General proceedings - Association mondiale de la Route

Highlights of the presentation:
• Studies made by World Bank in 1980s revealed that outsourcing road maintenance
works to the private sector reduce costs by between 30-50%.
• PBCs define minimum conditions of road, bridge, and traffic assets that have to be met
by the contractor, as well as other services such as the collection and management of
asset inventory data, call-out and attendance to emergencies, and response to public
requests, complaints and feedback.
• Payments are based on how well the contractor manages to comply with the
performance standards defined in the contract, and not on the amount of works and
services executed.
• PBC define a final product and it is up to the contractor how to achieve this. Therefore,
work planning, execution, and control are all his responsibility. Hence, the choice and
application of technology and the pursuit of innovative materials, processes, and
management procedures are all up to the contractor. This allocates higher risk to the
contractor compared to traditional contract arrangements, but at the same time opens up
opportunities to increase his margins where improved efficiencies and effectiveness of
design, process, technology or management are able to reduce the cost of achieving the
specified performance standards.
• Savings realized from PBCs ranged from 15-40% in Australia, New Zealand and
Virginia in USA.
• Benefits from use of PBCs include: To Road Agency: Reduced workloads; assures
long-term maintenance funding; provides better transparency and accountability;
reduces maintenance costs; improves customer focus; improves control and
enforcement of quality standards; avoids frequent claims and contract amendments to
increase quantities of work by contractors; reduces road rehabilitation; and reduces
risks. To Road Users: Provides better and safer roads with consistent conditions; and
reduces road user costs. To Consultants and Contractors: Guarantees workloads
over longer periods; provides potential for increased margins; and opens excellent
opportunities for business growth.
• Disadvantages of PBCs: To Road Agency: Tends to prolong tender period; requires
new procedures, mentality change of staff and training; loss of information if contractor
is not obliged to supply information on condition, interventions and inventory of the
road; loss of flexibility; loss of expertise; and reduces competition.
• Examples of Performance Indicators/ Standards include Absence of potholes,
Roughness of road surface, and Amount of obstruction of drainage system.
Recommendations:
• To cut the cost of road maintenance and improve road conditions, countries should
consider applying PBCs as a way of contracting out road maintenance. However,
savings might not be produced immediately.
• Durations of contracts include at least one periodic maintenance cycle i.e. 4 -5 years for
gravel roads and 8 -10 years for paved roads. Routine maintenance contracts can be 1 –
2 years. Initially go for shorter contract periods to enable corrections to be made in
future contracts if problems in the contract arise.
• Secure financing for the entire contract period.
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