1 cutting cost and improving quality through performance specified road maintenance contracts...

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Cutting Cost and Improving Quality through Performance Specified Road Maintenance Contracts


International Road Federation (IRF)German Agency for Technical Cooperation (GTZ)

Economic Commission for Latin America and the Caribbean(ECLAC))

Technical Assistance Program of the Federal Republic of Germany

e-mail: [email protected]://www.zietlow.com

Asian Development Bank, Manila, October 1999

byDr. Gunter Zietlow

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International Road Federation (IRF)German Agency for Technical Cooperation (GTZ)

Economic Commission for Latin America and the Caribbean(ECLAC))

Technical Assistance Program of the Federal Republic of Germany

e-mail: [email protected]://www.zietlow.com

Asian Development Bank, Manila, October 1999

byDr. Gunter Zietlow

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Overview ofPresentationOverview ofPresentation

Performance Specified Road Maintenance Management

Example Argentina Example Australia and NZ Example USA Pilot Projects


Example Argentina Example Australia and NZ Example USA Pilot Projects

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Performance Specified Road Maintenance Management is the optimization of actions in order to keep a road network in stable pre-defined conditions, preferably on a long term basis.

Performance Specified Road Maintenance Management is the optimization of actions in order to keep a road network in stable pre-defined conditions, preferably on a long term basis.

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Performance Specified Road Maintenance ManagementPerformance Specified Road Maintenance Management

Objectives: To improve road conditions

and/or reduce maintenance cost. To promote and encourage the

development and application of innovative road maintenance practice.

Objectives: To improve road conditions

and/or reduce maintenance cost. To promote and encourage the

development and application of innovative road maintenance practice.

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Performance Specified Road Maintenance Contract

Performance Specified Road Maintenance Contract

A service level agreement between the road authority and a contractor concerning a schedule of payments in return for an agreed level of road condition performance.

A service level agreement between the road authority and a contractor concerning a schedule of payments in return for an agreed level of road condition performance.

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Road Condition Performance

Road Condition Performance

Measurable parameters defining the performance of road, bridge and traffic assets in terms of maintenance program outcomes.

Measurable parameters defining the performance of road, bridge and traffic assets in terms of maintenance program outcomes.

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Performance SpecifiedRoad Maintenance Contracts

- Example of Performance Indicators -

Performance SpecifiedRoad Maintenance Contracts

- Example of Performance Indicators -

Roughness (IRI) Visual appreciation

Potholes Cracks Rutting Obstruction of drainage system Others

Friction Deflection ......

Roughness (IRI) Visual appreciation

Potholes Cracks Rutting Obstruction of drainage system Others

Friction Deflection ......M

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OD

OF

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D O

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ICA

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Performance indicators defining minimum physical road, bridge and traffic asset conditions, leaving it to the contractor as to how to achieve them.

Payments are made periodically and might be adjusted in accordance with the change of certain factors, like inflation or traffic volume.

Penalties for non-compliance with terms and conditions of contract.

Duration of contract more than 10 years.

Performance indicators defining minimum physical road, bridge and traffic asset conditions, leaving it to the contractor as to how to achieve them.

Payments are made periodically and might be adjusted in accordance with the change of certain factors, like inflation or traffic volume.

Penalties for non-compliance with terms and conditions of contract.

Duration of contract more than 10 years.

Principal Contract ElementsPrincipal Contract Elements

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Advantages Advantages

Greater efficiency and better use of new technologies reduces road maintenance cost.

Road users, road administration and contractor have a clear understanding to what standards roads have to be maintained (increased transparency).

Greater efficiency and better use of new technologies reduces road maintenance cost.

Road users, road administration and contractor have a clear understanding to what standards roads have to be maintained (increased transparency).

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Award of ContractAward of Contract

Based on the lowest discounted periodic payments to be made to the contractor.

alternatively Based on the highest initial payment

offered by the contractor to the owner of the road, on the basis of predefined periodic payments to the contractor. Initial payments can be substituted by physical road works such as rehabilitation.

Based on the lowest discounted periodic payments to be made to the contractor.

alternatively Based on the highest initial payment

offered by the contractor to the owner of the road, on the basis of predefined periodic payments to the contractor. Initial payments can be substituted by physical road works such as rehabilitation.

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TYPES OF CONTRACTTYPES OF CONTRACT

PERFORMANCE SPECIFICATIONSLUMP SUM PAYMENT

UNIT PRICES

CONSTRUCTIONREHABILITATIONEMERGENCIES

MAINTENANCE

TRADITIONAL CONTRACTS

PERFORMANCESPECIFIED

CONTRACTS

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Examples of Performance Specified Maintenance Contracts in Latin America

Examples of Performance Specified Maintenance Contracts in Latin America

GUATEMALAROUTINE MAINTENANCE

COLOMBIAROUTINE

MAINTENANCE

PERUROUTINE MAINTENANCE

CHILEROUTINE MAINTENANCE

ARGENTINACONCESSIONS WITH AND

WITHOUT TOLLS

URUGUAYROUTINE

MAINTENANCE

SANTA CATARINAROUTINE MAINTENANCE

BRASIL (DNER)ROUTINE MAINTENANCE

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Example Argentina


Example Argentina

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Performance Specified Maintenance Contract. Example Argentina (1)


9600 KM of national roads are being maintained and operated on the basis of Performance Specified Maintenance Contracts (concessions) since 1990.

Tolls are being collected by the concessionaire.

Duration of contracts is 12 years. Contracts specify performance indicators,

complimentary services to be provided to the road users, and penalties for non-compliance.

9600 KM of national roads are being maintained and operated on the basis of Performance Specified Maintenance Contracts (concessions) since 1990.

Tolls are being collected by the concessionaire.

Duration of contracts is 12 years. Contracts specify performance indicators,

complimentary services to be provided to the road users, and penalties for non-compliance.

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Another 10000 km of national roads are being contracted under a similar scheme.

Duration of contracts: 5 years. Contractor will be paid periodically by

the government. The tolling scheme cannot be applied due to insufficient traffic volumes.

Another 10000 km of national roads are being contracted under a similar scheme.

Duration of contracts: 5 years. Contractor will be paid periodically by

the government. The tolling scheme cannot be applied due to insufficient traffic volumes.

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Performance Indicators Example Argentina Performance Indicators Example Argentina

Pavements Bituminous concrete

Roughness (IRI): < 2,0 mts/km Rutting: <12 MM Cracking: type 4 (according to the catalogue of the

D.N.V.) and less than 15% of the area evaluated

Concrete Roughness (IRI) : < 3,3 mts/km Cracking : type 2

Bituminous surface treatment Roughness (IRI) : < 2,9 mts/km Cracking : type 4

Pavements Bituminous concrete

Roughness (IRI): < 2,0 mts/km Rutting: <12 MM Cracking: type 4 (according to the catalogue of the

D.N.V.) and less than 15% of the area evaluated

Concrete Roughness (IRI) : < 3,3 mts/km Cracking : type 2

Bituminous surface treatment Roughness (IRI) : < 2,9 mts/km Cracking : type 4

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Performance Indicators Example Argentina cont.

Performance Indicators Example Argentina cont.

Pavements Coefficient of friction: average minimum

0,4 per km (measured by equipment). Conditions of pavement borders: well

formed without settlements and cracks. Structural capacity: should be sufficient to

absorb traffic for 2 years after contract expires.

Pavements Coefficient of friction: average minimum

0,4 per km (measured by equipment). Conditions of pavement borders: well

formed without settlements and cracks. Structural capacity: should be sufficient to

absorb traffic for 2 years after contract expires.

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Performance Indicators Example Argentina cont. 2

Performance Indicators Example Argentina cont. 2

Examples of routine maintenance

Patching: there should be no potholes

Penalty: equivalent to 1000 liters of gas oil per day starting 24 hrs. after detection of the pothole.

Cutting of grass and weeds: grass and weeds should not exceed a height of 0,15 mts.

Penalty: equivalent to 100 liters of gas oil per week and hectare starting 15 days after violation has been detected.

Examples of routine maintenance

Patching: there should be no potholes

Penalty: equivalent to 1000 liters of gas oil per day starting 24 hrs. after detection of the pothole.

Cutting of grass and weeds: grass and weeds should not exceed a height of 0,15 mts.

Penalty: equivalent to 100 liters of gas oil per week and hectare starting 15 days after violation has been detected.

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Performance Specified Maintenance Contract. Example Argentina

Performance Specified Maintenance Contract. Example Argentina

Adherence to performance indicators is being controlled by the Department of Supervision of the National Road Agency.

Inspection is being done monthly by supervisors contracted by the Department of Supervision.

Department of Supervision contracts annual audits of the contractors.

Department of Supervision publishes annual statistics on the performance of the contractors.

Adherence to performance indicators is being controlled by the Department of Supervision of the National Road Agency.

Inspection is being done monthly by supervisors contracted by the Department of Supervision.

Department of Supervision contracts annual audits of the contractors.

Department of Supervision publishes annual statistics on the performance of the contractors.

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Example Argentina Example Australia and NZ


Example Argentina Example Australia and NZ

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AUSTRALIAPILOT PROJECTS (1)

AUSTRALIAPILOT PROJECTS (1)

2 two year maintenance management contracts with consulting firms had been awarded in 1991 for 100 km of urban roads each.

The contracts constituted a form of “performance contract” where the product was identified by the performance parameters defined in the maintenance manager’s Code of Practice.

In one case a private contractor provided the maintenance services and in the other case a workforce of the road agency .

2 two year maintenance management contracts with consulting firms had been awarded in 1991 for 100 km of urban roads each.

The contracts constituted a form of “performance contract” where the product was identified by the performance parameters defined in the maintenance manager’s Code of Practice.

In one case a private contractor provided the maintenance services and in the other case a workforce of the road agency .

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AUSTRALIAPILOT PROJECT (2)


Contractor’s cost was 16% lower than RTA workforce.

RTA workforce increased work productivity by 22% during the first year.

There was no difference in the ability to respond to emergency situations and in the quality of work undertaken by the contractor and the RTA workforce.

Contractor’s cost was 16% lower than RTA workforce.

RTA workforce increased work productivity by 22% during the first year.

There was no difference in the ability to respond to emergency situations and in the quality of work undertaken by the contractor and the RTA workforce.

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Renewed tendering after 2 years resulted in further reduction of maintenance cost by 25%.

Additional 10% effectiveness gain resulting from resource flexibility increased overall cost-effectiveness by 50% after two years compared with RTA workforce average rates prior to the pilot project.

Renewed tendering after 2 years resulted in further reduction of maintenance cost by 25%.

Additional 10% effectiveness gain resulting from resource flexibility increased overall cost-effectiveness by 50% after two years compared with RTA workforce average rates prior to the pilot project.

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AUSTRALIAPERFORMANCE SPECIFIED MAINTENANCE CONTRACT


Includes all maintenance activities of 450 km of urban roads or 1900 lane km.

Term of contract is 10 years. Asset conditions will be improved by

up to 15% at a saving of 35% with relation to the region’s average maintenance cost being 27% less than prior to the introduction of contracting.

Contract value is US$ 130 million.

Includes all maintenance activities of 450 km of urban roads or 1900 lane km.

Term of contract is 10 years. Asset conditions will be improved by

up to 15% at a saving of 35% with relation to the region’s average maintenance cost being 27% less than prior to the introduction of contracting.

Contract value is US$ 130 million.

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Cost of Road Maintenance in SydneyCost of Road Maintenance in Sydney

0 10 20 30 40 50 60 70

Time (months from June 1991)

0

20

40

60

80

100% 1991 Rates

RTA

SOR Contract

Transfield Contract

0 10 20 30 40 50 60 70

Time (months from June 1991)

0

20

40

60

80

100% 1991 Rates

RTA

SOR Contract

Transfield Contract

(Performance Specified Contract)

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Contracting out can reduce road maintenance cost

Contracting out can reduce road maintenance cost

100

80

60

100

50

30

0 20 40 60 80 100 120

LOW

HIGH

PERFORMANCE SPECIFICATIONS

UNITE PRICE CONTRACTS

FORCE ACCOUNT

%ROAD MAINTENANCE COSTROAD MAINTENANCE COST

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Contractor proposed intervention levels, schedule of payments and reporting procedures.

Reporting procedures include date and time when performance indicators exceed intervention levels, actual response time, and action taken.

Contractor proposed intervention levels, schedule of payments and reporting procedures.

Reporting procedures include date and time when performance indicators exceed intervention levels, actual response time, and action taken.

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ITEMS RESPONSETIME

RoughnessIRI < 2.5 and < 2.4 at the end ofcontract

-----------

Surface defects< 50 mm< 50 mm

24 hrs.4 hrs.

Underground drainage-blocked-siltation > 15%

4 weeks4 weeks

Road markings-missing, not legible, worn > 50%-loss of reflectivity > 70%

4 weeks4 weeks

Warning signals-missing-loss of reflectivity > 50%-Traffic signals

24 hrs.4 weeks2 hrs. to 7 days

ITEMS RESPONSETIME

RoughnessIRI < 2.5 and < 2.4 at the end ofcontract

-----------

Surface defects< 50 mm< 50 mm

24 hrs.4 hrs.

Underground drainage-blocked-siltation > 15%

4 weeks4 weeks

Road markings-missing, not legible, worn > 50%-loss of reflectivity > 70%

4 weeks4 weeks

Warning signals-missing-loss of reflectivity > 50%-Traffic signals

24 hrs.4 weeks2 hrs. to 7 days

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Performance Specified MaintenanceContract, New ZealandPerformance Specified MaintenanceContract, New Zealand

Contract covering 406 km of national roads was let for 10 years in 12/98

Contract cost was 15% below comparable cost of traditional contracting

Performance specifications are very well elaborated

Contractor is responsible for quality control (quality manual, quality plan, quality system procedures)

Contract covering 406 km of national roads was let for 10 years in 12/98

Contract cost was 15% below comparable cost of traditional contracting

Performance specifications are very well elaborated

Contractor is responsible for quality control (quality manual, quality plan, quality system procedures)

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Services management of the asset routine, periodic maintenance and

rehabilitation of assets incl. bridges collection and management of asset

inventory data call-out and attendance to emergencies response to public request, complaints

and feedback

Services management of the asset routine, periodic maintenance and

rehabilitation of assets incl. bridges collection and management of asset

inventory data call-out and attendance to emergencies response to public request, complaints

and feedback

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Objectives of the Performance Measures Provide a contracted condition standard at

the commencement of services to be compared to the conditions of the assets at the completion of the contract.

Provide a means to monitor and assess the Contractor’s performance during the Contract.

Provide security to the Principal that the condition of the assets and the services to be provided are being measured during the

Contract.

Objectives of the Performance Measures Provide a contracted condition standard at

the commencement of services to be compared to the conditions of the assets at the completion of the contract.

Provide a means to monitor and assess the Contractor’s performance during the Contract.

Provide security to the Principal that the condition of the assets and the services to be provided are being measured during the

Contract.

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Adjustment for rise and fall in costs All prices in the price schedules and the

lump sum payment are subject to adjustment for rise and fall in costs.

The adjustment will be made once only in each calendar year.

The adjustments are on formulas covering labor cost index, various producer price indices, and farm expenses price index.

Adjustment for rise and fall in costs All prices in the price schedules and the

lump sum payment are subject to adjustment for rise and fall in costs.

The adjustment will be made once only in each calendar year.

The adjustments are on formulas covering labor cost index, various producer price indices, and farm expenses price index.

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Inspections and reviews Network condition monitored by

contractor High speed data collection Falling weight deflectometer

Asset maintenance monitored by contractor

Random audits by the Superintendent Independent annual audits

Inspections and reviews Network condition monitored by

contractor High speed data collection Falling weight deflectometer

Asset maintenance monitored by contractor

Random audits by the Superintendent Independent annual audits

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Physical works performance measures (1) Network condition measures

roughness texture rutting depth skid resistance seal and residual life on hand-back

Sealed carriage way ….see above Potholes depressions edge breaking

Physical works performance measures (1) Network condition measures

roughness texture rutting depth skid resistance seal and residual life on hand-back

Sealed carriage way ….see above Potholes depressions edge breaking

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Physical works performance measures (2) Shoulders Drainage Controlled vegetation Traffic facilities Miscellaneous Bridges Structures

Physical works performance measures (2) Shoulders Drainage Controlled vegetation Traffic facilities Miscellaneous Bridges Structures

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Feature Base conditionstandard

Compliance duringPSMC

Responsetime

Potholes no potholes < 10 potholes with adiameter >100mm on any5km of lane length

4 days

Depressions no ponding ofwater >3mmabove surfaceaggregate

< 30m in any one km ofwheelpath with >3mmponding

6 months

Rutting no ruts greaterthan 30mm depth

no more than 5m in any100m length of wheeltrack in any lane withrutting exceeding 30mmdepth

12 months

Edgebreaking

< 2 meters of edgebreak per km, sealloss > 100mm

< 5 meters of edge breakper km

1 monthwhere sealedshoulder is <0.5motherwise 3months

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Example Argentina Example Australia and NZ Example USA


Example Argentina Example Australia and NZ Example USA

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First Performance Specified Road Maintenance Contract in the State of Virginia(Comprehensive Agreement for Interstate Highway Asset Management Services)

First Performance Specified Road Maintenance Contract in the State of Virginia(Comprehensive Agreement for Interstate Highway Asset Management Services)

Maintain and refurbish 1250 lane-miles on three Interstate Highways, 62 rest areas, and 7 visitor centers

5+ year contract since early 1997 131 million US$ for 5 years with

approximately 16% savings over VDOT cost

Contractor is VMS 15% of work is done by VMS staff

Maintain and refurbish 1250 lane-miles on three Interstate Highways, 62 rest areas, and 7 visitor centers

5+ year contract since early 1997 131 million US$ for 5 years with

approximately 16% savings over VDOT cost

Contractor is VMS 15% of work is done by VMS staff

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Maintenance Management Program (1)Maintenance Management Program (1)

Asset inventory and condition assessment (updated annually)

Pavement management program Bridge management program Snow and ice control operations plan Safety management and traffic

control plan Emergency response plan

Asset inventory and condition assessment (updated annually)

Pavement management program Bridge management program Snow and ice control operations plan Safety management and traffic

control plan Emergency response plan

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Maintenance Management Program (2)Maintenance Management Program (2)

Hazardous materials communications plan

Customer response plan Public information plan Implementation plan Annual work plan updated every 3

months Extensive reporting procedures

Hazardous materials communications plan

Customer response plan Public information plan Implementation plan Annual work plan updated every 3

months Extensive reporting procedures

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Outcome and Performance TargetsOutcome and Performance Targets

Drainage System Roadside Assets Traffic assets Pavement Bridges

Drainage System Roadside Assets Traffic assets Pavement Bridges

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Examples of PerformanceCriteria for Drainage SystemExamples of PerformanceCriteria for Drainage System

Asset Outcome PerformanceTarget in % ofasset

Tolerances/ Criteria

Cross Pipes(< 36 ft sq)

structurally soundopen drainsjoints intactadequate capacityno erosion

95 < 10% deteriorated barrel>90% diameter openjoints intactend protection intactno dip in road over pipe indicatingstructural problems

Ditches,paved

alignedstructurally soundclean

95 < 1" settlement< 25% spalledno obstruction to flow of water

Sidewalksand Ramps

smoothsafesound

90 no settlement > 1/2"no unsealed cracks > 1/4"< 25% spalled

Asset Outcome PerformanceTarget in % ofasset

Tolerances/ Criteria

Cross Pipes(< 36 ft sq)

structurally soundopen drainsjoints intactadequate capacityno erosion

95 < 10% deteriorated barrel>90% diameter openjoints intactend protection intactno dip in road over pipe indicatingstructural problems

Ditches,paved

alignedstructurally soundclean

95 < 1" settlement< 25% spalledno obstruction to flow of water

Sidewalksand Ramps

smoothsafesound

90 no settlement > 1/2"no unsealed cracks > 1/4"< 25% spalled

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Incident Response TimesIncident Response Times

24 hour duty roster available to local EMS personnel, State Police, and VDOT

20 minutes response time by Supervisor, during work hours, to site and 45 minutes after work hours

1 hour to set up lane closure during work hours and 1 1/2 hours outside work hours

24 hour duty roster available to local EMS personnel, State Police, and VDOT

20 minutes response time by Supervisor, during work hours, to site and 45 minutes after work hours

1 hour to set up lane closure during work hours and 1 1/2 hours outside work hours

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Washington D.C.Washington D.C.

Planning to maintain 74 km of federal roads within Washington D.C. on a performance specified road maintenance contract

Planning to maintain 74 km of federal roads within Washington D.C. on a performance specified road maintenance contract

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Example Argentina Example Australia Example USA Pilot Projects


Example Argentina Example Australia Example USA Pilot Projects

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Extension: 359 km 154 km bituminous concrete 88 km concrete 37 km bituminous surface treatment 21 km forced impregnation 59 km gravel

Variable conditions 30 km of roads need initial rehabilitation and

others require strengthening during the contract period.

Extension: 359 km 154 km bituminous concrete 88 km concrete 37 km bituminous surface treatment 21 km forced impregnation 59 km gravel

Variable conditions 30 km of roads need initial rehabilitation and

others require strengthening during the contract period.

Pilot ProjectUruguayPilot ProjectUruguay

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Contract period is 4 years Deadlines to comply with performance

indicators: 2 months for potholes 6 months for other defects on main roads one year for all roads

The contractor is being paid a fixed monthly fee per kilometer and type of road surface.

Sanctions for non-compliance

Contract period is 4 years Deadlines to comply with performance

indicators: 2 months for potholes 6 months for other defects on main roads one year for all roads

The contractor is being paid a fixed monthly fee per kilometer and type of road surface.

Sanctions for non-compliance

Pilot Project UruguayDeadlines, Payments, and SanctionsPilot Project UruguayDeadlines, Payments, and Sanctions

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Drainage systems, like culverts and ditches, should be clean to allow for a permanent free flow of water.

Right of way should be clear of trash and other foreign objects.

Vegetation should not exceed 6 cm on the median strip and 15 cm up to 5 m from the borders of ditches.

Traffic signs and markings: standards defined by the Traffic Department apply.

Drainage systems, like culverts and ditches, should be clean to allow for a permanent free flow of water.

Right of way should be clear of trash and other foreign objects.

Vegetation should not exceed 6 cm on the median strip and 15 cm up to 5 m from the borders of ditches.

Traffic signs and markings: standards defined by the Traffic Department apply.

Pilot Project Uruguay Examples of Performance IndicatorsPilot Project Uruguay Examples of Performance Indicators

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Remaining thickness of gravel surface layer: 5 cm during and 10 cm at the end of the contract

period

Roughness ( IRI ) of pavements: < 2,8 for bituminous concrete < 3,4 for bituminous surface treatment < 6 for gravel

Bituminous surfaces Absence of potholes Settlements < 10 mm

Shoulders Absence of potholes and settlements

Remaining thickness of gravel surface layer: 5 cm during and 10 cm at the end of the contract

period

Roughness ( IRI ) of pavements: < 2,8 for bituminous concrete < 3,4 for bituminous surface treatment < 6 for gravel

Bituminous surfaces Absence of potholes Settlements < 10 mm

Shoulders Absence of potholes and settlements

Pilot Project Uruguay Examples of Performance IndicatorsPilot Project Uruguay Examples of Performance Indicators

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2 routine maintenance contracts and 1 maintenance contract for traffic signs and markings have been concluded with former DNV staff.

Contracts have been let for 4 years. The former DNV staff have the right

to take up their former employment with the DNV, if they wish to do so, within one year of contract commencement.

2 routine maintenance contracts and 1 maintenance contract for traffic signs and markings have been concluded with former DNV staff.

Contracts have been let for 4 years. The former DNV staff have the right

to take up their former employment with the DNV, if they wish to do so, within one year of contract commencement.

Pilot Project Uruguay Redeployment of Displaced StaffPilot Project Uruguay Redeployment of Displaced Staff

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PSMC - UruguayPSMC - Uruguay

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Activities performed by small-scale enterprises

Activities performed by small-scale enterprises

Minor pothole patching

Cleaning of pavement and right-of-way

Cleaning of drainage system

Maintenance of road signs

Vegetation control Clearing of land

slides Removing of bill

boards Emergency

response Erosion control

Extension: 1 050 000 m² (150 km) asphalt concrete, concrete, cobble

stones, gravel

Road conditions vary Some require initial rehabilitation Others need rehabilitation during

contract period

Duration of contract: 3 years with possibility of a 3 year extension

Contract value: US$ 8 millions

Extension: 1 050 000 m² (150 km) asphalt concrete, concrete, cobble

stones, gravel

Road conditions vary Some require initial rehabilitation Others need rehabilitation during

contract period

Duration of contract: 3 years with possibility of a 3 year extension

Contract value: US$ 8 millions

Pilot Project Montevideo (1)

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Contract covers: rehabilitation works routine maintenance by performance

standards emergencies

Method of payment initial rehabilitation based on unit prices

(US$ 2.25 millions) fixed monthly payment per m² for each type

of road surface for maintenance, rehabilitation after the first year and emergencies

after the initial 3 years of contracts, fixed monthly payments will be reduced by 40%

Contract covers: rehabilitation works routine maintenance by performance

standards emergencies

Method of payment initial rehabilitation based on unit prices

(US$ 2.25 millions) fixed monthly payment per m² for each type

of road surface for maintenance, rehabilitation after the first year and emergencies

after the initial 3 years of contracts, fixed monthly payments will be reduced by 40%


Performance measures (examples) potholes repaired within 24 hrs minor cracks < 10% of road surface cracks and joints sealed drainage system clean to allow for

unhindered flow of water

Evaluation for purposes of payment detailed analysis of 50 mts. each 500 mts. every 10th drainage structure traditional system used for initial

rehabilitation works

Performance measures (examples) potholes repaired within 24 hrs minor cracks < 10% of road surface cracks and joints sealed drainage system clean to allow for

unhindered flow of water

Evaluation for purposes of payment detailed analysis of 50 mts. each 500 mts. every 10th drainage structure traditional system used for initial

rehabilitation works


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CHILEInspection systemCHILEInspection system

Inspections for purposes of payment done once a month taking 10% of the road network selected at random different stretches of 1 km length;

Regular inspections done once a week selecting 5% of the network at random;

Inspections due to complaint by the public; and

Follow-up inspections to verify if contractor rectified deficiencies detected by one of the inspections mentioned above.

Inspections for purposes of payment done once a month taking 10% of the road network selected at random different stretches of 1 km length;

Regular inspections done once a week selecting 5% of the network at random;

Inspections due to complaint by the public; and

Follow-up inspections to verify if contractor rectified deficiencies detected by one of the inspections mentioned above.

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CHILESystem of paymentCHILESystem of payment

During the monthly inspection the compliance of performance standards is being evaluated for each category having different importance. Based on a pre-established formula compliance is calculated as a percentage which is multiplied by the monthly payment foreseen for 100% compliance. During the first year of the contract compliance has been around 95%, mainly due to deficiencies related to road safety and right-of-way. In addition, penalties are being applied if the contractor does not rectify deficiencies within the time periods defined in the contract.

During the monthly inspection the compliance of performance standards is being evaluated for each category having different importance. Based on a pre-established formula compliance is calculated as a percentage which is multiplied by the monthly payment foreseen for 100% compliance. During the first year of the contract compliance has been around 95%, mainly due to deficiencies related to road safety and right-of-way. In addition, penalties are being applied if the contractor does not rectify deficiencies within the time periods defined in the contract.

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Comparison of Performance Specified Road Maintenance Contracts

Country Number ofContracts

Lengthin km

Duration ofContract inyears

Maintenance Cost per km andyear in US$

Chile 2(a) 747 5 r C: 3 850A: 3 200B: 2 700

Colombia 3 542 2 r,s A: 5 000Guatemala (me) 70 2 995 1 (b) r (drainage

system andright of wayonly)

1 950(drainage systemand right of wayonly)

Uruguay 1(a) 359 4 r,p C: 4 750A: 4 950

Uruguay (me) 2 275 2 (b) r A,B and G:3 100

Uruguay(Montevideo)

1(a) 1.5x106

sqm3 (b) r,p A: 1.8/m2

C: 2.8/m2

G: 2.0/m2

Brazil(Santa Catarina)

1(a) 375 5 r A and G:3 000

a)Contracts include some initial road rehabilitation works; b)Can be extended for one period of equal durationr: routine maintenance; p: periodic maintenance; s: other services provided to users (telephone, ambulance, towing)C: cement concrete; A: asphalt concrete; B: Bituminous treated; G: gravel

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Performance Specified Maintenance Contracts

- Critical Issues-


- Critical Issues-

Performance indicators should be comprehensive and clearly defined and measurable.

Penalties for non-compliance should be sufficiently high to encourage the contractor to comply in the first place.

Control of compliance with performance standards should be strict.

Performance indicators should be comprehensive and clearly defined and measurable.

Penalties for non-compliance should be sufficiently high to encourage the contractor to comply in the first place.

Control of compliance with performance standards should be strict.

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- Implementation Strategy -


- Implementation Strategy -

Phase introduction of performance indicators.

Routine maintenance Roughness and friction Deflection

Increase time span of contracts. 1 to 2 years 4 to 5 years < 12 years

Monitor implementation process.

Phase introduction of performance indicators.

Routine maintenance Roughness and friction Deflection

Increase time span of contracts. 1 to 2 years 4 to 5 years < 12 years

Monitor implementation process.

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VISIONNoNo

potholespotholes

Transport CostBusiness

Opportunities

1 cutting cost and improving quality through performance specified road maintenance contracts...

Documents

performance of road

road maintenance cost

road network

road authority

road administration

road users

road conditions andor

minimum physical road