this document - Rural Access Programme

Report
RAP3 and the Private Sector
Presentation for RAP3 Consultant’s Forum
Michael Green
June 2014
Rural Access Programme
Development through access
RAP3
 RAP3 Implementation £31.5m –





Works with district and central GON and private sector (14 districts)
Employment for the poor maintaining, upgrading, constructing rural roads. (14 districts)
Savings, literacy, income training as in RAP2 (14 districts)
Sustainable agricultural, small businesses, economic infrastructure (8 districts)
Trail Bridge construction (8 districts)
 Rural Employment Guarantee Programme Support £3.6m –




GON Karnali Employment Program (KEP) in Mid and Far West regions.
TA in pilot districts and at the national level. (2 districts)
Improving targeting, awareness, wage payment systems, registration, planning and
monitoring, transparency, capacity and coordination with local government.
Lessons learned inform a National Employment Guarantee Scheme
 Results, Evaluation and Policy support, £1.35m –



third party continuous monitoring (8 districts)
separate studies to capture lessons on specific issues
inform the design of future donor and government programmes.
Rural Access Programme
Development through access
2
Strategic SWOT Analysis – 2012
 Spending in LRN sector likely to continue to increase over next ten
years and outstrip capacity of DDC and DOLIDAR to manage the
sector.
 Without a substantial improvement in management of the sector
SWAp funding aspirations of GON will not be achieved.
 Chronic weaknesses that need to be overcome
 a) span of control -1:75 agencies vs SRN 1:1 agency
 b) district level planning and implementation
 c) M&E impact and progress reporting.
 These issues will take a long time to solve in terms of GON capacity
to manage LRN sector.
 GON needs a shorter term strategy
Rural Access Programme
Development through access
LRN Outsourcing Strategy
 Outsourcing to the private sector is probably the best
short term option and will appeal to the donors as well.
 DOLIDAR should therefore reposition its role as
management agency of the sector by outsourcing
planning, design, supervision and M&E to the private
sector through area contracts.
 Payment for this support could be through TA assistance
linked to donor projects or paid out of the LRN works
budget.
 Negotiate with donors for this in design of next
generation projects post 2013.
Rural Access Programme
Development through access
Current Span of Control
Rural Access Programme
Development through access
Area Based Outsourcing Approach
MOFALD/DOLIDAR/SWAp
Area Contract 1
Area Contract 2
Area 3 Contract
Area 4 Contract
Area 5 Contract
9
15
16
19
16
WB
ADB
DDC’s supported by Area TA’s
DFID
ADB
SDC
Rural Access Programme
Development through access
Looking to the Future
Rural Access Programme
Development through access
RAP3 Districts
Rural Access Programme
Development through access
Budget and Components (GBP)
Rural Access Programme
Development through access
District Road Core Network
 New Construction – (4)

Humla, Mugu, Bajura, Kalikot
 Maintenance – (10)



SED (8)



Doti, Achham, Dailekh, Jumla
Dadeldhura, Parbat, Sindhupalchowk, Morang, Jhapa, Sankhuwasabha
Humla, Mugu, Bajura, Kalikot (RAP2 style)
Doti, Achham, Dailekh, Jumla
Capacity Building/Policy Harmonisation (14)


Doti, Achham, Dailekh, Jumla, Humla, Mugu, Bajura, Kalikot
Dadeldhura, Parbat, Sindhupalchowk, Morang, Jhapa, Sankhuwasabha
Rural Access Programme
Development through access
Rural Access Programme
Development through access
DRCN First Year Funding
RAP3: Year-1 fund allocation (NPR)
District
New
construction
Remarks
ACH
0
0
Maintenance
(DDF)
96,000,000
DAD
0
30,173,725
49,826,275
80,000,000
DAI
0
52,296,000
43,704,000
96,000,000
DOT
0
7,346,000
57,654,000
65,000,000
JHA
0
71,175,000
98,825,000
170,000,000
JUM
0
42,606,000
17,394,000
60,000,000
MOR
0
91,205,478
112,794,522
204,000,000
PAR
0
41,703,000
74,297,000
116,000,000
SAN
0
0
84,000,000
84,000,000
SIN
0
0
100,000,000
100,000,000
BAJ
46,620,000
0
0
46,620,000
HUM
80,610,000
0
0
80,610,000
KAL
55,790,000
0
0
55,790,000
MUG
66,590,000
0
0
66,590,000
Total
249,610,000
336,505,203
734,494,797
1,320,610,000
1,560,063
2,103,158
4,590,592
8,253,813
Total (GBP)
Improvements
Total
96,000,000
Total allocated
annual budget is
from the
programme and
does not include
budget from other
sources of
funding.
Total length of 7
new construction
corridors is
94.77km
Rural Access Programme
Development through access
Example of Outsourcing - UK
 The UK Highways Agency's operations are split into six
regions that are roughly based on the regions of
England.
 These regions are subdivided into 13 operational areas.
These areas are managed and maintained by an Area
Team and a contractor, known as a Managing Agent
(MA) or Managing Agent Contractor (MAC).
 These combine supervision consulting and contracting.
In addition, there are a number of sections of road that
are managed by DBFO contracts separate from the area
teams.
Rural Access Programme
Development through access
13
Nepal LRN post 2013
 Translated to Nepal a Central TA supports DOLIDAR
 DOLIDAR keeps its project managers in KTM as now
with Area TA’s supporting DTOs in Districts as per RTI
Pilot.
 In addition, there will be a number of projects eg SDC
Bridges that can be managed through contracts that are
separate from the area teams.
 Once established and working move towards SWAp
funding agreements with donors.
 This will probably include elements of World Bank’s
Program for Results
Rural Access Programme
Development through access
14
Post 2013 New Generation Projects











Pursue common set of LRN policies
M&E able to demonstrate LRN impact to donors
Adopt harmonised Asset Management approach to cover whole of LRN network
o Planning of entire LRN Network
o Programming
o Maintenance
o Upgrading
o Rehabilitation
o New construction
Demand led TA support through DTMP to reflect capacity of different districts
Use of area based clusters of districts for TA support funded by donors.
Donor projects adopt single GON led approach and procedures
Donor projects provide capacity building to GON staff, especially in management
Update 5 year DTMP and make basis for upgrading and rehabilitation of network
Use of annual condition surveys for maintenance using ARMP
Include Modernisation Fund mechanism and
annual support plans for
institutional capacity building
Use out sourcing to private sector to improve capacity and governance issues
from 2013
Rural Access Programme
Development through access
15
SWAp Asset Management
 RAP3 supports GON SWAp programme in 14 districts
 LRN investment based on District Transport Master
Plans (DTMP).
 Identify minimum network to link VDC and District HQDistrict Core Road Network (DRCN)
 New GON policy puts maintenance first; upgrade to allweather; new last.
 DTMPs to guide short, medium and long term
investment by donors and GON ready by Dec.
 Annual investment based on ARAMP
Rural Access Programme
Development through access
16
RAP3 Modality
LRN Maintenance through DDF
LRN Upgrading – Start direct
New construction – Start direct
Income generation – Partners
Economic infrastructure – Linked to IG
Capacity Building – Annual Support Plans
 Central GON, Districts DTOs and Private Sector
Rural Access Programme
Development through access
17
The key to delivery of the new generation
of results based LRN contracts are private
sector consultants and contractors.
Can they do it?
Rural Access Programme
Development through access
The End
Rural Access Programme
Development through access
Consultant Procurement &
Performance
RAP3 Consultant’s Forum
Bill Seal (Engineering Team Leader)
5th June 2014
Rural Access Programme
Development through access
20
Purpose & Context
An open and honest view of RAP3’s
experiences with our Consultants so far,
Overview of the significant performance
issues and deficiencies (generalisations),
Ambition:
 Not
to blame, ‘sling mud’ or squabble,
 Expose the issues, discuss openly and agree
on how we can improve (Consultant & Client).
Rural Access Programme
Development through access
21
Current Engagements
Stage-1 Design: 5 num (3 months) – Lump
Sum
Improvement Design: 3 num (3 months) –
Lump Sum
Construction Supervision & Stage-2
Design: 4 num (3 years) – Time Based
LRNAM Support: 10 num (2 years) – Time
Based
Total: 22 ongoing assignments
Rural Access Programme
Development through access
22
Earlier Experiences
More than a decade of Consultant
partnerships (RAP1 & RAP2)
Presumptions Summarised:
 Company
involvement low (‘body shops’)
 Inadequate care (to project / client)
 High staff turnover / dissatisfied staff / absenteeism
 Long-vacant positions (following resignations)
 Competency / skill issues
Rural Access Programme
Development through access
23
RAP3 LRN Strategy
P4R (‘payment for results’) where possible
 Lump
Sum / Milestone contracts
Reward performance
Multi-year contracts with extensions linked to
Consultant performance
 Time-based contracts for supervision / support
assignments due to complexity

Quality & Cost Based Selection (QCBS)
Nepal Road Sector Assessment Study
 DDCs
to outsource services
 Support development of the Private Sector
Rural Access Programme
Development through access
24
Employment of Consultants
Why employ Consultants?
 Flexibility
for changes in work size and scope
 Management of man-power resource
 Technical back-stopping and expertise
 Checking and quality assurance
 Value for money
The Alternative?
 Develop
large in-house teams (RAP3)?
Rural Access Programme
Development through access
25
Service Procurement Challenges
How to …..
 engage
competent firms?
 ensure value for money (judging the
appropriateness of financial bids / relationship
of higher fees to better quality?)
 encourage assignment of capable /
appropriate staff?
 retain staff – adequate expenditure on staff
employment / facility packages?
Answer: not just to ‘pay higher fee rates’
Rural Access Programme
Development through access
26
RAP3’s Procurement Approach
Pre-qualification
 Standing
lists
 Expression of Interests
Specific & targeted invitation (i.e. on
district-wise basis not generic)
Pre-bid Briefing Meeting
QCBS
 80%
technical / 20% financial
Rural Access Programme
Development through access
27
Improved ‘Request for Proposals’ (RFP)
 Chapter limitations:



Standard methodology provided (LS contracts only)
Methodology – 7 pages max
Comments on ToR – 2 pages max, etc.
 CVs:



Provide a summary sheet (abstract)
Need not be full-time employee (benefit for 6 months previous only)
Realistic ceilings on full-mark experience
 Staff Provisions:



Allowances – to be the same or better than those of the Client
Payment of Allowances – will be treated as ‘reimbursable’ items
No ‘leave in lieu’ – Client will pay only for periods assigned i.e. rates
to be inclusive (leave, overtime, bonuses etc.)
 Ethics:


Strong emphasis
‘Whistle blowing’ etc.
Rural Access Programme
Development through access
28
Engineer’s Price Estimates
RAP3 intentions:
 To
promote the payment of ‘good’ rates (better
than before)
 Support private sector initiatives
Approach:
 Target
adoption of ‘Society of Consulting
Architectural & Engineering Firms’ (SCAEF)
published schedule of ‘Monthly Billing Rates’
 Bench-marking to earlier RAP experiences to
gauge VFM
Rural Access Programme
Development through access
29
SCAEF Schedule of Fee Rates
 Current version is 2010 (not updated)
 Quotes a multiplier (OH, fees etc.) of 2.61
 High at ‘top end’, low at ‘bottom end’
Senior Eng: NRs 267,500 p.m.
 IoW: NRs 85,600 p.m.
 AutoCAD Operator: 35,000 p.m.

 Applicable for staff with > 15 years exp.
30% reduction 7 to 15 years
 60% reduction 3 to 7 years

 Some necessary adjustments had to be applied
 Benchmarking to RAP2: approx. 30-35% higher
(like for like with inflation)
Rural Access Programme
Development through access
30
Technical Proposals
Very little original thought – even in
‘comments / suggestions’
Copy and paste
CVs (the biggest scoring section)
 poorly
presented
 summaries incorrect / overlooked, difficult to
evaluate
 nomination based on potential score not
ability / suitability
 authenticity of CV content?
Rural Access Programme
Development through access
31
Financial Proposals / Negotiations
 Prices widely dispersed (85% - 175% of Estimate)
 Patterns of bidding:
‘Scatter’ vs. ‘Cluster’ (several clusters ~ 150%)
 Significant suggestion of collusion / lack of
competition

 RAP3 negotiation approach:
Competition / near Estimate: no negotiation on fees (5
out of 14 packages)
 Grossly high / uncompetitive: offered at Estimate (9
out of 14 packages) – all bidders accepted
 Bidders in negotiated packages all formally agreed:

 Rates still sufficient to meet ToR without reduced quality
 Rates still sufficient to retain staff
Rural Access Programme
Development through access
32
Mobilisation / Implementation
Slow mobilisation (far longer than agreed)
Immediate staff changes / difficulties in
finding matching replacements (RAP3
provisioned 5% fee reduction for 6 months)
Poor understanding of ‘Inception’ / ability to
design / tune an approach (HQ input
needed?)
 Team
organisation / logistics
 Supplementary staff proposals (LRAMS)
Late and poor quality provision of resources
(office facilities, transport etc.)
Rural Access Programme
Development through access
33
Performance Issues (Firms)
1) Late staff payment (pay-when-paid approach) – despite
receiving an advance
2) ‘Pay-what-paid’ approach i.e. hints of unpaid leave, unpaid
travel etc.
3) Professionalism – narrow consideration limited to profit /
fees / cashflow, lacking professional duty on project delivery
4) Self-checking absent (reliance on Client)
5) Inadequate backstopping (HQ support)
6) Slow replacement of unavailable / resigned staff (to the
detriment of project)
7) Arbitrary assignment of staff (Lump Sum Contracts)
8) Assign inappropriate staff (age, fitness, non-drivers, attitude,
suitability, etc.)
9) Lack of responsibility (safety, project delivery / cost control)
10) Lack of pride?
Rural Access Programme
Development through access
34
Performance Issues (Staff)
1) Engineers or Technicians?
Technicians: apply technical procedure accurately,
 Engineers: direct, solve, evaluate, Interpret,
judgement, research, relevance, VFM, leadership,
etc.)

2) Over-reliance on software (‘blind’ application)
3) Reliance on templates not understanding,
inability to truly ‘design’
4) Unquestioned faith in design drawings (however
ridiculous)
5) Lacking professional / self development
6) Leave management / high absenteeism
Rural Access Programme
Development through access
35
Summary of Key Issues - 1
Seq
Issue
Strategy?
1. How ‘clean’ is the sector?
If fair competition is absent
the procurement approach
wont work.
1. SCAEF to promote honour, integrity and
professionalism.
2. Clients urge ‘whistle blowing’ and enforce ‘blacklisting’
2. Lump-sum contracts
unworkable in the present
context?
1. Abandon LS approach - make everything input /
time based?
2. Introduce Liquidated Damages to combat ‘time at
large’ delivery?
3. 80/20% QCBS is not
delivering value or
competition
1. Adjust the split more in favour of cost say 50/50 or
40/60 (Quality / Cost)
4. Engineers lacking
structured professional
development
1. SCAEF to move toward introduction of a
professional qualification (not merely registration),
2. SCAEF to seek to influence university degree
course content, practical training etc.
3. Increase professional training opportunities
Rural Access Programme
Development through access
36
Summary of Key Issues - 2
Seq
Issue
Strategy?
5.
Take responsibility for
their deliverables
(Consultants)
1. Consultants to take full responsibility for their
service deliverables rather than rely on clients to
do their checking and supervision i.e. develop
internal systems for quality assurance.
2. Clients need greater redress; introduce
requirement for Performance Securities, Indemnity
Insurance etc.?
5.
Lack of trust (in
Consultants by Clients)
1. Earn it through delivery.
2. Demonstrate a clean and competitive sector.
3. More engagement workshops.
6.
Commercial aspects not
fully understood by
Clients
1. SCAEF to lead in improving their schedule of
rates, disseminating and developing credibility
Rural Access Programme
Development through access
37
‘Step forward, or backward?’
THANK YOU
Rural Access Programme
Development through access
38
RAP Consultants Forum
Some Engineering Do’s and Dont’s
5th June 20147
TIMOTHY J.R STIFF
Senior Technical Director (Management Services)
IMC Worldwide Ltd, UK
Rural Access Programme
Development through access
Safety, Safety Safety
Do enforce safety on the sites
Hard Hats
Wellington boots
Gloves and Goggles (especially when
breaking rock)
Safety Harness when working on steep
slopes
Check that First Aid pack is available and
restocked as necessary in good time
Rural Access Programme
Development through access
Planning of the Works
Do Discuss, Plan and Agree how the
works are
to be carried out
Ensure that everyone in the RBG
understand the method of working and
emphasise the key safety and
environmental issues
Re-Brief as often as required so that
everybody is working to the same plan
Rural Access Programme
Development through access
Do check excavation and fill slopes for stability
Do look for signs of slope
movement
Such as tension cracks upslope or
down slope, loose rocks or stones
loose soil etc and warn and take
corrective action in good time
Rural Access Programme
Development through access
Do Ensure that only correctly made gabions are used
in the works
The Gabions need for properly constructed
gabion boxes with tightly wired edges
Rural Access Programme
Development through access
Do take care to check the design and detailing of
retaining walls
Retaining walls are a large capital investment
and need to be dsigned in strict accordance
with the RAP procedure
Cross Sections are required at a minimum of 10
metres along the length of the proposed wall
and at least 10 metres past it on each side to
ensure the wall geopmentry is appropriate
Rural Access Programme
Development through access
Gabion walls
Do bed the gabions in alternate stretcher
and header courses
so that it can distribute any movement most
effectively
Rural Access Programme
Development through access
Do provide adequate drainage to the base of the the retaining
wall foundation and back of wall drainage on the wall itself
Rural Access Programme
Development through access
Do -Establish Semi permanent chainage
markings
Establish chainage markers where they
can be seen and on permanent feature if
possible. Re establish as necessary
Rural Access Programme
Development through access
Road Drainage
 The consideration of the drainage of the road is critical in
ensuring the long term stability of the asset.
 Do consider where the water is going
 Do Minimise drainage runs to prevent concentration of
water at outfalls
 Optimizing surface cross drainage is often more easily
accomplished by site survey and analysis of an existing
segment rather than during the preconstruction phase of
road development, as concentration problems and
opportunities for their reduction are then readily
apparent.
 Therefore do visit the road during, or straight after any
rains to identify problems
 Field inspection of crossRural
drainage
needs
is especially
Access
Programme
enlightening during intense
climatic
events.
Development
through
access
Do pay close attention to cross Drainage Details
Do consider how the water can cross the
road especially where large season streams
are apparent
Use geotextile or bamboo mats under stone
pitching where necessary to ensure that the
raod formation does not soften and erode
during each rainy season
Closely consider where the water will
actually go taking account of the existing
Rural Access Programme
grades
Development through access
Do look around to identify any potential problems
Familiarity breeds contempt and walking
down the same section of road results in one
not actually seeing what is there
Don’t take the same short cuts each site visit
otherwise lengths of road could not be
looked at for long periods
Do write down any issues identified
(locating them accurately using the
permanent chainage markers that should be
Rural Access Programme
visible)
Development through access
Do Ask!
If you are not sure about any details or cause
of a problem - ask don’t leave it to get
worse!
Nobody will think any less of you and you
may just save a large embarrassment to the
Project!
Don’t be afraid to suggest alternative
solutions to a problem – you may just have
come up with an innovation!
Rural Access Programme
Development through access
Thank you for listening
Any questions, comments or
observations to share?
Rural Access Programme
Development through access
Rural Access Programme
Development through access
Rural Access Programme
Development through access
Rural Access Programme
Development through access
Rural Access Programme
Development through access
Rural Access Programme
Development through access
Rural Access Programme
Development through access
Rural Access Programme
Development through access
Rural Access Programme
Development through access
Rural Access Programme
Development through access
Rural Access Programme
Development through access
Supporting the Private Sector –
International Experience
Private Sector Workshop
Kirsteen Merrilees
June 2014
Rural Access Programme
Development through access
Overview
 Strong (Civil) Engineering Sector
 Examples of Support to Private Sector
 Private Sector in Nepal
Rural Access Programme
Development through access
STRONG (CIVIL) ENGINEERING
SECTOR
Rural Access Programme
Development through access
Features of a strong sector
Professional
and Ethical
Standards
Self
Regulation
Influence
Policy
Environment
Professional
Development
Strong
Sector
Performance
rewards
Rural Access Programme
Development through access
Civil Engineering Sector in UK
 Association for Consulting and Engineering

register of firms – code of business practice and ethics
 Engineering Council


regulatory body for engineering profession
standards for professional competence, ethics
 Institution of Civil Engineers


professional development and qualifications
influencing government policy and strategy
Rural Access Programme
Development through access
Professional Engineers
A. Innovation
and technology
E. Professional
standard and
ethics
B. Engineering
solutions
Professional
Engineer
D.
Communication
skills
C. Management
and leadership
Rural Access Programme
Development through access
EXAMPLES OF SUPPORT TO
PRIVATE SECTOR
Rural Access Programme
Development through access
Projects with PS Support
Project
Country
Description
Cross Roads
Uganda
• Capacity building
• Policy reform (outsourcing)
TAQA
Ethiopia
• Quality Management System
TA to UNRA
Uganda
• Model Procurement Documents
IEB
Bangladesh
• Professional development (ICE)
Rural Access Programme
Development through access
ICE support to Bangladesh
Support to Bangladesh Institution of Civil
Engineers
 Professional
Qualifications
 Graduate training programme
 Continuing Professional Development (CPD)
Working with Universities
 Improve
technical content
 Broaden curriculum for engineers
Rural Access Programme
Development through access
Technical Assistance to Uganda
National Road Authority
 Improving performance of national road sector
through contracts that include / require:
detailed TOR (requirements)
 CD with all technical manuals, specifications etc.
 Managing and sharing risk (time, quality, budget)
 Promotion of national resources (incl. expertise)
 Technical Audit
 Transfer of Knowledge
 Consultant QMS and Project Control Plan
 Address Skills Gap – technical assistants, graduate
development programme

Rural Access Programme
Development through access
Technical Assistance for Quality
Assurance, Ethiopian Road Authority
Addressing poor quality services through
Quality Management
 Improved
procurement & contract management by
ERA
 Clearly defined requirements for service providers
 Compliance with legal and funding requirements
 Training in QMS requirements
 Auditing QMS implementation
Rural Access Programme
Development through access
Cross Roads - Goals
Creating Opportunities for Sustainable Spending
on Roads
Capacity Building
improve services,
 create opportunities and competitive environment

Improved Government planning
 long
term planning,
 adequate & consistent funding,
 regulation,
 continuous work opportunities
Rural Access Programme
Development through access
Cross Roads Approaches
Market System Approach

tackling underlying causes of market inefficiencies
Policy Reform


outsourcing to Private Sector,
dedicated Government agency & maintenance funds
Incentives


Construction guarantee fund: affordable credit for bid bonds,
performance bonds, equipment
Challenge fund: develop innovative solutions to roads issues
Capacity Development


Support professional and industry associations to provide
better services
Develop skills of association members
Rural Access Programme
Development through access
PRIVATE SECTOR IN NEPAL
Rural Access Programme
Development through access
Addressing Weaknesses
Current Weakness
Possible solution
Limited sense of
professionalism and
responsibility within
engineering community
• Develop tiered registration within
Engineering Council
• Develop formal professional qualification
• Develop graduate training programme
• Promote Continuing Professional
Development
Poor contract management by
all parties
• Strengthen GON planning, procurement
and contract management processes
• Improve contract documents, TOR
• Training in basic contract management
• Enforce contract penalties
No incentive for good
performance
• Develop appropriate incentives for
individuals and organisations (awards?)
Rural Access Programme
Development through access
Addressing Weaknesses
Current Weakness
Possible solution
Poor resource planning and
management
• Improve GON planning processes to better
fit with construction seasons
• Ensure adequate resource provisions in
contracts
• Training of managers in basic resource
management (human, financial, physical)
Poor quality management –
poor end product
• Develop QMS for standard engineering
processes
• Training in basic QMS
Rural Access Programme
Development through access
Weak to Strong Private Sector
Poor
performance
Solutions to
challenges
Good
Performance
Weak
Sector
• Technical
• Management
• Business
Environment
• Social and Political
Strong
Sector
Rural Access Programme
Development through access
Thank you.
The End.
Rural Access Programme
Development through access

similar documents