The Punjab way

Punjab may soon be the trendsetter for maintenance of highways across the country. The state government has fixed stiff deadlines for road contractors to repair any damage that is spotted. According to a new model contract prepared at the behest of World Bank, a contractor has to repair potholes within 24 hours and a crack in three days, or lose a part of his monthly payment. In the next two months, the Punjab PWD and building & roads department will float a tender to award the work to improve and maintain six roads of Sangrur-Mansa-Bhatinda area totaling about 203 km at a cost of Rs 750 crore. This project will be awarded according to a new contract system known as Output and Performance-Based Road Contracts (OPRC) developed by World Bank in a move to develop best practices in road building and maintenance in the country. The multilateral agency will provide a Rs 630 crore soft loan to the state for this ambitious project. Under this system, the contractor has to make necessary improvements and maintain the roads for 10 years. The agreed monthly payment to the contractor is linked to the contractor’s performance in achieving specified service levels as agreed in the contract such as rehabilitation of the road, maintenance services, roughness of roads and specific improvements. The Punjab model is an improvement over NHAI’s and state PWD’s existing system. In case of cash contracts, the contractors build roads, maintain them for one year and exit from the project. There is enough chance of inferior work since the contractor is not held accountable in case the stretch deteriorates in a couple of years after construction. World Bank officials said this model could be replicated by other states including Gujarat, Maharashtra, Karnataka and Orissa where the agency is playing a big role in road construction activities. Together with his monthly invoice, the contractor will report the result of his own evaluation of compliance with the required service levels, based on his own monitoring system which is mandatory. The statement will then be verified by the government or the contractor’s representative through inspections. If the service levels are not met, payments are reduced, based on a schedule given in the contract. Payments may even be suspended, and the contract cancelled if the contractor fails during an extended period to achieve certain minimum thresholds values of service levels. “This system of awarding several sections of roads to one contractor is prevalent in the UK, New Zealand, the US and Australia,” said an official associated with the project. He added that output and performance contract module is designed to increase efficiency and effectiveness of road asset management and maintenance for several years.