Workshop on investment, financial and technological aspects of the Model Highway Initiative (MHI) implementation

Beyond Infrastructure:Building Roads as “Services” to the Users

World Bank, Europe and Central Asia Transport Department

Thessaloniki, Greece, 6-8 March 2012

Agenda• World Bank Transport Business Strategy in Europe and Central Asia:

– Demand – 5 strategic products

• Defining Road User Services– What are Road User Services?– Why are Road User Services Important?

• Setting the Policy Framework– Policy Objectives and Constituencies– Roles and Responsibilities of Stakeholders– Institutional Options

• One sample: World Bank Support to Kazakhstan– Development of a Road Sector Strategy– Pilot Implementation

Agenda• World Bank Transport Business Strategy in

Europe and Central Asia: –Demand –5 strategic products

• Defining Road User Services– What are Road User Services?– Why are Road User Services Important?

• Setting the Policy Framework– Policy Objectives and Constituencies– Roles and Responsibilities of Stakeholders– Institutional Options

• One sample: World Bank Support to Kazakhstan– Development of a Road Sector Strategy– Pilot Implementation

OUR CLIENT DEMAND IS CONTINUOUSLY CHANGING - REFLECTING EVOLVING NEEDS AND CHALLENGES

Deeper Integration with Europe

Strengthening Institutions (EU countries)

Developing Trade Links

Urban Mobility Management

Local Connectivity and Access

Managing Transport Assets

Improving Road Safety

Engaging the Private Sector

World Bank Transport Medium Term Business Strategy in Europe and Central Asia:

WHAT OUR CLIENTS ARE REQUESTING

1. Regional Integration / Trade

Facilitation

2. Asset Management

3. Urban Mobility 4. Local Access and Connectivity

5. Sector Governance

Competitiveness Inclusion Climate Change

ECA

Stra

tegi

c Pi

llars

Governance

Corporate Strategies

World Bank Transport Medium Term Business Strategy in Europe and Central Asia:

FIVE PRODUCTS THAT WHAT WE PLAN TO OFFER

Our Market Structure Is Broadly Clustered Around Three Types of (shifting) Demand

Inve

stm

ent /

Fin

anci

ng

Knowledge

BG

RO RU

KZ

UZ KG

TR

SRHZ

BA

AZ

AM GE

PL

UABY

MDTJ

TK

MK

KO

MOAL

Our Opportunities Lie in the Diverse Nature of Our Client Demand

Predominantly Investment/Financing

Driven Demand

Predominantly KnowledgeDriven Demand

Mixed Demand

• Relatively large investment lending opportunities• Investment lending can be leveraged to

influence policy/institutions• Room for collaboration with other IFIs

•High demand for sophisticated real-time knowledge, and ability/willingness to pay for services• Knowledge can still be bundled with

financing through DPLs or P4R

• Important but limited investment lending opportunities•High demand for knowledge, but limited

ability/willingness to pay for knowledge

Agenda• World Bank Transport Business Strategy in Europe and Central Asia:

– Demand – 5 strategic products

• Defining Road User Services–What are Road User Services?–Why are Road User Services Important?

• Setting the Policy Framework– Policy Objectives and Constituencies– Roles and Responsibilities of Stakeholders– Institutional Options

• One sample: World Bank Support to Kazakhstan– Development of a Road Sector Strategy– Pilot Implementation

Drivers and Passengers

Road Users and the Services they Expect

Local Communities

Shippers and Carriers

Road User Services

Travel Information

Service

Travel Necessities

Retail Service

Leisure and Tourism

Public Transport

Services to Freight

Transport

Why Road User Services?

Road User Services

Travel Necessities

Travel Information

Service

Retail Service

Leisure and Tourism

Public Transport

Services to Freight Transport

Improved Quality and Safety of Travels

Positive Impacts on the Local Economy – Jobs and Income

Facilitate Transport and Trade

Corridor Branding

Agenda• World Bank Transport Business Strategy in Europe and Central Asia:

– Demand – 5 strategic products

• Defining Road User Services– What are Road User Services?– Why are Road User Services Important?

• Setting the Policy Framework–Policy Objectives and Constituencies–Roles and Responsibilities of Stakeholders– Institutional Options

• One sample: World Bank Support to Kazakhstan– Development of a Road Sector Strategy– Pilot Implementation

Framework: Policy ObjectivesIndustry: Transport efficiency and trade facilitation improve

competitiveness of Kazakh businesses

Road Users: Road users are entitled to direct benefits such as improved safety, comfort and convenience

of travels

Local Population: Local communities should share benefits of development

With Whom The

Government Should

Interact?

Framework: Stakeholders and Partnerships

Civil Societies: Facilitating

communication and collaboration;

Monitoring environmental/ social impacts of

development

Central, Regional and Municipal Governments: Planner, Policy-maker; Responsible for Design Specifications, Quality Standards, Monitoring, Enforcement

Road Users (Individuals, Industries, Truckers): Ultimate Customers

Local Communities:

Service Providers, Constituencies

Commercial Developers:

Service Providers, Contractors

Local environment for commercial activities;

Impacts of commercial development on local

economy, environment

Prov

isio

n of

Bas

ic S

ervi

ces

Transactions,Cultural/social interactions

Transactions, Customer satisfaction

Policies that support local economy

Conducive investment climate, Contracts

Framework: Institutional Options

• Central government led development:– Road user services PLAN is centrally prepared and implemented

defining the role of the Government;– Central Gov’t may enter into contracts or concession agreements

with operators• Local government led development:

– Planning responsibility is handed to local governments– Some central government guidance and leadership may be necessary– Local Gov’t may enter into contracts or concession agreements with

operators• Market-driven development (minimal involvement of gov’t):

– Government requests for open (unsolicited) proposals– Turn-key type contract: site identification, construction, and

operation

Agenda• World Bank Transport Business Strategy in Europe and Central Asia:

– Demand – 5 strategic products

• Defining Road User Services– What are Road User Services?– Why are Road User Services Important?

• Setting the Policy Framework– Policy Objectives and Constituencies– Roles and Responsibilities of Stakeholders– Institutional Options

• One sample: World Bank Support to Kazakhstan–Development of a Road Sector Strategy–Pilot Implementation

The World Bank-Financed OperationsWestern Europe Western China (CAREC corridor)

(US$3.3 billion)

WB Support Regarding Road Side Services

Objectives: • Help the Government develop a strategy for provision of

road user services on the road network, • Assist the Committee for Roads to implement a pilot project

along the WE-WC Corridor

Methodology:– Review of the legal and regulatory framework– Assessment of service needs (IRU?)– Assessment of operating environment (IRU?)– Stakeholder consultation (IRU)– Strategy and action plan (IRU?)

Services Today

18

“Services”

19

Hopes …

WB Support: Pilot Implementation

• Pilot implementation(a) facilitation of trade and road transport;(b) improvement of road safety;(c) community development and poverty reduction in the

local communities along the road network.• Expected outcome

(a) improvement of convenience and comfort for road users;

(b) WE-WC corridor branding for international recognition;(c) Compliance with international regulations on road

transport.

WB Support: Pilot Implementation

• Pilot should fulfill basic service needs• Pilot should enforce international, regional, and national

regulations on road transport and goods movement.• Pilot should contribute to local economy.• Pilot should be coordinated , avoiding fragmented

development by segment or by jurisdictional area.

WB Support: Pilot Implementation

The impact of bypassing existing activities

WB Support: Pilot ImplementationSuggested roles, rights and responsibilities• Ministry of Transport, Committee for Roads: safety, technical specifications,

design, concession agreements .• Ministry of Industry: investment climate, reduce barriers to business, policy

measures.• Ministry of Health: emergency response .• Ministry of Internal Affairs: police dispatching.• Oblast and municipal governments: land-use , assessment of the needs.• Local communities NGOs, civil society: right to participate in decision-making,

enjoy benefits as key player of the development; monitor commercial development, service quality and development impacts.

• Private sector – SMEs: participate in the development while complying with obligations and standards.

• Road users: their basic travel needs must be served; rights to purchase other services.

Time line2012: Study and agreement on principle2013-2015: Pilot operation in three Oblasts

(1,400km): Kyzylorda

South Kazakhstan

Almaty