Motorcycle Upgrade Project for Bangkok

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Motorcycle Upgrade Project for Bangkok
Clean
Polluting
The World Bank February 12, 2001
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Air Quality Problem

• PM10 levels are two to three times the 24-Hour
  Average and Annual Average Thai standards.
• CO levels are two to three times the 8-Hour
  Average Thai standard.
• NOx may become a problem if PM repairs not
  performed correctly.

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Vehicle Growth in Bangkok
There are estimated to be almost 2 million
motorcycles registered in Bangkok currently.
About half may be in use and our target gross
polluters MC are about 50,000.
Source Road Transport Statistics, Department of
Land Transport
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MOTORCYCLES AND AIR POLLUTION

• Up to 50 of vehicle fleet
• up to 80 of them have 2-stroke engines
• Consume up to 25 of gasoline
• Emit up to 60 of total HC, 20 of total CO and
  20 of PM10 and NOx

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The Pillars of Vehicular AQM
In-Use Vehicle Standards - IM
New Vehicle Standards
Transport Management
Cleaner Fuel
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Ways to reduce motorcycle emissions

• New Vehicle Emissions Standards in progress
• Improved Lube Oil Standards done
• Encourage public transit in progress
• Tax incentives for clean MCs failed this year
• Improved in-use I M program in-use MC project
• MC Upgrade and Scrappage in-use MC project

The PCD, BMA, LTD, and other agencies are
addressing many of these issues, with the
co-operation of the manufacturers
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In-use MC Project Preparation Process

• Date
• - Oct. 1998
• - Jan. 1999
• - June 1999
• - Jan. 2000
• - April 2000
• - May 2000
• - Nov. 2000
• - Feb. 2001

• Major Milestones
• BMA and Bank agreed to work together to identify
  Air Quality Management related issues and
  options
• Defined possible Air Quality Management Project
  Components
• Stakeholder workshop with various agencies
• Decided to organize clinics to gather data
• MOA with the manufacturers
• Three MC clinics in Bangkok
• Results of the clinics and decision to start a
  small project
• Detailed project design and financing arrangements

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Bangkok Motorcycle ClinicsConcept

• Objectives
• To Improve the Knowledge-Base
• Promote Awareness
• Encourage Inter-agency coordination and
  public-private partnerships
• Pilot the approach to generate lessons for future
  program design

• Procedure
• Motorcycles brought in for testing.
• Based on their emissions, they were
• Given minor repair
• Given major repair
• Traded in for a new motorcycle -- old motorcycle
  to be refurbished and sold upcountry or scarpped

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Clinic Summary
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MC ClinicsBasic Information 3000 MCs in 6 days
in 2 clinics
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MC Clinic ResultsImpact of Minor tune-ups
Reduction in highly Polluting Vehicles
More Polluting Motorcycles (based on Opacity)
Less Polluting Motorcycles (based on Opacity)
Corresponding Increase in Cleaner Vehicles
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MC Clinic ResultsClassification of Motorcycles
Need Major Repairs / Potentially Scrappable
Borderline Cases
Clean Vehicle Population
Current Standard
Vehicles cleaned-up to standard after minor
tune-up
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Conceptual Framework of a MC Upgrade Project
Additional Motorcycles Added (Cleaner)
2005 - with program
Motorcycles taken out of circulation (Very
Polluting)
2000
Number of Motorcycles
1985
2005 - without program
0.1
0.6
0.8
0.5
Emission Factor (g/km) -----gt
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What are the Motorcycle Upgrade Project
Objectives?

• Reduce local air pollution from in-use
  motorcycles (and associated health impacts) in
  Bangkok Metropolitan Area
• Promote awareness of vehicular air pollution
  issues, maintenance practices
• Strengthen Inspection Maintenance enforcement
• Improve fuel economy of 2-wheelers

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Main Components

• Implement a Motorcycle Upgrade and Scrappage
  Program using a combined carrot-and-stick
  approach
• Piloting other components of the Bangkok Air
  Quality Management Project
• Project will be designed to be flexible and
  adaptable to incorporate lessons learned during
  implementation

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Schematic of Process, Benefits and Costs
Pass
Pass
No interest
Repair/Sell
50
35
9
4
100
Test1
Test2
MUP
Old MCs
Fail
Fail
New MC
2
15
6
50
Minor Repairs
Major Repairs
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Scrap

• Public Health benefits due to improved air
  quality Very High Reduction of Unit Pollution
  over very few vehicles (new and repaired)
• More fuel economy
• Sale of New MCs
• Safety Improvement
• Parts salvaged
• Global GHG benefits

• Environmental Awareness
• Enforcement Capacity
• Economy
• Experience lessons
• Dealer Benefits (Advertising/image, new vehicle
  sales)

• Public Health benefits due to improved air
  quality Small Reduction of Unit Pollution over
  large number of vehicles
• More fuel economy
• Safety Improvement
• Better Resale Value
• Global GHG benefits

• Public Health benefits due to improved air
  quality Significant Reduction of Unit Pollution
  over a few number of vehicles
• More fuel economy
• Better Resale Value
• Safety Improvement
• Global GHG benefits

Benefits

• BMA/LTD Capacity Building
• Transaction and other fixed costs, including
  Promotional Campaign

• Very High buyback/upgrade/scrapping Costs

• Testing Costs
• Freebees

Costs

• Low Repair Costs (primarily labor)

• Higher Repair Costs (parts and labor)

• Testing Costs

• Testing Costs

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How will the MC Testing work?
Pass or Minor Repair
Testing Center
Major Repair
MUP -NEW MC
Scrap/Recycle old MC
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MC Upgrade Process
Emission Test (MC Dealers to Administer)
In-Use MC
Pass
100
50
50
Fail
35
Minor Tune Up Emission Test
Pass
Fail
15
Major Repair Emission Test
Pass
9
Out on the road
Fail
6
6
User to Upgrade
New MC
6
Old MC
4
2
Repair/Recycle Parts/Sold Upcountry
Scrap
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MUP Estimated Costs
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Risks involved in such a scheme?

• Difficult to monitor as it will be dispersed
• Old MC may be sold in the countryside as is
• Second-hand market may get flooded
• Corruption in tracking of old
• Manufacturers commitment
• The Government commitment to enforcing standards
• Incentives may not be enough for dealers and
  owners of polluting MC

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What the Program means to Various Stakeholders

• MC Owners - fuel savings, new MC, pride of
  helping clean up Bangkok
• Thai Government (MOF, BMA, PCD) - Better
  enforcement, institutional capacity building,
  public outreach, part of air quality management
  efforts
• Motorcycle Manufacturers and dealers -
  Image/advertising, increased sales of newer
  products and service, goodwill
• World Bank - Pilot experience, lessons for
  proposed Bangkok Air Quality Management Project
• General Public - cleaner air, better fleet,
  awareness

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Role for BMA and LTD

• Oversight of the MC Upgrade Project
• Advisory services on the options available under
  the MUP
• Pre-qualify inspection sites for MC testing
• Awareness raising and MUP advertising campaign
  oversight (to be done by private sector)
• Improve Enforcement of I M standards

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Role of Financial Intermediary

• Clearing house for MUP transactions
• Transfer of funds to be used for purchase of a
  new MC and for scrappage
• Organization of community service cooperative
  (CSC)
• Provide credit financing for the purchase of the
  new MC

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Role of the World Bank
.

• Technical Experience from Around the World
• Facilitator of vision institutional dialogue
• Macro Policy Changes Dialogue with RTG
• Mobilize Bank Donors resources (TA and Loan)

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NEXT STEPS

• Pre-Appraisal of the MUP - February
  1 WB/AusAid
• Financial Intermediary agreement - Feb.
  20 GSB/BMA/WB
• Stakeholder discussion meeting - March
  10 BMA/MM
• Finalize MUP Concept - March 15 WB/BMA/MM
• Obtain MOF acceptance for the MUP - March
  31 BMA
• Finalize Draft Appraisal - April 15 WB/AusAid
• Project Implementation Plan ( Procurement) -
  April 15 WB/AusAid
• Negotiations for a Bank Loan - May MOF/BMA/WB
• Project Approval by June 2001 BMA/WB