Build maintenance provision into procurement

Build maintenance provision into procurement

How can we secure better long term value for money by employing new procurement models?

Think of maintenance as an investment in asset preservation.

Why maintenance matters

  • One-third of Africa’s infrastructure assets need rehabilitation,
  • indicating that historic neglect of maintenance is endemic [1]
  • Timely expenditure of $12 billion on road maintenance in Africa would have saved $45 billion in reconstruction [3]
  • The extra costs of poor maintenance in Africa amount to about $1.2 billion annually [3]
  • The return on investment from road maintenance is estimated to be almost twice as high as that from new construction [3]


  1. Foster, V , World Bank (2008) Overhauling the engine of growth: Infrastructure in Africa
  2. ICA (2008) Infrastructure Public-Private Partnerships in Africa
  3. Eng. M. R. Meghji The Cost of Corruption for Infrastructure Development in Africa
  4. HM Treasury, UK (2008) Infrastructure procurement: delivering long-term value
  5. OGC, UK (2007) Procurement and Contract Strategies

Currently, the overwhelming majority of investment in African infrastructure is delivered through traditional procurement techniques using public capital (see Figure 1 and ‘Conventional Procurement’ below).

Conventional procurement
Characterised by input based specifications, public sector funding and short-term contracts. Generally limited contractual integration with maintenance and operational phases. Design and construction may be procured separately or by a “Design and Build” (D&B) contract.

Choose the most appropriate model - innovative, incentivised, practical

Some varied solutions:
Private Public Partnership
– scale up funding and incorporate operation and maintenance into design and construction contracts.

Framework agreements – fast-track approach to improve efficiency and develop maintenance market/skills.

Create ownership – turn public assets into community assets and engage local people to operate and maintain their assets.

Framework agreements
Definition: an agreement with suppliers, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and quantity.

Key benefits: no requirement to re-bid for each individual project; continuous improvement by transferring learning from one project to another; improved working relationships; continuous workflow; speed of procurement.

Consider: collaboration with other local municipals.

Public Private Partnerships (PPPs)
Definition: a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies.

Key benefits: output based; fixed price; risk transfer to the private sector; efficiency gains through competition and innovation; strengthened planning process ensuring that both the capital and maintenance portions are fully funded over the long term; incentive for the private sector to maintain the assets to agreed standards over the full working life.

What is required at the country level?
Refer to “Infrastructure Public-Private Partnerships in Africa” by ICA, 2008.

Case studies:
St James’ University Hospital, UK (PPP) – HM Treasury, UK (2008) Infrastructure procurement: delivering long-term value
Framework Agreement
Create ownership – EAP (2008) Increasing local content in the procurement of infrastructure projects in low income countries