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March - April 2000

Some come to shop
At this innovative Uruguayan bus terminal, hassle-free travel is only one of the attractions



By DAVID MANGURIAN

Just ten years ago, domestic and international bus service in and out of Uruguay’s capital of Montevideo was a mess.

The situation was serious because buses are the most important means of public transportation in a country in which large numbers of small cities and towns make commercial air travel economically impractical. Moreover, Uruguayan buses carry not only passengers, but small cargo as well.

CENTRAL HUB: The Uruguayan capital of Montevideo is both destination and departure point for passenger buses that cover the entire country. (Photo: David Mangurian-IDB)


The problem was that Montevideo had no central bus terminal. Instead, more than 30 bus companies operated out of open-air curbside "terminals," often on main streets, at more than 20 different locations in the city.

"There were no bus connections," recalls Luis Muñoz, who was director of one of the larger bus lines at the time. Someone who needed to transfer from one line to another had to walk several blocks, or even go to another part of the city.

"Everything was very complicated—for tourists who had to catch another bus, and for people sending packages to different places," says Muñoz. Moreover, the big passenger buses created traffic problems and pollution. "It was practically a national emergency," he says.

So Muñoz and his counterparts from eight other bus lines formed a group to pressure the government to build a terminal. But right away they ran into a roadblock: initial studies indicated that such a terminal would not be economically viable by itself. It needed something more.

The group then sought out Luis Lecueder, a successful shopping center developer. Lecueder proposed combining a bus terminal with a shopping center, a mixed-use concept that had never been tried in Latin America.

Passengers on all of the country’s bus lines were surveyed. The results indicated that the concept would work if the shopping center included the kinds of stores and eateries that travelers wanted.

The nine bus companies, together with Lecueder’s firm and two Chilean investors, formed a joint-venture company called Gralado. In public bidding, Uruguay’s Ministry of Transportation and Public Works awarded Gralado a concession to operate the terminal for 30 years and the shopping center for 50.

But financing the $18.5 million project was a problem. Private banks were skeptical. But an investment officer for the Inter-American Investment Corporation, Roldán Trujillo, was intrigued. He was convinced that the project would be good for Montevideo and turn a profit besides.

In 1992, the IIC, the private sector member of the IDB Group, agreed to loan Gralado $4.5 million, syndicate a $6.6 million "B" loan through its cofinancing program, and make an equity investment of $300,000 in the company. The Gralado partners provided the rest of the money.

Built on four blocks of land near downtown Montevideo, the Tres Cruces bus terminal and shopping center opened in 1994. What replaced virtual chaos is one of the most modern bus terminals in the Americas. It has been a moneymaker for its investors from the beginning and stands as a model for private sector management of public facilities.

TRAFFIC CHOREOGRAPHY: Traffic controllers in the Tres Cruces terminal control room use software designed for airports to direct the daily flow of 1,000 buses in and out of 33 loading slots. (Photo: David Mangurian-IDB)

Tres Cruces’ 90 stores and restaurants are 100 percent leased, and the 1,000 buses that enter and leave its 33 loading slots are dispatched with airport precision. In fact, three controllers in a tower overlooking the Tres Cruces terminal direct the movement of buses with computer software designed for airport traffic control.

One of the terminal’s architects, Oscar Carlazzoli, remembers one election day when 1,500 buses passed through Tres Cruces in 24 hours—more than one every minute. "Seeing the movement of these buses gave one the impression of a mechanical ballet," he says.


Terminal shops and restaurants draw 15,000 customers per day, not counting travelers. (Photo: David Mangurian-IDB)

The Tres Cruces terminal is like a city within a city. On average, 45,000 persons pass through it every day, 30,000 of them bus passengers and the remainder shoppers and people looking for a bite to eat. The terminal offers a 24-hour medical center staffed with a doctor and nurse, a post office, a telephone company office with facilities for local and long-distance calls, a bank, a money exchange open from 8 in the morning to 11 at night, around-the-clock luggage storage, a government tourism office, restaurants and a food court. The terminal employs approximately 1,500 workers.

"There are provincial capitals in Uruguay with fewer people than pass through here every day," says Carlos Gutiérrez, Tres Cruces Terminal and Operations Manager. "More than a million people go through this terminal each month!"

In 1998, the IIC sold its stock in the venture at a profit equal to a 45 percent annualized return on its investment. The profit from IIC equity investments is plowed back into other projects. "This project was a win-win situation," says Trujillo, now chief of the IIC’s Corporate Finance Division. "There was a pent-up demand from the bus companies needing a solution to the mess and passengers needing better service. The project was well conceived and well designed."

In October 1999, Tres Cruces went on line with its own Internet website (www. trescruces.com.uy) offering bus routes and schedules and information about its shopping center stores, including special sales. According to Gutiérrez, the website will contain information on Uruguay’s 30-plus bus companies, including departure and destination points and departure and arrival times. The information will help people arriving from other countries and destined for towns in Uruguay’s interior to schedule their best bus connection. Eventually, the website will handle ticket reservations.



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