Public transport inremote and isolated territoriesof Chile
Nicolás Céspedes
Ministry of Transport and Telecommunications
Chile4,270 km long (longest and thinnest
country in the world)

40% of the population lives inSantiago Metropolitan Region

16 administrative regions

Population:
17.5 million
12%rural population

Metropolitan Region:462 residents/km2

Magallanes Region:
0.12 residents/km2

Desert climate in the north,
Mediterranean climate in the center,and steppe climate in the south

Chile features every climateclassification and territory spans
three continents

Difficult geographic conditions in Chile,especially in the southern portion of the country,
make Transport connectivity difficult.
Private operators are not interested in providing
connectivity services in these areas because
they provide a negligent (or nonexistent) returnon investment.

Puerto Edén, Magallanes Region

Subsidies for connectivity

The Ministry of Transport has provided subsidized
public transport for more than four decades to ensurethat geographically isolated localities remain connectedwith their respective regional capital cities.
Puerto Edén, Magallanes Region

Intervention of the State of Chile in thedevelopment of remote and isolated territories

EMAZA,
1960-2013
Was in charge ofsupplying basic
consumer goods
and products toremote areas

ODEPLAN,1985

SUBDERE,
1994

Provided public support

Committee for theDevelopment ofRemote andSpecial Areas

to isolated areas of thecountry, granting
customs tax-type
franchises and direct
bonuses to productive
sectors of the economy

SUBDERE,2010
National Policy for theDevelopment of Isolated
Locations
Based on “social equity, as it
gives all Chilean citizens thesame opportunities for accessto basic services so that they
can develop their potential”

ODEPA,
2014
National RuralDevelopmentPolicy

2009 Public Transport Subsidy Law
The Regional Public Transport Division, within the Sub-Secretary ofTransport, was created in response to the growing and non-deferrable needto raise the standard and quality of public Transport in regions outside ofSantiago, and to promote public Transport to ensure the integrated
development of all people and their communities, especially in hard-toreach isolated areas.
This law provides the Ministry of Transport and Telecommunications (MTT)with almost US$350 million per year to guarantee territorialconnectivity and strengthen public Transport throughout the country.
LOWEREDFARESCONNECTIVITYSERVICESINFRASTRUCTURE

RAILWAY
CONNECTIONSREGIONALASSISTANCE
FUND

Methodology to target, select, and prioritize
Transport services in isolated areas
Methodology toIdentify Isolated
Areas for Transport
SubsidiesThis updated methodology allows the MTT to identify, categorize,characterize, and prioritize isolated populated centers based on their degreeof access to a series of basic services.
Uses a geographic information system to determine which locations are
considered isolated with respect to access to basic services
Two main steps:1) Calculate travel times from each location to the destination that offers thebasic service(s) under consideration
2) Prioritize the degree of isolation based on estimated travel times todifferent services

Which services?

Public transportSupply and sale of products

Education

Financial and administrativeHealthSpecial population services

Methodology of targeting, selection and prioritization
for transport services in isolated areasImplementation process
End of Contract andReevaluation
Contract and Payment
Management
Contract Execution
PublicProcurement
Requests /Characterization
Studies

Design• Supply-side subsidy• Goverment provides subsidy
through public bidding process

Technical evaluation and application of methodology

724 connectivity services operating
throughout the country:554

OVERLAND

18

RIVER/CANAL111

MARITIME

2PASSENGER RAIL

15

AIR SERVICE

LAKE FERRY

24

Vehicle fleet used to service subsidized routes

495

BUSES

5TRAINS

24

MARITIME VESSELS

8AIRPLANES98

LAKE/RIVER VESSELS

Subsidized services viewer (Geo-portal)

https://goo.gl/vz5KD4

Public investment in connectivity services
in million USD, 2010-2018

ISOLATED AREAS, RURAL CONNECTIVITY,AND EXTREMELY ISOLATED TERRITORY$,90800$,80700$,70600

million USD$,60500$,50400$,40300$,30$,20200$,10100$-2010

2011

2012

2013

2014

2015

2016

2017

2018

Services

228

325

397

475

520

550

633

671,724

Expense MUS$$,19$,23$,31$,33$,39$,44$,49$,64$,800

Public investment in connectivity services
in million USD, 2010-2018

SERVICE DISTRIBUTION AND EXPENSE
BY MODE IN MILLION USD

Source: Ministry of Transport and Telecommunications, Chile.

Likewise, 70% of the services are concentrated in the southernmost part of ourcountry, from the Araucanía region to Magallanes and the Chilean Antarctic.

Studies developedStudy

Objective

Conclusions

2009, “Quality Analysis ofServices that Receive a Subsidy
for Transport in Isolated Areas”

Analyze and diagnose the quality ofprovision of different types of connectivity
services, especially in the southern regionsof the country.

Subsidized Transport services generally meet an acceptable level ofquality in terms of improving user connectivity; however, quality
indicators regarding frequency, capacity, and comfortability ofservices showed generally unfavorable results.

2010, “Evaluation of Results ofServices of the Subsidy Programin Isolated Areas”

Evaluate the results obtained by theimplementation of the Subsidy Program inIsolated Areas.

Subsidies indeed facilitate the connectivity of residents of isolatedareas, allowing broader and better access to public services,
ensuring a better quality of life for the inhabitants; particularly,
through access to health-related services and through greatercontact with other public services and, consequently, with thestate.

2011, “User Satisfaction
Perception Study Regarding
Subsidized Services of theSubsidized Program in IsolatedAreas”

Design, adjust, and apply a satisfactionmeasurement model for beneficiaries of
the Public Transport Subsidy Program inisolated areas.

On a scale of 1 to 7 (a traditional evaluation scale in Chile), thelevel of satisfaction of the users of these services corresponded to
6.13. The study captured the most- and least-valued aspects by theusers of each service, which has made it possible to define targeted
improvements for users.

Studies developed
However, as of today, a specific measurement or methodology has
not been developed to quantitatively establish how the isolatedareas subsidy program has impacted, for example, the economic
development in affected towns or economic outcomes that theirresidents experience as a result of improvements in connectivityservices.

Ministry-wide policy strengths•There is a robust methodology to analyze territorial isolation, whichallows the Ministry to precisely identify the degree of isolation in each
locality, based on available Transport options•The National Merchant Marine Law obligates the MTT to intervene andoperate those maritime routes that private companies will not operate•Law 20378 provides a legal framework for subsidizing services in isolatedareas. This legal basis ensures program stability over time and provides
guarantees of certainty for both private operators and bidders, and forprogram beneficiaries•The Ministry focuses not only on expanded service coverage, but also on
a progressive improvement in quality standards throughout the country

Needs for future policy improvements•Competitiveness of bidding processes: RFPs for maritime, lake,river, and air services receive a low number of interested andqualified bidders•Develop a methodology to establish baseline analysis, which allows
comparisons against the original situation of the localities over time•On-board vehicle technology must be improved in order to clearly
distinguish routes, and generate accurate subsidy payment
indicators•Periodically update and improve auxiliary methodological tools to
flexibly incorporate new information or new parameters based on
available data and best practices

Around 400,000 residents throughout thecountry benefit from increased access toservices and economic opportunities

Subsidized fares for overland
Transport services

Tourism promotion, especiallyin the far south of ChileROUTE CASE STUDIESBimodal Route
The Puerto Montt-Chaitén
bimodal route offers acombined and integrated
overland (bus) & maritime(barge) connection forpassengers and cargo between
Puerto Montt and the provinceof Palena, located in thesoutheastern portion of the Los
Lagos Region in the far southof the country.

Bimodal RouteSTATUSIN OPERATIONFREQUENCYTWO TRIPS
per day

ANNUAL SUBSIDY

20.500.000 US$

PAX PER YEAR

58,000Northern Coastal RouteThis 28-hour route spans 240
nautical miles and visits 10ports of call in southern Chile.
It connects various localities
in the northern coast of Aysén,
many of which are only
accessible by boat.
In February 2015, the Queulat
Barge was inaugurated along
this route. Built in 2014, it
increased passenger capacity
to 285.
Future plans include
incorporating a faster vessel
to reduce the travel time.

Northern Coastal RouteSTATUSIN OPERATIONFREQUENCY

THREE TRIPS
per week

ANNUAL SUBSIDY

20.000.000 US$

PAX PER YEAR

11,000Chile via Chile
Maritime Service

Yungay - Caleta Tortel
Puerto Edén - Puerto Natales
This service will connect
communities in the Aysén andMagallanes Regions, which
can only be connected
through Chilean maritime
territory. An overlandconnection is only possible
via Argentina.
The 145-nautical mile trip
requires a navigable travel
time of over 40 hours.

Chile via Chile

STATUSIN OPERATIONFREQUENCY

2,5 TRIPS
per month

ANNUAL SUBSIDY

17.000.000 US$

BENEFICIARIES

564

Promotion of tourism in southern Chile

Torres del Paine, MagallanesImproved connectivity for the residents
of isolated areas throughout the country

San Pedro de Atacama, Antofagasta Region

Increased opportunities for all residents

Tortel, Aysén Region

Quality of life improvements for rural residents

Valle de Elqui, Coquimbo Region

Visviri-Arica Service
Operating at more than
4,000 meters above sea
level, two isolated
corridors are served by abus route that benefits
1,600 residents in thecommunities of Visviri,
Huayancayane, andGeneral Lagos. Thesecommunities, located in
the extreme northern
Chilean plateau, receive aconnection with theregional capital of Arica.

Tacora Volcano, located along the subsidized Visviri route.
Arica y Parinacota Region

Cunco, La Araucanía Region

Castro, Chiloé Island

Thank you!

WWW.DTPR.GOB.CL