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INSTITUTIONAL IMPROVEMENT IN ROAD AGENCIES IN THE BALKANS:

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Title: INSTITUTIONAL IMPROVEMENT IN ROAD AGENCIES IN THE BALKANS:


1
  • INSTITUTIONAL IMPROVEMENT IN ROAD AGENCIES IN
    THE BALKANS
  • THE ROLE OF PROJECT MANAGEMENT

2
PRESENTATION C O N T E N T S
  • INTRODUCTION
  • THE ROAD AGENCY CHALLENGE
  • THE MODERNIZATION RESPONSE
  • MODERNIZATION STATUS IN THE BALKANS
  • RIPS REGIONAL PROJECT MANAGEMENT APPROACH
  • INITIAL APPLICATIONS AND RESULTS
  • LESSONS ON WHAT WORKS
  • OPPORTUNITIES FOR THE COMING YEAR
  • REFERENCES

3
Introduction...
ROAD AGENCY EXECUTIVES IN SOUTH EAST EUROPE MUST
DEAL WITH A NUMBER OF CRITICAL INSTITUTIONAL
INSOMNIA ISSUES
  • What changes in road agency structure
    operations are required for accession to the EU,
    and modernization?
  • How are road agencies modernizing -- in general,
    and in the Balkans?
  • Why are road agencies giving priority to
    improving their project management systems
    (including project identification, tendering,
    supervision, control, etc)?
  • What is the Balkans Regional Infrastructure
    Program (RIP) approach to project management
    improvement in the road sector?

AND THIS PRESENTATION REVIEWS RIPS LESSONS AND
OPPORTUNITIES FOR TACKLING THESE ISSUES
4
The Road Agency Challenge...
GLOBAL AND REGIONAL PRESSURES ARE PLACING NEW
DEMANDS ON NATIONS AND ROAD AGENCIES AROUND THE
WORLD...
  • Global and Regional Pressures
  • Global Institution Regulations
  • Efficiency Performance Requirements
  • Information Technology Applications

New Demands on Road Agencies
National Context
Laws Regulations
Feedback
Political Decisions
Investment Standards Requirements
5
The Road Agency Challenge...
ROAD AGENCY EXECUTIVES AND ENGINEERS WORLDWIDE
MUST DEAL WITH SEVERAL KEY LOCAL EFFECTS OF
COMPLEX GLOBAL CHANGES...
  • Redefined role of road agency as road regulator
    (not provider)
  • Additional road network transport performance
    requirements
  • Budget tightening along with new procedures for
    accountability
  • Pressures for further personnel reductions, and
    concerns for survival
  • Rising stakeholder expectations and active
    involvement
  • Increasing priority on environmental, safety and
    social issues

...AND INSTITUTIONAL IMPROVEMENTS ARE REQUIRED TO
DEAL WITH THESE EFFECTS
6
The Road Agency Challenge...
LOCALLY, IN THE BALKANS, ROAD AGENCIES ARE
CONFRONTING A NUMBER OF INSTITUTIONAL
CHALLENGES...
7
The Modernization Response
IN RESPONSE TO THIS CHALLENGE, RIP BEGINS WITH A
BEST PRACTICE MODEL OF A HIGH PERFORMANCE ROAD
AGENCY
RESOURCE MANAGEMENT TO ACHIEVE PERFORMANCE
REQUIREMENTS
RESOURCE MOBILIZATION AND ALLOCATION
MODERN, HIGH PERFORMANCE ROAD AGENCY
8
The Modernization Response
ROAD AGENCIES GLOBALLY ARE TRANSITIONING THROUGH
SEVERAL COMMON STAGES IN THEIR QUEST FOR
MODERNIZATION AND HIGH PERFORMANCE IN EACH OF
THESE THREE PROCESS CATEGORIES
9
The Modernization Response...
THE CHANGES IN ROAD AGENCIES ARE BEING DRIVEN BY
BOTH EXTERNAL AND INTERNAL NEEDS...
10
The Modernization Response...
SOME COUNTRY ROAD AGENCY CASES CAN BE REVIEWED
FOR THEIR MODERNIZATION PROGRESS...
  • Case Illustrations
  • Virginia, USA
  • Romania
  • Croatia
  • Bulgaria
  • Macedonia
  • Albania
  • Stage of Modernization
  • Modern
  • Mixed
  • Mixed
  • Traditional to Mixed
  • Traditional to Mixed
  • Traditional to Mixed

11
The Modernization ResponseUSA...
STARTING IN 1994, THE VIRGINIA DEPARTMENT OF
TRANSPORTATION HAS EMBARKED ON MEANINGFUL
INITIATIVES TO MODERNIZE...
  • The 56,101-mile state-maintained road system with
    2.6 billion annual budget of which 48 goes to
    construction and 38 to maintenance.
  • Financial Sources gasoline taxes, vehicle title
    fees, license tag fees, and general sales tax.
  • In 1995, a business process redesign (BPR) effort
    began that resulted in a clearly articulated
    strategy for the 21st century.
  • - Provide Highest Service Level
  • - Focus on Customer
  • - Define Success by Outcomes
  • - Share Statewide Ownership
  • - Keep Decision Making Close to Customer
  • The Public Private Transportation Act (PPTA) was
    enacted to offer major incentives for private
    sector participation.
  • - Creative Approach to Involve the Private
    Sector
  • - Design, Build, Maintain and Operate
    Facilities
  • - Solicited and Unsolicited Proposals
  • - Staged Review and Approval

12
The Modernization Response...
VIRGINIA IS OPERATING AS A HIGH PERFORMANCE ROAD
AGENCY IN MOST AREAS...
TRANSITION CATEGORIES
TRADITIONAL (Public Oriented)
MODERN (High Performing)
MIXED (Transitional)
  • Well defined vision and strategy in place with
    focus on customer and providing highest service
    level
  • Highly decentralized. Planning, design and
    construction outsourced to contractors. Large
    maintenance workforce with initiatives in
    contracting.
  • Streamlined regulations for transport. Changing
    regulatory environment for forward looking
    initiatives

Strategic Management in the Regulatory
Context Resource Mobilization and
Allocation Resource Management to Achieve
Performance Requirements
  • Planning done at the network level with a clear
    strategy
  • Mainly Federal and state funding. A few
    experiments underway with public/private
    partnerships
  • Resource allocations are clear and timely
  • Success defined by outcomes
  • Automated offices. E-mail. Integrated database
    systems. Increased contracting of systems
    design, development, and OM. Robust IT leading
    to ITS/GIS

13
The Modernization Response Romania...
IN ROMANIA THE NATIONAL ADMINISTRATION OF ROADS
IS TRANSITIONING TOWARD A MORE MODERN AGENCY
  • Romanias National Administration of Roads (NAR)
    is a state-owned, but autonomous entity funded
    by the state budget and other revenue sources
  • In 1994, NAR went through an institutional
    restructuring and commercialization process
  • In 1990 NARs staff reached 9,000, and today it
    has a staff of only 350
  • Balance of staff divested and restructured as
    privatized companies that compete openly for
    contracts, creating a growing construction and
    maintenance industry
  • Today NAR is the planner, contracting agency and
    use manager for the national roads with a clear
    strategy that stresses asset preservation and
    increased performance to meet the challenges of
    EU accession
  • Several issues that need to be resolved to
    successfully implement the EU accession strategy
  • Regulatory environment needs to be adapted to
    current road sector needs
  • NARS project management and project preparation
    capacity needs to be improved
  • Insufficient experience with team structure and
    team work

AND THE NAR IS PURSUING VARIOUS INSTITUTIONAL
IMPROVEMENT ACTIVITIES, INCLUDING COOPERATION
WITH RIP
14
The Modernization Response...
THE ROMANIA ROADS SECTOR REPRESENTS A MIXTURE OF
PROCESSES...
TRANSITION CATEGORIES
TRADITIONAL (Public Oriented)
MODERN (High Performing)
MIXED (Transitional)
Strategic Management in the Regulatory
Context Resource Mobilization and
Allocation Resource Management to Achieve
Performance Requirements
  • Well defined strategy with focus on providing
    highest service level, but not clear on the way
    to obtain the necessary funds
  • Decentralized small and autonomous structure.
    Planning, design and construction outsourced to
    contractors.
  • Regulatory context still needs to be adapted to
    current sector needs
  • Institutional Infrastructure to support strategic
    decision making on network management is in
    place but not fully operational
  • Multiple sources of funding, such as user
    charges, Road Fund, external loans and the state
    budget
  • Project management system needs strenghtening
  • NARs Center for Road Studies and IT provides
    support for computerization of NARs activities.
    PMS and other stand-alone systems in the process
    of being implemented
  • First stage of program to monitor road
    maintenance only covers the national road
    network. Second stage will cover regional roads

15
The Modernization ResponseCroatia...
IN CROATIA, THE ROAD INFRASTRUCTURE
ADMINISTRATION HAS BEEN RESTRUCTURED AND IS IN
TRANSITION
  • Transport demand for roads, has grown modestly
    (largely from Tourism) since the end of internal
    hostilities in 1995
  • Croatias road conditions are fair to poor due to
    deferred maintenance
  • Croatias infrastructure responsibilities were
    recently split into two separate state-owned
    entities
  • Croatian Road Authoritiy (HC)
  • Croatian Motorway Authority (HAC)
  • The road construction industry is capable with
    some contractors able to compete on
    international level

AND THE ROAD AGENCIES ARE ACTIVELY PURSUING
ADDITIONAL OPPORTUNITIES FOR PUBLIC PRIVATE
PARTNERSHIPS
16
The Modernization Response...
THE CROATIA ROAD SECTOR IS REPRESENTED BY MIXED
FEATURES, AND IS BECOMING MORE MODERN...
TRANSITION CATEGORIES
TRADITIONAL (Public Oriented)
MODERN (High Performing)
MIXED (Transitional)
Strategic Management in the Regulatory
Context Resource Mobilization and
Allocation Resource Management to Achieve
Performance Requirements
  • A body of law generally suitable to govern the
    transport sector in a market economy has been
    created
  • Recent reorganization diluted the responsibility
    for planning and administration of road system
  • Institutions policies are being reviewed
    upgraded
  • Road investment strategy not firmly grounded on
    economic environmental criteria and does not
    include rehabilitation of assets
  • Sources of funding include government, IFIs,
    private investors users
  • Resource allocations subject to political
    influence
  • Road staff involved in project design lack
    knowledge experience in economic, financial,
    social environmental analysis
  • Project implementation procurement capacity for
    the road sector needs improvement
  • Pavement, bridge maintenance management
    systems not fully operational

17
The Modernization ResponseBulgaria
IN BULGARIA, RECENT STRUCTURAL REFORMS HAVE PUT
THE ROAD SECTOR ON THE RIGHT TRACK TO BECOME A
MODERN HIGHWAY ORGANIZATION
  • In 2000, the Government of Bulgaria embarked upon
    a major restructuring of the road sector,
    effectively separating its policy and regulatory
    functions from implementation
  • The Directorate General Road Administration,
    responsible for road policy and regulatory
    matters, was established
  • The General Road Directorate (GRD) was
    reorganized into a smaller implementing agency,
    the Roads Executive Agency (REA), downsizing
    from 6,000 to 3,000 staff
  • REA is responsible for planning, procurement and
    monitoring of the design, construction and
    maintenance in the national road network.
  • Maintenance functions are outsourced to 66
    individual state-owned maintenance enterprises
    with the intent of future privatization
  • The new structure of the road sector is also
    posing new challenges
  • REA staff are not trained to carry out core
    services in the new setting (procurement,
    implementation and monitoring of IFI and EU
    financed projects contracts)
  • New players (maintenance enterprises) have
    limited capacity to carry out new roles and
    responsibilities

HOWEVER, THE TRANSITION WILL REQUIRE FURTHER
STRENGTHENING OF THE PLAYERS IN THE NEW STRUCTURE
18
The Modernization Response...
THE BULGARIA ROADS SECTORS REPRESENTS SOME
TRADITIONAL ALONG WITH A MAJORITY OF MIXED
PROCESSES..
TRANSITION CATEGORIES
TRADITIONAL (Public Oriented)
MODERN (High Performing)
MIXED (Transitional)
Strategic Management in the Regulatory
Context Resource Mobilization and
Allocation Resource Management to Achieve
Performance Requirements
  • Clear strategy for the sector, aimed EU accession
    and compliance with EU standards
  • Policy and regulatory functions separate from
    implementation, but still in transition
  • Downsized structure with focus on contract
    management focus, but previous practices still
    persist
  • Design and construction outsourced, but
    contractor market not sufficiently developed
  • Planning increasingly following an integrated
    strategy, but external influences still play a
    major role
  • Multiple sources of funding, state budget, Road
    Fund and external loans
  • Assignment of maintenance work to OM units is
    still based on quotas
  • Program planning in place but individual projects
    still uncoordinated and driven by technical
    considerations
  • In practice, transition from force account to OM
    contractors has not been realized as units plan
    activities on an ad-hoc basis and are not
    accountable for performance

19
The Modernization ResponseMacedonia...
IN MACEDONIA, DESPITE CURRENT DIFFICULTIES, THE
ROADS AGENCY IS TRANSITIONING TOWARD HIGHER
PERFORMANCE...
  • The country has a network of roads totalling over
    9400 kilometres of which half are maintained
    and paved highways links to neighbouring
    countries need renovation
  • Macedonia handles the road sector by a Fund for
    National Regional Roads
  • The Fund is in charge of the construction
    maintenance of all roads
  • A state-owned company (Makedonia Pat) deals
    with maintenance
  • The countrys strategic location as the Balkans
    crossroads has attractedsubstantial
    institutional finance for the motorway network
  • Institutional weaknesses in the road sector
    (including over-regulation, limited training
    low salaries) have led to inefficient core
    serviceses and inadequate maintenance

AND SEVERAL IFIS ARE WORKING WITH MACEDONIA TO
MAKE INSTITUTIONAL IMPROVEMENTS
20
The Modernization Response...
MACEDONIA IS TRANSITIONING FROM A TRADITIONAL TO
A MIXED MODEL...
  • Vision policies of Road Fund established with
    transition to clarification of performance
    requirements
  • Policy regulatory functions separate from
    service delivery, but procedures and support
    systems in transition
  • Along with Romania Bulgaria, Macedonia has
    negotiated agreements with EU to liberalize
    transport agreements
  • Informal network planning system in use but
    insufficient attention given to economic
    environmental factors
  • Road development maintenance is featured mainly
    from a petroleum products tax users fees
  • Resource allocations strongly influenced by
    political technical considerations
  • Road Fund staff involved in project design lack
    knowledge on international standards market
    oriented practices
  • Lack of familiarity with EU IFI procurement,
    supervision reporting procedures
  • Priority given to new construction leading to
    maintenance backlogs

21
The Modernization ResponseAlbania
IN ALBANIA, THE GENERAL ROADS DIRECTORATE (GRD)
IS TRADITIONAL AND CENTRALLY CONTROLLED...
  • Albania is opening to the Western world rapidly
    -- with substanial IFI and other investment
    resources in transportation
  • In 1996 GRD was restructured, but the sector
    remains highly centralized
  • Functions were divested and personnel
    significantly downsized
  • Project Implementation Units were established to
    manage externally financed projects
  • Planning is centrally done and regions only carry
    out maintenance work
  • Although design, supervision, construction and
    some maintenance functions are divested and
    privatized, capacities still need to be
    developed in several key areas
  • Staff are strong in traditional engineering
    disciplines but needs training in
    non-engineering competencies,
  • Routine maintenance is still carried out by force
    account and quality suffers due to lack of
    equipment and proper supervision

BUT THE INCREASING DETERIORATION OF THE ROAD
NETWORK IS CREATING AN ENORMOUS PRESSURE TO
ACCELERATE ITS MODERNIZATION
22
The Modernization Response
IN ALBANIA, THE GRD NEEDS TO FOCUS ON FURTHER
INSTITUTIONAL IMPROVEMENTS IF IT IS TO SEIZE THE
CURRENT OPPORTUNITY PROVIDED BY EXTERNAL
FINANCING
TRANSITION CATEGORIES
TRADITIONAL (Public Oriented)
MODERN (High Performing)
MIXED (Transitional)
Strategic Management in the Regulatory
Context Resource Mobilization and
Allocation Resource Management to Achieve
Performance Requirements
  • Unclear strategy with mixture of old and new
    policies and regulations
  • Downsized structure with limited degree of
    autonomy for regions (only maintenance
    functions) with minimal staff resources
  • Increasing outsourcing of design and
    construction, to divested state-owned companies
    in the process of privatization. Some
    joint-venturing with foreign firms, but market
    needs to be further developed. Maintenance still
    done in-house
  • Initiatives to develop an integratednetwork
    strategy, but still significantly influenced by
    politics and external financing entities
  • Funding mainly from state budget and external
    loans
  • No clear accountability for performance and
    results
  • Individual projects uncoordinated and driven by
    technical considerations
  • Quality of work is not uniform and efficiency is
    low due to lack of equipment and proper
    supervision
  • Staff competent in traditional engineering
    disciplines, but require training in modern
    systems of management, operations, economics and
    environment

23
Modernization Status in the Balkans...
RIPS ANALYSIS INDICATES THAT BALKANS ROAD
AGENCIES ARE IN THE PROCESS OF TRANSITIONING
TOWARDS MODERNITY...
  • Change is imperative as a result of
  • increasing level of globalization
  • rising public expectations
  • dwindling governmental resources
  • standards associated with EU accession
  • Change occurs through transitional stages -- at
    differing rates
  • Institutional improvement of core agency
    processes can speed up the rate of transition
    leading to higher performance
  • Transportation organization managers and
    engineers need to
  • sense and map out where improvements are needed
  • lead and manage the change efforts

AND RIP USES A MODEL OF CORE PROCESSES TO
IDENTIFY AND SEQUENCE ITS IMPROVEMENT ASSISTANCE
24
RIPs Regional Project Management Approach...
AND OUR ANALYSIS SUGGESTS THAT IMPROVEMENTS IN
THESE SYSTEMS ARE BOTH RELATIVELY EASY TO MAKE
WOULD YIELD SUBSTANTIAL BENEFITS TO ROAD AGENCIES
IN THE BALKANS
25
RIPs Regional Project Management Approach...
THE USAID-SPONSORED RIP INITIATIVE UNDER THE
STABILITY PACT IS INITIALLY FOCUSING ON THE AREA
WHERE USA CONTRACTOR EXPERIENCE AND EXPERTISE CAN
BRING THE HIGHEST VALUE...
Road Agency Process Category
Needed Road Agency Institutional Improvements
  • Strategic Management in the Regulatory Context
  • Resource Mobilization Allocation
  • Resource Management to Achieve Performance
    Requirements
  • Strengthened Executive Management System
  • Strengthened Network Planning Systems
  • Strengthened Project Management Systems

?
THAT IS IMPROVEMENTS IN PROJECT MANAGEMENT FOR
THE ROAD SECTOR
26
RIPs Regional Project Management Approach...
ROAD AGENCIES GAIN MANY BENEFITS FROM
IMPROVEMENTS IN THEIR PROJECT MANAGEMENT SYSTEM...
Improvements inProject Management
Benefits to Road Agencies
27
RIPs Regional Project Management Approach...
RIP GROUNDS ITS ROAD SECTOR PROJECT MANAGEMENT
IMPROVEMENT ACTIVITES IN THE INFRASTRUCTURE
PROJECT MANAGEMENT CYCLE
1. Strategic and Program Considerations
28
RIPs Regional Project Management Approach...
RIPS ORIENTATION IS THAT PROJECT MANAGEMENT IS A
PROFESSION APPROPRIATE FOR MANY ROAD SECTOR
PROFESSIONALS...
  • Project management is the profession of
    mobilizing and applying resources (financial,
    human, information, etc.) to accomplish valued
    project objectives under conditions of risk and
    partial control.
  • Project management is required in both phases of
    the project cycle -- project design and
    project implementation.
  • Project management involves both a
    well-articulated body-of-knowledge and a
    practical tool kit for road sector
    professionals

29
RIPs Regional Project Management Approach...
RIP BASES ITS WORK ON THE PROJECT MANAGEMENT
INSTITUTES BODY OF KNOWLEDGE (PMBOK)
30
RIPs Regional Project Management Approach...
RIPS CORE INSTITUTIONAL AND TRAINING CURRICULUM
IS ORGANIZED AROUND THE INFRASTRUCTURE PROJECT
CYCLE...
AND INCORPORATES PRACTICAL HOW TO KNOWLEDGE
HANDS-ON TOOLS
31
THE BOOZALLEN PROCESS APPROACH TO IMPROVEMENT OF
HIGHWAY MANAGEMENT CAPACITY IS GROUNDED IN FIVE
PRINCIPLES...
RIPs Regional Project Management Approach...
  1. Improve management capacity based on the previous
    local experiences
  2. Plan for the future based on current strengths
    and opportunities
  3. Work as an integrated foreign and local team
  4. Use and adapt modern concepts and appropriate
    technologies
  5. Create and sustain a learning, team-based work
    environment

AND THESE PRINCIPLES HAVE PROVEN TO BE
EFFECTIVE ALL AROUND THE WORLD
32
RIPs Regional Project Management Approach...
RIP FOLLOWS A NUMBER OF BEST PRACTICES IN
STRUCTURING ITS INSTITUTIONAL IMPROVEMENT
ACTIVITIES...
  • Important objectives, with realistic time
    parameters, must be developed and believed in by
    top management... and theseobjectives need to be
    communicated and supported
  • Key internal and external stakeholders need to
    perceive a sense of urgency around the
    improvement...in terms of crises or major
    opportunities
  • A powerful guiding coalition is required
    (champions) to steward the improvements
  • both from inside the organisation
  • and from outside the organisation
  • Short-term wins (results) need to be planned and
    created so, it is necessary to attack the
    problem from many angles, i.e. financing,
    restructuring, information technology,
    contracting etc Options selected should be
    achievable and oriented toward measurable results
  • Results need reinforcing and consolidating, by
    producing more improvements over longer periods
    of time

33
Initial Applications Results...
RIPS APPROACH COMBINES REGION-WIDE
TRAINING-THE-TRAINER (TTT) CAPACITY BUILDING
WITH COUNTRY-SPECIFIC RESULTS-ORIENTED
TRAINING...
RIPsTraining Phases
34
Initial Applications Results...
IN 2001 RIP IS IMPLEMENTING SEVERAL INSTITUTIONAL
IMPROVEMENT PROJECTS IN THE ROAD SECTOR -- EACH
WITH TARGETED RESULTS...
35
THE LESSONS RIP HAS LEARNED IN IMPLEMENTING OUR
REGION-WIDE INSTITUTIONAL IMPROVEMENT ACTIVITIES
DURING 2001 INCLUDE...
Lessons on What Works...
  • The value of continuously clarifying
    client/beneficiary expectations for our Projects
  • The importance of a geographical presence for
    adapting to local conditions
  • The value of RIPs ability to offer and deploy
    assistance quickly and with a minimum of
    bureaucratic hurdles
  • The importance of careful assessment prior to
    implementation, including involvement from key
    client and beneficiary representatives
  • The importance of working through local trainers
    institutions in order to have the right mix
    of technical and institutional experience
  • In a program like this with many dispersed
    operations, a special effort is required to
    capture, share and regularly update RIPs
    intellectual capital through our Best Practices
    website

AND THESE LESSONS WILL GUIDE RIPS INSTITUTIONAL
IMPROVEMENT TRAINING WORK IN 2002
36
Opportunities for the Coming Year...
RIP INTENDS TO CONTINUE AND EXPAND ITS ROAD
AGENCY PROJECT MANAGEMENT IMPROVEMENT FOCUS IN
2002 AND BEYOND...
  • The Regional Training-The-Trainer Activity will
    focus on developing viable local and regional
    institutions with Project Management Training
    Capacity
  • The country-specific institutional improvement
    efforts will target road agency
  • Executive Management Systems (like the
    Infrastructure Monitoring Unit Effort in
    Albania) and
  • Network Planning Systems (like skills development
    in HDM4)
  • More intensive Project Management systems
    improvement (with a focus on Procurement
    Contract Management Systems)
  • RIP will support local and regional Project
    Management Associations (like the Regional union
    of Project Management Associations in Central
    Southeast Europe (SENET) Conference in Dubrovnik
    in April 2002 and the new Romanian Project
    Management Institute (PMI) Chapter)

AND WE LOOK FORWARD TO COOPERATING WITH ROAD
AGENCIES IN THE BALKANS IN CARRYING OUT OUR
INSTITUTIONAL IMPROVEMENT TRAINING ACTIVITIES
37
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38
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