Road Development Contract E6 Helgeland Presentation for Contractors - - PowerPoint PPT Presentation

Road Development Contract E6 Helgeland Presentation for Contractors November 9, 2010

E6 Helgeland - Challenges

• Narrow road
• Poor alignment – sharp

curves

• Narrow sections – bottle

necks

• Low bearing strength
• Frost heaves
• Many accesses (private

entrances)

• Inefficient transportation
• High costs induced on

industry and commerce

• Approximately 40 traffic

accidents with injuries per year

• 2-3 fatalities per year

E6 Helgeland Status

• Appr. 50 km new road

with approved plans

• Appr. 150 km of road

improved according to adopted standard

• Appr. 60 km of road

with sufficient standard

1 1 8 0 m ill NOK 2 4 0 m ill NOK 1 0 9 0 m ill NOK 8 4 0 m ill NOK 5 7 0 m ill NOK

Measures on Various Road Sections

Smaller improvements New road New road Improvement of existing road Walk/bike road – Traffic safety measures Improvement of existing road Smaller improvements New road Improvement of existing road Smaller improvements

E6 Helgeland - Financing

State appropriations Mill NOK NTP 2010-2019 1700 NTP 2020-2022 500 Programs 260 Maintenance appropriation 2011-2013 340 Total amount State appropriation 2800 Toll collection sites are shown on the map Site Krokstrand, price 40 Nok per car 145 Site Reinforshei, price 40 Nok per car 300 Site Skamdal, price 15 Nok 175 Site Bru Fusta, price 20 Nok per car 155 Site Vefsn/Grane, price 25 Nok per car 205 Site Svenningvatn, price 25 nok per car 140 Total amount Toll collection 1120 Total amount 3920 Toll collection share 29 %

Proposed State Budget 2011

• Page 75: ”A Contract type which has not been

used until now in Norway, is a so-called development contract… The NPRA considers the possibility to make use of such a contract type for E6 Helgelenad… ”

• Page 208: More text
• Side 201: ”It is desirable to consider building,

maintenance and operation for a longer road section in a comprehensive manner… .”

Targets for development – level and standards related to improvements

• Road width min. 8.5 where improvements are implemented, bridges with

widths less than 7.5 m are improved

• Min. horizontal curvature 150 m - “problem hills” will be improved
• Bearing strength minimum 10 tons and frost heave points will be repaired
• Walk/ bikeroads are constructed around towns, between built-up areas and

along roads with pupils walking to school.

• Construction of parking/ rest areas for truckers.
• Improvement of rest areas for motorists.
• Assigned public transportation terminals will be designed according to

“guidelines for universal design” (for people with impaired ability to move and impaired vision)

• Requirements for stopping distance will be met. Objects preventing view will

be removed or secured. Forest and brushes will be cleared along 10 m belts

• n both sides of the road.
• Guard Rails will be repaired and improved.
• Local accesses will be concentrated to reduce the number of intersections to

improve traffic safety.

• Signs will be replaced to meet the standard requirements of the manuals

issued by the NPRA

Road Development Contract

E6 Helgeland Development Contract – some Principles

• Combining Building – Improvement – Operation –

Maintenance activities in the same contract, NPRA has never tried this before.

• Contract length 15 years. Building (construction) takes place

during the initial 8-12 years.

• Activities within the contract:

– Design and Building of new roads – Designing and implementing works related to improvements – Periodic maintenance activities – Operation

• Financing: Appropriations from the state and revenue from

toll collection - compensation based on an annual rate

• Options?

E6 Helgeland Purpose of Development Contract

• Continuous in time and geography – and predictable

building and improvement of a longer section of the road.

• The progress of the works is part of the commitment of

the contract. The financing will also be fixed in the contract.

• One (or alternatively two) comprehensive and long

term contracts should in theory give reduced costs.

• The connection between building and

maintenance/ operation will be an incentive to the contractor to optimize costs and quality.

Size of contract

• Operation and maintenance –

approximately 300 mill NOK

• Appr. 20 mill NOK annually
• Building and improvements –

approximately 2500-2800 mill NOK – Varying between 200-350 mill NOK annually

We are now focusing on…

• Content/ extent of contract(s)
• Procurement process with procedures

– Open procedure? – Competitive dialogue? – Negotiated procedure?

• Contract requirements

– National standards (i.e. NS3431) – Special requirements – Input from Norwegian DBFO contracts

• Product specification
• Design of tender documents, level of detail specification
• Transition with present contracts for operation and

maintenance

Assumed Timetable

• Decision on principles: - Nov/ Dec. 2010
• Description of content of tender

documents : Nov.2010-Aug 2011

• Time span: Issue of tender – tender

calculation - procurement: Aug 2011 - Jun 2012

• Works start: summer 2012
• Political decisions ?

Dialogue with contractors:

The Content of The Contract

• The contract will include designing and building

new roads, planning and implementing repair or replacement works associated with decay/ defects

• f the road structure and associated road

elements, periodic maintenance tasks and

• perational works (like snowplowing, spreading of

grit etc. Some planning work to be approved by local authorities (including political bodies) may also be covered by the contract. – Are there any advice as to w hich tasks to be included in the contract? – Advice related to include planning approved by local authorities in the contract?

The Scope of The Contract

• NPRA has made a proposal as to which

subsections of roads to be included in the

• contract. The fundamental principle is to include

subsections to be built as new roads or to be improved, and include the operation works for the whole contract period. This implies that there will be subsections without any improvement works, nevertheless to be included in the operational part

• f the contract in order to obtain an overall cost

efficiency when circumstances as geography is

• considered. (Refer to the map on a later slide)

– Do you have opinions on this principle?

The Scope of The Contract

• There are also subsections which will be tendered
• ut as ordinary construction contracts and

therefore not be included in the development

• contract. One subsection will be between Brattås-

Lien, however other subsections are considered to be left out of this contract. – Do you have opinions on leaving som e subsections out of the contract? – Do you have opinions on including options and canceling m echanism s in order to give the necessary flexibility for bringing in or leaving out subsections during the contract period? And if so, in w hat m anner should such m echanism s be designed?

The Scope of The Contract

Development plan Approved plan Reguleringsplan – Plan which is approved by the local authorities Skal lage reguleringsplan: Plan must be completed and approved by the local authorities G/s veg: Walk/bike road

Structure of The Contract

• The contract could be carried out as one contract, or

divided into smaller contracts. Alternatives could be:

• 1. One contract for the whole project “E6 Helgeland”
• 2. Two contracts, one north of Korgfjellet, and one

south of Korgfjellet

• 3. Three contracts
• North of Korgfjellet
• Mosjøen N – Korgfjellet
• Trofors – County line Nord-Trøndelag

– Any advice to size of contracts and dividing into sm aller contracts?

• If works are divided into several contracts, one option

is to introduce a phase lag of the tendering, i.g. the second contract is tendered out one year after the first.

• Any advice to this?

Plans

• The plans for development contract have different

status: – For some sections there are plans approved by the local authority – For other sections there are principal plans made by local authorities, and subsequently more effort is necessary to achieve approved plans – Some subsections need only simple plans which do not trigger new plans approved by the local authority – The NPRA considers to take the full responsibility for carrying out the process of getting the approved plans through the local authorities, as an alternative to leaving som e

• f the responsibility for this to the contractor

( and their partners) . W e w ould w elcom e

• pinions on this subject.

Payment mechanisms

• The contract is assumed to have a total value

based on the present value of NOK, i.e. a yearly lump sum adjusted with an inflation factor. In

• rder to adjust to the yearly budget

appropriations, it is assumed that there will be a difference between the value of work vs annual appropriations which will be evened out when the contract is completed. – Other proposals to reim bursem ent m echanism s? – W ill a fixed level of yearly paym ent be a problem ?

The Contract Period

• The duration of the contract is assumed to be 15 years.

The construction part of the contract is assumed to be completed within the first 8-10 years of the contract. We are considering others alternatives, as a fixed length of the operational period of 5-7 years after the construction works are finished, or the duration of the construction phase could represent an element of competition to be evaluated in the procurement phase. – Do you have opinions about the duration of the contract – shorter/ longer contract period? – Are there other schem es to be considered?

Procedure of Procurement

• The NPRA acknowledge that participation in the

tender competition is costly. We have not decided

• n the type of procurement to choose, however

prequalification and competitive dialogue are probable choices. We would also require assistance on the legal questions to make a decision. – W hat is the advice from the contractors regarding these issues? – I n w hat m anner should w e handle other criteria than price in the procurem ent process?

Contract Design

• The NPRA plans to adopt the same structure

as in the new “Manual # 66” (Håndbok nr 66) where the structure of NS 3450: 2006 is adopted. The contract requirements are assumed to be NS3431 as chapter C1 with some adjustments in

• Ch. C2; among other factors experiences from our

DBFO contracts and our performance based

• peration contracts. We also consider to have

separate Chapters C3 for the construction part of the contract and the operation/ maintenance part

• f the contract.
• Do the contractors have opinions about

these issues?

Distribution of Risk

• Distribution of risk between the NPRA and the

contractor is important for this contract type and not decided at this stage. – W e w elcom e input from the contractors, for instance w hich elem ents of risk are considered “intolerable”? – Are the opinions w ith regard to the pricing structure of the contract? – Do the contractors have opinions on schem es for incentives – and w hat types

• f incentives should be applied?