A study on PBC application in road maintenance management in Hanoi, Vietnam | Статья в журнале «Вопросы экономики и управления»

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Рубрика: Логистика и транспорт

Опубликовано в Вопросы экономики и управления №1 (23) февраль 2020 г.

Дата публикации: 02.02.2020

Статья просмотрена: 10 раз

Библиографическое описание:

Чан, Чунг Киен. A study on PBC application in road maintenance management in Hanoi, Vietnam / Чунг Киен Чан. — Текст : непосредственный // Вопросы экономики и управления. — 2020. — № 1 (23). — С. 30-33. — URL: https://moluch.ru/th/5/archive/153/4862/ (дата обращения: 16.01.2021).

Performance-based contracts (PBCs) have been commonly applied in many countries in the world but excluded Vietnam. In Vietnam, PBCs have been piloted on a number of national highways, with the local road system not yet applied. The article clarifies the basic characteristics of PBCs and proposes some solutions to successfully apply PBCs in Hanoi, Vietnam.

Keywords: road maintenance management, PBC contracts, performance, Hanoi road system, regular maintenance, criteria for evaluation.

  1. Problem statement

The road system includes expressways, highways (under the charge of Directorate for Roads of Vietnam) and local roads (under the charge of local Department of Transport). Road maintenance management is done mainly under traditional contracts — applying a centralized management model as planned. Specifically, based on the annual maintenance plan, the road management agency assigns the plan and signs a contract with the road maintenance contractor. The road maintenance contractor is responsible for performing the tasks requested by the road management agency and organizing the acceptance and payment on the basis of the execution volume with the pre-determined unit price of work categories (contract based on volume executed).

The road maintenance management contract does not encourage the road maintenance contractor to take preventive measures and prevent damages from rising. If the damage is not repaired in time, it will lead to more and more serious damages causing unsafe traffic, which will be more costly to repair. Currently, according to domestic and foreign experts' and scientists’ recommendations, this type of contract is no longer appropriate to the road maintenance strategy in developed countries.

In order to improve the effectiveness of road maintenance management, many countries over the world have studied and applied the Performance-Based Contract (PBC) for more than 20 years.

The studies done by G. J. Zietlow [1], [2]; NCHRP Synthesis 389 [3]; P. Pakkala [4] and World Bank [8] indicate that in comparison with traditional contracts, PBCs offer such great benefits of cost-saving, quality-service guarantee and encouragement of innovation and transparency from contractor side. Particularly, PBCs can be applied in various types of road, from national highways to local road system.

Although PBCs have been widely applied around the world, each country has different socio-economic characteristics and transport systems; thus, it is necessary to consider the practical conditions when implementing PBCs in a certain country.

In Vietnam, PBCs have been piloted since 2010 in Highway 1 and 10 with the total length around 300 kilometers [6]. However, the entire local road system managed by local Department of Transport has not applied PBCs in practice.

Therefore, the research and application of PBCs in road maintenance management on local road system is of great necessity, especially on road system of big city like Hanoi.

  1. Contents
    1. Performance-based contracts in Road maintenance management

The PBC was first applied in 1988 in British Columbia (Canada), then became a part of a road maintenance contract in Australia, England, New Zealand... and is now commonly used all over the world.

The PBC is also known as a lump-sum contract in which the payment for road maintenance is determined by the level of fulfillment of the pre-determined criteria for the result and the quality of maintenance.

As for PBC, the road maintenance contractor has the discretion on what, how and when to implement. Road management agency has the role of supervising and inspecting contractors in compliance with the terms of the contract. Contractors are paid based on the level of fulfillment of performance requirements. If a road construction or property on a road does not meet the quality requirements specified in the contract in a month, the payment will be reduced, even unpaid.

The PBCs obligate the contractor to have good management capacity, which means holding the ability to identify and timely conduct necessary repair activities in the short, medium and long term to ensure that the project still meets the level of service stated in the contract.

Advantages of PBC

– Stable financial source for road maintenance management in a long time: PBC often last for years, so the road management agencies are mandatory to have commitment to provide funding for years of road maintenance.

– The payment for PBC is quick, meeting the capital needs for contractors in maintenance and repair plans. This is an important factor to ensure the sustainable operation of the project.

– Contract management will be less complicated than traditional contracts. The contract has no volume incurred, so there are no risks of excessive cost.

– PBC offers opportunities and encourages contractors to make innovation and creativity during the contract performance.

2.2. Status of road maintenance management in Hanoi

2.2.1. Overview of Hanoi road system

Hanoi is the capital of Vietnam, also the center of politics, economy, culture, science and the important transport hub of the whole nation.

Currently, Hanoi has 1087 roads with the total length of 1,989.88 km, the total surface area of 23,964,249 m2 (see Table 1).

Table 1

Hanoi road system


Types of road

No. of Routes



Road width



road surface







Asphalt concrete


National highway




Asphalt concrete


Provincial roads




Asphalt concrete, cement concrete


Street roads




Asphalt concrete, cement concrete


Roads in urban areas




Asphalt concrete




Source: [5], [7]

The road surface structure is mostly asphalt concrete (accounting for 90.0 %), some provincial roads and old streets have cement concrete structure (see Figure 1). Roads with the width of 7 ÷ 14m account for the largest proportion (36.0 %); roads with the width of over 14m comprise only 25.1 % (see Figure 2).

Fig. 1: Hanoi road structure chart by pavement structure

Fig. 2: Ha Noi road structure chart by road width

Over the past years, although Hanoi road transport system has made great progress, the fast pace of socio-economic development has led to the increasing demand for road traffic. However, the existing road transport system is still inconsistent and does not keep up with the socio-economic development speed, causing the road traffic overload for Hanoi.

2.2.2. Status of road maintenance management in Hanoi

For many years, the road maintenance operation has been conducted by Hanoi Department of Transport in accordance with the order method. Annually, Hanoi Department of Transport, based on the maintenance plan, organizes the signing of ordering contracts with road maintenance units. The evaluation of maintenance results is based on the results of contract performance.

The nature of a road maintenance order contract is a contract based on the volume of performance (traditional contract). On the monthly basis, the road maintenance unit conducts inspection of maintenance volumes and implement acceptance with Hanoi Department of Transport on the basis of the workload with the pre-determined unit price of work categories.

Content of acceptance is the work categories in the monthly-approved production plan.

2.2.3. Evaluation of status of road maintenance management in Hanoi

The management of road maintenance has been implemented for many years and basically done in accordance with the regulations of the State and the direction of the Hanoi People's Committee; it has contributed to ensure technical requirements, contributed to serving the needs of people to travel safely, partly meeting the needs of socio-economic development and reducing traffic congestion.

However, the road maintenance operation is still mainly based on the order-based method, the nature of the order is appointing contractors. The bidding method is still in the pilot stage of implementation in some suburban roads in Hanoi, so it has not really stimulated the competition between the units participating in road maintenance.

Besides, the current form of maintenance management contract is not appropriate, the delivery of volume and acceptance of payment according to the actual volume do not encourage maintenance units to take preventive and protective measures.

The viewpoint of the current road maintenance management is not waiting for the damages then to be maintained, but having to evaluate and predict the degradation process, have timely interventions to prevent damage and ensure the construction is well exploited right to the technical standards as it was newly built.

Therefore, to ensure the road is always in the best service state, it is necessary to change the form of maintenance contract from traditional contract to a new one based on performance quality.

2.3. Several solutions to successfully apply PBC in Hanoi

In order to ensure the successful application of performance-based road maintenance contracts in Hanoi, the author proposes several solutions to be implemented for the Hanoi Department of Transport as follows:

First, organizing of bidding to choose the road maintenance unit.

Bidding for road maintenance is one of the important solutions to increase competitiveness, create motivation for contractors and attract economic sectors and social organizations that are eligible to participate in road maintenance.

Units wishing to participate in road maintenance must pass the capacity bidding, Hanoi Department of Transport plays the role of ordering and organizing the bidding, while the units are service providers. The evaluation of tenders to select contractors is based on technical, capacity, experience and price proposals. Contractors meeting capacity, experience and new techniques are later considered for price.

Second, choosing the project to perform the contract

Although the PBCs have been piloted in Vietnam on the national highway system, the application in Hanoi is entirely new. Hence, it is important to ensure that a successful PBC is to choose the right project to deploy. So:

– Priority should be given to the implementation of PBC contracts on national highways, ring roads and urban highways managed by the Department of Transport since these routes have similarities with the roads that have implemented the PBCs in Vietnam.

Depending on the current technical condition of the route, the appropriate project will be decided. For new roads that are invested in construction or upgrading, pure PBCs will be implemented and for degraded roads, integrated PBCs (recovery and maintenance) will be applied. Therefore, before widely deploying PBCs, it is recommended to choose new routes with good exploitation quality to pilot pure PBC contracts, which are regular maintenance, periodic repair and assurance traffic safety.

– After applying PBC to the system of national highways, ring roads and urban highways, it is necessary to draw experience. On that basis, PBC will be applied to the remaining roads: urban roads, provincial roads and district roads.

Third, building a maintenance management list

The maintenance management list is the maintenance area needed to be included in the PBC, including the management and maintenance tasks related to the categories of the road. The key maintenance management list is the services provided by the contractor including all maintenance management activities or other tasks that the contractor needs to perform to achieve the right level of service, other outcome and quality standards are regulated in the contract.

Finally, building a set of criteria, targets for acceptance

In order to have a basis for payment to the contractor, Hanoi Department of Transport must form a set of criteria and targets for acceptance. Performance criteria and targets must be associated with specific types of works. Performance evaluation criteria must be simple, easy to measure and inexpensive when measuring and checking; convenient for evaluation and acceptance. Performance indicators must be specific, measurable, achievable, realistic and timely.

  1. Conclusion

The management of road maintenance plays such a vital role to ensure that the construction is well exploited right to the original design and ensure the traffic safety.

The effectiveness of road maintenance management is determined by the application of modern maintenance technologies, techniques, and management methods. In particular, the management method of road maintenance based on the quality of implementation has many advantages compared to the maintenance management method currently applied in Hanoi. The paper proposed a solution to successfully implement the performance-based road maintenance contract in Hanoi in the coming time.


  1. G. J. Zietlow (2009), Performance-based Management and Maintenance of Roads, University of Birmingham, England.
  2. G. J. Zietlow (2007), «Performance-Based Road Management and Maintenance Contracts-Worldwide Experiences», in International Seminar on Road Financing and Investment, Arusha, Tanzania.
  3. NCHRP Synthesis 389 (2009), Performance-Based Contracting for Maintenance, Washington D. C.
  4. P. Pakkala (2007), International Overview of Innovative Contracting Practices for Roads, Finnish Road Administration, February 19, 2007.
  5. Hanoi Department of Transport (2016). Report No. 219/BC-SGTVT dated 17/03/2016 on the management and maintenance of Hanoi transport infrastructure.
  6. Directorate for Roads of Vietnam (2009), Bidding records for road management and maintenance contracts based on results and quality of implementation of NPP/PBC1. Hanoi.
  7. Hanoi People's Committee (2016). Decision No. 7017/QD-UBND dated December 20, 2016 approving the post-investment list of transport infrastructures managed by the City Council.
  8. World Bank (2010), Performance Based Contracts in the Road Sector: Towards Improved Efficiency in the Management of Maintenance and Rehabilitation Brazil’s Experience.
Основные термины (генерируются автоматически): PBC, NCHRP, BC-SGTVT, NPP, QD-UBND.

Ключевые слова

road maintenance management, PBC contracts, performance, Hanoi road system, regular maintenance, criteria for evaluation

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