adbtf14_c1 summary of global experiences with performance based road contracts

7/27/2019 ADBTF14_C1 Summary of Global Experiences with Performance Based Road Contracts

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Summary of Global Experienceswith Performance-Based Road

Contracts

(Dos and Donts)

Mr. Rowan Kyle

Opus International ConsultantsNew ZealandAsian Development Bank Transport Forum

16 September 2014


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This Presentation Will Cover:

Background

Main drivers of testing PBRCs in Punjab,(India), Liberia and New Zealand

Capacity building of domestic contractors

Main benefits obtained after the first pilot

Recommendations for the future dos anddonts

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Background Punjab, India

Funder World Bank Development 9 Month Contract: 2008 2012 204km network single contract package Implemented 2012 -10 Years

Liberia

Funder World Bank 180km network length full reconstruction

Implemented 2012 10 Years New Zealand

Entire 11,000 KM State Highway Network moving toPBRCs. 7 Years.

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Main drivers of PBRCs in Punjab4

Increased pavement lifecyclesDelivery of defined service levels

Linked to clientsasset management capacity

building Improved linkage between expenditure and

outcomes

Increased focus on road safety.


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Punjab OPRC 5


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Punjab OPRC 6


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Punjab OPRC7


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Main drivers of testing PBRCs inLiberia

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A flexible model to deliver full reconstruction andlong term maintenance

Transfer of risk to contractor for design andconstruction outcomes

Increase focus on post construction maintenanceand road user needs

Capacity building within the clientsorganisation.


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Liberia OPRC 9


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10Liberia OPRC


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11Liberia OPRC


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12Liberia OPRC


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13Liberia OPRC


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14Liberia OPRC


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Risk Management what might happen if...

15Liberia OPRC


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16Main drivers of ImplementingPBRCs in New Zealand

23 Regional Maintenance ContractsAv of 500km in each network Contracts awarded to date (5) - all below estimate! Greater control and asset management by the

Agency Consistent service levels nationally Increased risk transfer to contractors

Increased value for money outcomes Increased asset lifecycles Agency required to save $160m over 3 years.


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Capacity Building of DomesticContractors

Punjab, India: - Indian contractor and subcontractors used.

Liberia: - Chinese contractor, local labour force engaged.

New Zealand Significant focus on healthy market place 20% sub-contractor (by value) is mandatory.

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Main Benefits Obtained afterthe First Pilot

Punjab, India: Programmed works on track and a goodfocus on Routine Maintenance and road safety from theoutset.

Liberia: Improved awareness of the importance of qualityand safety by the Contractor. Approximately 45km ofpavement reconstructed and 1 bridge rebuilt.

New Zealand, cost savings achieved, more control andinvolvement by the highway agency.

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What are the Key Success Factors(the Dos)?

Road Agency institutional buy-in

Adequate and committed funding available

Early identification of impediments legal/institutional

Capacity building in both government agencies and the private sector

Effective risk identification and sharing

Procurement process get the best contractor possible and focus on (i)technical support; (ii) technical requirements; and (iii) evaluation criteria

Performance measurement / incentives / enforcement

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. Pitfalls to Avoid (The Donts)

Externally- imposed change (for sake of change) with little internal (domestic)

ownership/buy-in Paradigm shift (centrally driven) incompatible with current industry capacity

One size fits all approach

Service level scope creep specifying more to be done than can be afforded The impact of delaysTime really is money!

Aging of collected data / cost of recollection / risk of variations

Increased asset deterioration / additional maintenance requirements Impact of price adjustment over time significant risk to employer / donor

Increased road user costs / delayed project benefits

Increasing hazard level / accident rates / fatalities

Political fallout / loss of credibility.

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Thank You

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adbtf14_c1 summary of global experiences with performance based road contracts

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