May 7, 2002
International symposium on intelligent transportation systems in emerging economies
At this juncture, I am requested to make final comments about the INTERNATIONAL SYMPOSIUM ON INTELLIGENT TRANSPORTATION SYSTEMS IN EMERGING ECONOMIES.
Let me first thank the organization for this event, the Intelligent Transportation Systems of America, ITS America, an example of a successful partnership between the public and private sectors. This public-private partnership fulfils a crucial role – promoting and educating about transportation technology and its benefits all over the world. I want also to thank all the participants and in particular the colleagues of the US Department of Transportation with whom we have established a long standing relationship.
The topics of the Symposium and its debate make me focus on two important considerations:
First, the increasing complexity of projects and programs, particularly in the transportation sector, in emerging economies, which implies the application of modern technology in an integrated fashion, multidisciplinary, and with the participation of several stakeholders.
Second, due to this complexity costs and benefits cannot be mechanically evaluated, but encompass externalities and the creation of “public goods” that go beyond the private sector calculations and a single country. To overcome the difficulties and complexities of situations encountered in projects and programs in emerging economies and particularly in Latin America, a national and regional public policy is needed that in turn help develop a new framework, innovative structure and creative collaboration between the private and the public sector.
Also, as part of my thoughts, I will mention the role of Multilateral Development Banks (MDBs) and that of the IDB in particular.
At the outset, let me underline how infrastructure in general and transportation in particular is fundamental for the economic growthof emerging economies and for those of Latin America and the Caribbean. Bank studies clearly point to transportation as the key variable to increased trade growth both intra and extra -regional. Moreover, the improvement of the transportation infrastructure has to be seen in the context of the “quality” of infrastructure in other parts of the world that compete to attract flows of trade and investment. Therefore, the increase and the improvement of infrastructure and transportation cannot be regarded on a “standalone” basis without comparing it to the competitive situation of infrastructure in other parts of the world.
It is against this background that the challenge of complexity has to be regarded and faced. Complexity in transportation means that a project of a road, or a port, or an airport present two forms of challenges: the one specific, “internal” to the project, more technological; and the other in relation to other similar transportation projects in the context of an overall national transportation strategy and vision.
With regard to the complexity within the project, clearly transportation projects are not anymore just building a road or an airport, but it requires including in the project extremely valuable technology, which in turn entails coordination and interoperability with various other entities and stakeholders that would finally enhance the efficiency and the success of the project and its contribution to economic growth. For example, a road cannot be regarded as an efficient investment without several other related and connected components: electronic data to process information, coordination with the national and regional systems; appropriate and state of the art technology custom zone; synchronization between working hours at the customs at the time of borders crossing.
The IDB has a long history of funding successful transport infrastructure projects - and more recently, it has provided support for transportation technology or intelligent transport projects of all types. Some examples from a long list include:
In the area of commercial vehicle operations: WEIGH-IN-MOTION OR DYNAMIC TRUCK WEIGH STATIONS for motor carrier freight transport in Central America and Peru;
- In the area of urban traffic management: SIGNALIZATION AND TRAFFIC CONTROL PROJECTS IN SEVERAL MAJOR LATIN AMERICAN CAPITALS.
The level of complexity in transportation projects implies also that a project be not seen anymore as single asset, but inserted in a larger national and inter-modal plan with various participants. The IDB is responding to the challenge of managing projects that involve several stakeholders:
In the area of mass or public transportation: CURITIBA BUS PROJECT in southern Brazil, a project that is admired all over the world.So many foreign delegations visit this deployment that the Curitiba Bus Authority had to create a special department to welcome them!
SUBWAY SYSTEMS in several metropolitan areas of Latin America.
In the area of advanced highway management and electronic toll collection: THE CONCESSION HIGHWAY ECOVIAS DOS IMIGRANTES in Sao Paulo Brazil, and several other highway concessions granted by the Federal and state governments in Brazil.
The success enjoyed by all these projects, as well as the impressive achievements shared by experts from all over Latin America during this Symposium, show that the benefits of these technologies are not limited to easing congestion, but also to protecting the environment, saving lives, and having a significant positive impact on economic development and competitiveness. Through the years, these projects have benefited millions of people – providing better, cheaper, safer and faster transportation for travelers as well as for goods. Additional examples of projects in this category are Santa Catarina Highways in Brazil; Traffic Signal System in Panama; Strengthening of highway network in Honduras; Sao Paulo subway system expansion in Brazil.
A third generation of projects is emerging. Projects that present several challenges: integrated and coordinated technology; need of coordination of various national entities and stakeholders; and also a new transnational dimension, which calls for a shared regional vision and strategy and look at the inter-modal complementarity in a regional view.
The ultimate goal of these projects is to straighten the integration of the various countries of the region and thus improve overall efficiency and competitiveness. Cost and Benefits are no longer limited to one country. The typical third generation projects in Latin America are related to the process of physical integration through IIRSA (Integración de la Infraestructura Regional en América del Sur, or Integration of the Regional Infrastructure in South America, which covers all the South American Countries), and the Plan Puebla Panamá(which encompasses theseven countries of Mesoamerica and seven states of Southern Mexico). These are far-reaching and visionary initiatives and are expected to foster economic growth in the Region. The integration of infrastructure raises fundamental challenges for the countries and multilateral agencies – - through the inspired leadership and vision of transportation leaders in Latin America, the IDB works towards the objective that all Latin American countries will enjoy benefits.
To make this large scale projects happen, make them sustainable, and allow access for all to the facilities, a new framework is needed, which implies the use of Public Private Partnerships (PPP) as an instrument for co-development and for socio-economic growth.PPP requires being conceived ex-ante and regarded as an instrument to optimize the requirements of the various fundamental actors involved: the states, the regulatory authorities; consumers and citizens; and the private sectors investors and operators. While avoiding possible conflict of interest, PPP should be able to provide innovative financial and governance arrangements and a long-term view, which instills a virtuous process of economic efficiency. The Public-Private-Partnerships may play an important role to diminish the perception of risk and guaranteeing lenders and investors in a long-term perspective, which appraises externalities and net socio-economic benefits. The new framework would require a leadership role of governments, which evaluates ex ante the economic benefits of a complex transnational project, lays down transparent rules of engagement for all participants and stakeholders and monitor its realization.
Government agreements or arrangements would play an essential role in facilitating the discussion of basic project features, its costs and benefits, technical standards, funding schemes, and dispute resolution mechanisms.
Multilateral Development Bankswould play crucial functions in three respects: as facilitators of the dialogue among the various parties; as actorsto enact capacity building for the project in terms of the arrangements and regulation that would make the project sustainable over the long run; and finally as providers of partial funding mechanisms and/or of guarantees for some of the risks that would facilitate the catalytic financing of the private sector.
As part of its mission within the Multilateral Development Bank community, the IDB is taking up these challenges of creating innovative structure between private and publicsector to overcome the obstacles of geography, improve integration and competitiveness of the economies of the region and ultimately bringing the benefits to LAC citizens.
I wish to thank the participants in the Symposium -- some you have traveled long distances and taken time away from your busy schedules – and we appreciate it. We hope that this Symposium has been of value to you, and that many of the important ideas and proposals voiced during the last one and a half days will translate into tangible realities and benefits for all.
ABOUT ITS AMERICA (ITSA)
Intelligent Transportation Society of America (ITS America) is a non-profit association, whose mission is to foster public/private partnerships to increase the safety and efficiency of surface transportation through the application of advanced technologies. ITS America was mandated by the U.S. Congress in 1991 to coordinate the development and deployment of intelligent transportation systems in the United States.
ITS America continues to fulfill this public/private partnership role. Our members participate in on-going research, planning, standards development, deployment and marketing of ITS programs, products and services. Membership is open to federal, state, local government agencies from the United States and the rest of the World; national and international companies involved in the development of intelligent transportation systems (ITS); national and international universities, independent research organizations, public interest groups, and any others with a stake in ITS.
Membership is approximately 50% academia, government and associations, and 50% private sector. Some examples from all over the world include the U.S. Department of Transportation, Acunia (a Belgian company), the Association of Brazilian Highway Concessionaires (a Brazilian non-profit trade association), the Cape Metropolitan Council (a South African local government), the Cartographic Institute of Catalunia (a Spanish research institute), and Cablex (a traffic signalization company in Uruguay.) These organizations represent more than 60,000 individuals involved in ITS programs. Membership will continue its vigorous growth as emerging technologies are implemented throughout the world.
IDB Transportation Financing 1995-2001
During the period 1995-2001, the Bank has financed about US$4.5 billion in transportation projects for a total of 53 projects. The bulk of these projects, i.e., US$4.0 billion with 43 projects, is the public sector. However, as the Bank started in 1994 to direct part of its financing directly to the private sector (without the government guarantee), the amount of financing related to private sector participation has been about US$450 million, which has mobilized additional private sector resources for an amount around US$1.5 billion.