P. SARKI - PBC Experience from Kaduna State, NG.PDF

Africa Regional Seminar on Performance

Based Contracts for Roads

PREPARATION AND IMPLEMENTATION OF OUTPUT AND

PERFORMANCE BASED ROAD CONTRACTS (OPRC)

IN KADUNA STATE, NIGERIA:

A CASE STUDY OF EXPERIENCES AND LESSONS LEARNED

U. P. Sarki

OPRC in Kaduna State, Nigeria: A Case Study of Experiences and Lessons Learned - SARKI 2

PRESENTATION OUTLINE

1: Why OPRC in Kaduna?

2: About Kaduna

3: How are roads

managed in Kaduna?

4: Kaduna OPRC

Features

5: Challenges Encountered

6: Benefits Realized

7: What did Kaduna Learn?

8:How can we improve OPRC

outcomes?


1: WHY OPRC IN KADUNA?

►Kaduna State sought to:

• Improve road access for its rural

communities.

• Manage its road assets in an efficient, cost

effective and sustainable manner.

►With the support of World Bank, RAMP was

implemented in Kaduna and OPRC was

employed as delivery vehicle for the

improvement of 457Km of rural roads.

►OPRC was implemented as a Pilot Scheme to

facilitate learning before application on a wider

scale.


2: ABOUT KADUNA

Location


2: ABOUT KADUNA

►Kaduna State is located in the mid-central

portion of northern Nigeria.

► It occupies 5% of Nigeria’s land mass (46,000

sq.km).

► It is ranked the 3rd most populous state in

Nigeria with a population of about 6,000,000.

►60% of the population live in rural communities.

►About 80% of the population is engaged in

medium to small scale agriculture.

►Rural roads are few, sparsely located, and

poorly maintained.


2: ABOUT KADUNA

What the Rural

Roads Look Like


2: ABOUT KADUNA

What the Rural

Roads Look Like


2: ABOUT KADUNA

What the Rural

Roads Look Like


3: ROAD MANAGEMENT IN KADUNA

►No strategic policy for development,

maintenance and management of roads.

►Currently, Ministry of Works and Transport

(MoWT) deals with all road matters.

►Under MoWT – Kaduna State Public Works

Agency (KAPWA), for road maintenance.

►KAPWA largely ineffective: • Inadequate funding.

• Insufficient capacity – human resources, tools

& equipment, skills.

• Use of old methods of direct labour and force

account for maintenance works procurement.


3: ROAD MANAGEMENT IN KADUNA

►Lack of any form of road asset management

system. Incapable of:

• Determining maintenance needs.

• Prioritizing maintenance strategies.

• Justifying maintenance budgets through

sound economically based decision making.

►Under RAMP, Study on Road Reforms done:

• Draft Road Transport Policy prepared.

• New institutional framework proposed that

supports an effective and sustainable road

asset management system.


4: OPRC DESIGN FEATURES

► International Design Consultant engaged to:

• Determine road networks suitable for OPRC.

• Undertake network-specific design studies,

and prepare bidding documents.

• Provide procurement support.

►Pilot OPRC packaged into four contract lots, 2

lots in the northern part and 2 lots in the

southern part of Kaduna State.

►Works contracts modeled after the World Bank

Sample Bidding Documents for the

Procurement of Works and Services under

OPRC, 2006.



Contract Lots

Full Improvement

Works

Improve to gravel

standard (km)

Patch and reseal

(km)

Upgrade to DBST

(km)

Lot N1 102.25 74.84 27.41 -Lot N2 93.70 93.70 - -Lot S1 133.40 75.63 35.63 22.14

Lot S2 127.51 127.46 0.05 -Total 456.86 371.63 63.09 22.14

Initial/ Rehabilitation WorksLot ID Length

(km)



►The works comprised of:

• Full improvement – upgrade of unpaved road

to DBST standard.

• Spot improvements – at selected locations

providing box culverts, small bridges, Irish

drifts, embankments and guard rails.

• Initial/ rehabilitation works – to bring all other

sections not included in the improvement

works to the required service levels (site

clearance, earthworks, gravelling, drainage,

erosion control; patching, edge repair, and

resealing).




• Maintenance Services – routine and periodic

maintenance activities and network

management.

• Network management:

Road conditions monitoring and

maintenance planning.

Detailed documentation of maintenance

activities.

Monthly performance evaluations.

Preparation of monthly performance

statements.




• Emergency works – to repair damage from

unforeseen natural events (floods, land

slides, wash outs).

►Time schedule for works completion:

• Improvement works – 24 months.

• Initial works/ rehabilitation – 24 months.

• Maintenance services – 60 months.

►Four indigenous contractors nominated to carry

out works contracts.

►Monitoring consultant engaged to provide

technical and financial guidance.



►Three service level criteria were applied –

Road Usability, Road User Comfort and Road

Durability.

►Each criteria represented by a series of

performance/quality indicators.

• Road Usability – accessibility and travel

speed.

• Road User Comfort – roughness, rutting,

corrugations, surface texture, depressions.

• Road Durability – shape, width, vegetation,

drainage, road signs, alignment.



Payment Basis

Activity Payment basis

Improvement

Works

Unit prices per unit of output based on the

employer design (Output Based)

Monthly Lump sum fee for network length

maintained to predefined service levels

(Performance Based).

Based on Contractor‘s detailed design and

employer’s design criteria.

Emergency WorksUnit prices for works agreed on a case by

case basis (Output Based)

Initial Works,

Maintenance and

Management



►The contractor expected to comply with

performance indicators in order to qualify for

payment for performance-based works.

►Payments are penalized for non compliance.



OPRC Organization Min. of Works &

Transport

St. Project

Implementation

Unit

FPMU

Design

Consultant

Monitoring

Consultant

Lot 1

Contractor Lot 2

Contractor

Lot 3

Contractor Contractor 4

Planning &

Design

Implementation


5: CHALLENGES


5: CHALLENGES

►Lack of OPRC awareness/ acceptance

• Very little awareness prior to RAMP.

• SPIU communication unit ineffective.

• Limited awareness outside OPRC

organizational circle.


5: CHALLENGES

►Poor condition of roads

• Traffic on most roads < 50 veh./day.

• High road use by motorbikes and non-

motorized traffic.


5: CHALLENGES

►Poor condition of roads

• 72% of roads in poor condition

• Substantial works required to restore roads

to maintainable condition.


5: CHALLENGES

►Geographical dispersion of roads

• Final list of roads did not allow for formation

of cohesive networks.

• Reduced efficiency of maintenance services.

• Increased cost of service levels compliance.

►Contractors’ “business-as-usual” attitude

• Low level of seriousness and commitment.

• Low level of appreciation of responsibility for

network management.

• Focus on quantity rather than quality.

• Needed more supervision than anticipated.


5: CHALLENGES

►Poor performance of self-control units

• Identified deficiencies in:

Road design

Estimation of maintenance requirements.

Risk analysis.

Project management

skills.

• Difficulty understanding

payment model.


5: CHALLENGES

►Risk Sharing

• Design and cost estimation risks for initial

works passed to the contractor.

• Initial works constituted 52-76% of total

contract sum.

• Determination of maintenance requirements

passed to contractor.

• Only 15-30% of total contract sum for

maintenance services, providing little

motivation to contractors.

• No laws regulating pavement overloading.


5: CHALLENGES

► Inclement weather conditions

• Change in weather patterns.

Heavier rainfall in wet season.

Increased dust in dry season.

Increase in material loss.

• Increase in periodic

maintenance requirements.


5: CHALLENGES

►Security Issues

• Political disputes (post election violence)

• Labour disputes (wages and salaries, fuel

price increase)

• Sectarian clashes (territory, farmers/

herdsmen)


6: BENEFITS


6: BENEFITS

After 4th cycle (June 2015) of collecting and

analyzing monitoring and evaluation data:

► Improved access to farm inputs, markets,

schools and health facilities.

►Reduced journey times.

►Reduced transport costs.

► Improved quality of road works

►Employment for semi-skilled

and unskilled labour.


6: BENEFITS Outcome

Indicator

% Gain Recorded at end

of cycle 4 (June 2015)

Reduction in transportation unit

cost per trip20.3

Increase in average number of

daily trips106.5

Increase in households living

within 2 Km of an all-weather

road

28.5

Increase in heads of households

who are farmers40.1

Increase in volume of

agricultural produce transported

along project roads and river

crossings

30.7


6: BENEFITS

Before

After


6: BENEFITS

Before

After


7: LESSONS LEARNED


7: LESSONS LEARNED

Success requires:

►Key stakeholders support.

►Contracts suited to local conditions.

• Physical environment.

• Sector laws & regulations.

• Local economy.

• Financial regulations.

• Contracting industry maturity.

• Safety & security.

►Clear, simple and achievable

standards, specifications, service

levels and performance indicators.


7: LESSONS LEARNED

Success requires:

►Equitable risk allocation

• Each party to bear risk

comparable to its ability.

►Adequate and stable financing

• Vital for the conforming to service levels.

►Requisite skills and experience

• For timely and effective implementation.

• Neither parties in Kaduna had prior skills

and, or experience.

► Institutional support to ensure sustainability.


8: RECOMMENDATIONS


8: RECOMMENDATIONS

To enhance next iteration of OPRC:

►Select roads that can be maintained

and managed as a network.

►For roads in very bad conditions,

restore maintainable conditions

before applying OPRC.

►All implementing parties (employer, consultant,

contractor) to possess the requisite skills and

experience.

• Consider engaging OPRC Technical Advisor

to assist implementation.


8: RECOMMENDATIONS


►Service levels and performance

indicators to be simple, measurable

and achievable.

• Engage widely with consultants

and contractors during preparation of

bidding documents.

►Employ monitoring consultant early enough

before appointing contractors.


8: RECOMMENDATIONS


►OPRC should be supported

effectively by road sector institutions

for gains to be sustained.

• Such institutions should be

Capable of addressing such issues as:

Autonomy.

Funding.

Good governance.

Transparency.


8: RECOMMENDATIONS


► Implement effective change

management strategy.

• Introducing OPRC elicits change

in strategic objectives, personal

and organizational attitudes and culture,

skills, responsibilities, and relationships.

• Resistance likely to arise out of fear of job

loss, new responsibilities, lack of requisite skill

sets, or just natural resistance to change.

►Legitimate concerns should be dealt with in a

responsible and sensitive manner.


REFERENCES ► Brätland, J. (2010) “Capital concepts as insights into the

maintenance and neglect of infrastructure”, Independent

Review, 15 (1), pp.35-51.

► EgisBCEOM & Enviplan International (2010) Final Report:

Consultancy Services for The implementation of a Long

Term Output and Performance Based Road Contracts

(OPRC). April 2010.

► Gericke, B., Henning, T., & Greenwood, I. (2014) "A Guide

to Delivering Good Asset Management in the Road Sector

through Performance Based Contracting", Transport

Papers (TP 42B), World Bank, pp.13-14.

► IT Transport & Enviplan International (2013) Final Report:

Study on Road Management, Institutional Development

and Capacity Building Reforms in Kaduna State. May 2013.


REFERENCES ► Kaduna State Government (2010) Bidding Document for

Improvement/ Rehabilitation/ Maintenance of Rural Roads

in Kaduna State using Output and Performance based

Road Contracts: Volume I (Bidding Procedures, Project

Specifications and Conditions of Contract and Forms).

October 2010.

► Robinson, R. (2006) "A Perspective on Road Sector

Restructuring in Developing and Transitional Countries",

Public Administration & Development, 26(3), pp.265-278.

► 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,

62(2012), pp.350 – 355.


REFERENCES ► World Bank (2006) Sample Bidding Documents for the

Procurement of Works and Services under Output and

Performance based Road Contracts and Sample

Specifications. October 2006.

► World Bank (2008) Nigeria - First Rural Access and

Mobility Project (RAMP I). February 2008.


CONTACT

Umaru Peter Sarki

+234 803 329 6027

[email protected]


THANKS FOR YOUR ATTENTION!