||The TA will introduce integrated circuit card (ICC) ticketing and automatic vehicle location (AVL) systems that will improve the quality, efficiency, and transparency of the public transport sector. The systems will (i) establish a transparent and accountable ICT system for passenger ticketing based on a smart-card system; (ii) optimize use of resources by eliminating illegal free riding; (iii) install an efficient ICT-based financial management system; and (iv) rationalize bus routing, dispatching, and scheduling based on actual passenger demand and observed travel patterns. The proposed AVL system, which will be based on global positioning system technology, will help the public transport management body to (i) locate buses en route in real time, (ii) automatically detect deviations from schedule and allow operators to respond to deviations by holding buses or dispatching additional buses, (iii) develop and implement more efficient bus operating schedules, and (iv) transmit real-time information about bus locations to passengers and bus operators. Introducing these systems requires careful planning and meticulous preparatory work, including (i) establishment of a system management body, (ii) development of a financing mechanism, (iii) integration of the fare collection system of multiple bus operators, (iv) design of bus passenger services based on bus location data, and (v) development of a staged implementation program.
|Project Rationale and Linkage to Country/Regional Strategy
Mongolia has experienced rapid urbanization over the last decade - more than 60% of the countrys population currently resides in Ulaanbaatar. Serious urban development challenges now face Ulaanbaatar, including insufficient transport infrastructure and poor quality of public transport services and management. Investments in urban transport infrastructure, management, quality of services, and road safety have significantly lagged behind the pace of urbanization. As a result, the city is suffering from heavy road congestion, insufficient traffic management, poor safety conditions, and a weak public transport system. These factors contribute to economic inefficiency because of increased trip times, excessive fuel use, and poor air quality, which all diminish the quality of life. Without a viable public transport system, Ulaanbaatar will soon experience even more serious traffic congestion which will negatively affect economic development and quality of life.
Efficient public transport management institutions with clear mandates and strong capacity are required to implement investments, attract financing, coordinate among stakeholders, and regulate service providers. The institutional capacity of MGU needs to be improved with regard to (i) development, implementation, and enforcement of the urban transport policy and strategy; (ii) long-term investment planning, capital budgeting, and financial management; and (iii) the design and management of urban transport projects financed by international development partners and private sector investors.
Financial management of the public transport sector is one of the key areas requiring urgent assistance. Bus fares have not been increased since 1999 while fuel costs have increased more than five times during the same period. The municipal budget subsidizes about 42% of the bus companies' annual costs, but the mechanism for allocating subsidies does not account for actual passenger ridership and is inefficient. Bus operators do not have the 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. More than 20% of the city's budget is spent on subsidizing the bus expenditures of elderly people, military personnel, and students. The bus fare compensation system is inefficient because the amount of compensation is based on assumptions of passenger flow and does not reflect actual passenger numbers. This is exacerbated by illegal free riders using copied or fake identification documents. In addition, high levels of spending on public transport subsidies crowd out limited resources from other important city budget priorities such as education and public health programs. Thus, improving the efficiency and management of the public transport system would bring wide-ranging benefits in multiple sectors in Ulaanbaatar. The success and sustainability of the proposed Urban Transport Development Project largely depends on effectively addressing the inefficient revenue collection and passenger subsidy systems and the uncoordinated operating environment of the existing public transport system. The TA will build on the ongoing technical assistance to Mongolia for Preparing The Urban Transport Development Project and ensure that (i) the above issues are addressed in detail, (ii) the cost estimates for the proposed ICT investments under the Urban Transport Development Project are accurate and financially viable, and (iii) a well-conceived plan for implementing these improvements is in place before the Urban Transport Development Project is implemented.
Urban sector development, including urban transport infrastructure and services, is one of the key sectors for ADB assistance in Mongolia. ADB has provided support to the government for urban sector development since 1998. The Mongolia country operations business plan for 2009-2012 includes the Urban Transport Development Project in the 2011 pipeline. The TA will help the project employ integrated ICT solutions to improve public transport management in Ulaanbaatar. The proposed TA is in line with ADB's urban development strategy and road map for the country as well as the sustainable transport action plan, which aims to address transport needs and provide support to the transport sector in developing member countries and thereby reduce adverse environmental and social externalities associated with transport.