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

Transcription

1 Mind the Maintenance Gap: Framework, Global Trends, and Maintenance in OIC Member States Dr Adnan Rahman Director General, IRF

2 THE INTERNATIONAL ROAD FEDERATION Promoting the development and maintenance of better, safer and more sustainable roads and road networks. NON-PROFIT INDEPENDENT 90 COUNTRIES

3 Four Work Areas Road Finance & PPP Intelligent Transport Systems Environment & Climate Change Road Safety Better roads, better world.

4 Three Strategic Pillars Knowledge transfer & Information sharing Connecting people, businesses and organisations Policy & Advocacy Better roads, better world.

5 KNOWLEDGE TRANSFER & CAPACITY BUILDING SOFTWARE RADaR TRAINING COURSES DATA KNOWLEDGEP LATFORM PUBLICATIONS

6 CONNECTING PEOPLE, BUSINESSES, & ORGANISATIONS CONFERENCES PARTNERSHIPS

7 POLICY AND ADVOCACY ITS Advisory Group Task Force for Statistics methodologies UNRSC Green Public Procurement Better roads, better world.

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

9 JOBS GOOD ROADS IMPROVE ACCESSIBILITY HEALTHCARE EDUCATION MARKETS ECONOMIC DEVELOPMENT POORLY MAINTAINED ROAD NETWORKS LEAD TO: A DETERIORATION IN THE VALUE OF THE ASSETS MORE EXPENSIVE MAINTENANCE IN THE FUTURE (UP TO 9X) HIGHER VEHICLE OPERATING AND MAINTENANCE COSTS LONGER TRAVEL TIMES AND MORE ACCIDENTS LOSS OF BENEFITS FROM THE ORIGINAL INVESTMENT

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

11 WHAT IS MAINTENANCE? Maintenance is a series of activities designed to keep a road network serviceable by reducing the deterioration of pavements and other road assets. Routine maintenance Resurfacing Rehabilitation Reconstruction Restoration Betterment New road construction

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

13 A COMMON DECISION MAKING CYCLE STRATEGIC PLANNING Define Goals & Objectives PROGRAMMING Monitoring Needs Assessment Data & Information PREPARATION Implementation Define Options IMPLEMENTATION Analyse and Select Options

14 ASSET MANAGEMENT

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

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

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

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

19 1. OWNERSHIP AND INSTITUTIONAL STRUCTURE Involve stakeholders and road users in management of roads by creating an organsiation (eg., a road board) that: Is independent Has legal and legislative standing Has clearly defined executive or advisory responsibility Has a clear terms of reference With explicit rules and procedures Separate financing and procurement and delivery functions Institutionalise planning and programming function

20 2. FINANCING (1) Create an independent (free from political interference) organisation (eg., road fund): With dedicated revenue sources deposited directly to it, An independent board with a clear ToR, The ability to vary tariffs and charges to meet needs, With a simple consistent procedure for fund allocating, and Is regularly audited Revenues should come from user charges (fuel fees, parking, vehicle license fees, road pricing, weight-distance fees, ) Administrative considerations (evasion, international transit fees, inadvertent subsidies, ) Practical considerations

21 2. FINANCING (2) Level of charges should follow three core principles: Road tariff should not be lower than the variable costs of operating and maintaining the road network; Road tariff and the taxes and charges used to support local access roads should collectively cover all road costs; When there is significant road congestion, the road tariff should also include congestion costs, although this will only apply to a handful of seriously congested cities.

22 3. ASSIGNING RESPONSIBILITY Clear assignment of responsibility, based on a functional classification of road network, for its management Management includes responsibility for managing traffic and enforcing, for example, weight-axle rules and regulations Community and rural roads need special attention, including financing from the central/national government

23 4. ENHANCING EFFICIENCY (1) Clear definition of the role of the road agency in a mission or vision statement Management Structure: Decentralisation Management must understand of asset management Create positions with asset management responsibility Training of managers in asset management Working with the sector to improve skills and competences to permit more complex forms of contracting (eg., performance based maintenance contracts) Fewer staff, better terms and conditions for employment

24 4. ENHANCING EFFICIENCY (2) Use Management Information Systems (MIS) to suppport decision making Asset Management System with an up-to-date asset register Condition of assets Traffic information Regular data collection to support planning and programming Use life cycle costing approaches to set Use of models (transport demand models, pavement deterioration model, financial models)

25 4. ENHANCING EFFICIENCY (3) Program delivery Renew and adapt business models for maintenance lump sum contracts, with focus on outcomes Outsource delivery of maintenance works Simple, consistent, transparent procurement practices and contracts Program audits and monitoring are built into program delivery Strengthen managerial accountability Audits Reporting requirements Change financial accounting systems Match revenues to expenditures Account for asset owned by road agency

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

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

28 ROAD NETWORK BY ROAD TYPE (MOTORWAY, HIGHWAY, OTHER) OIC (%) US (%) EU (%) Motor Highway Seondary Other

29 PAVED VERSUS UNPAVED ROADS

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

31 EXPENDITURES ON MAIN ROAD NETWORKS IN SUB-SAHARAN OIC MEMBER STATES Length of Main Network Roads in Good Condition Maintenance Expenditures Rehabilitation/Capital Expenditures (KM) (KM) Annual Averages in USD / KM Benin 4, ,016 4,307 Burkina Faso 10,231 n.a. n.a. n.a. Cameroon 11,008 2,372 2,609 5,823 Chad n.a. 862 n.a. n.a. Cote d Ivoire 13, n.a. 9,016 Niger 6, ,137 Nigeria n.a. n.a. n.a. 16,964 Senegal 4,780 2,141 n.a. 24,938

32 SOME OBSERVATIONS ON ROAD NETWORKS Road network is too large relative to population & GDP. The share of motorways, highways, national and main roads in the total road network is disproportionately large. There is an acute lack of reliable and consistent data when it comes to expenditures in the road sector (this data is not readily available). There seems to be a capital investment bias with most expenditures on rehabilitation and capital projects. Road network is not in very good condition.

33 ISSUES - OWNERSHIP AND INSTITUTIONAL STRUCTURE Limited autonomy of road sector organsisation Road management and maintenance is still part of a Ministry of Transport, or a public works department Leadership of road agencies is often drawn from civil service Force accounts are still used for maintenance works Stakeholder involvement is limited or only in name Planning and programming is limited and not always supported by evidence and data

34 ISSUES - FINANCING Lack of adequate and stable funding for maintaining the road networks. Even in Member States with road funds, adequate and stable funding for maintenance activities remains elusive. User charges are at too low levels Fuel levies and general tax revenues remain the dominant sources of revenue for funding maintenance Maintenance needs are underfunded for large portions of the road network (especially the secondary and rural roads, requiring more expensive rehabilitation works at some later stage) Preference is for capital investment

35 ROAD FUNDS IN OIC MEMBER STATES Road Fund Number of Countries Established 20 In preparation or nonexistent 37 MOST OIC MEMBER STATES HAVE NO ROAD FUND The legal basis of many road funds remains weak. Autonomy of road funds is not ensured, there is significant risk of political interference Participation of stakeholders in the road funds is very limited. The accountability and transparency of road funds is limited to an annual financial audit without any reporting requirement. There are few disclosure requirements for legal documents and annual reports with financial data on the activities of the road funds. Road funds rarely use data-based performance indicators for monitoring and evaluating the impact of their funding activities. Thus, there is no link of the funding to improvements in the performance of the road network. The bulk of revenues come from a fuel levy and budget support from general government revenues. Despite road funds being established to fund maintenance, most finance development and rehabilitation.

36 ISSUES - ASSIGNING RESPONSIBILITY The responsibility for developing and maintaining rural and secondary roads is ambiguous Enforcement of rules and regulations, especially axleweight regulations is an issue

37 ISSUES ENHANCING EFFICIENCY Planning and programming are weak Data quality and quantity leave much to be desired Use of Asset Management Systems and models remains limited Performance based maintenance contracts are still the exception rather than the norm Link between the cost of maintenance works and their effects are missing

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

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

40 MOROCCO - ORGANISATION Two types of maintenance plans 2 and 5 year plans HDM used to do CBA Roads Directorate has 55 regional & provincial directorates CNER is responsible for doing a road condition survey every two years Maintaining Road Management System IFER is responsible for providing vocational education Ministry maintains ongoing dialogue with the association of contractors Developed a contractor qualification system

41 Four sources of revenue: General tax revenues The road fund (fuel levy) Partners External funds MOROCCO FINANCING Maintenance works get about 30% of total budget Current budget covers 50% of total financing need Of the funds dedicated to maintenance, about 71% are for routine and periodic maintenance General Budget (Million Dirhams) FSR (Million Dirhams) Partners (Million Dirhams) CFR (Million Dirhams) ,026 3, , ,471 2, ,305

42 MOROCCO ISSUES Overloading is a big problem Roads are being built to design standards that are not adequate for the larger, heavier vehicles in use today Weather related maintenance has been a big problem for the maintenance budgets since 2008 Staffing: Downsizing will require more outsourcing Difficulty in attracting talent Maintenance of rural roads is a problem Maintenance of equipment is an issue

43 TURKEY - ORGANISATION Separate department of facilities and maintenance 18 regional divisions Routine and emergency maintenance and snow and ice removal is undertaken by regional divisions Most routine maintenance works are contracted out 3-year maintenance contracts not performance based

44 TURKEY - FINANCING Major share of budget comes from general tax revenues 3- year budget is submitted to Parliament for approval approves funding for one year Funding available for maintenance works is inadequate (10-12 % of total GDH budget High level of ad-hoc funding for GDH 3 2,5 2 1,5 1 0,

45 TURKEY - ISSUES Responsibility and financing of the maintenance of rural (forest) and community roads is unclear Planning and programming can be improved (no asset management system, little data) No earmarked funding for maintenance (much funding is ad-hoc) Routine and periodic maintenance is delayed till more extensive, expensive maintenance works are required Overloading is a big problem Legal and regulatory framework for contracting maintenance works inhibits innovation

46 SENEGAL ORGANISATION (1) Ministry of Infrastructure and Land Transport Directorate of Roads Agency of Works and Management of Roads (AGEROUTE) Fund for Autonomous Road Maintenance (FERA) Directorate of Roads is responsible for: Policy Planning Support local authorities Develop rural roads

47 SENEGAL ORGANISATION (2) AGEROUTE is responsible for: Management and coordination of the classified road network Planning of maintenance, and activities to support planning FERA is responsible for ensuring financing of maintenance works Autonomous Independent board

48 SENEGAL FINANCING FERA is the road fund and gets its revenues from: General tax revenues Tax on road use General government subsidies The tax on road use was doubled in 2011 Actual revenues from tax collection are exceeding the estimates, but they are still falling short of requirements FERA is considering borrowing money from a commercial bank to meet the funding shortfall

49 SENEGAL ISSUES Overloading is a big problem (costs of overloading are higher than the total revenues from the tax on road use) Reliance on government tax revenues leads to uncertainty about the funds available for maintenance and this makes it difficult to plan Roads are being designed on standards that are no longer adequate for the heavier larger vehicles that are now in use Availability of materials is an issue There are problems with the local contractors

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

51 LESSONS FOR OIC MEMBER STATES (1) Preventive maintenance pays for itself (deferring maintenance can be very expensive) Maintenance should not be seen just as maintenance, but as part of a multi-year asset management plan Planning and programming are essential components for any successful maintenance strategy Plans, programs, and actions must be based on solid data and evidence linking condition of assets, costs, and benefits of alternative maintenance

52 LESSONS FOR OIC MEMBER STATES (2) Separate the management and operation of the road network from the funding of the maintenance works Earmarked, stable sources of revenue are required for having effective implementation of multi-year maintenance plans Use of innovative financing sources to meet the funding needed for maintaining the road network is needed Focus of the road fund s activities should be on preventive maintenance Dialogue with industry is necessary to understand the problems faced by industry, as well as to improve the capabilities of the sector.

53 System level recommendations RECOMMENDATIONS Recommendations depending on maturity of organsations and road sector: Phase 1 - Preparing for performance monitoring Phase 2 Monitoring and improving performance Phase 3 Performance based on outputs Phase 4 Organisation wide performance monitoring

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

55 RECOMMENDATIONS - PHASE 1 Identify the shortcoming and needs with respect to the systems and procedures Collect needed data and information Make changes to the institutional setting, including the legal and regulatory frameworks Make necessary internal reforms in the organisation

56 RECOMMENDATIONS - PHASE 2 Human resources issues Involvement of stakeholders and road users, and Financial security for the organisation

57 Focus is on outputs RECOMMENDATIONS - PHASE 3

58 RECOMMENDATIONS - PHASE 4 Focus is on organisational wide performance

59 THANK YOU