Managing privately produced rail transit systems : a case study of Tren Urbano

Abstract

As developing countries face rapid urbanization, the need for efficient public transportation systems is being increasingly felt. Rail transit systems are best suited to meet the capacity requirements in several large cities. However, such systems are very expensive and take several years to build. Most such systems face operating losses and are a continual drain on public budgets. Traditional procurement methods have also resulted in severe time and cost overruns during the construction stage. It is for these reasons that several countries are looking at alternative procurement strategies, particularly those that integrate design, construction and operation. These strategies also seek to benefit from private sector efficiencies in the construction and operation of infrastructure facilities. The Tren Urbano, a rail transit system in San Juan, Puerto Rico, is being procured through such a novel approach. It can offer important lessons for similar procurements being contemplated around the world. This thesis looks at the responsibilities of a public agency during the operations and maintenance phase of such procurement. As no two situations can be exactly alike, and a universal model is not possible, it does so by examining the case of the Tren Urbano. It highlights the role of the government under different procurement options and suggests institutional arrangements for the proper management of the system. It also focuses on certain problems with regard to tort liability, ability to raise finances and dispute resolution that are likely to be encountered and suggests administrative and legislative measures to remedy them.