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Brazil: US$112.9 Million for São Paulo's Urban Trains

September 21, 2010

Washington, September 21, 2010 – The World Bank approved today an US$112.91 million additional financing for Brazil’s State of São Paulo, in support of the Trains and Signaling Project for the urban rails and subway network of the capital city’s Metropolitan Region. The new funding will be used to purchase at least nine new trains, as well as the needed complementary equipment, to increase passenger capacity and comfort in the city’s Line 11. The project also includes financing for studies aimed at developing a strategy to reduce the system’s climate footprint.

“This represents an additional important step toward increasing urban mobility in the city, improving the traffic situation, increasing the population’s access to jobs and public services and strengthening the urban rail network,” said the Governor of São Paulo, Alberto Goldman.

The project will benefit the entire population of the Metropolitan Region, especially the low income citizens – the main users of public transportation – and increase the efficiency and competitiveness of Brazil’s biggest city. It is also expected to have positive impacts in mitigating greenhouse gas emissions and traffic jams, due to the transfer of passengers from other transportation systems to rail. Studies financed by the project will measure these impacts.

Line 11 connects the poor eastern part of the city with downtown São Paulo, where most jobs, commerce and services are. It is experiencing significant growth in passenger flow, and currently carries more than eight passengers per square meter during rush hour. The São Paulo Metropolitan Railroad Company (CPTM) estimates that, after the modernization, system integration and the arrival of the new trains, Line 11’s daily passenger capacity will increase from 438,000 (in 2008) to nearly 560,000 in 2012.

“Improving São Paulo’s public transportation is essential for the Metropolitan Region’s economic dynamism,” said the World Bank’s Director for Brazil, Makhtar Diop. “This new operation will allow the State Government to speed up the interconnection process in the entire system and expand the availability of affordable transportation for the low income population.”

The improvements in Line 11 add themselves to other interventions financed by the original US$550 million loan, signed in June 2008, which seek to increase the transportation capacity in lines 7, 11 and 12 of the urban rail system, as well as lines 1, 2 and 3 of the subway.

“The State of São Paulo has achieved significant progress in transport infrastructure and services in the last decades,” said World Bank Project Manager Georges Darido. “The new trains are vital to strengthen the its strategy to develop CPTM’s network following the subway model, with more frequent services both during rush hours and intermediate periods, benefitting all users.”

This is an IBRD Flexible Loan (IFL) with variable spread option, payable in 30 years, including a 5-year grace period. Repayment schedule is linked to commitment and all the conversion options are selected. The World Bank has been a partner of the State of São Paulo since 1952, having financed 39 development projects in the State, totaling more than US$4 billion.

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