Friday, March 3, 2017

Performance contracting in roads fact of the day

From an EBRD study of performance based contracting of maintenance in roads sector,
Every 1 euro/dollar of deferred maintenance today results in 3 euro/dollars needed in rehabilitation tomorrow.
This is evidence as clear as it gets. But governments, both in developed and developing countries, skimp on O&M despite knowing fully well that delayed maintenance or lack of preventive maintenance (say, for utility networks or motors) is only increasing the ultimate repair costs. 

The only solution to this is to outsource maintenance with a performance contract that lays down standards or service levels. In order to meet contractual obligations, the private contractors have to perforce do preventive and pre-emptive works. Another reason for outsourcing the maintenance of infrastructure assets. 

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