Informed but opinionated commentary and analysis on urban transportation topics from the Secret Worldwide Transit Cabal. Names have been omitted to protect the guilty.

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ADVICE TO TRANSPORTATION OFFICIALS IN DEVELOPING COUNTRIES

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From the Cabalmaster:

ADVICE TO TRANSPORTATION OFFICIALS IN DEVELOPING COUNTRIES
(or: The Secret Worldwide Transit Cabal Explains it All for You!)

Truth be told, Your Favorite Transit Pundits doubt that a large number of transport ministers follow our blog. But on the off chance that there’s one or two:

Developing countries may have difficulty generating the capital necessary for large infrastructure projects – rail lines, for example. If so, then they might seek financial assistance from a “development bank.” One such institution is the “International Bank for Reconstruction and Development,” aka the World Bank. The World Bank Group www.worldbank.org. includes five organizations with headquarters in Washington, DC. Together with the International Monetary Fund (IMF) www.imf.org, these are sometimes called the “Bretton Woods” institutions. Loans are financed by subscriptions paid by member countries, and by sale of bonds to private investors and institutions.

The World Bank is not without its critics (econjustice.net/wbbb, www.50years.org/index.html). Some charge that the Bank discourages rail projects in favor of roads. This is not unfounded. Studies prepared for the Bank question the economic benefits of full-scale metros and promote busways (see, for example, “Implementation of Rapid Transit; go here wbln0018.worldbank.org/transport/utsr.nsf and download the pdf file from the list of “What’s New. . .). The Bank does provide financing for some rail rehabilitation and improvement projects (www.reliefweb.int/w/rwb.nsf/0/b71166543c80210285256d7b00681aa7?OpenDocument), but some might argue that it doesn’t do enough: a “Google” researcher concludes that the world total of rail track-miles is declining, and that rail investment is declining as a share of total transportation investment answers.google.com/answers/threadview?id=109850.

Anyway: if the World Bank has turned thumbs down on your rail project, you might consider using one of the world’s original “market-based” strategies – take your business elsewhere!

On May 17, 2004, Turkish Prime Minister Recep Tayyip Ergodan joined state and local transport officials to break ground for a new rail tunnel beneath the Bosporus, the strait dividing Europe and Asia at Istanbul. The “Marmaray” project includes the 13-km (8-mile) tunnel itself and upgrading of connecting rail lines. The earthquake-resistant tunnel will be built at an average depth of 58 meters (190 feet) below the surface. www.ibb.gov.tr/ibbeng/news/news_detail.cfm?sayfa=4444. Project cost is estimated at $2.5 billion. Of this amount, $815 million will be paid by a Japan International Credit Bank loan. (Not by coincidence, the construction tender was awarded to a Japanese-led consortium.)

(The Mamaray project, by the way, will carry heavy commuter traffic as well as freight.)

Ok, so that’s one “alternative funding source.”

As for the second . . . imagine a former American colony receiving a loan for rail development from a COMMUNIST country !!!

(Well, sort of. The Americans referred to their colonization of the Philippines as “tuletage,” and today’s China has a booming capitalist economy. But still . . .)

On February 26, 2004, Philippine and Chinese officials signed an agreement for a $400 million loan for a 32-km (20-mi) commuter rail project in northern Manila. The funds will be provided by the Export-Import Bank of China english.peopledaily.com.cn/200402/27/eng20040227_136018.shtml. This was described as the largest Chinese-financed project in the Philippines to date.

“Phase 1, Section 1” of the Metro North Rail Project was estimated to cost $503 million, with the balance to be financed by the North Luzon Railways Corporation through commercial loans. The Philippine government has proposed that China expand the loan agreement to include the planned rehabilitation of the Philippine National Railway (PNR) Main South Line www3.mb.com.ph/BSNS200405058813.html.

The North Rail project is the first phase of a project to rebuild the PNR Main North Line, with branches to the Diosdado Macapagal International Airport, Clark (the former U.S. Clark Air Base) and Subic Freeport Zone (the former U.S. Subic Bay naval station) www.atimes.com/atimes/China/FD07Ad02.html. Philippine and Chinese officials attended the groundbreaking ceremony on April 5, 2004 www.malaya.com.ph/apr06/metro1.htm.

Yes, there’s a third “alternative funding source.” News reports covering the groundbreaking for the North Rail project in the Philippines stated that South Korea will provide financing for the PNR Main South Line project.

(Y’know, we can’t help but wonder whether “foreign” development banks will ever loan money to build a subway in a cash-strapped city such as, say, Detroit . . .)
posted by The Cabalmaster, Master of All Transit-dom 10/31/2004 02:39:00 PM