Increasing Punjab's economic growth
CLIENT: Punjab Roads and Bridges Development Board for the Punjab State Government with investment from the World Bank Group
In 2008 Opus was tasked with finding ways to sustain Punjab State’s 650km road network at the lowest possible cost. While keeping the asset in good condition is integral to the State’s social and economic well-being, operation and maintenance activities are estimated to add 60% to the network’s initial development investment.
The Client and investors’ goals are to ensure the road infrastructure increases Punjab’s economic growth and quality of life for as long and as efficiently as possible.
Opus prepared the network’s conceptual design and pilot output and performance based road contracts (OPRC). Robust asset management and risk sharing is integral to OPRCs with the Client assuming the higher risk and the Contractor the lower.
Opus undertook significant research to develop the 10-year OPRCs and set appropriate levels of service (LOS) for the network. The subsequent contracts included planned improvement and pavement rehabilitation works, and resurfacing the entire network that could cope with the demands of overloaded traffic while extending the pavement life by up to 50%.
By specifying these criteria, a means of measuring the Contractor’s achievements against the defined LOS was established. As an example, the OPRCs LOS for safety encourages contractors to invest in low cost improvements involving signage, pavement marking to separate the various transport modes and delineation improvements.
The OPRC award contract price was about 32% lower than the estimated price, which saved the Client and investor about USD64.1M.
Including specified pavement design criteria in the contract is expected to increase its life by more than 50%. This is projected to save an additional USD10M in reduced long-term costs. At the same time, establishing LOS within the contract ensured the Contactor sought to achieve these standards to avoid consequential payment deductions.
The LOS also created a transparent process in which the OPRC’s outcomes could be readily audited against defined performance measures.