Akbiyikli, R and Eaton, D (2006) Operation and maintenance (O&M) management in PFI road projects in the UK. In: Boyd, D (ed.) Proceedings of 22nd Annual ARCOM Conference, 4-6 September 2006, Birmingham, UK.
Abstract
Private Finance Initiative (PFI) projects are designed to fund long-term infrastructure and public services. A typical PFI road scheme involves the public sector client (Granting Authority), the private sector partner - Special Purpose Vehicle (SPV)-, the financial lenders, the road constructor and his supply chain, technical advisers (legal, financial, technical) and the Operation and Maintenance (facilities) Management Company.The main contracting party from the private sector side in a PFI road procurement mechanism is the SPV. The SPV must ensure that every design and construction of a road in respect of O & M shall be carried out in accordance with the requirement of Project Agreement (PA); in accordance with all statutory requirements and Environmental Statement; in accordance with the road project's Quality Plan; and in accordance with Good Industry Practice in order to satisfy the Granting Authorities Requirements.The Operation and Maintenance is the longest phase of PFI road project, the most important phase because the service and payment is created. The payment of the unitary fee is conditional on the SPV meeting certain "performance" and "availability" requirements set out in the PFI contract. The fee can be reduced if these standards are not met. This practice of "deductive payments" and "non-performance" is one of the main justifications for PFI, described by the UK government as transferring operational and maintenance risks to the private sector in a PFI road project. This paper will examine the current O&M management practice and will propose a conceptual framework for the O&M management practice in PFI road projects in the UK based upon two empirical case studies detailing physical and functional performance as the critical O&M criteria. The conceptual framework identifies that the functional and physical performance requirements need to be considered at the beginning of the life-cycle of the project and O&M has to be focused on delivery of the service by minimizing operation and maintenance expenses and maximizing the quality of services and satisfying the end-users' needs.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | concession; payment mechanism; performance; availability; SPV |
| Index terms: | case study, special purpose vehicle, operation and maintenance, contracting party, public-sector client, private sector, public services, design and construction, management practice, private finance initiative, quality of service, payment mechanism, road project, conceptual framework |
| Subjects: | industry analysis, administrative law, sociology, infrastructure engineering, maintenance engineering, public and environmental health, theoretical framing, management, economic analysis, financial and cost management, contractual arrangements, practitioner, data collection methods |
| Topics: | Legal Issues, Engineering Principles, Research Practice, Health and Safety, Cost Management, Business Strategy, Procurement, Stakeholder Management, Roles and Professions |
| Descriptive scope: | 4 PCEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here