MRT Feasibility Study JAKARTA

1
New Mechanism Feasibility Study 2011 Final Report

New Mechanism Feasibility Study for Development of Mass Rapid
Transit (MRT) Systems in Jakarta, Indonesia, and Hanoi and Ho
Chi Minh, Viet Nam.

By Mitsubishi Research Institute, Inc.

FS Partner(s) Marubeni Corporation, PT. Indokoei International, Transport
Development and Strategy InstituteTDSI, J ICA
Location of Project Activity Indonesia (J akarta), and Viet Nam (Hanoi and Ho Chi Minh
City)
Category of Project Activity Transportation
Description of Project/Activity The project will introduce mass rapid transit (MRT) systems
in the three cities of J akarta, Hanoi and Ho Chi Minh City,
which have relied on motorbikes, automobiles, and buses for
their urban transport. By promoting a modal shift, the project
is expected to contribute to the reduction of GHG emissions
from existing travel modes.
This study aimed to estimate emissions reduction and
establish MRV methods for the project.
Reference Scenario and
Project/Activity Boundary
BAU is considered as reference scenario for the following
reasons: a) Introduction of MRT requires huge amount of
initial investment while profitability is generally low; b) as
MRT is founded on advanced technology, it is difficult for the
host country alone to introduce MRT.
As for the boundary, the three options are considered, as
follows: (1)MRT, (2) MRT +access/egress traffic, (3) MRT +
access/egress traffic +traffic volume on nearby roads. The
GHG emissions and reductions for each MRT line in this
study are estimated under the conditions of Option (1).
Monitoring Methods and Plan It is important to consider their feasibility within the host
countries. On the other hand, accuracy and reliability must
also be maintained.
The key parameters to estimate emissions reduction are
traffic volume (PKM) and modal share of reference scenario.
As for traffic volume, three options have been proposed: (1)
OD table between MRT stations, (2) Passenger survey, (3)
Estimation from existing PT surveys. As for modal share,
three options have been proposed: (1) Estimation from
existing PT surveys, (2) Passenger survey, (3) Traffic volume
surveys. The choice of options depends on a ticket system
employed in the project and/or the availability of existing
surveys. On the other hand, the accuracy of each option
needs to be further evaluated.
New Mechanism FS 2011 Report
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GHG Emissions and Reductions

Unit: tCO2/yr Reference Project Reduction
Hanoi Line1 144,138 30,473 113,664
Hanoi Line2 135,016 30,147 104,869
HCMC Line1 135,925 21,440 114,485
J akarta
North-South Line
175,535 59,967 115,569
MRV System for GHG
Reductions
In principle, an MRV system should ideally minimize burden
on the host country while simultaneously guaranteeing a
required level of reliability.
Measurement: Since the estimation of traffic volume of
reference scenario has a major impact on the amount of
emissions reduction, the accuracy of estimation should be
carefully reviewed whichever option -- (1) OD table between
MRT stations, (2) Passenger survey, (3) Estimation from
existing PT surveys -- is selected.
Reporting: Periodic reporting may be required by both
governments of host country and J apan. Relevant
procedures, including a reporting format, should be
prepared.
Verification: Pre-project evaluation will, in accordance with
the methodology adopted, check the projects eligibility
under the BOCM and the validity of the monitoring methods.
Post-project evaluation will confirm that monitoring and
calculations conform to the approved methodology.
Assuming local institution within the host country will conduct
verification, J apan would need to provide assistance in terms
of capacity building.
Analysis of Environmental,
Socioeconomic and other
Impacts (including Securement
of Environmental Integrity)
Environment impact assessment (EIA) has been written into
law in both host countries. The EIA for each MRT line has
been completed and approved by the central and local
governments. The projects environmental positive impacts
would be reduction in air pollutants (NOx, CO, HC, PM). On
the other hand, the projects environmental negative impacts
are emissions of smoke and noise from the construction
works, or vibration arising from MRT operation.
Countermeasures have been implemented so that no major
concerns exist in implementing the project in terms of
environmental integrity.
Financial Planning Each MRT line requires initial investment of approx. 140
250 billion J apanese yen. In each case, approx. 80% of the
required costs will be procured through J apanese yen loans.
Introduction of Japanese
Technology
When introducing an MRT system, tenders are commonly
made for individual scopes, such as (1) civil engineering
works, (2) rolling stock, and (3) E&M. Of these, J apan has
the highest level of technology and safety in the world of (2)
rolling stock as well as signal systems and ticket vending
machines, which are included in (3) E&M. Because the
J apanese yen loans are conditional upon fulfillment of the
conditions, which require 30% or more of the loans are
allotted for use of equipment, materials, and services
originating in J apan, it is highly likely that J apanese
technology would be introduced.
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Co-benefits (i.e. Improvement
of Local Environmental
Problems)
The Manual for Quantitative Evaluation of the Co-Benefits
Approach recommends assessment of emission reductions
of NOx among other air pollutants for this project.
The emissions reduction of NOx from each MRT line was
calculated by multiplying distance traveled by mode of
transport [km] by NO
x
emission factor by mode of transport
[gNO
x
/km].and estimated to be approx. 503 - 667 tNO2/year.
Contribution to Sustainable
Development in Host Country
In both countries of this study, public transportation is
underdeveloped, dependence on automotive transport is
high, and urban population is rapidly growing. As a result, the
existing transport systems will make sustainable
development difficult. Therefore, building an efficient
transportation system by introducing mass transit system is
essential for realizing sustainable development. The benefits
of introduction of MRT may include:
Reduction in economic loss by reducing the time required
for travel
Reduction in traffic accidents
Reduction in vehicle operating costs by reducing traffic
congestion
Countermeasures against the increasing traffic demand
Reduction in air pollutants

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1. FS Partners:
Marubeni Corporation: Mainly responsible for investigating the projects feasibilityand
conducting its economic analysisl as well as providing coordination among local
stakeholders (related ministries, project entities, and local consulting firms).
Transport Development and Strategy Institute (TDSI): TDSI is a scientific career
organization with research functions supporting the Ministry of Transports State
management in the field of developing transport strategies, plans and policies. Iin charge
of collection of related data, traffic volume sample surveys and questionnaire surveys in
Vietnam.
PT. Indokoei International Indokoei : In charge of collection of related data in
Indonesia.
J apan International Cooperation Agency (J ICA): Provision of data and information for
urban traffic surveys and developmental surveys for the project covered in this study.

2. Description of Project/Activity:
1Project/Activity
The project will introduce mass rapid transit (MRT) systems in the three cities of J akarta,
Hanoi and Ho Chi Minh City, which have relied on motorbikes, automobiles, and buses for
their urban transport. By promoting a modal shift, the project is expected to contribute to the
reduction of GHG emissions from existing travel modes.
The outline of the project is shown below. Since agreement has already been reached on
providing yen loans for the project under the J apanese governments Special Terms for
Economic Partnership (STEP) scheme, it is likely that J apanese technology will be
implemented in carrying out the project.

Hanoi Ho Chi Minh City Jakarta
Project
Hanoi Urban Railway
(Line 1)
Hanoi Urban Railway
(Line 2)
Ho Chi Minh City Urban
Railway (Line 1)

J akarta Mass Rapid
Transport (North-South
Line)
Executing
Entity
Viet NamRailways
(RPMU)
Hanoi People's Committee
Hanoi Metropolitan Rail
Transport Project Board
(HRB)
Ho Chi Minh City
People's Committee
Ho Chi Minh City
Management Authority for
Urban Railways (MAUR)
Special Region of
Yogyakarta
(PT. MRT J AKARTA
established as the
executing entity)
Related
Ministries
Ministry of Transport of
Vietnam
Vietnam
Vietnam
Directorate General of
Railways, Ministry of
Transportation
Construction
Phase
2013-2017
(the second phase
completed in 2020)
2013-2017 2012-end of 2016
2013-end of 2016
(the second phase
completed in 2018)
Summary
Length: 28 km
Total 16 stations
Length: 27.7 km
(of which 14.5 km
underground)
Total 16 stations
Length:19.7 km
(of which 2.6 km
underground)
Total 14 stations (11
elevated and 3
underground stations)
Length: 23.2 km
(of which 6 km
underground)
Total 21 stations(7
elevated, 1 aboveground
and 13 underground
stations)

2Situation in the Host Countries
Views on the BOCM
With the J apanese government concluding official agreements on the BOCM, Bilateral
Offset Credit Mechanism, with the governments of Indonesia and Vietnam, which the
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J apanese government regards as priority countries in promoting the BOCM, understanding of
the mechanisms concepts is widespread in the government sector. The implementation of a
large number of feasibility studies in the last year has also raised awareness among the
counterparts. On the other hand, as specific details are still not clear within the bilateral
agreements or in the UN, the counterparts interest apparently remains limited to J apanese
technology and the project itself.

Transportation sector and climate change policies
In major cities of developing countries, economic growth and concentration of population
in urban areas have steadily pushed up road traffic volumes. In addition to the economic
losses arising from traffic congestions, the trend has given rise to global environmental
concerns, such as air pollution and increase in greenhouse gas (GHG) emissions. In particular,
with bus services being the only urban public transport available in J akarta, Hanoi and Ho Chi
Minh City, the traffic issues require immediate attention. To address these issues, the MRT
project is being promoted as part of the two countries development plans.

The scope of NAMAs as envisaged by the host countries at present and their relation to the
transportation sector are as shown below.

Table. NAMAs in the Transportation Sector
Country NAMAs in the Transportation Sector
Vietnam
1
Vietnam has not submitted its NAMA documents to the UN.
According to an AWG-LCA presentation document dated J une 2011,
Vietnam has identified 28 mitigation options (15 in energy, 5 in agriculture, and
8 in LULUCF) with total potential GHG reduction of 3,270 MtCO2e.
Indonesia
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Indonesia has stated its goal of 26% reduction on its own by 2020 and up to
41% reduction with international support. It aims to achieve the 26% target by
implementing NAMAs, including shifting to low-emission transportation
mode.

3 Eligibility for the New Mechanism
Eligibility defines the project criteria under which a project can be awarded emissions
reduction credits under the Bilateral Offset Credit Mechanism (BOCM). Considering that
there should be eligibility that applies to all projects under the BOCM scheme as well as
eligibility that applies to each sector, we make our proposals below for each type of eligibility.
Under the BOCM scheme, we believe that reduction in GHG emissions particularly though
introduction of advanced low-carbon technologies (both hardware and software) should be
actively embraced. One way of doing this may be to award credits to projects that, through
international support in terms of funding and technology, achieve the emissions reduction
beyond the reference level, which would be the Nationally Appropriate Mitigation Activities
(NAMAs) of developing country Parties that could be implemented in a developing country
using the countrys own technology and measures.
In this regard, the project fulfills the eligibility criteria both in terms of funding and
technology:
Funding: The project will receive J apanese yen loans, provided that J apanese technology is

1

http://unfccc.int/files/meetings/ad_hoc_working_groups/lca/application/pdf/vietnam_presentation_to_worksho
p_on_nationally_appropriate_mitigation_actions_submitted_by_developing_country_parties.pdf
2
DNPI(2011), "DNPI Green Review on REDD+". The Japanese Ministry of the Environment/OECC (2011), "Shin Mecha
EXPRESS, February 2011.
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used. In other words, without foreign capital, the MRT will not be introduced.
Technology: The project requires advanced technology and presupposes the use of both
overseas funding and technology. It cannot be implemented by the host country alone.

Secondly, we discuss the projects eligibility in the transportation sector. One way of
measuring eligibility in terms of funding may be to set a standard by which incomes from
credits must make up a certain percentage of O&M costs. In terms of technology, it may be
possible to set an efficiency benchmark or measure how much the technology has spread.
Another way may be to make a positive list of vehicles and facilities with high levels of
energy efficiency.

Relation with ODA
The J apan International Cooperation Agency (J ICA) has already conducted studies for the
project, and the J apanese government has agreed to provide J apanese yen loans to the project,
provided it uses J apanese technology. Although we believe existing projects do not
necessarily fall outside the scope of the BOCM, there is nonetheless a need to reappraise a
projects eligibility in terms of GHG emissions reduction if such reduction had not been the
primary objective in the development of the projects design.

4Measures to Spread the Project/Activity
Since introduction of the MRT requires substantial funding, development of a finance
scheme comprising J apanese yen loans and financial support of international organizations
and other developed countries is essential for the implementation of the project. We believe
the low-interest J apanese yen loans, which will be provided based on the Special Terms for
Economic Partnership (STEP) scheme for the project under this Study, will be effective both
in improving the projects feasibility and promoting export of J apanese technology.

3. Description of the Study
1 Challenges:
While ACM0016 is the existing CDM methodology applicable to MRT projects, only 4
projects have been registered under this methodology, and only 13 project proposals have
been filed under it (of which 10 for introducing MRT). Even considering the fact that it is a
relatively new methodology, which was adopted in October 2009, its use has been limited.
Some of the factors discouraging implementation as CDM projects may include the
requirements for annual passenger surveys and the cumbersome process for demonstrating
additionality. In light of the existing CDM methodology, we considered a methodology that
reduces the burden on the operator, who will monitor regularly and continuously updated
statistical data that are collectible. The main questions we considered were as follows:
Should access/egress traffic be included in the boundary?
How should changes in traffic volume on nearby roadss be treated?
Proposition of a methodology considering the ease or difficulty of obtaining data for
quantification, continuity of obtaining the data, and accuracy of the data. Our approach
will be to maintain reliability of the methodology while adopting realistic methods for
calculating emissions reduction.

(2) Contents:
From the perspective of maintaining reliability of the methodology, access/egress traffic
will have to be included in the boundary, in which case it is highly likely that questionnaire
surveys will have to be conducted and consideration made on what to include in the survey.
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There is also a possibility that the traffic on nearby roads would not increase in the absence
of the project. Therefore, a method for deducting an increase in traffic volume on nearby
roads as a result of the introduction of the MRT from the actual number of passengers will
have to be considered. This may be done, for example, by conducting traffic volume surveys
on the roads in the vicinity of the MRT lines prior to and after the introduction of the MRT.
As for access/egress traffic and traffic on nearby roads, however, if such traffic turns out to
have little impact on the emission reductions, it would be desirable, from the point of view of
feasibility (in terms of reducing the monitoring costs), to either exclude it from the calculation
or take such steps as to subtract a certain fraction from the overall emission reductions.
As for the method for obtaining traffic volume under the Reference Scenario, which will
have the greatest impact on emission reductions, we made a study of methodologies that
would be based on the use of existing materials (including person trip surveys) but that would
also allow us to gain data that are highly reliable while providing due consideration on
continuity. As a result, we have found three options, as follows:
Option 1: Use of OD table between MRT stations
Option 2: Conducting simple questionnaires for MRT passengers
Option 3: Correcting existing person trip surveys

4. Results of the Feasibility Study of New Mechanism Project/Activity
1Emission Reductions from Implementation of the Project/Activity:
With some users of the existing transportation modes (private automobiles, motorbikes,
buses, etc.) shifting to the use of MRT, which will efficiently transport a large number of
people simultaneously when introduced by the project, the project will reduce the energy
consumption and CO2 emissions in each travel mode.
The traffic that should be calculated in the methodology can be divided into traffic (A) on
the MRT, (B) of access to and egress from the MRT, and (C) on nearby roads, as shown in the
figure below. There can be three boundary options as to how they are included in the
calculation in the methodology, as follows:
Boundary Option (1): (A) to be included in the calculation
Boundary Option (2): (A) +(B) to be included in the calculation
Boundary Option (3): (A) +(B) +(C) to be included in the calculation

Figure. Conceptual Diagram of Boundary Options

(A) MRT traffic
Traffic volume on MRT
(B) Access/egress traffic
Traffic volume on access to and egress from MRT stations (terminal demand)
Station A Station B
Origin
Boundary Option (1)
Boundary Option (2)
Nearby roads
(C) Traffic on nearby roads
Effect on traffic volume on nearby roads
Boundary Option (3)
Destination

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The calculation of emissions from the travel modes that MRT passengers would have used
over the trip segment covered by the MRT had the MRT not existed (the reference emissions
for (A) in the figure above) is the most essential and the most difficult. The basic approach is
to multiply the traffic volume of the travel modes under the Reference Scenario [PKM] by its
standard unit [tCO2/PKM]. As for the traffic volume, the total traffic volume may be
multiplied by the modal share, depending on how we view such a volume, as an option.

In the above calculation of the reference emissions, the traffic volume weighs most heavily.
In calculating the traffic volume, we propose three options as shown in the table below in
consideration of the availability of data in the host countries.

Table. Options for Calculating the Traffic volume
Options Description Remarks
(1) Use
of an OD
table between
MRT stations
Calculate the traffic volume by obtaining the
number of passengers between MRT stations
from an OD table
3
.

An OD table can easily be
created if Suica or other IC
cards have been introduced.
(2) Passenger
survey
Calculate the traffic volume for each travel
mode from a questionnaire survey on MRT
passengers travel modes, their origins and
destinations, etc., had MRT not exist.
The use of a passenger
survey, as in the CDM
methodology, is costly.
However, if the access/egress
traffic is to be included in the
calculation, it is highly likely
that questionnaire surveys
would be required, in which
case the two surveys can be
conducted simultaneously.

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OD table: Origin-destination table expresses the volume of traffic movement within a zone (from a
certain origin to a certain destination) in the form of a table (matrix).
Total traffic volume [PKM]
= (number of person traveling between
stations [person] distance between
stations [km])

Traffic volume
CO2 emission factor

[PKM] [tCO2/PKM]

Calculated for each travel mode

Modal share [%]

Total traffic volume [PKM]
Traffic volume of each travel mode [PKM]
=
=
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(3)
Estimation
from existing
PT surveys
An OD table between MRT stations is
prepared by correcting existing data from PT
surveys
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by population, number of MRT
passengers, etc. to calculate the volume of
transportation. (The trip generation rates and
trip concentration rates may be used for the
correction.)
Because PT surveys are not
conducted each year,
correction is essential. It
requires availability of
statistical data on residential
population, daytime
population, etc., for
correction.

The calculating method is determined by which of an boundary option showed in the figure
on page 7 is adopted. The calculating method options are shown in the figure below. (Future
issues are shown in red)

By implementation of MRT, there would be:
No considerable impacts from transportation between MRT stations
and trip origin / destination
No increases in traffic on nearby roads due to the relief of traffic
congestions
Using only AMRT in calculations
It is conservative even without B and C
YES
Both questionnaire and traffic volume
surveys are not required.
Introduction of IC card system
or Not?
e.g. Suica
YES
Setting a default value is
possible
Traffic volume->OD
table
Modal shift->Existing
PT survey
CO2 emission factors
for fuels->Data for fuels
and fuel consumption
Setting a default value is
possible
Traffic volume->
Existing PT survey
Modal shift->Existing
PT survey
CO2 emission factors
for fuels->Data for fuels
and fuel consumption
NO
NO or Uncertain
It is not conservative if
excluding Bor C
B (Access/egress traffic)
Periodical questionnaire
survey is required
Traffic volume->
Questionnaire survey
Modal shift->
Questionnaire survey (or
traffic volume survey =if
Cis also included) or
Existing PT survey can
be applied.
CO2 emission factors for
fuels->Data for fuels and
fuel consumption
Periodical traffic volume
survey is required
Millage=Road length
Changes in the numbers
of vehicles->traffic
volume survey
CO2 emission factors for
fuels->Data for fuels and
fuel consumption
C (Nearby road)
More likely to include only
Ain calculations.
These surveys are for the purpose of setting up the average
fuel consumption and a default value for modal share.
By estimating emissions from
Band/or C, examine
options of excluding these
from calculations or deducting
X% from emission reductions
(To enhance emission reduction)
Include BAccess/egress trafficand CNearby road
Band Crequire questionnaire survey as well as survey
on traffic volume.
Adoes NOT require questionnaire survey and survey on
traffic volume.
Traffic volume and modal shift for Amay be captured by
questionnaire survey (or traffic volume survey)

Figure. Options for calculating method

2Reference Scenario and Project/Activity Boundary:
The Reference Scenario has been considered from the perspectives of funds, policy,
practice, and technology, as shown in the table below.
Concerning the boundary, as previously mentioned the three options outlined in the figure
on page 7 are considered, as follows:
Boundary Option (1): MRT
Boundary Option (2): MRT +access/egress traffic

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PT survey: Person trip survey studies movement of a person (person trip) within an area of the
survey. Trip is both a concept representing one-directional movement when a person travels from an
origin to a destination for a certain purpose (for example, commuting or shopping) and the unit used to
express such a movement quantitatively.
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Boundary Option (3): MRT +access/egress traffic +traffic on nearby roads

Table. Conceptual Framework for the Reference Scenario of the MRT Project
Perspective Approach Application to the Project
Funds
Profitability:
As profitability is generally low for this
project type, newly introduced MRT
meeting certain conditions is recognized as
eligible. The Reference Scenario will be one
where the MRT will not be introduced.

Provided that certain conditions
are met, the projects Reference
Scenario is one where the MRT
will not be introduced.
Funding:
Where MRT cannot be realized without
foreign capital, the Reference Scenario will
be one where the MRT will not be
introduced.
(Further consideration is needed, however,
on applying certain conditionality to
projects utilizing foreign capital.)

As there is an agreement to
provide J apanese yen loans for
the project, the Reference
will not be introduced (subject,
however, to the conditionality
mentioned in the left column).

Policy
Master plan:
The MRT lines in question are covered in
the master plan, but introduction of MRT is
not necessarily the Reference Scenario.
Whether or not the MRT lines are included
in the master plan has no implications on
the identification of the Reference Scenario.

Have no implications on the
Reference Scenario.
NAMA
It is unclear whether the MRT project will
be considered as NAMA in the countries
where this feasibility study (FS) is
conducted. Whether or not NAMA activities
will be made subject to the BOCM is
dependent on policy decisions.

Implications on the Reference
Scenario are dependent on policy
decisions.
Practice
If, for example, there is no MRT in the
same city is set as an eligibility
requirement and a project meets the
requirement, the Reference Scenario will be
one where the MRT will not be introduced.
The three cities in the project
have no existing MRT system,
fulfilling the requirement that
there is no MRT in the same
city. Therefore, the Reference
will not be introduced.
Technology
As MRT is founded on advanced
technology, it is difficult for the host
country alone to introduce MRT. For this
reason, an MRT project is considered to
achieve additional emissions reduction, and
the Reference Scenario will be one where
the MRT will not be introduced.
(Further consideration is needed, however,
on the identification of advanced
technology.)
The MRT is founded on advanced
technology, and it is difficult for
the host country alone to
introduce the MRT. Therefore, the
Reference Scenario is one where
the MRT will not be introduced.
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3Monitoring Methods and Plan
In developing the monitoring methods, it is important to consider their feasibility within the
host countries. On the other hand, accuracy and reliability at levels above certain standards
must also be maintained.
The monitoring methods and frequency for each parameter used in the calculation of the
reference emissions are shown in the table below. As for the project emissions, monitoring of
electricity consumption arising from MRT operation is necessary.

Table. List of Monitoring Methods (Reference Emissions)
Parameter Monitoring Method Frequency Remarks
Traffic volume for each travel mode [PKM]
1) Number of trips for each travel mode [person times] distance traveled [km]
Number of
trips for
each travel
mode
[person
times]
1) Results of
questionnaire
Questionnaire
Ask MRT passengers the
entry and exit stations and the
travel modes.
Once a year Sample
survey
2) Results of
existing surveys
(corrected)
Existing PT
Correct the number of trips in
each segment by number of
MRT passengers, etc.
Once at the
start
Use of
existing
surveys
Distance
traveled
[km]
1) Distance
between stations
Questionnaire
Obtain the distance between
MRT stations from route
charts, etc.
Once at the
start
Fixed
value
2) Distance
between sites
Questionnaire (when
access/egress traffic is
included)
Obtain O-D distance from
maps, etc.
At each round
of
questionnaire
survey
Sample
survey
3) Distance
between meshes
Existing PT
Calculate the distance
between centers of each
segment (mesh)
Once at the
start
Use of
existing
surveys
2) Total number of trips [person times] distance traveled [km] Modal share[%]
Total
number of
trips
[person
times]
1) Number of
entries and exits
at each MRT
station
OD table
Record all passengers entry
and exit stations, using Suica
or other IC cards.
As needed
(tabulation
once a year
Actual
measure-
ment
Distance
traveled
[km]
1) Distance
between stations
OD table
Obtain the distance between
MRT stations from route
charts, etc.
Once at the
start
Fixed
value
Modal
share [%]
1) Results of
existing PT
surveys
Modal share of the segment
(mesh) covering MRT lines
Once at the
start
Use of
existing
surveys
2) Results of
questionnaire
Modal Share used had MRT
not existed, as indicated in the
questionnaire
Once a year Sample
survey
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3) Results of
traffic volume
surveys
Share of the number of
vehicles in transit obtained
from traffic volume surveys
Once a year Sample
survey
CO2 emission coefficient [tCO2/PKM]
CO2 emission factors by fuel
type
Obtained from IPCC, etc. Once at the
start
Default
Average
fuel
consump-
tion
1) Average fuel
consumption
Obtained from existing
surveys, etc.
Once at the
start
Default
2) Fuel
consumption
Bus company data Once a year Actual
measure-
ment
2) Distance
traveled
measure-
ment
Average
number of
passengers
1) Average
number of
passengers
Obtained from existing
surveys, etc.
Once at the
start
Default
2) Total number
of passengers
measure-
ment

4 GHG Emissions and Reductions
The GHG emissions and reductions for each MRT line in this study are estimated under the
conditions of Boundary Option (1) (only MRT segment included in the calculation)
mentioned above.
As for the reference emissions (the emissions arising from the travel modes that MRT
passengers would have used over the distance traveled by MRT had the MRT not existed), the
total traffic volume (PKM), obtained from OD tables between MRT stations for each line, is
multiplied by the modal share (for buses, motorbikes and automobiles) that would be
expected if the MRT was not introduced. For this study, OD tables between MRT stations,
based on a demand forecast by the local executing entity of the MRT project, and estimates on
the number of passenger entries and exits at stations were used.
On the other hand, as for the project emissions, Hanoi Line 1s annual electricity
consumption per kilometer of laid track was used as a reference to estimate the project
emissions for each line in Vietnam in accordance with the distance of each lines laid track. As
for J akarta North-South Line, their specific data was used.
The results of the estimation and assumptions are as shown in the table below.

Table. Estimated Emission Reductions and Assumptions for Each MRT Line
Hanoi, Line
1
(2030)
Reference
emissions
144,138
tCO2/year
Project
emissions
30,473
tCO2/year
Emission
reductions
113,664
tCO2/year
Assumptions, etc. on which estimation is based:
Estimated operational route distance of 28.0 km (a total of 16 stations) and total
number of users at 543,772 passengers/day as of 2030
The estimated modal share replaced by MRT (PKM): buses 21.9%, motorbikes
50.9%, and automobiles 27.2%
The annual electricity consumption per unit operational route distance is estimated
at 2,339 MWh/km/year (source: Viet Nam Railways (VNR)).
13
Hanoi, Line
2
(2020)
Reference
emissions
135,016
tCO2/year
Project
emissions
30,147
tCO2/year
Emission
reductions
104,869
tCO2/year
to be the same as with Hanoi Line 1.
Ho Chi
Minh City,
Line 1
(2020)
Reference
emissions
135,925
tCO2/year
Project
emissions
21,440
tCO2/year
Emission
reductions
114,485
tCO2/year
The annual electricity consumption per unit operational route distance is estimated to
be the same as with Hanoi Line 1.
Jakarta,
North-Sout
h Line
(2037)
Reference
emissions
175,535
tCO2/year
Project
emissions
59,967
tCO2/year
Emission
reductions
115,569
tCO2/year
at 3,016 MWh/km/year.

5MRV System for GHG Reductions:
In principle, an MRV system should ideally minimize burden on the host country while
simultaneously guaranteeing a required level of reliability. In keeping with this condition, our
approach to M (measurement), R (reporting) and V (validation) is outlined below.

Measurement (M)
As discussed under (3) Monitoring Methods and Plan, above, the methods for monitoring
various parameters used in the calculation of emission reductions can be divided into five
categories, namely, actual measurement, sample surveys, correction of existing surveys, fixed
values, and default values.
Actual measurement: Parameters actually measured include OD tables between MRT
stations and amounts of purchases of electricity and fuel.
In particular, OD tables between MRT stations should be considered. Accuracy of the OD
tables will depend on the accuracy of the ticketing system that would be introduced. As details
of the ticketing system used for the MRT lines in this study are unknown at present, accuracy
will have to be considered after the details become clear. As acquisition of the OD tables
would be significantly facilitated by introducing an IC card system, such as Suica, the MRT
operator should be able to take the measurements.
Sample survey: There are two types of sample surveys: MRT passenger questionnaire
surveys and traffic volume surveys on roads in the vicinity of the MRT lines. While the
accuracy of the data will depend on the detailed design of the surveys, it is important to strike
a balance between accuracy and cost, as too much burden placed on the entity executing the
project will reduce the feasibility of the surveys.
14
Correction of existing surveys: Results of PT (person trip) surveys are used to measure
traffic volume, distance of travel, modal share, etc. The accuracy of the data will likely
depend on PT surveys zone granularity, time, and correction methods, among others. These
require further consideration.
Fixed value: Such parameters as the distance between MRT stations have fixed values. The
values indicated in design drawings may be used, which can be double-checked against online
maps to maintain accuracy. Fixed values can also reduce the monitoring costs.
Default value: Such parameters as electricity grid CO2 emission factor, CO2 emission factor
by fuel type, and average fuel consumption have default values. As default values are set once
a methodology is approved, the issue of accuracy does not arise in individual projects. As
default values are provided by recognized institutions, it increases the receptiveness of host
countries.

Reporting (R)
The results of the monitoring discussed above will be used to calculate and report on the
emission reductions.
As for the frequency of reporting, reporting at regular intervals is desirable. Therefore,
options likely to emerge are reporting at an interval, for example, of once a year or reporting
when requesting issuance of credits as is the case in CDM.
It is expected that the entity implementing the project in the host country or the J apanese
party to the implementation will report to both the host country government and the J apanese
government. From the point of view of reducing reporting costs, it may be necessary to
prepare separate reporting formats, one, for example, for aspects common to all
methodologies and another dealing with specific items in individual methodologies.

Validation (V)
It may be necessary to conduct validation both before and after the implementation of the
project. Pre-project validation will, in accordance with the methodology adopted, check the
projects eligibility under the BOCM and the validity of the monitoring methods expected to
be implemented, among others. Post-project validation will confirm that monitoring and
calculations conform to the approved methodology.
While the validation should preferably be conducted by an institution within the host
country from the perspective of reducing costs, it may be that few institutions have the
specific expertise and the skills needed for GHG validation, particularly in the field of
transportation. Therefore, J apan would need to provide assistance in terms of capacity
building.

Because the above MRV methods have been developed to ensure that existing data (from
statistical surveys, etc.) will be used as much as possible and that the methods can be
implemented as part of (or in association with ) regular MRT operation and management, the
host countries will be likely to be receptive to them. We believe that this notion of reducing
burden on the entities carrying out the project in the host countries while securing a sufficient
level of reliability is also important.

6Environmental, Socioeconomic Impacts
Environment impact assessment has been written into law in both host countries. In
Vietnam, the Law on Environmental Protection requires environment impact assessment
(EIA) for certain projects that are expected to have a large environmental impact.
Consequently, the projects EIA report was approved by the Ministry of Natural Resources
15
and Environment in December 2007 for Hanoi Line 1 and by the Hanoi municipal
governments Department of Natural Resources and Environment in February 2008 for Hanoi
Line 2. The Ministry of Natural Resources and Environment had also approved the EIA report
for Ho Chi Minh City Line 1 in November 2006.
Indonesia also has a legal framework for environment impact assessment. In August 2005,
the EIA report for the first phase of the project was approved by the Environmental
Management Agency (BPLHD) of the provincial government of the Special Capital City
District of J akarta.
Apart from the projects impact on global warming, the results of the projects EIAs
suggest that the projects environmental impacts would be as follows (excluding social
aspects):

<Positive impacts>
Reduction in air pollutants (NOx, CO, HC, PM)

<Negative impacts>
Emission of smoke and soot, noise and vibration, and traffic congestion arising from the
construction works
Noise and vibration arising from MRT operation

As for the above negative impacts, countermeasures have been implemented (including
installment of sound insulating walls and controls on construction works hours) so that no
major concerns exist in implementing the project in terms of environmental integrity.

7Other Impacts
The implementation of the project will give rise to the issue of eminent domain and
relocation of citizens. This has the potential to bring negative consequences on the citizens
living in areas where the tracks will be laid. On the other hand, the delay in addressing the
issue of eminent domain is putting back the construction schedule and bringing up the cost.
We interviewed related organizations in the host countries on expropriation of land and on
compensation for relocation of the affected citizens. Both in Vietnam and Indonesia, the local
government draws up a plan for executing eminent domain, and after obtaining approval from
related ministries, the local government begins the process of expropriation. Basically, an
eminent domain plan is based on the preliminary design and is prepared after the preliminary
design has been completed.
At present, the process of eminent domain for the project is progressing in accordance with
due process and relevant legal systems.

8 Comments by the Stakeholders:
The purpose of this study is to consider methods for quantitatively estimating GHG
emission reductions effected as a result of introducing MRT, and not to investigate the
feasibility of the MRT project per se. Therefore, the stakeholders in the matters dealt by the
study are expected to be the related ministries and agencies of the host countries, the entities
executing the project, and J ICA, which is providing financial support.
The overview of BOCM and the result of the study have been explained to local
stakeholders. As Vietnam and Indonesia have faster progress on bilateral negotiations with
J apan, the related ministries of Indonesia and Vietnam have possessed a deep understanding
of the BOCM. Also, they have showed positive responses to the BOCM. The MRT operating
16
entities are also interested in the BOCM, and they requested to hold a seminar to inform the
BOCM to their local stakeholders. They had a high expectation of continuing this study.

9 Framework for Implementation of the Project/Activity:
The framework for the project implementation is shown in the figure below.
It is generally the case for the municipal government or a project entity established by the
municipal government to take on the role of the executing entity for a MRT project.
As a project to introduce MRT will require substantial funding, beginning with the funding
for urban traffic surveys that will feed into the project planning, formation of a financial
scheme comprising of J apanese yen loans and other financial assistance from international
organizations and other developed countries will be essential in the expansion of MRT.
EPC tenders are usually separated into scopes and invited for each scope. Local
construction companies often bid in the civil engineering scope due to their cost advantage. In
many instances, J apanese and other foreign companies participate in scopes such as rolling
stock and E&M where they can capitalize on the technological advantage that developed
countries have.

General Scheme of
Project
Implementation
MRT Project Project
Hanoi Urban Railway
(Line 1)
Hanoi Urban Railway
(Line 2)
Ho Chi Minh City
Urban Railway (Line
1)
J akarta Mass Rapid
Transport
(North-South Line)

Related
Ministries
Ministry of Transport
of Vietnam
of Vietnam
of Vietnam
Directorate General
of Railways, Ministry
of Transportation

Executing
Entity
Viet NamRailways
(RPMU)
Hanoi People's
Committee (HRB)
Ho Chi Minh City
Management
Authority for Urban
Railways (MAUR)
Special Region of
Yogyakarta
(PT. MRT J AKARTA
established as the
executing entity)
Funding
Phase I: Yen loan
80%, government
funds 20%
Phase II: Yen loan
planned
Phase I: Yen loan
84.3%, government
funds 15.7%
Phase II: Yen loan
planned
Yen loan 83%,
government funds
17%
Phase I:Yen loan
83%,
government funds
17%
Phase II: Yen loan
planned

Project
Formation
EPC (BOQ)
O&M: Executing
Entity
EPC (Design&Build)
O&M: Executing
Entity
EPC (Design&Build)
O&M Contractor (5
years)
EPC (Design&Build)
O&M: Executing
Entity

Civil Engineering Works
Rolling Stock
E&M
EPC tenders are generally invited for each scope.

J apanese companies generally form a consortium in lodging a tender.
Trading Companies Rolling Stock Makers Engine Company
Facilities & Equipment
Manufacturers
General Contractors/Construction
Companies

Ministry of
Transport, etc.
Municipal
Government/MRT
Project Entity
ODA/Gov.
Funding
EPC

17

10Financial Planning
The total investment required for the projects implementation is as shown in the table
below. In each case, slightly less than 80% of the required funds will be procured through
J apanese yen loans.

Project
Hanoi Urban Railway (Line
1)
Hanoi Urban Railway (Line
2)
Railway (Line 1)

J akarta Mass Rapid
Line)
Total
Investment
Approx. 160 billion
(Phase I)
Approx. 150 billion
(Phase I)
Approx. 240 billion
Approx. 142.1 billion
(Phase I)
Funding
Phase I: Yen loan 80%,
government funds 20%
Phase II: Yen loan planned
Phase I: Yen loan 84.3%,
government funds 15.7%
Yen loan 83%,
Phase I:Yen loan 83%,
L/A (Loan-
Agreement)
Engineering-Service:
2008/3 (4,683 million)

RTS works: Loan expected
to be provided
Engineering-Service & RTS
works: 2009/3 (14,688
million)

RTS works: Continuation of
loan

Engineering-Service & RTS
works: 2007/3 (20,887
million)

RTS works: Continuation of
loan

Engineering-Service:
2006/11 (1,869 million)

RTS works:2009/3 (48,150
million)
Continuation of loan
EIRR 10.64% (TBA) Approx. 20% 7.38%
FIRR 0.28% (TBA) Approx. 4% 1.99%
EIRR/FIRR
Sources
The Study on Urban
Transport Master Plan and
Feasibility Study in Ho Chi
Minh Metropolitan Area
(HOUTRANS)

Report of feasibility study
Hanoi elevated railway
project
J ICA preliminary
assessment table

11Introduction of Japanese Technology
When introducing an MRT system, tenders are commonly made for individual scopes, such
as (1) civil engineering works, (2) rolling stock, and (3) E&M (Electrical & Mechanical:
signals, communications, electrification, etc.). Of these, J apan has the highest level of
technology and safety in the world with respect to the technology and operational knowhow
of (2) rolling stock as well as signal systems and ticket vending machines, which are included
in (3) E&M. Moreover, because the J apanese yen loans, which have already been decided to
be provided for the project, are conditional upon fulfillment of the J apanese governments
Special Terms for Economic Partnership (STEP), which require 30% or more of the loans are
allotted for use of equipment, materials, and services originating in J apan, it is highly likely
that J apanese technology would be introduced for the scopes (2) and (3) above.
As for automated fare collection systems, there are considerable expectations from host
countries as such systems would allow use of the collected data for preparation of OD tables
as well as for potential development of side businesses.

12Future Prospects and Issues:
The four MRT lines covered in this FS study are expected to start operations as shown in
the table below.

18
1 Project
Hanoi Urban Railway
(Line 1)
Hanoi Urban Railway
(Line 2)
Railway (Line 1)

J akarta Mass Rapid
Line)
2
Start of
MRT
Operations
(expected)
2018 2018 2017 2017
3 Issues
Eminent domain
Securing budget
(increase in budget)
Design risks
Eminent domain
Securing budget
Design risks
Securing budget
Design risks
Eminent domain
Securing budget
Design risks
4 Measures
Eminent domain: Although this is basically an issue for the host countries to address, constructors will need
to keep a close eye on the developments lest they affect bidding or construction schedules.

Securing budget (increase in budget): Delay in bidding or construction schedules may lead to an increase in
the budget (for construction materials). Need to monitor the situation closely.

Design risks: Constructors may have difficulty responding to changes in the basic design/detailed design,
making up for deficiencies, etc. Negotiations with the host countries and formation of a strong consortium
on the constructors part would be required.

[Prospects of the Project and Challenges]
The issues of eminent domain, securing budget, and design risks are common issues faced
by this type of project; however, the project has no major problem at this time. The outlook
for each MRT line is as follows:
Hanoi Urban Railway (Line 1): A series of PQ notices, beginning with the ground
leveling package, is expected in early 2012, which will be followed by PQ notices on
E&M systems and rolling stock. Factors affecting the schedule may include eminent
domain and increase in budget.
Hanoi Urban Railway (Line 2): The basic design is currently being drawn up. PQ and
bidding are expected to occur along the same schedule as Hanoi Line 1.
Ho Chi Minh City Urban Railway (Line 1): A construction contract is believed to be
signed by the client and contractor around May 2012.
J akarta Mass Rapid Transport (North-South Line): Following the announcement of
bidding for the construction works package in J anuary 2012, PQ notice for the E&M
package is expected in early 2012.

[Issues Related to Feasibility of the BOCM Project/Activity]
Essentially, MRT is introduced for the purpose of utilizing MRTs ability to realize mass,
rapid, and punctual transportation to enhance convenience of urban transport and to facilitate
sustainable development of urban economy. In cities like Hanoi and Ho Chi Minh City in
Vietnam and J akarta, Indonesia, which are covered by this study and where there is heavy
congestion of automobile traffic, the aim will be to promote modal shift from automobile
traffic, ease traffic congestion, and thereby reduce air pollution from exhaust gas emissions. In
a global economy, however, sustainable development on a global scale is essential for any city
to achieve sustainable development. Therefore, GHG reduction, which requires
implementation of measures globally, must be integral to the sustainable development of these
cities.
As a result of our consideration this year, we believe there are three issues to be addressed,
as already mentioned, as we consider the methodology for bilateral credits and as we move
towards the Bilateral Offset Credit Mechanism, as follows:
Development of continued collaboration with entities executing the MRT project
(towards Bilateral Offset Credit Mechanism)
19
Consideration on the details of the methodology (consideration on the methodology)
Approach to credit distribution (consideration on the methodology)

Development of continued collaboration with entities executing the MRT project (towards
Bilateral Offset Credit Mechanism)
The entities executing the MRT project have shown interest in the Bilateral Offset Credit
Mechanism and are hopeful for further continuation of the study.
There is a need to sustain efforts in further providing them details of the BOCM system and
information on the advantages of participating in it. As there is a particular interest in how
decisions will be made on the purchasing entities and prices of the credits, it is hoped that the
J apanese expeditiously work on the system design and reach policy decisions. As for the
methodology considered and prepared in this FS study, discussion must continue with local
project entities and others concerned to enhance its feasibility.

Consideration on the details of the methodology (consideration on the methodology)
Efforts will be made in the next year and beyond to acquire data we were not able to collect
adequately this year. Apart from using the data in the Reference Scenario after the
implementation of the MRT, we believe it is important to share the methods of data
acquisition with the host countries.
Table. Data of Necessary Data and Their Descriptions
Item Proposed Method for
Data Acquisition
Remarks
Average fuel
consumption by
modes
(Proposed method): Recruit
monitors who will measure fuel
consumption on weekdays and
holidays using the full-tank
method. At the same time, the
monitors will have a GPS to
record data on distance
traveled, duration of travel,
travel speed by region, etc.
MRI Inc. has vast experience in J apan with respect to
behavioral analysis using GPS. We also have patents on
the technology for automatically mapping data obtained
from GPS on a map.
We have worked with the University of Tokyos
Associate Professor Hato, an expert on traffic behavioral
analysis using GPS, and with Tokyo University of
Marine Science and Technologys Professor Hyodo, who
has extensive experience in traffic analyses in Vietnam
and Indonesia, in numerous projects. It is possible to
seek their advice for this project.
Modal share of
expected MRT
passengers
(Proposed method 1): Household
survey like the one conducted
this year and other
questionnaire survey
(Proposed method 2): Use GPS,
etc. on cell phones to collect
data on tracks of travel (origin,
destination) and travel modes
used. At the same time, obtain
data on distance of travel, etc.
This year, household survey was conducted in Vietnam.
The Vietnamese side (Ministry of Transport (MOT),
MOTs TDSI, etc.) recognizes the need for expanding
the survey (additional questions, greater sample size). A
similar survey will also need to be conducted in
Indonesia.
As mentioned above, MRI Inc. has vast experience in
the acquisition of GPS track data.

We presented three options for calculation ((1) MRT, (2) MRT +access/egress traffic, and
(3) MRT +access/egress traffic +traffic on nearby roads). While adopting Boundary Option
(1) from the point of view of feasibility, for the calculation, in principle, we will nonetheless
need to take estimates of GHG emission reductions under the other two options and consider
whether we can leave out the other two if they turn out to have little impact on the emission
reductions or take such steps as to subtract a certain fraction from the overall emission
reductions.
Furthermore, there is a need to work out the detailed design of the MRV system, including
details on the entities performing the measurement and validation. Together with the sharing
of information on the methods of data collection mentioned above, capacity building for
measurement, validation, etc. will be required in the host countries.
20
Approach to credit distribution (consideration on the methodology)
Tenders for a project to introduce MRT are usually divided into several categories, such as
(1) civil engineering works, (2) rolling stock, and (3) E&M (signals, communications,
electrification, etc.), and J apanese technology may not necessarily be awarded all tenders. For
example, if J apanese technology is adopted only for the signal system, there would be a need
to consider how to distribute emission reductions arising from the project as a whole. Possible
options are shown below. These options require bilateral agreement and will need to be
considered further.
Provided there is a bilateral agreement, all credits generated from the project as a
whole may be passed on to J apan regardless of the share of J apanese technology
adopted in the project.
Credits may be distributed in accordance with the cost of each technology comprising
the project as a whole.

5. Co-benefits (i.e. Improvement of Local Environmental Problems)
As for a co-benefit approach to global warming in the transportation sector, the Manual for
Quantitative Evaluation of the Co-Benefits Approach recommends assessment of emission
reductions of NOx among other air pollutants. Therefore, we selected NOx emissions for
assessment of co-benefits in this study.
As results of this evaluation serve only as a reference material to the general assessment of
the projects effectiveness and do not directly affect investment decisions or lead immediately
to monetary transactions of credits, the method adopted for the calculation of the co-benefit
should be able to be performed jointly with the calculation of GHG emission reductions to
lessen additional burden as much as possible.
Specifically, we adopted a simple assessment method as shown below.

<Reference emissions>
NOx emissions =Distance traveled by travel mode [vehicle km] NOx emission factor by
travel mode [gNOx/km]
Distance traveled by travel mode [vehicle km] = Traffic volume by travel mode
[PKM]/average rate of vehicle occupancy (person/vehicle)

<Project emissions>
The project emissions are regarded as 0. (This is because railroad is powered by electricity
and emissions from a suburban power station do not lead directly to urban air pollution.)

As a result, total emission reductions of 2,404 tNO2/year can be expected from the four
MRT lines as shown below.

Table. Estimated NO2 Emission Reductions (Unit: tNO2/year)
Project Hanoi Line 1 Hanoi Line 2 Ho Chi Minh City
Line 1
J akarta North-
South Line
Year of Assessment 2030 2020 2020 2037
Reference Emissions 637 597 667 503
358 335 158 171 282
215 201 500 248 71
65 61 9 84 88
Project Emissions 0 0 0 0
Emission Reductions 637 597 667 503
21

6. Contribution to Sustainable Development in Host Country
In both countries of this study, public transportation is underdeveloped, dependence on
automotive transport (motorbikes, private-owned cars) is high, and urban population is
rapidly growing. As a result, the existing transport systems will make sustainable
development difficult. Therefore, building an efficient transportation system by introducing
public transportation and in particular, mass transportation system is essential for realizing
sustainable development in the two cities that drive growth in the two countries.
In Indonesia, traffic congestion is already causing substantial economic loss in terms of loss
of time and traffic accidents (in a study conducted in 2005, Pelangi Foundation estimated an
annual loss of 12.8 trillion rupiah in time, fuel and health). The passenger transportation
capabilities need to be strengthened to realize improvements in the environment in which
people live as well as in the investment climate.
In Vietnam, traffic congestion continues to grow, and improvements in traffic safety are
lagging. Hanoi is drawing up the citys master plan to promote sustainable development, and
expansion of public transportation system is indicated as a top priority item in its urban
transportation master plan (a share of public transportation to increase from 5% today to
between 40 and 50% in 2025).
The project dealt with in this study is being promoted against such a background. The
projects prospectus clearly indicates its objectives to ease traffic congestion, counter air
pollution, create jobs, and contribute to urban development. Therefore, the project is expected
to contribute to sustainable development of the two countries through alleviation of the
transportation-related problems, promotion of peoples activities, movement of materials, and
services, and stimulation of the economy.
As for quantitative assessment of benefits generated by the mass transportation system of
this study in term of sustainable development, it may be possible to convert the following
effects into currency for the assessment:
Reduction in the time required for travel
Reduction in vehicle operating costs
Reduction in the incidence of traffic accidents

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New Mechanism Feasibility Study 2011 Final Report

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