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Assessing the Effectiveness of K.P.M.sAlex Finn – WBoPDC Transportation Manager David McDougall – Inroads Asset Manager
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Where and What
• Population 42,000– 3x national growth rate– 10th fastest growing (96-01)– 14th fastest growing (01-06)
• 212,000 hectares• 1030 km roads
– 790/240 (sealed/unsealed)– 177 Bridges and Structures
• Encompass Tauranga City– 110,000 pop– Largest port in NZ
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Background
• The problem faced in 1999– Growth at 4%– Declining Levels of Service– Escalating costs– Council not wanting rate rises
• The Solution– Lump sum, performance based, long
term maintenance contract ….PBC-01
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PBC-01 - Introduction
• 10 Years – 2002-2012• Joint Principals – NZTA & WBOPDC• 2-Tier Governance structure
Joint Client Panel
WBoPDC NZTA (Transit)
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PBC-01 Features
• Outcome based (measured by KPM)• Lump sum• Transfer of Operational Control &
therefore some risk transfer• Single provider
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Investment
$3million investment including subsidy
• Gathering data• Setting up KPMs• Developing contract document• Tendering process• Compensating tenderers
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Savings for Council
• Estimate for 10 years $135m• Tender $105m• Saving $30m• Tender/Estimate $78%
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In Summary
• Investment $3 million• Savings over 10 years$30 million
Includes savings in NZTA subsidy
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Setting up Performance Measures
• Affordable Level of Service• Necessary for community and the
asset• Must drive the contractor to provide
the correct response
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Basis of PBC Savings
• Economy of scale• Contract period – 10 years• Risk allocation• Definition of Level of Service
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• Economy of Scale– Efficiency–Multi-skilled workforce
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Contract Period
• Better resources• Opportunity to invest in asset• High value staff
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Risk Allocation
• To party suffering consequences of failure to manage
• To party best able to lower risk
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What has Worked
• Average road roughness has improved
• Smooth travel exposure has improved
• Surface condition (SDI) has improved• Condition of structures has improved• Provision of streetlighting has
improved• Roads are safer than peer local
authorities• Customer service has improved
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RFT Bench Mark Jun-04 Jun-05 Jun-06 Jun-07 Jun-09 Jun-1080
81
82
83
84
85
86
Table 3.3.1 Local Roads - 3 Rural
Road Group 3 - Rural KPM KPM Tolerance
Mea
n N
AASR
A
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What has not worked
Dust KPM• Difficult to measure• Subject to environmental conditions
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What has not Worked (2)
Sealed Width KPM• Good idea in principle• Formula weighting focused on long
straight underwidth roads• Mountainous, winding roads were
avoided• New roads agreed by negotiation
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What has not Worked (3)
Streetlighting• Intended to provide consistent level
of illumination• Difficult to measure consistently• Difficult to address if lights are too
far apart
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David McDougall
Asset Manager - Inroads
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Asset Consumption
• Whole of Life Value for money– Consuming inherent value/life of an asset by deferring
maintenance and thereby incurring more expense later– Assessing the long term impacts that negate initial
gains– Applies to assets where life cycle>> contract period
• Big Ticket Items– Resurfacing ($350k per annum)– Pavement Reconstruction ($1M p.a.)
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Resealing
• Why Resurface in a Performance Based Contract?– Minimise maintenance costs (internal)– Texture KPM (%<0.5mm thresholds)– Surface Defects Index KPM• f(RAMM Rating, High Speed Data)
– Residual Seal Life KPM
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Residual Seal Life – Issues
• RAMM Default life - based on average performance over similar geographical areas in NZ
• Measured @ Start = Matched @ End• Compares existing age to RAMM default age
f(traffic, seal type)• ∑network• Set at Year 0• KPM requires same Y0 profile @ Yr 8, 9 & 10• Flawed…? Why?
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Residual Seal Life – Flawed? Why?
• Large variation in actual performance• Not necessarily optimal @ start of Yr 0– Previous MIS, philosophy– Conservative seal selection criteria– Snapshot
• To insist @Yr 10 to match Yr 0?– Counter productive– Could extract more value with careful MIS
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Residual Seal Life – Why is it Important?
• Measurement of value left in a network• Difficult to measure• Now favour comparison to previous top
surface• Tracking texture change over time
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Existing Top Surface vs Previous Top Surface
UNKN
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-9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 170%
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WBOPDC - Network Remaining Surface Life - Pave Use 2Top Surface and 2nd Layer, by Length, Excluding First Coats
PaveUse2_Achieved PaveUse2_Top NETWORK (Top) NETWORK(Achieved) PaveUse2%_Achieved PaveUse2%_Top
Residual Life (Yrs)
Cum
ulati
ve %
Leng
th (k
m)
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UNKN
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-9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 170%
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WBOPDC - Network Remaining Surface Life - 1CHIPTop Surface and 2nd Layer, by Length, Excluding First Coats
1CHIP_Achieved 1CHIP_Top NETWORK (Top)NETWORK(Achieved) 1CHIP%_Achieved 1CHIP%_Top
Residual Life (Yrs)
Cum
ulati
ve %
Leng
th (k
m)
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UNKN
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-9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 170%
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WBOPDC - Network Remaining Surface Life - 2CHIPTop Surface and 2nd Layer, by Length, Excluding First Coats
2CHIP_Achieved 2CHIP_Top NETWORK (Top)NETWORK(Achieved) 2CHIP%_Achieved 2CHIP%_Top
Residual Life (Yrs)
Cum
ulati
ve %
Leng
th (k
m)
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Seal Residual Life - Summary
• Extending the life of an asset through a careful and proactive MIS thereby adding value
• Residual Life KPM should encourage the extraction of its maximum potential life through – an effective MIS– tracking age profiles– not through Y0 profiles– flexible– risk transfer– needs to have understanding/management
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Pavement Residual Life
• “Consuming inherent value/life of an asset by deferring maintenance and thereby incurring more expense later”
• What pavement KPMs drive Reconstruction?• Roughness – STE• Maintenance Costs• Residual Life
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Pavement Residual Life
• Intent in 2002:– Design Checks pre construction– Performance Measurement Post Construction
• Use FWD deflection to measure Residual Life
– Transfer maintenance consequences• Reality in 2010– Design Checks – Verify Design Assumptions Post Construction– Maintenance is only short term ( life)
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Design Theory
• Measure subgrade deflections• Calculate thickness of aggregate to protect
subgrade based on stiffness (Es)of aggregate• Empirical– Based on what has worked in past– If we do this in these situations then % failures
should be less than 5%– No guarantees
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Pavement Residual Life
• We don’t know how to measure residual life of pavements– Deflection (e.g. FWD) does not measure life– We know when they have failed/about to fail– Measurement/prediction of actual life is difficult
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Pavement Residual Life
• What have we learnt?– Rely on good investigation, design– Rely on Quality Assurance and Control during
construction– Monitor over time rutting and roughness– Expected life projection based on actual annual
trends in rutting and roughness
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Alex Finn
Transportation Manager - WBoPDC
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Team Culture
• Mindset “best for the network”• Win-win approach• Drive for innovation• Danger of under-pricing• Contractor must make a profit• Reported through Balanced
Scorecard
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Customer Care
• Contractor and client support each other
• Sharing information• Act jointly to resolve issues• Managing community expectations• Customer processes measured and
reported• Customer satisfaction surveys
reported
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Conclusion
• More for less • Partnering relationship based on
mutual respect • Data specific• Clearly articulated outcomes• Councils seeks to extend• Subject to NZTA endorsement
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Questions