Long Term Road Maintenance Contracts
Abstract
Having the right performance criteria are the key ingredient to a successful outcome
There is widespread global movement at all levels of government to outsource road maintenance activities to contractors on a long term basis. The potential benefits to be gained are:
- More efficient use of available resources (not constrained by government funding cycles and procedures)
- Greater flexibility with financing, allowing up front projects to proceed where they have been deferred/delayed under government budgeting)
- Greater control of cash flow
- More consistent maintenance regime
- Lower risk to the principal
- Savings, which can be invested in improvements in other services.
However, without the 'right' performance criteria being established this type of contract is destined for failure because the objectives of road maintenance are inadequately defined. Without definition, performance cannot be measured, nor controlled.
So what are the 'right' criteria? this paper suggests the 'right' performance criteria to be used when setting up long term performance based contracts.
The objectives of road maintenance can be split into two main streams: long term and short term. Both long and short term activities have two main purposes. For both, the first is to ensure a safe environment for the travelling public.
This paper proposes both short and long term criteria and offers comment based on the growing Australian experience of long term contracts.
Authors
Stuart Hughson, Graeme Booth
Sinclair Knight Merz
Malcolm Frost
CSR Emoleum Road Services