IndII Support to DGH on National Roads –

- Road sector achievements and future program

DGH, 9 July 2012

2

IndII Support under Phase 1 - summary

• MTEF, budgeting and sector performance: – Budgeting process, strategy linkage to long-term plan, KPI, action plan

• Road network development and planning (Bipran-AECOM): – NR Masterplan, road corridor plans for E Sumatra & N Java

– BPJT capacity, institutional options and toll road program

• Road program delivery (Bintek-Cardno):

– Extending design life, life-cycle costs, axle load limits, performance-based contracts, project management, routine maintenance delivery

• Road sector policy issues: – South Africa visit: SANRAL MTEF, road management, business model

• Sub-national roads:

– Pilot on road management surveys, programming and routine maintenance

• Road safety:

– Blackspot program prepared, design manual produced

3

Challenges for the road sector - MTEF

• Infrastructure is a critical constraint to growth – low competitiveness ranking for road infrastructure provision

• Poor connectivity – Main corridor times 60-100 percent longer than neighbours

• Low cost effectiveness of road asset management – while condition is fairly good, deterioration is rapid

– high annual costs, equivalent to new road every 5 years

– fragmented contracts; weak construction industry.

• Changed resource environment – 6-fold increase in funding in 6 years, 95+% budget execution

– Value for money?? - average cost up, but output flat

• Weak linkages to national development plan – lacks targets on connectivity, efficiency and effectiveness

4

Phase 1 – Road Program implementation

• Strong direction & interaction with Bintek and Balai

• Revision to Pavement Design Guide:

• Long-life designs (low maintenance)

• Catalog approach for greater reliability (based on detailed analysis and life-cycle costs)

• Strong foundation and drainage for long life

• Overloading incorporated in design

• Flexible, rigid, reconstructed and recycled pavements

• Larger package size improves cost and quality

• Balai want automated road surveys for better data

• Options for management of routine maintenance

• Economic justification for raising legal axle load limit

5

Phase 1 – Road Network Development

Connectivity: • low connectivity compared to regional neighbours, but no target

• how do we measure performance and set targets?

• need to measure, report and forecast travel times

• link RENSTRA workplan to connectivity target and national long-term plan

0.0 1.0 2.0 3.0 4.0 5.0 6.0

Trans-Sumatra

Trans-Java

Kalimantan

Sulawesi

Bali-NTT

Papua-Maluku

12

34

56

Trip time hr/100 km*

Normalized Trip Times on Economic Corridor Arterial Roads – 2011 Estimates

Road Trip Time Nautical Add-on

Target Service level

1-1.5 hr/100 km

* Corridor distance shorter

than Arterial road distance

Source: IndII estimates from bus schedules and DGH data, April 2012

0.00 1.00 2.00 3.00

Trip time (hr/100 km)

Vietnam

Indonesia

China

Thailand

Malaysia

High land transport costs – low

connectivity of economic centres

6

3,690

1,430

2,780

3,160

987

1,905

- 2,000 4,000 6,000 8,000 10,000

Sumatra

Java

Kalimantan

Sulawesi

NTT

Maluku-Papua

Road Length, km

Total Length

Improved

length

4.5 m width53%

6 m width33%

7 m width14%

Width standard of national arterial roads, after DGH road development program 2010-14

Road development program -

Incremental widening to

minimum width standard

• Budget IDR 7 trillion/yr

• Covers 47% of network in 5 yr

• Increments to 4.5, 6 or 7 m width

But comes at high cost:

• No distance saving, little speed

improvement

• Investment repeated in 5-10 yrs

• High cost = 30-40% of full

construction for 20-yr life

• Defers achieving modern asset

• Compounds land issues

DGH Masterplan for Road Infrastructure 2010-14

7

Jalan yang belum terbangun digambarkan dengan garis putus-putus

Samarinda

Balikpapan

Banjarmasin

Palangkaraya

Pontianak

Nunukan

Enttikong Putusibau

Aruk

Tayan

Malinau

Tj. Selor

Ng Badau

Expressway >= 7 m 6 m 4.5 – 6 m Not Connected Sea Port

Road standard

Strategic Options

(1) Widen existing road

(2) Realign & rebuild – “road renewal”;

(3) Highway on future expressway

location

(4) Expressway in new location

Corridor plan evaluates options when

generating project pipeline and

investment profile for Economic

Corridor:

staged over 5, 10,

15 & 20 year periods

Corridor planning approach for long-term development

8

Corridor plan (trans-Sumatra example): detailed multi-year program & standard

9

Corridor plan – strip map presentation: Trans-Sumatra - Corridor Plan for Staged Development of Capacity in Parallel Facilities over long-term 20-yr period

ARTERIAL NATIONAL ROAD WIDTH

Width m 14

10

7

6

5

101 102 103 104 105 106 107 108 109 110 111 112 113

B Aceh Medan Pekanba Palembg Lampung

Length km 644 694 754 443 0

Total distance 2536 1892 1198 443

EXPRESSWAYDual C'way

Renstra period color code

Baseline

2010-2014

2015-2019

2020-2024

2025-2029

101 102 103 104 105 106 107 108 109 110 111 112 113

B Aceh Medan Pekanba Palembg Lampung

Length km 460 564 610 380 0

Distance km 2014 1554 990 380

2029 2024 2019 2019

2014 2024

2019

2010 Road W

idth

Lampung Medan B Aceh Pekanbaru

10

0

10

20

30

40

50

60

70

2010 2015 2020 2025 2030

TRA

VEL

TIM

E (h

r)

Connectivity: Travel Time from South to

North

B Aceh

Medan

Pekanb

Palem

Boukh

1,8 3 3 3 3 1,7 3,6 0 2,6

47,9

58,6

20,2

7

1,5

0

0

10

20

30

40

50

60

70

80

R1 R2 R3 R4 5-Y

ear

Sp

en

din

g e

stim

ate

(ID

R T

)

RENSTRA PERIOD

Financing Plan

Rd Presv Rd Widening Exwy GOI Exwy PrivSec

Corridor Plan Output - Trans-Sumatra Example: Linkage of Development Outcomes and Financing Plan

– Long-term 20-yr Period

11

Forecast of Forward Funding Requirements (demonstration only, from study data)

• Public funding of IDR 42-56 trillion/yr required 2015-29

• Only IDR 4 trillion/yr (16%) attractive to private sector

• Road development requires IDR 19 trillion/yr – in renewal

• Road preservation 20-30% less due to stronger roads

0

10

20

30

40

50

60

70

2005-09 2010-14 2015-19 2020-24 2025-29

An

nu

al F

un

din

g R

equ

irem

ent,

ID

R t

rilli

on

(2

01

1 p

rice

s)

Forecast Funding Requirements

Expressway - private funding

Expressway - public funding

Arterial road development

Road preservation

Road management

12

Priorities for Phase 2 support

Based on DGH priorities and Phase 1 findings, key areas include:

• Preparation of long-term national road master-plan:

– Connectivity in main economic corridors

– Expressway development, project pipeline and financing

– Modernisation of arterial road network

• Better road performance and lower annual costs

– extend life of road assets – expected and actual

• Better budget allocation and accountability

– Improved asset management and systems

• Strategic priorities for RENSTRA and funding requirement

• Staff performance, capability and accountability

13

Proposed activities for Phase 2 National roads

Policy

Planning

Program delivery

14

1. Advisory support on road sector policy - DG, Directors

Aims

• Improving sector and institutional performance

• Effective legal, regulatory & financing provisions

• Effectiveness of IndII support to DGH & road sector

Sub-activities:

• Dialog with GOI – MPW, MOF, Bappenas, CMEA, MoT

• Revisions to Road Law

• Expressway financing and issues

• Institutional structure and organizational performance

• Management and financing

• Sub-national road role, road preservation fund

• IndII road program effectiveness

15

2. Support on Planning Road Development - Bipran, BPJT

Aims:

• Plan road development to meet connectivity goals

• Strategy for modernising arterial road network

• Improve delivery & financing of expressway network

Main outputs:

• Long-term development strategy for road infrastructure

• 20-yr pipeline of investment projects in economic corridors

• Expressway masterplan and PPP-VGF demonstration

• Road renewal policy to modernise arterial road network

Performance measures:

• Connectivity (travel time) in main corridors

• Accessibility in eastern region (km/km2)

16

• Procedures for planning development of road network – Advisory support in Bipran: long-term planning of connectivity &

capacity in corridors, road renewal policy, medium-term pipeline, KPI for network, staff competencies and training

• Planning & capacity for developing expressway network – Update expressway master-plan, include staging

– BPJT advisory support, VGF financing mechanisms, capacity-building, review of packages, institutional options

• Preparation of corridor plans for Java and Sumatra – Refine corridor plans & extend to arterial corridors, prepare 2015-19

project pipeline, guidance on expressway packages

• Preparation of corridor plans & pipeline for east region – Survey, analyse and prepare plans for 4 main corridors in Kal, Sul,

Bali-NTT, M-Papua; 2015-19 pipeline; review needs for other NAR

• Preparation of medium- and long-term plans – Assist preparation of 2015-19 RENSTRA and 2015-24 long-term plan

2. Support on Planning Road Development: Sub-activities

17

3. Improving performance of national road program implementation (Bintek, balai)

Aims:

• To extend asset life through improved design

• To build capacity for asset management in balai implementation offices

• To improve delivery and quality of construction and maintenance

Performance measures:

• Expected life and actual life of major works

• Contract package length

• Average preservation costs/km/yr

• Road and bridge condition

• Percentage of arterial road renewed

18

3. Improving the performance of national road program implementation (cont)

• Implementation of new design code – Longer life, better foundation & drainage, concrete

• Application of road renewal policy – Programming, design & implementation of road renewal along

arterial corridors coordinated with long-term network plan

• Development of improved asset management tools – Automated surveys, practical life-cycle programming tool with

strip-map report to replace IRMS, performance indicator reports

• Improved project management, skills & performance – Satker and PPK strengthened in contract packaging, procurement

and supervision

– Further use of performance-based and maintenance contracts

• Piloting of asset management & project management – 2 balai in 2013, then progressively to other balai 2014-15.

19

3. Improving the performance of national road program implementation (cont)

• Improved public participation – Use of program reports in local consultation, public disclosure of

program and project information (perhaps through CoST)

• Improved performance and incentives for contractors – Support for action plan of Bp Konstruksi to improve certification

and performance evaluation, strengthen LPJK and accountability

20

Interim activities – July-December 2012

• Bintek support: – Training of balai on new pavement design manual, calibration of

structural tests, preparation of drainage design manual, baseline survey of KPI

• DG, Bipran support: – Preparing & convening national symposium on road network

development and financing, with GOI & international participants

• Bipran support: – Baseline surveys of connectivity in main trunk routes; review

status of new toll road packages; preparation for main activity

• Detailed preparation and procurement of IndII DGH activities

21

IndII-2 in DGH: Key concepts to note

• Expressway as class of public road, not toll road

• New public financing model (VGF) in PPP – Availability- or performance-based, quarterly payment, toll optional

• Long-term corridor plan selects road standard and timing of renewal

• Road renewal policy – Defers betterment until full realignment & construction planned

– Gains long life, safe, modern highway

• Asset management and programming function for preservation transferred to balai, with graphical tool

• Costs reduced by extending expected and actual life

• Independence between supervision and contractor

• Monitor outcomes – KPI on travel time, age, costs

22

Timeline for Phase 2 on national roads

Month Activity

Jan-12 DGH workshop on future direction, Ongoing IndII-DGH discussions

Apr-12 IndII consultation on strategy with AusAID

Jul-12 - Activity proposals drafted

- Activities discussed with DGH

- Policy adviser (John Lee) arrives

Aug-12 - Activity designs finalised, procurement starts;

- Interim activities start

Oct-12 Symposium on road development planning and financing

Jan-13 Expected start of main Planning and Implementation activities

Jan-14 Mid-term review

Dec-14 Main activities end

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Conclusion

• The activities are designed to support DGH in delivering its program

• Core support will be provided through individual advisers working as partner to Directorate staff in DGH offices

• Consultant teams will be coordinated by the advisers and work closely with DGH staff in central and balai offices

• The teams will be most effective if working space can be made available in DGH offices

• Your input to the activity design is important – especially in the next two months Jul-Aug

Terima kasih

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4. Sub-national roads: Incentivising road management

Objectives Implementation and Outcomes

Strengthening central

and provincial

agencies on asset

management for sub-

national roads (SNR)

Improving participation

by private sector and

the public – to improve

communication and

agency performance

Implementation of pilot

output-based road

maintenance and

rehabilitation program

Effective delivery of

IndII support for sub-

national roads

Component 1: Preparation of Grant Design and Interim

Support for Critical Elements to expedite program,

(implemented second half of 2012)

Component 2: Consultants for project management and

implementation of grant program over 5 years, 2014-2018;

Creation of SNR project management unit in DGH

Establishment of transport forums

TA and training in planning and implementation of

maintenance & rehabilitation, and PBC

Incentives for increased budget allocation, for

contracting out works and performance-based contracts

Staged pilot, starting with one province (NTT) increasing

to up to other jurisdictions, based on demonstrated

capability and commitment.

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5. Improving Road Safety Blackspots and Program Management

Objectives Implementation and Outcomes

Building capability of

central and regional

offices for managing

blackspot improvement

programs

Implementation of

blackspot

improvements to meet

RENSTRA targets

Developing and

monitoring road safety

programs in national

police and sub-national

road agencies

Effective delivery of

IndII support for road

safety•

Component 1: Interim support: international road safety

specialist supporting RSEU 3 p-months to Jul-12;

Component 2. Implementation support by Consultant firm for

24 months to Jun-14 (2-stage);

Component 3. Program management support by International

specialist (50% of 30 months).

Strategic Plan for Road Safety in DGH

RSEU, DGH balai and local police trained in managing

road safety programs,

Support to achieve 150 blackspot improvements to

achieve RENSTRA objectives

Three fact-finding missions provide overseas training and

experience to 60 officials

Performance and results publicised and build GOI donor

& public support for road safety programs

Further road safety programs ready in DGH, INTP and

sub-national DGLT agencies.