Support in implementation of the Service Level Agreement and Further Development of Performance-Based Maintenance

The national road network represents a major asset for the Republic of Serbia as it is used for 90% of the overall passenger transport and for 80% of the freight transport. In charge of its maintenance is the public enterprise “Roads of Serbia” (PERS), which performs this activity through a pool of maintenance contractors that are paid based on agreed unit rates.

As a result of this maintenance method and the historical lack of a sufficient investment in maintenance activities, the asset condition has deteriorated. This chronic shortage of budget funding has also generated a large backlog of periodic maintenance and rehabilitation, resulting in a poor status and an unsafe condition on a substantial portion of the country’s road network.

The Government of Serbia has set out a reform policy focused on the introduction of result-based financing in the infrastructure sector, Service Level Agreements (SLAs) and Performance Maintenance Based Contracts (PBMCs). These are all seen as innovative instruments with a nation-wide impact and the potential to increase the transparency and efficiency of public spending and asset management on routine tasks, like road maintenance.

In this context, a Consortium led by IRD Engineering signed a new contract for a project aimed at the enhancement of capacities for the management of road assets and for a more efficient use of the funds allocated to road maintenance.

Thanks to this contract a team of specialists from IRD will develop a methodology for the planning of multi-annual performance-based financing in road maintenance, will produce a rule-book with technical specifications for the maintenance of the state road network, will enhance the standard tender documents for Performance-Based Road Maintenance Contracts, will further develop the Road Asset Management System in the context of Service Level Agreements for the state roads I category, and will transfer knowledge to the relevant stakeholders.