While adoption of competitive bidding for road and other civil works has been the norm in most countries of the world, some countries do not have a sufficient industry of independent contractors and road works are mostly done by force account or awarded to state construction agencies on a negotiated basis. In many of these countries, not only are cost high and quality low, it is common for suppliers of construction materials and services to have monopoly power, further increasing inefficiency and lowering quality. In these situations, it is a combination of transferring work from the public to private sector (PDF 22 KB) and the introduction of competition into operations that is often the best way to decrease inefficiency and improve quality. Introducing competitive bidding into public works contracts (PDF 21 KB) is also often an important first step to this goal. Secondly, the contracting out of the works function (PDF 21 KB) requires the introduction of competition into the operation of road agencies themselves, either by the greater use of existing private contractors, or by allowing public sector agencies to compete with the private sector.
Contracting of Civil Works
Where the private sector is relied on for the construction of roads, it is the bidding and contracting documents which are the foundation of the construction process. In recent years, as the process of contracting has quickly evolved, and contractors have experimented with new ways of acquiring new business and enhancing profit, there is an awareness of the need to refine these basic documents, particularly in the areas of risks and incentives. The construction industry has historically not dealt well with risk, leading to many failed contractors through poor planning, poor budgeting, and poor resource management. On the owner’s side, the push to minimize costs is often an absolute goal, regardless of market realities, resulting in impossibly low prices being accepted as part of bids and contracts which give owners all the rights and contractors all of the obligations. To overcome these problems during road construction, risks must be properly defined and the remedies associated with these risks (PDF 14 KB) spelled out in a way that eliminates the incentive of the contractor to bid other than at his best price. The owner must also be protected against irresponsibly low bids that later result in excess claims and controversy. Apart from insisting on clarity of contract terms, the owner should also carry out close scrutiny of the bidder’s credentials and the responsiveness of his bid, and they should also be linked to awarding to the lowest responsive, responsible bidder. New approaches, ranging from management contracts to BOOT, should be considered as valid options, together with the more traditional methods of bidding on the basis of existing designs and specifications (PDF 160 KB).
There are options for creating an enabling environment for the construction industry, thus leading to more involvement of private contractors and consultants in improved management of road assets. The process, which is of particular importance for economies in transition, begins with separating the functions of planning and management from implementation of road works. Different forms of contract have several implications on the risk allocation between client and contractor; the risks to the highway agency tend to decrease as the agency shifts from force account (or direct labor) to short- and long-term forms of contract with the private sector, including concessions (PDF 103 KB).
Labor-Based Construction and Maintenance Methods for Road Works
Using labor-based methods for road works (PDF 50 KB)has been an important part of the strategy to improve rural transport infrastructure in Africa over the past twenty-five years. These methods not only produce gravel roads of equal quality to those produced using equipment-based methods, but they also generate rural employment in a cost-effective manner. Although labor-based methods have proved to be a cost-effective alternative to equipment-based methods in many low-wage Sub-Saharan African countries, these methods have not been applied on a large scale.
The Rural Travel and Transport Program (RTTP) - a component of the Sub-Saharan Africa Transport Policy Program (SSATP) - launched a study to find sustainable solutions to this problem. An example of one labor-based road maintenance scheme (PDF 35 KB) used in Kenya is attached. The RTTP, with the support of a number of bilateral donors, has over the last two years examined experiences in Africa to identify why labor-based programs have not been adopted on a large scale and to develop appropriate reforms.
Experience gained under the RTTP identifies two key reforms that are necessary to mainstream labor-based programs, but which have not received the attention they require. These are improved financial management, to ensure that funds flow adequately and laborers are paid on time, and decentralization, to streamline payment procedures and strengthen stakeholders' support of these programs. These two reforms, together with government commitment, effective labor laws, appropriate design standards, and training, should facilitate the mainstreaming of labor-based programs in countries where such methods are feasible. While addressing these reforms, program designers can begin to establish a suitable delivery mechanism (PDF 13 KB).
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The safe and efficient flow of traffic through work zones is a major concern to transportation officials, industry, the public, businesses, and commercial motor carriers. The following illustrates the programs some highway agencies are developing:
U.S. Federal Highway Administration (FHWA):
- The FHWA has developed the National Highway Work Zone Safety Program (NHWZSP) to reduce the fatalities and injurious crashes in work zones, and to enhance traffic operation and safety within work zones. The four elements of the NHWZSP are standardization, compliance, evaluation, and implementation. In addition, the FHWA conducted a study entitled "Meeting the Customer's Needs for Mobility and Safety During Construction and Maintenance Operations," which involved interviews with FHWA and State personnel in 26 States. You can read about the best practices/policies for minimizing delay and enhancing safety during construction and maintenance operations at the FHWA's Work Zone Safety Best Practices site. The study's recommendations will be the foundation for future FHWA actions and programs with its partners to improve the safety and efficiency of work zones.
- The Manual on Uniform Traffic Control Devices (MUTCD) - the publication that governs how road managers nationwide install and maintain the signs, markings, and signals along the Nation's roadways - is being totally revised, reformatted, and readied for its premier in 2001. Until publication, please visit the new, expanded web site. You can review proposed changes in the MUTCD Millennium Edition, examine amendments to the 1988 edition, and follow the format and rewrite process.
Institute of Transportation Engineers (ITE), Washington Weekly, January 21, 2000:Return to top of document
Unit Costs of Construction and Maintenance Works
Assuming US$1=100 JPY in the following data:
- 4 lane bypasses of national highway: US$25 million/km
(construction cost without land acquisition, average of sections newly put in service between April '95 and March '97).
- Expressways: US$36.5 million (construction) + US$13.6 million (land)/km
(average of sections newly put in service between April '88 and March '95) The number of lanes on Expressways vary, but most of them are 4 lanes.
It is interesting that the cost of Expressways above was adjusted to the condition in United States. In the United States, the cost of construction could be reduced, because of fewer sections of bridges and tunnels, by US$15 million and the difference of geo-technical conditions and seismic design standards by US$0.9 million. In addition, the cost of land acquisition could be reduced by US$10.9 million in United States. All these deductions result in US$23.3 million/km (construction and land), which is comparable with actual US$19.1 million/km in the United States (average of 12 sections of Interstate which were newly put in service after 1990). Other examples of construction costs in Japan (Table 6) are provided monthly by the Kensetsu Bukka Chousakai foundation (only in Japanese). The registered English name of the foundation is the Construction Research Institute.Return to top of document
Proper road maintenance contributes to reliable transport at reduced cost, as there is a direct link between road condition and vehicle operating costs (VOC). An improperly maintained road can also represent an increased safety hazard to the user, leading to more accidents, with their associated human and property costs. Examples of ways in which different countries contract road maintenance services (PDF 34 KB). In general, road maintenance activities can be broken into four categories:
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- Routine works. These are works that are undertaken each year that are funded from the recurrent budget. Activities can be grouped into cyclic and reactive works types. Cyclic works are those undertaken where the maintenance standard indicates the frequency at which activities should be undertaken. Examples are verge cutting and culvert cleaning, both of which are dependent on environmental effects rather than on traffic levels. Reactive works are those where intervention levels, defined in the maintenance standard, are used to determine when maintenance is needed. An example is patching, which is carried out in response to the appearance of cracks or pot-holes.
- Periodic works. These include activities undertaken at intervals of several years to preserve the structural integrity of the road, or to enable the road to carry increased axle loadings. The category normally excludes those works that change the geometry of a road by widening or realignment. Works can be grouped into the works types of preventive, resurfacing, overlay and pavement reconstruction. Examples are resealing and overlay works, which are carried out in response to measured deterioration in road conditions. Periodic works are expected at regular, but relatively long, intervals. As such, they can be budgeted for on a regular basis and can be included in the recurrent budget. However, many countries consider these activities as discrete projects and fund them from the capital budget.
- Special works. These are activities whose need cannot be estimated with any certainty in advance. The activities include emergency works to repair landslides and washouts that result in the road being cut or made impassable. Winter maintenance works of snow removal or salting are also included under this heading. A contingency allowance is normally included within the recurrent budget to fund these works, although separate special contingency funds may also be provided.
- Development. These are construction works that are identified as part of the national development planning activity. As such, they are funded from the capital budget. Examples are the construction of by-passes, or the paving of unpaved roads in villages.
Maintenance by Contract
Contracting for specific items of maintenance work, such as the resealing, overlay or reconstruction of a specific length of pavement are widely used and there is considerable experience of this. However, particularly for road maintenance works, there is often a need for contracts to cover a wider scope of work. For example: Algeria, Belgium, Brazil’s DNER, British Columbia, Chile, Kenya, Malaysia and Pakistan use standard contract documents which may be different for major and minor maintenance works. Routine and periodic maintenance operations are sometimes contracted separately. This practice is used mostly in Chile, Kenya and Pakistan, and is applied frequently in other countries to more complex periodic activities, such as pavement or bridge repair work. In Algeria and Brazil, maintenance contracts for specific road sections combine execution of routine and minor periodic maintenance.
Some countries, including Canada (British Columbia), the United Kingdom and Malaysia have experience of including all maintenance activities on specific routes, or within entire geographic areas, in comprehensive maintenance contracts combining both periodic and routine works. Learn more about the experience of British Columbia in privatizing its road and bridge maintenance function (PDF 17KB). Contractors additionally are responsible for managing the maintenance and operations programmes, including performing routine patrols and detailed inspections to identify needs, setting priorities, scheduling the work, and public relations. The contracts used by British Columbia now have a five-year duration, whilst the United Kingdom is using three-year contracts. Malaysia uses contracts of two-year duration. Contractors in these countries indicated that they consider five years is appropriate to provide them with sufficient incentive to invest in costly, specialized equipment.
To address internal inefficiency and accountability issues, a number of Latin American countries have, over the last decade, moved decisively and successfully from force-account (direct labor) to contract maintenance. There has also been considerable progress in the region to transfer to the private sector, through concessions, the responsibility of improving, maintaining, and operating high-traffic volume roads, the cost of which is recovered from tolls. Among the most advanced countries in this respect are Argentina, Brazil and Chile. More recently, some countries, particularly Argentina, have switched from the traditional quantities and unit price-based short-term maintenance contracts to long-term performance-type or results-based contracts. The new approach encompasses either routine maintenance activities alone, or integrated contracts involving both the rehabilitation and routine maintenance of road networks (such as the Contrato de Recuperación y Mantenimiento (CREMA) system in Argentina). A paper, "Areawide Performance-Based Rehabilitation and Maintenance Contracts for Low-Volume Roads", (PDF 88 KB) presents a framework for extending the CREMA concept to cover both the paving and future maintenance of low-volume roads.
Cutting the cost of road maintenance and improving road conditions are the main reasons why several Latin American countries have started to look for new ways of contracting out road maintenance. With technical assistance from the International Road Federation and German Aid, Colombia, Brazil, Guatemala, Peru and Uruguay have initiated so called Performance Specified Road Maintenance Contracts on a pilot basis. In addition, Argentina and Chile have let several such contracts recently. In this scheme the Road Authority serves as the owner, but out-sources both the management and production of the maintenance work to a single contractor. 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 will provide a wide basis for evaluation and improvements.
This article provides an overview of the different pilot projects, giving special attention to the performance specifications and control procedures, how these contracts have been implemented, and what lessons can be learned so far. "Performance Specified Road Maintenance Contracts - The Road to the Future: The Latin American Perspective."Return to top of document
Monitoring, Implementation and Evaluation of Roads
Construction, especially with respect to the contracting and bidding for civil works, requires the effective evaluation and supervision of contractors and their bids. Without this ability at tender, marginal or unacceptable bidders can distort the bidding process by excessive underbidding for contracts or future inability to complete. At the point of construction, poor contractors can raise owner’s supervision and staffing costs substantially (PDF 16 KB). Management of the road network requires different information, at different levels of the decision-making process, for example, for planning, for programming, for design, and for implementation. The data to be collected by an inspection system, and where, and how it should be collected (PDF 24 KB) depend largely on the use of the data. Senior managers in road administrations may also be required to make decisions about the choice of computerised road management systems that are to be implemented within their organizations. The consequences of such decisions can be very costly, not only in terms of the cost of initial system procurement, but also because of the on-going costs of system management and data collection. The implementation of systems can have far-reaching effects on all aspects of the operation of the road administration. Hence, it is important that managers are aware of the need for an effective approach to system implementation (PDF 36 KB) and of the pitfalls of making inappropriate decisions in this area.Return to top of document
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- Roads and the Environment
Roads have significant impacts on both nearby communities and the natural environment. People and properties may be in the direct path of road works and affected in a major way. People may also be indirectly affected by construction, through the disruption of livelihood, loss of accustomed travel paths and community linkages, increases in noise and pollution, and more road accidents. Disturbances to the natural environment may include soil erosion, changes to streams and underground water, and interference with animal and plant life. New roads may bring development to previously underdeveloped areas, sometimes causing significant effects on sensitive environments and the lifestyles of indigenous people.
- Construction and the Environment
The construction process has particular environmental impacts and mitigation options at each level of work: site establishment and setup; construction work activities; and, site restoration after the completion of work. During site establishment it is the location of work facilities and resources that is the key environmental issue. During construction, on the other hand, erosion is a major risk and can be prevented by prompt planting and control of runoff water. Traffic, noise, waster disposal, and work practices are other important factors which need to be managed by road contractors. Restoration of work areas, especially quarries, borrow pits, work depots, and material storage sites, is an important aspect of contractor responsibility. Provision is also often required for follow up maintenance of restored vegetation.
- Maintenance and the Environment (PDF, 21KB)
Environment is seldom taken into account in the design and implementation of road maintenance tasks. While impact might be gradual because of the limited size of maintenance works, it is noticeable throughout the road network. The frequency of road maintenance operations can facilitate the implementation of standard good practices. Environmental consideration should be included in road maintenance programs and should be looked at from methodological, technical, economical and institutional/contractual points of view.
Sample Terms of Reference
Publications available on-line at this Web site
Publications available for purchase or downloading at other Web sites
For more information on the following three publications, please contact the Bureau of Publications at Fax: +41.22.799.6938 or E-mail: firstname.lastname@example.org or visit the ILO Web site.
- de Veen, Jan. 1994. “Guidelines on the Introduction of Employment Intensive Technologies in Large Scale Road Sector Programs.” Processed. Development and Policies Branch, Development and Technical Cooperation Department, Geneva: International Labour Organization.
- Guade J. and H. Watzlawick. 1992. “Employment Creation and Poverty Alleviation through Labor-intensive Public Works in Least Developed Countries.” International Labor Review 131(1):3-18.
- Nilsson, C. 1993. “Labour-based Contracting.” ASIST Bulletin 2. Geneva: International Labour Organization. December.
World Bank Sub-Saharan Africa Transport Policy Program publications Web site.
Lantran, Jean-Marie. 1993. "Managing Small Contracts." SSATP Paper, Contracting Out Series, Volume 4.
- Lantran, Jean-Marie. 1990. "Developing Domestic Contractors for Road Maintenance in Africa." SSATP Paper, Contracting Out Series, Volume 1.
The following two items are available from the OECD Online Bookshop
- OECD. 1995."Road Maintenance Management Systems in Developing Countries." Paris.
- World Bank/OECD. 1990. "Road Monitoring Manual for Maintenance Management." Paris. United Kingdom Highways Agency. "Design, Build, Finance and Operate: Value in Roads." London.
Publications available at other Web sites
Eaton, R. 1993. "Unsurfaced Road Maintenance Management." U.S. Army Corps of Engineers: Hanover. For more information on this publication, visit the U.S. Army Corps of Engineers Web site.
- Hodgins, B. 1994. "Management of Road Construction and Maintenance Wastes." Transportation Association of Canada: Ottawa. For more information on this publication, visit the TAC on-line bookstore .
- Rausch, Eugene. "Road Contractor Promotion and Employment Generation in Africa." Prepared by the German Agency for Technical Cooperation (GTZ). 1994. For more information on this publication contact GTZ at Dag-Hammarskjöld-Weg 1-5, 65760 Eschborn, telephone: +49 6196 79-0 or fax +49 6196 79-1115 or visit the GTZ Web site.
- PIARC. 1995. Proceedings from the XXth World Congress, Montreal. Paris: Permanent International Association of Road Congresses. For more information on these proceedings, visit the PIARC Web site.
- If you are interested in general technical information and publications of the Institute of Transportations Engineers, click here.
Publications Available Through Regular Library Services
- Robinson, Richard, Uno Danielson, Martin Snaith. 1998. "Road Maintenance Management Concepts and Systems." MacMillan Press Ltd. ISBN 0333721551.
- Wells, J. 1986. "The Construction Industry in Developing Countries: Alternative Strategies for Development." London:Croom Helm. ISBN: 0709936265
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