Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00006601 IMPLEMENTATION COMPLETION AND RESULTS REPORT IBRD-88890 and IBRD-82850 ON A LOAN IN THE AMOUNT OF US$ 435 MILLION TO THE Municipality of Quito FOR THE Quito Metro Line One June 29, 2024 Transport Global Practice Latin America And Caribbean Region CURRENCY EQUIVALENTS (Exchange Rate Effective {Jun 25, 2024}) Currency Unit = US$1 US$ = US$1 FISCAL YEAR July 1 - June 30 Regional Vice President: Carlos Felipe Jaramillo Country Director: Issam A. Abousleiman Regional Director: Maria Marcela Silva Practice Manager: Bianca Bianchi Alves Task Team Leader(s): Alejandro Hoyos Guerrero ICR Main Contributor: Joanna Charlotte Moody ABBREVIATIONS AND ACRONYMS Acronym Definition AF Additional finance BRT Bus rapid transit CAF Development Bank of Latin America and the Caribbean CBA Cost-benefit analysis CPF Country Partnership Framework EIB European Investment Bank EIRR Economic internal rate of return EPMMQ Empresa Pública Metropolitana de Metro de Quito (Quito Metro Company) Fédération Internationale des Ingénieurs – Conseils (International Federation of FIDIC Consulting Engineers) GHG Greenhouse gas ICR Implementation completion and results report IDB Inter-American Development Bank ISN Interim Strategy Note ISR Implementation summary report M&E Monitoring and evaluation MDB Multilateral development banks MDMQ Municipio del Distrito Metropolitano de Quito (Municipality of Quito) NPV Net present value PAD Project appraisal document PDO Project development objective PLMQ Primera Linea del Metro de Quito (Quito Metro Line One) PLR Performance and Learning Review RF Results framework SCD Systematic Country Diagnostic TOC Theory of change UNESCO United Nations Educational, Scientific and Cultural Organization WB(G) World Bank (Group) TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 6 A. CONTEXT AT APPRAISAL .........................................................................................................6 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) .......................................9 II. OUTCOME .................................................................................................................... 11 A. RELEVANCE OF PDOs ............................................................................................................ 11 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 12 C. EFFICIENCY ........................................................................................................................... 17 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 18 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 18 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 20 A. KEY FACTORS DURING PREPARATION ................................................................................... 20 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 20 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 22 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 22 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 23 C. BANK PERFORMANCE ........................................................................................................... 24 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 25 V. LESSONS AND RECOMMENDATIONS ............................................................................. 25 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 28 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 37 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 40 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 41 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 45 ANNEX 6. PDO INDICATOR DEFINITION AND METHODOLOGY .............................................. 45 ANNEX 7. LIST OF TECHNICAL ASSISTANCE ........................................................................... 50 ANNEX 8. QUITO PUBLIC TRANSPORT SYSTEM MAP ............................................................. 52 The World Bank Quito Metro Line One (P144489) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P144489 Quito Metro Line One Country Financing Instrument Ecuador Investment Project Financing Original EA Category Revised EA Category Full Assessment (A) Full Assessment (A) Organizations Borrower Implementing Agency Municipality of Quito Empresa Publica Metropolitana de Metro de Quito Project Development Objective (PDO) Original PDO The proposed Project development objective (PDO) is to improve urban mobility in the city of Quito serving the growing demand for public transport. The Project will reduce travel times, decrease operational costs of the transport service, improve connectivity, security and comfort of the current system and reduce emissions of pollutants and greenhouse gases. Page 1 of 53 The World Bank Quito Metro Line One (P144489) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 205,000,000 205,000,000 204,727,130 IBRD-82850 230,000,000 230,000,000 227,474,656 IBRD-88890 Total 435,000,000 435,000,000 432,201,786 Non-World Bank Financing 0 0 0 Borrower/Recipient 769,884,013 424,190,000 541,260,000 Andean Development 250,000,000 402,200,000 402,200,000 Corporation EC: European Investment 259,280,000 303,480,000 303,150,000 Bank Inter-American 200,000,000 450,000,000 449,800,000 Development Bank Total 1,479,164,013 1,579,870,000 1,696,410,000 Total Project Cost 1,914,164,013 2,014,870,000 2,128,611,786 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 25-Jul-2013 25-Sep-2015 09-Oct-2017 31-Dec-2018 31-Dec-2023 Page 2 of 53 The World Bank Quito Metro Line One (P144489) RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 22-Jun-2018 200.15 Additional Financing Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Change in Safeguard Policies Triggered Change in Legal Covenants Change in Procurement Change in Implementation Schedule 23-Dec-2020 401.09 Change in Results Framework Change in Loan Closing Date(s) Change in Implementation Schedule 01-Oct-2021 426.09 Change in Results Framework Change in Loan Closing Date(s) Change in Implementation Schedule 19-Dec-2022 427.52 Change in Loan Closing Date(s) KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Substantial RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 09-Dec-2013 Satisfactory Satisfactory 0 02 12-Jul-2014 Satisfactory Satisfactory 0 03 04-Mar-2015 Moderately Satisfactory Moderately Unsatisfactory 0 04 17-Dec-2015 Moderately Satisfactory Moderately Satisfactory 113.88 05 25-Aug-2016 Moderately Satisfactory Moderately Satisfactory 113.88 06 28-Mar-2017 Moderately Satisfactory Moderately Satisfactory 113.88 07 30-Nov-2017 Moderately Satisfactory Moderately Satisfactory 200.15 Page 3 of 53 The World Bank Quito Metro Line One (P144489) 08 08-Jun-2018 Satisfactory Satisfactory 200.15 09 27-Dec-2018 Satisfactory Satisfactory 201.79 10 29-Apr-2019 Satisfactory Satisfactory 326.09 11 20-Jun-2019 Satisfactory Satisfactory 326.09 12 24-Jul-2019 Satisfactory Satisfactory 326.09 13 03-Mar-2020 Moderately Satisfactory Moderately Satisfactory 386.09 Moderately 14 01-Dec-2020 Moderately Unsatisfactory 401.09 Unsatisfactory Moderately 15 08-Jun-2021 Moderately Unsatisfactory 426.09 Unsatisfactory Moderately 16 24-Dec-2021 Moderately Unsatisfactory 427.52 Unsatisfactory Moderately 17 19-Oct-2022 Moderately Satisfactory 427.52 Unsatisfactory 18 15-Feb-2023 Moderately Satisfactory Moderately Satisfactory 427.52 19 20-Jul-2023 Moderately Satisfactory Moderately Satisfactory 431.28 20 22-Dec-2023 Moderately Satisfactory Moderately Satisfactory 431.28 SECTORS AND THEMES Sectors Major Sector/Sector (%) Transportation 100 Urban Transport 95 Public Administration - Transportation 5 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Human Development and Gender 5 Gender 5 Page 4 of 53 The World Bank Quito Metro Line One (P144489) Urban and Rural Development 90 Urban Development 90 Urban Infrastructure and Service Delivery 90 Environment and Natural Resource Management 5 Climate change 5 Mitigation 5 ADM STAFF Role At Approval At ICR Regional Vice President: Hasan A. Tuluy Carlos Felipe Jaramillo Country Director: Susan G. Goldmark Issam A. Abousleiman Director: Ede Jorge Ijjasz-Vasquez Maria Marcela Silva Practice Manager: Aurelio Menendez Bianca Bianchi Alves Task Team Leader(s): Arturo Ardila Gomez Alejandro Hoyos Guerrero ICR Contributing Author: Joanna Charlotte Moody Page 5 of 53 The World Bank Quito Metro Line One (P144489) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. At the time of appraisal, Ecuador had experienced a period of political stability and significant investment in infrastructure and social sectors, but adequate public transport remained a challenge for most vulnerable groups. The country had made substantial progress in poverty reduction between 2006 and 2012. However, challenges remained, particularly in improving the quality of services crucial to the poor, such as public transport. The lack of adequate public transport—particularly in the Municipio del Distrito Metropolitano de Quito (MDMQ)—affected low-income groups the most, limiting their access to job opportunities, education, and health services. 2. In 2013, the MDMQ already boasted an innovative and multimodal public transport system, but the system had reached capacity with little room to expand. A Bus Rapid Transit (BRT) network of 83.8 km called Metrobus-Q already served MDMQ along three major corridors: the Central Trole corridor (opened 1995), the Ecovia corridor (opened 2002), and the Western corridor (opened in stages in 2004, 2010, and 2012). The BRT network served 828,000 passengers a day with an additional 1.8 million trips carried by a fleet of approximately 2,500 local buses operating in mixed traffic. Based on a household travel survey conducted in 2011, 52 percent of daily trips in the city were made by bus-based public transport, nearly 20 percent by private vehicle, and another 15 percent completed on foot (see Table 9 in Annex 4). Despite these advancements, issues persisted, such as long travel times for local buses, particularly affecting the poorest residents in the periphery of the city. As the population of the MDMQ continued to increase, the Central Trole BRT corridor had reached capacity with no opportunity to further expand given the narrow streets of the city center protected as a UNESCO World Heritage site. 3. In 2010, households with the lowest living conditions in the city lived far from the city center which concentrated economic opportunities (i.e., jobs) and services (e.g., education and healthcare). Analysis based on travel surveys carried out in 2011 found that households with the lowest living conditions could access 6,735 opportunities in 30 minutes of travel time, while the population with the highest living conditions could access 11,513 opportunities in the same travel time—an absolute difference of 4,778 opportunities and a relative difference of 70 percent. At 60 minutes of travel time, the accessibility gap was 9,005 opportunities or 25.5 percent.1 4. To address this accessibility gap to jobs and services for the city’s poor, the MDMQ enacted a city law in 2012 to create an integrated mass transit system to expand the coverage and improve coordination among transport services in the city. A key component of the integrated public transport system was the construction of an underground Metro, which would serve as the highest-capacity backbone of the system and provide an alternative to the at-capacity Central Trole BRT corridor on the surface (see Maps in Annex 8). Metro was determined to be the best available option capable of handling the expected future demand and overcoming the spatial limitations of the city’s historic center. The MDMQ had already prepared detailed designs of the Quito Metro Line One o r Primera Linea de Metro de Quito (PLMQ) and prepared for a phased construction approach. The World Bank (WB) started preparation some months later, leveraging the preparation efforts of other co-financing Multilateral Development Banks (MDBs)—including the European Investment Bank (EIB), the Development Bank of Latin America and the Caribbean (CAF), and the Inter-American Development Bank (IDB). The PLMQ strongly aligned with the 1 Quezada Larriva, Adriana, Daniel Orellana, Maria Laura Guerrero Balarezo, Javier Andres Garcia, Galo Cardenas Villenas, and Pablo Osorio Guerrero. 2023. Impact of Quito’s first metro line on the accessibility of urban opportunities. Journal of Transport Geography, 100: 103548. https://doi.org/10.1016/j.jtrangeo.2023.103548. Page 6 of 53 The World Bank Quito Metro Line One (P144489) government's focus on improving public transport quality and reducing travel times, particularly for low-income users to enhance access to jobs and services (thereby reducing poverty and fostering sustainable development). 5. The PLMQ was a strategic opportunity for the World Bank Group (WBG) to re-engage with the government of Ecuador through partnership with other MDBs. In 2013, the WBG Interim Strategy Note (ISN) for Ecuador identified transport and access to basic services at the subnational level as key priorities for further reduction of poverty and an opportunity for the WBG’s strategic re-engagement with the country.2 The PLMQ was strongly aligned with all three main areas of the WBG’s ISN for Ecuador: (i) sustainable and inclusive growth; (ii) access to social protection and quality basic services for all; and (iii) strengthening public sector capacity to provide access to quality services (see Figure 1). Theory of Change (Results Chain) Figure 1. Theory of Change (TOC) for the Quito Metro Line One 2 In April 2007, the newly elected president, Rafael Correa, expelled the permanent representative for the WB from the country. The government of Ecuador announced it would not accept further financing from the WB, and all non-disbursed WB operations under preparation at the start of FY08 (approximately 20) were subsequently dropped. In 2011, the WB initiated dialogue and technical assistance with several ministries and subnational governments on a limited set of issues where the WB’s assistance could be aligned with efforts at poverty reduction or where the political economy was more amenable. Throughout FY11–13, a dialogue at the subnational level on urban infrastructure and disaster risk management was taking place. A good-practice exchange on urban transportation financing paved the way for a series of requests for municipal transportation assistance. This exchange created interest in municipal transportation assistance in other municipalities. WB support at the municipal level thereafter became a key entry point for the WB’s lending reengagement. The FY14–15 Interim Strategy Note (ISN) signaled a return to a more normal, albeit limited, engagement with the government. The ISN outlined a menu of possible areas of support, depending on how the dialogue progressed and how the government’s demands and priorities evolved. The ISN included plans for technical assistance, advisory services, and lending for investment projects to build subnational capacity to implement key strategies and improve service delivery at the local level. Over FY14–15, the World Bank approved a small portfolio, financing a series of municipal infrastructure projects (transportation and water and sanitation operations in Manta, Quito, and Guayaquil) totaling US$407 million, for which the borrower was the municipal government, but the central government provided guarantees. The largest of these was the PLMQ. https://ieg.worldbankgroup.org/sites/default/files/Data/reports/ap_ecuador-cpe.pdf Page 7 of 53 The World Bank Quito Metro Line One (P144489) Project Development Objectives (PDOs) 6. The Project Development Objective (PDO) is to improve urban mobility in the city of Quito, serving the growing demand for public transport. The Project will reduce travel time, decrease operational costs of the transport service, improve connectivity, security and comfort of the current system and reduce emissions of pollutants and greenhouse gases (GHGs).3 Key Expected Outcomes and Outcome Indicators 7. The PDO was measured by six outcome indicators:4 i. Passengers per day in the PLMQ (number) ii. Travel time for public transportation users (minutes) iii. Operating costs of Quito’s vehicle fleet (amount US$) iv. Greenhouse gas emissions from transport in MDMQ (metric tons/year) v. Level of metro passenger occupancy (Yes/No) vi. Percentage of users satisfied with overall metro service, its security and comfort (percentage) Components 8. The Project was designed with five components for a total cost at appraisal of US$ 1,684.16 million of which the WB financed US$ 205.00 million for Components 2 and 5 (Table 1). The project was co-financed by other MDBs and counterparty funding (see Annex 3 for details). 9. Component 1. Construction of two metro stations of the Quito Metro: La Magdalena and El Labrador. The construction of two multimodal stations in an initial contract was an important phasing of civil works to provide the MDMQ with an opportunity to test market interest in the project, probe cost assumptions, and learn to manage risks of construction overruns and delays. 10. Component 2. Infrastructure and equipment investment for the PLMQ • Construction of 23 km of tunnel linking the Quitumbe and El Labrador metro stations • Construction of 13 metro stations • Construction of a yard and maintenance shops at the Quitumbe metro station • Provision and installation of metro system-wide facilities (including the permanent way, fare collection and ticketing system, and other systems and equipment) for the operation of PLMQ. 11. Component 3. Provision of train sets to operate in the PLMQ • Provision of 18 6-car train sets with 4 automotive cars per train • Provision of auxiliary vehicles for track maintenance and yard work • Provision of workshop equipment. 12. Component 4. Project management. Technical assistance for the management oversight and supervision of the project. This component financed the hiring of a project management firm and supervision firm for the infrastructure contract (Component 2). 13. Component 5. Technical studies to support implementation. At appraisal, the scope of activities to be financed under Component 5 was not fully developed. However, the Project Appraisal Document (PAD) mentions that the component would include a study to detail the financial arrangements of an integrated mass transit system 3 The PDO has a single objective: to improve urban mobility in the city of Quito. The rest of the language in the PDO statement explains the context of public transport and ways in which the project may achieve this objective. The PDO adopted by the WB was identical to the one used by the IDB as a co-financier of the project to streamline monitoring and evaluation frameworks and facilitate supervision. 4 The six outcome indicators were also identical to the ones used by the IDB. Page 8 of 53 The World Bank Quito Metro Line One (P144489) (including the PLMQ) and a study to define the technical characteristics of the associated fare collection system. This component was financed solely by the WB (see Table 1). Table 1. Financing of project components at appraisal (2013) versus actual costs at closing (2023), of which WB financed. Component Estimated costs at appraisal (US$ M) Component Actual costs at project close (US$ M) Total of which, WB- share of cost at Total of which, WB-financed financed appraisal (%) (including AF) 1 83.91 -- 4.98 124.00 -- 2 1,355.18 200.00 80.47 1,651.20 425.00 3 192.82 -- 11.45 183.59 -- 4 47.25 -- 2.81 46.06 -- 5 5.00 5.00 0.30 7.20 7.20 Project total 1,684.16 205.00 100.00 2,128.61 432.20 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) Revised PDOs and Outcome Targets 14. The PDO was not revised. The 2018 additional financing (AF) and associated project restructuring made the following changes (see Table 2).5 • Target for outcome indicator 1 (passengers per day) was reduced from 369,000 to 295,999; • Target for outcome indicator 3 (reduction in operating costs of vehicle fleet) was reduced; • Target for outcome indicator 4 (reduction in GHG emissions) was increased. • The wording and methodology of indicator 5 “Level of metro passenger occupancy” (with target = “No”, indicating that crowding levels on trains would stay below a certain level) was updated to “Adequate passenger capacity is provided by PLMQ” (with target = “Yes"). Table 2. Summary of revisions to outcome indicators and targets. Target PDO outcome indicator Baseline at 2013 at 2018 AF/ appraisal restructuring 1. Passengers per day in PLMQ (#) 0 369,000 295,999 2. Travel time for public transportation users (min) 38.501 23.10 23.10 3. (Reduction in) Operating costs of Quito’s vehicle fleet (USD) 0 60,000,000 59,400,000 4. (Reduction in) GHG emissions from transport in MDMQ (metric tons/yr) 0 47,000 58,170 5. Adequate passenger capacity is provided by PLMQ (Yes/No) No No Yes 6. Percentage of users satisfied with overall Metro service, security, and comfort (%) 0 65 65 6.1 Percentage of female users satisfied with overall Metro service, security, and comfort 0 -- 65 6.2 Percentage of low-income users satisfied with overall Metro service, security, and 0 -- 65 comfort (%) 7. Percentage of jobs accessible in 60 minutes of travel time (%) 45.3 -- 50.8 Table notes: -- = not applicable; 1Baseline from 2011 Quito Mobility Survey in which an average trip of 9.8 km made by bus at time of appraisal (2013) takes 38.5 minutes (projected to take 42.5 minutes by 2020 in no project counterfactual). 5 With each extension of the loan closing date, target years for outcome indicators were updated; target values were not changed after 2018. Page 9 of 53 The World Bank Quito Metro Line One (P144489) Revised PDO Indicators 15. The 2018 AF improved the description and methodology of the PDO outcome indicators (see Table 2 and Annex 6): • Added sub-indicators 6.1 and 6.2 that report the percentage of users satisfied with overall Metro service its security and comfort for females and for low-income users, respectively. • Added indicator 7. Percentage of jobs accessible in 60 minutes of travel time (%). Revised Components 16. The 2018 AF included the scale-up and restructuring of technical assistance activities under Component 5. The component at AF included new activities to support: (i) project implementation, particularly commencement of operations; (ii) integration of urban transport modes; and (iii) implementation of environmental and social safeguards measures. While the original loan did not include financing for resettlement-related compensations, the scale-up of Component 5 with the AF included resettlement expenditures. Other Changes 17. In 2018, the WB approved US$ 230 million AF for the project and other co-financiers also increased commitments. The detailed breakdown of financing by project component at AF is provided in Annex 3. 18. Cumulative extensions of the project closing date totaled 5 years (60 months). The project closing date was extended four times under the following project restructurings: (1) in 2018 with AF by two years (from Dec 2018 to Dec 2020); (2) in 2020 by 12 months (from Dec 2020 to Dec 2021); (3) in 2021 by 12 months (from Dec 2021 to Dec 2022); and (4) in 2022 by 12 months (from Dec 2022 to Dec 2023). Rationale for Changes and Their Implication on the Original Theory of Change 19. During implementation, the project faced a financing gap that called for AF. The financing gap was due to: • Higher-than-estimated project costs for civil works contracts for Components 1 and 2: The construction of La Magdalena and El Labrador metro stations (Component 1) experienced a cost overrun of US$ 40.09 million (or 47.8 percent above appraisal cost estimates) due to changes in the original scope and designs for the stations that were completed in 2015. Despite extensive value engineering/cost optimizations and renegotiation of the contract to reduce its scope,6 the final contract price for Component 2 was 30 percent higher than originally estimated. This higher cost was anticipated at appraisal and the risk considered acceptable. Due diligence documented in the PAD for AF found that the primary cause was an underestimation of indirect costs in the context of Ecuador compared to other countries in the region given relatively high costs of doing business, different profit structures, and potentially higher political and other risk perceptions on the part of bidders. This underestimation occurred also in the construction of Component 1. The analysis at AF also showed that, despite the differences in indirect costs, the price per km of the lowest-evaluated bid was within the lower range in the market for recent metro projects and within the cost variance expected at appraisal. • Financing committed at appraisal that did not materialize: Two of the financing sources that would make up the MDMQ’s contribution to the Project—namely US$ 80 million from Quito Airport revenue securitization and US$ 152.2 million loan from Banco del Estado—did not materialize. 20. To offset this financing gap, the EIB approved an additional loan of US$ 44.2 in 2016 and the MDMQ increased contributions to the project from their own resources (an additional US$ 65.7 million). In 2018, the WB, IDB, and CAF 6At this time the MDMQ removed two items from the original contract: (i) implementation of the fare collection system for the entire public transport network, which was transferred to the municipality’s Secretariat of Mobility for implementation and (ii) construction of an electrical substation which was transferred to the Quito Energy company. Page 10 of 53 The World Bank Quito Metro Line One (P144489) each approved additional financing to close the remaining financing gap of US$ 632.2 million (see Annex 3). 21. A cost-benefit analysis (CBA) was applied to evaluate the continued economic viability of PLMQ at AF in 2018 given the higher-than-anticipated project costs. At appraisal (2013), the CBA resulted in an economic internal rate of return (EIRR) of almost 15 percent. A sensitivity analysis showed that the project maintained a positive net present value even if demand was 26 percent lower than expected or initial investment costs increased by 40 percent. At AF, an update of the CBA showed that the project remained economically viable even with the higher costs for civil works and less ambitious targets for ridership—with an EIRR of 12 percent for a 35-year evaluation period.7 22. In 2018, the PDO outcome indicator target for passengers per day in PLMQ was reduced to reflect lack of progress on multimodal integration activities that the MDMQ had committed to carry out in parallel to the project . This change appropriately responded to the realized risk that A2 of the TOC would not be met, and ridership forecasts were revised downward. To maintain consistency of the PDO statement and streamlined M&E reporting among co- financiers, no further changes were made to the project’s results framework. 23. The scale-up of Component 5 responded to early difficulties in compliance with environmental and social safeguards as well as delays in key decisions by the MDMQ regarding multimodal integration activities . Additional resources covered new technical assistance activities to support the implementation of the PLMQ and the MDMQ’s broader decisions related to the implementation of an integrated urban/public transport system. The restructuring of the component also provided greater clarity to the specific activities to be implemented to respond to slow implementation and disbursement of the technical assistance. 24. The multiple extensions of the closing date were necessary to ensure a capable operator was in place (A3 in the ToC in Figure 1) and to respond to delays caused by the COVID-19 pandemic, which delayed civil works and affected the manufacturing, shipping, and supply of equipment for crucial systems. Social unrest as well as high turnover of authorities and managers of the metro also impacted implementation progress (see Section III). II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating 25. The PDO remains highly relevant for Ecuador’s latest Systematic Country Diagnostic (SCD) (2018). The PLMQ’s improvements to urban mobility support the SCD Pillar 3 (Expanding economic opportunities) by providing more inclusive and sustainable access to jobs, education, and other urban services. The PLMQ provides a high-quality public transport connection between areas with poorer living conditions in the south and the central district, which concentrates employment and other economic opportunities (see Figure 2). Furthermore, in a city and country with rising private vehicle (car and motorcycle) ownership and use, the PLMQ offers a more efficient and sustainable alternative below the city’s surface. This aligns strongly with the SCD Pillar 4 (Use of physical and natural capital) by improving urban mobility while protecting the valuable land and cultural heritage in Quito’s city center. 26. The PDO also remains highly relevant to the Country Partnership Framework (CPF) FY19-23, which was adapted and extended to 2025 with the completion of a Performance and Learning Review (PLR). The PLMQ further contributes to Objective 1 of the PLR, “Improve Revenue Mobilization and Quality of Spending.” Urban rail systems are typically cheaper to operate and maintain than bus services that provide equivalent levels of mobility and quality 7 In 2020, restructuring included a third update to the CBA to reflect an additional 20 percent reduction in demand in early years of operation due to the lasting impact of the COVID-19 pandemic and more modest assumptions on demand growth rate reflecting delayed implementation of the city-wide integrated mass transit system. In 2020, the EIRR was 8 percent. Page 11 of 53 The World Bank Quito Metro Line One (P144489) of service. Further, by investing in public transport infrastructure and services, the MDMQ can reduce the financial burden of road expansion and maintenance in the city. In a city and country with rising car ownership and use, the PLMQ has encouraged substantial modal shift from less efficient and more polluting modes of private transport, such as cars and motorcycles. In this way, the PLMQ directly contributes to the PLR’s Objective 7 “Increase Climate Change Adaptation and Mitigation” by reducing the GHG emissions associated with urban transport (see Section IIB below). The COVID-19 pandemic reinforced the relevance of the PDO given the need to continue to support public transport to prevent further diversion of trips to less efficient and more polluting modes of private transport, such as cars and motorcycles. Figure 2. Spatial distribution of living condition index, urban opportunities, and public transport network at opening of PLMQ. 8 (a) Living Conditions Index (ICV) (b) Urban opportunities (c) Public transport network B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome 27. This ICR conducts a split evaluation because the ambition of some of the outcome indicator targets were reduced during project implementation. Given that most project benefits accrue to passengers riding the metro, substantially reducing this outcome indicator target is considered by this ICR as a reduction in the ambition of the project in achieving its PDO. The results at project closure are assessed against the targets set at appraisal in 2013 as well as the targets set in 2018 with the project restructuring at AF (see Table 3). The methodologies for calculating outcome indicators are detailed in Annex 6. 28. The PLMQ opened for service in December 2023.9 In its fifth month of operation (April 2024), PLMQ surpassed 20 million trips served. The metro is providing fast and high-quality service to around 4 million trips per month (see Table 4). Metro projects maximize their benefits when metro trips replace travel by less efficient or more polluting 8 Living Conditions Index calculated based on Orellana and Osorio (2014). Cartography from Figures 2 and 3 in Quezada Larriva et al. (2023). 9Hoyos Guerrero, Alejandro. 2023. “Quito Metro: A megaproject to transform mobility.” World Bank Blogs: Latin America and Caribbean, December 6. https://blogs.worldbank.org/en/latinamerica/quito-metro-megaproject-transform-mobility Page 12 of 53 The World Bank Quito Metro Line One (P144489) private vehicles such as cars or motorcycles (measured through modal shift) and when they provide a much higher- quality and faster alternative to existing public transport systems, expanding the number of opportunities that can be reached in a given travel time (measured through accessibility). The PLMQ has surpassed expectations in inducing modal shift away from private vehicles. From January through April 2024, 13.7 percent of riders of the PLMQ reported that they would otherwise have made the journey by private car (compared to 10 percent assumed ex- ante), 4.2 percent by taxi, and 79.0 percent by BRT or local buses (see Table 10 in Annex 4).10 As ridership increases with greater familiarity with and integration of the system, the benefits of this modal shift is likely to have a positive, compounding effect. Table 3. Summary of PDO indicators at project close versus targets. Target Actual PDO outcome indicator Baseline at 2013 at 2018 AF/ at closing appraisal restructuring 1. Passengers per day in PLMQ (#) 0 369,000 295,999 152,610 2. Travel time for public transportation users (min) 38.501 23.10 23.10 23.10 3. (Reduction in) Operating costs of Quito’s vehicle fleet (USD 0 60.0 59.4 58.5 millions) 4. (Reduction in) GHG emissions from transport in MDMQ 0 47,000 58,170 64,056 (metric tons/yr) 5. Adequate passenger capacity is provided by PLMQ (Yes/No) No No Yes Yes 6. Percentage of users satisfied with overall Metro service, its 0 65 65 97.8 security and comfort (%) 6.1 Percentage of female users satisfied with overall 0 -- 65 97.5 Metro service its security and comfort (%) 6.2 Percentage of low-income users satisfied with overall 0 -- 65 no data Metro service, its security and comfort (%) 7. Percentage of jobs accessible in 60 minutes of travel time (%) 45.3 -- 50.8 50.8 Table 4. Ridership on the PLMQ during first five months of operation.11 Month Average daily passengers (#) Total monthly Share of riders by gender (%) Weekdays Weekends ridership (#) Male Female December 2023 148,722 131,112 4,434,284 51 49 January 2024 131,051 106,553 3,866,591 52 48 February 2024 146,953 108,432 3,953,458 46 54 March 2024 149,896 106,992 4,217,734 49 51 April 2024 *preliminary 152,610 112,827 4,260,036 46 54 29. Outcome indicator 1: Passengers per day in PLMQ. In its first five months of operation, PLMQ averaged around 146,000 riders per weekday and 114,000 riders per weekend day (see Table 4). For the month of April 2024, the 10 Based on response to the multiple-choice question “What mode of transportation did you use prior to the Metro? [¿Cuál es el medio de transporte que utilizaba antes de la operación de la PLMQ?].” 11 Data compiled from Quito Metro monthly statistics bulletins (in Spanish): January 2024: https://metrodequito.gob.ec/wp-content/uploads/2024/02/24-01-31-Boletin-Estadistico-01-v2.pdf February 2024: https://metrodequito.gob.ec/wp-content/uploads/2024/03/24-03-06-Boletin-Estadistico-02.pdf March 2024: https://metrodequito.gob.ec/wp-content/uploads/2024/04/24-04-12-Boletin-Estadistico-03.pdf April 2024: https://metrodequito.gob.ec/wp-content/uploads/2024/05/24-05-06-Boletin-Estadistico-04.pdf Page 13 of 53 The World Bank Quito Metro Line One (P144489) average weekday ridership was 152,610 passengers per day (reported in Table 4).12 While this average passengers per weekday in PLMQ still significantly lags the target of 296,000 passengers per day set in 2018 and fairs worse compared to the target set at appraisal in 2013, the metro is already significantly improving the mobility of many of Quito’s citizens. Experience from other metro systems around the world suggests that, as the city and its urban transport systems continue to develop around the metro, the project’s transformational impact on the mobility and wellbeing of the city will only grow.13 30. Outcome indicator 3. (Reduction in) Operating costs of Quito’s vehicle fleet was estimated using the ex-post CBA based on actual ridership, more conservative estimates of ridership growth, and reported modal shift from PLMQ user surveys (see Annex 4 for details on the CBA). The ex-post CBA estimates operating cost savings of US$ 58.5 million in the year 2024 compared to the scenario without PLMQ.14 This indicator only minorly underachieves the targets set at appraisal and AF because of the lower than estimated ridership on the PLMQ (see indicator 1). Still, the results show that the PLMQ has already induced significantly less travel by private motor vehicles and is making it possible to serve travel demand in the city at a lower cost. Further, demand scenarios show that these vehicle operating cost savings could increase to over US$ 66 million, exceeding all targets in the coming year should the MDMQ follow through with near-term complementary investments in integration, particularly of the fare system, that the current Mayor is prioritizing (see Annex 4). 31. Outcome indicator 4. (Reduction in) Greenhouse gas emissions from transport in MDMQ was also estimated using the ex-post CBA (see Annex 4). Accounting for the fact that Quito’s vehicle fleet has become more fuel efficient over the ten years of project implementation, ex-post estimates suggest GHG emission savings of 64,056 metric tons CO2 in the year 2024 compared to the no project scenario.15 Despite lower than anticipated ridership of the PLMQ, higher than expected modal shift away from private cars and taxis means the PLMQ has exceeded the targets set for emissions reductions at both appraisal and AF. Modal shift is the highest driver for emissions reduction. The PLMQ is contributing substantially to the decarbonization goals of the GoE, while supporting the mobility and wellbeing of the residents of the MDMQ. 32. Outcome indicator 2: Travel time for public transport users along the corridor decreased from a baseline of 38.5 minutes to 23.1 minutes, achieving its target reduction in travel time.16 This demonstrates how the PLMQ is providing high-quality, fast, and reliable service that saves passengers considerable time in traveling to their destinations. 33. Outcome indicator 5. Adequate passenger capacity provided by PLMQ was achieved (Yes). The frequency of service is more than adequate to provide sufficient passenger capacity such that occupancy is less than or equal to 6 passengers/m2, even during peak hours. Based on measurements carried out by the Quito Metro during the week of April 22-26, 2024, the average occupancy level during peak operating hours is 4.65 passengers/m 2.17 Even with anticipated ridership increases, the operational plan which includes frequent service by 16 trains is more than 12 Following the methodology for measuring this indicator (see Annex 6), we report the average weekday ridership for the month of April 2024 This is averaged over all weekdays in the month, avoiding holidays, rather than over a single week. 13 Chen, Guangzhe, and Carlos Felipe Jaramillo. 2024. “Transforming urban transport: Lessons from Quito Metro Line One.” World Bank Blogs: Voices, February 12. https://blogs.worldbank.org/en/voices/transforming-urban-transport-lessons-quitos-metro-line-one 14 The year 2024 is used as the first full year of operation of the PLMQ. The CBA suggests a total vehicle operating cost savings (without – with project) of US$ 58.564 million in the year 2024 for the MDMQ. 15 The year 2024 is used as the first full year of operation of the PLMQ. The ex-post without project scenario estimates annual GHG emissions from urban transport of 1.627 million tons of CO2 and the with project scenario estimates annual GHG emissions of 1.562 million tons CO2. 16 The indicator is measured for a 10.7 km trip on any stretch of the Metro. With an achieved average operating speed of 37.5 km/hr, this amounts to an in-vehicle travel time of 17.1 minutes. To recognize the need for walking to and from the metro stations, an additional 6 minutes is added to this time. This yields a total travel time by metro of 23.1 min, which is substantially faster than the 38.5 min by bus (at appraisal). 17 Morning peak (6:00am – 9:00am) occupancy was measured to be 4.48 passengers/m2 and evening peak (4:00pm – 7:00pm) occupancy was measured at 4.82 passengers/m2. Page 14 of 53 The World Bank Quito Metro Line One (P144489) adequate to serve demand in the coming years. This indicator highlights how the PLMQ contributes to the comfort and thus improved mobility of travelers. 34. Outcome indicator 6. Users are highly satisfied with the overall quality of service and safety of PLMQ. In its first 3 months of operations, the operating company of Quito Metro conducted user satisfaction surveys at all stations on the system. These surveys found that 97 percent of riders are “Satisfied” or “Very Satisfied” with the overall quality of service (see Table 12 in Annex 6). This far exceeds the target of 65 percent. • Sub-indicator 6.1. Women are equally satisfied as men with the overall quality of metro service and safety— both in terms of safety of Metro facilities (e.g., stations and trains) and in terms of safety from sexual harassment. Even combining across all survey waves for the greatest sample size, there is no significant difference in the reported satisfaction levels between males and females (see Table 7). Satisfaction with safety from harassment is lower than general satisfaction with the quality of service, but still above 90 percent for both men and women. The fact that women and men report similar levels of satisfaction with the PLMQ is a remarkable achievement in a city which has a history of alarming rates of sexual harassment reported by women users of public transport.18 • Sub-indicator 6.2. Unfortunately, the passenger surveys did not gather information on respondent household income, so this report is unable to report on satisfaction of low-income users. While having this information would be useful to cover project’s results framework as defined at AF, the PDO does not specifically target mobility improvements for low-income users. 35. Outcome indicator 7. Jobs accessible within 60 minutes of travel time. The PLMQ significantly increased access to jobs (and public services). Accessibility analysis performed at AF (2018) showed that the population-weighted average percentage of jobs accessible within 60 minutes of travel time would increase from a baseline of 45.3 percent to 50.8 percent—an increase of 5.5 percent—with completion of PLMQ (without operational integration).19 A third-party study of the accessibility benefits from the completion of the PLMQ found that the project (keeping all other components of the surface public transport system unchanged) increased overall accessibility to opportunities. With completion of the project, individuals could reach an additional 2,713 opportunities—including jobs and services—in 60 minutes of travel time compared to before the project (a relative increase in accessibility of 6.8 percent). Underlying these median values is significant variation in accessibility benefits based on geographic location and, consequently, travel time (see Figure 3). 36. The project delivered all intended outputs contributing to the PDO (following the TOC in Figure 1) (see Annex 2). Key outputs delivered include construction of a 23-km tunnel with 15 stations; construction of maintenance facilities and yards; installation of all necessary electrical, signaling, and other systems for operation; the procurement of rolling stock; and the completion of 14 studies supporting the implementation of the PLMQ and environmental and social safeguards. The delivery of all infrastructure-related outputs was necessary for metro operations to commence, providing improved mobility for the residents of Quito. 37. Component 5 of the project, which supported institutional strengthening, innovation, and technical studies, was instrumental in supporting project implementation and achieving the PDO. Thanks to technical support for project 18 In 2014, a study found that 81 percent of women using public transport in Quito reported having been harassed. This sparked the launch of the Bájale al acoso (Stop harassment) campaign in 2018. IDB Transport Gender Lab. 2018. “The Fight against Sexual Harassment runs Smoothly in Ecuador.” https://tglab.iadb.org/en/la-lucha-contra-el- acoso-sexual-marcha-sobre-ruedas-en-ecuador 19 An additional scenario considering the completion of the Metro line and an optimization of surface public transport operations to minimize transfer times showed a further increase to 56.1 percent of jobs accessible within 60 minutes. Page 15 of 53 The World Bank Quito Metro Line One (P144489) implementation and commencement of operations, the MDMQ was able to deliver high-quality infrastructure and make an informed decision on public vs. private sector operations, define the business model and contract for operations, finalize biding documents, and hire an operator. This decision was critical for delivering high-quality service to meet the project’s PDO of improving urban mobility in Quito. Technical work supporting urban transport integration included inputs to an Urban Mobility Master Plan, which included a study of travel patterns and proposed phased interventions for the integration of all modes. These activities not only reinforced the impact that the PLMQ on the PDO, but also support longer-term outcomes of the project such as better access to quality public services for all and better capacity within the public sector to deliver public transport. The technical assistance financed under the project was complemented by trust-funded studies. Annex 7 includes a list of studies completed under Component 5 of the project and executed by the WB. Figure 3. PLMQ’s spatial and temporal impact on median population accessibility. Colors indicate change in number of opportunities accessible within given travel time at the specific location.20 Justification of Overall Efficacy Rating 38. The PLMQ is already providing fast, relatively affordable, environmentally sustainable, high-quality, and inclusive mobility to the residents of Quito. These benefits are accruing to a substantial number of travelers in the city every day. Ridership in the first months of operation is almost 52 percent of the target set at AF (see Table 3) and can increase to this target if the city invests in the integration of the system with other modes over the next few years 20 Figure 10 from Quezada Larriva et al. (2023) Page 16 of 53 The World Bank Quito Metro Line One (P144489) (see Annex 4). Therefore, the overall efficacy rating with revised outcome indicators and targets from 2018 (AF) is assessed as Substantial. 39. However, because the average daily ridership of the PLMQ in its first months of operation is only at 41 percent of the original outcome target set at appraisal and demand scenarios suggest that this ridership level would be difficult to reach in the coming years even with complementary investment, the overall efficacy rating with original outcome indicators and targets is assessed as Modest. C. EFFICIENCY Assessment of Efficiency and Rating 40. An ex-post economic analysis of the PLMQ project shows that the project remains economically viable despite implementation delays and lower than expected demand. The analysis found an EIRR of 6.4 percent under conservative assumptions regarding demand growth that account for lingering COVID-19 impacts on travel and do not assume any future multimodal integration. While modest compared to earlier estimates at appraisal and AF, the EIRR is still above the social discount rate of 4.8 percent currently used to evaluate transport projects in Ecuador. In fact, with a 4.8 percent discount rate, the project yields a net present value (NPV) of 2016 US$ 618.7 million. Should the MDMQ use the opening of the PLMQ as a catalyst for implementing multimodal integration measures, the project’s EIRR could jump to 7.0 – 9.0 percent (see Table 11 in Annex 4)—close to the latest estimate during project implementation of 8 percent cited in 2020. 41. Despite higher costs and schedule delays compared to estimates at appraisal, the efficiency of PLMQ compares favorably to the performance of other metro projects in the region. At 22.9 km long and with a total project capital cost of US$ 2,131.41 million, PLMQ cost US$ 93.07 million per km. While benchmarking metro project costs across countries and systems with very different design parameters can be a challenge, the PLMQ’s costs per km is one of the lowest achieved by a WB-financed metro project while still ensuring high-quality construction.21 For example, the São Paulo Metro Line 5 extension which preceded PLMQ by 3 years cost US$ 3,774.83 million for 12 km or US$ 314.57 million per km. Similarly, while comparing implementation timelines across metro projects can be challenging given different levels of readiness of designs when projects are announced/appraised, the cumulative implementation period of 10 years is reasonable given the implementation times of other metro projects in the region, particularly considering cities implementing their first metro line (Table 6) and after accounting for the fact that the implementation of the project overlapped with the outbreak of the COVID-19 pandemic (see Section III). Table 5. Comparison of Metro project implementation timelines. Project Length Stations Primary vertical Year of Year of Implementation (km) (#) alignment project start operations time (yrs) Line One, Quito Metro, Ecuador 22.9 15 Underground 20121 2023 11 Line A, Medellin Metro, Colombia 25.8 21 Elevated 1985 1995 10 Line 1, Lima and Callao Metro, Peru 34.6 26 Elevated 1987 2014 27 2 Line 1, Santiago Metro, Chile 11.5 17 Underground 1969 1977 8 Line 5 ext., São Paulo Metro, Brazil 12.0 11 Underground 2009 2019 10 Table notes: 1Construction on Component 1 (two stations) began in 2012 before appraisal of the World Bank loan in 2013, but major construction works on the metro did not begin until 2016; 2In 1975 an initial 8.3 km began operations linking 12 stations. 21 Many factors contributed to the lower cost per kilometer exhibited by the PLMQ, including the availability of detailed designs and the phased construction approach employed to inform procurement of the full civil works, the use of value engineering within the FIDIC contract, the good quality of soil at an appropriate depth for use of Tunnel Boring Machines, the relatively large distance/spacing of stations along the line, etc. Page 17 of 53 The World Bank Quito Metro Line One (P144489) 42. Since the PLMQ’s costs and implementation timeline were as expected given the project’s complexity and scale and an ex-post CBA found the project to have a 6.4 percent EIRR, the efficiency is rated as Substantial. D. JUSTIFICATION OF OVERALL OUTCOME RATING 43. According to the split rating calculation in Table 6, the overall outcome is rated Moderately Satisfactory: Table 6. Split rating calculations of overall outcome of the project. Original outcome indicators and Revised outcome indicators and targets (at appraisal) targets (with 2018 AF) Relevance of PDO High Efficacy Modest Substantial Efficiency Substantial Outcome rating Moderately Unsatisfactory Satisfactory Numerical value of rating 3 5 Disbursed (US$ million) 200 235 Share disbursed 46% 54% Weighted value of outcome rating 1.38 2.70 Final outcome rating Moderately Satisfactory (1.38 + 2.70 = 4.08) E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender 44. The project included initiatives to support more gender-inclusive transport in Quito, particularly targeting issues of sexual harassment in public spaces through the Zero Acoso strategy (see Annex 7). All metro cars are equipped with an alert button, which can be activated by victims or witnesses to a case of harassment. When pressing, the button alerts the train operator who communicates with the Central Control Post to coordinate the attention of station agents and Metro Police. At the next station, the police officer and the control agent go to the car to identify the victim and the alleged aggressor and notify the victim of the option to file a complaint. Even if the victim does not wish to file a formal complaint, the harassment is administratively sanctioned with a fine equivalent to one Unified Basic Wage, currently US$ 460. In its first 5 months of operation serving over 20 million trips, only 6 cases of sexual harassment have been reported on the PLMQ. Users rate sexual reporting mechanisms with over a 9 out of 10. 45. PLMQ has also contributed meaningfully towards closing the employment gender gap in the transport sector. In 2017, statistics showed that women accounted for only 11 percent of people employed in the transportation, storage, and communication sector in Ecuador.22 Responding to this challenge, the project included new activities and output indicators at AF to increase women’s participation in Metro operations. The project included in the contract with the operator the creation of an organizational and employment plan that promoted equal opportunities for women. The plan included human resources processes from recruitment through career development to encourage a more diverse workforce, strategic partnerships with national universities, and adoption of response protocols and ethics codes of conduct to prevent and address violation of women’s rights within the organization. With gender-sensitive recruitment procedures, new training opportunities, and other initiatives, the operator has achieved a share of 40 percent female employees across the entire company with 50 percent of management positions occupied by women. This has far exceeded the output target of 20 percent included as an intermediate results indicator of the project.23 Increasing the number of women employed in 22International Labor Organization (ILO) Research Department. World Employment and Social Outlook: Trends for Women 2017. 23 The operator has also expanded efforts to encourage greater participation of indigenous people and indigenous women in its operations. As of April 2024, nearly 8 percent (9 out of 113) technical positions in the organization are held by indigenous employees and all but one are indigenous females. Page 18 of 53 The World Bank Quito Metro Line One (P144489) transportation lays a strong foundation for the consideration of women’s specific needs in designing future transport projects and services. Institutional Strengthening 46. Institutional strengthening activities directly contributed to the PDO and long-term outcomes of the project and are therefore discussed above in the efficacy section. Mobilizing Private Sector Financing 47. The construction and operation of PLMQ benefited from the expertise of the private sector, but no private sector financing was mobilized for the project. The PLMQ is currently being operated under a six-year service provision contract with a joint venture of Transdev and Metro de Medellin. Poverty Reduction and Shared Prosperity 48. Disaggregate accessibility analysis shows that the completion of PLMQ meaningfully decreased the accessibility gap between the poorest and richest households in the city. An ex-post accessibility analysis conducted by Quezada Larriva et al. (2023) found that the PLMQ increased the accessibility of all residents between 8–11 percent. However, this improvement occurred in shorter trips (up to 40 minutes) for higher-income populations living near the city center and in the vicinity of metro stations with greater baseline accessibility and in longer trips (between 60 and 80 minutes) for the lower-income population on the periphery of the city with lower baseline accessibility. The population living in peripheral areas, particularly in the south, saw increases of 9 percent on longer trips of 50 minutes or more, allowing them to access more than 3,000 additional opportunities with the completion of the PLMQ than they could before the project in the same amount of travel time. Other Unintended Outcomes and Impacts 49. Road Safety. PLMQ fostered important dialogue around traffic management in the city and provided the impetus for lasting road safety infrastructure improvements at key intersections. Despite having an integrated environmental, social, and health and safety management program to guide project implementation during the construction phase that included a strong occupational health and safety management system and a traffic management plan, the project experienced 9 work-related fatalities during its implementation of which 7 were related to road traffic crashes. In the span of a few weeks in late 2017 and early 2018, four road-safety fatalities involving the operation of trucks transporting excavated soil to landfills. The WB team undertook two missions in December 2017 and February 2018 to address the road safety issues. The WB team worked with the municipality and the contractor to identify and put in place preventative measures, which included the installation of additional mirrors on trucks to reduce blind spots; installation of GPS devices on all 300 project-affiliated trucks (including those of sub-contractors); implementation of a 4-strike speeding control procedure based on monitoring of the truck GPS signals; implementation of a barcode system scanning vehicles in and out of sites; improved route planning including community outreach and screening of road safety risk; and continued implementation of driver alcohol and drug testing. Many of these interventions have become standard components in other WB projects to mitigate road safety risks due to construction works as part of template operational health and safety management plans. The incidents also sparked wider discussions on speed management, road safety, and improved road crash data. The WB team mobilized funding from Bloomberg Philanthropies to conduct studies to support this dialogue, including an audit of areas around metro stations, which have led to tangible improvements in street design for pedestrians, including improved crossings, footpaths, and limited vehicle speeds.24 24 Velasquez, Juan Miguel, and Claudia Lopez Rodriguez. 2022. “How the construction of an underground metro in Quito is building momentum for road safety.” World Bank Blogs: Latin America and Caribbean, August 23. https://blogs.worldbank.org/en/latinamerica/how-construction- underground-metro-quito-building-momentum-road-safety Page 19 of 53 The World Bank Quito Metro Line One (P144489) III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 50. Principles of Collaboration’ for MDB co-financing. To formalize working arrangements among the many MDBs involved in the PLMQ and to ensure that these arrangements could last beyond individual relationships as teams change, the MDBs agreed to the ‘Principles of Collaboration’ at the start of the project. This document laid out how the banks would oversee procurement, financial management, environmental and social safeguards, integrity, and conflict resolution mechanisms. For the first time, the WB’s Board agreed to use another MDB’s Procurement Guidelines (in this case, those of IDB) and, in turn, the IDB waived the provision that only firms from member countries could bid for a project, accepting the WB’s approach to open international bidding for contracts. 51. Detailed designs at appraisal. At appraisal, the PLMQ benefitted from strong technical designs that minimized the social impacts from resettlement25 and laid the groundwork for the metro to form the backbone of Quito’s urban transport system (with six metro stations physically integrated with the existing BRT). Having project designs ready at appraisal helped facilitate bidding for the construction works. The project also included significant project management and supervision support to the implementing agency by design, which facilitated the implementation of the FIDIC works contract. B. KEY FACTORS DURING IMPLEMENTATION (a) Factors subject to the control of government and/or implementing agency 52. Changes in local government administrations leading to delays in decision of operating model and integration. Significant turnover in local government administrations and managers at the implementing agency significantly affected implementation progress towards the PDO. A lack of continuity in policies and loss of institutional knowledge from this high turnover particularly impacted the timing of key decisions related to how the metro would be operated. Since 2021 (when the civil works neared completion despite the COVID-19 pandemic), Quito had three mayors and the project implementing agency had seven managers. These changes were accompanied by changes in the key staff in EPMMQ, which delayed project implementation with substantial impact on aspects of the project requiring long-term planning. Within the project activities, the high turnover at the EPMMQ and changing political affiliations delayed the decision on the operating model for the PLMQ. Beyond the project activities, it also created delays in implementing integration in the urban transport system. 53. Strong project management support. The project management company proved a great asset for ensuring smooth implementation of the infrastructure contract. They proactively generated cost savings via optimizations of designs and adapted to emerging problems. They helped the MDMQ identify timely solutions to technical challenges such as fuel contamination in La Pradera, the landslide affecting the main project dumpsite, or the unexpected hydrological conditions in Quitumbe. 54. Lengthy budgeting process and lack of internal coordination. The budgeting processes within the MDMQ is a complex process plagued with bureaucratic inefficiencies. There are a significant number of steps required every year for loan agreement signing and executing of MDB-funded projects. For budgeting activities that are implemented over several years, the MDMQ requires a multiannual budget certification, which requires approval by the Planifica Ecuador at the national level. This cumbersome process generated bottlenecks in project implementation and caused significant delays. Similarly, the implementation of Component 5 required close coordination between EPMMQ and other entities in the MDMQ, including the Secretary of Mobility and Secretary 25 See Box 15.1 of Pulido, Daniel, Georges Darido, Ramon Munoz-Raskin, and Joanna Moody. 2018. The Urban Rail Development Handbook. Washington, DC: World Bank. http://hdl.handle.net/10986/30392 Page 20 of 53 The World Bank Quito Metro Line One (P144489) of Territory and Housing for technical inputs and the General Administration of MDMQ and Secretary of Planning for financial management. Lack of coordination and differing priorities among different entities within the MDMQ created additional implementation delays, particularly for decisions on integration and operation of the PLMQ. (b) Factors subject to World Bank control 55. Quality and continuity of supervision and extensive technical assistance. Continuous supervision, non-reimbursable technical assistance, and a flexible TA component allowed the Bank to provide tailor made support to multiple challenges faced by the project. Close supervision ensured compliance with environmental and social requirements. Technical support covered numerous activities including planning, road safety, infrastructure contract management, unblocking the decision on the business model and facilitating the hiring of an operator, among others (Annex 7). (c) Factors outside the control of government and/or implementing entities 56. Fuel prices and fiscal restrictions. The sharp decline in fuel prices had a significant impact on transfers to the Municipality from the central government. This impacted the project first, by making it infeasible to receive additional funding from the national government, and second, by delaying transfers such as tax exemptions that generated delays in importing equipment. 57. Social unrest. In October 2019, the GoE announced economic measures including the cancellation of fuel subsidies that sparked nationwide protests. The demonstrations in Quito were intense, with 12 days of riots that led the government to declare a state of emergency. Direct damages to the PLMQ included the theft of construction materials, cable cutting, small fires, and the theft of heritage stones (which were later recovered and reinstalled in Plaza San Francisco). According to the EPMMQ, these damages resulted in direct losses of approximately US$ 80 million. Further, as protest blocked access to key construction site, the instability further affected the progress of the PLMQ civil works. A similar situation occurred in 2022, when the GoE announced an increase in fuel prices, arguing the need to adjust subsidies due to the economic situation. The protests that followed lasted 17 days, used blockades and violence to force policy change. The protests led to another suspension of works. Further, as the nation faced fuel and food shortages, the import of key equipment for the PLMQ was disrupted. 58. COVID-19 Pandemic—implementation impact. Due to the spread of COVID-19 and emerging global pandemic, all works on the PLMQ were suspended on March 16, 2020, due to force majeure as the country declared a state of emergency. Compared to other countries in the region, Ecuador had a very strict response to the pandemic, which included lockdowns26 and Quito was particularly hard hit with the number of cases and deaths overwhelming healthcare facilities in March and April of 2020. In May, some activities on the project were allowed to resume, limiting capacity of the work fronts to 50 percent of staff to maintain ‘social distancing,’ slowing the pace of implementation. It was not until July 10, 2020, when works were reactivated on all fronts. The impacts of the COVID- 19 pandemic on global supply chains also impacted the supply of equipment for critical systems of the PLMQ. 59. COVID-19 Pandemic—outcome impact. From 2011-2017, public transport ridership (on BRT and local bus services) in the MDMQ increased from 2.23 million trips per day to 2.68 million trips per day. The COVID-19 reversed this increasing trend, as lockdowns, social distancing measures, and avoidance of enclosed spaced contributed to declines in travel and particularly public transport ridership in cities around the world. In the MDMQ, the total number of daily trips in 2022 remained at 77 percent of 2017 pre-COVID levels and bus ridership had only recovered to 1.98 million passengers per day in 2022 (74 percent of 2017 levels) (see Table 9 in Annex 4). The PLMQ opened to service in this context of lingering COVID-19 dampening of public transport use, which is likely a contributing factor to the project underachieving its ridership targets. 26 According to the Government Response Stringency Index by the Oxford COVID-19 Government Response Tracker. Page 21 of 53 The World Bank Quito Metro Line One (P144489) IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 60. At appraisal, the project had a clear PDO to improve urban mobility that remained highly relevant throughout project implementation. The outcome indicators were, for the most part, specific, measurable, relevant, and time bound and adequately measured the PDO, with the following caveats: • Achievement of the original targets set for the outcome indicators (particularly, passengers per day riding the metro) were dependent on the implementation of complementary investments in an integrated urban transport system for Quito that were beyond the scope of the project’s components (A2 in the TOC in Figure 1). Therefore, the scope of the project did not match the ambition set for outcome targets. While intermediate indicators were introduced to monitor progress in the implementation of integration activities (e.g., percentage of metro feeder routes in operation and percentage of bus fleet under unified fare-collection system), by setting outcome targets based on the assumption that these activities would be completed by the Municipality outside of the scope of the project (A2 in Figure 1), the project RF built in significant risk to underachieving the PDO. • While the text surrounding the PDO mentioned the importance of air quality, no indicator of air pollutant emissions was included in the RF. 61. Baseline values for all outcome indicators were established at project appraisal. And the proposed methodologies for data collection, analysis, and reporting on outcome indicators were well-aligned with regular data collection efforts relating to metro operations (e.g., passenger counts and user satisfaction surveys). 62. Intermediate indicators were designed to adequately monitor progress in the implementation of the project’s components related to physical works, systems installation, and rolling stock procurement. However, no intermediate indicators were included to measure progress on the institutional strengthening and technical assistance component of the project (Component 5), which were solely financed by the WB. M&E Implementation 63. During implementation, some of the weaknesses of M&E design at appraisal were corrected through restructuring. While the target for passenger demand for PLMQ (outcome indicator 1) at appraisal was contingent on the implementation of complementary investments in the integrated mass transit system outside the scope of the project, at AF (2018), no progress had been made towards these complementary investments and the end target was adjusted downward accordingly. At restructuring in 2020, the target for outcome indicator 1 should have been further reduced to account for reduced demand from COVID-19 and continued delays in integration, but the RF was not appropriately updated. M&E Utilization 64. While outcome indicators could not be meaningfully reported until completion of the PLMQ, intermediate results indicators were regularly and accurately updated during implementation. Intermediate results indicators were effectively used to track implementation progress by project component. Intermediate results indicators were updated regularly in candid and complete Implementation Summary Reports (ISRs) and supervision mission Aide Memoires produced by the WB team with input from project stakeholders. Intermediate results indicators showed that implementation of complementary investments in the integrated public transport system in Quito (outside the scope of the project) were not advancing, and this information was used to adjust the outcome indicator targets during AF/restructuring. Page 22 of 53 The World Bank Quito Metro Line One (P144489) 65. As the MDMQ considers potential extension of the PLMQ, the outcome indicators collected and analyzed for this Project will be highly valuable in planning of subsequent interventions in the near term. Justification of Overall Rating of Quality of M&E 66. The overall rating of quality of M&E is Substantial. There were moderate shortcomings in the M&E design, particularly in the setting of overly ambitious targets for ridership indicators. However, these shortcomings were partially addressed during implementation and the M&E system was sufficient to assess the achievement of the PDO. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE 67. Given the magnitude and complexity of PLMQ construction works, environmental and social risks remained high throughout implementation despite the adoption of many mitigation and monitoring measures. Of particular concern was the significant volumes of soil that had to be moved by truck to identified waste disposal sites—which increased road safety risks from the movement of many large trucks on city streets and issues at landfills. These issues were quickly reported and responded to with specific Environmental and Social Corrective Action Plans. 68. Social and Environmental Risk from Materials Disposal. The excavation of the tunnels and underground stations resulted in significant volumes of material for disposal. The project’s initial waste disposal site, the Troje IV landfill, experienced a slope failure, which killed a landfill worker in December 2017. With the closure of the Troje IV landfill following the slope failure, the project had to find alternative sites for disposal of extracted materials. The EPMMQ began using an alternative site in Bicentenario Park and a public landfill in Oyacote. The EPMMQ completed an E&S audit of potential disposal sites which included conducting soil stability analysis to mitigate future risk of slope failure as well as consultation with workers and waste pickers on site. The results of this audit found Oyacote landfill to be unsuitable and a new waste disposal site at Casantopamba was identified. The project also triggered the Indigenous Peoples Policy Framework due to the possibility of indigenous peoples being present in new landfill areas. 69. Structural Damages in Solanda Area. In 2017, complaints were received regarding damage to buildings in Solanda due to terrain subsidence allegedly caused by the underground construction works for the Metro. While initial reports suggested that there was no immediate risk to the residents of affected buildings, a site visit (delayed by the outbreak of the COVID-19 pandemic) and updated client´s reporting revealed the existence of said risks. In application of a cautionary approach, the WB issued a threat to suspend disbursements to push the PLMQ implementing agency to mitigate risk for the physical integrity of people and provide alternative housing arrangements for anyone who required it during the mitigation measures were implemented, regardless of whether the project was responsible for damages or not. The WB also financed a study to identify the scope of impacts and the cause of the terrain subsidence. The study identified 191 affected buildings and estimated that the project had a proportional responsibility of 22.5 percent of the subsidence, on average. Ongoing issues require supervision of this case beyond the closing of the project. 70. The project triggered the following safeguards policies: Environmental Assessment (OP/BP 4.01), Physical and Cultural Resources (OP/BP 4.11), and Involuntary Resettlement (OP/BP 4.12). In addition, the restructuring approved with the AF included Indigenous Peoples (OP/BP 4.10). The environmental and social risks and impacts caused by the project have been duly managed and all environmental and social management plans and mitigation actions have been completed in line with Bank applicable safeguard policies, except for three outstanding actions that will be included in a post-closure action plan. These outstanding are associated with structural and non-structural damages to certain houses in the Solanda neighborhood allegedly partially caused by the construction of the PLMQ. There are also two pending payments of the compensation at full replacement cost due to two PAPs: the Arboleda family and the residential condo Las Cuadras. Both cases are pending resolution in court and the amounts have been put in escrow. Page 23 of 53 The World Bank Quito Metro Line One (P144489) 71. Fiduciary Compliance. The project complied with financial management and procurement guidelines (with necessary waivers) and paid ongoing attention to mitigating fiduciary risks. There were no reported issues related to financial management. The project received waivers from the WB procurement guidelines, authorizing the use of IDB procurement guidelines for certain components. Technical assistance (Component 5) financed solely by the WB followed procurement guidelines for terms of reference and the selection of consultants. Throughout project implementation, the fiduciary risk rating was maintained at “high” to indicate the need for continued attention to financial management and compliance with fiduciary standards given the large amount of funds to be disbursed and the complexity of co-financing arrangements. C. BANK PERFORMANCE Quality at Entry 72. The WB, as the last mover among the co-financiers of the PLMQ piloted innovative approaches to partnerships with other MDBs, signing the ‘Principles of Collaboration’, seeking the first waiver of WB procurement policies, and streamlining M&E arrangements by adopting the same PDO and RF as had been approved by the IDB. Leveraging the advanced preparation work by the other MDBs and in close coordination with them, the WB finalized preparation of the original loan in a short time given the complexity of the project (five months from concept review to Board approval). The appraisal proved accurate regarding the risk of underestimation of project costs, but too optimistic in terms of assessing the time it takes to implement a project. Similarly, it was overly optimistic in assuming the client would implement full integration of the public transport system. Quality of Supervision 73. The supervising team demonstrated exceptional candor and quality in performance monitoring and reporting, through regular Implementation Status Reports (ISRs) and detailed mission correspondence. The WB demonstrated appropriate proactivity in responding to implementation issues towards achievement of the PDO, including processing of AF to respond to cost overruns and restructuring of the RF to reduce the risk to PDO achievement from lack of progress on multimodal integration that was beyond the scope of the project activities. 74. The WB-team used technical assistance to not only support key aspects of PLMQ implementation but also add value to the broader dialogue in the MDMQ on inclusive and sustainable urban transport. The WB team used AF to scale- up institutional support towards defining the operator business model and for environmental and social safeguards. In most cases of environmental and social safeguards issues, the WB responded promptly and with proportionate action. For example, triggering the Indigenous People policy at AF proactively as waste site investigation was underway, in going beyond compliance to add value to environmental initiatives as in the case of Casantopamba landfill, and in eliminating risk for people in Solanda (regardless of project culpability). Going beyond project funds, the WB team mobilized over US$ 2.8 million in trust funds to support Bank-executed activities that supported transit- oriented urban planning, road safety, infrastructure contract management, unblocking the decision on the business model and facilitating the hiring of an operator, gender, among others. 75. While the project was able to deliver many positive outcomes and impacts beyond the PDO and its results framework, the project design did not provide leverage to expedite decision-making or mechanisms to push the implementation of activities (such as multimodal integration) not financed by the WB. While the project provided close supervision and extensive technical assistance, this assistance was not enough for the Borrower to fully own and undertake integration reforms or to make timely decisions on operating arrangements. The WB could have considered incorporating dated covenants and disbursement conditions linked to key Borrower reforms and decisions to provide greater leverage in timely decision-making by the Borrower. Page 24 of 53 The World Bank Quito Metro Line One (P144489) Justification of Overall Rating of Bank Performance 76. The overall rating of Bank Performance is Moderately Satisfactory as the shortcomings in quality at entry were corrected through careful and proactive supervision. Of particular importance was the scale-up of technical assistance supporting environmental and social safeguards and decisions on the operator business model and integration of the PLMQ. Any residual shortcomings are moderate given the complexity of the project and the many changes managed throughout supervision. D. RISK TO DEVELOPMENT OUTCOME 77. The most substantial risk to the achievement of the project PDO in the coming years is whether the MDMQ follows through with reform of surface transport systems to provide integration with the metro and other complementary investments in land use and transit-oriented development (TOD) to complement the PLMQ. From February-April 2024, an average of 32 percent of users of the PLMQ reported completing their metro trip with a bus service. With better operational and physical integration of bus and metro services, the PLMQ can expand the access and mobility benefits it provides to the city of Quito. The technical assistance financed by the project and complementary trust funds mobilized by the WB team have laid a solid foundation for these future actions and there are positive signs that the opening of the PLMQ is catalyzing the city to pursue its plans for an integrated urban transport system. The Quito City Council recently approved the Urban Mobility Master Plan, which includes phased actions towards multimodal integration, including the restructuring of the bus routes and implementing fare integration (informed by studies financed by the WB). These actions could substantially increase ridership of the PLMQ (see Annex 4) and magnify the project’s already substantial benefits to accessibility, inclusion, and environmental sustainability. 78. An additional risk to the long-term sustainability of the development outcomes is the financial sustainability of the PLMQ’s operations and maintenance. The WB project mitigated this risk through in-depth technical assistance on the business model of metro operations and analysis of fiscal impacts on the MDMQ (see Annex 7 for full list of studies). However, given lower than anticipated ridership, further exploration of additional sources of income beyond user fares could be considered to balance the need for long-term subsidies from the government. V. LESSONS AND RECOMMENDATIONS 79. The PLMQ is a model for future MDB collaboration in transformational urban transport megaprojects. The project followed an unprecedented model where several multilateral banks—the WB, CAF, IDB, and EIB—joined together to finance the project and share risk among lenders. The banks agreed to ‘Principles of Collaboration’, which covered how the banks would oversee procurement, financial management, environmental and social safeguards, integrity, and conflict resolution mechanisms. For the first time, the WB’s Board agreed to use another MDB’s Procurement Guidelines (in this case, those of IDB) and, in turn, the IDB waived the provision that only firms from member countries could bid for a project, accepting the WB’s approach to open international bidding for contracts.27 80. Carefully match the level of ambition of the PDO and its outcome targets to what is achieved by the components of the project so that the WB is not held accountable for activities not within the project scope. At appraisal, the PLMQ’s primary PDO outcome target (passengers per day) and its EIRR assumed that the metro would be integrated with other urban transport modes based on actions to be taken by the MDMQ outside the scope of the project. While this assumption of integration (A2 in TOC in Figure 1) was noted as a risk in the PAD and sensitivities to the economic analysis showed that the project remained viable without the assumption, the higher targets were maintained in the project’s RF, holding the project accountable for actions that were only covered by technical assistance under the project scope. Project teams should carefully match the level of ambition of PDO outcome indicators and targets and 27Medina, Cristina. 2024. “One for All, and All for the Metro.” https://worldbankgroup.sharepoint.com/sites/news/Pages/One-for-All-and-All- for-the-Metro-05052024-194102.aspx Page 25 of 53 The World Bank Quito Metro Line One (P144489) economic returns with the scope of the project. 81. Set realistic timelines for high-complexity projects at appraisal. While on paper it looks like the project experienced substantial delay (with cumulative extension of the closing date totaling 5 years), the project’s cumulative implementation period of 10 years from appraisal compares favorably to the implementation times of other metro projects in the region, particularly considering the impacts of the COVID-19 pandemic, social unrest, and other major impacts outside the control of the project implementing agency or the WB. The projects’ original implementation timeline was overly ambitious considering the scale and complexity of the works. For complex megaprojects of this magnitude, ample time should be allowed to prepare and implement the project with long-lasting and transformational impacts in mind. 82. Consider programmatic approaches to developing the infrastructure, service models, and complementary investments/policies needed to maximize the impact of urban transport megaprojects. Multimodal integration significantly boosts the benefits of any mass transit project. While the PLMQ was correctly envisioned and designed to fit within a broader, integrated public transport system, these integration activities did not materialize in parallel with the construction of the PLMQ. Instead, the opening of the PLMQ served as a catalyst for reform and complementary investment in the MDMQ. With the diagnostic underpinnings already financed by the PLMQ, the MDMQ is well-positioned to use the momentum from the opening of the metro to galvanize further urban transport reform around a service that is now much more tangible to policymakers, users, and other operators alike. Rather than expecting integration to happen from the outset, future mass transit projects could conceive infrastructure investments as part of a broader programmatic approach that includes follow-on investments in bus route restructuring, improvements to walking and biking networks for transit access, transit-oriented development, and more. The majority of benefits of mass transit infrastructure investments are only realized when services commence; so, it is important to start talking about operations as early as possible. Delays in the decision on how the PLMQ would be operated presented a major roadblock to project implementation. While this roadblock was eventually overcome, designing future projects with dated covenants and disbursement conditions linked to key operational decisions may improve the chances of having an operator in place on time. 83. Careful design at the outset and strong project supervision support pay off. The PLMQ benefited from having detailed designs prepared at appraisal that had carefully considered the alignment and plan of works to minimize social impacts, such as resettlement. The project included significant project management and supervision support to the implementing agency, which facilitated the implementation of the FIDIC works contract. Future projects can build on this positive experience with value engineering for capital costs and construction management. Experience from the PLMQ suggests further value could come from including operational review of designs as an early project component that would finance an independent, third-party review of designs to identify potential operations and maintenance cost savings or potential bottlenecks for future service. Future projects could also consider including in bidding documents the need for the consortia to have a project integrator to ensure compatibility among infrastructure, all systems, and rolling stock. 84. Define technical assistance activities clearly upfront to guide project implementation and use them to engage in broader dialogue on environmental and social value-adds for the project. Technical assistance executed by the project and by the Bank proved instrumental in supporting project implementation was critical for managing the risks inherent in complex infrastructure projects of this magnitude. Adherence to the Bank's policies ensures that vulnerable populations, affected businesses, traffic detours, and other impacts on the environment and population during construction were adequately addressed.28 The PLMQ project apart went well beyond compliance to 28 For detailed lessons learned on environmental aspects see: https://metrodequito.gob.ec/wp- Page 26 of 53 The World Bank Quito Metro Line One (P144489) safeguards and corporate commitments; by embracing these commitments as opportunities to engage in broader dialogue with the Borrower, the WB team was able to elevate conversations and galvanize action in the MDMQ on, for example, gender and road safety (see Annex 7). These conversations have added lasting value to the city of Quito and its residents beyond the PLMQ. . content/uploads/2024/03/CasoExito_SalvaguardasBID.pdf Page 27 of 53 The World Bank Quito Metro Line One (P144489) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Improved urban mobility in the city of Quito Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Passengers per day in PLMQ Number 0.00 369,000.00 295,999.00 152,610.00 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-May-2024 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Travel time for public Minutes 38.50 23.10 23.10 23.10 transportation users 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-May-2024 Comments (achievements against targets): Page 28 of 53 The World Bank Quito Metro Line One (P144489) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Operating costs of Quito's Amount(USD) 0.00 60.00 59.40 58.50 vehicle fleet 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-May-2024 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion GHG emissions from Metric 0.00 47,000.00 58,170.00 64,056.00 transport in DMQ tons/year 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-May-2024 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Adequate passenger capacity Yes/No No Yes Yes Yes provided by PLMQ 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-May-2024 Comments (achievements against targets): Page 29 of 53 The World Bank Quito Metro Line One (P144489) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of users satisfied Percentage 0.00 65.00 65.00 97.80 with overall metro service, its security and comfort 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-May-2024 (differentiated by gender and income) Percentage of female users Percentage 0.00 0.00 65.00 97.50 satisfied with overall metro service, its security and comfort Percentage of low-income Percentage 0.00 0.00 65.00 97.80 users satisfied with overall metro service, its security and comfort Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of jobs accessible Percentage 45.30 45.30 50.80 50.80 in 60 minutes of travel time 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-May-2024 Page 30 of 53 The World Bank Quito Metro Line One (P144489) Comments (achievements against targets): A.2 Intermediate Results Indicators Component: C3. Provision of Train Sets to Operate in the Quito Metro Line One Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of rolling stock Percentage 0.00 100.00 100.00 100.00 completed 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-Mar-2024 Comments (achievements against targets): Component: C2. Infrastructure and Equipment Investment for the Quito Metro Line One Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of physical work Percentage 0.00 100.00 100.00 99.98 progress in civil works other than stations 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-Mar-2024 Comments (achievements against targets): Page 31 of 53 The World Bank Quito Metro Line One (P144489) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of physical work Percentage 0.00 100.00 100.00 100.00 progress in stations and universal access 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-Mar-2024 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of physical work Percentage 0.00 100.00 100.00 100.00 progress in rail yard 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-Mar-2024 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of progress in Percentage 0.00 100.00 100.00 99.35 installation of power supply, auxiliary, signaling and 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-Mar-2024 telecom systems Comments (achievements against targets): Page 32 of 53 The World Bank Quito Metro Line One (P144489) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of fare-collection Percentage 0.00 100.00 100.00 100.00 system installed 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-Mar-2024 Comments (achievements against targets): This indicator measures the installation of fare collection system software and hardware for the PLMQ only. There is currently a simple but fully functioning fare collection system with multiple options for payment (cash, QR code, app, and website). Turnstiles are installed at all stations and hardware such as ticket sales equipment are fully installed. Therefore, this indicator is reported at 100%. The contractor is working on implementing an advanced fare collection system beyond the closing date of the project. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of progress in Percentage 0.00 100.00 100.00 100.00 installation of permanent way 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-Mar-2024 Comments (achievements against targets): Component: C5: Institutional Studies, Safeguards and Project Implementation Supporting Activities Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Page 33 of 53 The World Bank Quito Metro Line One (P144489) Percentage of metro feeder Percentage 0.00 90.00 15.00 0.00 routes in operation 28-Jun-2013 28-Jun-2023 22-Jun-2021 22-Mar-2024 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of bus fleet Percentage 0.00 90.00 25.00 0.00 under unified fare-collection system 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-Mar-2024 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Implementation of a Yes/No No No Yes Yes reporting mechanism for cases of violence against 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-Mar-2024 women and girls in the PLMQ Comments (achievements against targets): Indicator Name Unit of Measure Baseline Original Target Formally Revised Actual Achieved at Page 34 of 53 The World Bank Quito Metro Line One (P144489) Target Completion Percentage of technical and Percentage 0.00 0.00 20.00 41.01 professional staff, directly empoyed by the operator of 28-Jun-2013 28-Jun-2018 22-Jun-2021 22-Mar-2024 PLMQ, that is female Comments (achievements against targets): Page 35 of 53 The World Bank Quito Metro Line One (P144489) B. KEY OUTPUTS BY COMPONENT Objective/Outcome 1. Improve urban mobility in the city of Quito 1. Passengers per day in PLMQ (#) 2. Travel time for public transportation users (min) 3. (Reduction in) Operating costs of Quito’s vehicle fleet (USD) 4. (Reduction in) GHG emissions from transport in MDMQ (metric tons/yr) Outcome Indicators 5. Adequate passenger capacity is provided by PLMQ (Yes/No) 6. Percentage of users satisfied with overall Metro service, security, and comfort (%) (i) Percentage of female users satisfied with overall Metro service its security and comfort (%) (ii) Percentage of low-income users satisfied with overall Metro service, its security and comfort (%) 7. Percentage of jobs accessible in 60 minutes of travel time (%) 1. Percentage of rolling stock completed (%) 2. Percentage of physical work progress in civil works other than stations (%) 3. Percentage of physical work progress in stations and universal access (%) 4. Percentage of physical work progress in rail yard (%) 5. Percentage of progress in installation of power supply, auxiliary, signaling, and telecom systems (%) Intermediate Results Indicators 6. Percentage of fare-collection system installed (%) 7. Percentage of progress in installation of permanent way (%) 8. Percentage of metro feed routes in operation (%) 9. Percentage of bus fleet under unified fare-collection system (%) 10. Implementation of a reporting mechanism for cases of violence against women and girls in the PLMQ (Y/N) 11. Percentage of technical and professional staff, directly employed by the operator of PLMQ, that is female (%) Component 1: 1. Construction of 2 metro stations Component 2: 2. Construction of 23-km tunnel, installed with necessary systems for operations Key Outputs by Component 3. Construction of 13 additional metro stations (linked to the achievement of 4. Construction of maintenance facility and yard the Objective/Outcome 1) Component 3: 5. 18 six-car trains procured plus auxiliary vehicles for maintenance Component 5: 6. 14 studies carried out to support project safeguards and implementation of integrated public transport system (see Annex 7) Page 36 of 53 The World Bank Quito Metro Line One (P144489) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS With an implementation period of 10 years, the PLMQ is a testament to the effort of many staff and consultants working for the WB and for the three other co-financiers. The below list includes names of staff listed on the Project Appraisal Document, the Additional Finance Project Paper, and those linked to the project at closing. Many more team members supported implementation as part of missions, trust-funded technical assistance activities, etc. Name Role Preparation Arturo Ardila Gomez Task Team Leader, Senior Urban Transport Economist Shomik Raj Mehndiratta Lead Urban Transport Specialist Jorge Rebelo Metro Infrastructure Specialist Jose A. Barbero Metro Management Consultant Leonardo Canon Rubiano Junior Professional Associate, Team Member Alejandro Hoyos Guerrero Operations Analyst Ricardo Eduardo Lugea Senior Procurement Specialist Jean-Jacques Verdeaux Senior Procurement Specialist Jose Yukio Ramussen Kuroiwa Procurement Specialist Alejandro Roger Solanot Senior Financial Management Specialist Ana Lucia Jimenez Nieto Financial Management Specialist Raul Tolmos Environmental Specialist Alonso Zarzar Casis Senior Social Specialist Steven Farji Weiss Social Development Consultant Robert Hale Montgomery Lead Environment Specialist Aracelly G. Woodall Senior Program Assistant Sonia Rousseau-Lopez Program Assistant (ET) Jimena Garrote Counsel Sofia de Abreu Ferreira Legal Consultant Lucy Vargas Executive Assistant Gabriela Encalada Romero ET Consultant Supervision/ICR Alejandro Hoyos Guerrero Task Team Leader, Senior Transport Specialist Bianca Bianchi Alves Task Team Leader (Additional Finance), Practice Manager, Transport, LAC Daniel Pulido Task Team Leader (Additional Finance), Senior Infrastructure Specialist Fatima Arroyo Arroyo Senior Urban Transport Specialist Tatiana Peralta Quiros Senior Transport Specialist Page 37 of 53 The World Bank Quito Metro Line One (P144489) Chen Yang Senior Transport Specialist Gladys Mendez Road Safety Specialist Diego Canales Salas Transport Consultant Javier Escudero Marroquin Transport Analyst Claudia Lopez Rodriquez Transport Consultant, Road Safety Aitor Franco Arana Transport Consultant; ICR Contributing Author Juan Carlos Serrano-Machorro Senior Financial Management Specialist Ana Lucia Jimenez Nieto Financial Management Specialist Sandra Monica Tambucho Perez Senior Finance Officer Maria Virginia Hormazabal Finance Officer Carlos Tomas Perez-Brito Senior Social Development Specialist Valeska Marcela David Contreras Social Specialist Sofia De Abreu Ferreira Social Specialist Caterina Isabel Portelo Senior Counsel Alvaro Larrea Lead Procurement Specialist Maria Elizabeth Grandio Procurement Team Antonella Celeste Perila Procurement Team Maria Caridad Gutierrez Cordoba Procurement Team Carla Albertina Jerez Abascal Procurement Team Claudia Gabriela Larenas Herdoiza Procurement Team Marco Fernando Ricaurte Paredes Environmental Specialist Fiorella Cristina Pino Luna Environmental Specialist Leanne Farrell Environmental Specialist Licette M. Moncayo Program Assistant Paula Genis Operations Officer Patricia De la Fuente Hoyes Team Member Ximena Velandia Transport Consultant Nathaly Sofia Noboa Lopez Transport Consultant; ICR Contributing Author Joanna Charlotte Moody Transport Specialist; ICR Author Page 38 of 53 The World Bank Quito Metro Line One (P144489) B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY13 33.763 249,767.00 FY14 6.905 29,714.24 Total 40.67 279,481.24 Supervision/ICR FY14 24.918 127,703.97 FY15 18.858 107,300.83 FY16 38.081 697,881.36 FY17 40.397 337,597.03 FY18 45.646 367,633.90 FY19 44.645 549,052.87 FY20 62.404 481,336.47 FY21 49.397 520,575.06 FY22 63.142 871,127.54 FY23 24.214 625,043.46 FY24 43.348 266,253.67 Total 455.05 4,951,506.16 Page 39 of 53 The World Bank Quito Metro Line One (P144489) ANNEX 3. PROJECT COST BY COMPONENT Table 7. Project costs by component at appraisal, AF, and closing Amount at Approval, Amount at AF, 2018 Actual at Project Closing Component 2013 (US$ M) (US$ M) (US$ M) 1. Construction of Two Metro Stations 83.91 124.00 124.00 2. Infrastructure and Equipment Investment for *1,355.18 1,650.25 1,651.20 the PLMQ 3. Provision of Train Sets to Operate in the PLMQ 192.82 183.59 183.59 4. Project Management 47.25 47.03 46.06 5: Institutional Studies, Safeguards and Project 5.00 10.00 7.20 Implementation Supporting Activities Total 1,684.16 2,014.87 2,128.61 Table notes: *including VAT. Table 8. Project costs by source of financing at appraisal, AF, and closing Amount at Approval, Additional Finance Total Committed Actual at Project Source of financing 2013 (US$ M) (US$ M) (US$ M) Closing (US$ M) Gov of Ecuador 40.69 0 40.69 40.69 29 199.91 MDMQ 536.37 (336.46) 316.98 30 183.59 FIEM 192.82 (9.23) 183.59 EIB 259.28 44.20 303.48 303.15 IDB 200.00 250.00 450.00 449.80 CAF 250.00 152.20 402.20 402.20 WB 205.00 230.00 435.00 432.20 Total 1,684.16 330.71 2,014.87 2,128.61 Table notes: GoE = Government of Ecuador, EIB = European Investment Bank, IDB = Interamerican Development Bank, CAF = Development Bank of Latin America and the Caribbean, MDMQ = Municipio del Distrito Metropolitano de Quito. 29MDMQ contributions to Components 2 and 4 were to be partially financed through US$ 80.000 million from the securitization of revenues accruing to the MDMQ from the concession of Quito’s New International Airport (NAIQ) and a US$ 157.148 million loan from the publicly owned Bank of the Ecuadorean Social Security Institute (Banco del Instituto Ecuatoriano de Seguridad Social, BIESS) later replaced with a loan of US$ 152.200 million from the Banco del Estado (BdE) in August 2013. This amount also includes VAT estimated at appraisal. 30 The MDMQ proposed to finance Component 3 in its entirety through an export promotion loan from the Spanish Fund for Corporate Internationalization (Fondo para la Internationalización de la Empresa, FIEM). Page 40 of 53 The World Bank Quito Metro Line One (P144489) ANNEX 4. EFFICIENCY ANALYSIS An ex-post Cost-Benefit Analysis (CBA) was used to evaluate the economic viability of the PLMQ. The ex-post analysis used the same CBA model used at project appraisal that was updated in 2018 (AF) and in 2020 (restructuring). Model parameters were updated to most recent available values. The incremental CBA accounts for project capital and operations and maintenance costs as well as the following benefits: • Travel time savings for metro users, including both in-vehicle travel time savings and waiting/transfer time savings compared to alternative modes; • Travel time savings for road users due to reduced traffic on the surface; • Reduction in vehicle operating costs for private cars and buses; and • Reduction of CO2 emissions. Project Costs. Capital expenditures consisted of US$1.69 million for rolling stock and US$ 2.076 billion for infrastructure, systems, and facilities. Total reinvestment of US$ 801,570 was also modeled. Operating and maintenance cost per year was based on the operations and maintenance contract for the PLMQ—signed for US$ 153.4 million through 2025 with US$ 26.1 million in 2023, 63.1 million in 2024, and 64.2 million in 2025. Parameter Updates. The ex-post CBA uses a social discount rate of 4.8 percent. This discount rate is calculated using the WB Guidance on determining the social discount rate for economic analysis and is the value used to appraise transport projects in Ecuador at the time of this ICR. Parameters underlying general travel behavior in the city were updated based on a household origin-destination survey conducted in 2022: • Total vehicle fleet in the MDMQ of 634,340 vehicles. • Vehicle occupancy rates of 1.4 passengers per private vehicle and 40.0 passengers per public transport vehicle. • Average travel distances of 14 km per trip by private vehicle and 23 km per trip by public transport. • Average travel speeds of 28.6 km/hr for private vehicles, 14.0 km/hr for conventional buses, and 12.8 km/hr for the Metrobus-Q BRT. The total vehicle fleet was disaggregated based on data from the Association of Automotive Companies of Ecuador (AEADE, 2022): 98.5 percent of vehicles are private vehicles and 1.5 percent are public transport vehicles (including buses and taxis). The fleet of private vehicles was assumed to grow at a rate of 5.3 percent per year.31 For the calculation of travel time savings, the model uses value of time parameters estimated for the Sustainable Mobility Master Plan for the MDMQ (2022).32 The value of time for private vehicle trips is US$ 2.34 per hour for leisure and US$ 2.82 per hour for business. The value of time for public transport trips is US$ 1.92 for in-vehicle time, US$ 7.80 for access time spent walking to/from metro stations, and US$ 1.56 for waiting or transfer time. For the calculation of vehicle operating costs, fuel costs (excluding subsidies) were updated based on values from January 2024 provided by the National Chamber of Petroleum Derivatives Distributers of Ecuador (CAMDDEPE): US$ 2.93 per gallon of diesel, US$ 2.40 – US$ 2.65 per gallon of extra gasoline and US$ 3.14 per gallon for super gasoline. All other vehicle operating costs included in the model—such as the cost of routine maintenance, depreciation, tires, and lubricants—were extrapolated to present values based on average inflation of 3.47 percent.33 31 The motorization growth rate for the MDMQ cited by the National Institute of Statistics and Censuses (INEC, 2024). 32 https://gobiernoabierto.quito.gob.ec/wp-content/uploads/2023/05/PMMS-Quito_2022_2042.pdf 33 World Bank Development Indicators (2010-2022). Page 41 of 53 The World Bank Quito Metro Line One (P144489) For the calculation of CO2 emissions, analysis was carried out using emissions parameters for different vehicle types from World Bank Guidance (2021) Greenhouse Gas Accounting and Shadow Price of Carbon for Transport Investment Operations: 222 g CO2/km for private vehicle (car) and 1,408 g CO2/km for public transport (diesel bus).34 Since the PLMQ is expected to reduce CO2 emissions, the low value for shadow price of carbon was used as a conservative estimate of project benefits. This low value increased from US$ 52.0 per tCO2 in 2024 to US$ 93 per tCO2 in 2050. Demand Scenarios. The CBA model evaluates the PLMQ against a without project scenario. The without project scenario models the number of annual trips in the city by multiplying daily travel by mode by an annualization factor. Data from 2022 was used for the year 2024 to account for the lingering impacts of COVID-19 on travel within the MDMQ. From this base year, pre-COVID growth rates based on data from 2011-2017 were used to project daily trips to 2050.35 Specifically, the CBA assumes an annual growth rate of 3.03 percent for private vehicles and 2.87 percent for daily trips by public transport. Table 9. Number and share of daily trips by mode in the MDMQ before the opening of the PLMQ. Mode Number of trips per day (#) Share of daily travel (%) 2011 2017 2022 2011 2017 2022 Walking 654,751 731,579 571,595 15.3 14.6 14.8 Car 833,279 1,009,764 732,714 19.5 20.2 19.0 Bicycle and similar 13,206 -- 23,959 0.3 -- 0.6 Metrobus-Q (BRT) 596,464 52.2 53.5 15.5 Conventional bus 2,230,584 2,677,671 1,084,424 28.1 Intercity bus 299,186 7.8 Motorcycle -- -- 105,267 -- -- 2.7 Taxi or similar 141,271 167,858 200,496 3.3 3.4 5.2 School and institutional transportation 398,474 422,517 242,708 9.3 8.4 6.3 Total 4,271,565 5,009,389 3,856,812 100.0 100.0 100.0 Table notes: 2017 data from the Home Mobility Survey conducted as part of project preparation; 2017 data from the Demand Model Update Study conducted in preparation of AF; and 2022 data collected for the update of the Sustainable Mobility Master Plan for the MDMQ. The survey methodologies and choice options differed across sources, so “--“indicates that information was not collected for a given mode in a given year. For the with project scenario, the ICR considers a baseline demand scenario, an intermediate integration scenario, and an advanced integration scenario based on results of detailed demand modeling conducted as background to the Sustainable Mobility Master Plan for the MDMQ (see Figure 4 in Annex 8 for a map of public transport trips). These scenarios differ in terms of key assumptions on the level of investment that the MDMQ makes in multi-modal integration around the metro in its first few years of operation. All demand scenarios assume that ridership on the PLMQ will then grow from to 2050 at the same rate assumed in the without project scenario: 2.86 percent per year. • For the baseline with project scenario, the demand in the year 2024 is based on the number of daily trips used in the without project scenario and applies estimated modal shift from PLMQ passenger surveys36 (see Table 10) and the average number of weekday trips in the PLMQ in the month of April 2024: 152,610 (reported as outcome 34 These estimates of CO2 emissions calculated based on vehicle-km-traveled using global parameters were checked against CO2 emissions calculated based on gallons of fuel consumed using local parameters: emissions factor of 0.0033 tCO2/gallon for private vehicles (car) and 0.1408 tCO2/gallon for public transport (bus) were used to match the Sustainable Mobility Master Plan for the MDMQ (2022). 35 Data from 2011-2017 suggests an average annual growth rate in total trips in the MDMQ of 2.5 percent. As expected, this is slightly higher than the population growth rate of 1.6 percent in the MDMQ because of economic growth allowing individuals to afford more travel. 36 Average modal shift response across monthly passenger surveys conducted from January – April 2024. Page 42 of 53 The World Bank Quito Metro Line One (P144489) indicator 1). This approach assumes that the introduction of the PLMQ does not generate any additional trips due to lack of data on induced demand. Table 10. Number of daily trips by mode with the PLMQ. Mode 2022 (without Modal shift Number of 2024 PLMQ) to PLMQ (%) trips shifted (estimated with PLMQ with PLMQ) Walking 571,595 0.50 -763 570,831 Car 732,714 13.70 -20,908 711,806 Bicycle and similar 23,959 0.00 0 23,959 Metrobus-Q (BRT) 596,464 49.40 -75,389 521,074 Conventional bus 1,084,424 29.60 -45,173 1,039,252 Intercity bus 299,186 0.00 0 299,186 Motorcycle 105,267 2.50 -3,815 101,452 Taxi or similar 200,496 4.30 -6,562 193,933 School and institutional transportation 242,708 0.00 0 242,708 Metro -- -- +152,610 152,610 Total 3,856,812 100.00 0 3,856,812 • The moderate integration scenario is based on Phase I of the MDMQ’s integration plan, involving the implementation of near-term actions such as fare integration with the BRT systems (Trolebus, Ecovia and Metrobus), physical integration in four main interconnection stations between BRT and the Metro (Quitumbe, El Recreo, La Magdalena, and El Labrador), and the physical integration of the San Francisco (24 de Mayo Viaduct), El Ejido and La Carolina stations, with express services to Los Chillos and Tumbaco valleys. It is estimated that under this moderate integration scenario, ridership of the metro would increase from 152,610 daily trips in 2024 to 172,640 daily trips by 2025. • The advanced integration scenario is based on Phase II of the MDMQ’s integration plan, involving the restructuring of all public transport routes around the PLMQ following the implementation of near-term actions. It is estimated that under this advanced integration scenario, ridership of the metro would increase from 152,610 daily trips in 2024 to 172,640 daily trips by 2025 to 274,052 daily trips by 2029. Ridership growth is capped at the maximum design capacity of the system—400,000 passengers per day. Page 43 of 53 The World Bank Quito Metro Line One (P144489) 400,000 350,000 PLMQ passengers per day 300,000 250,000 200,000 150,000 100,000 50,000 - 2024 2029 2034 2039 2044 2049 Baseline demand scenario Moderate integration scenario Advanced integration scenario Ridership target at appraisal Ridership target at AF Conclusions. The ex-post CBA shows that the PLMQ achieves an EIRR of 6.42 percent under conservative demand estimates that account for lingering COVID-19 impacts on travel and do not assume any future multimodal integration. While modest compared to earlier estimates at appraisal and AF, the EIRR is still above the social discount rate of 4.8 percent currently used to evaluate transport projects in Ecuador. In fact, with a 4.8 percent discount rate, the project yields a net present value (NPV) of 2016 US$ 618.7 million (see Table 11). Should the MDMQ use the opening of the PLMQ as a catalyst for implementing even moderate integration measures in the next year, the project’s EIRR could jump to 7.0 percent. And if advanced integration is pursued over the next five years, the project’s EIRR could reach as much as 9.0 percent with an NPV of 2016 US$ 1.93 billion. Table 11. Summary of ex-post CBA results. PLMQ demand scenario EIRR NPV (US$ 2016 millions) with 4.8 percent discount rate Baseline 6.42 618.7 Moderate integration 7.08 910.7 Advanced integration 9.00 1,931.9 Page 44 of 53 The World Bank Quito Metro Line One (P144489) ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS The Borrower provided a detailed (100+-page) report on the project (in Spanish) that was consulted fully in the drafting of this ICR. For the sake of brevity, the report has not been reproduced here but is included in the Project Files. The ICR also benefited from coordination with other co-financiers, particularly the IDB. Data requests and assessment of project outcomes based on the shared M&E framework were coordinated with the IDB. Further, Mr. Jean Pol Armijos Leray (Transport Senior Specialist, IDB) served as a peer reviewer of the ICR. ANNEX 6. PDO INDICATOR DEFINITION AND METHODOLOGY Indicator 1. Passengers per day in PLMQ Methodology at appraisal (2013): Average daily number of passengers using the metro system on a weekday. The PLMQ will have electronic fare collection which easily counts the number of passengers that enter the system and therefore use it. Methodology at AF (2018): This indicator is the average daily number of passengers using the Metro. • Baseline or without-project situation: there are zero passengers riding the Metro. • With-project situation: to be measured three to six months after the Metro begins commercial operations. The indicator is the average daily number of passengers using the Metro system on a weekday. The indicator is the average of five workdays in a typical week when schools are in session and there are no holidays. Data on ridership can be obtained from the Metro’s fare collection system. Indicator 2. Travel time for public transportation users Methodology at appraisal (2013): Reduction in average travel time for public transport users in Quito who use metro versus the without project situation. The indicator will be measured by timing a 10.7 km trip on any stretch of the metro with this distance between origin and destination. 6 minutes shall be added to this time to recognize the need for walking to and from the metro stations. The trip will be compared against the equivalent average trip of 9.8 km made by bus. Currently the trip of 9.8 km by bus takes 38.5 minutes and it is estimated that by 2018 the trip will take 42.5 minutes. The trip by metro of 10.6 km (considering six minutes of walking) will take 23.1 minutes when the system is operational. Indicator related to “reducing travel time” element of the PDO. Methodology at AF (2018): It is the average travel time of public transport users of the Metro, once the Metro is operational. • Baseline or without-project situation: demand studies conducted for the Metro stated that the equivalent average trip of 9.8 km made by bus at time of appraisal (2013) takes 38.5 minutes. This is a conservative baseline as the trip time is expected to increase by the time of project completion in the without-project situation. • With-project situation: three to six months after the Metro begins commercial operations, this indicator will be measured by timing a 10.7 km trip on any stretch of the Metro from origin to destination during weekday rush hour. The indicator is the average of five workdays in a typical week when schools are in session and there are no holidays. To recognize the need for walking to and from Metro stations, add six minutes. The Page 45 of 53 The World Bank Quito Metro Line One (P144489) travel time in the Metro will be obtained from reports by the Metro operator. Indicator 3. Operating cost of Quito’s vehicle fleet Methodology at appraisal (2013): Reduction (savings) in Vehicle Operating Costs, including motorized public transport and private vehicles. The methodology used to estimate the indicators value is in the model used by the EPMMQ for the CBA analysis. EPMQ used the VOC-HDM 1993 to estimate vehicle operating costs by type of vehicle. The VOC model is more suited for inter-urban roads. But with great care a reasonable estimate of operating costs can be obtained for urban areas. This same approach should be used at project completion to measure total operating costs. Demand studies done foresee that 10 percent of metro demand will come from former private vehicle users, and 85 percent will come from former bus-based public transport users. The cost of operating the PLMQ will have to be added. Currently, total yearly operating costs are estimated to be US $999 million. By 2018, they are estimated to be US$ 1,249 million. With the PLMQ, total yearly operating costs will be US$ 1,181 million for a net yearly reduction of US$ 68 million once the metro is operation. The indicators is related to the “decreasing operational costs” element of the PDO. Methodology at AF (2018): The indicator is the operating cost of Quito’s total vehicle fleet, including public transport by bus and private vehicles. The Metro will induce less travel by motorized means and will make it possible to serve a growing demand at a lower cost. Therefore, the comparison of baseline and target for this indicator indicates a reduction in vehicle operating costs (VOCs). • Baseline or without-project situation: total yearly operating costs of the motorized fleet are estimated to be US$999 million in 2013. By 2020 these are estimated to be US$1.121 billion without the PLMQ. • With-project situation: With the PLMQ operating, total yearly operating costs in 2020 will be US$1.062 billion, with a net yearly reduction of US$59.4 million once the Metro is operational. The indicator will be measured three to six months into commercial service of the PLMQ. The methodology used to estimate this indicator is included in the model used by the EPMMQ for the Cost–Benefit Analysis (CBA). The EPMMQ used the VOC-HDM 1993 to estimate VOCs by type of vehicle. The VOC model is more suited to interurban roads. But with great care, a reasonable estimate of operating costs can be obtained for an urban area. This same approach should be used at project completion to measure total operating costs. Demand studies foresee that 10 percent of Metro demand will come from former private vehicle users, and 85 percent will come from former bus-based public transport users. The costs of operating the PLMQ must be added. Nevertheless, the total operating costs will be lower with the Metro than without. Indicator 4. GHG emissions from transport in the MDMQ Methodology at appraisal (2013): Yearly reduction in GHG emissions of 67,000 tons per year by 2018 against dynamic baseline which supposes that, in the absence of the proposed project, the growth rate of vehicle operating costs would be higher. The methodology used to estimate the indicators value is in the model used by EPMMQ for the CBA analysis. It is a simplified methodology that considers the fuel consumption and km per vehicle per year by type of vehicle. The reduction in surface vehicle use will result in a reduction in fuel consumption and km logged. Currently, emissions are estimated by the CBA to be 1,201,000 tons. By 2018 in the without project scenario, emissions would be 1,472,000 tons. With the PLMQ, emissions would instead by 1,407,000 tons for an impact of the Project of 65,000 tons per year of GHG gases [saved]. Indicator relates to the “reducing transport-related emissions of pollutants” element of the PDO. Methodology at AF (2018): The indicator measures the PDO by reducing emissions of GHGs. Reduction in the use of motorized vehicles will result in a reduction in kms logged and in fuel consumption. A reduction in the transport system’s fuel consumption will enable Quito to sustainably serve the growing demand for public transport. Therefore, Page 46 of 53 The World Bank Quito Metro Line One (P144489) the comparison of the baseline and target for this indicator indicates a reduction in GHG emissions. • Baseline or without-project situation: the CBA estimated emissions from transport (public and private) to be 1,201,000 tons in 2013. By 2020 without-project, emissions would be 1,274,400 tons. • With-project situation: With the PMLQ, emissions would instead be 1,102,400 tons, a reduction of 58,170 tons of GHG per year. GHG emissions are measured through the model used for this purpose in the CBA conducted by the EPMMQ. The model uses a simplified methodology that considers fuel consumption and kms logged per vehicle type (motorized private and public modes) per year. The CBA assumes that each gallon of fuel causes on average 8,460 grams of CO2 emissions. To evaluate if the indicator was met, this model will be run again using similar assumptions and updated values such as kms logged by vehicle type. Note that this indicator shares data with the indicator on operating costs of Quito’s vehicle fleet. Indicator 5. Level of Metro passenger occupancy / The PLMQ provides adequate passenger capacity Methodology at appraisal (2013): The trains are designed to have a capacity of 6 passengers per square meter. The indicator measures comfort by actual occupancy being equal to or less than 6 passengers per square meter. The indicator will be estimated from ridership counts and fleet available. Indicator relates to “improving comfort” element of the PDO. Methodology at AF (2018): • Baseline or without-project situation: there are zero passengers riding the Metro. • With-project situation: The trains are designed to have a capacity of six passengers per square meter (m2). The indicator measures the adequacy of capacity by actual occupancy being equal to or less than six passengers per m2. The occupancy is the number of riders per m2 of Metro fleet three to six months after the Metro becomes operational. Specifically, the occupancy is estimated as the total number of riders using the Metro during morning and evening rush hours during five normal workdays in a typical week when schools are in session and there are no holidays, divided by the total m2 that Metro service provided during the same time over the same five-day period. Indicator 6. Percentage of users satisfied with overall Metro service, its security and comfort, differentiated by gender and income Methodology at appraisal (2013): Six months after the metro becomes operational, the quality of service would be stable enough to measure this indicator through statistically significant surveys to users to be carried out by EPMMQ. Gender, income, and disability will be self-reported. Care should be used, however, on the matter of Low-income users are defined as those belonging to the lower two quintiles of the Registro Social from the Ministry of Social Development. This indicator relates to the “… connectivity, security, and comfort” elements of the PDO to improve urban mobility. Methodology at AF (2018): The indicator measures user satisfaction regarding security and comfort. It includes two sub-indicators, broken down by gender and income. • Baseline or without-project situation: there are zero passengers riding the Metro; therefore, user satisfaction is zero. • With-project situation: The indicator is measured by a “User Satisfaction Survey”. Three to six months after Page 47 of 53 The World Bank Quito Metro Line One (P144489) the Metro becomes operational, the quality of service would be stable enough to measure this indicator through statistically significant user surveys to be conducted by the EPMMQ. Sample Size: 200 per station. Surveys must ask the respondent’s gender and income. Low-income users are defined as those belonging to the lower two quintiles of the Ministry of Social Development’s Registro Social. User satisfaction will be measured using a 5-point Likert scale (1: unsatisfied; 2: moderately satisfied; 3: neutral; 4: moderately satisfied; 5: satisfied) in the questionnaire, asking whether the user is satisfied with (1) Metro service; (2) Metro security; and (3) Metro comfort. Those who answer 4 or 5 would be counted as “satisfied”. Notes on evaluation in ICR: The operating company of Quito Metro Line One conducted a series of passenger satisfaction survey at all 15 stations in: December 23, 2023 (417 responses); January 18, 2024 (435 responses); and February 23, 2024 (439 responses).37 All survey waves collected users’ perceptions of the metro’s overall safety and safety specifically from sexual harassment on a scale of 1 (lowest evaluation) to 10 (highest evaluation); the January and February survey waves also asked for a rating of the service overall. Consolidating the 10-point scale into a 5-point scale to be consistent with the methodology set out in the RF, scores of 7 or more are counted as “satisfied” (4) and scores of 9 or more are counted as “very satisfied” (5). A question on comfort was not included in the surveys so this ICR cannot report on this aspect of the outcome indicator. Table 12. Satisfaction with Quito Metro Line One Satisfaction Survey wave All respondents Males Females with: Satisfied or Very Satisfied or Very Satisfied or Very very satisfied satisfied very satisfied satisfied very satisfied satisfied Overall quality December 2023 -- -- -- -- -- -- of service January 2024 97.9 85.6 97.3 82.7 98.6 88.6 February 2024 99.1 83.1 99.0 82.5 99.2 83.7 All 98.5 84.4 98.1 82.6 98.9 86.0 Security December 2023 98.8 90.6 99.5 92.0 98.0 89.2 January 2024 96.8 82.4 96.9 80.1 96.7 84.8 February 2024 97.9 87.7 98.0 87.5 97.9 87.9 All 97.8 86.9 98.1 86.4 97.5 87.3 Safety (zero December 2023 88.0 80.6 88.7 83.1 87.2 77.8 harassment) January 2024 87.0 70.5 85.8 68.1 88.2 73.0 February 2024 95.4 82.2 96.5 83.0 94.6 81.6 All 90.2 77.7 90.1 77.8 90.2 77.6 Table notes: In December 2023, of 417 respondents, 213 identified as male and 203 as female. In January 2024, of 437 respondents, 226 identified as male and 211 as female. In February 2024, of 439 respondents, 200 identified as male and 239 as female. Indicator 7. Percentage of jobs accessible in 60 minutes of travel time Methodology at appraisal (2013): Not applicable. Methodology at AF (2018): The indicator measures the percentage of all jobs in the city that are accessible from a given origin in 60 minutes of travel time. An open-source software platform for measuring accessibility, the Urban Accessibility Tool (UAT), is available to government officials and all urban transport practitioners. This tool is available 37 The combined sample size across all survey waves was 1,291, which is significantly lower than the 3,000 suggested in the methodology (200 per station x 15 stations). Results were analyzed by survey wave, but there were no meaningful differences in reported satisfaction across wave. The indicator reported in the ICR is therefore the share from the combined sample of all survey waves (from first through third month of operation). Page 48 of 53 The World Bank Quito Metro Line One (P144489) at https://analysis.conveyal.com/. The UAT requires geo-referenced databases for housing and jobs, plus the existing transport network. All these databases are typically used in a demand model exercise. The UAT runs an algorithm that models a single person traveling from thousands of possible origins to thousands of possible destinations. The UAT estimates the percentage of jobs this typical person can access in 60 minutes of total travel time. Total travel time is defined as the sum of: time to access the public transport system, time waiting for a public transport vehicle, time in the vehicle, and time to access the destination. • Baseline or without-project situation: the UAT considers Quito’s transit network, which includes BRT and buses in mixed traffic and no Metro as operating in the morning rush hour. The UAT uses land-use databases that include household and job location. • With-project situation: By using the UAT with a transit network including the Metro, it was possible to set a target value. This target assumes that the BRT and Metro are physically integrated at six stations. Page 49 of 53 The World Bank Quito Metro Line One (P144489) ANNEX 7. LIST OF TECHNICAL ASSISTANCE Component 5 of the project, financed wholly by the WB, supported technical assistance activities to inform MDMQ’s decisions on the operation and maintenance model for the PLMQ, master planning and institutional arrangements for multi-modal integration, integration of the PLMQ’s fare collection system with other modes of public transport in the city, as well as gender, culture, and heritage (see Table 13). Table 13. Consultancy activities financed under Component 5 of the Project. Activity Implementation Amount period (US$) October 2017 – Update of the demand model for Quito Metro Line One 198,220 April 2018 March 2018 – Incorporating gender perspective into the Integrated Public Transportation System 175,000 March 2019 February 2020 – Development of the strategy for the promotion of Metro Culture 57,000 October 2020 May 2020 – Advisor for the Selection of the Operator of the Quito Metro Line One 200,000 October 2022 Preliminary engineering design and definition of the preliminary budget for the construction December 2020 – 1,295,802 of the extension of the Quito Metro Line One (El Labrador - La Ofelia Section). May 2021 July 2021 – August Environmental Impact Study for the Operation phase 235,212 2022 December 2021 – Technical structuring of the operation and maintenance of the Quito Metro Line One 1,304,829 March 2023 February 2022 – Sustainable Mobility Master Plan 1,218,778 November 2022 Study to structure and establish the Administrative Entity of the Integrated Public Transport March 2022 – 261,848 System (Single Transport Authority) August 2022 Consultancy to determine the causes of settlements and damage to buildings in the Solanda January 2023 – 1,081,034 neighborhood and proposed solutions. December 2023 Design of the permanent exhibition “Quito World Heritage, History of the City” at the San February 2023 – 40,200 Francisco Metro Station. May 2023 Update of the fare integration model (Phase II). Determination of the revenue distribution August 2023 – 225,000 formula December 2023 September 2023 – Rolling Stock Tuning Service 801,571 February 2024 Analysis, evaluation, and formulation of project alternatives for exclusive public transport bus December 2023 – lanes and demand management measures that contribute to strengthening the metropolitan 350,000 March 2024 public transportation system Note: Table summarizes only the firm contracts procured under Component 5, which totaled US$ 7.44 million. Individual contracts also supported the MDMQ with aspects of environmental and social safeguards compliance and the use of Intelligent Transportation Systems for the city of Quito. In addition to the technical assistance activities financed by Component 5 of the Project, the WB team also mobilized over US$ 2.8 million in trust funds to support the MDMQ on key topics such as the determination of the appropriate business model for operation of the PLMQ, integration of the metro with other modes of urban transport, complementary activities in transit-oriented development and access to public transport by walking and biking, and road safety. The full list of trust funds mobilized is included in Table 14. Other MDBs also supported complementary studies. Page 50 of 53 The World Bank Quito Metro Line One (P144489) Table 14. Trust funds mobilized by WB team in support of the PLMQ and MDMQ. Grant name Development objective and key outputs Amount Trust (US$) Fund* Supporting Quito to access Supporting the implementation of the integrated urban transport system 474,500 PPIAF market-based financing to through market loans and increased private sector participation, resulting in implement its Integrated reduced congestion, lower carbon emissions, and significant cost savings. Transport System Key outputs included: (1) diagnosis of BRT system including proposal for restructuring of bus routes and pilot for privatization of operations and (2) capital investment plan including fiscal impact analysis of the PLMQ to support access to commercial financing. Integration of transport and Enhance technical and institutional knowledge to support the coordination 43,500 South- urban planning exchange of urban development and mobility policies, thereby aiding the South implementation of the integrated urban transport system in Quito, by fostering knowledge sharing and adopting best practices. Specific activities included study visits to Chile, Brazil and Mexico to learn about metro operation and integration of transport modes and urban planning. Municipality of Quito This Project Definition Activity supported studies on (1) identification of 467,000 GIF Commercial Financing for business model for the operation of PLMQ and (2) identification of new Metro Line 1 source of revenues for funding public transport and financial structures to leverage funding. Vision and Implementation Optimize value for public transport infrastructure and promote non- 300,000 QII Strategy for Transit motorized trips, leading to improved productivity, lower VOC, enhanced Oriented Development in road safety, noise reduction, positive health impacts, and better utilization Quito (Phase 1) of public spaces and mixed-use infrastructure. Outputs included (1) legal, financial, and technical assessment for TOD around metro stations and (2) selection and development of pilot intervention (operationalized by the project around La Magdalena station). Road Safety in Quito Metro Enhance road safety through three key strategies: enhancing pedestrian 850,000 KWPF Project mobility around metro stations, implementing technology for efficient mobility control, and boosting capacity and awareness through training and community events. Key outputs included: (1) road safety audits and recommended improvement of pedestrian infrastructure and (2) study on ITS for road safety (e.g., speed monitoring, improved signaling, etc.). Support to Road Safety Enhance road infrastructure safety management capacity by conducting 143,500 GRSF under Bloomberg Initiative surveys on high-risk roads and providing support for their implementation. Produced (1) manual on road safety for urban rail projects and (2) manual on road safety for cities in Ecuador. Public Transport during and Identify and formulate public policy measures to enhance access for the 75,000 MOLO beyond COVID-19: An public transport system to commercial financing on competitive terms. MDTF opportunity to strengthen Simultaneously, strength the system's financial resilience and sustainability sustainability and resilience over the long run. Outputs included: (1) diagnostic of COVID-19 impact on public transport and (2) financing strategy (involving credit cooperatives) for fleet renewal. Resilient Urban Maximize value for money in public transport infrastructure and boost non- 400,000 QII Regeneration in Quito motorized trips, leading to increased productivity, lower VOC, improved World Heritage City Center road safety, noise reduction, positive health impacts, and better use of (TOD Phase 2) public spaces and mixed-use infrastructure. Cycle plan and bike-sharing Enhance and implement the cycling plan, aiming to encourage increased 120,000 MOLO systems in Quito bicycle usage as a transportation mode. This involves facilitating potential MDTF Page 51 of 53 The World Bank Quito Metro Line One (P144489) Grant name Development objective and key outputs Amount Trust (US$) Fund* investments from private operators and promoting sharing schemes among cities. Output studies included: (1) strategy for disposing of the outdated bike share system; (2) prefeasibility for PPP on bike sharing; and (3) investment plan for cycle infrastructure for Quito. *PPIAF = Public Private Infrastructure Advisory Facility; South-South = South-South Experience Exchange Between Practitioners Multi-Donor Trust Fund; GIF = Global Infrastructure Facility; QII = Quality Infrastructure Investment; KWPF = Korea-World Bank Partnership Facility; GRSF = Global Road Safety Facility; and MOLO MDTF= Mobility and Logistics Multi-Donor Trust Fund. ANNEX 8. QUITO PUBLIC TRANSPORT SYSTEM MAP Figure 4. Map of Quito’s rapid transit systems including the PLMQ (dotted red line) and BRT corridors (solid orange, blue, and purple lines). Page 52 of 53 The World Bank Quito Metro Line One (P144489) Figure 5. Trips in public transport in the MDMQ. Map generated for this ICR based on data from 2022 mobility survey at the transport analysis zone level (similar geographical unit to census area). Page 53 of 53