Performance-based management and maintenance contract (PBMMC) of road networks is a new concept designed to increase the efficiency and effectiveness of road maintenance operations. It should ensure that the physical condition of the roads under contract is adequate for the need of road users, over the entire period of the contract, which are normally several years.

In traditional contracts for maintenance works, the Contractor is responsible for the execution of works that are normally defined by the Road Administration or the Employer, and the Contractor is paid on the basis of unit prices for different work items, i.e., a contract based on “inputs” to the works. While this modality often brings improvement over force-account maintenance practices, the results are in many cases still less-than-optimal. The problem is that the Contractor has the wrong incentive, which is to carry out the maximum amount of works, in order to maximize its turnover and profits. Under this traditional way of “contracting out” maintenance works, it has been observed that even if a lot of work is carried out and much money is spent, the overall service quality for the road user depends on the quality of the design given to the Contractor who is not accountable for it and the results are sometimes not satisfactory.

The Performance-Based Management and Maintenance Contract tries to address the issue of inadequate incentives. During the bidding process, contractors compete among each other by proposing a fixed monthly lump-sum fee per km of road to be paid to them. It is important to understand that contractors are not paid directly for “inputs” or physical works (which they will undoubtedly have to carry out), but for “ouputs,” i.e., the initial rehabilitation of the road to pre-defined standards (if so required by the bidding documents), the maintenance service of ensuring certain quality levels on the roads under contract and specific improvements (if so required by the bidding documents). The monthly lump-sum remuneration paid to the Contractor will cover all physical and non-physical maintenance services provided by the Contractor, except for unforeseen emergency works, which would be remunerated separately. The initial rehabilitation works, which have been explicitly specified by the Employer in the contract, would be quoted on the basis of measurable output quantities and paid as performed. In order to be entitled to the monthly payment for maintenance services, the Contractor must ensure that the roads under contract comply with the service quality levels, which have been specified in the bidding document. The Department of Road has launched the pilot PBMMC project in 2003 in Narayanghat - Butwal sector of Mahendra Highway. The salient features of the project are as follows:

Autonomous Equipment Maintenance system (AM) is an equipment care system implemented in seven distinct steps or stages. The purpose of the program is to involve operators in the fundamental maintenance of their own equipment by carrying out routine inspections, lubrications and minor repairs to maintain machine at optimum conditions.
As a result operators will need to be trained in machine and process fundamentals to give them the ability to detect abnormality, pre-warn of failure conditions and assist with routine maintenance and planned maintenance activities.
Skilled Personnel can be released to become involved in diagnostics analysis, data collection, improvement of equipment, and higher level maintenance activities that they previously were prevented due to the need to “fire fight”.

Objectives:

•  Enable operators to look after their own equipment.
  
• Train the operators to understand their equipment and pre-warn of abnormal conditions.
  
• Improve equipment reliability.
  
• Develop pride and ownership by the operator
  
• To improve the operators mechanical skills
  
• Motivation through additional responsibilities.