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TRANSPORTATION

Objective

To orient the financial assistance and technical cooperation the Bank extends to its member countries in the transportation sector for them efficiently to organize, construct, administer and operate their transportation systems.

This assistance should be consistent with the growth and development model of each country, its needs for physical integration and its transportation requirements, both in the national sphere and in the sphere of regional integration.

Emphasis will be placed on the institutional aspects, programming, planning and maintenance, as well as on rehabilitation and expansion of existing systems. Projects for new construction will also be considered.

Fields of Activity

1. SCOPE. The Bank may finance projects for transportation by land, river, air, sea or pipeline.

However, due to the limited resources assigned by the Bank to the transportation sector, the Bank's participation in large transport projects primarily may be catalytic in nature so as to encourage more massive financial assistance from other sources and to provide financing in those areas where other resources are less likely to be available.

The Bank's policy will cover financing of loans and technical cooperation for:

a) collaboration in the institutional strengthening of the transportation sector in the member countries, including training and manpower development;

b) the organization, rationalization and/or improvement of transportation services for the movement of passengers and freight to and from the various human settlements, production centers and consumption centers;

c) maintenance, rehabilitation and expansion of existing infrastructure with a view to the utilization, in the best possible way, of those modes of transport that will best support the economic development process of the Bank's member countries as well as new transportation projects necessary for the process of socioeconomic development; and

d) support for the transportation industry (this will be coordinated, whenever applicable with the Industrial Development policy, OP-722).

For all modes of transportation the Bank may finance the purchase of materials, equipment and vehicle needs that enhance construction of transportation projects and the Bank may also finance other materials and equipment that clearly complement physical infrastructure such as: cranes and loaders for freight stations, ports and airports, navigation aids and other equipment for the operation of land, air and maritime terminals with greater security and efficiency for the movement of passengers and freight.

Purchase of rolling stock or traction vehicles, aircraft or watercraft may be financed by the Bank to meet particular developmental needs.

Developmental needs may be identified, for example, in the following areas: the overall rationalization of a public transportation system and regional integration projects.

Provision of Bank financing for these items would take into account the availability of private sources of financing, which, in the opinion of the Bank, are reasonable for the borrower.

In addition, when the acquisition of such items is programmed within the context of agricultural, industrial, mining, energy or other such projects, the Bank will consider financing within the framework of the corresponding sectoral policy.

2. SUBSECTORS. In view of the great complexity of the transportation sector and the different stages found in each of the developing member countries, this policy does not establish priorities, this policy does not establish priorities among the different subsectors (road, railway, water transportation, etc.). The priorities may differ in each country according to its particular conditions and special characteristics.

However, in each of the subsectors indicated below the different activities are listed in general order of priority.

a) Road Transportation. The Bank will support the financing of roads, terminals or stations for passengers and freight, and complementary equipment of the physical infrastructure, in any of the various road systems making up the national and international systems of Latin America.

The Bank will place emphasis on: i) institutional strengthening of the subsector; ii) projects to rehabilitate and widen existing highways and roads, as well as projects for the maintenance and protection of road systems; and iii) construction of new projects with special emphasis on rural roads and penetration roads.

b) Railway Transportation. Railway projects considered by the Bank should contemplate:

i. strengthening the institutional capacity of railway enterprises through improvements in their management, administrative and technical systems. In any case the evaluation of such capacity and improvements, if necessary, should precede any investment in construction of infrastructure, in accord with the general policies of the Bank;

ii. rationalization, maintenance, rehabilitation, remodeling and/or extension of systems currently in operation; and

iii. construction of new rail lines, terminals and intermediate stations, and the acquisition of equipment for passenger and cargo-handling service, as well as traffic safety installations, etc.

c) Water Transportation. The Bank may finance infrastructure projects for maritime, lake or river transportation, under the following headings:

i. institutional strengthening of the subsector;

ii. rationalization, maintenance, rehabilitation, reconstruction or expansion of port systems and existing maritime, river or lake infrastructure, including facilities for service and maintenance of ships; and

iii. construction of new ports and new sea, river and lake infrastructure.

d) Air Transportation. In this subsector the Bank may extend financing for:

i. institutional strengthening;

ii. rationalization, maintenance, rehabilitation, remodeling or expansion of existing airports and their aerial navigation and safety systems;

iii. construction and/or expansion of aerial navigation and safety systems; and

iv. construction of new airports and their aerial navigation and safety systems, with preference for local traffic.

e) Transportation by Pipeline. The Bank may finance the construction, rehabilitation, maintenance and extension of pipelines, including the purchase and installation of pipe and necessary equipment.

3. URBAN TRANSPORTATION. Because of the special characteristics of urban transportation, Bank assistance in this field will be considered within the context of the Urban Development Policy (OP-751) and with preference given to integrated urban projects.

In general, the Bank will encourage mass transportation systems to provide better and more facilities to users, rationalize services, encourage the saving of fuel, and minimize pollution.

Within the above considerations the Bank may finance: rationalization, construction, remodeling, rehabilitation, expansion and maintenance of streets and urban transport systems, including terminals or stations for passengers and freight and complementary equipment of the physical infrastructure.

4. TECHNICAL ASSISTANCE. The Bank may provide technical cooperation to its developing member countries for the transportation sector, either on a reimbursable or nonreimbursable basis, utilizing all of the Technical Cooperation measures normally employed by the Bank. In the case of this sector, special consideration will be given for Technical Cooperation in institution strengthening (including training of personnel at managerial, technical-operational, and technical-administrative levels), sectoral studies and plans, encouraging regional integration, project preparation and design, including final design, energy use rationalization, analysis of alternate and combined transportation modes, adaptation of intermediate and less capital intensive technologies.

5. MAINTENANCE. The Bank will place emphasis on technical and financial assistance for the improvement of such aspects as programming, planning, administration, operation and execution of the maintenance of the transportation infrastructure and of the transportation systems, in general.

In this regard, the Bank will extend priority support to specific projects for the maintenance and rehabilitation of transportation systems for the purpose of prolonging the useful life and service efficiency of the infrastructure and related materials and equipment.

In addition, all Bank loans for the transportation sector will include standard maintenance clauses to assure that the project will be adequately maintained, in accordance with generally accepted technical standards for a period of at least ten years from the date of completion of the works financed with loans from the Bank.

Basic Criteria

In addition to applying the general criteria set forth in the Operations Policies Manual, the Bank will take into account that the programs and projects submitted for its consideration will:

  • Preferably be part of short, medium or long term investment plans for financing the transportation sector or its subsectors as well as being integrated with the socioeconomic planning at the national level.
  • Have the capacity to provide a speedy and efficient transportation service that makes it possible to link up the different areas each member country and helps to facilitate foreign trade.
  • Consider investments that make it possible to combine and complement the various modes of transport that can be efficiently exploited in each member country.
  • Contribute to rationalization of the consumption of energy, promoting especially the saving of energy generated with nonrenewable resources.
  • Offer possibilities to promote new socioeconomic benefits for the population.
  • Ensure the utilization of appropriate technologies, with emphasis on intensive use of labor and local materials in the execution and maintenance of infrastructure projects.
  • Protect the environment through the adoption of measures to eliminate or reduce the negative effects that the project might have and facilitate sustained utilization of the country's natural resources.
  • Offer solutions to the problems of those displaced due to execution of transport programs and projects.

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Prevailing Reference Document: GP-102-4, July 1981.

* The operational policies of the Inter-American Development Bank are intended to provide operational guidance to staff in assisting the Bank's borrowing member countries. Over the course of the Bank's more than 40 years of operations, the approach to developing operational policies has taken various forms, ranging from the preparation of detailed guidelines to broad statements of principle and intent. Many policies have not been updated since they were originally issued, and a few reflect emphases and approaches of earlier years which have been superseded by specific mandates of the Bank's Governors, the most recent being the Eighth Replenishment mandates of 1994.

In accordance with the Bank's information disclosure policy, the Bank is making all of its operational policies available to the public through the Public Information Center. Users please note that the Bank's operational policies are under a process of continuous review. This review process includes preparation of best practice papers summarizing experience at the Bank and other similar institutions, and sector strategy papers.