Title: INSTITUTIONAL IMPROVEMENT IN ROAD AGENCIES IN THE BALKANS:
1- INSTITUTIONAL IMPROVEMENT IN ROAD AGENCIES IN
THE BALKANS - THE ROLE OF PROJECT MANAGEMENT
2PRESENTATION 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
3Introduction...
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
4The 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
5The 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
6The Road Agency Challenge...
LOCALLY, IN THE BALKANS, ROAD AGENCIES ARE
CONFRONTING A NUMBER OF INSTITUTIONAL
CHALLENGES...
7The 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
8The 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
9The Modernization Response...
THE CHANGES IN ROAD AGENCIES ARE BEING DRIVEN BY
BOTH EXTERNAL AND INTERNAL NEEDS...
10The 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
11The 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
12The 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
13The 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
14The 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
15The 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
16The 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
17The 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
18The 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
19The 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
20The 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
21The 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
22The 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
23Modernization 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
24RIPs 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
25RIPs 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
26RIPs Regional Project Management Approach...
ROAD AGENCIES GAIN MANY BENEFITS FROM
IMPROVEMENTS IN THEIR PROJECT MANAGEMENT SYSTEM...
Improvements inProject Management
Benefits to Road Agencies
27RIPs Regional Project Management Approach...
RIP GROUNDS ITS ROAD SECTOR PROJECT MANAGEMENT
IMPROVEMENT ACTIVITES IN THE INFRASTRUCTURE
PROJECT MANAGEMENT CYCLE
1. Strategic and Program Considerations
28RIPs 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
29RIPs Regional Project Management Approach...
RIP BASES ITS WORK ON THE PROJECT MANAGEMENT
INSTITUTES BODY OF KNOWLEDGE (PMBOK)
30RIPs 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
31THE BOOZALLEN PROCESS APPROACH TO IMPROVEMENT OF
HIGHWAY MANAGEMENT CAPACITY IS GROUNDED IN FIVE
PRINCIPLES...
RIPs Regional Project Management Approach...
- Improve management capacity based on the previous
local experiences - Plan for the future based on current strengths
and opportunities - Work as an integrated foreign and local team
- Use and adapt modern concepts and appropriate
technologies - Create and sustain a learning, team-based work
environment
AND THESE PRINCIPLES HAVE PROVEN TO BE
EFFECTIVE ALL AROUND THE WORLD
32RIPs 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
33Initial Applications Results...
RIPS APPROACH COMBINES REGION-WIDE
TRAINING-THE-TRAINER (TTT) CAPACITY BUILDING
WITH COUNTRY-SPECIFIC RESULTS-ORIENTED
TRAINING...
RIPsTraining Phases
34Initial Applications Results...
IN 2001 RIP IS IMPLEMENTING SEVERAL INSTITUTIONAL
IMPROVEMENT PROJECTS IN THE ROAD SECTOR -- EACH
WITH TARGETED RESULTS...
35THE 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
36Opportunities 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
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