 March 1 February 150.00 Loan 2014 29th 2020 Total: 400.00 80 100.10 20 500.10 187.60 Project Financing Data [X] Loan [ ] Credit [ ] Grant [ ] [ ] Other: Guarantee For Loans/Credits/Others: Total Bank financing (US$m.): 150.00 Proposed terms: FSL Financing Plan (US$m) Source Local Foreign Total Borrower 37.60 0.00 37.60 iii IBRD 135.00 15.00 150.00 Total: 172.60 15.00 187.60 Borrower: Argentine Republic Responsible Agency: Secretariat of Transport Hipolito Yrigoyen 250, 2do Piso CP1310 Argentina PTUBA PIU Coordinator: Ing. Jorge De Belaustegui (belaustegui@ptuba.gov.ar) Estimated Disbursements (Bank FY/US$m) FY 2010 2011 2012 2013 2014 2015 2016 Annual 0.50 10.00 25.00 30.00 40.00 35.00 9.50 Cumulative 0.50 10.50 35.50 65.50 105.50 140.50 150.00 Project implementation period: Start March 1, 2010 End: September 29, 2015 Expected effectiveness date: March 1, 2010 Expected closing date: February 29, 2016 Does the project depart from the CAS in content or other significant respects? [ ]Yes [X] No Ref. PAD I.C. Does the project require any exceptions from Bank policies? Ref. PAD IV.G. [ ]Yes [X] No Have these been approved by Bank management? [ ]Yes [ ] No Is approval for any policy exception sought from the Board? [ ]Yes [X] No Does the project include any critical risks rated "substantial" or "high"? [X]Yes [ ] No Ref. PAD III.E. Does the project meet the Regional criteria for readiness for implementation? [X]Yes [ ] No Ref. PAD IV.G. Project Development Objective Ref. PAD B.4., Technical Annex 3 The overall development objective of the program is to improve the quality and sustainability of urban transport systems in Argentine Metropolitan Areas, through the improvement of sectoral decision making frameworks and by giving priority to public transport modes in the urban transport sector. The project (APL1) development objectives contribute to the overall program development objective by: (i) supporting the design and creation of a multijurisdictional Metropolitan Transport Agency for the Buenos Aires Metropolitan Area (AMBA); (ii) strengthening the institutional capacity of the transport authorities in decision making, planning, priority setting, and resource allocation in urban transport; (iii) improving the quality and performance of urban transport infrastructure and/or services in medium size Metropolitan Areas; and (iv) improving the physical integration and access to public transport networks in the Buenos Aires Metropolitan Area. Project Description Ref. PAD B.5., Technical Annex 4 Component 1: Creation of a Metropolitan Transport Agency (MTA) for the Buenos Aires iv Metropolitan Area (US$28.5 million without contingencies). This component will prepare the legal, technical, financial and institutional conditions for the creation of a Metropolitan Transport Agency (MTA). Component 2: Urban Transport Improvements in Argentina's medium size Metropolitan Areas (US$62.9 million without contingencies). The component will finance: (a) one or more priority projects that are in an advanced state of planning and have been evaluated from social, environmental and economic perspectives, and (b) a set of specific feasibility studies and/or final designs for future projects that result from comprehensive transport studies currently under way and studies to support interested cities in meeting the eligibility criteria so that they may participate in the Program in APL2. Component 3: Public Transport access and modal integration in Buenos Aires Metropolitan Area (US$53.6 million without contingencies). This component will include infrastructure works on transfer centers, train stations and grade-separated crossings. It will also feature operational improvements in the current train signaling system. Component 4: Sectoral Training: Urban Transport Planning Master (US$2.5 million without contingencies). The component will design a postgraduate course (Masters) in urban transport including all the component disciplines such as engineering, planning, economics, etc. Component 5: Project Management (US$4.6 million without contingencies). The objective of this component is to finance the PIU to carry out the proposed operation. The structure and functions of the PIU have been agreed with the Bank and are described in the project Operational Manual. Which safeguard policies are triggered, if any? Ref. PAD C.6., Technical Annex 10 · Environmental Assessment (OP/BP 4.01) · Physical Cultural Resources (OP/BP 4.11) · Involuntary Resettlement (OP/BP 4.12) Significant, non-standard conditions, if any, for: Ref. PAD C.5. Board presentation: None Loan/credit effectiveness: Effectiveness conditions are limited to standard effectiveness conditions. Key covenants applicable to project implementation include the following: 1. The Borrower shall and shall cause the Eligible Municipalities, Participating Provinces and/or Rail Service Operators to carry out the Project in accordance with the provisions of the Operational Manual and the Environmental and Social Management Manual. 2. The Borrower shall operate and maintain at all times during Project implementation a Project v Implementation Unit (PIU) with a structure, functions and responsibilities acceptable to the Bank. 3. Prior to the carrying out of any of the works or Project activities under a sub-project, the Borrower, through the PIU, shall enter into Implementation Agreements with the relevant Eligible Municipalities, Participating Provinces, or the relevant Rail Service Operators, as the case may be, under terms and conditions acceptable to the Bank. 4. For the purpose of the implementation of sub-component 4.3, with respect to the distribution of scholarships, the Borrower, through the PIU shall sign specific agreements with the beneficiaries, under terms and conditions acceptable to the Bank. 5. The Borrower shall comply with the detailed safeguard-related covenants set forth in the Loan Agreement. 6. The Borrower, through the PIU, shall, prior to the commencement of each calendar year during Project implementation, create and thereafter maintain throughout each said calendar year of Project implementation, a specific budget line entry in the relevant annual budget in order to keep track of the corresponding expenditures incurred during Project implementation. 7. The Borrower, through the PIU, shall, not later than six months after the Effective Date, establish, and thereafter operate and maintain, at all times during Project implementation, a web page for purposes of disseminating Project information (as determined by the Bank), all acceptable to the Bank. vi I. STRATEGIC CONTEXT AND RATIONALE A. Country and Sector Issues 1. Argentina's recovery from the deep economic crisis of 2001-02 has been impressive. Sparked by increased exports and consumption, GDP has surpassed the pre- crisis level, growing at an average rate of around 9 % between 2003 and 2007, and reaching 7% in 2008 despite the global economic crisis. The recovery has been pro-poor as earnings of the low income segments of the population have grown faster during the upturn than the average for the population as a whole and poverty rates have been reduced from 58% in 2002 to 23.4% in 20071. 2. Overall, the global financial crisis (aggravated by a drought) has found Argentina in a healthier fiscal position than in prior crises. Primary fiscal surpluses averaged above 3% between 2004 and 2008, international reserves reached US$46,700 million, and a significant reduction in public debt took place following the 2005 sovereign debt restructuring. As a result the country has weathered the crisis relatively well to date. Nonetheless, the decline in commodity prices combined with the world economic slowdown is also affecting the economic outlook through its impact on the fiscal accounts and international trade. 3. In the short term, the Government has taken several counter-cyclical measures to mitigate the negative impact of the decline in private aggregate demand and to strengthen the safety net system. The GoA anti-crisis plan includes announced investments of around 1.6% of GDP for public works.2 The current account has remained strongly in surplus as a result of a sharp decline in imports. This surplus has helped the Central Bank manage pressures on the exchange rate in an orderly fashion. Perhaps the biggest challenge looking forward is to maintain public spending to both boost aggregate demand and meet key infrastructural and social needs in the face of slow growth in revenues. To this end, the authorities have reiterated their intention to regularize their relations with both private and public external creditors and to take other confidence building measures. These policies and announcements, together with improvements in external economic conditions, have led to a turnaround in economic growth as evidenced by several indicators. 4. As higher economic growth resumes, it is expected that lower income segments of the population will increase their use of urban transport infrastructure and services. This is clearly evident in the growth of public transport patronage in the Buenos Aires Metropolitan Area (AMBA) between 2002 and 2008, where Metro patronage increased by 19% and suburban railway 17%3. Therefore, an efficient urban transport system must be seen as one of the necessary pre-conditions of the GoA economic policy framework, where increasing domestic consumption capabilities of lower income population segments need to 1 National Institute of Statistics (INDEC). 2 World Bank, LCSSD Economic Unit; Crisis in LAC: Infrastructure Investment, Employment and Expectations of Stimulus, 2009. 3 Buenos Aires Urban Transport Project (Loan 4163-AR and Loan 7442-AR) ­ Bi-annual Report , December 2008. 1 be supported by increased access to urban services, employment opportunities, and commercial facilities. 5. In this respect, the strategic position of urban transport in the GoA economic policy framework was recognized early by the authorities, and ample subsidies to the sector were provided to keep transport fares frozen for many years4, so that transport costs would be reduced in real terms. This approach, although necessary given the critical context of 2002, has shown its limitations over the last few years as subsidies are distributed to the operators rather than users, reducing the incentives of operators to improve operational efficiency. Furthermore, with increasing demand, operational subsidies increased, and financing originally destined to transport infrastructure was likely diverted to this end5. The GoA has recognized the limitations of this policy and has decided to improve the design and application of subsidies for the sector6 in a gradual fashion. 6. Despite the recovery in patronage over the last few years, the levels have not fully reached the peak in the nineties, and it seems that the improvement in infrastructure and services has not kept up with the increase in transport demand observed in the period. Indeed, investment commitments by the GoA in the suburban railway and Metro concessions lagged several years and have arguably contributed to the deterioration of the existing infrastructure. Equally, modernization investments that were expected to be undertaken by the concessionaires have been lacking. As a result, the suburban railway and Metro are critically overcrowded and run-down. 7. The GoA is aware that an initial phase after the 2002 crisis characterized by supporting demand, limiting fares, and complying with the commitments of the urban transport concessions, in some cases after renegotiation, has come to an end. Now, the urban transport sector will enter a new phase in which significant infrastructure investments are needed to adequately meet increasing demand. Therefore, a more integral policy framework has to be adopted where the sustainability, level and direction of subsidies are revised, and important investments are planned and undertaken. 8. The suburban railway which serves the Buenos Aires Metropolitan Area and is used primarily by the lower-income segment of the population living in outlying districts of the Buenos Aires Metropolitan Area, transports 18% of annual transport demand. These services are all operated on concession with the exception of the Roca Line. This railway network suffers from a structural problem that has been faced by all such networks in similar Metropolitan Areas, which is the inefficiency and lack of safety caused by at-grade road/rail intersections, as all the lines are at grade. The Bank- supported Buenos Aires Urban Transport project (Loan 4363-AR and Loan 7442-AR) built twelve below grade crossings, and over the years many other such solutions have been adopted. In line with the stated policy to improve urban transport, the GoA has announced the electrification and works to put the Buenos Aires sections of the Roca and Sarmiento lines completely 4 Buenos Aires Metropolitan Area urban transport fares were increased by 33.33% in January 2009. 5 "Relationship between the Nation and the medium size cities of Argentina in matters of urban planning and urban transport". AC&A SA, 2009 6 Interview with Ricardo Jaime, Secretary of Transport, October 2008. Declarations of new Transport Secretary, Juan Pablo Schiavi in Clarin , July 6th 2009. 2 underground. The other lines will continue to represent safety risks because of their at- grade crossings, and the operational efficiency of the railway services will remain limited. 9. The Metro, also on concession, has been in need of expansion for many years. In recent years, the GoA has belatedly complied with the concession contract investment commitments7, extended Line A and is working on Line E. The Metro falls within the National Government's jurisdiction, as it signed the concession contracts, although the intention is to transfer it to the City of Buenos Aires government. 10. The granting of concession for the suburban railways and the Metro followed a period of low investment in both networks, which gave rise to a situation of relative neglect. The concession contracts signed included a commitment from the GoA to provide infrastructure investments to all networks as part of the agreements. These commitments were complied with partially and belatedly, and arguably the concessionaires did not carry out all the investments expected. The impact of the GoA investments in the Metro and the relative competitive advantage of a Metro in a congested city may explain the difference in performance between it and the suburban railway. In any case, for both networks the result of the lack of or lagging investments and the greater and increasing demand resulting from the 6 previous years of continued economic growth are exerting tremendous pressure on the system. As a result the suburban railway and Metro are critically overcrowded and run- down. 11. In the Buenos Aires Metropolitan Area, the majority of transport demand (71%) centers on the public bus system, which consists of 17 thousand vehicles operated by approximately 300 companies. The buses in Buenos Aires are under the jurisdiction of the National Government, while buses that cross municipal lines are in the Provincial government's jurisdiction, and the lines that operate within municipal boundaries are under the corresponding municipal jurisdiction. These services have historically provided reasonable services with acceptable quality, and continue to do so. However, recently the limited quantity of coins in circulation in the country has meant that public transport users, in particular bus users, are seriously inconvenienced, as these services do not accept any other form of payment. To address this issue the GoA announced the introduction of an electronic payment mechanism for all of the Metropolitan Area transport services. 12. The complexities that emanate from a Federal Government set-up, where decentralization of jurisdictional responsibilities tends to atomize planning and managing urban transport adds to limited local government capacity, especially in the Buenos Aires Metropolitan Area, hindering the ability to deal with transport issues efficiently. The lack of a body to coordinate between jurisdictions makes it difficult to deal with transport infrastructure and services which inevitably span various municipalities. It also complicates the implementation of a Metropolitan approach to planning, programming and priority- setting for the urban conglomerate that is served by the transport services regardless of the administrative limits. Deeply needed reforms, such as fare integration or the establishment of sustainable financing mechanisms not dependent on the current direct subsidies to transport operators, are difficult to address within the current institutional arrangement. 7 US$400 million of 1994 investments in all lines. Only investments in Line C have not been carried out. 3 13. In other Metropolitan Areas many of the issues identified and faced by the Buenos Aires Metropolitan Area are also beginning to emerge. Most of the population increases that the medium size cities are experiencing are located in the urban outskirts, exerting additional pressure on the road infrastructure and generating high levels of congestion and local pollution in the central business districts. As a result, there is a decline in the quality of services in the downtown areas, a natural increase in the rate of private vehicle use and minimal measures to promote compact cities and to control urban expansion. In many cases this results in a greater need for improved public transport services to counter the growing use of private vehicles, on the one hand, and to prevent the deterioration of the existing public transport systems which are the sole alternative for many, on the other. In some Metropolitan Areas this means moving from small scale systems to mass transit. 14. A second common issue faced by medium size Metropolitan Areas is the lack of a transport coordinating agency to manage infrastructure and transport services on a metropolitan scale. Just as in Buenos Aires, the current institutional set-up makes it extremely difficult to coordinate plans and investments whenever there is a need for inter- jurisdictional intervention, which is the case with many rail, transit and road projects, therefore hindering the local efforts to improve transportation services. At present, the National Government is intervening in Metropolitan scale projects in these areas to circumvent this barrier. A more detailed description of the sector issues for each municipality is found in Annex 1. 15. Finally, and common to all Metropolitan Areas in Argentina, poverty and exclusion tend to concentrate in the outskirts of Metropolitan Areas or in some pockets within the cities , where exclusion from urban services is added to the already precarious living conditions. Although, as previously mentioned, important strides have been made regarding poverty reduction, solid pockets of poor and excluded settlements exist in Metropolitan Areas, with the Buenos Aires Metropolitan Area arguably concentrating the greatest share. The distance from the center of the Buenos Aires Metropolitan Area to the poor outskirts and the difficulties of the bus system in entering the impoverished and sometimes unauthorized settlements mean that the poor are disproportionally affected by the poor quality and access to the public transport system, on which they depend completely to limit their exclusion. 16. The current GoA and its predecessor have pursued active policies favoring public investment in infrastructure as described in the previous sections. In this respect, urban public transport has been no exception; projects have included complying with the commitments under the concessions for the Metro and suburban trains in the Buenos Aires Metropolitan Area, urban infrastructure (rail/road underpasses, road paving, public spaces etc.), transfer centers, renewal of rolling stock for suburban railways, a small tramway line in Buenos Aires, and revival of peri-urban railway systems in Córdoba, Chaco, Salta and Tucumán. These actions clearly demonstrate a policy trend and direction, and have been supported by measures to keep public transport fares low through a subsidy scheme. 17. The actions to date, however, have been lacking a more detailed or cohesive plan, and the interventions of the National Government to pursue its policy direction have been 4 restricted by the Federal Government structure. As the National Government does not have jurisdiction in urban transport within Municipal boundaries, many of the projects that have seen the light are rail-based, as the National Government is the owner of rail-tracks nationwide. Arguably, the transport sector subsidy scheme has also been a way of participating in the urban transport sector despite the jurisdictional barriers, as the subsidies go mainly to the operating companies. 18. In the last year and with greater emphasis with the advent of the new Secretary of Transport in July 2009, the GoA has been working to provide a more coherent policy framework for the urban transport sector, to review the transport subsidy scheme, to rationalize investments to make them more effective, and to carry-out more significant projects that could mean a qualitative leap for urban transport in the main Metropolitan Areas of the country and in Buenos Aires in particular. In this context, the Secretary of Transport has provided a Sector Development Letter, which includes a document outlining the new National Urban Transport Policy framework that this Program will be supporting, and has actively sought Bank advice and support on these issues. 19. While previously the sector policy had focused on providing the necessary services to the population to move away from the crisis, and later on to reduce the backlog of infrastructure investments and to revive the rail-based public transport system, the GoA now recognizes that a new phase of reform is necessary. Indeed, the structural reforms envisaged are fundamental for the future of the sector and its improvement. The Bank is seen as a privileged partner in the sector to help the GoA tackle these issues; whereas in the past the support given by the Bank was limited in its policy content, this loan is an opportunity for the Bank to provide assistance with a more complex agenda than in the past. 20. Strictly speaking, the National Government does not have urban transport policy responsibilities as they are decentralized to local governments. However, the National Government, according to the Constitution, is responsible for the overall well-being of the citizens of the country, particularly in such matters as the preservation of the environment, and the safeguarding of consumers and users of services from unfair treatment or unequal conditions across the country. As a result, to ensure compliance with its constitutional responsibilities, the National Government has proposed a National Urban Transport Policy to set national guidelines to address macro challenges that cannot be resolved at the local level. 21. The more salient points of the new policy framework build on past achievements. The National Government has given maximum priority to the public transport systems throughout the country and will continue to do so since they contribute to the development of the domestic urban markets. Consequently, the National Government will provide direct technical and financial support for the Metropolitan Areas developing and investing in public transport systems. This support will be realized through transport infrastructure finance, planning tools, technical assistance and various other collaborations. Within the given framework, the National Government will modify the sector's subsidy scheme to make it more equitable and sustainable without compromising operator efficiency. 5 22. Additionally, the National Government's Urban Transport Policy recognizes the complications of the Federal Government set-up in urban transport management, as urban agglomerations function independent of administrative jurisdictional frontiers. Therefore, the National Government will foster the creation of Metropolitan Transport Agencies in the areas that need them the most, giving absolute priority to the Buenos Aires Metropolitan Area. In this context, a policy of public transport network integration will also be pursued, focusing on both physical and fare integration where possible. B. Rationale for Bank Involvement 23. Domestic consumption has been a central element of the GoA pro-poor economic growth strategy and continues to be essential in its response to the global economic crisis. Urban transport infrastructure and services are essential to foster and develop domestic markets, thus the Bank's continued support of the urban transport sector in Argentina is an essential element contributing towards pro-poor growth. 24. In order to address the present shortcomings and face the significant challenges involved in the urban transport sector, a more complex set of policies and a more integral framework needs to be developed. In recent years Argentina has shown a clear willingness to improve its urban transport public system, and the Bank has been a privileged partner in this effort since 1997, through the ongoing Bank transport loans, the PTUBA (Proyecto de Transporte Urbano de Buenos Aires, Loan 4163-AR and Loan 7442-AR). Thus, the Bank offers a comparative advantage in its ability to draw upon global knowledge, sustain a policy dialogue, and exploit synergies with other operations and past experiences in the implementation of transport projects in Argentina. Furthermore, the Bank, as part of its engagement strategy in Argentina in this period, is seeking to be involved in more complex policy operations, moving away from the infrastructure implementation type support in the previous period. This operation does exactly that in the urban transport sector. 25. The Bank's involvement and experience in countries that have undergone radical reforms in the sector - such as Colombia, Mexico, Chile and Brazil - make it an ideal partner for the GoA in what should be a new generation of policies for the sector. As a clear example, the Government has decided to support the creation of a Metropolitan Transport Agency for Buenos Aires Metropolitan Area8 to ensure coordination between the different levels of government in the urban transport sector9, a policy the Bank has supported for many years. 8 As mentioned in the document elaborated by the Interprovincial Council of Public Works Ministries (CIMOP, June 2005, page 258), Una visión estratégica del transporte en la Argentina, which highlights the need for Metropolitan Transport Agencies both in the Buenos Aires Metropolitan Area and the biggest metropolitan areas. 9 As per discussion with Secretary of Transport Ricardo Jaime on 10/08/08. 6 C. Higher Level Objectives to which the Project Contributes 26. The overall and specific objectives of this operation are consistent with the Country Partnership Strategy (CPS10) for the 2010-2012 period, which seeks to reduce the extent and severity of poverty in Argentina by focusing on three pillars: (i) the promotion of sustained economic growth with equity; (ii) social inclusion, and (iii) improved governance by strengthening institutions and increasing accountability and transparency. 27. The operation is strongly aligned with the CPS objectives by (i) addressing a sector which supports and enables the urban economy, contributing to the strengthening of domestic markets which are at the forefront of the GoA's economic strategy of sustained economic growth; in addition (ii) the emphasis on public transport of the operation, as opposed to individual motorized solutions, supports the equity aspect of the sustained growth the GoA is seeking, and supports social inclusion of socioeconomic sectors that are at present excluded from domestic markets, by giving them physical access to urban facilities through an improved and accessible public transport system; and finally (iii) the approach sought by the operation - to improve sectoral decision making frameworks through the improvement of policy formulation, planning and the creation of a multijurisdictional institution in the Metropolitan Area of Buenos Aires - is highly aligned with the last pillar of the CPS. II. PROJECT DESCRIPTION A. Lending Instrument 28. The proposed operation is structured as a two-phase Adaptable Program Loan (APL) in agreement with the Government of Argentina. This instrument will ensure phased support toward the achievement of the Program Development Objectives. Several triggers define the movement from one loan to another. 29. The operation comprises two overlapping phases to be executed over the period 2010-2020, both phases are estimated to take around six (6) years, but a three (3) year overlap is foreseen. The first phase (APL1) will extend for the period 2010-2016 for a total loan amount of US$150 million, but it is believed that the triggers to move to APL2 may be attained in 2013. The second phase (APL2) with a loan of US$250 million will begin after achievement of defined triggers. 30. The choice of instrument coincides with the building block approach and the complexities of institutional capacity building necessary in the sector. The Bank-supported Buenos Aires Urban Transport loan (PTUBA) and Additional Financing together with the GEF Sustainable Transport Project in Argentina have been structured to build on each other. This approach needs to be continued because: (i) from an institutional perspective, 10 World Bank Group's Country Partnership Strategy for the Period 2010-2012 (Report No. 48476-AR) discussed by the Executive Directors on May 6th, 2009. 7 steps have to be taken with necessary consensus to result in a major reform; and (ii) all works have to be based on improved planning, feasibility studies and design, thus creating transparent, sustainable and objective frameworks and moving away from ad-hoc approaches. B. Program Objective and Phases 31. The overall development objective of the proposed program is to improve the quality and sustainability of urban transport systems in Argentine Metropolitan Areas, through the improvement of sectoral decision making frameworks and by giving priority to public transport modes in the urban transport sector. 32. The first phase (APL1) will support: (i) institutional strengthening in the Buenos Aires Metropolitan Area (AMBA) transport sector institutions through the creation of the Metropolitan Transport Agency and the strengthening of its planning tools and information databases; (ii) support for the electronic ticketing scheme for the AMBA; (iii) transport infrastructure investments in the AMBA and the medium size Metropolitan Areas that are adequately prepared (an underpass and access to suburban railway improvements in AMBA, and infrastructure investments in Tucumán, Mendoza and Posadas); (iv) preparation studies for the remaining infrastructure investments identified in the AMBA and the Medium size Metropolitan Areas (a multijurisdictional project in AMBA to be identified, and infrastructure investments in Córdoba and Rosario); and (v) identification and support studies for other Metropolitan Areas that wish to join the program framework. At this stage, the Metropolitan Areas that have manifested interest in joining the program are Resistencia, Santa Fe, and Paraná. APL1 is structured around five components: (i) Creation of a Metropolitan Transport Agency (MTA) for Buenos Aires; (ii) Urban Transport improvements in Argentina's medium size Metropolitan Areas; (iii) Public Transport Access and mode integration in Buenos Aires Metropolitan Area (AMBA); (iv) Sectoral Training: Urban Transport Planning Master; and (v) Project Management. 8 Table 1: Summary of Program Scope, Amount and Contents Phase 1 Phase 2 Total Loan Amount US$150 million US$250 million Implementation Period 2010-2016 2014-2020 Periodic Monitoring Semester Semester APL Trigger Assessment June 2013 Appraisal of Second APL August 2013 Phase: Geographical Scope of AMBA, Rosario, AMBA, Rosario, Cordoba sub-projects Córdoba, Mendoza, and other eligible Tucumán, Posadas and Metropolitan Areas other interested Metropolitan Areas (Santa Fe, Paraná, Resistencia) Geographical Scope of AMBA, Mendoza, AMBA, Rosario and sub-projects containing Tucumán and Posadas Córdoba infrastructure investments 33. The second phase (APL2) is seen as a culmination of the first phase. If all triggers are met, the next phase shall include: (i) the execution of a multijurisdictional project in the Buenos Aires Metropolitan Area (AMBA) to be carried out by the new Metropolitan Transport Agency; (ii) the transport infrastructure investments in Rosario and Córdoba, the preparation of which will have been finalized in APL1; (iii) the transport infrastructure investments in the suburban area of Buenos Aires (Conurbano), in particular the transfer stations of the Municipalities of La Matanza, Pilar and Florencio Varela, the preparation of which will have been completed in APL1; and (iv) investment preparation studies for eligible Metropolitan Areas. A group of Metropolitan Areas that have manifested interest in joining the program will be supported in APL1 so they can meet the eligibility criteria; if they do so, the program will finance more advanced investment preparation studies in APL2. 34. The proposed trigger system to allow the start of the second phase is summarized in Table 2: 9 Table 2 : Triggers for Moving to Phase 2 Triggers Indicators 1. The creation of the Buenos Aires - The Buenos Aires Metropolitan Transport Agency Metropolitan Area Transport Agency has been legally created. (MTA) - Thirty percent of the staff set-out in the technical assistance plan for the definition of the MTA is in place. - The MTA is in place physically; has adequate offices and equipment. - The budget provisions are in place for the MTA. 2. Buenos Aires Metropolitan Area - All detailed designs and bidding documents of all sub-projects to be included in Phase sub-projects to be included in Phase 2 for component 2 are ready to be implemented 3 have been finalized. 3. Medium Size Metropolitan Areas - All detailed designs and bidding documents of all sub-projects to be included in Phase sub-projects to be included in Phase 2 for component 2 are ready to be implemented 2 have been finalized. 4. Adequate overall progress - At least 25% of all APL1 loan proceeds have been disbursed - At least 50% of all APL1 loan proceeds have been committed 35. APL2 would be considered by the Bank when all triggers have been met. However, if there are triggers whose indicators have not been met at the time of trigger assessment, the Bank may consider financing an APL2 that includes only activities which are not directly related to the outstanding triggers. For instance, if the Buenos Aires Metropolitan Area does not meet the trigger of setting up the MTA, then the AMBA sub-projects would not be included in APL2. Trigger assessment is expected by June 30, 2013. C. Project Development Objective and Key Indicators 36. The project (APL1) development objectives contribute to the overall program development objective by: (i) supporting the design and creation of a multijurisdictional Metropolitan Transport Agency for the Buenos Aires Metropolitan Area (AMBA); (ii) strengthening the institutional capacity of transport authorities in decision making, 10 planning, priority setting, and resource allocation in urban transport; (iii) improving the quality and performance of urban transport infrastructure and/or services in medium size Metropolitan Areas; and (iv) improving the physical integration and access to public transport networks in the Buenos Aires Metropolitan Area. 37. The following indicators will be used to measure progress towards the achievement of the proposed objectives (Annex 3 provides the baseline values and targets for the selected APL1 indicators): APL1 The Buenos Aires Transport Metropolitan Agency is legally created, is adequately staffed according to the organization chart designed in the project, has adequate offices and equipment, and its own operating budget. Number of Metropolitan Areas with updated origin-destination household surveys and urban transport/land use master plans and transportation modeling tools. The AMBA Urban Transport Planning Observatory is fully functioning and data is accessible via webpage. The AMBA Transport Master Plan is completed. In Tucumán: - % of primary school students absent on poor transitability days is reduced. - Number of appointments in CAP (Centros de Atencion Primaria or Community Health Centers) cancelled on poor transitability days is reduced. - Number of days with no circulation of public buses is reduced. - Average speed of public buses in Barrio 11 de Marzo is increased. In Posadas : - User's perception of public transport system quality is increased. - Average speed of public buses on corridor increases. In Mendoza: - Public transport services on the Colector Papagayo. Users quality perception of access to AMBA suburban railway stations. A post-graduate course in urban transport is registered with the federal Ministry of Education. D. Project Components 38. Component 1: Creation of a Metropolitan Transport Agency (MTA) for the Buenos Aires Metropolitan Area (US$28.5 million without contingencies). The objective of this component is to strengthen the capacity for transportation planning and management at the metropolitan level. This component will prepare the legal, technical, financial and institutional conditions for the creation of a Metropolitan Transport Agency (MTA). The existence of an agency for the AMBA is a prerequisite to rationally restructure inter-jurisdictional bus routes, coordinate bus and subway services, implement multimodal 11 integration, especially fare integration, smart card compatibility, subsidy and uniform tariff policies etc. Furthermore, this component will finance the consolidation of a solid transport database, building on the database created in the PTUBA, and consolidating it through the creation of the Urban Transport Observatory. Finally, the operation will support the Electronic Ticket project (SUBE) initiated by the GoA by financing Project Management consultancy and technical assistance. Both the Observatory and SUBE projects are the necessary building blocks to support a possible change in the existing subsidy scheme which this operation will also support with individual consultants. 39. This component is divided into the following sub-components: · Sub-component 1.1: Agency Structuring (US$1.0 million without contingencies): Development of adequate legal and institutional frameworks for the new Metropolitan Transport Agency. · Sub-component 1.2: Consolidation of Transportation Planning in Buenos Aires (US$13.0 million without contingencies): Support for necessary technical efforts for transportation planning activities. This includes: (i) continued improvement of the AMBA Urban Transport Model (US$2.0 million); (ii) An AMBA Transport Master Plan (US$2.0 million); (iii) Feasibility Studies and Design Studies for a major multijurisdictional project in AMBA (US$6.0 million); (iv) Transport Planning data collection and updating (US$3.0 million). · Sub-component 1.3 Urban Transport Observatory (US$1.1 million without contingencies): Finance for the creation of an Observatory which will collect, process and maintain all the urban transport and air quality databases. · Sub-component 1.4 SUBE Supervision (US$10.5 million without contingencies): Facilitation of the provision of a single fare media payment technology across all transportation modes in AMBA. This sub-component will finance supervision and project management consultant services only. · Sub-component 1.5 Staff and Operational Expenses (US$2.9 million without contingencies): Financing of the necessary staff, office and other operational expenditures of the Metropolitan Transport Agency for the duration of the project. This may include a seed group of professionals destined to become part of the MTA, to work on the activities financed by component 1, prior to the legal creation of the MTA. 40. Component 2: Urban Transport Improvements in Argentina's medium size Metropolitan Areas (US$62.9 million without contingencies). The objective of this component is to enhance the mobility conditions of selected Argentina's medium size Metropolitan Areas. Five Metropolitan Areas have been selected to participate in the program (Mendoza, Posadas, Tucumán, Córdoba and Rosario). The eligibility criteria for a city or Metropolitan Area to participate in the PTUMA Program are the following: (i) An urban transport policy or strategy that favors public transport; (ii) A Master or Strategic Transport Plan for the Metropolitan Area that has been adopted, is duly recognized, and has been published; (iii) An origin-destination household survey that provides information on mobility indices in the Metropolitan Area; and (iv) A working computer-based transport model for the Metropolitan Area. Other cities or Metropolitan Areas may participate in the 12 Program provided they meet the eligibility criteria. The Program provides financing for interested cities or Metropolitan Areas for assistance in attaining the eligibility criteria. 41. Therefore, the component will finance: (a) one or more priority projects that are in an advanced state of planning and have been evaluated from social, environmental and economic perspectives; and (b) a set of specific feasibility studies and/or final designs for future projects that result from comprehensive transport studies currently under way and studies to support interested cities in meeting the eligibility criteria so that they may participate in the Program in APL2. 42. This component is divided into the following sub-components: · Sub-component 2.1 Metropolitan Area of Mendoza(US$9.8 million without contingencies): Paving works for Colector Papagayos. · Sub-component 2.2 Metropolitan Area of Posadas (US$14.6 million without contingencies): Construction of segregated busway on Uruguay Avenue. · Sub-component 2.3 Metropolitan Area of Tucumán (US$22.5 million without contingencies): Paving and storm water drainage for Barrio 11 de Marzo. · Sub-component 2.4 Metropolitan Area of Córdoba (US$2.0 million without contingencies): Preparation studies for Mitre Intermodal transport terminal. · Sub-component 2.5 Metropolitan Area of Rosario (US$4.0 million without contingencies): Preparation studies for High Quality transit for the Corredor Norte- Sur Project. · Sub-component 2.6 Technical assistance (US$8.5 million without contingencies): Financing of feasibility and/or design studies or other studies supporting interested cities in attaining eligibility criteria for the Program. · Sub-component 2.7 Strengthening Environmental and Social Management Capacity (US$1.5 million without contingencies): Financing the strengthening of institutional capacity of participating Metropolitan Areas in environmental and social management. 43. The works sub-projects prepared under APL1 up to detailed design will be financed in APL2, specifically the sub-projects presented by Córdoba and Rosario. However, all sub-projects that comply with preparation criteria (economic, social and environmental assessments), have a detailed design and come from eligible Metropolitan Areas (i.e. those that comply with the criteria set for Metropolitan Areas) may be considered for financing in APL2; these may include Metropolitan Areas not yet identified. In the case of the Metropolitan Areas that have already had sub-projects financed in APL1 (potentially Tucumán, Posadas and Mendoza), they will need to show progress in the institutional set- up regarding multijurisdictional coordination to be considered in APL2, in particular the way they implement the Metropolitan Area transport plan in multiple jurisdictions. 44. Component 2 addresses sectoral issues such as the underinvestment in road maintenance and road infrastructure, increased traffic congestion in urban areas, the decreasing quality of public transport service and the limited intermodal integration. The target groups are the future users of the infrastructure projects, the residents of surrounding 13 neighborhoods and the commercial areas adjacent to the projects. The main outputs of this component are the road improvements and new public transport infrastructure in Mendoza, Posadas, Tucumán, Córdoba and Rosario as well as a set of feasibility and/or design studies for previously identified projects. 45. Component 3: Public Transport access and modal integration in Buenos Aires Metropolitan Area (US$53.6 million without contingencies). The objective of this component is to improve current accessibility to and mode integration of the public transport network in the AMBA. This component will include infrastructure works on transfer centers, train stations and in a grade-separated crossing. It will also feature operational improvements in the current train signaling system. This component provides an integral strategy to improve service quality by acting simultaneously on bus-train physical integration, accessibility to stations, railway signaling improvements, and rail-road crossings. The combination of these actions will improve the perceived quality of suburban train services in the AMBA. The area of intervention is considered one of the poorest in the country, the types of works are relatively low-cost and will have significant impacts, and the users will be public transport passengers. Thus the benefits will be, to a great degree, accrued by the some of poorest sectors of the population. 46. This component is divided into the following sub-components: · Sub-component 3.1 Transfer centers (US$5.0 million without contingencies): Detailed design studies for improvement infrastructure works in three intermodal centers of the AMBA. · Sub-component 3.2 Station Accessibility (US$30.6 million without contingencies): Works to improve the access conditions around train stations in the AMBA. This component is demand-based. A universe of stations eligible to have their access conditions improved has been identified and ranked on the basis of poverty indicators of the area, number of passenger boarding and alighting, and train frequency. The corresponding interested Municipality will present the project concept, within the framework of the type of works that are considered eligible, and if the PIU approves it, the project design will be carried out. The eligible types of works are small, such as road and sidewalk paving, urban furniture, street lighting, bicycle facilities etc. The works per station will be limited to approximately US$1.0 million without taxes. Technical and economic studies justifying small increases in specific cases will be accepted. · Sub-component 3.3 Grade separated crossings (US$17.5 million without contingencies): Works to build one grade-separated crossing at a critical railroad intersection. · Sub-component 3.4 Train signaling System (US$0.5 million without contingencies) Train signaling system: Study to design the best strategy to improve the train signaling system. 47. Component 3 addresses sectoral issues like the underinvestment in rail infrastructure such as stations and transfer centers in the AMBA, the high accident rates at rail crossings, and the inefficient barrier and signaling systems. The target group will be the commuter train passengers and the surrounding communities. The main outputs of this component are the improvement of access conditions to existing rail infrastructure. 14 48. Component 4 Sectoral Training: Urban Transport Planning Master (US$2.5 million without contingencies). The objective of this component is to improve academic training in urban transport. The component will design a postgraduate program (Masters) in urban transport including all the component disciplines such as engineering, planning, economics, etc. The component builds on the course designed and carried out with the support of the PTUBA AF loan (Loan no. 7442-AR), and will attempt to follow the academic curriculum designed then, but adapted so as to become a permanent course in the participating universities. 49. This component seeks to bring together the Universities of Buenos Aires, Cuyo, Córdoba and Rosario to develop and implement this program. The program is planned to be shared by the participating universities and would be given in class and through a virtual platform (Internet, videoconferencing, etc.), so that students in each of the universities would follow the same curriculum but based in their own city. 50. This component is divided into the following sub-components: · Sub-component 4.1 Institutional and Academic Development (US$0.64 million without contingencies). The institutional and academic design of the course with the objective of obtaining permanence for the courses through accreditation by the Ministry of Education. · Sub-component 4.2 Implementation of the course (US$1.76 million without contingencies). The sub-component will finance education fees and a limited amount of scholarships for students. The program will finance the first two promotions and from then on the course will be self-sufficient. · Sub-component 4.3 Teacher training program (US$0.1 million without contingencies). This sub-component will finance the implementation of a teacher training program for the teaching staff that will participate in the Masters course. 51. Component 5 Project Management (US$4.6 million without contingencies). The objective of this component is to finance the PIU to carry out the proposed operation. The structure and functions of the PIU have been agreed with the Bank and are described in the project Operational Manual. 52. The total cost of the project will be distributed as shown on the following table: 15 Table 3: Project Costs by Component COMPONENT COST (US$ Million) Component 1: Creation of a Metropolitan Transport Agency 28.50 (MTA) for Buenos Aires Component 2: Urban Transport Improvements for 62.90 Argentina's medium size Metropolitan Areas Component 3: Public Transport Access and modal 53.60 integration in Buenos Aires Component 4: Sectoral Training: Urban Transport Planning 2.50 Master Component 5 : Project Management 4.60 Physical contingencies 20% of Physical works 18.00 Price contingencies: 10% (C1+C2+C3+Physical 17.125 Contingencies) Front end fee 0.375 PROJECT TOTAL 187.60 Bank share (80%) 150.00 National share (20%) 37.60 53. Components have been selected on the basis of addressing identified needs and requirements in the respective municipalities. The specific definition and characteristics of every component were planned and discussed with the local counterparts. Component 1 was designed with the Buenos Aires Transport Planning Team (PLATAMBA), at the Secretariat of Transport, in order to improve the current transportation planning process under this proposal. 54. Components 2 and 3 were developed along with the Project Implementation Unit (PIU) at the Secretariat of Transport, which served as a liaison with the local municipalities. For these two components, all infrastructure elements were required to be justified on the basis of a positive economic evaluation, an adequate technical assessment and a thorough understanding of safeguard aspects. Moreover, all sub-components were required to be consulted with the public and undergo social and environmental screenings. 55. Component 4 was designed by the PIU in liaison with several universities and the Secretariat of Transport staff that recently created a Masters in Railway Engineering at the University of Buenos Aires. The final architecture of the Masters degree will largely depend on the activities carried out during the implementation of the loan. E. Lessons Learned and Reflected in the Project Design 56. The role of national governments in the implementation of urban transport services projects and reforms is paramount. Reforms in the sector normally require large investments and complex technical decisions. Given that municipalities lack both financial 16 and technical resources, the participation of the National Government becomes crucial in promoting reforms at the municipal level and finds its justification in the fact that most of the economic growth at the national level happens in Metropolitan Areas, provided that this growth is not hindered by deficient urban services, including transport. 57. Bringing public transport infrastructure to a state of good repair is essential to maintain public transport ridership: Buenos Aires lost nearly 50% of its public transport ridership since the early nineties due to an increasing urban motorization, a deteriorating bus transport service and an overcrowded commuter train system. In response, the GoA financed infrastructure improvements for selected lines of the subway system in Buenos Aires and railway systems in some medium size cities, leading to a steady recovery of public transport ridership. Nonetheless, the increase in transport demand due to improved economic conditions and the backlog of infrastructure and service improvements in the public transport systems have recently led to the stagnation of public transport ridership in the AMBA, and the increasing demand from medium size Metropolitan Areas for significant investments in public transport systems. The PTUMA project will try to address the need in public transport infrastructure investments in all eligible Argentine Metropolitan Areas. 58. Planning must be institutionalized to improve resource allocation. Lack of planning is endemic in the transport sector in Argentina; Buenos Aires is arguably the largest and most important city in Latin America without a household transport survey and the corresponding planning tools and institutions. As a result, resource allocation decisions tend to be inefficient at best and arbitrary at worst. A major effort has been started with the PTUBA-AF to provide all the necessary transport planning tools to the GoA; this project will consolidate and institutionalize that effort. 59. Public transport operations can be improved by empowering a centralized body with service planning decisions: The current public transport systems in most Argentine cities rely almost fully on private operators. This approach improves efficiency in operations but leaves little room for reaping benefits from intermodal integration. A centralized planning body can leverage transport policies that lead to a better physical, operational and institutional integration across service providers. This operation will lay the basis in all Metropolitan Areas to move towards schemes of inter-municipal cooperation for managing and planning transport systems and it will support the creation of the Buenos Aires Metropolitan Area Transport Agency. 60. The Buenos Aires Metropolitan Area Transport Agency must be created with limited functions and with the participation of the National Government, the Provincial Government and the Municipal Government of Buenos Aires only at the outset. A law regarding the creation of the MTA (then denominated ECOTAM) was approved by Congress in 1998 (Law No. 25,031). It defined that all the 43 Municipalities of the AMBA had to adhere to the MTA for it to be effective. This did not occur and the law was never regulated. It seems wiser to limit the functions delegated to the MTA and to limit the participants in order to cover the essence of what is needed to overcome the main issues faced by the AMBA. In this respect, the coordinated planning of major multijurisdictional infrastructure and services seems to be sufficient at the outset. 17 61. The World Bank support must be consistent with the objectives sought and the tools chosen to tackle the main development barriers identified in the urban transport sector in Argentina. The Bank's involvement in the urban transport sector over the years has clearly identified that the lack of a MTA in Buenos Aires is a barrier to the development and improvement of the urban transport system, as it is in similar Metropolitan Areas in the world. Therefore, this operation is conceived and geared fully to address this issue and the choice of loan instrument and trigger scheme are consistent with that fact. 62. Creation of Institutional Synergies at the Municipal level: Countries that have developed successful multi-city transport Programs (e.g. Colombia) have strengthened local institutional practices through a constant knowledge transfer across municipalities. The adoption of Bank procedures for the Program's implementation in every Metropolitan Area will foster communication across municipalities and the sharing of best practices. 63. Public consultations can greatly improve project design and acceptance. The on- going Buenos Aires Urban Transport Project (PTUBA) has financed projects similar to those featured in the proposed operation such as rail-road crossings and transfer centers. The final designs and rationale were discussed during public participation exercises that improved projects on the basis of the suggestions made by the citizenry, and consequently increased the project's public acceptance. Such scheme will be replicated under the proposed operation, building upon the experience of the PTUBA. 64. This project is building on lessons from the PTUBA. Performance of this project has been recently evaluated by the World Bank's Quality Assessment Group in 2008. This group rated the likelihood of achieving the proposed Development Objectives as "Satisfactory/Likely". The evaluation panel recommended: (i) to pursue dialogue at the Country Management Unit level to address any systemic causes of implementation delays (ii) to further pursue the creation of the Metropolitan Transport Agency and, (iii) to give particular attention to the results of the ex-post evaluation. The first two recommendations of the panel will be adopted in this operation as they refer to the same sectoral context and issues. F. Alternatives Considered and Reasons for Rejection 65. SIL vs. APL: The Bank's team proposed an APL (Adaptable Programmatic Lending) for implementation of the loan, as it allows financing in phases based on the achievement of pre-set objectives, which in turn trigger subsequent phases. As the objectives include important sector reforms, the more gradual approach of the APL and the incentive of triggering a second round financing seemed more adequate to bolster a difficult reform package. 66. Back loaded vs. Front loaded APL. The option of a front loaded APL was rejected for three reasons: (i) the preparation of this project was done in the context of the 2008/2009 global economic crisis; hence, Bank Management concluded that a more conservative US$150 million figure for the first APL would allow a greater flexibility in 18 budget allocation under the crisis; (ii) more leverage is obtained for the more important reform ­ the creation of the Metropolitan Transport Agency - with a greater APL2; (iii) increasing the size of the second APL allows other Metropolitan Areas to be included in future stages of the program. Currently, only six Metropolitan Areas have become eligible for Bank financing; this approach allows the inclusion of other municipalities in the second APL. III. IMPLEMENTATION A. Partnership Arrangements (if applicable) 67. There are no applicable partnership arrangements. B. Institutional and Implementation Arrangements 68. Borrower: The Borrower is the Argentine Republic and the executing agency the PIU within the Secretariat of Transport of the Ministry of Federal Planning, Public Investment and Services. 69. Project Management and Implementation: The Project Implementation Unit set up when the Buenos Aires Urban Transport Project (Loan AR 4163) was initiated (hereinafter PIU) will execute the proposed project. This PIU is a well established unit, which has performed satisfactorily during recent project implementations and is fully familiar with Bank's rules. It has particularly gained fiduciary experience from the implementation of the ongoing project and has the capacity to manage the project funds. 70. The PIU will retain overall responsibility for Project implementation, acting as a permanent link between the Bank and the Borrower. For the purpose of this Project the PIU will, in particular: (i) manage and monitor project implementation; (ii) elaborate pre- qualification and bidding documents for works and appraise all activities included in the institutional strengthening sub-components prior to submitting them for the Bank's no objection; (iii) work closely with engineering consulting firms hired by the Borrower to prepare engineering designs and bidding documents; (iv) carry out the Project's budgeting, accounting, financial management, monitoring general flow of funds, authorizing transfers of funds, managing financial and accounting information systems, preparing Project progress reports and financial statements, and interacting with the Bank and the external auditors on FM issues.; (v) monitor and assess the impact of the Project in relation to the development objectives and on the basis of the results indicators established in the project's results framework (Annex 3); and (vi) cooperate closely with the transport agencies of the participating municipalities both in the AMBA and the five participating Metropolitan Areas. The institutional arrangements between the PIU and participating Metropolitan Areas will be clearly defined in Implementation Agreements to be signed with the PIU and participating Municipal and Provincial Governments as needed. 71. The PIU is headed by a General Coordinator who is assisted by various coordinators in the following areas: Works, Technical Designs and Studies, Accounting and Finance, Relations with Metropolitan Areas, and Legal Affairs, as well as having support in the 19 different municipalities involved. The composition of the PIU is submitted to the Bank's approval. Procurement and Financial Management activities will be centralized at the federal level through the PIU. C. Monitoring and Evaluation of Outcomes/Results 72. The monitoring and evaluation system is designed to assess whether or not the Project is being implemented in line with the proposed objectives and to measure fulfillment of agreed targets. Project progress reports will be prepared by the PIU on a semi-annual basis and submitted to the Bank. These reports should indicate the progress made under the different components of the Project and measure performance against the results indicators established in the results framework (Annex 3). In addition, progress reports will include information regarding: (i) disbursement performance over the period covered by the report and an updated disbursement calendar ; (ii) a procurement report, and an updated procurement plan for activities under each of the project's components ; (iii) progress in the implementation of the Environmental and Social Management Plan laying out problems identified as well as documenting positive environmental and social impacts of the project in the areas of intervention; (iv) a section describing potential developments that could affect project implementation, which should consist of a review of the main risks and the impact of mitigation measures envisioned at appraisal (see section on risks); and (v) an annual operation plan for the following year, presented in the second semi-annual report. 73. Collaboration arrangements between the PIU and the participating municipalities for monitoring of relevant outcome indicators and intermediate indicators will be included in each Cooperation/Implementation Agreement. Mendoza, Córdoba, Posadas, Rosario and Tucumán will have the main responsibility for data collection and reporting on project results to the PIU. Annex 3 and the Project Manual provide more specific procedures and monitoring and evaluation responsibilities at the municipal and national level. D. Sustainability 74. The proposed investments and initiatives supported by this operation are strongly aligned with the GoA National Urban Transport Policy as presented in the Sector Development Letter (Appendix 1 of Annex 1). As such, the investments financed correspond to a larger policy framework that will align other initiatives and investments along these same lines, contributing to the overall sustainability of the Program. 75. The investments in component 1 that support the creation of the MTA are institutionalized by the trigger scheme proposed in this operation. In other words, if this operation is successful, it will have meant that the MTA has gathered all the necessary elements of sustainability (legal existence, budget, physical presence and staffing), which in turn are the proposed triggers. 76. The other investments in component 1 relate to transport planning tools and data. These investments will be made sustainable by the creation of an Urban Transport 20 Observatory which will collect, maintain and publish all the data gathered in the operation and will continue the task of maintaining and updating the information. The commitment to publish the information on a webpage will introduce external pressure for the improvement and continuity of the availability of the information. 77. Infrastructure investments under components 2 and 3 will be owned by the corresponding Municipalities. They will sign an agreement with the Secretariat of Transport in which, amongst other things, they will commit to maintaining the works financed by this operation. Future investments and further participation by the eligible Metropolitan Areas in the program, particularly in APL2, will be subject to the level of compliance with the agreements signed with the Secretariat of Transport in APL1. 78. Having said the above, the project is built around the premise that despite its relatively modest amount, the dialogue developed with the Borrower will allow it to support elements which will lead to a major reform of the sector that will improve overall sustainability. These are: (i) the electronic ticketing system, which will lead to transport network integration in the AMBA and to future fare integration; (ii) restructuring of the subsidy policy11, which with the existence of the electronic ticketing system may include a greater level of demand-based subsidies; (iii) the creation of a Metropolitan Transport Agency that can resolve the jurisdictional barriers in the AMBA and promote and carry out Metropolitan transport projects more efficiently. If the project achieves these elements of reform, the possibility of furthering the program's overarching objectives is greatly enhanced. E. Critical Risks and Possible Controversial Aspects Table 4 : Risks and Mitigation Measures Risks Risk Mitigation Measures Risk Rating with Mitigation Sector Policies: Existence of a Increased awareness and knowledge base on Moderate transport sector subsidy scheme the subsidy issue in the GoA. There is that no longer provides incentives consensus on the need to improve the scheme, for the improvement of transport and PTUMA should provide the basis for the sector operations and service improvement through the implementation of provision. the: (i) transport sector observatory, and (ii) the single fare media. (Boleto Unico). The GoA's interest in improving the sector subsidy scheme is reflected in the Sector Development Letter. 11 The subsidies granted to the urban transport sector alone amount to US$1,600 million per year from the National government, which also allocates significant amounts for transport infrastructure such as rail and rolling stock for suburban railways, etc. Furthermore, Municipalities also finance to some extent local transport and urban infrastructure. 21 Risks Risk Mitigation Measures Risk Rating with Mitigation Sectoral institutional weaknesses: Substantial (i) Lack of coordination of land Improved awareness and knowledge base on use, urban development, and strategic planning in the sector and the GoA. transport policies at a Metropolitan and introduction of eligibility criteria in level; and (ii) Lack of a medium size Metropolitan Areas for project multijurisdictional coordinating finance, which include the existence of entity at Metropolitan level in Comprehensive Transport Plans that back up Buenos Aires. the investments proposed. Over two years of meetings held by the coordinating team that comprises all the jurisdictions in the Buenos Aires Metropolitan Area (PCT). A consultation process within the PCT and consensus with the Bank on multijurisdictional projects that could be implemented in the Buenos Aires Metropolitan Area. Finally, consensus within the Secretariat of Transport that the creation of the Metropolitan Transport Agency for Buenos Aires should be pursued by this project The GoA's interest in supporting the creation of the MTA is reflected in the Sector Development Letter. Project costs: Experience from Moderate previous projects shows that that Mitigation measures related to inflation will differences between project costs include: (i) factoring in the cost estimates the estimates at appraisal and real costs likely inflation on costs of materials (asphalt, at bid presentation may arise. gas-oil, labor and transport) during the period comprised between appraisal and bid presentation; (ii) allowing for price adjustment on a monthly basis; (iii) tendering on the basis of final designs that define quantities of work, thus leaving less margin to the discretion of bidders; (iv) requesting procurement plan updates to include cost estimates updates; (v) the bidding documents will be critically reviewed focusing on their impact on the cost of projects; (vi) advanced preliminary project designs and/or specifications will be required at appraisal, for the more complex works. Implementation capacity and Conversations with local authorities have Substantial sustainability: Potential absence already been started to foster support for the 22 Risks Risk Mitigation Measures Risk Rating with Mitigation of political support for the creation MTA. The way the Agency is set up of the Metropolitan Agency and (adherence meaning access to the funds inter-institutional disputes delaying managed by the Agency) should provide the or impeding the creation of the necessary incentives for local governments to Metropolitan Agency. support the creation of the MTA. In addition, the adherence of all municipalities is not required for the "seed" MTA to be operational. There is currently consensus about the need for such a coordinating institution and a consultative committee (PCT) has been working since 2006 to bring together all potential MTA stakeholders. Moreover, the second phase of the APL is expected to act as an incentive to institutionalize the functions of MTA. The existence of well-functioning examples of such agencies in other Metropolitan Areas in Argentina is encouraging. Risks in the area of The Task Team with the CMU will study Substantial procurement: Delays in certain provisions to be included in the Loan procurement processes Agreement and agreed at Negotiations regarding the procurement process in relation to Bank guidelines. Lack of new firms participating in For selection of consultants the project will Low bids may lead to a lack of make a special effort to ensure that there is competition and higher costs in open participation, through wide publication of consulting services expressions of interests. Financial management: The Argentina Fiduciary Action Plan; use of a Moderate project involves significant amount reliable country system (UEPEX) for the of funds and flow of funds, which execution of the project; execution at the increases the potential risk related Federal level only, so payments and flows of to financial management. funds are centralized at the PIU of the Secretariat of Transport. Limited capacity in Preliminary studies for the design of Low municipalities: Limitations in the economically, socially and environmentally municipalities' ability to design justifiable projects are in current development. and manage urban transport Training workshops have been carried out with projects and road maintenance the participating Metropolitan Areas. programs, and delays in Provision of adequate training in safeguard implementation due to lack of requirements; frequent Bank supervision experience in participating missions; use of experienced staff at the Metropolitan Areas with Bank federal level (in the PIU) to manage the project components and provide assistance to the 23 Risks Risk Mitigation Measures Risk Rating with Mitigation safeguard requirements. Metropolitan Areas. The project's Environmental and Social Manuals are based on the PTUBA's. Supervision: The project will The project benefits from the experience of the Low involve projects in participating PTUBA-AF and the GEF which work under Metropolitan Areas to be the same set-up successfully, so both the PIU supervised by the Secretariat of and the staff in the Metropolitan Areas have Transport (PIU) at the national experience of the set-up. This experience will level, with the support of local be reinforced by the addition of staff with municipalities, which could add relevant expertise on both environmental and complexity to project supervision. social issues. Overall Program Risk Moderate F. Loan /Credit Conditions and Covenants 79. Effectiveness conditions are limited to standard effectiveness conditions. 80. Other Covenants: a) The Borrower shall and shall cause the Eligible Municipalities, Participating Provinces and/or Rail Service Operators to carry out the Project in accordance with the provisions of the Operational Manual and the Environmental and Social Management Manual. b) The Borrower shall operate and maintain at all times during Project implementation a Project Implementation Unit (PIU) with a structure, functions and responsibilities acceptable to the Bank. c) Prior to the carrying out of any of the works or Project activities under a sub- project, the Borrower, through the PIU, shall enter into Implementation Agreements with the relevant Eligible Municipalities, Participating Provinces, or the relevant Rail Service Operators, as the case may be, under terms and conditions acceptable to the Bank. d) For the purpose of the implementation of sub-component 4.3, with respect to the distribution of scholarships, the Borrower, through the PIU shall sign specific agreements with the beneficiaries, under terms and conditions acceptable to the Bank. 24 e) The Borrower shall comply with the detailed safeguard-related covenants set forth in the Loan Agreement. f) The Borrower, through the PIU, shall, prior to the commencement of each calendar year during Project implementation, create and thereafter maintain throughout each said calendar year of Project implementation, a specific budget line entry in the relevant annual budget in order to keep track of the corresponding expenditures incurred during Project implementation. g) The Borrower, through the PIU, shall, not later than six months after the Effective Date, establish, and thereafter operate and maintain, at all times during Project implementation, a web page for purposes of disseminating Project information (as determined by the Bank), all acceptable to the Bank. IV. APPRAISAL SUMMARY A. Economic and Financial Analyses 81. The project has been evaluated by component and sub-component considering only the sub-projects that contain major investments ­ in particular works. Consultancy services, training and capacity building sub-components are not evaluated economically. Their impact may be ascertained from the monitoring and results framework. 82. The sub-projects evaluated are all those that involve works. These are included in components 2 and 3: they are sub-components 2.1, 2.2, 2.3, 3.2 and 3.3. All these sub- projects were evaluated using similar methodologies with the exception of sub-component 3.2, which underwent a qualitative evaluation through a multicriteria prioritization and selection methodology, given that the individual works for each station are limited (US$1 million) and that the valuation of benefits is difficult. It was decided to carry out an ex-ante impact evaluation study to better ascertain and possibly value the impacts of this sub- component. 83. All other sub-components were evaluated using standard cost benefit analysis with temporal horizons of 22 years (2 years of construction and 20 years of operation), 12% discount rates and accounting resulting Net Present Values (NPV) and economic rates of return (ERR) to assess the projects. In all cases, sensitivity analyses were carried out. Depending on the objective of the sub-project the benefits valued were different but overall they include: (i) vehicle operating costs; (ii) public transport operating costs; (ii) reduction in travel times for all users, public transport users, pedestrians and cyclists; (iii) accessibility to health care facilities, schools and work places. Benefits were valued using COSTOP12 values, average salaries, estimation of days of inaccessibility to urban facilities, amongst other items. 12 COSTOP is a Vehicle operating cost methodology used by the National Road Directorate of Argentina. I, it standardizes the standard input values necessary for the calculation such as fuel costs, labor costs etc. 25 84. All of the evaluated sub-projects yield positive economic rates of return. The projects in component 2 present ERRs of 16.4% for the Tucumán sub-project, 16.8% for the Posadas sub-project, and 60.8% for the Mendoza sub-project. All the sensitivity analyses showed that the economic evaluations are robust, since no project goes to a negative NPV in the sensitivity tests performed. 85. The underpass sub-project financed under sub-component 3.3 yields a 13.4% ERR if only the leg to be financed under this loan is considered. The different sensitivity tests performed on the sub-project show the ERR varying from 11.4% to 15.2%. 86. Overall the benefits of the works evaluated in the proposed loan can be summarized as follows: Table 5: Economic Evaluation Results for the Project Net Present Value ERR (@ 12% discount rate) Sub-component 2.1 14,726,373 23.1% Sub-component 2.2 37,405,069 16.8% Sub-component 2.3 32,174,617 60.8% Sub-component 3.3 1,226,384 13.4% Total 85,532,443 B. Technical 87. Component 1 is aimed at institutionalizing and providing technical tools for transportation planners. Planning is justified by the need to rationally distribute the limited sectoral resources. Technical tools allow a planner to evaluate a set of investments based on a comprehensive set of criteria (economic, social, environmental, etc) and prioritize the proposed investments. Moreover, this component is designed to ensure a long term commitment to the adoption of transportation planning by fostering an institutional change through the creation of the Agency. 88. Components 2 and 3 are aimed at improving transportation systems in medium size Metropolitan Areas and the AMBA through infrastructure interventions. The approach in the Metropolitan Areas is aligned with the strategy of public transport support. Public transport is the only mobility alternative for most of the poor and, from economical and environmental standpoints, it represents a sustainable alternative for the local provision of mobility solutions. Therefore, taking into account the historical underinvestment and declining quality in transit systems, a set of infrastructure interventions are proposed to address the most pressing issues while supporting the development of new technical tools and comprehensive transportation plans in Argentina's Metropolitan Areas. All interventions in these components will include urban infrastructure works of varied nature, 26 the corresponding supervision of works, and in some cases feasibility studies and detailed design studies. C. Fiduciary 89. Financial Management: A Financial Management (FM) review of the adequacy of the current financial management arrangements for the ongoing project was carried out in line with the guidelines issued by the Financial Management (FM) Board in November 2005 to determine if the financial management arrangements originally in place for the Loans AR-4163/AR-7442 (P039584) are adequately working, continue being acceptable to the Bank, and are able to support the new project. 90. The assessment conclusion indicates that the Secretariat of Transport (SOT), through its Project Implementing Unit (PIU), continues to have adequate financial management arrangements in place and has experience in implementation of Bank-financed projects. The FM arrangements for the proposed project are sound and the existing project fiduciary performance indicates a positive attitude by management toward control. Furthermore, external audit reports of this project13 did not show any substantial accountability issue. Given the characteristics of this operation and past financial management performance of the ongoing project, no specific complementary measures on standard FM arrangements have been designed for this project. A summary of the financial management assessment report in accordance with the Guidelines mentioned above is presented on Annex 7. 91. Fiduciary Risk: From the financial management perspective, the Project is considered a moderate risk operation. A detailed risk analysis is included in Annex 7. 92. Procurement: The Secretariat of Transport has a well established implementation unit that is fully familiar with the Bank's procurement guidelines; no changes are expected in the unit during the implementation of upcoming operations (except the hiring of some additional experts, including a Technical Specialist who will support all procurement and filing activities of PTUMA). A Procurement Plan for the Project, acceptable to the Bank, was prepared and has been posted in the SEPA14. The thresholds for the procurement methods will follow the Bank's Guidelines of May 2004, revised in October 2006; the specific packages, procurement methods, and prior review threshold by the Bank will be reviewed and approved in the Procurement Plan prepared according to the guidelines of May 2004, and revised in October 2006. 93. Retroactive financing. The Bank will reimburse payments made up to one year before the date of signature of the Loan Agreement and after September 1st, 2009. These expenditures would be paid in advance by the Borrower and should not exceed US$ 30 million. 13 Details on the ongoing project audit outcomes are presented in Annex 7. 14 SEPA (Sistema de Ejecución de Planes de Adquisición) is a computer based Procurement Plan monitoring system 27 D. Social 94. Positive Social Impacts: The Project is expected to have positive impacts on the living standards of population, as it is aimed at improving physical access to and quality of public transport, improving sidewalks, paving roads, adding lighting and urban furniture. The social assessment suggested that the majority of stakeholders were in favor of the Project, as it contributes to providing solutions to many transport related problems, offering an increase of connectivity, reduction of accidents, mitigation of health disorders, reduction in waiting and travel times, and limitation of urban interferences. Low income and vulnerable groups will capture most of the benefits of the projects, given the emphasis on upgrading public transport and improving access to low income areas. Other positive social impacts identified during the consultation process were: (i) the generation of jobs by the construction and maintenance works, and indirectly, by the contribution to commerce; and (ii) the revaluation of land and buildings by the improvement of urban settings. 95. Negative Social Impacts The inhabitants of the neighborhoods where the works will be built will face some temporary negative impacts during the construction phase, such as noise, dust and traffic disruption. Given that these social impacts are related to the environmental management of the construction of the works, they will be addressed through the Environmental and Social Management Manual (ESMM; see the Environmental Section). 96. A site-specific Environmental Impact Assessment was prepared for the Esteban Echevarria grade-separated crossing. This report was reviewed by the Bank and it was found acceptable. It incorporates all the issues raised in public consultations and any comments made by the neighbors in any other way. The report concludes that the proposed road/rail crossing will not have any adverse impacts that cannot be mitigated through an environmental and social management plan, ensuring compliance with safeguard policies. 97. Consultation and Disclosure Process: The consultation and disclosure process has been launched at the preliminary design stage to have early feedback for project improvement. The consultation process will continue as per the ESMM after loan approval, including (i) the dissemination of project information prior to consultation activities; (ii) the presentation of potential negative impacts and measures to cope with them; (iii) an agreed mechanism for following up recommendations. The activities carried out to date for the presentation of each preliminary project resulted in important contributions for project improvement, as detailed in Annex 10. E. Environment 98. The Bank's analysis concludes that the project is expected to have positive environmental impacts in the long run, such as a reduction in congestion and emissions and 28 improved traffic safety. A number of civil works will produce short-term term impacts, which trigger OP 4.01. Based on a screening exercise, the Bank has classified the project as Category B, based on the type, location, sensitivity, and scale of the different projects involved and the nature and magnitude of its potential environmental impacts, which are limited to the site of projected works with impacts which could be addressed with already known mitigation measures, involving the implementation of detailed environmental assessments conducted at project design level, environmental management plans and public consultation. 99. The Borrower has the safeguard tools in place, including an Environmental and Social Management Manual. The Borrower will strengthen the PIU with relevant staff well- trained in environmental and social management in order to be prepared for the challenge of field supervision, not only in the AMBA but also in the other Metropolitan Areas. These will receive specific training and support in order to ensure proper implementation of safeguards. 100. Safeguards supervision is ensured by the inclusion of specific procedures in the project's Operational Manual and in the Environmental and Social Management Manual. F. Safeguard Policies 101. The project preparation has complied fully with all applicable Bank safeguard policies. In order to ensure the implementation of specific recommendations raised during the environmental assessment process conducted at preliminary design level, the counterpart team will use an Environmental and Social Manual that it has been using since the PTUBA AF loan, but that was updated and improved for the purposes of this operation. 102. Environmental Assessment (OP/BP 4.01). The Borrower has prepared four Environmental Assessment (EA) packages (one for each sub-project, Component 2), including expedite site-specific EA which include a first stage of public consultations and a set of environmental management measures, as part of an Environmental and Social Management Manuals. An overall environmental analysis of minor improvements in railway stations (Component 3) was carried out, based on the review of a sampling exercise and of a bidding document. EA process has indicated that the main direct impacts are expected to occur during construction and cause localized negative environmental impacts. Such impacts are expected to consist essentially of noise, vibration, dust, and traffic disruption. Additional negative impacts during construction will occur due to haulage and final disposal of materials. Access to commercial sectors and houses will be affected temporarily; however, the mitigation measures already designed will reduce unnecessary interference in commercial activities. Based on the available information, no involuntary resettlement will result, with the exception of the Mendoza sub-project, which requires specific resettlement measures. Most project impacts can be mitigated by adequate design and environmental management plans. Water management and design of adequate drainage systems will be critical to ensure the environmental feasibility of sub-projects, as well as to avoid and minimize the eventual impact of floods in vulnerable populations, particularly in Tucumán and Mendoza sub-projects. Although they are not expected as part of this project, 29 eventual indirect impacts linked to changes in land-use, changes in traffic volumes, or specific impacts on commercial activities will be addressed by the project if they are detected during the public consultation process to determine they are in line with Bank's safeguards policies. 103. In all the feasibility studies, detailed design, transport master plans, and eventual land use plans under the Project, the Borrower shall ensure that the terms of reference for all studies include a provision to incorporate the World Bank Safeguard Policies in them. 104. The sub-project in Esteban Echeverría, to be partially funded with this loan proceeds from Component 3, has received criticism from a local community group. This group has sent its comments to the Bank, the PIU and the Municipality. The Bank team and the PIU have met with the citizens involved, and their concerns have been considered. The Environmental Impact Assessment for this project incorporates all the issues raised by consultations with local population and any observations made by the neighbors. This report provides specific mitigation and monitoring measures to address any adverse impacts that result from the implementation of the project. The Bank team has been monitoring the process and has supported the PIU to ensure safeguard compliance, as well as implementation of public consultations and public information disclosure. The Borrower has been proactive, not only improving the EA to include a technically sound analysis of alternatives acceptable to the Bank, but also offering permanent dialogue and access to project information to reach consensus on the proposed project by the participating municipality. 105. In conclusion, the project is complying with environmental safeguard requirements. Project implementation will be guided by the use of detailed environmental management plans, promoting public consultation processes and detailed EA at project design level. In particular, safeguard implementation will be ensured by a central PIU that will coordinate the supervision and approval of local procedures and monitoring with sub-national units in each participating Metropolitan Areas. A strengthening plan will be prepared before appraisal to ensure proper environmental management conditions in the PIU and in participating Metropolitan Areas. For works under the demand - driven Component 3, a framework approach is being followed. All projects, identified during the phase of loan implementation, will be subject to the EA process included in the Environmental and Social Management Manual prepared by the Borrower. Screening and Expedite EA will be prepared for each particular sub-project. 106. Involuntary Resettlement Policy (OP/BP 4.12). Most of the civil works under the project will follow the alignments of existing roads and rights-of-way, reducing the likelihood of involuntary displacements. However, a Resettlement Policy Framework (RPF) was prepared for the project, because all component 2 sub-projects are presented at a preliminary design level, so siting alignments are not yet final (detailed designs will be completed during implementation), and sub-projects under sub-component 3.1 are demand- based so their final location and designs are not known at this stage. The RFP will be applied where physical and/or economic resettlement occurs. 30 107. In sub-component 2.1, according to the sub-project's preliminary designs submitted by the PIU, field visits, and work with the Borrower and local counterparts, an Abbreviated Resettlement Plan was deemed be necessary for Colector Papagayos in Mendoza. The Plan was presented to the Bank, and it was found that it complied with OP4.12; it was published in the Borrower's webpage and in the Bank's Infoshop. It will be necessary to acquire a small fraction of one land plot (less than 200 m2) belonging to a firm. Talks have already been initiated with the owner, and there will be a voluntary ceding of the property by the firm. This acquisition or voluntary donation of land is not considered to involve a high amount and will be financed by the Municipality of Mendoza. 108. Physical Cultural Resources (OP/BP 4.11). Given that this loan involves projects with civil works that could affect cultural resources, this policy is triggered. Even though the EA process conducted so far indicates there is no expectation that cultural property is in the project areas, the Environmental and Social Management Manual sets forth "chance find" procedures in the event such property is encountered. Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [X] [] Natural Habitats (OP/BP 4.04) [] [X] Pest Management (OP 4.09) [] [X] Physical Cultural Resources (OP/BP 4.11) [X] [ ] Involuntary Resettlement (OP/BP 4.12) [X] [ ] Indigenous Peoples (OP/BP 4.10) [] [X] Forests (OP/BP 4.36) [] [X] Safety of Dams (OP/BP 4.37) [] [X] Projects in Disputed Areas (OP/BP 7.60) [] [X] Projects on International Waterways (OP/BP 7.50)* [] [X] G. Policy Exceptions and Readiness 109. The Project does not require any exceptions to Bank policies and is deemed to be ready for implementation. 110. An acceptable Operational Manual, dated September 11th, 2009, has been presented to the Bank at negotiations, thus no major delay is expected at effectiveness. 31 ANNEX 1. COUNTRY AND SECTOR OR PROGRAM BACKGROUND ARGENTINA: Metropolitan Areas Urban Transport Project 1. Sector Context 1. Like most Latin American countries in the last few decades, Argentina has experienced a rapid transformation of its urban centers, with a sharp increase of urban population; 89% of the total population now lives in urban areas. This phenomenon brings with it issues inherent to large Metropolitan Areas, in particular urban sprawl and the increasing distance between homes and work places, increasing peri-urban and suburban areas, and the surpassing of administrative boundaries that no longer have a real function. In Argentina, the Buenos Aires Metropolitan Area epitomizes this situation, but more and more medium size Metropolitan Areas such as Córdoba, Rosario etc. are exhibiting the same developments. 2. The Federal structure of the government of Argentina which consists of decentralizing government responsibilities to autonomous and distinct territorial entities such as Municipal, Provincial, and National governments, further complicates the consequences of urban agglomeration and sprawl. As the population grows, the complexity of issues grows yet the administrative boundaries separate different administrative entities that have to manage territories that function cohesively as one. These administrative differences driven by legitimate political outlooks, become barriers to the adoption of required agglomeration-wide projects and policies. 3. Furthermore, the decentralization of jurisdictional responsibilities atomizes planning and managing urban transport adds to limited local government capacity, especially in the Buenos Aires Metropolitan Area, hindering the ability to deal with transport issues efficiently. The lack of a body to coordinate between jurisdictions makes it difficult to deal with transport infrastructure and services which inevitably span various municipalities and to implement a Metropolitan approach to planning, programming and setting priorities for the urban conglomerate that is served by the transport services and functions together, irrespective of the administrative limits. Deeply needed reforms such as fare integration or the establishment of sustainable financing mechanisms not dependent on the current direct subsidies to transport operators, are difficult to address within the current institutional arrangement. 4. The cycle of increasing urban population, growing motorization, inadequate street networks, poor traffic management, and increasing congestion and air pollution is evident in many metropolitan areas and medium size Metropolitan Areas. In the biggest Metropolitan Areas, there is a heavy reliance on public transport but the service quality is poor and the cities are hard pressed to satisfy the demand. Partly as a result, public transportation, especially bus-based transit, is losing share and there are more frequent calls for governments to address the issues, some of which are discussed below. 32 Buenos Aires Metropolitan Area 5. The Buenos Aires Metropolitan Area (AMBA) is one of the largest urban centers in Latin America, containing more than 13 million inhabitants (37% of the total) and much of the administrative, economic, industrial, and social activity of the country. The administrative organization of the Region consists of the Autonomous City of Buenos Aires (Federal Capital), 42 Municipalities, and the Provincial Government. All of these entities have responsibilities in the urban transport sector. 6. The AMBA offers varying urban and population characteristics; the City of Buenos Aires city concentrates the majority of services, activities and the wealthier population groups. Its urban structure is dense and fairly uniform with globally dense-knit neighborhoods of between two to ten story buildings and pockets of high rise buildings. The first ring of Municipalities bordering Buenos Aires tends to follow a similar urban pattern, with decreasing density. The southern part of the area includes more industrial activities and the northern has a higher proportion of wealthy residents. The second and third rings consist of low density, suburban housing, where slightly higher densities can be found around suburban railway stations, but housing is basically one story houses. The composition of the AMBA and its suburban railway can be seen in Figure A1-1. 7. The urban structure reflects the unequal wealth distribution of the AMBA; poverty and exclusion tend to concentrate in the second and third rings of Metropolitan Areas or in pockets within the city located in various places as a result of land availability. Although as previously mentioned important strides have been made regarding poverty reduction, solid pockets of poor and excluded settlements exist in Metropolitan Areas, and the Buenos Aires Metropolitan Area concentrates a large number of these. The distance from the center of the Buenos Aires Metropolitan Area to the poor outskirts and the difficulty of the bus system in reaching into the impoverished and sometime unauthorized settlements means that the poor are disproportionally affected by the quality and access to the public transport system, from which they depend completely to limit their exclusion. As can be seen in Figure A1-2, the poorest pockets of population are on average further away from the center of the AMBA and the center of employment opportunities. The City of Buenos Aires concentrates the wealthier strata of the population, nonetheless the southern and south-west parts of the city have clearly lower-income populations, and the Villa Miseria (Villa 31) amidst the most elegant parts of the city shows the contrasts even in the Capital. 33 Figure A1-1 : The Metropolitan Area of Buenos Aires and Suburban Railway15 . Municipalities Network of Suburban Trains Metropolitan Area of Buenos Aires City Buenos Aires First Ring Second Ring Third Ring Sources: PIU 15 First ring Municipalities: Vicente López, San Isidro, San Martín, Tres de Febrero, Hurlingham, Morón, La Matanza, Lomas de Zamora, Lanus, Avellaneda. Second ring Municipalities: San Fernando, Tigre, Malvinas Argentinas, San Miguel, J.C.Paz, Moreno, Merlo, Ituzaingo, Ezeiza, Esteban Echeverría, Presidente Perón, Almirante Brown, Quilmes, Florencio Varela, Berazategui. Third ring Municipalities: Escobar, Campana, Zarate, Pilar, Exaltación de la Cruz, Gral. Rodríguez, Lujan, Mercedes, Marcos Paz, Las Heras, Lobos, Cañuelas, San Vicente, Brandsen, La Plata, Berisso, Ensenada. 34 Figure A1-2 : Percentage of Households per Census Unit with one or more NBI Indicator Triggered Sources: PIU 8. The regional urban transport network consists of a suburban railway network (7 lines), an underground metro in the City of Buenos Aires (6 lines), and bus services over the whole region (around 300 companies and 17,000 vehicles). All the railway networks with the exception of two lines (Roca and Belgrano Sur) have been granted on concession to different operators. The underground metro system was granted to a single operator. The National government has responsibility over the services on concession and the transport systems that cross over provincial boundaries (suburban railway, metro system, and some interprovincial bus routes), the Provincial government has responsibility over the transport networks within its territory that cross over Municipal boundaries (Provincial bus routes) and the City of Buenos Aires has partial responsibility for the underground metro and the bus routes that stay within City boundaries. Finally, the Municipalities are responsible for Municipal bus lines that remain within the Municipal boundaries. 35 9. Due to the complexities of the institutional set-up and the strategic importance of the Region, the role of the National government as an actor and organizer of the system has been necessary, and should probably remain so in the future. 10. The 2002 crisis deeply affected the transport sector; from 1995 to 2002, public transport lost around 26% of its ridership in the Buenos Aires Metropolitan Area, operator's profit dropped severely and de-capitalization was inevitable, forcing a great number of them out of business. By 2002, 43% of the traditional operators had disappeared. Operational subsidies had to be introduced to alleviate losses and to allow the freezing of the fares in a crisis context. The quality of services provided decreased considerably, making it necessary to define new transportation policies, in order to guarantee better mobility and accessibility. 11. The suburban railway which serves the Buenos Aires Metropolitan Area and is used by primarily the lower income populations as they inhabit proportionally more the outer parts of the Metropolitan Area, transports 18% of annual transport demand. These services are all on concession with the exception of the Roca Line. This railway network suffers from a structural problem which has been faced by all such networks in similar cities, which is the at-grade road/rail interference in urban spaces, as all the lines are at grade. The Bank-supported Buenos Aires Urban Transport project (Loan 4363-AR and Loan 7442- AR) built twelve below grade crossings and over the years many other such solutions have been adopted. In line with the stated policy to improve urban transport, the GoA has announced the electrification and works to put the Roca and Sarmiento lines completely underground in their Buenos Aires sections. The other lines will continue to cause safety problems at their at-grade crossings and the operational efficiency of the railway services will remain limited. 12. The Metro, also on concession, has been in need of expansion for many years. In recent years, the GoA has belatedly complied with the majority of its concession contract investment commitments16, and the Buenos Aires Urban Transport project supported by the Bank rehabilitated Metro Line A. More recently, the GoA has extended Line A and is working on Line E. The Metro is in the National government's jurisdiction and for this reason it signed the concession contracts, although it should be transferred to the City of Buenos Aires government. 13. The majority of transport demand (71%) uses the public bus system, , which consists of 17 thousand vehicles operated by 300 or so companies. The buses in Buenos Aires are under the jurisdiction of the National government, the buses that cross municipal lines are in the Provincial government's jurisdiction, and the lines that operate within municipal boundaries are under the corresponding municipal jurisdiction. These services have historically and still provide reasonable services with acceptable quality, however, recently the limited quantity of coins in circulation in the country have meant that public transport users, in particular bus users are seriously inconvenienced as these services do not accept any other form of payment. To address this issue the GoA announced the 16 US$400 million in 1995 investments in all lines. Only investments in Line C have not been carried out. 36 introduction of an electronic payment mechanism for all of the Metropolitan Area transport services. 14. Total public transport patronage regained and surpassed the pre-crisis levels in 2007, and in 2008 these levels fell back slightly probably reflecting the limits attained by the system. Nonetheless, the total patronage in 2008 is higher than the pre-crisis level. However, the story is unequal per mode: (i) the metro has around 2% more ridership than the highest pre-crisis level; (ii) the suburban railway has lost 12% of ridership with respect to the highest pre-crisis level; (iii) the bus network lost around 5% ridership. The trends observed show that both the bus system and the metro have been on an upward cycle since the end of the crisis, but the suburban railway is not showing such a real recovery. The reasons for this may lie in the significant lags in investment and upgrading of the suburban railway system. 15. The granting on concession of the suburban railways and the metro followed a period of low investment in both networks, leading to a situation of relative neglect. The concession contracts included a commitment from the GoA to provide infrastructure investment for networks. These commitments were complied with partially and belatedly, and arguably the concessionaires also did not carry out all the investments expected. The impact of the GoA investments in the Metro and the relative competitive advantage of a Metro in a congested city may explain the difference in performance between it and the suburban railway. In any case, for both networks the result of the lack of or lagging investments and the newfound and increasing demand resulting from the 6 previous years of continued economic growth are exerting tremendous pressure on the system and as a result the suburban railway and Metro are critically overcrowded and run-down. Table A1-1: Public Transport Patronage in the Buenos Aires Metropolitan Area Year Metro and Pre- Suburban Bus system Total Metro Railway 1995 187,220,075 346,703,230 1,726,000,000 2,259,923,305 1996 198,878,785 413,549,367 1,685,000,000 2,297,428,152 1997 221,865,056 456,131,327 1,588,000,000 2,265,996,383 1998 254,006,700 477,482,840 1,486,000,000 2,217,489,540 1999 260,310,633 479,428,486 1,402,000,000 2,141,739,119 2000 258,824,602 475,896,070 1,327,000,000 2,061,720,672 2001 241,743,735 430,202,603 1,198,000,000 1,869,946,338 2002 222,067,124 353,810,568 1,123,000,000 1,698,877,692 2003 228,503,679 376,396,076 1,295,000,000 1,899,899,755 2004 241,186,229 395,237,303 1,438,000,000 2,074,423,532 2005 253,319,033 412,890,128 1,557,000,000 2,223,209,161 2006 263,876,453 433,061,883 1,629,000,000 2,325,938,336 2007 265,064,631 421,515,258 1,664,000,000 2,350,579,889 2008 264,344,145 410,701,257 1,636,000,000 2,311,045,402 Source: Comisión Nacional de Regulación de Transporte (CNRT) 16. The Buenos Aires Metropolitan Area has not had a central decision making or planning agency or Department dedicated to the Region. The decisions on significant investments and policy issues have been adopted at the level of the National Transport Secretariat or at the City of Buenos Aires level without necessarily obtaining the consensus 37 of other jurisdictions and without planning. The Bank's PTUBA loan, aware of this deficiency, supported the creation of the Buenos Aires Metropolitan Area Planning Group within the Secretariat of Transport (PLATAMBA) which has been developing databases, surveys, and planning tools to create the necessary knowledge base for future coordination and planning efforts for the whole Region, and in particular for the creation of the Metropolitan Transport Agency. Medium Size Metropolitan Areas 17. Córdoba is the second largest metropolitan area of Argentina, with almost 1.3 million inhabitants and an extension of 576 square kilometers. It suffers from severe social issues, and an estimated 30.7% of the population is poor. In addition to these social problems, urban sprawl has reinforced social exclusion and led to the inability of mass transit to guarantee mobility and accessibility for the least favored population that cannot afford a private vehicle. Like any intermediate Metropolitan Area, Córdoba has a multimodal network of transportation where buses and taxis are its most significant components, followed by non-motorized modes which play a significant role. Following the country's trend, Córdoba's transportation system started presenting serious problems towards 2000, which were aggravated by the crisis and a decrease in ridership due to high levels of unemployment and the decrease in purchasing power of transit users. In 2002, for the first time in over 40 years, a fleet of buses was handed over to the municipal government through the creation of a Municipal Agency, TAMSE, created initially to improve service in some corridors, and by 2004 it was facing major economic difficulties. To address these problems, the agency was given more autonomy and allowed to buy its own buses and contract out services. The municipal government has been thoroughly involved over the past 3 years trying to increase ridership levels, but several problems persist. 18. Córdoba has recently elaborated its second urban strategic plan which aims at rehabilitating the central area of the Metropolitan Area and at strengthening neighborhood identity. The plan will improve access to infrastructure networks and public services, with the premise that sustainable transport and smart growth are essential features of the overall policy. 19. Urban expansion of Córdoba is a key challenge, the main effects of which are congestion in the city center, due to the high volumes of people coming to public and administrative buildings concentrated there, and uncontrolled growth on the periphery, which imposes time-consuming commutes. This situation leads to local air pollution and high levels of noise, especially in the central area and its main feeder routes. 38 Box 1: Public Transport Agencies Public transport is a service that provides a necessary condition for the functioning of many economical and social activities in a city. The need for an overseeing agency arises in order to guarantee the minimal requirements in service provision such as the quantity and quality of service and fare affordability. It is also the agency's responsibility to provide the conditions for an efficient service provision that recovers the highest possible share of the associated costs. The inherent tension between both objectives and the public nature of public transport allows for various types of transport agencies and arrangements depending on the nature of ownership, responsibilities and jurisdiction. Following is a brief list of the most common types of agencies depending on ownership and jurisdiction: a. Quasi-private companies: This type of partnership works under an arrangement where a share of a company is owned by private investors and another share by a public entity. These companies are common in some European cities (e.g. Madrid) and are often referred to as consortiums. These arrangements benefit from the relative independence of political interests, the efficiency of private sector operations and the direct oversight of a public entity. b. Utility division: Transit agencies can also function as the division of a larger utility company. This is most likely to occur with an electrical utility company which can provide electrical power for lower prices and operate certain modes such as trains and trolleys at affordable fares. This is the case of New Orleans which maintained this scheme for a long time and built sustained transit habits in the city. c. Municipal transit agency: These agencies are owned by the city and exist as a branch of the local government. This setup permits a city to channel its pro-transit policies in a rather direct way, as opposed to agencies that have more independency from the local government. This is the case of the San Francisco Municipal Transportation Agency, which provides transit service within the municipality boundaries. The main shortcoming of this type of setup is that, as cities evolve into regions and metropolitan areas, the limitation to a local jurisdiction hinders the ability of the agency to plan adequately and serve all the trips that the area demands. d. Metropolitan and regional transit agencies: This is a type of organization that is created by legislature to serve a particular purpose but does not adhere to the existing boundaries of cities, towns and provinces. Instead, the boundaries of these agencies are defined based on the degree of connectivity between different municipalities and the transport flows that are generated. Metropolitan agencies can play different roles; the roles they are assigned depend on the functions the different jurisdictions have decided to delegate to the agency. These functions may span from a full service provider (builds and/or operates transit) to a coordinator of several transit operators, coordinating the planning and operations, and in some cases, financing. Examples of these agencies can be found in most major metropolitan areas of the United States (New York's MTA, Washington D.C.'s WMATA, Chicago's RTA), where they play the role of service providers. However, these agencies are supported by Metropolitan Planning Organizations (MPOs), which assist local governments in policy making and elaborating and approving the city plans. These agencies may exercise regulating functions, amongst these the usual regulations they carry out are: a. Economic regulation: Required to ensure that the customers obtain an adequate level of service. The agency controls the rights of companies to operate services, the level of the fares that are offered and the quantity and quality of service. b. Safety regulation: Required to ensure high levels of safety in transit operation. The agency controls the safety standards of different elements such as structural elements (infrastructure, signaling, etc), vehicle design, frequency of vehicle maintenance and driver practices and training. c. Regulation of technical and social aspects: Required to ensure transit access for all segments of population, in particular, the least favored. The agency controls aspects of service provision that allows individuals with disabilities (e.g. physical, mental) and limitations (economic, location) to access the system. d. Regulation of impacts: Required to examine the impacts that transportation interventions have on the surrounding environment. Agencies study aspects such as the impact of a transit system in noise level, air quality, congestion, urban growth, poverty alleviation, among others. Source: Vuchic, 2005 20. Rosario, with over 1.2 million habitants and an extension of 760 square kilometers, is the third largest metropolitan area in Argentina. As an important port complex, it has 39 traditionally been an industrial and commercial center for the country. Its urban form has clearly been influenced by two major elements: the Paraná river and the railway tracks that cross the region. Through and with them, Rosario has defined its semi-radial growth, utilizing these two elements for cargo transportation, where the river has acted as a link connecting the province with the country, and the rail lines, as corridors that have clustered urban developments. Given its extension and its semi-polycentric structure, Rosario presents a fragmented urban structure with severe socio-economic disparities. 21. Like other Argentine regions, Rosario faces juxtaposition of different political (federal, regional, and municipal) levels, leading to lack of coordination and inefficient urban and regional planning. The freight rail system operational capacity needs to be expanded in order to seize the current and future demand of cargo managed by the region and by the port. Poor access to ports, congestion and low connectivity of the road network have hindered the region's competitiveness. Lack of infrastructure and adequate multimodal transfer centers have increased congestion, hence service levels for commuters have decreased noticeably. On the basis of origin-destination surveys carried out in 2002, the Municipality defined short-term proposals to address the newly identified travel patterns. A bidding process was organized to concession out public transport services for 7 years, including a restructuring of the bus routes and the fleet modernization to better address the needs of the users. The North-South corridor, because of its high levels of potential and existing demand, was selected for the implementation of a new mass transit system. 22. Urban transportation in Rosario is provided by 9 operators, one being public and representing 13% of the market share. Not surprisingly, Rosario's ridership levels dropped severely between 1994 and 2002, recuperating somewhat during the following years. After 2000, the Municipal government took action and re-tendered some of the public transport services, but results were not satisfactory. In 2002, after the bankruptcy of one of the operators, the Municipality started operating transit services, creating a new agency, Semtur. After this, a new bidding process was opened to enable concessions for a 7-year period. 23. In recent years Rosario has faced a significant decrease in the number of public transport passengers and of the relative importance of public transport, as well as an increase in motorization rates, accompanied by incipient congestion in the downtown area. In addition, Rosario lacks of adequate infrastructure for non-motorized transport, in spite of the relative importance of bike trips (12% of total trips) and presents high air pollution levels, especially in terms of NOx (45% above local maximum admissible levels). 24. Posadas. The city of Posadas is the capital of the Province of Misiones, and together with the cities of Garupá and Candelaria, its population stands at about 366.000 inhabitants, representing 40% of the total of the province. Like other growing urban areas, Posadas has started to face transportation issues, mainly concerning quality of service, efficiency and social exclusion, followed by low air quality. 25. Population growth and migrations from the countryside to the capital increased the urbanized area and contributed to urban sprawl with new low-density, remote 40 neighborhoods. This, combined with a lack of adequate public transport provision, has begun to affect air quality in the urban area. Additionally, the construction of a big hydroelectric project (the Yaciretá dam, which involved the resettlement of thousands of families in Posadas) together with new roads linking Posadas to these new settlements, contributed to further expansion of the urban area and an increase in trip lengths that affect public transport sustainability and attractiveness. 26. Like other Metropolitan Areas that had not implemented strict policies and institutions that regulated transportation, Posadas suffered directly from excessive supply, as well as of low quality of service and high costs. To address this and other increasing problems, in 2002 the Municipal Government of Posadas adopted a new Transportation Master Plan for the city, consisting of the progressive implementation of a Bus Rapid Transit (BRT)-type Transport Integrated System (TIS). The TIS is being implemented by a metropolitan transport agency, the first of its kind in Argentina, with active involvement and heavy commitment from local private operators. The efforts developed in the institutional framework make possible the execution of the system within a metropolitan dimension as a result of the effective participation in the agency of the Municipal Governments of Garupá and Candelaria and the Government of the Province of Misiones, ensuring its legal and institutional sustainability. 27. Tucumán. The province of Tucumán has a population of around 1.3 million habitants, and has traditionally been an important part of the commercial and industrial sectors. Its urban population, almost 55% of the region's, is mostly concentrated in its capital San Miguel de Tucumán and has been continuously increasing due to rural migration and the agricultural crisis. As in other regions in transition, infrastructure is responding deficiently. Migration settlements in poor areas have worsened these conditions. 28. Public transport in Tucumán is one of the most expensive and of least quality in the country. In 2004 Tucumán had 14 bus lines and a fleet of 357 vehicles, of which almost 50% were 10 or more years old. The provision of adequate public transport services in the metropolitan region of San Miguel de Tucuman is becoming extremely difficult, as the metropolitan area struggles with inadequate infrastructure, increasing transport-related pollution and informal and chaotic services. The absence of a legal framework that would enable the six different municipalities to enforce traffic rules and vehicle standards is seen as one of the main reasons for this situation. The Compressed Natural Gas (CNG)-powered taxis and local remises have lower fares than other formal transport services, mainly because of the CNG subsidy vis-à-vis diesel price. Under the current regulation, smaller units do not have to comply with strict standards, such as years of service, maintenance and insurance. Predatory competition among service providers has resulted in low service standards, high accident rates and a chaotic and increasingly polluted environment. 29. All of the medium size Metropolitan Areas mentioned above are being supported by the Bank's Buenos Aires Urban Transport project (Loan 7442-AR), as part of that project all of these Metropolitan Areas have or are developing planning tools such as an origin destination survey, a transport model, Master Plans and feasibility studies. 41 30. Mendoza. The Greater Mendoza Metropolitan Area (GMMA) has a population of around 850,000 inhabitants, making it the fourth largest census metropolitan area in Argentina. The city is located in the north-central part of the Mendoza Province, an important region on the eastern side of the Andes, with an economy is based on wine and olive oil production. 31. The province is basing its planning endeavors on the local law Ley de Ordenamiento Territorial de Mendoza. This law is currently being approved by the local legislature and identifies the Local Development Plan for the GMMA as one of the instruments to "reconcile the economic, social and environmental development with a balanced and efficient territorial occupation". Some of the transport and urban development issues that have been detected prior to the law approval are: a) Increase in the number of vehicles and trips between the outskirts and the central business district of the metropolitan area; b) The obsolete design of the road network; c) Insufficient public transport service in rural areas; d) Circulation of heavy freight services through inner urban areas; e) Undeveloped areas without specific use or occupation; and f) Lack of coordination across transport agencies at different government levels. 32. In the province of Mendoza, public transport regulation and the traffic- light network are under the jurisdiction of the provincial government. The agency in charge of regulating public transport is the Dirección de Vías y Medios de Transporte. Public transport in the GMMA is provided by a combination of private (85%) and public (15%) companies. Service is provided by trolleybuses, buses and taxis; however, the current route design allows most of the vehicles to enter downtown Mendoza generating high levels of congestion, local pollution and other externalities. Transport Sector Subsidy Scheme 33. The Federal System in Argentina features a scheme where the Central Government participates in financing Provincial and Municipal investments in the transport sector by transferring financial resources and subsidizing certain expenditures. The current urban transport subsidy scheme is framed in a broad structure (See Figure A1-1) for the whole transport sector called the SIT Fund (Fondo Fiduciario para el Sistema de Infraestructura de Transporte). This fund was created in 2001 through Decree 802 (later modified through Decrees 976 and 1377). The main source of funding is a 21% tax on the price of diesel oil, known as gasoil in Argentina17. The SIT has a structure that is composed of earmarked funding for the different transport sub-sectors. It has two main components: SISVIAL (Sistema Integrado Vial) and SITRANS (Sistema Integrado de Transporte Terrestre). The mandate of SISVIAL is to finance road sector investments and it draws about 50% of the SIT funding that remains after paying for initial transport expenditures18. The other 17 The tax on gasoil was originally set as a levy ­ a fixed amount per liter of gasoil sold. The change in structure to make it proportional to the price of gasoil has resulted in a quadrupling of the resources of the Fund between 2001 and 2005. 18 Before being distributed to SISVIAL and SISTRANS, the SIT funds initially pay for the REFOP (Sistema de Fomento de la Profesionalizacion del Transporte Automotor), a share of the CCP (Compensaciones Complementarias Provinciales), a share of the SISTAU (Sistema Integrado de Transporte Automotor), the SISCOTA (Sistema Integrado de Compensaciones Automotor) and contribute to the fund financial reserve. 42 remaining 50% of the SIT funds are used to finance SISTRANS, a fund created to compensate private transport operators (bus and rail), whose tariffs had been frozen as a response to the 2001 economic crisis (only increased twice since 2001), but whose costs have been increasing. 34. In the specific case of the urban transport sub-sector, there are four major sources of subsidies. The principal source is the SISTRANS, which assigns about 65% of its funds to the SISTAU (Sistema Integrado de Transporte Automotor) and the remaining 35% to the SIFER (Sistema Intergador Ferroviario). These two funds have specific provisions to compensate bus and rail operating companies in the contexts of urban, regional and freight transport. In addition to the SISTRANS, there are three other funding provisions that complement the urban transport sub-sector subsidies: First, the RCC (Regimen de Compensaciones Complementarias), originally introduced in 2006, which is intended to compensate companies that provide public transport services in the AMBA and selected municipalities. RCC funds come from general federal revenue. Second, the CCP (Compensaciones Complementarias Provinciales), introduced in 2007, allocates funds to transport companies that provide service outside the AMBA. The source of the CCP funds is also general federal revenue. A third and last subsidy source in urban transport is the discounted fuel price that urban transport companies have access to. This differential price is maintained on condition that fares are not unilaterally raised. Table A1-2 summarizes the characteristics of the above mentioned subsidy sources. 35. The distribution of the urban transport subsidies also varies according to the funding source: a.) The SISTAU subsidies are distributed based on the type of jurisdiction within which the beneficiary operates. If the beneficiary operates in a Provincial jurisdiction, then the amount of subsidy will be proportional to the number of passengers that are transported in that Province compared with the national total. This is defined as the CPF (Coeficiente de Participación Federal). On the other hand, if the beneficiary is subject to federal jurisdiction, then the amount of subsidy will result from a formula that includes the relative amount of revenues, passengers and served kilometers. This is the definition of the CDCT (Coeficiente de Distribución de Compensaciones Tarifarias). b.) The RCC subsidies are distributed based on the difference between the SISTAU subsidies and the increase in labor, fleet renewal and training costs. c) The CCP subsidies are distributed based on the size of each fleet as estimated by the CNRT (Comisión Nacional de Regulación del Transporte). d) The gasoil discounted price is distributed based on the amount of fuel required by each company. This figure is estimated by the CNRT and only that amount is sold by fuel companies at the discounted price. 36. Given the above mentioned scheme, the total amounts that were transferred by these subsidy sources (SISTAU, RCC, CCP and Gasoil Discount), amounted to AR$ 205 M (US$ 68.3 M) per month in September 2008. This amount has steadily increased, as one year later this number equaled AR$ 350 M (US$ 116.6 M) per month, and two years later in September 2008, the Nation transferred AR$ 425 (US$ 141.6 M) for the month. As can be seen in Table A1-3 the subsidy source that draws the highest contributions is the RCC, After this initial distribution, the remaining SIT funds (about 80%) are divided between the SISVIAL and the SISTRANS. 43 which is compensation, funded by the National Treasury, for transport operating companies in the AMBA and a few other municipalities. In fact, when comparing the urban transport transfers across the Metropolitan Areas (MAs) of the PTUMA project, it can be seen that the AMBA draws the largest amounts of subsidies, by far, as shown in Table A1-4. The current distribution scheme assigns subsidies to each Province based on a set of rules for each type of funding source; however, the rules for estimating the amount of subsidies for the AMBA follows a different procedure, therefore, distorting the geographical distribution with respect to the other Metropolitan Areas. For instance, the subsidy per passenger in the AMBA in 2008 was about 3 times greater than the average subsidy per passenger in the other MAs. Also, the subsidy per vehicle is about twice as large in the AMBA compared with the other MAs. The rationale behind this geographical disparity in the amount of subsidies is not completely clear but it may be rooted in the current distribution scheme which features different rules for the AMBA than for the other MAs. 37. The subsidies were initially motivated to freeze and keep the transit fares at affordable levels during the crisis. Since then, the scheme has been modified several times in order to respond to rising prices in operating costs while modestly increasing fares (only twice between 2001 and 2009)19. As a result, the amount of subsidies has been increasing steeply during the last years. Nowadays, 50% of the revenues of bus companies and 75% of the revenues of urban train companies correspond to national subsidies. However, when examining the increase of operating costs, it can be seen that, while costs of fuel and general maintenance have stayed relatively constant, labor costs are those that have spiked in recent years. For instance, in 2004 labor costs represented 50% of the operating costs; but in 2007, this share became about 75% of operating costs. Moreover, when analyzing the evolution of salaries of similar professions, it can be seen that the salary of drivers has increased 460% between 2001 and 2008, significantly higher than salaries of other comparable professions in the transport sector20 which have increased by only 260% in the same period. This apparent distortion in the labor market is not completely explained by these figures but may very well be originated by the evident possibility of obtaining an increase in the amount of transit subsidies every year in order to meet rising operating costs. 38. The GoA is aware that an initial phase in which it was responsible for supporting demand, limiting fares, and complying with the commitments of the urban transport concessions, in some cases after renegotiations, has come to an end. Now, the urban transport sector will enter a new phase where significant infrastructure investments are needed to adequately meet increasing demand. Therefore, a more integral policy framework has to be adopted in which the sustainability, level and direction of subsidies are revised, and important investments are planned and undertaken 19 Resolutions 1.170/2007 and 13/2009 20 Boletín de Estadísticas Laborales, MTESS 44 Table A1-2: Urban Transport transfers per funding source in the months of September 2006, 2007 and 2008 ($AR Million) 09/06 09/07 09/08 CCP $0 $ 25 $ 35 RCC $ 75 $ 165 $ 190 SISTAU $ 50 $ 60 $ 75 Gasoil discount $ 80 $ 100 $ 125 Total $ 205 $ 350 $ 425 Table A1-3: Urban Transport transfers* per Metropolitan Area in the months of September 2006, 2007 and 2008 ($AR Million) 09/06 09/07 09/08 Córdoba $ 1.8 $ 3.8 $ 5.2 Rosario $ 2.2 $ 4.2 $ 6.3 Mendoza $ 1.5 $ 4.2 $ 5.5 Tucumán $ 1.4 $ 4.0 $ 5.5 Posadas $ 0.5 $ 1.2 $ 1.5 Buenos Aires $ 100 $ 195 $ 240 * SISTAU + RCC + CCP 45 Table A1 -4: Details of the Urban Transport Sector Subsidy Scheme Gasoil Price SISTAU RCC CCP Differential Date 2002 2006 (until 2008) 2007(until 2008) 2002 (until 2008) Gas tax (0.80% liter + 3.8% of the gas tax National budget. Funds origin Gas Tax National budget collected + Quarterly agreements. reserves) + National budget Compensation of Avoids increase in increasing costs Tariff Objectives Tariff compensations fares. It is not a (personnel, rolling compensations. monetary subsidy. stock renovation). Application Transport Transport Transport Secretariat Transport Secretariat Authority Secretariat Secretariat Automotive 1) Subject to provincial Automotive transport or municipal jurisdiction transport enterprises of (adhered to by enterprises of Automotive transport national, Beneficiaries agreements). National, enterprises in general, provincial and Provinces are the Trust provincial and Railway companies of municipal in the Fund beneficiaries. municipal AMBA. rest of the 2) Subject to national governments in country (not jurisdiction. AMBA and UA. AMBA). 1) Provincial jurisdiction: (interjurisdictional In accordance The CNRT calculates distribution) The coefficient with the the amount of liters CPF (recalculated by for its difference per beneficiary and the semester) X available distribution is between amounts Transport Secretariat funds per month. prepared based paid for the informs the oil Distribution 2) National jurisdiction: on the quantity SISTAU and companies the number Criteria (enterprises of units available increase in the of liters to be sold to distribution): CDCT X for the costs that each beneficiary. The available funds for performance of enterprises face benefit can be national jurisdiction the service regarding suspended if the according to CPF. informed by the personnel, and beneficiary increases CDCT calculated based CNRT. fleet renovation. fares. on gross revenue, travelled km and transported passengers. 46 Figure A1 -1: Structure of the Transport Subsidy Scheme 47 Box 2: Public Transport Subsidies Justification: There are two main arguments for the allocation of public transport subsidies: Increasing efficiency and social redistribution. The first argument (efficiency) is based on the fact that alternative transport modes, such as the private vehicle, are likely underpriced as users do not pay full costs in terms of pollution, congestion and accidentality, among others (externalities). Thus, public transport subsidies are justified on the grounds of improving resource allocation. A second argument (social redistribution), which is more likely to apply to developing countries, is based on the importance of providing affordable transport services to all groups of society. Transport is a necessary condition for the development of most economic activities regardless of social status. Therefore, if the cost of providing an accessible and reliable service is too high, then subsidies are justified to mitigate this household expenditure. Allocation and Distribution: The allocation of transport subsidies depends on what group is receiving the resources: Transport subsidies may be channeled to the providers (supply side) or directly to the users (demand side). In the case of the supply side subsidies, these can be provided to the infrastructure provision or to the service operation. In both cases, the overarching goal is to reduce the proportion of cost recovery that will be funded from fares. However, the distribution of the subsidies can change between supply and demand side subsidies. If the underlying argument is social redistribution, subsidies are expected to be largely distributed to the poor: Demand side subsidies are likely to be better targeted to poorer segments of the population; however, the implementation schemes can be more complex and costly. Supply side subsidies are common across the transport sector in both developed and developing countries; however, these schemes tend directly distribute resources to operators that do not discriminate across types of users. Nevertheless, in the case of public transport, this error is ameliorated by the fact that most transit users actually belong to the poorer segments of society. International Experience: There is a wealth of experiences in transport subsidies in both developed and developing countries. Following is a brief description of five different allocation schemes: (i) Unconditional operating subsidies: This is a supply side subsidy where resources are awarded to operators with little performance conditions. The main goal is to recover operating costs in deficit-prone systems. This is the case of most transit agencies in the United States where government transfers cover annual operating deficits. The source of these funds is, in large degree, local taxes such as property, fuel and sales taxes. (ii) Conditional operating subsidies: This is a supply side subsidy where transit operators are awarded cost recovering amounts after meeting performance milestones. This is the case of Argentina's bus operators where this amount depends on the number of passengers transported and the kilometers that the firm operated. The main funding source is a 21% tax on the price of diesel oil (gasoil) in Argentina. (iii) Flat fare structure: This is a common case of a cross subsidy between system users. The idea is that trip fares within a system are the same regardless of the length of the trip. In this way, short trip users subsidize long trip users while keeping the fare at affordable levels. This is a subsidy scheme that is used in many cities and some large sized and emblematic systems such as the Mexico City subway and the New York City subway. (iv) Transport vouchers: This is a demand side subsidy scheme where employers retain a percentage of the monthly earnings from formal workers that register in the program. In return, workers receive transport vouchers that are valid for the monthly commute trips. This case is well exemplified in Brazil, where 6% of the earnings are retained from employees, resulting in formal low income workers benefiting from the program and high income workers opting out of it. (v) Means tested transfer: This is a demand side scheme where, previous to assigning the resources, a test is made to determine the economic capacity of a household before transferring a subsidy amount. This case was used in Chile between 2005 and 2006 as a response to the increase in the cost of fuel. Transfers were funded from the general tax revenue base. Source: Estupinan, Gomez-Lobo, Munoz-Raskin, and Serebrisky; World Bank 2007. 48 3. Government Strategy 39. The current GoA and its predecessor have pursued active policies favoring public investment in infrastructure as described in the previous sections. In this respect, urban public transport has been no exception; projects have ranged from complying with the commitments to the metro and suburban trains operated as concessions in the Buenos Aires Metropolitan Area, urban infrastructure (rail/road underpasses, road paving, public spaces etc.), transfer centers, renewal of rolling stock in suburban railways, a small tramway line in Buenos Aires, revival of peri-urban railway systems in Córdoba, Chaco, Salta and Tucumán, to name a few. Thus, the GoA is clearly demonstrating a policy trend and direction, supported with maintaining public transport fares low through a subsidy scheme. 40. All of the projects and other actions by the GoA in the sector clearly show a firm emphasis on support of urban public transport. The actions to date, however, have been lacking a more detailed or cohesive plan, and the interventions of the National Government to pursue its policy direction have been restricted by the Federal Government structure. As the National Government does not have jurisdiction in urban transport within Municipal boundaries, many of the projects that have seen the light are rail based, where the National Government is the owner of rail-tracks nationwide. Arguably, the transport sector subsidy scheme has also been a way of participating in the urban transport sector despite the jurisdictional barriers, as the subsidies go mainly to the operating companies. 41. For the last year and with greater emphasis with the advent of the new Secretary of Transport21, the GoA is seeking to provide a more coherent policy framework to the urban transport sector, to review the transport subsidy scheme, to rationalize investments to make them more effective and to carry-out more significant projects that could mean a qualitative leap for urban transport in the main Metropolitan Areas of the country and in Buenos Aires in particular. In this context, the Secretary of Transport has provided a Sector Development Letter which includes a document outlining the new National Urban Transport Policy framework that this Program will be supporting. 42. Where previously the sector policy had been focused on providing the necessary services to the population to move away from the crisis, and later on to reduce the backlog of infrastructure investments and to revive the rail based public transport system, the GoA now recognizes that a new phase of reform is necessary. Indeed, the structural reforms envisaged are fundamental for the future of the sector and its improvement. The Bank is seen as a privileged partner in the sector to help the GoA tackle these issues. Whereas in the past the support given by the Bank was limited in its policy content, this loan is an opportunity for the Bank to provide assistance in a more complex agenda than in the past. 43. The new National Urban Transport Policy framework is based on the fact that although strictly the National Government does not have urban transport policy responsibilities as they have been decentralized to local governments, the need to set national guidelines to be able to face macro challenges has become apparent. The National 21 Juan Pablo Schiavi assumed as Secretary of Transport, in July 2009. 49 Government according to the Constitution is responsible for the overall well- being of the citizens of the country in such matters as the preservation of the environment and safeguarding consumers and users of services from unfair treatment or unequal conditions across the country. As a result, to ensure compliance with its constitutional responsibilities the National Government has proposed a National Urban Transport Policy. 44. The more salient points of the new policy framework build on the past achievements. The National Government has given maximum priority to the public transport systems throughout the country and will continue to do so, since they contribute to the equitable development of the domestic urban markets. Consequently, the National Government will provide direct technical and financial support for the Metropolitan Areas developing and investing in public transport systems. This support will be realized through transport infrastructure finance, planning tools, technical assistance and various other collaborations. 45. The National Government will channel investments to the authorities responsible for urban transport management and planning provided they comply with a number of conditions. To ensure that national level issues are considered and resources are uses efficiently it will request that the corresponding authorities prepare short, medium and long term land-use plans and strategies so that coherence is shown between land-use planning and urban transport planning. Furthermore, basic urban transport statistics, planning tools, a published Urban Transport Master plan for the short, medium and long term, as well all the pre-investment stages (pre-feasibility, feasibility and design) of a project will have to be presented so that a transport infrastructure project can be considered for financing. 46. There is a consensus that operational subsidies should be gradually reduced.. Future operational subsidies will be limited to two cases: (i) for the services and/or transport lines that are not financially profitable but the authorities wish to maintain for social reasons, and (ii) in the case where the authority simply strives to maintain a fare level that is below the operator's equilibrium, such as in the case of an integrated fare scheme. Only in the latter can national subsidies be expected, in which case national authorities would impose a limit on fare increases. 47. Finally, the National Government's Urban Transport Policy recognizes the complications of the Federal Government set-up in urban transport management, as urban agglomerations function independent of administrative jurisdictional frontiers. Therefore, the National Government will foster the creation of Metropolitan Transport Agencies in the areas that need them the most, giving absolute priority to the Buenos Aires Metropolitan Area. 50 Appendix 1. SECTOR DEVELOPMENT LETTER ARGENTINA: Metropolitan Areas Urban Transport Project Mr. Robert B. Zoellick President World Bank Buenos Aires, August 7, 2009 Urban Transport Program for Argentine Metropolitan Areas Dear Mr. Zoellick, I am writing to you in regards to the loan application presented by the National Government to the World Bank for the financing of the "Urban Transport for Argentine Metropolitan Areas" (The Program), and to inform you of the principle guidelines set forth by the National Government policy that will contribute to the achievement of the expected program results. As you know, the funding of the Program will promote progress through the use of the APL (Adaptable Program Loan) World Bank finance tool. This tool was selected because it allows flexibility to bring forth short-term investments and prepare the groundwork for the future medium-term investments considered for the Program. The National Government aims to complete the APL program in two stages, during a 9-year period and with a global cost of approximately US$500 million. Accordingly, the total funding amount requested from the World Bank would be US$400 million. It is worth mentioning that the National Government will confirm its request for the Program's second stage of funding during the execution of the first stage, by means of an official letter expressing prioritization and taking into account the financial needs of the country. The main objective of the Program is the improvement in quality and sustainability of the transport systems throughout the Metropolitan Areas of Argentina. This is to be carried out through improvements in the sector's decision-making framework, giving a new emphasized focus on public transport. Given the significant nature of the project, the National Government considers it to be of top priority. The program will directly benefit inhabitants' living conditions in metropolitan areas of Buenos Aires, Mendoza, Tucumán, Posadas, Córdoba, Rosario and other potential metropolitan areas that may become part of the Program during the second phase. 51 The National Government's Urban Transport Policy outlines the Program in an attached document, for your review. Some noteworthy, fundamental points of the Program are listed below. The National Government has given maximum priority to the public transport systems throughout the country, since it contributes to the equitable development of the domestic urban markets and will provide direct technical and financial support for the metropolitan areas undergoing the development process. This support will be realized through transport infrastructure finance, finance planning tools, technical assistance and various other collaborations. Within the given framework, the National Government will modify the sector's subsidy scheme to make it more equitable without compromising operator efficiency. Additionally, the National Government's Urban Transport Policy recognizes the limitations of the national administration in planning and urban transport management, as it operates within urban agglomerations that function independent of municipal boundaries. Therefore, the National Government will foster the creation of Metropolitan Transport Agencies in the areas that need it most, giving absolute priority to the Buenos Aires Metropolitan Area. Furthermore, the National Government, with the Program support, will design and create an Urban Transport Metropolitan entity for the Metropolitan Area of Buenos Aires within the upcoming two years according to the consensus of the provincial governments and municipal authorities, providing definitive solutions to the management of urban transport in the Buenos Aires Metropolitan Area. Finally, given the visibility of the Program at a national level, the Government is committed to the active and informed participation of citizens throughout the execution of the Program. Sincerely, Juan Pablo Schiavi Secretary of Transport Cc: Pedro Alba World Bank Director for Argentina, Chile, Paraguay and Uruguay Attachment: National Urban Transport Policy 52 NATIONAL URBAN TRANSPORT POLICY Introduction The objective of this document is to lay the foundation for a National Urban Transport Policy. Although the management of urban transport is the responsibility of local governments, the National Government as a guarantor of the common good must ensure that basic urban transport policy guidelines are established and respected at all levels in order to ensure the Argentine citizen's constitutional rights. This document therefore establishes the rudiments of the national vision for urban transport in Argentina. The National Government will share this information with local governments, operators and users, employing this document as a guide to foster the harmonious development of the transportation sector. Issues / Concerns Urban expansion and multiple jurisdictions... Demographic growth is concentrated in urban zones around the world, and Argentina is no exception. Between the last two censuses (1990 and 2000) urban population has grown 14.1%. This rapid growth rate is accompanied by an urban expansion and a metropolitanization phenomenon that generally surpasses the agglomeration perimeters and the city-center borders, circumventing administration and jurisdiction limits. The City of Buenos Aires and Greater Buenos Aires represent an emblematic and historic instance of this phenomenon in Argentina, though it is now being seen in various mid-sized cities as well. The structure of the Republic of Argentina's federal government, which constitutes the division or fragmentation of state power based on geographic autonomous entities, exacerbates the complications that arise from urban zone expansion. And even though the actual urban space is territorially continuous, integral and physically absolute, it is subject to multiple jurisdictions: national, provincial and municipal. The jurisdiction limits generate diverse legal authorities throughout the region, which create barriers that interfere with the efficiency of numerous public services, especially with the provision of urban transit. Economic growth and motorization... Economic growth translates logically into income growth of households. This invariably reinforces the motorization rates for individuals within the household, as the ownership of a vehicle is viewed as a social aspiration and a symbol of prosperity. Furthermore, a greater economic level also increases individual mobility, since increased activity brought on by higher salaries tends to generate more travel opportunities. Consequently, increased motorized travel within Argentine cities is inevitable and it obliges respective governments not to avoid the inevitability, but rather to foster the most beneficial motorized travel for the community. 53 This increase in the use of individual vehicles and the lack of permanent investment in public transport engenders a vicious cycle of deterioration of public passenger transport, as the decrease of potential transport patronage reduces the services' economic profitability, thereby reducing the likelihood of reinvestment and improvements. This eventually lowers the quality and comfort of public transport services, further discouraging public use. In parallel, the rising number of private vehicles on the road perpetuates traffic congestion affecting the reliability and timeliness of public transport services and also diminishing user attraction. As a consequence, the sustainability of the public transport system remains a permanent challenge that should be addressed, as the majority of the Argentine population, especially those with limited resources, depends on it. Travel patterns and the urban structure... A dense urban agglomeration and land-use mix creates a situation that favors relatively short journeys with a high density of users that perhaps are best served by a mass transit system. A city with a more segregated land-use and suburban development presents a situation that favors longer journeys with disperse trip origins and a concentration of few destinations. This latter urban structure is more appropriately served by private vehicles. Historically, Argentine urban development has produced both types of urban structure with a greater tendency toward the latter in recent decades. Argentine cities, thus, present a mosaic overlay of urban structures situated between the two extremes described. In other words, the urban framework begets the travel pattern network and thus the manner in which it is developed. As a result, the concerns of urban transport remain associated to the policies concerning urban structure: territory, land-use, and ultimately the city in and of itself. Inequality of access to public urban services... In Argentina, as in all countries in the region, economic growth is unequal. Economic inequality within urban zones is reflected in various ways, one of which concerns access to job opportunities, education, basic public services and general participation in the urban economy and citizen's life. This access can be defined as economic access, but can also be considered as physical. The roll of the urban transport system is key as it is the means that facilitates physical access to urban economic activities. As a consequence, economic inequality is manifested through whether or not one possesses a personal vehicle, perpetuating inequality in the alternative methods of urban transportation amongst individuals. This can inevitably be seen as the inequality of the participation opportunities within the urban economy and citizen practice. Negative externalities... The provision of transportation services registers a series of irrationalities that cannot be solved by the simple and spontaneous intervention of the market. This is especially true in the urban transport sector, where the market presents clear flaws and distortions, affecting its own development and the community's development concurrently. These distortions are manifested through negative externalities like local gas emissions, greenhouse gases, noise, congestion, etc. The resolution of negative externalities, by definition, exceeds actors 54 within the transportation market: suppliers and services users, and requires state intervention as the presumed provider of general welfare. Lack of resources... The urban sector has a peculiar and complex condition of concentrating multiple contradictory activities and interests that compete for the same limited urban spaces including: dwellings, commercial locations, industrial and public spaces. Likewise, the advancement of urban transportation services requires financial resources for infrastructure development and fuel for operations, which are evidentially being competed for by various possible destinations, and are all equally necessary for the community. The definition of public space usage and allocation of limited energy and finance resources will require arbitration, exceeding the functions of the transport sub-sector. In view of the fact that the development of the urban transport sector is a task that vastly exceeds the service supplier and user participation, the decisive and firm participation of the state is needed to: (i) compensate the social and economic inequities of the urban sector which can either be deepened or diminished by the urban transport system; (ii) correct market distortions and negative externalities of the urban transport system; (iii) mediate regarding the use of limited energy and finance resources within the urban sector; and (iv) overcome the federal jurisdiction barriers that impede the natural development of transport activity in Argentine urban agglomerations. Conceptual and Legal Fundamentals The 1st Article of the National Argentine Constitution consecrates the regime of the government's federal representative republic. From this, the makeup of the Argentine State is derived with relation to the territorial element as federalism. The State, to a certain degree, organizes itself based on a duality of powers: the federal along with each local authority. It is the definition of local powers gives them relative authority over the urban transport sector22. However, without compromising this definition, the National Constitution has consecrated its own supremacy explicitly in Article 31, to the effect that each provincial authority is obligated to comply, despite any contradictions expounded by provincial laws or constitutions. Therefore, local powers should acquiesce in legitimate practice to the principles, declarations and guarantees of the National Constitution. On this understanding, a set of subject matters can be identified, which have warranted explicit consideration in the latest constitutional reform, are found strongly implicated in the provision of urban passenger transport services. This justifies the Federal State's intention to establish a general policy within the given scope, which allows for a unified approach for the benefit of equity and equality of the entire country's population. 22 With the exception of the Metropolitan Region of Buenos Aires, where the federal government has responsibility for the transport services that transverse both the Province and the City of Buenos (the subway and railway trains). There are no other urban agglomerations of such magnitude that require a similar national power presence. 55 One of the concerns stated is the preservation of the environment. Article 41 of the 1994 Constitution establishes that all inhabitants enjoy the right to a healthy environment, balanced and apt for human development, assuming the responsibility of preservation. Environmental harm generates reparation obligations according to the established law. Regulations indicate likewise that authorities are to provide the protection of this right through the conservation of natural resources, the preservation of natural endowments, culture and biological diversity, as well as environmental awareness education. In addition, National Constitution Article 42 asserts that consumers and users of goods and services have rights in relation to consumption, protection of their health, security and economic interests; rights to adequate and truthful information; the liberty of personal choice; and to the conditions of equal and fair treatment. This implies that authorities are to provide consumption education, ensure adequate competition to avoid market distortion, control over natural and legal monopolies, quality and efficiency of public services and the composition of consumer associations. In other words, the authorities are obligated to oversee user and consumer protection, through means that neither undermine nor threaten free initiative, allowing for the control of beneficiary and third-party rights. Since beyond the service exchange, the aforementioned are potential victims of the given process' negative externalities. Consequently, the National Government as a whole has a national obligation in relation to the urban transport sector to ensure the following: (i) that local authorities respect constitutional principles in organizing transport service provisions within their region; (ii) national territorial equity in the level of transportation services to be expected by users throughout the region's respective territory, including quality and service costs; and (iii) national territorial equity regarding the maximum level of externalities that the urban sector can produce, including pollution, emissions, noise, security, etc. National Urban Transport Policy Guidelines A national urban transport policy is necessary as Argentine cities have grown and are confronting similar problems consistent with all large agglomerations. The responses to these problems throughout Argentine cities thus far have been insufficient. Additionally, the already high and still growing volume of resources allocated to the transport sector must be organized to maximize their impact and achieve larger benefits. It naturally follows that the time to design the main guidelines of a National Urban Transport Policy has arrived. This must be done so that similarly oriented cities are able to work together successfully, seizing the opportunities to exchange ideas and experiences, for example in the areas of climate change and safety. This joining of forces will aid in the progress of utilizing national resources allocated to the urban transport center in the most efficient manner possible. Fundamental strategic concept... Every Argentine citizen, regardless of location and socioeconomic condition, has the right to adequate public transportation and decent mobility that allow access to opportunities 56 such as employment, education and basic urban services. This concept is not only conceived as an economic necessity for the functioning of the city, but also as a basic citizen right; the more the population has access to employment opportunities, commerce and services, the more dynamic and efficient the urban economy is in regards to its full capabilities. Likewise, the greater access to basic urban services, the greater the citizen's participation in city life. Due to the unequal distribution of national income, authorities should guarantee that in all Metropolitan Areas public transport services are available for those that do not enjoy the luxury of private, personal transport. This would at the very minimum, help foster equality in the access to opportunities and mobility for all citizens. Coherence with land-use and urban policy... It is difficult to isolate the extremely complex array of decisions, actions, inactions and interactions that contribute to the type of city that continuously grows territorially. It does hold, however, that the urban transport system concurrently favors and is affected by a specific type of urban structure. Subsequently, authorities have the responsibility of keeping the urban policy and land-use policies in coherence with the urban transport system that they wish to develop. The National State will guide local authorities so that they acquire the necessary tools for land-use and urban planning so that they can ensure coherence between their land-use and urban transport policies. In particular, the National State will request that provincial governments prepare short, medium and long term land-use plans and strategies as a financial condition for obtaining National Government financing of transportation infrastructure projects within their respective territories. Operational organization... The urban transit system throughout Argentine cities will be composed of private transportation modes (personal automobiles and motorcycles), and public modes (trains, subways, buses, taxis, etc.). This will be according to individual preference and demand of the existing public services system, as previously mentioned. The participation percentage of each mode of transportation within the city matrix should tend towards maximizing the common good of the city. The modes of transportation that use limited national resources (funds, fuel, space) most efficiently should be prioritized and organized in such a way that minimizes negative externalities (pollution, noise, traffic congestion) and that ensures user safety. In short, the public transport services should be understood as a service of interest to the economy in general, since the allocation of resources solely by the market does not contribute solutions adequately: surplus in some of the profitable schedules and transit lines, and insufficient supply in other zones and schedules. Because of this, the authorities should regulate the market in efforts to ensure that routes, stops/stations, frequencies and fares correspond to the needs of the population and not only to the financial profitability of the operators. This would aid in maintaining a consistent, quality service so that the range of travel demand across the various zones is not reflected in differences in service quality, punishing those locations with less traffic. 57 Investment and limited resources... In order to achieve an efficient urban transport sector, a quality public transport system that responds to the needs of its population is needed. In this manner, the trend towards excessive use of individual transport can be revised and consequently a more efficient use of limited resources like space, fuel and finance can be accomplished. Therefore, the National State will provide financial resources for projects that favor public transport infrastructure in cities and urban agglomerations that have complied with the minimum prerequisites. These requirements include the existence of basic urban transport statistics, planning tools, a published Urban Transport Master plan for the short, medium and long term, as well as a transport infrastructure project that includes all the pre-investment stages (pre-feasibility, feasibility and design). Fares and subsidies... Operational subsidies are to be gradually reduced on the basis of consensus with local authorities. Future operational subsidies would be limited to two cases: (i) for the services and/or transport lines that are not financially profitable but the authorities wish to maintain for social reasons, and (ii) in the case where the authority simply strives to maintain a fare level that is below the operator's equilibrium, such as in the case of an integrated fare scheme. Only in the latter can national subsidies be expected, in which case national authorities would impose a limit on fare increases. It is socially desirable that transport subsidies be demand-oriented. This means directly bestowing necessary resources to the users who because of their socioeconomic condition cannot cover the real cost of the transport fare. This will allow maximizing operator efficiency, so that fare levels reflect their operational costs, and the fare level will not limit passenger demand. The National State will provide incentives and finance projects for the implementation of electronic fare tickets in all eligible agglomerations capable of implementing medium and long-term strategies with complex price-structures and required subsidies. Institutional organization... Urban public transportation is most efficiently organized at the local level, in a decentralized manner. The authorities closer to the daily realities of their communities have a better understanding of what their communities need. This does not however preclude the association of local authorities who may have the same management objectives of an urban transport system over one contiguous and integrated region. On the contrary, the association of municipalities, metropolitan transport authorities, inter-municipal consortiums and metropolitan consortiums is promoted. This is due to the fact that in many cases, this is the most efficient method of urban transport management for an agglomeration. 58 The National State will dedicate specific financing to the creation of local authority associations during their first five years of existence and on the basis of a work program. The Metropolitan Region of Buenos Aires, a special case... The Metropolitan Region of Buenos Aires (MRBA) is one of the largest urban areas in all of Latin America. Today its population boasts over 13 million people. The growth rate is relatively low, at 6.8% over the last 10 years23. The Province of Buenos Aires is the center of administrative, economic, industrial and social life of Argentina, concentrating over one- third of the country's population (37%). From the perspective of the public passenger transport system, the Buenos Aires Metropolitan Region is integrated with the Autonomous City of Buenos Aires including 42 municipalities of the Province of Buenos Aires. The public passenger transport system in the region is made up of subsystems of surface metropolitan railways, subways and public auto-transport for passengers (AFP). The entities that have authority in this transport sector are the National Government (railways, subways and inter-provincial AFP), the Provincial Government (Provincial AFP), the Autonomous City of Buenos Aires Government (subway infrastructure, AFP within the City of Buenos Aires), and the Municipalities of the Province of Buenos Aires (APP municipalities). In contrast with other Argentine urban agglomerations, given its strategic positioning and jurisdictional complexity, the Buenos Aires Metropolitan Region needs active participation from the National Government as an actor in the organization of the public transport sector, beyond its role in the direction and formulation of national policy. The National Policy, before being revealed should apply to the Buenos Aires Metropolitan Region with the following stipulations: (i) The creation of an Organizing Entity for Metropolitan Transport in the MRBA The National Government will channel its participation as one of the functional authorities of the MRBA transport, through a multi-jurisdictional entity organizing the urban transport in the MRBA. Only a multi-jurisdictional entity can overcome the jurisdictional barriers within the MRBA, which complicate the execution of projects needed to take a qualitative leap in public transport services and the overall organization of the urban transport sector. The National Government's main priority will be the creation of this entity, whose minimal functions will be to plan and organize transport, though it may have greater responsibilities according to the consensus reached with the other authorities. (ii) Priority to Mass Public Transport As with the rest of the nation, the National Government will give top priority to public transport seeking to achieve its strategic objectives. In the case of MRBA, it will do so particularly through the development and improvement of mass transport systems according to its regional characteristics and dimensions. It will promote physical and fare integration projects throughout the various transport networks in such a manner as 23 INDEC, Censo Nacional de Población, Hogares y Viviendas 2001 59 to improve user perception of the systems. Transport safety projects will also be promoted. (iii) Investment, Subsidies and Fares Investments, pricing policy and subsidies for the MRBA will be defined within the metropolitan transport entity, but the National Government will apply the same national policy to the MRBA: investments will be oriented towards infrastructure and network integration projects, operational subsidies will be reduced and consented upon by the metropolitan entity. The electronic ticket project will be completed to facilitate future possibilities of subsidies when needed, and fare levels will be decided in consensus within the metropolitan entity. (Unofficial translation) 60 ANNEX 2. MAJOR RELATED PROJECTS FINANCED BY THE BANK AND/OR OTHER AGENCIES ARGENTINA: Metropolitan Areas Urban Transport Project 1. Current Bank lending and grant funding operations in related sectors proposed to receive funding under this Project are summarized in the table below. Table A2.1 Current Bank Urban Transport Lending in Argentina DO Name PO number Approved Status IP rating rating Argentina Sustainable Transport and Air Quality P114008 11/04/2008 Active S S Project (GEF Grant) Buenos Aires Urban Transport P104984 03/27/2007 Active -- -- Additional Financing Buenos Aires Infrastructure P088032 12/07/2004 Active N/A S 1st Phase APL Buenos Aires Infrastructure P105288 06/28/2007 Active S S 2nd Phase APL Buenos Aires Urban Transport P039584 5/15/1997 Active S S Pre- Rosario Metropolitan Area P101421 06/01/2008 Evaluaci -- -- Project on Basic Municipal Infrastructure P060484 06/06/2006 Active MS MS 61 Table A2-2 Other Infrastructure Projects in Argentina Roads Water and Sanitation Flood Protection Federal Level Loan 7242-AR Loan 77060-AR National Highway Asset Management Project Matanza-Riachuelo Basin Sustainable CReMA contracts (performance-based) Development APL Improving Institution Building of Federal Highway Agency sewerage services in MRB Road safety activities Loan 4484-AR Water Sector Modernization Project Contracts for 3 provincial level water operators (Posadas, Olavarria, and Tucumán) Provincial Level Loan 4093-AR Loan 7268-AR Loan 4117-AR Provincial Roads Project Buenos Aires Province Sustainable Flood Protection APL Road rehabilitation and maintenance contracts Investment Development Project Flood protection and Closing June 30, 2006 Water and sanitation contracts in prevention contracts in six eligible areas of the Province with Provinces Loan 7301-AR poverty focused interventions Provincial Roads II Project Loan 7268-AR Provincial-level CREMA contracts Buenos Aires Province (performance-based) Sustainable Investment Inst. Building Prov. Hwy Agencies Development Project Road Safety Component Small water resource management component Loan 7268-AR Buenos Aires Province Sustainable Investment Development Project Road rehabilitation and maintenance Road safety component Loan 7398-AR Córdoba Provincial Road Infrastructure Project Road rehabilitation and maintenance, Road Paving, Road Safety in Province of Córdoba Loan 7429-AR Santa Fe Road Infrastructure Project Widening of Road 19 (Córdoba ­ Santa Fe) in the Province of Santa Fe Municipal Level Loan 3860-AR Loan 3860-AR Loan 3860-AR Municipal Development Project II Municipal Development Project II Municipal Development Closed on Dec. 31, 2005 Closed on Dec. 31, 2005 Project II Closed on Dec. 31, 2005 Basic Municipal Services Project Basic Municipal Services Project Basic Municipal Services Project 62 ANNEX 3: RESULTS FRAMEWORK AND MONITORING ARGENTINA: Metropolitan Areas Urban Transport Project Table A3-1: Project APL1 Development Objectives PDO Project Outcome Indicators Use of Project Outcome Information The project (APL1) development objectives are: (a) Support the design and (a) The AMBA Transport (a) (i) Results will be creation of a multijurisdictional Metropolitan Agency is legally disseminated to help build the Metropolitan Transport Agency created, is adequately staffed case for replication in other cities. for the Buenos Aires according to the organization Metropolitan Area (AMBA). chart designed in the project, has (a) (ii) Inclusion of results in adequate offices and equipment, national communications and and its own operating budget. inform policy makers in charge of urban transport planning. (b) Strengthen the institutional (b) (i) Number of Metropolitan (b) (i) Provide decision makers capacity of transport authorities Areas with updated OD surveys with tools for objective decision in decision making, planning, and urban transport/land use making, planning and priority priority setting, and resource master plans and transportation setting. allocation in urban transport. modeling tools. (b) (ii) The AMBA Urban (b) (ii) Inform stakeholders and Transport Planning Observatory public at large of urban transport is fully functioning and data is sector situation in AMBA. accessible via webpage (b) (iii) The AMBA Transport (b) (iii) Provide decision makers Master Plan is completed with the information to set the AMBA urban transport sector priorities and identify the multijurisdictional emblematic project for execution in APL2. ( c) Improve the quality and (c) (i) Tucumán: (c ) Provide decision makers and performance of urban transport - % of primary school students technical staff with the insight to infrastructure and/or services in absent in low transitability days the impact of interventions, for Metropolitan Areas of is reduced feedback for improved planning. Argentina. - number of appointments in CAP (Centros de Atencion Primaria or Community Health Centers) cancelled in low transitability days is reduced 63 - Number of days with no circulation of public buses is reduced - Average speed of public buses in Barrio 11 de Marzo is increased (c) (ii) Posadas : - User's perception of public transport system quality is increased - Average speed of public buses on corridor increases (c) (iii) Mendoza: - Availability of public bus service along Papagayo corridor (d) Improve the physical (d) User perception (d) Provide decision makers and integration and access to public technical staff with the insight to transport networks in the Buenos the impact of interventions, for Aires Metropolitan Area. feedback for improved planning. Monitoring of Results. 1. Institutional Issues. The project will be monitored by the selected municipalities but overall supervision is to be carried out by the PIU. 2. Data Collection. Household surveys are being carried out to determine the baseline of transport mode use in each participating Metropolitan Areas and in the AMBA. A second series of household surveys using the same methodologies and sample will be carried out after the end of the project to determine the impact of the project and measure the relevant indicators. Since most of the project components address barriers to implementation of sustainable transport policies, additional attitudinal information will be gathered, through opinion surveys, seeking insight on a shift in attitudes. This will involve a combination of gathering reports from counterparts in cities participating in the program, telephone interview surveys, including some with cities not participating in the program, and culling information generally available on the internet and through other sources. Participation of Córdoba, Posadas, Rosario, Mendoza and Tucumán sub-projects will be guaranteed through the Implementation Agreements among municipalities and the Federal government. Participation of other Metropolitan Areas will be voluntary. 64 3. Capacity. Because the data collection, analysis, and evaluation will be carried out by the PTUBA PIU, and funding for this activity has been assured, capacity to carry out the evaluation is not considered to be an issue. 65 Table A3-3: Arrangements for Results Monitoring Target Values (*) Data Collection and Reporting Project Outcome Indicators Baseline YR1 YR2 YR3 YR4 YR5 YR6 Frequency Data Responsibility and Reports Collection for Data Instrument Collection Component 1 ­Creation of the Metropolitan Transport Agency (1) The AMBA Transport Not created Not Not Created Created Created Created Annual Report PIU Metropolitan Agency is legally created created progress created, is adequately staffed reports according to the organization chart designed in the project, has adequate offices and equipment, and its own operating budget. (2) Number of Metropolitan Areas 0 0 1 2 4 5 6 Annual Participating Cities and PIU with updated OD surveys and urban progress Metropolitan transport/land use master plans and reports Areas transportation modeling tools. (3) The AMBA Urban Transport Not NF NF F F F F Annual Report PIU Planning Observatory is fully functioning progress functioning and data is accessible (NF) reports via webpage (4) The AMBA Transport Master Not NC NC NC C C C Annual Report PIU Plan completed completed progress (NC) reports Component 2 ­Urban Transport Improvements in Argentina's Medium Size Metropolitan Areas Posadas: (1) Users quality perception Survey Survey Twice Users surveys Municipality and PIU (2) Average speed of public buses on 15 15 15 20 20 20 20 Annual Measurement Municipality and corridor at peak hour (km/h) PIU Tucumán: 3) % of primary school students absent 60% 60% 60% 60% 50% 30% 30% Annual Interviews Municipality on low transitability days and PIU (4) Number of appointments in CAP 70% 70% 70% 70% 50% 30% 30% Annual CAP Books Municipality (Centros de Atencion Primaria or and PIU Community Health Centers) cancelled in 66 low transitability days (5) Number of days with no circulation 65 65 65 65 50 35 0 Annual Bus Operators Municipality of public buses Registry and PIU Books (6) Average speed of public buses 5 5 5 5 7 10 15 Annual Frequency and Municipality (km/h) Time census and PIU Mendoza: (7) Public Transport serving No No No No Yes Yes Yes Annual Report Municipality Papagayo corridor and PIU Component 3: Public Transport Access and Modal Integration in Buenos Aires Railway Station Accessibility (1) Users perception Survey Survey Twice Survey PIU Intermediate Outcome Indicators Component 1 ­Creation of the Metropolitan Transport Agency (1) Legal creation of the AMBA Not created Not Not Created Created Created Created N/A Report PIU Transport Metropolitan Agency created created (2) Percentage of staffing according 0% 0% 10% 30% 40% 75% 75% N/A Report PIU to the organization chart designed (3) Approval of MTA's operating Not NA NA A A A A N/A Report PIU budget approved (NA) (4) Installation of MTA in offices Not NI NI I I I I N/A Report PIU with adequate equipment installed (NI) Component 2 ­ Urban Transport Improvements in Argentina's Medium Size Metropolitan Areas Posadas: (1) Linear km of segregated bus 0 0 0 4 4 4 4 Annual Report PIU lane constructed in Ave. Uruguay (km) Tucumán : (2) Linear km of roads and 0 0 0 3.4 3.4 3.4 3.4 Annual Report PIU sidewalks paved in Barrio 11 de Marzo (km) Mendoza : (3) Linear km of Colector 0 0 0 3.2 3.2 3.2 3.2 Annual Report PIU Papagayo constructed (km) Component 3: Public Transport Access and Modal Integration in Buenos Aires Railway Station Accessibility: Improvement of access conditions of train stations in AMBA (1) Number of railway stations 0 20% 30% 40% 50% 80% 100% Annual Report PIU completed 67 Component 4: Sectoral Training; Urban Transport Planning Masters (1) Post-graduate course in urban Not NR NR NR NR R R Annual Report PIU transport is registered with Ministry registered of Education. (NR) Component 5: Project N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Management * NF=Not Functioning; F=Functioning; NC= Not Completed; C=Completed; NI=Not Installed; I=Installed; NA= Not Approved; A= Approved; NR = Not Registered; R= Registered; N/A= Not Applicable. 68 ANNEX 4: DETAILED PROJECT DESCRIPTION ARGENTINA: Metropolitan Areas Urban Transport Project 1. This annex provides a detailed description of the project by component, with a cost estimate for each, including contingencies. Component 1: Creation of a Metropolitan Transport Agency (MTA) for Buenos Aires: 2. This component is aimed at strengthening capacity for transportation planning and management at the metropolitan level. It will prepare the legal, technical, financial and institutional conditions for the creation of a Metropolitan level transport agency for the Buenos Aires Metropolitan Area. The creation of the agency will be a significant step forward for urban transport management in Argentina. Well-functioning urban transport systems in the world, whether in Europe or in North America owe part of their success to a good inter-institutional coordination process, ensured by some type of transport agency. The creation of one for the AMBA is indispensable to rationally restructure inter- jurisdictional bus routes, coordinate bus and subway services, implement multimodal integration, especially fare integration, smart card compatibility, subsidy and tariff policy that are uniform, etc. Furthermore, the GoA Urban Transport Policy states the need to develop Metropolitan Area Transport Agencies where needed all over the country and clearly spells out the decision to create the AMBA Transport Metropolitan Agency. This component supports the GoA decision through its five sub-components: Sub-component 1.1 Agency Structuring (US$1.0 million without contingencies): This sub-component will develop the adequate legal and institutional frameworks for the new transport Agency. The current framework will be revised and a set of recommendations will be provided in the form of drafted laws or amendments to support the Agency's functions and responsibilities. This activity will also define an adequate organizational architecture and an implementation plan for the Agency. The project will define the responsibilities and functions of each member and the way the Agency interacts with other governmental bodies. Hired consultants will assist the local team in structuring and presenting the project across all transportation stakeholders in the Buenos Aires Metropolitan Area (AMBA). Sub-component 1.2 Consolidation of Transportation Planning in Buenos Aires (US$13.0 million without contingencies): This sub-component will support necessary technical efforts for transportation planning activities. Specifically, it will update and complement the current databases that are being collected towards the creation of a metro-area transportation model. These databases include automatic traffic counts, a bus supply survey, a bus frequency survey and passenger oriented focus groups. The ultimate outcome of this sub-component is the development of a transportation plan that provides the strategic direction for the development of the AMBA and a medium and long term investment framework. Additionally, this sub-component will finance the feasibility studies and final designs for priority projects that have been previously identified. In sum: (i) continued improvement of the AMBA Urban Transport Model (US$2.0 million); (ii) An AMBA Transport Master Plan (US$2.0 million); (iii) Feasibility Studies and Design Studies for a major multijurisdictional project in AMBA 69 (US$6.0 million); (iv) Transport Planning data collection and updating (US$3.0 million) Sub-component 1.3 Urban Transport Observatory (US$1.1 million without contingencies): This sub-component will finance the creation of an Observatory which will collect, process and maintain all the urban transport and air quality databases. The sub-component will finance a study to design the technical requirements of the Observatory. It will also finance all the necessary software and equipment. The Observatory will produce global and specific statistics and inform the public of the state of the sector. A website will be developed to publish all produced information and position the Agency as the leading entity in transport planning. Sub-component 1.4 SUBE Supervision (US$10.5 million without contingencies): This sub-component will finance the supervision and project management consultancy that will oversee the acquisition and implementation of all goods, hardware and software necessary for the provision of a single fare media payment technology across all transportation modes in AMBA, otherwise known as the SUBE project (Sistema Unico de Boleto Electronico). The project carried out by the GoA consists of introducing a single electronic ticket on all of the AMBA transport networks. The project includes the acquisition of the cards, the ticket vending machines, and the validating machines on the transport vehicles. This investment is expected to improve transport services by reducing user transfer time, reducing the current levels of fare evasion, and solving the inconvenience experienced by public transport users due to the lack of coins in the system. Furthermore, the existence of this new medium will pave the way to the introduction of more sophisticated fare structures and demand based subsidies. Sub-component 1.5 Staff and Operational Expenses (US$2.9 million without contingencies): This sub-component will finance the necessary staff, office and other operational expenditures of the Agency for the duration of the project. The main source for the technical staff is expected to be a group of young professionals that is being trained through the PTUBA. This group will finish their training by April 2010, date by which they should join the MTA to perform different tasks. This may include a seed group of professionals that have been destined to become part of the MTA and are working on the activities financed by component 1, prior to the legal creation of the MTA. Component 2: Urban Transport Improvements in Argentina's Medium Size Metropolitan Areas: 3. This component is aimed at improving the quality of the urban transport systems of Argentine medium size Metropolitan Areas and to continue strengthening the transport planning capacity of the local governments. Five Metropolitan Areas (Mendoza, Posadas, Tucumán, Córdoba and Rosario) were selected to participate in the previous Bank- supported project, Buenos Aires Urban Transport Project (PTUBA), through a demand based process, whereby all medium size cities were offered to have their urban transport projects financed by the PTUBA. The context of the Metropolitan Area, the merits of the project, as well as the quality of preparation and suitability of the projects presented were used as the basis for the selection. 70 4. As a result, each of these Metropolitan Areas, either through their own financing or supported by the PTUBA have developed a series of planning tools and elements that now make them eligible to participate in the PTUMA Program. The eligibility criteria for a city or Metropolitan Area to participate in the PTUMA Program are the following: (i) An urban transport policy or strategy that favors public transport; (ii) A Master or Strategic Transport Plan for the Metropolitan Area that has been adopted, is duly recognized, and has been published; (iii) An origin-destination household survey that provides information on mobility indices in the Metropolitan Area; (iv) A working computer-based transport model for the Metropolitan Area. 5. Notwithstanding, the Program considers the above criteria as a framework within which any other Metropolitan Area that complies with the basic criteria can participate. With these basic tools it is believed that a Metropolitan Areas can present an objective investment project for consideration 6. Therefore, the works sub-projects prepared in APL1 up to detailed design will be financed in APL2, specifically the sub-projects presented by Córdoba and Rosario. However, all sub-projects that comply with preparation criteria (economic, social and environmental assessments), have a detailed design and come from eligible Metropolitan Areas (i.e. those that comply with the criteria set for Metropolitan Areas) may be considered for financing in APL2; this may include Metropolitan Areas not yet identified. In the case of the Metropolitan Areas that have already had sub-projects financed in APL1 (potentially Tucumán, Posadas and Mendoza), they will need to show progress in the institutional set-up regarding multijurisdictional coordination to be considered in APL2, in particular the way they implement the Metropolitan Area transport plan in multiple jurisdictions. 7. For each selected Metropolitan Area, the component will finance: (a) one or more priority projects that feature in the Transport Master Plans, that are in an advanced state of preparation and have been evaluated from social, environmental and economic perspectives. The projects chosen may not necessarily be the first priority transport wise as the level of preparation and timing of the operation were also taken into consideration; (b) a set of specific feasibility studies and/or final designs for future projects that result from comprehensive transport studies currently under way. Sub-component 2.1 Metropolitan Area of Mendoza (US$9.8 million without contingencies): This sub-component will finance infrastructure works on the Colector Papagayo, a connection that will improve transport conditions between the east-west areas of the city and regional connectivity with the west of the Mendoza Metropolitan Area. The infrastructure works will comprise of the paving of 3.7 km of the existing road and building an interchange with access roads. The objective is to improve transport fluidity conditions for those trips moving east to west in the Metropolitan Area. The existing infrastructure is not sufficient to meet the existing trip demand and the current travel conditions are affected by congested arteries. Moreover, the current access road to the city -Ave. Libertador- crosses Parque San Martin, deriving a significant amount of traffic onto one of the main recreational areas of Mendoza. Other benefits derived from the project will be the reduction in congestion of surrounding residential roads, which are currently used by public transport companies. These vehicles, which connect the eastern and 71 western areas of the city, are forced to cross local residential neighborhoods, with limited road space, due to a lack of major east-west arteries. The Colector Papagayo will provide an alternative -and more efficient- route which will improve public transport conditions and unclog residential streets. Sub-component 2.2 Metropolitan Area of Posadas (US$14.6 million without contingencies): This sub-component will finance infrastructure works for a segregated busway on Avenue Uruguay and boarding stations to complement a currently operating Bus Rapid Transit system. The Avenue Uruguay project is framed in the Integrated and Sustainable Transport System Implementation Plan. This plan includes a set of urban interventions in the areas of traffic reorganization, new infrastructure and public transport enhancements. The infrastructure works for Avenue Uruguay comprise the construction of a segregated busway, the implementation of boarding stations, new traffic signaling and innovative urban furniture. This project is expected to significantly improve the current conditions for public transport in the corridor. It is also complemented by the improvement in signaling and the traffic light system of parallel avenues Rademacher and Haro to improve fluidity of private vehicle flows. Sub-component 2.3 Metropolitan Areas of Tucumán (US$22.5 million without contingencies): This sub-component will finance infrastructure works in the Barrio 11 de Marzo, a low income neighborhood where roads are unpaved. This activity is expected to improve mobility for locals and decrease the levels of work and school absenteeism. Infrastructure works comprise paving 10 km of roads of the neighborhood. The project aims to improve mobility conditions in the neighborhood. Currently, most of the local streets are dirt roads which are not in optimal conditions for the operation of public transport and which are not transitable when it rains. The rain makes the neighborhood roads unusable around 60 days per year. The project takes a comprehensive approach to these issues by executing the following activities: (a) paving the Barrio 11 de Marzo Street grid ; (b) constructing a storm water drainage system; (c) rebuilding and improving the sidewalk network; and (d) redirecting public transport routes through the neighborhood. The project is expected to bring broader benefits, besides the improved mobility, due to the better access that local dwellers will enjoy. This will be reflected in an increased school attendance rate, better public health and a better quality of life. Sub-component 2.4 Metropolitan Areas of Córdoba (US$2 million without contingencies): This sub-component will finance the detailed designs for the construction of the Mitre Intermodal transport terminal. The investment will be financed in APL 2. This activity is expected to improve modal integration between bus, rail and non motorized transport. This project is both an urban and transport sector intervention. First, construction in this part of the city will be accompanied with a land use strategy to redevelop the surrounding area and improve the use of public space. Second, improving the transfer conditions is essential to promote the use of public transportation, therefore, this project will guarantee a smooth modal transition for bus users, rail users, 72 pedestrians and also for motorists that choose to connect with the train line. Third, the project features the physical and operational restoration of the Ferrocarril Mitre station which is part of the historical and architectural heritage of the city. The project will improve the current conditions of public transport and will attract new users due to the ease in transferring, the more attractive public spaces and the improved walking conditions. Sub-component 2.5 Metropolitan Areas of Rosario (US$4 million without contingencies: This sub-component will finance the detailed design of the infrastructure works in the North South corridor, one of the main corridors of the city. The investment would be financed in APL2. It comprises the construction of a 12.25 km high quality transit system which is expected to improve public transportation service in the short term and increase transit ridership in the medium term. The project is part of the implementation of a mass transit system along the North- South corridor. The system is intended to provide fast, safe and clean service in order to attract private vehicle users to public transport. The total project comprises 21 km, however, the first phase which will be developed through the PTUMA, is only 12.25 km. The first phase connects the North of the city with Plaza Central (the largest urban and interurban transfer center of the city). The project comprises the construction of a segregated way, public space improvements, designated stops and the redevelopment of the Plaza Central station. Currently the type of technology that will serve the corridor is still being studied under technical criteria; however, the list has been narrowed to high capacity buses, trolleys and light rail. Sub-component 2.6 Technical assistance (US$8.5 million without contingencies): For each of the selected Metropolitan Areas, this sub-component will finance a set of feasibility and/or design studies. These studies will examine projects that have been previously identified by ongoing comprehensive studies. This sub-component is expected to support and validate the current transportation planning efforts and institutionalize a rational methodology for project development. Furthermore, within this sub-component other Metropolitan Areas may be included and assisted through the financing of origin-destination studies, transport modeling work and preparation of Master Plans.. Sub-component 2.7 Strengthening Environmental and Social Management Capacity (US$1.5 million without contingencies): For each of the selected Metropolitan Areas, this sub-component will finance the strengthening of institutional capacity of selected Metropolitan Areas in environmental and social management Component 3: Public Transport Access and Modal Integration in Buenos Aires: 8. The objective of this component is to improve current accessibility and integration conditions in the AMBA public transport networks. This component will include infrastructure works on transfer centers, train stations and in a grade-separated crossing. It will also feature operational improvements in the current train signaling system. Suburban rail services have been deteriorating since the 2001 crisis, taking a heavy toll on train users, mainly the lower income population from the AMBA. Fares are kept at low levels but users 73 complain heavily about a lack of reliability, delays, poor accessibility to train stations, rundown trains and stations, long headways between trains, cancelled services and insecurity. This component provides an integral strategy to improve service quality by acting simultaneously on bus-train physical integration24, accessibility to stations, and rail- road crossings. The combination of these actions will improve the quality of suburban train services in the AMBA, the integration between transport networks and the accessibility of stations for users. There are already some on-going works of this type on some rail lines, part of them being financed by the PTUBA25, which will be complemented by the works envisaged under this operation. The following is the description of the activities planned for this project. Sub-component 3.1 Transfer centers (US$5 million without contingencies): This sub-component will finance the preparation studies and detailed design for the infrastructure works in three critical intermodal centers of the AMBA. The investments will be financed in APL2. These works include the construction of terminals and the redesign of the access roads and boarding platforms. These interventions are expected to reduce transit travel times by providing smoother transfer conditions between modes for users. Furthermore, the transfer centers are expected to spur urban redevelopment around them due to the improvement of the surrounding public space. Three sub-projects in the AMBA will be supported by the PTUMA: a. Laferrere transfer center: This center is located in one of the areas of highest trip generation of the AMBA: The existing train station sells the most tickets of all the rail line. It is part of the Belgrano Sur rail line which is currently operated by a private company. The area surrounding the station is high in commercial activity, particularly in the north side; however, there is little organization in the flow of pedestrians, bus passengers and vehicles. A significant number of public transport routes connect with the station, making it an important trip attractor. The center is expected to provide the necessary infrastructure to organize these flows and provide a more amenable walking environment. b. Florencio Varela transfer center: This center will reduce the currently existing conflicts affecting rail and bus passengers and pedestrians. However, the current station is in a badly depressed area that has been largely abandoned to urban degradation. The project is expected to spur redevelopment by improving public spaces and constructing new amenities. c Pilar transfer center: This project will increase Pilar neighborhood's connectivity to surrounding streets and residential areas. The current station is located on the San Martin rail line which divides the area in two, however, there is only one grade- level crossing in the 11 blocks that the neighborhood covers. The new transfer center will improve the current station by redeveloping all supporting transit infrastructure, reconnecting the Pilar area through a new grade level crossing and reorganizing all surrounding bus services. The project is complemented by an 24 And in the medium-term, fare integration as soon as the Agencia exists or its institutionalization is sufficiently advanced to facilitate the implementation of an integrated fare system over the AMBA. 25 The PTUBA rail-road crossing component, was awarded the traffic safety prize of the Asociación Argentina de Carreteras in 2004. 74 ambitious zoning strategy which will generate new recreational areas, foster commercial activity and restore historical buildings. Sub-component 3.2 Station Accessibility (US$30.6 million without contingencies): This sub-component will improve the access conditions of train stations in the AMBA. These interventions will bring the existing stations and access roads to a state of good repair. These improvements are expected to enhance the attractiveness of public transportation by improving the areas surrounding important suburban railway stations. This sub-component is an extension of the PTUBA work program with a new set of railway stations. The type of works that will be carried out in the selected stations include: Sidewalk improvements, pothole repairs, bicycle shelter replacements, ramps for handicapped, and improvements in signaling and traffic light system, as well as any other works of similar nature acceptable to the Bank. Sub-component 3.3 Rail Grade-separated crossings (US$17.5 million without contingencies): This sub-component will build one grade-separated crossing in a critical railroad intersection. This crossing was selected and appraised in the PTUBA loan and due to lack of financing in that loan it was decided to include financing for it in this new loan. The "Esteban Echeverría" crossing that will be financed by the PTUMA is one of the 600+ crossings in the AMBA. It is located on the Gral Roca rail line, intersecting the Alegre General Rodriguez St. It will feature an under-grade crossing for vehicles and a subterranean connection to the train station for pedestrians. This crossing was selected due to the demanding traffic conditions (number of trains and number of cars per day), the time of barrier operation, the number of accidents at the crossing and the impact of this project on train operations. The existing designs were designed to fit the new infrastructure in the current urban configuration and minimize any disruption. Sub-component 3.4 Train signaling system (US$0.5 million without contingencies): This sub-component will finance preparation studies to define and to arrive at a consensus on the operational improvements in the train signaling system and infrastructure improvements in critical intersections. The investments will be financed in APL2. A number of specific interventions were recommended by a recent study and include changing the barrier's circuits, repairing existing pavement, reorganizing traffic directions and traffic light sequences and educational campaigns. These interventions are expected to optimize the overall traffic flow in the intersections of rail and mixed traffic. Currently, actual train speeds are lower than when the signaling system was put in place. The barriers on each of the crossing activate with more time in anticipation than required. Therefore, vehicle passengers lose a fair amount of time waiting at the crossing before the train arrives. The proposed interventions consist in optimizing the barrier system by changing the timing between closing cycles. Instead of depending on a fixed speed (which is currently not accurate), the system will now be able to measure actual train speeds and calculate the required time for the barrier closing that optimizes traffic flow. These interventions represent a 75 change in technology on all AMBA crossings and will require the acquisition of new equipment and the execution of civil works. Component 4: Strengthening Sectoral Training: Urban Transport Planning Masters 9. The objective of this component is to improve academic training in urban transport. The component will design a postgraduate program (Masters) in urban transport including all the component disciplines such as engineering, planning, economics etc. The component builds on the course designed and carried out with the support of the PTUBA AF loan (Loan 7442-AR), and will attempt to follow the academic curriculum designed then, but adapted so as to become a permanent course in the participating universities. 10. At present no transport planning program exists at postgraduate level in Argentina, and given the success of the course carried out in the PTUBA AF, where more than a hundred candidates competed for thirty places on the course, it is believed that there is a latent demand for this type of training. Additionally, the Secretariat of Transport has set up a Railway Engineering postgraduate program in partnership with the University of Buenos Aires, having determined that a significant number of professionals will be needed in the future, providing a recent and similar experience of creation of a sectoral training course at a university. 11. This component seeks to bring together the Universities of Buenos Aires, Cuyo, Córdoba and Rosario to develop and implement this program. The program would be shared by the participating universities and would be given in class and through a virtual platform (internet, videoconferencing, etc), so that students in each of the universities would follow the same curriculum but based in their own city. 12. The component would support the necessary institutional tasks to ensure that the program is registered, accepted and accredited by the Ministry of Education, and would also develop a teacher training course for potential professors who will be participating in the Masters so as to update their knowledge and training to the appropriate level. 13. The component is divided into three sub-components: Sub-component 4.1 Institutional and Academic Development (US$0.64 million without contingencies): This sub-component will finance consultant services to design the Masters in its academic and institutional contents, design a teacher training program, find and secure the partnerships with the identified universities, analyze the possibility of creating an ad-hoc institution to coordinate the course and develop financing mechanisms. Furthermore, this sub-component will design the passage from Bank financing to self-sufficiency of the course within APL1. In APL2 the course shall be self-sufficient. Individual consultants will also be hired to monitor and supervise the course during APL1. Sub-component 4.2 Implementation of the course (US$1.76 million without contingencies): This sub-component will finance the cost of providing the course through the financing of academic related costs for three years. The course is programmed to be a two-year Masters, therefore the Bank will fully finance the first two promotions of students of the course during which the self-sufficiency of the course will be assessed so as to define what the adequate student fees and eventual 76 their party financing amounts and mechanisms should be in the future. The sub- component will also finance a limited amount of scholarships. Sub-component 4.3 Teacher training program (US$0.1 million without contingencies): This sub-component will finance the implementation of a teacher training program for the professors who will participate in the Masters course. This sub-component will address the weaknesses in knowledge of participating professors and finance their participation in specific international and national courses to improve their knowledge base. Component 5: Project Management 14. The objective of this component is to finance the PIU to carry out the proposed operation. The structure and functions of the PIU have been agreed with the Bank and are described in the project Operational Manual. 77 ANNEX 5: PROJECT COSTS ARGENTINA: Metropolitan Areas Urban Transport Project 1. The table below shows the base cost by component followed by contingencies. Below the table is an indication of the amount and percentage of tax. Table A5-2 of this Annex shows the cost of each major component by sub-component Table A5-1: Project Costs Project Cost By Component and/or Counterpart Bank Total % Bank2 Activity US $million US $million US $million Component 1: Creation of a Metropolitan Transport Agency (MTA) for Buenos Aires 1.80 26.70 28.50 94.0% Component 2: Urban Transport Improvements in Argentina's Medium Size 13.50 49.40 62.90 78.7% Metropolitan Areas Component 3: Public Transport Access and Modal Integration in Buenos Aires 13.50 40.10 53.60 74.8% Component 4: Sectoral Training : Urban 2.50 2.50 Transport Planning Masters 100% Component 5: Project Management 0.00 4.60 4.60 100% 28.80 123.30 152.10 Total Baseline Cost Physical Contingencies (20% physical works) 5.40 12.60 18.00 Price Contingencies 10% (C1+C2+C3+Phys. Cont.) 3.40 13.725 17.125 Total Project Costs1 37.60 149.625 187.225 Front-end Fee 0.375 0.375 Total Financing Required 37.60 150.00 187.60 80% 1 Identifiable taxes and duties are value added tax (21%), gross income tax (3.5%) and credit and debit Bank duty (1.2%). The total amounts to US$48.1 million, and the total project cost, net of taxes, is US$139.0 million. Therefore, the share of project cost net of taxes is 34.6%. 2 Bank shall finance 100% of goods, consultant services, non consultant services, training, scholarships, equipment and software, operating costs of the PIU, 40% of the operating costs of the Metropolitan Transport Agency (or seed organization), and 70% of works. Counterpart shall finance 60% of operating costs of the Metropolitan Transport Agency (or seed organization) and 30% of works. 78 Table A5-2: Project Costs by Component and Sub-Component Component 1: Creation of a Metropolitan Transport Agency (MTA) for Buenos Aires US$ Million 1.1 Agency Structuring Dollars 1.1.1 Organizational structure and Project management 1.0 Item 1.1 ......... 1.0 1.2 Consolidation of Transportation Planning in Buenos Aires 1.2.1 Updating Metropolitan Transport Model 2.0 1.2.2 Development of a Metropolitan Transport Plan 2.0 1.2.3 Feasibility Studies 2.0 1.2.4 Final design studies 4.0 1.2.5 Updating transport supply and demand data 3.0 Item 1.2 ......... 13.0 1.3 Urban Transport Observatory 1.3.1 Observatory design 0.5 1.3.2 Air quality monitoring system design 0.3 1.3.3 Equipment and software 0.3 Item 1.3 ......... 1.1 1.4 SUBE Supervision 1.4.1 Project Management 10.5 Item 1.4 ......... 10.5 1.5 Staff and Operational expenses 1.5.1 Young Professionals 1.5 1.5.2 Senior Professionals 1.2 1.5.3 Operational expenses MTA 0.2 Item 1.5 ......... 2.9 Total Component 1 ......... 28.5 79 Component 2: Urban Transport Improvements on Argentina's Medium Size Metropolitan Areas US$ Million 2.1 Mendoza Dollars 2.1.1 Detailed Design of the Colector Papagayos 0.3 2.1.2 Project Colector Papagayo 9.0 2.1.3 Project supervision 0.5 Item 2.1 ......... 9.8 2.2 Posadas 2.2.1 Project Avenue Uruguay 14.0 2.2.2 Project supervision 0.6 Item 2.2 ......... 14.6 2.3 Tucumán 2.3.1 Barrio 11 de Marzo Project 22.0 2.3.2 Project supervision 0.5 Item 2.3 ......... 22.5 2.4 Cordoba 2.4.1 Detailed Design of the Centro de Integración Mitre Project 2.0 Item 2.4 ......... 2.0 2.5 Rosario 2.5.1 Detailed Design of the Corredor Norte-Sur Project 4.0 Item 2.5 ......... 4.0 2.6 Technical Assistance 2.6.1 Feasibility studies and final designs 7.5 2.6.2 Monitoring studies 1.0 Item 2.6 ............ 8.5 2.7 Strengthening Environmental and Social Management Capacity 2.7.1 Strengthening Environmental and Social Management Capacity 1.5 Item 2.7 .......... 1.50 Total Component 2 62.9 80 Component 3: Public Transport Access and Modal Integration in Buenos Aires US$ Million 3.1 Transfer centers Dollars 3.1.1 Detailed design of Laferrere center 3.0 3.1.2 Detailed design of Florencio Varela center 1.0 3.1.2 Detailed design of Pilar center 1.0 Item 3.1 ......... 5.0 3.2 Station Accessibility 3.2.1 Station interventions 28.0.5 3.2.3 Design Studies for stations 1.0.5 3.2.4 Supervision for stations 1.6 Item 3.2 ......... 30.6 3.3 Grade-separated crossings 3.3.1 Esteban Echeverría crossing 17.0 3.3.2 Supervision 0.5 Item 3.3 ......... 17.5 3.4 Train signaling system 3.4.1 At-grade crossings system preparation studies 0.5 Item 3.4 ......... 0.5 Total Component 3 53.6 Component 4: Sectoral Training: Urban Transport Planning Master US$ Million 4.1 Institutional and Academic Development Dollars 4.1.1 Structuring course consultancy 0.50 4.1.2 Technical assistance 0.14 Item 4.1 0.64 4.2 Implementation of Course 4.2.1 Teaching staff 0.86 4.2.2 Scholarships 0.90 Item 4.2 1.76 4.3 Teacher training program 4.3.1 Implementation of training program 0.1 Item 4.3 0.10 Total Component 4 2.50 Component 5: Project Management 5.1 PIU PTUMA Staff 2.5 5.2 Operating costs 2.1 Total Component 5 4.6 Subtotal 1 (Components) 152.10 Physical contingencies 20% Physical works 18.00 Price contingencies: 10% (C1+C2+C3+Physical Contingencies) 17.125 Front end fee 0.375 PROJECT TOTAL 187.60 81 ANNEX 6: IMPLEMENTATION ARRANGEMENTS ARGENTINA: Metropolitan Areas Urban Transport Project Implementation Overview 1. The Argentine Republic is the Borrower. The Loan Agreement (LA) will be signed between the Argentine Republic and the Bank. The PIU of the Argentine National Secretariat of Transport will execute and supervise the execution of specific activities. 2. The project funds will be disbursed to the Argentine Republic (Secretariat of Transport) through the designated account for implementation of Project activities in the AMBA and in selected Metropolitan Areas. Institutional Analysis 3. The Secretariat of Transport, through the Project Implementing Unit (PIU) is currently implementing the Bank supported Urban Transport Project for Buenos Aires (PTUBA, Loan 4163-AR), as well as an additional financing loan (7442-AR). The loan proceeds include support for projects in the Buenos Aires Metropolitan area and medium size Metropolitan Areas in the provinces. The PIU has extensive experience with the Bank's safeguards policies, and financial and procurement procedures. It is proposed that this same PIU execute the proposed project. As the national agency responsible for urban transport, the Secretariat of Transport has the capacity to involve other Metropolitan Areas in Argentina and disseminate nation-wide the lessons learned through this project. Implementation Arrangements 4. The PIU will be responsible for allocating funds according to approved and agreed work plans with participating municipalities. All procurement and financial management activities will be centralized at the national PIU level. There will be no transfer of funds to the participating Metropolitan Areas. The PIU will coordinate budget preparation, annual financial audits, and accounts/statements at the project level and for ensuring that project activities in each Metropolitan Area are sustainable. 5. The institutional arrangements for cooperation between the Municipalities and, if applicable, the Provinces and Rail Service Operators participating in the project will be clearly defined in Implementation Agreements between the PIU and participating Municipalities, Provinces and Rail Service Operators. These agreements will be signed before commencement of activities in the relevant Metropolitan Area (disbursement condition). In the case of the works in the Metropolitan Area of Mendoza, since part of the right of way of the "Colector Papagayo" to be paved is within the jurisdiction of the Province of Mendoza, the implementation agreement will include as parties the Secretariat of Transport, the Municipality of Mendoza, and the Province of Mendoza. In Posadas, the agreement will be signed between the Secretary of Transport and the Province of Misiones, as leading authority within the Transport Coordinating Commission, which constitutes the transport agency in the Metropolitan Area of Posadas and includes representatives from the Province of Misiones, the three municipalities that make up the Metropolitan Area of Posadas, and representatives of the bus operators in Posadas. 82 6. Although the execution of projects through a PIU is not the most preferable solution, there are currently both institutional and legal constraints that limit the ability of the GoA to execute externally financed projects from line ministries, especially since staff recruitments are frozen and the Secretariat of Transport in-house skills required to execute this project are very scarce or already assigned to other tasks within the Ministry. In addition, there is a satisfactory multi-year experience of project execution with the PIU. Therefore, it seems reasonable to extend the implementation arrangements as the project financing is extended. Nonetheless, it should be noted that, as originally envisaged by the PTUBA, part of the staff currently working for the PIU would be gradually integrated into the urban transport planning agency for the Buenos Aires metropolitan area that is expected to be created in the coming years, with support from the new Urban Transport operation under preparation. Thus, the sectoral institutions will capitalize on the experience gained by some of the PIU staff. Project Technical Management 7. Project technical oversight will be the responsibility of the PIU, which will review and approve work plans, resource allocation and supervision and monitoring of project activities. The PIU will lead the technical execution, project coordination and M&E of all project activities. 8. The PIU will retain overall responsibility for Project implementation, acting as a permanent link between the Bank and the Borrower. For the purpose of this Project the PIU will in particular: (i) manage and monitor project implementation; (ii) elaborate pre- qualification and bidding documents for works, and appraise these activities prior to submitting them for the Bank's no objection; (iii) work closely with engineering consulting firms hired by the Borrower to prepare engineering designs and bidding documents; (iv) carry out the Project's budgeting, accounting, financial management, monitoring general flow of funds, authorizing transfers of funds, managing financial and accounting information systems, preparing Project progress reports and financial statements interaction with the Bank and the external auditors on FM issues; (v) monitor and assess the impact of the Project in relation to the development objectives of the project and on the basis of the results indicators established in the project's results framework (Annex 3); (vi) cooperate closely with the transport agencies of the participating municipalities both in the AMBA and the five participating Metropolitan Areas. The institutional arrangements for the cooperation between the PIU and participating Metropolitan Areas will be clearly defined in Cooperation/Implementation Agreements to be signed between the Secretary of Transport and participating Municipal and Provincial Governments as needed. Procurement 9. The PIU, under the Argentine National Secretariat of Transport will have the responsibility for procurement at the national level, and will carry out procurement of city- specific activities. For details refer to Annex 8. Financial Management 10. Project Funds for city-specific activities in Argentina will be disbursed directly to the PIU, upon meeting the Loan Agreement conditions of effectiveness. A separate 83 Implementation Agreement between each participating Municipality and the PIU will be signed before disbursements related to project activities in the respective Metropolitan Area are made. The PIU, with support from the Municipalities, will procure and contract the works and services, the PIU will disburse directly to contractors. For details of financial management arrangements, see Annex 7. Information Exchange 11. The PIU is the depository of all information, technical, management and financial reports at the project level, provided by the PIU and participating Municipalities. The PIU is the depository of all national project information and is responsible for maintaining records. Selected information will be published on a project website. Intellectual Property Rights 12. The project is expected to deliver a number of outputs which are subject to various types of intellectual property rights (IPR), e.g., authors' rights, patents, trademarks, logos, knowledge, products, methodologies, databases (including -versions) and other forms of intellectual property. All partners and subcontractors commit through Memorandums of Understanding (MoUs) to freely and continuously share the outputs on which they have acquired such rights with all other project partners and funding donors, while respecting authorship. Subcontractors commit to transfer all IPR they may obtain as part of their activities in this project to the contractor. Implementation Risks 13. Critical risk: Decreasing political support for the creation of the Metropolitan Agency and inter-institutional disputes delay or impede the creation of the Metropolitan Agency. Conversations with local authorities have already been started to foster support for the MTA. The way the Agency is set up (adherence meaning access to the funds managed by the Agency) should provide the necessary incentives for local governments to support the creation of the MTA. In addition, the adherence of all municipalities is not required for the "seed" MTA to be operational. The process will be challenging as it requires re- assigning attributions of existing entities to the to-be-born agency. However, there is current consensus about the need for such a coordinating institution and a consultative committee (PCT) has been working since 2006 to bring together all potential MTA stakeholders. Moreover, the second phase of the APL is expected to act as an incentive to institutionalize the functions of MTA. The existence of well-functioning examples of such agencies in Salta and Posadas is encouraging. 14. Critical risk: Deficient or slower-paced performance of Municipalities may affect sequencing of project activities and financing. In this event, PIU in consultation with the World Bank would develop an alternative action plan for recouping Municipal government performance, and the pace of project execution. Further, funds will flow to the PIU, not individual Municipalities, permitting control over the flow of funds vis-à-vis performance. 84 Monitoring and Evaluation 15. The framework for the monitoring and evaluation (M&E) of outcomes and results has been fully developed. This framework takes into account that a well-designed system is critical to ensure timely and successful implementation of the Project, and to enhance its impact for the beneficiaries by the systematic and periodic analysis of lessons learned, and their effective dissemination. Project monitoring and evaluation will be the responsibility of the PIU under the Secretariat of Transport. Performance indicators have been established for the Project and its components, and are presented in the Results Framework in Annex 3. The M&E system is based on a cascade of goals, purposes, results, and activities where higher-order activity, that is, components, become the purpose of the lower order, that is, the sub-components. This approach will ensure the tracking of all activities to the developmental objective of the Project. The Project design includes baseline determinations and performance (milestones) indicators to monitor the implementation of the plan. Such monitoring will consist of an internal evaluation at the component level, and one at the Project level. The monitoring will be based on periodic reports. 16. By using a management information system (MIS) and the financial management system, Project activities will be kept on track and potential problems identified and appropriately addressed. The PIU will design and complete the MIS for M&E, reporting formats for each component, according to the target annual performance objectives and monitoring indicators. The quarterly reports will cover the progress in implementation, and milestones in the use of project funds and impact. Quarterly technical and financial reports will be consolidated by the PIU into bi-annual progress reports to be submitted to the Bank within two months of the end of each six-month reporting period. These bi-annual reports will also include an implementation plan and activity program for the subsequent six months of the reporting period. A midterm review will assess the overall progress of the Project. The lessons learned and recommendations for any needed improvements would be used in restructuring or realigning the Project plans. Post-project impact assessments will be conducted to improve quantitative assessment of the Project outcome. 17. Data will be generated using a bottom-up approach, from the sub-projects at city and national level, through the PIU, to the World Bank. The PIU will provide standardized formats and templates for the different reports. The project will have the following monitoring and evaluation instruments: Annual operational plan, procurement plan and training plan Semi-annual progress reports Semi-annual financial reports Twice yearly: World Bank supervision missions Annual Project Reports Annual Financial Reports Mid-Term Review Implementation Completion Report 18. At the National level, M&E responsibilities are as follows: (a) the PIU, under the Secretariat of Transport is responsible for collating elements at national level for all the reports, identification of departures from plan (reporting to the World Bank, proposing 85 solutions); and (b) Municipalities: responsible for preparing the data for all reports, early warning on problems (including proposals for solutions). 19. The project has established an M&E system consistent with the Bank's operational standards. This M&E system has been incorporated into the Operational Manual prepared by the PIU. See additional M&E conceptual details in Annex 3. 86 ANNEX 7. FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS ARGENTINA: Metropolitan Areas Urban Transport Project 1. A Financial Management (FM) review of the adequacy of the current financial management arrangements for the ongoing project was carried out in line with the guidelines issued by the Financial Management (FM) Board on November 2005 to determine if the financial management arrangements originally in place for the Loans 4163 AR / 7442 AR (P039584) are adequately working, continue being acceptable to the Bank, and are able to support the new project. 2. The assessment conclusion indicates that the Secretariat of Transport (SOT) through its Project Implementing Unit (PIU) continues to have adequate financial management arrangements in place and has experience in implementation of Bank-financed projects. The FM arrangements for the proposed project are sound and the existing project fiduciary performance indicates a positive attitude by management toward control. Furthermore, external audit reports of this project26 did not show any substantial accountability issue. Given the characteristics of this operation and past financial management performance of the ongoing project, no specific complementary measures on standard FM arrangements have been designed for this project. 3. Fiduciary Risk: From the financial management perspective, the Project is considered a moderate risk operation. A detailed risk analysis is provided on the Risk Section. Country Issues 4. A Country Financial Accountability Assessment (CFAA) that was conducted jointly by the Bank and the IDB in 2006/2007 and whose final Report27 was published in March 2008 provides a diagnostic of Argentina's public financial management (PFM) systems and practices. Its main findings are that the PFM systems are well designed and underpinned by a strong legal framework and the availability of human resources with sufficient technical skills. These systems enable control of the budgetary resources received by the Government from all sources. Furthermore, they provide sufficient information to determine whether funds are used in accordance with their objectives. The report further indicates that the introduction of the National Integrated Financial Management System (SIDIF) and the associated expenditure execution systems adopted in the decade preceding the financial crisis of 2001-2002 represented a significant accomplishment for the public administration. Each spending unit manages its expenditure process within the control framework established by the Financial Management Law (LAF) and SIDIF. 5. However, despite these achievements, the CFAA concludes that the country's PFM performance is still operating below expectations. Limitations in the legislative oversight of the budget execution, the tendency to adopt exceptional rules instead of already established standards and the lack of a risk-oriented external audit approach are some of the factors affecting PFM performance. With regard to FM risk, the CFAA indicates that the PFM risk 26 Details on the ongoing project audit outcomes are presented in the Financial Management Assessment Report 27 Argentina Country Financial Accountability Assessment; Report No. 39228-AR. 87 can be considered moderate at the National Public Administration (NPA) and social security institutions that are included in the SIDIF as is the case of the SOT. 6. The Argentina CPS for the period 2010-2012 approved by the Board on June 9, 2009 includes improved fiduciary risk and portfolio monitoring as one of the key elements of the Bank strategy to strengthen the capacity of the Government to prepare, approve and implement investment projects in Argentina. 7. The following measures will contribute to the Bank effort to improve fiduciary risk and portfolio monitoring as expressed in the CPS: · Enhanced FM supervision throughout the project implementation period to ensure the continuous adequacy of financial management arrangements, evaluate project internal control and update assessed risk. At least one on-site visit integrating the project team is planned for the first year. · Continuous support to AGN (Argentina Supreme Audit Institution) efforts to ensure timely audit compliance for the project. Upon audit findings, follow-up on the PIU action plans to address the auditors' recommendations. · Involving the Internal Audit Units to carry out review of project financial transactions. 8. Given the characteristics of this operation and past financial management performance of the ongoing project, no specific complementary measures on standard FM arrangements have been designed for this project. Risk Assessment 9. The FM risk assessment process aims at identifying FM risks so as to take appropriate measures mitigating identified project risks. This enables the Bank to make decisions on the appropriate level of supervision intensity allocating FM resources in a manner consistent with assessed risks. The FM risk of the project is rated as Moderate due to the overall adequate FM arrangements. A detailed risk assessment is presented below: 88 Table A7-1 Risk Assessment and Mitigation Measures Risk Residual Risk Mitigating Measures Condition Risk Rating (*) Inherent Risk Moderate Country Level Moderate The moderate risk reflects strong legal No and institutional framework for PFM while acknowledging some perceived weaknesses that are addressed in ongoing government reform programs Entity Moderate - Implementing Entity has experience in No implementing Bank Funded Operations - Existing adequate segregation of duties among FM/Administrative staff Project Moderate Satisfactory Fiduciary performance in No previous operation Control Risk Moderate Budgeting Moderate Separate budgetary line in annual Legal covenant budget to allow tracking of budget resources. Accounting, Moderate The UEPEX system, linked to the No SIDIF, will be used to record all accounting transactions Internal Control Moderate -The Internal Audit Unit of the Ministry No of Planning has the authority to audit Bank funded projects and define its own annual audit plan. - Operational Manual includes administrative and Internal Control Procedures to be implemented Flow of Funds Moderate Uses of Funds fully centralized at the No Under Secretariat of Transport (SOT) Financial Moderate UEPEX system will be used to generate No Reporting financial reports on a regular basis. Auditing Moderate Continuous support to AGN No Overall Risk Moderate rating (*) L= Low M= Moderate S= Substantial H= High Strengths and Weaknesses 10. Strengths: Expertise and experience of the PIU staff that carry out FM functions of the existing project. Also, the use of UEPEX to maintain project accounts is a key asset. UEPEX allows online recording of project transactions and facilitates account reconciliations, as well as the timely preparation of financial reporting. 11. Weaknesses: No major weaknesses identified. 89 Implementing Entity & Staffing 12. The same as for the existing operation- PTUBA- (Loans 4163-AR/ 7442-AR P039584), SOT through its PIU will be in charge of project implementation and will be responsible for project accounting, FM reporting, internal control, disbursements and interaction with the Bank and the external auditors on FM issues. FM staff from PTUBA implementing unit is qualified, has gained experience from the implementation of the ongoing project, and has the capacity to manage the project funds. Flow of funds & Disbursement Arrangements 13. The following disbursement methods may be used under the loan: · Reimbursement · Advance · Direct payment. 14. Loan proceeds to be withdrawn by the PIU using the advance method will be deposited into a segregated designated account (DA) in U.S. dollars. The DA will be held at Banco de la Nacion Argentina (BNA) as usual for the Bank operations with the national government. The ceiling for advances to be made into the Designated Account would be US$15 million, estimated sufficient for peak disbursement periods of project execution. 15. Supporting documentation for documenting project expenditures under advances and reimbursement method will be: statements of expenditures (SOEs) for all expenditures below the following thresholds; payments for goods against contracts valued at US$500,000 or less; payments for works against contracts valued at US$1,000,000 or less; payments for Consultant Services provided by firms against contracts valued at US$100,000 or less; and payments for Consultant Services provided by individuals against contracts valued at US$50,000 or less respectively. All consolidated SOEs documentation would be maintained by the PIU for post review and audit purposes for up to one year after the final withdrawal from the loan account. 16. Direct payments supporting documentation will consist of records (for example, copies of receipts, suppliers' and contractors' invoices). The minimum value for applications for direct payments and reimbursements will be US$3 million. 90 Figure A7-1: Flow of Funds Proposed Flow of Funds Loan Account Direct payments in USD $ Suppliers or Contractors $ Local Counterpart Funds Transfers from TGN pesos Designated pesos Account in USD PIU Project Account Account in BNA pesos in BNA 17. The PIU would continue accessing the Bank's Client Connection Web page to facilitate periodical reconciliations among its own ledgers, bank statements and the Bank disbursement records. 18. Loan proceeds would be disbursed against the following expenditure categories: Table A7-2: Disbursements per Expenditure Category Expenditure Category Amount of Loan Allocated in Percentage of Expenditures US$ million to be financed (inclusive of Taxes) 1.Works 63.00 70% 2. Goods, Consultants' 56.24 100% Services, non Consultants' Services. 3. Scholarships and Training 1.86 100% 4. Operating Costs MTA* 0.10 100% 5. Operating Costs PIU* 2.10 100% 6. Front End Fee 0.375 7. Unallocated 26.325 Total Loan Disbursements 150.00 * The Operating Costs category does not include the salaries of the consulting staff affected to the PIU or MTA these are included under the Consultant Services' category 91 Accounting & Reporting 19. Financial statements will be prepared using cash basis. All project funds will be processed in the Government-wide project execution system UEPEX, commonly used for externally funded projects in Argentina, and will be supported by documentary evidence for related works, goods and services procured in line with Bank guidelines for the proposed project. UEPEX is compliant with Bank requirements, provides a good ex ante internal control framework, and is in line with and better integrated with the budget execution process at the NPA. 20. The Operational Manual for the project has been reviewed and found acceptable to the Bank. It includes (i) format and contents of the annual financial statements and semi- annual financial management reports; (ii) terms of reference for the external auditing; and (iii) terms of reference for key FM staff. The chart of accounts has been updated to reflect the components, activities and categories to be financed under the proposed project. 21. The PIU would be responsible for keeping accounting records for project activities and preparation of annual financial statements and semiannual Interim Financial Reports (IFRs) for reporting purposes, as follows: · Sources and uses of funds: sources and uses of funds, for each semester and cumulative (uses by category), uses of funds by component and beginning and ending cash balances. · Physical progress: Allocated budget and financial execution compared to physical progress and results achieved. 22. Interim Financial Reports (IFRs) will be solely used for reporting purposes and will be part of the progress reports of the project. The Draft format of Annual and Interim Financial Statements has been reviewed and found acceptable to the Bank; and has been included in the Project Operation Manual. Internal Control and Internal Auditing 23. Administrative and internal control procedures to be implemented are detailed in the Operational Manual. 24. PIU is subject to internal audit of the General Syndicate of the Nation (SIGEN), which is the federal government's internal audit agency under the jurisdiction of the executive branch. SIGEN supervises and coordinates the actions of the Internal Audit Units (IAUs) in all agencies, approves their audit plans, conducts research and independent audits, and systematizes the information from its own reports and those produced by the IAUs. The internal audit reports on the project performance will be reviewed during project supervision. 92 External Audit Arrangements 25. The project annual financial statements will be audited under terms of reference and auditing standards and by an auditor acceptable to the Bank. The audit report shall be submitted to the Bank within six months of each fiscal year. The annual audit would cover all funding and expenditures reported in the project financial statements. For audit purposes, the fiscal year will be the calendar year. The external auditor for the proposed project will be the Argentine Supreme Audit Institution, Auditoria General de la Nación (AGN). Current audit TORs will be used for the project proposed. 26. The audit reports that will be required to be submitted are presented below: Table A7-3: Audit Reports Schedule Audit Report Due Date 1) Project Specific Financial Statements June 30 2) Special Opinions June 30 SOE June 30 Designated Account June 30 27. Ongoing Project External Audit Results: Acceptable audit reports of the ongoing project were submitted to the Bank from the Ministry of Economy and Public Finance. The audits were carried out by Argentina's Supreme Audit Institution; Auditoría General de la Nación (AGN) and audit opinions did not indicate any substantial accountability issue. Details of the audit opinions are included in the FM assessment Report. Action Plan 28. Financial management actions to be completed by the Project Coordinating Unit are reflected in the table below. Table A7-4: Financial Management Action Plan Action Responsible Entity Completion Date Status Set a separate budget line in PIU First year annual Legal dated the annual budget to keep budget and covenant track of project financial thereafter execution Supervision Plan 29. The project will be subject to annual on-site supervision missions. In addition, the Bank will carry out annual supervision missions focused on implementing audit recommendations and completing Action Plans addressing potential audit issues. The supervision scope will be adjusted by the assigned FMS according to the fiduciary performance and updated risk. The initial supervision planning is presented in the table below. 93 Table A7-5: Financial Management Supervision Plan Type Timing Mechanism Objective On-site Once a Supervision Review FM Visit year. missions. performance. Follow up on external auditors recommendations/ raised issues. Review control. Update assigned risk. Transactions review as needed Review Internal Audit reports. IFRs Semi- Over the IFRs Review IFRs Review annually submitted to information the Bank. consistency. Raise issues disclosed in IFRs. Audit Once a Over the Audit Raise issues Review Year Report disclosed in Audit submitted to Report the Bank 94 ANNEX 8. PROCUREMENT ARRANGEMENTS ARGENTINA: Metropolitan Areas Urban Transport Project General 1. Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement Under IBRD Loans and IDA Credits" dated May 2004, revised October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, revised October 2006, and the provisions stipulated in the Legal Agreement. The general description of various items under different expenditure categories are described below. For each contract to be financed by the Loan/Credit, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank project team in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 2. Procurement of Works: The procurement of works would consist in: i) under Component 2, paving of urban roads, construction of segregated busways, storm water drainage in neighborhoods and other civil works in metropolitan areas, ii) under Component 3, improvement of transfer centers in three intermodal centers of the AMBA, construction of Station Accessibility in train stations in the AMBA, construction of Rail Crossings underpasses and other civil works in AMBA. The procurement will be done using the Bank's Standard Bidding Documents (SBD) for all ICB and National SBD agreed with the Bank. When the estimated cost is less than US$5,000,000 it may be procured using NCB. 3. Procurement of Goods: Goods procured under this project would include IT equipment, train signaling systems and other minor items. The use of ICB is not foreseen. The procurement will be done using the Bank's Standard Bidding Documents (SBD) for all ICB and National SBD agreed with the Bank. Contracts for goods estimated to cost less than $500,000 per contract, may be procured using NCB. Contracts for goods estimated to cost less than $50,000 per contract, may be procured using Shopping. 4. Procurement of Non-Consulting Services: All contracts for services not related to consultant services (surveys and counts of traffic) may be procured under the same methodologies and thresholds specified for goods. 5. Selection of Consultants: Consultant services procured under this project are expected to include: supervision of works, design of projects, elaboration of Transport Plan, technical studies to improve accessibility and intermodal integration in the Buenos Aires Metropolitan Area, and organizational design of the Urban Transport Observatory. Consulting Services under this project would also include services to be provided by individuals, such as: (i) technical assistance and ii) training. All contracts will be procured using Bank's Guidelines for the hiring of consultants. 6. For consultant firms, QCBS (Quality and Cost Based Selection) will be the preferred method; however, LCS (Least Cost Selection) and QBS (Quality Based Selection) for very specialized services may be used as well. LCS procedures will be limited to contracts estimated to cost less than $500,000 equivalent. Small contracts estimated to cost 95 less than $100,000 equivalent may be procured using CQS (Selection based on Consultant's Qualifications). Any contract procured under CQS must meet the requirements of paragraph 3.7 of the Consultants' Guidelines. Single-source selection (SSS) procedures may be used, with prior agreement of the Bank, for hiring services that meet the requirements of paragraphs 3.10 of the Consultants' Guidelines, for assignments when only one firm is qualified or has experience of exceptional worth. 7. Short lists of consultants for services estimated to cost less than $500,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Specialized advisory services would be provided by individual consultants selected by comparison of qualifications of at least three candidates and hired in accordance with the provisions of paragraph 5.1 to 5.3 of the Consultant Guidelines. Individual consultants may be selected sole-source with prior approval of the Bank in accordance with provisions of paragraphs 5.4 of the Consultants Guidelines. 8. Operational Costs: These are to be procured using the implementing agency's administrative procedures, which were reviewed and found acceptable to the Bank. This heading includes transportation fares, travel expenses and per diem, and other expenses related to supervision activities. Operating cost will not include salaries of civil servants. 9. Training: The Project will finance expenditures (other than those for consultants service) incurred by the Borrower through the PIU, as approved by the Bank on the basis of an annual plan, to finance reasonable transportation costs, per-diem and training registration fees; which would be procured using the implementing agency's administrative procedures that were reviewed and found acceptable to the Bank. 10. Other: Scholarships: To be financed under sub-component 4.2 in accordance to the provisions of the Operational Manual. Table A8-1: Guidance for Thresholds for Procurement Methods (in US$) Category Contract value Procurement method (thresholds US$) 5,000,000 ICB Works < 5,000,000 NCB 500,000 ICB Goods and Non-consulting < 500,000 NCB Services < 50,000 Shopping or NCB Consultants' services (firms) <100,000 CQS or SSS Consultants' services N/A See section V of Guidelines (individuals) Note: QCBS = Quality- and Cost-Based Selection; QBS = Quality-based Selection; LCS = Least-Cost Selection; CQS = Selection Based on Consultants' Qualifications; SSS = Single Source Selection 96 Table A8-2: Guidance for Thresholds for Prior Review (in US$) Category Contract value Contracts subject to (thresholds US$) prior review 10,000,000 All Works < 10,000,000 First contract Goods and Non-consulting 1,000,000 All contracts Services < 1,000,000 First contract Consultants' services 500,000 and All contracts (firms) SSS < 500,000 First contract of each method Consultants' services 200,000 or sole All (individuals) source < 200,000 No Assessment of the Agency's Capacity to Implement Procurement 11. Local Regulations and Practices: National Public Procurement in Argentina is not totally consistent with accepted international standards and therefore the Special Procurement Provisions listed below should be included in the Loan Agreement. National Procurement is ruled by separate and incomplete statutes. Supreme Decree No.1023/200128 and its subsequent modifications enacted through the Decrees Nos. 666/2003 and 204/2004 establish the principles for public procurement and rule the procurement of goods and services. The applicability and enforceability of this Decree is, however, limited, since not all the necessary regulations have been issued. Decree 436/2000, which regulated the procurement-related articles of National Account Law 23354 of 1956, is still used, despite the fact that those articles were repealed by Decree No.1023/2001. Law 22460 of 1981 for the contracting and promotion of consulting services was partially repealed in 1994, and it is in practice ignored. Decree 2345/2008 governs the hiring of individual consultants. 12. General Portfolio Performance in Argentina: In general, procurement performance in Bank-financed projects in Argentina has recently been rated as "Moderately Satisfactory"; however, shortcomings were found in some projects. The most serious of them are: (a) agreements signed with NGOs that are not consistent with Bank standard contract forms, (b) inaccurate cost estimates, (c) biased technical specifications, (d) indications of collusion in the preparation of short-lists and (e) requirement of compliance with ISO quality standards as a way to restrict participation of small ITC equipment producers. Delays in the processing of project procurement have also been identified as a problem is some projects in Argentina. Lastly, the hiring of a high number of individual consultants was identified as a source of fiduciary risk. In order to add transparency to Bank operations and improve procurement performance, the Government of Argentina and the Bank developed and implemented the SEPA in 2007 and the set of procurement-related covenants was subsequently put in place. 13. Agency's capacity assessment: Procurement activities will be carried out by the Executing Agency, the Secretariat of Transport within the Ministry of Federal Planning and 28 Delegated Decree. 97 Public Investment through the Project Implementation Unit (PIU) which was created for the implementation of the PTUBA (4163-AR and 7442-AR). 14. An assessment of the capacity of the Implementing Agency to implement procurement actions for the project was carried by the Bank's procurement team. The assessment reviewed the organizational structure for implementing the project and the experience of the existing procurement personnel. Even though the PIU has experience in implementing Bank financed projects, the procurement capacity needs to be strengthened to levels consistent with the heavy workload foreseen under this project and 7442-AR. 15. The key issues and risks concerning procurement for implementation of the project have been identified and include the following: National Public Procurement Regulations and Practices in Argentina are not totally consistent with accepted international standards. Some shortcomings were found during the recent implementation of Bank projects in Argentina and the Bank has developed tools to improve procurement processing. Lack of staff resources to carry out the volume of work in procurement for both the existing project and the proposed one. 16. The corrective measures that have been agreed are the following: The Special Procurement Provisions listed below have been included in the Loan Agreement. The PIU procurement specialist and technical staff should attend procurement training course within one (1) year of Loan approval. All supervision contracts shall be signed before Bank's prior review of corresponding works contract. The Project will operate under an Operational Manual (OM) which will include the implementation arrangements and the procurement procedures consistent with those specified in the Loan Agreement. 17. Based on country conditions and sectoral risks, the overall project risk for procurement is Substantial. Procurement Plan 18. The Procurement Plan of the project for the first 18 months was agreed on September 14th 2009. The Procurement Plan approved will be available at the SEPA (www.iniciativasepa.org) within 30 days of project approval. The Procurement Plan will be updated in agreement with the Project Team at least every three months or as early as required to reflect the actual project implementation needs and improvements in institutional capacity. Frequency of Procurement Supervision 19. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended annual supervision missions to visit the field to carry out post review of procurement actions. The Bank's ex- post review shall cover not less than 1 in 10 contracts signed. 98 Details of the Procurement Arrangements 1. Works (a) A list of works contracts for the first year. Table A8-3: Works Contracts in First Year Metropo Procure Review by Expected Contract Estimated P- Domestic litan ment Bank Bid- (description) Cost Q Preference Areas Method (Prior / Post) Opening Colector Mendoza 9,000,000 ICB N N Post Month #12 Papagayos Uruguay Ave. Posadas 14,000,000 ICB N N Prior Month #1 Paving "Barrio Tucumán 22,000,000 ICB N N Prior Month #1 11 de Marzo" Rail Crossings underpass AMBA 17,000,000 ICB N N Prior Month #1 Esteban Echeverría Improvement of AMBA 28,000,000 ICB N N Prior Month #9 25 train stations (b) ICB contracts estimated to cost above US$10,000,000 for works and above US$1.000,000 for goods and non-consultant services per contract, the first contract for works, goods and non-consultant services procured under NCB and shopping, regardless of their cost, and all direct contracting will be subject to prior review by the Bank. (c) Contracts for works estimated to cost below US$5,000,000 and contracts for goods and non-consultant service estimated to cost below US$500,000 may be awarded through NCB procedures. 99 2. Consulting Services (a) List of consulting assignments for the first year. Table A8-4: Consulting Contracts in First Year Review by Expected Date Description of Estimated Selection Bank Proposal Assignment Cost Method (Prior / Post) Opening Legal, institutional and organizational 1,000,000 QCBS Prior Month #1 structuring of the AMT Design Model of 2,000,000 QCBS Prior Month #1 Transportation Planning Project Management of Electronic Ticket 10,000,000 QCBS Prior Month #1 System Detailed Design of 300,000 QCBS Prior Month #1 Colector Papagayos Supervision of works: Colector Papagayos. 500,000 LCS Prior Month #10 Mendoza Supervision of works: Prior Month #1 Uruguay Ave. Posadas 600,000 LCS Supervision of works: paving of "Barrio 11 de 500,000 LCS Prior Month #1 Marzo". Tucumán Detailed Design of Transfer Center 2,000,000 QCBS Prior Month #1 Laferrere (b) Consultancy services estimated to cost $500,000 or more per contract, the first processes under each selection method, regardless of their cost, and all single source selection of consultants (firms) will be subject to prior review by the Bank. 100 Special Procurement Provisions The following shall apply to procurement under the project: General · All procurement shall be done using standard bidding documents29, standard requests for proposals, model bid evaluation forms, model proposal evaluation forms and contract forms previously agreed with the Bank. As for consultant services contracts, only the types of contracts listed in Section IV of the Consultant Guidelines may be used and "Convenios" will not be permitted. · Foreign and local contractors, service providers, consultants and suppliers shall not be required: (a) to register (except as provided in the Standard Bidding Documents acceptable to the Bank); (b) or establish residence in Argentina; (c) or enter into association with other national or international bidders as a condition for submitting bids or proposals. · The invitations to bid, bidding documents, minutes of bid opening, requests for expressions of interest and notifications of contract award of all processes aimed at the procurement of goods, works and services (including consultants' services), as the case may be, shall be published in the web page of Oficina Nacional de Contrataciones in a manner acceptable to the Bank. · The Borrower: (a) will feed the Bank publicly accessible Procurement Plans Execution System (SEPA) within 30 days of Board approval with the information contained in the initial Procurement Plan, (b) will update the Procurement Plan at least every three months or as required to reflect the actual project implementation needs and progress and will feed the Bank Procurement Plans Execution System (SEPA) with the information contained in the updated Procurement Plan immediately thereafter and (c) will use its Financial Management System known as UEPEX to keep information on actual procurement progress updated through the SEPA. · Bidders and consultants shall not be allowed to review or make copies of other bidders' bids or consultants' proposals, as the case may be. · Bidding documents for NCB shall include Anticorruption Clauses, including those that give the Bank audit rights over bidders, suppliers, contractors and consultants, acceptable to the Bank. These clauses shall be substantially identical to those pertaining to Bank Standard Bidding Documents for ICB. Goods, Non-Consultant Services and Works · A two-envelop system of procurement will not be used for the procurement of goods, services (other than consultants services) or works. · Contracts of goods, services ­other than consulting services- and works shall not be awarded to the "most convenient" bid but to the one that has been determined to be substantially responsive and the lowest evaluated bid, provided that further the bidder is determined to be qualified to perform the contract satisfactorily. 29 Bidding documents for NCB shall include Anticorruption Clauses, including those that give the Bank audit rights over bidders, suppliers, contractors and consultants, acceptable to the Bank. These clauses shall be substantially identical to those pertaining to Bank Standard Bidding Documents for ICB. 101 · Witness prices shall not be used as a parameter for bid evaluation, bid rejection or contract award. Works · Price Adjustment for Civil Works Contracts shall follow the Price Adjustment Methodology agreed between the Government of Argentina and the Bank. Goods · Inclusion of the bidder in lists published by specialized magazines will not be an acceptable criterion for determining the qualification of such bidder. · Compliance with ISO standards shall not be required as a condition for contract award. Procurement-Related Covenants (a) In order to disseminate project implementation requirements and procedures, and define roles, responsibilities, mechanisms, schedules and accountability arrangements, the Recipient will implement the project following the stipulations of an Operational Manual (OM) acceptable to the Bank. The OM will include, inter alia, the project's institutional arrangements and operational, accounting, procurement and disbursement procedures. (b) The Implementing Agency will operate and maintain a web page to disseminate its most significant project information30. 30 For example, the Operational Manual, Bidding Documents and Standard Request for Proposal, technical background, designs, specifications and drawings of the works to be financed, terms of reference of the works to be executed with project funds; agreements with third parties and progress and monitoring reports. 102 ANNEX 9. ECONOMIC AND FINANCIAL ANALYSIS ARGENTINA: Metropolitan Areas Urban Transport Project 1. The project has been evaluated by component and sub-component considering only the sub-projects that contain major investments. Consulting services, training and capacity building sub-components are not evaluated economically. Their impact may be ascertained from the monitoring and results framework. 2. The sub-projects evaluated are all those that involve works. These are included in components 2 and 3: they are sub-components 2.1, 2.2, 2.3, 3.2 and 3.3. All these sub- projects were evaluated using similar methodologies with the exception of sub-component 3.2, which underwent a qualitative evaluation through a multicriteria prioritization and selection methodology, given that the individual works for each station are limited (US$1 million) and that the valuation of benefits is difficult. It was decided to carry out an ex-ante impact evaluation study to better ascertain and possibly value the impacts of this sub- component. 3. All other sub-components were evaluated using standard cost benefit analysis with temporal horizons of 22 years (2 years of construction and 20 years of operation), 12% discount rates and accounting resulting Net Present Values (NPV) and economic rates of return (ERR) to assess the projects. In all cases, sensitivity analyses were carried out. Depending on the objective of the sub-project the benefits valuated were different but overall they include: (i) vehicle operating costs; (ii) public transport operating costs; (ii) reduction in travel times for all users, public transport users, pedestrians and cyclists; (iii) accessibility to health care facilities, schools and work places. Benefits were valued using COSTOP31 values, average salaries, estimation of days of inaccessibility to urban facilities, amongst others. 4. All of the evaluated sub-projects yield significant economic rates of return. The projects in component 2 present ERRs of 16.4% for the Tucumán sub-project, 16.8% for the Posadas sub-project, and 60.8% for the Mendoza sub-project. All the sensitivity analyses showed that the economic evaluations are robust, since no project goes to a negative NPV in the sensitivity tests performed. 5. The underpass sub-project yields a 13.4% ERR if only the leg to be financed under this loan is considered. The different sensitivity tests performed on the sub-project show the ERR varying from 11.43% to 15.15%. 6. Overall the benefits of the works of the proposed loan can be summarized as follows: 31 COSTOP is an Vehicle operating cost methodology used by the National Road Directorate of Argentina, it that standardizes the standard input values necessary for the calculation such as fuel costs, labor costs etc. 103 Table A9-6: Economic Evaluation Results for the Project Net Present Value (@ ERR 12% discount rate) Sub-component 2.1 3,741,480 16.4% Sub-component 2.2 37,405,069 16.8% Sub-component 2.3 32,174,617 60.8% Sub-component 3.3 13.4% Total 7. Component 2: Urban Transport Improvements in Argentina's Medium Size Metropolitan Areas. This component includes infrastructure investments in APL phase 1 in the Metropolitan Areas of Tucumán, Mendoza and Posadas. As such, economic appraisal was carried out for those investments, as follows: 8. Subcomponent 2.1: Metropolitan Area of Tucumán: Improvement of Public Transport Accessibility in Barrio 11 de Marzo. The main objective of the sub-project in this sub-component is to improve the accessibility conditions of the population in one of the poorest neighborhoods of Tucuman, by improving the conditions of the infrastructure. At present, roads are unpaved and lack storm drainage; as a result, accessibility to public transport and urban facilities such as hospitals and schools is hampered in adverse weather conditions. 9. Economic Evaluation: The methodology used to carry out the economic evaluation was a cost benefit analysis with the calculation of the net present value (NPV) of the investment costs of the project at a 12% discount rate, and valuing the following benefits: access to health care facilities, access to schools, access to work places, and operating costs of public transport transiting in the Barrio, in with and without project situations. 10. The accessibility benefits were calculated on the premise that during the year there are days with no accessibility to these facilities due to rain and consequent road conditions. Thus a number of no accessibility days were assumed during the year based on the number of days it rains. The value of those days was calculated based on average salaries of workers, teachers, and health care providers. 11. The operating costs for bus line 11 that serves the Barrio was calculated using values published in COSTOP from March 2008 to 2009 and increased by 30% to account for inflation, using a standard operating cost model. 104 Table A9-7: Cost Benefit Analysis for Tucumán (Based on 22 year horizon, 2 year construction period and 12% Discount Rate) Net Present Benefits Net Present Costs Net Present Flows AR ($) 122,482,310 65,943,036 56,549,274 US$ 31,899,039 17,172,666 14,726,373 Economic Rate of 23.1% Return (ERR) 12. Sensitivity Analysis: The analysis supposes that the average bus speeds in the neighborhood are 5km/h and the average speed after the project is competed it will be 10km/h. The sensitivity tests supposed that the starting speed is 10km/h and future speeds could be from 15km/h to 35km/h. This test gave ERRs ranging from 17.1% to 19.6% with differing final average speeds. An additional test, supposing 5km/h as starting speed and after project speeds ranging from 10km/h to 35km/h gave ERRs from 23.1% to 25.4%. In all cases, the project gives positive returns. 13. Sub-component 2.2: Metropolitan Area of Posadas: Avenue Uruguay Segregated Bus Lane: The main objective of the sub-project in this sub-component is to provide steady and improved speeds for the buses on Avenue Uruguay through segregation from the rest of the traffic. 14. Economic Evaluation: The methodology used to carry out the economic evaluation was a cost benefit analysis with the calculation of the net present value (NPV) of the investment costs of the project at a 12% discount rate, valuing operating costs of public transport on Avenue Uruguay and general traffic on parallel roads which will be affected as a consequence of the project. 15. The operating costs were calculated using values published in COSTOP from March 2008 to 2009 and increased by 30% to account for inflation, using a standard operating cost model. Table A9-8: Cost Benefit Analysis for Posadas (Based on 22 year horizon, 2 year construction period and 12% Discount Rate) Net Present Benefits Net Present Costs Net Present Flows AR ($) 197,590,733 59,191,979 138,398,754 US$ 53,402,901 15,997,832 37,405,069 Economic Rate of 16.8% Return (ERR) 16. Sensitivity Analysis: Supposing the benefits were reduced by 15% and costs increased by 15% the resulting ERR was 15.8% and the NPV was US$26,994,959. 17. Sub-component 2.3 : Metropolitan Area of Mendoza : Colector Papagayo The main objective of the sub-project in this sub-component is to provide a road connection between the east and west of the city, but also to provide accessibility to the low-income neighborhood that borders the road. Dwellers, in particular children, use the road to access 105 schools west of their neighborhood and at present have to get on and off a causeway as part of their itinerary to school, since the road is incomplete. 18. Economic Evaluation: In detail, the main benefits identified include: (i) access improvements to and from adjacent neighborhood; (ii) circulation conditions for pedestrians, non motorized transport along Colector Papagayo, as it does not have sidewalks; (iii) increased possibilities for public transport lines to access the neighborhood and east ­ west routes; (iv) deviation of traffic from the Ave. Civit ­ Libertador and Champagnat on to Colector Papagayo thus reducing congestion; (v) improvement of environmental quality in San Martin park due to traffic reduction on roads that cross the park. 19. The methodology used to carry out the economic evaluation was a cost benefit analysis with the calculation of the net present value (NPV) of the investment costs of the project at a 12% discount rate, valuing the following benefits : (i) vehicle operating costs; (ii) travel time reductions; (iii) travel time reductions on public transport; (iv) pedestrian and cycling travel time reductions. 20. The operating costs were calculated using values published in COSTOP from March 2008 to 2009 and increased by 30% to account for inflation, using a standard operating cost model. Table A9-9: Cost Benefit Analysis for Mendoza (Based on 22 year horizon, 2 year construction period and 12% Discount Rate) Net Present Benefits Net Present Costs Net Present Values AR ($) 149,377,288 30,331,205 119,046,083 US$ 40,372,240 8,197,623 32,174,617 Economic Rate of 60.76% Return 21. Sensitivity Analysis: The analysis shows that there is sensitivity to the amount of traffic the project supposed will be deviated from competing roads to the Colector Papagayo. The standard scenario assumes traffic deviation to Colector Papagayo of 10%. In the worst case, with no traffic deviation from alternate roads, the ERR would be 30.0% and the NPV US$12,351,021 showing the significant benefits of the project without traffic deviation. 106 Table A9-10: Sensitivity Analysis: NPV and ERR with different levels of traffic deviation Percentage of Traffic NPV (US$) ERR (%) Deviated to Colector Papagayo 0.0% 12,351,021 30.0% 5.0% 21,513,877 44.1% 10.0% 32,174,617 60.8% 15.0% 40,374,215 67.7% 20.0% 47,807,450 75.3% 25.0% 52,455,467 80.0% 22. Component 3: Access to Public Transport networks and modal integration in Buenos Aires. This component includes infrastructure investments in APL phase 1, around suburban railway stations in the Buenos Aires Metropolitan Area and one underpass at a rail/road crossing in the Municipality of Esteban Echeverría. 23. Sub-component 3.2: Station Accessibility. This consists of improving access conditions to suburban railway stations in the AMBA. These interventions will bring the existing stations and access roads to a state of good repair. These improvements are expected to enhance the attractiveness of public transportation and provide more seamless transfers for intermodal trips. This sub-component is an extension of the PTUBA work program for a new set of rail stations. 24. The individual works at each railway station will be limited to no more than US$1 million plus contingencies, and only eligible works will be allowed. The selection process to determine the stations to be treated will continue based on the multi-criteria table set-up with the PTUBA project that uses a poverty index (NBI), number of passengers boarding and alighting at the stations, and the relative importance of the corresponding train line. 25. The economic evaluation and work selection process will be limited to this approach given that the works yield significant but difficult to value benefits. Nonetheless, an ex-ante and ex ­post impact study will be carried out to determine the exact benefits of the program and to attempt to define an economic evaluation methodology. 26. Sub-component 3.3: Grade separated crossings. The main objective of this sub- component is to complete the grade-separated crossing at Esteban Echeverría initiated in the PTUBA loan. The crossing has two "legs" the first of which was bid and executed with the proceeds of the PTUBA and the second is proposed to be financed under this loan. 27. According to the economic evaluation, both legs of the proposed underpass are economically viable as they have ERRs from 11.43% to 15.15% from the worst case scenario to the best. The details of the evaluation are as follows: 28. Economic Evaluation: The economic evaluation of all candidate road/rail crossings was carried out for the appraisal of the PTUBA AF: 22 proposed road/rail crossings were 107 analyzed. The economic rates of return vary between 0.89 and 29 percent, with eight crossings having an ERR of over 12 percent, as shown in Table A9-4.32 29. Methodology. The road traffic base for the calculations was obtained from a 24-hour automatic count, supplemented by a one-hour classified count during a working day. Where these counts were undertaken by the consultants, they were done in conformity with a guide on counting methods. 30. The rail traffic base for the study was obtained from the concessionaires. This consists of the timetable of the trains, together with a calculation of numbers of passengers derived from manipulation of an origin-destination matrix of passengers obtained from the concessionaire. From the same sources, estimates were made of the times during which the barriers are closed to allow the passage of trains and these were complemented with observations. 31. Information on accidents at level crossings was obtained from statistics provided by the rail concessionaires and the Transport Secretariat. 32. Costs and benefits were estimated separately for effects during the period of construction of the grade-separated crossings, directly associated with the construction process, and for the subsequent period of operation of the crossings. 33. Effects during the Period of Construction. The major costs during the period of construction are the economic costs (excluding taxes) of construction itself. Where the location of the new crossing is the same as that of the existing crossing, that crossing would have to be closed during the period of construction. The calculation included the costs associated with extra travel distance incurred when the existing crossing is closed during construction. For this calculation, in the absence of a comprehensive traffic model, a simple reassignment formula was used to assign traffic to alternative crossings. On the basis of this reassignment, the increase in time and operating costs associated with the works was calculated. In these cases there is also an associated benefit in that the costs of guarding the crossing can be avoided immediately. Costs were also calculated for the reduction in train speeds in the vicinity of the works during the period of construction. 34. Effects during the Period of Operation. The benefits to road users include both vehicle operating costs and time costs of passengers. The operating costs of private cars and trucks were calculated on the basis of the publication "Costos de Operación de Vehículos", issued in 2005 by the National Directorate of Roads. For buses, they are based on the costing model of the National Transport Regulatory Commission (CNRT). 35. Estimates of the value of time savings were derived from INDEC's Permanent Household Surveys, carried out in the second semester of 2005, and using valuation criteria elaborated by the World Bank.33 36. Accident rates were calculated on the basis of the number of expected accidents without the improvements increasing at the rate of increase of vehicles of 3 percent per 32 Estudio de Prioridades para la Ejecución de Pasos a Distinto Nivel en el Area Metropolitana de Buenos Aires, Evaluación Preliminar de Pasos, prepared by IATASA for the PTUBA PIU, December 2006. 33 Kenneth Gwilliam, The Value of Time in Economic Evaluation of Transport Projects, World Bank, 1997. 108 annum for vehicular accidents and at the rate of population growth of 1.4 percent in the case of pedestrian accidents. These are conservative assumptions, as they make no allowance for the increase in the number of potential conflicts which is also a function of the increasing number of trains, and the risk associated with a potential conflict which is likely to be a function of train speed. 37. Each accident causes an interruption of the rail service. This interruption was estimated, on the basis of historical data, to be 58 minutes in the case of a vehicle-related accident and 30 minutes in the case of a pedestrian-related accident. The number of trains affected was calculated on the basis of the train frequency and the accident type. Passenger time delays were then evaluated on the basis of the average load factors and time values discussed earlier. 38. Delays to vehicles at barriers were estimated using standard formulae reflecting average arrival rates at the barrier, closure time of the barrier, cycle time, and capacity of the level crossing. Estimates were also made of the increased operating costs of vehicles, particularly fuel consumed, on account of the low speed of movement into and across the grade crossing. 39. Annual savings on the maintenance of barriers replaced were estimated as US$9,600 per manual barrier and US$4,800 per automatic barrier. 40. For the purpose of the economic evaluation, a residual value of 50 percent of the original cost of the works was assumed at the end of the period of appraisal (20 years). Sensitivity analyses were undertaken halving the value of personal time savings. 41. Sensitivity Analysis: For the purpose of the economic evaluation several sensitivity tests were carried out. In particular, the analyses were sensitive to the present performance of the at-grade crossing and the length of time the barrier stays closed. Secondly, it was found that the way in which the construction was carried out and the temporary arrangements to deviate traffic had a cost that could have a significant effect on the final evaluation. Therefore, additional analyses were carried out to determine the impact of the abovementioned elements. (i) Traffic deviation during construction: The economic evaluation of the road/rail crossings was carried out changing the construction scheme; a provisional road crossing structure was installed next to the construction. In this manner, the economic evaluation no longer took into account time savings and cost savings of vehicles being deviated but simply the installation cost of a temporary barrier. The cost of the temporary crossing used was US$400,000 except for the crossing at Dorrego-Constanzo where US$300,000 was used because the temporary crossing would be very near the existing road. (ii) Existing Barrier Closing Time: The economic evaluation of the road/rail crossings was carried out changing the time the existing barrier stayed closed. In the initial evaluation, the time the barrier stays closed comes from observations. In this new analysis, the measures taken for 306 existing road/rail crossings were taken and averages were used for all crossings according to the type of barrier: - Automatic barrier more than 200m from the station: 01 min 50 secs closing time 109 - Automatic barrier less than 200m from the station: 02mins 09 secs closing time - Manual barrier:01 mins 38 secs closing time 42. Both tests were carried out and ERRs calculated; table A9-4 reports ERR1, ERR2, ERR3 and ERR4. The first one, ERR1, corresponds to the basic original analysis; ERR2 corresponds to the analysis with a temporary crossing structure during construction; ERR3 corresponds to the analysis with more uniform barrier closing times; and ERR4 corresponds to the combination of ERR2 and ERR3. As can be observed from the table, eight candidate sub-projects are feasible in all analyses, and a ninth would be feasible according to the two proposed tests. As the project will finance seven road/rail crossings the choice amongst the best eight sub-projects seems adequate. 110 Table A9-11 : Ranking of Grade Separations by ERR1, ERR2, ERR3 and ERR4 Nº Location Municipality Railway ERR1 ERR2 ERR3 ERR4 Ave. San Martín 1 Florencio Varela Gral. Roca 13.60 22.41 16.90 27.17 (Ruta 53) Ruta Nacional Nº 2 La Matanza Belgrano Sur 14.84 26.98 14.10 25.85 3 Lisandro de la 3 Tres de Febrero San Martín 12.74 14.86 20.89 23.48 Torre Ruta Nacional Nº Malvinas Belgrano 4 29.23 29.23 23.00 23.00 202 Argentinas Norte 5 Italia - Eva Perón Berazategui Gral. Roca 5.97 10.53 14.70 20.79 Ave. Julio A 6 Roca (Ruta Nº Hurlingham Urquiza 10.51 13.23 14.64 15.50 201) Esteban 7 Rodriguez A. Gral. Roca 13.36 17.47 11.43 15.15 Echeverría Dorrego Esteban 8 Gral. Roca 12.24 12.24 14.26 14.26 Constanzo. Echeverría 9 Ave. Henry Ford Tigre Mitre 13.24 13.24 14.18 14.18 10 Espora Quilmes Gral. Roca 8.25 9.88 4.38 - 11 Melo - Güemes Vicente López Mitre 9.61 10.36 6.99 - Montevideo - San 12 Almirante Brown Gral. Roca 7.67 7.67 9.22 - Juan 13 Hudson Florencio Varela Gral. Roca 7.18 8.04 8.48 - 14 Perdriel San Martín Mitre 6.94 7.40 5.31 - 15 Las Flores Avellaneda Gral. Roca 6.74 7.48 3.18 - 16 Bahía Blanca Avellaneda Gral. Roca 6.40 6.71 3.63 - Belgrano 17 Sarratea Boulogne 4.46 7.30 9.62 - Norte Quilmes - 18 Florencio Varela Gral. Roca 4.41 7.85 5.04 - Berazategui Esteban 19 Fader Gral. Roca 2.91 2.91 2.49 - Echeverría Asamblea - 20 Tres de Febrero Urquiza 2.63 2.63 3.27 - Triunvirato 21 La Guarda Quilmes Gral. Roca 1.39 3.41 1.81 - Avellaneda 22 San Martín Mitre 0.89 0.89 2.94 - (Sgto. Cabral) 111 ANNEX 10. SAFEGUARD POLICY ISSUES ARGENTINA: Metropolitan Areas Urban Transport Project Introduction 1. This annex summarizes the main environmental and social management issues addressed during preparation stage and related to the proposed project. The overarching objective of the project is to improve the quality, sustainability, and efficiency of urban transport systems in selected Argentine Metropolitan Areas. In terms of environmental incidence, the project involves a number of civil works in participating Metropolitan Areas, and other minor interventions in train stations, which might have potential environmental impact, which should be addressed by an appropriate environmental framework. 2. This annex summarizes the main findings identified in the environmental documents prepared by the Borrower and describes the measures taken by the Borrower to address any environmental impact as well as eventual conflicts with communities during project implementation. The annex includes an analysis of environmental safeguards compliance, mainly in the light of World Bank Operational Policy 4.10 on Environmental Assessment, which requires conducting environmental assessment for all activities to be financed by the Bank. 3. The preparation of this annex has included desk reviews of Borrower's documents (mainly screenings and expedite environmental impact assessment reports prepared at pre- feasibility level), interviews with key stakeholders, meetings, participation in public consultations workshops and field visits, all of them with participation of relevant Bank staff (Environmental Specialist and Task Team Leader). 4. The Bank's analysis concludes that the project is expected to have positive environmental impacts in the long run, such as providing access, reducing congestion and emissions and improving traffic safety. A number of civil works will produce short-term term impacts, which trigger OP 4.01. The main direct impacts are expected to occur during construction and cause localized negative environmental impacts. Such impacts are expected to consist essentially of noise, vibration, dust, and traffic disruption. Additional negative impacts during construction will occur due to haulage and final disposal of materials. Access to commercial sectors and houses will be affected temporarily. Mitigation measures already designed, and available in the project's Environmental and Social Management Manual, would be applied to avoid unnecessary interferences. 5. Based on the available information, it was determined that involuntary resettlement will only be required by sub-component 2.1 (Metropolitan Area of Mendoza: Colector Papagayos ). In the case of sub-component 3.2 Station Accessibility, given that the projects have not yet been designed and that the final list of specific target sites has not been yet determined, it will require the application of an involuntary resettlement policy framework. 6. Most project impacts can be mitigated by adequate designs and environmental management plans. The project will incorporate strategies to increase safety and incentives to reduce air pollution. 112 7. In conclusion, the project preparation is complying with environmental safeguards requirements in a way acceptable to the Bank. This annex is based on the presented preliminary project designs, expedite environmental assessments and screenings. Project implementation will carry out detailed environmental assessments at project final design level, including the corresponding environmental management plan and promoting public consultation processes. 8. The annex includes the following sections: (i) a brief description of baseline condition in the project's area of influence, (ii) the outcome of the environmental assessment summarized above, (iii) a presentation of the set of mitigation measures that are part of the project's environmental management plan, and (iv) a description of the environmental institutional arrangements, including the reference to a strengthening plan to ensure adequate environmental management conditions in the PIU and in participating Metropolitan Areas. Environmental Assessment Screening Process and Environmental Category 9. The Bank's team has undertaken, with the input of the Borrower, the environmental screening of each proposed sub-project to determine the appropriate extent and type of EA, based on the preliminary design of each sub-project. Screened sub-projects were: (i) Sub- component 2.1 Metropolitan Area of Mendoza: Colector Papagayos; (ii) Sub-component 2.2 Metropolitan Area of Posadas Avenue Uruguay; (iii) Sub-component 2.3 Metropolitan Area of Tucumán Barrio 11 de Marzo; (iv) Sub-component 3.2 Station Accessibility; (v) Sub-component 3.3 Grade separated road/rail crossing. 10. From the result of the screening exercise, the Bank team classified the project into Category B, based on the type, location, sensitivity, and scale of the different projects involved and the nature and magnitude of its potential environmental impacts, as demonstrate in the following table: 113 Table A10-1: Potential Environmental Impacts of Sub-Projects Scope of Colector Avenue Uruguay Barrio 11 de E. Echeverría ­ Minor accessibility possible Papagayos ­ ­ Posadas Marzo ­ Tucumán grade separated works in rail-way impacts34 Mendoza crossing stations ­ AMBA The sub-project No. Minor No. Only site- No. Only the need An important No significant has significant resettlement specific to synchronize the transformation impacts are adverse issues to be construction proposed works of the urban expected. environmental addressed by an impacts and road with a projected landscape is impacts that are Abbreviated safety impacts new drainage expected. sensitive, Resettlement during system in the However the diverse, or Plan. operational project's target project unprecedented phase. area. promotes a sound landscape design. These impacts No. Expected No. Expected No. Expected No. Expected No significant may affect an impacts are site impacts are site impacts are site impacts are site impacts are expected area broader specific. specific. Impacts specific. Impacts specific. than the sites or Impacts during during during operational Impacts during facilities subject operational operational phase phase will be operational to physical phase will be will be positive positive phase will be works positive. positive The impacts on Yes. No major Yes. No major Yes. No major Although no No significant human impacts are impacts are impacts are major physical impacts are populations or expected expected beyond expected beyond impacts are expected. environmentally beyond the the positive the positive expected important areas positive effects. effects. effects. beyond the are less adverse positive effects than those of of the sub- large scale, project, it is complex controversial projects. for a community group. Presence of Anticipated Anticipated Anticipated Anticipated No significant anticipated impacts impacts detected impacts detected impacts impacts are impacts, detected during during during detected during expected. However, particularly on consultations consultations can consultations can consultations the Borrower will vulnerable can be be addressed by be addressed by can be conduct screening populations. addressed by mitigation mitigation addressed by and expedite EA mitigation measures. The measures. The mitigation during project measures. The project brings project brings measures. The implementation in project brings benefits to benefits to project brings order to avoid or benefits to vulnerable vulnerable benefits to manage eventual vulnerable populations and populations and vulnerable resettlement issues populations and improves the improves the populations and as well as drainage improves the traffic systems, traffic systems. improves the local conditions. traffic systems. decreasing traffic systems. congestion and improving accessibility. Areas where No. The project Yes. The project Yes. However the Yes. A well- Yes. However, 34 The scope of possible impacts is based on the OP 4.01 and in the comments provided by SAT for the PCN review. Sensitive impacts are related to large scale resettlements, important impacts on natural habitats, involvement of native forests and effects on cultural goods. 114 works would will take place will take place in population density planned projected works are take place are in a an avenue with is not a problem or management of minor improvements densely consolidated an intense restriction for the traffic during works in train populated but peri-urban commercial use project. The construction stations area in terms of but without project will finance phase will be surroundings geographic permanent the paving of roads key to avoid without critical location effects. in existing right- negative impacts. of-ways. impacts during construction. Potential If the city is The project will The project will The project will No regional impacts regional and considered as a have a positive have a positive have a positive are expected. indirect impacts region, the impact impact in terms of impact in terms of the project will improving the creating of reducing envisioned have a positive access to the city accessibility congestion in improvements impact in terms from other conditions for the Monte Grande of the overall of creating medium size poor in Barrio 11 city and in urban transport accessibility cities and in de Marzo while improving the system conditions and terms of resolving sanitary land-use reducing reducing and vulnerability planning in the congestion, and congestion and conditions linked project's emissions and emissions and to the lack of immediate area improving improving traffic proper drainage of influence. traffic safety safety systems. The impacts are Yes. Direct Yes. Direct Yes. Direct Yes. Direct Yes. Direct impacts site-specific impacts are impacts are impacts are limited impacts are are limited to the limited to the limited to the to the direct area of limited to the direct area of direct area of direct area of influence. direct area of influence. influence. influence. influence. Few impacts Yes. Paving of Yes. Paving of Yes. Paving of Yes. An There are no are irreversible roads will cause roads will cause roads will cause important irreversible impacts. changes but changes but changes, but change in the limited to the limited to the limited to the right local landscape right of way. right of way. of way. Vehicle (loss of green New traffic circulation will be areas and circulation will considerably cultural be induced. improved heritage) is expected given the replacement of the current circulation scheme by another one, involving a separated grade crossing. Mitigating Yes. The Yes. The project Yes. The project Yes a full These interventions measures are project has has already has already version of a could require well known and already designed a first designed a first set detailed EA has specific mitigation can be designed designed a first set of generic but of generic but identified a set measures to more readily set of generic comprehensive comprehensive of mitigation complement those than for a but mitigation mitigation measures, already applied by complex comprehensive measures which measures which including the contractors based on project. mitigation were assessed as were assessed as basis for an generic measures which acceptable. acceptable. EMP. environmental were assessed specifications. as acceptable. 11. The screening process determined that several of the environmental issues identified warrant attention. Therefore, the findings and results of the Category B screening have been 115 set out in an Environmental Assessment, based on the project design cycle agreed with the Borrower during preparation. Given the sub-project's preliminary level of design, and considering the type of sub-projects, as well as the nature and magnitude of the impacts, the Borrower conducted expedite environmental impact assessments focused on main issues, the identification of major environmental mitigation measures to be taken into account by the PIU, and an update of an Environmental and Social Management Manual to address the whole project cycle in each sub-project, taking into account all the safeguards-related issues during project final design and supervision. 12. For sub-component 3.2 Station Accessibility, the list of participating stations to be included in the program has not been decided yet and the sub-projects have not been designed. Thus, sub-project specific screenings and expedite EAs will be conducted during project implementation and prior to the commencement of works. For the purpose of loan preparation, a screening exercise involving 123 stations was prepared and demonstrated there are no environmentally sensitive areas and that the train station accessibility sub- projects present well-defined and well-understood environmental and social issues of narrow scope. This screening exercise combined the complexity of works to be developed together with the level of public flow in each site. This allowed the Borrower to conclude that, initially, all train station sub-projects could manage the environmental impacts of the projects by applying environmentally sound design criteria, construction standards and inspection procedures. However, and given that the final universe of sites is still unknown, and that the Bank review during preparation revealed some potential risks (eventual impact on economic activities and local drainage conditions), the Borrower will conduct screenings and EAs during implementation to determine the involuntary resettlement potential and other physical impacts (changes in local drainage conditions, etc.). 13. The project will finance through sub-component 3.3, the second phase of a grade- separated crossing in Monte Grande (Esteban Echeverría Municipality). This sub- component will build a grade-separated crossing at a critical railroad intersection. This sub- project has already been designed and appraised by the PTUBA program and is expected to improve traffic safety, personal safety and relieve traffic bottlenecks in the city. A site- specific detailed environmental assessment report is available for this project. Despite an ongoing effort by the project team with Bank support to improve the quality of the Environmental Assessment and its exposure, discussion and consultation, this project has not been accepted by a group from the local community. The Bank has proactively supported the PIU to ensure it complies with all Bank procedures and that all observations, comments and complaints by neighbors are addressed. 14. Finally, the following planned activities have not been included in the EA at this stage as the project will only finance the studies and designs. The screening, as well as site- specific environmental assessments in accordance with environmental and social Bank's safeguards, will be prepared during the design of these projects, but after loan approval35: (i) Sub-component 3.1 Transfer centers: This sub-component will finance infrastructure studies in critical intermodal centers of the AMBA. These studies will contemplate the construction of terminals and the redesign of the access 35 A covenant in the Loan Agreement will ensure that all feasibility studies/final designs will include provisions in the Terms of Reference mandating the Borrower to incorporate the applicable Bank safeguards to these project activities. 116 roads and boarding platforms. These interventions are expected to reduce transit travel times by having a smoother transfer and decrease accident rates in the surrounding areas due to a better physical integration across modes. (ii) Sub-component 3.4 Train signaling system: This sub-component will finance studies to make operational improvements in the train signaling system and infrastructure improvements in critical intersections. These interventions are expected to optimize the overall traffic flow at the intersections of rail and mixed traffic. Baseline Conditions for EA and Lessons Learned from the Ongoing PTUBA Project Context and Baseline Conditions 15. These projects do not involve transformation of pristine natural resources or critical natural habitats. Instead, they take place in heavily transformed areas. The project will be implemented in three medium size Metropolitan Areas (Mendoza, Tucumán, and Posadas) and in the Buenos Aires Metropolitan Area, including Monte Grande city for the grade- separated crossing project. All these cities are densely populated urban areas mostly populated by low-income citizens. All the target areas share environmental problems of congestion, air quality, public safety, and land development. All project-related works will take place in consolidated urban areas, with the exception of Colector Papagayos, which is in a slightly more a peri-urban area. 16. No adverse effects are expected on natural habitats, natural resources or ecologically fragile zones. No wetland areas are affected by the proposed works. Special attention has been given to the potential impacts of constructions in highly urbanized areas and the potential impacts of the project on surrounding communities. 17. The project will be implemented in urban agglomerations where growth without infrastructure improvements reinforces social problems. The Buenos Aires Metropolitan Area, as well as Mendoza, Posadas and Tucumán Metropolitan Areas are all urban agglomerations that are still growing. In these Metropolitan Areas, social exclusion is becoming a defining issue exacerbating urban poverty. Infrastructure investments and transportation policies can address and help attenuate this exclusion, and hence, alleviate poverty. As these Metropolitan Areas become more car-dependent, there is an increase in congestion, accidents and pollution, affecting the poor disproportionately while public transit quality declines. Inability to access jobs, public health, education and other services becomes greater, reinforcing the breach between social classes in all these Metropolitan Areas. 18. In this context, this project seeks to enhance the mobility conditions of Argentina's medium size Metropolitan areas and to strengthen their local transportation planning capacity. For each city, the project will finance the following: (a) one or more priority projects once they have reached an advanced state of planning and have been considered as fully acceptable from social, environmental, and economic perspectives. (b) a set of specific feasibility studies and/or final designs for future projects that result from comprehensive transport studies currently being carried out, with safeguard policies incorporated into these studies/designs. 117 Overall Project Environmental Benefits 19. In terms of environmental problems, the increase in car ownership and the inefficient management of the public transport fleet, combined with the proliferation of old and polluting micro-buses and deficiencies in bus inspection and maintenance have led to increased congestion and high levels of traffic-generated air pollution. In terms of benefits, the project will have impacts on four pillars: economic growth, environmental quality, poverty alleviation, and improved governance. The project will promote the use of low- emission modes such as high-capacity, clean buses, suburban trains and non-motorized transport, bringing clear benefits in environmental aspects. Evaluation and Lessons Learned from the Ongoing PTUBA Project 20. In general terms, the Borrower's PIU has environmental and social assessment and management procedures in place, which will be effective in identifying, mitigating and/or preventing negative impacts of new projects. Capacity in terms of environmental management in the PIU will be strengthened with additional qualified staff, to improve overall environmental supervision in the entire project (involving all the components), to increase the analytical quality of environmental assessment reports, and to further integrate the public consultation process with the environmental and social assessment and management process, as a cross-cutting issue during the entire project cycle. 21. In addition to strengthening the PIU with safeguard staff, the Bank proposes: (i) proper integration of staff from participating Metropolitan Areas in the environmental assessment process, and (ii) hiring long term consultants with experience in this kind of projects where needed. Environmental Assessment of Proposed Sub-Projects 22. To characterize the environmental impacts of the PTUMA project, two different reports were prepared by the Borrower. (i) Site-specific Environmental Screenings and Expedite Environmental Assessments for sub-projects in medium size Metropolitan Areas (Mendoza, Tucumán and Posadas). These reports are part of an integrated package which includes EMPs at preliminary design level, a part of the ESMM. (ii) A site-specific and detailed Environmental Impact Assessment, including the respective EMP, for the grade-separated crossing in Monte Grande city. This report has received criticism from a local community group. Criticisms include the scope of the assessment as well as the selected alternative and the loss of cultural/natural heritage. 23. Environmental Assessment of Sub-component 3.2 Station Accessibility: As a background document, the project presented a first level of analysis conducted over 123 railway stations. This analysis combines the complexity of proposed works with the level of public flow at each site. Based on this analysis, it was concluded that these works could be managed by the application of general environmental specifications in bidding documents to be followed by Contractors. However, after the visit to a sample of sites and 118 the revision of a bidding document, the Borrower will conduct screenings and expedite EA once each site is selected in order to determine unexpected impacts such as involuntary resettlement or other physical impacts (e.g. negative changes in drainage conditions). 24. Cumulative Effects. The proposed infrastructure works are in different locations (in different cities). There is no cumulative effect of the different sub-projects being constructed or operating at the same time. Each sub-project has been appraised individually and specific economic and traffic evaluations explain their socio-economic impacts. Environmental Assessments for Component 2 sub-projects in the Medium Size Metropolitan Areas 25. Both the Environmental Assessment (EA) and community consultation methodologies were applied to the sub-projects in participating Metropolitan Areas. All components to be financed under those sub-projects have been subject to EA screening, EA, and public consultation according to the agreed methodologies with the Borrower for project preparation. All sub-projects will follow environmental management principles. This methodology, which will be applied during the project's entire life cycle, can be summarized as follows in the chart below, where for each phase the EA requirements have been defined. This project preparation has reached the preliminary design. Table A10-2: Project's Safeguards Management Tools Technical Phase Evaluation and Objective Tools Environmental and Social Management PRELIMINARY PHASE Concept Definition of Concept Definition of Evaluation of the project, Guide for the the Project the Project feasibility and efficiency in Concept Definition regional planning of the Project Preliminary Screening Evaluation of Alternatives Preliminary Screening Guide Provide information for project concept and preliminary design Information and Inform about project Information and Public Consultation characteristics public consultation Procedures guide (meetings, seminars, web page, e-mail, newspapers, etc.) Identification of positive and negative impacts perceived by the affected community Validation of impacts identified by the technical team Preliminary design Expedite evaluation Evaluate specific positive and Expedite evaluation negative impacts in the different guide phases of the project 119 Determine the need of additional Terms of Reference studies for additional studies Information and Inform about project Information and Public Consultation characteristics and responsible public consultation Procedures entities guide (meetings, seminars, web page, e-mail, newspapers, etc.). Detailed Design and Coordination among Incorporation of feasible Bidding Process social, environmental environmental and social and design teams suggestions into the preliminary design. Prepare a detailed EIA report and adjust the impact evaluation according to final design Definition of each Establish the different Institutional actor's responsibilities responsibilities for the different Organization map in the sub-project actors (PIU, municipalities, contractors, community) Final Project Design Inclusion of the social Legally incorporate management Environmental and and Works and environmental procedures in the bidding Social Specification Contracting management documents and works contract in the bidding procedures documents for the contractor of the works Guarantee resources allocation for the application of the procedures Contracting of Incorporation of Incorporate the supervision of the Environmental and Supervision Works social and social and environmental Social Specification environmental procedures in the bidding in the bidding management documents and contract of the documents for the procedures. supervision firm(s) contractor of the works. 120 PLANNING PHASE OF THE WORK Planning of works Incorporation of the Reduction of the negative Environmental social and impacts of the works through management environmental adequate planning of works that datasheet dimension in the incorporate social and planning of works environmental impacts Assure the accessibility to shops Traffic deviation and residences affected by the management construction guide. Information and Inform the community about the Information and community final project design, work public consultation schedule, and people responsible. consultation procedures. guide (meetings, seminars, web page, e-mail, newspapers, etc.) Present the impact and management procedures final evaluation Inform about the incorporation of Guide for the community's suggestions in managing the design and management complaints and procedures requests Information and Give clear, truthful, timely Information and communication information about the project, public program works, and application of social consultation and environmental measures guide (meetings, seminars, web page, e-mail, newspapers, etc.) CONSTRUCTION PHASE Construction Application of the Apply prevention, mitigation and Management of information and or compensation procedures of construction public communication the negative impacts of the works activities procedures Supervision of the application of Monitoring tools procedures Regular communication with the Supervision community and population Guide directly affected Preparation of regular monitoring reports on social and environmental Prepare reception and conflict solution mechanism for neighbors' complaints 121 OPERATIONAL PHASE Contract conclusion Final evaluation Preparation of a final monitoring Monitoring and report on environmental and Final Evaluation social aspects of the project with Guide recommendations on the management of the project for the municipality Apply procedures during the process 26. The sub-projects' final design to be finalized during implementation and construction will also follow: (a) a well-defined set of environmental criteria and principles, and (b) a set of environmental guidelines for construction of this type of civil works in urban areas. Specific mechanisms for assuring the application and compliance of all environmental criteria, guidelines, and methodologies have been spelled out in an ESMM prepared for each participating city. This Manual will be a binding document, as part of the loan agreement. Municipalities and contractors will be obliged to apply it, as part of the project institutional arrangements for coordination and supervision. 27. The most environmentally sensitive sub-projects are related to construction of civil works. These sub-projects involve construction works in or near populated areas, with dense commercial or residential activities to be temporarily affected by the progress in the work front, with the exception of Mendoza sub-project, to be constructed in a relatively less populated sub-urban area. However, all sub-projects are expected to have positive impacts. The project will improve physical access and quality of public transport, by upgrading sidewalks, paving roads, and improving urban furniture. Nevertheless, the neighbors where the works will be built will face some negative impacts during the construction phase, such as noise, dust, and traffic disruption. In general, the civil works under the project will all follow the alignments of existing roads and rights-of-way, which will limit any involuntary displacements. 28. The main impacts and critical situations in the proposed sub-projects are summarized as follows: (i) Metropolitan Area of Mendoza: Colector Papagayo Infrastructure works to pave 3.7 km of the existing road, and build an interchange with access roads. This project could have negative effects on local drainage conditions if not well designed. In addition, given the nature of the regional geomorphology, the project area is highly vulnerable to avalanches. Both issues have been identified by EA as the main problem/restriction for the project. Final design of works will have to consider in detail the impact on drainage and will have to design adequate drainage systems. Additionally, the sub-project EA describes the project area as affected by high volumes of water and mud, as a result of short and intense summer storms. The EA highlights some populated areas where not only road infrastructure, but also housing and safety are exposed to a high risk of floods. Engineering detail design will have to include a specific hydro- geomorphology study, as part of a detailed environmental assessment. (ii) Metropolitan Area of Posadas: Ave. Uruguay. The EA prepared for the construction of the needed infrastructure (segregated busway and boarding 122 stations for a currently operating bus rapid transit system), reports the typical environmental impacts expected for a road project to be constructed on a highly transformed environment. In addition, direct impacts on commercial activities along Uruguay Avenue and road safety issues during project operation (for Rademacher and de Haro avenues) related to the speed increase on alternates road acting as future entrance/exit accesses in the new system, are the main challenges to be addressed with proper mitigation measures. In the light of this consideration, the project will adopt specific mitigation measures to minimize these possible problems as well as for the replacement of banners in commercial areas and possible interference with commercial activities. Consultation and communication activities with stakeholders are highly recommended. (iii) Metropolitan Area of Tucumán: The sub-project, which affects Barrio 11 de Marzo, involves the paving of 10 km of roads and construction of a storm water drainage system. Local drainage conditions as well as high flood susceptibility are the main environmental conflicts if well-designed project and mitigation measures are not applied. EA has identified and provides clear information regarding site conditions, including a map which illustrates the drainage conditions and its flow directions in the project area. At the same time, EA highlights the importance of synchronizing the paving project and related improvements with the drainage works projected in the area, in order to avoid cumulative or unexpected impacts. Baseline conditions indicate that the proposed works will need to be complemented by education to promote solid waste management and other improvements in sanitation in the project area. The improvement in local drainage conditions will not change the quality and quantity of water flows. In addition, the project affects a tributary which runs exclusively in Argentina, where this country is the only riparian. Environmental Assessment for Sub-Component 3.3, Grade-Separated crossing in Esteban Echeverría 29. This sub-project is comprised of a grade-separated crossing. Its detailed engineering design is already prepared. As part of the sub-project a detailed site-specific Environmental Impact Assessment report was prepared. It was submitted to public consultation with the local community. As a result of the consultation, and specific comments from neighbors regarding the scale and scope of analysis, quality of information, and the lack of analysis of alternative locations, a new version of this Environmental Assessment was prepared. 30. This new assessment incorporates all the issues raised by consultations with local population and any comments or observations made by neighbors in any other way. The assessment confirms that the proposed road/ rail crossing will not have any adverse impacts that cannot be mitigated through an environmental and social management plan focused on the problems identified at local level. 31. This full Environmental Impact Assessment was reviewed by the Bank and it was found acceptable. It provides specific mitigation and monitoring measures ­to be adopted by future Contractors- in order to address negative impacts that result during the construction and operation phases. 123 Environmental Assessment for Sub-Component 3.2 Station Accessibility 32. These interventions will bring the existing stations and access roads to a state of good repair. These improvements are expected to enhance the attractiveness of public transportation and provide more seamless transfers for intermodal trips. This sub- component is an extension of the PTUBA work program for a new set of railway stations in the AMBA. 33. The Borrower presented a document prepared by a Consultant to assess a sample of proposed small projects. Based on this list, two criteria were defined to analyze the projects according to the potential environmental and social complexity: (i) nature of the works (such as painting, urban furniture, elevators, fences, sidewalks, paving, etc.), and (ii) socioeconomic characteristics of the areas where the works will take place (such as number of transport customers, population density and percentage of poor population). The document shows that the specific works can be characterized as follows: (i) Minimal or no impacts: painting, parking, signalization, illumination, urban furniture, bus stops, ramps for disabled people, fences, bike parking facilities, and (ii) Minor impacts: sidewalks, pathways, drainage improvements; bike paths, road crossings near stations; and, (iii) Medium: pedestrian tunnels or bridges, paving. 34. In addition to the above mentioned analysis, the Bank team reviewed the template of the bidding document applied to this kind of works, and conducted a field visit to a sample of railway stations to determine the impact of on-going works financed under the PTUBA loan. The Bank team concluded that screenings and expedite EA should be prepared for this sub-component during project implementation and once the specific sites for investments were identified, to determine specific physical impacts as well as potential involuntary resettlement situations. Protocols for EA are included in the ESMM prepared by the Borrower and approved by the Bank. In general terms, these sub-projects will have no significant impacts that cannot be addressed through the measures of the ESMM and, more specifically, through the Environmental and Social Contract Clauses, and will not cause involuntary displacement. However, as a precautionary approach, screenings and EAs will be developed for each proposed work. Mitigation of Impacts 35. The project will apply a set of environmental principles for the design and construction of civil works. All sub-projects will apply EMPs which have been included in the ESMMs. 36. As a result of the environmental assessment process, a set of environmental criteria for the design and construction of such civil works were proposed for the project. These criteria have been described with concrete program of activities in the project's ESMM in order to be taken into account by stakeholders (municipalities) and would be supervised by 124 the Project Implementation Unit, at the national level. These criteria are summarized as follows: (i) The designs must avoid/minimize the need for residential resettlement of population, as well as minimize or avoid the impact on green and recreational areas and buildings of historical or architectural value. (ii) Access to dwellings and businesses should be guaranteed for both the construction and operational phases. Any restriction or limitation on accessibility to properties should be properly mitigated or compensated (see social safeguards section). (iii)The design should harmonize with urban surroundings including landscaping and planning for other uses for all additionally created spaces in order to minimize negative impacts on environmental quality and property values. (iv) Alternative solutions and final designs should be subject to environmental assessment and to public and community consultation with special emphasis on the property owners directly affected, local NGOs and community organizations, and business and professional organizations. (v) To minimize public nuisances, construction activities should follow strict environmental guidelines. Construction schedules and the timing of necessary interruption of public utilities (electricity, water and telephone) should be informed to the affected community. (vi) All areas and infrastructure affected during construction should be restored to their original condition, especially sidewalks, green street dividers, gardens, sidewalk trees, utilities, shop banners, and side streets impacted by traffic diversion. 37. In addition, the project will apply Environmental Guidelines during construction. A set of environmental guidelines for the construction of roads and transfer stations has been defined for the project. The purpose of these guidelines is to establish specific rules for contractors for minimizing environmental damage and public nuisance during the construction of this type of urban infrastructure. Examples of the topics that are included in the guidelines are: (i) Traffic and pedestrian safety measures and signals; (ii) Work schedule to guarantee accessibility to properties and commercial activity; (iii) The appropriate handling of construction and equipment wastes such as excavated earth, spoil materials and oily wastes from machinery; (iv) Noise and dust control measures; (v) Information to the public about work schedules and public services interruptions; (vi) Traffic detours; (vii) Construction planning, camp location, and rules for workers to minimize public nuisances; (viii) Stockpiling of materials and drainage on work sites; and (ix) Camp dismantling and abandonment. 125 38. The project will provide the necessary resources and mechanisms to ensure the application and implementation of all environmental criteria and guidelines. This will be achieved through the following: (i) Technical assistance to provide advice on environmental and social aspects, and urban environmental regulations during project execution; (ii) Strengthening of the PIU's environmental capability to screen designs, conduct environmental assessments, and ensure compliance with environmental requirements; (iii) Training programs in environmental management of urban infrastructure for planning and design officials of participating municipalities; (iv) Environmental criteria, EA and community consultation methodologies are specified in the ESMM to facilitate the use by officials from municipalities; (v) Bidding documents will include environmental and social guidelines for construction, and other environmental requirements; and (vi) The ESMM includes specific criteria for compensating any eventual diminished accessibility to dwellings and businesses caused by the construction of road and other facilities (see social annex section). Consultation Process During EA and Affected Target Groups 39. The screening exercise identified the need for community consultation in the area of influence of the proposed works. Between February-June 2009, the Borrower consulted the target groups in Mendoza, Tucumán, Posadas and Monte Grande during project preparation. 40. A community consultation methodology was designed (see section on environmental assessment for sub-projects) which includes a set of consultation sessions encompassing broad and specific areas of influence of the sub-projects. The application of this methodology in the above mentioned cities included specifically designed presentations for: (a) public and community organizations; and (b) the community in general. The public and community organizations to be consulted included: (a) local professional associations (including engineering and architectural associations); (b) local chambers of commerce and industries; and (c) community organizations (neighborhood organizations). 41. The public and community participating in the consultation process can be divided into two groups so far: (a) public at large in the area of influence; and (b) affected community in the immediate area of proposed works. The consultation process involved both formal and informal presentations and meetings with the target groups as well as information dissemination through newspapers and radio announcements. 42. As a result of the consultation process, with the exception of Esteban Echeverría sub-project, it can be concluded that there is an important level of consensus among organized groups, and the public at large about the need of the project. The consultation process implemented during preparation confirmed the benefits of the sub-projects: (a) there is consensus in the public at large about the need for the sub-projects in the proposed sites (excluding E. Echeverría where a group of neighbors is against the proposed 126 alternative for the project); (b) a first set of specific recommendations for the sub-projects location and design have been obtained from meetings; (c) property owners whose accessibility to their houses or to their economic activities would be permanently diminished have found a mechanism to start a dialogue with the municipalities to reach different mitigations measures (see social safeguards section); and (d) a sense of ownership is being achieved both with the neighborhoods and the municipal institutions. Reports on the consultation meetings are available in the project files and have been disclosed together with the Environmental Assessment packages. Disclosure of Environmental Information 43. During the implementation of PTUBA project, an important degree of public interest was focused on the progress of the project and the results of consultation activities. The PIU and the participating municipalities will work together to ensure close collaboration related to public disclosure of environmental reports and data throughout the life of the project. The PIU has already established a public website (http://ptuba.gov.ar/ ) where environmental assessment reports and other information are already available. Institutional Arrangements and Budget 44. The following chart summarizes the roles and responsibilities for environmental management during preparation and supervision of sub-projects. Table A10-4: Institutional Arrangements for Safeguards Management Task Responsibility Screening of the sub-projects/works Municipalities Review of the screening PIU Environmental Impact Assessment PIU and Municipalities Inclusion of the Manual (ESMM) in the Contract Clauses PIU Application of the Manual (ESMM) in the Contract Contractors Clauses Supervision of the sub-projects/works PIU and Municipalities Public Consultation and Communication Municipalities and PIU 45. The implementation costs of the environmental and social measures will be part of the overall contract costs. The Borrower has already assigned enough resources for environmental management for each sub-project. 46. The PIU will assign expert staff/specialists to ensure implementation of the environmental and social measures and activities, coordinate activities with the municipalities and other stakeholders and supervise compliance by the contractors. 127 Environmental Training Activities 47. During project implementation, the PIU will carry out workshops to train staff from municipalities of medium size Metropolitan Areas and AMBA. The main objective will be to keep on involving the municipalities in the process and enhance their understanding and skills in relation to the environmental and social aspects of the project. The Bank's Safeguard policies will be presented and discussed. Institutional Capacity Assessment 48. The proposed executing agency has already been exposed to Bank safeguard policies. The Borrower will be the Argentine Republic, and the Executing Agency will be the PIU of the Secretariat of Transport, which will play the same management and coordination role as for the ongoing operation, the "Urban Transport Project for Buenos Aires" - PTUBA (Loan 4363-AR and AF Loan 7442-AR) and for the GEF Regional Project "Sustainable Transport and Air Quality Program" (P114008). In addition, participating Municipalities will be encouraged to form counterpart teams who will lead the local level institutional development efforts as well as to form the core technical team where appropriate. 49. Through the above mentioned operations, the PIU, as well as the sub-national counterparts, have been exposed to the Bank safeguard policies and are now familiar with them. The team in the PIU has hired an Environmental Specialist who has been the liaison with the other Metropolitan Areas to compile environmental information. However, given that this proposed project represents an expansion and additional work, an additional Environmental Specialist with technical background will be incorporated to ensure good quality in project supervision. Expertise in social issues will be also incorporated. Implementing agencies involved with sub-projects will also include relevant expertise both on environmental and social issues. This has already been achieved in the cities of Mendoza and Tucumán, where the Bank's team could appreciate the good technical capacity already existing at local level, including an Environmental Specialist for Mendoza and an Environmental Specialist and Social Specialist for Tucumán . 50. In addition, the PIU has experience in the use of environmental management plans. During preparation of the additional financing for PTUBA, the team prepared a Manual for Environmental and Social Management (ESMM), dated February 12, 2007. This Manual was considered as acceptable to the Bank, and it was disclosed at http://ptuba.gov.ar/Componentes/Componentes.htm. Given that the nature and scope of proposed activities and sub-projects are similar to those financed by the PTUBA project, the proposed project has applied the guiding principles of this Manual on those that have been prepared by the participating cities for the recently approved GEF project. 51. A coordination strategy was developed to ensure that all participating sub-national entities were enabled to use the ESMMs. In particular, and as a first step, the PIU conducted an updated survey to assess institutional capacities in the cities of Mendoza, Tucumán and Posadas. A template for this survey is included in the above mentioned Manual for PTUBA. Based on the findings of these surveys, the project team will determine the strengthening needs in terms of environmental and social management in each sub-national counterpart and propose specific activities tailored for each city team. 128 52. Specific activities to strengthen the capacity of PTUBA and the municipalities regarding environmental and social management and supervision will be included in the project. In principle, the surveys already received have produced the following outcomes: (i) Metropolitan Area of Mendoza: Colector Papagayo. The survey determined strengthening needs to implement the project environmental framework, and to clarify the roles and responsibilities of local participating agencies, at the moment of the signature of the agreement between the Secretariat of Transport and the Municipality. (ii) Metropolitan Area of Posadas: Avenue Uruguay. The counterpart for the national project will be the Provincial Transport Secretariat which will be supported by a Provincial Executing Agency. Although the survey confirms this provincial executing agency has qualified staff who have been working with projects for the last six years, it still needs to determine their concrete experience in projects of this nature. At the same, the Municipality of Posadas will be directly involved in environmental issues related to pollution and green area maintenance in the city. In addition the Secretary of Public Works for that municipality will be developing its environmental management procedures. The survey has determined strengthening needs to implement the project's environmental framework, and to clarify the roles and responsibilities of local participating agencies. These will be defined at the moment of the agreement between the Secretariat of Transport and the Municipality. (iii) Metropolitan Area of Tucumán: involving Barrio 11 de Marzo. The counterpart has clearly stated in the survey that the municipality has no EA procedures or consultation mechanism. The award of environmental licenses to projects is provided by an intersectoral provincial council. However, there is an Environmental Unit in the local municipality which can provide support for sub- project monitoring. The survey has determined strengthening needs to implement the project environmental framework, and to clarify the roles and responsibilities of local participating agencies, at the moment of the agreement between the Secretariat of Transport and the Municipality. (iv) Station Accessibility: This sub-component contains little environmental complexity, therefore the capacity required to monitor the execution of minor works is limited. However, the PIU and the participating municipalities will need to improve their capacity to conduct field-based expedite EA. (v) Esteban Echeverría grade-separated crossing. This project was appraised in the PTUBA AF loan. The institutional capacities of the Municipality have not been re-assessed. Strengthening needs will be addressed during implementation to ensure the project environmental framework and to clarify the roles and responsibilities of local participating agencies, at the moment of subsidiary agreements signature. Environmental and Social Management Manual 53. This loan builds on the work already carried out under other previous and ongoing projects in the urban transport sector in Argentina and on having a coordinated approach for addressing environmental issues in different sub-projects across various municipalities. 129 Based on the experience during the implementation of PTUBA project preparation, the same ESMM will be adopted by this proposed project, and will be implemented by each participating municipality. 54. An ESMM is already available for each participating municipality. These are fully consistent with the Environmental Management Plans required for the proposed activities. Specific EMPs will respond to the guidelines and contents included in these Manuals and will be prepared by Contractors for all sub-projects identified during project implementation. The ESMM contains: (i) Institutional and regulatory framework of AMBA, medium size Metropolitan Areas and the Bank's safeguard policies; (ii) Explanation of the screening process during project preparation and main impacts identified; (iii) Responsibilities of involved actors; (iv) Manual with measures and procedures to mitigate, prevent and manage environmental and social impacts associated with proposed works financed by the project; (v) A public consultation guide; (vi) Grievance procedures; and (vii) A Resettlement Framework. 55. The ESMM includes specific measures of environmental management for activities directly and indirectly related to this phase such as: design guidelines to minimize impacts, removal of vegetation and required arborization, management of traffic, selection of camp sites, asphalt plants, machinery, qualification of personnel, the required inputs to carry out proposed work, soil movement, crossings of water channels, civil works in general, fuel storage, pesticides, paintings and grease removers, handling and disposition of solid and liquid waste, etc., and abandonment phase. 56. The ESMM also includes measures required for handling activities directly and indirectly related to maintenance and operation, including: road zone cleaning, pothole and shoulder repairing, sealing of pavement fissures and asphalt shoulders, repairing potholes in pavements and shoulders of superficial treatment, maintenance of horizontal signaling, etc. 57. As part of the ESMM, a Public Consultation Guide has been prepared to ensure close involvement of relevant stakeholders during all project phases (design, construction and operation). It is expected that the guide will allow a more accurate identification of possible, negative and positive, effects of the sub-projects, related to the population and their activities. It will also allow for improvements in the ESMM for prevention, mitigation and compensation of negative impacts and promote community participation and ownership. 130 Social Assessment Background: Social Problems Related to Urban Transport 58. Social problems related to transport in Argentine urban areas have a number of common raison d'être, including limitations in urban planning and management, lack of investments in transport infrastructure, and a rapid motorization. The main impacts include the increase in road accidents, traffic congestion, increasing travel times and waiting times for drivers and passengers, disturbances for pedestrians and residents, personal insecurity, and poor accessibility to public service facilities. 59. The works in the PTUMA sub-components will address some urban transport problems, as described below: a) Sub-component 3.2 Station Accessibility: The poorest areas of Buenos Aires are located in the districts around the Federal Capital, in the AMBA. Millions of low- income individuals commute by train daily to the Capital, through precarious suburban railway stations. Most of these stations have inadequate access, lack pavements, lighting; sidewalks and green areas are in poor condition, and are occupied in some cases by street vendors. Moreover, bus stops around stations contribute to a disordered intermodal dynamic. b) Sub-component 2.1 Metropolitan Area of Mendoza: The west-east connection in Mendoza is hindered by the lack of adequate roads. As a result, pedestrians, car and bus passengers take longer and congested routes to travel in that direction. Barrio San Martin is a low-income settlement severely affected by this lack of accessibility. Public and private transport must circulate by insufficient and deficient routes, leading to longer travelling time, fewer frequencies and worse transport services. In addition to the Barrio San Martin blockade, the daily connection of residents with schools and places of work has recently been cut off by the extension of a wall surrounding an airport, across the only west-east road in the area. Since then, Barrio San Martin residents have had to go down and up the Colector to walk along its base and cross the barrier set up by the wall, being exposed to accidents and vandalism. Public transport access to Barrio San Martin is limited to the east, meaning useless extra rides. c) Sub-component 2.2 Metropolitan Area of Posadas: This metropolitan area of Posadas had an increase of 33% in the last inter ­ census period. The rapid population growth was accompanied by a substantial increase of vehicles. Ave. Uruguay, the main link between the Posadas city centre and densely populated areas in the southern districts, is not prepared for a fast bus service. It is a commercial route, with industrial and car supply stores, and buyers are accustomed to park at store entrances. Parked cars and drivers traveling slowly while looking for goods interfere with bus services, resulting in delays and discomfort for bus users. The disorder of road traffic on Ave. Uruguay is accompanied by a chaotic urban landscape, brought about by an unregulated location of banners. d) Sub-component 2.3 Metropolitan Area of Tucumán: Barrio 11 de Marzo is one of the lowest income areas in San Miguel de Tucuman, with 24% of its population with unmet basic needs (NBI). The lack of pavements and sidewalks in the 131 neighborhood limits the availability and quality of bus services, taxis, bicycle or any type of access and circulation within Barrio 11 de Marzo. As a result, the Barrio's residents have fewer opportunities to access work, basic services (health, education and recreation), and commercial areas. The health centers and school workers in the Barrio have difficulties in reaching their workplaces on rainy days. Muddy roads discourage work and school attendance overall. In addition, the restrictions imposed limit the access of garbage collectors, police cars, ambulances, fire trucks, and providers in general. e) Sub-component 3.3 Esteban Echeverría grade-separated crossing: Urban growth in many districts of the AMBA transformed small suburban railway stations into intermodal nodes used by thousands of passengers, surrounded by overcrowded commercial areas. Frequent bottlenecks at a critical railroad intersection crossing result in long waiting times. 60. Differential Impact of Problems: The mentioned problems impact differently on road users (including public and private transport users) and residents, depending on social class, gender, age, and role in the street. In the case of road users, vulnerable groups usually travel by public buses along some of the congested roads, having less opportunity to select alternative routes. Vulnerable groups usually reside in inadequate dwellings in less serviced areas, without paved roads, sidewalks and traffic signs, with limited accessibility, far away from main ´laces of work and good quality educational and health establishments. On rainy days, muddy roads hinder the ability to provide services from trucks, heavy machines or buses, such as garbage collection, cesspits disposal collection, public transport (buses and taxis). Personnel who work in schools and health centers are also reluctant to get to their work places within unpaved areas. 61. In the case of gender, low income housewives are more affected because the obstacles to their daily activities in those areas. Male breadwinners must usually suffer longer travel and waiting times to/from work. In terms of road safety, children, the elderly and the disabled are most exposed to risks because of their mobility limitations. Proposed Sub-projects from a Social Perspective: 62. All the proposed sub-projects seek to improve some of the above described problems related to urban transport. The proposed intervention in each sub-project, however, addresses context-specific problems, described as follows: a) Sub-component 3.2 Station Accessibility: Accessibility improvements to suburban railway stations in the Buenos Aires Metropolitan Area: consists of small scale urban upgrading interventions in pavements, sidewalks, lighting; construction of bike parking areas, etc. b) Sub-component 2.1 Metropolitan Area of Mendoza The construction of the Colector Papagayos road will connect Barrio San Martin with the surrounding areas. Barrio San Martin disconnection from surrounding areas, provoked by the barrier set up by Colector Papagayos in the south and west of the Barrio, has been recently exacerbated by the construction of a wall alongside an airport at the western boundary of the Barrio, which cut-off connection to schools and workplaces in the 132 west of Mendoza. With the proposed project, public transport will improve its services, and walking, bicycle, car and bus connections will be improved. c) Sub-component 2.2 Metropolitan Area of Posadas: The construction of a Bus Rapid Transit system on Ave. Uruguay and the redefinition of De Haro and Radomacher Avenues seeks to improve flows of public transport between the center of Posadas and the southern districts of the metropolitan area. d) Sub-component 2.3 Metropolitan Area of Tucumán: This sub-project will improve the accessibility to public urban transport in San Miguel de Tucumán Metropolitan Area. The paving and improvement of sidewalks for 3400m of roads in Barrio 11 de Marzo will enable full access to public transport and other services to the area, resulting in urban social integration with the rest of the city. e) Sub-component 3.3 Grade separated crossings: A grade-separated crossing will end frequent bottlenecks at a critical railroad intersection crossing in the Buenos Aires Metropolitan Region. Social Assessment: 63. Social assessments of the preliminary design of each sub-project are being undertaken during Project preparation in order to identify problems and design appropriate solutions. Concerning social issues, the adopted methodology to carry out the social assessment included socio-environmental screenings and an expedite EIA, prepared on the basis of the Environmental and Social Management Manual (ESMM). The studies were complemented with dissemination activities, which consisted of a workshop in each locality where a sub-project was being prepared, where local and PTUMA authorities, consultants, and other stakeholders participated. 64. The assessments identified social aspects that could be positively or negatively affected by each sub-project, generating opportunities and social risks for Project implementation. Also, they identified context specific issues that could affect the Project. The opportunities and risks identified were taken into account in order to improve the social benefits and incorporate changes and risk-management measures into Project design. 65. Positive Social Impacts: The Project is expected to have positive impacts on the living standards of population as it is aimed at improving physical access to and quality of public transport, improving sidewalks, paving roads, adding lighting and urban furniture. 66. The social assessment suggested that the majority of stakeholders were in favor of the Project, considering that it contributes to resolve many transport problems, resulting in an increase of connection, reduction of accidents, health disorders, waiting and travel times, and urban interferences. Low income and vulnerable groups will capture most of the benefits of the projects, given the emphasis on upgrading public transport and improving access to low income areas. Other positive social impacts identified during the consultation process were: (i) the generation of jobs by the construction and maintenance works, and indirectly, by the contribution to commerce; (ii) the revaluation of land and buildings from the improvement of urban settings. 67. Negative Social Impacts The inhabitants of the neighborhoods where the works will be built will face some temporary negative impacts during the construction phase, such as noise, dust and traffic disruption. These social impacts are related to the environmental 133 management of the construction of the works and will be addressed through the Environmental and Social Management Manual. 68. A group of neighbors opposed the technical proposal in Esteban Echeverría. Further studies were commissioned, which assessed alternative projects submitted by those neighbors, concluding that fewer negative impacts result from the original proposal. In Posadas, shop owners expressed concern about the reduction of parking areas for their clients. This project was reviewed and parking areas were incorporated, in order to address this concern. 69. Consultation and Disclosure Process: The consultation and disclosure process was launched at the preliminary design stage in order to have early feedback for nurturing project improvement. It has been agreed with the Borrower to continue and deepen the consultation process after loan approval, including (i) the dissemination of project information prior to consultation activities; (ii) the presentation of potential negative impacts and measures to cope with them; (iii) an agreed mechanisms for following up recommendations. 70. The activities carried out for the presentation of each preliminary project resulted in important contributions for project improvement, as detailed below: a) Sub-component 2.1 Metropolitan Area of Mendoza: some 20 people, including representatives of local organizations attended a workshop at which a preliminary project was presented. The meeting helped PPI to realize the alternative of splitting the project on both sides of the Colector and connecting them with a bridge, in order to keep the wall set up by the airport, was unviable. Barrio San Martin´s inhabitants confirmed they need a direct connection to schools and workplaces in the west of the city. b) Sub-component 2.2 Metropolitan Area of Posadas: overall satisfaction was expressed by most of those attending a workshop at which a preliminary project was presented. The meeting made it possible to determine the concern by Ave. Uruguay's store owners regarding parking restrictions on this avenue at the entrance to their stores. Sisters from San Basilio school expressed concern about the switch from two-way to one way traffic on Ave. Radomacher and the potential increase of traffic speed and accidents. As a result of this consultation, the PPI incorporated new parking areas on Ave. Uruguay, and road safety will be improved through the installation of traffic lights on Ave. Radomacher. c) Sub-component 2.3 Metropolitan Area of Tucumán: More than 300 people attended a workshop at which significant support for the project was manifested. d) Sub-component 3.3 Esteban Echeverría grade-separated crossing: Two workshops and public information stands were arranged. Given the objections by a group of neighbours to the technical design, it was reviewed by means of a new environmental and social study, which considered alternative options proposed by the mentioned group. Involuntary Resettlement: 134 71. Most of the civil works under the project will follow the alignments of existing roads and rights-of-way, reducing the likelihood of involuntary displacements. However, given that all projects at this stage are at preliminary design level and that final designs will be completed prior to the bidding of works, a Resettlement Policy Framework (RPF) was prepared to cover all project sub-projects, and is part of the ESMM. The RPF will be applied where physical and/or economic displacements occur. The RFP provides an umbrella framework for all the project, but the specific details of each sub-project are as follows: a) Sub-component 2.1 Metropolitan Area of Mendoza: The alignment of Colector Papagayos partially affects a property, requiring an Abbreviated Resettlement Plan. The affected property is a plot belonging to a gated neighborhood (`Dalvian'), where there is warehouse and a water tank with a pumping station to provide water to Dalvian. b) Sub-component 2.3 Metropolitan Area of Tucumán: Despite there being fences that invade sidewalks from residential properties, no property is going to be affected. Through the design of sidewalks and streets with variable width, the invasion of public space will be absorbed. The Borrower is committed together with the Municipal Government to avoid affecting properties in any way while this sub- project is constructed. c) Sub-component 2.2 Metropolitan Area of Posadas: The construction of a segregated busway on Avenida Uruguay will not result in changes in sidewalks or affect residents or shop-owners. d) Sub-component 3.2 Station Accessibility: This is largely a demand-based sub- project, so at this stage the final project locations or designs of the sub-projects are not completed, therefore a RFP compliant with OP/BP4.12 has been prepared to guide future actions regarding resettlement. f) Sub-component 3.3 Grade separated crossings: The Esteban Echeverría grade- separated crossing will be built on a public space around Monte Grande railway station. Replacement of affected community infrastructure has been included in the project. 72. The table below summarizes the identified impacts and compensation measures related to social safeguards: 135 Table A10-5: Impacts on Land, Housing, Community Infrastructure and Livelihood (OP 4.12) and Cultural Property (OP 4.11) Location Impact Compensation according OP 4.12/ 4.11 AMBA Land: no land affected NA (Railway stations) Housing: no housing and no residents affected. NA Community Infrastructure: paving, roads crossings, bus stops, bike parking facilities, Replacement and/or improvement signalization, illumination, urban furniture, of affected community sidewalks, ramps for disabled people, etc. to be infrastructure adapted to the improvements of accesses to railway stations. Livelihood: displacement of street vendors Assistance for relocation and restitution of livelihood Mendoza city Land: The project will affect partially one Expropriation and compensation private plot, used for storage of building to be determined through an material and tools Abbreviated Resettlement Plan. Housing: No housing and no residents affected NA Community Infrastructure: a borehole and Displacement of water facilities to pumping facilities will be affected in the private replace existing premises plot. (Abbreviated Resettlement Plan). Livelihood: no livelihood affected (TBD) NA Posadas Land: no land affected NA Housing: No housing and no residents affected NA Community infrastructure: bus stops, Replacement and/or improvement signalization, illumination, urban furniture, of affected community sidewalks, ramps for disabled people, etc to be infrastructure adapted to the new design. Livelihood: Ave. Uruguay's shop owners The project has already included expressed concern over restrictions on parking new parking sites. in front of their stores. Banners suspended over sidewalks and streets Banners will be relocated along will be removed the municipal line. Tucumán city Land: no land affected NA Housing: fences occupying sidewalks will be The project will be adjusted to maintained. absorb public space invasion. Community infrastructure: bus stops, Replacement and/or improvement signalization, illumination, urban furniture, of affected community sidewalks, ramps for disabled people, etc. to be infrastructure adapted to the new design. Livelihood: no livelihood affected NA Esteban Land: no land affected NA Echeverría Housing: no housing and no residents affected NA Community infrastructure: public square with Replacement and/or relocation of cultural properties (monuments, building, trees) affected community will be affected infrastructure, according OP 4. 11 Livelihood: no livelihood affected NA 136 Mechanisms for Mediation, Conflict Resolution, and Redress: 73. Complaints related to the Project can be submitted using internal and external instances. Any individual can submit an administrative claim before the PIU, depending on the nature of the claim, or by the mechanisms provided by the Administrative Procedures Law. Alternatively, people can directly claim before the provincial or national ombudsmen, and file "amparo" claims (restraining orders) before local, provincial or national courts. 137 ANNEX 11. PROJECT PREPARATION AND SUPERVISION ARGENTINA: Metropolitan Areas Urban Transport Project 1. Dates of project preparation and supervision (mm/yyyy): Table A11-1: Project Preparation and Supervision Planned Actual PCN review 12/2008 12/2008 Initial PID to PIC 01/2009 01/2009 Initial ISDS to PIC 01/2009 01/2009 Appraisal 08/2009 09/2009 Negotiations 09/2009 09/2009 Board/RVP approval 10/2009 Planned date of effectiveness 03/2010 Planned date of mid-term review 03/2012 Planned closing date 03/2015 2. Key institution(s) responsible for preparation of the project: Secretariat of Transport, World Bank staff and consultants. 3. Bank staff and consultants who worked on the project included: Table A11-2: Project Team Name Title Unit Andres Pizarro Senior Transport Specialist, TTL LCSTR Verónica Raffo Infrastructure Specialist LCSTR Carlos Mojica Junior Professional Associate LCSTR Marcelo Acerbi Environmental Specialist LCSEN Glenn Morgan Lead Environmental Specialist LCSEN Estanislao Gacitua-Mario Senior Social Specialist LCSSO Ana Grofsmacht Procurement Specialist LCSPT Natalia Bavio Financial Management Specialist LCSFM Ricardo Schusterman Social Specialist LCSSO Reynaldo Pastor Senior Counsel LEGLA Jose Janeiro Disbursement Officer LCSPO Maria Emilia Sparks Team Assistant LCC7C Ana Kuschnir Team Assistant LCC7C Geise Santos Team Assistant LCSTR Pierre Graftieaux Sr. Transport Specialist, Peer Reviewer AFTTR Shomik Raj Mehndiratta Sr.Transport Specialist, Peer Reviewer EASCS Juan Gaviria Sector Leader, Peer Reviewer AFTTR Mauricio Cuellar Sr. Transport Specialist, QER Peer Reviewer LCSTR Alan Carroll Country Operations Adviser, QER Peer Reviewer LCC3C 4. Bank funds expended to date on project preparation: Bank resources: US$ 275,444 Trust funds: 0 Total: US$ 275,444 5. Estimated Approval and Supervision costs: Remaining costs to approval: US$30,000 138 Estimated annual supervision cost: US$100,000/year ANNEX 12. DOCUMENTS IN THE PROJECT FILE ARGENTINA: Metropolitan Areas Urban Transport Project Project Documents Project Concept Note Project Information Document Concept Stage Integrated Safeguards Data Sheet Concept Stage Decision Notes of the PCN Review Meeting Project Information Document Appraisal Stage Integrated Safeguards Data Sheet Concept Stage Decision Notes of the Decision Meeting Project Reports and Studies Agosta, Roberto D. 2000. Pobreza y Transporte en Buenos Aires. Agosta, Roberto & Orduna, M. Abril 2009. Estudio de la Relación entre el Estado Nacional y las Ciudades del Interior de la Republica Argentina en Materia de Planeamiento Urbano y del Transporte Urbano. Banco Mundial. 1997. Metodología para realizar Estudios de Impacto Ambiental en Proyectos de cruces a distinto nivel en el Área Metropolitana de Buenos Aires. Brunstein, Fernando, Pedersen, Lilian, Rodríguez, Francisco. 2007. Manual de Manejo Ambiental y Social. Programa de Transporte Urbano de Buenos Aires (PTUBA) - 4163- AR. Brunstein, Fernando José. 2006. Proyecto paso a desnivel junto a Estación Carupá (municipios de San Fernando y Tigre). Impactos sobre funcionamiento de Estación de Carga de GNC. Brunstein, Fernando José. 1998. Informe complementario del Estudio de Impacto Ambiental y Asesoramiento al Municipio para la Consulta Comunitaria. Municipio de Avellaneda. Grimaux Oscar G. y Asociados S.A.T. Consultoría. 2009. Eje de Vinculación Colector Papagayos. Informe Preliminar, de Factibilidad. Documentación Ambiental. Mendoza. Grupo de Trabajo para la Planificación del Transporte Urbano del Área Metropolitana de Buenos Aires, Secretaria de Transporte. 1999. Caracterización de la situación actual y diagnóstico de tránsito y transporte. Hurlingham. Grupo de Trabajo para la Planificación del Transporte Urbano del Área Metropolitana de Buenos Aires, Secretaria de Transporte. 1999. Caracterización de la Operación en los Centros de Transbordo de Rubén Darío y Hurlingham. Poder Ciudadano. 1999. Informe Audiencia Pública proyecto Construcción Puente de la Serna Avellaneda. 139 Pricewaterhouse Coopers. 2001. Conversion of Railway Lines for Suburban Passenger Service. Pupareli, Silvia. 2000. Estudio Redes para la Circulación No Motorizada en Comunas del AMBA, Informe Ejecutivo, Informe de Avance. Secretaria de Transporte. 2000. Principales Indicadores de Actividad del Sector Transporte. Secretaria de Transporte. 2000. Estudio de Factibilidad Sistema Cruces a Distinto Nivel Corredor Ferroviario Bandfiel-Temperley, Municipio de Lomas de Zamora. Secretaría de Transporte. 2008. Manual Operativo y de Gestión actualizado del Préstamo BIRF N°4163-AR y del Financiamiento Adicional Préstamo BIRF Nº7442-AR. UTE Electrowatt Engineering S.A. IATASA. Latinoconsult S.A. 2001. Sistema Ferroviario Subterráneo de Buenos Aires, Modernización de la Línea A. UTE DE - Consult ­ Grimaux ­ Setepla. 2001. Asistencia Técnica para el Centro de Trasbordo de Moreno. Evaluación de Impacto Ambiental. UTE DE - Consult ­ Grimaux ­ Setepla. 2001. Asistencia Técnica para el Centro de Trasbordo de Moreno. Evaluación Económica y Prefactibilidad Financiera. UTE WS ATKINS International Limited Steer Davies & Gleave Limited (CASETRAM). 2000. Estudio Integral de Transporte Urbano de Buenos Aires. Funes, Carlos. 2006. Ciudad de Córdoba: Análisis de Movilidad y Pobreza. Municipalidad de Córdoba. 2007. Manual de Manejo Ambiental y Social. Municipalidad de la Ciudad de Mendoza. 2006. Componentes Generales. Municipalidad de la Ciudad de Mendoza. 2008. Proyecto Colector Papagayos. Documento de Categorización Ambiental y Social. Municipalidad de San Miguel de Tucumán. 2008. Análisis socioeconómico y de accesibilidad para la remodelación integral del transporte urbano de pasajeros en San Miguel de Tucumán y su Área Metropolitana. Municipalidad de San Miguel de Tucumán. 2008. Mejora de la Accesibilidad al Transporte Urbano de Pasajeros en San Miguel de Tucumán y su Área Metropolitana. Subprograma de Obras: Barrio 11 de Marzo ­ Corredor Central Sur. Municipalidad de Posadas. 2008. Sistema Integrado de Transporte Metropolitano de la Ciudad de Posadas, Misiones. Propuesta Preliminar de Obras y Estudios del Sector Transporte. Municipalidad de Posadas. 2008. Sistema Integrado de Transporte Metropolitano de la Ciudad de Posadas, Misiones. Obra de intervención sobre la Avenue Uruguay. Análisis Ambiental de Mejoras en Estaciones de Tren. Criterios de Muestreo y Muestra de Proyectos del AMBA. http://www.ptuma.gov.ar/ 140 References Estupinan, Nicolas & Gomez-Lobo, Andres & Munoz-Raskin, Ramon & Serebrisky,Tomas, 2007. "Affordability and subsidies in public urban transport : what do we mean, what can be done?," Policy Research Working Paper Series 4440, The World Bank. Foster Vivien. 2004. "Toward a Social Policy for Argentina's Infrastructure Sectors: Evaluating the Past and Exploring the Future, (World Bank Policy Research Working Paper 3422, October 2004) Quintero, Juan D. et al. 2003. Guía para la Categorización y definición de Requerimientos para la Evaluación Ambiental y Social de Proyectos Viales. Aplicación de las Políticas de Salvaguarda del Banco Mundial. WB, Washington D.C Vuchic, Vukan R. 2005 Urban transit: operations, planning and economics. Wiley, New York, 1 edition 141 ANNEX 13. STATEMENT OF LOANS AND CREDITS ARGENTINA: Metropolitan Areas Urban Transport Project Table A13-1: IBRD's Portfolio Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev'd P115183 2009 AR Basic Protection Project 450.00 0.00 0.00 0.00 0.00 179.14 -45.40 0.00 P110462 2009 AR Mining Environmental Restoration 30.00 0.00 0.00 0.00 0.00 30.00 0.00 0.00 Proj P106752 2009 AR Unleashing Productive Innovation 150.00 0.00 0.00 0.00 0.00 141.12 -8.51 0.00 P106684 2009 AR 2nd Prov Agric Dev 300.00 0.00 0.00 0.00 0.00 289.25 12.28 0.00 P105680 2009 AR(APL1) Matanza-Riachuelo 840.00 0.00 0.00 0.00 0.00 840.00 0.00 0.00 Development P101171 2009 AR SOC&FISC NTL ID SYS II 20.00 0.00 0.00 0.00 0.00 17.94 3.12 0.00 P100806 2008 AR Sustainable Natural Res Mgt 60.00 0.00 0.00 0.00 0.00 58.90 10.05 0.00 P101170 2007 AR 2nd State Modernization 20.00 0.00 0.00 0.00 0.00 14.14 6.68 0.00 P105288 2007 AR APL2 Buenos Aires Infrastructure 270.00 0.00 0.00 0.00 0.00 229.40 45.74 0.00 P099585 2007 AR-Cordoba-Road Infrastructure 75.00 0.00 0.00 0.00 0.00 25.43 21.77 0.00 P099051 2007 AR- SANTA FE ROAD Infrastructure 126.70 0.00 0.00 0.00 0.00 84.59 38.20 56.20 P095569 2007 AR APL2 National Highway Asset Mgt 400.00 0.00 0.00 0.00 0.00 337.00 273.00 -13.97 P095515 2007 AR (APL2) Prov Maternal-Child Health 300.00 0.00 0.00 0.00 0.00 231.94 104.54 0.00 P095514 2007 AR Lifelong Learning Project 200.00 0.00 0.00 0.00 0.00 167.67 27.67 0.00 P090993 2007 AR-Essential Public Health Functions 220.00 0.00 0.00 0.00 0.00 109.29 30.16 0.00 P093491 2006 AR (APL2)Urban Flood Prev.&Drainage 70.00 0.00 0.00 0.00 0.00 64.46 64.63 0.00 P092836 2006 AR Inst. Strengthening - ANSES II TA 25.00 0.00 0.00 0.00 0.00 18.19 13.86 0.00 P089926 2006 AR Solid Waste Management Project 40.00 0.00 0.00 0.00 0.00 36.32 26.06 0.00 P070963 2006 AR Rural Education Improvement Project 150.00 0.00 0.00 0.00 0.00 110.69 82.83 -39.16 P060484 2006 AR Basic Municipal Services Project 110.00 0.00 0.00 0.00 0.00 96.31 47.12 0.00 P070448 2006 AR Subnational Gov Public Sec 40.00 0.00 0.00 0.00 0.00 35.58 28.26 0.00 Modernizat P070628 2005 AR-Provincial Road InfrastructureProject 150.00 0.00 0.00 0.00 0.00 86.58 71.01 -8.26 P088032 2005 AR(CRL1)Buenos Aires Infrastr 200.00 0.00 0.00 0.00 0.00 29.18 29.18 0.00 SIDP(1APL) P088220 2005 AR (APL1)Urban Flood Preven&Drainage 130.00 0.00 0.00 0.00 0.00 112.63 108.18 0.00 P071025 2004 AR-Provincial Maternal-Child Hlth Inv Ln 135.80 0.00 0.00 0.00 0.00 13.26 13.26 0.00 P088153 2004 AR National Highway Asset Management 200.00 0.00 0.00 0.00 0.00 12.15 12.15 0.00 P006043 1999 AR RENEW.ENERGY R.MKTS 80.00 0.00 0.00 0.00 0.00 52.16 2.16 0.74 P006041 1998 AR SMALL FARMER DV. 120.00 0.00 0.00 0.00 0.00 38.11 -6.89 -6.89 P039584 1997 AR B.A.URB.TSP 300.00 0.00 0.00 0.00 0.00 75.50 -24.50 -24.50 P006010 1997 AR PROV AG DEVT I 162.00 0.00 0.00 0.00 0.00 20.04 -16.87 20.13 Total: 5,374.50 0.00 0.00 0.00 0.00 3,556.97 969.74 - 15.71 142 ARGENTINA STATEMENT OF IFC's Held and Disbursed Portfolio In Millions of US Dollars Table A13-2: IFC's Portfolio Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2000 ASF 3.76 0.00 0.00 3.85 3.76 0.00 0.00 3.85 1998 AUTCL 4.28 0.00 0.00 0.00 4.28 0.00 0.00 0.00 2004 Aceitera General 50.00 0.00 20.00 30.00 50.00 0.00 20.00 30.00 2006 Arcor 70.00 0.00 0.00 210.00 70.00 0.00 0.00 210.00 2000 BACS 0.00 6.25 0.00 0.00 0.00 6.25 0.00 0.00 2006 BACS 50.00 0.00 0.00 0.00 13.25 0.00 0.00 0.00 1999 Banco Galicia 57.79 0.00 0.00 40.91 57.79 0.00 0.00 40.91 2005 Banco Galicia 40.00 0.00 0.00 0.00 5.00 0.00 0.00 0.00 1997 Bunge-Ceval 0.00 0.00 5.00 0.00 0.00 0.00 5.00 0.00 2006 CAPSA 50.00 0.00 0.00 20.00 50.00 0.00 0.00 20.00 1995 CEPA 3.00 0.00 0.00 1.20 3.00 0.00 0.00 1.20 1998 F.V. S.A. 1.50 0.00 4.00 0.00 1.50 0.00 4.00 0.00 Grupo Galicia 0.00 3.06 0.00 0.00 0.00 3.06 0.00 0.00 1998 Hospital Privado 8.40 0.00 0.00 0.00 8.40 0.00 0.00 0.00 1992 Huantraico 0.00 27.00 0.00 0.00 0.00 0.00 0.00 0.00 2004 Jumbo Argentina 0.00 39.12 0.00 0.00 0.00 39.12 0.00 0.00 LD Manufacturing 0.00 0.00 5.00 0.00 0.00 0.00 5.00 0.00 Milkaut 0.00 1.23 0.00 0.00 0.00 0.00 0.00 0.00 1997 Milkaut 5.33 0.00 9.44 1.44 5.33 0.00 9.44 1.44 1993 Molinos 0.00 2.00 0.00 0.00 0.00 2.00 0.00 0.00 1994 Molinos 0.00 0.57 0.00 0.00 0.00 0.57 0.00 0.00 1996 Neuquen Basin 0.00 26.40 0.00 0.00 0.00 0.00 0.00 0.00 1999 Neuquen Basin 0.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00 2006 Noble Argentina 18.00 0.00 0.00 18.00 15.00 0.00 0.00 15.00 2005 PAE - Argentine 105.50 0.00 15.00 135.00 103.53 0.00 15.00 135.00 1998 Patagonia 1.76 0.00 1.00 0.00 1.76 0.00 1.00 0.00 1998 Patagonia Fund 0.00 8.54 0.00 0.00 0.00 1.65 0.00 0.00 1999 S.A. San Miguel 2.76 0.00 0.00 0.00 2.76 0.00 0.00 0.00 2005 S.A. San Miguel 20.62 0.00 0.00 10.00 17.29 0.00 0.00 8.33 1995 SanCor 8.70 0.00 19.89 0.00 8.70 0.00 19.89 0.00 Socma 7.00 0.00 0.00 0.00 7.00 0.00 0.00 0.00 1995 Socma 0.94 0.00 0.00 15.00 0.94 0.00 0.00 15.00 1997 T6I 3.33 0.00 5.00 3.75 3.33 0.00 5.00 3.75 1997 Terminal 6 3.33 0.00 0.00 1.63 3.33 0.00 0.00 1.63 1995 Terminales Port. 0.50 0.00 0.00 0.00 0.50 0.00 0.00 0.00 2000 Tower Fund 0.00 0.85 0.00 0.00 0.00 0.00 0.00 0.00 1995 Tower Fund Mgr 0.00 0.05 0.00 0.00 0.00 0.05 0.00 0.00 1996 Transconor 4.20 0.00 0.00 157.58 4.20 0.00 0.00 157.58 2001 USAL 9.27 0.00 0.00 0.00 7.27 0.00 0.00 0.00 2005 Vicentin 20.00 0.00 15.00 0.00 0.00 0.00 15.00 0.00 1993 Yacylec 0.00 2.52 0.00 0.00 0.00 2.52 0.00 0.00 143 Total portfolio: 549.97 122.59 99.33 648.36 447.92 55.22 99.33 643.69 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 2001 ITBA 0.01 0.00 0.00 0.00 2001 Gasnor 0.02 0.00 0.00 0.02 2006 Arcor Swap 0.00 0.00 0.00 0.00 2004 Banco Rio TFF 0.02 0.00 0.00 0.05 2005 Vicentin Exp. 0.00 0.00 0.00 0.05 Total pending commitment: 0.05 0.00 0.00 0.12 144 ANNEX 14. COUNTRY AT A GLANCE ARGENTINA: Metropolitan Areas Urban Transport Argentina at a glance 9/24/08 La t in Uppe r- P O V E R T Y a nd S O C IA L A m e ric a m iddle - Development diamond* A rge nt ina & C a rib. inc o m e 2007 P o pulatio n, mid-year (millio ns) 39.5 563 823 Life expectancy GNI per capita (A tlas metho d, US$ ) 6,050 5,540 6,987 GNI (A tlas metho d, US$ billio ns) 238.9 1 3,1 8 5,750 A v e ra ge a nnua l gro wt h, 2 0 0 1- 0 7 P o pulatio n (%) 1.0 1.3 0.7 Labo r fo rce (%) 2.3 2.1 1.3 GNI Gross per primary M o s t re c e nt e s t im a t e ( la t e s t ye a r a v a ila ble , 2 0 0 1- 0 7 ) capita enrollment P o verty (% o f po pulatio n belo w natio nal po verty line) .. .. .. Urban po pulatio n (% o f to tal po pulatio n) 92 78 75 Life expectancy at birth (years) 75 73 71 Infant mo rtality (per 1,000 live births) 14 22 22 Child malnutritio n (% o f children under 5) 2 5 .. Access to improved water source A ccess to an impro ved water so urce (% o f po pulatio n) 96 91 95 Literacy (% o f po pulatio n age 1 5+) 97 90 93 Gro ss primary enro llment (% o f scho o l-age po pulatio n) 12 1 181 11 1 Argentina M ale 1 13 120 1 12 Upper-middle-income group Female 1 12 161 109 KE Y E C O N O M IC R A T IO S a nd LO N G - T E R M T R E N D S 19 8 7 19 9 7 2006 2007 Economic ratios* GDP (US$ billio ns) 1 .1 11 292.9 214.2 262.3 Gro ss capital fo rmatio n/GDP 19.6 19.4 23.5 .. Expo rts o f go o ds and services/GDP 7.9 10.5 24.7 .. Trade Gro ss do mestic savings/GDP 19.9 1 7.1 29.0 .. Gro ss natio nal savings/GDP .. 15.2 26.8 .. Current acco unt balance/GDP -3.8 -4.2 3.7 2.4 Interest payments/GDP 3.3 1.9 1.4 .. Domestic Capital savings formation To tal debt/GDP 52.6 43.8 57.0 .. To tal debt service/expo rts 74.3 49.9 32.0 .. P resent value o f debt/GDP .. .. 55.6 .. P resent value o f debt/expo rts .. .. 200.8 .. Indebtedness 19 8 7 - 9 7 19 9 7 - 0 7 2006 2007 2 0 0 7 - 11 (average annual gro wth) GDP 4.1 1.9 8.5 8.7 5.0 Argentina GDP per capita 2.7 0.9 7.4 7.6 4.0 Upper-middle-income group Expo rts o f go o ds and services 8.6 5.2 7.4 .. .. S T R UC T UR E o f t he E C O N O M Y 19 8 7 19 9 7 2006 2007 (% o f GDP ) A griculture 8.1 5.6 8.4 .. Industry 37.8 29.1 35.6 .. M anufacturing 27.5 19.5 22.3 .. Services 54.1 65.3 56.0 .. Ho useho ld final co nsumptio n expenditure 75.4 70.8 58.6 .. General go v't final co nsumptio n expenditure 4.7 12.1 12.4 .. Impo rts o f go o ds and services 7.6 12.8 19.2 .. 19 8 7 - 9 7 19 9 7 - 0 7 2006 2007 (average annual gro wth) A griculture 3.4 2.2 2.6 .. Industry 3.3 1.0 10.1 .. M anufacturing 2.8 0.7 8.9 .. Services 4.1 0.7 8.0 .. Ho useho ld final co nsumptio n expenditure .. 0.0 7.4 .. General go v't final co nsumptio n expenditure .. 0.8 5.2 .. Gro ss capital fo rmatio n 6.5 0.2 18.7 .. Impo rts o f go o ds and services 19.5 -1.9 15.2 .. No te: 2007 data are preliminary estimates. This table was pro duced fro m the Develo pment Eco no mics LDB database. * The diamo nds sho w fo ur key indicato rs in the co untry (in bo ld) co mpared with its inco me-gro up average. If data are missing, the diamo nd will Project be inco mplete. 145 Argentina P R IC E S a nd G O V E R N M E N T F IN A N C E 19 8 7 19 9 7 2006 2007 D o m e s t ic pric e s (% change) Co nsumer prices 169.2 0.3 9.8 8.6 Implicit GDP deflato r 127.1 -0.5 13.5 14.1 G o v e rnm e nt f ina nc e (% o f GDP , includes current grants) Current revenue 0.0 18.4 24.2 .. Current budget balance 0.0 -0.4 4.3 .. Overall surplus/deficit 0.0 -1.5 1.8 1.6 TRADE 19 8 7 19 9 7 2006 2007 (US$ millio ns) To tal expo rts (fo b) 8,934 26,431 46,569 52,238 Fo o d 744 3,007 2,964 .. M eat 655 1,025 ,61 1 0 .. M anufactures 3,661 8,335 14,801 .. To tal impo rts (cif) 5,820 30,450 34,1 59 43,700 Fo o d .. .. .. .. Fuel and energy 653 970 1,729 .. Capital go o ds 973 13,259 14,384 .. Expo rt price index (2000=100) 83 1 14 123 .. Impo rt price index (2000=100) 104 12 1 108 .. Terms o f trade (2000=1 00) 80 102 141 .. B A LA N C E o f P A Y M E N T S 19 8 7 19 9 7 2006 2007 (US$ millio ns) Expo rts o f go o ds and services 8,134 30,943 54,058 .. Impo rts o f go o ds and services 7,627 37,481 ,1 41 21 .. Reso urce balance 507 -6,538 12,937 .. Net inco me -4,738 -6,202 -5,456 .. Net current transfers .. .. .. .. Current acco unt balance -4,239 -12,224 7,997 6,246 Financing items (net) 2,070 8,951 1 -1 ,527 .. Changes in net reserves 2,169 3,273 3,530 .. M emo : Reserves including go ld (US$ millio ns) ,61 1 7 22,320 .. .. Co nversio n rate (DEC, lo cal/US$ ) 2.10E-4 1.0 3.1 3.1 E X T E R N A L D E B T a nd R E S O UR C E F LO WS 19 8 7 19 9 7 2006 2007 (US$ millio ns) To tal debt o utstanding and disbursed 58,458 28,1 1 56 22,1 1 90 .. IB RD 2,146 5,494 6,206 5,674 IDA 0 0 0 0 To tal debt service 6,244 8,1 1 92 18,994 .. IB RD 224 635 1,480 1,387 IDA 0 0 0 0 Co mpo sitio n o f net reso urce flo ws Official grants 5 37 47 .. Official credito rs 664 -69 -761 .. P rivate credito rs 939 8,765 2,51 5 .. Fo reign direct investment (net inflo ws) -19 9,160 4,840 .. P o rtfo lio equity (net inflo ws) 0 2,319 662 .. Wo rld B ank pro gram Co mmitments 639 1,221 960 ,1 1 84 Disbursements 795 797 459 505 P rincipal repayments 133 299 ,1 1 34 1,037 Net flo ws 662 498 -675 -532 Interest payments 91 335 346 350 Net transfers 571 162 -1,021 -882 No te: This table was pro duced fro m the Develo pment Eco no mics LDB database. 9/24/08 146 ANNEX 15: MAPS IBRD NOS. 37157, 37184, 37183 ARGENTINA: Metropolitan Areas Urban Transport Project 147 MAP SECTION IBRD 37157 BOLIVIA PA R AG BRAZIL ARGENTINA PACIFIC OCEAN UA Y San Miguel de Tucumán METROPOLITAN AREAS URBAN TRANSPORT PROJECT Posadas (for detail, see (for detail, see IBRD 37183) IBRD 37184) Cordoba NATIONAL CAPITAL Rosario URUGUAY POTENTIAL STATION IMPROVEMENT SITES MAIN ROADS CHILE Mendoza MUNICIPALITY BOUNDARIES (for detail, see main map) BUENOS PROJECT ROADS SUBURBAN RAIL LINES CONURBANO BONAERENSE AIRES (METROPOLITAN AREA OF BUENOS AIRES) This map was produced by the Map Design Unit of The World Bank. ARGENTINA The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. ATLANTIC OCEAN ROSARIO BUENOS AIRES EL NORTE-SUR BUENOS AIRES BUENOS AIRES ROSARIO 0 2 0 10 KILOMETERS KILOMETERS SEPTEMBER 2009 IBRD 37183 BOLIVIA PA R AG PACIFIC OCEAN BRAZIL UA Y ARGENTINA San Miguel de Tucumán METROPOLITAN AREAS URBAN TRANSPORT PROJECT Posadas (for detail, see (for detail, see main map) IBRD 37184) Cordoba Rosario URUGUAY PROJECT ROADS MAIN ROADS CHILE Mendoza (for detail, see IBRD 37157) BUENOS AIRES This map was produced by the Map Design Unit of The World Bank. ARGENTINA The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. ATLANTIC OCEAN SAN MIGUEL DE TUCUMÁN POSADAS ENCARNACIÓN POSADAS AVENIDA URUGUAY SAN MIGUEL DE TUCUMÁN RUGUAY U AVENIDA BARRIO 11 DE MARZO 0 2 0 2 KILOMETERS KILOMETERS SEPTEMBER 2009 IBRD 37184 BOLIVIA PA R AG BRAZIL ARGENTINA PACIFIC OCEAN UA Y San Miguel de Tucumán METROPOLITAN AREAS URBAN TRANSPORT PROJECT Posadas (for detail, see (for detail, see IBRD 37183) main map) Cordoba Rosario PROJECT LOCATIONS URUGUAY CHILE Mendoza (for detail, see PROJECT ROADS IBRD 37157) BUENOS AIRES MAIN ROADS This map was produced by the Map Design Unit of The World Bank. ARGENTINA The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. ATLANTIC OCEAN MENDOZA CORDOBA Colector Papagayos Estación Mitre R. Suquia M E N DOZ A CORDOBA Area of map Area of map 0 0.5 0 0.5 KILOMETERS KILOMETERS SEPTEMBER 2009