Performance-based Contracting for Preservation and Improvement of Road Assets

The method of delivering road maintenance has progressively evolved. Historically, road agencies have moved from using in-house force account to traditional method-based maintenance contracting. Many countries are now heading towards performance-based contracting (PBC), an approach that has been deployed rapidly in the road sector in the past decade. However, while PBC offers a number of benefits for road agencies and road users, it is a relatively new approach and there are several aspects that need careful consideration to ensure that the goals of PBCs are fully achieved. The purpose of this Note is to review the worldwide experience with the PBC approach, highlight the main advantages, the steps involved and the results generated. The document is intended to provide World Bank transport sector staff, Ministries of Transport and road agencies of developing and transition countries with a clear understanding of the benefits, and risks, of applying the PBC approach. A separate Resource Guide (to be released by the World Bank in 2006) will offer more detailed information and resources pertaining to performance-based contracting.