2014 - World Bank - A Guide to Delivering Good Asset Management in the Road Sector through Performance Based Contracting

World Bank Report TP-42B.

Performance-Based Contract (PBC) methods are widely used for road maintenance in developing countries. There are many reasons why road agencies have decided to introduce these methods, e.g., better transparency, increased focus on workmanship and reduced long term costs. The World Bank (the Bank) has supported and financed almost 50 PBC projects over the last 15 years. Currently, most PBC projects are developed on the basis of Sample Bidding Document for Output- and Performance-based Road Contracts (OPRCs).

This guide has been developed on the underlying presumption that good asset management is an essential goal of any Bank investment in the on-going management of a road network, and that PBC is a proven way (but not the only way) to drive the paradigm shift in all parties typically needed to achieve good asset management.

The term OPRC represents a spectrum of contract models, while the term PBC is the general term for all contracts using performance-based methods. Currently, in order to maximize value for money, OPRCs are dramatically evolving in line with road asset management principles. According to the results of the PBC review project (P118614), there are three principal scenarios where PBCs are applied:

I. unpaved roads PBC;
II. paved roads in a generally poor-fair condition (DBMOT PBC); and
III. paved roads in a generally good-excellent condition (Network Management PBCs).

This guide is intended to assist those new to the topic of PBCs to understand what they are, how they align with good asset management and what the key issues are to consider before (and during) implementation.

The guide commences with a discussion on what constitutes good asset management, before describing how PBCs assist in the delivery of good asset management. The guide then addresses the key issues associated with making an implementation successful, concluding with an overall PBC implementation decision tree and checklist.