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Mobilizing Resources t o Manage Risk

& Pursue Opport unit ies



EMBARQ

• A catalyst for socially, financially, and

environmentally sound solutions to theproblems of urban mobility



EMBARQ

• A center within World Resources Institute, anindependent non-profit research and policyorganization

• Founded in May 2002 by WRI with a 5 yr grantfrom Shell Foundat ion

• Additional EMBARQ contributors include – Hew let t Foundat ion – Netherlands Minist ry of Foreign Affairs – Asian Development Bank – Energy Foundat ion – Blue Moon Fund

– US Environmental Protect ion Agency



EMBARQ’s St rat egy

• Work with politically and financially empowereddecision makers

• Form strategic public-private partnerships

• Inject “business DNA” into government/NGOprojects or a Disciplined Drive for Quality

– Learn from corporate sectors’ mistakes and successes

to save time and money in public sector

– Reduce risks and costs by good project planning andmanagement techniques



EMBARQ in Mexico

From t heory t o pract ice



EMBARQ’ s St rategy

• Work with politicallyand financiallyempowered entities

• Form strategic

public-privatepartnerships

GENERAL MEXI CO CI TY

• GDF• Shell & Hewlett

Foundations

• Vehicle manufacturers• World Bank

• MOU with City Gov to

create CTS-Mexico andto cooperate onsustainable transport

1

2



EMBARQ’ s St rategy

• Form strategicpublic-privatepartnerships

• Inject “BusinessDNA” to obtain bestoutcomes

GENERAL MEXI CO CI TY• Partnered with national

government, other NGOand numerous privatecompanies to implement

solution set

• Orientation

• Opportunity Framing

• Risk Analysis

• Decision Road Maps

• FAST Diagrams

3

4



I nt egrated solut ions for Mexico Cit

• Bus Rapid Transit – Technical advisory services t o cit y on:

• Design and infrast ructure• I nst it ut ional/ Organizat ional Reform• Negotiat ion w it h service providers

• Diesel Retrofit – Test potent ial emissions reduct ion for heavydiesel

– I nt roduct ion of top-of- t he-line t echnologies

• Test Clean Fuels and Buses – Secured donat ions/ loans from MNC

– I dent ify best -perform ing fuel/ enginecombinat ions for Mexico Cit y condit ions



Bus Rapid Transit

• Systemat ic Reorganizat ion of Sur face

Transport – Rapid implementation, stable finances still possible – Reliable (mostly private) operators, relatively transparent

regulations,

– Potential for integration with other modes (smart cards)• Backbone of I nt egrated Mass Transit System

– Friendly to other modes – Clearly branded and popular (High customer satisfaction)

– Can be integrated with State of Mexico transit services• Priorit y t o t he Client

– Speed through protected lanes, traffic signal synch. – Greater comfort and security on board, smoother ride

– Reliability and high frequency, with pre-paid fares

• Health impacts baseline and w it h corr idor

More than just lines on a map!



Scaling Up: Mexico City

Met ro & l ightMet ro & l ightrailrail

FutureFutureBRTBRTcorridorscorridors

InsurgentesInsurgentesBRT corr idorBRT corr idor

TLALPAN

CUAUHTÉMOC

AZCAPOTZALCO

VENUSTI ANOCARRANZA

BENI TOJUÁREZ

COYOACÁN

XOCHI MI LCO

I ZTAPALAPA

TLÁHUAC

G. A. MADERO

I ZTACALCO

ÁLVAROOBREGÓN

MI GUELHI DALGO

L 1, 5, 9, A

LAL8L2

L3

L7

L1 L9 L4

L4

L2LB

L6

L5L6

L7

LB

L8



Ret rof it t ing Mexico Cit y’s Diesel Fleet

• Exhaust retrofit of existing heavy vehicles;

90% less PM, 20% less NOx

with catalyst-based diesel particulate filters• Used cleanest diesel available (<15 PPM)

• Careful testing to pick best buses to retrofit

• Competitive bidding for equipment



Test ing for best engine/ fuel combo

• Advanced Systems – Maybe Now , MaybeLater – Fuel cells: Feedstock and infrastructure main

uncertainties; cost is high

– Hybrid showed lowest emissions, fuel use, butnot best value

– Clean diesels (with ultra low sulfur fuel) likelythe most cost-effective option

– CNG buses good emissions performance butwill require system change - a high hurdle



Tractor t rai75,000

Light t ruck19,000

Buses30,000

Other9,100

Passenger32,000



Anatomy of a Train Wreck

Why large projects fail in cost-efficiency & performance

• Poor front-end loading (early-stage planning)

• Schedule Driven Vs. Decision Driven

• Caught up in company politics

• Ignored best practices:Learning curve does not curve!

• Inappropriate contracting strategies



Ignoring best practices

• Exceptionalism: “We do it differently

here”• Lack of ownership: “Give me a call

when its finished”

• Inadequate front-end planning: “It’s afast track project”

• Corporate arrogance: “This project isdifferent”



Risks and Opportunities

• Municipal proj ect s exhibi t all of t hese r isks,and t hen some

• They have less access to good practices thanbusiness, less money to waste, but less incentive to

be efficient

• Partnership with EMBARQ contingent upon beingwilling to manage risks and opportunities

collaboratively, using process adapted from Shelland other businesses



The EMBARQ Process: Objectives

• To produce clarity and alignment among theteam, interest groups, and decision makers

about what is, in fact, the opportunity;• Identify the main motivation points and

success factors, as well as the risks andopportunities;

• Define the range of efforts necessary to

develop the opportunity;• Build a road map oriented by decisions and

a plan to reach success.



Why Plan so Carefully?

DEFI NEI DENTI FY &EVALUATE EXECUTE

OPERATE YMAINTAIN

Abil i ty t oinf luence cost

TiME

Low

High

Cost t o Change

Abil i ty t oinf luence cost

SELECTStage of t heproject

$1 $10 $100 $1000>$10,000I nvestment in$1,000

De ining t e Opportunity an t e



De ining t e Opportunity an t elife cycle of a Generic Project

Defining the opportunity

SELECT DEFI NEI DENTI FY AND

ESTI MATE EXECUTEPERFORM AND

MAINTAIN

Determine theopportunity’s

pot encial valueand t heal ignment w iththe business’strategy

Generat e andselect t he

concept t otake theopportunity

Finalize t herange, costs,

chronogram,and ger t heexecutionresources

Build andproduce in a

consistentmanner w i thdefined range,cost s, andchronogram

Start t o performand evaluate to

guarantee acorrectperformance andthe return t oshareholders

Identification of the Value Realization of the Value



Good front -end planning

• What is left t o do?

• What are the risks andopportunities?

• Act ions/ decisions

• What m ust be done to makeprogress and succeed?

3. How do w e get t here?3. How do w e get t here?

•Objectives

• Definit ionof success

2. Where

do w e w antt o be?

2. Where2. Where

do w e w antdo w e w antt o be?to be?

•What has beendone up unt ilnow?

•Why this proj ect?

•Where are w e int he project?

1. Whereare w e?1. Where1. Whereare w e?are w e?



The opport unit y statement defines w hat t he opport unit y is andisn’t!

• Serves as basis for t he design and it w ill be tested as w e

move forw ard;• Serves to mant ain t he team’s focus;• Establishes a reference point .

A good pportunit y st at ement should have the follow ingcharacteristics:• Be logical;• Allow all t eam m embers t o use it as a reference;• Open enough opport unit ies t o invest igate creat ive

alternatives;• Be clear and concise to all t hat read it ;• Consider ful l li fe cicle.

The opportunity statement



Framing

• By 2007, Cit y X w ant s t o beoperat ing a new , high qualit yBRT, w it h a t runk-feed design,

managed/ administ rated by anindependent ent it y, w hich offersusers an improvement in service

and w hich creates new businessopport unit ies for t he incumbentsoperat ing in t he system today.

2. Where

do w ew ant t obe?

Opportunity Statement

2. Where2. Where

do w edo w ew ant t ow ant t obe?be?



Framing

Opportunity Statement

By t he end of 2007, a corr idor going

through t he cit y center w il l be w ork ing,t aking out stops and t erminals,improving the space and t ransport

circulat ion; aspir ing t o be of highperformance and keeping the arr ival ofpeople t o t he cent er. The operat ion of

t he corr idor w ill be economicallysustainable, t ranscending change ingovernment and creat ing opport unit iesof pr ivate investment s.



Framing

Definition of success

Principal Success Crit eria • Rest ructure of public spaces in t he cit y

cent er, start ing by removing buses f romSuch and Such an Avenue;

• High customer sat isfact ion;• No more lines of people w ait ing for

buses in t he cit y cent er .



InfrastructureProjectTecnology

InfrastructureProjectTecnology

BudgetsCostsEconomic ModelFinancing

BudgetsCostsEconomic ModelFinancing

ContractsCommercial ModelMarketing

ContractsCommercial ModelMarketing

StructureResponsabilitiesProcedures

Structure

ResponsabilitiesProcedures

GovernmentInterested GroupsEmployment

GovernmentInterested Groups

Employment

Risk Analysis – the TECOP Concept

Technical

Economic

Polit ic

Organizational

Commercial



Process

Where arew e?

How do we get t here?Where do wew ant t o go?

LimitsDecisions m adePressuposts

Business Cont ext

Management of I nterestGroups

Define the opportunit y

Define the success

Key-factors for success

Success measurements

Success

Path t o be followed

Risks

InfrastruturaProjetoTecnología

InfrastruturaProjetoTecnología

OrcamentosCustosModeloeconômicofinanciamento

OrcamentosCustosModeloeconômicofinanciamento

ContratosModeloComercialMarketing

ContratosModeloComercialMarketing

EstruturaCompetênciasProcedimentos

EstruturaCompetênciasProcedimentos

GovernoGruposinteressadosEmprego

GovernoGruposinteressadosEmprego

Técnico

Econômico

Político

Organisacional

Comercial

Proj ect phasesPrincipal goals

Key-decisions

Business Minds BV

TECOP A infraestrutura, o Projeto, a Tecnologia…

Riscos técnicos

23

2221

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

OportunidadeAmeaçaRiscoRef

The Risks

D i i R d M



Decision Road Map

Quien Decide Quien Decide Quien Decide Quien Decide Quien Decide

Líder del equipo:

Equipo:

Líder del equipo:

Equipo:

Líder del equipo:

Equipo:

Líder del equipo:

Equipo:

Líder del equipo:

Equipo:

Fase 1 Fase 2 Fase 3 Fase 4 Fase 5

Detenerse, Espera, Reciclar Detenerse, Espera, Reciclar Detenerse, Espera, Reciclar Detenerse, Espera, Reciclar Detenerse, Espera, Reciclar

Tiempo Tiempo Tiempo Tiempo Tiempo Tiempo

OBJECTI VE

TIME

KEYDECI SI ONS

DECI SI ON

MAKERSDELI VERABLES



The most recurring risks

• Prioritizing the project (assign projectmanager full time)

• Prioritizing the project (mayor gives itsufficient budget and attention)

• Exclusive focus on technological• Time to define financial model vs time

to execute the project

• Resistence to change (incumbentoperators, street vendors, users, etc)



Thank You

Nancy Kete28 March 2006

www.embarq.wri.org

S stainable T anspo t Sol tions



Sustainable Transport Solutions

Operate & Maintain

ExecuteDefineSelectIdentify& Assess

Diagnose

Decide to Go

Ready to start

up

A portfolio of solutions to be implementedProblems are now well defined

Typical EMBARQ Solution Set

•Mass Transit - BRT typically, and/ortransit system business model restructuring

• Non-motorized transport• Transport demand management• Traffic engineering• Retire, Replace, or Retrofit for emissions

control• Transport oriented development• Policy reforms to enable any of the above

Typical Diagnosis Outputs

•Emissions Inventory• Indicators•Preliminary assessment

of transit system quality

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