LIQ talks to Roberto Roy, Executive Secretary
1. The Metro de Panamá project is an appropriate reflection of the growth of Panama, what can you tell us about the economy and the main engines of growth?
Panama has shown the highest GDP growth in Latin America over the last years and has the largest GDP per capita in Central America.
This significant growth can be attributed to the dynamics of the following sectors: construction, mining, transportation, storage and communications, hotels and restaurants, water and electricity, commerce, private health, and financial services.
The public sector cannot be left aside this listing given that it plans to invest US$ 13.6 billion between 2010 and 2014. This number does not include the US$ 5,250 million for the expansion of the Panama Canal.
2. What is the status of public transportation in Panama City and how will the Metro improve it?
The problems with transport in Panama City are of a great magnitude and considerably affect the quality of life of the population. The majority of the city's inhabitants depend on public transportation to move around the city. Public transportation is currently slow, poorly organized and of low quality and the segment of the population that uses the car to move around experiences high congestion levels.
The Línea 1 of the Metro de Panamá is a project that materializes the transportation and urban planning efforts that have been carried out since the 90's by several administrations. While these efforts have not been linked, they have had the virtue of generating knowledge about urban and transportation problems.
As the majority of Latin American cities, the Metropolitan Area of Panama City has shown an uninterrupted increase in its motorization rate, which is associated with economic growth and the low quality of public transportation services.
The average length of commuting to work is of 70 minutes which is a relatively long time considering the size and population of Panama City. It is important to note as well that more than 50% of trips using public transportation involve one or more transfers.
The economy of the sectors with the lowest income is the one most severely affected. Their transportation-related expenses with respect to their income are three times higher than the average (16% against 4.6%). The overall perception of the service provided by public transportation is that it is getting worse with time. This perception is aggravated with the increasingly frequent tragic accidents.
The studies performed set forth the necessity to approach the urban mobility problem of Panama City through the development of an integrated transportation system, restructuring the bus service and adding mass transportation systems along the main city's corridors. Among the different technological alternatives that were analyzed for mass transportation systems were the light rail, buses for exclusive lanes and the monorail.
Accordingly, in 2009 the Secretariat for the Metro de Panamá, based on a preliminary demand study that confirmed that the axis San Isidro – Albrook should be the one to focus on, began the project that has materialized with the construction of the first line of the Metro.
The objective is the implementation of a Metro type high capacity component that is integrated physically and tariff-wise with the rest of the city's public transportation system and that improves the current urban mobility conditions affecting the Metropolitan Area of Panama City. The users and the overall population will be benefited through savings in the cost and time of each trip, an enhanced traffic-related safety and an improvement in environmental conditions.
The Línea 1 is the first stage of the Master Network of Mass Transport (Red Maestra de Transporte Masivo) which will be made of 4 Metro lines and a tram linking Paitilla with Casco Antiguo. This system will have to be comprehensively integrated with the city's bus system which will create more efficient transportation routes and will decrease the length of trips.
3. Can you provide us with a brief description of the project for the Línea 1?
The Línea 1 will have the capacity to carry more than 15,000 people per hour per direction at first and will grow to 40,000 people per hour per direction by 2035.
The line will be 14km long and will have 13 stations: 5 above-street level (Los Andes, Pan de Azúcar, San Miguelito, Pueblo Nuevo y 12 de Octubre), 7 below-street level (Fernández de Córdoba, Vía Argentina, Iglesia del Carmen, Santo Tomás, Lotería, 5 de Mayo, Curundú) and one half-buried terminal (Albrook). The construction of Curundú station has begun and will be completed in the future. In the same way, the foundations were left ready for the future construction of the fourteenth station, El Ingenio. Each of the stations will have elevators and escalators to facilitate the access of all the users, included those physically handicapped.
The above-street level stations will have an average length of 100 meters and the below-street level stations will have an average length of 115 meters. Both types of stations will have a width of 20 meters.
Initially the line will have 19 trains each of which will have 3 coaches and will be able to safely and reliably transport 600 passengers. Each train will be able to have a maximum of 5 coaches (1000 passengers).
The Metro de Panamá will have a high-technology automatic driving system to control the train's operations and a 1,500 volts rigid overhead electrification system that will guarantee a transport system free of polluting gases. Further, a yard and workshop facility will be set up at the end of the line, covering an area of approximately 10 hectares.
The most important aspect of this project are the social and economic benefits that it will bring. An update to the demand study performed in September, 2012, identified the following benefits that the project will bring between the years 2014 and 2035:
• A satisfied demand of 41,7 million passengers as of 2014.
• An annual demand of 77,9 million passengers by 2035.
• Accumulated savings in transportation operating costs of US$ 1,020 million.
• Accumulated savings from a lower number of accidents of US$ 176.2 million.
• Accumulated savings from a reduction in polluting gases of US$ 49.7 million.
But there are also non-quantifiable benefits that this project will bring:
• Family time.
• Increase in competitiveness.
• Increase in productivity.
As of December, 2012, the overall accumulated progress of the project is of 70.5%.
4. Please describe the tender process for the Línea 1.
The tender process for the awarding of the Línea 1 contract began with a pre-qualification process that lasted three months and ran along smoothly. We had seven offerors and three of them qualified for the final round. The idea behind the pre-qualification was to make sure we would then analyze the proposals of companies with proven experience and technical, administrative and financial capacity to carry out a project of this magnitude.
The three offerors that qualified for the final round were:
a) CONSORCIO CIMA, made up by: Acciona Infraestructuras, S.A. (52%), Mitsubishi Corporation (12%), Mitsubishi Heavy Industries, LTD. (12%), Constructoras ICA, S.A. de C.V. (12%) and Construcciones y Auxiliar de Ferrocarriles, S.A. (12%) with CAF trains;
b) CONSORCIO LINEA UNO, made up by: Construtora Norberto Odebrecht, S.A. (55%) and Fomento de Construcciones y Contratas, S.A. (45%) with Alstom trains; and
c) CONSORCIO GRUPO ITALIANO METRO PANAMA, made up by: Impregilo SPA (50%) and Astaldi and Ghella (50%), with Ansaldo-Brea trains.
We then began the analysis of the proposals following the provisions of the federal law of government contracts (Ley de Contrataciones Públicas) which meant that the price was delivered previously and was known only after the technical evaluation was over.
The contract was awarded to CONSORCIO LINEA UNO that, besides the companies mentioned above, had Sener Ingeniería y Sistemas, S.A. (Spain) and T.Y. Lin International (U.S.A.) as project designers.
The tender process was designed and administered in a transparent and impartial manner, complying with all the requirements imposed by the relevant laws and selection criteria set forth in the specifications for pre-qualification and the statement of objections.
5. What is the cost of the Línea 1 project?
The costs have been divided into the following three components:
Main contract (units in US$ million):
• Civil works and electromechanic systems engineering: 54.9
• Civil works for tunneling (8km), stations, viaducts (6km), works in the city, canals: 966.2
• Design, supply and installation of electromechanic systems: 65.7
• Design, supply and installation of an integrated railway system and rolling stock: 427.6
• Other (Quality inspections, price variation for indexed materials, reallocation of public services): 65.7
• Additional civil works: 91.0
• TOTAL: US$ 1,671.2 million
Related costs (units in US$ million):
• Escalators and elevators: 23.1
• Yard and workshop facility – civil works related to buildings and paving: 30.0
• Fare charging system: 8.0
• TOTAL: US$ 61.1 million
Expenses and transitional investments by the Metro de Panamá Secretariat (units in US$ million):
• Project management: 29.3
• State's Insurance Policies: 15.3
• Indemnities and compensations. Social Assistance Program, rent and land acquisition. Assistance to businesses: 22.4
• Administrative and transitional expenses by the Secretariat from 2010 through 2014: 20.1
• Contingencies: 60.7
• TOTAL: US$ 147.8 million
It is important to point out that the entire work is intended to be executed in just 38 months including engineering design and the final commissioning tests. Two new Herrenknecht tunnel boring machines with an external diameter of 9.77 meters were used in the project.
6. How was this project financed?
The construction of the Línea 1 of the Metro de Panamá is a project that represents a great opportunity for the country's development and promotes foreign investment and the support of international financing institutions.
Among the main international financing institutions that have invested in this project we find:
• Confederación Andina de Fomento – Latin American development bank: initially invested US$ 400 million. Recently approved a second financing for US$ 100 million.
• Citibank / World Bank (MIGA): Citibank (structuring agent) and MIGA issued on June 30, 2012, a guarantee for up to US$ 250 million.
• Compañía Española de Seguros de Crédito a la Exportación (CESCE): US$ 61 million.
• Compagnie Française d'Assurance pour le Commerce Extérieur (COFACE): US$ 284 million.
• Government: for current or transitional expenses such as compensations, acquisitions, rent, project manager, partial financing of works and equipment such as elevators and escalators or the down payment to the EPC contractor.
7. What can you tell us about some of the main contracts affecting the project such as the EPC, insurance and the contracting of the Project Manager?
Under the EPC contract, the contractor is responsible for the design, detail engineering, the supply of the trains, the construction and commissioning of the system. This contract was tailor-made for this project and the Secretariat was advised by an international law firm with experience in Metro projects. The contract also includes the reallocation of public services and the implementation of an environmental plan. Furthermore, the contract has a provision to adjust for changes in the prices of materials, inputs and workforce and sets forth the procedure to calculate the adjustment and a quarterly calculation. As a result of this provision, previously agreed on prices can be increased or reduced.
We decided to move forward with the project using a OCIP insurance (Owner-Controlled Insurance Program), which saves costs and improves the risk and claim management. The government, as owner of the work, is directly involved and participates in the processes of risk and claim management.
The Project Manager and Technical Advisor (consortium made up by Metro de Barcelona, AYESA and Inelectra) is the party responsible for monitoring the contractor and is the representative of the State before the contractor for technical matters.
8. Metro Bus is intended to complement the Metro de Panamá, can you tell us about this project?
The Metro Bus is the system that began the transformation of the Transportation System in Panama. It comprises a brand new fleet of 1,200 buses that replace the old "Diablos Rojos" (Red Devils) that caused so many problems and tragedies. The system was tendered so that it is administered by only one operator. Metro Bus' rates will be harmonized with those of the Metro de Panamá.
LIQ talks to Rafael Perez Pire, Executive Director of the Unión Eólica Panameña (Panamenian Eolic Union - UEP)
1. What is the UEP and what is UEP’s relationship with Union Eólica Española (Spanish Eolic Union - UEE)?
UEP is a subsidiary of Unión Eólica Española, a Spanish company with solid and proven experience in the renewable energy sector, with more than 300 MW installed worldwide in wind farms, cogeneration projects, biomass and waste management projects.
With our team in Panama, UEE intends to transfer its successful business model to Panama, installing innovating infrastructures with proven technology worldwide, which favors the introduction of clean energy.
2. What other infrastructure-related Spanish companies are presently doing business in Panama?
I do not think any other Spanish companies are constructing wind farms in Panama. However, there are several companies involved in hydro plants and energy distribution, as Gas Natural. Furthermore, the companies that had been contracted for the balance of plant of UEP´s wind plants are Spanish, because one of the requirements in the ETESA [Panama's state-owned electrical transmission company] tender was expertize for more than 10 years in the construction of wind facilities.
3. The homepage of UEP’s website gives an excellent concise explanation on why you chose Panama to develop projects; can you comment on Panama’s politic and economic stability and its state policy towards foreign direct investment?
For us, as for other investors, it’s important to maintain clear rules in order to ensure the success of the Project.
UEP chooses Panama for being a country with contrasted political, legal and economic stability, and with infrastructure and legislative systems that favor the establishment of clean energy. We believe that this political, legal and economic stability is what makes Panama an ideal country for capital inflows and foreign direct investment.
4. What are the sources of financing for your projects available in Panama?
Financing is coming from local and international banks, leaded by BICSA [Banco Internacional de Costa Rica S.A.] There are some multilateral banks also involved in project financing.
5. Please describe the main characteristics and status of the Penonomé Wind Farm project and the economic benefits envisioned for end users.
The Penonomé Wind Farm, located in the city of Penonomé, province of Cocle, will be the first wind farm in Panamá and the biggest in Central America. With an investment of more than 440 million dollars, the Penonomé Wind Farm will strengthen the national energy matrix, complementing the existing technologies and creating more balance and security to the national electric system.
All the necessary topography and geotechnical studies are completed, as well as the implantation phase of the concrete plant and the quarry. The civil works for the Substation El Coco are in process, as well as the purchase of the wind turbines and the main equipment for the Substation El Coco. We estimate that the wind farm will begin its operation between December, 2013 and January, 2014.
Among its benefits we can list:
• The Penonomé Wind Farm will have a total installed power of 220 megawatts that will cover between 6 and 7% of the total energy consumption in Panama. With this power, it will be able to supply 100,000 Panamanian families, that’s equivalent to more than half a million citizens.
• 75% of the energy will be produced during the summer when it’s windier, allowing water savings during the dry season and reducing dependency on fossil fuels.
• The production of the Penonomé Wind Farm will reduce the consumption of approximately 145 thousand tons of petroleum a year, will avoid the emission of 450 thousand tons of CO2 to the environment, the emission of 1,000 tons of nitrous oxides (NOx) a year and, 500 tons of SO2 a year, that produces acid rain.
• The entry of wind energy will strengthen Panama’s energy matrix and will increase the security of the electric system of the country, significantly reducing fluctuations in the service.
• The project is going to generate jobs especially for the Cocle community construction phase as well as its operation phase.
• UEP will develop important social projects in benefit of the Penonomé community and neighboring areas.
It’s important to highlight that the wind turbines of the Penonomé Wind Farm are compatible with the current use of the land, which means that they will not affect the regular activity carried out there. Besides, these lands are generally used for cattle farming and planting of rice, meaning that the Penonomé Wind Farm does not require the movement of the proprietors and does not cause deforestation or degradation of the environment.
Furthermore, the wind turbines will be located at least 500 meters away from the houses and their towers are 95 meters high, so the machinery won’t affect the neighboring communities.
6. Who are some of your suppliers for this Project?
UEP recently formalized an agreement with Grupo Cobra for the execution of the civil and electric works of this project. It’s a turnkey contract that includes the construction of internal roads, roads, trench, foundations and other civil works in the project.
Cobra Group will also be in charge of building El Coco’s substation and all electric works for the connection of the wind farm to the National Interconnection System.
Lastly, the contracted works include the development of the optic fiber communications network between the wind turbines and the substation, as well as the one between the substation and the National Dispatch Center.
The company also finalized its agreement with Goldwind USA Inc. for the supply of the wind turbines. Goldwind is the largest manufacturer of wind turbines in China and the second largest globally. The Penonomé wind farm will feature Goldwind’s GW2.5MW Permanent Magnet Direct Drive (PMDD) wind turbines.
Goldwind will be supplying, erecting and commissioning the wind turbines and power plant, including the supervision of work performed by the balance of plant contractor on civil works construction, electrical and transmission interconnection.
7. Can you describe the waste management project you are currently working on?
We are planning to use urban solid waste to produce energy using a gasification process to produce synthesis gas to be used in conventional gas motors. The gasification process will use a gasification device developed jointly by two companies in Spain and the Polytechnical University of Madrid for biomass. Before gasification we will homogenize the wastes and separate all the inorganic fractions, to be recycled, and use only the organic fraction of the urban solid wastes.
How important is to design, develop, and implement a comprehensive site security / emergency preparedness (EP) plan? Do facilities even have one? If so, is it inspected, and validated on an annual basis? Latin American companies have experienced its share of natural disasters from hurricanes, massive floods, and earthquakes. They also have experienced tragic industrial accidents, and criminal attacks against facilities. Site security / emergency preparedness plans are vital and should be considered the foundations of security processes and procedures. This article will briefly touch on basic considerations.
It is not uncommon to read poorly written security / EP plans. The root cause of a poorly written plan is usually the result of not involving enough subject matter experts (SME) during the planning, design and development phases. It is imperative that companies include SMEs because these professionals bring a wealth of real world experience to the table. Many times companies will frown on bringing in outsiders. Companies should make every attempt to bring in disinterested professionals with relevant experience that have no stake in your company to provide information and opinions.
Venezuelan oil refinery explosion
It would be interesting to sit down in a lessons-learned forum with the Venezuelan officials involved in the unfortunate explosion at the Amuay oil refinery on August 25th. The goal would be to learn if they had comprehensive plans that aided in their response, or if they had a sub-par plans that hindered their response. Some readers might think, what would a security plan have to do with fighting a massive fire? Many security plans also form an important part of the emergency preparedness plan and in some cases they are or can be fused together. Many sites do have separate security and emergency preparedness plans but they are closely inter-locked in many areas. The Venezuelan incident can offer valuable lessons-learned to gauge the effectiveness, or ineffectiveness of the facility’s security / emergency response plans.
What should these plans include?
When developing these plans the importance is in the details and the “how” is the most important element. Security / EP plans should, at a minimum, cover topics such as:
1) screening and selection processes for personnel;
2) chain of commands;
3) liaisons with outside agencies;
4) communication equipment and protocols;
5) training and qualifications;
6) operating systems and equipment;
7) contingency planning stages prior, during, and after events; and
8) if applicable, how the plans would meet regulatory requirements.
This is just a short list that can be broken down into many sub-groups. In order to establish effective plans companies have to define what to protect, how to protect it, how it will respond to everyday operations, and how it will address emergency / contingency events. The lessons-learned from the August 25th Venezuelan incident will be important for every Latin American security manager in order to assist in the development, or review of existing security / emergency plans.
How to guarantee effectiveness?
How do companies validate viable plans? The answer is simple and two-fold, one is by conducting security inspections of site processes and procedures, and the other one is conducting security / emergency plan evaluations through realistic mock exercises. When it comes to the inspections, conversations need to be held with personnel in order to gauge their understanding of operating procedures. Security and EP personnel should be able to explain their processes and demonstrate task proficiency. Inspections should also be conducted while sampling personnel during normal operational periods.
Mock exercises are different in that personnel have to demonstrate their knowledge, skills, and abilities while operating under scripted but realistic security / contingency conditions. Basically, inspections are conducted during normal conditions and exercises are conducted under a simulated but realistic contingency environment. Companies need to conduct both, inspections and simulated exercises.
Let’s go back to the oil refinery incident in Venezuela. Did they conduct both inspections and exercises on an annual basis? Were there any gaps that could have been mitigated prior to the explosion? Any Security / EP Manager operating in Latin America ought to be asking these questions to then assess if one's facility has the same or similar gaps.
Having good security / emergency response plans is imperative to driving performance and response capabilities in the event of a real-world contingency. Latin American companies need to analyze the Venezuelan oil refinery incident to evaluate what went right, and what went wrong.
If Latin American countries are to continue to compete on a global stage they have to improve their internal infrastructures and contingency capabilities. Investments are only going to be made when companies know that their Latin American business partners are ready for any contingency. Proper planning leads to proper processes, procedures, and responses.
Juan Garcia is an expert in physical security planning, security force training and operations, threat analysis & vulnerability assessments, and protective strategies.
With the implementation of the United States-Colombia Trade Promotion Agreement (TPA) on May 15, 2012, Colombia joins the list of other Latin American countries such as Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua as growing and important export markets to the United States. Panama hopes to join said list as it is still in the process of working on gaining trade agreement status with the United States. What does this mean? As these countries continue to export millions of dollars worth of goods to the United States they will have to look harder at increasing their security postures at maritime ports, terminals, company facilities, and warehouses.
Security is a necessary evil that many companies do not like to pay too much for. Security programs do not produce anything, especially profits. It is a bottom-line expenditure that frequently is taken for granted until something happens. Throughout Latin America, countries are enduring guerilla insurgencies, narco-terrorism, and increasing transnational gang violence. Criminal organizations look for every opportunity to exploit, and extort companies out of millions of dollars worth of goods and services. Police forces in many Latin American countries are overwhelmed, under-equipped, under-funded, and ill-trained to deal with the realities and scale of criminal / terrorists activities.
Professional security services can act as a counter-balance to the growing menace of crime against critical infrastructure. If properly run security can work effectively alongside, both law enforcement and the military to secure valuable markets and assets.
What to Look For
The first question to ask is, “what do I look for in a security company”? Like everything else you start by looking for reputable companies with track records of good customer service and performance. Conduct some benchmarking of other companies similar to yours that employ contract security providers. Create a list of who is considered the best and start ranking them, just like you would when interviewing candidates for an employment position. Contact their clients and request some information on customer satisfaction, pricing, and performance. Once you do this set up a meeting with the perspective security providers.
LIQ Talks to Luis Ricardo Gutiérrez, EMBARQ Latin America Strategic Director and General Secretary of the Latin American Association of Integrated Systems and BRT (“SIBRT”)
Special thanks to Julián Sastre, Deputy Chair of the Infrastructure and Services Forum (Spain), for arranging and contributing to this interview.
1. Could you briefly explain EMBARQ and SIBRT?
EMBARQ’s mission is to act as a catalyst and help implement environmentally and financially sustainable transport solutions to improve the quality of life in cities.
Since 2002, the network has grown to include five Centers for Sustainable Transport, located in Mexico, Brazil, India, China, Turkey and the Andean Region, that work together with local transport authorities to reduce pollution, improve public health, and create safe, accessible and attractive urban public spaces. The network employs more than 100 experts in fields ranging from architecture to air quality management; geography to journalism; and sociology to civil and transport engineering.
SIBRT brings together Latin America’s most influential Integrated Transit Systems and Bus Rapid Transit (“BRT”) agencies. SIBRT facilitates the exchange of knowledge, produces “best practice” studies of the management, standardization, and operation of urban public transport, and proactively promotes Integrated Systems and BRT adoption as the safest, most efficient and sustainable form of mass transit. The Association is committed to quality urban public transportation development. SIBRT is present in 19 cities of 8 countries, which together comprise more than 95 million urban inhabitants. Its Associates provide public transit services to more than 20 million riders per day on more than 700 km of exclusive bus corridors (further information in www.sibrtonline.org). SIBRT was created in April 2010 with headquarters in Curitiba.
EMBARQ acts as SIBRT’s General Secretariat.
2. What is the functional concept of BRTs and why are they interesting for Latin America.
BRTs are high-performance transportation solutions for urban corridors with elevated demand. BRT was conceived as an alternative to metros and light rails, which are more expensive, take longer to implement, and are less flexible than BRTs. BRTs, like railways, are one solution to sustainable urban public transportation challenges; they are an important part in managing the complex transportation needs of growing cities.
The BRT model was invented in Curitiba. The design features that constitute a BRT are:
• Exclusive corridors
• High-capacity buses, either articulated or bi-articulated buses
• Closed stations using pre-paid ticketing systems
• Centralized control system
• Smart card payment collection system
• User information systems
Curitiba’s BRT has two additional design elements which are often overlooked in other BRT systems throughout the world:
• The BRT system was designed as part of an integrated network of buses that serves the entire city.
• The BRT and integrated network are linked to land use management, providing a comprehensive citywide transportation vision.
These two components were not sufficiently present in the following BRT systems: Trole of Quito (1995), and Transmilenio in Bogotá (2000). In the Quito Project, only the colonial center was connected to the city’s other bus networks and in Bogota the BRT was implemented above the Avenida de Caracas (the corridor with the greatest level of demand), making it detached form the city’s center. It is worth highlighting that Transmilenio revolutionized the mass transit industry when it achieved the highest level of BRT capacity at 45,000 passengers per hour per direction. Transmilenio shifted the mass transit paradigm, proving that BRT is indeed a mass transit solution that can compete with rail-based technology.
Transmilenio’s success led to the acceptance of BRTs in the mass transport industry. Its impact can be seen in the graphs below, which show the evolution of BRTs and exclusive corridors for bus routes worldwide. In a 10 year period between the launch of Transmilenio in 2000, when there were 23 BRTs in the world, the number of BRTs worldwide has reached 134 cities. As of 2012, 53% of BRT passenger demand is located in Latin America although significant growth levels are being noted in China and India.
In Latin America, EMBARQ and SIBRT have been promoting the integration of BRTs into the entire city transportation network. We have found that it is not enough to have solutions that only focus on main corridors; rather to provide high-quality service the transportation system needs to be integrated operationally, physically, and fares must allow for transfers. Fortunately, Latin American cities are increasingly moving towards high-quality integrated transport solutions for all citizens.
3. What problems are found during development?
The lack of clear policy on the part of national governments with regards to sustainable transport and the prioritization of public transport is a challenge for cities attempting to develop a BRT. Some national governments have highly advanced transit policies while others do not. Brazil stands out as a leader in the field. Brazil voted last April to adopt a highly-advanced Public Transport Act which is geared towards sustainable mobility founded on the following basic pillars:
o Collective and non-motorized (bicycle) public transport.
o Physical and fare integration of mobility aimed at the entire population.
o Demand management of the use of private vehicles.
o Acknowledgement of persons and rights of public transport users (quality standards of vehicles, information, time-keeping and openness of service).
o Establishment of directives which state:
Efficiency and quality of service are demanded of Public Sector Managers.
The reduction of contaminating substances and emissions.
Transport and Transit Plans (PlanMob) for cities with more than 20 thousand inhabitants (previously 60 thousand) in order to provide federal resources.
Another policy element that is lacking in most countries is the adoption of urban mobility as a social right. This would allow for governments to assign resources more efficiently and take into account the social and economic impacts of urban transport projects.
Limited institutional capacity, with regards to infrastructure (public sector) and operations (private sector), limits the funding options available to regional governments. These problems are even more of a problem when city and local governments are searching for funding options.
With regard to institutional capacity, we have found that there are limited human resources availability that have the skillset needed to carry out and promote BRT and integrated transportation solutions. As demand continues to grow for transit modernization projects this will create a bottle-neck. Available financial resources are beginning to increase, but the lack of institutional capacity at the city and local level will prevent funders and investors from dispersing their funds, creating lost opportunities for public transportation improvements.
The challenge of private operator capacity is of the utmost importance. The majority of transport services (80 to 85%) are provided using buses or mini-buses with highly deteriorated service levels, operating under precarious company structures. Public transportation services run by professional and modern companies are still the exception to the rule. Where they exist they are found in tandem with BRTs or integrated transport systems (the latter generally in Brazil). Perhaps this might be the most sensitive issue for the transformation of public transport in Latin America. The quality of private transit companies deserves greater study in order to best understand how to change from conventional operators to professional operators.
4. What were main conclusions drawn from the 2nd SIBRT Congress held in Leon in April 2012, and what were your highlights from this event?
During the 2nd SIBRT Congress twenty-eight high-quality presentations were given on the four transportation issues: Public Policy for Sustainable Urban Transport, Financing of Integrated Transport Systems, Road Safety for Urban Bus Networks and Quality of Service / User Satisfaction / Image of BRTS. These presentations allowed us to reach conclusions which will guide the next stage of SIBRT’s benchmarking work.
Amongst the dignitaries present at the event, the following are worthy of special mention: the President of the Municipality of Leon, Ricardo Sheffield Padilla; the Mayor of La Paz, Bolivia, Luis Revilla; the Columbian Deputy Transport Minister, Felipe Targa Rodríguez; the General Manager of the EMBARQ Network, Holger Dalkmann; the General Manager of URBS-Curitiba and Deputy Chair of SIBRT, Marcos Isfer; the General Manager of BHTrans, Ramón Víctor Cesar; The World Bank’s Urban Transport Advisor, O.P. Agarwal; and the Deputy Chair of the Infrastructure and Services Forum in Spain, Julián Sastre; as well as the General Manager of Excelencia ALC-BRT, Juan Carlos Muñoz.
The event attracted the attendance of more than 350 specialists and operators in the field of urban public transport from 15 Latin-American countries and beyond. Management representatives and technical staff from 19 SIT and BRT associate management agencies in countries such as Brazil, Colombia, Chile, Ecuador, Guatemala, Mexico, Paraguay and Peru were present. Other attendees included transport managers and public sector representatives from countries such as Argentina, Bolivia, Botswana, Canada, Spain, the United States and India. Also participating were representatives of operators from the aforementioned countries amongst which was Otavio Cunha, the General Manager of the NTU, the National Association of Brazilian Operators for Urban Transport.
21 sponsors took part including: DINA, Pagobus, ACS, Andina Technology, Empresa1, Inteligensa; Silver Plus: Volvo, GMV, Servyre; Caliper, Doppelmayr, Hersan, Trapeze, BEA, Transconsult, InterBerica, Grupsa, Nettropolis, Hyundai, Régie T, Bioplast. The organization of the event was funded by EMBARQ.
5. How are these projects linked to the philosophy behind PPPs?
Due to their very nature urban public transport projects imply PPP style solutions. The public sector usually assumes financing of BRT infrastructure, as well as duties pertaining to regulation and management of operational contracts. The private sector generally operates and manages the bus fleets and drivers and receives a concession from the government to operate for a determined number of years. In this way a combined action between public and private sectors is indispensable in order to avoid serious negative externalities, which are generated in the urban transport market:
• Inefficient land use (congestion and urban chaos)
• Negative effect on public health (accidents, pollution, lack of public space for physical activities) utterly onerous for governments, companies and families.
All of this demands the presence of the public sector combined with an efficiently managed and professional private sector presence, which incorporates state-of-the-art technology in order to provide the service levels expected. For this reason, there must be a meeting of minds and an alignment of wills geared towards the citizens’ needs with an eye towards how those needs align with private sector interests.
6. What is the outlook for major projects on the horizon?
According to estimations made by EMBARQ and SIBRT, the modernization of public transport networks in 242 Latin American cities with more than two hundred and fifty thousand households which signifies around three hundred and seventy million inhabitants requires:
• 27,000 M US$ for public investment in infrastructure, in order to put into service 5,400km of additional BRT corridors, and
• A further 70,000 M US$ of private investment for fleet renovation.
Rodolfo Vouga and Cecilia Llamosas of Vouga & Olmedo Abogados
Paraguay is the largest net energy exporter in the world. The country annually exports 45,000 GWh and imports nil. Paraguay’s installed capacity is of 8.8 GW. In contrast, Paraguay is one of the lowest consumers of energy in South America, with its annual per capita consumption being only 6,388 KWh. Paraguay has reported losses of about 30% of the total energy distribution per year.
From the macro point of view, one of the most desired assets in the region and in the world is without any doubt energy. The country produces and wastes energy every year, depriving the region of clean and abundant energy as well as its own economy from receiving market-priced retribution for its export product which could very well be invested in more infrastructure projects to enhance its transmission and distribution systems as well as export installations.
As some studies report, even if the country´s energy demand were to grow 200 MW per year there would still be a long way to go until the situation turns critical as is currently the case in other countries in the region.
The region is in dire need of energy. In 2012, Paraguay exported over 39,000 GWh to Brazil and about 6,000 GWh to Argentina. Additionally, it received generous offers from Uruguay and Chile to buy its energy surplus. By not seizing these opportunities, Paraguay is throwing away its most valuable commodity. Not only is the country squandering its chances of obtaining instant income in exchange of its product, but it is also losing an invaluable chance to become a true integration catalyst.
However, being one of the world’s largest producers of energy does not ensure Paraguay energy availability. Up until now Paraguay has proven incapable of taking advantage of its most abundant asset. As an example, the city of Salto del Guairá, located in the Eastern Region, is currently satisfying its energy demand with imported fuel-based energy, produced by generators that were installed as an emergency measure. The fact remains that, albeit abundant and excessive, energy lacks a physical way to get to the focal points of development.
So far, the absence of modern transmission lines has hampered Paraguay´s ability to offer a solid internal energy transmission and distribution system, which in addition to the competitive prices and availability of resources would attract energy-intensive industries. Not only would the enhancement of the transmission and distribution system facilitate the installation of such industries, but moreover it may lead to a cost-effective management of the energy surplus which would enable the optimisation of exportation.
In September 2011, the construction of the first high voltage transmission line started. The transmission line will connect the Itaipú Hydroelectric Dam –the largest operating in the world- with the Department of Villa Hayes in the Chaco (Western) Region, 37 km north-east from the capital Asunción..
The installation of this transmission line alone will bring substantial benefits to the industrial sector in the country. As more energy is served to the industrial centres, the sector will blossom by boosting the creation of new industries and the development of the areas adjacent to the project.
LIQ speaks to Paul Gallie, Managing Director - APM Terminals Moin
In March 2011, APM Terminals, a major global port and terminal operator based out of the Hague, won a 33-year concession from the Costa Rican government to design, finance, build, operate and maintain a new container terminal in the city of Moin, on the country’s Caribbean coast. The US$992 million terminal (known as TCM for its name in Spanish, Terminal de Contenedores de Moin) will be the largest infrastructure project in Costa Rican history and is meant to bolster Costa Rica’s growing agricultural export industry.
Milagros Maraví, Partner - Rubio Leguía Normand and Diego Harman, Associate - Rubio Leguía Normand
The Taboada Wastewater Treatment Plant was granted in concession in 2009 to a Peruvian subsidiary of Spain’s ACS Group, through which the amount of treated water shall be significantly increased in Lima and Callao, thus reducing ocean pollution. This is one of the new mega water projects launched by SEDAPAL. Under this project SEDAPAL makes RPICAO and RPMO payments, which remunerate construction and O&M costs, respectively. The Project was financed in 2011 through a future flow PEN denominated VAC-indexed securitization of RPICAOs. As the Concessionaire completes construction milestones it receives RPICAOs, which are irrevocable and unconditional payment obligations (with a government guarantee) vested upon the issuance of Works Progress Certificates.
Milagros Maraví, Partner - Rubio Leguía Normand and Diego Harman, Associate - Rubio Leguía Normand
The Red Vial 4 Tollroad is a new highway spanning across the northern region of Peru granted in concession in 2009, to be built by a Peruvian subsidiary of Spain’s OHL Concesiones. The project contemplates tariff as revenue for the Concessionaire, as well as a Guaranteed Minimum Annual Income which guarantees a minimum of income for the project irrespective of traffic flow. The size of the project and the amount of investment required demanded the largest amount ever financed by syndicated lenders for a self sustainable toll road concession. Moreover, the project was financed by a syndicate comprised of a multilateral entity, a foreign financial institution and a Peruvian bank, relevant feature that made the financing be particularly arranged.
Daniel Brieba, ARA WorleyParsons; Mauricio Casanova, Ministry of Transport and Telecommunications (Chile); María Fernanda Figueroa, ARA WorleyParsons; Julián Sastre, International Transport Consultant;
ITS – Intelligent Transport Systems – is a term which is used to describe the wide range of computer and telecommunications based technologies and applications geared towards the resolution of transport problems through the use of specially designed systems. Transport management is increasingly more aware of the need to adapt to policies regarding the environment, city-planning, passenger safety and security, as well as economic and social factors such as time lost, comfort etc. Likewise, ITS have become more relevant as density of traffic and railway operational speed has increased, at the same time, safety levels demanded by users has risen. It is difficult to imagine transportation in the future without use of ITS, especially as these systems will take on a continually more important role in the coming years.
Rodolfo Guillermo Vouga, Associate, Vouga & Olmedo Abogados
In October 2011, a bill was put forward by the President of Paraguay and the Ministry of Public Works and Communications (MOPC) to implement a Bus Rapid Transit (BRT) Public Transport System on a central line along the Eusebio Ayala Avenue between Asunción and San Lorenzo city centres.The Senate approved the Project in December 2011, and the bill is expected to be studied by the Lower Chamber in March, when the legislative period resumes.
Rodolfo Guillermo Vouga, Associate, Vouga & Olmedo Abogados
The Hidrovia waterway, planned for the Paraguay-Parana rivers of the Southern Cone, has been qualified as the largest engineering project in the frame of the integration process of MERCOSUR. The Hidrovia project represents the joint efforts on behalf of the countries concerned for adopting a unified maritime legal framework for the region and the implementation of a dredging program.
Milagros Maraví, Partner - Rubio Leguía Normand and Diego Harman, Associate - Rubio Leguía Normand
The Huascacocha Water Derivation Project was granted in concession in 2008 to a Peruvian subsidiary of the Brazilian construction conglomerate Construtora OAS. This project consists in the construction, operation and maintenance of a dam at the Huascacocha Lake located in the Peruvian provinces of Pasco and Junín, along with a pumping station and a derivation canal in order to convey water to the Rímac river in Lima and thence to water treatment facilities owned by SEDAPAL (government owned water utility company of Lima and Callao) and a hydropower plant.
Rodolfo Guillermo Vouga, Associate - Vouga & Olmedo Abogados
The Airports Concession Bill was launched by the President of Paraguay and the Ministry of Public Works and Communications (MOPC) on October 14th, 2010. The Bill authorizes the Executive Power to grant the concession of international airports Silvio Pettirossi (Asunción), Guaraní (Ciudad del Este) and the airfield of Mariscal Estigarribia in the Chaco Region. As the Bill was introduced as an urgent matter by the Executive, it was due to be studied by both chambers by March 31st, 2011. Perhaps due to miscommunications, this urgent treatment character was not transmitted to the Representatives Chamber, which led to the normal course of action to be taken with the Bill. After having been discussed and amended, it was sent back to the Senate for its ratification on April 12th.
Rodolfo Guillermo Vouga, Associate - Vouga & Olmedo Abogados
The proposed 500 KV Itaipú-Villa Hayes transmission line is considered to be the most important engineering project for Paraguay in the last 20 years. The Joint Declaration between Paraguay and Brazil’s heads of government on July 25, 2009, acknowledged the need to reach an agreement on Itaipu Binacional’s construction of a 500 KV electric transmission line between the Right Margin Electric Substation (SEMD) and the Villa Hayes Electric Substation (SEVH), serving Paraguay’s capital, Asunción, and the main industrial poles and running along five administrative divisions and extending 345 km. The project is critically important as the state-owned transmission system is on the verge of failing to meet the country’s needs by early 2012.