Improving Project Financing for Public Transportation Projects in Mexico: Lessons for Developing Countries

Based on case studies of BRT projects in Mexico, this paper identifies the major challenges facing project financing and PPP approaches for public transportation projects in developing countries and suggests strategies to overcome these challenges. Public transportation project documents, including concession contracts and bank loans and conditions, were analyzed and supplemented with interviews with project stakeholders. It was found that although project financing and PPP schemes can improve public transit service provision, many issues—including weak project structures, poor contract design, lack of risk analysis, unclear priority of payments, and lack of funding—remain unaddressed and inhibit the ability of project financing to efficiently allocate risks among stakeholders. The following suggestions are made to improve project financing practices: i) well-defined project structures and contracts; ii) risk analysis and baseline studies; iii) clear priority of payments; iv) guarantees; and v) realistic financial structures. These findings can be adopted in other developing countries facing similar challenges in including the private sector in public transportation service provision.

• Supplemental Notes:
  • This paper was sponsored by TRB committee ABE10 Standing Committee on Revenue and Finance.
• Authors:
  • Lopez Dodero, Abel
  • Hoyos Guerrero, Alejandro
  • Lee, Janelle
  • Casello, Jeffrey M
  • Vargas, Abraham
• Conference:
  • Transportation Research Board 97th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2018-1-7 to 2018-1-11
• Date: 2018

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References;
• Pagination: 15p

Subject/Index Terms

• TRT Terms: Bus rapid transit; Developing countries; Financing; Public private partnerships; Public transit
• Geographic Terms: Mexico
• Subject Areas: Finance; Passenger Transportation; Planning and Forecasting; Public Transportation;

Filing Info

• Accession Number: 01663637
• Record Type: Publication
• Report/Paper Numbers: 18-04344
• Files: TRIS, TRB, ATRI
• Created Date: Mar 22 2018 11:57AM