Sponsored by:

In cooperation with:

American Association of State Highway 

and Transportation Officials

National Cooperative Highway 

Research Program

International Technology 

Scanning Program

Managing Pavements and 

Monitoring Performance:

Best Practices in Australia, 

Europe, and New Zealand

E x e cutiv e Summary | A ugu s t 2012
NOTICE

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and the public in a manner that promotes public 

understanding. Standards and policies are used to 

ensure and maximize the quality, objectivity, utility, 

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reviews quality issues and adjusts its programs and 

processes to ensure continuous quality improvement.
Managing Pavements and Monitoring Performance: Best Practices in Australia, Europe, and New Zealand 1

Introduction

In the last few years, transportation agencies in the United 

States have seen the gap between available resources and 

investment needs widen. At the same time, demand on the 

infrastructure has been increasing and pressure from the U.S. 

Congress and State and local governments has been growing 

to preserve asset conditions and improve transparency and 

accountability in asset management. These factors have 

forced agency leaders to reevaluate how they manage assets 

and adopt innovative and cost-effective strategies for doing 

more with less.

Internationally, many countries have faced similar 

challenges and have responded with policies and programs 

to deal effectively with rising costs, declining revenues, 

and increasing demands for mobility and growth. They 

have developed cultures that support a performance-based 

management approach that accounts for the long-term 

financial implications associated with system expansion 

and views transportation decisions from a service-oriented 

rather than condition-based perspective. The lessons they 

have learned and the adjustments they have made could 

benefit transportation agencies in the United States 

that are considering new strategies for managing 

transportation assets.

Because pavements represent one of a transportation 

agency's largest investments, an international scan was 

conducted to investigate how countries internationally 

have improved the management of their pavements as they 

faced the challenges of decreased revenue, deteriorating 

conditions, and increased public demand for transportation services. The scan, which focused on pavements 

but was applicable to other assets, was cosponsored by 

the Federal Highway Administration (FHWA) and the 

American Association of State Highway and Transportation 

Officials (AASHTO). Richard Tetreault, director of program 

development and chief engineer for the Vermont Agency of 

Transportation, and Butch Wlaschin, director of the FHWA 

Office of Asset Management, served as scan chairs. The 

scan took place in June 2011. Since the scan was completed, 

Congress has passed Moving Ahead for Progress in the 21st 

Century (MAP-21), legislation that supports the use of 

performance-based programs such as those found internationally. The lessons learned in the evolution of practices 

used by the international scan participants will benefit 

the United States greatly as agencies respond to the 

accountability requirements outlined in MAP-21.

The scan focused on the following topic areas:

❖ Processes for implementing sustainable performancebased programs for managing pavements, and the use 

of pavement condition information and projections 

to support programs such as pavement preservation, 

public-private partnerships, and safety hazard mitigation. This included the use of financial and other 

incentives for linking pavement budgeting decisions 

to cost-effective management practices over the life 

cycle of the pavement.

❖ Effective methods for communicating with upper 

management, legislators, and other stakeholders, 

including strategies to secure public and legislative 

support. 

❖ Agency cultures that support performance-based 

programs, including effective capacity-building 

programs. This included strategies for addressing 

organizational or institutional issues to ensure that 

a decentralized organization works toward specific 

performance targets established for the entire network.

❖ Techniques, tools, analyses, and reporting mechanisms 

that support and encourage performance-based 

management and optimal use of available resources 

in transportation agencies. 

Although the scan team was investigating practices for 

managing pavements, most of the agencies it met with 

manage their pavement networks in an asset management 

framework that considers factors such as strategic fit, 

effectiveness, efficiency, and risk in determining levels of 

investment for roads, waterways, rails, and other assets. 

These agencies operate in a culture in which the long-term 

implications of their decisions are understood and communicated to decisionmakers using strategic performance 

measures linked to tactical decisions. Therefore, many of 

the recommendations have an asset management focus 

that can be applied to pavements or other transportation 

infrastructure assets.
2 Executive Summary

Participating Organizations

The transportation agencies and industry representatives 

selected for the scan had demonstrated the use of sound 

management principles and philosophies for managing 

their road (and other) assets. Even though the agencies 

ranged in size and population, each had implemented 

systematic processes for preserving and managing its road 

networks in response to external pressure to improve 

government efficiency and increase customer satisfaction, 

even during periods of tightened budgets. Without exception, each transportation agency outsourced most of its 

road maintenance and restoration activities in response 

to external pressure. Most incorporated a service-based 

approach that focused on stakeholder expectations in 

their road management practices.

The delegates traveled to Australia, England, the Netherlands, New Zealand, and Sweden, where they met with 

representatives from the agencies shown in table 1.

A separate visit to Adelaide, South Australia, was canceled 

because of air travel disruptions related to volcanic activity in 

Chile. South Australia’s Department of Planning, Transport 

and Infrastructure (formerly the Department for Transport, 

Energy, and Infrastructure) submitted information to the 

scan team electronically, and the team conducted a Web 

conference with agency representatives in June 2012 to 

discuss their practices.

Table 1. Agencies participating in scan meetings. 

New Zealand Australia Sweden Netherlands England

• New Zealand 

Transport Agency 

(New Zealand)

• Institute of Public 

Works Engineering 

Australia 

(Sydney, Australia)

• Roads Corporation 

of Victoria (Australia)

• South Australia 

Department of 

Planning, Transport 

and Infrastructure 

(Adelaide, South 

Australia) via Web 

conference

• Swedish Transport 

Administration 

(Sweden)

• Finnish Transport 

Agency (Finland)

• Danish Road 

Directorate

(Denmark)

• Norwegian Public 

Roads Administration 

(Norway)

• Road Traffic and 

Transport Authority 

(the Netherlands)

• Institute for 

Transport Sciences 

(Hungary)

• Highways Agency 

(United Kingdom)

• Transport 

for London 

(London, England)

• Transport Scotland 

(Scotland)

• Transport Research 

Laboratory 

(United Kingdom)
Managing Pavements and Monitoring Performance: Best Practices in Australia, Europe, and New Zealand 3

Key Findings

The economic situation the United States faces is similar to 

the economic situations many of the countries visited during 

the scan faced a number of years ago. These agencies, under 

pressure to improve government efficiency, responded by 

implementing systematic processes for maintaining the 

existing road network that emphasized reducing total 

maintenance and renewal costs over the life of pavements, 

managing future investment requirements, and minimizing 

agency risk. Although most of these agencies continue to 

face declining budgets, they have clearly defined priorities 

and investment strategies that have been accepted by 

stakeholders. The stakeholders also understand and 

accept the resulting impact of these decisions on the 

condition of the pavement network. 

The timing of the scan proved to be extremely beneficial.

The facilitated discussions provided the U.S. scan delegates 

with an opportunity to learn from agencies that had already 

experienced difficult financial situations and emerged with 

strong support for road maintenance and renewal among 

agency leadership, elected officials, and the general public. 

The challenges they faced and the lessons they learned 

while evolving their practices led to six key findings:

❖ Pavement management is integrated into an 

asset management culture that supports agency 

business processes and long-term financial 

responsibilities.

❖ Agencies help elected and appointed officials be 

better stewards of transportation assets.

❖ Agencies focus on outcomes and operate as 

service providers.

❖ Investment priorities are known and stakeholders are held accountable for their actions.

❖ Agencies invest in workforce capacity development and succession planning.

❖ Efficiency and value drive program delivery 

approaches.

The scan team noted that although the scan focus was 

on pavement management, many of the findings relate 

to the broad application of a systematic process for 

managing pavements and other transportation assets 

under constrained conditions. Therefore, the scan 

findings are equally applicable to pavement management and asset management practitioners, as well as other 

transportation officials striving to obtain the greatest value 

possible for the funding levels available.

Pavement Management Is Integrated Into an Asset 

Management Culture That Supports Agency Business 

Processes and Long-Term Financial Responsibilities

As in the United States, many of the transportation 

agencies included in the scan face outside pressure to be 

more efficient even as customer expectations increase and 

available funding decreases. In response to these pressures, 

several agencies have implemented systematic processes 

for maintaining their road networks, improving customer 

service, and maximizing the value for each dollar spent. 

These systematic processes focus on decisions that support 

a long-term vision for a sustainable pavement management 

program. The resulting framework is driven by an assessment of the whole-life costs of preserving the value of road 

assets and documenting the information in a long-term 

financial plan, as shown in figure 1. In several of the 

Stakeholder & Legal Requirements

& Needs

Service Planning

Asset Management Plans

Operational Plans

Service Delivery

at agreed service levels and cost

Organisational Strategic Plan

Vision, Mission, Goals, Objectives, 

Level of Service, Business Policies, Risk

Figure 1. Role of the long-term financial plan (IPWEA).

Long Term

Financial Plan

Funding Plan
4 Executive Summary

countries visited, agencies must either fund the depreciation in the road network each year or account for the 

unfunded liability. The scan team also found more flexibility in programs than is typically observed in the United 

States. For instance, budgets at Transport for London are 

fixed over a multiyear period, providing flexibility in 

shifting projects from one year to the next. This feature 

was especially important to Transport for London so 

that construction projects were not scheduled during the 

2012 Summer Olympics.

The scan team found that project priorities for road maintenance and renewal were based primarily on reducing agency 

risk and liability. This has led agencies to take very different 

approaches to managing their pavement networks. For 

example, the New Zealand Transport Agency has prioritized 

seven key state highway routes that have been designated 

roads of national significance for moving people and freight 

efficiently and safely between the five largest population 

centers. VicRoads, on the other hand, considers the deterioration of its low-volume sprayed-seal rural road network a 

catastrophic risk that would be more cost-prohibitive to 

address than the robust asphalt network in the urban area. 

Therefore, preservation of the low-volume road network is a 

top priority. There was also evidence of multiyear financial 

plans to manage the road network that provide flexibility 

to move funding from one year to another and stability 

because the plans cannot easily be changed once they 

have been approved. 

Agencies Help Elected and Appointed Officials 

Be Better Stewards of Transportation Assets

Some of the countries visited, especially Australia, had a 

strong use of long-term financial plans at the local level 

(see figure 2). These financial plans outline the strategies 

that will be used to effectively manage the road network and 

communicate risk and deferred liabilities for any underfunded maintenance and renewal activities. The long-term 

financial plans are developed collaboratively with government officials, who are held accountable for the way public 

funds are used to preserve the condition of infrastructure 

assets. As fiscal stewards, elected and appointed officials are 

responsible for the long-term viability and sustainability of 

the investment programs. 

At several of the agencies the scan team met with, government officials are trained to better understand and honor 

their fiduciary responsibilities, which has led to support of 

transportation agency programs at all levels of government. 

This understanding of stewardship responsibilities was 

catalytic in supporting performance-based programs in 

several countries. This support has been especially important 

because transport agencies internationally do not have 

dedicated trust funds and must compete for funding. 

Agencies Focus on Outcomes and Operate as 

Service Providers

The agencies that participated in the scan are moving 

toward a service-based approach for managing their road 

networks rather than a condition-based approach. Under 

this service-based approach, customer-driven priorities—

such as safety, reliability of travel, comfort, and livability—

are becoming the primary drivers for road maintenance and 

renewal actions. This change in philosophy is considered 

more meaningful than merely reporting on condition-based 

performance metrics. It has influenced the types of data 

collected and the performance targets used to drive the 

maintenance and renewal program. The New Zealand 

Transport Agency compared the philosophy to managing 

a utility. Under a more traditional model, a road may not 

have been available to carry an unusually heavy load 

because of existing road conditions. Under a service 

approach, the agency considers itself responsible for finding 

a way for the heavy vehicle to use the facility, representing 

a major shift in its philosophy and the way it approaches 

programming decisions. Rijkswaterstaat, the executive arm 

of the Ministry of Infrastructure and the Environment in 

the Netherlands, bases decisions on the following key 

performance indicators, which focus almost entirely 

on service-oriented metrics:

Figure 2. Australian Infrastructure Financial Management 

Guidelines.
Managing Pavements and Monitoring Performance: Best Practices in Australia, Europe, and New Zealand 5

❖ Reliability

❖ Availability

❖ Maintainability

❖ Safety

❖ Security

❖ Health

❖ Environment

❖ Economics

❖ Politics

Transport for London considers risk, customer satisfaction, 

and cost as the three factors that must be balanced to 

provide an acceptable level of service, as shown in figure 3. 

The relationship among these factors and the point at 

which a zone is established for making investment decisions differ based on the particular asset being investigated. 

For instance, because most highway users are less aware of 

bridge conditions than road conditions, risk and whole-life 

costs are the key decision drivers for that asset and the 

decision zone shifts to ensure that risks are suitably 

mitigated. For roadways, customer satisfaction is a much 

higher decision factor, so the decision zone reflects an 

effort to maintain it at a high level.

Figure 3. Transport for London’s three-legged stool.

Investment Priorities Are Known and Stakeholders Are Held Accountable For Their Actions

As in the United States, most of the agencies participating in 

the scan face significant budget constraints and increasing 

demands to improve efficiency. In response, many have 

established clear priorities that emphasize service levels, 

while assessing the various options based on strategic fit, 

effectiveness, efficiency, and risk. As a result, these agencies 

assign the highest priority to maintaining and renewing the 

existing highway network rather than spending limited 

dollars on capital enhancements. In some cases, such as 

England’s Highways Agency, the opportunities for expansion 

are limited because of space constraints. This places even 

more importance on the agency’s emphasis on asset management as a way to maintain the value of the existing road 

network. The Finnish Transport Agency has developed 

long-term strategies aimed at maintaining the current 

condition of the main roads and letting the remainder of the 

system absorb the funding shortage. Priorities are typically 

conveyed in an asset management plan. For instance, 

Transport Scotland publishes a Road Asset Management 

Plan that sets objectives, targets, and required financial plans 

that support the government’s targets for improving efficiency, reducing casualties, and lessening the impacts of 

climate change.

To help ensure the implementation of asset management 

programs, many agencies have established methods for 

holding agency personnel and contractors responsible for 

their actions through audits and contractual agreements. The 

audits the participating agencies used differed dramatically 

from those commonly used in the United States in important ways. In the United States, audits are used primarily to 

verify that a process was followed. In the countries participating in the scan, the audits are tied to the asset management plans and long-term financial plans to see how well 

the agencies carried out their plans. Transport Scotland 

programs are monitored and reported by the Performance 

Audit Group and reviewed and endorsed by Audit Scotland, 

as shown in figure 4 (see next page).

Agencies Invest in Workforce Capacity 

Development and Succession Planning

The agencies that have successfully navigated a paradigm 

shift in managing road networks have fostered a culture in 

which road maintenance and renewal costs are known and 

the long-term implications of decisions are understood and 

communicated by decisionmakers at various levels. As a 

result, these agencies have more mature asset management 

programs, as evidenced by the branding of asset manage-
6 Executive Summary

ment at Rijkswaterstaat As shown in figure 5, Rijkswaterstaat 

uses a yellow line as a symbol that connects pavement 

management with the management of bridges, traffic 

equipment, and people. The yellow line appears on all asset 

management materials and is featured prominently in the 

asset management office.

Without exception, the agencies that participated in the scan 

have committed to building and retaining internal capacity 

in asset management. As a result, they demonstrate strong 

investment in asset management capabilities that result in 

well-established, trained, and assimilated units in the 

organizations that all stakeholders, including executives and 

legislators, look to for information. This focus on training 

was especially evident in the tools and templates provided 

by the Institute of Public Works Engineering Australia 

(IPWEA), an association that supports the implementation 

of financially sustainable public works programs. As a result, 

the organization focused on the following actions to lay the 

framework for infrastructure sustainability:

❖ Creating a national framework that addresses the three 

key elements of building a sustainable community: 

stewardship (i.e., the role of elected members), asset 

management planning, and long-term financial 

planning

❖ Providing the tools needed to integrate the technical, 

financial, and community aspects of managing 

transportation assets

❖ Influencing the development of drivers that support 

the development of sustainable communities

This three-tier approach and the products developed to 

support these efforts are shown in figure 6.

In some cases, internal capacity building focused on regaining some of the internal capabilities lost when maintenance 

and renewal activities were contracted out. However, there is 

now a sense of urgency in replacing the competencies that 

were lost and building new capabilities that allow agency 

personnel to act as smart buyers of future maintenance 

and renewal services. 

Efficiency and Value Drive Program Delivery 

Approaches

Most of the participating agencies contract out 100 percent 

of their pavement maintenance and renewal activities. 

According to the information the participants provided, 

these activities were privatized in response to pressure to 

reduce the debt load or improve efficiency during times of 

limited funding with a focus on maximizing the value of the 

investment. Over time, as agencies have gained experience 

with these types of contracts, contractual terms have evolved, 

as have the performance metrics that drive the contractor’s 

performance. 

The participating agencies were frank about the advantages 

and disadvantages of contracting for maintenance activities. 

For example, one advantage is that the cost of programs is 

known with certainty when the work is outsourced. These 

contracts have also helped several agencies improve government efficiency. However, several agencies indicated that 

they lost too much of their maintenance expertise and are in 

the process of rebuilding it. It has been a challenge to attract 

and retain skills in the agencies because less engineering is 

being done internally. They also report that it has been 

difficult to find the right performance metrics and monopolies may form that limit competition. South Australia’s 

Department of Planning, Transport and Infrastructure found 

that outsourcing its maintenance activities forced the 

organization to consider performance requirements from a 

Figure 4. Performance Audit Group Annual Report.

Figure 5. Yellow line used to brand asset managment in the 

Netherlands.
Managing Pavements and Monitoring Performance: Best Practices in Australia, Europe, and New Zealand 7

road user perspective and to link the performance requirements to pavement condition characteristics. Although it was 

not recognized at the time, the discussions that took place 

focused informally on managing risk in terms of what risk 

level was considered acceptable and what was not.

Perhaps the most valuable lesson for the United States is 

that it takes time to develop contracts that work as planned. 

Transport Scotland, for example, is using its fourth generation of outsourcing contracts. The Finnish Transport Agency 

recommends that agencies considering privatized contracts 

do the following:

❖ Develop a good procurement strategy.

❖ Use objective road condition measurements.

❖ Allow a reasonable level of flexibility in contracts.

❖ Develop a cooperative relationship with the 

private sector.

❖ Do not expect immediate benefits.

❖ Make improvements to the contracts based on 

experiences.

Application of Key Findings in the United States

The agencies the team met with during the scan provided 

a wealth of information that will benefit the United States 

as its transportation agencies strive to find more effective 

methods of managing pavements and monitoring performance. The scan yielded a number of strategies for addressing the transportation issues the United States faces today:

1. Performance data and systematic processes are used 

to evaluate investment strategies. As a result, agencies 

can respond effectively to pressures caused by decreasing budgets, government efforts to improve efficiency, 

and increasing customer expectations. 

2. Consideration of whole-life costs associated with 

preserving asset value has been instrumental in 

shifting agency culture to support asset management 

and improving agency accountability. By calculating 

and communicating the long-term maintenance costs 

associated with system expansion projects, stakeholders have resisted pressure to expand the system 

without addressing long-term costs. Further, agencies 

can determine the financial sustainability of their 

programs by evaluating the percentage of depreciation 

funded each year and accounting for any unfunded 

depreciation as an agency liability.

3. Internationally, there has been a shift toward 

service-oriented performance measures as a way to 

address customer-driven priorities such as reliability, 

availability, maintainability, and safety. These 

customer expectations must be balanced against 

funding and risk tolerance when developing an 

acceptable level of service. 

4. The ability to commit funding and projects as part of 

4-year programs has been a critical component of an 

agency’s ability to ensure that treatments are applied 

at the right time to be economical.

5. Holding elected and appointed officials, agency 

employees, and contractors accountable for their 

actions has served as a catalyst to the success of 

Figure 6. IPWEA’s three-tier approach to sustainability.

Provide 

Framework Tools 

and Drivers

Framework Tools Drivers

Stewardship Government 

Requirements 

Agreed

AM DVD:

The Movie

Asset 

Management

Planning

International 

Infrastructure 

Management 

Manual

Legislation & 

Incentives

Long Term 

Financial 

Planning

Australian 

Infrastructure 

Financial 

Management 

Guidelines

Long Term 

Financial 

Planning 

Tools

National 

Assessment 

Model
8 Executive Summary

performance-based programs. For instance, government performance audits of agency spending have 

reduced political interference in program development and have helped ensure that the government 

gets the best value for its investment.

6. Outsourcing maintenance activities is one way 

agencies have improved government efficiency, but 

the programs have not been without challenges. 

Among other lessons, agencies have learned that they 

must retain a certain degree of competency to remain 

smart buyers of the required services.

7. Strong investment in asset management capabilities 

results in well-established, trained, and assimilated 

units in the organizations that all stakeholders, 

including executives and legislators, look to for 

information. Building and maintaining agency 

capacity requires skills outside of a traditional civil 

engineering program. It requires a better understanding of finance, accounting, risk, and communication, 

among other skills. 

Implementation Strategies, Dissemination, and 

Recommendations

The scan team included representatives from Federal, State, 

and local agencies to foster the implementation of the 

findings into the practices of transportation agencies 

throughout the United States. The representatives from 

FHWA and State highway agencies have identified strategies 

that can be implemented through FHWA programs, the 

National Cooperative Highway Research Program, and State 

initiatives. The local agency representative will work with 

FHWA's Local Technical Assistance Program to encourage 

adoption of the key findings at the city and county levels.

Based on the findings from the scan, the delegates identified 

the following implementation strategies to foster the use of 

systematic processes for managing pavements that support 

performance-based decisions to improve serviceability, 

accountability, and stewardship in the United States:

❖ Develop guidelines for asset management plans and 

long-term financial plans as the foundation for sound 

and transparent investment.

❖ Improve accountability through the use of program 

assessments that answer the question "Is the agency 

working its plan?"

❖ Develop agency capabilities.

❖ Communicate the findings and introduce the serviceoriented approach observed in the agencies visited.

Encouraging use of long-term financial plans and providing 

technical assistance on how to develop them were the top 

implementation goals of the scan team. IPWEA has developed 

templates for use by local agencies in Australia, and the scan 

team would like to see similar templates, suitable for State 

agencies, developed in the United States. The financial plans 

would make agency funding transparent in the same way that 

publicly traded stocks are transparent: agencies would have to 

fund the depreciated value of their assets each year or account 

for this loss of value to the public as a liability.

Program assessments, termed audits by most of the agencies 

visited, close the loop between the work plan and the work 

conducted. The agencies depended on these program assessments to reduce political additions to their work plan because 

they are held accountable for work completed. The program 

assessment is a regular part of the business cycle and is a tool 

to keep the program on track and within budget.

In developing asset management plans, long-term financial 

plans, and program assessments, the countries found that 

new skills were required in their agencies. The financial plans 

require close communication between accountants familiar 

with depreciation accounting and engineers knowledgeable 

about maintaining the assets. Data are required and data 

collection and analysis are necessary for sound decisionmaking. Agencies in the United States will need this marriage of 

financial accounting and technical expertise, as well as the 

technology to support asset management.

Communication is an important first and ongoing step in 

implementing any research or scan findings. Through this 

executive summary, the scan report, and presentations to committees of AASHTO, FHWA, State and local agencies, and the 

Transportation Research Board, the scan participants are 

committed to bringing the value of the scan into U.S. practice.

OFFICE OF INTERNATIONAL PROGRAMS

FHWA/US DOT (HPIP)

1200 New Jersey Avenue, SE

Washington, DC 20590

Tel: (202) 366-9636

Fax: (202) 366-9626

international@fhwa.dot.gov

www.international.fhwa.dot.gov

Publication No. FHWA-PL-12-032 HPIP/8-12(3.5)EW