City to earn $15 million from BRT

CEBU, Philippines - The proposed Bus Rapid Transit may soon be implemented in Cebu City after a pre-feasibility study conducted by the consultants of World Bank shows that the project is feasible and financially viable.

The results of the pre-feasibility study show that the city government will earn US$1.5 million net revenue from BRT operations every year.

World Bank consultants yesterday presented to the city council the draft final report of their pre-feasibility study on the BRT conducted from October last year to May this year.

According to them, BRT in the main corridor of the city is not only feasible technically and physically but financially viable as well.

Integrated Transport Planning director Colin Brader, said that the BRT once operational will bring the city US$15 million in gross revenue per annum, computed based on the current Public Utility Jeepney rates and their projection of 80 percent shift to BRT from the conventional PUJ mode of transportation.

Brader said that their passenger forecast tells them that the BRT will be able to service 317,000 passengers per day maximum and about 221,000 passengers per day minimum.

The US$15 million gross revenue, according to Brader, is sufficient enough to finance the continuous operation without being a burden to the government since it does not need subsidy anymore.

The WB consultants claimed that the study shows that the BRT’s projected operating cost per annum is only at US$7.9 million. The amount already includes the compensation for operators, drivers and fuels among others.

The vehicles cost is estimated at US$38 million while the system management and the maintenance for infrastructure will cost about US$4.3 million and US$1.8 million per annum, respectively.

All of these will be sourced from the USD15 million gross revenues per annum leaving a surplus of US$ 1.5 million for the city.

Brader said that the surplus is insufficient to pay back the infrastructure loan but he said it is only normal at the start of the implementation.

Cebu City Planning and Development coordinator Paul Villarete said that it does not matter if the revenue surplus is not enough to pay for the loan but what is important is the BRT’s revenue is sufficient to support its continuous operation.

The WB has already allocated US$350 million for the implementation of the BRT for both Cebu and Manila. Of this amount, US$50 million will come from the Clean Technology Fund, US$250 million from the WB and US$50 million from the national government.

In Cebu, the infrastructures, to be built in two-phases, for the BRT project includes the development of the BRT lines and stations which will cost about P3,919 million..

The first phase will cost P2,197 million while the second phase will cost P1,722 million.

Averagely, this is US$5.1 million per kilometer but with optimism bias and contingency the cost may rise up to US$7.2 million per kilometer or US$115.2 million in total.

Brader said that they have added a generous contingency amount in case there will be emergency expenses like road right of way acquisition and others.

In terms of environmental benefits, Brader said that the BRT will save the public from exposure to 386 metric tons of particle matters per annum. There is also a reduction of about 61,400 metric tons of Carbon Dioxide which is the main cause of air pollution.

The national government, as the primary sponsor, will prepare and assess the proposals for the BRT and shall be in charged for the procurement of funds.

The local government shall be in charged with the day by day management of the system.

After the pre-feasibility study, a more comprehensive feasibility study and planning for the design will be conducted for another 12 months. They hope to start the feasibility study by November this year and complete it by November next year.

If everything goes well, Brader said that Phase 1 which includes lines from Bulacao to Ayala – Ayala to Talamban will be implemented by January of 2013. (FREEMAN NEWS)