Integrating Policy Objectives, Quantifiable Performance Indicators And Implementation Targets In Managing Road Network Assets
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1 Integrating Policy Objectives, Quantifiable Performance Indicators And Implementation Targets In Managing Road Network Assets Antonio Fortunato Marcon, Federal University of Santa Catarina Professor, Department of Civil Engineering Rua João Pio Duarte Silva, s/n - Córrego Grande Caixa Postal Florianópolis SC Brazil Phone: Fax marcon@ecv.ufsc.br Ralph Haas The Norman W. McLeod Engineering Professor Department of Civil and Environmental Engineering University of Waterloo Waterloo, Ontario, Canada N2L 3G Ext ; ; haas@uwaterloo.ca Susan Tighe Canada Research Chair and Associate Professor Department of Civil and Environmental Engineering University of Waterloo Waterloo, Ontario, Canada N2L 3G Ext ; ; sltighe@uwaterloo.ca Lynne Cowe Falls Associate Professor, Director of Students Department of Civil Engineering University of Calgary Calgary, Alberta, Canada T2N 1N ; lcowefal@ucalgary.ca ABSTRACT Pavement management systems, followed by bridge management systems and other component asset management systems have seen widespread adoption in many countries. The basic premise has been that good management practices, together with adequate financing, proper knowledge management and now security are vital to preservation of our infrastructure assets. However, in moving to a more broadly based asset management approach, where private sector business principles are seen to have applicability, there is a dilemma of balancing private sector profit motives with the many social, economic, environmental, resource and other issues facing public sector agencies. The development and implementation of component asset management systems, certainly relevant to pavements, has seen a focus largely on life cycle cost-effectiveness at both the network/system wide and project/site specific levels. Any policy objectives that exist are usually only implicitly incorporated and it has only been recently that quantifiable performance indicators have been suggested by the World Bank, Australian agencies and others including the authors of this paper.
2 Marcon, Haas, Tighe and Cowe Falls Page 2 What remains to be realized is an integration of these policy objectives, quantifiable performance indicators and implementable targets in a coherent framework. It is the purpose of this paper to describe such a framework and to offer recommendations on the specific items that can or should be included. In a more specific sense the paper address such policy objectives as provision of service to users, the related performance indicator(s) of ride quality, functionality and utilization and in turn a strategy of maintaining a certain percentage of the network at or above quantified levels of these indicators. Other policy objectives range from preservation of investment to resource conservation and environmental protection to institutional productivity and efficiency to technological advancement. Variation of strategies with categories of road network service providers, from small to medium to large, is also addressed. INTRODUCTION The pavement engineering and management community has implicitly recognized that pavement assets are preserved through good technology, good management and adequate financing. The agency policies should be realistic and implementable targets should be selected for the asset preservation, user impacts, and life cycle economic efficiency. The overall purpose of this paper is to provide a framework for management of road assets by articulating a set of realistic policy objectives, associated performance indicators and suggesting implementation strategies or targets. The following topics are addressed in this paper: The driving forces underlying policy development and implementation strategies Establishment of quantifiable performance indicators related to these policies and to providing measures for the implementation targets Defining a set of policy objectives applicable to road agencies Examples of strategies and possible application to a pavement network Conclusions and recommendations toward to realistic road asset management. FRAMEWORK FOR ROAD ASSET MANAGEMENT Road asset management comprises a set of key elements established by an agency or road authority for preserving and improving the infrastructure of a road network, taking in account the available resources. This is possible through an integrated approach of realistic policy objectives tied to performance indicators [1]. Figure 1 shows an overall framework for road asset management. Strategic Level encompasses various activities that deal with general information and data to establish road agency policy. First of all, it is necessary to determine the amount, classification, and location of road assets. The asset current conditions permit an estimate of the deterioration degree of the assets. It is essential to have targets based on performance indicators that should be accomplished relative to the level of service, safety and functional aspects. Performance indicators are adopted or established by a road agency, based on experience, knowledge, available data, technical and economic resources, and stakeholder interests, and make it possible to quantify the underperforming assets and the current and future needs for preserving or improving the assets. At the Network Level, road agencies may have different management systems for roads, bridges, security, etc. Performance models are used to estimate future needs. Alternative solutions for maintenance, rehabilitation and improving road assets are studied and work programs are determined for selected time horizons, financial and
3 Marcon, Haas, Tighe and Cowe Falls Page 3 ASSET MANAGEMENT ROAD AUTHORITY BUSINESS PLAN GENERAL PRINCIPLES OF ASSET MANAGEMENT (including a decision support process, Training and Knowledge Management / Succession Planning) STRATEGIC LEVEL Classes / Types of Assets, Locations, Amount or Extent Current Status or Condition Current Asset Values Level(s) of Service, Safety and Functional Targets Current Under Performing (Deficient) Assets Current & Future Investment Needs NETWORK LEVEL Integration Platform Future Deficiencies Program Alternatives and Life Cycle Costs Analysis Budgets and Program Selection Future Asset Values PROJECT LEVEL IMPLEMENTATION Stakeholder Group Interests; Performance Indicators; Methods of Analysis; Criteria; Time Horizons; Social/ Political & Environmental Factors; Financial Forecasts CORPORATE DATABASE EXECUTIVE INFORMATION System Road User Communication Models/Estimates; Financial and Environmental Constraints; Time Horizons FIGURE 1 Overall Framework for4 Road Asset Management environmental constraints. Life Cycle Costs Analysis and performance indicators help to make decisions on selection of the best alternative that best fits the agency objectives and financial and environmental constraints. Project Level Implementation relates to execution of program work established at the network level. The data collected during the implementation (as built) and in service after execution are important for evaluating the effectiveness and efficiency of alternative solutions adopted in previous stages. The results of this evaluation may be used on strategic and network levels as feedback for future decisions. All data and information of road agency assets should be stored in a Corporate Data Base. It is important that all data use the same location referencing that facilitates data retrieval and correlations between parameters at the same or different locations. Integration platform is the mechanism by which the various assets are linked together through the authority s corporate data base. The basic purpose is to tie together in a common, useable, effective and understandable way the overall strategic level with the component, network level management systems [2]. This platform also includes road agency business activities necessary to integrate all existing asset management systems and to guide the actions to reach established objectives. It is essential to have a specific way for communicating the results to road authority managers and road users. Executive Information System contains general data and information the road authority should know to make decisions. These may include graphics, tables, forecasts, recommendations, and other types of information extracted from strategic and network levels. On the other hand, road users should receive information about the traffic conditions, security, alternative routes, road works, possible delays, etc. This should be made in an understandable form and of easy access.
4 Marcon, Haas, Tighe and Cowe Falls Page 4 To get effectiveness and efficiency from all activities previously described, it is fundamental to apply the General Principles of Asset Management, that includes decision support process based on road agency data and characteristics, training for executing specific tasks, and knowledge management. Finally, it is vital to establish succession planning to guarantee the road asset management will not be interrupted due the lack of people having the appropriate skills. People Economic and Finance Resources Environment Policy Development and Implementation Targets Security P3 Contracts Social / Political Knowledge Science and Engineering FIGURE 2 Driving Forces Underlying Policy Development and Implementation Targets
5 Marcon, Haas, Tighe and Cowe Falls Page 5 Service Provision is Paramount in Asset Management! Asset Service Provider(s) (agency, concessionaire, managers, operators, etc.) Private Users (Households, Cars, Individuals, etc.) Provision of Service (safety, functionality, reliability, accessibility, price, etc.) Commercial Users (Manufacturers, Shippers, Bus Firms, Truckers) Preservation and Efficiency Requirements Regulators, Standards, Enforcement, Collectors, Measurable Performance Indicators FIGURE 3 Stakeholder Groups, Provision of Service Expectations and Related Factors After Ref. (1) DEVELOPING POLICY OBJECTIVES AND PERFORMANCE INDICATORS The development of realistic policy objectives for road asset management should be focused on the following main aspects: Consider the interests of stakeholders(agency, road user, owner) Use quantifiable performance indicators for controlling the quality of service delivered to the user and the accomplishments of targets Establish achievable implementation targets. Figure 2 illustrates the driving forces underlying policy development and implementation targets. Reliable and quantifiable performance indicators are necessary for verifying the quality of provided services and the target accomplishments. The following sections present the main aspects for the development of policy objectives and establishment of performance indicators. Examples are given on the experience and knowledge from Canada and also from other countries. Stakeholders Stakeholders may be classified into different groups: private road users, commercial road users and service providers. Figure 3 shows the groups, the controlling factors of their relationships and the provision of service that is the main objective of road construction and maintenance. Provincial or State, federal and municipal road agencies have different objectives or targets. User service quality is usually based on the road classification. In most cases, available resources have the most important influence on limiting user service quality. These aspects influence and limit the user expectations and constitute the main reason for establishing policy objectives and reliable implementation targets. Performance Indicators
6 Marcon, Haas, Tighe and Cowe Falls Page 6 Effective asset management requires measures or indicators of performance, which should be objectively based, consistent and quantifiable (3, 4). The performance indicator set should reflect the acceptable conditions of the asset components and incorporate institutional, economical, environmental, safety, constraints, user s expectations, technical and functional considerations. It is important that an underlying rationale exists and that objectivity and consistency have been achieved (1). Figure 3 shows the role of performance indicators on provision of service quality. So, performance indicators should be understood by users and enable the following aspects (1): A monitoring mechanism for assessing policies, and a tool for resource allocation Provision of information to users or customers Provision of data to track condition, costs, safety, etc., and use as a diagnostic tool Pavement preservation: structural capacity and surface deterioration Pavement functionality: smoothness, texture depth and skid resistance Drainage facilities Traffic facilities: signs, lines and delineators Aesthetics, vegetation control and litter management Bridges Institutional effectiveness: asset value, program delivery (savings in construction, maintenance; reductions in traffic disruption) and productivity(such as vehicle-km, per unit cost) Operational effectiveness (response time to incidents or complaints/inquiries) Mobility (average trip time or travel speed; delay as a percentage of trip length). Individual road agencies might use only a subset of indicators, depending on their resources, size, location and specific conditions or requirements (4). The use of high quality level for performance indicators requires higher resources needs for maintenance and rehabilitation. Successful implementation of performance indicators requires adequate skills and expertise within the road agency and the degree of complexity should be matched to the level of development of road sector in each country, state, province or municipality (5). It is also important to be realistic when selecting indicators, taking into account data availability, understandability and usefulness in decision-making (6). EXAMPLE OF POLICY OBJECTIVES AND IMPLEMENTATION TARGETS The following discussion presents examples of policy objectives and implementation targets. Table 1 lists nine objectives with correspondent performance indicators plus implementation targets, adapted from the Investment Analysis and Communication Challenge for Road Assets in the 7 th International Conference on Managing Pavement Assets (7). These match large road network service providers and apply primarily to the North American situation. Table 2 lists four objectives with correspondent performance indicators and implementation targets that better match small and medium road network service providers, for example, in developing country conditions, where there is a relative lack of resources. The implementation targets presented in Tables 1 and 2 should be considered as examples, not a set of universally applicable targets. They are based largely on current practices and to a degree on the experience and opinion of the authors.
7 Marcon, Haas, Tighe and Cowe Falls Page 7 TABLE 1 Suggested Institutional Policy Objectives, Performance Indicators and Example Implementation Strategies/ Targets (Modified from Ref (7) Police Objectives Performance Indicators Implementation Strategies/Targets 1- Quality of Service to Users Network level of service (smoothness, functionality and utilization) - % good, fair and poor Provision of mobility (average travel speed by road class) Annual user costs ($/km) Maintain at 90% or Greater of Network in Fair or Better Category (IRI 2) Greater than 50% of speed limit Total user costs/total network km increase at no more than CPI 2- Safety Goals Accident reductions (%) Reduction of fatalities and injuries by 1% or greater annually 3- Preservation of Investment 4- Productivity and efficiency Asset value of road network ($) Increase (written down replacement cost) annually of 0.5% or greater Cost effectiveness of programs (ratio) Annual turnover (%) 1% or greater annual increase 5% or less annually 5- Cost recovery ($) Revenues Annual increase at no less than rate of inflation 6- Research and training Expenditures (% of budget) Annual commitment of 2.5% of total program budget 7- Communication with stakeholders 8- Resource conservation and environmental protection Satisfaction survey sampling (%) Recycling of reclaimed materials (asphalt, concrete, etc) - % Monitoring of emissions Greater than 75% of respondents satisfied or very satisfied Maintain at 90% or greater Maintain at levels < 90% of standards 9- Bridges Remaining life (years) No bridge with remaining life less than 5 years
8 Marcon, Haas, Tighe and Cowe Falls Page 8 TABLE 2 Suggested Institutional Policy Objectives. Performance Indicator an Example Implementation Strategies/Targets for Medium and Small Network Providers (from 5,8,9) Police Objectives Performance Indicators Implementation Targets 1- Quality of Service to Users Network Level of Service (smoothness) - % good, fair and poor Surface Distress (potholes) Maintain at 90% or Greater of Network in Fair or Better Category (IRI 3) No Potholes on Paved Roads with AADT 1,000 Rut Depth 12 mm Rut depth (mm) 2- Safety Goals Accident Reduction (%) Reduction of Fatalities and Injuries by 1% or Greater Annually 3- Research and Training Expenditure (% of Budget) Annual Commitment of 1% of Total Program Budget 4- Bridges Remain Life (years) No Bridge with Remain Life less than 5 years COMPARISONS OF NETWORK SMOOTHNESS AND IMPLEMENTATION TARGETS Reference (7) presents in detail a data base of a real, existing network that involves two classes of highways termed as interurban and rural. Figure 4 shows the distribution of IRI values for both classes. From Figure 4a, it is clear that interurban network, consisting of freeways and major arterial highways has more than one third as excellent (IRI 1.0), about one quarter as good(1.5 IRI>1.0), one fifth as fair(2.0 IRI>1.5) and less than 10% as poor. Thus, the target of having 90% of the network in fair or better condition with regard to smoothness (Table 1) is met by interurban network. Figure 4b shows the distribution of IRI of rural network, consisting of lower volume arterial and collector highways. It may be inferred that about one quarter is excellent, one third good, one fifth as fair and a little more than 10% as fair. Also it is slightly below the target of 90% of the network being in fair or better condition. But, it will be more appropriate to use different target values for rural road smoothness; for example, a limit of IRI=2.5m/km for fair condition. Figure 5 (10) presents a typical distribution of IRI values of a state road network of a developing country. The analysis considers different (higher) limits for IRI performance indicators, for example, excellent (IRI 1.0), good (1.1 IRI 2.0), fair (2.1 IRI 3.0) and poor (IRI 3.0). It may be observed that 0% is in excellent condition, about 24% good, 56% fair and 20% poor (IRI 3.0). From this example, despite higher limits, a high percentage (20%) of the network needs to be rehabilitated (poor condition). Comparison with the preceding example reveals that the selection of performance indicator targets should match the realistic conditions of the network and technical and financial resources available. The decision on what level of service to offer to the user depends on these factors and the user expectations.
9 Marcon, Haas, Tighe and Cowe Falls Page 9 SAFETY GOALS Safety goals have been previously identified as among the top three priorities in the list of policy objectives (Table 1). Perhaps no area of highway field has received more attention than safety. Safety continues, however, to be treated largely as an area separate from the other management systems, partially because it is impacted by many external factors like weather, visibility, vehicle characteristics, driver behavior and capabilities, highway geometrics, speed, etc. and often interactions of these factors. That is why Table 1 suggests an implementation target of 1% or greater annual reduction of fatalities and injuries, rather than targets for individual factors. Distribution of IRI Values 30 Percent of Network ( %) <= >3.5 IRI Intervals FIGURE 5 Distribution of IRI Values: Typical Road Network of Developing Country from Ref (10) PRESERVATION OF INVESTMENT The third top priority policy objective in Table 1 is preservation of investment, which can be measured by asset value. Pavements are tangible or capital assets and these were among the set of highway elements in a comprehensive TAC study on measuring and reporting highway asset value (11). This study illustrated that asset valuation is a complex subject and that the method(s) used can result in widely varying results. A further, in-depth study on asset valuation methods, with example application to a pavement network, was carried out by Cowe Falls (12). She evaluated nine different methods, including four variations of GASB34, using a network of 113 pavement sections for which cost data, performance model estimates, etc. were available. A base year of 1993 was used as the current year, and predictions were made for 1999, as a future year, for which actual data was available for verification. A summary comparison of the future year, predicted and actual/measured value of the network is provided in Table 3. The values in Table 3, and the much more comprehensive analysis of Ref (12) which included statistical significance tests suggest the following: Agencies who are carrying out asset valuation need to clearly recognize that considerable variation can exist between methods, particularly past based vs. current, BUT it is
10 Marcon, Haas, Tighe and Cowe Falls Page 10 dangerous to generalize from one situation (e.g. the example of Table 3) to another era or jurisdiction or infrastructure element. If asset value is used as a performance indicator for pavement preservation (Table 1) it is important that agencies are able to report how well they are retaining or improving asset value as a result of proper management and funding. It is also important to select a valuation method that is easily sustained and managed, understandable and not data and/or analytically burdensome. CONCLUSIONS Road asset management should involve a culture of institutionally based realistic policy objectives that explicitly incorporate quality of service to users, safety goals, asset value, productivity and efficiency, cost recovery, research and training, communication with stakeholders and resource conservation and environmental protection. Realization of these objectives depends on measurable performance indicators and in turn achievable implementation targets. Examples from an existing small or medium and pavement network and demonstrate that the implementation targets suggested in the paper are both realistic and achievable. Interurban Percent of km 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% IRI <=1 1>IRI <= >IRI<=2 IRI>2 Series1 FIGURE 4a Distribution of IRI Values from the Challenge : Inerurban Sections Derived from Ref. (7).
11 Marcon, Haas, Tighe and Cowe Falls Page 11 Rural 35.00% 30.00% Percent of km 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% IRI <=1 1>IRI <= >IRI<=2 IRI>2 Series1 FIGURE 4b Distribution of IRI Values from the Challenge : Rural Sections Derived From Ref. (7) TABLE 3 Total Asset Value in Pavement Netw3ork: Future Year Prediction vs. Actual Extracted from Ref. (12) Method Base Year Current Value ($ million) Future Year Predicted Value ($million) Actual (Measures Future Year Difference (Predicted Value Measured) Value BV/HC WDRC RC (8%) WDRC(SL) (8%) NSV a (9%) WDRC(Eng) (21%) NSV b (28%) Notes: BV/HC = Book Value/Historical Cost; WDRC = current written down replacement cost; WDRC(SL)=WDRC based on a financial straight line model; NSV a = net salvage value using a simple decision tree for rehabilitation; NSV b = NSV using a multi-point decision tree; WDRC(Eng.) is WDRC based on an engineering deterioration model; RC = replacement cost REFERENCES 1. Haas, R., Tighe, S. and Cowe Falls, L. Preserving Pavement Assets Through Realistic Policy objectives and Life Cycle Consideration of Users, Economic Efficiency, Resource Conservation and Environmental Protection In Proceedings Annual Conference of the
12 Marcon, Haas, Tighe and Cowe Falls Page 12 Transportation Association of Canada CD-ROM - Saskatoon Saskatchewan Canada October, Haas, R., Cowe Falls, L., Tighe, S. Integrating Pavement and Assset Management in Functional and Operational Terms In Proceedings 2004 Annual Conference of the Transportation Association of Canada Quebec Quebec- Canada Sep Jurgens, R. and Chan, J. Highway Performance Measures for Business Plans in Alberta In Proceedings 2005 Annual Conference of the Transportation Association of Canada CD-ROM - Calgary Alberta Canada 4. Haas, R., Cowe Falls, L., Tighe, S. Performance Indicators for Properly Functioning Asset Management Systems In Proceedings 21 st ARRB an 11 th REAAA Conference CD-ROM Cairns Australia May Stankevich, N., Qureshi, N., Queiroz, C. Performance-based Contracting for Preservation and Improvement of Road Assets Transport Notes Roads and Rural Transport Thematic Group World Bank Washington DC/USA June Litman, T. Developing Indicators for Comprehensive and Sustainability Transport Planning In Proceedings Annual Meeting of Transportation Research Board CD-ROM Washington DC/USA Jan Haas, Ralph The ICMPA7 Investment Analysis and Communication Challenge for Road Assets Prepared for the 7 th Int. Conference on Managing Pavement Assets Calgary Alberta Canada June 2008 (see 8. Yeman, J. Critical review of Performance Specified Maintenance After ten Plus Years Proceedings Annual Meeting of Transportation Research Board Washington-DC/USA Jan Zietlow, G. Implementing Performance-based Road Management and Maintenance Contracts in Developing Countries An Instrument of German Technical Cooperation - Accessed October 22, Marcon, A.F. Contribution to the development of a pavement management system for the highway network of the State of Santa Catarina - Doctoral Thesis - Technological Institute of Aeronautics (ITA). São José dos Campos - São Paulo - Brazil (in Portuguese). 398 p. December, Cowe Falls, Lynne and Ralph Haas Measuring and Reporting Highway Asset Value, Condition and Performance, Report Prepared for Transportation Association of Canada Cowe Falls, Lynne Analysis of Asset Valuation Methods for Civil Infrastructure PhD Thesis, University of Waterloo
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