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Mariano Gálvez University of Guatemala

Faculty of Administration Sciences
Graduate Studies Office
Master in Business Administration MBA
Headquarters: Central

Course: Project Evaluation

Professor: Licda. Astrid Herrera

Case Study
Road Interconnection and Urban Passenger Rail Transport North - South Axis of the
Guatemala City.
Metrail

Authors:

Members Notebook
Hibys Lizbeth Martinez 3290-16-15415
Henry Giovanny Aguirre Argueta 3290-09-10075
Sulmi Guadalupe Cruz Gómez 3290-12-11015
Elder Fabián Antonio Martínez E. 3290-04-2716
Erica Enriqueta Paredes López 3290-13-11063

Guatemala December 8, 2023.

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Index

INTRODUCTION
I. TRELEVANT THEORY..........................................................................................................4
1.1 Project Scope......................................................................................................5
1.2 Assigned Budget....................................................................................................5
II. CASO.................................................................................................................................6
a. Learning Objective...............................................................................................6
General Objective...........................................................................................................6
Specific Objectives....................................................................................................7
b. Opening Paragraph.......................................................................................................7
c. General background of the organization...................................................................8
d. Specific area of interest.............................................................................................9
e. Specific situation, decision, problem or opportunity.............................................10
f. Alternatives.................................................................................................................12
g. Conclusions...............................................................................................................13
h. Recommendations
i. Questions...................................................................................................................15
Questions and Answers Related to Theoretical Concerns:................................15
Questions and Answers Regarding Experience:................................................17
REFERENCES........................................................................................................................18
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INTRODUCTION

In the constant search to improve the quality of life of the inhabitants of the City of
Guatemala, where it faces a serious problem of mobility and road networks.
congested, due to the lack of various transportation options, which impacts the area
metropolitan area as it has around 3.5 million inhabitants, which represents the
largest urban concentration of Guatemala (around 25% of the national population) This
geographic area constituting the main economic and cultural center of the country. Due to this,
the "Metro Riel" project emerges. This ambitious plan, conceived as a comprehensive solution of
public transportation emerges as a response to the significant challenges faced by the
metropolis in terms of traffic congestion, population growth, and the need for a
sustainable mobility. Launched in March 2016 by the Spanish consultancy IDOM,
ENGINEERING AND CONSULTING, S.A.U., the project 'Metro Rail' became a
joint venture between the National Agency for Infrastructure Development Partnerships
Economic (ANADIE), the Municipality of Guatemala, and FEGUA. Its primary objective was
explore the possibility of an intercity passenger rail transportation system,
called 'Metro Riel', complementary to the existing transport systems.

This project is created to address the needs according to the statistics of the
Tax Administration Superintendency -SAT- the vehicle fleet registered in the area
The total is 1 million 718 thousand 713 vehicles, nearly 75% higher than reported in 2008.
when there were 982 thousand 430 vehicles in circulation, this has caused users today
They face long hours of transit in the country which causes them high extra expenses.
fuel purchase, waiting time in line, and stress.

The bus routes of urban transport have average speeds of only seven.
kilometers per hour, which can be reduced during peak hours. In that context, it is made
necessary the implementation of new transportation systems that can integrate with the already existing ones

existing and future ones, with the aim of providing the user with faster alternatives,
comfortable and dignified for their travels
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This approach could provide a quick and efficient solution to users, since its
implementation faces significant challenges which will benefit hundreds of
"Metro Riel" represents a milestone in urban planning and development
infrastructure in Guatemala, promising not only to change the way citizens
they displace, but also contribute to the economic and social development of the metropolitan region.
This case study provides a detailed window into the planning, implementation and
expectations associated with this transformative project.

I.RELEVANT THEORY

During the Guatemala project that dates back to October 2, 2019. The National Program
of Competitiveness called PRONACOM, as the executing entity of the Threshold Program
Millennium Challenge Corporation –MCC- for its English initials, conducts the study for the
structuring of the high-impact project called Metro Riel in Guatemala, which within
its objectives seek social benefit for the population, to counteract the problem
vehicular, which will contribute in the medium and long term to improving urban mobility and,
end, competitiveness and productivity at the national level.
Based on this, in March 2019, the bases for the public procurement were made public on Guatecompras.

receipt of proposals for the provision of consulting services: Transaction Phase 1,

North-South Urban Passenger Rail and Road Interconnection Project
Guatemala City (NOG 10054006), better known as Metro Riel, which will be
funded by the Umbral Program.

1.1 Project Scope.

This project started in 2014, when FEGUA presented a technical profile to ANADIE.
Metro Riel project, which proposes to design, build, and operate a train through an app.
passenger electric train in the current right of way of the railway that crosses the city of
Guatemala. This as a measure to improve mobility. Subsequently, the Municipality of
Guatemala joined this project to contribute its experience in development
urban transport projects and facilitate its integration with the transportation offer
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existing public. With the support of the Inter-American Development Bank -IDB-, in 2016 it
pre-feasibility studies were prepared for this project, which must be taken to a
higher level of precision and depth in order to have the necessary elements to
make its execution viable. This project aims to help solve mobility problems.
in the metropolitan area and involves the recovery and construction of a stretch of
approximately twenty-one kilometers (21 km) of railway line, where a service will operate
of passenger transport in a light rail system with all its facilities and services
accessories, which will cross the municipality of Guatemala from Centra Norte to Centra Sur.
It is an innovative project that will mobilize more than 250,000 people daily.

1.2 Assigned Budget

The total of this total investment (CAPEX) has been calculated at 772,098,181.68 USD, the distribution among the
the main components of the Project would be the following:

Source:Invalid input. Please provide a text for translation.

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Source: Study on the 'Road interconnection and intercity passenger rail transport north-south axis'
City of Guatemala (IDOM 2016)

II.CASE

a. Learning Objective

General Objective
Primarily knowing the development of projects at the feasibility level, based on
Information collected to improve the quality of public transport service in the City
from Guatemala and obtaining a substantial saving on travel time for your
population.

Specific Objectives
Conduct a detailed analysis of the implementation process of the Metro Riel project in the
Guatemala City. The key stages from project conception to will be examined
its execution, identifying the challenges, the strategic decisions, and the lessons learned
along the way. This objective aims to provide an understanding
deep management of large-scale infrastructure projects and draw lessons
valuable for future similar projects.

Acquire specific skills to analyze and address the identified challenges in the
Metro Riel project of Guatemala City. This will include the ability to identify
potential problems, propose effective solutions and evaluate the implications of the
decisions made during different phases of the project.
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Identify best practices derived from the project and formulate specific recommendations
to improve the planning, implementation, and management of future transport projects
public. Successful experiences and areas for improvement will be reviewed, providing to the
responsible for decision-making and transport professionals a set of
practical guidelines based on real experience. This objective aims to
contribute to the advancement of knowledge in the field of transportation planning and provide
useful tools for the successful design of similar projects in the future.

Develop a deep understanding of the social and economic impacts of the project.
This will include the assessment of the benefits and challenges for the community, as well as the
ability to consider ethical and sustainable factors in decision-making related to
similar projects. The aim is to understand the essential social responsibility in management
large-scale projects.

b. Opening Paragraph

On the brink of a significant transformation in urban mobility, the Area

The Metropolitan Area of Guatemala City is facing a groundbreaking opportunity.
Taking advantage of the old route of the railway line between the Atlantic and the Pacific, it
envisions the creation of a revolutionary public transport system: the Riel Metro. This
project, proposed by IDOM, represents an ideal technical solution to address the urgent
congestion problem affecting the city. The vision crystallizes in a subway line
lightweight on the surface that promises to transport more than 250,000 passengers a day, with 20 stations
along a 21 km corridor. The intelligent design adapts to the urban environment,
incorporating exclusive platforms, elevated steps and a shared tram typology.
Urban integration becomes a fundamental pillar, enhancing the layout of the tram.
as a sustainable green corridor and promoting the creation of pedestrian spaces and
bikeways. The proposed rail operation, with low-floor tram vehicles, promises
a capacity of up to 440 people, double composition circulation and passage intervals
of 3 minutes during rush hour, at a commercial speed of 27 km/h. This ambitious project does not
It not only seeks to alleviate congestion in the city, but also considers road connections.
strategic, the construction of bridges over key ravines, the creation of yards and workshops,
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as well as park-and-ride facilities. IDOM has conducted a thorough Study of

Feasibility for public entities such as ANADIE, PRONACOM, FEGUA and the
Municipality of Guatemala, providing the technical, economic, financial basis,
environmental and legal necessary for the international bidding of the Design, Construction and
Operation of the system through a Public-Private Partnership scheme. This project does not
not only redefines the mobility of the city, but also lays the groundwork for a more
sustainable and integrated.

c. General background of the organization

The National Agency for Alliances for the Development of Economic Infrastructure (ANADIE)
plays a fundamental role in the planning and execution of key projects in
Guatemala. In this context, the organization received, through the office Gag 143-2016 with
date June 17, 2016, the assignment of FEGUA (Guatemala Railways) in quality
of the State Contracting Institution. This assignment, based on articles 6 and 35 of the Decree
16-2010, as well as in articles 78 and 79 of its Regulations, consisted of the delivery of the profile
project technician "ROAD INTERCONNECTION AND RAIL TRANSPORT"
URBAN PASSENGER, NORTH-SOUTH AXIS OF THE CITY OF GUATEMALA.
The technical profile proposed the assessment of the feasibility of implementing a modality of
Public-Private Partnership (PPP) to design, build, and operate a commuter train
passengers on the railway right-of-way that crosses the City of Guatemala. This
the project had as main objectives to support mobility issues in the areas most
populated areas of the metropolis and expand the coverage of the Atanasio Tzul roadway both in the south

like in the north, connecting it with the CENMA Wholesale Center and CENTRANORTE,
respectively, with the central station located in Zone 1, in the old station
railway.
Subsequently, the technical profile was presented to the National Alliance Council for the
Development of Economic Infrastructure (CONADIE) on June 24, 2016, being
prioritized in the project portfolio as stated in minutes number 06-2016 of
CONADIE. The ANADIE was instructed to continue with the preliminary studies prior to the launch of the

project bidding.
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Within the framework of the Strategic Investment Support and Transformation Program Project
Productive of the loan No. BID 1734/OC-GU, the Contract No. BID 1734/OC was signed.
GU-FC-002-2016 on March 30, 2016, between the National Competitiveness Program
(PRONACOM) and the company IDOM, ENGINEERING AND CONSULTING, S.A.U., to carry out
completion of the consultancy related to the study of "Road Interconnection and Rail Transport"
interurbano de pasajeros eje norte sur, de la Ciudad de Guatemala", conocido como Metro
Riel.
Finally, on September 13, 2016, the Administrative Agreement was signed.
Mandate, through which FEGUA grants mandate to ANADIE to carry out the
prequalification procedure, bidding, awarding, contracting, execution, exploitation
and conservation of the project. This set of steps and agreements demonstrates the complex network of
relationships and collaborations between various government and private entities for the
successful execution of large-scale infrastructure projects.

d. Specific area of interest

Benefits obtained from the project, in Guatemala City it is located at a point

of inflection in the management of your daily mobility. Taking advantage of the old route of the line
railway between the Atlantic and the Pacific, the aim is to develop a transportation system
public that helps alleviate the serious problem of congestion.

The scope of the project also includes the road connections that allow for
decongest the entrances to the city, with the construction of two new bridges over the
ravines of El Frutal and Las Vacas. It also includes the design of the patios and workshops, with a
future capacity of 47 units, and the park and ride facilities.

e. Specific situation, decision, problem, or opportunity

Guatemala City faces a mobility issue that threatens efficiency and

sustainability of its growth. The congested road network and the lack of transportation options
inefficiently generate adverse economic and environmental consequences. Hence arises the
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intervention initiative for interurban passenger road and rail transport North Axis
As a strategic response to this issue.
It focuses on the urgency of developing a transportation infrastructure that responds to the
needs of the population and promotes sustainable development. The city of Guatemala
requires a solution that not only improves mobility but also contributes to
economic development and reduce the negative environmental impact associated with congestion
vehicular. The transportation challenge has intensified, marked by vehicle congestion and
the inadequacy of current road infrastructures. This has triggered not only a
decrease in urban mobility efficiency, but also economic consequences and
negative environmental impacts. The growing demand for transportation and the saturation of the roads
conventional methods have generated an urgent need to address these issues in a
integral.
The project for the road interconnection and intercity passenger rail transport northern axis
it arises as a crucial initiative to address this issue. Its fundamental objective
is to offer a comprehensive and sustainable solution that efficiently integrates road transportation and
railway. This initiative aims to improve the mobility system, reduce management
reduce traffic and promote a more sustainable environment by encouraging the use of public transport. The
The interested parties and beneficiaries of this project are diverse, ranging from ANADIE to the citizens.

who will directly experience an improvement in mobility. Among the beneficiaries are
they find the most dynamic economic sectors, anticipating an increase in their
productivity and competitiveness thanks to a more efficient transportation infrastructure.
job creation and the increase of fiscal resources are crucial objectives that are
to achieve with the implementation of this project, contributing to growth
economic present and future.
The decision to take on this challenge arises from the pressing need to improve mobility.
urban and alleviate traffic congestion. The lack of efficient public transport options has
led to an excessive dependence on private vehicles, intensifying the congestion and
affecting the quality of life of citizens. The opportunity to implement a system
An integral that combines road and rail transport is presented as a way to transform.
positively mobility and provide a sustainable alternative. In addition, this decision to
carrying out this initiative is based on Decree 16-2010, which recognizes the importance of
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the alliances for the development of economic infrastructure. These alliances are designed
to free up resources, increase the magnitude and quality of investment, and enhance
economic development of the country. This legal framework establishes the basis to promote a cycle
virtuoso of investment and social spending, benefiting both the present and the future of the
nation. In financial terms, the investment needed for the implementation of this project is
estimated at USD $772,098,181.68, covering the construction of road infrastructure and
railway-related, as well as the costs associated with the relocation of affected populations and others
logistical aspects.
The income variable is carefully analyzed and composed, considering the rates.
for the use of railway transport, as well as other potential revenues, such as tolls and
leasing of commercial spaces. The income generated directly by the service
the metro rail amounts to USD $2,257,787,202.85, while the revenue from connections
the funds associated with the project amount to USD $418,819,564.59 regarding additional income.
that do not come directly from the transportation service such as tolls,
Lease or other sources amount to USD $29,141,796.03, totaling as income.
generated by the project of USD $2,705,748,563.48. These revenues are essential for
the evaluation of the profitability and balance of the project. They are based on hypotheses
considered to be more likely in the baseline scenario and their analysis contributes to the
determination of the financial viability of the project, especially in the context of a
collaboration contract between the private investor and the public administration.
As for the suppliers, it breaks down into the different parties involved in the construction and
operation of the infrastructure. As is the case with the Millennium Challenge Corporation
(MCC) in advanced engineering and the Inter-American Development Bank (IDB). These
organizations act as consulting service providers. And with this ensuring
an efficient supply chain. Costs are analyzed meticulously, covering both
those related to construction such as operation and maintenance. Guaranteeing
a comprehensive assessment of the necessary resources.

f. Alternatives

Given the mobility problem in the city of Guatemala, the Interconnection Study
North South Intercity Passenger Rail and Transport has evaluated various
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alternatives aimed at finding the most efficient and sustainable solution. These
alternatives have been carefully considered, taking into account the long-term benefits
deadline and the feasibility of the project.

a. One of the alternatives considered is the expansion of the existing road infrastructure. Without
embargo, this option presents significant challenges, such as the limited capacity of
expansion in densely populated urban areas and the impact on existing properties.
In addition, the expansion of roads does not comprehensively address the diversity of
mobility needs and does not significantly contribute to the reduction of emissions
contaminants.
Another alternative considered is the implementation of an underground subway system.
Although this approach could offer a quick and efficient solution, its implementation is
faces significant challenges, such as high costs, long construction timelines and
possible interruptions in densely populated urban areas.
Other alternatives such as strengthening the transportation system have been tested.
public through the adoption of high-capacity buses, the introduction of lanes
exclusive to these buses and the renewal of the fleet. However, these alternatives do not
they fully address the congestion problems and do not fully take advantage of the potential
of a multimodal system.

There are also alternatives such as the promotion of active transportation, such as cycling and
hiking, through the creation of adequate infrastructures and the implementation of policies
promotion. Although this option can be beneficial for health and the environment,
may not meet long-term mobility needs and may not be viable for
all citizens.
The selected alternative as the most viable and beneficial is the implementation of a
integrated transport system that combines rail and road infrastructure. This option
offers significant advantages, such as reducing traffic congestion, improved mobility
more efficient and the possibility of attracting a larger number of users to public transport.
Additionally, the multimodal approach contributes to environmental sustainability and development.

economic by providing a comprehensive solution to mobility challenges.

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g. Conclusions

The project of the Road Interconnection and Interurban Passenger Rail Transport Axis
North South emerges as a key initiative to address the growing issues of
mobility in Guatemala City. This comprehensive study has allowed the identification of
magnitude of the challenges and propose comprehensive solutions that could transform
significantly the transportation landscape in the region.
The current situation presents an alarming traffic congestion, affecting the quality of life.
of the citizens and generating negative repercussions in economic terms and
environmental. In light of this scenario, the decision to undertake a project of this importance
it becomes a strategic opportunity to redefine urban mobility and establish the
bases for a more sustainable development.
Current legislation, especially Decree 16-2010, becomes a tool
fascinating that establishes the legal framework for partnerships in economic infrastructure, offers
the necessary support for the ease and execution of the project. This legislation provides
a solid regulatory framework that facilitates collaboration between the public and private sectors,
promoting large-scale investments that will positively impact development
economic of the country.

In financial terms, the necessary investment, carefully analyzed, reflects a

significant commitment to the improvement of transportation infrastructure. The
proposed financial structure, with participation from both the private sector and entities
multilateral and banking, establishes a solid foundation for the execution of the project.
The detailed analysis of financial variables, such as income, suppliers, costs, taxes
and projections, provides a comprehensive view of long-term sustainability and profitability.
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project timeline. This meticulous approach not only addresses economic viability, but
also consider the social and environmental impact, ensuring a comprehensive balance.

recommendations

Promote Interinstitutional Collaboration:

Given the magnitude of the project and its multidimensional impact, it is recommended to strengthen the

collaboration between the involved institutions, including ANADIE, FEGUA, and entities
governmental at the municipal and national level. Close coordination will facilitate the
overcoming obstacles and ensuring efficient implementation.

Refine Citizen Participation Strategies:

To ensure the acceptance and participation of the community, it is suggested to perfect the
strategies for citizen participation. The inclusion of the voice of local inhabitants since
the initial stages up to implementation will be crucial for addressing concerns and ensuring
a project that aligns with the needs of the population.

Continuously Evaluate Risk and Adjust Strategies:

Given the dynamic nature of projects of this scope, it is advisable to establish a system
robust risk management. This would include regular assessments and strategic adjustments to
anticipate and mitigate possible setbacks, thus ensuring feasibility and long-term success
deadline.

Promote Transparency in Project Execution:

Transparency in all phases of the project, from planning to execution, is
essential. Publish relevant information, progress reports, and financial data in a way
accessible to the public will strengthen the trust of citizens and other stakeholders.
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Exploring International Alliances and Multilateral Financing:

It is suggested to explore funding possibilities through international partnerships and
multilateral organizations. This could not only diversify the sources of financing, but also
also offer valuable technical collaboration opportunities.

Prioritize Sustainable Development and Innovation:

Integrating environmental and social sustainability criteria in all phases of the project will be
key. Additionally, promote technological innovation to optimize operational efficiency and
minimizing negative impacts will contribute to the creation of an advanced transportation system and
sustainable.

i. Questions

Questions and Answers Related to Theoretical Concerns:

1. How does this project align with current development theories?

infrastructures?

This project aligns with contemporary theories by adopting a Partnership approach.

Public-Private Partnership (PPP), taking advantage of the private sector's experience to improve the

efficiency and sustainability of public infrastructures. From a theoretical perspective, there

based on the idea that collaboration between the public and private sectors can optimize
the management and execution of highly important projects.

2. What are the foundations that support the decision to use the model of
PPP instead of traditional public financing methods?

The APP model is supported by economic theories that suggest that participation in
the private sector can generate efficiencies, reduce fiscal risks, and promote innovation in
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the development of infrastructure. Theoretically, the aim is to improve the allocation of resources and the
quality of public investment by involving private actors with aligned incentives.

3. How are concerns related to equity and accessibility addressed?

in the design of the proposed transportation system?

Equity and accessibility theories are addressed through inclusive strategies, such as the
citizen participation and consideration of social impacts, ensuring that the system
benefit the entire community. From a theoretical perspective, the aim is to balance the
benefits of the project to prevent possible disparities and ensure equitable access to
transport services

4. What is the expected impact in terms of local economic development and

national through the implementation of this project?

This project is expected to contribute to local and national economic development by improving the
connectivity, facilitate trade and generate employment. Following economic theories, one
it anticipates a multiplier effect that stimulates economic activity and improves the quality of
life of the population.

5. How are environmental sustainability theories integrated into planning and

execution of this project?

The integration of environmental sustainability theories is reflected in the consideration of

clean technologies, sustainable construction practices, and environmental mitigation measures.
Theoretically, the goal is to minimize environmental impact and move towards more sustainable development.

sustainable.

6. How is the choice of specific financial structures justified, such as the

participation of private investors and multilateral financing?

The choice of specific financial structures is justified in the pursuit of efficiency and
diversification of funding sources. The participation of private investors aligns
with theories suggesting that private investment can optimize management, while the
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multilateral financing seeks to mitigate risks and improve financial conditions of

project.

Questions and Answers Regarding the Experience:

1. How does this project align with current theories of development?

infrastructures?

This project conforms to modern theories of infrastructure development by learning from

past experiences. Current practice highlights the need to consider not only the
technical aspects, but also social acceptance and long-term sustainability.

2. What are the foundations that support the decision to use the model of
APP instead of traditional public financing methods?

Experience supports the choice of the PPP model by evidencing that participation of
the private sector can accelerate execution and improve efficiency. It has been seen that the
financial flexibility and risk transfer are key to success, elements
fundamentals that support that decision.

3. How are concerns related to equity and accessibility addressed?

in the design of the proposed transportation system?

Concerns about equity and accessibility are addressed from the beginning. There have been
learned that strategies such as community consultations and social impact assessments are
essential to ensure that the design is inclusive and responds to diverse needs of
the affected communities.

4. What is the expected impact in terms of local economic development and

national through the implementation of this project?

It will anticipate a significant impact on economic development. Similar projects have

demonstrated to boost economic activity, generate employment, and improve connectivity,
contributing to long-term sustainable economic growth.

5. How are environmental sustainability theories integrated into planning and

execution of this project?
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They incorporate sustainable practices into the planning and execution of the project, based on
clean technologies and prior learnings, implementing environmental mitigation measures and
adopted international practices that promote sustainability.

6. How is the choice of specific financial structures justified, such as the

participation of private investors and multilateral financing?

The choice of financial structures is justified by prior experience. Participation

Private investors have proven essential for efficiency and attracting investments.
In addition, multilateral financing relies on risk management and conditions
more favorable financial conditions that have been observed in similar projects globally.

REFERENCES

Railways Guatemala. 2019. Project Metro Riel. Recovered

Unable to access the provided URL to retrieve and translate content.
IDOM (s.f.). Metro Riel. Guatemala. Light Urban Transport. Retrieved from:
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Ministry of Public Finance. ANADIE 2022 Call. Retrieved from:
Unable to access the content from the provided URL.
National Competitiveness Program (2019). PRONACOM, through the program
UMBRAL promotes the development of the Metro Riel project in Guatemala.
Retrieved from:The provided text seems to be a URL and not translatable content. Please provide a text to translate.
PRONACOM.pdf
Valladares Vielman, L.R. (2020). Buses, trains or cabins. Mobility and transport in the City
From Guatemala. Part III. Metro Rail. Center for Urban and Regional Studies.
University of San Carlos of Guatemala. Recovered de:
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The provided text is a file name and cannot be translated.
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