The first tranche under the proposed MFF will require $59.9 million from ADB's ADF resources and $10.0 million of the government counterpart funds to finance (i) $29.3 million for BRT infrastructure development; (ii) $22.5 for BRT system development; (iii) $2.2 million for ITS system; (iv) $5.3 million for project management, detailed design, and institutional development; (v) $7.0 million for physical and price contingency; and (vi) $3.6 million for financing charge during implementation.
Tranche-1 will (i) develop BRT infrastructure: upgrade 7.7 km of road, expand the Peace bridge, and install 14 km of electric trolleybus infrastructure (electric wires, feeder cables, and substations) for the BRT system; (ii) introduce a 14 km BRT line in the north-south corridor of Ulaanbaatar; (iii) construct 3 bus stations in ger area subcenters ; (iv) install an intelligent transport system (ITS) component: bus management system (BMS); and (v) provide resources for project management, detailed engineering design, and institutional development. The investment program will also help MUB (i) develop a clean transport policy and investment program, procure and install emission testing equipment, and pilot a clean energy-based transport modality in Ulaanbaatar; and (ii) prepare a performance based BRT operation contract.
|Project Rationale and Linkage to Country/Regional Strategy
Transport infrastructure and services in Ulaanbaatar are suffering from increasing road congestion, inefficient traffic management, poor safety conditions, and a weak public transport system. Most of the major intersections in the city center are severely congested (220 seconds/vehicle) resulting in average speeds of 5-8 kilometers (km) per hour at the central section of the city during peak hours. Traffic congestion is aggravated by insufficient parking management and enforcement, excessive and inappropriate designation of parking spaces, lack of pedestrian facilities and driver discipline, and inadequate traffic signaling and control. Traffic accidents are common due to poor traffic management and the uncontrolled interaction of pedestrians and vehicles. Encroachment on roads and sidewalks by parked vehicles worsens the traffic situation. Planning and budgeting for pedestrian and parking infrastructure is lacking.
Inefficient public transport policies and lack of coordination among the urban development and public transport regulatory agencies exacerbate the situation. Increased trip times, excessive fuel use, and health problems due to poor air quality, all serve to reduce residents' quality of life and have a negative impact on the economic growth of the city. The public transport system is struggling with low service quality; and technical, financial, and institutional challenges. Public transport service has lagged behind the recent urban growth and majority of buses are more than 10 years old. The public transport tariffs do not fully cover the costs of the operators and about 40% of the passengers are subsidized by the municipal budget. As a result, the municipal budget subsidizes a substantial part of the bus companies' annual costs, but the mechanism for allocating subsidies lacks transparency and is perceived as inequitable. Bus operators lack financial resources to renew and expand their bus fleet and provide adequate transportation services. Interaction among the different modes of public transport is far from optimal. The public transport routes are not designed as part of a feeder-and-main-line system, and the route allocation and management system needs to be improved.
Ulaanbaatar has a range of serious road traffic safety problems. While the total number of recorded traffic accidents may have peaked in the year 2000 and appear to have been falling since then, the rates of traffic fatalities and personal injury accidents relative to the number of registered vehicles are alarming. It is evident that, while the capital city is home for about 42% of the total population of Mongolia, Ulaanbaatar routinely accounts for over 70% of the annual traffic accidents in the country. An incidence of 7.5 deaths per 10,000 vehicles per year highlights the extent of the road safety issue.
The road network is well developed only in the central area of the city, but in outlying residential and ger areas, where many low income families live, an undeveloped road network became a barrier for provision of public transport services. The government increased budgetary allocations for upgrading the city road network, but the growing fleet of private vehicles requires a substantial amount of investments to expand the road network. Efficacy of these investments is reduced by the lack of a systematic road maintenance program and budgeting mechanism.
The Municipality of Ulaanbaatar (MUB) is preparing the city master plan that aims to develop the city infrastructure, including urban roads, utility network, transport system, and services. In line with the city master plan, MUB established a road fund that finances the road network construction and maintenance works, but the funds are still insufficient to cover the city's needs. The following areas of MUB's capacity require considerable improvement: (i) development, implementation, and enforcement of the urban transport policy and strategy; (ii) long-term investment planning, capital budgeting, and financial management; and (iii) design and management of urban transport projects financed by international development partners.
The urban poor suffer disproportionately from an inadequate transport system. Underinvestment in public transportation raises the cost of commuting and restricts access to jobs and services. The poor tend to be more exposed to risks associated with externalities in transport: they lack adequate means to avoid exposure to polluted air, face higher commuting distances and costs, and are particularly affected when there is a lack of provisions for pedestrians. The poor stand to benefit significantly from improved transportation services. Road improvements will only make limited and temporary improvements. Strong institutions with clear mandates are required to implement investments, attract financing, coordinate among stakeholders, and regulate service providers. Without a viable public transport system, Ulaanbaatar has started experiencing serious traffic congestion with negative impacts on economic vitality and quality of life. Improvements in traffic and parking control, driving behavior, and enforcement are also critical for addressing the city's transport needs. The problem tree that highlights the key urban transport sector challenges in Ulaanbaatar is in Appendix 2.
Development partner engagement in the urban transport has been increasing. The Japan International Cooperation Agency (JICA) is (i) helping MUB update the city master plan that also includes the transport sector; (ii) developing an international airport construction project; (iii) financing construction of a railway flyover; and (iv) financing a feasibility study for a light rail transit (LRT) system for Ulaanbaatar. The European Bank for Reconstruction and Development (EBRD) is developing a project that aims to develop an electric transport company that operates trolleybuses and upgrade the electric transport infrastructure of the city. The Export-Import Bank of Korea has financed an intelligent transport system project, at an estimated cost of $17.0 million, to improve traffic signals at 79 intersections that are being integrated and coordinated through a central control center. The World Bank team is preparing Ulaanbatar Services Improvement Project 3, which will improve secondary roads in ger areas. The Asian Development Bank (ADB) is (i) implementing the Urban Development Sector Project that is improving road access of ger areas to the central areas of Ulaanbaatar; and (ii) developing the Urban Services Development Investment Program (USDIP) that will help MUB develop urban subcenters. Tranche 1 of the proposed Urban Transport Development Investment Program will finance upgrading of 3 bus stations in the urban subcenters of Ulaanbaatar that will be included in the USDIP's scope. The project team is coordinating its activities with all the international financial institutions to strengthen policy dialogue with the government on introducing a financially sustainable and environmentally-friendly transport system to support economic growth of the capital city.
The above challenges and setbacks of Ulaanbaatar's urban transport system require a comprehensive program that includes investments in infrastructure improvement combined with modern traffic management technologies, policy reforms, efficient and sustainable transport modalities, and institutional development.