Embed Size (px)
Citation preview
The Potential of Performance Based Maintenance Contracting for
Road Infrastructure Systems of Developing Countries
Masuda Sultana
B.Sc. (Civil Engineering)
Griffith School of Engineering
Science, Environment, Engineering & Technology
Griffith University
Submitted in fulfilment of the requirements of the degree of
Master of Philosophy
August, 2012
i
ABSTRACT
The road authority is responsible for the construction and maintenance of the road
network system. The authorities strive to reduce cost and time of maintenance activities
and to control quality of work as well as keeping the road infrastructure in an efficient
state using the traditional methods of contracting. Many road authorities have
considered contracting out road maintenance to the private sector based on performance
measures as an alternative and better solution than traditional methods of contracts. This
method is named performance based maintenance contracting (PBMC). PBMC has
received a significant attention from researchers and practitioners as it has a
considerable success in minimizing infrastructure maintenance costs in many developed
countries over the last two decades. The application of PBMC improves the road
maintenance system by applying more efficient technologies and work methods.
However, effectiveness of PBMC is still a challenge for developing countries because
of resource and skill limitations, corruption, shortage of fund and poor management
systems.
Hence, the aim of this thesis is to analyse the potential and effectiveness of PBMC for
road infrastructure maintenance systems of developing countries. This thesis presents a
comprehensive state of the art review of the literature on PBMC that has been produced
in recent years. This thesis defines and presents the benefits of PBMC. It briefly
discusses the problems of traditional methods of contracting in developing countries.
Application of PBMC in developing countries has been reviewed and analysed based on
the published journal articles, conference papers, published reports and online
databases.
As developing countries struggle to implement this new concept for their road
infrastructure maintenance, this research conducted a case study in a developing country
to examine the potential of PBMC in developing countries. The road authority in
Bangladesh is facing similar difficulties like other developing countries in maintaining
the road infrastructure system. Their experience with PBMC could be used as an
example to develop a guideline for the implementation of PBMC in developing
countries. Sample data on road maintenance projects has been collected and a series of
questionnaire surveys and interviews have been conducted to achieve the research
objective.
ii
Moreover, there are many studies that have focussed mainly on the beneficial sides of
PBMC for the road maintenance systems. In contrast, problems or difficulties of PBMC
especially in the developing countries have not been studied as extensively. The
significant achievement of this study is to establish the challenges that could create
hindrance in successful implementation of PBMC in developing countries, presenting
the issues that have been considered by several road authorities during the
implementation of PBMC, examining the potential and effectiveness of PBMC in
developing countries in the context of Bangladesh.
This research suggests that PBMC is a better alternative that should be adopted together
with the current method in developing countries for example Bangladesh. The potential
of reducing maintenance costs, increasing the quality of works and reducing the chance
of corruption in the long term in developing countries are the challenging issues for
PBMC, which needs more attention.
This thesis would be useful for the future research on PBMC. The study conducted in
this research can be used as a base or platform for future research in the area of PBMC
such as developing optimal policies and cost models. It would be beneficial for the
engineers or professionals to improve the performance of the road infrastructure
maintenance and management system.
iii
STATEMENT OF ORIGINALITY
This work has not previously been submitted for a degree or diploma in any university.
To the best of my knowledge and belief, the thesis contains no material previously
published or written by another person except where due reference is made in the thesis
itself.
Signed By…………………Masuda Sultana
Date:……….
v
ACKNOWLEDGEMENT
I would like to take the opportunity to acknowledge all the people who have provided
support and guidance in performing this research. The completion of my M.Phil. degree
would not have been possible without them. I appreciate their help and encouragement
towards my study.
First of all, I would like to sincerely thank my principal supervisor Dr. Anisur Rahman,
for his guidance, magnificent assistance, advice, encouragement and most of all, for his
enthusiastic and magnificent supervision throughout this research. I owe my deepest
gratitude to him for his patience and time during discussions, data collection and
examination of this manuscript. His experience, critical review and suggestions
contributed towards the dissertation.
I would also like to thank my principal supervisor, Dr. Sanaul Chowdhury for his
support whenever I needed it for this study. His supervision, assistance and feedback in
preparing the refereed papers and manuscript were crucial for the completion of this
study.
Special thanks to the Centre for Infrastructure Engineering & Management for
providing the financial support to make this research possible. I am also grateful to all
academic and technical staff at the Griffith School of Engineering who contributed in
diverse ways to this thesis. They have created a dynamic and creative environment in
Griffith University which fosters research and innovation.
I would like to express my sincere appreciation to all the participants of survey and
interviews for giving their time and sharing knowledge. I would also like to thank to the
people from the Roads and Highways Department of Bangladesh who have provided
unconditional support during the data collection process. Thanks to all who provide
their valuable inputs and expertise for this research.
Thanks also goes to Ms Lynne A Nathan, for her great help in English corrections and
professional editing of this thesis.
I am also grateful to my friends and peers for their valuable support, encouragement and
friendship throughout my study.
vi
Finally, I express my gratitude to my husband Dolon and my father, mother and father-
in-law and mother-in-law. I want to dedicate this achievement to my husband and
parents, thank you for your love, patience, understanding, encouragement and support.
Thanks to the almighty Allah, because you gave me the strength, patience, health and
wisdom to make this possible.
vii
LIST OF RESEARCH PUBLICATION
Publication as a result of the content of this thesis
Referred International Journal papers (Published)
Sultana, M., Rahman, A. and Chowdhury, S. (2012), Performance Based Maintenance
of Road Infrastructure by Contracting—A Challenge for Developing Countries, Journal
of Service Science and Management, 5, 2, 118-123.
(Based on Chapter 5 and 6)
Sultana, M., Rahman, A. and Chowdhury, S. (2013), A Review Performance Based
Maintenance of Road Infrastructure by Contracting, International Journal of
Productivity and Performance Management, 62, 3.
(Based on Chapter 2)
Referred International Journal papers (Under review/in process)
Sultana, M., Rahman, A. and Chowdhury, S. (2012), The Potential and Effectiveness of
Performance Based Maintenance Contracting for Road Infrastructure Systems of
Developing Countries, submitted to Journal of Infrastructure Systems.
(Based on Chapter 5, 6 and 7)
Sultana, M., Rahman, A. and Chowdhury, S. (2012), A Case Study on the Problems and
Prospects of Improving the Road Infrastructures Maintenance System of Bangladesh (in
process).
(Based on Chapter 3, 4 and 7)
Referred International Conference papers
Sultana, M., Rahman, A. & Chowdhury, S. (2012), An Overview of Issues to Consider
Before Introducing Performance-Based Road Maintenance Contracting, World
Academy of Science, Engineering and Technology, International Conference on
Transportation and Logistics Engineering, February 19-21, 2012, Kuala Lumpur,
Malaysia. WASET, 350-355.
(Based on Chapter 2 and Chapter 6)
ix
GLOSSARY OF TERMS
ADB = Asian Development Bank
ADP = Annual development Programme
ARMP = Annual Road Maintenance Plan
BOOT = Built Operate Own Transfer
BoQ = Bill of Quantity
BRTA = Bangladesh Road Transport Authority
DBB = Design Bid Build
DFID = Department for International Development of the United Kingdom
FY = Fiscal Year
HDM = Highway Design and Management
IBRD = International Bank of Reconstruction and Development
IDA = International Development Association
IRF = International Road Federation
JBIC = Japan Bank for International Cooperation
LGED = Local Government Engineering Department
OECF = Overseas Economic Cooperation Fund
PBMC = Performance Based Maintenance Contracting
RHD = Roads and Highways Department
RTA = Road Transport Authority of New South Wales
TIB = Transparency International Bangladesh
xi
TABLE OF CONTENTS
Abstract .............................................................................................................................. i
Statement of Originality .................................................................................................. iii
Acknowledgement ............................................................................................................ v
List of Research Publication ........................................................................................... vii
Glossary of Terms ........................................................................................................... ix
List of Figures ............................................................................................................... xvii
List of Tables ................................................................................................................. xix
CHAPTER ONE INTRODUCTION .............................................................................. 1
Overview .................................................................................................................. 1 1.
Background of the Research .............................................................................. 3 1.1.
Objectives of the Research................................................................................. 4 1.2.
Research Design ................................................................................................ 4 1.3.
Significance of the Research .............................................................................. 4 1.4.
Outline of the Thesis .......................................................................................... 5 1.5.
CHAPTER TWO PERFORMANCE BASED MAINTENANCE CONTRACTING- A
LITERATURE REVIEW ................................................................................................. 7
Performance Based Maintenance of Road Infrastructure by Contracting (PBMC) . 7 2.
Brief History of PBMC ...................................................................................... 7 2.1.
Key focus of PBMC ........................................................................................... 8 2.2.
Problems of Traditional Methods of Contract ................................................... 9 2.3.
Escalation of cost and time ....................................................................... 10 2.3.1.
Poor Quality of Work ............................................................................... 12 2.3.2.
Inadequate Motivation .............................................................................. 13 2.3.3.
No Proper Risk Sharing ............................................................................ 13 2.3.4.
xii
Overhead and Supervision Cost ............................................................... 14 2.3.5.
Delay in Project Completion .................................................................... 15 2.3.6.
High Level of Political Influence and Corruption .................................... 16 2.3.7.
Lack of Proper Training in the Public Sector ........................................... 17 2.3.8.
Benefits of Using Performance Based Maintenance Contracting.................... 18 2.4.
Cost Savings ............................................................................................. 18 2.4.1.
Reduction of Administrative Cost and Increase in Proficiency ............... 22 2.4.2.
Introduction of Innovation ........................................................................ 23 2.4.3.
Reduction of Delay and Impact on Public ................................................ 24 2.4.4.
User Satisfaction ....................................................................................... 24 2.4.5.
Risk Sharing by Contractors ..................................................................... 24 2.4.6.
Assurance of Quality ................................................................................ 26 2.4.7.
Availability of Initial Funding Sources .................................................... 26 2.4.8.
Sustainable Road Management System and Assurance of Long-Term 2.4.9.
Funding……………………. .................................................................................. 27
Increase in Flexibility ............................................................................... 28 2.4.10.
Increase in Transparency and Reducing the Chance of Corruption ......... 28 2.4.11.
Key requirements of PBMC ............................................................................ 29 2.5.
Performance Indicators .................................................................................... 30 2.6.
Performance Monitoring .................................................................................. 33 2.7.
Scope of Work in PBMC ................................................................................. 35 2.8.
Drawbacks and Impediments of PBMC .......................................................... 36 2.9.
Drawbacks of PBMC ................................................................................ 36 2.9.1.
Impediments to PBMC ............................................................................. 39 2.9.2.
Conclusion ....................................................................................................... 41 2.10.
xiii
CHAPTER 3 PBMC IN DEVELOPING COUNTRIES: CASE STUDY-
BANGLADESH ............................................................................................................. 43
Case Study- Bangladesh ......................................................................................... 43 3.
Road Network System of Bangladesh ............................................................. 44 3.1.
Goal of the RHD ...................................................................................... 45
A Brief Overview on Assets of the RHD ................................................. 46
A Brief Overview of the RHD Management and Personnel .................... 47 3.1.3.
TYPES OF ROAD MAINTENANCE COVERED BY THE RHD ................ 48 3.2.
Road Maintenance System of the RHD ........................................................... 48 3.3.
Present Situation of Road Maintenance of Bangladesh ................................... 50 3.4.
Improving the Road Maintenance of Bangladesh ............................................ 51 3.5.
Performance-Based Routine Road Maintenance Component in 3.5.1.
Bangladesh ............................................................................................................. 53
Conclusion ....................................................................................................... 54 3.6.
CHAPTER FOUR RESEARCH DESIGN ................................................................... 55
Introduction ............................................................................................................ 55 4.
Research Design and Methodology ................................................................. 55 4.1.
Research Questions .......................................................................................... 57 4.2.
Data collection process .................................................................................... 57 4.3.
Initial Data Collection .............................................................................. 58 4.3.1.
Design of Questionnaire Survey ............................................................... 58 4.3.2.
Selection of the Sample ............................................................................ 61 4.3.3.
Structure of Interview ............................................................................... 61 4.3.4.
Analysis of Data ............................................................................................... 62 4.4.
Conclusion ....................................................................................................... 62 4.5.
CHAPTER FIVE INSIGHTS FROM THE SURVEY AND INTERVIEWS ............... 65
xiv
Findings of the survey and interviews .................................................................... 65 5.
Questionnaire Survey Part 1: Details of the Respondents ............................... 65 5.1.
Questionnaire Survey Part 2: Traditional Method of Contracting ................... 67 5.2.
Budget/Cost of Projects ............................................................................ 67 5.2.1.
Project Schedule and Scope ...................................................................... 69 5.2.2.
Project Funding ........................................................................................ 72 5.2.3.
Quality of Work ........................................................................................ 74 5.2.4.
Skill of Staff ............................................................................................. 77 5.2.5.
Administrative and Supervision Costs ..................................................... 78 5.2.6.
Mismanagement/Political Influence ......................................................... 78 5.2.7.
Risk Sharing ............................................................................................. 80 5.2.8.
Questionnaire Survey Part 3 ............................................................................ 81 5.3.
Risk Sharing by Contractors ..................................................................... 81 5.3.1.
Assurance of Quality ................................................................................ 82 5.3.2.
Improves efficiency .................................................................................. 84 5.3.3.
Introduction of Innovative Technology .................................................... 84 5.3.4.
Get expertise ............................................................................................. 85 5.3.5.
Increases Transparency............................................................................. 86 5.3.6.
Increases Customer Satisfaction ............................................................... 87 5.3.7.
Secures Long Term Funding .................................................................... 88 5.3.8.
Fast Delivery of Projects .......................................................................... 88 5.3.9.
Achieves Cost Savings ............................................................................. 89 5.3.10.
A Better Alternative.................................................................................. 90 5.3.11.
Technical Feasibility................................................................................. 90 5.3.12.
Barriers of Introducing PBMC ................................................................. 91 5.3.13.
xv
Insight from the Interviews .............................................................................. 93 5.4.
Conclusion ....................................................................................................... 98 5.5.
CHAPTER SIX CHALLENGES OF PBMC IMPLEMENTATION IN DEVELOPING
COUNTRIES .................................................................................................................. 99
Implementing PBMC in developing countries ....................................................... 99 6.
Challenges for the Developing Countries ........................................................ 99 6.1.
Support from the Government ................................................................ 100 6.1.1.
Dependency on External Funding .......................................................... 101 6.1.2.
Political Influence and Corruption ......................................................... 103 6.1.3.
Lack of Experience and Knowledge on PBMC...................................... 104 6.1.4.
Lack of Planning ..................................................................................... 105 6.1.5.
Challenges in Estimating the Cost .......................................................... 106 6.1.6.
Fear of Losing Job .................................................................................. 106 6.1.7.
Performance and Attitude of Contractors ............................................... 107 6.1.8.
Monitoring the Cost Savings .................................................................. 107 6.1.9.
Loss of Competition ............................................................................... 108 6.1.10.
Loss of Control of the Network .............................................................. 109 6.1.11.
Issues to be considered before the introduction of PBMC ............................ 109 6.2.
Setting a Performance Standard ............................................................. 110 6.2.1.
Expertise of the Private Sector ............................................................... 110 6.2.2.
Deciding the Project in the Early Stage of PBMC ................................. 111 6.2.3.
Risk exposures ........................................................................................ 112 6.2.4.
Performance Monitoring......................................................................... 113 6.2.5.
Employee Issue ....................................................................................... 113 6.2.6.
Payment and Termination of the contract .............................................. 114 6.2.7.
Potential of PBMC in Bangladesh ................................................................. 115 6.3.
xvi
Potential of PBMC in Developing Countries ................................................ 116 6.4.
Conclusion ..................................................................................................... 117 6.5.
CHAPTER 7 CONCLUSION AND SUGGESTIONS FOR FUTURE RESEARCH 119
INTRODUCTION ................................................................................................ 119 7.
Contribution of this thesis .............................................................................. 119 7.1.
Limitations of this research ............................................................................ 124 7.2.
Recommendation for future research ............................................................. 125 7.3.
Closure ........................................................................................................... 126 7.4.
Appendices ................................................................................................................... 127
Appendix 1 ................................................................................................................... 129
Appendix 2 ................................................................................................................... 139
Appendix 3 ................................................................................................................... 143
Appendix 4 ................................................................................................................... 155
Appendix 5 ................................................................................................................... 157
Appendix 6 ................................................................................................................... 159
REFERENCES ............................................................................................................. 165
xvii
LIST OF FIGURES
Figure 1-1: A flow chart outlining the structure of the thesis. ......................................... 5
Figure 2-1: Scope of work in PBMC (Zietlow 2007) ..................................................... 36
Figure 3-1: Total value of the RHD assets (in Million US$) (RRD 2001). ................... 47
Figure 3-2: The RHD makes temporary arrangements to repair Dhaka-Mymensingh
highway (Khan, P 2011). ................................................................................................ 51
Figure 4-1: Flow chart for Research Process................................................................. 56
Figure 5-1: The percentage of responses on projects’ completion by achieving the
target. .............................................................................................................................. 70
Figure 5-2: The Percentage of Projects regarding extension of time. ............................ 71
xix
LIST OF TABLES
Table 2-1: Cost savings of Different countries using PBMC over traditional method of
contracts (Pakkala 2002). ............................................................................................... 19
Table 2-2: Cost savings in different parts of Australia and New Zealand (Frost 2001). 20
Table 2-3: Typical performance standards and their influence on roads (Zietlow 2005).
........................................................................................................................................ 31
Table 2-4: Examples of performance standards applied in different contracts .............. 32
Table 2-5: Examples of Performance Specified Road Maintenance Contracts as of
Dec.1998 (Zietlow & Bull 1999) .................................................................................... 32
Table 3-1: Summary of the road network under the RHD (RHD 2012). ...................... 46
Table 3-2: Progress of Performance-Based Routine Road Maintenance Component
(PBRRMC) (ADB 2010c): ............................................................................................. 54
Table 5-1: Summary of the result on the background of respondents. ........................... 66
Table 5-2: The percentage of responses on budget/cost of projects. .............................. 68
Table 5-3: Summary of analysis on road maintenance projects data of Bangladesh. .... 68
Table 5-4: Factors that contribute mostly to projects' failure to complete in scheduled
time. ................................................................................................................................ 71
Table 5-5: The percentage of responses ranking common factors that contribute towards
the delay of contractors' payment. .................................................................................. 73
Table 5-6: The percentage of responses on quality of work........................................... 75
Table 5-7: The percentage of responses regarding skill of staff..................................... 77
Table 5-8: The percentage of responses on mismanagement, political influence or
corruption. ...................................................................................................................... 79
Table 5-9: The percentage of responses on risk sharing between the client and
contractors. ..................................................................................................................... 80
Table 5-10: The percentage of responses on risk sharing by contractors. ...................... 82
Table 5-11: The percentage of responses on assurance of quality. ................................ 83
Table 5-12: The percentage of responses on improving efficiency of the RHD staff. ... 84
xx
Table 5-13: The percentage of responses on the introduction of innovative technology
by using PBMC. ............................................................................................................. 85
Table 5-14: The percentage of responses regarding getting expertise by contractors.... 86
Table 5-15: The percentage of responses regarding increase in transparency. .............. 86
Table 5-16: The percentage of responses regarding increase in customer satisfaction. . 87
Table 5-17: The percentage of responses regarding securing long term funding. ......... 88
Table 5-18: The percentage of responses on the fast delivery of work under PBMC. ... 89
Table 5-19: The percentage of responses on cost savings. ............................................. 89
Table 5-20: The percentage of responses on technical feasibility of the RHD. ............. 91
Table 5-21: The percentage of responses on barriers during the implementation of
PBMC. ............................................................................................................................ 92
1
CHAPTER ONE
INTRODUCTION
OVERVIEW 1.
A strong road infrastructure system is the key component for poverty eradication and
economic sustainability. It is the backbone of economic growth of a country. Road
authorities are responsible for the construction and maintenance of the road network
system. Controlling the cost of maintenance as well as keeping the road infrastructure in
an efficient state is a very important issue for a road authority. Road authorities use
various traditional methods of contracting for road construction and maintenance such
as lump sum contracts, unit price contracts, prime cost contracts, design and build (DB)
contracts, design, bid and build (DBB) contracts and build own operate transfer
(BOOT) contracts.
The traditional methods of contracting for the road maintenance work is based on the
amount of work done and payment is given on the basis of a mutually agreed unit rate
with the contractors (Zietlow 2004). Experience and existing literature suggests that the
road authorities face difficulties in controlling quality, time, and cost using the
traditional methods of contracting. Escalation of cost and time, delays in completion of
maintenance projects, lack of proper training in the public sector, high level of political
influence and corruption are the main problems associated with the traditional methods
of contracting. In the late 90’s, road authorities of many countries started to introduce a
new maintenance contract which is more effective in resolving the short comings and
problems associated with traditional methods of contracting. The new method is called
performance based maintenance contracting (PBMC). It has the potential of reducing
road maintenance cost by 10% to 50%. Road authorities can reduce the agency risk and
agency administrative burden by using PBMC (Zietlow 2005). As performance based
maintenance contracts had huge success records in minimising infrastructure
2
maintenance costs in many developed and developing countries over the last two
decades, PBMC has received enormous attention from researchers and practitioners.
PBMC is a method under which contractors have to plan, design and implement
maintenance activities in order to achieve short and long term road condition standards
for a fixed price, subject to specified risk allocation (Frost & Lithgow 1998). In PBMC,
contracts are awarded to the contractors on the agreement that they will meet the
minimum standards of performance measures of roads set by the governments’ road
authorities. The contractors have to share higher risk and obligations of the road
maintenance work with the client in comparison with the earlier type of contracts. They
are also responsible for the design and implementation of the maintenance projects in
PBMC. The main reasons for implementing PBMC are as follows:
reduce the road maintenance costs by applying more effective and efficient
technologies and work procedures;
provide transparency to the road users, road administrations and contractors in
terms of the conditions in which the roads have to be maintained;
improve control and enforcement of quality standards and overall road
conditions (Zietlow 2005).
Since, the concept of PBMC is new for road authorities and contractors alike, close
cooperation between both parties is vital for success. Both sides have to be comfortable
with the contractual arrangement and understand the risks involved. In all PBMC, that
have been let until now, road authorities and contractors have closely worked together
in preparing the bidding documents (Zietlow 2005). In some countries, such as
Uruguay, the road authority, which was used to prepare bidding documents without
consulting contractors, had to adjust to the new situation, because of a lack of interest
from contractors to embark on the new contracting scheme. In the United States, it was
the contractor, who actually initiated the process and presented a draft of the bidding
documents to the road administration. In this case, the Virginia State Parliament had to
pass a law first to allow for unsolicited bids to be accepted by the Virginia Department
of Transportation. In almost all the other PBMC, competitive-bidding procedures have
been followed after pre-qualification of potential contractors. Especially in the case of
pilot schemes, the qualification of the contractor is a major factor besides the overall
price. Therefore, the contractor who offers the lowest price does not necessarily win the
3
contract (Zietlow 2005). Although PBMC is very successful in western developed
countries, unfortunately developing countries have faced problems in implementing this
type of contract.
BACKGROUND OF THE RESEARCH 1.1.
The government has to face economic losses and road users have to spend a lot of
money on the maintenance of vehicles due to the poor condition of roads. Road
maintenance cost is a burden for road authorities in developing countries due to the
constant pressure of constructing new roads and shortage of funding for road
maintenance. PBMC is a new approach which has been successfully used for efficient
road maintenance and management systems in many developed and developing
countries. However, implementation of PBMC in a country requires long term planning
and a constant source of funding (Sultana et al. 2013). Developing countries are still
lagging behind in the successful implementation of PBMC. This research examines the
implementation and effectiveness of PBMC in developing countries. As a part of the
research, a case study has been conducted in Bangladesh.
Bangladesh is a small developing country in South Asia with a land area of 147570 sq.
km. The government of Bangladesh has faced various challenges to construct and
maintain the massive transportation system consisting of 140000 km of roads, 2700 km
of rail paths, 5970 km of perennial and seasonal waterways, two major seaports and
seven airports. The assorted geographical features increase the cost of establishment and
maintenance of transportation network. The road network system of Bangladesh will be
considered as a case study in this research. The major road network system of
Bangladesh is maintained under the Roads and Highways Department (RHD). The
RHD of Bangladesh is struggling to properly maintain the road infrastructure system by
using various traditional methods of contracting with limited funding.
The literature review of this research focuses on the introduction of PBMC for road
infrastructure maintenance. It also includes discussion on the countries that are
successfully using the method. The literature review will also discuss the disadvantages
of traditional methods of contracting as well as advantages and disadvantages of PBMC.
The literature review will also include the discussion on the present condition of the
road network system of Bangladesh.
4
This research will study the problems associated with the use of traditional methods of
contracting in brief and the potential prospects and challenges of implementing PBMC
in developing countries. This research has reviewed as many countries as possible to
use their experience of implementing PBMC in maintaining the road infrastructure
system of developing countries.
OBJECTIVES OF THE RESEARCH 1.2.
Research always sets up goals and tries to achieve the goals by presenting a valid and
scientific conclusion. Hence, the objectives of this research project are as follows:
examine the potential of PBMC for improving the road infrastructure
maintenance in developing countries.
analyse the benefits of introduction and implementation of PBMC for road
maintenance.
investigate the disadvantages of introducing PBMC in a country.
analyse the challenges or problems that can causes the failure of PBMC during
its introduction in a country.
RESEARCH DESIGN 1.3.
PBMC has been introduced in many developed and developing countries. However,
research is necessary to find out how PBMC can be used as an alternative method for
improving the quality of road management and maintenance in developing countries,
considering Bangladesh as a case study. The methodology of the research is designed to
answer the research questions and fulfil the research objectives. A large number of
published reports, journals and conference papers have been reviewed and analysed to
achieve the research objective. A series of questionnaire surveys and interviews have
also been conducted to fulfil the research objective.
SIGNIFICANCE OF THE RESEARCH 1.4.
PBMC can make road maintenance a most desirable business for the contractors.
However, the significance of this research is to implement PBMC as a cost and time
effective method for the maintenance and management of road network system of
5
developing countries. This research is necessary to find out the research gap in
implementation of PBMC in developing countries. However, the significance of this
research can be summarised as follows:
presenting the benefits of PBMC to improve the road infrastructure maintenance
system in developing countries.
analysing the challenges that can create hindrance in successful implementation
of PBMC in a developing country.
presenting an overview of issues that should be considered before introducing
PBMC in a country.
OUTLINE OF THE THESIS 1.5.
This thesis consists of seven chapters and a reference section. The outline of the thesis
has been diagrammatically shown in Figure 1-1 which is presented in the next page.
Figure 1-1: A flow chart outlining the structure of the thesis.
Chapter 1 provides an introduction to performance based maintenance contracting
(PBMC). It clearly outlines the importance of PBMC for road maintenance. This
chapter also presents research objective, methodology and significance of the research.
Chapter 1 Introduction
Chapter 4 Research Design
Executive Summary
Chapter 5 Insights from Survey and Interview
Chapter 6 Challenges of PBMC Implementation in Developing Countries
Chapter 2
Performance Based Maintenance
contracting- A Literature Review
Chapter 3
PBMC in Developing Countries: Case Study-
Bangladesh
Chapter 7 Conclusion
6
Chapter 2 provides a detailed review of literature on various aspects of PBMC,
problems of traditional methods of contracting, advantages and drawbacks of PBMC.
Chapter 3 contains an overview of the road network system and the present status of
road maintenance of Bangladesh. It also discusses the potential sides of improving the
road maintenance system of Bangladesh.
Chapter 4 discusses the research design and methodology, defines research questions
and describes the steps followed to answer the research questions. It also includes the
process of collecting data, describes the preparation of questionnaire survey and
interview.
Chapter 5 presents the analysis and findings of the questionnaire surveys and
interviews which finally draw out the outcome of the research.
Chapter 6 presents the summary of the challenges of implementing PBMC in
developing countries. It also presents an overview of issues to consider before
implementing PBMC in a country.
Chapter 7 presents contribution and limitations of this research, future scope for
research, and conclusion of the research.
7
CHAPTER TWO
PERFORMANCE BASED MAINTENANCE CONTRACTING- A
LITERATURE REVIEW
PERFORMANCE BASED MAINTENANCE OF ROAD 2.
INFRASTRUCTURE BY CONTRACTING (PBMC)
Performance based maintenance contracting (PBMC) reduces the cost of road
maintenance works. Cost savings in PBMC have been achieved mainly through better
resource allocation, the introduction of new technologies and work procedures, and the
training of staff and contractors. At the same time, contractors are maintaining the road,
bridge, and traffic assets to a higher standard than previously applied to the same assets.
It also bestows good customer service by providing transparency to the road users and
administrators. The overall road condition develops as this method focuses on
developing the quality of work. In this contracting method, contractors may need to
carry on 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 made after checking if the contractor is meeting the
performance standards defined in the contract properly (Zietlow 2005).
BRIEF HISTORY OF PBMC 2.1.
Road infrastructure maintenance professionals started to implement PBMC in the early
90s with the realization that it could resolve the short comings and problems associated
with the traditional methods of contracting. PBMC was first used by British Columbia,
Canada in 1988. The successful applications of PBMC have also been observed in
many other developed and developing countries such as in Argentina (1990), Australia
(1995), USA (1996), Uruguay (1996), Chile (1997), New Zealand, Colombia, Brazil
(1998), and Peru (1998) (Zietlow 2005). This trend has spread to other developed and
8
developing countries in Europe, Africa and Asia, e.g., UK (known as Managing Agent
Contracts), Sweden, Finland, Netherlands, Norway, France, Estonia, Serbia and
Montenegro (8% of national roads), South Africa (100% of national roads), Zambia,
Chad (17% of all season roads), the Philippines (231 km or 140 miles of national roads)
(Stankevich et al. 2005). PBMC are also referred to as “Performance-based contracts
(PBC) ”, “output-based aid by the World Bank (OBA)”, “Asset Management Contracts”
(in USA), “Performance specified maintenance contracts” in Australia and New
Zealand (PSMC)”, “Performance–based road maintenance contracts (PBRMC)”,
“CREMA (Contrato de Recuperation y Mantenimiento which means Contract for
Rehabilitation and Maintenance) ” in Argentina and other Latin American countries.
PBMC are referred to as “Managing Agent Contracts” (MAC) in the UK. In Finland,
they refer to PBMC as “Area Maintenance Contracts” (Stankevich et al. 2005).
KEY FOCUS OF PBMC 2.2.
Performance-based contracts essentially are fixed price contracts. But they often do
contain a schedule of prices for emergency works. If sections of the road in question
are in poor condition, the contract should include the rehabilitation of these sections as
well. Rehabilitation works may be carried out following the traditional form in this case,
with official design and paid on the basis of unit prices as in the cases of Chile,
Colombia and Uruguay. Or alternatively, final design of rehabilitation works can be left
to the contractor and payment for these works can be included in the lump sum contract
price. Argentina has taken this approach whereby 55% of the lump sum works has been
paid in three instalments during the first year (rehabilitation period) and 45% in 48
equal monthly instalments in the years two to five of the five-year contract period. To
include the initial rehabilitation works in the Performance-based Contracts has two main
advantages: first, it gives the contractor incentives to perform well on the rehabilitation
works to avoid premature repairs which would increase maintenance cost, and second, it
insures that maintenance will start immediately after the rehabilitation works have been
finished (Zietlow 2005).
9
Therefore, PBMC has some key focuses which makes this method better than other
traditional methods of contract. The key characteristics of PBMC have been
summarised as follows by reviewing the literature of, Silva and Liautaud (2011),
Stankevich et al. (2005), Frost and Lithgow (1998):
PBMC focuses on contractors’ performance to achieve a minimum level of
service rather than inputs and road users’ satisfaction;
Contractors are bound to share the risk of the project with the owner;
The contractors are required to set up their own quality control system in order
to reduce the need for time and supervisory staff;
Promote lump-sum contracts in order to reduce the risk of cost overruns;
Require the Contractor to carry out a detailed engineering design before
initiating the works, thus reducing the delays that are due to a lack of stock of
prepared sub-projects;
Road authorities have to ensure a constant source of funding for road
maintenance;
Introduce innovation on part of the contractors in the programming and
execution of works by making payments tied to end results and level of service
rather than to rigid specifications related to workmanship.
The next section will discuss the problems of traditional methods of contract.
PROBLEMS OF TRADITIONAL METHODS OF CONTRACT 2.3.
In traditional methods of contracting, the road authority or project owner selects the
consultant for the design of the project and the contractors are decided by the
competitive bidding procedure. Governments’ road authorities in many countries have
faced problems regarding routine and periodical maintenance done by an in-house
labour force based on the unit price method. Engineering Maintenance is not just
cosmetic in nature. Road Maintenance is directed to preserving the value of the roads
assets by preserving the durability of the roads and bridges. Without maintenance the
value of these assets will rapidly deteriorate. Moreover, the problems are severe in
developing countries as their road authorities are always struggling to manage funding
for the maintenance of their roads after the roads are constructed. A single rehabilitation
is estimated to cost three to four times the amount that should have been spent on
10
routine and periodic maintenance of roads. If the road network system is not maintained
properly national economic growth is probably slowed by about one per cent of GDP
each year (RRD 2001). The respective government department has to go through a long
term step by step process in traditional methods of contracting. Especially in the case of
large road maintenance projects where many organisations such as external funding
party and consultants are involved and all these factors make it difficult to make the
right decisions.
Public transportation agencies retained tight control over the design and construction of
the highway systems in Europe. In the late 1980s, European agencies began to make
significant changes to contract administration techniques. Some of the most significant
drivers of change in Europe are as follows: growing infrastructure needs, inadequate
public funds, insufficient and diminishing staff, lack of innovation in delivery, slow
product delivery and delays, cost overruns, adversarial relationships, claims-oriented
environments, perceived lack of maintenance efficiency, new European union
directives, user frustration, and political discontent (Carpenter et al. 2003).
However, the common problems observed in traditional methods of road maintenance
contracts based on the literature are as follows:
Escalation of cost and time;
Poor quality of work;
Inadequate motivation;
No proper risk sharing;
Overhead and supervision cost;
Delay in project completion;
High level of political influence and corruption and
Lack of proper training in the public sector.
The problems are discussed in the following section.
Escalation of cost and time 2.3.1.
Construction and maintenance of the road network system involve a large amount of
money. Road authorities give more priority to the construction of new roads than the
maintenance of older roads due to various reasons. When an underprivileged old road
11
badly needs maintenance, the rehabilitation work is delayed due to bureaucracy. In the
traditional method of contracting, the relevant authority has to go through a long
process starting from inspection of sites, planning of maintenance works, allocation of
funds, preparation of tender document, tender bidding, selection of contractors and
finally implementation of the work. The whole process takes such a long time that the
road becomes more deteriorated which consequently increases the maintenance work
and cost.
The traditional Design-Bid-Build (DBB) method uses a two-step process separating the
planning and design phase from the construction phase. Generally, the public agency
and their consultants accomplish the design part and the private sector procures the
subsequent construction contract. Contractors are selected almost always by a “low-bid”
approach in DBB. This method has worked well for many projects in delivering quality
work for the lowest bid price. This is particularly true for those projects where the work,
and the public agency’s management procedures, are well understood by the contracting
community and where there is relatively low uncertainty in the work or conditions,
particularly geotechnical conditions (Reilly 2009). But the system is slow and does not
favour a life cycle cost approach to projects (Carpenter et al. 2003). As stated by Reilly
(2009), pressures resulting from the low-bid environment in DBB have resulted in
substantial cost and schedule increases. Frequently, these increases occur in a non-
productive, inefficient, adversarial work environment leading to further claims by
contractor, disputes and costly litigation. This often results in a substantial increase in
cost and time during construction that might otherwise be avoidable.
The growing population in USA was continuously placing increased demands on the
aging road network and highways. At the same time, government entities were faced
with uncertain fiscal conditions (Segal et al. 2003). For example, the Florida
Department of Transportation (FDOT) of USA acquainted a 12.4 per cent cost overrun
and a 30.7 per cent time overrun on the 375 traditional low-bid contracts in 1997-98
(Carpenter et al. 2003; FDOT 2000).When preventative maintenance was often
rescheduled due to various reasons, outsourcing through public/private partnerships
offered a solution to several road authorities of USA to improve quality and save money
(Segal et al. 2003). After analysing more than 700 FDOT transportation projects, it was
found by Vidalis and Najafi (2002) that the majority of cost and time overruns were due
12
to design factors, changed conditions, and designer errors and omissions by the
consultants. Time and cost overrun due to unpredictable events cannot be evaded, but
delay caused by plan, design, and implementation-related issues can be resolved by
using the alternative method of contracting. A review paper of FDOT (2000) identified
three areas which needed improvement of the department’s bid and contract
administration procedure which are as follows:
1) The provision for adjusting the prices for minor items which may result in cost
overrun in a project was not included in the contract of FDOT. The FDOT was
trying to reduce cost overruns because of unbalanced bids in minor items. 108
contracts were investigated during the preparation of this report and they found
out that the department had paid a total premium of $702,000 as extra work was
required on minor items bid with high unit prices (FDOT 2000).
2) The department made advance payments to some contractors whose construction
contracts contained work items in early project phases that were priced
substantially above average bid prices. This resulted in the contractors receiving
higher than reasonable progress payments and the department lost potential
income through interest (FDOT 2000).
3) Construction engineering and inspection work by consultants appears to be
costlier than similar work by department staff. The department needs to continue
efforts to reduce consultant costs (FDOT 2000).
However, escalation of cost and time has a direct impact on the construction industry
and the economy. Road engineers are always seeking for a better solution to this
problem.
Poor Quality of Work 2.3.2.
The traditional low bid project delivery method does not select contractors on the basis
of qualifications or proven ability to perform similar projects in the past (Kwak &
Bushey). This study finds out that some traditional methods of contracting have
included the prequalification of contractor prior to bidding to improve the quality of
work. However, these methods still select the contractors depending on the competitive
13
unit price bidding. There is a risk that contractors may compromise with quality in order
to reduce the cost.
Inadequate Motivation 2.3.3.
Lack of motivation of the contractors to do better quality work in traditional methods of
contracting is a major cause of cost overrun. In many cases, contractors neglect small
maintenance works which can be critical in the future if left unattended for a long time.
As the payment is based on a lump sum work in a traditional method of contract, the
contractors only concentrate on conferring a huge amount of works to maximise their
earnings (Hartwig et al. 2005). Above all, contractors do not even pay attention to
improve the quality of service or reduce the maintenance cost by introducing new
technologies because of the short term nature of the contract.
Chad first started to contract out all road maintenance works to private contractors in
1994. As they were continuously using the traditional civil works contractual
arrangements for road maintenance, the improvements were not satisfactory. This
contracting approach has generated a vicious circle of heavy rehabilitation works
followed by long periods of neglect and thus rapid deterioration (Hartwig et al. 2005).
The contractors are not adequately motivated by the short-term traditional contracts to
improve the quality of service or reduce the maintenance cost or to use new
technologies. Modifications in traditional methods of contracting are inevitable to
improve the condition.
No Proper Risk Sharing 2.3.4.
In the DBB method, the owner agency meets up with all the requirements of
construction during the design phase, which includes finalising specified drawing, an
estimation of works and arranges necessary permission from other authorities. After
completion of design, a competitive bidding process is organised to take the project to
the construction phase. The main purpose of the process is to reduce the risk to the
contractor by defining most of the unknown conditions. This is the limitation of the
method because a contractor can leave behind the project without the assurance of
quality as he need not take any risk (Carpenter et al. 2003).
14
On the other hand, the bidder who bids the lowest price is awarded the contract over the
second-lowest bidder who might have bid a slightly higher amount. According to Reilly
(2009), this does not always mean the lowest cost. In order to become the lowest bidder,
the contractor either determines to deliver the work at a minimum quality level or has an
expectation that any insufficiency in cost can be made up by changes caused by new
agency requirement, changed site or environmental conditions, defects in the design or
other strategies that will accrue to his advantage (Reilly 2009). Thus this type of
contract increases the risk of the owner depending on how the terms are interpreted in
the contract document. Robinson et al. (2006) added that under the contract language
the contractors are only obligated to barely achieve the performance criteria and targets.
Therefore, they will be willing to maintain the road asset at the existing level. They will
not improve the condition of roads in order to minimise the cost.
This study also suggests that the risk sharing between the owner and the contractor is
necessary to improve the quality of road construction and maintenance work. This
option can help the owner to reduce the burden of cost overrun and poor quality of
work.
Overhead and Supervision Cost 2.3.5.
The government’s road authority is accountable for the supervision of any project in the
traditional method of contracting. More than two parties (Government, consultant, and
contractor) are involved in many construction and maintenance projects. A considerable
amount of proficient and expert personnel have to be hired and paid by the
administration to inspect the contractors’ performance and for co-ordination and
integration of work which increases cost (Carpenter et al. 2003; Hardy 2001).
Moreover, lack of plan, administrative capacity and supervisory staff can be a hindrance
to the effective road maintenance. As stated by Hartwig et al. (2005), these factors
caused problems in Chad during transferring the road maintenance to the private sector.
Hardy (2001) argued that cutting down of staff is only commendable if the road-users
are satisfied by using the roads maintained under PBMC. Therefore, overhead and
supervision cost is a problem when the road authority has to pay extra money and hire
employees for the supervision of work.
15
Delay in Project Completion 2.3.6.
A direct consequence of traditional methods of contracting is their contribution in
delaying the completion of the projects as per the schedule. This research has reviewed
14 journal articles which discusses delay in project completion using traditional
methods of contracting
For example, many building and residential construction projects in Kuwait have failed
to be finished in due time because of inefficiency. The contractor and consultant group
ranked slow progress in decision making process by client’s organisation as one of the
top ranked factors. The reasons are that the client organisation (Government) is large
and in most of the cases associated with problems like poor management, bureaucracy
and sometimes corruption (Al-Tabtabai 2002).
Ogunlana et al. (1996) compared the findings of their survey on the impact of time and
cost overrun of high-rise building construction projects in Bangkok, Thailand with
similar research done in other developing countries. According to the study, delays in
completion of projects are caused because of scarcity of materials, lack of expert
technical and managerial personnel, frequent changes in orders and slow decision
making by the owner. They also identified that in developing countries contractors had
to work under special constraints different from developed countries. The problems can
only be solved by giving special attention and proper training. Memon et al. (2011)
discussed the effects of construction delays in Majlis Amanah Rakyat (MARA) large
construction projects in Malaysia. Abdullah et al (2010) said that contractors did not
have enough money to start the assigned project due to the ineffective loan option in
Malaysia. Alaghbari et al. (2007) also discussed similar financial difficulties of the
Malaysian construction industry.
A survey on three groups (the owners, contractors and consultants) of Ghana identified
delays in monthly payment, difficulties from agencies, poor contractor management,
material procurement, poor technical performances, and escalation of material prices are
the top five main causes of delay in construction (Frimpong et al. 2003). Fugar and
Agyakwah-Baah (2010) also agreed that manpower, material and equipment shortage
are the common problems in the construction sector of Ghana.
16
Nguyen et al. (2004) identified five critical factors for a successful project which are a
competent project manager, adequacy of funding throughout the completion of project,
skilled project team, commitment to project and availability of resources. Chua et al.
(1999) also mentioned adequacy of plans and specifications. Long et al. (2004)
identified the top ranked causes of delay in the Vietnam construction industry which
were incompetent designers and contractors, poor estimation and change management,
social and technological issues, site related issues and improper techniques and tools.
The survey of Odeh and Battaineh (2002) conducted in Jordan, mentioned that owner
interference, inadequacy in contractors’ experience, financing and delay in payment
were among the top four notable factors for both contractors and consultants. Moreover,
factors like labour productivity, poor site management, slow decision making by client,
construction methods, improper planning and subcontractors are also mentioned by the
surveyed groups.
High Level of Political Influence and Corruption 2.3.7.
Construction is a $1.7 trillion industry worldwide, amounting to between 5 and 7 per
cent of GDP in most countries. As the construction industry comprises a big and
intricate set of activities where several parties like consultant, contractor and
government closely work together, political influence and corruption are some of the
most common problems of that industry (Kenny 2007). The problem is worse in
developing countries than developed countries. Kenny (2007) presented some cases
where corruption is disclosed in the construction industry. In 2006, the Deputy Mayor
of Beijing who was responsible for urban development and Olympic projects was
dismissed along with nine vice-mayors as they were charged with corruption related to
construction. In the same year, an audit on 21 Chinese highway construction projects at
a cost of $605 million found that as much as a third of that amount had been mishandled
by officials.
A report published by Transparency International Bangladesh (2002) indicated that
there is a widespread recognition within Bangladesh that corruption is endemic and its
roots lie deep in bureaucratic, business and political institutions. The Roads and
Highways Department (RHD) of Bangladesh receives a healthy allocation from the
government's development budget. In Fiscal Year (FY) 1999-2000, RHD's allocation
17
was US $270 million, of which the foreign aid component was 55 per cent. The bulk of
aid funds (83%) came from IDA (International Development Association), ADB (Asian
Development Bank) and OECF (Overseas Economic Cooperation Fund) Japan. Apart
from the 9,000 permanent employees, RHD is burdened with at least an equal number
of temporary lower level staff, who were originally employed under specific projects
but managed to stay in employment with support of the unions and other vested groups.
Not surprisingly, the RHD is grossly over-manned (Transparency International
Bangladesh 2002).
Moreover, a cost-benefit analysis for the selection of new roads to be constructed in
Bangladesh is seldom done except when the project is externally funded. The selection
procedure of new road projects has traditionally been handed over to ministers,
members of parliament, bureaucrats, and the influential local elite, for whom the
construction of a road is an effective means of buying future votes. Thus, many of the
road projects which are initiated have very little to do with national or regional priority
and availability of financial resources. Their influence is so strong that neither the
Planning Commission nor any other relevant agency dare to question the rationalization
of such mandatory projects (Transparency International Bangladesh 2002).
Political influence and corruption are another area of concern for road authorities. They
are always seeking a better method of contracting to resolve or reduce the effect of these
problems.
Lack of Proper Training in the Public Sector 2.3.8.
Shortage of efficient personnel in the right place is a common problem in many
countries. Contractors lack of project management and construction site management
skills also cause cost and time overruns. Most of the contractors’ organization is in need
of professionalism and proper training for their engineers (Al-Tabtabai 2002). The road
authorities and contractors are hardly motivated to provide training for the staff and
engineers when they use the traditional methods of contracting.
This study suggests that the knowledge of understanding and applying construction
project and site management skills of the staff from both road authority and contractors’
organisation should be improved with the development of technology. Regular training
should be provided to the employees to increase the efficiency of the road authority.
18
BENEFITS OF USING PERFORMANCE BASED MAINTENANCE 2.4.
CONTRACTING
The owner and contractors are needed to be motivated and share the construction risk,
have sufficient skilled staff and efficient management system in order to ensure the
successful implementation of a project. This section discusses and analyses the
literature on the benefits of PBMC over the traditional methods of contracts. The
benefits of PBMC identified by the literature review are as follows:
Cost savings;
Reduction of administrative cost and increase in proficiency;
Introduction of innovation;
Reduction of delay and impact on public;
User satisfaction;
Risk sharing by contractors;
Assurance of quality;
Availability of initial funding sources;
Sustainable road management system and assurance of long-term funding;
Increase in flexibility and
Increase in transparency and reducing the chance of corruption.
Cost Savings 2.4.1.
A road authority can save a huge expenditure required for road maintenance by
implementing PBMC. As stated by Frost (2001), a review of evidence reported from
around the world indicates that long term PBMC are consistently delivering lower costs
than any other form of maintenance delivery, and at the same time are generally
delivering higher levels of service and a lower level of risk for the owner.
The contractors are paid in equal monthly instalments if they are able to meet the
specified performance measures mentioned in the contract. So there is no option to
charge for extra work which is common in traditional method of contracts. On the other
hand, road authorities have to manage fewer contracts in the PBMC approach than the
earlier type of contracts. There is no need to measure the large quantities of inputs in
PBMC approach which is essential in unit-rate or lump-sum contracts. As the nature of
19
this approach requires less administrative effort, the road authority can maintain fewer
in-house personnel (Stankevich et al. 2005).
Straub (2009) said that on an average the indirect cost of contractors were 21% lower in
PBMC. He also added that contractors can improve their internal business process with
more efficient manpower, equipment and materials due to the long term nature of
PBMC. This helps to reduce the overhead costs. Examples of countries that have
successfully implemented PBMC have been discussed in this section to deeply
understand the benefits of PBMC. Cost savings of different countries using PBMC over
traditional methods are tabulated after Pakkala (2002) in Table 2-1.
Table 2-1: Cost savings of Different countries using PBMC over traditional method of
contracts (Pakkala 2002).
The road system is one the most important public assets of Australia with a minimum of
US$120 billion invested in its creation over the last century, and several times that
invested in its management and maintenance (Frost 2001). However, Australian road
agencies also struggled to assure the adequate funding for their road maintenance. In
1995, the Australian construction industry was introduced to PBMC (called
performance specified Maintenance Contract, PSMC in Australia and New Zealand) for
the maintenance of a large proportion of the arterial road network in Sydney, New
South Wales. The road transport authority wanted to provide a quality road network
Country Cost Savings, %
Norway About 20-40%
Sweden About 30%
Finland About 30-35%;About 50% less cost/km
Holland About 30-40%
Estonia 20-40%
England 10% minimum
Australia 10-40%
New Zealand About 20-30%
USA 10-15%
Ontario, Canada About 10%
Alberta, Canada About 20%
British Columbia, Canada Some might be in order of 10%
Source: Pakkala (2005)
20
system to road users at a reduced cost, free of the many risks which traditionally retrain
effective road management (Frost & Lithgow 1996).
Analysis of the evidence shows that, on average, schedule of rates and a combination
schedule of rates/lump sum contracts deliver maintenance services at a cost of
approximately 20 per cent lower than the same services delivered by an in-house
workforce. Results of this order, and often higher, are consistently reported by road
agencies across the world. Despite there being a limited number of reported examples of
the long term performance-based contract model, these contracts are consistently
delivering maintenance services at costs of more than 15 per cent lower than the
schedule of rates type contracts (Frost 2001). Examples of the results which have been
reported are tabulated after Frost (2001) in Table 2-2:
Table 2-2: Cost savings in different parts of Australia and New Zealand (Frost 2001).
Area Cost Savings, %
Sydney, New South Wales 38%
Southern Tasmania 20%
South Perth, Western Australia 25%
Mid North Region, Western Australia 30%
North Island, New Zealand 15%
Source: Frost (2001)
It has also been reported that a further six performance based contracts in Western
Australia have delivered savings of between 15 and 25 per cent. These savings are
reported against other forms of maintenance contract, which in themselves have
reported average savings of 20 per cent against in-house operations. Therefore, the
performance based model is consistently delivering savings in excess of 35 per cent
compared to in-house operations (Frost 2001).
Argentina had the lowest share of paved roads in good condition among the upper-
middle income countries in 1990. The government of Argentina now gives
infrastructure development a high precedence to reduce poverty and social imbalance.
The Argentine government introduced PBMC (Called CREMA in Argentina and other
Latin American countries) for road maintenance in 1995 to reduce the administrative
cost of input-based methods such as the need for efficient staff to measure and monitor
activities and additional budget to meet the extra claim demanded by the contractor, to
motivate the contractor to use innovative technology and share the risk of the
21
maintenance work, and to ensure quality services for road users (The World Bank
2010). The first performance-based contracts were a kilometre per month contract with
a life span of four years, covering a network of about 3600 kilometres of paved roads.
By 2002, around 75 per cent of Argentina’s non-concessioned roads were expected to
be operating under CREMA. Argentina estimated that a reduction by 30 per cent of
capital investments was needed due to the implementation of PBMC (Liautaud 2001).
In Latin America, no cost reductions have been reported so far, since no cost
comparison studies have been undertaken. But road conditions have notably improved
on roads that are being maintained under the new contracting scheme (Zietlow 2005).
As stated by Silva and Liautaud (2011), assessing the cost effectiveness of the CREMA
system compared to the more conventional ad-measurement type of contracts was a
difficult exercise for the first generation of CREMA. Indeed, the payment system used
induced significant financial charges that were not easy to determine, and the
contractor’s detailed bill of quantities and unit rates analyses were not readily available
since the contract was let on a lump sum basis, with no obligation from the bidders to
produce up-front their cost analyses and unit rates. Later on, a comparison between the
unit costs of the rehabilitation works of the CREMA to those offered in the more
conventional ad-measurement contracts shows that the long-term performance-based
system is, overall, more cost efficient.
The study of Anastasopoulos et al. (2010) implied that PBMC with longer duration are
more likely to experience cost savings and have a higher amount of cost savings. The
findings also showed that projects with long road segments or very short road sections
tend to perform better under PBMC. Moreover, projects with strong competition, long
duration and extension periods, long outsourced road sections, that incorporate crack
sealing, pothole repair, illumination repair/maintenance, and mowing activities, perform
better under PBMC (Anastasopoulos et al. 2010). However, the application of PBMC is
still at an early stage and road authorities and contractors will gain experience with time
(Zietlow 2007).
This study also suggests that more research and analysis is required from other countries
using PBMC in order to determine the method’s success in terms of cost savings. There
is still a gap in the research in comparing the cost savings between traditional methods
of contracting and PBMC.
22
Reduction of Administrative Cost and Increase in Proficiency 2.4.2.
The application of PBMC can reduce the supervision costs and increase the efficiency.
The road authority has to provide necessary training to the staff and contractors in order
to introduce them to the new contracting approach and to improve their quality. If the
owner is unable to provide training, they can reform the administration by contracting
out to the private sector. The Texas department of Transportation, USA started to
outsource a significant portion of their roads due to the lack of expert personnel
(Menches et al. 2010).
The road administrations of Guatemala and Uruguay have successfully been able to
inspire some of their staff to form small road maintenance enterprises and to maintain
roads under the new approach. Thus the road administrations reduce excessive staff and
the experienced personnel with their new enterprise can now gain experience with
contracting out road maintenance by performance standards (Zietlow & Bull 1999).
Hardy (2001) argued that the reduced administrative staff is passed mainly onto the
contractor. Actually, the consultants’ roles in earlier types of contracts are absorbed by
the contractors. In this way, cost for one contract is saved; and on the other hand
contractors get some expertise.
In Estonia, where 63% of the national road network is under PBMC, the workforce of
the national and sub-national road agencies has declined, specifically from 2046
(administration staff - 561, workers- 1485) in 1999 to 692 employees (administration
staff - 343, workers - 349) in 2003 (Stankevich et al. 2005). Queiroz (2011) stated that
from 2001 to 2009 several 5-year performance contracts were awarded in Estonia which
covered 100% of Estonian road administration’s network (16,487 km).
However, reducing the staff is not the main purpose of implementing PBMC in a
country. Road authorities still need to provide adequate people to supervise the
performance of the contractors. In Argentina, inspectors visited the site twice per month
and randomly checked the roads. On the other hand, contractors maintained a well-
documented inventory and daily records of activities which helped to understand the
specific behaviour of roads and contributed to improved preventive maintenance
(Zietlow & Bull 1999).
23
In Chad, the government followed two systems for overall supervision of four service
quality criteria or outputs such as, roads must be open for use, average speed attainable,
road-users’ satisfaction and long-term stability of road. Firstly, the contractor
accomplishes checking his organisation’s maintenance work and submits a report to the
government with a monthly invoice. Secondly, a consultant substantiates the report
through monthly inspections to the site. If a contractor fails to fulfil any of the criteria
mentioned earlier, his payment will be less as a penalty in that month. If failure occurs
repeatedly, the contract can be terminated (Hartwig et al. 2005).
The example of Argentina, Estonia or Chad can be followed by other countries during
the introduction of PBMC. However, Hardy (2001) stated that cutting down of staff is
only commendable in PBMC if the road-users are satisfied by using the roads
maintained under PBMC.
The review of this research also suggests that road authorities’ attitude towards the new
approach in terms of staff reduction can be a very sensitive issue in the initial stage of
implementing PBMC in a country. A questionnaire survey should be conducted to find
out if the cost savings claimed in terms of the supervisory staff reduction is true or is the
cost passed to the contractor or private sector.
Introduction of Innovation 2.4.3.
Scientists are inventing and improving technologies so that people can utilize time and
money more effectively than ever. Construction and maintenance of road infrastructure
systems should not be overlooked in using innovative technology for a better economy
and smarter community. The contractors will only be motivated to use innovative
technologies if it is beneficial to them. Use of specifications based on performance can
promote innovation by allowing the contractor to control the materials and methods
used (Carpenter et al. 2003). Moreover, successful contractors have long term revenue
streams under PBMC which motivated them to make long term investment decisions for
both research and development (R&D) and training (Hardy 2001).
However, research is also necessary on the performance based contracts conducted in
countries to date, to examine the method’s ability to motivate contractors. A further
24
questionnaire survey can be conducted to see if the advantage is achieved due to the
longer duration or the change in the form of the contract.
Reduction of Delay and Impact on Public 2.4.4.
The use of technology under PBMC can help to minimize the impact of highway
projects on the public by reducing the unnecessary construction delay. Utilization of
technologies, materials and techniques reduce noise and other environmental impacts. In
the long run, it can reduce the bad effects of road construction projects on the public
(Carpenter et al. 2003)
User Satisfaction 2.4.5.
The need for a new contracting approach arises considering many factors, one of which
was the satisfaction of road users. Road users or general public never measure the
amount of work done for the maintenance of roads. They consider the outcome of the
work (Cabana et al. 1999). A well maintained road reduces the cost for vehicle
maintenance. PBMC can help to increase the road safety which is discussed by Manion
and Tighe (2007).
For example, the outsourcing of the road network management and maintenance
activities has produced significant benefits to New Zealand’s economy and road users.
Less money is being spent on reactive repairs, users enjoy a higher level of service, and
there is a far greater understanding of the asset’s future needs. (Porter 2005). The use of
PBMC in Estonian road network has decreased the number of complaints from road
users (Queiroz 2011).
Risk Sharing by Contractors 2.4.6.
A change in the method of specification from work output to performance, allocates the
risk exposure of the road authority to the service provider i.e. contractor (Carpenter et
al. 2003; Frost 2001; Frost & Lithgow 1996; Segal et al. 2003). Performance based
contracts are designed to more closely link the achievement of these functional
objectives and the cost of achievement of those standards, removing many of the
prescriptive and procedural steps on which more traditional work output based contract
types rely. That is, the contracts specify the performance of the road system in terms of
25
asset condition parameters, and of the contractor in terms of management performance
parameters, in lieu of specification of work activities, output quantities, cycle times or
process description. Moreover, performance based contracts integrate all of the
components of the road maintenance task (routine and periodic maintenance,
rehabilitation, restoration and replacement) necessary for the management of the
achievement of the specified performance outcome. This shift in the method of
specification, from activity prescription to performance, brings about a commensurate
shift in the risk exposure of the road agency. In a work output specification
environment, the client is generally responsible for determining the quantity, type and
location of work outputs required to achieve the desired performance levels. As the bulk
of the performance achievement risk resides with these decisions, the client carries a
considerable risk. However, in a performance specification environment the client
carries no direct risks arising from these decisions, but will be exposed to a risk
premium on service delivery to cover the service provider's increased risk profile. The
effective allocation of performance risk away from the client is dependent on the service
provider having, and maintaining, the skills and experience to turn the performance
specification into a work output plan. Traditionally, this skill and experience has
predominated in road agencies. To be fully effective, therefore, the establishment and
maintenance of these skills outside of the road agencies needs to be encouraged and
nurtured as part of the contracting strategy (Frost 2001).
Hardy (2001) and Austroads (2003) also stated that risk allocation to the contractors
would be beneficial for the road authorities only when contractors would better be able
to manage the risk. There is evidence that PBMC results in better outcomes at lower
cost with less risk and more financial predictability for highway agencies. The
maintenance contract may include risks like poor quality of construction, unexpectedly
severe weather, unanticipated environmental problems, emergencies, unanticipated
legislative change, unexpected traffic growth, a short-term focus that fails to minimize
long-term life-cycle costs, difficulty in acquiring the resources needed to perform the
work (e.g., subcontractors), the possibility of having to correct problems covered under
a warranty (Hyman et al. 2009).
26
Assurance of Quality 2.4.7.
PBMC significantly expands the role of the private sector, from the simple execution of
works to the management and conservation of road assets. One fundamental feature of
the performance-based contract is that the contractor is responsible for designing,
scheduling and carrying out the actions he believes are necessary in order to comply
with the service quality levels stated in the contract. The service quality levels are
defined from a road user’s perspective and may include factors such as average travel
speeds, riding comfort, safety features, etc. If the service quality is not achieved in any
given month, the payment for that month may be reduced or even suspended. Under
PBMC, the contractor has a strong financial incentive to be efficient. In order to
maximize profits, he must reduce his activities to the smallest possible volume of
intelligently designed interventions, which nevertheless ensure that pre-defined outputs
(measured indicators of service level) are achieved and maintained over time. PBMC
makes it necessary for the contactor to have a good management capacity. Here,
“management” means the capability to define, optimize and carry out the work in a
timely basis, the physical interventions which are needed in the short, medium and long
term, in order to guarantee that the roads remain above the agreed service quality levels.
In other words, within the contract limitations and those required to comply with local
legislation, technical and performance specifications and environmental and social
regulations, the Contractor is entitled to independently define: (i) what to do, (ii) where
to do it, (iii) how to do it, and (iv) when to do it. The role of the road administration and
of the employer is to enforce the contract by verifying if the agreed service levels have
been complied with, as well as all other legislation and regulations the contractor must
comply with (The World Bank 2004).
However, the bidding process of PBMC includes prequalification of contractors,
ensuring that the final bid evaluation was not overwhelmed by poor-quality providers
(Hartwig et al. 2005). Thus this approach is able to assure the quality of maintenance
work.
Availability of Initial Funding Sources 2.4.8.
Developing a country's construction industry is vital to achieve increased involvement
of private contractors in the management of road assets. International financing
institutions provide assistance to developing countries and economies in transition to
27
develop a local construction industry (Queiroz 1999). A review of PBMC was
approached jointly by the World Bank Group, IDA/IFC secretariat (International
Development Association/International Finance Corporation) and the Global
Partnership of Output-Based Aid (GPOBA). Since inauguration of the first project using
that approach in 2002-03, the World Bank has consequentially increased from 32
projects to around 200 projects all over the world with various funding sources which is
anticipated to favour at least 60 million poor people. The review also identified 23
projects within the World Bank group for a total value of US$2 billion (excluding more
than US$1.7 billion in Government subsidy financing) and 11 projects outside the Bank
(with the majority in Latin America). International donors and agencies such as the
IDA, the IBRD (International Bank for Reconstruction and Development), bilateral aid
agencies (for example, the U.S. Agency for International Development), the United
Nations Development Programme, the United Nations Economic Commission for Latin
America and Caribbean provided funding for many road projects (Mumseen et al.
2010). For example, in 2001, the government of Chad took the help of an external
funding authority to fully move to PBMC and the contractors successfully improved the
road conditions to an expected satisfactory level (Hartwig et al. 2005). The World Bank
and the Asian Development Bank (ADB) not only provide financial support for the
introduction of PBMC but also provide training to implement the new approach.
However, the analysis of this study suggests that availability of initial funding source
can be counted as a benefit in a sense that road authority is ready to go for a long term
contracting commitment. The top level management has agreed to provide the constant
funding required for the monthly payment in PBMC.
Sustainable Road Management System and Assurance of Long-Term Funding 2.4.9.
The road authority gets the option for the possibility of long term sustainability using
PBMC. These types of contracts have exhibited larger reductions in necessary long-
term expenditure for road maintenance in Chad which proves the method’s ability of
providing a more sustainable road maintenance and management system. The
Government of Chad gradually increased the road maintenance fund because of
improved management. The existence of donor involvement also gave the contractor
motivation and confidence that the output-based payments would be paid regularly. The
28
same arrangement is also being replicated elsewhere in Sub-Saharan Africa, including
Burkina Faso, Cape Verde, Madagascar, and Tanzania (Hartwig et al. 2005).
In Brazil, the road sections maintained under CREMA are in better condition than the
road sections with traditional rehabilitation. Use of performance contracts also increases
the management efficiency which includes providing good engineering design and
drawing, a gradual streamlining and standardization of processes used for preparation
and evaluation of engineering designs and for bidding of civil works (with, for example,
the emergence of standard bidding documents for contracting of civil works in road
administrations). Another aspect of the contract was that it helped to increase
government commitment to invest in road maintenance and management (Lancelot
2010).
However, PBMC will be beneficial when the road authority of a country will be truly
able to manage the road network
Increase in Flexibility 2.4.10.
Contractors receive the flexibility in achieving their work target in PBMC. This
flexibility can be enjoyed either by choosing the desired engineering design and
drawing or by using innovative technology. Lancelot (2010) indicated on the CREMA
experience in Brazil which showed that under performance based contracts, contractors
needed to have sufficient flexibility to determine an optimized mix of technical
solutions and an optimized execution schedule, without any interference from the
employer.
However, this will be a great benefit depending on the contractors’ ability to choose
engineering design, and use of managerial capabilities and technologies.
Increase in Transparency and Reducing the Chance of Corruption 2.4.11.
As discussed earlier, a traditional method is more prone to corruption because of the
nature of its decision making process. PBMC has the potential to reduce the scale of the
decision making process by promoting transparency and good governance in road
maintenance works (Liautaud 2001; Zietlow 2004).
29
Kenny (2007) said that construction companies bribe in order to obtain contracts, to
increase profit margins on those contracts and to reduce the cost of construction. He
also suggested that corruption is likely to be reduced if there are fewer opportunities
which mean less chance for government officials to decide contract winners and
contract terms, or interpret regulatory compliance and less need i.e. fewer contracts,
fewer competitors, less fear of competitor bribery, less regulation. In addition, the net
benefits of corruption will change if costs are higher and bribes are larger or have to be
paid to more people or the risk of being caught increases because of audits, inspections
or punishment regimes. As discussed earlier, in PBMC, the output is specified at a given
price and payment is disbursed only after delivery is verified. It helps ensure that
corruption does not derail the delivery of expected results. Moreover, in contrast with
inputs, outputs are by definition relatively easy for everyone to monitor and results are
therefore transparent and measurable (Mumseen & Kenny 2007).
Tineo (2007) said that the limited experience with PBMC (OBA- Output based aid) in
developing countries has prevented a comprehensive examination of its effects on
lowering corruption. However, even at this early stage, PBMC can reasonably be
expected to reduce administrative discretion and increase efficiency; two factors
associated with corruption. As procurement and financing decision risks rest on the
service provider, contracting agencies procure significantly fewer contracts, and are not
required to measure and account for vast quantities of inputs as a basis for payments.
Moreover, the disbursement of subsidies upon achievement of outputs means that the
service provider has considerable incentives to perform in a cost-efficient manner.
Therefore, there is still not enough evidence on PBMC reducing the chance of
corruption. For some countries, due to possibilities of corruption, PBMC may not be
achieving the desired level of success.
KEY REQUIREMENTS OF PBMC 2.5.
The key requirements for introducing PBMC in a country are summarised after Pakkala
(2005) which are as follows:
robust & good data of existing road network assets and what are the present
costs of these assets at existing levels of service;
30
good funding stream for maintenance, if funding continues to decline then the
costs for repair tend to escalate;
requires expertise, good tendering practices, and clear & concise contract
language. It is difficult to write all conditions in the contract.
having common standards & performance measures;
a good understanding and relation among the client and service providers;
partnering or partnering board;
head to head competition among service providers;
good communications & sharing of knowledge with all parties.
According to Ozbek and de la Garza (2011), the key issues a state Department of
Transportation (DOT) or a road authority should consider when using PBMC, as
learned from Virginia DOT’s pilot project experience, can be summarized as follows:
the payments must be made to the contractor based on actual performance;
generating a detailed baseline condition information;
establishing a performance target for every single item required to be
maintained;
using performance targets that increase (as opposed to being constant) over the
contract period, and developing objective, quantifiable, and easily measurable
performance criteria;
having multiple inspections per year;
developing a standard rating procedure for all elements.
However, the above mentioned requirements of introducing PBMC are just a starting
point. There are many other issues and requirements that will be revealed and discussed
in this research.
PERFORMANCE INDICATORS 2.6.
Performance indicators/standards help to measure the performance of the contractors’
work. Performance standards have to be clearly defined in the contract and objectively
31
measurable to avoid ambiguity. The cost of the road maintenance may vary depending
on the road sections, traffic condition of roads, vehicle operating costs and the
environment of the country. The application of Highway Design Model (HDM) can also
help to set up parameters, for example, International Roughness Index (IRI) (Zietlow
2005). Moreover, the application of a minimum acceptable level of performance can be
achieved through the implementation of targets based on performance standards (Haas
et al. 2009). Table 2-3, which is tabulated after Zietlow (2005) presents some typical
performance standards and their influence on roads.
Table 2-3: Typical performance standards and their influence on roads (Zietlow 2005).
Performance Standards Influence/Affect
International Roughness Index (IRI) to measure the
roughness of the road surface. Vehicle operating cost
1. Absence of potholes.
2. Control of cracks and rutting. Road safety and pavement performance
The minimum amount of friction between tires and
the road surface Road safety
The maximum amount of siltation or other
obstruction of the drainage system. To avoid destruction of the road structure
The retro reflexivity of road signs and markings. Road safety
Examples of Performance Indicators Applied in Different Performance Contracts in
Latin America has been presented in Table 2-4 and Table 2-5 (Zietlow 2004; Zietlow &
Bull 1999).
32
Table 2-4: Examples of performance standards applied in different contracts
Asset Class Component Performance Standard
Pavement Potholes Roughness (asphalt) Roughness (bituminous)
treatment) Rutting Cracks
No potholes IRI < 2.0 (Argentina), IRI < 2.8 (Uruguay) IRI < 2.9 (Argentina), IRI < 3.4 (Uruguay) < 12mm (Argentina), < 10mm (Uruguay,
Chile) Sealed
Gravel surfaces Potholes Roughness Thickness of gravel layer
No potholes IRI < 6 (Uruguay), IRI < 11 (Chile) 10 cm (Chile, Uruguay)
Shoulders Potholes Cracks Joints with pavement
No potholes Sealed Vertical alignment < 1cm (Chile, Uruguay),
sealed (Peru) Drainage system Obstructions
Structures No obstructions. Should allow for unhindered
flow of water (Chile, Uruguay) Without damages and deformations (Chile,
Peru) Road signs and
markings Road signs Road markings Retro reflexivity of road
markings
Complete and clean (Argentina, Chile, Peru) Complete and visible (Argentina, Chile, Peru) 160 mcd/lx/sqm. (Argentina) 70 mcd/lx/sqm. (Uruguay)
Right of way Vegetation Foreign elements
< 15cm height (Argentina, Uruguay) No foreign elements allowed
(Zietlow 2004; Zietlow & Bull 1999)
Table 2-5: Examples of Performance Specified Road Maintenance Contracts as of
Dec.1998 (Zietlow & Bull 1999)
Country Number of
Contracts Length in
km
Duration of
Contract
in years
Type of
Maintenance
Cost per km and
year
in US$
Argentina 61(a) 11.813 5 r A: 11.000(c) Chile 2(a) 747 5 r C: 3 850
A: 3 200 B: 2 700
Colombia 3 545 2 r, s A: 6 200 Guatemala, small scale
enterprises
70 2 995 1 (b) r (drainage
system and
right of way
only)
1 950
(drainage system
and right of way
only) Uruguay 4(a) 1 007 4 r, p C, A, B and G
6 980 Uruguay, small scale
enterprises
8 1 564 2 (b) r (excluding
signs and
markings)
A, B and G:
3 800
Uruguay(Monte
video) 1(a) 1.05x10
6
m2
3 (b) r, p A: 1.8/m2
C: 2.8/m2
G: 2.0/m2
Brazil (Santa
Catarina) 1(a) 375 5 r A and G
3 000
33
(a) Contracts include some initial road rehabilitation works
(b) Can be extended for one period of equal duration
(c) Lump sum including the initial rehabilitation costs
r: routine maintenance; p: periodic maintenance; s: other services provided to users
(telephone, ambulance, towing) and administration of the roads.
C: cement concrete; A: asphalt concrete; B: Bituminous treated; G: gravel
PERFORMANCE MONITORING 2.7.
Monitoring the performance of the contractor regularly is a very important part of
PBMC. It will be beneficial in the initial stages of introducing PBMC in a country. The
monitoring system differs among the road authorities. However, a monitoring system is
necessary to maintain the quality of work and also to record the data for future research
and development in the road authorities.
Queiroz (2005) and Zietlow (2007) said that the monitoring system may include:
Contractor’s self-control system;
Formal monthly inspections;
Supervisors (formal/informal) inspections;
Project Managers (formal/informal) inspections;
And maintaining a record book to follow the comments or complaints of roads
users.
Zietlow (2007) said that contractors’ self-control system should have-
Own organizational structure with qualified personnel;
Verifying continuously the compliance with the service level criteria;
Monthly reporting of compliance to client using standard formats;
Participating in monthly formal inspections.
34
For example, in Uruguay, inspections for purposes of payment was done once a month
taking 10% of the road network selected at random different stretches of 1 km length;
Informal inspections done once a week selecting 5% of the network at random;
Inspections due to complaints by the public;
And follow-up inspections to verify if the contractor rectified deficiencies
detected by one of the inspections mentioned above (Zietlow 2007).
At present, road authorities follow the criteria and standards developed for their
traditional methods of contracting to evaluate the performance of contractors in
maintaining road infrastructure system. These standards vary significantly among the
road authorities and some of them have not been properly defined to monitor PBMC.
The development of revised performance evaluation procedures will assure the
reliability of the overall performance in PBMC (de la Garza et al. 2009). Piñero (2003),
Piñero and de la Garza (2004), de la Garza et al. (2008) and de la Garza et al. (2009)
identified five components in order to develop a framework for monitoring performance
in PBMC which are level of service effectiveness, timeliness of response, safety
procedures, quality of services, and cost-efficiency. The major contribution of the
proposed framework is to provide transportation agencies with guidelines for evaluating
the effectiveness and efficiency of PBMC as an alternative delivery method to maintain
and preserve the roadway system. The components are as follows:
Level of Service Effectiveness indicates the extent to which the performance
criteria and performance targets defined in the contract are being met.
Timeliness of Response evaluates the response time of the contractor to service
requests related to events or deficient elements in the roadway that need to be
attended in a timely manner.
Safety Procedures evaluates if a safety program is properly implemented by the
contractor. This component is very important to ensure that the roadway users as
well as the maintenance crews performing the work are exposed to minimum
risk of accidents.
Quality of Services assesses the customer perceptions with respect to the
condition of the assets and contractor performance. Customers are the ultimate
evaluators of the quality of the service provided; therefore, it is extremely
important to assess their satisfaction.
35
Cost-Efficiency assesses the cost savings, if any, accrued by the government as
a result of engaging a contractor to perform performance-based road
maintenance services.
SCOPE OF WORK IN PBMC 2.8.
PBMC has much scope to improve the road maintenance and management. The
CREMA in Argentina provides an example of area wide performance-based contracts.
These contracts cover about 14,000 kilometres (45 per cent of the national paved road
network). Each contract comprises rehabilitation and subsequent maintenance of 100-
300 kilometres over a five-year period according to the following schedule (Queiroz
1999):
In the first year, rehabilitation (for example, slurry seal, surface dressing,
overlay, reconstruction)
In years 1 through 5, maintenance (for example, patching, cleaning drainage
system, renew signs, clearing roadsides).
Argentina provides an example (later followed by Brazil) of concessioning maintenance
(with possible upgrading) and operations. Concessioning on the major road network
started in 1990. The country had an established, well-connected but poorly-maintained
network. Maintenance had received low priority because of shortage of public funding
and of the high cost of public sector construction and maintenance. Argentina’s main
objectives were therefore reconstruction and maintenance of existing roads, rather than
new construction, and simultaneously a reduction of the public support required by the
road sector. Involving the private sector in exchange for the right to charge user tolls
was seen as a way to shift the financial burden to the users, and at the same time to
maintain roads more efficiently than previously. However, the main contract features of
CREMA are as follows (Cabana et al. 1999):
Each contract specifies the minimum rehabilitation solution;
The contractor carries out detailed engineering design;
About 50 per cent of the contract payment is made up to rehabilitation
completion; and
36
The remaining payment is made in equal monthly amounts. Payments depend on
meeting specified levels of service.
Figure 2.2 shows the use of PBMC in maintenance and management of road
infrastructure system which is based on the literature of Zietlow (2007).
Figure 2-1: Scope of work in PBMC (Zietlow 2007)
Some countries have increased the scope of work in Performance-based maintenance
contracts using hybrid contracts which includes both performance-based contracts and
unit price contracts (Zietlow 2007).
DRAWBACKS AND IMPEDIMENTS OF PBMC 2.9.
PBMC has some drawbacks and impediments which are discussed below.
Drawbacks of PBMC 2.9.1.
PBMC is still a new approach in the construction industry with some disadvantages
which is not an exception. Most studies available on PBMC mainly focus on the good
sides and benefits. Negative sides are mentioned on a small scale in very little available
literature such as Pakkala (2002), Queiroz (2005), Zietsman (2004), Zietlow (2007).
Hardy (2001) and Austroads (2003) have provided a detailed list of drawbacks of
PBMC which are discussed below.
Maintenance and Management of Roads
Routine Maintenance
Periodic Maintenance
Response to Emergency
Improvement of Road Rehabilitation
Record of Data
Research
Monitoring
37
High Cost of Tendering 2.9.1.1.
Preparation of tender documents and also tendering are the costly parts of PBMC which
require legal and financial advice to support the business decisions in excess of the
detailed technical expertise needed to determine a price. This limits the parties able to
tender for the contract and raises questions about supporting the cost. Preparation of
tender documents involves a set of typical contract documents, compilation and
verification of asset inventory and condition data. It also requires calculation of
programmes and estimation to be used in the tender evaluation (Hardy 2001). Because
of a very high cost of bidding, the resulting number of tenderers after prequalification
for long-term performance based contracts in Tasmania and Western Australia was only
four in the early stage (Robinson 1999).
Decreased Competition 2.9.1.2.
The majority of performance contracts are large in regard to the money and work
needed to accomplish them. However, there should be sufficient economical ability to
provide financial incentives to contractors in order to offset the high initial cost of
tendering and to neutralize the probable downside of taking on additional risk (in
particular the network condition risk) (Hardy 2001).
Zietsman (2004) and Queiroz (2005) also mentioned about the pressure on small
contractors due to PBMC. Actually the length of PBMC also means that the size of the
market is reduced for the duration of the contract which in turn decreased the
competition. Pakkala (2002) said that results to date have not showed any serious
problems with smaller or medium sized companies as they have been able to create
places for them in their specialised areas and by partnering and forming alliances. Frost
(2001) added that the objective of this contract is to create more work, and hence release
previously inefficient resources for the purposes of improving road standards.
Reinvestment of the released funds into these improvements in turn generates more
work, and sequentially jobs. Hence, assuming that savings are reinvested in the road
system, the total effect of contracting on jobs is reduced, but not eliminated.
38
Increased Significance of Poor Contractor’s Performance 2.9.1.3.
The possibility of poor contractor performance exists in all contracts. As with other
types of contract remedies exist in PBMC to address poor performance. But the
consequence of premature termination of contracts is probably harder to handle than for
a traditional contract because of the need for costly re-tendering and time. A similar
situation would exist if a contractor were to go into liquidation. It could be argued that
the transfer of significantly greater risk onto the contractor increases the possibility of
such occurrence, especially if he is not capable of measuring the potential costs of this
risk and include additional provision for them (Hardy 2001).
Reduced Ability to Deal with changes 2.9.1.4.
During the life of a performance contract many factors affecting the contract could
change. These could be physical, political or environmental. The lump sum nature of
the performance contract means that the ability to deal with such changes is reduced by
being locked in to out-dated contract provisions. For example one of the local road
authorities of New Zealand emphasized that they would never approach for PBMC
because it would not allow them to do necessary changes in the life of a contract
(Hunter & Kyle 2001).
It is always possible to handle variations but they invariably result in increased costs to
the road authority and the lack of contract rates may make negotiation of the variation
more difficult. So it can be said that it is not an easy task to make changes once the
contract is in progress.
Reduction of Technical Capability 2.9.1.5.
Road authorities will require a reduced level of technical expertise as the responsibility
for design and technical specification is transferred to the contractor. There is a risk that
if this downsizing in key technology areas is taken to an extreme level, then that RA
could lose the ability to be an informed purchaser. In addition, if road authorities do not
practice sufficient technical skills to keep pace with developing technologies they risk
being unable to take advantage of emerging technologies in future contracts. However,
the developing role of road authorities as procurement specialists still requires technical
39
skills and in many respects requires a higher level of technical skills focused on asset
management rather than day-to-day design and supervision (Hardy 2001).
Keir and Blerk (2006) commented on the basis of the experience achieved through the
first contract of New Zealand (called PSMC) that if the right people are unavailable and
a transition period cannot be undertaken the contract is placed under considerable risk.
A new person coming into a PBMC in a senior role without understanding the nature of
the relationships or the various goals and strategies can do significant damage. Also the
loss of network and systems knowledge can be significant.
Loss of Control 2.9.1.6.
A common anxiety amongst road authority’s staff about PBMC is the loss of control of
the network. Ownership passes from the RA to the contractor who has the greatest say
of work done on the network. The problem is that this loss of control will lead to a
reduction of the standard of service provided. It can happen in the premature stage of
implementing PBMC if the performance measures are inadequately defined. The
ownership is not the main concern here as long as an adequate level of service is
provided (Hardy 2001).
Loss of Innovation to the public Domain 2.9.1.7.
The risk of loss of innovation to the public domain is predicted on the assumption that if
contractor developed innovation in some way replaces road authority funded research
and development. If road authorities continue research and development, any
innovations coming out of performance contracts can be considered a bonus. It is likely
that ground-breaking innovations will continue to come from a variety of sources. The
performance contracts may ensure additional incentive to investigate new methods and
products, the risk of these being lost to the public domain is no greater under a
performance model arrangement that under a conventional contract arrangement (Hardy
2001).
Impediments to PBMC 2.9.2.
Although there are many reasons to implement PBMC, there are various reasons and
impediments which may hinder some road authorities from adapting to PBMC or which
40
may be experienced by some road authorities in their first contracts (Hyman et al.
2009). They mentioned some impediments which are cited in the literature and the
survey responses which are as follows:
Lack of government support (legislative or executive branch).
A significant change in culture required by the contracting agency and
contractors not familiar with this approach.
Adjustments required for the implementation of performance specifications.
Inadequate experience with the PBMC or a negative experience on the first try.
Lack of training and legal authority.
Challenges in estimating in-house and contractor costs.
Loss of quality sometimes observed in the first years of a long-term contract.
Insufficient contractor capacity.
Inability to achieve sufficient competition.
Potential bond or warranty requirements, including those established by state
law.
Incomplete or inaccurate asset inventory and condition data.
Concern over loss of control over methods, equipment, and material used.
Concern that life-cycle costs will increase.
Fear that privatization will result in large numbers of staff having to leave
government jobs.
Concern of union members that PBMC will undermine wages, benefits, work
conditions, and job security that government provides.
The need to secure substantial funds through the budgetary process for large,
multiyear contracts.
Concerns about the contractors’ ability to effectively handle reactive
maintenance, such as snow and ice control, repair of traffic control devices, and
incident and emergency response.
The challenges of reassuming the responsibility for maintenance if the contractor
fails to perform, especially if the contracting agency sells off its equipment and
lays off all its maintenance staff except those who are necessary to administer
the maintenance contracts.
41
CONCLUSION 2.10.
This chapter carries out a thorough literature review of performance based maintenance
of road infrastructure by contracting (PBMC). The aim of the literature search is to
collect information on the available research performed to date on PBMC. This chapter
also studied and analysed problems of traditional methods of contracting. The
drawbacks and hindrances which can be the cause of failure of PBMC are also
discussed in the chapter. The review shows that a great amount of research has been
done on the success of PBMC. Although very few detailed works have been carried out
on cost savings of PBMC especially in the developing countries. It also shows that there
is a little amount of detailed research on disadvantages of PBMC and developing a
model to compare the cost savings and other advantages of PBMC with traditional
methods of contracting. Therefore, this research aims to study and analyse the benefits
of PBMC and also the drawbacks or challenges during the introduction of PBMC in
developing countries. These are discussed in the subsequent chapters of the thesis.
43
CHAPTER 3
PBMC IN DEVELOPING COUNTRIES: CASE STUDY-
BANGLADESH
CASE STUDY- BANGLADESH 3.
In Chapter 2, through an extensive literature review, the problems of traditional
methods of contracting have been studied and the benefits of using performance based
maintenance contracting (PBMC) have been explored in some details. It provides the
precise information on the research topic. As many developing countries have been
found to have achieved success in road maintenance through PBMC, a developing
country has been chosen as a case study for the current research project. The
significance of choosing a country as a case study is to analyse the potential of PBMC
in the selected country. Bangladesh, a promising developing country of south Asia has
been chosen for this research. This research investigates the problems of using
traditional methods of contracting in road maintenance of Bangladesh. It also
investigates the suitability and potential of PBMC in Bangladesh.
The preliminary study and literature review indicate that the roads and highways
department (RHD) of Bangladesh strives to maintain the road network system like other
developing countries. They need a better solution to upgrade the road infrastructure
maintenance and management system which is discussed in this chapter. The RHD also
had a chance to experience two small scale PBMC projects which is mentioned later in
this chapter. Therefore, assessing the potential and effectiveness of PBMC in
developing countries in the context of Bangladesh would also offer guidance to the road
authorities of developing countries that are currently considering the introduction of
PBMC for the road infrastructure systems.
44
The outline of this chapter is as follows: an informative discussion on the road network
system of Bangladesh is presented in Section 3.1 and Section 3.2 discusses the potential
aspects of improving the road maintenance system of Bangladesh which is followed by
the concluding remarks for the chapter.
ROAD NETWORK SYSTEM OF BANGLADESH 3.1.
As the population is increasing in Bangladesh, urbanisation is in progress and the need
for stronger road infrastructure system is rising day by day. The RHD of Bangladesh is
building new roads to meet the increasing demand. In the meantime, they have to
maintain and manage the older roads very well. The RHD is facing difficulties in
maintaining both the tasks properly. However, effective road infrastructure system in
Bangladesh can only be achieved by upgrading road maintenance and specifically
improving periodic and routine maintenance. Though efficient road maintenance is a
costly way to elevate transport efficiency, it is essential to provide the rural poor with
better access to economic opportunities (ADB 2010a).
Roads in Bangladesh are classified in four main groups, (RRD 1996);
National highways,
Regional highways,
Feeder roads,
Local roads.
National highways join the capital city of Dhaka with district headquarters, port
cities and international highways. Regional highways join different regions and
district headquarters (64 districts) not connected by national highways. Feeder roads are
of two types:
Feeder roads Type A,
Feeder roads Type B.
Type A feeder roads link Thana (lowest tier of administration) headquarters and
important growth centres to the main arterial road network.
45
Type B feeder roads connect growth centres with other growth centres and Thana
headquarters.
Local roads include municipal roads and rural roads. There are three kinds of rural
roads:
Type 1 roads, those connect about 2100 growth centres with farms;
Type 2 roads, those connect union headquarters (4551) and local markets with
villages and farms;
Type 3 roads, those include roads within the village.
The Roads and Highways Department (RHD) of Bangladesh under the Department of
Ministry of Communication is mainly responsible for the development and
management of national, regional and Type A feeder roads and bridges. Type B feeder
roads and rural roads (except municipal roads) are constructed and maintained by the
Local Government Engineering Department (LGED) in collaboration with local
government bodies like district council, Thana council and union.
This research has mainly considered the implementation of PBMC in maintenance of
road network system under the RHD.
Goal of the RHD
The goal of the RHD as mentioned in the RHD (2012),
"The Roads and Highways Department is able to provide the People of Bangladesh
with a safe, cost effective and well maintained road network".
And the purpose of the RHD is stated as follows (RHD 2012):
"The Roads and Highways Department has a sustainable capacity to plan, manage and
deliver its full range of responsibilities in respect of the main road and bridge network
and to be accountable for these duties".
46
A Brief Overview on Assets of the RHD
In relation to roads in Bangladesh, most of the assets, expenditure and staff are within
RHD, although BRTA (Bangladesh Road Transport Authority) plays an important role
in revenue collection. Roads, bridges, ferries, land, equipment and building are assets of
RHD which in terms of money is US$7400 million. Bangladesh has approximately
21000 km of road network and 18,258 bridges under the RHD. The value of this
resource will rapidly reduce at a rate of 8% per year, if it is not maintained properly
(RHD 2012; RRD 2001). This total asset value is the largest of any individual
organisation in Bangladesh and indeed, probably exceeds the combined total of all
private sector businesses operating in the country as a whole. Maintaining the value of
these assets is a fundamental requirement which is vital to the economy of Bangladesh
and which should be treated as one of the highest priorities of the government. This
places a great responsibility on the Ministry of Communications and the RHD (RHD
2012).
Total road network under the RHD is summarised in the Table 3-1 and total value of
roads and highways department assets in terms of the type of assets is presented in
Figure 3.1.
Table 3-1: Summary of the road network under the RHD (RHD 2012).
Category No. of road Total Length in km
National Highway 71 3538
Regional Highway 121 4278
District Road 628 13455
Total 820 21171
47
Figure 3-1: Total value of the RHD assets (in Million US$) (RRD 2001).
A Brief Overview of the RHD Management and Personnel 3.1.3.
The RHD is headed by a Chief Engineer who is supported by a number of Additional
Chief Engineers. The total number of posts in the Department is almost 20,000. The
proposed new structure for RHD consists of five Headquarter Wings/Zones and seven
Field Zones, each headed by an Additional Chief Engineer (ACE) who reports directly
to the Chief Engineer. In addition two ACEs will be assigned to manage foreign aided
projects one for the World Bank Projects and one for Asian Development Bank Projects
(RHD 2012).
The current sanctioned staff of the Department totals 9,331 comprising 573 Class I, 773
Class II, 4,759 Class III and 3,226 Class IV personnel. Out of this total figure there are
currently about 2,800 vacant posts all excepting about 150 of which are from Class III
and Class IV staff. These figures for sanctioned staff however mask the fact that there
are currently about 12,000 ‘temporary’ (work charged, muster roll and casual staff)
employed by the Department giving a total of about 18,000 staff currently engaged.
Because of the Government restrictions on recruitment of Class III and Class IV staff
and the total ban on recruitment of temporary staff most staff are now over 40 years of
age and there is an increasing rate of retirement which should result in major changes in
staff numbers during the next 5-10 years (RHD 2012).
Roads $5,800
Bridge $1,000
Land $480 Other $60
Roads
Bridge
Land
Other
48
The work of the Department is becoming ever more complex and there is a now an
urgent need for specialists in many areas of operation. Specialists may be either from
non-engineering disciplines with appropriate education and experience (such as
resettlement, law and finance) or in certain cases may be engineers who have undergone
special training for a particular post (such as HDM, road safety, project management).
Specialist posts have been identified as part of the details of the re-organisation. Some
specialists are in high demand (such as IT personnel) and many engineers are not keen
to be posted into specialist posts which appear unattractive compared with field
postings. The strategy for RHD is to introduce systems to assist with attracting and
retaining specialists. During the past few years technology has changed but little has
been done to develop those support activities which are essential to the efficient
operation of the Department. Training and development of support staff is an important
aspect of the RHD Strategy (RHD 2012).
TYPES OF ROAD MAINTENANCE COVERED BY THE RHD 3.2.
The RHD covers four types of maintenance works for roads in Bangladesh which are as
follows (RHD 2012):
Routine Maintenance: small-scale activities that must be carried out frequently.
Periodic Maintenance: planned activities that are related to age or condition.
Rehabilitation & Improvement: work on failed roads & bridges (due to poor
construction or lack of maintenance) or improvements to meet increasing
demands.
Emergency Repair: activities that respond to an event caused by unforeseen
circumstances.
ROAD MAINTENANCE SYSTEM OF THE RHD 3.3.
The RHD, the LGED and Municipalities are simultaneously responsible for both
construction and maintenance of roads and bridges within their respective jurisdiction in
Bangladesh. As stated in the report by RRD (1996), traditionally, needs for road
maintenance in this country have been determined on the basis of visual inspection of
road conditions by field engineers. Earlier, road maintenance activities in Bangladesh
were carried out mainly as condition responsive repairs which included routine
49
maintenance, pothole patching, seal-coat and thin layered overlay works within the
budget constraints. These activities were undertaken rather arbitrarily as and when
necessary if funds allowed, without proper planning and employing any analysis in
determining and justifying the actual needs. In so far as allocation of funding is
concerned, a road development program was always given preference over maintenance
works (RRD 1996).
However, until recently, planning of the RHD annual programmes had to be based on
perceived needs rather than on analysis. The RHD now has access to an extensive body
of computerised data from surveys. This data can be used with inventory data, to
determine the future budgetary needs for maintenance and rehabilitation. At the core of
this system is the HDM that provides an economic ranking of options. The database
system is also linked to GIS mapping that facilitates the production of maps and the
location of data (RRD 1999).
Under the old system, requests for the Revenue Budgets were generally based on the
previous year’s budget with some allowance for inflation. Some variations occur from
year to year to meet the specific requirements. The Annual Development Budget is
based on requests for funding from the field Zones and priorities perceived by the
Ministry, RHD headquarters and donors. Development projects are processed through a
system established by the Planning Commission. However, the budget is dispersed
across a number of budget heads in the revenue and Annual development Programme
(ADP) budgets (RRD 1999).
There is also a lack of clarity in the various types of maintenance. It is hoped that in
future the budgets will provide separate allocation for each of the major maintenance
activities. Moreover, rational planning must be included for the equitable distribution of
funds to all Zones, and allocation of sufficient funds to enable the maintenance projects
to be undertaken to completion (as opposed to doing a little in a number of places which
wastes money). The execution of maintenance works should include an expanded
periodic maintenance requirement that would create a major new demand for the larger
local contractors. It is estimated that on the national and regional highway network,
about 700 km of thin overlay or other bitumen surface treatment should be undertaken
each year (RRD 1999).
50
On the other hand, Transparency International Bangladesh (2002) mentioned that the
RHD receives a healthy allocation from the government's development budget. In fiscal
year (FY) 1999-2000, RHD's allocation was US $270 million (Taka 14 billion), of
which the foreign aid component was 55 per cent. The bulk of aid funds (83%) came
from IDA (International Development Association), ADB and OECF (Overseas
Economic Cooperation Fund) Japan.
PRESENT SITUATION OF ROAD MAINTENANCE OF BANGLADESH 3.4.
The road infrastructure system is an important element for the development of a
country. The road sector is always the most attractive sector in Bangladesh. Any ruling
party of Bangladesh is always interested in implementing mega budget road
development and construction projects. They do not pay attention or pay very little
attention to improving the poor condition of roads.
The overall situation of the road network system is not very satisfactory due to the lack
of maintenance. The terrible condition of the road maintenance system in Bangladesh
can be described by giving some examples. According to a local newspaper report,
vehicular traffic on 290 Kilometre highway has become so intense and chaotic that a
journey between the capital city, Dhaka and the port city, Chittagong could take as long
as 15 hours. Lack of maintenance and repairs for years have created potholes and even
large ditches at various places of the busy highway, causing further delay and severe
damages to the vehicle (Khan, MA 2011).
According to the RHD records, out of a total 21000 km of major highways, about 4400
km are in bad condition requiring emergency repairs. The communication ministry
claimed that they could not repair the roads due to a fund shortage, but the finance
ministry and many ruling party leaders and lawmakers blamed the communication
ministry for being negligent (Azad 2011). Another report published on the same day
added the quotation of the finance ministry who said that the road maintenance and
many other important works were not done properly as numerous projects have been
taken without priority and with small allocation of funds. There were many such
instances of poor conditions for the busiest highways and local roads in the country.
Figure 3.2 shows the effort of the RHD to make temporary arrangements to repair
51
Dhaka-Mymensingh highway with broken bricks in 2011. The photo was taken from
Bogra area of Gazipur on 17 August, 2011 (Khan, P 2011)
Figure 3-2: The RHD makes temporary arrangements to repair Dhaka-Mymensingh
highway (Khan, P 2011).
However, the present condition of the road network system in Bangladesh can be
summarised as follows:
Poor condition of the road network system with increasing demand of roads; in
some cases ongoing construction works on the roads, footpaths or side roads
which helps to deteriorate the situation.
Construction work of new roads is being carried on; some roads urgently need
rehabilitation or maintenance where some others need to be extended or
upgraded.
Government is interested in carrying out big-budget projects like Padma-
multipurpose bridge project, construction of new flyovers in major cities. They
rarely pay attention to the road rehabilitation and maintenance works.
Traffic congestion and road accidents have become common phenomena as a
consequence of the poorly maintained and managed roads. Road accidents and
deaths are increasing at an alarming rate in the country.
IMPROVING THE ROAD MAINTENANCE OF BANGLADESH 3.5.
The performance of the road sector has consistently improved in the past decades aided
by extension of the road network and a rapid increase in demand for road transport. The
52
demand increased at an average annual rate of 8.4% for passengers and 8.2% for freight
during the 1990s, increases that were almost double the average gross domestic product
(GDP) growth of 4.7% for the same period. The condition of roads, as well as the
capacity and reach of the road network, has also substantially improved. From 1997-
2002, the primary roads classified as good or fair have increased from 73% to 96%. The
sustainability of these achievements could, however, be jeopardized by insufficient
resources allocated to road maintenance. From 1997-2002, the allocation for routine and
periodic road maintenance per kilometre of the RHD roads decreased by 3% per annum
(ADB 2002).
The Highway Design and Maintenance Standards Model (HDM) estimated that the
long-term spending on preserving the road network should be US$85.5 million (Taka 5
billion) per annum. The actual spending is, however, no more than US$53 million
(Tk3.1 billion), about 62% of the requirement. Furthermore, the accumulated backlog of
deferred maintenance, estimated at US$410 million (Taka 24 billion), will require an
additional US$42.7 million (Taka 2.5 billion) per annum for the next 10 years.
Recognizing this problem, the RHD is shifting its focus from road development to road
maintenance (ADB 2002).
Under the institutional development components funded by the Department for
International Development of the United Kingdom and included in the World Bank’s
second and third road rehabilitation and maintenance projects, the RHD developed an
annual road maintenance plan (ARMP). The first ARMP covered 1999-2000. The
ARMP uses the HDM to determine which roads should be maintained for the year in
question and what the level of maintenance should be. Apart from strengthening
institutional focus on road maintenance, there is also a need to establish additional
sources of road maintenance financing so that the ARMP can eventually be financed
from domestic sources on a sustainable basis. A loan covenant of the Asian
Development Bank’s (ADB’s) previous project required by 2003, the Government
would have carried out a national review of mechanisms for funding the requirements of
the ARMP from domestic sources, including the option of establishing a road
maintenance fund; and that by 2005, it would implement a time-bound action plan for
meeting the annual costs of maintaining all roads under RHD’s jurisdiction. The
national review is supported jointly by ADB, the World Bank, Department for
53
International Development (DFID) of the United Kingdom, and Japan Bank for
International Cooperation (JBIC), building on previous work by the World Bank to
examine the requirements for introducing a road maintenance fund. DFID provided
consulting services for these activities (ADB 2002).
Performance-Based Routine Road Maintenance Component in Bangladesh 3.5.1.
PBMC is called by the name performance based (routine) road maintenance component
(PBRMC) in Bangladesh. It comprises a civil works contract covering 35 km in
Rangpur- Syedpur National Highway along with 7.45 km in Rangpur by-pass and 8.05
km in Syedpur by-pass. The Mission noted that the bid for the contract was invited on
25 February 2008, with the extended deadline for submission of bids on 2 June 2008.
ADB approved the bid evaluation report on 16 October 2008 and the contract was
signed with the lowest evaluated responsive bidder on 9 November 2008 and the notice
to proceed was issued in December 2008. The contractor has mobilized and completed
road condition survey on 25 March 2009 (ADB 2010b).
As stated by ADB (2002), the consultant's responsibilities include the following:
establishing a performance indicators standard for 50 km of regional or type A
feeder roads to be contracted out to domestic contractors based on a
performance-based contract for 3-5 years;
preparing a basic design indicating the minimum standards to apply;
proposing contract packages and produce tender and contract documentation
suitable for performance-based maintenance to be procured under LCB
methods;
providing cost estimates for the cost of works (including the performance-based
maintenance);
assisting the RHD in procuring civil works, and supervise and monitor the
works for the first year of the contract period;
training for the RHD staff to properly supervise and monitor the contractor’s
works for the remaining period of contract; and
conducting a feasibility study for privatizing the RHD’s road maintenance
equipment and workshops, and develop a time-bound action plan to implement
the recommendation of the study.
54
As of 30 September 2010, the progress of Performance-based maintenance works was
70.54% against the target of 84.7% and elapsed time of 59.15%. And achievement in
financial progress is 71.07% (ADB 2010b). Table 3-2 presents the progress of two
projects maintained using PBMC concept in Bangladesh.
Table 3-2: Progress of Performance-Based Routine Road Maintenance Component
(PBRRMC) (ADB 2010c):
Road Name
Contract No.
Duration
(from-to)
Progress
(Up to April 10) Remarks
Dhaka Zone PBRRMC Contract
Mymensingh to
Netrokona (R370)
Raghurampur-Nakla-
Sherpur (R371)
Mymensingh to
Fulbari (Z3035)
PBRRMC-DZ
3 Jan.
2008 to 2
Jan. 2011
88.80%
Performance Based
Contract is fixed time
due for completion in
January 2011.
Rangpur Zone PBRRMC Contract
Gobindaganj-
Goraghat- Birampur-
Fulbari-Dinajpur
(R585)
PBRRMC-DZ
3 Jan.
2008 to 2
Jan. 2011
88.80%
Performance Based
Contract is fixed time
due for completion in
January 2011.
However, these two projects were a trial attempt of PBMC in Bangladesh. They have
not been able to finish on time and faced difficulties.
CONCLUSION 3.6.
This chapter presented an overall and brief review of the road network system of
Bangladesh. It also discusses the current practice for the road maintenance system of
Bangladesh. The obstruction that the RHD of Bangladesh is facing for the road
maintenance also resembles the problems of other developing countries. Although
finding a solution to the problems may not be easy, a continuous effort and willingness
to adopt the better suggestions would improve the situation. Introduction of PBMC
improved the road maintenance system of many other developing countries with similar
difficulties which is discussed in Chapter two. Therefore, performing questionnaire
surveys and interviews is necessary to find out if PBMC can be a good solution for the
improvement of the road maintenance in Bangladesh. The methodology of preparing
and conducting questionnaire surveys and interviews has been presented in the next
chapter.
55
CHAPTER FOUR
RESEARCH DESIGN
INTRODUCTION 4.
Once the literature has been critically reviewed, a researcher achieves a position to state
the problems in unambiguous and precise terms (Shajahan 2005). After carrying out a
comprehensive state of the art review on the literature, this chapter establishes the
research questions for this project. In finding the solutions for the research questions,
the design and methodology and the relevant data collection process have also been
developed in this chapter.
RESEARCH DESIGN AND METHODOLOGY 4.1.
A research should be systematic, logical, empirical and replicable. It should be
structured, with specific steps to be taken in a specified sequence in accordance with a
well-defined set of rules. A systematic research design specifies the objectives of the
study, methodology and techniques to be adopted for achieving the objectives (Shajahan
2005). Methodology is the most important part of a research. It guides the researcher to
collect data, analysis and interpretation of findings.
This research has followed a structured methodology to achieve the research objective.
This section describes the research design and methodology. The strategy of a research
can be based on experiments, surveys or a case study. This research conducted
extensive literature review to establish the background and identify the problems. This
research collected quantitative data, conducted surveys and interviews.
A flow chart in Figure 4-1 summarises the overall research process.
56
Figure 4-1: Flow chart for Research Process.
First of all, an extensive literature review has been conducted to obtain the
background information on the topic and to set the research questions.
Secondly, research conducted to date on performance based maintenance
contracting (PBMC) has been collected and studied. Studying and analysing the
existing literature on the introduction and implementation of PBMC in
developed and developing countries is necessary to answer the research question
one. The literature review helps in establishing the problems of traditional
methods of contracting as well as benefits of PBMC. PBMC is considered as an
alternative solution to the problems of traditional methods of contracts in many
countries. It also helps to find out some disadvantages of introducing PBMC.
Therefore, the literature review helps to collect the necessary information to
prepare the framework of the research and data collection. Chapter two and three
are the two parts of the literature search which includes reviews from books,
journal and conference papers, and published online articles and reports from
various trusted websites. Therefore, studying the road network system of
Defining the Problem
Literature Review
Identifying the main issues and investigating them.
Data Collection:
Collecting data from ongoing and finished road maintenance
projects.
Collection of report on PBMC.
Conducting questionnaire survey and face to face interviews.
Analysis of Data
Analysing and studying the road maintenance project data.
Analysing the questionnaire surveys.
Summarising the interviews.
Findings and Discussion
Conclusion and Recommendation
57
Bangladesh was necessary to find out the answer of research question two.
Relevant information on the road network system of Bangladesh has also been
collected and studied. Chapter three includes the present situation of road
network maintenance and management of Bangladesh.
The third step was to collect data on road maintenance projects in developing
countries, conducting surveys and interviews to examine the potential and
effectiveness of introducing PBMC for road maintenance in developing
countries considering Bangladesh as a case study. A study has been carried out
on some recently finished and ongoing maintenance projects to identify the
problems or shortcomings of using traditional methods of contract to maintain
and manage the road infrastructure of Bangladesh. This research is also very
outcome oriented to implement PBMC in Bangladesh.
Finally, all the collected data, interviews and survey results are analysed and
results are presented in Chapter five. Findings of the study are presented in
Chapter six. The conclusions and recommendations for future research have
been made at the end.
RESEARCH QUESTIONS 4.2.
Research questions are set to achieve the research objectives which are as follows:
1) Why road authorities are adopting PBMC as an alternative method for road
maintenance?
2) Is introduction of PBMC for maintenance of the road network system in a
developing country, for example Bangladesh, feasible and if so, how to
implement it?
3) What are the challenges or problems that can be the cause of failure during the
implementation of PBMC in developing countries?
DATA COLLECTION PROCESS 4.3.
A need for collecting data has been identified to achieve the research objective. The aim
of data collection is to examine the effectiveness and potential of PBMC in Bangladesh.
Details of some ongoing and already finished road construction and maintenance
projects have been collected from Bangladesh which indicates the need for performing a
58
questionnaire survey and interviews for the detailed analysis. The sequence of data
collection and the process of analysis will be described in the subsequent sections under
this heading.
Initial Data Collection 4.3.1.
The Roads and Highways Department (RHD) of Bangladesh has helped during the
collection of the initial data. The analysis of this data gives the validation of conducting
questionnaire surveys and interviews. More detailed data collection is necessary through
the interviews and questionnaire surveys. Data of some road maintenance projects has
been collected from the RHD of Bangladesh. Initially, the data on road maintenance
projects samples of nine different major cities of Bangladesh were collected. These road
maintenance projects were carried out in cities namely Dhaka, Chittagong, Khulna,
Comilla, Sylhet, Rajshahi, Rangpur, Barisal, Pirojpur and Gopalgonj. The maintenance
works of these projects have been completed within the last five years. Information on
these projects have also been collected such as contractors’ details, budget of the
maintenance works, quality of work, contract period, and source of funding.
49 sample projects data were studied. The RHD used traditional methods of contracts
for these projects. Most of the projects have faced various difficulties. These data and
summary of analysis are attached in Appendix 3, 4 and 5. After carefully studying these
projects a questionnaire survey was prepared to give a deep insight into the problems of
road maintenance and investigate the prospects of PBMC in Bangladesh.
Design of Questionnaire Survey 4.3.2.
Questionnaires can always be used for descriptive and explanatory research. Descriptive
research such as that undertaken using attitude and opinion questionnaires and
questionnaires on organisational practices enables the researcher to identify and
describe variability in different phenomena. In contrast, explanatory or analytical
research enables the researcher to examine and explain relationships between variables,
in particular cause and effect relationships (Shajahan 2005).
After analysing the road maintenance project data, it was found that conducting a
questionnaire survey was necessary. The opinions of the experienced personnel of the
relevant organisation can be obtained through the questionnaire survey.
59
Griffith University conducts research in accordance with the National Statement on
Ethical Conduct in Human Research. Ethical clearance was taken from Griffith
University before conducting the survey. This study was approved by the Griffith
University research Ethics Committee (GU ref No. ENG/13/11/HREC, Clearance
Type: Human ER1). The questionnaire survey and interviews are anonymous which
guarantee the identity of the participants will not be disclosed to any third party. It was a
requirement to obtain the ethical clearance of the research by Griffith University.
The questionnaire survey has been attached in Appendix 1.
The questionnaire contains a three part series as part 1, 2 and 3.
Part 1 of the questionnaire survey consists of four questions on the background of the
respondent. These questions are included to ensure the education, qualification and
experience of the respondents in the field of road construction and maintenance.
Ensuring the quality of the participants is necessary to ensure the quality of the survey
and interview as well.
Part 2 of the questionnaire survey was prepared for traditional method of contracts. It
was designed to gain knowledge on the road maintenance works, reasons for variations
in cost, quality and time. Thirty questions were asked in part 2 of the questionnaire. The
questions were checked for validity.
Questions on Budget or cost of projects and project schedule and scope are prepared
based on the literature review conducted in Chapter 2, section 2.3.1. In order to ask the
questions on delay of project, this research identified some common factors which
contribute to projects’ failure to complete in scheduled time. This research has reviewed
14 journal article which were published recently and discussed delays in project
completion, such as Memon et al. (2011), Fugar and Agyakwah-Baah (2010), Kaliba et
al. (2009), Alaghbari et al. (2007), Assaf and Al-Hejji (2006), Nguyen et al. (2004),
Long et al. (2004), Parviz and and Nabil (2004), Frimpong et al. (2003), Odeh and
Battaineh (2002), Al-Tabtabai (2002), Chua et al. (1999), Ogunlana et al. (1996) and
Dlakwa and Culpin (1990). These factors have been considered in the questionnaire
survey of the research. The factors are as follows:
60
Lack of efficient/competent Contractor;
Poor top management support (Government);
Slow administrative process by Client (Government/RHD);
Poor supervision by client (Government/RHD);
Lack of expert technical personnel provided by client (Government/RHD);
Extreme site conditions like rain, flood etc.;
Extra work requirements of contractors;
Contract disputes or issues between the parties;
Delay in payment of contractor;
Shortage of Material, Manpower;
Uneven increase/fluctuation of material price;
Modification of plan or design related issues.
Questions were also asked on issues such as funding for projects, quality of work, skills
of staff, administrative and supervision cost, mismanagement or political influence and
sharing the risk of projects. Question regarding project funding are supported by the
literature in Chapter 2, section 2.3.6, quality of work (Chapter 2, section 2.3.2), skills of
staff (Chapter 2, section 2.3.8), administrative and supervision cost (Chapter 2, section
2.3.5), mismanagement or political influence (Chapter 2, section 2.3.7), risk sharing
(Chapter 2, section 2.3.3 and 2.3.4).
Part 3 of the questionnaire survey was entirely on performance based maintenance
contracting (PBMC), its aspects, and potential of the application of PBMC in a
developing country in the context of Bangladesh. This part also seeks opinions on the
barriers and challenges of implementing PBMC in Bangladesh. The questions in this
part were prepared based on the literature conducted in Chapter 2, section 2.4.
Questions regarding a better alternative (section 3.3, 3.4), technical feasibility (section
3.1.2, 3.1.3) and barriers (section 3.1.2, 3.3, 3.4) are partly supported by the literature of
Chapter 3.
An interview was designed which is complementary to the questionnaire survey. The
questionnaire survey and interviews commenced from August, 2011 and ended in
January, 2012.
61
Selection of the Sample 4.3.3.
It is needless to say that no investigator can study the entire population during a
questionnaire survey; hence a few individuals are selected for the purpose of the
investigation (Shajahan 2005). This research identified a target group for the surveys
and interviews of road authority personnel, contractors and other stakeholders in
Bangladesh. The questionnaire survey has been carried out among these selected target
groups. The respondents were selected based on the following criteria:
Professional background;
Experience of work;
Education level and;
Position of the person in the construction industry.
The group represents the experts of the road sector in a developing country. Therefore,
emphasis was given to make sure that the questionnaire surveys were sent to high
officials, project managers, senior engineers, graduate engineers, stakeholder and
contractors of a developing country. The same strategy was also followed for the
interviews.
Surveys were sent to the targeted groups of people from the RHD, stakeholders and
contractors of Bangladesh. 250 surveys were sent to the selected people through email,
by post or by face to face response method. A total of 53 responses were received from
August, 2011 to January, 2012. The response rate is 21.2% which is good.
Structure of Interview 4.3.4.
Although questionnaires may be used as the only data collection method, it is often
better to use them with another method in a multi method approach. In-depth interviews
can be complemented to explore and understand the opinions obtained in the surveys
(Shajahan 2005). Therefore, the main aim of the face to face interview is to collect
information and expert opinions which may not be covered by the questionnaire survey
to give the research more accuracy and perfection. The interviews are also anonymous
and will never disclose the identity of the interviewee. Interviews were taken among the
following personnel:
62
Top level engineers or high officials, mid-level engineers of the RHD of
Bangladesh;
Experienced contractors (working on road maintenance projects of the RHD).
The questions of the interviews were prepared based on the literature review and
responses received from the questionnaire survey. Although the interview is semi-
structured, it also gave the interested participants opportunities to include comments
which may be beneficial for the research. The interview included eight questions. It
includes questions on the experience of working with traditional methods of
contracting, the main difficulties or problems that the RHD or other government
agencies face during the implementation of road maintenance projects, potential and
effectiveness of PBMC in Bangladesh, prospects and barriers that can create problems
during the implementation of PBMC in Bangladesh. Interview has been attached in
Appendix 2.
The summary of the interviews is presented in Chapter five.
ANALYSIS OF DATA 4.4.
Statistical analysis is needed for the questionnaire survey. After completion of the
survey, data is processed and analysed using the Microsoft Office software MS Excel.
Face to face interviews covered issues which are not included in the questionnaire and
support the analysis of the survey. Some secondary data was collected from ADB and
RHD websites; research on PBMC and studies of PBMC in developed and developing
countries also provides information on the introduction of PBMC. Other data like
contractual procedure, tender documents, and general review of contract management
and policy of road maintenance in Bangladesh have also been studied. Examples of
other developing countries such as Chad, Argentina, Brazil and Indonesia are used as
secondary data. Detail on analysis of data and the results are presented in Chapter five.
CONCLUSION 4.5.
This chapter contains the description on research methodology, research questions,
research design, preparation of the questionnaire survey and interviews and a review on
the analysis process of the research. After the analysis of the road maintenance project
63
data, questionnaire surveys and interviews, findings have been presented in the next
chapter.
65
CHAPTER FIVE
INSIGHTS FROM THE SURVEY AND INTERVIEWS
FINDINGS OF THE SURVEY AND INTERVIEWS 5.
The targeted group of participants for this research were highly experienced and
qualified people of the Roads and Highways Department (RHD) of Bangladesh who
work on the road construction and maintenance projects, relevant stake holders and
contractors. All the data has been processed and analysed using MS excel software. This
chapter comprises the analysis and findings of the data, survey and interviews. The
analysis and findings of the survey have been presented in sections 5.1 to 5.3. Section
5.4 discusses the findings of the interviews.
QUESTIONNAIRE SURVEY PART 1: DETAILS OF THE 5.1.
RESPONDENTS
Part 1 of the questionnaire survey includes five questions to keep a record of the
respondents’ background. The aim of this part of the survey is to ensure the quality and
experience of the participants. It is very important for the validity of the answers
provided by the respondents in Part 2 and Part 3 of the survey. Table 5-1 presents the
summary on the background of respondents and is included in the next page.
66
Table 5-1: Summary of the result on the background of respondents.
Personal Background Frequency Percentage
Organisation (No.) (%)
Roads and Highways Department 46 86.8
Contractor 7 13.2
Position
Top Level Management (Chief, Additional Chief or
Superintending Engineer/Senior Project manager) 5 9.4
Mid-Level Management (Executive or Sub-Divisional
Engineer/Project Manager) 29 54.7
Bottom Level Management (Assistant Engineer/Sub-
Assistant Engineer/Graduate Engineer) 12 22.6
Contractor 7 13.2
Experience in the Road Sector
0-5 Years 7 13.2
5-10 Years 17 32.1
10-15 Years 14 26.4
15-20 years 6 11.3
20-25 years 4 7.5
25 years or more 5 9.4
Higher level of Education Achieved
Masters Degree 6 11.3
B.Sc. Degree 37 69.8
Diploma/Technical Certificate 6 11.3
Others 4 7.5
Type of Contract the person is working with
Both Lump sum and Bill of Quantity (BOQ) type
Contract
6 11.3
Only BOQ type contract 47 88.7
Table 5-1 shows that majority of the participants (86.8%) are from the RHD of
Bangladesh. Other participants (13.2%) are contractors. Most of the participants
(81.1%) have at least a Bachelor’s degree. Therefore, respondents are highly qualified
personnel and mostly civil engineers. They have to pass through a screening test and
must have a strong educational background before joining the RHD.
Table 5-1 indicates that more than half of the respondents (64.1%) are working in a role
such as senior project manager, project manager, and senior engineer level or above. It
also shows that the majority of the respondents (86.8%) have more than five years of
experience. Half of the participants (54.6%) have more than ten years of experience.
Only a small group of respondents (13.2%) have less than five years of experience and
are mostly graduate engineers.
Most of the respondents (88.7%) are working with bill of quantity (BOQ) type contract.
Only a small group of respondents (11.3%) use both lump sum and BOQ type contract
67
in different projects. In general, these responses give an idea of the type of contract in
the road projects of a developing country. Moreover, it allows the researcher to
investigate more on the problems of these traditional methods of contract during the
interview.
It can be concluded from the analysis of Part 1 of the questionnaire survey that the
majority of the participants work in senior roles and have sufficient education, working
experience and knowledge of the road construction and maintenance projects of a
developing country. Therefore, these findings ensure the quality of the respondents and
also validate the survey and subsequent interviews.
QUESTIONNAIRE SURVEY PART 2: TRADITIONAL METHOD OF 5.2.
CONTRACTING
This section presents the analysis, results and findings of Part 2 of the questionnaire
survey. Part 2 includes questions on the problems of the current method of contracting
in developing countries on the context of the RHD, Bangladesh. The results and
findings also support and complement the analysis of the potential of PBMC in a
developing country considering Bangladesh as a case study.
Budget/Cost of Projects 5.2.1.
Maintaining the budget or cost is the most important part in determining the success of
projects. This section of the survey has three questions. The responses would increase
understanding of the trends of expenditure for maintenance projects of the RHD to some
extent. The summary of the questionnaire on budget/cost has been tabulated in Table 5-
2.
68
Table 5-2: The percentage of responses on budget/cost of projects.
Were /Are cost of the projects remained within budget?
Frequency (No.) Percentage (%)
All of them within budget 0 0
All of them exceeds budget 51 96.2
Some of them within budget and some exceeds
budget 2 3.8
Please rank the reasons for the variation in cost from the most significant to the least
significant one.
Frequency (No.) Percentage (%)
Extra works were required by the contractors Ranked 1 by 36 people
Ranked 1 by 67.9%
people
Additional works instructed by the owner/Client Ranked 2 by 17 people
Ranked 2 by 32.1%
people
Interest on late payment 0 0.00
Other Reasons (Please indicate) 0 0.00
Almost all the participants (96.2%) believed that all the projects exceeded budget. A
small group of the respondents (3.8%) stated that some projects remained under budget
and some projects exceeded budget. The summary of the analysis and results on sample
projects data that has been collected from the RHD is shown in Table 5-3. This table
shows that all the sample projects (49 road maintenance projects) exceeded budget.
More detail analysis and data are included in Appendix 4 and 5. All of these projects
were completed using traditional methods of contracting. Therefore, it can be concluded
from the analysis that almost all the road maintenance projects are over-budgeted in
developing countries.
Table 5-3: Summary of analysis on road maintenance projects data of Bangladesh.
District No of Project
Studied
Time extension Budget
Failed
Within
Budget Required Not
Required
Dhaka 12 10 2 All of them
Chittagong 2 1 1 All of them
Khulna 7 2 5 All of them
Comilla 4 3 1 All of them
Sylhet 3 2 1 All of them
Rajshahi 5 0 5 All of them
Rangpur 5 5 0 All of them
Barisal 2 0 2 All of them
Pirojpur 3 3 0 All of them
Gopalgonj 6 3 3 All of them
Total 49 29 20 49 0
Table 5-2 also presents that the majority of the respondents (67.9%) ranked the reason
“extra works were required by the contractors” as number one significant reason for the
69
variation in cost of projects. Other participants (32.3%) ranked the reason “additional
works instructed by the owner/Client” as second significant cause which contribute
mostly to the variation in cost of projects. No participants ranked the reason “interest on
late payment” as a remarkable factors which contribute mostly to the variation in cost of
the projects. The condition of roads became more deteriorated than earlier during the
lengthy contracting process. In that case, the contractors compelled to do additional
works which helped in increasing the cost of the projects. Sometimes contractors also
demand for lump sum works to increase their payment. Moreover, client also gave
instructions to do additional works due to change in scope and quality requirement.
Traditional methods of contracting take a long time to start the maintenance of the
roads. When contractors start the project, they often find the site condition is worse than
they have estimated during the bidding of the contract. The contractors can demand
more lump sum work requirement as these types of contracts have the provision of
fulfilling the extra work requirement. In some cases, their demand is true while
sometimes it is the policy of the contractors to earn extra money. Moreover, client’s
instructions and modification of plan and design can also increase the cost of the
projects.
Project Schedule and Scope 5.2.2.
A project is unsuccessful if it fails to be completed within the scheduled time and by
achieving the target. This survey asked the respondents three questions in this regard
which improves the understanding of the road projects’ success in terms of maintaining
schedule and scope using traditional methods of contracting. First question investigates
whether the projects were completed by achieving the target. The result is presented in
Figure 5-1.
70
Figure 5-1: The percentage of responses on projects’ completion by achieving the
target.
A majority of the participants (50.9%) stated that projects totally failed to meet the
target. A group of participants (37.7%) believed that the projects were almost within the
target. Other participants (11.3%) considered that the projects were completed by
achieving the target. Therefore, most of the participants believed that many completed
road maintenance projects totally failed to meet the target.
The participants also responded to the question which investigates if the projects were
completed on time as per the original schedule. The analysis on the responses is as
follows:
35.8% respondents stated that the projects were not completed as per the
schedule.
32.1% agreed that the projects were completed as per the schedule.
A small group of the participants (15.1%) stated that 50% of projects completed
as per the schedule while 50% of projects were not completed as per the
schedule.
Another small group of participants (9.4%) responded that 10% of projects were
completed ahead of the schedule, 50% projects were completed as per the
schedule, and 40% projects were not completed as per the schedule.
Only 7.5% respondents stated that 10% projects were completed ahead of
schedule, 30% projects were completed as per the schedule, and 60% projects
were not completed as per the schedule.
11.3
37.7 50.9
Percentage of Responses on projects'
completion by achieving the target
Completed by achieving
the target
Almost within the target
Totally failed to meet the
target
71
Figure 5-2: The Percentage of Projects regarding extension of time.
Figure 5-2 presents data of 49 road maintenance projects completed under the RHD of
Bangladesh. It shows that a majority of the projects (59.2%) needed an extension of
time while some projects (40.2%) were completed within the scheduled time. Therefore,
it can be concluded that a majority of the road maintenance projects failed to be finished
within the scheduled time.
The participants ranked the factors that contribute mostly to projects' failure to complete
in scheduled time in the following question. The result is shown in Table 5-4.
Table 5-4: Factors that contribute mostly to projects' failure to complete in scheduled
time.
Ranking Factors affecting projects’ completion within
scheduled time
Ranked by Number of
Respondents
1. Lack of efficient/competent contractor 26
2. Uneven increase/fluctuation of material price 22
3. Allocation & release of fund in due time 19
4. Modification of plan or design related issues 17
5. Extra work requirements of contractors 18
6. Delay in payment of contractor 15
7. Poor top management support (Government) 12
8. Extreme site condition like rain, flood etc. 19
9. Slow administrative process by Client
(Government/RHD) 13
10 Shortage of Material, Manpower 10
11. Contract disputes or issues between the parties 11
12. Poor supervision by client (Government/RHD) 11
13. Lack of expert technical personnel by client
(Government/RHD 12
59.2
40.8
Percentage of projects that
needed time extension
Percentage of projects that
completed within scheduled
time
72
Therefore, the main obstacles which delays completion of the road construction and
maintenance projects in developing countries are as follows:
1) Lack of efficient contractor and adequate construction industry;
2) Uneven increase or fluctuation of price of construction materials after tendering;
3) Allocation and release of fund in time;
4) Either modification of plan after the work commences or design related issues;
5) Extra work requirements of the contractors;
6) Delay in the payment of the contractor due to lack of funding;
7) Poor support from the top level management of the government;
8) Failure to handle the extreme site condition like rain, flood;
9) Slow administrative process by Client;
10) Shortage of material and manpower.
As traditional methods of contracts are not long term, contractors do not have enough
motivation to improve the skills of the staff. Moreover, many small scale contracting
organisation do not have enough money or projects to increase their efficiency.
Fluctuation of price of the construction materials is another significant obstacle which
delays completion of the road construction and maintenance projects. If the project
takes a long time once the finishing of bidding and tendering process, contractors have
to face such kind of problem in developing countries. Allocation of funds affects the
start of the project and also delays payment of the contractor. If the client fails to pay
the contractors, they are unable to carry out the project timely due to shortage of fund.
Thus it gives the contractors chance to claim for extra work which is discussed in the
subsequent sections. Poor support or lack of support from the top level management of
the government is also responsible for the delay of projects.
All obstacles mentioned above are closely related to each other. However, these
obstacles need proper attention from the road authority in developing countries to
ensure the success of the projects.
Project Funding 5.2.3.
A constant source of funding is necessary to successfully implement any contracting
management scheme. This questionnaire survey has four questions regarding project
73
funding mainly for routine maintenance of roads. The aim of asking these questions is
to gain knowledge on the availability of funding in road maintenance projects on the
context of the RHD, Bangladesh.
The first question of this section investigated if funding is a major issue that delays the
progress of the project. Almost all the participants (94.3%) agreed that funding is a
major issue that delays progress of the project in a developing country. In the
subsequent question, the respondents were asked whether contractors received the
payment within the required time. Most of the respondents (90.6%) agreed that few
claims are paid within the required time, while only a small group of people (9.4%)
stated that most claims are paid within the required time. Therefore, the responses of
these two questions infer that funding is indeed a major issue that contributes mostly to
the delay of projects in a developing country. The same problem also delays the
payment of the contractors which I turn affects the efficiency of contractors.
The respondents also ranked the common factors according to its significance that
contributes towards the delay of contractors' payment. The analysis is summarised in
Table 5-5.
Table 5-5: The percentage of responses ranking common factors that contribute towards
the delay of contractors' payment.
Name of Factors Ranking (%)
Missi
ng Total
1 2 3 4 5 6 7
1 Funding unavailability or delays 94.3 5.7 0.0 0.0 0.0 0.0 0.0 0.0 100
2 Processing of payment is slow or
takes time 0.0 34.0 54.7 1.9 0.0 0.0 0.0 9.4 100
3 Contractors' claims have errors
and need clarification 20.8 66.0 11.3 0.0 0.0 0.0 0.0 1.9 100
4 Client's site officers slow in claim
clarification 0.0 0.0 1.9 18.9 0.0 0.0 0.0 79.2 100
5 Delays in contract payments are
quite common 0.0 0.0 5.7 0.0 15.1 1.9 0.0 77.4 100
6 Intentional or deliberate delay by
government workers 0.0 0.0 0.0 0.0 0.0 1.9 7.5 90.6 100
7 IT or computer system failure 0.0 0.0 0.0 0.0 1.9 0.0 1.9 96.2 100
Almost all the respondents (94.3%) ranked funding unavailability or delays as the
number one factor that contributes to the delay of contractors’ payment. While a
majority of the respondents (66%) ranked contractors' claims have errors and need
clarification as the second reason that contribute towards the delay of contractors'
74
payment. Majority of the participants (54.7%) ranked processing of payment is slow or
takes time as the third reason that contributes to the delay of the projects. Another small
group of participants (18.9% and 15.1%) marked that client's site officers slow in claim
clarification and delays in contract payments are quite common as fourth and fifth cause
that contributes to the delay of the projects.
Therefore, factors that contribute mostly to the delay of contractors’ payment are as
follows:
1) funding unavailability or delays for the road maintenance projects;
2) contractors' claims have errors and need clarification;
3) processing of payment is slow or takes time;
4) client's site officers slow in claim clarification;
5) delay in contract payments are quite common due to the delay in allocation of
fund.
In this section, respondents also stated their opinion on the sufficiency of funding for
road maintenance projects provided by the government in a developing country. More
than two third of the respondents (69.8%) indicated that very little funding is provided
for road maintenance projects by the government. Almost one third of the respondents
(30.2%) stated that half of the funds requested for works are provided. The responses
also indicated that getting fund for road maintenance is a problematic issue in the RHD
of Bangladesh. It hinders the road maintenance works especially routine maintenance
and adds to the poor condition of the road network system in developing countries.
Quality of Work 5.2.4.
This section of the survey has seven questions on the quality of work achieved in road
maintenance projects by using traditional methods of contracting. First five questions
have been prepared using a five point Likert scale. The result has been presented in
Table 5-6.
75
Table 5-6: The percentage of responses on quality of work.
No. Statement Highly
Sufficient Sufficient Average Insufficient
Highly
Insufficient
% % % % %
2.11
The level of quality
achieved on the
projects are considered
0.0 17.0 9.4 73.6 0.0
2.12
Material quality
control on the projects
are
0.0 22.6 32.1 45.3 0.0
2.13
The level of
supervision provided
by the client to cover
contractors site
activities is
0.0 73.6 15.1 11.3 0.0
2.14
The existing quality
control policies that
addresses all quality
control issues are
0.0 24.5 75.5 0.0 0.0
2.15
The amount of
resource allocated for
implementing quality
objectives are
0.0 15.1 58.5 26.4 0.0
The majority of the respondents (73.6%) considered the level of quality achieved on the
projects insufficient. Only a small group of respondents (17%) believed that the level of
quality is sufficient while another group marked that the statement is average.
Almost half of the participants (45.3%) considered that material quality controls on the
projects insufficient while 32.1% respondents believed the statement is average.
Another small group of respondents (22.6%) stated that material quality control on the
projects is sufficient.
Most of the respondents (73.6%) considered that the level of supervision provided by
the client to cover contractors’ site activities is sufficient. Only a small group (11.3%)
stated that they believe the level of supervision is insufficient.
Most of the participants (75.5%) stated that the existing quality control policies that
address all quality control issues are average. Other respondents (24.5%) implied that
the existing quality control policies are sufficient.
The majority of the participants (58.5%) considered that the amount of resource
allocated for implementing quality objectives is average. Another group (26.4%)
believed that the amount of resource allocated for implementing quality objectives is
76
insufficient. Only few respondents (15.1%) agreed that the amount of resource allocated
for implementing quality objectives is sufficient.
Therefore, it can be concluded that the current level of quality achieved on the projects
and quality control of material are insufficient. However, the current level of
supervision provided by the client or the RHD to cover contractors’ site activities is
sufficient. The existing quality control policies that address all quality control issues and
the amount of resource allocated for implementing quality objectives are average.
The subsequent questions are included mainly for routine maintenance works. The
respondents indicated the time when the first pothole is likely to appear after the defects
liability period. The defects liability period is a part of the construction contract, during
this time the contractor is required to repair defects that occur within the project. A
majority of the respondents (73.6%) stated that the time needed for the first pothole to
appear is likely to be after the defects liability period of 1-2 years. Another small group
of participants (18.9%) indicated that the time needed for the first pothole to appear
after the defects liability period is 6-12 months. Only a few people (7.5%) indicated that
the time needed for the first pothole to appear depends on the level of traffic.
The respondents also indicated the time of commencing the road maintenance works
after the defects liability period in the subsequent question. One group of respondents
(15.1%) stated that the time needed to commence the road maintenance works after the
defects liability period is 6-9 months. A majority of the respondents (39.6%) indicated
that the time needed to commence the road maintenance works after the defects liability
period is one year. 35.8% respondents indicated that the road maintenance works
commence after the defects liability period as soon as defects start arising. Only a small
group of participants (9.4%) believed that the road maintenance works would
commence whenever funding is received.
Therefore, majority of the respondents implied that the first pothole is likely to appear
after 1 to 2 years of the completion of the defects liability period. On the other hand,
many participants believed that the time of commencing the routine maintenance works
after defects liability period varies for different projects as it is dependent on the fund
and priority of projects.
77
Skill of Staff 5.2.5.
Ensuring the skill of the employees is very important to successfully implement the
projects. This section has three questions which investigate the skill of staff in a
developing country. Five point Likert scale has been used for these questions. The
results have been tabulated in Table 5-7.
Table 5-7: The percentage of responses regarding skill of staff.
No. Statement Highly
Sufficient Sufficient Average Insufficient
Highly
Insufficient
% % % % %
2.18
The level of skill and
experience of the
supervisory staff are
0.0 41.5 58.5 0.0 0.0
2.19
The supervisory staffs'
efficiency in achieving
project goal are
11.3 49.1 39.6 0.0 0.0
2.20
The level of training
(pre & on the job) for
staffs are
0.0 1.9 22.6 69.8 5.7
From Table 5-7, it is seen that the majority of people (58.5%) considered that the level
of skill and experience of supervisory staff is average. Other participants (41.5%) stated
that the level of skill and experience of supervisory staff is sufficient. The majority of
participants (60.4%) considered that the supervisory staffs' efficiency in achieving the
project goal is sufficient. More than one third of respondents (39.6%) believed that the
supervisory staffs' efficiency in achieving the project goal is average. Majority of the
respondents (75.5%) stated that the level of training (pre & on the job) for staff is
insufficient. Only a small group of participants (22.6%) considered that the level of
training (pre & on the job) for staff is average.
Therefore, it can be summarised from the analysis that many supervisory staff have
average level of skill and experience due to lack of training in the job in developing
countries. There are also some skilled and experienced staff team. However, the staff
somehow managed to achieve the project goal with all their limitations. Sufficient levels
of regular training should be provided to employees to improve the efficiency of the
road authority in a developing country.
78
Administrative and Supervision Costs 5.2.6.
One of the reasons many road authorities moved to PBMC is to reduce the
administrative and supervision costs. Reducing the number of staff members is not an
easy task for a road authority and determining whether the road authority is burdened
with staff or not also requires a complex procedure. This section of the survey
investigated if the RHD has this kind of problem.
The participants were questioned how many projects they work on at one time on an
average. 20.8% participants suggested that they have less than 5 projects; 34%
respondents indicated that they have 5 to 10 projects; another group (32.1%) stated that
they have 10 to 15 projects, and only a small group (13.2%) stated that they have more
than 15 projects.
The respondents offered their opinion in a five point Likert scale in the following
question. Majority of the respondents (66.1%) disagreed with the statement that the
requirements of clients for project supervision costs a lot of money. Only a small group
(13.2%) believed that the statement ‘the requirements of clients for project supervision
cost a lot of money’ is average. A minority of respondents (5.7%) agreed with the
statement while another group of people (15.1%) inferred that they do not know
whether the requirements of clients for project supervision cost a lot of money.
Therefore, supervision does not cost a lot of money for most of the projects in the RHD.
Few big budget projects may have the requirement of clients for supervision which
costs a lot of money. However, it cannot be determined that the RHD is burdened with
administrative and supervision costs by asking only two questions. Due to time
limitation and considering the sensitivity of this issue, this research did not include
many questions in this section.
Mismanagement/Political Influence 5.2.7.
Political influence, mismanagement and corruption were the most sensitive issue of this
survey and also for the RHD. This section contains four questions in a five point Likert
scale on mismanagement/political influence/corruption in different road construction
and maintenance projects. The results are presented in Table 5-8.
79
Table 5-8: The percentage of responses on mismanagement, political influence or
corruption.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
There are some mismanagement/political influence/Corruption ------
2.23 in selecting the project (in a
priority basis)-- 0.0 28.3 13.2 35.8 22.6
2.24 during tender stage of the projects-- 0.0 7.5 17.0 26.4 49.1
2.25 during selection of the contractor-- 0.0 15.1 13.2 47.2 24.5
2.26 during construction phase-- 0.0 13.2 17.0 50.9 18.9
A majority of the respondents (58.4%) agreed that there is some mismanagement,
political influence or corruption in selecting the project (in a priority basis). However,
28.3% respondents also disagreed that there is some mismanagement, political influence
or corruption in selecting the project (in a priority basis).
The majority of the respondents (75.5%) agreed that there is some mismanagement,
political influence or corruption during the tender stage of the projects. Only a few
people (7.5%) disagreed with the statement. A small group of participants (17%) neither
agreed nor disagreed that there is some mismanagement, political influence or
corruption during the tender stage of the projects. Most of the respondents (71.7%) also
agreed that there is mismanagement, political influence or corruption during selection of
the contractor. Majority of the respondents (69.8%) agreed that there is
mismanagement, political influence or corruption during construction phase of the
project.
The participants also shared their opinions on the competitive bidding procedure in
traditional civil contracts. Majority of the participants (45.3%) agreed that the
competitive bidding procedure in traditional civil contracts involves political influence
and corruption. 34% respondents implied that the process is influenced by top level
management, involves political influence and corruption. Another small group of
participants (13.2%) stated that bidding of many projects (60%) is fair while rest of the
bidding of the projects (40%) are influenced by top level management. Only a small
group (7.5%) believed that the bidding procedure is fair and based on quality.
80
From the above mentioned analysis, it is evident that mismanagement, political
influence or corruption exists severely during the tender stage of the projects, selection
of the contractors and construction phase. Therefore, very few road maintenance
projects have passed through the fair bidding procedure based on quality using the
traditional methods of contracting in a developing country. Majority of the projects
involve political influence and corruption, or are influenced by top level management.
The same problems also affect the selection of the project in a priority basis to some
extent. However, some prioritized projects have also been selected with less chance of
political influence or corruption.
Risk Sharing 5.2.8.
This section observes if contractors are taking any responsibility for poor works in the
current contracting process in a developing country. The respondents gave their
opinions to three statements in a five point Likert scale. The results have been presented
in Table 5-9.
Table 5-9: The percentage of responses on risk sharing between the client and
contractors.
No. Statement Strongly
Agree Agree Average Disagree
Strongly
Disagree
% % % % %
2.27
Contractors do not need to take
any responsibility for poor quality
of works.
0.0 28.3 7.5 60.4 3.8
2.28 Client has to take all the
responsibilities of the project. 15.1 50.9 11.3 22.6 0.0
2.29
Sometimes contractors’ poor
workmanship results in quick
deterioration of roads.
49.1 43.4 7.5 0.0 0.0
A majority of the respondents (64.2%) disagreed with the fact that contractors do not
need to take any responsibility for poor quality of works. Other participants (28.3%)
agreed that contractors do not need to take any responsibility for poor quality of works.
Majority of the respondents (66%) agreed that the client has to take all the
responsibilities of the project. Another group of people (22.6%) disagreed with the
statement that the client has to take all the responsibilities of the project. Most of the
participants (92.5%) agreed that sometimes contractors’ poor workmanship results in
quick deterioration of roads. Only a small group of people (7.5%) neither agreed nor
81
disagreed with the statement that sometimes contractors’ poor workmanship results in
quick deterioration of roads. Nobody disagreed with that statement.
Therefore, it can be concluded that contractors need to take some minor responsibility
for poor quality of works during the defect liability period if the roads deteriorate
quickly. As clients or road authorities take the major responsibilities for quick
deterioration of roads, contractors can finish the project by not rendering a quality work.
If the contract documents include penalty for failure to ensure the quality of work,
contractors would be compelled to perform good works. Hence, adding such provision
in the contract language is a great option which improves the road condition.
QUESTIONNAIRE SURVEY PART 3 5.3.
Part 3 of the questionnaire survey seeks the opinions of the participants in a five point
Likert scale on various aspects of PBMC to investigate the potential and effectiveness
of PBMC in developing countries. These aspects are as follows: risk sharing by
contractors, assurance of quality, improving efficiency, introduction of innovative
technology, getting expertise, increase in transparency, increase in customer
satisfaction, securing long term funding, fast delivery, achieving cost savings, a better
alternative, technical feasibility and potential barriers during the introduction of PBMC.
The findings from this part will also help to determine the effectiveness of PBMC in
Bangladesh.
Risk Sharing by Contractors 5.3.1.
The contractors and the client share the risk of the road construction and maintenance
projects to achieve success in PBMC. This section observes the potential of sharing the
project risks between contractors and the road authority in developing countries. Table
5-10 contains the result of this section.
82
Table 5-10: The percentage of responses on risk sharing by contractors.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.1
Construction project risks should be
properly identified and shared
between the contractor and the
client.
0.0 0.0 3.8 54.7 41.5
3.2
Risk sharing would bring a sense of
discipline and responsibility to the
contractor on road contracts.
0.0 0.0 1.9 39.6 58.5
3.3 Risk sharing would benefit the
government to a certain extent. 0.0 0.0 0.0 54.7 45.3
Almost all the respondents agreed (96.2%) that construction project risks should be
properly identified and shared between the contractor and the client. Almost all the
participants (98.1%) also agreed that risk sharing would bring a sense of discipline and
responsibility to the contractor on road maintenance projects. The respondents were
asked whether they believe risk sharing would benefit the government. All the
participants agreed that risk sharing would benefit the government to a certain extent.
No respondent disagreed with any statement of this section.
Therefore, identifying and sharing the risk of the construction project will improve the
quality of work in developing countries. As risk sharing is compulsory in PBMC, it
would also increase consciousness in contractors to perform better work. Thus, the
client or government would enjoy the benefit of shifting risk to contractors.
Assurance of Quality 5.3.2.
Quality and performance of contractors plays a big role in implementing PBMC. The
contractors’ responsibilities increase from simple execution of works to being project
manager and supervisor to match the complexity of the PBMC project. This section
focuses on assuring the quality of contractor as well as setting performance standards
for works in PBMC. The final result of respondents’ opinions on assurance of quality
has been presented in Table 5-11.
83
Table 5-11: The percentage of responses on assurance of quality.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.4
Setting detailed and prescriptive
work methods have not always
yield quality output.
0.0 62.3 20.8 15.1 1.9
3.5
Ensuring the quality of the
contractor during tendering would
help to assure the good quality of
work.
0.0 0.0 0.0 77.4 22.6
3.6
Setting the performance measures
of the completed works would
help the contractors to do quality
works.
0.0 0.0 0.0 43.4 56.6
The majority of the participants disagreed (62.3%) with the statement that setting
detailed and prescriptive work methods have not always yielded quality output. Only a
small group of participants (17%) agreed with this statement while for another group of
respondents (20.8%) neither agreed nor disagreed that setting detailed and prescriptive
work methods have not always yielded quality output. This section also includes a
statement to investigate whether ensuring quality of the contractor during tendering
would help to assure good quality of work. All the respondents agreed (77.4% agree and
22.6% strongly agree) that ensuring quality of the contractor during tendering would
help to assure good quality of work. They also agreed (43.4% agree and 56.6% strongly
agree) that setting the performance measures of the completed works would help the
contractors to do quality works.
Therefore, prescriptive methods can be suggested for contractors during the early stage
of PBMC in a developing country. It can offer the road authority and contractors more
confidence as shifting towards PBMC requires a massive change in the work culture. In
the initial stage, road authority personnel and contractors may feel comfortable to have
such options in the contract. On the other hand, prequalification of contractors during
tendering and setting the right performance measures of the works is also necessary in
PBMC. However, the road authority and contractors may no longer need prescriptive
work methods when they can gain experience with the new approach. It may hinder the
experienced contractors from enjoying the flexibility of choosing work methods at an
advanced stage of PBMC in a country.
84
Setting an acceptable and clearly defined performance measures for works is necessary
to ensure that the road would meet the minimum standard level of service throughout its
life cycle. It would warrant the safety as well as comfort for road users in the long run.
Improves efficiency 5.3.3.
The road authority should provide training to the staff to improve their efficiency before
introducing PBMC. The statement in this section investigates the necessity of training
on project maintenance and management in a developing country. Table 5-12 shows the
percentage of responses regarding improving efficiency of the staff.
Table 5-12: The percentage of responses on improving efficiency of the RHD staff.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.7
The current level of efficiency
regarding project maintenance by
RHD staff needs improvement.
0.0 0.0 5.7 39.6 54.7
Almost all the respondents (94.3%) agreed that the current level of efficiency regarding
project maintenance of the RHD staff needs improvement. A small group of participants
(5.7%) neither agreed nor disagreed with the statement that the current level of
efficiency regarding project maintenance of the RHD staff needs improvement.
Therefore, regular training enhances the skill and efficiency of the staff. In turn, it
increases the chance of achieving success of projects.
Introduction of Innovative Technology 5.3.4.
Using innovative technology minimizes delay of road works which reduces the impact
of delays on the public. The statements in this section observe whether traditional
methods of contract lack or restrict contractors from introducing new technology and
whether PBMC would enable the contractor to introduce efficient technology in
developing countries. Table 5-13 shows the percentage of responses on the introduction
of innovative technology by using PBMC.
85
Table 5-13: The percentage of responses on the introduction of innovative technology
by using PBMC.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.8
The current contracting process lacks
or restricts contractor from
introducing new technology.
0.0 9.4 5.7 58.5 28.3
3.9
The long term nature of PBMC
enables the contractors to introduce
efficient technology.
0.0 0.0 0.0 94.3 5.7
The majority of the respondents (86.6%) agreed that the current contracting process
lacks or restricts contractor from introducing new technology. Only a small group of
respondents (9.4%) disagreed with the statement that the current contracting process
lacks or restricts contractor from introducing new technology. On the other hand, all the
respondents agreed that the long term nature of PBMC enables the contractors to
introduce efficient technology.
As road maintenance projects are awarded to the contractors for a short period of time
in traditional methods of contracting, they do not want to improve the service quality
level. They only want to keep it in a certain level to receive the payment. In PBMC, the
project is awarded for two to ten years. Hence, the contractors could plan organised and
cost saving work methods which would maximise their profit. The long term contract
gives them the motivation to improve the quality of work by introducing innovative
technologies.
Get expertise 5.3.5.
The contractors get flexibility of work and have limited interference from the road
authority in PBMC. Therefore, the organisation of the contractors should have efficient
and experienced employees so that they can make better decisions regarding road
maintenance projects to fulfil the requirements set by the road authority. This part seeks
the opinions of the participants in this regard and the result is presented in Table 5-14.
86
Table 5-14: The percentage of responses regarding getting expertise by contractors
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.10
The contractors will get better
expert personnel in PBMC than
current contracting process.
0 0 11.3 88.7 0.0
A majority of the respondents (88.7%) agreed that the contractors would get better
expert personnel in PBMC than with the current contracting process. Only a small
group of respondents (11.3%) neither agreed nor disagreed with the statement that the
contractors would get better expert personnel in PBMC than with the current
contracting process. Hence, the expertise of the contractors’ organisation would be
increased under PBMC than the current contracting practice.
Increases Transparency 5.3.6.
This section focuses on the possibility of increasing the transparency in road
maintenance projects in developing countries using PBMC. It is still a wonder whether
PBMC helps lower the level of possible corruption or mismanagement in the
contracting processes in developing countries. Table 5-15 shows the percentage of
responses regarding increase in transparency.
Table 5-15: The percentage of responses regarding increase in transparency.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.11
PBMC can lower the level of
possible corruption/
mismanagement in the contracting
process.
3.8 50.9 9.4 35.8 0.0
3.12 As PBMC is a long term contract,
the chance of continuous forced
manipulation will be reduced.
0.0 32.1 18.9 49.1 0.0
More than half of the respondents (54.7%) disagreed with the statement that PBMC can
lower the level of possible corruption or mismanagement in the contracting process.
35.8% agreed and only a small group of people (9.4%) considered that the chance of
PBMC in lowering the level of possible corruption or mismanagement in the
87
contracting process is average. Half of the respondents (49.8%) agreed and other
participants (32.1%) disagreed that the chance of continuous forced manipulation will
be reduced in long term PBMC.
Therefore, there is still doubt whether the use of PBMC would reduce the forced
interference of top level management or influential and stubborn political leaders in
developing countries. There is a possibility that corruption may occur in a higher level
which could be hard to catch. Another possibility of corruption is during the supervision
of work by the client which increases the chance of poor performance by the
contractors. Such kinds of disputes will be hard to handle as the cost of tendering and
even the cost for breaching the contract in the mid-way is high in PBMC. However,
corruptions may be reduced to some extent due to the long term nature of PBMC.
Increases Customer Satisfaction 5.3.7.
As PBMC improves the quality of service, the road network system is expected to be
managed better than the traditional methods of contract. Hence, this section seeks
opinions to investigate whether the road authority personnel believe that PBMC would
improve the satisfaction of customer or road users. The result has been presented in
Table 5-16.
Table 5-16: The percentage of responses regarding increase in customer satisfaction.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.13 PBMC will improve the service
quality during the extended period. 0.0 0.0 17.0 56.6 26.4
3.14
The nature of PBMC mainly
focuses on customer or user
satisfaction.
0.0 0.0 13.2 62.3 24.5
Most of the respondents (83%) agreed that PBMC would improve the service quality
during the extended period. A small group of participants (17%) neither agreed nor
disagreed with the statement that PBMC would improve the service quality during the
extended period. The majority of the respondents (86.8%) agreed that the nature of
PBMC mainly focuses on customer or user satisfaction. A small group of people
(13.2%) neither agreed nor disagreed with the statement that the nature of PBMC
mainly focuses on customer or user satisfaction.
88
Therefore, the successful implementation of PBMC can improve service quality and
customer satisfaction during the extended period. It can be concluded from the above
analysis that PBMC helps to reduce the road users’ cost of vehicle maintenance as the
condition of roads would be improved.
Secures Long Term Funding 5.3.8.
International organisations have provided funds to introduce PBMC in many developing
countries so that they can improve their road maintenance system. Moreover, managing
funding for road maintenance projects is very difficult in developing countries. This
section of the survey keenly observes the opinions on the security of long term funding
when implementing PBMC for road maintenance. Table 5-17 shows the percentage of
responses on securing long term funding for road maintenance in developing countries.
Table 5-17: The percentage of responses regarding securing long term funding.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.15
PBMC ensures long term road
maintenance funding which is
difficult in the current contracting
process.
0.0 20.8 5.7 43.4 30.2
A majority of the respondents (73.6%) agreed that PBMC would ensure long term road
maintenance funding which is difficult in the current contracting process. Minority of
the respondents (20.8%) disagreed that PBMC would ensure long term road
maintenance funding which is difficult in the current contracting process.
However, it is virtually impossible in many developing countries to have total assurance
of funding for each year for a multi-year contract. If roads or trial projects maintained
under PBMC show good performance, the government may be convinced to provide
financial support for the long term PBMC approach.
Fast Delivery of Projects 5.3.9.
Traditional methods of contract are slow due to the bureaucracy. This section
investigates whether the participants believe PBMC would deliver the project faster
89
than traditional methods of contracts. Table 5-18 presents the percentage of responses
regarding the fast delivery of work under PBMC.
Table 5-18: The percentage of responses on the fast delivery of work under PBMC.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.16
PBMC will deliver the projects in
time or earlier than expected
compared to the current method.
0.0 0.0 11.3 88.7 0.0
3.17
Under a PBMC, private sector
workers (contractor's staff) would
be more motivated than the
traditional contracts.
0.0 0.0 3.8 73.6 22.6
The majority of the respondents (88.7%) believed that PBMC will deliver the projects
in time or earlier than expected compared to the current method. Most of the
participants (96.2%) agreed that under a PBMC project, private sector workers
(contractor's staff) would be more motivated than the traditional contracts.
Therefore, it can be concluded that use of innovative technology and motivation of
contractors and their staff help the fast delivery of work under PBMC.
Achieves Cost Savings 5.3.10.
In this section, two statements are included which investigate whether PBMC helps in
achieving cost savings for road maintenance projects. The result is as shown in Table 5-
19.
Table 5-19: The percentage of responses on cost savings.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.18
Supervision and overhead costs
would be reduced in a PBMC
compared to current practice.
0.0 17.0 32.1 50.9 0.0
3.19 PBMC will reduce maintenance
costs during the contract duration. 0.0 7.5 43.4 49.1 0.0
Half of the participants (50.9%) agreed that supervision and overhead costs would be
reduced in PBMC compared to the current practice. 32.1% participants stated that the
possibility of reduction of supervision and overhead costs in PBMC compared to the
90
current practice is average. Another group of respondents (17%) disagreed that
supervision and overhead costs would be reduced in PBMC compared to the current
practice. Almost half of the respondents (49.1%) agreed that PBMC will reduce
maintenance costs during the contract duration. While another large group of
participants (42.4%) said it is average which means they neither agreed nor disagreed or
not sure whether PBMC will reduce maintenance costs during the contract duration.
Therefore, a majority of the respondents are confident about the cost savings of PBMC
while rest of the people either not sure or not confident enough to agree with the above
mentioned statements. However, success of PBMC in terms of achieving cost savings
should be monitored keenly in future by the road authority.
A Better Alternative 5.3.11.
In PBMC, use of performance measures has been counted as a solution to encourage
innovation of the contractors in selecting the materials and methods. PBMC can also
motivate contractors to share risk and responsibility and ensure quality of their
performance within a smaller period of time for lesser overall costs. PBMC is expected
to reduce the overall project costs and time. In this part of the survey, respondents were
asked if PBMC is a better alternative and should be adopted together with the other
traditional methods in Bangladesh. All respondents (45.3% agreed and 54.7% strongly
agreed=100%) agreed that PBMC is a better alternative that should be adopted in
Bangladesh together with the current method. It can be concluded that PBMC could be
an alternative solution to improve the road maintenance of developing countries.
Technical Feasibility 5.3.12.
One of the objectives of this research is to examine the potential of PBMC in
developing countries in the context of Bangladesh. In this section of the survey, this
research intends to investigate the technical capability of the RHD, Bangladesh to adopt
PBMC. Opinions of the participants were sought on contracting management
experience of the RHD, sufficiency of knowledge and data of the road network system
of Bangladesh. Table 5-20 presents the percentage of responses on technical feasibility.
91
Table 5-20: The percentage of responses on technical feasibility of the RHD.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.21
Roads and Highways Department
has good contracting management
experience and can easily adopt the
PBMC concept.
0.0 0.0 9.4 30.2 60.4
3.22
RHD has good knowledge and data
of road networks, maintenance
needs and costs which can be used
to implement PBMC.
0.0 0.0 3.8 43.4 52.8
Most of the respondents (90.6%) agreed that the RHD has good contracting
management experience and can easily adopt the PBMC concept. Almost all the
respondents (96.2%) also agreed that the RHD has good knowledge and data of road
networks, maintenance needs and costs which can be used to implement PBMC.
Therefore, contracting management experience of the RHD, knowledge and data of road
network system would not create problem to introduce PBMC in Bangladesh. However,
Bangladesh has a huge potential to effectively implement PBMC for road maintenance.
Barriers of Introducing PBMC 5.3.13.
A road authority may need to overcome some barriers or obstacles to implement PBMC
successfully. This part seeks opinions on these barriers during the planning and
introduction of PBMC. The percentage of responses on barriers during the
implementation of PBMC is presented in Table 5-21.
92
Table 5-21: The percentage of responses on barriers during the implementation of
PBMC.
No. Statement Strongly
Disagree Disagree Average Agree
Strongly
Agree
% % % % %
3.23
Staff attitude on the new work
culture would offer resistance to
the new concept.
0.0 9.4 0.0 58.5 32.1
3.24
Skills and staff training will be an
area of concern that may cause
delay in the implementation
process.
0.0 5.7 1.9 50.9 41.5
3.25
Contractors' capacity and
commitment would be a
problematic issue of concern in
PBMC.
0.0 28.3 7.5 58.5 5.7
3.26
Construction industry in
Bangladesh is still underdeveloped
to implement performance
contracts.
0.0 52.8 7.5 39.6 0.0
3.27
Lack of government's budgetary
allocation for the long term
commitment could be a problem.
0.0 0.0 1.9 60.4 37.7
The results are discussed as follows based on Table 5-21:
Most of the participants (90.6%) agreed that staff attitude on the new work
culture would offer resistance to the new concept.
A majority of the respondents (92.4%) agreed that skills and staff training will
be an area of concern that may cause delay in the implementation process. While
only few people (5.7%) disagreed with the statement that skills and staff training
would be an area of concern that may cause delay in the implementation process.
The majority of the respondents (64.2%) agreed that contractors' capacity and
commitment would be a problematic issue of concern in PBMC. On the other
hand, another group of respondents (28.3%) disagreed with the statement that
contractors' capacity and commitment would be a problematic issue of concern
in PBMC.
A majority of the participants (52.8%) disagreed that the construction industry in
Bangladesh is still underdeveloped to implement PBMC. On the other hand,
more than 39.6% respondents agreed that the construction industry in
Bangladesh is still underdeveloped to implement PBMC.
93
Almost all the participants (98.1%) agreed that lack of government's budgetary
allocation for the long term commitment could be a problem during the
introduction of PBMC.
Therefore, it can be concluded from the above mentioned analysis that the barriers
of implementing PBMC in a developing country in the context of Bangladesh are as
follows:
staff attitude on the new work culture;
lack of skills and experience on PBMC;
training of staff (both road authority and contractors’ organisation);
contractors' capacity and commitment;
lack of government's budgetary allocation for the long term PBMC;
political influence, mismanagement or corruption.
INSIGHT FROM THE INTERVIEWS 5.4.
Interviews have been conducted mainly with highly experienced top and mid-level
personnel of the RHD of Bangladesh. Though the interview was structured, interested
participants of the questionnaire survey were also welcomed to send their comments
during the survey. After analysing the interviews and comments from the expert, the
summary is presented in this section.
Comment on your Experience on Traditional Methods of Contracting in
Bangladesh
The RHD gets almost sufficient fund and support from the government to do the
construction, development and periodic maintenance of road network system. However,
fund for routine maintenance is not sufficient and overlooked which deteriorates the
roads. The RHD accomplishes the routine maintenance work using their own material
which includes pothole, patching and crack sealing of roads.
Lack of competent contractors is a problem in Bangladesh. In the current contracting
practice, the contractors do not participate in the design process. Frequent orders for
modification of plan and design from the client and extra work requirement of the
contractors delay the project and increases cost. Fluctuation of material price is another
94
problem for the RHD. The price of materials fluctuates after tendering which affects the
budget and schedule of the project in the current contracting process.
One participant sent a comment regarding the survey question 2.3, which requested to
rank the reasons for the variation in cost from the most significant to the least
significant one. He commented that sometimes extension of time required due to
unexpected circumstances also causes variation of cost.
Some participants commented in response to the survey question 2.17 which requested
them to indicate how soon road maintenance works will commence after the defects
liability period. They stated that sometimes road maintenance works was done on a
priority basis due to the scarcity of fund. Important roads are maintained as soon as
potholes start arising.
A contractor mentioned that small contractors sometimes do the small scale emergency
maintenance works on a lump sum basis for the RHD. They receive the payment for
such kind of work whenever funding is allocated.
The main difficulties or problems that the RHD or other Government agencies
facing during the implementation of road maintenance projects
According to interviewees, the main difficulties that the RHD or other government
agencies are facing during the implementation of road maintenance projects are lengthy
processes due to bureaucracy, unavailability or shortage of funds, delay or further
extension of time and budget to complete most of the projects, poor performance and
lack of quality of the contractors and unwillingness of doing quality work by the
contractors. Moreover, high level of political influence and corruption makes it difficult
to ensure the quality of works.
The RHD is currently using HDM (Highway Design and Management) technology for
selecting the road maintenance and rehabilitation projects. This selection process may
be fair in most of the cases (not all of them are fair).Corruption and political influence
severely hampers the work after this phase. In many cases, inexperienced contractors
succeed in getting the contracts due to the political influence. Political leaders have
higher influences than law enforcement agencies in some remote parts of the country.
There is a chance of unexpected incidents. Contractors even try to get the payments
95
showing false proof of doing the work which contributes to the delay of the payment in
some places. Even RHD officers get forced to transfer to some other places for not
signing the payment of the contractors who did the poor quality of work. Political
influence is so severe in these places that RHD officers even receive threats if they do
not want to approve the payment without clearing the false or misleading claim by the
contractors.
The contractors who have a track record of carrying out poor quality of work get fewer
contracts as a punishment. In the case of big-budget projects which involve a donor
funding consultant also bears responsibility of the project together with the client.
Have you ever heard about Performance-based Road Maintenance
Contracting/Component?
Asian Development Bank (ADB) funded two PBMC projects in Bangladesh. The
interviewees were very familiar with the PBMC concept.
Please give an overall comment on the prospect of Performance-based road
maintenance contract/component in Bangladesh
The RHD has capable engineers and employees in different wings. It also has good
knowledge and records of data of road network system which can be used to implement
PBMC as a better alternative for the road maintenance in Bangladesh. However,
providing training and lack of experience on PBMC would be costly issues which may
delay this implementation.
Based on your knowledge, do you think that Performance-based Road
Maintenance Contracting will be effective in improving the maintenance of road
infrastructure of Bangladesh?
Participants in the interviews commented that PBMC in Bangladesh is now affected by
several factors; otherwise it could be very effective way of maintaining roads or bridges
in Bangladesh and other developing countries.
Are there any factors which may affect the introduction of performance-based
contracts in Bangladesh?
96
Government support and dependency on the external funding can be a possible
hindrance to implement long term PBMC in Bangladesh. Political influence may also be
an interruption. Some participants believed that if political influence interacts with
introducing PBMC, it is hard to achieve success in Bangladesh. Many people do not
have the confidence that it would reduce the forced manipulation, or like many other
privatization approaches it would also be a costly burden on the government.
Interviewees indicated that PBMC should not be a mean of downsizing the employee in
the RHD as it can shed a negative effect on the employees. Moreover, not many
government sector officials would willingly leave the job and join the private sector if it
happened as a consequence to implementing PBMC in Bangladesh. Most of the private
sector jobs are not considered as secure as government jobs in Bangladesh. They also
worried that it may reduce the technical capability of the RHD in future.
Some participants indicated that initially setting performance standards and estimating
the cost would be a complex task as they are not experienced with PBMC like the
traditional methods of contracting. They asked how to compare the cost when two types
of contracts are so different. They also commented that the initial set up of PBMC in
Bangladesh will not be lower in cost if an international consultant has to be hired. They
feared that many small-sized contractors would not be able to participate in the
tendering as it could be a complex process for them.
Experts also commented that in the earlier stages or for trial projects prescriptive
methods can be suggested to achieve the performance measures. As the contractors are
habituated to this type of agreement for so many years, they may find it difficult in the
trial projects without getting the assistance of RHD officials. They are afraid that if they
provide too much flexibility in the earlier stages, they may lose control of the project.
As too much interference from the client may not be helpful, later on, if the contractors
gain experience with time, prescriptive methods may not be necessary. If proper training
and supervision is provided to introduce PBMC, it will help to achieve a strong road
maintenance system.
One interviewee indicated that Bangladesh has some large-scale contractors who are
capable of taking the responsibility of establishing PBMC. They need sufficient
training, support and feedback from the RHD in estimating the cost of tendering during
97
the initial stage. If large-sized contractors neglect small sized contractors, there is fear
of reducing the competition.
The current contracting method of the RHD of Bangladesh does not guarantee the
timely payment of the contractors. The contractors agreed that getting payment in a
timely manner in PBMC would help them to ensure the quality of work. In that case,
they can be more organized in planning of work. They indicated that if they get the
payments regularly and in time they can even prepare advance planning to hire good
machinery which will improve the quality of work and reduce time.
Some participants stated that the factors affected the quality of the projects and worked
as a barrier for implementation of PBMC in Bangladesh were as follows:
Huge political influence in selecting the contractors which resulted in the
selection of inexperienced, non-compatible and in-experienced contractors for
the job.
Contractors claimed the payment without doing proper work and sometimes
were negligent in performing the duty.
It can be concluded from the interviews that PBMC looked like a very effective way for
maintaining roads/bridges based on its principles. However, the following aspects of
PBMC need improvement in order to implement the method successfully:
Elimination or reduction of political influence during the selection process of
contractors and projects.
Securing the funding for prompt payment of the contractors.
Reduction of the dependency on Asian Development Bank (ADB), the World
Bank or other donors for funds and loans.
Providing proper training of the contractors and supervisory staff of the RHD.
There are many experienced contractors in Bangladesh who can take such kind
of responsibilities if they receive proper training. Even RHD staff members are
highly qualified engineers and professionals of the country. They need to work
as a team to gain skills and efficiency.
Motivation of RHD staff and contractors towards the new concept.
Improving the attitude of the top management towards PBMC.
98
However, to ensure the success of PBMC in Bangladesh, it must be ensured that
the site will be safe and contractors and the RHD officers can work together as a
team honestly and safely, and get an environment of work free of political
influences.
CONCLUSION 5.5.
This chapter presents the result of the analysis of this research. Although developing
countries may face some barriers in introducing PBMC, it is a better alternative which
can be adopted together with the current contracting process. However, some guideline
and strict regulation should be followed to eliminate these problems that can affect the
successful implementation of PBMC in Bangladesh. Chapter six will summarise the
findings of chapter five and provide a discussion which will support the successful
implementation of PBMC in a developing country.
99
CHAPTER SIX
CHALLENGES OF PBMC IMPLEMENTATION IN DEVELOPING
COUNTRIES
IMPLEMENTING PBMC IN DEVELOPING COUNTRIES 6.
This chapter summarises the findings of the survey and interviews. Implementing
performance based maintenance contracting (PBMC) in a developing country is more
challenging than developed countries. This research keenly observes the problems and
challenges of PBMC in the context of Bangladesh and other developing countries that
are already using PBMC successfully.
This chapter discusses the challenges of PBMC in developing countries in section 6.1
and presents an overview of issues that should be considered during the introduction
and implementation phase of PBMC in section 6.2. It also discusses the potential of
PBMC in Bangladesh in section 6.3.
CHALLENGES FOR THE DEVELOPING COUNTRIES 6.1.
The critical review of literature and analysis of the results from the data, questionnaire
surveys and interviews of this research finally establishes the factors that may work as
challenges in the path of introducing PBMC in developing countries (Sultana et al.
2012b). The challenges are as follows:
1) Support from the Government,
2) Dependency on External Funding,
3) Political Influence and Corruption,
4) Lack of Experience and Knowledge on PBMC,
5) Lack of Planning,
6) Challenges in Estimating the Cost,
100
7) Fear of Losing Job,
8) Performance and Attitude of Contractors,
9) Monitoring the Cost Savings,
10) Loss of Competition,
11) Loss of Control of the Network.
The factors mentioned above may affect the introduction of PBMC in developing
countries. However, it is not necessary that every country would confront all of these
difficulties. Overcoming the challenges would lead to the successful establishment of
PBMC for road network maintenance and management in developing countries.
Support from the Government 6.1.1.
Getting support from the government for a long-term road maintenance approach like
PBMC is one of the most challenging issues in a developing country. All the
participants of the survey agreed that lack of government's budgetary allocation for the
long term commitment could be a problem in a developing country (refer to Chapter 5,
section 5.3.13). Introducing a PBMC project without the assurance of funding from the
government could turn into a disaster for the road maintenance system in developing
countries. It is evident that the government of a developing country always gives
priority to the construction of new roads than the maintenance of existing ones. New
construction projects are always the easiest way to attract the attention of the general
public and secure votes for the ruling party.
Most developing countries have internal issues related to the building of a sustainable
infrastructure system. It is evident from the analysis that the government of a
developing country always gives priority to the construction of new roads than
maintaining existing ones. The construction projects of building new roads seems to be
more attractive than the maintenance of older one to draw the attention of the general
public and secure votes for the ruling party.
The studies on the road network maintenance system of Bangladesh assists in
understanding the problem well. The research findings from surveys and interviews
show that bureaucracy among the various ministries and funds shortage for road
maintenance projects cause delay in allocating fund for road maintenance works in
101
Bangladesh. The finding also infers that shortage of funding for road maintenance
works is one of the reasons that cause delay in project completion in developing
countries. In Bangladesh, when the roads become almost unusable or a majority of the
community criticizes the government’s effort towards road maintenance, the
government immediately manages to allocate funds for the routine maintenance to stop
the outrage of people.
The literature shows that the road network system of Chad was in a poor condition due
to insufficient domestic funds for road maintenance before shifting to PBMC. The
government of Argentina also supported a series of transformations in the road sector
which has enabled important achievements in terms of sector development. They have
decentralized the expenditure and financing responsibilities to provincial and local
governments and introduced private sector financing. They also transferred the
execution of works to private contractors and focussed on the capacity of the existing
road agencies towards more efficient planning (Silva & Liautaud 2011). The support of
the government in Argentina helps in achieving the success to implement PBMC (called
CREMA) for road maintenance and rehabilitation. These are two examples of how
receiving or not receiving the support of the government can affect the road network
system.
However, shortage of funding for routine maintenance works is always a problem in
developing countries. Moreover, the success of PBMC may not be achieved in the first
trial project. Governments in developing countries, who are already facing funding
shortages in other sectors, hesitate to provide funding at the early stages. Once the
application of PBMC is established with the help of a loan, then the government may be
interested to finance the road maintenance projects.
Dependency on External Funding 6.1.2.
Many developing countries in Latin America like Argentina, Brazil, Chad, Chile,
Uruguay, and many other countries in Africa, Asia, and Europe started PBMC as they
often received external funding for the privatization of road maintenance by introducing
PBMC. Donor agencies recognized the benefits of PBMC as a tool for poverty
reduction and sustainable development in the developing countries (Hartwig et al.
2005). For example, Colombia, Brazil, Guatemala, Peru and Uruguay have initiated
102
PBMC on a pilot basis with technical assistance from the International Road Federation
(IRF) and German Aid (Zietlow & Bull 1999). Most of these contracts have been
operating for more than a year and cover routine maintenance and in some cases,
periodic maintenance and road rehabilitation as well. Extension of the road network,
road surfaces and conditions, and the time period vary in each pilot project and would
provide a wide basis for evaluation and improvements.
Argentina also received a loan from the World Bank for the first time in 1993 for high
priority rehabilitation and maintenance works on the non-concessioned paved network.
Later on, delays were accumulated in the implementation of the Bank-financed highway
project on-going at the time, stemming from problems with counterpart funds that
became critical with the onset of the macroeconomic crisis in 1995. It affected all the
World Bank projects in Argentina; such delays being compounded by a lack of stocks
of government-prepared detailed engineering projects, ready to bid (Silva & Liautaud
2011). However, they solved the problem by reducing the dependency on external
funding which is discussed in section 6.1.1.
The literature review and survey show that PBMC ensures the long term funding for
road maintenance (refer to Chapter 5, section 5.3.8). It is now evident that the
government shows interest for investing in this long-term approach if the initial cost of
introducing PBMC is supported by any external funding authority. The two trial
projects of PBMC in Bangladesh are also supported by a donor agency.
However, receiving support from an external authority or the donor agency can only be
a temporary solution for developing countries as providing fund is mainly dependent on
the donor’s willingness to support the country. Actually, lack of funding and
dependency on the external funding are the hardest obstacles for the road sector of
developing countries. If donors are not satisfied with the road authority or the
government for any reason, they may suspend or cancel the loan. It may severely affect
the construction project and the country may confront difficulties in implementing or
even starting the project.
The suspension of external loans of the US $2.9 billion Padma Multipurpose Bridge
Project construction in Bangladesh is an example of the negative side of dependency on
donor funding. The lead financier, the World Bank, suspended the loan on September,
103
2011 while the construction work of the bridge was planned to start in 2012 (The Daily
Star 2011). As a result of the World Bank’s decision towards the project, other
financiers also suspended the loan. The purpose of this bridge-project is to connect the
south-western region of the country to the rest of Bangladesh. This project could help to
improve the economic growth of the country. The cancellation of the loan for the Padma
Multipurpose Bridge Project in Bangladesh is an example of how such a decision can
stop a construction project in a developing country.
Moreover, the survey result also indicates that the Roads and Highways Department
(RHD) of Bangladesh has a severe shortage of funds for the routine maintenance of
roads. If the situation continues, the establishment of PBMC will be difficult for
Bangladesh. The interviews show that assurance of getting timely payments is one
among many reasons that make contractors happy with PBMC in Bangladesh.
Therefore, this study suggests that the road authority in a developing country should not
depend only on the external support. They should ensure the source of internal funding
as early as possible if they are planning to introduce PBMC. Otherwise, it would be
difficult to handle such long term contracting approach.
Political Influence and Corruption 6.1.3.
Political influence and corruption is another barrier for any new concepts or good
efforts to be implemented in developing countries. The survey shows that political
influence and corruption exist during the tender stage of the projects, selection of the
contractors and in the construction phase of the road maintenance works in a developing
country (refer to Chapter 5, section 5.2.7). For example, the World Bank suspended a
loan for the Padma Multipurpose Bridge Project in Bangladesh alleging the involvement
of a company in corruption. They claimed that a company illegally tried to win the bid
of supervising the construction works of the main bridge costing around US$50 million
(The Daily Star 2011). The World Bank has finally cancelled its $1.2 billion loan for the
project in June, 2012 saying it has proof of corruption and conspiracy involving
Bangladeshi officials, executives of a Canadian firm and individuals (Staff Report
2012). Hence, political influence and corruption can terribly affect the road sector and
in turn, the economy of a country. The literature also shows that the construction of new
roads is the means of becoming popular and securing future votes among the local elite
104
and politicians in Bangladesh. The road sector of Bangladesh is also very famous for the
widespread corruption. The scenario is similar in most of the developing countries.
One of the objectives of introducing PBMC for road infrastructure maintenance is to
reduce the chance of political influence and corruption. Performance of contractors is
supervised by the road authority in PBMC. The supervision work and the selection of
contractors should be fair. This issue is not a concern in developed countries as their
road authorities are always keen to ensure road users’ satisfaction and return the tax
payers money in the form of safe and secure roads.
The survey and interview results indicate that the strong influence of the politicians and
the top level management increase the possibilities of corruption in the road sector of
developing countries (refer to Chapter 5, section 5.4). A contractor is awarded the
contract for a long term to maintain the selected road network in PBMC. A tendering
free of corruption must be ensured in this regard. The road authority officials supervise
the site to check the performance of the contractors in PBMC. If these officials take
bribes during these checks, the situation can be worse than ever.
Therefore, it can be concluded that reduction of the political influence and corruption in
the construction and maintenance of roads depends on the willingness of the
government, ruling political party, and influential elite of a developing country. Any
new approach may be able to reduce it for a while, but it requires massive cultural and
economic changes as a whole in the country to improve the total phenomenon. This
study suggests that the contract documents should be strictly prepared and implemented
in PBMC. Otherwise, there is no guarantee that PBMC would be free of political
influence and corruption in developing countries.
Lack of Experience and Knowledge on PBMC 6.1.4.
Lack of experience and knowledge of PBMC is a barrier for its implementation in
developing countries. The findings of the survey show that shortage of skilled and
experienced staff and lack of efficient contractors in the RHD of Bangladesh affects the
current contracting system. The survey also indicates that shortage of skill and training
of staff and contractors is an area of concern which may delay the implementation of
PBMC in a developing country. Literature infers that other developing countries also
105
have similar problems. For example, during the introduction of PBMC in Indonesia,
providing training to the staff on the new approach was necessary so that they could
adapt to their new roles and responsibilities. Otherwise, the government agencies are
considered to be capable of undertaking a pilot trial of PBMC (Opus International
Consultants Ltd & MWH NZ Ltd 2006).
Therefore, experienced personnel are required to decide the appropriate maintenance
project, prepare the guidelines for the trial project of PBMC, prepare the contract
documents, set up the suitable performance standard, and provide training for the staff
and contractors. Many developing countries also consult overseas contractors
experienced in PBMC.
Lack of Planning 6.1.5.
Lack of planning is another challenge for developing countries during the introduction
of PBMC. This research suggests that lack of planning and organisation of work may
cause loss of quality in the first trial of PBMC. The road authority has to decide whether
their construction industry is underdeveloped to implement the new contracting
approach (refer to Chapter 5, section 5.3.13). They should plan a systematic way for
moving its maintenance works towards PBMC approach. For example, the experience
of other countries in an early stage of PBMC suggests that in the case of highly
deteriorated road condition, the roads should be rehabilitated first before moving to
PBMC. Planning and experience is really important to take such decisions.
Therefore, the road authority should prepare a long term plan before introducing PBMC
to confront this barrier such as: having a good record of data or starting the project with
the roads for which historical data and inventory are available and in the meantime
collecting data for future projects, ensuring a long-term source of funding, preparing a
good contract document, providing training to staffs and contractors, having future
planning for the staffs losing the jobs, determining the projects that are suitable for the
pilot trial of PBMC, increasing the transparency of the projects and doing research in
similar contracts in other developing countries.
106
Challenges in Estimating the Cost 6.1.6.
The literature review on PBMC suggests that the successful implementation of PBMC
also requires a proper estimation of costs of the tendering and the contract. Contract
terms, documents and performance standards may vary in different countries. As PBMC
is a long-term contract, it is difficult to change anything once the contract starts.
Interviews with the expert personnel indicates that estimating the costs of PBMC at an
early stage will be difficult for developing countries as they do not have the working
experience with the new concept (refer to Chapter 5, section 5.4). Lack of data on roads
also increases the severity of this problem.
However, in the case of the externally funded project, donors provide consultancy
services. On the other hand, the downside of hiring a consultant from outside the
country is that the road authority has to spend more money than that of hiring an
internal consultant. Experts also have an anxiety that initial set up of PBMC in
developing countries may not be lower in cost if an international consultant has to be
hired due to the lack of experienced consultants in the country. Moreover, due to the
lack of experience on PBMC, internal consultants may lose the chance of getting the job
at an early stage of PBMC.
Fear of Losing Job 6.1.7.
Another beneficial side of PBMC mentioned in the literatures is to reduce the number of
employees in road authorities. The survey of this research shows that staff attitude on
the new work culture would offer resistance to PBMC in a developing country (refer to
Chapter 5, section 5.3.13). Interview of this research reflects that PBMC should not be a
direct way of downsizing the employee as it can shed a negative effect on them (refer to
Chapter 5, section 5.4). Moreover, not many government sector officials will be willing
to leave the job and join the private sector if it has happened as a consequence of
implementing PBMC in developing countries for example, Bangladesh.
Most of the private sector jobs are not considered as secure as government jobs in many
developing countries. The staff and union of developing countries may not cooperate in
implementing PBMC as a result of fear of losing jobs. The road authority should
prepare a plan for the staff that is losing their jobs if they want to achieve success. On
107
the other hand, a road authority should also consider the consequences of the reduction
of the staff before introducing PBMC. The government’s road authority should have the
sufficient technological capability to improve the road infrastructure system with
increasing population and upcoming technologies in the future. The cut down of staff
should not be so extreme that the road authority in a developing country has to depend
on the private sector for research and development in the future.
Performance and Attitude of Contractors 6.1.8.
As PBMC is dependent on the performance of the contractors, the contractors must be
capable enough to adapt the approach. The survey confirms that lack of efficient
contractors and adequate construction industries have impacts on the timely completion
of projects (refer to Chapter 5, section 5.2.2). The survey also shows that contractors’
capacity and commitment would be a problematic issue of concern for PBMC in
developing countries (refer to Chapter 5, section 5.3.13).
The literature review confirms that poor performance of the contractors has been
observed in some contracts. However, this drawback may be addressed properly by
introducing qualitative pre-qualifications to the tender. The necessary information on
the contracts should be provided prior to the implementation of PBMC. Training in
PBMC should also be a prerequisite for the contractors who want to participate in the
tendering. This can help to reduce the fear of poor performance of the contractors at the
initial stages of PBMC.
Moreover, the road authority should also monitor the level of service provided by the
contractors in PBMC. PBMC ensures the risk sharing of contractors and gives them the
flexibility to choose the work methods. Contractors should be motivated to enjoy the
benefits of PBMC.
Monitoring the Cost Savings 6.1.9.
One of the main reasons of PBMC becoming popular is the claim of cost savings. For
example, in Guatemala, fortunately most of the pilot schemes were highly successful,
with the exception of a few smaller contracts which were not prepared properly. In all
other cases, road conditions in the pilot areas have improved notably and maintenance
108
costs have either stayed the same or have been reduced. Road authorities and
contractors express satisfaction with the preliminary results (Zietlow & Bull 1999).
There is no doubt that successful implementation of PBMC improves the road
maintenance and management system. However, this research has found out that there is
a lack of detailed information or study on the claim of cost savings by using PBMC in
Argentina, Brazil, Chad, or other developing countries to date. They may not conduct
any direct research or survey on cost savings using PBMC. The interviewees of this
research also asked for a model to compare the cost savings of PBMC and traditional
methods of contracting (refer to Chapter 5, section 5.4). Therefore, it can be concluded
that there is a gap in the research on the claim of true cost savings and estimated cost
savings of PBMC in developing countries.
However, this research suggests that due to a very limited amount of evidence of cost
savings by implementing PBMC in developing countries, monitoring the cost savings is
also a challenge for other countries that are planning to start PBMC. Road authorities
should consider this challenge and try to monitor the possibilities of cost savings from
the earliest stage of implementing PBMC in their countries.
Loss of Competition 6.1.10.
PBMC transfers the risk and responsibility of the design and management of projects to
the contractors. The size of the contractors must be big enough to take such
responsibilities. The literature review indicates that the number of contractors bidding
and tendering for PBMC projects is very few due to the high cost of tendering and
bidding. For example, in the early stages of introducing PBMC, the resulting number of
tenderers after the prequalification phase for PBMC in Tasmania and Western Australia
was only four as the cost of bidding was high (Robinson 1999).
Preparing the tender documents, bidding, prequalification of the contractors, sharing the
risk and estimating the cost of PBMC involves a complex procedure. Interviews imply
that it may reduce the competition between the contractors and increase the fear in small
contractors of losing their work (refer to Chapter 5, section 5.4). This research suggests
that the road authority and the large scale contractors can provide training to the small
contractors to work together as a union or as a subcontractor to get jobs.
109
Loss of Control of the Network 6.1.11.
The literature indicates that the road authorities have a common anxiety of losing
control over the network as PBMC gives flexibility to the contractors to choose their
own work methodologies. If performance standards are not properly addressed in the
contract, loss of control of the service could be observed in the earlier stages of PBMC
in developing countries.
The survey results indicate that most of the respondents supported prescriptive methods
in traditional methods of contracting for doing the work (refer to Chapter 5, section
5.3.2). In the earlier stages or for trial projects, some prescriptive methods can be
suggested to achieve the performance measures in PBMC. As the contractors are
habituated with this type of prescriptive agreement for so many years, they may find it
difficult in the trial projects without getting the support of road authority officials.
Providing too much flexibility in the earlier stages can result in a loss of control of the
project (refer to Chapter 5, section 5.4). A direct contract manager can also be appointed
by the road authority that will manage and supervise the delivery of the contract.
However, too much interference from the road authority may not be helpful to the
contractors. Prescriptive methods may no longer be necessary when the contractors gain
experience with time.
ISSUES TO BE CONSIDERED BEFORE THE INTRODUCTION OF 6.2.
PBMC
Many road authorities are trying to introduce PBMC in their countries because of its
beneficial sides. A Pilot trial project of PBMC is needed to measure the feasibility,
capability, cost and quality of work before it is fully introduced for road maintenance. It
would help to establish a relationship between the contractor or private sector and the
road authority (Frost & Lithgow 1996). The road authority in a developing country
should consider the challenges discussed in section 6.1 during the pilot trial. However,
the literature review and analysis of this research has identified a number of common
issues that have been considered by several road authorities in developed and
developing countries before the introduction of PBMC (Sultana et al. 2012a). The issues
are as follows:
110
1) Setting a performance standard;
2) Expertise of the private sector;
3) Deciding the project in the early stage of PBMC;
4) Risk exposures;
5) Performance monitoring;
6) Employee issues and
7) Payment and termination of the contract.
Road authorities should also address these issues so that they can successfully
implement PBMC.
Setting a Performance Standard 6.2.1.
Performance standards help the contractors to achieve desired outcome in PBMC.
Specifying the standards is also necessary to measure the contractors’ performance and
to give their payment. The road authority takes the responsibility to decide the
standards. They have to ensure that the performance standards are clearly defined in the
contract document and during the tendering. This would help to avoid any costly
dispute of the PBMC project.
Expertise of the Private Sector 6.2.2.
PBMC requires an experienced private sector or large contractor to take the risks and
responsibilities. Implementation of PBMC depends on the capability of the road
authority and the private sector or the contractor. The findings of this research indicate
that the road authority and the contractors also get a chance to increase the expertise in
the road sector by using PBMC. For example, contractors in Indonesia were capable of
handling a large contract with risk sharing responsibility, but they required training on
maintenance management (Opus International Consultants Ltd & MWH NZ Ltd 2006).
Therefore, training could in turn increase the management skills.
The introduction process of PBMC (CREMA) approach in Brazil can also be given as
an example. The implementation of this revolutionary approach in the Brazilian context
required important efforts of adaptation on both the public/client and private/contractor
sides. Such adaptation took place in a gradual fashion, with a relatively lengthy process
(close to a year) to structure the first bidding documents and related technical norms. At
111
bidding stage, the private sector reaction to PBMC in the state of Rio Grande do Sul
was adequate. On the other hand, reaction in a first round of bidding at the federal level
was less successful and inadequate proposals warranted the re-bidding of the first
contracts (Lancelot 2010).
It can be concluded from the survey and interview results that the long term PBMC
requires proper planning, skills and knowledge in the road authority and the contractor
to gain experience with time and fulfil its objective of achieving a strong and cost-
effective road infrastructure system.
Deciding the Project in the Early Stage of PBMC 6.2.3.
The road authority has to decide the type of the road and the duration of the contract
which will perform better under PBMC at its initial stage. The level of complexity of a
PBMC can range from “simple” to “comprehensive” depending on the number of assets
and range of services included. A simple PBMC would cover a single service (for
example, only mowing, only street light maintenance) and could be awarded for
relatively short periods (several months or one year) (Stankevich et al. 2005).
A comprehensive PBMC would typically cover all road assets with the right-of-way and
comprise the full range of services needed to manage and maintain the contracted road
corridor. Such services would include routine maintenance, periodic maintenance and
traffic accident assistance. As periodic maintenance works (for example, resurfacing, re-
graveling) need to be repeated in a certain period, the contract tenure is usually from 3
years to 10 years and could go up to 30 years. In a comprehensive PBMC, most of the
works are often outsourced by the main contractor to subcontractors. Rehabilitation is
not a compulsory component of a comprehensive PBMC. (Stankevich et al. 2005).
However, the review of other countries experiences suggests that the maintenance and
rehabilitation work of roads should be separately identified for the pilot trial of PBMC
to avoid complications. In case of highly deteriorated roads, roads should be
rehabilitated before starting the PBMC. Many road authorities used traditional methods
of contracts for rehabilitation.
Moreover, this research also suggests that during the selection of the pilot project a road
authority should consider the type and length of roads and duration of the contract. The
112
length of PBMC can vary from 2 to 10 years. The road authority should carefully select
the first trial project. It may not be possible to achieve success in the first trial. Many
road authorities revealed the weaknesses of the contract once the project started. They
may hesitate to proceed further with the new concept if they fail to achieve good
outcomes. However, road authorities should learn from the first contract and use the
lessons to improve the future contracts.
Risk exposures 6.2.4.
A shift in the method of specification, from work output to performance, will shift the
risk exposure of the road authority to the contractor. The fundamental premise of the
first PBMC by Road Transport Authority (RTA) of New South Wales, Australia was
that the contractor had to achieve the specified road condition standards over the term of
the contract and must program, fund, design and deliver whatever works are required to
achieve these standards (Frost & Lithgow 1996). The risks for which the RTA
continued to bear some responsibility in that contract were as follows:
Major bridge repair activities such as strengthening, rehabilitation and
replacement and major embankment repair activity.
Force Majeure includes events such as earthquake, bushfire, extreme weather or
flood, war, riot, blockades and contamination. The basic definition is that Force
Majeure applies for events which could not have been reasonably predicted, are
beyond the control and could not have been avoided by the road authority and
the contractor.
Changes in traffic volume and in inventory.
Exclusion of two low trafficked roads in poor condition.
Reimbursement of costs arising from the defined third party actions such as the
restoration of road excavations by others (water, gas, telephone etc), damage due
to an over-dimensioned vehicle operating under permit, damage due to a motor
vehicle accident, vandalism, excluding graffiti (Frost & Lithgow 1996).
Some literature also suggested that PBMC may include risks like poor quality of
construction, unexpectedly severe weather, unanticipated environmental problems,
emergencies, unanticipated legislative change, unexpected traffic growth, a short-term
focus that fails to minimize long-term life-cycle costs, and difficulty in acquiring the
113
resources needed to perform the work (for example, subcontractors) (Hyman et al.
2009).
The survey result infers that the contractors should be capable of taking the risk. The
findings of the research also indicate that risk sharing is beneficial for the road
authority. It would reduce the poor workmanship of contractors which is common in
traditional method of contracts. This research suggests that the risk exposure issue
should be properly identified and addressed to the contractors who want to participate in
the tendering during the introduction of PBMC. Moreover, individual road authorities
should consider to what extent they can share and manage the risk during the trial
projects.
Performance Monitoring 6.2.5.
Monitoring the performance of the contractor is another important part of PBMC.
Moreover, the road authorities should always try to keep pace with the advancement of
innovative technology, and increasing expectation of road users with time. Road
authorities are required to monitor the quality of work, cost savings and record the road
history and inventory data for future research and development during the
implementation of PBMC.
Employee Issue 6.2.6.
As the road authority requires fewer people for administrative work and supervision in
PBMC, the fear for losing job is an important issue for the employees and the road
authority. In many contracts, private operators retain the existing employees because of
the benefits of having an experienced workforce (Segal et al. 2003).
For example, prior to the establishment of PBMC, the Road Transport Authority (RTA)
of New South Wales, Australia employed 89 people on works which would be included
in the contract. The contracting company’s offer included a provision for their
employment of up to 35 of these people, based on the contractor’s satisfaction on their
suitability and willingness of these employees to work with the contractor. The
negotiations between the RTA and unions focused on arrangements for dealing with the
affected staff, the nature of any redundancy payout package, and the number of staff
affected and to be taken by the contractor. Finally, the RTA transferred 44 of the
114
affected staff to other duties within the RTA and gave voluntary redundancy packages
to a further 40 employees. Only 5 staff took up the offer of employment by the
contracting company (Frost & Lithgow 1996).
However, the experiences of other countries indicate that many road authorities used
PBMC to solve the shortage of skilled people and also to reduce the administrative
burden. This research suggests that the road authority should carefully consider the
employee issue during the introduction of PBMC. Moreover, excessively reducing the
number of employees may create a shortage of expertise in commencing research and
development in the road authority in the future.
Payment and Termination of the contract 6.2.7.
The compensation package and payment schedule should be incorporated into the
contract. Payments in PBMC should be a part of the package and would be a bit more
complex than standard fixed-price payment schedules. One strategy is to structure the
compensation in two parts. First, a fixed fee designed to cover basic facility operating
costs and any maintenance and capital upgrades must be agreed upon. Second, a
variable fee tied to performance against a basket of outcome measures may be
developed (Segal et al. 2003).
A “must” section details the method of termination for non-compliance, non-
performance, or general breach of a contract. It can be helpful to establish an escalating
scale of specific sanctions that culminate in termination and to specify the use and
structure of arbitration or mediation. Often, contracts will include “termination for
convenience” clauses, which allow either party to end the agreement without cause but
requiring sufficient notice, usually 60 to 120 days (Segal et al. 2003).
The experiences of other countries found in the literature indicate that the cost of
tendering and bidding in PBMC is very high. The contract documents should be
prepared carefully so that any problems which can lead to the termination of the
contract can be handled properly. It can be observed especially during the premature
stage of PBMC in a country.
115
POTENTIAL OF PBMC IN BANGLADESH 6.3.
Bangladesh has good potential for the implementation of PBMC. It is evident from the
research that the construction industry of Bangladesh is capable of implementing
PBMC. The interviews confirm that the RHD has many experienced engineers and staff
that can be trained for the PBMC. The surveys also confirm that the RHD has good
contracting management experience and can easily adopt the PBMC concept. They also
have good knowledge and data of road networks, maintenance needs and costs which
can be used to implement PBMC. Therefore, contracting management experience of the
RHD, knowledge and data of the road network system would not create obstacles to
introducing PBMC in Bangladesh.
However, the RHD of Bangladesh should consider -
the allocation of fund from the government for the long term road maintenance
contract,
the consequences and effect of high level political and top level management
influence, corruption,
motivation and training of the employee and contractors,
capacity, commitments and efficiency of contractors in using the long term
PBMC.
Moreover, the downside of the road sector in Bangladesh is the popularity for
corruption. The survey also indicates that influence of political leaders and top level
management and a high level of corruption exist extremely during the tender stage of
the projects, selection of the contractors and construction phase. The survey results also
show that there is doubt among the participants whether PBMC will reduce the
corruption in developing countries. However, the respondents of the survey indicated
that PBMC would be effectively reducing the chance of continuous forced manipulation
as it is a long term contracting approach.
Allocation of fund would also be an area of concern in Bangladesh as the RHD faces
severe shortage of fund especially for routine maintenance works. Dependency on the
donors or external funding can only be a temporary solution. However, this research
suggests that long term funding for road maintenance should be raised by better using
116
the roads users and tax payers’ money like other countries do. This is a necessity to
implement a better management system for Bangladesh.
Bangladesh does not have shortage of labour, but they have shortage of skilled labour.
The survey also shows that Bangladesh has a lack of efficient contractors. These
problems can be solved by providing necessary training.
PBMC ensures the quality of work and expertise of staff and contractors, focuses on
customer satisfaction and motivates the contractors to do better quality of works.
Provision of sharing risk between the RHD and the contractor would improve the sense
of responsibility and discipline in road maintenance works. Currently, the RHD is
facing difficulties using traditional methods of contracting. This research suggests that
PBMC can be a better alternative in Bangladesh which should be adopted together with
the current practice of road maintenance contracting.
POTENTIAL OF PBMC IN DEVELOPING COUNTRIES 6.4.
The implementation of PBMC would be effective and successful in a developing
country if a road authority addresses its potential benefit and obstacles. As discussed in
the literature (refer to Chapter 2), analysis (refer to Chapter 5) and earlier sections of
this chapter, a road authority should run a trial project of PBMC to ensure that the aim
is achievable for them. If a road authority have a good record of past history and data on
roads, support from the government, a source of funding, the technical feasibility, the
private sector or contractors who could share risk, could consider PBMC to improve the
road maintenance system. Many developing countries like Argentina, Brazil, Chad,
Guatemala, Indonesia and Uruguay improved their road infrastructure maintenance and
management systems by implementing PBMC. It has the potential to reduce the road
maintenance cost.
Introduction of PBMC improves quality of work as the contractors also share the risk
and responsibility of maintenance projects. It helps to improve the efficiency and
expertise of both staff and contractors. It ensures customer satisfaction and fast delivery
of projects, increases transparency in the long run. Moreover, the development of road
network maintenance system convinces the government in a developing country to
provide funding for the long term PBMC.
117
The road authority decides performance standards which should be clearly defined in
the contract document and during the tendering.
CONCLUSION 6.5.
The interpretation of the contract language is very important for PBMC.
Implementation of such an approach requires a total cultural change among the road
authority and the contractors. However, this chapter has presented a set of issues which
can be considered as the challenges of PBMC in its early stages in developing countries.
Overcoming these barriers can make this approach successful in developing countries. It
also summarises the findings of surveys and interviews conducted on Bangladesh to
examine the potential of PBMC application in developing countries in the context of
Bangladesh. It also summarises the potential and effectiveness of PBMC in developing
countries. The next chapter will present the summary and contribution of this thesis.
119
CHAPTER 7
CONCLUSION AND SUGGESTIONS FOR FUTURE RESEARCH
INTRODUCTION 7.
The scope of this research was to define and present the benefits of performance based
maintenance contracting (PBMC) for road maintenance, analyse the hindrance to
implement PBMC in developing countries, and conducting a case study to examine the
potential of PBMC in developing countries. This chapter summarises the contributions
of this thesis and discusses the scope for future research. The main contribution of this
thesis are (i) defining PBMC and presenting advantages and disadvantages of PBMC
for road maintenance and management (ii) analysing the experiences of other countries
during the implementation of PBMC (iii) examining the potential of PBMC in
developing countries on the context of the case study Bangladesh (iv) analysing the
challenges of implementing PBMC in developing countries (v) presenting an overview
of issues that should be considered before introducing PBMC and (vi) examining the
potential of PBMC for road maintenance in Bangladesh. A summary of contribution of
this thesis is provided in section 7.1, limitations of this study are identified in section
7.2 and recommendations for future research are discussed in section 7.3.
CONTRIBUTION OF THIS THESIS 7.1.
This thesis provides the scope of this research and defines PBMC for road infrastructure
maintenance in Chapter 1. It also presents the need for a better management decision for
road maintenance which can be achieved by implementing PBMC. The objective of the
research is also defined in this chapter.
The main contributions of this research are described in this section in the subsequent
paragraphs.
120
An in depth state of the art review of the literature on PBMC was carried out to provide
the background of this research in Chapter 2. PBMC is still a new concept with 24 years
of history after the inauguration of the first contract in British Columbia, Canada in
1988. This thesis presents a brief history of PBMC, discusses and analyses the benefits
of introducing and implementing PBMC for road maintenance in Chapter 2.
(i) The benefits of introducing PBMC for road maintenance are as follows-
Cost savings;
Reduction of administrative cost and increase in proficiency;
Introduction of innovation;
Reduction of delay and impact on public;
User satisfaction;
Risk sharing by contractors;
Assurance of quality;
Availability of initial funding sources;
Sustainable road management system and assurance of long-term funding;
Increase in flexibility and
Increase in transparency and reducing the chance of corruption.
(ii) Analysing the experiences of other countries during the implementation of
PBMC
In Chapter 2, this research also discussed examples of other developed and developing
countries that have been using PBMC as their preferred method of contracting for road
maintenance such as Argentina, Australia, Brazil, Chad, Guatemala, Indonesia, New
Zealand, Uruguay and USA. The experiences of these countries have also been used to
investigate the advantages and disadvantages of PBMC.
This research briefly discusses problems of traditional methods of contracting which are
as follows-
Escalation of cost and time;
Poor quality of work;
Inadequate motivation;
No proper risk sharing;
Overhead and supervision cost;
121
Delay in project completion;
High level of political influence and corruption and
Lack of proper training in the public sector.
In Chapter 2, this research project also investigated and reviewed literature on
disadvantages and impediments of PBMC.
(iii) Examining the potential of PBMC in developing countries on the context of the
case study Bangladesh
Bangladesh-A Case Study
After analysing many journal and conference papers and published reports on PBMC,
this research project determined to conduct a case study in a developing country to fulfil
the research objectives. This research selected Bangladesh, a developing country of
south Asia as a case study. There is no academic research conducted till to date on
Bangladesh to examine its potential in implementing PBMC. Hence, this case study
examines the potential of PBMC to improve the road infrastructure maintenance in
developing countries on the context of Bangladesh. The Roads and Highways
Department (RHD) of Bangladesh wants to introduce PBMC to improve the poorly
maintained road network system.
In chapter 3, an overview of the road network system of Bangladesh was presented. The
Asian Development Bank (ADB) initiated two trial projects of PBMC in Bangladesh. A
preliminary study was conducted on the present situation of road maintenance of
Bangladesh. This chapter also briefly discussed initiatives to improve the road
maintenance of Bangladesh.
This thesis presents the design of the research in Chapter 4. However, after studying the
data of several road maintenance projects of Bangladesh, this research determined to
conduct questionnaire survey and interviews. The preparation of survey and interview
has also been discussed this chapter.
Findings of the questionnaire surveys and interviews
122
Analysis and findings of questionnaire surveys and interviews of this research project
were discussed in Chapter 5 which are as follows -
The most remarkable factors which contribute to the variation in cost of the
projects in traditional methods of contracting.
Factors that contribute mostly to projects' failure to complete in scheduled time.
Factors that contributes mostly to the delay of contractors’ payment.
The quality of work achieved on the road maintenance projects using traditional
methods of contracting.
Level of skill and experience of staff in the road authority of a developing
country.
Effect of mismanagement, political influence or corruption in road maintenance.
Potential of risk sharing between the client and contractors for road maintenance
projects in developing countries.
Assurance of quality and introduction of innovation by the contractors in road
maintenance projects using PBMC.
Improving efficiency of the employees and getting expertise by the contractors
using PBMC.
The potential of increase in transparency, customer satisfaction, securing long
term funding for road maintenance, fast delivery of projects, and achieving cost
savings using PBMC.
Technical feasibility of the RHD of Bangladesh to adopt the PBMC approach.
Barriers during the implementation of PBMC in a developing country.
(iv) The challenges of implementing PBMC in developing countries
There is very little research that focuses on the obstacles of PBMC especially in a
developing country. Moreover, investigating the challenges of PBMC implementation
in developing countries has not been received much emphasis till to date. After
analysing the survey and interviews, this research develops the list of challenges that
can create hindrances in implementing PBMC in developing countries. In Chapter 6,
this thesis presents and analyses these barriers which are as follows:
Support from the Government,
Dependency on External Funding,
Political Influence and Corruption,
123
Lack of Experience and Knowledge on PBMC,
Lack of Planning,
Challenges in Estimating the Cost,
Fear of Losing Job,
Performance and Attitude of Contractors,
Monitoring the Cost Savings,
Loss of Competition,
Loss of Control of the Network.
(v) Presenting an overview of issues that should be considered before introducing
PBMC
The literature review and analysis of this research identified a number of common
issues that were considered by several road authorities in developed and developing
countries before the introduction of PBMC. These issues were presented and discussed
in Chapter 6 which are as follows:
Setting a performance standard;
Expertise of the private sector;
Deciding the project in the early stage of PBMC;
Risk exposures;
Performance monitoring;
Employee issues and
Payment and termination of the contract.
(vi) Examining the potential of PBMC for road maintenance in Bangladesh
Bangladesh has a huge potential to implement PBMC. This research suggests that
PBMC is a better alternative that should be adopted together with the current method in
Bangladesh. The RHD has good contracting management experience and can easily
adopt the PBMC concept. The surveys and interviews also implied that contracting
management experience of the RHD, knowledge and data of the road network system
would not create obstacles to introduce PBMC in Bangladesh.
124
However, the RHD of Bangladesh should consider the challenges and issues described
in this thesis. The barriers of implementing PBMC in Bangladesh are as follows-
lack of government's budgetary allocation for the long term PBMC;
Political influence, mismanagement or corruption ;
lack of skills and experience on PBMC;
training of staff (both road authority and contractors’ organisation);
contractors' capacity and commitment and
staff attitude to the new work culture.
LIMITATIONS OF THIS RESEARCH 7.2.
The research has some limitations such as:
This research has only focused on the problems of the road maintenance using
traditional methods of contract and examines the potential of using PBMC as an
alternative method in developing countries in the context of Bangladesh. In
depth research would be required to prepare a detailed guideline on how to start
PBMC in developing countries. There is also scope to do further research on the
criteria or performance standards upon which the road authorities of developing
countries can implement PBMC. This research does not include these issues due
to time limitations.
Only two trial projects using PBMC have been conducted in Bangladesh until
now. It is too early to comment on them as the numbers of trial projects are very
few. Moreover, two trial projects are not sufficient enough to investigate the
success of PBMC in Bangladesh.
Although this research presents the challenges of PBMC in the developing
countries, preparation of a detailed guideline is necessary regarding the factors
for the success of PBMC. This research does not include the process of set up
the tender documents, or prequalification criteria for contractors which are also
very important for PBMC.
125
RECOMMENDATION FOR FUTURE RESEARCH 7.3.
PBMC is a new concept to resolve the problems related to traditional methods of
contracting and has significant potential to improve the maintenance and management
of road infrastructure system. Developed countries including USA, Australia, New
Zealand, and UK have implemented PBMC successfully. Many developing countries
have already implemented PBMC, where some other countries are currently considering
PBMC for their road infrastructure systems. This concept is still in its early stages and
has huge potential and scope of work for future researchers. Some of these are-
Future research can be conducted on the countries that are using PBMC to
compare the cost saving between traditional methods of contracts and PBMC.
More research is necessary to find out the cost savings of PBMC in developing
countries. A cost model can be developed to compare the cost savings of PBMC
and traditional methods of contracting. If the model can be successfully
developed, it can improve the performance of PBMC. This research can be used
as a base or platform for future research in the area of PBMC such as developing
optimal policies and cost models.
Further researches can be carried out on standards which are needed to measure
the performance of contractors and to monitor the level of service provided by
the contractors. Further research can be carried out on performance standards in
different countries, and to develop a model which can help the road authority to
plan a proper performance-based maintenance contract and save costs of road
maintenance works.
The potential of reducing maintenance costs, increasing the quality of works and
reducing the chance of political influence and corruption in developing countries
are the challenging issues for PBMC, which needs more attention. Future
research could further investigate the challenges which can be the cause of
failure to implement PBMC in developing countries. Future research could be
carried out to develop a model including policies and guideline to overcome
barriers of PBMC in developing countries.
126
CLOSURE 7.4.
Researchers, professionals and engineers are working hard to maintain a well-
established road infrastructure system for communication in their countries. PBMC is a
new concept to resolve the problems of traditional methods of contracting and
significantly help to improve the maintenance and management of roads. This research
sheds some light on the way to introduce PBMC in developing countries.
As the concept is new, it also contains some negative aspects. However, the successful
implementation of the process requires patience, planning, experience personnel,
sufficient data, analysis, training, transparent management system and long-term
funding. If the road authority of a country carefully implements PBMC, most of the
objectives and benefits can be obtained by this method.
127
APPENDICES
129
APPENDIX 1
QUESTIONNAIRE SURVEY
130
1.1
1
2
1.2
1
2
3
4
5
6
1.3
1
2
3
4
Roads And Highways Department (RHD)
What is your current position? (Please tick or mention your position)
Top Level Management (Chief, Additional Chief or
Superintending Engineer/Senior Project manager)
Masters Degree
Contractor
Consultant
Questionnaire Survey Part 1: Personal Details
Mid Level Management (Executive or Sub-Divisional
Engineer/Project Manager)
Others (Please Specify)
What is the name of the organization?
Name of The Project: Examine the Potential of Performance Based Maintenance of Road
Infrastructure by Contracting (PBMC) in Developing Countries - Case Study from Bangladesh.
Questionnaire Survey
Confidential when completed
Questionnaire Structure: The Questionnaire contains pages consisting of three main parts.Part 1 solicits background information,
Part 2 requests information regarding the current contracting process on past and present road maintenance projects.
Bottom Level Management (Assistant Engineer/Sub-
Assistant Engineer/Graduate Engineer)
Ethical Statement: Griffith University conducts research in accordance with the National Statement on Ethical Conduct in Human
Research. This study was approved by the GU research Ethics Committee (GU ref No. ENG/13/11/HREC). If potential participants
have any concerns or compliants about the ethical conduct of the research project they should contact the Manager, Research Ethics on:
+61 07 37355585 or email: [email protected]
Contact Information: If you require any further information or have any questions regarding the research, please contact a member of
the project team:
1. Mrs. Masuda Sultana, M.Phil. Candidate, Phone: +61 07 55529057, [email protected]
2. Dr. Anisur Rahman, Chief Investigator, Phone: +61 07 55528255, [email protected]
3. Dr. Sanaul Chowdhury, Senior Investigator, Phone: +61 07 55528662, [email protected].
Others (Please Specify)
What is your highest level of education?
Griffith School of Engineering, Gold Coast Campus, QLD 4222, Australia
Information for Respondents
Purpose of the Survey: The goal of the survey is to assess the outcome of several road maintenance projects finished under traditional
methods of contracting in Bangladesh. Your response will help to evaluate this outcome against its objectives.
Partcipation: Your participation in this research is voluntary and will involve the completion of a Questionnaire survey.
Confidentiality: The Information will be used for academic purposes only. Your answers will be kept completely confidential. The
results will be collected and presented as summaries only, The compiled results of this research may be published in scientific research
journals or presented at professionals conferences. However, the individual respondent, their name or positions will not be identified.
The return of this completed survey will be granted as your consent to participate in the survey.
B.Sc. Degree
Diploma/Technical Certificate
Others
131
1.4
1
2
3
4
5
6
1.5
1
2 Bill of Quantities (BOQ)
3
4
5
2.1
1
2
3
2.2
1
2
3
4
5
6
2.3
1
2
3
5
2.4
1
2
3
4
2.5
1
2
3
4
In the next questions (2.1-2.10) please indicate your answers by a tick (or rank) as applicable.
Questionnaire Survey Part 2: Traditional Contracting Process
Were the projects completed by achieving the target?
Were not completed as per the schedule
Were the projects completed on time as per the original schedule?
Design Bid Build (DBB)
15-20 Years
All of them failed
10-15 Years
25 or more Years
What is the percentage of the maintenance projects that fails to be finished within budget?
25% or 1 out of 4 projects
50% or 1 out of 2 projects
More than 50% of projects failed
Others (Please Specify)
Were/Are cost of the projects remained within budget?
Please rank the reasons for the variation in cost from the most significant to the least significant one.
Totally failed to meet the target
Difficult to tell
20% or 1 out of 5 projects
Project Schedule and Scope
Almost within the target
Additional works instructed by the owner/Client
Other Reasons (Please indicate)
Other Reasons (Please indicate)
Some of them within budget and some exceeds budget
Note:This part consists of 1 section only and has up to 30 Questions (2.1 to 2.30).When rating a
statement or question, please use the rating scale as provided in each section.
Completed by achieving the target
All of them exceeds budget
Interest on late payment
All of them within budget
Budget/Cost
Extra works were required by the contractors
Completed ahead of schedule
Completed as per the schedule
Built Own Operate Transfer(BOOT)
How many years have you been in the road sector?
0-5 Years
5-10 Years
Lump sum
20-25 Years
What is the type of the contract that you are working? (tick as many necessary)
Others (Please Specify)
132
2.6
2.6.1
2.6.2
2.6.3
2.6.4
2.6.5
2.6.6
2.6.7
2.6.8
2.6.9
2.6.10
2.6.11
2.6.12
2.6.13
2.7
1
2
3
4
2.8
1
2
3
4
2.9
1
2
3
4
5
6
7
2.10
1
2
3
4
5
Contractors' claims have errors and need clarification
Are contractors always paid within the required time?
Rank common factors according to its significance that contributes towards the delay of contractors'
payment.
All funding requested for work are provided
Hardly any funding are provided
Delays in contract payments are quite common
Client's site officers slow in claim clarification
Intentional or deliberate delay by government workers
Claims are always paid within the required time
Most Claims are paid within the required time
Is an issue at the later stages of the project
Slow administrative process by Client (Government/RHD)
Processing of payment is slow or takes time
Funding unavailability or delays
Is fund a major issue that delays the progress of the project?
Poor supervision by client (Government/RHD)
No, its not
Project Funding
Lack of expert technical personnel by client (Government/RHD)
Extreme site condition like rain, flood etc.
Contract disputes or issues between the parties
Delay in payment of contractor
Extra work requirements of contractors
Shortage of Material, Manpower
Uneven increase/fluctuation of material price
Lack of efficient/competent Contractor
Poor top management support (Government)
Rank the following factors (as 1,2,3.. Up to 13) that contribute most to projects' failure to
complete in scheduled time (If you want to add any comments please provide in 2.6.13).
Few Claims are paid within the required time
All claims were paid late
Is an issue at the early stages of the project
Other Issues (Please Specify)
Yes it is
Modification of plan or design related issues
IT or computer system failure
Half of the funds requested for work are provided
Very little funding are provided
Indicate your opinion on the sufficiency of funding for road maintenance project provided by the
government.
Available fundings are more than the total funds requested for work
133
Highly
Sufficient
Sufficien
t
Average
Insufficient
Highly
Insufficien
t
Don't
know
2.11
2.12
2.13
2.14
2.15
2.16
1
2
3
4
5
2.17
1
2
3
4
5
6
Highly
Sufficient
Sufficien
t
Average
Insufficient
Highly
Insufficien
t
Don't
know
2.18
2.19
2.20
2.21
1
2
3
4
Strongly
DisagreeDisagree Average Agree
Strongly
Agree
Don't
know
2.22
Less than 5
Between 5 and 10
Between 10 and 15
Quality of work
Material quality control on the projects are
After a long time
For the next questions 2.11 to 2.16, please indicate your opinion where necessary by circling the
number on the rating scale, some questions may require ticks.
After 3-6 months
After 6-9 months
After 6-12 months
After 1-2 years
After 5 years
Depends on the level of traffic
The level of supervision provided by the
client to cover contractors site activities is
The existing quality control policies that
addresses all quality control issues are
Rating ScaleE
Indicate how soon road maintenance works will commence after the defects liability period.
The supervisory staffs' efficiency in
achieving project goal are
Rating ScaleE
The amount of Resource allocated for
implementing quality objectives are
Never at all
Please indicate the time when the first pothole is likely to appear after the defects liability period.(The
defects liability period is part of the construction contract, during this time the contractor is required to
repair defects (mainly routine maintenance) that occur within the project ).
After a year
The level of skill and experience of the
supervisory staff are
The level of training (pre & on the job) for
staffs are
Rating ScaleE
Administrative and Supervision Costs
More than 15
The requirements of clients for project
supervision costs a lot of money
For how many projects are an officer/employee engaged at a time on an average (approximate)?
The level of quality achieved on the projects
are considered
As soon as defects start arising
When ever funding is received
Skills of Staff
134
Strongly
DisagreeDisagree Average Agree
Strongly
Agree
Don't
know
2.23
2.24
2.25
2.26
Strongly
AgreeAgree Average Disagree
Strongly
Disagree
Don't
know
2.27
2.28
2.29
2.30
1
2
3
4
5
6 Other Issues (Please Indicate)
in selecting the project (in a priority basis)--
There are some mismanagement/political influence/Corruption ------
Rating ScaleE
Fair bidding procedure based on Quality.
Client has to take all the responsibilities of
the project.
Contractors do not need to take any
responsibililty for poor quality of works.
Rating ScaleE
during tender stage of the projects--
Risk sharing
What is your opinion about the competitive bidding procedure in traditional civil contracts?
Sometimes contractors poor workmanship
results in quick deterioration of roads.
during selection of the contractor--
during construction phase--
Involves political influence and corruption
Some fair, some influenced
Influenced by top level management
Mismanagement/Political Influence
No need to ensure quality of contractors in doing similar works in the past.
135
Strongly
DisagreeDisagree Average Agree
Strongly
Agree
Don't
know
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
Purpose of the Survey: The survey aims to investigate the potential benefits of PBMC as well as strategies and policies needed if
PBMC is implemented for the maintenance and management of government road assets in Bangladesh. Your response will help to
evaluate the potetial of PBMC in Bangladesh.
Performance Based Maintenance by Contracting (PBMC) Brief Overview:
PBMC is a new and innovative concept that is output based where payments are based on performance of the contractors. It is the
concept of extended contract period (2 to 10 years) and is designed to increase the efficiency and effectiveness of road maintenance
operations. Payments are given based on work outputs demonstrated by performance indicators other than measuring the amount of
work done. The concept is being embraced by leading international organisations (World Bank, ADB) and is becoming popular in both
developed and developing countries. Propely developed and implemented Performance contracts can achieve net savings on road
maintenance costs of upto 40% compared to the traditional contracting methods.
Questionnaire Survey Part 3
Information for Respondents
Setting detailed and prescriptive work
methods have not always yield quality
output.
Ensuring the quality of the contractor during
tendering would help to assure the good
quality of work.
Setting the performance measures of the
completed works would help the contractors
to do quality works.
Rating ScaleE
Risk Sharing by Contractors
Construction project risks should be properly
identified and shared between the contractor
and the client.
Risk sharing would bring a sense of
discipline and responsibility to the contractor
on road contracts.
Risk sharing would benifit the government to
a certain extent.
Assurance of Quality
Improves efficiency
The current level of efficiency regarding
project maintenance by RHD staff needs
improvement.
Introduction of innovative Technology
The current contracting process lacks or
restricts contractor from introducing new
technology.
The long term nature of PBMC enables the
contractors to introduce efficient technology.
Please read the following statements and tick a answer which closely represent your opinion.
136
Strongly
DisagreeDisagree Average Agree
Strongly
Agree
Don't
know
3.10
3.11
3.12
3.13
3.14
3.15
3.16
3.17
Strongly
DisagreeDisagree Average Agree
Strongly
Agree
Don't
know
3.18
3.19
3.20
3.21
3.22
PBMC will improve the service quality
during the extended period.
Get expertise
Roads and Highways Department has good
contracting management experience and can
easily adopt the PBMC concept.
RHD has good knowledge and data of road
networks, maintenance needs and costs
which can be used to implement PBMC.
The contractors will get better expert
personnel in PBMC than current contracting
process.
Increases Transparency
PBMC can lower the level of possible
corruption/mismanagement in the
contracting process.
As PBMC is a long term contract, the
chance of continuous forced manipulation
will be reduced.
Under a PBMC, private sector workers
(contractor's staff) would be more motivated
than the traditional contracts.
Fast DeliveryFast Delivery
PBMC will deliver the projects in time or
earlier than expected compared to the
current method.
The nature of PBMC mainly focuses on
customer or user satisfaction.
Secures Long Term Funding
PBMC ensures long term road maintenance
funding which is difficult in the current
contracting process.
Increases Customer Satisfaction
Achieves Cost Savings
Supervision and overhead costs would be
reduced in a PBMC compared to current
practice.
Technical Feasibility
PBMC is a better alternative that should be
adopted in Bangladesh together with the
current method.
PBMC will reduce maintenance costs during
the contract duration.
A better alternative
Rating ScaleE
Rating ScaleE
137
Strongly
DisagreeDisagree Average Agree
Strongly
Agree
Don't
know
3.23
3.24
3.25
3.26
3.27
Lack of government's budgetary allocation
for the long term commitment could be a
problem.
Barriers
Skills and staff training will be an area of
concern that may cause delay in the
implementation process.
Construction industry in Bangladesh is still
underdeveloped to implement performance
contracts.
Contractors' capacity and commitment
would be a problematic issue of concern in
PBMC.
Staff attitude on the new work culture would
offer resistance to the new concept.
Rating ScaleE
End of Survey-Thank You
139
APPENDIX 2
INTERVIEW
140
1
2
1. Name of the organization-
2. Your current position in the management-
3. Please comment on your experience on traditinaol methods of contracting in Bangladesh (such as DB, DBB, BOT,
BOOT).
4. Could you please explain the main difficulties or problems that Roads & Highways Department or other Government
agencies facing during the implementation of road maintenance project?
5. Have you ever heard about Performance-based Road Maintenance Contracting/Component?
Mid Level Management (Executive or Sub-Divisional Engineer)
Griffith School of Engineering, Gold Coast Campus, QLD 4222, Australia
Information for Respondents
Purpose of the Inteview: The goal of the interview is to get expert opinions on traditional methods of road maintenance contracting
and effectiveness of the performance -based road maintenance contracting in Bangladesh.
Partcipation: Your participation in this research is voluntary and will involve the completion of an interview.
Confidentiality: The Information will be used for academic purposes only. Your answers will be kept completely confidential. The
results will be collected and presented as summaries only , The compiled results of this research may be published in scientific research
journals or presented at professionals conferences. However, the individual respondent, their name or positions will not be identified. The
completion of this interview will be granted as your consent to participate in the research.
Name of The Project: Examine the Potential of Performance Based Maintenance of Road
Infrastructure by Contracting (PBMC) in Developing Countries - Case Study from Bangladesh.
Interview
Top Level Management (Chief, Additional Chief or Superintending Engineer)
Confidential when completed
Ethical Statement: Griffith University conducts research in accordance with the National Statement on Ethical Conduct in Human
Research. This study was approved by the GU research Ethics Committee (GU ref No. ENG/13/11/HREC). If potential participants have
any concerns or compliants about the ethical conduct of the research project they should contact the Manager, Research Ethics on: +61
07 37355585 or email: [email protected]
Contact Information: If you require any further information or have any questions regarding the research, please contact a member of
the project team:
1. Mrs. Masuda Sultana, M.Phil. Candidate, Phone: +61 07 55529057, [email protected]
2. Dr. Anisur Rahman, Chief Investigator, Phone: +61 07 55528255, [email protected]
3. Dr. Sanaul Chowdhury, Senior Investigator, Phone: +61 07 55528662, [email protected].
Performance Based Maintenance by Contracting (PBMC) Brief O verview:
PBMC is a new and innovative concept that is output based where payments are based on performance of the contractors. It is the
concept of extended contract period (2 to 10 years) and is designed to increase the efficiency and effectiveness of road maintenance
operations. The concept is being embraced by leading international organisations (World Bank, ADB) and is becoming popular in both
developed and developing countries. Propely developed and implemented Performance contracts can achieve net savings on road
maintenance costs of upto 40% compared to the traditional contracting methods.
141
End of Interview-Thank You.
6. Based on your knowledge, do you think that Performance-based Road Maintenance Contracting will be effective in
improving the maintenance of road infrastructure of Bangladesh?
7. Are there any factors which may affect the introduction of performance-based contracts in Bangladesh? (such as
inadequate government support, dependency on donor funding, inadequate management capacity, knowledge and
planning, challenges in setting the performance standard of the contractors and contract documents, need for
experienced large-sized contractor, political influence)
8. Please give an overall comment on the prospect of Performance-based road maintenance contract/component in
Bangladesh.
143
APPENDIX 3
Data of Road maintenance projects of the Roads and Highways Department of Bangladesh.
Division Package No. Road
No
Road Name Length
(KM)
Contractor's
Name
Date of
Contract
S igning
Time
Allowed
(Days)
Planned
Completio
n Date
Time
extension
(days)
Extra
Time
required
%
Validity
of P.G.
Contract /
Revised
Amount
Financial
Progress
%
Financial
Expenditure
Further
Requireme
nt
Remarks
Dohazari PMP: 2009-
10/04/ Overlay
N-1 Dhaka (Jatrabari)-
Comilla(Mainamati)-
Chittagong-Teknaf
Road
14.368 CPC-DIENCO JV 20-06-2010 180.00 17/12/2010 - 0.00% 15/03/2011 841.28 40.05% 336.96 504.32
R-160 Hathazari-Fatikchhari-
Manikchhari-
Matiranga-
Khagrachhari Road
42.568 02-04-2009 360.00 31/12/2010 277.00 76.94% 4/09/2011 1077.94 96.01% 1,034.94 43.00
R-151 Baraiyerhat-Karerhat-
Heako-Narayanhat-
Fatikchhari
(Haidchokia) Road
(30/03/2010 -
30/06/2010 =
93 and
01/07/2010 to
Cox's Bazar R-172 Chokoria - Baderkhali
Road
Moheshkhali Bridge
App
1,919.22 1,371.90 547.32
Chittagong PMP: 2008-
09/23/ DBST
(Taka in lac)
Consortium: The
Engineers Ltd. -
Corolla Corporation
(BD) Ltd.
Work in
progress
Extended
time in hansd
20 days
Chittagong
144
(Taka in lac)
Division Package
No.
Road
No
Road Name Length
(KM)
Contractor's
Name
Date of
Contract
S igning
Time
Allowed
(Days)
Planned
Completion
Date
Time
extension
(days)
Extra
Time
required
%
Validity of
P.G.
Contract
Amount
Financia
l
Progress
%
Financial
Expenditure
Further
Requireme
nt
Remarks
N-1 Dhaka (Jatrabari)-
Comilla(Mainamati)-
Chittagong-Teknaf Road
26.46
WGMEC-RC JV
19-04-2010 300.00 20-02-2011 0.00% 3/12/2011 1445.13 1,445.13 Work in progress
R-113 Madanpur-Madangonj-
Sayedpur
Narsingdi N-2 Dhaka -Sylhet Road
Dkaka R-110 Jatrabari-Demra-Shimrail-
Narayangonj
23.78 19-04-2010 270 days 21-01-2011 1509.07 31.75% 479.06 1,030.01 Work in progress
R-810 Postogola-Chasara Road
N-802 2nd Burigonga bridge
approach Mawa link-
N8+Link ZKD Road
Manikgonj R-315 Mawna-Fulbaria-Kaliakoir-
Dhamrai-Nabinagar
32.07 CPC-DIENCO
JV
18-04-2010 150.00 28-09-2010 118.00 78.67% 30/03/2011 849.74 43.10% 366.24 483.50 Work in progress
Gazipur R-315 Mawna-Fulbaria-Kaliakoir-
Dhamrai-Nabinagar
(29/09/2010
to
24/01/2011)
Munshigonj PMP 2009-
10/15/
Overlay
R-820 Zinzira-Keraniganj-Dohar-
Srinagar Road
23.94 MM Builders
& Engineers
Ltd.
19-04-2010 270 days 21-01-2011 995.98 995.98 Work in progress
Manikgonj PMP: 2008-
09/08/DBST
& Overlay
N-5 Dhaka (Mirpur)-Utholi-
Paturia- Natakhola-
Kashinathpur- Bogra-
Rangpur-Beldanga-
Banglabandh Road
52.68 National Civil
Engineers Ltd
02-04-2009 360.00 04-04-2010 271.00 75.28% 31/01/2011 1,533.79 81.31% 1,247.14 286.65 Work in progress
Time expired
Narayanganj N1 Dhaka (Jatrabari)-
Comilla (Mainamati)-
Chittagong-Teknaf Road
(05/04/2010
to
30/12/2010)
N2 Dhaka (Katchpur)-
Bhairab-Jagadishpur-
Shaistaganj-Sylhet-
Tamabil-Jaflong Road
Munshigonj PMP: 2008-
09/21/ DBST
& Overlay
N-8 Dhaka (Jatrabari)-Mawa-
Bhanga-Barisal-
Patuakhali Road
32.11 MM Builders
& Engineers
Ltd
02-04-2009 300 days 844.71 84.59% 714.57 130.13 Work in progress
Gazipur PMP: 2008-
09/11/
DBST &
Overlay
N-3 Dhaka (Banani)-
Joydebpur-Mymensingh
Road (Tongi -
Joydebpur Section)
13.35
ICC Ltd.
29-07-09 120 days 746.84 93.86% 701.02 45.82 Work in progress
Pubali
Construction
Co. Ltd
Dhaka
Narayangon
j
PMP 2009-
10/06/
Overlay
PMP 2009-
10/07/
Overlay
PMP: 2009-
10/08/
Overlay
145
Division Package
No.
Road
No
Road Name Length
(KM)
Contractor's
Name
Date of
Contract
S igning
Time
Allowed
(Days)
Planned
Completion
Date
Time
extension
(days)
Extra
Time
required
%
Validity of
P.G.
Contract
Amount
Financia
l
Progress
%
Financial
Expenditure
Further
Requireme
nt
Remarks
Netrokona PMP: 2008-
09/13/Overla
y
R-370 22.36 ICC Ltd. 29-07-09 270.00 05-05-2010 240.00 88.89% 18/01/2011 907.66 65.45% 594.06 313.60 Work in progress
Time expired
(06/05/2010
to
31/12/2010) Gazipur PMP 2007-
08/Overlay
& DBST/03
N4 Joydebpur-Tangail-
Jamalpur Road
(Jamuna Access Road)
10.20 Shamim
Enterprise
(Pvt.) Ltd.
27-02-08 180.00 04-08-2008 879.00 488.33% 19/05/2011 1,220.85 20.17% 246.28 974.57
Tangail N4 Joydebpur-Tangail-
Jamalpur Road
8.00
Tangail N4 Joydebpur-Tangail-
Jamalpur Road
13.70
Dhaka PMP 2007-
08/Overlay/
07
N3 Dhaka (Banani)-
Joydebpur-Mymensingh
Road
5.80 Bengal
Development
Corporation
Ltd.
27-03-08 150.00 26-08-2008 96.00 64.00% 31-10-2009 1,284.45 91.17% 1,171.09 113.36 Completed
(27-08-08 to
30-11-08)
Dhaka PMP 2007-
08/Overlay/
08
N3 Dhaka (Banani)-
Joydebpur-Mymensingh
Road
3.70 Abdul Monem
Ltd
27-03-08 150.00 - 0.00% 1,106.71 86.16% 953.56 153.15 Work in progress
Dhaka PMP 2007-
08/Overlay/
09
N501 Mirpur Bridge-Dhour
Road
11.90 National Civil
Engineer Ltd.
03-04-08 180.00 02-10-2008 210.00 116.67% 1,095.50 95.58% 1,047.04 48.46 Completed
Munshigon
j
N8 Dhaka (Jatrabari)-Mawa-
Bhanga-Barisal-
Patuakhali Road
1.63 (30-09-08 to
31-01-09 =
121 and 01-02-
2009 to 30-04-
2009 =89)
Mymensingh (D.C
Office)-Raghurampur-
Netrokona-Mohonganj-
Jamalganj-Sunamganj
Road
Work in progress
Extended time
expired
(05/08/08-
28/02/2010 =
573 and
03/03/2010 to
31/12/2010
=306)
146
Division Package
No.
Road
No
Road Name Length
(KM)
Contractor's
Name
Date of
Contract
S igning
Time
Allowed
(Days)
Planned
Completion
Date
Time
extension
(days)
Extra
Time
required
%
Validity of
P.G.
Contract
Amount
Financia
l
Progress
%
Financial
Expenditure
Further
Requireme
nt
Remarks
Gazipur
PMP 2007-
08/DBST/10
N3 Dhaka (Banani)-
Joydebpur-Mymensingh
Road
33.94 MM Builders
& Engineers
Ltd.
02-04-08 150.00 30-08-2008 303.00 202.00% 30-06-2009 922.42 99.98% 922.21 0.21 Work in progress
Mymensin
gh
PMP 2007-
08/DBST/11
N3 Dhaka (Banani)-
Joydebpur-Mymensingh
Road
47.00 SEL-MBEL
JV
06-04-08 150.00 03-09-2008 570.00 380.00% 29/03/2010 696.45 55.94% 389.58 306.87 Work in progress
Extended time
expired
Narayanganj N1
Dhaka (Jatrabari)-
Comilla (Mainamati)-
Chittagong-Teknaf
Road
9.00 Monico Ltd. 25-06-07 150.00 22-11-2007 178.00 118.67% 28-05-2008 984.36 97.34% 958.17 26.19 Completed
Narayanganj R111
Narayanganj Link
Road
( 6 KM of N-1 to
chashara)
8.50(23-11-07 to
28-05-08)
Dhaka N8
Dhaka (Jatrabari)-
Mawa-Bhanga-Barisal-
Patuakhali Road
2.50
Manikganj R505Nabinagar-EPZ-
Kaliakoir (Chandra) 12.90
Tangail N4Joydebpur-Tangail-
Jamalpur Road28.55
25-06-07 150.00 22-11-2007 180.00 120.00% 19-02-2010 873.68
99.99%
873.60 0.08 Completed
N4Joydebpur-Tangail-
Jamalpur Road6.63
N4Joydebpur-Tangail-
Jamalpur Road21.72
17,017 10,664 6,354
PMP 2006-
07/06/DBS
T &
Overlay
(03-12-07 to
31-05-08)
Shamim
Enterprise
(Pvt.) Ltd.
PMP 2006-
07/16/DBS
T &
Overlay
147
Khulna (Taka in
Division Package No. Road
No
Road Name Length
(KM)
Contractor's
Name
Date of
Contract
S igning
Time
Allowed
Planned
Completio
n Date
Time
extension
(days)
Extra
Time
required
%
Validity
of P.G.
Contract
Amount
Financial
Progress
%
Financial
Expenditu
re
Further
Requirement
Remarks
Jessore PMP2009-
10/05/DBST
N-702 Magura(Viana More)to
Jessore (Daratana More)
Intraco (BD)
Associates Ltd.
15-04-10 180.00 19/10/2010 0.00% 590 92.77 547 43
Magura
Kushtia R-710 Ahaladipur-Rajbari-
Pangsha-Kumarkhali-
36.550 TSL-RIB JV
18-08-2010 300 14/06/2011 - 0.00% 1,564 0.00 1,564
Kushtia N-704 Jhenaidah-Kushtia-
Paksey Ferry-Dasuria
Road
Jessore PMP 2009-
10/19/DBST &
Overlay
Z-7031 Churamonkathi-
Chaugachha Road
44.077 M.M.Builders &
Engineers Ltd
18-08-2010 180 21/02/2011 - 0.00% 1,516 0.00 1,516
Jhenidah Z-7457 jhenidah-Horinakundu
Road
Jhenidah N-704 Jhenaidah-Kushtia-
Paksey Ferry-Dasuria
Road
Chuadanga PMP 2009-
10/20/Overlay
R-747 Kushtia (Bottoli)-
Poradah-Alamdanga-
Chuadanga Road
28.773 Orient Trading
& Builders Ltd
18-08-2010 300.00 - 0.00% 1,435 1,435
Jhenaidah PMP: 2008-09/10/
Overlay
N-7 Dauladia-Faridpur
(Goalchamot)-Magura-
Jhenaidah-Jessore-
Khulna-Mongla (Digraj)
Road
28.501 M/S Ismail
Hossain
02-04-2009 300.00 31/12/2010 360.00 120.00%
31/12/2010
1,287 99.84 1284 2 completed
Chuadanga R-745 Kushtia (Trimohoni)-
Maherpur-Chuadanga-
Jhenaidah Road
01/01/2010 to
30/06/2010 and
01/07/2010 to
31/12/2010)
Khulna PMP: 2008-
09/24/Overlay
N-7 Dauladia-Faridpur
(Goalchamot)-Magura-
Jhenaidah-Jessore-Khulna-
Mongla (Digraj) Road
27.945 Concord
Progatee
Consortium Ltd
02-04-2009 360.00 27/06/2010 90.00 25.00%
14/09/2010
1,885 99.33 1872 13 Completed
N-710 Khulna Town Old Section
(Ferryghat-Dakbangla
More)
(29/03/2010 to
27/06/2010)
Satkhira PMP: 2008-
09/06/Overlay
R-765 Navaron--Ellishpur -
Satkhira
43.000
ICC Ltd.29-07-2009 360.00 31/07/2010 - 0.00%
20/07/2010
1,697 97.18 1649 48
9,384 4,806 4,578
PMP 2009-
10/18/Overlay
148
(Taka in
lac) Division Package No. Road
No
Road Name Length
(KM)
Contractor's
Name
Date of
Contract
S igning
Time
Allowed
Planned
Completio
n Date
Time
extension
(days)
Extra Time
required
%
Validity of
P.G.
Contract/
Revised
Amount
Financial
Progress %
Financial
Expenditure
Further
Requirem
ent
Remarks
Comilla PMP: 2009-10/09/
DBST
N-102 Comilla (Mainamati)-
Brahmanbaria (Sarail)
Road
35.744
ICC Ltd.
18-04-2010 270.00 20/01/2011 0.00% 14/04/2011 1339.19 14.57 195.18 1,144.01
Comilla
PMP: 2008-09/28/
DBST R-140
Comilla-Lalmai-
Chandpur-Lakhmipur-
Begumganj Road
37.530
HRBC-OTBL JV
02-04-2009 180.00 6/05/2010 272.00 151.11% 30/06/2010 550.81 99.99 550.74 0.07 Completed
Chandpur R-860
Mostafapur-Madaripur-
Shariatpur (Monohar
Bazar)
-Ibrahimpur-Harina-
(11/09/09 to
11/06/2010)
Comilla PMP: 2008-09/12/
DBST
N-102 Comilla (Mainamati)-
Brahmanbaria (Sarail)
Road
25.364 ICC Ltd. 29-07-2009 270.00 2/05/2010 0.00% 20/07/2010 845.73 95.30 806.02 39.72
B-Baria N-102
B-Baria N103 Brahmanbaria Town
Portion (Kuatali-
Ghaturia)
5.00 MM Builders &
Engineers Ltd.
02-04-08 180.00 31/05/09 245.00 136.11% 21/06/2009 721.28 98.69 711.84 9.44 Work in
progress
Feni N-104 Feni - Noakhali Road 15.60 (29/09/08 to
21/03/09 = 174
and 21/03/09
to 31/05/09 =
71)
i) Comilla Town
Portion (Old portion)
0.76 IH-RC JV. 01-01-06 150.00 25/06/08 810.00 540.00% 31/07/08 428.46 93.90 402.34 26.12 Work in
Progress
ii) Comilla-Lalmai-
Chandpur Road
4.50 upto 25/06/08
3,885 2,666 1,219
PMP 2007-
08/Ovrlay &
DBST/12
Comilla PMP 2005-06/14
R-140
Comilla
149
Sylhet
Package No. Road
No
Road Name Length
(KM)
Contractor's
Name
Date of
Contract
S igning
Time
Allowed
(Days)
Planned
Completion
Date
Time
extension
(days)
Extra Time
required
%
Validity
of P.G.
Contract
/Revised
Amount
Financi
al
Progress
%
Financial
Expenditure
Further
Requirem
ent
Remarks
PMP: 2009-10/03/
Overlay
R-240 Shaistaganj-Habiganj-
Nabiganj-Sherpur
(Auskandi) Road
29.0 M/S Ismail Hossain 19-04-2010 270.00 21/01/2011 0.00%
14/04/2011
993 28 277 716
PMP: 2008-09/09/
Overlay
N-2 Dhaka (Katchpur)-
Bhairab-Jagadishpur-
Shaistaganj-Sylhet-
Tamabil-Jaflong Road
45.6 Concord Pragattee
Consortium Ltd
02-04-2009 510.00 30/03/2011 217.00 42.55%
13/03/2011
2,901 42 1,228 1,673
N-206 Keean Bridge-
Nayarpool Road
(26/08/2010
to
30/03/2011)
PMP 2007-
08/DBST/13
N-2 Dhaka (Katchpur)-
Bhairab-Jagadishpur-
Shaistaganj-Sylhet-
35.6 Bengal
Development
Corporation Ltd.
27-03-08 180.00 27/03/2010 546.00 303.33%
31/01/2011
757 89 673 84 Completed
N-2 Dhaka (Katchpur)-
Bhairab-Jagadishpur-
Shaistaganj-Sylhet-
Tamabil-Jaflong Road
9.93
4,651 2,178 2,473
(Taka in lac)
150
Rajshahi (Taka in
lac)
Division Package No. Road
No
Road Name Length
(KM)
Contractor's
Name
Date of
Contract
S igning
Time
Allowed
Planned
Completion
Date
Time
extension
(days)
Extra
Time
required
%
Validity of
P.G.
Contract /
Revisded
Amount
Financial
Progress
%
Financial
Expenditure
Further
Requirem
ent
Remarks
Naogaon R-545 Bogra-Naogaon-
Mohadebpur-Patnitala-
Dhamoirhat-Joypurhat
Road
37.000 SEL-MSA JV 18-04-2010 300.00 19/2/2011 0.00% 4/04/2011 1181.6 24.2 286.5 895.0
Rajshahi Z-6004 Puthia-Bagmara Road 33.020 ICC Ltd 18-04-2010 360.00 20/04/2011 0.00% 1444.0 23.6 341.3 1102.7
Sirajgonj PMP: 2008-09/19/
Overlay
N-5 Dhaka (Mirpur)-Utholi-
Paturia- Natakhola-
Kashinathpur- Bogra-
Rangpur-Beldanga-
Banglabandh Road
21.874 M/S Ismail
Hossain
02-04-2009 300.00 30/06/2010 - 0.00% 29/09/2010 949.1 1.0 946.9 2.2 Work in
progress.
Rajshahi PMP: 2008-09/20/
Overlay
N-603 Rajshahi Town By-
Pass Road
20.830 M/S Rising
Construction
02-04-2009 300.00 173 days
(09/01/2010
to
30/06/2010)
0.00% 22/09/2010 811.6 95.7 776.6 35.0
Natore PMP : 2008-
09/04/ DBST
N-507 Hatikamrul-Banpara
Road
41.875 ICC Ltd. 29-07-2009 300.00 15/02/2010 0.00% 20/07/2010 1120.7 99.9 1120.0 0.7 Completed
5507.0 3471.3 2035.7
PMP: 2009-10/12/
Overlay
PMP 2009-10/13/
DBST
151
Barisal
Division Package No. Road No Road Name Length
(KM)
Contractor's
Name
Date of
Contract
S igning
Time
Allowed
(Days)
Planned
Completion
Date
Time
extension
(days)
Extra Time
required
%
Validity
of P.G.
Contract
Amount
Financial
Progress
%
Financial
Expenditure
Further
Requirem
ent
Remarks
Barisal PMP:2009-
10/01/ Overlay
N-8 Dhaka (Jatrabari)-Mawa-
Bhanga-Barisal-
Patuakhali Road
60.242 M/S Ismail
Hossain
19-04-2010 450.00 20/07/2011 0.00% 2516.93 2,516.93
Pirojpur PMP 2009-10/02
/Overlay
Z-8701 Charkhali-Tushkhali-
Mathbaria-Patharghata
Road
30.633 M/S Ismail
Hossain
19-04-2010 270.00 21/01/2011 0.00% 1963.64 27.13% 532.70 1,430.94
PMP 2005-
06/C0708.00
04-05-06 120.00 9/08/2006 665.00 554.17% 30/06/2008 241.81 91.87% 222.14 19.67
05/09/2006 -
30/06/2008 =
665
9.00 04-05-06 120.00 9/08/2006 634.00 528.33% 30/06/2008 231.24 95.00% 219.68 11.56
06/08/2006 -
30/04/2008 =
634
PMP 2005-
06/C072
Charkhali-Tushkhali-
Mothbaria-Pathorghata7.00
Zahidul - Rumi -
KICL (JV)
04-05-06 120.00 9/08/2006 672.00 560.00% 30/06/2008 233.50 81.46% 190.21 43.29
19/08/2006 -
30/06/2008 =
672
5,187 1,165 4,022
Pirojpur
(Taka in lac)
M/S. Gazi Shah
Jaman- Lucky
International
and M/S. Gazi
Associates
(JV)
Pirojpur-Najirpur-
Matibanga-patgati-
Gopalgonj
road(including Pirojpur-
Najirpur By pass Road
Pirojpur(Togra)-
Zianagar-Balipara-
Kalaron-Swannashi
Road
PMP 2005-
06/C071
M/S. Raj &
Brothers
Extended time
expired
Extended time
expired
Extended time
expired
152
Division Package No. Road
No
Road Name Length
(KM)
Contractor's Name Date of
Contract
S igning
Time
Allowed
(Days)
Planned
Completion
Date
Time
extension
(days)
Extra Time
required
%
Validity of
P.G.
Contract/
Revised
Amount
Financial
Progress
%
Financial
Expenditur
e
Further
Requirem
ent
Remarks
Bogra PMP: 2008-
09/05/DBST &
Overlay
N-502 Bogra (Jahangirabad)-Natore
Road
40.543 National Civil
Engineers Ltd
02-04-2009 360.00 31/12/2010 278.00 77.22% 31/01/2011 1451.16 48.12% 698.30 752.86
Bogra N-5 Dhaka (Mirpur)-Utholi-
Paturia- Natakhola-
Kashinathpur- Bogra-Rangpur-
Beldanga- Banglabandh Road
29/03/2010 to
31/12/2010
Lalmonirhat PMP: 2008-
09/17/ DBST &
Overlay
N-506 Rangpur-Barobari-Kurigram
Road
43.620 Concord Progatee
Consortium Ltd
02-04-2009 300.00 27/03/2010 60.00 20.00% 16/06/2010 1348.47 9951.35% 1,341.91 6.56 Completed
Kurigram N-506 Rangpur-Barobari-Kurigram
Road
N-517 Rangpur Town Old Section
(Modern More-Medical More)
R - 557 Madhypara-Badarganj Road
Bogra
PMP: 2008-
09/18/Overlay R-545
Bogra-Naogaon-Mohadebpur-
Patnitala-Dhamoirhat-
Joypurhat Road
26.500 M/S Rising
Construction
02-04-2009 300.00 26/05/2010 138.00 46.00% 23/06/2010 826.82 23.02% 190.33 636.50 Work in
progress.
Extended time
09/01/2010 -
26/05/2010 =
138
Bogra PMP 2007-08/
Overlay &
DBST/01
N-5 Dhaka (Mirpur)-Utholi-
Paturia- Natakhola-
Kashinathpur- Bogra-Rangpur-
Beldanga- Banglabandh Road
5.850 20-02-08 150.00 31/12/2009 530.00 353.33% 30/01/2010 1,417.09 81.48% 1,154.58 262.51
N-514 Bogra (Banani)-Matidali Road 20/07/2008 -
31/12/2009 =
530
Bogra PMP 2007-
08/Overlay &
DBST/23
N-5 Dhaka (Mirpur)-Utholi-
Paturia- Natakhola-
Kashinathpur- Bogra-Rangpur-
Beldanga- Banglabandh Road
31.064 Pubali Construction
Co. Ltd
06-07-08 300.00 30/06/2010 443.00 147.67% Valid upto
completion
certificate
issued
655.74 47.59% 312.08 343.66 Work in
progress.
Extended time
in hand 20
Nilphamari N-5 Dhaka (Mirpur)-Utholi-
Paturia- Natakhola-
Kashinathpur- Bogra-Rangpur-
Beldanga- Banglabandh Road
1.859 14/04/2009 -
30/06/2010
=443
5,699 3,697 2,002
Rangpur
Rangpur
(Taka in lac)
Islam Trading
Consortium Ltd
27/01/10 to
27/03/2010
Work in
progress.
Time expired
Extended time
expired
153
Division Package No. Road
No
Road Name Length
(KM)
Contractor's
Name
Date of
Contract
S igning
Time
Allowed
(Days)
Planned
Completion
Date
Time
extension
(days)
Extra
Time
require
d
%
Validity of
P.G.
Contract
Amount
Financia
l
Progress
%
Financial
Expenditu
re
Further
Require
ment
Remarks
Faridpur PMP: 2009-
10/11/ Overlay
N-7 Dauladia-Faridpur
(Goalchamot)-Magura-
Jhenaidah-Jessore-Khulna-
Mongla (Digraj) Road
35.486 TSL-RIB JV 18-04-2010 360 20/04/2011 0.00% 17/07/2011 1516.10 33.45 507.13 1,009
Gopalgonj PMP : 2009-
10/14/DBST &
Overlay
R-850 Tekerhat-Gopalganj -
Mollahhat Road
10.000 Orient Trading
& Builders Ltd
17/06/2010 180 21/12/2010 0.00% 12/12/2010 908.73 91.88% 834.91 73.82
Bhola PMP: 2009-
10/10/ Overlay
R-890 Bhola (Paran
Talukderhat)-Burhanuddin-
Lalmohon-Char Fassion-
Char Manika Road
14.472 Orient Trading
& Builders Ltd
17/06/2010 270 21/03/2011 0.00% 3/12/2011 1101.58 77.84% 857.42 244.16
Madaripur PMP: 2008-
09/02/Overlay
N-8 Dhaka (Jatrabari)-Mawa-
Bhanga-Barisal-
Patuakhali Road
18.864 Project
Builders Ltd.
02-04-2009 300 2/03/2010 162.00 54.00% 31/07/2010 1323 74.84% 990.00 332.80
Madaripur R-860 Mostafapur-Madaripur-
Shariatpur (Monohar
Bazar)-Ibrahimpur-
Harina-Chandpur
(Bhatialpur) Road
20/01/2010 -
30/06/2010 =
162
Shariatpur R-861 Monohar Bazar More at
R860-Shariatpur Road
Faridpur N-804 Bhanga-Faridpur
(Goalchamot) Road
Rajbari PMP 2007-
08/Overlay/14
N-7 Dauladia-Faridpur
(Goalchamot)-Magura-
Jhenaidah-Jessore-
Khulna-Mongla (Digraj)
Road
18.72 Islam Trading
Consortium
Ltd
06-04-08 270 30/06/2009 174.00 64.44% 30/06/2009 1,140 34.76% 396.44 743.92
Faridpur N-7 Dauladia-Faridpur
(Goalchamot)-Magura-
Jhenaidah-Jessore-
Khulna-Mongla (Digraj)
Road
10.96 07/01/09 -
30/06/2009 =
174
Rajbari PMP 2007-
08/Overlay/19
R-710 33.885 06-07-08 300 31/12/2009 182.00 60.67% 965.15 99.46% 959.94 5.21 Completed
03/05/09 to
31/12/09
6,955 4,546 2,409
(Taka in lac)
Work in
progress
Extended time
in hand 20
days
Extended time
expired
Ahaladipur-Rajbari-
Pangsha-Kumarkhali-
Kushtia (Chourhash)
Road
Pubali
Construction
Co. Ltd
Gopalgonj
155
APPENDIX 4
Summary of Road Maintenance Projects Expenditure(14-12-2010)
Amount in BDT in Lac
Zone Contract
Amount
Financial
Expenditure Further Requirement
Dhaka 17,017.32 10,663.62 6,353.70
Chittagong 1919.224433 1371.9 547.32
Khulna 9,383.58 9,383.58 4,577.71
Comilla 3,885.48 2,666.12 1,219.36
Sylhet 4,650.97 2,178.08 2,472.89
Rajshahi 5,507.02 3,471.33 2,035.68
Rangpur 5,699.28 3,697.20 2,002.09
Barisal 5,187.12 1,164.73 4,022.39
Gopalgonj 6,954.72 4,545.84 2,408.88
Total 60,204.71 39,142.40 25,640.02
157
APPENDIX 5
Summary of Analysis on Road Maintenance Projects Data of Bangladesh
District
Name No. Project area
Time
extension
Required
Extra Time
requiremen
t (%)
Budget
Failed
Within
Budget
Dhaka
1 Narayangonj-Narshingdi-Dhaka No 0% Yes
2 Manikgonj- Gazipur-Nunshigonj
Yes 78.67% Yes
3 Manikgonj-Narayangonj Yes 75.28% Yes
4 Munshigonj-Gazipur-Netrokona Yes 88.89% Yes
5 Gazipur-tangail Yes 488.33% Yes
6 Dhaka (Banani)-Joydebpur-
Mymensingh Road Yes 64.0% Yes
7 Dhaka (Banani)-Joydebpur-
Mymensingh Road No 0% Yes
8 Dhaka-Munshigonj Yes 116.67% Yes
9 Gazipur-Dhaka (Banani)-
Joydebpur-Mymensingh Road Yes 202% Yes
10 Mymensingh- Dhaka (Banani)-
Joydebpur-Mymensingh Road Yes 380.00% Yes
11 Narayanganj-Dhaka-manikgonj Yes 118.67% Yes
12 Joydebpur-Tangail-Jamalpur
Road Yes 120.00% Yes
Chittago
ng
13
Dhaka (Jatrabari)-
Comilla(Mainamati)-Chittagong-
Teknaf Road
No 0% Yes
14
Hathazari-Fatikchhari-
Manikchhari-Matiranga-
Khagrachhari Road
Yes 76.94% Yes
Khulna
15 Jessore-Magura No 0% Yes
16 Kushtia No 0% Yes
17 Jessore-Jhenidah No 0% Yes
18 Chuadanga No 0% Yes
19 Jhenidah Yes 120.00% Yes
20 Khulna Yes 25.00% Yes
21 Satkhira No Yes
Comilla
22 Comilla-B Baria No Yes
23 Chandpur Yes 151.11% Yes
24 Comilla (Mainamati)-
Brahmanbaria (Sarail) Road Yes 136.60% Yes
25 Comilla Town Portion Yes 540.00% Yes
158
District
Name No. Project area
Time
extension
Required
Extra Time
requiremen
t (%)
Budget
Failed
Within
Budget
Sylhet
26 Habigonj No 0% Yes
27
Dhaka (Katchpur)-Bhairab-
Jagadishpur-Shaistaganj-Sylhet-
Tamabil-Jaflong Road
Yes 42.55% Yes
28 Sylhet Yes 303.33% Yes
Rajshahi
29 Naogaon No 0% Yes
30 Rajshahi-Sirajgonj No 0% Yes
31 Sirajgonj No 0% Yes
32 Rajshahi Town By-Pass Road No 0% Yes
33 Natore No 0% Yes
Rangpur
34 Bogra Yes 72.22% Yes
35 Lalmonirhat-Kurigram Yes 20.00% Yes
36
Bogra-Naogaon-Mohadebpur-
Patnitala-Dhamoirhat-Joypurhat
Road
Yes 46.00% Yes
37
Dhaka (Mirpur)-Utholi-Paturia-
Natakhola-Kashinathpur- Bogra-
Rangpur-Beldanga- Banglabandh
Road and Bogra (Banani)-
Matidali Road
Yes 353.33% Yes
38 Bogra-Nilphamari Yes 147.67% Yes
Barisal 39 Barisal-Patuakhali-Jhalokathi No 0% Yes
40 Pirojpur-Jhalokathi No 0% Yes
Pirojpur
41
Pirojpur-Najirpur-Matibanga-
patgati-Gopalgonj road(including
Pirojpur-Najirpur By pass Road
Yes 554.17% Yes
42
Pirojpur(Togra)-Zianagar-
Balipara-Kalaron-Swannashi
Road
Yes 528.33% Yes
43 Charkhali-Tushkhali-Mothbaria-
Pathorghata Yes 560% Yes
Gopalgo
nj
44 Faridpur No 0% Yes
45 Tekerhat-Gopalganj -Mollahhat
Road No 0% Yes
46 Bhola No 0% Yes
47 Madaripur-Shariatpur-Faridpur Yes 54% Yes
48 Rajbari-Faridpur Yes 64.44% Yes
49
Ahaladipur-Rajbari-Pangsha-
Kumarkhali-Kushtia (Chourhash)
Road Yes 60.67% Yes
159
APPENDIX 6
Analysis of the Survey
2.4 Were the projects completed by achieving the target?
% Total
1 Completed by achieving the target 11.3 6
2 Almost within the target 37.7 20
3 Totally failed to meet the target 50.9 27
4 Other Reasons (Please indicate) 0.0 0
Total 100.00 53
2.6
1 2 3 4 5 6 7 8 9 10 11 12 13
Miss
ing
2.6.1 26 9 5 4 2 1 0 6 53
2.6.2 2 7 3 5 12 8 1 3 1 2 2 0 7 53
2.6.30 3 4 5 8 13 11 2 3 0 4 53
2.6.4 0 0 0 1 3 2 0 3 2 8 11 9 0 14 53
2.6.53 2 1 1 2 9 4 12 19 53
2.6.6 0 0 0 1 8 7 3 19 2 2 0 11 53
2.6.7 0 0 8 18 3 0 3 2 4 6 2 0 7 53
2.6.81 0 0 0 5 6 11 7 5 0 18 53
2.6.9 0 0 3 5 15 9 4 3 2 4 2 1 0 5 53
2.6.10 0 2 3 0 2 1 3 10 4 9 2 0 17 53
2.6.11 11 22 9 7 2 0 2 53
2.6.12 0 2 9 17 9 6 4 2 0 4 53
2.6.130 16 19 0 7 0 0 11 53
Rank the following factors (as 1,2,3.. Up to 13) that contribute most to projects' failure to complete in scheduled time (If
you want to add any comments please provide in 2.6.13).
Modification of plan or design related issues
Slow administrative process by Client
(Government/RHD)
Poor supervision by client (Government/RHD)
Lack of expert technical personnel by client
(Government/RHD)
Shortage of Material, Manpower
Uneven increase/fluctuation of material price
Extreme site condition like rain, flood etc.
Extra work requirements of contractors
Lack of efficient/competent Contractor
Poor top management support (Government)
Contract disputes or issues between the
parties
Delay in payment of contractor
Other Issues (Please Specify) Allocation &
release of fund in due time
160
2.9 Rank common factors according to its significance that contributes
towards the delay of contractors' payment.
Missi
ng
Tot
al
Ranking 1 2 3 4 5 6 7
1 Funding unavailability or delays 50 3
0 53
2 Processing of payment is slow or takes
time 18 29 1
5 53
3 Contractors' claims have errors and need
clarification 11 35 6
1 53
4 Client's site officers slow in claim
clarification 1 10
42 53
5 Delays in contract payments are quite
common 3
8 1
41 53
6 Intentional or deliberate delay by
government workers 1 4 48 53
7 IT or computer system failure
1
1 51 53
For the next questions 2.11 to 2.16, please indicate your opinion where necessary by circling the
number on the rating scale, some questions may require ticks.
Quality of work
Rating Scale
Highly
Sufficient
Sufficien
t
Averag
e
Insufficien
t
Highly
Insuffici
ent
2.11
The level of quality
achieved on the projects are
considered
9 5 39
2.12 Material quality control on
the projects are 12 17 24
2.13
The level of supervision
provided by the client to
cover contractors site
activities is
39 8 6
2.14
The existing quality control
policies that addresses all
quality control issues are
13 40 0
2.15
The amount of Resource
allocated for implementing
quality objectives are
8 31 14
2.16
Please indicate the time when the first pothole is likely to appear after the defects liability
period.(The defects liability period is part of the construction contract, during this time the
contractor is required to repair defects (mainly routine maintenance) that occur within the
project ).
% Total
1 After 6-12 months 18.9 10
2 After 1-2 years 73.6 39
3 After 5 years 0.0 0
4 Depends on the level of traffic 7.5 4
5 After a long time 0.0 0
100.0 53
161
2.17 Indicate how soon road maintenance works will commence after the defects liability
period.
% Total
1 After 3-6 months
2 After 6-9 months 15.1 8
3 After a year 39.6 21
4 As soon as defects start arising 35.8 19
5 Whenever funding is received 9.4 5
6 Never at all 100.0 53
Skills of Staff
Rating Scale Highly
Sufficient Sufficient Average Insufficient
Highly
Insufficient
2.18
The level of skill and
experience of the
supervisory staff are
0 22 31 0 0
2.19
The supervisory staffs'
efficiency in achieving
project goal are
6 26 21 0 0
2.20
The level of training
(pre & on the job) for
staffs are
0 1 12 37 3
2.21 For how many projects are an officer/employee engaged at a time on an average (approximate)?
% Total
1 Less than 5 20.8 11
2 Between 5 and 10 34.0 18
3 Between 10 and 15 32.1 17
4 More than 15 13.2 7
100.0 53
Rating Scale
Strongly
Disagree Disagree Average Agree
Strongly
Agree
Don't
know
2.22
The requirements of
clients for project
supervision costs a
lot of money
9 26 7 3 0 8
Mismanagement/Political Influence
There are some mismanagement/political influence/Corruption ------
Rating Scale Strongly
Disagree Disagree Average Agree
Strongly
Agree
2.23 in selecting the project (in a
priority basis)-- 0 15 7 19 12
2.24 during tender stage of the projects-
- 0 4 9 14 26
2.25 during selection of the contractor-- 0 8 7 25 13
2.26 during construction phase-- 0 7 9 27 10
162
Risk sharing
Rating Scale Strongly
Agree Agree Average Disagree
Strongly
Disagree
2.27
Contractors do not need to take
any responsibility for poor quality
of works.
0 15 4 32 2
2.28 Client has to take all the
responsibilities of the project. 8 27 6 12 0
2.29
Sometimes contractors’ poor
workmanship results in quick
deterioration of roads.
26 23 4 0 0
Questionnaire Survey Part 3
Please read the following statements and tick an answer which closely represents your opinion.
Rating Scale
Strongly
Disagree Disagree Average Agree
Strongly
Agree
Risk Sharing by Contractors
3.1
Construction project risks should
be properly identified and shared
between the contractor and the
client.
0 0 2 29 22
3.2
Risk sharing would bring a sense
of discipline and responsibility to
the contractor on road contracts.
0 0 1 21 31
3.3 Risk sharing would benefit the
government to a certain extent. 0 0 0 29 24
Assurance of Quality
3.4
Setting detailed and prescriptive
work methods have not always
yield quality output.
0 33 11 8 1
3.5
Ensuring the quality of the
contractor during tendering would
help to assure the good quality of
work.
0 0 0 41 12
3.6
Setting the performance measures
of the completed works would
help the contractors to do quality
works.
0 0 0 23 30
Improves efficiency
3.7
The current level of efficiency
regarding project maintenance
by RHD staff needs
improvement.
0 0 3 21 29
Introduction of innovative Technology
163
3.8
The current contracting process
lacks or restricts contractor from
introducing new technology.
0 5 3 31 15
3.9
The long term nature of PBMC
enables the contractors to
introduce efficient technology.
0 0 0 50 3
Rating Scale Strongly
Disagree Disagree Average Agree
Strongly
Agree
Get expertise
3.10
The contractors will get better
expert personnel in PBMC than
current contracting process.
0 0 6 47 0
Increases Transparency
3.11
PBMC can lower the level of
possible
corruption/mismanagement in the
contracting process.
2 27 5 19 0
3.12
As PBMC is a long term contract,
the chance of continuous forced
manipulation will be reduced.
0 17 10 26 0
Increases Customer Satisfaction
3.13
PBMC will improve the service
quality during the extended
period.
0 0 9 30 14
3.14
The nature of PBMC mainly
focuses on customer or user
satisfaction.
0 0 7 33 13
Secures Long Term Funding
3.15
PBMC ensures long term road
maintenance funding which is
difficult in the current contracting
process.
0 11 3 23 16
Fast Delivery
3.16
PBMC will deliver the projects in
time or earlier than expected
compared to the current method.
0 0 6 47 0
3.17
Under a PBMC, private sector
workers (contractor's staff) would
be more motivated than the
traditional contracts.
0 0 2 39 12
Achieves Cost Savings
3.18
Supervision and overhead costs
would be reduced in a PBMC
compared to current practice.
0 9 17 27 0
3.19
PBMC will reduce maintenance
costs during the contract
duration.
0 4 23 26 0
A better alternative
3.20
PBMC is a better alternative that
should be adopted in Bangladesh
together with the current method.
0 0 0 24 29
Technical Feasibility
164
3.21
Roads and Highways Department
has good contracting
management experience and can
easily adopt the PBMC concept.
0 0 5 16 32
Rating Scale Strongly
Disagree Disagree Average Agree
Strongly
Agree
3.22
RHD has good knowledge and
data of road networks,
maintenance needs and costs
which can be used to implement
PBMC.
0 0 2 23 28
Barriers
3.23
Staff attitude on the new work
culture would offer resistance to
the new concept.
0 5 0 31 17
3.24
Skills and staff training will be an
area of concern that may cause
delay in the implementation
process.
0 3 1 27 22
3.25
Contractors' capacity and
commitment would be a
problematic issue of concern in
PBMC.
0 15 4 31 3
3.26
Construction industry in
Bangladesh is still
underdeveloped to implement
performance contracts.
0 28 4 21 0
3.27
Lack of government's budgetary
allocation for the long term
commitment could be a problem.
0 0 1 32 20
165
REFERENCES
ADB, 2002, Report and Recommendation of The president to The Board of Directors on A
Proposed Loan to The People’s Republic of Bangladesh for The Road Network Improvement
and Maintenance Project.
ADB, 2010a, Bangladesh: Road Maintenance and Improvement Project, Independent
Evaluation Department, Asian Development Bank, PCV: BAN 2010-19.
ADB, 2010b, Project Review Mission for Loan 1920-Ban (sf): Road Network Improvement
and Maintenance Project- i (10 to 27 October 2010), Aide Memoire.
ADB, 2010c, Project Review Mission for Loan 2021-Ban (sf): Road Network Improvement
and Maintenance Project - i (10 to 27 October 2010), Aide Memoire.
Al-Tabtabai, HM, 2002, 'Causes for Delays in Construction Projects in Kuwait', Engineering
Journal of the University of Qatar, vol. 15, pp. 19-37.
Alaghbari, W, Kadir, MRA, Salim, A & Ernawati, 2007, 'The significant factors causing
delay of building construction projects in Malaysia', Engineering, Construction and
Architectural Management, vol. 14, no. 2, pp. 192-206.
Anastasopoulos, PC, McCullouch, BG, Gkritza, K, Mannering, FL & Sinha, KC, 2010, 'A
Cost Savings Analysis of Performance-Based Contracts for Highway Maintenance Operations ',
Journal of Infrastructure Systems, vol. 16, no. 4, pp. 251-263.
Assaf, SA & Al-Hejji, S, 2006, 'Causes of delay in large construction projects', International
Journal of Project Management, vol. 24, no. 4, pp. 349- 357.
Austroads, 2003, Development of Performance Contracts and specifications- Full report,
Opus International Consultants, New Zealand.
Azad, MAK, 2011, 'Highway repair to take months', The Daily Star, Bangladesh, 18 August.
Cabana, G, Liautaud, G & Faiz, A, 1999, 'Areawide Performance -Based Rehabilitation and
Maintenance Contracts for Low-Volume Roads', paper presented to Seventh International
Conference on Low-Volume Roads, May 23-27.
Carpenter, B, Fekpe, E & Gopalakrishna, D, 2003, Performance-Based Contracting for the
Highway Construction Industry, An Evaluation of the Use of Innovative Contracting and
Performance Specification in Highway Construction, Koch Industries Inc., Washington, D.C.
Chua, DKH, Kog, YC & Loh, PK, 1999, 'Critical Success Factors for Different Project
Objectives', Journal of Construction Engineering and Management, ASCE, vol. 125, no. 3, pp.
142-150.
de la Garza, J, M, Piñero, J, C & Ozbek, M, E, 2008, 'Sampling Procedure for Performance-
Based Road Maintenance Evaluations', Transportation Research Record: Journal of the
Transportation Research Board, no. 2044, pp. 11-18.
de la Garza, J, M, Pinero, J, C & Ozbek, M, E. , 2009, 'A Framework for Monitoring
Performance-Based Road Maintenance Contracts', paper presented to Proceedings of the
166
Associated Schools of Construction 45th Annual International Conference, Gainesville, Florida,
April 1-4.
Dlakwa, MM & Culpin, MF, 1990, 'Reasons for overrun in public sector construction
projects in Nigeria', International Journal of Project Management, vol. 8, no. 4, pp. 237-241.
FDOT, 2000, Office of Program Policy Analysis and Government Accountability, Highway
Construction and Engineering and Transportation System Maintenance Programs, Chapter 4,
Report 99-29, Florida Department of Transportation.
Frimpong, Y, Oluwoye, J & Crawford, L, 2003, 'Causes of delay and cost overruns in
construction of groundwater projects in a developing countries; Ghana as a case study',
International Journal of Project Management, vol. 21, no. 5, pp. 321-326.
Frost, M, 2001, 'Imperatives in Future Road System Management, Improved Road
Maintenance Productivity- the Australian Case ', paper presented to 14th IRF Road World
Congress, Paris, France, June 11-15.
Frost, M & Lithgow, CM, 1996, 'Improving Quality and Cutting Costs Through Performance
Contracts-Australian Experience', paper presented to World Bank Road Management Training
Seminar, Washington DC, USA, December 17-18, <http://www.zietlow.com/docs/frost.htm>.
Frost, M & Lithgow, CM, 1998, 'Future Trends in Performance-Based Contracting- Legal
and Technical perspectives', paper presented to 19th ARRB Transport Research Ltd. Conference,
Sydney, Australia., December 7-11.
Fugar, FDK & Agyakwah-Baah, AB, 2010, 'Delays in Building Construction Projects in
Ghana', Australasian Journal of Construction Economics and Building, vol. 10, no. 1, pp. 103-
116.
Haas, R, Felio, G, Lounis, Z & Falls, LC, 2009, 'Measurable performance indicators for
roads: Canadian and International Practice', paper presented to Best Practices in Urban
Transportation Planning: Measuring Change, Vancouver, British Columbia, October 18-21.
Hardy, P, 2001, Austroads Review of Performance Contracts: The Potential Benefits of
Performance Contracts, Opus International Consultants, New Zealand.
Hartwig, T, Mumssen, Y & Schliessler, A, 2005, Output Based aid in Chad using
Performance-Based Contracts to Improve Road, Note No.6, OBA Approaches, The World
Bank, Washington DC.
Hunter, E & Kyle, R, 2001, A review of achievable efficiencies and associated issues under
output and performance based contracts, Contracting the Future NZIHT Symposium, The World
bank, Washington D.C.
Hyman, WA, (US), NRC, Program, NCHR, AASHTO & Administration, FH, 2009,
Performance-based contracting for maintenance, A Synthesis of Highway Practice, NCHRP
Synthesis 389, Transportation Research Board, Washington, D.C.
Kaliba, C, Muya, M & Mumba, K, 2009, 'Cost escalation and schedule delays in road
construction projects in Zambia', International Journal of Project Management, vol. 27, no. 5,
pp. 522-531.
167
Keir, M & Blerk, GV, 2006, A Review of the Performance Specified Maintenance Contract
(PSMC) Model Using a Case Study of PSMC 001, Case Study- Transit New Zealand,
Transfield Services.
Kenny, C, 2007, Construction, Corruption, and Developing Countries, World Bank Policy
Research Working Paper 4271, The World Bank.
Khan, MA, 2011, 'Dhaka-Ctg Road Trips Turn terrible', The Daily Star, Bangladesh.
Khan, P, 2011, 'Photo', The Daily Star, Bangladesh, 18 August.
Kwak, YH & Bushey, R, 2000, 'Construction Management at Risk: An Innovative Project
Delivery Method at Stormwater Treatment Area in the Everglades, Florida', paper presented to
Construction Congress VI: Building Together for a Better Tomorrow in an Increasingly
Complex World Proceedings of Construction Congress VI, Orlando, Florida, USA February
20–22, 2000 <http://ascelibrary.org/proceedings/resource/2/ascecp/278/40475/52_1>.
Lancelot, E, 2010, Performance Based Contracts in the Road Sector:Towards Improved
Efficiency in the Management of Maintenance and Rehabilitation Brazil’s Experience,
Transport Papers, TN-31, The World Bank, Washinton D.C.
Liautaud, G, 2001, Maintaining Roads: Experience with Output-Based Contracts in
Argentina Chapter 4, Contracting for Public Services, Output-Based Aid and its Applications,
The World Bank, Washington D.C.
Long, ND, Ogunlana, S, Quang, T & Lam, KC, 2004, 'Large construction projects in
developing countries: a case study from Vietnam', International Journal of Project
Management, vol. 22, no. 7, pp. 553-561.
Manion, M & Tighe, SL, 2007, 'Performance-specified maintenance contracts - Adding
value through improved safety performance', Transportation Research Record, no. 1990, pp.
72-79.
Memon, AH, Rahman, IA, Abdullah, MR & Azis, AAA, 2011, 'Assessing the Effects of
Construction Delays on MARA Large Projects', paper presented to Proceeding of the
International Conference on Advanced Science, Engineering and Information Technology 2011,
Putrajaya, Malaysia, January 14-15
Menches, CL, Khwaja, N & Chen, J, 2010, Synthesis of Innovative Contracting Strategies
Used for Routine and Preventive Maintenance Contracts, Centre for Transportation Research,
Performed in Co-operation with Texas Department of Transportation and the Federal Highway
Administration, USA, Texas.
Mumseen, Y, Johannes, L & Kumar, G, 2010, 'Roads, Chapter 4, Output-Based Aid: Lessons
Learned and Best Practices', in The World Bank, Washington D.C.
Mumseen, Y & Kenny, C, 2007, Output-Based Aid in Infrastructure, A Tool for Reducing
the Impact of Corruption, OBA Approaches, Note no. 16, The World Bank, Washington D.C.
Nguyen, LD, Ogunlana, SO & Lan, DTX, 2004, 'A Study on Project Success Factors in
Large Construction Projects in Vietnam', Engineering, Construction and Architectural
Management, Emerald Group Publishing Limited, vol. 11, no. 6, pp. 404-413.
168
Odeh, AO & Battaineh, HT, 2002, 'Causes of Construction Delay: Traditional Contracts',
International Journal of Project Management, vol. 20, no. 1, pp. 67-73.
Ogunlana, SO, Promkuntong, K & Jearkjirm, V, 1996, 'Construction delays in a fast-growing
economy: Comparing Thailand with other economies', International Journal of Project
Management, vol. 14, no. 1, pp. 37-45.
Opus International Consultants Ltd & MWH NZ Ltd, 2006, Introducing Performance Based
Maintenance Contracts to Indonesia Framework Document.
Ozbek, ME & de la Garza, JM, 2011, 'A Comprehensive Evaluation of Virginia Department
of Transportation’s Experience with its First Performance-Based Road Maintenance Contract',
Journal of Transportation Engineering.
Pakkala, P, 2002, Innovative Project Delivery Methods for Infrastructure An International
Perspective, Finnish Road Enterprise, Helsinki.
Pakkala, P, 2005, 'Performance-Based Contracts - International Experiences', paper
presented to TRB Executive Workshop, Finnish Road Administration, Washington, D.C., April
27.
Parviz, A, Koushki, & and Nabil, K, 2004, 'Impact of construction materials on project time
and cost in Kuwait', Engineering, Construction and Architectural Management,, vol. 11, no. 2,
pp. 126-132.
Piñero, JC, 2003, 'A Framework for Monitoring Performance-based Road Maintenance',
Doctor of Philosophy thesis, Faculty of the Virginia Polytechnic Institute and State University.
Piñero, JC & de la Garza, JM, 2004, 'Issues Related to the Assessment of Performance-Based
Road Maintenance Contracts', paper presented to Towards a Vision for Information Technology
in Civil Engineering, Proceedings of 4th Joint International Symposium on Information
Technology in Civil Engineering, Tennessee, USA, November 15-16.
Porter, TM, 2005, 'Procurement Models for Road Maintenance', paper presented to Annual
Conference of the Transportation Association of Canada, Calgary, Alberta, <http://www.tac-
atc.ca/english/resourcecentre/readingroom/conference/conf2005/docs/s13/porter.pdf>.
Queiroz, C, 1999, 'Contractual Procedures to Involve the Private Sector in Road
Maintenance and Rehabilitation', paper presented to Transport Sector Familiarization Program,
Washington, D.C., April 16-22.
Queiroz, C, 2005, 'Options for Implementing Performance-Based Contracts', in Transport
Forum, Washington D.C. .
Queiroz, C, 2011, 'Performance Based Contracting in Estonia, The World Bank PBC
Resource Guide', in Evolution of road maintenance management and Performance-Based
Contracting (PBC) in Roads – 3rd BBL, Washington, D.C., The World Bank.
Reilly, J, 2009, Alternative contracting and delivery methods, John Reilly Associates
International, 1101 Worcester Road, Framingham, Massachusetts, USA.
(www.ctta.org/FileUpload/ita/2009/papers/O-01/O-01-09.pdf).
169
RHD, 2012, Website of Roads and Highways Department, <http://www.rhd.gov.bd/>.
Robinson, MD, Raynault, E, Frazer, W, Lakew, M, Rennie, S & Edward, S, 2006, 'DC
Streets Performance-Based Asset Preservation Experiment: Current Quantitative Results and
Suggestions for Future Contracts', paper presented to Transportation Research Board 85th
Annual Meeting, Washington DC, USA, January 22-26.
Robinson, P, 1999, 'Road Maintenance by Contract- What are the Risks and Benefits?', paper
presented to International Congress on Local Government Engineering and Public Works:
Incorporating 10th National Local Government Engineering Conference, , Sydney, Australia.,
August 22-26, 1999.
RRD, 1996, Country Papar on Bangladesh Road and Road Transport, Government of
Bangladesh.
RRD, 1999, Roads in Bangladesh The Next Millennium, May edn, Roads and Railways
Division, Ministry of Communications, Government of the People’s Republic of Bangladesh.
RRD, 2001, Roads and Highways Department Towards Effective Asset Management of
Roads & Bridges, June edn, Roads and Railways Division, Ministry of Communications,
Government of the People’s Republic of Bangladesh.
Segal, GF, Moore, AT & McCarthy, S, 2003, Contracting For Road and Highway
Maintenance, Reason Foundation, Reason Public Policy Institute.
Shajahan, S, 2005, Research Methods for Management, Jaico Publishing House, India.
Silva, MM & Liautaud, G, 2011, Performance-based Road Rehabilitation and Maintenance
Contracts (CREMA) in Argentina A Review of Fifteen Years of Experience (1996-2010),
Transport Papers No. 36, The International Bank for Reconstruction and Development, The
World Bank, Washington, DC.
Staff Report, 2012, 'WB scraps Padma loan', The Daily Star, Bangladesh, 1 July.
Stankevich, N, Qureshi, N & Queiroz, C, 2005, Performance-based Contracting for
Preservation and Improvement of Road Assets, Transport Notes No. 27, The World Bank,
Washington, DC.
Straub, A, 2009, 'Cost Savings from Performance-Based Maintenance Contracting',
International Journal of Strategic Property Management, vol. 13, no. 3, pp. 205–217.
Sultana, M, Rahman, A & Chowdhury, S, 2012a, 'An Overview of Issues to Consider Before
Introducing Performance-Based Road Maintenance Contracting', paper presented to
International Conference on Transportation and Logistics Engineering, Kualalumpur,
malaysia, February 19-21.
Sultana, M, Rahman, A & Chowdhury, S, 2012b, 'Performance Based Maintenance of Road
Infrastructure by Contracting - A Challenge for Developing Countries', Journal of Service
Science and Management, vol. 5, no. 2, pp. 118-123.
Sultana, M, Rahman, A & Chowdhury, S, 2013, 'A Review of Performance Based
Maintenance of Road Infrastructure by Contracting', International Journal of Productivity and
Performance Management, vol. 62, no. 3.
170
The Daily Star, 2011, 'Published Article on Padma Multipurpose Bridge project on June 22,
September 6 and 30, October 10, 15-17, 26, November 30, 2011', The Daily Star, Bangladesh.
The World Bank, 2004, Design and procurement of long-term pilot contracts for the
performance-based management and Maintenance of roads (output based Approach),
Washington D.C.
The World Bank, 2010, Implementing and Rolling out Argentina’s New Approach to Road
Maintenance, IBRD Results, Washington D.C.
Tineo, L, 2007, 'Procurement issues in Performance-Based Contracts: The World Bank
Experience With Output-Based Aid Subsidies', Journal of Public Procurement, vol. 7, no. 1, pp.
62-83.
Transparency International Bangladesh, 2002, Corruption in Public Sector Departments: Its
Manifestations, Causes, And Suggested Remedies, a report on the findings of four diagnostic
studies on corruption conducted for the World Bank., Transparency International Bangladesh,
<http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan004882.pdf>.
Vidalis, SM & Najafi, FT, 2002, 'Cost and Time Overruns in Highway Construction', paper
presented to 4th Transportation Specialty Conference of the Canadian Society for Civil
Engineering, , Montréal, Québec, Canada, 5-8 June 2002.
Zietlow, GJ, 2004, Implementing Performance-Based Road Management and Maintenance
Contracts in Developing Countries, An instrument of German Development Cooperation,
Birmingham.
Zietlow, GJ, 2005, 'Cutting Costs and Improving Quality through Performance-Based Road
Management and Maintenance Contracts-The Latin American and OECD Experiences', paper
presented to Senior Road Executives Programme, Restructuring Road Management, German
Development Cooperation, Birmingham,U.K., April 24-29.
Zietlow, GJ, 2007, 'Performance-Based Road Management and Maintenance Contracts-
Worldwide Experiences', paper presented to International Seminar on Road Financing and
Investment, Arusha, Tanzania, April 16-20
Zietlow, GJ & Bull, A, 1999, 'Performance Specified Road Maintenance Contracts- The
Road to the Future, The Latin American Perspective', paper presented to 21st World Congress,
International Road Federation (IRF), UN-Economic Commission for Latin America and the
Caribbean (ECLAC), Kuala Lumpur, Malaysia, October 3-9.
Zietsman, J, 2004, 'Performance Measures for Performance Based Maintenance Contracts,
Texas Transportation Institute'.
