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Connections is a weekly series of knowledge notes from the World Bank Group’s Transport & Information and Communication Technology (ICT) Global Practice. It covers projects, experiences, and front-line developments.

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    Lima Urban Transport: On the Way to Transformation
    (World Bank, Washington, DC, 2015-10) Darido, Georges ; Pulido, Daniel ; Targa, Felipe ; Alvim, Bernardo ; Peralta-Quirós, Tatiana
    The implementation of metro line 2, now under way, will provide a modern, 35 kilometer mass transit axis linking major population and job centers in Lima, the capital of Peru, with Callao to the west, the country’s chief seaport and international airport. Integrated with the Lima-Callao region’s existing public transport network, line 2 will create a major corridor that will improve the accessibility of jobs, services, and markets for 2.3 million people and provide a backbone for more efficient urban development. Beyond the investment loan, this co-financed project is an outgrowth of a long term metropolitan transport strategy and multifaceted engagement that is aligned with the World Bank’s goals of reducing poverty and boosting shared prosperity through sustainable development. It will give a boost to the competitiveness of the entire Lima-Callao Metropolitan Region, which has a population of more than 9 million and constitutes more than one-third of the national economy.
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    Private Participation in Urban Rail: A Resurgence of Public-Private Partnerships
    (World Bank Group, Washington, DC, 2015-03) Pulido, Daniel ; Hirschhorn, Fabio
    Cities in the developing world are relying more on public-private partnerships (PPPs) to carry out the most complex and demanding of public works initiatives - the development of new urban heavy rail, or metros, usually involving underground lines. Most of the world’s metro systems are operated and were funded and built by public agencies. But developing country governments are shying away from the high cost and complexity of such systems and are acquiring more experience partnering with the private sector on infrastructure projects. Hence, the PPP approach, tried for metros with mixed results in the 1990s, has become more attractive. In the past five years, 2010-2014, five cities in Latin America and developing Asia have initiated seven new urban heavy rail lines using PPPs. In four of these projects, the PPPs are fully bundled, that is, they encompass design, financing, construction, and operations. It is too early to judge the overall performance of these seven projects, but some recommendations can be drawn from them as well as from earlier urban rail PPPs. The central lessons are the critical importance of a robust planning and management capacity in the public sector partner and the value of strong efficiency incentives for the private sector partners.
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    Boosting Mass Transit through Entrepreneurship: Going beyond Subsidies to Reduce the Public Transport Funding Gap
    (World Bank Group, Washington, DC, 2015-02) Pulido, Daniel ; Portabales, Irene
    Most of the world’s urban mass transit systems cannot cover operating costs, let alone capital expenses, through farebox revenues. On average, 25 percent of metro operating expenditures are not funded by farebox income. With limited public subsidies, as well as obstacles to raising fares and political sensitivities to road user taxes, metro systems have been increasingly pursuing income from commercial activities connected with their operations. Metro systems earn commercial income, such as from advertising, naming rights, and especially real estate activities, are making inroads in their operating deficits. Commercial revenue in some systems is nearing 20 percent of fare revenue. Although reforms of transit financing structures remain high on the policy agenda, a review of ancillary income streams of metro systems around the world shows that a more entrepreneurial approach to tapping their commercial potential can help them narrow their funding gap.