Using Value Engineering in a Middle-Income Country Context: Metro Line 1,

Bogotá, Colombia

The city of Bogotá contracted advanced engineering studies for a first metro line with sup- port
from a World Bank loan. The proposed solution included 27 kilometers of underground metro
line with 25 stations, two terminals, and one train depot and workshop. The project was
designed for a peak capacity of 80,000 passengers per hour per direction and daily ridership of
up to 900,000. The project had a pre–value engineering (VE) capital expenditure estimate of
US$7.1 billion, including rolling stock, based on 2013 prices and exchange rates. An updated
cost estimate at the final-design level was significantly above the original estimate and the
foreseeable funding envelope to be provided by national and local government budget
appropriations. This merited a profound discussion of the project’s affordability and the
credibility of the cost estimates.
In 2015, following World Bank recommendations on project optimization for megaprojects, the
public sponsor of the project—Financiera de Desarrollo Nacional (FDN)—competitively
procured a consulting firm to carry out a VE study following the SAVE methodology. The VE
exercise generated 49 possible changes to the advanced engineering designs, identifying
potential capital cost savings of nearly 24 percent of estimated total project capital expenses
(US$1.7 billion), as well as significant operational expense savings. Of these options,
approximately 80 percent of the project capital cost savings could come from three broad
themes: reducing the number of stations, replacing underground segments with at-grade or
elevated segments, and reducing the total length of the line. After the VE dissemination
workshop with key decision makers, FDN carried forward 27 of the proposals, with combined
potential savings of 8 percent of total project capital expenses (US$554 million). The VE study
also assisted in identifying specific options for minimizing tax duties.
The following are some key takeaways from the Bogotá Metro Line 1 VE experience:
• Since this was the first VE study implemented in the transport sector in Colombia, a key
ingredient for success was the investment of initial time and effort in informing
relevant stakeholders of the VE methodology and its applicability to the project. The VE
consulting firm, the project sponsor, and the World Bank partnered to build stakeholder
capacity and buy-in prior to the start of the workshop.
• Key decision makers understood that the VE options proposed by the consulting firm
were nonbinding and embraced them as an opportunity for adding value to the project.
A sensitive topic was the differentiation between a nonbinding VE study and a technical
review or audit (a more traditional approach in the Colombian context, which would
require due action by the project sponsor based on possible findings).
• The VE study increased the credibility of the project’s engineering assumptions and
cost estimates and strengthened the public and political perception of the project.
In Colombia, this VE study was a seminal exercise, which, beyond identifying significant capital
and operating cost savings for the project, established the VE practice in the preparation of
transport infrastructure projects. Other rapid transit projects, including the Medellín Ayacucho
light rail transit line sponsored by FDN, followed suit and made use of VE studies.
References:
SENER (Ingeniería y Sistemas Colombia S.A.S). 2015. Proyecto estructuración integral de la
primera línea del Metro Bogotá: Informe final de ingeniería de valor [Structuring of Bogotá Metro
Line One Project: Final Value Engineering Report]. Bogotá, Colombia: SENER.
http://www.metrodebogota.gov.co/sites/default/files/documentos/Informe%20Final%20Ing
enier%23U00eda%20de%20Valor.pdf