Philippines : Davao Public Transport Modernization Project

Project Name

Davao Public Transport Modernization Project

Project Number

45296-006

Country / Economy

• Philippines

Project Status

Active

Project Type / Modality of Assistance

• Loan
• Technical Assistance

Source of Funding / Amount

Loan 4324-PHI: Davao Public Transport Modernization Project

Source	Amount
Ordinary capital resources	US$ 1,014.69 million

Loan 8449-PHI: Davao Public Transport Modernization Project

Source	Amount
Green Climate Fund	US$ 50.00 million

Loan 8450-PHI: Davao Public Transport Modernization Project

Source	Amount
ASEAN Infrastructure Fund	US$ 10.00 million

TA 10120-PHI: Road Transport Project Implementation Support and Institutional Strengthening

Source	Amount
Technical Assistance Special Fund	US$ 500,000.00
Green Climate Fund	US$ 500,000.00

Operational Priorities

• OP1: Addressing remaining poverty and reducing inequalities
• OP2: Accelerating progress in gender equality
• OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
• OP4: Making cities more livable
• OP6: Strengthening governance and institutional capacity

Sector / Subsector

• Transport / Urban public transport

Gender

Effective gender mainstreaming

Description

The project will establish a modern public bus transport system in Davao City, the third largest city in the Philippines, with modern electric buses and Euro-5 standard diesel buses, standardized operations and reliable timetables, an intelligent transport system to support bus operation, designated bus stops with shelters and lighting, and designated bus lanes in selected road sections. The project is part of the efforts of the Department of Transportation (DOTr) to improve the public transport system in the Philippines by creating a reliable, safe, and comfortable passenger experience and by reducing air pollutants and greenhouse gas emissions. The system will (i) establish bus operation concession arrangements, engaging private bus operators with performance-based contracts; (ii) rationalize about 670 km of bus routes from more than 120 PUJ routes currently into about 30 routes, with four levels (i.e., metro Davao, Davao inter, Davao feeder, and Davao local), which will carry about 800,000 passengers per day; (iii) procure about 1,100 more energy-efficient buses that will be leased out to bus operators, of which 380 will be articulated electric buses to service metro Davao routes, while small and regular-sized Euro-5 standard diesel buses will service other bus routes; (iv) construct about 1,000 bus stops along bus corridors with shelters to protect passengers from the weather; (v) construct five bus depots and three bus terminals, and establish a bus driving school; (vi) implement minor road improvements, including identifying designated bus lanes for selected road sections, creating queue-jump lanes for buses, building pedestrian crossings near bus stops, and improving sidewalks near bus stops; and (vii) establish an ITS including bus priority traffic signaling; a bus operation control center; automatic fare collection system; and Wi-Fi connection in buses, terminals and depots, and other public waiting areas.

The project will not only create an efficient, reliable, safe, and environmentally friendly public transport system, but will also incorporate the Philippines' first ever just transition program for affected people by providing a comprehensive social development program.

Project Rationale and Linkage to Country/Regional Strategy

Davao City, with a population of 1.78 million people, is the third largest city in the Philippines. The strong growth in the Davao region (8.1% average annual economic growth during 2014-2019) has boosted demand for travel across the expanding urban area. Davao City has no rail transport system, and public transport relies on small vehicles, including jeepneys, filcabs (vans modified for ride sharing), tricycles, motorbikes, taxis, and other utility vehicles. Public utility jeepneys , including jeepneys and filcabs, serve as the backbone of public passenger transport. Most buses only operate between cities and do not provide intracity transport. Public transport accounts for 80% of trips within the city but fails to keep up with changing travel demands and routing patterns because of fragmented ownership of vehicles and franchises. As a result, severe congestion as well as vehicular pollution have been increasing, particularly over the last 10 years. Vehicular congestion has reduced travel speeds in the central business district of Davao City to less than 10 kilometers (km) per hour at peak times. The opportunity cost in the form of lost income has also been increasing over time.

PUJs are privately owned, with 90% of them on a single owner-operator basis, making it difficult to rationalize routing and create a streamlined public transport network. Also, PUJ drivers tend to wait until their PUJs are full before traveling their routes, resulting in unpredictable scheduling and blocked road lanes during peak hours. Further, there are usually no designated stops to board or alight PUJs, and the back door of PUJs cause passengers to walk directly on the carriageway of roads, creating safety hazards. According to the National Emissions Inventory conducted in 2018 by the Department of Environment and Natural Resources, the majority (74%) of air pollutants in the Philippines came from mobile sources such as PUJs, cars, motorcycles, trucks, and buses. In particular, PUJs emit large amounts of particulate matter per vehicle kilometer. In 2017, the DOTr issued the omnibus guideline on the planning and identification of public road transportation services and franchise issuance to promote reliable, safe, accessible, environmentally friendly, and comfortable public utility vehicles, which requires public transport route planning, designated stops, a curbside door for passengers, and engines complying with Euro-4 or better emission standards. A nationwide transition has been gradually under way, but it needs to gain momentum. In Davao City, PUJs currently emit 232,000 tons of carbon dioxide equivalent (tCO2e) per year, which can be significantly reduced by modernizing public transport in the city.

The project will support the government to achieve its strategic targets in the transport sector under the National Transport Policy, which focuses on (i) resource generation and allocation (ii) criteria for the preparation of agency plans, programs, and projects; (iii) cost recovery; (iv) regulation of passenger transport; (v) improvement of urban transport; (vi) support to other sectors; and (vii) governance. The transport sector development plan is outlined in the Philippine Development Plan 2023-2028, which identifies shortage of road-based public transportation as one of the main problems in connectivity in the country. The project is also fully consistent with the omnibus guideline with respect to boosting reliability, safety, accessibility, environmental soundness, and comfort of the proposed bus system. The project will also contribute to the country's first Nationally Determined Contribution, which sets a 75% greenhouse gas emission reductions and avoidance target by 2030 as part of the Philippines' commitment under the Paris Agreement on Climate Change. The city government of Davao has shown strong commitment to improving public transport management by (i) amending its comprehensive transport traffic code to strengthen the legal and regulatory framework for public transport, and (ii) developing a public safety and security command center that integrates several city operations into a single system, which enhances safety and security of public transport uses.

Impact

Inclusive connectivity though the mass transport network in Davao City achieved.

Project Outcome

Description of Outcome

Reliability, efficiency, and environmental impact of public transport improved

Progress Toward Outcome

Implementation Progress

Description of Project Outputs

A modern bus system developed

Institutional capacity strengthened

Social Development Program delivered

Status of Implementation Progress (Outputs, Activities, and Issues)

Geographical Location

Davao City

Safeguard Categories

Environment

B

Involuntary Resettlement

A

Indigenous Peoples

B

Summary of Environmental and Social Aspects

Environmental Aspects

Safeguards due diligence ongoing. Small environmental effects are expected due to the construction of depots/terminals and bus stops on the roads.

Involuntary Resettlement

Safeguards due diligence ongoing. The land for depots/terminals will be required. The locations are being finalized.

Indigenous Peoples

Safeguards due diligence ongoing

Stakeholder Communication, Participation, and Consultation

During Project Design

The main stakeholders groups are the city officials in Davao, public transport owners and/or operators, and passengers. The city officials and passengers will directly benefit from improved management and public transport services. The owners and/or operators could benefit through enhanced services and revenue streams, but could also be negatively impacted by the transition to a modern public transport system. To address the potential negative impact on owners and/or operators, the project preparatory TA will assess needs and prepare livelihood components for inclusion in the project.

During Project Implementation

The project will introduce new forms of performance-based contracts for public transport service operations. Such contracts will include a passenger feedback and measurement system ensuring that the passengers are fully involved in the process and have an active and direct involvement in the project outcomes.

Business Opportunities

Consulting Services

See above.

Procurement

All contracts will be procured in accordance with ADB's Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). The proceeds of the loan are intended to be used for the procurement of the works and consulting services using open competitive bidding procedure. Please refer to the project website, Tenders section, for the advance contracting notice, and specific procurement notices issued. ADB approval of advance contracting will not commit ADB to subsequently approve the project or to finance the procurement costs. Project website link: https://www.adb.org/projects/45296-006/main

Contact

Responsible ADB Officer

Kimura, Shuji

Responsible ADB Department

Sectors Group

Responsible ADB Division

Transport Sector Office (SG-TRA)

Executing Agencies

Department of Transportation

Timetable

Concept Clearance

10 Aug 2015

Fact Finding

14 Jun 2021 to 22 Feb 2022

MRM

14 Oct 2022

Approval

29 Jun 2023

Last Review Mission

-

Last PDS Update

29 Jun 2023

Funding

Loan 4324-PHI

Loan 8449-PHI

Loan 8450-PHI

TA 10120-PHI