Summary of Global Experiences

with Performance-Based Road

Contracts
(Dos and Donts)
Mr. Rowan Kyle
Opus International Consultants
New Zealand
Asian Development Bank Transport Forum
16 September 2014


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 and
donts

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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 to
PBRCs. 7 Years.
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Main drivers of PBRCs in Punjab
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Increased pavement lifecycles
Delivery of defined service levels
Linked to clients asset management capacity
building
Improved linkage between expenditure and
outcomes
Increased focus on road safety.




Punjab OPRC
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Punjab OPRC
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Punjab OPRC
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Main drivers of testing PBRCs in
Liberia
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A flexible model to deliver full reconstruction and
long term maintenance
Transfer of risk to contractor for design and
construction outcomes
Increase focus on post construction maintenance
and road user needs
Capacity building within the clients organisation.

Liberia OPRC
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Liberia OPRC
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Liberia OPRC
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Liberia OPRC
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Liberia OPRC
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Liberia OPRC
Risk Management what might happen if...






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Liberia OPRC
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Main drivers of Implementing
PBRCs in New Zealand

23 Regional Maintenance Contracts
Av 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.


Capacity Building of Domestic
Contractors

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 after
the First Pilot

Punjab, India: Programmed works on track and a good
focus on Routine Maintenance and road safety from the
outset.
Liberia: Improved awareness of the importance of quality
and safety by the Contractor. Approximately 45km of
pavement reconstructed and 1 bridge rebuilt.
New Zealand, cost savings achieved, more control and
involvement 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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