Analysis of Private Participation Effects in Bus Rapid Transit Projects in Ecuador

Abstract

The two largest cities in Ecuador each implemented three bus rapid transit (BRT) corridors from 1995 to 2013. The projects present similar characteristics, and thus a unique opportunity to analyze factors that influenced their performance. This paper identifies the level of private participation and the extent to which it influenced the outcomes of the projects. Two approaches were identified: 1) including incumbent operators by delegating vehicle acquisitions and operations; and 2) replacing them with a public company. The financial strength and interest of the incumbent operators in continuing to function along parallel routes were major issues. Quito was successful in the implementation of the first corridor through public delivery but failed in its attempts with private participation. Guayaquil surmounted the barriers for effective private participation through a special purpose vehicle (SPV) that managed the risk created by the inherent nature of the consortiums. It is expected that a deeper understanding of these processes will contribute to more efficient and sustainable transportation investments in Ecuador.