Transport infrastructure and services still need to be made safer, cleaner and more affordable, particularly in developing countries. Provision of transportation needs to respond to increasing urbanization and motorization with solutions for urban mobility, rural poverty with more efficient and long-lasting accessibility solutions, and the need to make lower- and middle-income countries more competitive in the global market. The transport sector must be more responsive to create long-term skilled employment, to reduce the cost element of attaining food security, and to address mitigation and adaption to climate change.
Poverty reduction is more likely when communities have ready access — at all hours and in all weather — to essential services and to markets. Still, an estimated 1 billion people, or about 40 percent of the rural population in countries receiving International Development Association (IDA) support, lack direct access to an all-season road, and lack of routine maintenance threatens the life of many transport infrastructure assets. Urban transport systems in developing cities face major challenges too amid the continuous growth of urban population, private vehicle ownership and congestion, and the fragility or even absence of public transport systems.
Improvements in transport have the greatest impact on poor people when part of a cross-sectoral development agenda. Efficiencies are also gained through a multi-modal approach, such as improving passenger and freight mobility. However, enhancing transport infrastructure and services is not enough. The functioning of institutions and practitioners’ access to knowledge are also crucial to effective transport solutions.
The International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) are facilitating more effective strategies needed to harness the sector's contribution to poverty reduction and economic growth.
IBRD lending in the transport sector focuses on facilitating economic growth and regional integration through national and international trade. High transport costs magnify the impact of distance and reduce trading opportunities, while good freight services can make traded goods more affordable and help developing countries to build more complex supply chains that facilitate trade. The IBRD focus on the reduction of transport costs for traded goods allows producers to increase their disposable income.
IDA’s main transport priorities over the last 10 years have been the construction, rehabilitation, and maintenance of roads and highways, representing 79 percent of commitments for the sector. Within this category, rural roads account for 64 percent of the commitments. IDA lending has also addressed policy and institutional development and general transport, together accounting for 10 percent of the total spending. Eleven percent includes programs in ports, shipping, railways, and air transport.
The multidisciplinary capabilities of IDA allow comprehensive initiatives that cut across economic sectors. IDA commitments help governments formulate national and rural transport policy, strategy, and programs and develop sector-wide approaches and multi-donor cooperation for rural transport investment. Due to its work on road programs, IDA has developed a strong capacity for diagnosing bottlenecks and can recommend solutions to encourage institutional innovation, such as second-generation road funds, for more successful implementation of new projects and programs.
The portfolio of IBRD and IDA together is more diversified in urban, rail, maritime and air transport, and contains projects aiming to improve trade competiveness through transport reform and investments. The share of lending in roads, as a percentage of total transport lending, has decreased from 83 percent in 2006 to 49 percent in 2012.
The World Bank has adopted the Governance and Anti-Corruption (GAC) Strategy in its infrastructure advisory program and, since 1999, has developed a Road Cost Knowledge System to monitor and benchmark Bank-financed road and highway project costs.
Since 2002, World Bank-supported projects constructed or rehabilitated more than 190,000 kilometers of roads. Some results achieved by IBRD/IDA-funded projects include:
Nigeria: The IBRD-funded Lagos Urban Transport Project (FY02) supported a bus rapid transport (BRT) system, the first of its kind in Sub-Saharan Africa, as a comprehensive and integrated approach to improving public transport. In Lagos, some 200,000 commuters per day are now using this bus system. BRT passengers have seen a 30 percent decrease in average fares and have cut their time in transit by 40 percent.
Colombia: The IBRD-supported Urban Transport Program (FY03), has developed a bus rapid transit system, planned by local city planners and implemented using local capacity. The system, TransMilenio, carries close to 1.4 million passengers per day — approximately 27 percent of Bogotá’s public transport demand, and low-income residents account for 70 percent of the passengers. More than 2,000 highly polluting buses have been eliminated from the streets, and accidents in TransMilenio corridors have declined by 90 percent. Overall, Bogotá has been transformed by safer and quicker commutes and a healthier urban environment.
Mexico: IBRD, in partnership with the Carbon Fund and the Clean Technology Fund, contributes to the transformation of urban transport toward a lower carbon growth path. The Urban Transport Transformation Program (FY10) proposed to the reduce CO2 emissions in Mexican cities by approximately 1.96 million tons per year beginning in 2017 through capacity building and the development of 18 integrated transit systems. This project represented a scaling-up of the prototype Carbon Fund project: Mexico City Insurgentes Bus Rapid Transit (BRT) System (FY05), which was the first surface mass transport corridor in Mexico City. At end of 2011, 18 percent of the users of the Insurgentes BRT owned a car but chose to use the BRT system, and demand had reached an average of 260,000 rides per weekday, with peaks of over 300,000 trips per day.
Armenia: The Lifeline Roads Improvement Project (FY09) rehabilitated about 290 km of the lifeline roads network under 42 civil works contracts. The project created about 17,000 person-months of employment in the form of local jobs, or enabled people to keep their existing jobs. In addition, local designers and contractors successfully applied new technologies and appropriate and cost-effective design standards based on international practice, strengthening the sustainability of investments and improving road safety for pedestrians.
Vietnam: The rehabilitation of 7,600 km of roads and 26 km of bridges by IDA-supported projects increased their use by 70 percent between 2002 and 2004, with an accompanying 12 percent drop in travel time. Access to all-season roads has improved for approximately 16 million rural people, and helped to lift 210,000 of 950,000 people out of poverty over a five-year time span. The roads contributed to increased access to health facilities, higher school attendance, and greater access to local government services. The project also helped develop the private sector by allowing small private contractors to construct and rehabilitate roads.
Brazil: The Rio de Janeiro Mass Transit Project (FY09) aimed to improve the level of service provided to suburban rail transport users, to place the suburban rail transport system on a lower carbon growth path, and to improve the transport management and policy framework in the Rio de Janeiro Metropolitan Region. Through the implementation of an electronic single fare ticket card system, the project increased affordability, average savings of R$2.62 per user, while bringing reductions in travel time and when transferring between different modes of transport.
Argentina: The Road Safety Project (FY10) focused on contributing to the reduction of road traffic injuries and fatalities through institutional strengthening, improved management capacity for road safety, and the reduction of road crashes in pilot corridors. Within a year of project implementation, the use of helmets increased by 14 percent, seatbelts by 4 percent, and child restraint systems by 2.8 percent. In a context of a 15 percent increase in the number of registered vehicles between 2008 and 2011, a 12.5 percent decrease in road crash fatalities was also observed.
India: Expenditures on roads were found to have the largest impact on rural poverty compared with other types of public expenditure. For every 1 million rupees invested in rural roads, 163 people were lifted out of poverty. IDA-funded rural road projects are estimated to have helped 3.4 million people out of poverty between 2001 and 2010.
Bank Group Contribution
The World Bank’s engagement in transport projects tripled between fiscal year 2003 and FY12, reaching US$9.3 billion in new annual commitments in FY10 (74 percent from IBRD and 26 percent from IDA). There was a reduction in roads and highways sector lending (from 81 percent in FY03 to 49 percent in FY12) and an expansion for railways (from 1 percent in FY03 to 17 percent in FY12), as well as urban transport (from 3 percent in FY03, to 22 percent in FY12). For the ports and shipping sector, the investments have varied from 2 percent to 4 percent during the last decade.
The modal distribution of all transport projects funded by IBRD and IDA between FY03 and FY12 shows that roads and highways account for 60 percent, urban transport 15 percent, railways 7 percent, aviation 3 percent, and ports and shipping 4 percent, with the remaining 11 percent in general transportation and public administration in transportation. This more diversified modal split of the portfolio demonstrates the development potential of railways and maritime transport, particularly for long-distance general freight transport and the vital role of air transport in the shipping of high-value items that need to reach markets quickly.
The urban transport portfolio has consistently increased, from 5 percent in FY03 to 24 percent in FY12, reflecting the Bank’s response to the escalating challenges posed by the dramatic growth of cities.
In the Latin America region, the Bank partners with other development banks and donors in collaborative projects. For instance, in Peru, IBRD has supported the Rural Roads Program in collaboration with the Inter-American Development Bank to upgrade the condition of the rural road network. In Asia, the World Bank is partnering with the Indian Government, state governments and various road agencies as well as the Asian Development Bank on the Prime Minister’s Rural Roads Program.
In Africa, the World Bank works with regional organizations such as the Regional Economic Councils, as well as multilateral initiatives such as the African Union’s Programme for Infrastructure Development in Africa, and the donor-coordinated Infrastructure Consortium for Africa. Within the World Bank Group, the International Finance Corporation (IFC) provided upstream advisory work to the Government of Kenya, in addition to debt financing in the Rift Valley Railways Consortium, while IDA provided partial risk guarantees to the investor for termination risks and financed the East Africa Trade and Transport Facilitation Project. The success of this type of partnership is acknowledged by the Euromoney Award in 2007 for the “Africa Infrastructure Deal of the Year.”
In addition, due to its convening power, strong financial management and linkage with investment programs, the World Bank is playing a formative and key role in partnerships such as the Global Facilitation Partnership for Transportation and Trade, the Global Road Safety Facility, and the Sub-Saharan Africa Transport Program.
Demand for transport infrastructure and services is expected to remain strong. The Bank will continue to provide high-quality knowledge and act as a convener to improve harmonization and coordination among clients and development partners. The World Bank has been increasingly involved in urban transport projects. The rural agenda will still benefit from the significant attention of the Bank as it looks forward to a more comprehensive framework of rural support.
The World Bank will also remain active in the reduction of the transport carbon footprint. It engages in innovative efforts to reduce emissions in order to exploit the true potential of climate policies and to reduce sector vulnerability. Furthermore, special attention continues to be given to co-benefits with other sectors, and to transport safety.
In the last decade, more than 100 million people have benefitted from World Bank-financed transportation projects.
In the northern highlands of Vietnam, a project with IDA and United Kingdom financing is piloting efforts to train rural, ethnic minority women in road maintenance and then formally employ them for the work. The Lao Cai Provincial Women Union has been entrusted with the responsibility to manage and monitor the recruitment of these women who are living along the rural roads in four communes of Bac Ha District of Lao Cai Province. So far, 1,533 women are already trained, and more are awaiting their turn.
“Women like to do this work; they are competing to join. They think that maintaining the road makes the roads nicer, and more convenient for transporting commodities to develop the household economy. During this time of the year, it often rains so maintaining the roads during this time is good,” said Phung Pha Sui, a trainee.
On completion of the training, women were enrolled as road maintenance workers with the Provincial Women Union.