Part 2: Conclusions and Recommendations

The majority of the essential components of transportation infrastructure in the region are vulnerable to the effects of natural disasters and to the secondary impacts that may occur (spills, accidents, etc.)

A more in depth analysis of vulnerability is needed to ensure that all the most vulnerable elements on each component are identified and mitigation measures taken. For example, COCESNA, COCATRAM, and CEPREDENAC, as well as COMITRAN and its technical secretariat in SIECA, are working to incorporate ways to reduce the vulnerability and mitigate damage.

The vulnerability of some components is more complex because their repair and restoration depends on goods and services that are not available locally or regionally, e.g. air navigation aids, "Bailey type" bridge components and dredging services for shipping channels.

There is a need to quantify the potential economic losses that could result from the loss of the most vulnerable components to be able to understand the full impact and to weigh the cost-benefit of vulnerability reduction measures.

Each sub sector should undertake a detailed and profound evaluation of their vulnerable components, beginning with those that are most vulnerable (i.e. prioritizing them greatest to least in terms of vulnerability) for the purposes of determining the specific areas requiring attention.

Programs and actions to analyze vulnerability and redefine policies promoting measures to reduce loss should be identified by specialized regional transportation organizations and supported at the national and ministerial levels.

To develop improved project designs to reduce losses, it is necessary to undertake research about the economic and social impact of natural disasters and how to reduce vulnerability. Recommend that "Mode" or sub sector-level workshops be held with local, regional, and international specialists in order to design studies that can consider the possible impact of natural disasters on the transportation infrastructure and identify the best means to reduce vulnerability.

Regional institutions are the appropriate entities to undertake and organize these studies about the reduction of vulnerability. CEPREDENAC has international credibility, has contacts with other technical and financial institutions, and has indicated a willingness to partner with other organizations.

Research and studies should be developed with the goal of analyzing the economic impact produced by the interruption in the transportation services caused by damage to its infrastructure from natural disasters, and its multiplier effect. Additionally, the human suffering resulting from loss of jobs, property, and services as a cause of the economic downturn should be evaluated. These calculations should be made as if the country were a private enterprise.

It is useful to generate professional exchanges and training opportunities locally and regionally, so that the technical personnel will continue to contribute ideas and solutions related to the re-establishment of the transportation infrastructure in the shortest timeframe possible and also to reduce its vulnerability.

The principal conclusion from this study is that, at this time, there is no formal mechanism for mutual assistance to evaluate damage or to expedite the repair, rehabilitation, or reconstruction of critical transportation infrastructure components; and there are only limited efforts to reduce their vulnerability.

Informal networks exist among local transportation authorities and their specialized regional transportation organizations to evaluate damages and repair, rehabilitate, reconstruct, and replace some essential components of the transportation infrastructure. However, when a natural disaster of a significant magnitude affects the region, the emergency conditions will exceed the capacity of these processes and the informal networks to respond adequately.

There are some more formal international mechanisms, for example signed treaties between countries and some "membership agreements" within the regional or with international institutions that contain useful elements. Some agreements include components of the three transportation sub sectors, e.g. COCESNA has the authority and the ability to act in case of damage to aerial navigation infrastructure components and it has taken some vulnerability reduction actions. Also, in the maritime sub sector, there is a mechanism to coordinate plans and the response to the secondary effects of natural disasters, e.g. the spill of hydrocarbons and dangerous substances. However, local capacity to respond is very limited.

The rest of the formal mechanisms that are referred to throughout the report are isolated processes, in general, agreements that formalize projects financed by credit institutions, agreements with bilateral donors, and other processes that need to be reviewed.

Mechanisms to provide "humanitarian or disaster assistance" have been extended to assist the repair or rehabilitation of transportation infrastructure. However, this process is not timely and has no formal vulnerability reduction component. This assistance is often guided by the availability of resources from donors and their own policies and priorities rather than focused on the priority needs of the impacted country.

There are no agreements in the region that formally incorporate the international private sector in the emergency response to transportation infrastructure damaged as a result of a natural disaster. There are a few contracts and there are several limited agreements such as airport concessions. Agreements and treaties for specific purposes, such as oil spills and hazardous materials planning and response have been signed, but the private sector remains skeptical that governments have fulfilled their obligations or will after an emergency.

Businesses that operate or manage their services as an owner, in general, get insurance against natural risks/disasters, which can include the rehabilitation of infrastructure and protect them against the loss of business income. As more critical transportation services are managed by concession agreements, identifying who is responsible for natural risks and damage should be included in these agreements.

There are few arrangements between the transportation authorities and the private sector (the provider of goods and services) to evaluate potential damage and access what critical goods and services might be required from private sources, to replace essential components of the transportation infrastructure. In some cases, spares and equipment must be manufactured, because their anticipated need was not known. When a major emergency occurs and the local authorities don’t have the components or spare parts, they are not generally able to procure them immediately, often due to a lack of pre arranged financing.

The informal mechanisms of assistance should be formalized in written agreements. Agreements, such as Mutual Assistance Agreements, treaties, regional or international organization support agreements, bilateral donor agency arrangements, flexible loans with credit institutions, and contracts with the private sector are a clear way to determine what each party is prepared to provide or accept in case of emergency. Formal agreements permit the anticipation of deficiencies and identify costs before emergency situations materialize, and thus permit the incorporation of improvements to reduce future losses. (An example of the elements that should be considered in a Mutual Assistance Agreement is provided in Appendix C.)

Regional specialized institutions should lead a process to develop formal regional mutual assistance agreements and stimulate activities to reduce the vulnerability of the transportation infrastructure. Regional agreements permit each country to maximize its resources without incurring the cost of doing all such activities itself. Regional organizations possess leadership and the technical capacity to be useful intermediaries between party countries and with other regional or specialized international organizations, and with countries outside the region. Regional technical organizations have credibility with multilateral credit institutions, and with the private sector, that could facilitate access to financial resources in the form of donations or loans. During emergencies, these intermediaries can function as a bridge among the parties requesting or willing to provide assistance.

Meetings with major donors and bilateral cooperation agencies can be organized to review their policies for post disaster assistance. Suggest that vulnerability be considered and that loss reduction measures be required for donor funded relief and reconstruction activities.

A Private – Public Task Force be established to review opportunities and to develop "action plans" between the public and private sector to identify quantifiable, effective mutual assistance in the case of emergencies, and to promote the reduction of losses and the mitigation of damage.

Incentives to motivate the private sector to take loss reduction actions should be considered, including a waiver or reduction of import duties or taxes on mitigation materials. The public sector should establish the technical and design-based parameters for mitigation measures, including the rehabilitation and reconstruction of damaged infrastructure.

The informal understandings and personal networks based in friendship or occasional agreements between officials and organizations should be replaced by formal agreements. Agreements should diminish the extent of damage, by defining responsibilities and expectations between the parties, and accelerating the provision of aid. All agreements should include a specific element for payment or reimbursement so that goods and services are furnished with the certitude that the party paying will be compensated.

Transportation authorities and the institutions with jurisdiction over the critical transportation infrastructure components should consider agreements or contracts with the private suppliers for essential spare parts or services, and for their installation or repair. The representatives of the provider enterprises should be contracted to assure that they have the components most susceptible to being damaged by natural disasters and have the spare parts for them. A price and modality of payment or financing should be agreed upon that satisfies both parties; and the timeframe in which a certain component should be sent to the buyer in the case of an emergency. Such a process should be solicited from a variety of businesses, so that a comparison of prices and conditions can be made. Similar methods of pre-agreements have been done in Japan and the U.S. with great benefits as infrastructure repairs were rapidly completed. The California Department of Transportation, CALTRANS, uses a similar process that has permitted it to proceed with the rehabilitation of its highways in a fast and efficient manner. (See http://svhqsgi4.dot.ca.gov/contractor/.) (Appendix D offers guidance on pre-qualifying suppliers of goods and services.)

Regional and international instruments have been identified that would be able to channel certain aspects of assistance. Recommend undertaking workshops with international specialists to discuss these instruments to apply, as possible, to existing projects.

Meet with all of the regional organizations that deal with material transport in order to see whether each one of them includes aspects related to the identification of risks and disaster mitigation with the goal of not duplicating efforts.

Many donor governments also have legal restrictions regarding the manner in which they can invest their money, including some conditions that inhibit them from financing the reconstruction of infrastructure in such a way that improvements to the original structure are incorporated. While this might be understood in a historical context, such policies should be discussed and reviewed.

The presidents of the Central American countries have the sufficient constitutional jurisdiction and authority to establish international accords, which in general would be ratified by their legislatures. When dealing with agreements of assistance, they may simply require an exchange of notes/letters to make them effective.

Regarding the private sector, agreements signed prior to an emergency will help avoid prolonged contractual negotiations that make it difficult to rapidly select a provider of goods and services. The negotiation of fundamental aspects such as the availability of goods and services, terms of sending the assistance, payment conditions, and financing should be agreed upon before the need is urgent. In order to get a practical agreement with private companies, it would require the participation of the empowered representatives of the local transportation authorities, e.g. civil aviation institutions, and maritime authorities, to meet with the representatives of the private suppliers.

Senior officials with the legal authority, as well as financial and technical specialists, should be involved in the dialogue to develop agreements. Negotiations about agreements should include the legal authority, technical details and clearly identified financing to avoid bureaucratic instances that can slow down the provision of assistance in cases of emergency.

Organize work groups with public and private sector members of the transportation sector with the goal of identifying areas of conflict and creating opportunities for effective cooperation. With this in mind, regional organizations such as CEPREDENAC, COCATRAM, and COCESNA, local chambers of commerce, and technical representatives of the aerial, maritime, and terrestrial transportation industries should be brought together to meet, since all of these entities have positive connections with the commercial and industrial sectors.

Accords should be defined with the private sector to protect the essential components of the transportation infrastructure, and encouraging investment to move ahead with the tasks of reduction of vulnerability and improve response to natural disasters.

The surveys reveal that human and material assistance is needed. Nonetheless, many of the institutions surveyed declared that they are in a position to provide the goods and services that others say they need.

The authorities interviewed also do not distinguish between if the needed assistance refers to goods, services, or both. It is important to determine the specific characteristics of assistance that might be needed and requested.

The possibility of agreeing how to repair or replace certain goods has been difficult because of the obsolescence of equipment and uncertain source of spare parts.

Organize work groups with technical representatives of each mode to determine areas of cooperation when one of the local transportation authorities has goods and services that another institution in the region may need. Additionally, discussions should include the basis on which the assistance will be provided, with a special focus on mechanisms for reciprocity, reimbursement, and compensation.

The transportation authorities need to identify by mode and by facility the exact characteristics of the goods and services that may be needed as a pre-condition to all negotiations between cooperating parties and with the private suppliers.

When replacing or repairing damaged equipment, it is necessary to choose advanced technologies that include vulnerability reduction. Loans are also needed to modernize the equipment with new and variable technology.

The scarcity of financial resources in the region has been identified as one of the most serious problems in promoting the mitigation of damage and participation in pre-arranged accords for re-establishing damaged infrastructure.

Obtaining financing for work in the reduction of vulnerability and repair, rehabilitation, reconstruction, and repair of components of the infrastructure is fundamental to the effective functioning of any mechanism.

Financial institutions have recognized the importance of providing material funds, and they are also adopting new strategies relating to disaster mitigation. Concretely, the World Bank is providing loans for reduction of vulnerability and loss reduction, e.g. financing of bridges sections and materials to use in case of an emergency. Similarly, the Inter-American Development Bank (IADB) has revised its traditional policies on loans for reconstruction, in order to emphasize preventative actions and disaster mitigation (IADB 2000).

Study opportunities for immediate financing of critical transportation repair and reconstruction from national budgets and from multilateral credit institutions. Promote development of projects for strengthening regional cooperation related to disaster mitigation and vulnerability reduction.

Ask international and regional banks for their technical cooperation by providing project design materials, cost estimates, and support for the disaster-related projects of regional or local transportation organizations.

Include in the projects with foreign bilateral cooperation agencies flexible funds that allow for the negotiation of additional accords with providers of essential goods and services.

Organize workshops with research economists and disaster technicians to identify how to more accurately quantify direct and indirect losses from disasters.