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Document of

The World Bank

Report No: RES18682

RESTRUCTURING PAPER

ON A

PROPOSED PROJECT RESTRUCTURING

OF

SÃO PAULO METRO LINE 4 (PHASE 2)

LOAN NO. 78690-BR

MAY 4, 2010

TO THE

STATE OF SAO PAULO, BRAZIL

WITH THE GUARANTEE OF THE FEDERATIVE REPUBLIC OF BRAZIL

APRIL 13, 2016

Transport and ICT Global Practice

Latin America and the Caribbean Region

This document has a restricted distribution and may be used by recipients only in the performance of their

official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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Regional Vice President: Jorge Familiar

Country Director: Martin Raiser

Senior Global Practice Director Pierre Guislain

Practice Manager: Aurelio Menendez

Task Team Leader: Georges B. Darido

Bianca Bianchi Alves

BRAZIL


CONTENTS

A. SUMMARY …………………………………………………………………..2

B. PROJECT STATUS ……………………………………………………………3

C. PROPOSED CHANGES………………………………………………………..7

D. ANNEXES

Annex I Revised Result Indicators…………………………………………..7

Annex II Tables of Economic Analysis………………………………………15

1

DATA SHEET

Brazil


LATIN AMERICA AND CARIBBEAN

Transport & ICT

Report No: RES18682

Basic Information

Project ID: P106390 Lending Instrument: Specific Investment Loan

Regional Vice President: Jorge Familiar Original EA Category: Full Assessment (A)

Country Director: Martin Raiser Current EA Category: Full Assessment (A)

Senior Global Practice

Director: Pierre Guislain Original Approval Date: 04-May-2010

Practice

Manager/Manager: Aurelio Menendez Current Closing Date: 30-Apr-2016

Team Leader(s):

Georges Bianco

Darido,Bianca Bianchi

Alves

Borrower: State of Sao Paulo

Responsible

Agency: Sao Paulo Secretariat of Metropolitan Transport

Restructuring Type

Form Type: Full Restructuring Paper Decision Authority: RVP Decision

Restructuring Level: Level 2 Explanation of

Approval Authority:

Although a Level II

restructuring, this request

involves a Loan Closing Date

extension of 2 or more years

cumulatively beyond the

original Loan Closing Date.

Therefore CD Concurs and

RVP decides.

Financing ( as of 17-Mar-2016 )

Key Dates

Project Ln/Cr/TF Status Approval

Date Signing Date

Effectiveness

Date

Original

Closing Date

Revised

Closing Date

P106390 COFN-

C1230 Effective 15-Nov-2010 15-Nov-2010 15-Nov-2010 30-Jun-2014 30-Apr-2016

P106390 IBRD-78690 Effective 04-May-2010 27-Sep-2010 15-Dec-2010 30-Jun-2014 30-Apr-2016

2

Disbursements (in Millions)

Project Ln/Cr/TF Status Currency Original Revised Cancelle

d

Disburse

d

Undisbur

sed

%

Disburse

d

P106390 COFN-

C1230 Effective USD 130.00 130.00 0.00 51.68 85.27 40

P106390 IBRD-78690 Effective USD 130.00 130.00 0.00 67.18 62.82 52

Policy Waivers

Does the project depart from the CAS/CPF in content or in other significant

respects? Yes [ ] No [ X ]

Does the project require any policy waiver(s)? Yes [ ] No [ X ]

A. Summary of Proposed Changes

This restructuring paper is to extend the Loan Closing Date from April 30, 2016 to February 28, 2018 in

response to the Borrower request submitted on August 7, 2015. The proposed 22-month extension of the

Closing Date is the time necessary to substantially achieve the Project objectives and fully disburse the

US$130 million Loan (currently 52% disbursed, US$62.8 million remaining). If accepted, it would be the

second extension for this Project for a cumulative total of 44 months.

Change in Implementing Agency Yes [ ] No [ X ]

Change in Project's Development Objectives Yes [ ] No [ X ]

Change in Results Framework Yes [ X ] No [ ]

Change in Safeguard Policies Triggered Yes [ ] No [ X ]

Change of EA category Yes [ ] No [ X ]

Other Changes to Safeguards Yes [ ] No [ X ]

Change in Legal Covenants Yes [ ] No [ X ]

Change in Loan Closing Date(s) Yes [ X ] No [ ]

Cancellations Proposed Yes [ ] No [ X ]

Change to Financing Plan Yes [ ] No [ X ]

Change in Disbursement Arrangements Yes [ ] No [ X ]

Reallocation between Disbursement Categories Yes [ ] No [ X ]

Change in Disbursement Estimates Yes [ ] No [ X ]

Change to Components and Cost Yes [ ] No [ X ]

Change in Institutional Arrangements Yes [ ] No [ X ]

Change in Financial Management Yes [ ] No [ X ]

Change in Procurement Yes [ X ] No [ ]

Change in Implementation Schedule Yes [ X ] No [ ]

Other Change(s) Yes [ ] No [ X ]

Appraisal Summary Change in Economic and Financial Analysis Yes [ X ] No [ ]

3

Appraisal Summary Change in Technical Analysis Yes [ ] No [ X ]

Appraisal Summary Change in Social Analysis Yes [ ] No [ X ]

Appraisal Summary Change in Environmental Analysis Yes [ ] No [ X ]

Appraisal Summary Change in Risk Assessment Yes [ ] No [ X ]

B. Project Status

The São Paulo Metro Line 4 (Phase 2) Project was approved on May 4, 2010 and became effective on

December 15, 2010. The Project Development Objective (PDO) is: (a) to improve the quality of service

provided to the urban transport users in the area of influence of the new Line 4 stations (São Paulo-

Morumbi, Fradique Coutinho, Oscar Freire, Higienópolis-Mackenzie and Vila Sônia) and (b) to facilitate

the integration between metro and bus at those stations. The Project will add five stations to the existing

Line 4 to achieve an extension of 12.8km from the expanded center of the city to the west, and is expected

to cost approximately US$980 million. The Project is co-financed by the State of São Paulo (the

Borrower), IBRD, JBIC and the private concessionaire already operating the line.

The basic engineering designs were completed in 2011 and two procurement processes for civil works

were issued using ICB in 2012, in a very competitive process with around 36% discount of the price

estimated by SP Metro. Project implementation was satisfactory until October 2015 with the delivery of

one station (Fradique Coutinho), and despite delays in project designs and construction, the project

objectives seemed achievable. However, by December 2014 the construction had essentially stopped. The

contract was terminated by Metro in September 2015 and a new bid was published in November 2015. An

extension of the implementation is required because there have been significant delays in implementation

since December 2014 which cannot not be recovered. SP Metro is now rebidding the remaining civil

works through an international competitive process expected to be concluded by May 2016.

Despite delays and cost increases, the implementation progress was recently upgraded to Moderately

Satisfactory as the Borrower presented an acceptable Action Plan to resume works and is following up on

that plan. The Project's objectives remain fully achievable and the only proposed change to the original

results framework is a revision of the target dates.

C. Proposed Changes

Development Objectives/Results

Project Development Objectives

Original PDO

The objectives of the Project are: (a) to improve the quality of service provided to the urban transport users

in the area of influence of the new Line 4 stations (São Paulo-Morumbi, Fradique Coutinho, Oscar Freire,

Higienópolis-Mackenzie and Vila Sônia), and (b) to facilitate the integration between metro and bus at

those stations.

Change in Project's Development Objectives

Change in Results Framework

Explanation:

The dates for the results framework were updated based on the new schedule of the project.

Financing

4

Change in Loan Closing Date(s)

Explanation:

The Project needs to be extended because civil works, the main component of this Project, have been

delayed and the contracts were canceled. The new main procurement process was published in November

2015 and the new contracts are expected to be signed only by May/2016. As a consequence, the Bank's

loan will not be disbursed much further before the current Closing Date of April 30, 2016, except for an

ongoing systems contract and emergency contracts to control groundwater levels in partially built stations.

Ln/Cr/T

F Status

Original Closing

Date

Current Closing

Date

Proposed Closing

Date

Previous Closing

Date(s)

COFN-

C1230 Effective 30-Jun-2014 30-Apr-2016 28-Feb-2018 30-Jun-2014

IBRD-

78690 Effective 30-Jun-2014 30-Apr-2016 28-Feb-2018 30-Jun-2014

Other Change(s)

Change in Procurement

Explanation:

The civil works contracts awarded were canceled, so a new procurement had to be initiated. Civil works

will be contracted under one bidding process, and permanent way (tracks) under a different bidding

process. The reason for the separation was that detailed design for civil works were completed, whereas

permanent way (tracks) scope includes contracting detailed design.

Change in Implementation Schedule

Explanation:

An extension of the implementation is required because there have been significant delays in

implementation since December 2014 which cannot not be recovered. SP Metro is now rebidding the

remaining civil works through an international competitive process expected to be concluded by May

2016. Therefore, there will be very little physical progress or financial disbursements from the Bank’s loan

before then.

Appraisal Summary

Appraisal Summary Change in Economic and Financial Analysis

Explanation:

A. SUMMARY

1. The Project Appraisal Document (PAD) for the São Paulo Metro Line 4 (Phase 2) Project was

published on March 25, 2010. Since then, the expected number of passengers’ boardings for Phase 2

stations has varied substantially, decreasing from 96.8 to 59.3 million passengers/day, as can be seen in the

new demand indicators below.

2. This change in demand values can be attributed to two main factors: i) demand estimates from

PAD had been based on the 1997 OD Survey and related socioeconomic projections; this new data reflects

the updated model with 2007 OD Data and ii) estimates did not fully consider the impacts of Line 5

opening into the demand of Line 4. The free integration between Line 5 and the suburban bus system

impacts boardings at Vila Sonia station. Some passengers that would prefer to take line 4 would still use

Line 5 because of this fare integration, and integrate physically through CPTM Line 9 and Pinheiros

station. Although this does not affect overall demand for Line 4, it changes the distribution of boardings

among stations.

5

3. This new situation requires an update to the Economic Analysis carried out in the PAD. In the

previous analysis, a conservative hypothesis was taken into consideration; potential metro users would

shift to buses and rail as a counterfactual scenario. This time, however, given the important participation of

private vehicles (car), benefits associated with those were included. São Paulo Metro (Implementing

Agency) has revised the transport model and provided the new demand indicators, including the induced

change in private vehicles users (car).

4. The base scenario considered the demand for Line 4 (Yellow Line) Vila Sonia-Luz in 2018

(stations Morumbi, Oscar Freire and Higienópolis/Mackenzie), and in 2020 with the extension until Vila

Sonia Station, and included the Capao Redondo-Largo Treze segment of Line 5 (Lilac Line). The review

of the transport demand and economics study involved the following activities: a) network simulation

review; b) review of investment flows as reported by the PMU; and c) calculation of the internal rate of

return considering updated unit costs and operational parameters of the transport system.

5. The methodology consisted of comparing the situation with and without Project and quantifying

the benefits due to time savings for users of transport modes, operating cost savings for all modes, road

maintenance cost savings, accident savings, air pollution savings against the investment and operating

costs. The demand for each mode was determined using a demand model which estimated the passenger-

hours and passenger-km saved by mode with the Project for without and with scenarios (refer to Table 4).

An incremental analysis of Phase 2 investments was conducted. Only incremental benefits and costs were

included; benefits associated with Fradique Coutinho station (inaugurated in 2014) were not considered, as

well as all sunk costs.

6. Values of travel time savings per mode of transportation were updated; as in 2010 PAD, it was

assumed that home-to-work trips and other purposes were 33% of the average hourly income updated to

2016 and for business trips a 160% factor was used. It was also assumed that car users had a 2.38 higher

value of time than bus users.

7. As per the Technical note from March 2016, it was considered a long-term growth rate of 3% as a

rough estimated for developing countries as a discount rate. Given the current economic crisis in Brazil, a

sensitivity analysis was developed to estimate more conservative growth rates, starting from 1%.

Additionally, the discount rate utilized to calculate net present value for the project and Benefit to cost

ratios was set to 6%.

8. Finally, updated investments were provided by PMU, and all sunk costs were excluded of the

analysis. For consistency, both investments and value of time considerations used the same exchange rate

used in the PAD.

B. DEMAND ANALYSIS

9. An incremental analysis of Phase 2 investments was conducted, excluding both sunk costs and

benefits already accrued.

10. Value of time was updated for each mode. The new values are included in the Table 9-1. Car value

of time was considered to be 2.38 times the bus value of time, based on the relationship between both

modes found in similar projects.

11. The new trip distribution by purpose is shown in Table 3.

12. The new demand for the peak hour situation can be summarized as showed in Table 4, according

to the new values provided by Metrô de São Paulo. Although the expected demand for metro and bus

services has raised significantly in the new forecast, the net change for both modes has decreased in this

new situation when compared to the analysis for the PAD 2010.

C. METR O ECONOMIC COSTS

13. Total Investment Costs estimations for Phase 2 resulted in a total of US$ 415 million (after

excluding expected tax discounts). The new yearly disbursements are shown in Table 5.

14. Using the same depreciation assumptions as in the original analysis, investments amounted to US$

207.8 million for Metro Line 4 after a useful life of 32 years.

E. ECONOMIC COST-BENEFIT ANALYSIS

15. Besides the above mentioned changes, all other circumstances in the Economic Analysis were

6

considered to remain invariable.

16. The Project flows are presented in Table 7. The economic internal rate of return (EIRR) of 9,37%

was obtained for incremental investment of Phase 2 Line 4. The rate is higher than the 7.57% obtained for

phase 2 alone from the 2010 PAD. The main reason for this change can be attributed to the fact that

although demand estimates had decreased for overall project, the incremental investment for Phase 2 (i.e.

excluding sunk costs) is also lower. Moreover, in this analysis a social discount rate was used, as per

Banks technical notes. Finally, net present value for the project and Benefit to cost ratios are also

calculated with a discount rate of 6%.

F. SENSITIVITY ANALYSIS

17. A sensitivity analysis was conducted where effects on the rate of return were tested from changes

in the social discount rate, demand estimates, costs and values of time of selected items referred to the base

case.

18. The base case accounts for 6% discount rate and a 3% growth rate during the project life cycle.

Social discount rates from 1 to 6% were tested, given the instability of economy in Brazil. The EIRR

ranges from 4.93% (with assumption of 1% growth rate) to 15.87% (with assumption of 6% growth rate).

19. Additionally, since procurement for the new construction contract is undergoing, investment costs

were allowed to vary from a discount of 25% to 25% increase. A 25% reduction on investment costs,

would increase the EIRR to 11.17%. Procurement for the main contract is undergoing, but last

procurement for civil works had obtained a 30% discount in relation to the base estimate.

20. The remaining tested variables are presented in the Table below 6. Increases is operating costs

have small impact on the overall EIRR. Changes in demand and value of time produce larger changes to

the EIRR. Metro estimates for demand had been generally conservative; demand is likely however to

remain lower with economic crisis. However, measures for increased and densified urban development

around Metro stations, recently approved in the city’s Masterplan, will likely produce increases in demand,

a process that has naturally started in the last 10 years with the increase in service capacity.

7

Annex I Revised Result Indicators

Project

Name: SÃO PAULO METRO LINE 4 (PHASE 2) (P106390)

Project

Stage: Restructuring Status: DRAFT

Team

Leader(s)

:

Georges Bianco Darido Requesting

Unit: LCC5C Created by: Bianca Bianchi Alves on 30-Mar-2015

Product

Line: IBRD/IDA

Responsible

Unit: GTI04 Modified by: Hanayo Taguchi on 13-Apr-2016

Country: Brazil Approval FY: 2010

Region: LATIN AMERICA AND

CARIBBEAN

Lending

Instrument: Specific Investment Loan

Project Development Objectives

Original Project Development Objective:

The objectives of the Project are: (a) to improve the quality of service provided to the urban transport users in the area ofinfluence of the new Line 4

stations (São Paulo-Morumbi, Fradique Coutinho, Oscar Freire, Higienópolis-Mackenzie and Vila Sônia), and (b) to facilitate the integration

between metro and bus at those stations.

Results

Core sector indicators are considered: Yes Results reporting level: Project Level

Project Development Objective Indicators

Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target

Revised Quality of service objective:

Travel time plus average

waiting time between pairs of

stations (in minutes, at peak

Minutes Value 55.00 51.00 40.00

Date 30-Dec-2009 28-Mar-2016 28-Feb-2018

Comment The indicator of

8

hour) 20 minutes will

be achieved.

Quality of service objective:

Travel time plus average

waiting time between pairs of

stations (in minutes, at peak

hour)

Minutes Value 55.00 55.00 20.00

Date 21-Dec-2009 30-Sep-2013 30-Apr-2016

Comment

Revised a. Vila Sonia - Luz

Minutes Value 55.00 51.00 40.00

Sub Type Date 30-Dec-2009 28-Mar-2016 28-Feb-2018

Breakdown Comment The indicator of

20 minutes will

be achieved.

a. Vila Sonia - Luz

Minutes Value 55.00 46.00 20.00

Sub Type Date 30-Dec-2009 21-Sep-2015 30-Apr-2016

Breakdown Comment

Revised b. Fradique Coutinho - Luz

Minutes Value 26.00 11.00 11.00



10 minutes will

be achieved in

2019.

b. Fradique Coutinho - Luz

Minutes Value 26.00 9.00 10.00


Breakdown Comment

Revised c. Higienopolis/Mackenzie -

Luz




9

5 minutes will

be achieved in

2019.

c. Higienopolis/Mackenzie -

Luz



Breakdown Comment

Revised Integration objective:

Percentage of 5 new stations

integrated with bus lines

Percentage Value 0.00 64.00 91.00

Date 21-Dec-2009 28-Mar-2016 28-Feb-2018


100% will be

achieved in

2019.

Integration objective:

Percentage of 5 new stations

integrated with bus lines

Percentage Value 0.00 0.00 100.00

Date 21-Dec-2009 30-Sep-2014 30-Apr-2016

Comment

Revised Accessibility objective: Total

annual passenger boardings in

new stations (both directions,

in millions)

Number Value 0.00 0.00 0.00

Date 21-Dec-2009 28-Mar-2016 28-Feb-2018

Comment There was a

revision of

demand target

given the

updates of the

transport model,

the current

operational plan

and the low

integration with

the interurban

bus system.

10

Accessibility objective: Total

annual passenger boardings in

new stations (both directions,

in millions)

Number Value 0.00 0.00 47.00

Date 21-Dec-2009 30-Sep-2014 30-Apr-2016

Comment

Marked for

Deletion

a. Vila Sonia

Number Value 0.00 0.00 47.00


Breakdown Comment

Revised b. Morumbi



Breakdown Comment There was a

revision of

demand target

given the

updates of the

transport model,

the current

operational plan

and the low

integration with

the interurban

bus system.

b. Morumbi

Number Value 0.00 0.00 17.10


Breakdown Comment

Revised c. Fradique Coutinho




revision of

11

demand target

given the

updates of the

transport model,

the current

operational plan

and the low

integration with

the interurban

bus system.

c. Fradique Coutinho

Number Value 0.00 4.00 10.60


Breakdown Comment

Revised d. Oscar Freire




revision of

demand target

given the

updates of the

transport model,

the current

operational plan

and the low

integration with

the interurban

bus system.

d. Oscar Freire

Number Value 0.00 0.00 10.80


Breakdown Comment

12

Revised e. Higienopolis/Mackenzie




revision of

demand target

given the

updates of the

transport model,

the current

operational plan

and the low

integration with

the interurban

bus system.

e. Higienopolis/Mackenzie

Number Value 0.00 0.00 11.30


Breakdown Comment

Intermediate Results Indicators

Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target

Revised Cumulative % of completion of

Vila Sônia Tunnel

Number Value 0.00 9.00 77.00

Date 21-Dec-2009 28-Mar-2016 28-Feb-2018

Comment This number was

revised based on

the new

methodology to

calculate physical

progress.

The indicator of

100% will be

achieved in

2019.

Cumulative % of completion of

Vila Sônia Tunnel

Number Value 0.00 29.00 100.00

Date 21-Dec-2009 21-Sep-2015 30-Apr-2016

13

Comment

Revised cumulative % of completion of

Vila Sônia Station

Number Value 0.00 14.00 76.00

Date 21-Dec-2009 28-Mar-2016 28-Feb-2018


100% will be

achieved in

2019.

cumulative % of completion of

Vila Sônia Station

Number Value 0.00 14.00 100.00

Date 21-Dec-2009 21-Sep-2015 30-Apr-2016

Comment


Vila Sônia yard

Number Value 0.00 36.00 100.00

Date 21-Dec-2009 28-Mar-2016 28-Feb-2018

Comment


Vila Sônia yard

Number Value 0.00 35.00 100.00

Date 21-Dec-2009 21-Sep-2015 30-Apr-2016

Comment


existing stations (finalization)

Number Value 0.00 55.00 100.00

Date 21-Dec-2009 28-Mar-2016 28-Feb-2018


revised based on

the new

methodology to

calculate physical

progress.


existing stations (finalization)

Number Value 0.00 63.75 100.00

Date 21-Dec-2009 21-Sep-2015 30-Apr-2016

14

Comment


systems

Number Value 0.00 19.00 73.00

Date 21-Dec-2009 28-Mar-2016 28-Feb-2018


revised based on

the new

methodology to

calculate physical

progress.

The indicator of

100% will be

achieved in

2019.


systems

Number Value 0.00 23.72 100.00

Date 21-Dec-2009 21-Sep-2015 30-Apr-2016

Comment

15

Annex II Tables of Economic Analysis

Table 1: Sao Paulo Line 4 Total Annual Boardings,

both directions, per station (in million passengers)

Stations

PAD

(2010)

New

(2018) New (2020)

Vila Sonia 47 0 26.5

Morumbi 17.1 8.5 9.3

Fradique Coutinho 10.6 3.9 5.5

Oscar Freire 10.8 7.2 7.4

Higienópolis/Mackenzie 11.3 9.9 10.6

Totals 96.8 29.5 59.3 Source: SP Metro Planning Department, based on the Transport Model updated with the 2007 Origin and

Destination Matrix

Table 2: Value of Time Distribution (US$)

Travel Purpose Metro Bus Rail Car

Home to Work 2.49 1.89 1.25 4.49

Business 17.17 13.05 8.58 31.06

Other 2.49 1.89 1.25 4.49

Table 3: Travel Purpose Distribution (%)


Home to Work 63.1 58.7 74.8 47.4

Business 10.8 13.3 6.9 19

Other 26 28 18.3 33.6

Table 4: Variation of Peak Hour Indicators for Tested Scenarios


Passenger Trips

- Phase 1 Only 758,059 2,427,344 385,072 1,371,292

- Phase 1 and 2 790,557 2,396,319 389,898 1,370,590

- Net change Phase 2 32,498 -31,025 4,826 701

Pass-Km

- Without Project 5,043,467 15,201,423 6,534,085 16,083,594

- Phase 1 and 2 5,258,827 14,721,701 6,718,349 16,050,547

- Net change Phase 2 142,227 -167,217 31,586 19,587

Pass-Hour

- Without Project 126,165 901,815 141,340 651,022

16

- Phase 1 Only 127,699 884,864 144,435 650,370

- Phase 1 and 2 131,095 874,626 145,128 648,795

- Net change Phase 2 3,395 -10,238 693 1,575

Speed (Km/h)

- Phase 1 Only 40.07 16.83 46.30 24,71

- Phase 1 and 2 40.11 16.83 46.29 24,74

- Net change Phase 2 -0,05 -0,01 0,00 -0,03

Source: SP Metro Planning Department, based on the Transport Model updated with the 2007 Origin and

Destination Matrix

Table 5: Investment Components for Line 4 (thousands US$)

Year Cost of Investment

Phase 2

2016 45,276

2017 144,734

2018 190,308

2019 35,655

Sum 415,974

Table 6: Sensitivity Analysis

Scenario Attribute Test Alternative EIRR % a

a

NPV

(US$

Millions)

B/C Ratio

Base Case Discount Rate

6%

9.37%

$439.31 1.34

10% ($49.09) 0.95

15% ($257.27) 0.66

Growth

(Discount

Rate = 6%)

Growth

1% 4.93% ($107.77) 0.92

2% 7.18% $134.70 1.10

3% 9.37% $439.31 1.34

4% 11.54% $823.47 1.64

5% 13.70% $1,309.70 2.02

6% 15.87% $1,927.20 2.50

Benefits

(Discount

Rate = 6%)

Demand

10% reduction 8.11% $267.07 1.21

10% increase 10.56% $611.55 1.48

20% increase 11.71% $783.79 1.61

30% increase 12.82% $956.02 1.75

Value of Time

10% increase 10.49% $601.26 1.47

10% reduction 8.19% $277.36 1.22

30% reduction 5.60% ($46.54) 0.96

50% reduction 2.47% ($370.44) 0.71

Operating Costs

10% increase 9.38% $441.08 1.34

10% reduction 9.36% $437.54 1.34

50% reduction 9.30% $430.47 1.34

17

100% reduction 9.24% $421.63 1.33

Costs

(Discount

Rate = 6%)

Construction Costs 25% increase 7.75% $265.07 1.18

25% reduction 11.71% $613.55 1.55

18

Table 7: Economic Evaluation (Base case, in Thousands of US$)

TOTAL BENEFIT

(A)

INVESTMENT (-)

taxes(B)

TOTAL COSTS

(B+C)

NET BENEFITS

A-(C+D)

TRAVEL TIME

SAVINGS

OPERATING

COST

SAVINGS

MAINTENAN

CE COST

SAVINGS

BUS

MANAGING

COST

SAVINGS

ACCIDENT

REDUCTION

AIR

POLLUTION

SAVINGS

WAGES

LABOR

EXPENSES

OTHERS

COST

TOTAL COST

(C )

1 2,016 - - - - - - - 97,082 - - - 97,082 (97,082)

2 2,017 - - - - - - - 310,341 - - - 310,341 (310,341)

3 2,018 43,984 699 748 1,422 401 795 48,049 408,060 16,668 34,046 50,714 458,774 (410,725)

4 2,019 45,756 706 755 1,437 405 803 49,862 76,452 16,668 34,046 50,714 127,166 (77,303)

5 2,020 100,035 1,498 1,603 3,050 861 1,704 108,751 - 16,668 34,046 50,714 50,714 58,037

6 2,021 104,067 1,513 1,619 3,080 869 1,721 112,869 - 16,668 34,046 50,714 50,714 62,155

7 2,022 108,261 1,528 1,635 3,111 878 1,738 117,151 - 16,668 34,046 50,714 50,714 66,437

8 2,023 112,623 1,544 1,651 3,142 887 1,756 121,603 - 16,668 34,046 50,714 50,714 70,889

9 2,024 117,162 1,559 1,668 3,173 896 1,773 126,231 - 16,668 34,046 50,714 50,714 75,517

10 2,025 121,884 1,575 1,685 3,205 905 1,791 131,044 - 16,668 34,046 50,714 50,714 80,330

11 2,026 126,796 1,591 1,701 3,237 914 1,809 136,047 - 16,668 34,046 50,714 50,714 85,333

12 2,027 131,906 1,606 1,718 3,270 923 1,827 141,250 - 16,668 34,046 50,714 50,714 90,536

13 2,028 137,221 1,623 1,736 3,302 932 1,845 146,659 - 16,668 34,046 50,714 50,714 95,945

14 2,029 142,751 1,639 1,753 3,335 941 1,864 152,283 - 16,668 34,046 50,714 50,714 101,569

15 2,030 148,504 1,655 1,770 3,369 951 1,882 158,132 - 16,668 34,046 50,714 50,714 107,418

16 2,031 154,489 1,672 1,788 3,402 960 1,901 164,213 - 16,668 34,046 50,714 50,714 113,499

17 2,032 160,715 1,688 1,806 3,436 970 1,920 170,536 - 16,668 34,046 50,714 50,714 119,822

18 2,033 167,192 1,705 1,824 3,471 980 1,939 177,111 - 16,668 34,046 50,714 50,714 126,397

19 2,034 173,930 1,722 1,842 3,505 989 1,959 183,948 - 16,668 34,046 50,714 50,714 133,234

20 2,035 180,939 1,740 1,861 3,540 999 1,978 191,057 - 16,668 34,046 50,714 50,714 140,343

21 2,036 188,231 1,757 1,879 3,576 1,009 1,998 198,450 - 16,668 34,046 50,714 50,714 147,736

22 2,037 195,816 1,775 1,898 3,612 1,019 2,018 206,138 - 16,668 34,046 50,714 50,714 155,424

23 2,038 203,708 1,792 1,917 3,648 1,029 2,038 214,133 - 16,668 34,046 50,714 50,714 163,419

24 2,039 211,917 1,810 1,936 3,684 1,040 2,059 222,446 - 16,668 34,046 50,714 50,714 171,732

25 2,040 220,458 1,828 1,956 3,721 1,050 2,079 231,092 - 16,668 34,046 50,714 50,714 180,378

26 2,041 229,342 1,847 1,975 3,758 1,061 2,100 240,083 - 16,668 34,046 50,714 50,714 189,369

27 2,042 238,584 1,865 1,995 3,796 1,071 2,121 249,433 - 16,668 34,046 50,714 50,714 198,719

28 2,043 248,199 1,884 2,015 3,834 1,082 2,142 259,156 - 16,668 34,046 50,714 50,714 208,442

29 2,044 258,202 1,903 2,035 3,872 1,093 2,164 269,268 - 16,668 34,046 50,714 50,714 218,554

30 2,045 268,607 1,922 2,055 3,911 1,104 2,185 279,784 - 16,668 34,046 50,714 50,714 229,070

31 2,046 279,432 1,941 2,076 3,950 1,115 2,207 290,721 - 16,668 34,046 50,714 50,714 240,007

32 2,047 290,693 1,960 2,097 3,989 1,126 2,229 302,095 (207,769) 16,668 34,046 50,714 (157,055) 459,150

OPERATING COSTS

PROJECT

YEAR YEAR

DIRECT BENEFITS INDIRECT BENEFITS

19

Table 7: Economic Evaluation (Base case, in Thousands of US$) – continuation IRR 9.37%

NPV 439,311

PV Benefits 1,722,372

PV Cost 1,283,061

B/C 1.34

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