ROAD MAINTENANCE CONTESTABILITY REFORM PROGRAM INDUSTRY BRIEFING

ROAD MAINTENANCE

CONTESTABILITY REFORM PROGRAM

WELCOME

Jim Peachman

1. BACKGROUND AND CONTEXT

To be the leader in the management and delivery of safe, efficient and high quality services and infrastructure to the community and businesses of NSW.

CUSTOMER FOCUS EFFICIENCY AND EFFECTIVENESS IMPACT AND REPUTATION

THE VISION FOR OUR ROADS

RMS has the following goals for maintenance in 2012 – 16:

• Improve the quality of urban and rural State Roads, including seeing 93 percent of State Roads meeting national road smoothness standards by 2016.

• Deliver maintenance services by the most efficient and effective methods. • Develop reports on the condition and performance of roads and waterways to

THE NEED FOR REFORM

To deliver on our vision for RMS’ road network:

• The Treasurer has made a commitment to improve contestability in road maintenance.

• The NSW Government has supported recommendations by the NSW

Commission of Audit to subject road maintenance in Sydney to contestability. • RMS internal research has confirmed that road agencies in Australia and

internationally have achieved better outcomes through better asset management and innovation.

• The Reform Program has a high level of support within Transport for NSW and Infrastructure NSW.

THE ROAD MAINTENANCE

CONTESTABILITY PROGRAM

The objectives of the Program are to:

• Increase contestability of road maintenance services in the Sydney Region. • Improve customer, network and asset outcomes.

• Improve total asset management capability and decision making. • Reduce the total cost of managing and maintaining assets.

THE PROGRAM MANAGEMENT OFFICE

• An integrated PMO has been established to develop a business

case which will identify potential options for the delivery of road

maintenance within the Sydney Region.

OUR INDUSTRY ENGAGEMENT PROCESS

• The PMO is committed to an ongoing engagement process with

industry to inform the development of future road maintenance

delivery options.

• The PMO will research and seek to understand industry best

practice, principles and methods in road maintenance, domestically

and internationally, as well as establishing any lessons learnt from

these arrangements.

• We have already engaged with our counterparts in Western

Australia, Queensland, Victoria and in New Zealand, as well as

with key players in the UK.

2. OVERVIEW OF THE NSW ROAD NETWORK

MICHAEL VEYSEY

THE SYDNEY REGION ROAD NETWORK

Sydney Region assets include:

• 2,800 km carriageway.

• 7,000 lane km.

• More than 800 bridges.

• Traffic and ITS assets.

Sydney Region works include:

• Maintenance of assets.

• Operation of assets.

Asset / program Summary asset description Summary Activities Sydney North ($M) Sydney South ($M) Sydney West ($M) Corridor ~2,800 carriageway km

Corridor routine – vegetation control, mowing, roadside assets Corridor projects / rehab – slope, drainage, noise walls and ferries

9 10 21

Bridge 821 no. Bridge routine and minor rehabilitation

Bridge structural capacity – strengthening or replacement

15 51 10

Pavement ~7,000 lane km Routine pavement and heavy patching – reactive minor repair

Pavement resurfacing, rehab, reconstruction, widening

28 30 36

INDICATIVE SUMMARY OF SYDNEY MAINTENANCE AND

OPERATIONS SPEND (Four Year Average Per Annum)

Asset / program Summary asset description Summary Activities Sydney North ($M) Sydney South ($M) Sydney West ($M)

Traffic (Signs & Delineation)

Static Signs (>115,000 no) & delineations

(7,917 Lkm – Long lines (291.23 sq km – Trans lines & other markings (499,022 – RRPM))

Signs routine – Inspection, cleaning Signs projects – Replacement due to wear & tear, emergency repairs Delineation routine – Inspection & condition rating

Delineation projects – Annual works program based on needs

4 3 3 Traffic (Intelligent Transport System – ITS) 3019 TCS, 27,270 Sensing loops, 259 VMS, 90 VSLS, 113 TMU, 22 W/S, 11 TFS, 3749 Street lights, 449 EP Routine/preventive maintenance, Systems inspections, functional checks, emergency repairs,

Program of works for replacement or upgrade different asset elements

9 13 10

Incident Management and Driver Aid

Services contracted to TMC/ Incident Management

Traffic Emergency Patrol Service / Driver Aid

15 (network wide)

(Page 2 of 3)

INDICATIVE SUMMARY OF SYDNEY MAINTENANCE AND

OPERATIONS SPEND (Four Year Average Per Annum)

Asset / program Summary asset description Summary Activities Sydney North ($M) Sydney South ($M) Sydney West ($M) Minor improvement works

Network efficiency and congestion treatments, safety management, cyclists improvements and public transport 46 26 39 Operations (excl. TMC) Operating asset Upgrades and operation efficiency Infrastructure 3 2 -

Services Asset management, project development and management, technical support, data capture and management 20 (network wide) Sydney Harbour Bridge (SHB) Alliance SHB maintenance and improvement works - 19 - (Page 3 of 3)

INDICATIVE SUMMARY OF SYDNEY MAINTENANCE AND

OPERATIONS SPEND (Four Year Average Per Annum)

CUSTOMER, ASSET AND

NETWORK OUTCOMES

The customer is at the centre of everything we do.

We are committed to:

• Ensuring effective access and reliability in the road network.

• Maintaining acceptable standards in asset quality and safety.

• Meeting customer expectations in the way we deliver services.

• Preserving the value of the road assets.

WHERE WE HAVE BEEN,

WHERE WE ARE GOING

• RTA was the first State Road Authority to implement a long term

road network maintenance contract in 1995.

• Road maintenance practices have been evolving since that time.

• Industry is maturing in safety and environmental management

practices.

• Potential for increasing collaboration between government

agencies, the public and the service deliverers.

CHALLENGES AHEAD

• Access to the network has become more difficult.

• Increasing focus on managing congestion and improving

interactions with our customers.

• Freight loads on the network are increasing.

RMS CASE STUDIES

Heathcote Road Roadworks

• An informed community is a satisfied community.

• Collaboration between community and works providers reduces inconvenience for both. • Changing focus – first option is „close the

road‟.

Sydney Harbour Bridge Re-surfacing • High risk, high exposure work.

• Client providing forum, industry providing innovation.

ROADS AND MARITIME SERVICES

ROADS AND MARITIME SERVICES CHIEF EXECUTIVE PETER DUNCAN REFORM AND TRANSFORMATION DIRECTOR NEIL DICKSON • Organisational Reform

• Executive Reform Committee support

• Communication and Community Engagement

• Ministerial and Executive Coordination • Strategy and Performance

• Government Information and Privacy STRATEGY AND ENGAGEMENT DIRECTOR MARYANNE GRAHAM CUSTOMER AND COMPLIANCE DIRECTOR PETER WELLS • Customer Service • Road User Regulation • Road Freight

• Accreditation and Assurance • Compliance Operations • Sanctions and Prosecutions

NETWORK MANAGEMENT

DIRECTOR MIKE VEYSEY

• Infrastructure Asset Management • Traffic and Safety Management • Engineering Technology • Environment

• Motorway Management • Road Information Service • Regional Engagement and

Coordination • Portfolio Management INFRASTRUCTURE DEVELOPMENT DIRECTOR GEOFF FOGARTY • Infrastructure Development • Infrastructure Delivery • Motorway Projects • Pacific Highway Office • Princes Highway Office • Infrastructure Contracts

MARITIME

DIRECTOR TONY MIDDLETON

• Boating Safety

• Commercial Vessels Infrastructure • Marine Property

• Investigations and Operational Capability

COMMERCIAL

DIRECTOR - RICHARD BOGGON

CORPORATE

DIRECTOR - PAUL HESFORD

• Tolling

• Road and Fleet Services • Commercial Development

• Property

• Commercial Operations • MyPlates

• Work Health and Safety

• Strategic Program Implementation • Financial Management

• Information Management and Information Technology

• Human Resources

• Governance – Reports to the Chief Executive on all matters • Legal Branch – Reports to the

CURRENT MANAGEMENT ARRANGEMENTS

ROADS AND MARITIME SERVICES

CHIEF EXECUTIVE

PETER DUNCAN

NETWORK MANAGEMENT

DIRECTOR – MIKE VEYSEY

COMMERCIAL SERVICES

DIRECTOR – RICHARD BOGGON

Portfolio Management Road Information Services Infrastructure Asset Management Traffic & Safety Management Motorway Management Engineering Technology Regional Engagement & Coordination Environment

Tolling Property Commercial Development

Road & Fleet Services

Commercial

Operations MyPlates

WORK BY RMS (Network Management)

CURRENT ARRANGEMENTS

(EXCEPT SYDNEY NORTH)

Asset strategy

Asset management

Asset maintenance

RMS Network Management sets strategy and program. RFS delivers the works.

• Determining the desired outcome • Budgeting and funding

• Ownership and visibility of asset

• Monitoring the asset condition • Asset modelling

• Developing works programs

• Scheduling the works programs • Carrying out the works

• Updating asset data DELIVERY

ALLIANCES

WORK BY RMS

CURRENT ARRANGEMENTS

(SYDNEY NORTH)

PSMC delivers some activities. RFS delivers balance.

• Determining the desired outcome • Budgeting and funding

• Ownership and visibility of asset

• Monitoring the asset condition • Asset modelling

• Developing works programs • Scheduling the works programs • Carrying out the works

• Updating asset data

WORK BY DOWNER PAVEMENTS

CORRIDOR NO OPERATIONS

NO MINOR IMPROVEMENT WORKS

WORK BY RFS BALANCE

OF ASSETS/ SERVICES

THE ROLE OF ROAD AND FLEET SERVICES

IN ASSET MAINTENANCE

RFS is the service delivery arm within RMS, mandated to deliver

maintenance services by the most efficient and effective method

possible.

3. SUMMARY OF ROAD AND FLEET SERVICES

• RFS is part of RMS‟ Commercial Services Directorate,

delivering works and services valued at over $700m per annum

statewide.

• RFS has over 2,000 professional and skilled staff based in

strategically located offices, depots and workshops throughout

the state.

• Ninety percent of RFS works are delivered through alliance

relationships with RMS Network Management.

• RFS also works for external clients in NSW and interstate,

principally in the government sector.

ROAD AND FLEET SERVICES (RFS)

WHO ARE WE?

Our history…

RMS is the primary customer

along with councils, other government agencies and private sector

• Over 2,000 staff + contractors • 40% of work is contracted to industry

Road Maintenance Road Construction Bridge Maintenance & Construction Bitumen Sealing Line-marking Traffic Services and ITS Incident Management / Driver Aid Roadside, route, routine and corridor

maintenance in urban and rural

areas

Fleet Services Technical Operations

Quality, Safety & Environment

Quality and Risk Work Health & Safety

Environment

Commercial Operations

Commercial Finance & Performance

Project Finance/ Financial Reporting /Pricing

RFS Regions

Develop and upgrade road

networks throughout NSW

Maintain and construct steel, timber and concrete

bridges throughout NSW

Provide bitumen binder spray and covering to road surfaces ensuring long-lasting durability

Carry out long-line and special purpose line- marking

all over NSW Design, supply, install and maintain traffic management systems Provide support to the TMC for incident management

and driver aid

Estimation Procurement Business Development

Plant Equipment Vehicle Ferry Services

Sydney Region Hunter Region Northern Region Southern Region Country West

OVERVIEW OF RFS

RFS REGIONS

AREA OF FOCUS FOR INCREASING CONTESTABILITY SYDNEY REGION

Over 850

employees in

Sydney, as well as

subcontractors

SYDNEY REGION

• Approx 60% road maintenance and operations.

• Approx 30% improvement projects. • Approx 10% external parties.

SYDNEY REGION CAPABILITIES

Bridge services 138 21% • Bridge repair, rehabilitation, strengthening, joint replacement,

routine works

• Painting and barrier repairs

• Special projects (Spit Bridge, culvert works, major bridge repairs) • Support staff (estimating, procurement, admin/accounts support) Sydney Harbour

Bridge (SHB) Alliance

94 10% • SHB maintenance and improvement works

Civil works 304 60% • Routine maintenance

• Construction works

• Manage asphalt panel contracts

• Support (procurement, planning and resourcing, quality management, admin/accounts)

Traffic services 321 37% • Maintenance and construction of traffic signals and ITS

• Manufacture and maintain signal controllers • Upgrade programs (i.e. LED upgrade) • Minor & major sign repairs and installations • Pavement marking

RFS SYDNEY REGION

DEPOTS, FLEET AND EQUIPMENT

Depots

• 11 depots/yards

Fleet and Equipment

• Owned

• Leased

CHALLENGES AND OPPORTUNITIES

• Our challenges

• Our opportunities

MORE THAN JUST ROAD MAINTENANCE

• All Sydney Road Service Sections contribute to operational support

and incident response.

Protecting the peak – M4 truck accident response

• A serious multi vehicle accident occurred on the M4 motorway on Thursday 11 October 2012 at 12:18pm.

• Involved two trucks and one light vehicle.

• The M4 was closed to all traffic west of the Silverwater Road Overpass.

• RFS assisted with the east and west bound road closures while the site was cleared.

• RFS road maintenance staff accessed the site by sweeping the road pavement using a vacuum truck, replaced the centre concrete road barriers with a backhoe and removed debris from the site.

• The M4 was reopened by 3pm, prior to peak hour traffic.

Adapting to meet the service needs – F3 contraflow

arrangements

• F3 contraflow arrangements can be serviced by Hunter or Sydney Regions. • Requires adaptability to meet ease-of-access requirements.

• Long-term arrangements require shift changes for crew relief.

• Currently in Sydney, road maintenance on state roads and other services are largely delivered through RFS (except in the current PSMC contract area). • Industry feedback will contribute to informing the development of an improved

road maintenance service delivery model for the Sydney Region.

• Councils deliver their own maintenance on local roads through their own arrangements.

4. FORMULATING THE OPTIONS FOR CONTESTABILITY

JOHN STATTON

GENERAL MANAGER

DEVELOPING THE BUSINESS CASE FOR

ROAD MAINTENANCE CONTESTABILITY

• The PMO will be developing a Business Case over the next three to four months to identify options to improve road maintenance contestability.

• The Business Case will enable Government to make a decision on future arrangements.

• Input from industry will be critical to informing the development of options. • A number of key variables will be considered when developing the Business

Case including: • Desired outcomes • Scope of services • Activities • Packaging • Staging

SCOPE OF THE BUSINESS CASE

CONTEXT AND PROGRAM OBJECTIVES

What do we want to achieve?

Outcomes Services Activities Packaging Staging

KEY STRATEGY VARIABLES

CONTRACT ARRANGEMENTS To support the strategy

CONTESTABILITY PROCESS

STRATEGY VARIABLES OUTCOMES SERVICES ACTIVITIES PACKAGING STAGING

Stage 1: One contract in place Roadmap going forward

KEY OBJECTIVES OF THE PROGRAM

• Increase contestability of road maintenance services in the Sydney

Region.

• Improve customer, network and asset outcomes.

• Improve total asset management decision making.

• Reduce the total cost of managing and maintaining assets.

Stage 1: One contract in place Roadmap going forward

WE ARE SEEKING CONTINUOUS IMPROVEMENT

IN ASSET MANAGEMENT

Traditionally asset management effectiveness has been measured on an input (effort expended) or output (work done) basis

• Funding is always constrained and there are always competing priorities.

RMS is implementing a better approach

• Linked to outcomes (not outputs).

• Seeking consistency in outcomes across road hierarchies.

We also recognise there may be future improvements

• Better asset planning.

• Better coordination between asset planning and delivery. • Innovation.

MANAGEMENT ACTIVITIES

Asset strategy

Asset management

Asset maintenance

There are three hierarchies of service management with opportunities to set different boundaries for the desired level of management.

• Determining the desired outcome • Budgeting and funding

• Ownership and visibility of asset

• Monitoring the asset condition • Asset modelling

• Developing works programs

• Scheduling the works programs • Carrying out the works

• Updating asset data

Stage 1: One contract in place Roadmap going forward

DELIVERING MAINTENANCE ACTIVITIES

ASSET TYPES KEY OPPORTUNITIES AND CHALLENGES

Road and corridor Static traffic (excl. ITS)

Maintaining close ties and communications with network operations. Managing a high level of interface and interaction with customers. Managing customer expectations in delivery of services.

Precision in works planning and making contingency plans for delays.

Operational support Instilling a proactive operational culture – “doing what it takes”.

Responsiveness to Traffic Management Centre (TMC) traffic commander. Leveraging knowledge of the network and constraints.

Bridges and structures Managing older assets with unique circumstances and issues.

Obtaining specialist technical, asset management and maintenance skills. Lack of „stable‟ forward program – major upgrades tend to be „lumpy‟. Strong focus on safe access and environmental protection.

Intelligent transport systems (ITS)

Opportunity to employ emerging intelligent technologies to improve network. Specialist skills and knowledge required for asset management and maintenance. Understanding and managing total network rather than isolated assets or regions. Reliability-centric management and responsiveness to failures.

Stage 1: One contract in place Roadmap going forward

CONTESTING ACTIVITIES

KEY CONSIDERATIONS

Where can outcomes be improved?

• Innovation • Collaboration • Competition

Is there capability to manage?

• Nature of activities and specialist skills required (including management). • Scale of activities in the network.

• Managing risk on behalf of RMS – “Network Stewardship”.

Can the risk be defined?

• Able to be understood and managed by a Network Steward.

STRATEGY VARIABLES OUTCOMES SERVICES ACTIVITIES PACKAGING STAGING

Stage 1: One contract in place

PACKAGING FOR SERVICE PROVISION

Opportunity to review existing boundaries.

Key considerations:

• Size of sub-region networks to promote

efficiency whilst being manageable for a service provider.

• Ensuring arrangements are in place to manage activities that cross boundaries e.g. traffic

systems and incident management.

• Ensuring sustainable competition and industry capability in the future.

• Ensuring that there are no neglected assets.

STAGING OPTIONS FOR CONSIDERATION

• If the Government decision is made to increase road maintenance

contestability, no new arrangements will be put in place before July

2013.

• Any new arrangements will have plans in place to minimise risk to

ensure a seamless transition.

Stage 1: One contract in place Roadmap going forward

KEY FEATURES FOR POTENTIAL

ARRANGEMENTS WITH A SERVICE PROVIDER

FEATURE DETAIL

1. Customer focused • Ownership of customer outcome

• Managing and responding to customer expectations • Responsive to customers

2. Commercially aligned • Shared outcome for service partner and RMS

• Competitive pricing

• Clarity in business processes and risk allocation

3. Collaborative • Collaborative relationship

• Complete transparency in assets and activities • Cost transparency

4. Leveraging capability & knowledge • Capability and knowledge retention and development

• RMS remains an informed client

5. Outcome focused •Stewardship role – acting in best interests of customer, asset and network

•Clearly defined outcomes

•Demonstrating value for money

6. Flexible & adaptable •Able to evolve to reflect changing priorities, scope and standards

•Staging transition arrangements to mitigate risk of change

THE IMPORTANCE OF INDUSTRY ENGAGEMENT

• Industry engagement will be used to inform the development of

future options to deliver greater road maintenance contestability

within the Sydney Region.

• This is an opportunity for industry to contribute to the future

strategy of road maintenance within NSW.

5. INDUSTRY ENGAGEMENT IN THE PROGRAM

EVA HANLY PROGRAM DIRECTOR, PROGRAM MANAGEMENT OFFICE ROAD MAINTENANCE CONTESTABILITY REFORM PROGRAM, RMS

INDUSTRY ENGAGEMENT PROCESS

NEXT STEPS

Step 1: Written submissions from industry

• Interested proponents should provide written feedback to the PMO on potential future arrangements including consideration of the key variables mentioned earlier in this presentation.

• Submissions should address industry views, opinions or other insights regarding potential future arrangements put forward.

• Written submissions should be sent by Wednesday, 21 November, 2012 to:

[email protected]

Step 2: Industry dialogue

• Respondents to the written submissions should indicate whether they would like to be contacted by the PMO for further discussion.

• The PMO will contact each organisation that has indicated that they would like to be involved in further discussion.

The industry feedback will contribute to informing the development of an improved road maintenance service delivery model for the Sydney Region.