Mind the Maintenance Gap: Framework, Global Trends, and Maintenance - - PowerPoint PPT Presentation

Mind the Maintenance Gap: Framework, Global Trends, and Maintenance in OIC Member States

Dr Adnan Rahman Director General, IRF

www.irfnet.ch

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

THE INTERNATIONAL ROAD FEDERATION

Promoting the development and maintenance of better, safer and more sustainable roads and road networks.

NON-PROFIT 90 COUNTRIES INDEPENDENT

Better roads, better world.

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

Road Finance & PPP Intelligent Transport Systems Environment & Climate Change Road Safety

Four Work Areas

Better roads, better world.

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

Knowledge transfer & Information sharing Connecting people, businesses and

• rganisations

Three Strategic Pillars

Policy & Advocacy

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

KNOWLEDGE TRANSFER & CAPACITY BUILDING

SOFTWARE TRAINING COURSES DATA KNOWLEDGEP LATFORM

RADaR

PUBLICATIONS

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

CONNECTING PEOPLE, BUSINESSES, & ORGANISATIONS

CONFERENCES PARTNERSHIPS

Better roads, better world.

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

POLICY AND ADVOCACY

ITS Advisory Group UNRSC

Green Public Procurement Task Force for Statistics methodologies

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

OUTLINE

• A Framework for Road Maintenance
• International Best Practices
• Review of OIC Member States
• Case Studies
• Lessons for OIC Member States

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE GOOD ROADS

IMPROVE ACCESSIBILITY

JOBS HEALTHCARE EDUCATION MARKETS

ECONOMIC DEVELOPMENT

POORLY MAINTAINED ROAD NETWORKS LEAD TO:

• A DETERIORATION IN THE VALUE OF THE ASSETS
• MORE EXPENSIVE MAINTENANCE IN THE FUTURE (UP TO 9X)
• HIGHER VEHICLE OPERATING AND MAINTENANCE COSTS
• LONGER TRAVEL TIMES AND MORE ACCIDENTS
• LOSS OF BENEFITS FROM THE ORIGINAL INVESTMENT

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

THE MAINTENANCE GAP IS THE DIFFERENCE BETWEEN: INVESTMENT NEEDED FOR MAINTAINING ROAD NETWORK IN “GOOD” CONDITION AND THE AVAILABLE FINANCING FOR MAINTENANCE OF ROAD NETWORK

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

• Routine maintenance
• Resurfacing
• Rehabilitation
• Reconstruction
• Restoration
• Betterment
• New road construction

WHAT IS MAINTENANCE?

Maintenance is a series of activities designed to keep a road network serviceable by reducing the deterioration of pavements and other road assets.

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE IMPLEMENTATION PREPARATION PROGRAMMING STRATEGIC PLANNING

Involves analysing the road network and preparing a long-term strategic plan that includes future needs in terms of, for example, maintenance needs, the resource requirements for different future budgetary and economic scenarios Involves developing a multi-year program of work and associated expenditures. This work program identifies future maintenance needs of the road network, and prioritises these needs based on costs and benefits and available budgets. Involves developing the details for implementing the multi-year program of work – detailed designs and cost estimates are prepared. Covers the management of daily on-going works activities of the organisation on a daily or weekly basis. This includes, for example, the scheduling of work, monitoring of the work, and evaluation of completed works.

A FRAMEWORK FOR ROAD MAINTENANCE – FOUR FUNCTIONS

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE IMPLEMENTATION PREPARATION PROGRAMMING STRATEGIC PLANNING

A COMMON DECISION MAKING CYCLE

Data & Information Define Goals & Objectives Needs Assessment Define Options Analyse and Select Options Implementation Monitoring

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

ASSET MANAGEMENT

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

Goals and Policies Asset Inventory Condition Assessment & Performance Modeling Evaluation of Options Project Selection Implementation Performance Monitoring Budget Allocation What are our objectives and policies? What is included in the inventory of assets? What is the value of assets? What services do they provide? What is the past and present condition of the assets? What is the predicted future condition of the assets? How can assets be preserved, maintained, and improved through their life cycle, while providing the service for which they were designed? What resources are available, now and in the future? What investment options are available? What are the associated costs and benefits? Which option, or combination thereof is “optimal”? What are the consequences of not maintaining the assets? How can we monitor the impact of our investment decisions?

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

CORE PRINCIPLES OF ASSET MANAGEMENT

Policy Driven – Resources are allocated for undertaking different activities based on well -defined policy objectives Performance Based – All policy objectives are translated into indicators to measure system performance and used for operational and strategic management Analysis of Options and Trade-offs - The allocation of resources to different types of projects (maintenance versus rehabilitation) is based on evaluating how different budget allocations perform with regards to reaching the policy objectives Decisions Based on Information – The costs and benefits of the different options is based on current, complete, and accurate data Monitoring – The performance of policy options is measured and reported

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

OUTLINE

• A Framework for Road Maintenance
• International Best Practices
• Review of OIC Member States
• Case Studies
• Lessons for OIC Member States

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

WHAT CAN WE LEARN FROM INTERNATIONAL EXPERIENCE? 1.Ownership and institutional structure 2.Financing 3.Assigning responsibility 4.Enhancing efficiency

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

• 1. OWNERSHIP AND INSTITUTIONAL STRUCTURE
• Involve stakeholders and road users in management of roads

by creating an organsiation (eg., a road board) that:

• Is independent
• Has legal and legislative standing
• Has clearly defined executive or advisory responsibility
• Has a clear terms of reference
• With explicit rules and procedures
• Separate financing and procurement and delivery functions
• Institutionalise planning and programming function

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

• 2. FINANCING (1)
• Create an independent (free from political interference)
• rganisation (eg., road fund):
• With dedicated revenue sources deposited directly to it,
• An independent board with a clear ToR ,
• The ability to vary tariffs and charges to meet needs,
• With a simple consistent procedure for fund allocating, and
• Is regularly audited
• Revenues should come from user charges (fuel fees, parking,

vehicle license fees, road pricing, weight-distance fees, …)

• Administrative considerations (evasion, international transit fees,

inadvertent subsidies, …)

• Practical considerations

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

• 2. FINANCING (2)
• Level of charges should follow three core principles:
• Road tariff should not be lower than the variable costs of operating

and maintaining the road network;

• Road tariff and the taxes and charges used to support local access

roads should collectively cover all road costs;

• When there is significant road congestion, the road tariff should also

include congestion costs, although this will only apply to a handful of seriously congested cities.

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

• 3. ASSIGNING RESPONSIBILITY
• Clear assignment of responsibility, based on a functional

classification of road network, for its management

• Management includes responsibility for managing traffic and

enforcing, for example, weight-axle rules and regulations

• Community and rural roads need special attention, including

financing from the central/national government

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

• 4. ENHANCING EFFICIENCY (1)
• Clear definition of the role of the road agency in a mission or

vision statement

• Management Structure:
• Decentralisation
• Management must understand of asset management
• Create positions with asset management responsibility
• Training of managers in asset management
• Working with the sector to improve skills and competences

to permit more complex forms of contracting (eg., performance based maintenance contracts)

• Fewer staff, better terms and conditions for employment

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

• 4. ENHANCING EFFICIENCY (2)
• Use Management Information Systems (MIS) to suppport

decision making

• Asset Management System with an up-to-date asset register
• Condition of assets
• Traffic information
• Regular data collection to support planning and

programming

• Use life cycle costing approaches to set
• Use of models (transport demand models, pavement

deterioration model, financial models)

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

• 4. ENHANCING EFFICIENCY (3)
• Program delivery
• Renew and adapt business models for maintenance – lump sum

contracts, with focus on outcomes

• Outsource delivery of maintenance works
• Simple, consistent, transparent procurement practices and contracts
• Program audits and monitoring are built into program delivery
• Strengthen managerial accountability
• Audits
• Reporting requirements
• Change financial accounting systems
• Match revenues to expenditures
• Account for asset owned by road agency

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

• 4. ENHANCING EFFICIENCY (4)
• Change financial accounting systems
• Match revenues to expenditures
• Account for asset owned by road agency
• Record value of road assets
• Generate information to support decision making and priority setting

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

OUTLINE

• A Framework for Road Maintenance
• International Best Practices
• Review of OIC Member States
• Case Studies
• Lessons for OIC Member States

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

ROAD NETWORK BY ROAD TYPE (MOTORWAY, HIGHWAY, OTHER)

OIC (%) US (%) EU (%) Motor 0.42 1 1 Highway 12.4 0.4 5 Seondary 22 28.6 25 Other 65 70 69

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

PAVED VERSUS UNPAVED ROADS

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

LENGTH OF ROAD NETWORK (KM) / GDP (USD 10 MILLION)

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

EXPENDITURES ON MAIN ROAD NETWORKS IN SUB-SAHARAN OIC MEMBER STATES

Length of Main Network Roads in Good Condition Maintenance Expenditures Rehabilitation/Capital Expenditures (KM) (KM) Annual Averages in USD / KM Benin 4,735 911 3,016 4,307 Burkina Faso 10,231 n.a. n.a. n.a. Cameroon 11,008 2,372 2,609 5,823 Chad n.a. 862 n.a. n.a. Cote d’Ivoire 13,291 4545 n.a. 9,016 Niger 6,055 3250 494 4,137 Nigeria n.a. n.a. n.a. 16,964 Senegal 4,780 2,141 n.a. 24,938

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

SOME OBSERVATIONS ON ROAD NETWORKS

• Road network is too large relative to population & GDP.
• The share of motorways, highways, national and main

roads in the total road network is disproportionately large.

• There is an acute lack of reliable and consistent data when

it comes to expenditures in the road sector (this data is not readily available).

• There seems to be a capital investment bias with most

expenditures on rehabilitation and capital projects.

• Road network is not in very good condition.

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

ISSUES - OWNERSHIP AND INSTITUTIONAL STRUCTURE

• Limited autonomy of road sector organsisation
• Road management and maintenance is still part of a Ministry of

Transport, or a public works department

• Leadership of road agencies is often drawn from civil service
• Force accounts are still used for maintenance works
• Stakeholder involvement is limited or only in name
• Planning and programming is limited and not always

supported by evidence and data

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

ISSUES - FINANCING

• Lack of adequate and stable funding for maintaining the

road networks.

• Even in Member States with road funds, adequate and stable

funding for maintenance activities remains elusive.

• User charges are at too low levels
• Fuel levies and general tax revenues remain the dominant sources
• f revenue for funding maintenance
• Maintenance needs are underfunded for large portions of

the road network (especially the secondary and rural roads, requiring more expensive rehabilitation works at some later stage)

• Preference is for capital investment

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

ROAD FUNDS IN OIC MEMBER STATES

Road Fund Number of Countries Established 20 In preparation or non- existent 37

MOST OIC MEMBER STATES HAVE NO ROAD FUND

• The legal basis of many road funds remains weak.
• Autonomy of road funds is not ensured, there is significant risk of political interference
• Participation of stakeholders in the road funds is very limited.
• The accountability and transparency of road funds is limited to an annual financial audit without any reporting
• requirement. There are few disclosure requirements for legal documents and annual reports with financial data
• n the activities of the road funds.
• Road funds rarely use data-based performance indicators for monitoring and evaluating the impact of their

funding activities. Thus, there is no link of the funding to improvements in the performance of the road network.

• The bulk of revenues come from a fuel levy and budget support from general government revenues.
• Despite road funds being established to fund maintenance, most finance development and rehabilitation.

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

ISSUES - ASSIGNING RESPONSIBILITY

• The responsibility for developing and maintaining rural and

secondary roads is ambiguous

• Enforcement of rules and regulations, especially axle-

weight regulations is an issue

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

ISSUES – ENHANCING EFFICIENCY

• Planning and programming are weak
• Data quality and quantity leave much to be desired
• Use of Asset Management Systems and models remains

limited

• Performance based maintenance contracts are still the

exception rather than the norm

• Link between the cost of maintenance works and their

effects are missing

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

OUTLINE

• A Framework for Road Maintenance
• International Best Practices
• Review of OIC Member States
• Case Studies
• Lessons for OIC Member States

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

THREE CASE STUDIES 1.Morocco 2.South Africa 3.Turkey

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

MOROCCO - ORGANISATION

• Two types of maintenance plans – 2 and 5 year

plans

• HDM used to do CBA
• Roads Directorate has 55 regional & provincial

directorates

• CNER is responsible for doing a road condition

survey every two years

• Maintaining Road Management System
• IFER is responsible for providing vocational

education

• Ministry maintains ongoing dialogue with the

association of contractors

• Developed a contractor qualification system

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

MOROCCO – FINANCING

• Four sources of revenue:
• General tax revenues
• The road fund (fuel levy)
• Partners
• External funds
• Maintenance works get about 30% of total budget
• Current budget covers 50% of total financing need
• Of the funds dedicated to maintenance, about 71% are for

routine and periodic maintenance

General Budget (Million Dirhams) FSR (Million Dirhams) Partners (Million Dirhams) CFR (Million Dirhams) 2015 2,026 3,207 106 2,408 2016 2,471 2,500 600 2,305

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

MOROCCO – ISSUES

• Overloading is a big problem
• Roads are being built to design standards that are not

adequate for the larger, heavier vehicles in use today

• Weather related maintenance has been a big problem for

the maintenance budgets since 2008

• Staffing:
• Downsizing will require more outsourcing
• Difficulty in attracting talent
• Maintenance of rural roads is a problem
• Maintenance of equipment is an issue

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

TURKEY - ORGANISATION

• Separate department of facilities

and maintenance

• 18 regional divisions
• Routine and emergency

maintenance and snow and ice removal is undertaken by regional divisions

• Most routine maintenance works

are contracted out

• 3-year maintenance contracts – not

performance based

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

TURKEY - FINANCING

• Major share of budget comes from general tax revenues
• 3- year budget is submitted to Parliament for approval – approves funding

for one year

• Funding available for maintenance works is inadequate (10 -12 % of total

GDH budget

• High level of ad-hoc funding for GDH

0,5 1 1,5 2 2,5 3 1980 1997 2001 2005 2009 2013

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

TURKEY - ISSUES

• Responsibility and financing of the maintenance of rural (forest) and

community roads is unclear

• Planning and programming can be improved (no asset management system,

little data)

• No earmarked funding for maintenance (much funding is ad-hoc)
• Routine and periodic maintenance is delayed till more extensive, expensive

maintenance works are required

• Overloading is a big problem
• Legal and regulatory framework for contracting maintenance works inhibits

innovation

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

SENEGAL – ORGANISATION (1)

• Ministry of Infrastructure and Land Transport
• Directorate of Roads
• Agency of Works and Management of Roads (AGEROUTE)
• Fund for Autonomous Road Maintenance (FERA)
• Directorate of Roads is responsible for:
• Policy
• Planning
• Support local authorities
• Develop rural roads

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

SENEGAL – ORGANISATION (2)

• AGEROUTE is responsible for:
• Management and coordination of the classified road network
• Planning of maintenance, and activities to support planning
• FERA is responsible for ensuring financing of maintenance

works

• Autonomous
• Independent board

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

SENEGAL – FINANCING

• FERA is the road fund and gets its revenues from:
• General tax revenues
• Tax on road use
• General government subsidies
• The tax on road use was doubled in 2011
• Actual revenues from tax collection are exceeding the

estimates, but they are still falling short of requirements

• FERA is considering borrowing money from a commercial

bank to meet the funding shortfall

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

SENEGAL – ISSUES

• Overloading is a big problem (costs of overloading are

higher than the total revenues from the tax on road use)

• Reliance on government tax revenues leads to uncertainty

about the funds available for maintenance and this makes it difficult to plan

• Roads are being designed on standards that are no longer

adequate for the heavier larger vehicles that are now in use

• Availability of materials is an issue
• There are problems with the local contractors

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

OUTLINE

• A Framework for Road Maintenance
• International Best Practices
• Review of OIC Member States
• Case Studies
• Lessons for OIC Member States

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

LESSONS FOR OIC MEMBER STATES (1)

• Preventive maintenance pays for itself (deferring maintenance

can be very expensive)

• Maintenance should not be seen just as maintenance, but as

part of a multi-year asset management plan

• Planning and programming are essential components for any

successful maintenance strategy

• Plans, programs, and actions must be based on solid data and

evidence linking condition of assets, costs, and benefits of alternative maintenance

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

LESSONS FOR OIC MEMBER STATES (2)

• Separate the management and operation of the road network

from the funding of the maintenance works

• Earmarked, stable sources of revenue are required for having

effective implementation of multi-year maintenance plans

• Use of innovative financing sources to meet the funding needed

for maintaining the road network is needed

• Focus of the road fund’s activities should be on preventive

maintenance

• Dialogue with industry is necessary to understand the problems

faced by industry, as well as to improve the capabilities of the sector.

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

RECOMMENDATIONS

• System level recommendations
• Recommendations depending on maturity of organsations and

road sector:

• Phase 1 - Preparing for performance monitoring
• Phase 2 – Monitoring and improving performance
• Phase 3 – Performance based on outputs
• Phase 4 – Organisation wide performance monitoring

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

RECOMMENDATIONS - SYSTEM

• Use of performance indicators for decision-making
• Data collection
• Financial Management Systems
• Road Information System and Asset Management System
• Project Management System
• Risk Management Framework

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

RECOMMENDATIONS - PHASE 1

• Identify the shortcoming and needs with respect to the systems

and procedures

• Collect needed data and information
• Make changes to the institutional setting, including the legal and

regulatory frameworks

• Make necessary internal reforms in the organisation

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

RECOMMENDATIONS - PHASE 2

• Human resources issues
• Involvement of stakeholders and road users, and
• Financial security for the organisation

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

RECOMMENDATIONS - PHASE 3

• Focus is on outputs

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

RECOMMENDATIONS - PHASE 4

• Focus is on organisational wide performance

Better Roads, Better World

INTERNATIONAL ROAD FEDERATION

FEDERATION ROUTIERE INTERNATIONALE

THANK YOU WWW.IRFNET.CH INFO@IRFNET.CH