The city of Bogota’s urban transit system is a chaotic network with long bus routes and an old fleet. Its 4.5 million daily passengers often face lengthy travel times, poor service, pollution, and frequent accidents. The Colombian capital contracted with Recaudo Bogota S.A.S to overhaul this system by developing and operating the fare collection, fleet management, and real-time information technology for its Integrated Public Transportation System (SITP). The SITP has the potential to transform Bogota, and the service provided by Recaudo is critical to the success of the entire operation.
IFC & Recaudo
IFC committed $55 million in 2012 in Peso-linked loans, while facilitating a $176 million financing package from multiple parties, including Korean Exim Bank, HSBC and Korean commercial banks. IFC also provided the swap to hedge these loans into local currency.
Efficiency This investmentis expected to make public transit in Bogotá more affordable and convenient through the efficient management of a complex system of 12,000 buses running 500 routes. Accordingly, a more efficient system should lead to less traffic congestion and gridlocks. The project will also introduce an easy-to-use electronic-payment mechanism using smartcards that will eliminate cash from the system, increasing security and efficiency.
Labor As a result of increased efficiency and less traffic congestion,driver-owners in Bogotá are expected to enjoy improved labor conditions. It is expected that working hours will be reduced from 13-14 hours per day to eight hours per day, and that they will also receive a stable income, social security, health insurance and other benefits.
Environment Pollution levels in Bogotá are affected by an aging bus fleet wherein a number of buses fall below the environmental (and safety) standards there. As a part of this project, the number of the buses in circulation in the Bogotá system will be reduced by around 7,500.
Access 1.5 million smartcards have been distributed for free to low-income people. In the future, Recaudo plans to use the smartcards as a payment platform for additional goods and services, such as supermarket or drugstore purchases, or to distribute social benefits to customers who are unbanked or under-banked. This will help provide those at the base of the pyramid with greater access to the financial system.
$55 million loan, while facilitating an additional $121 million in financing
2,500 new jobs
7,500 fewer buses
2.7 million free smartcard fare cards administered to low-income people