This paper was presented at the `Recent achievements and developments in maintenance and construction outsourcing' session. The traditional approach for capital expenditures on road construction in Canada is to let contracts on individual links or projects, and using in-house forces to carry out a major part of the maintenance work. However, a trend to privatization or outsourcing of maintenance, started by British Columbia in 1987-88, is prevalent across Canada and in other countries. Most of the contracts involved are end-result based and short term, but there are no two "models" alike and a plethora of terms and approaches exist. Examples of various approaches, their features and the pros and cons are described in this paper. As well, the relative assumptions of risk are identified. Essentially, the private sector seems to have responded effectively to the opportunities and to have delivered quality services. Long term performance based contracts in North America, Europe and elsewhere seem to have almost exclusively been restricted to individual projects or highway links, usually involving toll roads or concessions, with the exception of initiative in Australia. These Australian initiatives cover networks of roads and incorporate all maintenance and capital works. The contractor assumes essentially all of the risk and makes all decisions as to what work, ranging from repairs to reconstruction, is carried out, when and where, subject only to the performance guarantees specified. Examples and key details are provided in the paper. A long term performance based contract framework is described in the paper, based to some extent on the Australian experience. It provides the potential for superior cost savings and innovation benefits. Finally, the paper presents a series of recommendations toward maximizing these benefits for both the agency and the contractor. (A)
Abstract