Key Performance Indicators in

Public-Private Partnerships

A State-of-the-Practice Report

Australia  British Columbia  New Zealand  United Kingdom  United States 

International Technology Scanning Program

Sponsored by:

In cooperation with:

American Association of State Highway 

and Transportation Officials

National Cooperative Highway 

Research Program

March 2011
NOTICE

The Federal Highway Administration provides 

high-quality information to serve Government, 

industry, and the public in a manner that promotes public understanding. Standards and 

policies are used to ensure and maximize the 

quality, objectivity, utility, and integrity of its 

information. FHWA periodically reviews quality 

issues and adjusts its programs and processes 

to ensure continuous quality improvement.
Technical Report Documentation Page

1. Report No.

FHWA-PL-10-029

2. Government Accession No. 3. Recipient’s Catalog No.

4. Title and Subtitle

Key Performance Indicators in 

Public-Private Partnerships

5. Report Date

March 2011

6. Performing Organization Code

7. Author(s) 

Michael Garvin, Keith Molenaar, 

Desiderio Navarro, Gordon Proctor

8. Performing Organization Report No.

9. Performing Organization Name and Address

American Trade Initiatives

P.O. Box 8228

Alexandria, VA 22306-8228

10. Work Unit No. (TRAIS)

11. Contract or Grant No.

DTFH61-99-C-005

12. Sponsoring Agency Name and Address

Office of International Programs

Federal Highway Administration

U.S. Department of Transportation

American Association of State Highway 

and Transportation Officials

13. Type of Report and Period Covered

14. Sponsoring Agency Code

15. Supplementary Notes

FHWA COTR: Hana Maier, Office of International Programs

16. Abstract

This report provides a state-of-the-practice description of domestic and international practices for key 

performance indicators (KPIs) in public-private partnerships (PPPs). The report is based on a comprehensive 

literature review and eight case studies from Australia, British Columbia, the United Kingdom, and the United 

States. The concept for this report came from an implementation strategy in Public-Private Partnerships 

for Highway Infrastructure: Capitalizing on International Experience, as well as Linking Transportation 

Performance and Accountability and Construction Management Practices in Canada and Europe. The report 

identifies how government-developed performance measures reflecting societal goals such as congestion 

management or environmental impact are translated through KPIs and included in project documents for 

designing, constructing, operating, and maintaining transportation facilities. The report shows that it is 

possible to align projects with these higher goals. The findings are applicable to agencies that wish to 

align overarching organizational and societal performance measures through KPIs not only to PPP 

projects, but also to conventionally bid projects. 

17. Key Words

key performance indicator, performance measure, 

public-private partnership, tollroad, transportation 

asset measurement 

18. Distribution Statement

No restrictions. This document is available to the 

public from the: Office of International Programs, 

FHWA-HPIP, Room 3325, U.S. Department of 

Transportation, Washington, DC 20590

international@fhwa.dot.gov

www.international.fhwa.dot.gov

19. Security Classify. (of this report)

Unclassified

20. Security Classify. (of this page)

Unclassified

21. No. of Pages

120

22. Price

Free

Form DOT F 1700.7 (8-72) Reproduction of completed page authorized

Key Performance Indicators in Public-Private Partnerships

This work was sponsored by the Federal Highway Administration Offices of Innovative Program Delivery, 

Asset Management, and International Programs. The topic was identified in the International Scanning 

Program report Public-Private Partnerships for Highway Infrastructure: Capitalizing on International 

Experience as a key implementation item. 

Review Panel 

Jan Weingart Brown (FHWA)

Steven DeWitt (North Carolina Turnpike Authority)

Roger Driskell (Illinois DOT)

Ted Ferragut (TDC Partners)

Leon E. Hank (Michigan DOT)

Steve Gaj (FHWA)

Dusty Holcombe (Virginia DOT)

Bob Pieplow (CalTrans)

Michael Saunders (FHWA)

Jeff Seiders (Texas DOT)

Art Smith (National Council for Public-Private Partnerships)

Jerry Yakowenko (FHWA)

Research Team

Keith Molenaar (University of Colorado)

Michael Garvin (Virginia Tech)

Gordon Proctor (Proctor and Associates)

Desiderio Navarro (University of Colorado)
iv

The International Technology Scanning Program, 

sponsored by the Federal Highway Administration 

(FHWA), the American Association of State Highway 

and Transportation Officials (AASHTO), and the 

National Cooperative Highway Research Program 

(NCHRP), evaluates innovative foreign technologies 

and practices that could significantly benefit U.S. 

highway transportation systems. This approach 

allows for advanced technology to be adapted and put 

into practice much more efficiently without spending 

scarce research funds to re-create advances already 

developed by other countries.

FHWA and AASHTO, with recommendations from 

NCHRP, jointly determine priority topics for teams 

of U.S. experts to study. Teams in the specific areas 

being investigated are formed and sent to countries 

where significant advances and innovations have 

been made in technology, management practices, 

organizational structure, program delivery, and 

financing. Scan teams usually include representatives from FHWA, State departments of transportation, local governments, transportation trade and 

research groups, the private sector, and academia. 

After a scan is completed, team members evaluate 

findings and develop comprehensive reports, including recommendations for further research and pilot 

projects to verify the value of adapting innovations for 

U.S. use. Scan reports, as well as the results of pilot 

programs and research, are circulated throughout 

the country to State and local transportation officials 

and the private sector. Since 1990, more than 85 

international scans have been organized on topics 

such as pavements, bridge construction and maintenance, contracting, intermodal transport, organizational management, winter road maintenance, safety, 

intelligent transportation systems, planning, 

and policy. 

The International Technology Scanning Program has 

resulted in significant improvements and savings in 

road program technologies and practices throughout 

the United States. In some cases, scan studies have 

facilitated joint research and technology-sharing 

projects with international counterparts, further 

conserving resources and advancing the state of the 

art. Scan studies have also exposed transportation 

professionals to remarkable advancements and 

inspired implementation of hundreds of innovations. 

The result: large savings of research dollars and time, 

as well as significant improvements in the Nation’s 

transportation system.

Scan reports can be obtained through FHWA free

of charge by e-mailing international@dot.gov. Scan 

reports are also available electronically and can be 

accessed on the FHWA Office of International Programs Web site at www.international.fhwa.dot.gov.

International Technology Scanning Program
v

International Technology Scan Reports

International Technology Scanning Program: Bringing Global Innovations to U.S. Highways 

Safety

Assuring Bridge Safety and Serviceability in Europe 

(2010)

Pedestrian and Bicyclist Safety and Mobility in Europe 

(2010)

Improving Safety and Mobility for Older Road Users 

in Australia and Japan (2008)

Safety Applications of Intelligent Transportation 

Systems in Europe and Japan (2006)

Traffic Incident Response Practices in Europe (2006)

Underground Transportation Systems in Europe: 

Safety, Operations, and Emergency Response (2006)

Roadway Human Factors and Behavioral Safety in 

Europe (2005) 

Traffic Safety Information Systems in Europe and 

Australia (2004) 

Signalized Intersection Safety in Europe (2003) 

Managing and Organizing Comprehensive Highway 

Safety in Europe (2003) 

European Road Lighting Technologies (2001) 

Commercial Vehicle Safety, Technology, and Practice 

in Europe (2000) 

Methods and Procedures to Reduce Motorist Delays 

in European Work Zones (2000) 

Innovative Traffic Control Technology and Practice 

in Europe (1999) 

Road Safety Audits—Final Report and Case Studies 

(1997) 

Speed Management and Enforcement Technology: 

Europe and Australia (1996) 

Safety Management Practices in Japan, Australia, 

and New Zealand (1995) 

Pedestrian and Bicycle Safety in England, Germany, 

and the Netherlands (1994) 

 Planning and Environment 

Reducing Congestion and Funding Transportation 

Using Road Pricing In Europe and Singapore (2010)

Linking Transportation Performance and 

Accountability (2010)

Streamlining and Integrating Right-of-Way and Utility 

Processes With Planning, Environmental, and Design 

Processes in Australia and Canada (2009)

Active Travel Management: The Next Step in 

Congestion Management (2007)

Managing Travel Demand: Applying European 

Perspectives to U.S. Practice (2006)

Transportation Asset Management in Australia, 

Canada, England, and New Zealand (2005)

Transportation Performance Measures in Australia, 

Canada, Japan, and New Zealand (2004) 

European Right-of-Way and Utilities Best Practices 

(2002) 

Geometric Design Practices for European Roads 

(2002) 

Wildlife Habitat Connectivity Across European 

Highways (2002) 

Sustainable Transportation Practices in Europe (2001) 

Recycled Materials in European Highway 

Environments (1999) 

European Intermodal Programs: Planning, Policy, 

and Technology (1999) 

National Travel Surveys (1994) 

 Policy and Information 

Transportation Research Program Administration 

in Europe and Asia (2009)

Practices in Transportation Workforce Development 

(2003) 
International Technology Scan Reports

vi

Intelligent Transportation Systems and Winter 

Operations in Japan (2003) 

Emerging Models for Delivering Transportation 

Programs and Services (1999) 

National Travel Surveys (1994) 

Acquiring Highway Transportation Information 

From Abroad (1994) 

International Guide to Highway Transportation 

Information (1994) 

International Contract Administration Techniques 

for Quality Enhancement (1994) 

European Intermodal Programs: Planning, Policy, 

and Technology (1994) 

Operations

Freight Mobility and Intermodal Connectivity 

in China (2008)

Commercial Motor Vehicle Size and Weight 

Enforcement in Europe (2007)

Active Travel Management: The Next Step in 

Congestion Management (2007)

Managing Travel Demand: Applying European 

Perspectives to U.S. Practice (2006)

Traffic Incident Response Practices in Europe (2006)

Underground Transportation Systems in Europe: 

Safety, Operations, and Emergency Response (2006)

Superior Materials, Advanced Test Methods, and 

Specifications in Europe (2004) 

Freight Transportation: The Latin American Market 

(2003) 

Meeting 21st Century Challenges of System 

Performance Through Better Operations (2003) 

Traveler Information Systems in Europe (2003) 

Freight Transportation: The European Market (2002) 

European Road Lighting Technologies (2001) 

Methods and Procedures to Reduce Motorist Delays 

in European Work Zones (2000) 

Innovative Traffic Control Technology and Practice 

in Europe (1999) 

European Winter Service Technology (1998) 

Traffic Management and Traveler Information 

Systems (1997) 

European Traffic Monitoring (1997) 

Highway/Commercial Vehicle Interaction (1996) 

Winter Maintenance Technology and Practices—

Learning from Abroad (1995) 

Advanced Transportation Technology (1994) 

Snowbreak Forest Book—Highway Snowstorm 

Countermeasure Manual (1990) 

Infrastructure—General 

Freeway Geometric Design for Active Traffic 

Management in Europe (2011)

Public-Private Partnerships for Highway 

Infrastructure: Capitalizing on International

Experience (2009)

Audit Stewardship and Oversight of Large and 

Innovatively Funded Projects in Europe (2006)

Construction Management Practices in Canada 

and Europe (2005) 

European Practices in Transportation Workforce 

Development (2003) 

Contract Administration: Technology and Practice 

in Europe (2002) 

European Road Lighting Technologies (2001) 

Geometric Design Practices for European Roads 

(2001) 

Geotechnical Engineering Practices in Canada 

and Europe (1999) 

Geotechnology—Soil Nailing (1993) 

Infrastructure—Pavements

Warm-Mix Asphalt: European Practice (2008)

Long-Life Concrete Pavements in Europe 

and Canada (2007)

Quiet Pavement Systems in Europe (2005)
Key Performance Indicators in Public-Private Partnerships 

 vii

Pavement Preservation Technology in France, 

South Africa, and Australia (2003) 

Recycled Materials in European Highway 

Environments (1999) 

South African Pavement and Other Highway 

Technologies and Practices (1997) 

Highway/Commercial Vehicle Interaction (1996) 

European Concrete Highways (1992) 

European Asphalt Technology (1990) 

Infrastructure—Bridges

Assuring Bridge Safety and Serviceability in Europe 

(2010)

Bridge Evaluation Quality Assurance in Europe (2008)

Prefabricated Bridge Elements and Systems in 

Japan and Europe (2005) 

Bridge Preservation and Maintenance in Europe 

and South Africa (2005) 

Performance of Concrete Segmental and 

Cable-Stayed Bridges in Europe (2001) 

Steel Bridge Fabrication Technologies in Europe 

and Japan (2001) 

European Practices for Bridge Scour and 

Stream Instability Countermeasures (1999) 

Advanced Composites in Bridges in Europe 

and Japan (1997) 

Asian Bridge Structures (1997) 

Bridge Maintenance Coatings (1997) 

Northumberland Strait Crossing Project (1996) 

European Bridge Structures (1995) 
viii

Contents

Executive Summary | 1

Overview | 1

Summary Conclusions | 1

Recommendations | 2

Chapter 1: Introduction | 5

1.1 Report Purpose | 5

1.2 Definitions | 5

1.3 Study Approach | 5

1.4 Guide to the Report | 6

Chapter 2: Background | 9

2.1 Introduction | 9

2.2 Public-Private Partnerships and 

Performance-Based Management | 9

2.3 Background of Performance-Based 

Management in Highway Agencies | 10

2.4 Who Uses Performance-Based 

Management Systems? | 10

2.5 Outcomes of Measuring Performance | 12

2.6 Conclusion | 12

Chapter 3: Performance Management Models | 13

3.1 Introduction | 13

3.2 Performance-Based Management 

System Principles | 13

3.3 Fundamental Highway Performance Model | 13

3.4 AASHTO Performance Management 

Process | 15

3.5 Performance Measure Development | 17

3.6 Conclusions | 17

Chapter 4: Case Studies | 19

4.1 Introduction | 19

4.2 Research Approach | 19

4.2.1 Literature Review | 19

4.2.2 Data Collection | 19

4.2.3 Synthesis | 20

4.3 Case Studies | 20

4.3.1 I-595 Corridor Improvements | 21

4.3.2 Golden Ears Bridge | 21

4.3.3 Kicking Horse Canyon Phase II | 22

4.3.4 EastLink | 23

4.3.5 Capital Beltway | 23

4.3.6 CLEM7 North-South Bypass Tunnel | 24

4.3.7 M25 | 24

4.3.8 Airport Link | 25

4.4 Conclusions | 26

Chapter 5: Case Study Findings | 27

5.1 Introduction | 27

5.2 Operations and Maintenance | 28

5.2.1 Linking Agency Performance Measures 

With Project KPIs | 28

5.2.2 Organizational Structure for Monitoring 

Operations and Maintenance | 36

5.2.3 Using Performance Points to Track 

Operations and Maintenance | 48

5.2.4 Remedies and Dispute Resolution 

Procedures for Poor Operations and 

Maintenance Performance | 56

5.3 Design and Construction | 61

5.3.1 Organizational Structure for Monitoring 

Design and Construction | 61

5.3.2 Remedies and Dispute Resolution for 

Poor Design and Construction Work | 71

5.4 Handback Requirements and KPI Evolution | 74

5.5 Conclusions | 79

Chapter 6: Conclusions | 81

6.1 Introduction | 81

6.2 Conclusions | 81

6.2.1 Alignment of Agency Goals With 

Performance Measures and PPP 

Project KPIs | 81

6.2.2 Dynamic Nature of Performance Measures 

and KPIs Over Time | 82

6.2.3 Alignment of Performance Data With 

Agency Performance Management 

System | 84

6.2.4 Use of Asset Management Plans 

in Addition to KPIs | 84

6.2.5 Focus on Outcomes Rather Than 

Outputs | 85
ix

Key Performance Indicators in Public-Private Partnerships 

6.2.6 Emphasis on Service Requirements 

Versus Asset Condition | 85

6.2.7 Use of Incentives 

(Positive and Negative) | 85

6.2.8 Creating an Asset Management 

Culture | 85

6.2.9 Opportunity for More Use of KPIs in 

Design and Construction | 86

6.2.10 Focus of Handback Provisions | 86

6.3 Application of Key Findings to Other 

Delivery Methods | 87

6.4 Recommendations | 88

Endnotes | 90

Appendix A: Annotated Bibliography | 91

Appendix B: Case Study Protocol | 95

Appendix C: Example Summary 

Operations and Maintenance KPI Tables | 97

FIGURES

Figure 1. American Society of Civil Engineers guiding 

principles on infrastructure improvement. | 9

Figure 2. MoDOT Tracker system. | 11

Figure 3. VDOT Dashboard system. | 11

Figure 4. Pyramid of relationships. | 14

Figure 5. AASHTO performance management 

framework. | 15

Figure 6. Minnesota DOT performance management 

measurement example. | 16

Figure 7. I-595 corridor improvements. | 22

Figure 8. Golden Ears Bridge. | 22

Figure 9. Kicking Horse. | 23

Figure 10. EastLink. | 23

Figure 11. Capital Beltway. | 24

Figure 12. North-South Bypass Tunnel. | 24

Figure 13. M25. | 25

Figure 14. Airport Link. | 25

Figure 15. Relationship between HA goals and M25 

DBFO performance measures. | 36

Figure 16. Kicking Horse Canyon payment 

reduction formula. | 51

Figure 17. Linkage between agency goals, 

performance measures, and KPIs in the 

Highways Agency. | 82

TABLES

Table 1. Case study overview. | 6

Table 2. Requirement levels in different 

delivery methods. | 14

Table 3. Case study project summary. | 21

Table 4. Overall summary of KPI information. | 27

Table 5. British Columbia Ministry of Transport 

performance measures. | 34

Table 6. KPI information for organizational structures 

for operations and maintenance. | 37

Table 7. Golden Ears Bridge inspection types 

for structures. | 40

Table 8. Golden Ears Bridge inspection types 

for drainage and debris-control structures. | 40

Table 9. EastLink customer service and complaints 

reporting system. | 43

Table 10. Airport Link permitted maintenance 

closures. | 47

Table 11. KPI information for performance points 

to track operations and maintenance. | 49

Table 12. I-595 noncompliance point notification 

approach. | 51

Table 13. Kicking Horse Canyon nonconformity 

report point approach. | 51

Table 14. EastLink KPI credit approach. | 52

Table 15. Capital Beltway performance 

point approach. | 53

Table 16. Capital Beltway performance point 

examples. | 54

Table 17. Capital Beltway performance point 

implications. | 55

Table 18. KPI information for remedies and dispute 

resolution procedures for poor operations and 

maintenance performance. | 57

Table 19. I-595 operations and maintenance 

availability faults examples. | 58
Contents

x

Table 20. KPI information for organizational structures 

for design and construction. | 62

Table 21. CLEM7 North-South Bypass Tunnel required 

design life for named features. | 69

Table 22. KPI information for remedies and dispute 

resolution procedures for poor design and 

construction work. | 71

Table 23. KPI information for handback requirements 

and KPI evolution. | 75

Table 24. I-595 example handback requirements. | 75

Table 25. Golden Ears example handback 

requirements. | 76

Table 26. Examples from FDOT I-595 KPI table. | 83

Table 27. Capital Beltway performance point 

approach. | 86

Table 28. Capital Beltway performance point 

examples. | 87

Table 29. Golden Ears example handback 

requirements. | 87

Table 30. Application to other delivery methods. | 88

Table 31. I-595 categories for operations and 

maintenance performance measurement. | 98

Table 32. Golden Ears Bridge/Kicking Horse Canyon 

Phase II asset preservation performance measure 

categories. | 99

Table 33. I-595 corridor improvements example 

operations and maintenance KPIs. | 100

Table 34. Golden Ears Bridge/Kicking Horse Canyon 

Phase II example asset preservation performance 

measures. | 103

Table 35. Kicking Horse Canyon Phase II example 

corridor and environmental management key 

performance measures. | 105

Table 36. CLEM7 North-South Bypass Tunnel example 

project deed KPIs. | 106

Table 37. CLEM7 North-South Bypass Tunnel example 

operating company KPIs. | 108
Chapter 3: Performance management models

1

Overview

This report provides a state-of-the practice description 

of domestic and international practices for key performance indicators (KPIs) in public-private partnerships 

(PPPs). The report is based on a comprehensive 

literature review and eight case studies from 

Australia, British Columbia, the United Kingdom, 

and the United States. The concept for this report 

came from an implementation strategy in PublicPrivate Partnerships for Highway Infrastructure: 

Capitalizing on International Experience (FHWAPL-09-010), as well as Linking Transportation 

Performance and Accountability (FHWA-PL-10-011) 

and Construction Management Practices in Canada 

and Europe (FHWA-PL-05-010). The report identifies 

how government-developed performance measures 

reflecting societal goals such as congestion management or environmental impact are translated through 

KPIs and included in project documents for designing, 

constructing, operating, and maintaining transportation facilities. The report shows that it is possible to 

align projects with these higher goals. The findings 

are applicable to agencies that wish to align overarching organizational and societal performance measures 

through KPIs not only to PPP projects, but also to 

conventionally bid projects. 

The following summary conclusions provide a basis 

for the recommendations of this study. The report 

contains the background, methodology, and details 

on which these findings are based. Chapter 6 

discusses the conclusions and recommendations 

in greater detail. 

Summary Conclusions

Alignment of Agency Goals With Performance 

Measures and PPP Project KPIs

Ideally, agencies will be able to align their higher level 

goals with performance measures and individual PPP 

KPIs. All agencies are striving for this goal. This report 

documents several examples of this alignment, but 

none of the agencies has achieved a completely 

seamless alignment of project KPIs with its 

overarching agency performance measures. The 

largest challenge in this goal is the evolving and 

dynamic nature of both the agency performance 

measures and the project KPIs.

Dynamic Nature of KPIs and Performance 

Measurement Over Time

Some cases illustrate the necessity of a dynamic 

approach to performance measurement because 

service or asset requirement expectations are likely 

to change over time. In some instances, the measure 

and the indicator used have an inherent ability to 

evolve because the indicator is oriented toward 

trends in particular measures. In other instances, 

provisions are put in place to modify measures 

over the contract period.

Alignment of Performance Data With Agency 

Performance Management System

As U.S. highway agency performance management 

systems continue to mature, PPP performance data 

will need to be integrated with these systems to 

ensure optimal network operations. It is important 

to collect performance data during the concession 

period in a manner consistent with the agency’s 

network management approach. This implies that 

the data will also be used to verify PPP performance. 

The alignment of these measures is challenging. 

As these systems evolve, PPP project data collection 

formats and reporting structures will also need to 

evolve to be consistent with the overall network 

management approach.

Use of Asset Management Plans in Addition 

to KPIs

Although specific performance measures or key 

performance indicators are used to categorize and 

track the quality of operations and maintenance 

services, the asset management plans proposed 

at time of selection, agreed to at time of contract 

close, and modified (per contract provisions) over 

the contract period are clearly a significant dimension of the overall approach to asset management 

in a PPP arrangement.

Executive Summary
Executive Summary

2

Focus on Outcomes Rather Than Outputs

The agencies are evolving performance measures for 

use in internal operations and with their contractors’ 

measures. Increasingly, these measures focus 

on outcomes rather than outputs. In some cases, 

this has evolved from the agency promulgating a 

lengthy set of prescriptive measures to negotiating 

key outcomes. This negotiation provides the local 

government or the contractor more latitude in how 

to achieve results, rather than dictating that the 

contractor or local government achieve many 

detailed performance indicators. 

Emphasis on Service Requirements Versus 

Asset Condition

Specific performance measures and KPIs used 

across the cases vary, but more recent cases 

illustrate more emphasis on service requirements 

than asset condition.

Use of Incentives

Incentives used are positive and negative, with the 

latter appearing to be more prevalent. In general, 

positive incentives are more associated with overall 

contractor performance, while negative incentives are 

more associated with compliance to specified service 

or asset requirements. Some projects include a strong 

emphasis on incentives for outcomes, such as rewarding the availability of travel lanes. Penalties and 

deductions to payments are also included, but the 

contract emphasizes rewards for performance 

above negotiated minimums.

Creation of an Asset Management Culture

A theme in all of the case studies is creating an 

ongoing asset management culture in the PPP 

organization that fosters a high level of service 

during the life of the contract and that attempts 

to preserve a substantial remaining service 

life at the handback point. 

Opportunity for More Use of KPIs in Design 

and Construction

While the use of KPIs for operations and maintenance 

is pervasive in this study, the application of performance measurement during design and construction 

is noticeably absent in the case study projects. Given 

that many PPP projects are upgrades of existing 

networks, there is an opportunity to apply KPIs to 

measure network performance during design and 

construction. The broad agency performance measures that apply to operations and maintenance 

should also apply to projects during design and 

construction. As performance-based management 

systems mature, they can be broadened to cover 

design and construction of PPP projects and more 

traditional forms of project delivery.

Focus of Handback Provisions

Handback provisions are generally asset focused 

and rely almost exclusively on residual service life 

specification. This practice introduces a significant 

auditing effort at the conclusion of the contract 

and the potential for disputes. The nature of these 

provisions also tends toward negative, complianceoriented incentives. 

Recommendations 

This study offered considerable insights into the 

evolution and application of performance measurement for PPP projects. Obvious trends toward the 

application of performance-based management 

systems were found in many sectors, including 

transportation. Examination of the PPP agreements 

showed trends in how agencies mandate performance measures and KPIs while allowing for flexibility in changes that will occur over the term of the 

agreement. The case studies demonstrate the viability of PPP projects for meeting critical infrastructure 

needs. The interviews with agency officials also 

provided insights on how the agencies and projects 

have evolved to better meet the goals of their 

customers and society.

The results of this study can be summarized in the 

following recommendations gleaned from literature, 

case study document analysis, and interviews.

1. Align project performance measures and KPIs 

with overarching agency goals.

2. Plan for the dynamic nature of performance 

measures throughout the PPP life cycle and 

handback.

3. Do not rely completely on KPIs to align agency 

goals and project performance, but strive to 

create an asset management culture through 

asset management plans that are continuously 

improved throughout the concession period.
3

Key Performance Indicators in Public-Private Partnerships 

4. Similarly, keep the number of programmatic 

and project-level measures and indicators to a 

manageable number. Focus on measures and 

indicators that result in outcomes instead of 

data outputs. 

5. Consider asset management plans during 

procurement and concession agreement 

negotiation.

6. Continue to develop and apply KPIs during 

design and construction to help align all types 

of projects to agency goals.

7. Explore outcomes-based handback provisions 

rather than compliance-oriented means.

8. Recognize that KPIs are not the only means of 

ensuring contract compliance during decades of 

design-build-operate-and-maintain projects.

9. Focus on customer needs and societal goals in 

addition to asset condition.

10. Unique agency locations and user demands 

necessitate unique agency goals, performance 

measures, and strategies, which are developed 

most effectively by involving upper management, stakeholders, community residents, and 

end users in the process. 
4
5

Chapter 3: Performance management models

1.1 Report Purpose

This report provides a state-of-the-practice description 

of domestic and international practices for key 

performance indicators (KPIs) in public-private partnerships (PPP). The report is based on a comprehensive literature review and eight case studies from 

Australia, British Columbia, the United Kingdom, 

and the United States. While the report focuses on 

PPPs, projects of all delivery methods, traditional 

and innovative, can benefit from the findings.

The primary audience for this report is State and 

Federal agencies that are developing PPP programs 

and wish to align these programs with the overall 

strategic objectives of their agencies. The use of 

definitive performance measures to drive agency 

decisions and resource allocation is a relatively recent 

development in the U.S. highway industry. Likewise, 

the use of PPPs as an integral part of highway networks is relatively new in the United States when 

compared to the international community. The U.S. 

highway industry can benefit from the experience of 

the international community in the development of 

KPIs for PPP projects and their alignment with overarching performance measures because international 

agencies have applied these practices for a longer 

time than the United States.

1.2 Definitions

Clear and consistent definitions for performance 

measures and KPIs are critical to appropriate application, but the definitions for performance measures 

and KPIs differ from country to country and even in a 

single country. The research team synthesized definitions from a number of sources.(1,2,3,4) The following 

definitions are provided for purposes of this report:

» Performance measures are derived from the 

programmatic levels of service sought by the 

transport agency and imposed contractually 

as broad classifications of desired outcomes 

required of the contractor.

» Key performance indicators are more specific 

milestones in or components of performance 

measures that serve as precursors to indicate 

progress toward the eventual achievement of 

the desired performance measures.

Performance measures are the broad classifications 

of desired outcomes required of the contractor. They 

are reflected by contractual goals and statements 

of increasing and decreasing specifics ensuring a 

specific, establishing a specific, or implementing 

a specific for a project. Key performance indicators 

typically include, but are not limited to, elements 

such as project benchmarks, targets, milestone 

dates, numbers, percentages, variances, distributions, rates, time, cost, indexes, ratios, survey data, 

and report data. These definitions are useful in 

understanding the results of and conclusions on 

the information gathered from each case study. 

1.3 Study Approach

The core findings of this research are based on eight 

international and domestic case studies. The study 

approach involved three primary phases: (1) literature 

review—reviewing existing documentation for PPP 

projects and literature containing KPI information, 

(2) data collection—obtaining detailed information 

via communication with foreign practitioners, and 

(3) synthesis—synthesizing final results and 

documentation.

The literature review collected data on current 

international and domestic approaches to performance management and KPIs. The literature review 

included both transportation and nontransportation 

sectors. From this review, the team captured theory 

and practice on performance-based management 

systems. The results of this review provided an 

understanding of the need for performance-based 

management systems, a summary of theoretical and 

applied models, and a basis for developing a comprehensive case study protocol. The literature review 

findings are reflected throughout the report and in 

the annotated bibliography in Appendix A.

Chapter 1: INTRODUCTION
Chapter 1: Introduction

6

Data collection involved gathering information from 

eight PPP project case studies and information 

from the agencies in which they operate. The team 

developed a data collection instrument in the form of 

a case study protocol to collect comprehensive and 

consistent information from the foreign and domestic 

practitioners. Many of the detailed findings derive 

from a rigorous content analysis of the PPP agreements. The content analysis of the documents was 

augmented by discussions with project and agency 

personnel when available. Table 1 summarizes the 

eight case studies.

Table 1. Case study overview.

Project Name Owner Location

I-595 Corridor 

Improvements

Florida

Department of 

Transportation

Broward County, 

Florida,

United States

Golden Ears Bridge TransLink

Metro Vancouver, 

British Columbia, 

Canada

Kicking Horse 

Canyon Phase II

British Columbia 

Ministry of 

Transportation

Golden, British 

Columbia, Canada

EastLink Victoria State 

Government

Melbourne, 

Australia

Capital Beltway

Virginia

Department of 

Transportation

Northern Virginia, 

United States

CLEM7 NorthSouth Bypass 

Tunnel

City Council of 

Brisbane Brisbane, Australia

M25 Highways Agency London, England

Airport Link Queensland State 

Government Brisbane, Australia

The research team synthesized the data by exploring 

patterns across the literature and case studies. The 

team used the categories discovered in the content 

analysis to organize the results. The results were 

presented to the Federal Highway Administration 

(FHWA) oversight panel for this research as an 

additional form of validation. The following categories 

were used for analysis and presentation of results:

 Operations and maintenance

 Design and construction

 Handback requirements and KPI evolution

1.4 Guide to the Report

This research report contains six chapters, including 

this introduction, and three appendices. This organization is meant to provide a context for the research, 

describe the basis for its findings, and present the 

results and recommendations in a concise format. 

The following is a summary of the sections and 

appendices for this report:

 Chapter 2: Background

The background summarizes the findings from 

the literature review. It takes a broad approach 

to examining performance-based management 

systems to provide a context for the study. 

It discusses the need for performance-based 

management, the relationship between PPPs 

and performance-based management, who 

is using performance-based management 

systems, and the outcomes of measuring 

performance.

 Chapter 3: Performance Management Models

After discussing the fundamental principles 

of performance-based management systems, 

this section presents models developed 

by the Dutch Ministry of Transport, Public 

Works, and Water Management and the 

American Association of State Highway 

and Transportation Officials (AASHTO) Task 

Force on Performance Management. It also 

includes insights from the literature on how 

to develop performance measures.

 Chapter 4: Case Studies

After describing the approach to the 

literature review and content analysis, this 

section provides the case study approach 

and a summary of the case studies. The 

case study summaries are limited to a highlevel description of the project context 

and PPP agreement.
7

Key Performance Indicators in Public-Private Partnerships 

 Chapter 5: Case Study Findings

This section presents the raw data for each 

case study. The information consists of a 

blend of KPIs and performance requirements 

from the language in the PPP agreements.

 Chapter 6: Results and Conclusions

The research findings are presented in this 

section. The results and conclusions are 

based on the patterns and trends found 

in the literature review, case studies, and 

discussions with agency and private 

sector personnel.

 Endnotes

This section includes the references to the 

citations in the report.

 Appendix A: Annotated Bibliography

This section expands on the references and 

provides an abstract for relevant journal 

articles, agency plans and reports, research 

reports, government articles, and Web site 

gateways.

 Appendix B: Case Study Protocol

This section includes the case study protocol 

used for the content analysis and agency 

interviews.

 Appendix C: Example Summary 

Operations and Maintenance KPI Tables

This section includes KPI tables from the 

PPP case study agreements.
8
9

Chapter 2: BACKGROUND

2.1 Introduction

The purpose of the background is to define the 

state of practice in the use of performance measures 

and KPIs in PPPs for highway design, construction, 

maintenance, and operations. The background 

demonstrates the need for and benefits of using 

performance-based management systems in PPPs 

to fund and manage U.S. transportation network 

improvements. It also offers a brief history and 

evolution of performance-based management 

systems in transportation agencies. 

The background presents highway agencies in the 

United States and abroad that use performance 

measures to successfully manage their highway 

systems and provides the framework the organizations use to apply these measures to their management process. It also provides valuable insight for 

creating useful and effective performance measures 

to anchor the management framework. Finally, the 

background describes the challenges and benefits 

of using performance-based management practice 

to govern highway systems.

2.2 Public-Private Partnerships and 

Performance-Based Management

PPPs are a delivery method that is integrally linked to 

performance management systems. PPPs generally, 

but not always, use capital acquired by the private 

sector partner to supplement or, in some cases, 

replace the need for publicly arranged financing 

of highway design, construction, operations, 

and maintenance.

Performance measures and the PPP project delivery 

method are relatively new concepts in the United 

States. A possible justification for the PPP concept 

is the ability to attain high-level societal or performance measures related to environmental improvement, congestion mitigation, trip reliability, quality 

enhancement, or public safety improvement. In 

many cases, the linkage is an integral part of the 

solicitation, award, and monitoring of the project 

throughout its life. 

This report examined case studies from around the 

world to determine if it was possible and beneficial 

to link performance goals to specific project goals. P oor road conditions cost motorists $67 

billion a year in repairs and operating 

costs and cost 14,000 Americans their 

lives. One-third of America’s major roads are 

in poor or mediocre condition and 36 percent 

of major urban highways are congested.(7)

Figure 1. American Society of Civil Engineers guiding

principles on infrastructure improvement.

Raising the Grades

5 Key Solutions

★ Increase federal leadership in 

infrastructure to address the crisis.

★ Promote sustainability and resilience 

in infrastructure to protect the natural 

environment and withstand natural and 

man-made hazards.

★ Develop national and regional infrastructure plans and complement a national 

vision and focus on system-wide users.

★ Address life-cycle costs and ongoing 

maintenance to meet the needs of current 

and future users.

★ Increase and Improve infrastructure investment from all stakeholders.
10

Chapter 2: Background

2.3 Background of Performance-Based 

Management in Highway Agencies

Performance-based management was initially 

referred to as a “transportation asset management 

system” by practicing foreign countries. Australia, 

Canada, Great Britain, Japan, and New Zealand are 

recognized as innovative leaders in performancebased management and have applied this methodology for nearly two decades.(1,5) Several of these 

countries’ infrastructure agencies established themselves on principles of performance measurement, 

such as Japan’s Ministry of Land, Infrastructure, and 

Transportation (MLIT) and Queensland, Australia’s, 

Department of Transport and Main Roads. Others 

attained this program by way of government policies 

and acts requiring the use of measurable standards 

and targets for government ministries and agencies, 

similar to the British Columbia Ministry of Transportation.(1) No matter the journey, various developed 

countries around the world are profiting from its use 

while others, including the United States, are only 

beginning to realize the system’s effectiveness and 

potential for inducing success.

Built on the notion of better understanding and 

controlling outcomes, the concept of using performance measurement to manage the efficiency of 

services and programs has been in the United States 

for over half a century. It was introduced under titles 

such as “RAND Corporation’s system analysis” in the 

1950s and “planning-programming-budgeting systems” in the 1960s.(6) However, the approach of using 

performance measurement to manage highway 

systems is a more recent phenomenon’ for a 

number of U.S. highway agencies.(5)

The process has been in development for about 40 

years, but has made only incremental advancements 

each decade in the transportation sector. The 1970s 

and 1980s found Ohio, Pennsylvania, Washington, 

and Wisconsin creating maintenance management 

systems using performance indicators to reflect the 

scope and scale of the programs being performed at 

that time.(6) In the early 1990s, Florida, Minnesota, 

Oregon, and Utah defined an early set of performance 

benchmarks for transportation after realizing that 

broader performance measurement focusing more 

on the outcomes of government programs was 

needed.”(6) In the mid-1990s, more State departments 

of transportation (DOTs) and metropolitan planning 

organizations (MPOs) began to establish and apply 

more comprehensive approaches to performance 

measurement in transportation systems. 

Over the past 10 years, more State DOTs and MPOs 

have turned to performance-based management in 

response to the limited resources for transportation 

systems and the resounding plea from the public for 

increased accountability in government programs 

before more tax dollars are spent on highway projects.(6) All State DOTs now track asset condition 

and safety data, vital elements of a comprehensive 

performance management system, and are 

progressing toward a full and successful 

application of this system.(8)

2.4 Who Uses Performance-Based 

Management Systems?

Performance-based management systems have been 

proven effective for a range of scenarios. As a result, 

a wide variety of programs and organizations outside 

the transportation sector use this technique. In 2002, 

the Office of National Drug Control Policy implemented and executed a performance measurement system 

with an overall goal of reducing the supply of and 

demand for illegal drugs in the United States with 

great success.(9)

A similar management system based on overall goals 

and daily manageable control objectives was introduced to a small division in a growing Hewlett Packard company; in 5 years, the division became the 

company’s most profitable.(10) Outside the United 

States, Japanese businesses for years have applied 

a similar management procedure termed “policy 

deployment” (a strategic, direction-setting methodology used to identify business goals as well as formulate and execute major change management projects 

throughout an organization) and have continually 

achieved goals.(10) 

Observing the success of such an approach, the 

executive and legislative branches of the U.S. 

T

he approach of using performance

measurement to manage highway

systems is a more recent phenomenon

for a number of U.S. highway agencies.(5)
Key Performance Indicators in Public-Private Partnerships 

11

government adopted the same policy in the 1993 

Government Performance Results Act and have used 

it to govern planning in cabinet-level departments 

with success.(10)

Noting this success, some U.S. transportation 

agencies have begun to use performance-based 

management systems. California’s DOT (Caltrans) 

has used performance management and performance measures extensively in program areas such 

as maintenance and operations, programming and 

budgeting, and project delivery.(6)

The Missouri DOT (MoDOT) also uses performance-based management extensively and 

has implemented an effective user information tool called “Tracker” to monitor and 

publicly report its performance results.(11)

An example from Tracker system is shown 

in figure 2. Former MoDOT Director Pete 

Rahn said the purpose of the Tracker tool is 

to inform the public of “what we [MoDOT] 

do well, what we don’t do so well and what 

we are doing to get better.” (11) 

The New York State DOT (NYSDOT) is expanding its performance management program from individual units in the DOT to the 

entire agency. This DOT uses “dashboards” 

to track and report performance measures to 

the public, stakeholders, and agency.(6)

For more than 10 years, Maryland’s State Highway 

Administration has been using performance management. It now uses its measures for program areas 

such as budgeting and programming, program 

management and project delivery, operations, and 

monitoring of results, feedback, and communication.(6) 

The Florida DOT (FDOT) is recognized as a national 

leader in performance measurement and has a 

systematic approach to decisionmaking that is both 

driven by policy and supported by data collection, key 

elements of a successful performance management 

system.(6) 

Finally, the Virginia DOT’s (VDOT) performance 

management program uses a “dashboard” similar 

to NYSDOT’s to report performance results (figure 3). 

Using a performance-based management system has 

resulted in commendable benefits for VDOT. Since 

implementing a more focused performance

S

ince implementing a more focused 

performance measurement system, 

VDOT’s construction ontime performance 

has improved from 20 percent to 90 percent 

and construction on-budget performance has 

improved from 51 percent to 90 percent.(6)

Figure 2. MoDOT Tracker system.

Figure 3. VDOT Dashboard system.
12

Chapter 2: Background

measurement system, VDOT’s construction ontime 

performance has improved from 20 percent to 90 

percent and construction on-budget performance 

has improved from 51 percent to 90 percent.(6)

2.5 Outcomes of Measuring Performance

Performance measurement system application offers 

both challenges and benefits. A major challenge of 

applying a performance-based management system 

is coming to a reasonable agreement in an agency on 

common goals and the strategies to achieve them.(12) 

In addition, the magnitude and complexity of currently operating transportation networks poses issues for 

implementation. These issues will arise specifically in 

the areas of organization, analysis, consistent data 

collection, and application of information based on 

performance measures.(6)

Along with the challenges are limitations to the 

performance-based management system for transportation agencies. First, performance data alone 

do not answer the question of why certain outcomes 

occurred (i.e., they may not tell the story behind 

the numbers). Second, some outcomes, such as the 

prevention of undesirable events, cannot be measured directly. Third, performance measures are only 

part of the solution. Managers and elected officials 

need to make good decisions based on these measurements for the process to be a success. Last, 

each agency has different issues and problems 

based on specific locations and unique underlying 

circumstances. It is unrealistic to develop a one-sizefits-all performance management system that will 

create absolute solutions for every DOT or MPO.(6)

Therefore, different methodologies are likely 

necessary for individual agencies.

Although performance management systems have 

limitations, the benefits clearly outweigh the challenges. Highway agencies using the system view it 

as an essential management tool that allows them to 

prove and improve their performance in delivering 

service with the benefit of making better decisions.(2)

Performance-based management facilitates 

communication within the agency and with the 

public, improves accountability, and yields a more 

balanced and sustainable transportation system.(3)

Agencies using the system are also experiencing a 

much-needed increase in investment from stakeholders and the public in their transportation projects 

and programs.(3) Performance measurement systems 

create strong partnerships between the agency and 

its stakeholders and the general public that assure 

better transportation systems are developed while 

existing systems are improved.(1)

AASHTO has determined, from numerous examples 

of success, that the system allows for more efficient 

allocation of increasingly scarce resources while 

assisting in the development and justification of 

budget and project proposals. Most important, it 

holds government agencies accountable to road 

users and the public at large for funding, constructing, 

maintaining, and operating the highway network to 

an increasingly higher standard.(6) This ultimately 

leads to a better transportation system for today 

and tomorrow. 

2.6 Conclusion

The application of performance-based management 

systems has the potential to improve the nation’s 

transportation network. The use of performance 

measures and KPIs in PPP projects is imperative 

because contract terms must align the partners over 

the course of the project, which in some cases can be 

more than 30 years. The use of performance-based 

management systems has increased rapidly in the 

transportation sector over the last decade, and this 

section of the report highlights some of the leading 

agencies’ successes and challenges.

P

erformance measures are only part of

the solution. Managers and elected

officials need to make good decisions 

based on these measurements for the

process to be a success.(6)

[P

erformance-based management

systems] hold government agencies 

accountable to road users and the public 

at large for funding, constructing, maintaining, 

and operating the highway network.(6)
13

3.1 Introduction

Performance-based management systems are based 

on a set of common principles and strategies. This 

section provides a discussion of these concepts to 

aid understanding of performance measures and 

key performance indicators. After a discussion of 

nonindustry-specific performance-based management systems, this section presents a fundamental 

performance management model developed by 

the Dutch Ministry of Transport, Public Works, and 

Water Management and ends with a presentation 

of an applied model developed by AASHTO.

3.2 Performance-Based Management 

System Principles

An examination of performance-based management 

strategies in use across many different disciplines and 

organizations yields a general framework for the 

system. Before all else, the general purpose of a 

performance-based management system is to cultivate 

accountability. To achieve this purpose, the formula for 

the system must contain four components: strategy, 

community, budget, and evaluation.(9) Strategy, founded on the organization’s mission, contains specific 

goals tied directly to specific targets and benchmarks 

used to set the direction for the organization. This 

element is subject to continual refinement. Community 

is the involvement of stakeholders in establishing these 

goals and targets. Stakeholders have a strong notion 

of what is realistic for these objectives, so their input 

should be highly valued. The budget element assures 

that resources are properly aligned with program 

activity in a manner that is consistent with the strategy. 

The results of the program performance indicate the 

best allocation of resources to reach the targets. Finally, 

evaluation is the element that dictates what changes 

need to be made to the strategy based on the performance results and feedback. Evaluation should force 

the interests of budget and community to converge 

in the creation of strategy.(9) To be successful, 

performance-based management should contain 

these four components and be a cyclical process. 

3.3 Fundamental Highway 

Performance Model

The Dutch Ministry of Transport, Public Works, and 

Water Management developed a model (figure 4, 

see next page) that defines performance in terms of 

levels.(13) The performance levels begin at the most 

basic specification level of material and processing 

and range through systemwide performance measures. Moving from one level to another in the 

model involves the transfer of risk through a contract 

between the agency and the designer, builder, or 

operator, depending on how the project delivery 

system is defined.

Starting from the bottom, the Dutch model outlines 

five levels for highway construction, maintenance, 

and systems operations:

5. Basic materials and processing involve current 

standard specification requirements, including 

individual material selection and processing 

issues.

4. Materials properties are specified by the agency 

in traditional project delivery and include items 

such as elasticity, plasticity, fatigue, and compactibility—elements of a project that can be 

optimized by the contractor.

3. Construction behavior and practices involve 

the behavior of the construction in terms of 

engineering properties. For example, elastic 

and plastic deformation and durability can be 

specified by the agency. Under performance 

specifications, construction and materials may 

be left to the discretion of the contractor. 

Chapter 3: Performance management models

B

efore all else, the general purpose of a 

performance-based management system 

is to cultivate accountability. To achieve 

this purpose, the formula for the system 

must contain four components: strategy, 

community, budget, and evaluation.(9)
14

Chapter 3: Performance Management Models

Examples include labor placement, equipment 

selection, and time to construct to best address 

weather and environmental conditions.

2. Functional performance requirements look at 

specific aspects of the products included in the 

contract—from embankments to drainage to 

structures. Performance requirements 

that link to road users are translated into 

requirements for the pavement surface, 

such as skid resistance, smoothness, 

noise reduction, and evacuation of 

precipitation. Traditionally, this is the 

owner’s responsibility, but it may be 

transferred to the contractor through 

an alternative contract delivery method.

1. User and societal demands are 

the highest level of the pyramid. The 

driver wants a road that is usable, safe, 

environmentally sound, and reasonably 

accessible via different modes of traffic 

and demand. This level involves an 

alignment of high-level project goals 

with broad agency performance requirements. This is fundamentally the owner’s 

responsibility in traditional delivery, but 

portions of this are transferred to the 

concessionaire in a PPP delivery.

The model developed in the Netherlands further 

establishes a relationship between the form of 

contract and levels of requirements, although not 

a straightforward (one-to-one) relationship. As 

shown in table 2, level 2 requirements are applicable 

in maintenance performance, design-build (D-B), 

design-build-maintain (DBM), and PPP contracts. 

Table 2. Requirement levels used in different delivery methods.

 Figure 4. Pyramid of relationships.

Key to symbols:

X: The first or highest level at which the owner can specify performance requirements.

x: In many cases these levels will be also used for considerable parts of the project. A contract for a typical highway project will

 always have a hybrid character in the sense that parts of a project must be specified on different levels.

➞: During initial development of a project, the owner should always start with Level 1, reasoning down to the desired contract level.

Con: The contractor will have to translate contract specifications down to instructions for its personnel, on Level 5 or even lower.

Project Delivery/

Contract Type

Level 1

User Demands/

Needs

Level 2

Functional Performance 

Requirement

Level 3

Construction Behavior 

and Practices

Level 4

Materials 

Behavior

Level 5

Basic Materials 

and Processing

Traditional X x

Maintenance 

Performance

X x x x

D-B X X Con Con

DBM X Con Con Con

PPP X x Con Con Con

Key to symbols

➞ ➞ ➞

➞

➞

➞
15

Key Performance Indicators in Public-Private Partnerships 

But when desired lifetime is longer than the contract 

time under DBM and PPP contracts, there might be 

risks that make it necessary to use level 3 requirements, in which the contractor must ensure future 

construction behavior.

The Dutch performance model aids understanding of 

the relationship between highway performance at its 

most basic level and how that performance can be 

shared in a PPP delivery. In PPP contracts, the agency 

and concessionaire agree on terms at levels 1 and 2. 

The concessionaires work with their designer and 

constructor team members to encompass the 

performance of levels 3, 4, and 5.

In this model, the traditional design-bid-build 

contract specifications start at level 4 by describing 

the material requirements and methods used to place 

the materials. As the contract types move to alternative delivery, the specification requirements can be 

described at progressively higher levels that reflect 

functional performance requirements and, at the 

highest performance level, user demands or 

needs under a PPP contract.

3.4 AASHTO Performance 

Management Process

Nonsector-specific performance-based management 

systems and an understanding of fundamental 

performance issues in transportation provide a 

context for a highway-specific performance management framework. AASHTO’s Task Force on Performance Management has used this context to develop 

a basic framework specifically for transportation 

performance management. The association believes 

that a proper framework must be practical, focused, 

cost-effective, and consistent with what is measured, 

how it is measured, and how the measured data are 

presented while also quantifying agency performance, 

driving interest and participation in achieving improvement, and aligning the measurement activities 

with outcomes and objectives.(2) As figure 5 shows, 

AASHTO’s fundamental process for performance 

management consists of five phases. The first phase 

is the selection of appropriate performance measures 

to evaluate the agency in critical program and service 

areas. This is followed by monitoring and reporting 

the performance results. The third phase consists of 

analyzing the results and identifying key factors that 

influence performance and opportunities for 

improvement. Subsequently, resources must be 

distributed to the system in a manner that drives 

better results. Finally, progress in achieving results 

should continue to be monitored and reported. The 

process cycles back to the third step and repeats.(6) 

According to AASHTO’s Task Force on Performance 

Management, for a highway agency to have a comprehensive performance management system, these 

basic principles of the performance management 

process must be integrated into every function in 

the agency, including the following:

 Policy development and long-range 

planning—Set the goals and objectives of 

the agency with input from elected officials, 

stakeholders, transportation interest 

groups, and the general public.

Figure 5. AASHTO performance management framework.

Performance Management Process

Select measures to assess

performance in key

program/service areas

Track and report

performance results

Identify key factors

influencing performance and

opportunities to improve

Allocate resources to

drive better results

Continue to monitor

and report progress
16

Chapter 3: Performance Management Models

 Programming and budgeting —Use performance results to direct resources and effort 

where the potential for improved performance 

is the greatest and most important.

 Program, project, and service delivery — 

Measure an agency’s performance in delivering 

projects on budget and on schedule as an 

effective tool for establishing credibility and 

accountability.

 Systems operations —Address congestion 

and safety by measuring traffic conditions, 

delay, clearance time for incidents, work zone 

delay and safety, snow and ice removal, and 

other system parameters.

 Monitoring and reporting results —Track and 

report performance results to identify opportunities for improvement and allow adjustments 

to be made in the policy and long-range planning process, resource allocation, delivery, 

and operations. 

The basic process of performance management 

presented by AASHTO is a key element to having a 

successful performance-based management system 

and can be implemented at the planning and decisionmaking levels in an agency. Along with this essential 

process, leaders in using performance management 

for transportation systems stress a few critical elements of the methodology. Stakeholder input in 

developing performance measures for the system, 

strong data collection strategies, benchmarking both 

inside and outside an organization, and development 

of a management system that is modally focused are 

just a few points of perpetual emphasis.(1) Furthermore, use of before-and-after studies of the highway 

system as additional feedback in any decisionmaking 

processes is strongly encouraged. These studies 

should be coupled with graphic and visual 

I

f what is measured and presented 

is not understood, the system is 

inevitably ineffective.(1)

Figure 6. Minnesota DOT performance management measurement example.

Moving Minnesota Projects

Projects On Schedule • Status Report: November 2002
17

Key Performance Indicators in Public-Private Partnerships 

presentations of performance results for the public 

and top agency decisionmakers to view because “if 

what is measured and presented is not understood, 

the system undoubtedly will be ineffective”(1) (see 

figure 6). The agency leaders also insist that collected 

performance data not lay dormant; they must be used 

in decisionmaking and improving performance for 

this system to be effective. Finally, many agency 

leaders have picked a handful of what they consider 

the most important performance measures, namely in 

the area of safety, and designated them “core performance measures.” They insist that these goals be met 

at the end of each cycle of the framework process. 

This is done while monitoring smaller, and still 

valuable, performance measures.(1) 

3.5 Performance Measure Development

Useful performance measures are requisite elements 

of a successful performance-based management 

system. In general, performance management 

system measures should be controllable, actionable, 

realistic, flexible, accurate, and credible. They should 

be conceived with the overall goals of the agency 

in mind while focusing on features such as revenue, 

cost, effectiveness, customer service, and public 

satisfaction.(14,15) Each measure should be tied to a 

specific target to assure it makes a direct contribution 

to the overall agency goals.(10) Balance is also important to performance measure development because 

seemingly smaller measures can be as important as 

larger ones in achieving agency goals and objectives. 

Most important, performance measure quality is 

substantially more influential than quantity; an overabundance of measures is overwhelming and can 

be destructive to the effectiveness of the system 

as a whole.(15)

The development of a performance measure specifically for transportation system management is similar 

to the general developmental case. Measures should 

have the ultimate goal of influencing decisionmaking 

and budget allocation in an agency and should be 

constructed with this goal in mind.(1) Also, they should 

add value and drive improvement for the agency 

while simultaneously being practical and costeffective.(2) Statistical evidence, both quantitative and 

qualitative, should be used to determine the progress 

of each measure in contributing to agency goals. This 

evidence is often labeled a “performance indicator” 

by many leading agencies and is attached directly 

to a performance measure.(3) Such indicators may 

include elements such as pavement smoothness, 

transportation-related fatalities and injuries, air and 

water quality, travel times and quality, fuel use, and 

customer satisfaction determined through survey 

responses.(3) In addition, the number of measures and 

indicators should be kept to a concise and efficient 

minimum because too many measures can be overwhelming and confusing to monitor.(1) Finally, it 

should be realized that developing performance 

measures for a transportation system is an ongoing 

process. Some measures may need to be added as 

agency goals and objectives expand or change over 

time, while others may need to be deleted as goals 

are achieved or become outdated.(3)

3.6 Conclusions

This chapter presents a common set of principles 

and strategies on which performance management 

systems are based to aid understanding of performance measures and KPIs. At its most fundamental, 

performance can be organized into five levels: basic 

materials and processing, materials properties, 

construction behavior and practice, functional performance requirements, and user needs. These fundamental performance issues should be considered 

when defining a performance-based management 

system. This report uses the AASHTO performance 

management process as a generic model for performance management systems because it represents 

the current thinking of leaders in this area.

I

n general, any measure of performance 

should be controllable, actionable, realistic, 

flexible, accurate, and credible and should 

be conceived with the overall goals of the 

agency in mind.(14)
18
19

4.1 Introduction

A series of international and domestic case studies is 

the basis for the exploration of performance measures 

and KPIs in this report. Three primary research tasks 

were developed to complete this research. The 

subsequent sections discuss the tasks in detail. 

The rest of this chapter describes the case studies 

and their salient characteristics. Chapter 5 discusses 

the results of the case studies.

4.2 Research Approach

The research approach consisted of three primary 

tasks: (1) literature review—reviewing existing documentation for PPP projects and literature containing 

KPI information, (2) data collection—obtaining 

detailed information via communication with foreign 

practitioners, and (3) synthesis—synthesizing final 

results and documentation.

4.2.1 Literature Review

The research team conducted a thorough review of 

existing documentation for PPP projects. This task 

focused on collecting data on current national and 

international industry approaches to KPIs and more 

general performance measures. The objective of the 

data collection effort was to provide information to 

define the state of the practice. An extensive literature 

review was conducted using the following sources:

 General Internet search engines 

(Google, Google Scholar, Yahoo, etc.)

 Transportation Research Board’s Transportation 

Research Information Services (TRIS) database

 Academic engineering databases, such as 

LexisNexis® and Engineering Village

 Academic business databases, such as EBSCO 

Business Source Complete and Management 

and Organizational Studies

 American Society of Civil Engineers Civil 

Engineering database

 Selected transportation agency Web sites 

and reports

The team gathered more than 40 scholarly articles 

and research reports from these sources. The team 

extracted more than 1,700 performance measures and 

indicators in use or previously used by highway 

agencies relating to all aspects of a project, including 

design, construction, operations, maintenance, safety, 

and environmental stewardship. This extraction was 

useful both in defining performance measures and 

indicators for the purpose of this report and in familiarizing the team with possible measures and indicators for use in examining the case study projects. The 

information gathered was constructed into a review in 

an annotated bibliography format (see Appendix A) 

that addressed the essential elements of performancebased management for highway construction:

 The need for performance-based management 

and PPPs in highway construction

 The history of performance-based management 

in highway agencies

 Who uses performance-based management 

systems

 The proper framework for a performance-based 

management system

 How to develop a useful performance measure

 The outcomes of measuring performance

4.2.2 Data Collection

The scope of the data collection involved gathering 

information from eight PPP project case studies. The 

project case studies also required collecting agency 

data on programmatic performance measures. Before 

beginning the case studies examination, the research 

team conducted a content analysis of the literature 

and contract documents in its database. Subsequently, the team developed a data collection instrument in 

the form of a case study protocol to collect comprehensive and consistent information from the foreign 

practitioners.

The first step in obtaining detailed information was 

analyzing the content of relevant documents before 

or concurrent with creating the data collection 

Chapter 4: CASE STUDIEs
20

Chapter 4: Case Studies

instrument. The purpose of the content analysis was 

to identify measures used in policy and implementation documents and minimize the burden on the 

international respondents. A formal content analysis 

involves collecting and organizing information in a 

standardized format that allows for the transformation 

of nonstructured information into a format that 

permits analysis. The basic steps of the content 

analysis method are (1) deciding to use content 

analysis, (2) determining what material should be 

included in content analysis, (3) selecting units of 

analysis, (4) developing coding categories, (5) coding 

the material, and (6) analyzing and interpreting the 

results. The result of the content analysis was a list of 

performance measures and KPIs that the team used 

as a basis for designing the case study protocol and 

supplementing data collection from foreign 

practitioners.

To preserve the quality of the research, the case 

studies were required to maintain trustworthiness, 

credibility, conformability, and data dependability. 

Four validity tests were used to determine the quality 

of the case study research: (1) construct validity, 

(2) internal validity, (3) external validity, and (4) 

reliability. Construct validity deals with people’s 

opinions and biases; subjectivity should be avoided 

in the research. This study dealt with construct validity 

by using multiple sources to collect the data for the 

research (e.g., both agency and contractor representatives). Internal validity refers to the interpretation of 

the data, especially when some causal factors are 

not recognized or omitted during analysis of the data. 

To ensure the internal validity of this study, the team 

used the technique of pattern matching across the 

case studies. External validity in this study involved 

the transfer of the results to practice. The external 

validity test was met by replicating the findings 

developed in one case study in another. Reliability 

is the capability of replicating the findings if the same 

steps are repeated. The condition of reliability was 

met by drafting a detailed protocol that guided the 

formulation of propositions, research questions, 

case study design, and data collection. 

The team worked together to develop the final 

case study protocol. The FHWA oversight panel 

reviewed and approved the protocol to assure it 

was not too burdensome for the foreign practitioners 

to answer. The approved case study protocol is in 

Appendix B.

4.2.3 Synthesis

The research team synthesized the data by exploring 

patterns across multiple case studies and literature. 

The team used the categories discovered in the 

content analysis to organize the results. The results 

were presented to the FHWA oversight panel as an 

additional form of validation. The following categories 

were used for presenting results. These categories 

were also chosen to align as closely as possible with 

AASHTO’s performance management model.

I. Operations and maintenance

A. Organizational structure for monitoring 

operations and maintenance

B. Use of performance points to track 

operations and maintenance

C. Remedies and dispute resolution procedures 

for poor operations and maintenance 

performance

D. Example operations and maintenance 

performance measures and KPIs

II. Design and construction

A. Organizational structure for monitoring 

design and construction

B. Remedies and dispute resolution procedures 

for poor design and construction work

III. Handback requirements and KPI evolution

4.3 Case Studies

The research team, with the concurrence of the FHWA 

oversight panel, selected 10 PPP case study projects 

for this research. Eight of the case studies are included in this report. The case studies were selected for 

their applicability to the research in terms of (1) 

containing design, construction, maintenance, and 

operations activities; (2) availability of contract documents; (3) previous and ongoing contact with key 

project personnel; (4) diversity of status in the project 

delivery process; and (5) diversity of geographical 

location. The case studies and pertinent information 

are in table 3. The text describes the salient characteristics of the case studies.

To set a foundation for understanding subsequent 

case study results, the following sections provide 

the salient characteristics of each case study, including the location, duration, and cost of the project, 

as well as the project owner and major partners 

involved in the contract. This is intended to provide a 

high-level description of the type and size of projects, 
21

Key Performance Indicators in Public-Private Partnerships 

using both PPP agreements and performance 

management systems in their contract to 

facilitate this understanding.

4.3.1 I-595 Corridor Improvements

The Interstate-595 highway project in Broward 

County, FL, is a corridor reconstruction and 

addition of auxiliary lanes. The project involves 

resurfacing the I-595 mainline and adding a 

reversible express lane system in the I-595 median. 

Florida’s Turnpike mainline and interchange will 

also be widened and new bicycle and pedestrian 

paths will be constructed as components of the 

county’s New River Greenway System. Thirteen 

sound barriers will be constructed to provide noise 

abatement for 21 communities in Broward County, 

and a bus rapid transit and express bus service will 

be added to the corridor to increase traffic mobility. 

The $1.2 billion contract involves a 35-year concession for a total project length of 10.5 miles (mi) 

(16.8 kilometers (km)). 

The PPP agreement is between FDOT and the private 

concessionaire I-595 Express LLC (created by ACS 

Infrastructure Development). The concessionaire’s 

design team consists of nine design firms, including 

AECOM; its construction team consists of five contractors, including GLF Construction Corp.; and its operations and maintenance contractor is Jorgensen Contract 

Services. FDOT’s management team is comprised of a 

public involvement team headed by Media Relations 

Group, LLC; a design oversight team made up of five 

firms, including Reynolds Smith & Hills; and a construction oversight team headed by the Corradino Group.

4.3.2 Golden Ears Bridge

The Golden Ears Bridge project is located in 

metropolitan Vancouver, British Columbia, Canada. 

The project consisted of constructing 4,656 meters 

(m) of bridge length and 112,000 square meters 

of bridge deck. Also, 13.3 km (8.2 mi) of roadway 

were constructed, including the bridge span, and 

12.2 km (7.5 mi) of public streets were upgraded.

Project Name Owner Location Project Duration Cost

I-595 Corridor 

Improvements

Florida Department of 

Transportation

Broward County, 

Florida, United States

Award: October 2008

Begin Concession: Spring 2014

Concession Term: 35 years

US$1.2 

billion

Golden Ears Bridge TransLink Metro Vancouver, 

British Columbia, 

Canada

Award: December 2005

Begin Concession: June 2009

Concession Term: 35.5 years

CA$808 

million

Kicking Horse Canyon 

Phase II

British Columbia Ministry 

of Transportation

Golden, British 

Columbia, Canada

Award: October 2005

Begin Concession: August 2007

Concession Term: 25 years

CA$13 

million

EastLink Victoria State 

Government

Melbourne, Australia Award: July 2003

Begin Concession: June 2008

Concession Term: 39 years

AU$2.5 

billion

Capital Beltway Virginia Department of 

Transportation

Northern Virginia, 

United States

Award: December 2007

Begin Concession: December 2007

Concession Term: 80 years

US$1.93 

billion

CLEM7 North-South 

Bypass Tunnel

City Council of Brisbane Brisbane, Queensland, AustraliaAward: April 27, 2006

Begin Concession: 2010

Concession Term: 35 years

AU$3.2 

billion

M25 Highways Agency London, England Award: May 2009

Begin Concession: 2012

Concession Term: 30 years

£6.2 billion

Airport Link Queensland State 

Government

Brisbane,

Queensland, 

Australia

Award: May 2008

Begin Concession: 2012

Concession Term: 45 years

AU$3.4 

billion

Table 3. Case study project summary.
22

Chapter 4: Case Studies

The project’s PPP agreement is between TransLink, 

the owner, and a joint venture led by Bilfinger Berger 

and CH2M Hill. TransLink, British Columbia’s South 

Coast Transportation Authority, was the sponsor and 

is the remaining project owner for the Golden Ears 

Bridge. The Bilfinger Berger–CH2M Hill partnership, 

calling itself the Golden Crossing General Partnership 

(GCGP), was awarded the project contract on Dec. 7, 

2005. Construction started in June 2006. Golden Ears 

Bridge formally opened to traffic 3 years later on June 

16, 2009. TransLink engaged GCGP to design, build, 

finance, and operate the project over a 35.5-year 

period under a contract totaling roughly CA$808 

million. GCGP, owned by Bilfinger Berger Project 

Investments, a branch of the Bilfinger Berger 

organization, delegated the design and construction 

services to 20 British Columbia-based firms (including 

Bel Contracting, Imperial Paving, and Fraser River 

Pile and Dredge Ltd.) and acted as the design and 

construction project manager. The partnership elected 

Capilano Highway Services to maintain the bridge 

and road network in accordance with the contract’s 

operations, maintenance, and rehabilitation agreement after it opened to traffic to complete the 

35.5-year concession term.

4.3.3 Kicking Horse Canyon Phase II

The Kicking Horse Canyon Phase II project is located 

in Golden, British Columbia, Canada. This phase of 

the project involved the design, construction, and 

financing of 5.8 km (3.6 mi) of highway and the 

replacement of the Park Bridge. It also included a 

subcontracted agreement for HTMC Services Inc. 

to maintain, operate, and rehabilitate the entire 

project (phases I, II, and III), a total of 26 km (16.1 mi) 

of highway, for 25 years. The cost of the second 

phase of the Kicking Horse Canyon Project was 

calculated at CA$143 million.

The PPP agreement between the British Columbia 

Ministry of Transportation and the Trans-Park Highway Group is a performance-based agreement used 

to govern the phases of design, construction, maintenance, and operations. The foundation of this 

system is the proper monitoring of performance, 

which for Kicking Horse Canyon was done by the 

province of British Columbia represented by the 

British Columbia Ministry of Transportation. The 

Figure 8. Golden Ears Bridge.

 Figure 7. 1-595 corridor improvements.
23

Key Performance Indicators in Public-Private Partnerships 

British Columbia Ministry of Transportation has 

monitored performance since the late 1980s. 

The ministry monitored all aspects of the design, 

construction, completion, commissioning, testing, 

and maintenance of the works through inspections, 

testing, surveys, certifications, and review. The 

contract for the project was awarded to Trans-Park 

Highway Group on Oct. 28, 2005, and the project 

officially opened to traffic on Aug. 30, 2007. The 

Trans-Park Highway Group is a joint venture led and 

managed by Bilfinger Berger BOT Inc. The partnership includes other teams, such as Flatiron Constructors Canada, responsible for construction management, and Parsons Overseas Co. of Canada, leading 

design program and management. HTMC Services 

Inc. was subcontracted the task of ongoing operations and maintenance services for the project’s 

lengthy concession term. The partnership also 

consists of smaller subconsultants and subcontractors providing specific designs, checks, and 

specialized construction.

4.3.4 EastLink

Mitcham-Frankston Freeway (EastLink) is an AU$2.5 

billion tolled freeway linking a large area through 

the eastern and southeastern suburbs of Melbourne, 

Australia. It is part of Melbourne’s Metropolitan 

Ring Road project. The project includes a new 39-km 

24.2-mi) roadway and 6 km (3.7 mi) of bypass roads 

at Ringwood and Dandenong. Three traffic lanes in 

each direction run for 33 km from the Eastern Freeway 

to Thompson Road at Carrum Downs. At the southern 

end, two traffic lanes in each direction run for 6 km 

(3.7 mi) from Thomson Road to the Frankston 

Freeway. Twin 1.6-km (0.9-mi) three-lane tunnels run 

through the Mullum Mullum Valley as a means of 

environmental protection. EastLink is electronically 

tolled with no toll collection booths. 

The PPP agreement is between Victoria and 

ConnectEast. The Southern and Eastern Integrated 

Transport Authority (SEITA) was established to act 

on behalf of Victoria to plan, procure, and commission this facility. ConnectEast was selected as the 

concessionaire to fund, design, construct, operate, 

toll, and maintain the road for 39 years and was 

officially awarded the contract by SEITA in October 

2004. ConnectEast contracted Thiess John Holland 

for the detailed design and construction, SICE for the 

tolling system, and United Group Infrastructure for 

mechanical and electrical work. Construction began 

in March 2005 and the freeway opened to traffic 3 

years later in June 2008. Tolling for the freeway did 

not begin until July 2008, so motorists used it free 

of charge for the first month. 

4.3.5 Capital Beltway 

The Interstate 495 Capital Beltway project will build 

14 mi (22.5 km) of new high-occupancy toll (HOT) 

lanes (two in each direction) on I-495 from the Springfield Interchange to north of Dulles Tollroad in Northern Virginia. These HOT lanes will allow the Capital 

Beltway to offer HOV-3 connections with I-95/395, 

I-66, and Dulles Tollroad for the first time. In addition 

to providing new travel choices, this project will 

also make a contribution to the beltway’s 45-year-old 

infrastructure, replacing more than 50 aging bridges 

and overpasses, upgrading 10 interchanges, and 

improving new bike and pedestrian access. When 

completed, buses, carpools and vanpools with three 

Figure 9. Kicking Horse.

Figure 10. EastLink.
24

Chapter 4: Case Studies

or more people, and motorcycles will be able to ride 

in the new lanes for free. Vehicles carrying two people 

or fewer will either travel for free in the regular lanes 

or pay a toll to ride in the HOT lanes. Tolls for the 

HOT lanes will change according to traffic conditions, 

which will regulate demand for the lanes and keep 

them congestion free. The project will be electronically tolled using transponder technology.

In 2002, VDOT received an unsolicited PPP conceptual 

proposal from Fluor Daniel to develop, finance, design, 

and construct HOT lanes on the Capital Beltway. 

Although VDOT advertised for competing proposals, 

none were received. In spring 2003, VDOT submitted 

a grant application to FHWA to study HOT lanes and 

other value-pricing applications in Northern Virginia. 

In September 2007, VDOT and Capital Beltway 

Express, LLC, formed by Fluor and Transurban, 

reached an agreement in principle for the design, 

construction, operation, and maintenance of the 

Capital Beltway HOT lanes. A comprehensive 

agreement was finalized on Dec. 20, 2007. Under 

this agreement, VDOT will own and oversee 

the HOT lanes and Capital Beltway Express will 

construct and operate them. The length of the 

concession is 80 years (5 years of construction 

and 75 years of operation).

4.3.6 CLEM7 North-South Bypass Tunnel

The Clem Jones Tunnel, formerly known as the 

North-South Bypass Tunnel, will be a 4.08-mi (6.5-km) 

tunnel in Brisbane, Australia, that links five freeways 

and arterials on the north and south sides of the 

Brisbane River. When it opened in 2010, it will operate 

with fully electronic tolls that rely on either vehicle 

transponders or license plate recognition photography. The project is also called the CLEM7 after its 

route designation. It will feature two twin tunnels of 

4.8 km (2.88 mi). The Brisbane municipal government 

anticipates that it will be the first of five major projects 

intended to relieve congestion in the rapidly growing 

Australian metropolis. The CLEM7 is also the first 

section of the new M7 motorway in Brisbane. The M7 

is expected to be completed in 2012 following completion of the Airport Link tunnel. That will be a 6.7-km 

(4.1-mi) tunnel that will connect the CLEM7 to the 

region’s airport and growing northern suburbs.

The project is being built and managed by the 

RiverCity Motorway Group on behalf of the Brisbane, 

Queensland, City Council. RiverCity Motorway is 

a publicly traded company under contract to the 

Brisbane City Council. RiverCity Motorway, in turn, 

contracted the design and construction of the tunnel 

to the Leighton Contractors and Baulderstone Hornibrook Bilfinger Berger Joint Venture (LBB JV). The 

35-year contract includes design-build-finance-operate 

(DBFO) provisions. Another firm, Brisbane Motorway 

Services, a joint venture of Leighton Services and 

Bilfinger Berger, will operate and maintain the 

CLEM7 during the concession period.

4.3.7 M25

As a hub of the United Kingdom’s motorway network, 

the M25 is one of the busiest motorways in Europe 

and is the key strategic orbital route around London. 

Widening of the M25 began in May 2009. The project 

is designed to widen about 102 km (63.3 mi) of the 

M25 by adding a lane in each direction, making the 

majority of it a four-lane motorway. The widening 

will be done around the north side of London 

Figure 12. North-South Bypass Tunnel. between Junctions 16 (M40) and 23 and between 

Figure 11. Capital Beltway.
25

Key Performance Indicators in Public-Private Partnerships 

Junctions 27 and 30 (A13 Interchange). Construction 

will take place over 3 years. In addition, the M25 

may be widened between Junctions 23 and 27 

and between Junctions 5 (M26) and 7 (M23) around 

southeast London. The decision on these two sections 

will be made later in the contract period. The total 

cost of the project, including the operations and 

maintenance, is £6.2 billion.

On May 20, 2009, the Highways Agency (HA) awarded 

the M25 DBFO contract to Connect Plus. Design and 

construction completion is expected in 2012 with a 

subsequent 30-year operating contract period. The 

PPP agreement for the M25 is based on the DBFO 

form of contract that has evolved in HA for more than 

10 years. The agreement is based on previous agreements used for DBFO roads, but incorporates amendments to reflect the more complex nature of the M25 

DBFO and to make the agreement compliant with 

Treasury’s Standardization of PFI Contracts (Version 

3). Because of heavy traffic on the M25, HA decided to 

apply an availability payment mechanism rather than 

a congestion management payment. Availability 

payments are subject to lane availability, condition 

criteria, and performance measures. 

4.3.8 Airport Link

The Queensland government included a voluminous 

set of performance metrics and management system 

requirements to ensure that its 11-km (6.8-mi) Airport 

Link toll project will operate acceptably for 45 years. 

Airport Link is a mainly underground tollroad planned 

between Brisbane’s northern suburbs, the airport, and 

the inner city. When completed in 2012, it will connect 

the North-South Bypass Tunnel, Inner City Bypass, 

and local road network at Bowen Hills to the 

northern arterials of Brisbane.

Airport Link will include one northbound and one 

southbound three-lane tunnel. It is expected to carry 

95,000 vehicles soon after opening, with volumes 

predicted to reach 120,000 in 2026. It will allow 

motorists to avoid 18 sets of traffic signals in the 

rapidly growing city, which is expected to grow from 

2.6 million today to 3.7 million by 2026. In May 2008, 

the Queensland government announced BrisConnections as the preferred bidder for the Airport Link and 

the adjacent Northern Busway and Airport Roundabout upgrade projects—all under a 45-year DBFO 

contract. Despite a controversial collapse of the 

project’s original stock-financing plan, the project 

remains on schedule and its financing is guaranteed 

Figure 13. M25.

Figure 14. Airport Link.
26

Chapter 4: Case Studies

by major partners Macquarie Capital Advisors and 

Deutsche Bank.

BrisConnections is a publicly traded operating company under contract to the Queensland government 

to build and operate the facility. BrisConnections, 

in turn, contracted with Thiess-John Holland, a joint 

venture between Thiess and John Holland Group, 

to build the facility. Airport Link Motorway Services, 

a joint venture between Thiess Services and John 

Holland Services, will operate and maintain the 

tollroad on completion. 

4.4 Conclusions

This section presented the case study approach for 

this research. The case study protocol is in Appendix 

B. The eight international and domestic case studies 

are the basis for the exploration of performance 

measures and KPIs in this report. This section presented a high-level summary of the cases studies. 

Section 5 of this report discusses the results of 

the case studies.
27

5.1 Introduction

The research team collected a wealth of data 

from the content analysis of the PPP case study 

agreements and interviews with the project team 

members. This chapter summarizes the findings and 

presents the raw data from the case studies. Chapter 

6 presents the interpretation of the overall results 

and conclusions from the findings. The information 

consists of a blend of KPIs and performance requirements from the language in the PPP agreements. 

While the performance requirement examples are 

not KPIs per se, they do provide insights into performance management in the key areas identified in 

the case study protocol. The results are organized 

into the following three categories:

 Operations and maintenance

 Design and construction

 Handback requirements and KPI evolution

Table 4 summarizes the findings for each category. 

Data were found for each category, but not in every 

project because of the nature of the data available 

for each case study. Much of the data in this section 

come directly from the actual contract language in 

the agreements. The section summarizes the data 

first by category and then by subcategories for 

each project.

In addition to the KPI data summarized in this section, 

Appendix C provides a summary of KPI tables for 

Chapter 5: CASE STUDY FINDINGS

Table 4. Overall summary of KPI information. 

KPI Category I-595 

Corridor

Golden 

Ears Bridge

Kicking Horse 

Canyon

East 

Link

Capital 

Beltway

North-South 

Bypass

M25 Airport 

Link

5.2 Operations and Maintenance (O&M)

5.2.1 Linking Agency Performance 

Measures With Project KPIs ✓ ✓ ✓ ✓

5.2.2 Organizational Structure for 

Monitoring O&M ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

5.2.3 Using Performance Points to 

Track O&M ✓ ✓ ✓ ✓ ✓ ✓

5.2.4 Remedies and Dispute 

Resolution Procedures for Poor 

O&M Performance

✓ ✓ ✓ ✓ ✓ ✓

5.3 Design and Construction (D&C)

5.3.1 Organizational Structure for 

Monitoring D&C ✓ ✓ ✓ ✓ ✓ ✓ ✓

5.3.2 Remedies and Dispute 

Resolution Procedures for Poor 

D&C Work

✓ ✓ ✓ ✓ ✓ ✓

5.4 Handback Requirements and KPI Evolution

5.4 Handback Requirements and 

KPI Evolution ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
28

Chapter 5: Case Study Findings

I-595, Golden Ears Bridge, Kicking Horse Canyon, and 

the North-South Bypass. The Appendix C tables come 

directly from the project agreements.

5.2 Operations and Maintenance

The richest set of KPIs was found in the operations 

and maintenance categories of the PPP agreements. 

The agencies use KPIs to align project operations with 

network operations and overall agency performance 

measures. The KPIs for operations and maintenance 

are presented in the following subcategories:

 Linking project performance measures with 

agency and societal goals

 Organizational structure for monitoring 

operations and maintenance

 Using performance points to track operations 

and maintenance

 Remedies and dispute resolution procedures for 

poor operations and maintenance performance

5.2.1 Linking Agency Performance 

Measures With Project KPIs

Ideally, agencies will be able to link their higher level 

performance measures with individual PPP KPIs. 

These higher level performance measures typically 

deal with network operations and societal goals. For 

example, AASHTO strongly promotes reform for the 

entire U.S. highway system centered on reaching the 

six key national interests.(6) AASHTO is in the process 

of developing and establishing a handful of broad, 

overall agency goals for the entire U.S. highway 

system on highway construction safety, mobility, and 

stewardship. These six key national interests appear 

to reflect the interests of American society and address the public’s major concerns about and views of 

the transportation system. If the goals are accepted 

and implemented, AASHTO believes that every 

highway agency in the United States will be able 

to—and will be held accountable for—producing 

results that reflect and work toward realizing these 

goals. The challenge for each PPP is to link project 

KPIs to these higher level agency goals.

A number of the eight case studies reveal strategies 

foreign highway agencies are implementing to meet 

some of their unique performance measures. It is 

apparent that the agencies are attempting to align 

KPIs with performance measures. This can be seen in 

individual project contract elements and the underlying strategies on which they are founded. However, 

the agencies have not found integration of the performance measures and KPIs to be seamless. Agency 

goals and performance measures can change over 

time in response to societal goals, while PPP agreements must be more rigid in defining KPIs. A good 

example involves agency goals on climate change 

issues that were not contemplated when the PPP 

contracts were executed. This section details the 

general alignment between project goals and agency 

goals, as well as between agency goals and wider 

societal goals. This linkage is built on the idea that 

many small and specific achievements (meeting 

project goals) will eventually lead to larger, more 

significant accomplishments (reaching societal goals).

Airport Link and CLEM7 North-South 

Bypass Tunnel

Linking Societal Goals to Project Performance

A linkage is evident between Brisbane’s broad 

goals and the KPIs and other oversight mechanisms 

in the Airport Link and the CLEM7 North-South 

Bypass Tunnel projects. Although the contract 

documents do not directly reference the larger 

state strategic objectives, the many management 

systems, including quality plans and KPIs in the 

projects, appear to parallel or replicate many of 

the same strategic objectives articulated in the state 

transportation strategic plans. General strategic 

outcomes desired in the state transportation plan, 

such as environmental sustainability, traffic reliability, 

neighborhood quality of life, and safe transport, 

all have parallel requirements in the contract 

documents for both projects. 

The Queensland Department of Transport and Main 

Roads (QDTMR) is the state transportation agency 

governing the projects. Both projects are linked to 

larger state transportation plans and objectives, 

although both projects were developed by spinoff 

government entities, not QDTMR, which is typical in 

Australia for large, multiyear toll facilities. The Airport 

Link project was developed by Queensland through 

a spinoff entity labeled City Infrastructure North (CNI). 

The CLEM7 North-South Bypass Tunnel was managed 

through the RiverCity Motorway Group. CNI is a 

government agency, while RiverCity Motorway Group 

is a publicly traded private company under a long-
29

Key Performance Indicators in Public-Private Partnerships 

term contract with the city of Brisbane. Both CNI and 

RiverCity motorway issued tenders for other firms 

to construct and operate the facilities.

While priority concerns from the state transportation 

plans are mirrored in the contract documents for the 

projects, the contract documents do not rely solely 

on a set of KPIs to ensure the concessionaire fulfills 

the state’s strategic objectives for the project. Instead, 

the contracts rely on a more comprehensive approach 

that requires the concessionaire to develop management plans and management systems for all major 

aspects of the projects’ planning, design, construction, maintenance, operations, toll collection, and 

community relations. At least 28 different management systems or plans are required for the projects, 

while only 19 individual KPIs are explicitly stated 

in the contract documents. Outside audits and an 

independent verifier are required as part of the 

contract to attest to the Brisbane City Council and 

Queensland that the many provisions of the management systems and plans are being followed. At least 

three management systems—project, environmental, 

and health and safety—must comply with the Australian provisions of the International Organization for 

Standardization (ISO) for these management systems. 

Also, a minimum of three performance bonds are 

required to ensure adherence to the performance 

specifications. These include bonds for design and 

construction, operations and maintenance, and the 

tollroad’s condition at handover. Although KPIs are 

included in the project contracts, they comprise only a 

small part of the oversight framework for the complex 

and multiphased CLEM7 North-South Bypass Tunnel 

and Airport Link projects. For example, all 19 of the 

KPIs referenced in the contract documents relate to 

aspects of the operations phase, and none relate 

to the design and construction phase. 

Underlying State Strategic Planning Process

QDTMR displays a well-articulated strategic management framework in which broad, catalytic state goals 

flow through a performance management process 

in the transportation agency down to the individual 

project and activity level. Although many of the issues 

addressed by the strategic management framework 

for QDTMR also are addressed in the CLEM7 NorthSouth Bypass Tunnel and Airport Link projects, they 

are addressed in different ways. Generally, the state 

agency adopts objectives and metrics to guide its 

next 5-year period. With the 40-year horizons for 

the CLEM7 North-South Bypass Tunnel and Airport 

Link projects, the contracts rely on longer term 

management systems and quality assurance processes that can adapt and change over time. One BrisConnections executive said, “The contract approach is 

intended to provide the owner with flexibility to 

evolve its oversight metrics over time while providing 

the concessionaire some certainty of performance 

to enable the concessionaire to predict and manage 

its costs.”

In an interview, an official of BrisConnections, the 

concessionaire selected by CNI to build and operate 

the Airport Link, said that the most direct linkage 

between the state’s strategic transportation objectives 

and the Airport Link contract documents is the actual 

construction of the project. The construction and 

operation of the facility fulfills a fundamental transportation objective of the state’s strategic plan, 

which is to alleviate congestion and improve 

mobility in the rapidly growing urban area.

For more than a decade, QDTMR has operated under 

a state strategic transportation plan. In 2008, Queensland’s minister for Transport, Trade, Employment, 

and Industrial Relations and minister for Main Roads 

and Local Government jointly developed the updated 

state transportation plan known as the Transport 

Coordination Plan for Queensland. This plan set the 

strategic direction for the highway and transit agencies before and after a recent merger to form QDTMR. 

It expresses the strategic context and challenges the 

state faces. The state is coping with rapid growth, 

high congestion, automobile dependency, environmental changes, high community expectations, a 

threatened quality of life, and diverse regions with 

differing transportation needs, according to the plan. 

The Transport Coordination Plan lays out 10 strategic 

objectives for the transportation agencies:

 Make the most of the existing transportation 

network by balancing demand and supply 

of infrastructure and services to maximize 

efficiency.

 Invest in Queensland’s transport system by 

targeting investment to achieve best value 

for industry and community.

 Keep the system working well by ensuring 

the transport system performs well and accommodates the changing travel patterns and 

requirements of society and industry.
30

Chapter 5: Case Study Findings

 Get people walking, cycling, and using public 

transport by increasing the share of trips made 

by public transport, walking, and cycling and 

providing alternatives to private car use.

 Support regional and remote communities 

by connecting them to essential services that 

support economic development and social 

cohesion.

 Move freight efficiently by contributing to 

a strong and diverse trading environment.

 Make transport safer by reducing transportrelated incidents, fatalities, and injuries.

 Make transport more secure by protecting 

personal security and the integrity of the 

transport network.

 Care for the natural and built environment by 

contributing to a cleaner, healthier, and more 

livable environment for all Queenslanders.

 Integrate transport planning and land use by 

matching transport and land use patterns to 

enhance livability and trade.

QDTMR converts these broad goals into an increasingly specific set of reports and metrics by which it 

can assess—and be measured on—how well it is 

implementing the state government’s overall transportation aspirations, including the following:

 Adopt a 5-year strategic plan derived directly 

from the 10-year state plan. 

 Adopt a specific list of projects, called the roads 

implementation plan, that are intended to meet 

the strategic plan objectives.

 Annually, produce a highly detailed and quantified service delivery statement (SDS), which is a 

public report on what QDMTR plans to achieve 

in the upcoming budget year.

 Every quarter, produce a board of management 

report to the cabinet agency reporting on 

QDMTR’s progress on the SDS.

 Conclude each year with an annual report that 

specifies what QDMTR actually accomplished in 

the SDS and through overall efforts in the past 

fiscal year.

Translating State Goals Into Project Performance

Although QDMTR has its own set of departmental 

KPIs and objectives, they do not closely correlate to 

the KPIs and objectives in the CLEM7 Tunnel or 

Airport Link contracts. There are, however, general 

similarities in that both the state agency and the 

project entities create systems and metrics for 

common transportation issues, such as safety, 

emissions, travel reliability, and asset conditions.

The QDTMR strategic plan has a key results area 

(similar to a strategic goal) of having “effective 

relations,” which are supported by key result indicators of “stakeholder satisfaction” and “effective 

relationship management.” The project deed for the 

CLEM7 North-South Bypass Tunnel project requires 

the concessionaire to have a relationship management plan facilitated by a third-party contractor to 

bring stakeholders together to create a shared mission, vision, and objectives for the project. A reporting 

system will be designed to keep all stakeholders 

informed throughout the project of key areas, such 

as cost, safety and health, environmental compliance, 

project quality, schedule status, and design status. 

Although both the state transportation department 

and the CLEM7 North-South Bypass Tunnel project 

organization have strategic objectives for customer 

relations, they approach them somewhat differently. 

The state agency approaches its objective with a 

5-year timeframe and key results indicators, while 

the CLEM7 North-South Bypass Tunnel contract 

documents require a permanent, ongoing relationship 

management plan that evolves over the years as 

stakeholder requirements mature. The CLEM7 NorthSouth Bypass Tunnel’s overall quality system also 

is paired with the project community relations plan 

and a corresponding community relations policy. All 

personnel must complete an induction, or training, on 

the community relations policy before beginning work 

on the jobsite. The community relations policy and its 

corresponding plan say, in part, that the concessionaires will adopt the following:

 Company approach —Demonstrably treat 

the community with sensitivity and respect in 

relation to its issues, views, and suggestions.

 Community interaction —Interact with the 

community in a way that is—and is seen to 

be—accessible, transparent, and responsive.

 Mutual trust and respect —Achieve a level of 

mutual trust and respect that leads to problemsolving and solutions that improve the overall 

project outcomes.
31

Key Performance Indicators in Public-Private Partnerships 

 Shared recognition —Leighton Contractors 

and the community will achieve industry 

recognition for world-best practice 

performance in project delivery.

 Management systems —Use innovative, 

people-focused management systems to 

achieve the above.

In the area and interest of safety, QDTMR has the 

following key result indicators:

 Safety of the state-controlled road network in 

line with national targets

 Efficiency of heavy vehicle operation on the 

state-controlled road network

 Travel efficiency and reliability on the statecontrolled road network

In its 2009 SDS, QDTMR has a 2008–09 target fatal 

crash rate per 100 million kilometers of less than or 

equal to 0.57 and a target number of fatalities per 

100,000 population of 3.97.

Comparable metrics on safety were not found in 

the contract documents for the CLEM7 North-South 

Bypass Tunnel or Airport Link projects. Instead, on the 

CLEM7 North-South Bypass Tunnel project, safety is 

based more specifically on the unique conditions of 

a highway tunnel. For instance, the fire and life safety 

systems must be reliable at least 99.995 percent of the 

time. The electrical system must be reliable 99.971 

percent of the time, and the facility control systems 

must have total redundancy and have availability of 

99.995 percent. The communication systems must 

have 99.99 percent availability and the ventilation 

system, at full capacity, must be reliable 99.954 

percent of the time. Outages within those limits 

are not allowed to exceed 1 hour.

Roadway safety is addressed through continually 

improving processes instead of adhering to a specifically narrow metric. Safety audits are required by 

an independent and qualified party. They must be 

performed during the design phase, immediately 

before the public opening, and every 2 years during 

the operations and maintenance phase. The concessionaire must implement the recommended corrected 

actions or justify to the independent verifier why 

the actions cannot be implemented. Not evident in 

the contract documents for either the CLEM7 NorthSouth Bypass Tunnel or the Airport Link project were 

KPIs related to the number of crashes or a crash rate. 

Instead of a fixed numeric crash KPI, the project relies 

on the creation, operation, and continual monitoring 

of a project safety and health management plan that 

addresses all aspects of the project, including vehicular crashes, injuries to the project workforce, and the 

fire suppression and ventilation systems in the tunnel.

In the asset management areas, similar contrasts 

are evident between how QDTMR measures and 

manages its performance and how the contract 

documents provide for the measurement and management of the CLEM7 North-South Bypass Tunnel 

and Airport Link projects. QDTMR begins with a 

strong policy-based transportation asset management 

(TAM) program and relies on annual performance 

metrics to ensure the ongoing achievement of sound 

roadway and bridge conditions. The service delivery 

statement has a target that 95 percent of miles traveled on urban routes and 92 percent of travel on rural 

routes meet pavement smoothness standards. To 

sustain those levels, it measures whether its targeted 

number of miles of pavement that need to be rehabilitated or resurfaced are met. For bridges, its strategy

is to continue retiring substandard timber bridges, 

the primary structures that reduce the quality of the 

overall bridge inventory. The QDTMR asset management processes produce a total needed level of 

expenditure to sustain roadway conditions, which 

in 2008–09 was AU$461 million. In the SDS the 

department tracks whether it successfully delivers 

that program. 

In the CLEM7 North-South Bypass Tunnel and Airport 

Link projects, a slightly different approach is taken. 

The contract documents do not prescribe specific 

condition levels for pavement smoothness, bridge 

conditions, or annual maintenance expenditure levels. 

Instead, they rely on a series of complementary and 

overlapping strategies to ensure that the project is 

designed, constructed, and maintained to ensure a 

high quality of condition throughout its service life 

and at its handover. The adequacy of the maintenance 

for the 31-year operations phase is controlled through 

extensive operations and maintenance requirements 

and adherence to an asset management plan. During 

the design stage, the designs for elements such as 

pavements and bridges are subjected to a mandatory 

review process by the independent verifier to ensure 

they meet current design specifications. Quality 

assurance plans throughout construction are required 
32

Chapter 5: Case Study Findings

to ensure that construction means, methods, 

and materials are sound. 

The concessionaire must establish and update an 

asset management system satisfying the project 

deed. The asset management system must record the 

current, historical, and projected future condition of 

each project asset. It must include detailed records 

of the repair or replacement of assets to assist in 

estimating the residual design life of the various 

elements. An asset inventory should be maintained 

that records the nature, extent, quantity, location, 

time, and type of any maintenance and repair. The 

asset inventory must be layered in terms of asset 

elements, types, items, and subitems, and the asset 

management system must document their regular 

inspection. The system must also trigger the necessary response defined in a code of maintenance 

standards for each asset element. 

The Operations and Maintenance Manual covers 

more than 600 pages of how the operating company 

will perform maintenance throughout the life of the 

project. The manual is, in effect, a comprehensive 

maintenance management system. It describes the 

various maintenance elements, defines their adequate 

state of condition and inspection cycles, describes 

necessary corrective actions, and includes a reporting 

process to monitor the overall condition of the 

maintained items. It includes more than 200 pages of 

summary tables, each providing details on a maintenance subitem, how it is to be inspected, what its 

general performance characteristics should be, and 

how it should be repaired to bring it into serviceable 

operation. The items cover many general roadway 

elements, such as potholes, pavement markings, 

signage, lighting features, and bridge elements such 

as bearings, expansion joints, and scuppers. It also 

includes details on the ventilation system, fire-suppression system, electrical components, and other 

elements of the physical plant. Both internal and 

external audits of the operations and maintenance 

activities are required, which serve as the basis for 

determining compliance with the contract 

specifications.

Summary

In summary, Queensland and the Brisbane City 

Council ensure sound infrastructure conditions are 

maintained by the concessionaires, but they do not 

achieve that assurance by imposing a lengthy list of 

KPIs to address each roadway component throughout 

the 4-decade contract life. Instead, they require 

creation of asset management and maintenance 

management systems to ensure that the projects 

remain in sound condition through each year of their 

contract life. The contract strategy for ensuring 

serviceability at the project handover is to require a 

remaining service life of about 50 percent for each 

asset component. Throughout the project’s life, 

oversight of the independent verifier and other 

auditors is the principal means to gauge the adequacy 

of the asset management and maintenance management efforts.

Review of the contract documents for the CLEM7 

North-South Bypass Tunnel and Airport Link indicate 

that KPIs are only one component of the contractual 

strategy to ensure quality. The other components 

include the following:

 Performance bonds

 Management system

 Hiring of an independent quality manager

 KPIs

 Audits of performance and finances

 Oversight of the independent verifier and other 

verifiers, such as the construction verifier 

The contract documents for the Airport Link and the 

CLEM7 North-South Bypass Tunnel projects are very 

similar. In an interview, Airport Link project officials 

indicated that because the projects are close to each 

other and both are intended to operate as part of 

the Brisbane roadway network, the same attorneys 

drafted both sets of contract documents for the local 

transport agencies. The BrisConnection officials 

confirmed that KPIs are only a small part of the overall 

management structure of the contracts. They noted 

that the 19 KPIs all focus on long-term operational 

issues and do not pertain to the design or construction phase. They also noted that the other performance strategies listed in the bullets above create a 

comprehensive and overlapping series of strategies 

to ensure reliable operation of the facility over the 

40-year life of the contract.
33

Key Performance Indicators in Public-Private Partnerships 

Kicking Horse Canyon Phase II

Agency Goals and Objectives

The British Columbia Ministry of Transportation has 

mandated that it “is committed to opening up BC 

through innovative, forward-thinking transportation 

strategies that move people and goods safely 

throughout BC, while helping maintain our provincial 

economy.” Two strategies the ministry has adopted 

to accomplish this mandate are (1) maintaining 

highways at a high standard through contracts with 

private sector road maintenance providers and (2) 

managing funding for high-quality, modern public 

infrastructure that supports the development of 

strong communities by contributing to long-term 

economic growth and a clean environment. Closely 

related to these strategies are five goals the ministry 

lives by. Each goal contains its own objectives, 

strategies to accomplish the objectives, and a 

performance measure.

 Goal 1: Key infrastructure is improved to drive 

economic growth and trade.

• Objective 1.1: Improve mobility servicing major 

economic gateways.

• Objective 1.2: Identify and select priority 

improvement projects.

• Objective 1.3: Use available provincial investment dollars as effectively as possible.

• Objective 1.4: Improve road access for resource 

industries and rural residents.

• Objective 1.5: Manage to build and improve 

infrastructure that contributes to their sustainable development.

 Goal 2: British Columbia’s transportation 

industries become more globally competitive.

• Objective 2.1: Develop Canada’s Pacific 

Gateway.

 Goal 3: Greenhouse gases are reduced for the 

transportation sector.

• Objective 3.1: Increase use of transit, cycling, 

and other alternative modes of personal 

transportation.

• Objective 3.2: Improve supply chain efficiency 

for the movement of goods.

• Objective 3.3: Reduce greenhouse gases 

through the adoption of new technologies.

 Goal 4: British Columbia is provided with a safe 

and reliable highway system.

• Objective 4.1: Contractors maintain the provincial highway system to a high standard.

• Objective 4.2: The main highway system is 

rehabilitated on a lowest life-cycle cost basis.

• Objective 4.3: Improve highway safety and 

reliability.

• Objective 4.4: Have effective road safety enforcement, education, and programs for the 

commercial transport industry.

 Goal 5: Excellent customer service is achieved.

• Objective 5.1: Continue to improve service 

levels to the British Columbia business 

community.

• Objective 5.2: Excellent customer service is 

provided to all British Columbians.

Each goal has an attached high-level performance 

measure with a target for the upcoming years in each 

area. The goal of increasing highway safety and 

reliability is the only one with two performance 

measures. These measures are presented in table 5 

(see next page).

Translating Agency Goals Into Projects

To achieve these larger agency goals, the goals’ 

objectives must be passed down to individual ministry projects. For the Kicking Horse Canyon project, the 

ministry has required a number of management plans 

from the concessionaire. Each management plan has 

characteristics and attributes that contribute small 

portions to the achievement of the five overall goals 

of the agency. The ministry has also set project-specific operational performance measures, asset preservation performance measures, and operations, maintenance, and rehabilitation (OM&R) specifications. 

These performance measures and indicators must be 

monitored, collected, and reported to the ministry.

The concessionaire is required to develop seven 

management plans for the project concession. 

These plans, in the ministry’s Highway Corridor 

Management Specifications for Highway 

Concessions, include the following:

 Quality and OM&R management plan

 Five-year management plan
34

Chapter 5: Case Study Findings

 Asset management plan

 Communications and customer care plan

 Salt management plan

 Emergency response plan

 Safety management and intervention plan 

Most of the management plan titles reasonably imply 

which of the five agency goals they reflect. These 

general management plans are built around agency 

goals four and five. Although there is no clearly 

defined link between these strategies and goals, there 

is an underlying tie between them and the management plans. A brief summary of the notable plans is 

in the next subsection of the case study findings for 

this project.

Along with developing these management plans, the 

concessionaire must also report its performance to 

the ministry in several different areas. These reports 

include the following:

 Monthly reports

 Asset condition reports

 Traffic incident reports

 Salt use reports (during the winter months)

 Highway condition reports

 Wildlife collision reports

 Operations and maintenance manual for special 

facilities

 A chargeable maintenance cost report

An example of the link from agency performance 

measures to project-specific KPIs can be seen for 

agency goal number four. The goal states that British 

Columbia is provided with a safe and reliable highway 

system. The first objective under this goal is that 

contractors maintain the provincial highway system 

at a high standard. The ministry required the concessionaire for the Kicking Horse Canyon Project to 

develop an asset management plan that includes 

Table 5. British Columbia Ministry of Transport performance measures.

Agency Goal Performance 

Measure

Description 2008–09 

Actual

2009–10 

Target

2010–11 

Target

2011–12 

Target

Key infrastructure is 

improved to drive economic 

growth and trade.

Project 

performance

The percentage of projects that 

meet their budget and schedule 91.1% 91.5% 91.5% 91.5%

British Columbia’s transportation industries become 

more globally competitive.

Container traffic 

growth

Growth in container volume

handled at west coast ports in TEUs

(20-foot equivalent units)

2.67 

million 

TEUs

2.34 

million 

TEUs

2.69 

million 

TEUs

2.96 

million 

TEUs

Greenhouse gases are 

reduced for the

transportation sector.

Transit ridership Annual public transit ridership

in British Columbia 229 

million

235 

million

248 

million

264 

million

British Columbia is 

provided with a safe and 

reliable highway system.

Contractor 

assessment

Rating of the maintenance contractors’ performance using contractor 

assessment program

92.4% 92.5% 92.5% 92.5%

British Columbia is 

provided with a safe and 

reliable highway system.

Highway safety Crash reduction after construction 

on safety improvement capital 

projects, with baseline of 152

18% 

reduction

20% 

reduction

25% 

reduction

30% 

reduction

Excellent customer service 

is achieved.

Customer service Customer satisfaction survey: 

Stakeholder satisfaction

with existing ministry services and 

delivery processes, rated on a scale 

of 1 to 5, with baseline of 3.89

4.05 4.10 4.10 4.10
35

Key Performance Indicators in Public-Private Partnerships 

an annual summary of the preceding year’s completed maintenance work, a presentation of the results of 

the data collected, and an indication of the expected 

performance of the asset over the remainder of the 

concession period and how the concessionaire is 

ensuring that full contractual compliance will be 

achieved. It is the ministry’s method of ensuring that 

the concessionaire is held to this high standard. The 

concessionaire is also required to report the asset 

condition in the asset condition report, providing the 

ministry with evidence that the concessionaire has 

complied with the asset preservation performance 

measures. A small sample of these asset preservation 

performance measures is in table 34 of Appendix C.

Summary

The British Columbia Ministry of Transportation has 

five clear goals for the transportation sector. Each goal 

has objectives and strategies for achievement. To 

reach these large goals, there are small connections 

to individual transportation projects. This connection 

is evident in the Kicking Horse Canyon project, and 

the link is created through project-specific management plans, reporting techniques, performance 

measures, indicators, and specifications. 

M25

Highways Agency Overview

Established in 1994 as an executive agency of the 

Department of Transport, the Highways Agency (HA) 

is responsible for the country’s strategic roadway 

network that includes 2,700 km (1,677 mi) of motorways and 4,350 km (2,702 mi) of all-purpose trunk 

roads. This network is only 3 percent of all roadways 

in the United Kingdom, but it carries one-third of all 

road traffic and two-thirds of all freight traffic and is 

valued at more than £85 billion.

Since its formation, HA has used private contractors 

to operate and maintain major portions of its 

existing network, and it has entered into multiple 

DBFO agreements with private entities to expand or 

enhance the network. Effectively, HA is the manager 

of the highway network, not the provider of it. 

Agency Aim, Objectives, and Performance Measures

As the network’s manager, HA conducts its business 

differently than a typical department of transportation. 

Quite simply, HA’s principal focus is its customers. 

Accordingly, its aim is “safe roads, reliable journeys, 

informed travelers.” These three principles guide all 

agency efforts. This aim is manifested in several 

agency objectives:

 Reducing congestion and improving reliability

 Improving road safety

 Respecting the environment

 Seeking and responding to feedback from 

customers

To deliver on its aim and objectives, HA has 

established seven key program-level performance 

measures:

 Reliability —Implement a program of delivery 

actions that tackle unreliable journeys on the 

strategic road network.

 Major projects —Deliver on time and budget 

the program of major schemes on the strategic 

road network.

 Safety —Deliver HA’s agreed proportion of the 

national road casualty reduction target.

 Maintenance —Maintain the strategic road 

network in a safe and reliable condition and 

deliver value for money.

 Carbon emissions —Contribute to national 

and international goals for a reduction in carbon 

dioxide emissions by lowering HA’s emissions.

 Customer satisfaction —Deliver a high level 

of road user satisfaction.

 Efficiency—Deliver HA’s contribution to the 

Department for Transport’s efficiency target.

Across its network, HA has enacted a number of 

initiatives to deliver on its aims and objectives, and 

it uses performance measures to guide and monitor 

its actions at both programmatic and project levels. 

Translating Agency Goals Into DBFO Projects

In HA’s DBFO contracts, a consistent challenge is 

mapping the broader programmatic goals into the 

performance measures and indicators in these 

projects. Figure 15 provides an overview of how HA 

translates it broader goals into DBFO project performance measures and links these with the payment 

mechanisms used in the contracts. This figure 
36

Chapter 5: Case Study Findings

indicates the most current thinking because 

it corresponds to the structure of the performance 

measures and the payment mechanism in the 

agency’s most recent (and largest) DBFO project, 

the M25 enhancement. The payment mechanism 

is described in further detail in Section 5.2.3 of 

the case study findings.

5.2.2 Organizational Structure for 

Monitoring Operations and Maintenance

Fundamental to the concept of a performance-based 

management system is a well-constructed monitoring 

approach that ensures all major performance objectives are consistently met. A variety of methods to 

monitor the operations and maintenance performance 

of a project exist, each technique offering its own 

unique benefits and structure to the project. A common monitoring tool used in the industry is a quality 

management plan for operations and maintenance. 

Typically, the concessionaire develops this quality 

management plan and submits it for review and 

acceptance by the owner, or a third-party representative of the owner, before the system is cleared for 

application. The significance of the plan is to identify 

who is doing what operations and maintenance work, 

how well it is executed, and who is inspecting it. The 

owner continually reviews these results to assess 

the quality and performance of the concessionaire’s 

operations and maintenance performance.

Along with operations and maintenance quality 

management plans, other tools and techniques 

such as asset management plans, monthly progress 

reports, monthly meetings, performance scorecards, 

inspections, audits, and the use of intelligent transportation systems (ITS) are commonly included in PPP 

agreements. Each one has a specific line of 

management that the results must go through 

before reaching the owner, creating a chain of 

accountability to keep the project operating 

and maintained at peak performance. Generally, the concessionaire is responsible for 

applying most of these techniques individually 

and honestly and reporting the results to the 

owner. In some instances, however, the results 

travel through the management chain, which 

may involve inspecting engineers, auditors, 

program directors, and other third-party 

entities that hold an interest in the project.

In other instances, the owner conducts 

investigations to determine the extent of 

the concessionaire’s success in meeting the 

project’s objectives and performance standards. Most of the projects in this study use 

a combination of these techniques along 

with the operations and maintenance quality 

management plan to achieve results and 

ensure accountability. 

Table 6 summarizes the KPIs and related 

contract provisions for operations and 

maintenance organizational structures. 

Example contract language is in the 

text that follows.

I-595 Corridor Improvements

Self-Monitoring System

The PPP contract agreement for I-595 requires 

the concessionaire to establish its own 

Figure 15. Relationship between HA goals and

M25 DBFO performance measures.

Reduce Casualties

Maintain Project Road in Safe

and Serviceable Condition

Minimize Delay and Disruption

from Planned Maintenance

Minimize Delay and Disruption

from Incidents

Ensure Technology Systems

Are Kept Operational

Safe

Roads

Reliable

Journeys

Informed

Travelers

Work Proactively With the Agency to Improve
37

Key Performance Indicators in Public-Private Partnerships 

Table 6. KPI information for organizational structures for operations and maintenance.

KPI Category I-595 

Corridor

Golden 

Ears Bridge

Kicking Horse 

Canyon

EastLink Capital 

Beltway

North-South 

Bypass

M25 Airport 

Link

5.2 Operations and Maintenance (O&M)

 5.2.1 Organizational Structure for Monitoring O&M

Self-Monitoring 

System ✓

Monthly Maintenance 

Rating Program ✓

Quality Management 

System Plans and 

Manuals

✓ ✓ ✓ ✓ ✓ ✓ ✓

Monthly Meetings and 

Reports ✓ ✓ ✓

Intelligent Transportation Systems ✓ ✓ ✓

Monitoring Highway 

Surfaces ✓ ✓ ✓ ✓ ✓ ✓

Monitoring Highway 

Structures ✓ ✓ ✓ ✓ ✓ ✓

Monitoring Drainage 

and Debris-Control 

Structures

✓ ✓

Joint O&M Protocols ✓

Asset Management 

Plan ✓ ✓ ✓ ✓ ✓

Five-Year Management Plan ✓

Safety Management 

and Intervention Plan ✓

Corridor and Environmental Management ✓

KPI Assessment 

Process ✓ ✓ ✓ ✓

Customer Service and 

Complaint Reports and 

Scorecards

✓ ✓ ✓ ✓

Independent Verifiers 

and/or Auditors ✓ ✓ ✓ ✓ ✓ ✓

Maintenance Data 

Management System ✓ ✓
38

Chapter 5: Case Study Findings

self-monitoring system to oversee operations 

and maintenance. In this system, the concessionaire 

must develop two operations and maintenance 

plans, one for the construction phase and one for 

the concession (operations) phase. These plans 

detail the concessionaire’s approach to executing 

the operations and maintenance requirements and, 

at a minimum, are required to include (1) a list of 

procedures to be used in the self-monitoring process 

to monitor compliance with the minimum performance criteria, (2) a bridge inspection and maintenance schedule, and (3) the method to be used to 

track and report noncompliance points (NCPs). These 

plans also describe the concessionaire’s approach 

to meet what the contract calls the monthly maintenance rating program (MRP) requirements. See 

Appendix C, table 33, for KPI examples from the 

language in the agreement.

Monthly Maintenance Rating Program

The MRP is the primary tool the department uses to 

evaluate the overall quality and effectiveness of the 

concessionaire’s execution of routine maintenance 

activities. The program uses a formal and systematic 

method of data collection to rate the maintenance 

level provided. The concessionaire is required to 

conduct MRP ratings on randomly generated locations of the project decided on by the department. 

The results of the monthly ratings are pooled into 

a single sample set and assessed every 3 months to 

determine the quarterly success or failure rating of 

the concessionaire in fulfilling the MRP requirements 

in the contract. See Appendix C, table 33, for KPI 

examples from the language in the agreement.

Quality Management System

As part of the self-monitoring system for operations 

and maintenance, the concessionaire must also 

develop a quality management system. This system 

must include both an operations manual and a 

maintenance manual. The operations manual 

must identify the procedures to be used to monitor 

elements such as incident response, express lane 

operation, and traffic events during construction and 

operation. Similarly, the maintenance manual must 

include procedures to be used for maintaining the 

project assets during the construction and concession 

periods. A detailed asset management plan to be 

used by the concessionaire’s maintenance staff is 

a required element of this maintenance manual. 

In addition to these manuals, a quality management 

plan is required. It must (1) be reviewed by the 

department before it is applied, (2) provide a means 

to evaluate the level of performance, (3) provide the 

necessary information to compare the operations and 

maintenance ratings to the minimum performance 

requirements so the department can determine if 

NCPs are in order, and (4) include a quality assurance 

plan to validate the information, accuracy, and results 

of the system itself. See Appendix C, table 33, for KPI 

examples from the language in the agreement.

Monthly Meetings and Reports

Monthly meetings and reports identifying recently 

executed operations and maintenance activities are 

also used to evaluate the concessionaire’s performance. The monthly reports are used as confirmation 

that the concessionaire has performed its operations 

and maintenance duties in compliance with the 

minimum contract requirements. The important 

minimums to be included in these reports are a 

summary of the maintenance performed and 

completed during the month, a summary of NCPs 

assessed and the details of the assessments, and 

detailed results of all inspections, assessments, and 

testing activities, including the related procedures 

and forms used. The department is given full access 

to audit these reports and other operations and 

maintenance records. The department may also 

perform periodic inspections and testing at its own 

discretion to verify minimum performance requirements are being satisfied. Finally, the concessionaire 

and department conduct monthly meetings to discuss 

the assessment of any NCPs, the number of incidents 

or emergencies that occurred in the past 30 days, the 

planned maintenance schedule for next month, and 

any future lane closures necessary to repair and 

maintain the project.

Using Intelligent Transportation Systems to Monitor

ITS is also an integral tool for evaluating the concessionaire’s performance via status reports, real-time 

video, and live streaming video of traffic conditions, 

incidents, and toll operations. The data collected from 

these devices are used to generate monthly, quarterly, 

and yearly performance measure reports to identify 

areas of operations and maintenance that are meeting 

standards and those that need improvement. The 

outputs from these devices are posted on a weekly, 

monthly, quarterly, and annual basis in SMART 

SunGuide on the department’s Web site for public 

viewing. Publishing the results keeps concessionaire 

accountability high and the public well informed. 

The Florida Transportation Committee monitors the 
39

Key Performance Indicators in Public-Private Partnerships 

department’s operational productivity, performance, 

and fiscal management and, in turn, the department 

monitors the concessionaire using the results 

produced by the SunGuide software and ITS. 

See Appendix C, table 33, for KPI examples 

from the language in the agreement.

Golden Ears Bridge

Quality Management System

The ministry requires the concessionaire to develop 

and implement a quality management system for 

operations and maintenance to monitor performance 

and document the processes and procedures used 

to meet the minimum criteria listed in the operations 

and maintenance performance measures. Innovation 

is strongly encouraged under the contract, and the 

concessionaire is expected to develop new and 

creative ways of providing services to achieve project 

goals and performance levels set in the contract’s 

performance measures. The ministry reviews the 

proposed quality management system for approval 

before it is admitted for application. Quality management systems support the ministry in monitoring 

project assets during the concession term through 

audits and inspections performed by the ministry 

and/or independent third parties. All costs for 

performing these audits and inspections are included 

in the agreement. This system provides the ministry 

with information to assess concessionaire compliance 

with operations and maintenance standards. 

The maintenance quality management system 

consists of (1) inspections at specified intervals, 

(2) rating of the structure or asset condition, 

(3) programming treatments, (4) physical remedial 

works when asset conditions fall below minimum 

standards, (5) inventory updating, and 6) reporting 

on achievements after any remedial work is conducted. If the data collected during steps one and two 

of the process reveal that physical remedial works are 

necessary to comply with the contract performance 

measure standards, the concessionaire must develop 

and report to the ministry a remediation strategy 

detailing an action plan to limit asset consumption 

within a specified response time. Strategies considered appropriate include excess monitoring, special 

inspection, investigation (which may include material 

testing), reevaluation, and physical remediation 

(maintenance, rehabilitation, and replacement). These 

phases are consistent with the provincewide approach 

for monitoring maintenance performance with subtle 

differences between the highway running surfaces 

and structures data collection and inspection procedures specific to the Golden Ears Bridge Project. 

See Appendix C, table 34, for KPI examples from 

the language in the agreement.

Monitoring Highway Surfaces

The concessionaire is responsible for collecting 

annual pavement condition data for measuring 

performance achievement. Generally, these measurements are taken using high-speed data results collected at 50-m intervals along the paved travel lane. 

The data collected must be in accordance with the 

ministry’s specifications so the ministry can enter 

the data into its own pavement management and 

monitoring system for performance verification. 

See Appendix C, table 34, for KPI examples from 

the language in the agreement.

Monitoring Highway Structures

Any condition data collected for the project’s structures must also be in accordance with the ministry’s 

specifications, specifically its bridge management 

information system (BMIS) program, for verification 

purposes. The concessionaire is required to employ 

a qualified bridge structural engineer (BSE) to take 

ownership of the structure assets and quality management plan and interpret any structure inspection data 

to devise acceptable remediation strategies. The BSE 

will interpret three types of structure inspections over 

the course of the concession (see table 7, next page). 

If one or more of these inspections identifies a defect 

in any project structure, the concessionaire’s core 

structures management team will correct or engage a 

specialist staff (when the problem requires expertise 

outside the core management team) to correct the 

defect according to the BSE’s newly developed 

remediation strategy. See Appendix C, table 34, for 

KPI examples from the language in the agreement.

Monitoring Drainage and Debris-Control Structures

Drainage and debris-control structures require another 

set of maintenance performance measures for this 

project’s performance monitoring cycle. These measures are similar to the project’s structures measures 

in that a BSE must take ownership for these assets 

and the quality management system governing them, 

as well as interpret inspection results and develop and 

apply an acceptable remediation strategy. However, 

the inspections for drainage and debris-control 

structures are slightly different and are presented in 

table 8 (see next page) for comparison. Considering 
40

Chapter 5: Case Study Findings

the large number of drainage and debris-control 

structures, it is expected that many staff members 

will conduct these inspections over the course of 

the concession. See Appendix C, table 34, for KPI 

examples from the language in the agreement.

Kicking Horse Canyon Phase II

Quality Management Plan

The Kicking Horse Canyon concessionaire is required 

by contract to submit a quality management plan 

(referred to as the “OM&R quality management 

system”) for monitoring and measuring the operations, maintenance, and rehabilitation activities of 

the project. The quality management plan must be 

in alignment with all operations and maintenance 

performance measures while defining the concessionaire’s approach to comply with the agreement 

requirements of these measures. To ensure that all 

performance specifications and measures are met, 

the concessionaire must include procedures and 

process flow charts in the plan documenting who 

does the work, what they do, and what evidence 

is generated that they have done it correctly. 

The quality management plan must also identify 

a quality management representative selected 

by the concessionaire, likely an independent 

professional engineer or a certified auditor, who 

will work directly with the province’s representative. 

This project selected Morrison Hershfield, an 

engineering firm in British Columbia, as independent 

certifier. More important, the quality management 

representative is responsible for developing, 

implementing, and preserving the OM&R quality 

management plan and preparing quality audit 

plans, nonconformity and corrective action programs, and quality management system reports 

for the province’s representative to review.

Table 7. Golden Ears Bridge inspection types for structures.

Type Description Maximum Inspection Frequencies

Superficial

Focus on road user safety and structure functionality; 

refer to the ministry’s Highway Maintenance 

Specifications for Highway Concession 8-850.

Refer to the response times in the ministry’s 

Highway Maintenance Specifications for 

Highway Concessions 8-850.

Routine Focus on a general assessment of condition

and developing a remediation program. 1 year

Detailed Focus on producing a comprehensive assessment of 

condition and undertaking physical testing, if necessary. 5 years

Significant 

Natural Events

Focus on a general assessment of condition

and developing a remediation program.

48 hours following a significant natural 

event (i.e., earthquake, rainstorm, snow)

Table 8. Golden Ears Bridge inspection types for drainage and debris-control structures.

Type Description Maximum Inspection Frequencies

Superficial Focus on road user safety, waterway

maintenance, and structure functionality.

Refer to the response times in the ministry’s 

Highway Maintenance Specifications for 

Highway Concessions 8-830 and 8-840.

Structure Condition 

Inspection

Focus on a general assessment of condition and 

developing a remediation program. 5 years

Significant Natural 

Events

Focus on a general assessment of condition and 

developing a remediation program.

48 hours following a significant natural event 

(i.e., earthquake, rainstorm, snow)
41

Key Performance Indicators in Public-Private Partnerships 

The OM&R quality management plan details a 

performance measures compliance monitoring 

process to track the concessionaire’s ability to meet 

all specified performance measures. This monitoring 

process, constructed by the concessionaire, must 

clearly describe the approach taken in assessing 

compliance and define the frequency and method 

used for monitoring and reporting compliance. 

The concessionaire must submit the proposed 

OM&R quality management plan to the province’s 

representative according to the review process in the 

agreement. The review process allows the province’s 

representative to request changes in the monitoring 

and measuring procedures to facilitate the accurate 

and appropriate monitoring and reporting of compliance with the performance measures. The concessionaire’s monitoring process is subject to review by 

the province’s representative throughout the entire 

agreement term. See Appendix C, table 34, for KPI 

examples from the language in the agreement.

Five-Year Management Plan

This management plan is described as “a rolling 

forward works program” that is meant to describe the 

preventive maintenance and rehabilitation, excluding 

routine maintenance, that the concessionaire plans

 to undertake over the next 5-year period. These plans 

are broken into two asset types: linear assets (shoulders, traffic lanes, etc.) and point assets (bridges, 

rock slopes, etc.). Among other things, the plan 

must contain details on field investigations completed, updated rehabilitation treatments and costs, and 

any advanced technical evaluations completed.

Asset Management Plan

The concessionaire must also develop an asset 

management plan for the pavement, structures, 

and related highway infrastructure that describes 

the concessionaire’s procedures for achieving the 

key performance criteria in these areas. This plan 

includes elements such as a description of how 

key performance indicators will be achieved, the 

intervention criteria for each indicator, and the 

approach for asset condition inspection and work 

identification. This asset management plan is used 

to track all routine maintenance activities as well as 

the condition and disposition of the highway pavement assets. The concessionaire is required to keep 

files of all structure inspection records and associated 

remedial works for ministry review. See Appendix C, 

table 34, for KPI examples from the language in 

the agreement.

Communications and Customer Care Plan

The purpose of managing communications and 

customer care is to ensure that public perception 

of the project and its management is enhanced and 

positive. According to the ministry, this is done by 

treating all customers courteously, promptly, and 

in a professional manner. The ministry requires the 

concessionaire to include certain minimums for 

addressing requests for information, responding to 

public inquiries, conducting customer surveys, and 

advising the province and media of road conditions, 

among others. 

Safety Management and Intervention Plan

The ministry has defined the purpose of these plans 

as improving the safety of the highway corridor and 

ensuring health and safety systems are established 

and implemented. At a minimum, these plans must 

include an understanding of compliance with laws, 

regulations, and Workers Compensation Board 

requirements; a crash database for recording and 

tracking incidents; and the application of crash data 

with inspections to identify safety hazards and improvements. Overall, the objective is to reduce risks 

related to safety and security on the corridor.

Corridor and Environmental Management

A set of key performance measures establish outcome 

criteria against which the concessionaire’s performance is measured for the delivery of corridor and 

environmental management. The concessionaire is 

required to develop, implement, and manage corridor 

activities to achieve the outcomes specified in these 

measures. The objective of the corridor management 

measures is to maximize the reliability, safety, and 

availability of the corridor at all times. The environmental management key performance measures also 

aim to minimize the environmental impact of the 

activities carried out during the concession term. 

Table 35 in Appendix C offers a glimpse of these 

outcome-oriented performance measures. 

Reporting

The ministry requires a number of reports from the 

concessionaire. These reports, provided at high level, 

include the following:

 Monthly reports —Provide the ministry with 

a status of the concession. They include an 

updated maintenance and rehabilitation program for the next 12-month period, status and 

audit reports, copies of relevant newspaper 
42

Chapter 5: Case Study Findings

clippings noting negative commentary 

on the highway, and a summary of key 

events occurring during the month.

 Asset condition report —Provides the ministry 

with evidence that the concessionaire has 

complied with the asset preservation performance measures through an asset condition 

survey. It includes details of the data collection 

survey on timing, data collected, procedures, 

and quality assurance measures employed.

 Traffic incident report —Provides the ministry 

with sufficient information to understand 

the nature of the incident within 24 hours of the 

crash. It includes information such as date, time, 

location, and description of the incident; weather 

and road conditions at the time; a crash history 

of the site; and suggested improvements.

EastLink

Operations and Quality Management

The concessionaire (ConnectEast) has obligations to 

develop project plans that explain how it will execute 

operations activities in accordance with the project 

deed. Project plans must be updated during the 

performance of operations activities to reflect events 

or circumstances that will or may affect the performance of these activities, and the plans must be 

prepared and updated in a way that ensures ConnectEast can comply with its obligations at all times.

Specifically, ConnectEast must prepare a traffic 

management strategy, an incident management plan, 

and operations and maintenance manuals. ConnectEast may amend its traffic management strategy only 

with the agreement of the state and in accordance 

with the project scope and requirements, and each 

traffic management plan must be consistent with the 

current traffic management strategy. It must prepare 

an incident management plan in consultation with 

the Incident Planning Committee and provide it to the 

state and the independent reviewer before completing 

construction activities. It must review the incident 

management plan at least once every 6 months in 

consultation with the Incident Planning Committee. 

ConnectEast also must develop operations and 

maintenance manuals in consultation with the state 

and provide copies to the state and the independent 

reviewer. It must ensure that the operations and 

maintenance manuals comply with the project scope 

and requirements. It must also (1) ensure that the 

operations and maintenance manuals are maintained 

and revised in consultation with and take into account 

the reasonable requirements of the state, in accordance with the project scope and requirements and 

operations and maintenance best practices; (2) 

conduct a complete review (and revision when 

necessary) of all consistent with operations and 

maintenance best practices at least once every 2 

years; and (3) provide the state and independent 

reviewer with copies of the manuals promptly after 

they are revised. ConnectEast must comply with the 

operations and maintenance manuals.

Monitor Freeway

Each concessionaire involved in operations activities 

must prepare and submit to the state for approval the 

traffic management plans mandated by the project scope 

and requirements. Each concessionaire must control, 

direct, manage, and protect all traffic in the leased area 

to ensure (1) the safe, efficient, and continuous passage 

of vehicles; (2) that the traffic-carrying capacity of local 

roads is maintained; (3) that any traffic congestion, 

delays, or disruptions to public transport or pedestrian 

or shared-use paths are minimized; and (4) that the 

concessionaires otherwise comply with the deed.

Maintenance Management

The concessionaire must comply with current operations and maintenance manuals. By the date the first 

freeway section is opened for public use, the concessionaire must establish a maintenance and repairs 

account, maintain that account with a financial institution nominated by ConnectEast and approved by the 

state, and give details of that account to the state. At 

least every 5 years during the concession period, the 

concessionaire must update the forecast maintenance 

program to comply with its operations, maintenance, 

and repair obligations. 

KPI Assessment Process

Beginning with the first date of freeway section 

completion, ConnectEast must prepare a quarterly KPI 

report and deliver it to the state within 20 business 

days of the end of each quarter. The quarterly KPI 

report must include the KPI data and the information 

required or contemplated by schedule 5 and contain a 

certificate signed by a ConnectEast director that the 

report is accurate and complete.

Within 30 business days of the end of each financial 

year, ConnectEast must give the state an audit report 
43

Key Performance Indicators in Public-Private Partnerships 

prepared by a reputable independent auditor that has 

audited the accuracy, completeness, and correctness 

of the KPI data and quarterly KPI reports and the 

fitness for intended purpose of the KPI assessment 

system for that financial year.

ConnectEast must use these quarterly KPIs and 

the results of the annual customer services audit 

(described below) as a scorecard to assess its 

performance against the KPIs. The scorecard will be 

prepared on the basis of a combination of internal 

and independent measures of performance across 

KPIs. In addition to the assessment methods used 

by ConnectEast, the state will have the right to 

use other methods.

Customer Service and Complaint Reports

The project uses KPIs to monitor customer service 

complaints during operation. ConnectEast and any 

customer service contractor and subcontractors are 

subject to an annual audit to determine whether they 

are providing customer service and complaint resolution at the level required by the deeds. The state and 

ConnectEast must appoint an independent auditor to 

conduct the customer service audit for the previous 

12 months. The state will pay reasonable costs of 

the auditor. 

Capital Beltway

Quality Management

The concessionaire is responsible for all quality 

assurance and quality control activities necessary 

to manage the development, design, construction, 

operation, and maintenance of the project and any 

enhancements proposed by the concessionaire or 

VDOT. The concessionaire must develop and provide 

its plans, manuals, and procedures to VDOT. It also 

must also require its contractors, subcontractors, 

and suppliers to comply with the requirements of 

the quality management plans.

VDOT has the right to review the concessionaire’s 

quality management system, including the right to 

inspect work and activities and to verify the accuracy 

and adequacy of quality management documentation. 

The concessionaire must require its contractors and 

subcontractors to provide the access and assistance 

VDOT reasonably requires to conduct such reviews.

If the concessionaire’s performance during the O&M 

period results in 200 or more performance points 

during any 365-day cycle or maintains 45 (or any 

higher applicable number during the phase-in period) 

or more uncured performance points, part of the 

remedial action required by the concessionaire may 

include improvements to its quality management

practices, plans, and procedures.

Intelligent Transportation Systems

The HOT lanes will use open road tolling facilities to 

charge, debit, and collect tolls for vehicular use. The 

facilities, equipment, and software for this purpose 

are referred to as the electronic toll and traffic 

management (ETTM) system. Provided that both 

parties agree, all tolling on the HOT lanes will be by 

electronic means, so no toll booths will be installed 

and the concessionaire will not be required to accept 

cash tolls. The tolling facilities will be physically 

located on the right-of-way or use Global Positioning 

System technology, remote sensing, or other technologies as long as such systems are interoperable 

with the E-ZPass network and, with reasonable 

notice from VDOT, any successor to E-ZPass 

used on Virginia highways.

With the approval of the concessionaire, VDOT 

maintains the right to perform ITS research and install 

ITS equipment on the HOT lanes right-of-way for 

public, nonrevenue-generating purposes, provided 

that the ITS equipment does not interfere with the 

functioning of the ETTM or ITS systems used for 

the HOT lanes and does not negatively impact toll 

Table 9. EastLink customer service and complaints reporting system.

Report Submit to Frequency Content

Custom Service and Complaints Report State Annually

Quarterly KPI Report State Quarterly p. 123

Annual Audit State Annually p. 226

Periodic Reporting State and Reviewer Monthly p. 226–227

Tolling System Information State On request p. 229
44

Chapter 5: Case Study Findings

operations or reduce the vehicle throughput capacity 

of the project. If VDOT’s ITS activities result in 

damages to the concessionaire, it will be entitled to 

compensation as defined in the contract. VDOT will 

bear all installation, maintenance, operations, replacement, and other costs relating to the ITS equipment 

and research and all claims and liabilities.

Joint O&M Protocols

At the time of the Capital Beltway project agreement, 

the level of engineering and design for the project 

was not sufficient to allow the parties to specify all 

protocols that will define their operational relationship. VDOT and the concessionaire, therefore, established joint operations and maintenance protocols 

(JOMP), which describes how they will coordinate 

operation of the HOT lanes and the general purpose 

lanes. Essentially, JOMP established a process and 

procedures for finalizing operational issues related 

to operating systems, information sharing, data 

exchange, and asset maintenance. 

Asset Management Plan

The Capital Beltway project requires the concessionaire to develop a baseline asset condition report and a 

life-cycle maintenance plan. No later than 18 months 

before the projected date for beginning operating 

services, VDOT and the concessionaire shall agree on 

baseline asset condition reports that evaluate (1) the 

four inner lanes of the Capital Beltway and maintenance and repair requirements, and (2) the HOT lanes 

and all other improvements and assets of the HOT 

lanes project and their physical conditions on the date 

of the report. This will serve as the baseline report. 

No later than 90 days before the beginning of each 

calendar year after the service commencement date, 

the concessionaire shall prepare and provide to VDOT 

for its approval a 5-year period maintenance plan on 

a rolling basis that describes life-cycle asset maintenance for the HOT lanes project. The life-cycle maintenance plan shall include a description of all major 

maintenance to be undertaken during the 5-year 

period by component, item, or discrete project; the 

estimated costs and timing of each task; and other 

information that VDOT may request.

Every 5 years after the service commencement date, 

the concessionaire shall conduct a reassessment of 

the physical condition of the HOT lanes assets and 

prepare an analysis comparing the conditions to those 

reported in the baseline report. This analysis shall take 

into account any changes in Federal requirements and 

safety standards. If the condition of any HOT lanes 

asset is determined by the concessionaire, VDOT, or 

the independent engineer to fall below its assessment 

rating in the baseline report (or the original condition 

of a project enhancement), the concessionaire shall, 

within 90 days of such assessment, develop and 

submit to VDOT a plan to restore the asset to its 

baseline or original condition, as applicable, subject to 

ordinary wear and tear. The plan will include a budget, 

timeline, and identification of the funding sources that 

will be used to restore the asset.

Independent Engineer

During the operations and maintenance period, 

VDOT may require the independent engineer to make 

routine inspections for monitoring and reporting any 

breaches or failures and provide written recommendations on whether performance points should be 

assessed. The cost of such services shall be paid by 

the concessionaire, subject to a maximum cost per 

calendar year. In addition, the independent engineer 

shall have the authority, when requested, to assess 

HOT lane assets to determine whether a deviation 

exists between the current condition and that in 

the baseline report.

VDOT may also request the independent engineer 

to determine whether any circumstances exist that 

warrant issuance of a safety compliance order and 

give VDOT and the concessionaire recommendations 

on such matters.

If either party submits a compensation event notice 

as described in section 13 of the agreement, the other 

party shall have the right to obtain from the independent engineer a comprehensive report on the concessionaire’s estimate of the net cost impact attributable 

to the event.

While VDOT retains the right to carry out oversight 

services throughout the term of the agreement, it 

shall perform oversight services in cooperation with 

the independent engineer to minimize duplication or 

inefficiencies in the performance of such services.

CLEM7 NorthSouth Bypass Tunnel

Quality Management System and Plans

The complex 35-year project does not rely solely on a 

set of KPIs for oversight and accountability, but uses a 

more comprehensive approach. It requires contractors 
45

Key Performance Indicators in Public-Private Partnerships 

to develop management plans and management 

systems for all major aspects of the project’s planning, 

design, construction, maintenance, operations, toll 

collection, and community relations. At least 28 

management systems or management plans are 

required for the project. Adherence to these management systems and plans is enforceable under the 

contract. Outside audits and an independent verifier 

are required as part of the contract to attest to the 

Brisbane City Council that the many provisions of the 

management systems and plans are being followed. 

At least three management systems—project, environmental, and health and safety—must comply with 

the Australian provisions of ISO for those management systems. In addition, at least three performance 

bonds are required to ensure adherence to the performance specifications—for design and construction, 

operations and maintenance, and tollroad condition at 

handover. Although KPIs are included in the contracts, 

they comprise only a small part of the oversight 

framework for the complex and multiphased Clem 

Johnson Tunnel. See Appendix C, table 36, for KPI 

examples from the language in the agreement.

The independent verifier is a third-party contractor 

charged with verifying compliance with the major 

management systems and plans. The independent 

verifier was selected jointly by the concessionaires 

and the Brisbane City Council, which share the cost 

of the verifier. The independent verifier will function 

throughout the project, but provisions exist for the 

parties to end the verifier’s services and rely on 

periodic audits once the project begins functioning 

to the satisfaction of the council, concessionaires, 

finance agencies, and performance bond providers. 

Asset Management Plan

Adequacy of maintenance for the 31-year operation 

phase is controlled through extensive operations and 

maintenance requirements and adherence to an asset 

management plan. 

The concessionaire must have in place and update an 

asset management system that satisfies the project 

deed. The system must record the current, historical, 

and projected future condition of each asset in the 

project. It must include detailed records of the repair 

or replacement of assets to assist in estimating the 

residual design life of the various elements. An asset 

inventory must be maintained that records the nature, 

extent, quantity, location, time, and type of any 

maintenance and repair. The inventory must include 

asset elements, types, items, and subitems. The asset 

management system must document the regular 

inspection of the various elements, types, items, and 

subitems. The system must also trigger the necessary 

response defined in a code of maintenance standards 

for each asset element.

The Operations and Maintenance Manual has more 

than 600 pages covering how the operating company 

will perform maintenance throughout the life of the 

project. In effect, the manual is a comprehensive 

maintenance management system. It describes 

the various maintenance elements, defines their 

adequate state of condition, defines inspection 

cycles, describes necessary corrective action, and 

includes a reporting process to monitor the overall 

condition of the maintained items. It has more than 

200 pages of summary tables that provide details on 

each maintenance subitem, how it is to be inspected, 

what its general performance characteristics should 

be, and how it should be repaired to bring it into 

serviceable operation. The items cover many 

general roadway elements, such as potholes, 

pavement markings, signage, lighting features, and 

bridge elements such as bearings, expansion joints, 

and scuppers. It also includes details on the ventilation system, fire-suppression system, electrical 

components, and other elements of the physical 

plant. See Appendix C, tables 36 and 37, for KPI 

examples from the language in the agreement.

Both internal and external audits of the operations 

and maintenance activities are required, which serve 

as the basis for determining compliance with the 

contract specifications.

M25

Performance Management Framework

The performance management framework for the 

M25 DBFO contract is founded on (1) performance 

management to achieve the project objectives; 

(2) performance planning; (3) performance monitoring, reporting, and reviewing; and (4) incentives 

and sanctions. 

The primary objective of the project, as defined in the 

invitation to tender, is to provide high-quality service 

in accordance with the agency’s aims, objectives, and 

values. The following are specific objectives of the 

project: 
46

Chapter 5: Case Study Findings

 Delivery of high-quality, flexible service that 

puts customers first and helps reduce congestion, improve journey time reliability, and 

improve safety through the following:

•	 Integrated operation of the whole of the 

project road in a way that minimizes 

delay to the traveling public

•	 Timely, efficient, and safe management of 

incidents, crashes, road work, and winter 

service

•	 Timely planning and delivery of trunk road 

improvements while minimizing disruption 

to the traveling public

•	 Provision of proactive public relations service 

to customers and stakeholders

•	 Accurate forecasting, planning, and implementation of road space management

•	 Maintenance of the project road in a safe and 

serviceable condition

•	 Use of state-of-the-art asset, traffic, and safetyrelated information recording, analysis, and 

presentation systems

•	 Timely and accurate delivery of information to 

influence travel behavior and inform decisions

•	 Delivery of continuous improvement in 

performance and processes

 Respect for the environment, promotion of a 

healthier community, and integration of sustainability principles into the project through the 

following:

•	 Mitigation of the potentially adverse environmental impact of the project and, where 

possible, reduction of the existing impact

•	 Proactive engagement with stakeholders to 

identify, develop, and implement environmental improvement measures

•	 Delivery of sustainability as part of the capital 

works and operation and maintenance of the 

project in support of the Department for 

Transport Sustainability Action Plan

 Delivery of best value through the following:

•	 Achievement of value for money for the 

widening works, asset management, and 

operations

•	 Effective (and cost-effective) contract 

management

Central to the performance management framework 

is the performance management plan, which is 

reviewed and modified annually. This plan (1) is 

responsive to any changes in the project’s objectives, 

(2) guides and informs management activities such as 

monthly performance reports and periodic progress 

meetings, and (3) uses information from contractual 

audits for subsequent adjustments. Contractual 

performance audits also provide routine feedback 

to periodic progress meetings, which may result 

in improvement planning and additional auditing 

requirements. These regular audits are closely linked 

to the payment incentives or sanctions that the DBFO 

contractor may receive periodically. Ultimately, the 

goal of this managerial and contractual performance 

management system is to ensure that the DBFO 

contractor delivers on the agency’s aim of “safe 

roads, reliable journeys, informed travelers” 

throughout this project.

Airport Link

Similar to the strategy the Queensland government 

used for the North-South Bypass Tunnel, the voluminous Airport Link contract documents contain relatively few explicit KPIs. Instead, they rely on an 

extensive series of management systems and performance reviews to ensure the quality and performance 

of the project over its 45-year lifespan.

Manuals and Plans

The operator is required to adopt and abide by a 

comprehensive series of operating and maintenance 

manuals. These cover all major systems in the facility 

and include performance standards. The performance 

standards must include hazard and risk mitigation 

strategies and a comprehensive tunnel danger study. 

The operating and maintenance manuals must 

include the following:

 A pavement performance system, including 

pavement cracking, roughness, skid resistance, 

rutting, and deflection targets

 Response times for incident management

 Maintenance targets for timeliness of defect 

rectification and inspection, quality of maintenance work, and how to mitigate road user 

impacts as a result of maintenance activities

 Equipment reliability targets

 Tunnel noise limits
47

Key Performance Indicators in Public-Private Partnerships 

 Airflow velocity targets and limits

 Normal operating condition levels, including 

lighting, air quality, signage, and other features

 Unsafe operating thresholds that can trigger 

closure or response

 System capacities, including safety limits and 

protection levels

 Design life and durability strategies

 Load limits and ratings

The intention of the operations and maintenance 

requirements are to ensure safe, reliable operation of 

the facility and its remaining service life at the 46-year 

handover point. Among the first requirements is an 

incident response plan. This must include creation 

of a traffic management center, which must operate 

continuously to monitor traffic flow and respond to 

incidents. The incident response plan must include 

strategies, equipment, employee training, response 

protocols, and formal methods for coordinating with 

emergency responders and adjacent agencies to 

ensure prompt incident response. As noted in the 

KPIs, all incidents must be recognized within 2 minutes of occurrence. A maintenance operation traffic 

plan is required to address planned incidents involving maintenance. The plan must ensure that to the 

extent possible, maintenance occurs in offpeak, 

overnight periods. Maintenance must also occur, to 

the extent possible, when maintenance activities are 

not occurring on parallel local roads, which may rely 

on the facility as a detour. The maintenance traffic 

plan must also include protocols and practices for 

ensuring safe operating conditions and speeds 

through the facility during maintenance periods. 

The operators must present an annual schedule 

of planned maintenance closures, which must be 

approved. Each minute of additional maintenance 

closure time results in a $1,000 penalty. 

During the years of operation, the operator is required 

to participate in a Traffic Management Operations 

Liaison Group, which consists of other roadway 

operators such as the Queensland Department of 

Main Roads and local authorities. The group is intended to be an ongoing forum of communication and 

coordination to ensure that operations and incident 

response strategies remain coordinated for the 

tollroad, which is an integral link in the metropolitan 

transportation network.

The tollroad must also be operated to integrate into 

the regional traffic management system and ITS 

networks of the larger region. The operator must 

manage the tollroad in compliance with the local 

council’s and QDMR’s overall planning and management hierarchy, protocols, and processes for the 

Brisbane metropolitan network. The operator is 

required to coordinate its changeable message signs, 

variable speed limit signs, detector loops, closedcircuit television cameras, and communication 

systems with the ITS systems of the state and local 

councils. The operator also is expected to adopt 

a continuous improvement ethos. It must conduct 

debriefings of incidents and conduct tabletop planning exercises at least twice a year. The operations 

response plan is expected to mature and improve 

as a result of the continuous improvement efforts.

In an interview, a key project official said the reliability 

requirements are somewhat redundant for the concessionaire, for which traffic reliability is 

a critical customer requirement. Because 

the concessionaire is paid through the toll 

revenue of the project, it has an overriding 

interest in ensuring that traffic flows freely 

and that the route remains the preferred 

alternative for motorists. 

Asset Management System

The operator must develop, maintain, and 

update an asset management system in 

accordance with the project documents. 

The system must be acceptable to the 

state and in a form that enables the state 

to assess the adequacy of the system. The 

system must accomplish the following: 

Table 10. Airport Link permitted maintenance closures.

Period Maximum Allowable 

Full Closure, Including 

Ramps (hours/year)

Maximum Allowable 

Single-Lane, Partial Ramp, 

or Elevated Structure 

Closure (hours/year)

5 to 10 a.m. 0.2 0.4

10 a.m. to 3 p.m. 2 4

3 to 8 p.m. 0.2 0.4

8 to 10 p.m. 1 2

10 p.m. to 5 a.m. 84 42
48

Chapter 5: Case Study Findings

 Maintain a record of the current, historical, 

and projected condition of each asset, including 

detailed records of the repair and replacement 

of asset elements. They must be prioritized by 

criticality of safety, traffic capacity, and other 

criteria.

 Maintain a record of the nature, maintenance 

activity, extent, and actual work of all types of 

works performed or programmed for the assets.

 Include a method for reporting on the performance of any asset.

 Provide for the development and maintenance 

of models for monitoring pavement performance throughout the 45-year operating period. 

A model must provide for the expected pavement performance as the facility ages and 

traffic volumes increase.

The asset management system must document the 

regular inspection of the asset items and document 

any failure to meet the code of maintenance standards. Any documented failure to the meet the 

maintenance schedule triggers a necessary 

maintenance response. 

Auditing

The project deed requires quarterly audits of the 

KPI data and may also require a more extensive audit 

at least once a year if the owner questions the KPI 

findings. Road safety audits are also required every 

2 years throughout the life of the project and after 

major incidents. 

Maintenance Data Management System

The operator is required to create a code of maintenance standards and a maintenance management 

system to assure the continued maintenance of the 

facility throughout its life. It must include a routine 

maintenance schedule that details a systematic 

approach to performing the cleaning, preventive 

maintenance, inspections, and monitoring that 

comply with the maintenance code. The maintenance 

must extend to the safety appurtenances and facilities, such as the traffic control center, fire-suppression 

systems, incident-management systems, and other 

facility components.

It must also develop a nonroutine asset repair process 

to ensure the durability of assets approaching the 

end of their useful life. The systematic approach is 

required to ensure that the assets retain their required 

residual design life throughout the life of the project. 

Detailed records of repairs and maintenance must be 

retained in a maintenance data management system. 

It must include records of all operations and maintenance activities undertaken, as well as assets that 

have been repaired, rehabilitated, and replaced. 

The system must track all parts and inventories 

necessary to maintain the facility and its systems.

Data Collection, Reliability, and Cost

In an interview, an official tied to the concessionaire 

revealed a simple approach to addressing the collection of accurate data to support KPI measurement: 

the concessionaire is responsible. The project deed 

requires the concessionaire to have a KPI assessment 

system, which must be audited periodically by an 

independent firm. The cost of producing the KPI data, 

the cost of the audit, and ensuring that the project 

continuously meets the KPI requirements are the sole 

responsibility of the concessionaire over the life of the 

project. The project official indicated that the question 

of how much KPI data collection costs is not one the 

concessionaire has frequently discussed. He noted 

that the cost of data collection is only one component 

of the much larger and more complex management 

systems and management plans. 

The degree of risk the concessionaire assumes is 

substantial under the models used in both Australian 

case studies. The concessionaire assumes the traffic 

risk and agrees to provide the various management 

systems, audits, and performance bonds while paying 

its share of the independent verifier costs and abiding 

by the contract documents and appendices in the 

project deed. Project officials indicated that it cost 

the project team about AU$30 million just to produce 

the winning proposal for the project. The costs of 

maintaining the facility at the high level required 

in the contract documents is solely the risk of the 

concessionaire, and its ability to increase toll rates 

is limited to escalation of the consumer price index. 

In the total scheme of the complex, multidecade 

projects, the cost of KPI data collection was not 

a significant issue.

5.2.3 Using Performance Points to 

Track Operations and Maintenance

Tracking operations and maintenance performance 

is often achieved through the use of a formal point 

system. A point-tracking system assesses points to 

an operations and maintenance concessionaire based 

on examinations of its success or failure in fulfilling 
49

Key Performance Indicators in Public-Private Partnerships 

performance standards. If the system assigns points 

for successes in meeting requirements, it is generally 

referred to as a “compliance” point-tracking system, 

and the concessionaire is rewarded for meeting 

performance targets and benchmarks on schedule. 

In contrast, some systems assign points correlating 

to the concessionaire’s failure to meet performance 

standards. These are called “noncompliance,” 

“nonconformity,” or “demerit” point-tracking 

systems. In this case, the concessionaire is penalized 

for not meeting performance targets on time, and 

the penalty typically results in payment reductions, 

retentions, or credit to the owner. The owner must 

decide whether to use the funds obtained from poor 

concessionaire performance to refund frequent 

customers using the project, fund a new project, 

or reinvest in the current project.

Table 11 summarizes the KPIs and related contract 

provisions for using performance points to track 

operations and maintenance performance. 

Example contract language is in the text that follows.

I-595 Corridor Improvements

Noncompliance Point-Tracking System

A noncompliance point system is used to track 

the progress of satisfying the operations and 

maintenance requirements for the I-595 highway 

project. The system is based on both the concessionaire and the department recognizing instances of 

noncompliance. The concessionaire is responsible for 

notifying the department, as soon as possible and in 

writing, of any noncompliance that matches Appendix 5 in the contract documents, which lists potential 

areas of noncompliance. The written notification 

must completely describe the noncompliance and 

the associated cure period given in Appendix 5. 

The cure period is critical because a noncompliance 

rectified within that time is not assessed any points 

if the concessionaire notified the department of the 

noncompliance before the department issued a 

notice of determination. A notice of determination, 

which the department issues if it believes there is 

a noncompliance in the project’s operations and 

maintenance procedures, describes the issue and 

the associated cure period. If the concessionaire 

overlooks or ignores a noncompliance in a notice, 

noncompliance points will be assessed to the concessionaire whether or not the issue is rectified within 

the cure period. However, both a fast-cure period and 

full-cure period are offered for each noncompliance. 

If the department notifies the concessionaire of a 

noncompliance before the concessionaire notifies the 

department but the concessionaire is able to rectify 

the issue within the fast-cure period, only half of the 

Table 11. KPI information for performance points to track operations and maintenance.

KPI Category I-595 

Corridor

Golden 

Ears Bridge

Kicking Horse 

Canyon

East 

Link

Capital 

Beltway

North-South 

Bypass

M25 Airport 

Link

5.2 Operations and Maintenance (O&M)

5.2.2 Using Performance Points to Track O&M

Noncompliance 

Point-Tracking 

System

✓ ✓ ✓ ✓ ✓

Calculation and 

Allocation of 

KPI Credits

✓ ✓ ✓

Performance 

Point System ✓ ✓ ✓ ✓ ✓ ✓

Demerit/Penalty 

Points ✓ ✓ ✓ ✓ ✓ ✓

Payment 

Mechanisms ✓
50

Chapter 5: Case Study Findings

noncompliance points will be assessed. 

Table 12 reveals how points are assessed 

based on different notification categories.

Penalties and Deductions for Noncompliance Points

If the concessionaire has accumulated more than 50 

NCPs in a 1-year period, 100 NCPs in a 3-year period, 

or 75 instances of noncompliance in a 3-year period, 

the department is entitled to increase the level of 

monitoring, inspection, sampling, measuring, testing, 

auditing, and oversight of the project at the concessionaire’s expense. These levels of oversight will be 

increased until the concessionaire can demonstrate 

that it has reduced the number of outstanding NCPs 

and is capable of performing the remainder of the 

project according to the agreement. Along with point 

allocation, specific instances of noncompliance result 

in monetary deductions, including liquidated damages to compensate the department for increased 

monitoring and inspection costs relating to a high 

number of NCPs, potential loss of toll revenues 

resulting from noncompliance, harm to the department’s reputation, and potential harm to highway 

users. The department may also exercise its step-in 

and work suspension rights any time a noncompliance is not rectified within the associated cure 

period given in the contract documents. 

Kicking Horse Canyon Phase II

Nonconformity Point-Tracking System

The OM&R quality management system required 

by contract calls for the concessionaire to develop a 

nonconformity report log detailing any nonconformity 

identified to date and how it will be managed and 

remedied in the near future. If the province is notified 

or identifies (by audits, inspections, and investigations) that there is a nonconformity in the operation 

or maintenance of the project facilities, it may issue 

a nonconformity report to the concessionaire. This 

report will remain in the nonconformity tracking 

system until the concessionaire can provide satisfactory evidence that the identified issue has been 

acknowledged by the concessionaire’s quality management system and is being corrected or has been 

remedied within the allotted timeframe. If one or both 

of these criteria are met, the province will remove the 

nonconformity report from its list of outstanding 

reports in the system. However, until the report is 

removed from the tracking system, the concessionaire 

is at risk for payment retentions and performance 

payment reductions.

Penalties and Deductions for Noncompliance Points 

If a nonconformity report is not removed from 

the system and is related to poor asset condition, 

the concessionaire is subject to payment retentions 

according to the payment retentions process. If the 

report relates to the operation or maintenance of the 

project facilities, it will be taken into account in the 

calculation of annual and monthly performance 

deductions. Any outstanding nonconformity reports 

related to operations and maintenance in the tracking 

system will be allocated points according to a nonconformity report points (NCRP) table (see table 13). The 

table reveals repeat nonconformities and the failure 

to identify and record defects in the project to be the 

most costly for the concessionaire in terms of NCRPs. 

After a nonconformity is assessed with an NCRP, 

the performance and safety deductions are calculated 

using the formula in figure 16. The deductions for the 

contract year depend on the monthly deductions, and 

the monthly deductions depend on the nonconformity 

report points collected by the concessionaire in a 

30-day period. 

The concessionaire is responsible for investigating 

all nonconformity reports and initiating corrective 

actions to remedy reported issues. The concessionaire 

has 7 days to respond to any issued nonconformity 

reports and either accept the report and provide a 

corrective action plan or appeal the report, in which 

case the matter will be solved according to the agreement’s dispute resolution procedures. It is the concessionaire’s responsibility to maintain records of each 

instance of noncompliance, the nonconformity report 

points allocated, the proposed corrective action plans, 

the times the nonconformities were identified, and the 

time the nonconformity report was rectified if the 

dispute resolution procedure was used.

EastLink

Calculation and Allocation of KPI Credits

The EastLink agreement applies KPI credits. KPI points 

accumulate during each year, and once the total KPI 

threshold is reached in a year, it triggers a corresponding KPI credit to be applied to eligible customers. In 

the first and second years after the first date of tolling 

completion, the maximum credits (with the total KPI 

score exceeding 2,000 points) are $5 million. In the 

third year, it is $10 million, and in each subsequent 

year it is $15 million. Table 14 (see page 52) provides 

an example of the EastLink KPI credit approach.
51

Key Performance Indicators in Public-Private Partnerships 

Table 12. I-595 noncompliance point notification approach.

Notification Category Percent Assessed Before

Expiration of Applicable

 Cure Period

Remaining Percent Assessed If No Cure Period or 

After Expiration of Applicable Cure Period Without 

Full and Complete Cure (totaling 100%)

Notification initiated by concessionaire 

under Section 7.2.1 0% 100%

Notification initiated by FDOT under 

Section 7.2.2 100% 0%

Table 13. Kicking Horse Canyon nonconformity report point approach.

Item Standard Nonconformity 

Report Points 

Repeat nonconformity report Four or more nonconformity reports relating to the same

occurrence in a rolling 12-month period 6

Failure to identify and record defects Inspection regimes are specified in Highway Maintenance Specification 

8-830 to 8-850, including amendments. Compliance with the requirements 

for snow avalanche program, weather-monitoring program, and unstable 

slope mitigation program

6

Operational performance measures 

within the limits of the traveled lanes 

and sealed shoulders

As specified in the OM&R output specifications and OM&R requirements

3

Records and reporting As specified in the reporting specifications and local area specifications 2

All other nonconformities Any OM&R output specifications and OM&R requirements not covered 

above, or any other obligations relating to the operation and

maintenance of the project facilities not covered above

1

Performance/safety deductions ($) for the contract year n (PSDn”) are calculated as follows:

PSDn = Σ {PSDm * [1 + (1FEASP * PPIn)]}

Where:

q = The number of months in contract year n, rounded to the nearest four decimal places

PSDm = The performance/safety deductions ($) for month or part of a month m in contract year n, determined in accordance with 

the following formula:

Where:

dm= The number of days in month or part of a month m in the contract year n

NCRPRd = Nonconformity report points rate ($) for day d in month or part of a month m in the contract year n determined in 

accordance with the following:

Aggregate Nonconformity 

Report Points 0–10 11–15 16–25 26–35 >35

NCRPRd ($) Private Private Private Private Private

Figure 16. Kicking Horse Canyon payment reduction formula.

q

n=1

dm

d=1

PSDm = Σ NCRPRd
52

Chapter 5: Case Study Findings

The total credits will be allocated among each eligible 

customer by its use of the project during the year. 

Eligible customers are those who have a customer 

contract with ConnectEast at any time during the year 

to which the KPI credit relates. Casual users will not 

be eligible for the credits.

Capital Beltway

Performance Point System

The Capital Beltway agreement establishes a performance point system to measure the concessionaire’s 

performance level and identify certain concessionaire breaches or failures to perform its contractual 

obligations. The accumulation of performance points 

may trigger the remedies set forth or referenced in 

the agreement. 

Each concessionaire breach is classified in one of 

three categories and assessed points, as shown 

in tables 15 and 16 (see page 54).

There are 32 measurement criteria classified into eight 

main categories to measure the concessionaire’s 

operations and maintenance performance.

Tolling

 Transactions

 Cross-reads

 Signage

 Privacy

 Transactions

Communications

 Public information

 Customer service

Project management

 Project plans

Concessionaire obligations

 Discrimination

 Subcontracting

 Suspension of tolls

 Permit fee

 Updates of financial model

Table 14. EastLink KPI credit approach.

Total KPI Threshold 

(Financial Year)

KPI Credit $m 

(Indexed)

First full financial year 

after the first date of 

tolling completion

Second full financial 

year after the first date 

of tolling completion

Third full financial year 

after the first date of 

tolling completion

Each subsequent financial 

year after the first date of 

tolling completion

 500 points 0.83 0.83 1.67 2.50

 600 points 1.00 1.00 2.00 3.00

 700 points 1.17 1.17 2.33 3.50

 800 points 1.33 1.33 2.67 4.00

 900 points 1.50 1.50 3.00 4.50

1,000 points 1.67 1.67 3.33 5.00

1,100 points 2.00 2.00 4.00 6.00

1,200 points 2.33 2.33 4.67 7.00

1,300 points 2.67 2.67 5.33 8.00

1,400 points 3.00 3.00 6.00 9.00

1,500 points 3.33 3.33 6.67 10.00

2,000 points 5.00 5.00 10.00 15.00
53

Key Performance Indicators in Public-Private Partnerships 

Table 15. Capital Beltway performance point approach.

Category Cure Periods Assessment of Performance Points

A

Cure period shall be deemed to start on the date the

concessionaire first obtained knowledge of, or first reasonably 

should have known of, the breach or failure. For breach or 

failure no later than the date of delivery of the initial notice to 

the concessionaire, as described in § 8.16(a) of the agreement.

Provided that the breach or failure is not cured,

performance points shall first be assessed at the end of 

the first cure period, and shall be assessed again at

the end of each period of the agreement, as 

described in § 8.16 of the agreement.

B

Cure period shall be deemed to start from the date on which 

the breach or failure occurred, whether or not an initial notice 

has been delivered to the concessionaire, as described 

in § 8.16(a) of the agreement

Performance points shall first be assessed on the date of 

the initial notification under § 8.16 of the agreement

(the start of the first cure period). Provided that the breach 

or failure is not then cured, performance points shall be 

assessed again at the end of the first and each

subsequent cure period.

C No cure period applicable Performance points shall be assessed on the date of the 

initial notification under § 8.16 of the agreement.

 Refinancing

 Operations and maintenance contractor

 Maintenance budget

 Department access and inspection

Operations

 Incident management

 Information sharing

 Systems control

 Work zone management

Inspections

 Qualification of inspection

Maintenance

 Performance requirements

Level of service

 Degradation of the facility

The total of uncured performance points assessed 

by VDOT shall be monitored by the department or 

its designee for the duration of the operating period. 

The cumulative total of cured and uncured performance points assessed by VDOT shall be monitored 

in rolling 365-day cycles from the time the breach 

has been cured for breaches in categories A and 

B and from the time the breach has occurred for 

breaches in category C. At the end of each 365-day 

cycle, the performance points assessed for that 

specific breach will be subtracted from the 

cumulative total number of performance points 

the concessionaire has been assessed.

Penalties and Deductions for Noncompliance Points

If the concessionaire is assessed 135 or more performance points during any 365-day cycle or has 30 or 

more uncured performance points at any time, VDOT 

may increase the level of project monitoring. The 

concessionaire shall compensate VDOT for allocable 

costs incurred as a result of such increased monitoring. The concessionaire may submit a cure plan 

describing specific actions the concessionaire will 

undertake to improve its performance and avoid the 

need for increased monitoring, which VDOT may 

accept or reject.

If the concessionaire is assessed 200 or more 

performance points during any 365-day cycle or 

has 45 or more uncured performance points, VDOT 

may require the concessionaire to prepare and 

submit a remedial plan for VDOT’s approval. The 

remedial plan shall be delivered within 45 days of its 

request. The plan shall set a schedule and describe 

specific actions the concessionaire will undertake to 

improve its performance, demonstrated by incurring 

no additional performance points and reducing the 

number of uncured performance points. Such actions 

may include, but are not limited to, improvements in 

the concessionaire’s quality management practices, 

plans and procedures; changes in its organizational 
54

Chapter 5: Case Study Findings

Table 16. Capital Beltway performance point examples.

Heading Subheading Breach or Failure Category Cure 

Periods

Maximum 

Points

Tolling Transactions The concessionaire transmits duplicate transactions 

or incorrect toll amounts to the Customer Service 

Center (to be determined on a per transmission basis).

C None 5

Communications Public 

information

The concessionaire issues information to the public or 

in news releases through variable message signs

or other means that is factually incorrect.

C None 5

Customer 

service

The concessionaire fails to respond within 7 days to 

customer inquiries and complaints about HOT lanes 

when contact details of customers have been 

provided, no matter whether the complaint is received 

directly from customers, the customer service center, 

or the department.

A 2 days 5

Project 

management

Project plans The concessionaire fails to produce, review, and, if 

necessary, update plans during the operating period in 

accordance with the agreement including, but not 

limited, to (1) the concessionaire management plan;

 (2) the hazardous substances management plan; 

(3) the communication, public outreach, and community education plan; (4) the life-cycle maintenance 

plan; and (5) the operations and maintenance plan.

A 30 days 5

Operations Work zone 

management

The concessionaire fails to meet requirements of I&IM 

241 on work zone safety, management, maintenance 

of traffic, and diversion routes for regular 

maintenance during operations.

B 60 minutes 5

Inspections Quality of 

Inspection

The concessionaire fails to identify material defects 

in the inspection reports, life-cycle maintenance

plan, or work currently undertaken.

C None 5

Maintenance Performance 

requirements

The concessionaire fails to meet the performance 

requirements for each asset in cycles adopted

in the industry for each asset.

A 30 days 5

Level of service Degradation of 

the facility

The concessionaire fails to appropriately manage the 

dynamic tolling mechanism to ensure the level of 

service of the HOT lanes project does not become 

degraded, as required by law. In addition, and to

be measured separately, upon receiving notice of a 

problem with the dynamic tolling mechanism, 

the concessionaire fails to submit a rectification

plan to the department for approval.

B 7 days 5

Concessionaire 

obligations

Subcontracting The concessionaire fails to include provisions in all

of its subcontracts requiring its subcontractors

to refrain from discrimination.

C None 5
55

Key Performance Indicators in Public-Private Partnerships 

and management structures; increased monitoring 

and inspections; changes in key personnel; and 

replacement of subcontractors.

If the concessionaire fails to deliver the remedial plan 

within 45 days of the department’s request, fails to 

comply with the course of action in the plan, and 

incurs 245 performance points during any 365-day 

cycle or maintains 68 or more uncured performance 

points, VDOT may notify the concessionaire in writing 

that such failure is a breach of a material obligation 

under Section 17.01(c).

Performance points will accumulate and when they 

reach certain thresholds, the department will be 

granted certain rights, shown in table 17.

CLEM7 North-South Bypass Tunnel

The operating company must set up a KPI assessment 

system to measure how well the operations and 

maintenance concessionaire is meeting the KPIs. The 

system must identify each instance in which a KPI is 

not met and identify the remediation steps necessary 

to correct it. A quarterly KPI performance report is 

required to be given to the council. All reports and 

data must be kept for 7 years. Any time the council 

chooses, it can request an audit of the KPI data and 

the KPI assessment system.

Demerit Points

As indicated in the KPI demerit point column (see 

Appendix C, tables 36 and 37, for KPI examples from 

the language in the agreement), both positive and 

negative points can be accumulated. Negative points 

are actually positive to the concessionaire and can 

be used to offset other penalty points. Penalties are 

assessed at a rate of AU$1,000 for every point. 

The penalties are used to reduce the concessionaire’s 

income, so they serve as a credit to the owner. The 

owner can decide if the credits will be refunded to toll 

users, used for other projects, or used to correct the 

conditions that led to the penalty.

M25

Payment Mechanism

The payment mechanisms for this project are used to 

both reward and penalize the DBFO contractor based 

on its level of performance in five categories:

 Lane availability

 Route performance

 Condition criteria

 Safety performance

 Proactive management

Lane availability, correlated with the “reliable 

journeys” goal, evaluates the adequacy of traffic 

flow and the availability of travel lanes. Monthly 

adjustments to this payment mechanism element 

are made for delays to the traveling public due to 

traffic management actions during planned maintenance and repair activities. The idea is to incentivize 

the DBFO contractor to plan and execute maintenance and repair actions when the impact on 

travelers is minimal.

Route performance, also correlated with the “reliable 

journeys” goal, assesses the reliability of trip times 

and the impacts of incidents. Monthly bonuses are 

made when trip times are highly reliable, and monthly 

deductions are made when trip times show significant 

variance from the norm.

Condition criteria, correlated with the “safe roads” 

and “informed travelers” goals, assess ride quality, 

roadway defects, and technology systems. Monthly 

deductions are made for failure to meet ride quality 

Table 17. Capital Beltway performance point implications.

Total Cumulative Number 

of Uncured Points

Total Cumulative Number of 

Cured and Uncured Points

Implications

30 135 Increased monitoring by the department

45 200 Remediation plan to be submitted to the department

68 245 VDOT may exercise its right under Section 1701 of the agreement
56

Chapter 5: Case Study Findings

standards or correct serious roadway deficiencies, as 

well as for any loss in technology systems that are in 

place primarily to inform the public or assist with 

roadway management.

Safety performance, associated with the “safe roads” 

goal, assesses roadway safety. Annual bonus payments or deductions are made if the roadway shows 

either positive or negative trends on the identified 

safety metrics.

Proactive management is linked with all three goals. 

The intent of this element is to reward the DBFO 

contractor for actively and productively working 

with HA to achieve its overall objectives and engaging 

with the agency as priorities or objectives change.

Airport Link

As with the CLEM7 North-South Bypass Tunnel 

project, the KPIs in the project deed are outcome 

oriented and focus on project aspects important 

to the everyday project user. KPIs focus on issues 

such as prompt response to customer calls, lane 

availability, air quality in and next to the tunnel, water 

runoff quality, operability of tunnel communication 

and safety systems, response times to incidents, 

and aesthetic appearance of the facility.

Demerit Points

The KPIs in the Airport Link project are very similar 

to those in the North-South Bypass Tunnel, which 

has been renamed the Clem Jones M7 Tunnel. The 

projects are contiguous, share many similar environmental and social impacts, and have similar DBFO 

structures. The Airport Link project uses a KPI 

assessment system to monitor performance. If the 

contractor fails to attain any of the major performance 

metrics, demerit points are applied. At the end of any 

financial year, the number of demerit points is multiplied by $1,000 from a base year of 2008. The cost of 

the demerits rises over the life of the contract by the 

consumer price index. 

The KPI assessment system is intended to record 

and report on the PPP company’s performance 

against those benchmarks. The assessment system 

must be adequate to determine whether the benchmarks have been made, each separate occurrence, 

the accumulation of demerit points, and all source 

information necessary to assess the issues surrounding achievement or nonachievement of the KPIs. 

A quarterly report on KPI compliance must be 

generated.

5.2.4 Remedies and Dispute Resolution 

Procedures for Poor Operations and 

Maintenance Performance

Remedial procedures for poor operations and 

maintenance performance were included in the case 

study PPP agreements. Executing remedies for poor 

work is directly linked to performance point-tracking 

systems. If the concessionaire exceeds a set number 

of performance points in a given period, it is susceptible not only to monetary punishment, but also to 

the owner’s remedial rights. These rights allow the 

owner to continue operations and maintenance 

work on the project or repair project elements when 

the concessionaire fails to do so. The most common 

remedial right in a PPP contract that might be 

executed by the owner is the step-in right, in which 

the owner may take up any of the concessionaire’s 

responsibilities that are being neglected or hire 

another independent party to do so. The concessionaire is held responsible for reimbursing the owner 

for all costs incurred in such a step-in. The second 

most common remedial right is work suspension, 

in which the owner has the right to suspend any 

concessionaire operations and maintenance work 

it deems unsatisfactory until the concessionaire 

develops an approvable remedial plan. Since the 

concessionaire is typically charged for each day

the project runs over schedule, work suspension

can be extremely motivating. 

Each PPP agreement also includes a dispute resolution 

procedure to solve issues that may arise between 

the owner and concessionaire on the operations and 

maintenance work. In the case study projects, these 

procedures begin at the lowest level of management 

before escalating to senior management and third 

parties. Contract procedures also leave room for 

legal entities and court cases to resolve issues. The 

purpose of these resolution procedures is to ensure 

that the owner and concessionaire can resolve their 

differences and continue the project work in unison 

before resorting to the more drastic measures of 

work suspension, step-in, default, or termination.

Table 18 summarizes the KPIs and related contract 

provisions for remedies and dispute resolution 

procedures for poor operations and maintenance 

performance. Example contract language is in the 

text that follows.
57

Key Performance Indicators in Public-Private Partnerships 

I-595 Corridor Improvements

Remedies for Poor Work

As stated in the I-595 agreement, persistent concessionaire operations and maintenance noncompliance 

will result in the department exercising its remedial 

rights. It is imperative that noncompliance issues are 

remedied because repeated or numerous instances 

of noncompliance will undermine the confidence and 

trust essential to the success of the public-private 

agreement. If the concessionaire collects 100 NCPs 

in a 1-year period or 200 NCPs in a 3-year period, 

the department may exercise its right to suspend, 

in whole or part, the concessionaire’s operations 

and maintenance work. During this suspension, the 

concessionaire will have no right to extra work costs, 

delay costs, time extensions, or other relief costs. 

Before having work suspended, the concessionaire 

is likely to receive a warning notice from the department stating in detail the matters causing the notice 

and, if applicable, the amounts due from the concessionaire as penalty. On receiving a notice, the concessionaire is required to prepare and submit a remedial 

plan describing a schedule and specific actions it will 

take to correct the issue. Another common remedial 

right the department may exercise is the step-in right. 

This gives the department the right to pay another 

entity to perform all or any part of the concessionaire’s obligations and work that relate to the concessionaire default. In turn, the concessionaire will be 

held responsible for reimbursing the department 

for all costs in connection with this step-in. Example 

faults that may result in these consequences for this 

project are in table 19 (see next page). The concessionaire’s failure to meet the minimum performance 

requirements acts as a trigger for remedies to be 

put into action.

Dispute Resolution Procedures

The dispute resolution procedures for this contract 

begin with both the concessionaire and the department agreeing to resolve disputes as quickly as 

possible without involving a third party. However, 

if a dispute cannot be resolved at this lowest level 

of management, the issue will move to the disputes 

review board elected for the contract by both parties. 

The review board will be given all evidence and 

documentation necessary from both parties to make 

a fair and accurate solution recommendation. The 

evidence will be circulated to all players involved in 

the dispute. After the board recommends a resolution, 

each party will determine whether the board’s recommendation is suitable. If either party decides to appeal 

the review board’s recommendation, subsequent 

proceedings will take place with the initial recommendation admissible as evidence. The dispute resolution 

board will not be responsible for handling disputes 

related to final acceptance or the performance of 

value added. The Regional Disputes Review Board 

and Statewide Disputes Review Board will handle 

these issues, respectively. During the course of any 

dispute resolution, the concessionaire is required to 

continue performing all work, even in the subject 

area of dispute, as directed by the department. 

Golden Ears Bridge

Remedies for Poor Work

This contract agreement exhibits remedies for concessionaire default related to poor operations and maintenance performance. The concessionaire is subject 

to operations and maintenance default if it fails to 

perform any of its obligations under the operations, 

maintenance, and rehabilitation (OMR) agreement 

and does so in a manner that jeopardizes the safety 

Table 18. KPI information for remedies and dispute resolution procedures for poor operations and maintenance performance.

KPI Category I-595 

Corridor

Golden Ears 

Bridge

Kicking Horse 

Canyon

East Link Capital 

Beltway

North-South 

Bypass

M25 Airport 

Link

5.2 Operations and Maintenance (O&M)

 5.2.3 Remedies and Dispute Resolution Procedures for Poor O&M Performance

Remedies for Poor 

Work ✓ ✓ ✓ ✓ ✓ ✓

Dispute Resolution 

Procedures ✓ ✓ ✓ ✓ ✓

Bond Safeguards ✓ ✓
58

Chapter 5: Case Study Findings

of the public, the facility lands or assets, or any facility 

occupiers. In any calendar quarter during the concession term, if the concessionaire receives three or more 

warning notices for the same failure to perform under 

the OMR agreement or in two consecutive calendar 

quarters it receives one or more warnings for the 

same failure, it will be subject to contractor default.

The remedial procedure for operations and maintenance default is as follows: The ministry may require 

the concessionaire to develop a reasonable schedule 

and plan for rectifying the default with details on the 

approach and the latest date it will be corrected. If the 

plan is considered unacceptable, the ministry and 

concessionaire will work together to develop a new 

strategy. When a plan is approved but the concessionaire does not remedy the default within the allotted 

time period, the ministry may move to correct the 

default itself or engage an independent third party to 

do so with the concessionaire fully reimbursing the 

ministry for all costs associated with the remedial 

procedure. Ultimately, the ministry may move to 

terminate the contractor and agreement if the contractor is unwilling to correct any defaults according to a 

reviewed and accepted remedial plan. 

Kicking Horse Canyon Phase II

Remedies for Poor Work

If the concessionaire stops maintaining or operating 

the project facilities in accordance with the agreement, it will be subject to default. If the concessionaire 

defaults, the province has the option to apply the 

following remedies: First, the province may make any 

payment retentions in accordance with the agreement 

or suspend the concessionaire’s work (specifically the 

functions subject to default) until the concessionaire 

can demonstrate to the province’s satisfaction that

it is has the capability and willingness to perform

its obligations under the OM&R agreement correctly. 

If the concessionaire’s work is suspended, the

concessionaire is required by contract to reimburse 

the province for all costs incurred to perform or 

engage others to perform the functions of the concessionaire under suspension. The concessionaire is also 

required to develop a program to rectify the default 

and submit it to the province for review. If the program is deemed acceptable, it will be allowed for 

implementation and the suspension will be released. 

However, if the province and concessionaire cannot 

agree on an appropriate program to correct the 

Table 19. I-595 operations and maintenance availability faults examples.

Availability 

Faults

Minimum Performance Requirements Availability 

Classification

Cure 

Period

Interval of 

Recurrence

Incident

Response

Respond to and secure sites of incidents, emergencies, crashes, and 

other events that that result in a condition that is unsafe or may 

present a life-threatening condition, such as, but not limited to, fuel 

spills, debris, pavement failure (e.g., potholes), flooding,

guardrail failures, attenuator faults, and other elements

as detailed in this matrix.

B 15 

minutes Hourly

Flexible Pavement 

Potholes

Pavement section meets the requirements in Division II,

Section 6 of the Technical Requirements. B 60 minutes Hourly

Signs Sign (single or multipost) on a given segment meets the temporary 

mitigation performance requirements in Section 4.6.2. B 30 

minutes Hourly

Toll Gantry Toll gantry on a given segment meets the temporary mitigation 

performance requirements in Section 4.6.2. This availability fault does 

not apply if a failure to meet the performance requirements interrupts 

toll collection on the express lanes, in which case it shall be

deemed a toll collection interruption availability fault.

D 60 

minutes Hourly

Rapid Incident 

Scene Clearance

Respond to and provide the necessary equipment and personnel,

as specified in Section 4.3.4.1. E 60 minutes Hourly
59

Key Performance Indicators in Public-Private Partnerships 

default, the matter is subject to the dispute resolution 

procedure. In that case, termination of the agreement 

is the ultimate, worst-case possibility.

Dispute Resolution Procedures 

The dispute resolution procedure for operations and 

maintenance starts with resolution at the lowest level 

of management before reaching an independent 

certifier or senior executives. If these three levels of 

resolution do not yield an acceptable decision on the 

dispute, a trio of experts, identified as the operations 

and maintenance panel, will be selected by the 

province and concessionaire to resolve the dispute. 

The panel’s decision is considered final and binding 

unless the consequences total more than $250,000 for 

either party, in which case the dispute can be referred 

to the arbitration procedure.

Arbitration Procedures

Either a single arbitrator or a panel of arbitrators 

selected by both parties will perform the arbitration 

process. The arbitrators will be provided with all the 

necessary documents required to resolve the dispute, 

and both parties will be eligible to be represented by 

legal counsel. Any witnesses selected for questioning 

may be examined, reexamined, and cross-examined 

by either party at the arbitration. Within 30 days of the 

arbitration, a written conclusion of the hearings will 

be sent to both parties. The decision will be final and 

binding unless the result awards either party more 

than $5 million, in which case the decision may be 

appealed and the process repeated.

EastLink

Actions and Remedies Available to State 

The agreement provides the state broad and specific 

rights on actions it can take in the event of poor 

performance by the concessionaire. Broadly, if a 

concessionaire fails to comply with the terms of the 

deed at any time after the first date of freeway 

section completion, the state may issue a notice to 

the concessionaires specifying the noncompliance 

and requiring that it be corrected as soon as practicable but, in any event, within 12 months of the date 

of the notice. If the noncompliance is not corrected, 

the state may issue a further notice requiring 

ConnectEast to replace the operation phase bond.

In addition, the state has rights to audit the operator, 

outside of the normal reporting and auditing requirements, any time up to 12 months after the end of the 

concession period. It may give notice (KPI audit 

notice) to ConnectEast requiring an audit of the KPI 

data, quarterly KPI reports, or KPI assessment system 

to verify their accuracy, correctness, completeness, 

and fitness for the intended purpose.

If the state gives a KPI audit notice, it will appoint and 

notify ConnectEast of the entity to conduct the audit 

at the state’s expense. The concessionaires must, 

within a reasonable period, make the KPI data, 

quarterly KPI reports, and KPI assessment system 

available for the audit.

If the report of the KPI auditor concludes that the 

KPI data or a quarterly KPI report is not accurate, 

complete, or correct or that the KPI assessment 

system is not fit for its intended purpose, ConnectEast 

must (1) fix the inaccuracy, incorrectness, incompleteness, or lack of fitness for intended purpose in the 

affected data, report, or system and reissue the data 

or report to the state or advise the state of any change 

to the system; (2) reassess any KPI affected by the 

inaccurate, incorrect, or incomplete data or report or 

lack of fitness for intended purpose in the affected 

system, and notify the State of and pay any necessary 

adjustment to the KPI points or KPI credit; and (3) pay 

the costs of the KPI auditor or reimburse the state for 

any costs. If the KPI auditor’s report concludes that the 

KPI data or a quarterly KPI report is materially inaccurate, incomplete, or incorrect or that the KPI assessment system is not fit for its intended purpose, the 

state may require ConnectEast to pay $500,000 

(indexed) within 5 business days.

Dispute Resolution Procedures

The concession agreement has a number of instances 

in which it refers to potential disputes. Typically, any 

dispute between the state and a concessionaire that 

relates to the deed or the concessionaire’s obligations 

under this deed (including if the state or concessionaire disagrees with the decision of the independent 

reviewer) shall be resolved through negotiation and 

subsequent expert determination, unless the contract 

expressly provides that the dispute is to be referred 

directly to expert determination. Under certain 

circumstances, resolution may also involve 

arbitration proceedings.

In the event of expert determination, the state and the 

concessionaires must exchange written lists of at least 

three qualified persons, in order of preference, within 

7 business days of the notice date. Any person who 
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Chapter 5: Case Study Findings

appears on both the state’s and the concessionaires’ 

lists will be appointed as the expert to determine a 

dispute. If more than one person appears on each list, 

the person given the highest order of preference by 

the party that gave the notice will be appointed. If no 

person appears on both lists, the party that gave the 

notice must ask the national president of the Institute 

of Arbitrators & Mediators Australia to nominate a 

person to act as the expert. The expert may meet or 

have discussions with the parties together, but not 

separately. 

Bond Safeguards

The concessionaire must procure an operation phase 

bond of $5 million (indexed to inflation) within 10 

business days of the issue of the first certificate of 

freeway section completion. If the concessionaire fails 

to comply with the contract terms at any time after 

the first date of freeway section completion, the state 

may issue a notice specifying the noncompliance and 

requiring that it be corrected as soon as practicable, 

but in any event within 12 months of the date of the 

state’s notice. If the noncompliance is not corrected, 

the state may issue a further notice to the concessionaires requiring ConnectEast to replace the operation 

phase bond with a replacement bond of $20 million 

(indexed) within 10 business days. 

Capital Beltway

Remedies for Poor Work

If the concessionaire does not meet the minimum 

standards for operations and maintenance work, the 

department may require the concessionaire to prepare and submit a remedial plan for the department’s 

approval. The remedial plan shall set a schedule 

and describe specific actions the concessionaire will 

undertake to improve its performance as demonstrated by incurring no additional performance points and 

reducing the total number of uncured performance 

points it has accumulated. Such actions may include, 

but are not limited to, improvements in the concessionaire’s quality management practices, plans, and 

procedures; changes in its organizational and management structures; increased monitoring and inspections; changes in key personnel; and replacement of 

subcontractors. If, 180 days after the implementation 

of the remedial plan, the concessionaire can demonstrate that (1) the remedial plan has reduced the 

number and frequency of performance points 

assessed compared to the period before the implementation of the remedial plan, (2) the concessionaire 

is complying with the course of action described 

in the remedial plan, and (3) the concessionaire has 

no uncured performance points, the total number of 

performance points assessed over the 180-day period 

shall be reduced by 50 percent. If the rolling 365-day 

cycle ends during the 180-day period, the number 

of performance points the concessionaire has cured 

during that 365-day cycle shall carry over to the 

next 365-day cycle. However, if the total number of 

performance points assessed over the 180-day period 

is reduced by 50 percent as described above, the 

number of previously cured performance points that 

were carried over also shall be subtracted from the 

concessionaire’s cumulative total of assessed 

performance points.

If the concessionaire fails to deliver the remedial plan 

within 45 days of the department’s request, or fails 

to comply with the course of action in the remedial 

plan and incurs a total of 245 performance points 

during any 365-day cycle, or maintains 68 (or any 

higher applicable number during the phase-in period) 

or more uncured performance points at any time, the 

department may notify the concessionaire in writing 

that such failure is a breach of a material obligation. 

Such failure shall become breach of a concessionaire 

default unless cured within the time period specified. 

Dispute Resolution Procedures

In the event of a disagreement or dispute relating to 

a life-cycle maintenance plan, VDOT and the O&M 

contractor shall try to resolve it within 60 days. Any 

disagreements or disputes raised by VDOT on the 

life-cycle maintenance plan must be based on whether the assessment and the underlying assumptions 

are reasonable, realistic, and consistent with good 

industry practice, project experience and condition, 

technical requirements, and applicable law. If no 

agreement is reached in 60 days, either party 

may submit the dispute to the dispute resolution 

procedures in Section 17.06 of the agreement. Until 

resolution of any disagreement, the treatment of the 

disputed tasks in the most recently approved life-cycle 

maintenance plan shall remain in effect and govern 

the requirements relating to such tasks.

The parties shall attempt in good faith to resolve a 

dispute within 15 days or other time period specified 

in the agreement. If the parties are unable to resolve 

the dispute within that timeframe, the dispute shall be 

referred to mediation or any other form of alternative 

dispute resolution acceptable to both. They must 
61

Key Performance Indicators in Public-Private Partnerships 

share equally the expenses of the mediator or other 

alternative dispute resolution process. If after 180 

days (or 60 days in the case of disputes relating to 

the I-495 HOT lanes in Virginia project arising before 

substantial completion) following the date of the 

referral the dispute remains unresolved, either party 

may litigate the matter in court. All litigation between 

the parties arising out of the agreement or its breach 

shall be filed in the Circuit Court for Richmond, VA, 

Division I, which shall have exclusive jurisdiction and 

venue. Each party shall bear its own attorneys’ fees 

and costs, and no party shall seek or accept an award 

of attorneys’ fees or costs, except as expressly set 

forth in the agreement.

CLEM7 North-South Bypass Tunnel

Bond Safeguards

In the CLEM7 North-South Bypass Tunnel, the 

operations and maintenance bond is for an inflationadjusted $20 million. If after 12 months of notice the 

operations company fails to correct documented 

maintenance deficiencies, the council has the option 

of calling the bond and using the proceeds to correct 

the deficiencies. The operations and maintenance 

requirements demand that the operating company 

perform the following: 

 Keep all lanes of traffic open at all times, except 

as permitted for planned maintenance and 

incidents.

 Meet the roadway and bridge performance 

specifications.

 Meet the required design life.

 Meet the handover requirements, which require 

at least 50 percent remaining design life for each 

element of the facility.

 Correct defects as soon as possible.

 Operate and maintain the tollroad in accordance 

with operations and maintenance best practices.

 Operate the project in accordance with the 

project deed.

5.3 Design and Construction

Agencies use design and construction KPIs to set 

performance expectations during facility construction. 

The use of design and construction KPIs is not as 

prevalent as operations and maintenance KPIs 

because of the nature of the design-build contract in 

the concessionaire agreement and the fact that the 

concessionaire operates the facility for such a significant period before its eventual handback. However, 

agencies do use high-level design and construction 

KPIs to align design and construction operations with 

overall agency performance measures. The KPIs for 

design and construction are presented in the 

following subcategories:

 Organizational structure for monitoring design 

and construction

 Remedies and dispute resolution procedures 

for poor design and construction performance

5.3.1 Organizational Structure for 

Monitoring Design and Construction

Similar to the monitoring structure for operations and 

maintenance, PPP agreements require a formalized 

and structured method for monitoring the design and 

construction processes of a project. In the case study 

projects, this is done using a design quality management plan and a construction quality management 

plan, both of which are developed by the concessionaire and submitted to the owner for review. Because 

the concessionaire has the freedom to develop these 

plans, each is unique to the project, the project’s 

objectives, and the concessionaire’s procedures. 

Although unique, these plans must have basic components that include important monitoring elements, 

such as inspection, investigation, and auditing techniques and procedures. The general concept for these 

management plans is the same as those used for 

operations and maintenance.

In contrast to the operations and maintenance monitoring structure, the design and construction structure 

often involves the use of quality milestones as both 

monitoring and incentive tools. The project owner and 

its representatives commonly set a number of milestones for project design and construction. Specific 

incentive amounts are set aside to reward the concessionaire for meeting these milestones. Before giving 

the concessionaire an incentive for meeting a quality 

milestone on time, the owner will either inspect the 

project’s progress itself or hire a third party to do so. 

If the concessionaire has completed quality work by 

the milestone deadline, it will receive a specific 

amount of the overall bonus proportional to the 

significance, effort, and difficulty in achieving the 

milestone. This system aims to keep the project 
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Chapter 5: Case Study Findings

progressing on time by offering the concessionaire 

opportunities to be rewarded for ontime, high-quality 

work.

Table 20 summarizes the KPIs and related contract 

provisions for organizational monitoring structures for 

design and construction. Example contract language 

is in the text that follows.

I-595 Corridor Improvements

Schedule and Progress Meetings

Monitoring of the concessionaire’s design and construction performance begins in the early stages of 

the project with the department requiring a project 

schedule for both design and construction work to 

be submitted for approval. This project schedule is 

updated and continually submitted to the department 

for approval throughout the entire design and 

construction process, and all design and construction 

work must comply with the set schedule at all times. 

Progress meetings, attended by both the concessionaire and the department, are conducted once a month 

during the construction period to ensure the work is 

conducted properly. If either party believes additional 

meetings are necessary to resolve any design and 

construction issues, they are scheduled on request. 

The contract agreement also requires the concessionaire to submit design and construction work reports 

to the department to be used as a supplementary 

evaluation tool.

Interim Milestones

During the course of the design and construction 

work, interim milestones were set for the project 

under Appendix 3 of the agreement. A total of 

Table 20. KPI information for organizational structures for design and construction.

KPI 

Category

I-595 

Corridor

Golden 

Ears Bridge

Kicking Horse 

Canyon

East 

Link

Capital 

Beltway

North-South 

Bypass

M25 Airport 

Link

5.3 Design and Construction (D&C)

5.3.1 Organizational Structure for Monitoring D&C

Schedule and Progress 

Meetings ✓ ✓ ✓

Quality Management 

System Audits ✓ ✓ ✓ ✓

Design Quality 

Management Plan ✓ ✓ ✓ ✓ ✓ ✓

Construction Quality 

Management Plan ✓ ✓ ✓ ✓ ✓

Road Safety Audits ✓ ✓ ✓

Design and Construction 

Program ✓

Review of Construction ✓ ✓ ✓

Inspection and Test ✓ ✓

Milestones ✓ ✓ ✓

Construction Management 

and Coordination ✓ ✓ ✓

Management Systems 

and Plans ✓ ✓

Design Requirements ✓ ✓ ✓

Monthly Progress and 

Work Reports ✓ ✓ ✓ ✓ ✓
63

Key Performance Indicators in Public-Private Partnerships 

$50 million in potential bonuses, labeled “interim 

milestone works bonus,” is included in the first final 

acceptance payment. This incentive works when the 

concessionaire notifies the department it has achieved 

the completion of an interim milestone. The department will assess whether the milestone conditions 

have actually been met and notify the concessionaire 

of the assessment results. If the milestone has not 

been achieved by the milestone deadline, the result 

will be reductions from the milestone work bonus. 

The milestone deadlines are concrete unless the 

concessionaire can prove it was persistently working 

toward meeting a deadline, but was precluded by an 

uncontrollable event. In this case, the final milestone 

date or bonus may be modified. 

Other significant milestones to assess design and 

construction progress are substantial completion 

and final acceptance. Two months before the scheduled substantial completion date, the department 

will review the condition of the constructed works to 

determine if all design and construction criteria have 

been met for standard completion approval. The 

first 2 weeks of these 2 months are dedicated to the 

department conducting inspections of the project, 

components, final design documents, construction 

documents, and other submittals necessary to evaluate whether substantial completion will be achieved. 

After these 2 months expire, the department will 

either issue a substantial completion certificate to 

the concessionaire or notify the concessionaire why 

it has decided not to issue the certificate (e.g., incomplete work found, repairs needed). Twenty days before 

final acceptance of the project, the department will 

conduct inspections of punch list items, as-built plans, 

and other submittals required for investigation. These 

inspections and investigations will determine whether 

a final acceptance certificate is issued to the 

concessionaire.

Kicking Horse Canyon Phase II

Quality Management System: Audits

A design and construction quality management 

system submittal from the concessionaire to the 

ministry is the basis for monitoring the design and 

construction performance of the project. Quality audit 

plans are required for the management system and 

are a primary monitoring tool. The audit plans require 

concessionaire acceptance and scheduling of three 

audit types: concessionaire audits, province audits, 

and third-party audits.

The concessionaire’s audit plans detail the internal 

and external audits the concessionaire will conduct 

on the performance of its own contractors and 

subcontractors. The purpose is to confirm that all 

activities comply with those documented in the 

quality management plans previously submitted to 

the province and are in accordance with the design 

and construction output specifications and criteria. 

Internal audits are conducted on behalf of the concessionaire, while external audits are conducted by 

independent parties with an interest in the project. 

The province audits required in the quality management system are conducted by the province’s representative using two categories of auditing: surveillance and quality system management. Surveillance 

audits are performed by the ministry on an unscheduled, random basis to monitor the concessionaire’s 

work, workmanship, and general quality of materials. 

In contrast, quality management system audits are 

scheduled audits to assess the concessionaire’s 

performance and compliance with the previously 

submitted and accepted quality management system. 

Finally, third-party audits are conducted by external 

independent organizations, such as certification or 

registration bodies, on a scheduled basis. These audit 

reports are made available to the ministry on request. 

All audit plans must be implemented into the project 

within 90 days of the commencement date.

Design Quality Management Plan

A quality design management plan is developed by 

the concessionaire and submitted to the province’s 

representative to monitor the design of the project 

and ensure all the design criteria are fulfilled. The 

design management plan identifies procedures and 

processes for design input review, output review, 

verification that all input requirements are met, 

design changes, external and internal quality audits, 

and corrective and preventive action plans. The 

design management plans also contain important 

design documents, including drawings, notes, 

reports, and computations showing the design 

decision process, criteria, and assumptions used to 

develop the design, along with quality control reports, 

test results, and final record drawings detailing how 

the process complies with the design and construction output specifications. According to the design 

and certification procedure, the concessionaire is 

required to submit these design data documents in 

the form of progress reports for review by the province’s representative at 50 percent and 100 percent 

of detailed design completion to identify and address 
64

Chapter 5: Case Study Findings

any nonconforming design elements. The province’s 

representative will question or comment on the 

design, and the concessionaire is required to address 

these comments to the satisfaction of the province 

before the design is approved. The representative 

requires the concessionaire to have all design drawings and materials prepared and certified by a professional engineer of the appropriate discipline licensed 

to practice in British Columbia before they are 

submitted. 

Construction Quality Management Plan

The concessionaire is required to submit a construction quality management plan describing how it 

intends to manage the construction process. The 

plan will include procedures and processes for construction safety audits; construction inspections and 

testing; contractor, subcontractor, and supplier of any 

tier quality assessment and procurement; external 

and internal quality audits; control of nonconforming 

products; and corrective and preventive action plans. 

These elements of the management plan will document who does the work, what they do, and what 

evidence is generated that they do it correctly. Also, 

the province’s representative and any contractors or 

consultants affiliated with the representative are given 

unrestricted access during normal construction hours 

to inspect the works and the project site. The concessionaire is also obligated to provide an updated works 

schedule to the province’s representative on a monthly basis reflecting the progress to date, a comparison 

to the previous works schedule, and a forecast to 

completion, whether changed or unchanged, as a 

method for monitoring construction performance. 

Traffic Quality Management Plan

A traffic quality management plan is also an integral 

part of monitoring the concessionaire’s construction 

procedures because managing traffic during construction is essential for completing the project safely and 

on time. The concessionaire is required to submit a 

traffic management plan to the province’s representative for review to ensure construction is done safely 

and efficiently. The plan identifies the concessionaire’s 

qualified traffic management personnel, including a 

traffic control supervisor (TCS), traffic engineer, and 

traffic manager who will monitor different aspects of 

the construction process. The TCS is responsible for 

overseeing all requirements of the agreement that 

contribute to the convenience, safety, and orderly 

movement of traffic during construction. The traffic 

engineer is responsible for signing off on the proposed traffic management plan and ensuring 

all traffic engineering issues and requirements are 

accounted for. The traffic manager is appointed by 

the concessionaire and approved by the province’s 

representative to finalize proposed traffic control 

measures and direct the application of the plan while 

communicating updates on traffic management to the 

province’s representative. The manager reviews the 

TCS’s daily activity and traffic control reports to make 

field modifications to submit to the province’s 

representative. 

Monthly Progress Reports

In addition to the quality management systems to 

monitor design and construction, the concessionaire 

and the province’s representative agree that until the 

final completion certificate is issued, the concessionaire will submit monthly progress reports to the 

province’s representative describing all relevant 

aspects of the works. These progress reports will 

include all actual or potential departure from the 

design and construction output specifications, the 

construction requirements, and the project and works 

schedules in the project agreement. The progress 

reports contain the concessionaire’s new prediction 

for the substantial and final completion date of the 

works if the schedule is affected by the previous 

month’s performance. The substantial and final 

completion date certificates will be issued only after 

an independent certifier has inspected and investigated the project on the quality and safety of the 

concessionaire’s works. This independent certifier 

cannot be a partner or joint venture of any party in 

the agreement and must warrant to each party that it 

has expert and professional staff who are competent, 

experienced, and qualified to perform the inspections 

and investigations of the project construction. 

Road Safety Audits

Road safety audits are required elements in monitoring the design and construction processes. These 

audits are performed by a safety audit team retained 

at the concessionaire’s expense, but are completely 

independent of the concessionaire’s design team to 

ensure that designs and constructed works meet 

a high safety standard. Audits occur at five stages: 

(1) on completion of the preliminary design, (2) at 

50 percent of detailed design, (3) at 100 percent 

completion of detailed design and before construction 

begins on the relevant works, (4) as part of any design 

changes during construction, and (5) immediately 

before any of the concessionaire’s works are opened 
65

Key Performance Indicators in Public-Private Partnerships 

to the public. If the audit team is not satisfied that the 

concessionaire’s design meets the standards set in 

the agreement or general safety requirements, the 

team will prepare a report for the province’s representative identifying all aspects of the project that raise 

concerns. The concessionaire is required to address 

all issues and correct the design to meet the team’s 

recommendations. These audits are extremely 

influential because the concessionaire is not eligible 

to receive a substantial completion certificate without 

a road safety audit certificate.

EastLink

Design and Construction Program

The EastLink project lists specific elements for the 

concessionaire to include in its design and construction program. On or before the commencement date, 

the concessionaire must submit a detailed design and 

construction program to the state of Victoria and the 

independent reviewer that includes the following: 

 It must be in the form of a critical path network 

set to a time scale of calendar weeks.

 It must be compatible with the state’s and the 

reviewer’s software and other systems.

 It must include the content specified in the 

project scope and requirements.

 It must not include programming activities 

or methodologies that create false criticality 

or constrain the program from reacting 

dynamically to change. 

 For the construction activities in each section, 

it must clearly demonstrate the actual, current 

critical path to achieving freeway section 

completion by the planned date.

If requested by the state, the reviewer must review 

and, if applicable, comment on the first program 

submitted within 14 business days of submission 

by the concessionaire. If the reviewer believes the 

program is not in accordance with the concession 

agreement, it may notify the concessionaire and the 

state of the reasons for that opinion. After receiving 

a reviewer’s notice, the concessionaire must, as soon 

as practicable, revise the program to address the 

reviewer’s concerns and resubmit it. 

The concessionaire must review the program regularly (at least every month) to ensure that it reflects 

the actual progress of construction activities, the 

effect of delays, and the current critical path to 

achieving freeway section completion by the planned 

date. The concessionaire must provide a copy of the 

most recent program to the state and the reviewer 

immediately after it is reviewed or updated and, 

at a minimum, within 3 business days after the 

beginning of each month.

Design Requirements

The concessionaire warrants—to the extent that it has 

relied on, used, adopted, or developed any part of the 

outline scope and project requirements or the reference design for any purpose—that it has checked the 

project scope and project requirements and that they 

are proper, adequate, and fit for their intended purposes. It also warrants that it has allowed for all risks and 

costs associated with carrying out all of its obligations.

In preparing the design of its works and temporary 

works, including the design documentation, the 

concessionaire warrants it has consulted with the 

operator and the tollroad service provider to ensure 

that it has incorporated their whole-of-life 

recommendations.

The design documentation for each discrete component or package of the works and temporary works 

must comply with the deed and be fit for the purpose 

of their construction.

Before starting construction of each component of 

its works, the concessionaire must submit proposed 

design documentation to the state and independent 

reviewer and 7 business days must have elapsed. 

The design documentation submitted by each concessionaire must contain at least the following information: (1) identification of the component or package 

of the works to which it relates; (2) identification of 

the aspect of its design plan to which it relates; (3) a 

design development report demonstrating that issues 

of planning, design (including urban design), materials selection, constructability, and operations and 

maintenance have been fully coordinated and integrated into its design documentation; (4) all necessary 

design drawings and specifications for the component 

or package of works; and (5) any other information 

required by the deed.

If required by the independent reviewer, each concessionaire must make available the appropriate design 
66

Chapter 5: Case Study Findings

personnel (including the design consultant or proof 

engineer and construction verifier) to explain its 

design documentation or to provide the requested 

information.

Construction Review

In the EastLink project, the reviewer reviews the 

program and the construction works and temporary 

works. If required, the concessionaire must make 

available the appropriate personnel (i.e., proof engineer and construction verifier) to explain or provide 

information on the review matters. If the reviewer 

believes the works are not being constructed in 

accordance with the agreement, it may notify the 

state and the concessionaire of its opinions. Within 

5 business days of receiving the notice, the concessionaire must notify the state and the reviewer of 

any matters on which it disagrees with the reviewer’s 

opinions or provide a plan for remediation if it agrees 

with the opinions. Within 7 business days of receiving 

a remediation plan, the reviewer may notify the state 

and the concessionaire whether the plan addresses 

its concerns. 

Inspection and Testing

The state and any authorized person may, upon giving 

reasonable notice to the concessionaire (except in an 

emergency, when no notice is required), inspect the 

licensed area (any land over which a land license has 

been granted) and any other place where construction 

activities are performed or materials are prepared or 

stored, and inspect or test any part of the works or 

temporary works at any time. All costs of uncovering 

or making accessible the works must be borne by 

the concessionaire.

Milestones

The concessionaire must notify the state and the 

reviewer at each relevant milestone date whether the 

milestone has been achieved. If a milestone has not 

been achieved, the state and the concessionaire must, 

within 5 business days of the passing of that milestone date, enter into discussion. The concessionaire 

must do the following:

 Provide a detailed explanation of the reason 

for the failed milestone.

 Identify the action it will undertake.

 Develop a revised program.

 Identify any necessary reporting of the 

progress of the construction activities.

 Identify any consequential changes to any other 

construction milestone dates.

Defect Correction

If a concessionaire identifies any defect in construction activities, it must notify the state and the independent reviewer immediately and expeditiously correct 

the defect. If the state identifies any defect, it may 

notify the concessionaires and require them to correct 

the defect. If the defect could cause the works to be 

unsafe to the public or workers or relates to a freeway 

section or bypass open for public use, the state may 

specify a reasonable time by which this must be 

carried out. The concessionaire must expeditiously 

correct the defect and comply with any reasonable 

time for correction the state specifies.

Capital Beltway

Design and Construction Quality Management

The concessionaire shall provide oversight and 

management of the project to control its scope, quality, 

cost, and ontime delivery. If the work does not satisfy 

applicable performance or quality standards, the 

concessionaire shall increase its management and 

oversight efforts so that repair or replacement of 

nonconforming items does not require any increase 

in VDOT’s limited oversight of the project.

The concessionaire will develop and provide to the 

department its quality management plans, manuals, 

and procedures for design and construction. The 

plans, manuals, and procedures shall be consistent 

with VDOT’s quality assurance and quality control 

requirements, as well as the procedures and 

processes in the technical requirements. 

The concessionaire will require each contractor, 

subcontractor, and supplier to comply with the 

requirements of the quality management plans. 

VDOT has the right to review the concessionaire’s 

quality management system, including the right to 

inspect work and verify the accuracy and adequacy 

of quality management documentation. The concessionaire will require its contractors and subcontractors to provide any assistance VDOT reasonably 

requires in conducting such reviews.

Construction Management and Coordination

The project agreement for the Capital Beltway 

contains key performance requirements between 

the concessionaire and VDOT:
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Key Performance Indicators in Public-Private Partnerships 

 The concessionaire and VDOT representatives 

shall be reasonably available to each other and 

shall have the necessary authority, expertise, 

and experience required to oversee and 

communicate.

 VDOT, the concessionaire’s project manager 

and senior representatives, and other pertinent 

representatives of the parties shall meet within 

7 days after the closing date to discuss issues 

affecting the administration of the work and 

implement necessary procedures, including 

those relating to submittals and approvals.

 The concessionaire shall hold monthly 

progress meetings with VDOT to review 

progress during the prior month. The concessionaire shall collect information from any key 

subcontractors and subconsultants responsible 

for work completed during the month and 

work scheduled during the upcoming month. 

The concessionaire shall be responsible for 

preparing and distributing meeting minutes 

to all attendees for review within 2 calendar 

days after the meeting.

 The initial baseline schedule shall be the 

basis for monitoring the concessionaire’s 

work performance until VDOT has approved 

a baseline schedule. The baseline schedule 

shall provide for a guaranteed substantial 

completion date.

 Within 60 days of the date work commencement 

is approved, the concessionaire shall submit to 

VDOT a critical path method schedule. This 

schedule shall be resource-loaded, be broken 

down into work packages and deliverables 

generally completed within 30 days, identify 

the dollar value of each deliverable, and comply 

with the technical requirements of and in a 

form acceptable to VDOT. 

 The concessionaire shall provide VDOT with 

any proposed update of the baseline schedule 

for the department’s review and approval. 

It shall also provide a progress narrative that 

describes the overall progress for the preceding month; a critical path analysis; a discussion 

of problems encountered and proposed 

solutions; work calendars; constraints; delays 

experienced and any pending time impact 

analysis; float consumption as a result of 

department, concessionaire, or design-build 

contractor delays; and documentation of any 

logic, duration, resource, or other relevant 

changes. 

 If VDOT believes the baseline schedule needs 

a revision in logic, activity duration, manpower, 

or cost, it will request it from the concessionaire 

in writing. The concessionaire shall respond in 

writing within 7 days, either agreeing with the 

department’s proposed revision and including 

it in the next baseline schedule update or 

justifying why it should not be accomplished. 

 The concessionaire shall submit two copies 

in electronic format of the baseline schedule, 

including updates and narratives.

 Whenever VDOT requires, the concessionaire 

shall provide in writing a general description 

of the arrangements and methods it proposes 

to adopt to execute the work.

Inspection and Testing

VDOT, its authorized agents, and the independent 

engineer have unrestricted access at all times to 

inspect, sample, measure, and physically test any 

part of the project or rights-of-way. VDOT also has 

the right, upon reasonable written notice to the 

concessionaire, to inspect financial or other records 

relating to the project. If the concessionaire has failed 

to perform any of its construction, operating, or 

maintenance obligations, VDOT is entitled to increase 

the level of its monitoring during the work or operating period of the project until the concessionaire has 

demonstrated to VDOT’s satisfaction that it is capable 

of performing its obligations. The concessionaire 

shall compensate VDOT for all costs of increased 

monitoring levels.

Clem-7 North-South Bypass Tunnel

Management Systems and Plans

The contract requires the concessionaire to ensure 

that all aspects of the financing, design, construction, 

operation, maintenance, and repair of the project; 

collection of tolls; and interactions with the community meet the contract provisions. In many cases, 

the contract provisions are general statements, such 

as that the design of the project must comply with 

appropriate Austroads or Queensland Department of 

Main Roads standards. The contract lacks voluminous 

or detailed performance measures for many aspects, 

such as design and construction. Instead, the contract 

approach is to require the concessionaire to design 

and build the project according to professionally 
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Chapter 5: Case Study Findings

recognized standards and to rely on the independent 

verifier and auditors to ensure that the project meets 

the standards.

Through the various contract stages, the independent 

verifier is to control the adequacy of the concessionaire’s efforts by issuing or not issuing a series of 

certificates. Approval and certification occurs at the 

following stages:

 At the acceptance of design documentation 

if the design plans meet the terms of the 

performance specification

 During and after construction to ensure 

that the construction meets the terms of 

the performance specification

 At the completion of the tolling system to 

ensure that it operates with the accuracy and 

speed required under the performance 

specification

 After the resolution of any disputes over defects

 When the customer service rollout program is 

sufficiently advanced to allow the operating 

company to comply with its obligations under 

the customer services and complaint provisions 

of the contract when customer audits are 

performed

The independent verifier acts independently of the 

city council, the security trustee, the concessionaire, 

and their associates. 

The concessionaire’s project management plan must 

detail how the concessionaire will ensure the delivery 

of the project by implementing a supervisory team, 

creating and updating a design and construction plan, 

managing resources, managing risk, ensuring project 

reporting, managing labor issues, engaging the 

community, and interfacing with key stakeholders, 

such as the Queensland Department of Main Roads or 

the adjacent railroad. The project management plan 

includes 17 components, such as traffic management, 

construction management, environmental management, and human resources management plans. 

In short, the project management plan requires a 

comprehensive and self-correcting series of plans, 

compliance checks, and corrective actions to ensure 

that the many phases of construction and operations 

meet the general statements of desired quality in 

the performance specification.

Each concessionaire must have its quality management, environmental management, and safety and 

health management plans audited every 6 months 

during the design and construction phase and every 

12 months thereafter. The audits will be conducted by 

an independent auditor, acceptable to the city council 

but paid by the concessionaire. The independent 

verifier is to be present during the audits.

Design Requirements

In keeping with the other approaches to the project, 

the contract does not include KPIs, per se, for toll 

facility design. The contract documents include only 

general engineering details that must be met, such 

as lane width, shoulder width, superelevation, grades, 

and sight distances. For the most part, general language is used to describe project details, such as that 

the project must be constructed in a general location, 

connect existing named routes, accommodate an 

estimated 95,000 vehicles per day with sufficient lanes 

for adequate peak-time travel speeds, and provide 

service levels to prevent queuing at the terminals and 

connections. Table 21 summarizes the required design 

life for the named features, with a residual design life 

at handover of about 50 percent of each design life.

Durability requirements must be addressed throughout the design, construction, operation, and maintenance of all assets and must be reflected in the project 

plans and the operations and maintenance manual. 

The durability elements must describe how the 

design, construction, materials, operation, and maintenance will meet the durability requirements, ongoing condition requirements, and handback condition 

requirements. The plans must include the following:

 Describe the characteristics of the environment.

 Describe the potential deterioration mechanisms in the environment.

 Determine the likely rate of deterioration.

 Assess the material life.

 Define the material performance.

 Assess the need for further protection.

 Develop procedures for the replacement of 

assets at appropriate intervals.

 Determine inspection and monitoring 

requirements.

 Outline remedial procedures.
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Key Performance Indicators in Public-Private Partnerships 

In addition to durability requirements, reliability 

requirements also are stated. For instance, the fire 

and life safety systems must be reliable at least 99.995 

percent of the time and the electrical system must be 

reliable 99.971 percent of the time. The facility control 

systems must have total redundancy and have availability of 99.995 percent. The communication systems 

must have 99.99 percent availability and the ventilation system at full capacity must be reliable 99.954 

percent of the time. Outages within those limits are 

not allowed to exceed 1 hour.

Safety Audits

Safety audits are required by a qualified independent 

party. They must be performed during the design 

phase, immediately before the project is opened to 

traffic, and every 2 years during the operations and 

maintenance phase. The concessionaire must implement the recommended corrected actions or justify to 

the independent verifier why the actions cannot be 

implemented.

Considerable detail is provided for the technical 

performance of tunnel ventilation. Neighborhood 

concerns about localized air quality from the exhaust 

stacks prompted considerable discussion during 

the environmental review and planning phases of 

the project. Internal air quality standards are set 

for carbon monoxide, nitrogen oxide, and 

particulate matter. 

In addition, there are design requirements for the 

communication systems, traffic monitoring system, 

plant monitoring and control, and tolling system.

Airport Link

Quality Management System

The design and construction contractor is required to 

implement a quality system for the management of all 

aspects of its obligations under the contract. Again, 

the overall quality plan must be ISO compliant and 

meet the quality management system requirements 

of the Queensland Department of Main Roads. “Hold 

points” and “witness points” are points at which the 

contractor delays work to allow inspection by the 

owner and the owner’s surrogates, such as the independent verifier. The contract specifies the notice that 

must be given before the achievement of those points 

to allow the owner’s inspectors to review the work. 

The quality system plan must detail the contractor’s 

system for the following:

 Appointing and empowering personnel to 

oversee the quality system

 Identifying roles and responsibilities

 Identifying interfaces with other organizations 

that may need to be involved

 Process for risk management

 

Table 21. CLEM7 North-South Bypass Tunnel required design life for named features.

Required Design Life (Years)

100 50 40 30 25 20 10

Tunnel structures Buildings Drainage 

structures State pavements Mechanical equipment Lighting Tolling hardware

Bridge structures Tunnel, ramp 

pavements City pavements Local streets Sign faces

Embankments, 

retaining walls

Architectural 

panels Shared paths Wearing surfaces

Buried elements Noise barriers Traffic control 

systems

Signage support, 

barriers

Tolling structures
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Chapter 5: Case Study Findings

 Process for liaison with the independent verifier

 The designer’s methodology and scope for 

reviewing and inspecting the construction

 Procedures for addressing nonconformance 

with the quality plan

 Independently certifying the effectiveness of the 

contractor’s quality system and conformance to 

the project deed

 Having an independent auditor audit the 

quality plan on a 6-month basis throughout 

the construction phase

Design and Reliability Standards

The project deed and its addenda, known as annexures, have many implicit KPIs in addition to the 

handful of explicit ones mentioned above. The project 

is required to meet all design standards in effect in 

Australia. While in its design phase, the project also 

must undergo a safety-in-design assessment to 

reduce or eliminate hazards. Issues that must be 

assessed include roadway hazards, workplace health 

and safety, community health and safety, environmental issues, and the protection of the asset during all 

stages of its life.

The project design must accommodate the same 

design life standards as required in the North-South 

Bypass project. They include the following:

 One-hundred years for tunnel structures, bridge 

structures, reinforced embankments, and 

inaccessible elements, such as conduits for 

drainage, fire protection, and mechanical and 

electrical systems

 Fifty years for buildings

 Forty years for accessible drainage elements, 

pavements, architectural panels, noise barriers, 

tolling system structures, and signage support 

structures

 Thirty years for local road pavements

 Twenty-five years for mechanical and electrical 

systems

 Twenty years for lighting systems, traffic control 

systems, and busway station furniture

 Ten years for ITS equipment, tolling system 

hardware, fixed sign faces, and pavement 

wearing surfaces

The project deed design addenda require designs and 

continued operation of facility assets to ensure a high 

degree of reliability. Failure to meet the reliability 

standards can trigger audits, demerits, or even the 

calling of a performance bond to ensure that reliability 

standards are met. Because the facility is a tunnel with 

all of its associated safety concerns, the electrical, 

mechanical, and communication systems are required 

to operate with a significant degree of reliability. The 

following standards are required in the design and 

construction and the operations and maintenance 

documents:

 Electrical power supply —99.995 percent 

availability

 Fire detection and suppression systems — 

99.995 percent availability

 Communication and closed-circuit television 

systems —99.99 percent availability

 All control systems —99.995 percent 

availability

 Ventilation system —99.95 percent availability

 Lighting systems —99.95 percent availability

The standards are intended to lead to designs that 

have redundancies and no single-point-of-failure 

components, as well as robust maintenance practices 

throughout the life of the concession. The systems 

must also comply with the Australian versions of ISO 

requirements for safety and risk management systems. Maintenance schedules and management 

systems for these components are required.

Independent Verifier

The contract calls for the appointment of an independent verifier jointly engaged by the owner and the 

design and construction contractor. The role of the 

independent verifier is to assure that the design 

documentation the contractor submits complies 

with the performance deed. The independent verifier 

issues a formal certification after reviewing the 

design plan for conformance with the project deed. 

The verifier performs a similar function during 

construction when the firm conducts inspections and 

issues a certification that construction conforms with 

the deed. The verifier also reviews payment claims 

and the value of work completed by the contractor. 
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Key Performance Indicators in Public-Private Partnerships 

The firm also is involved in settling disputes between 

the owner and contractor, and it certifies whether all 

major milestones have been met and time extensions are warranted. The verifier is required to act 

independently of the owner, the contractor, the 

security trustee, and their associates.

The design of the tunnel and its communications, 

ventilation, and fire suppression systems are required to receive an independent assessment during 

the design phase of the project. The independent 

assessment by a competent safety assessment firm 

is intended to certify that the fire identification, 

suppression, and evacuation systems meet 

standards for safe facility operation.

5.3.2 Remedies and Dispute Resolution 

for Poor Design and Construction Work

Remedies for poor design and construction work 

serve the same purpose as those used for poor 

operations and maintenance work: to keep the 

project on schedule and repair damaged or 

problematic work. Because failing to meet design 

and construction standards has a severe impact on 

project schedule and budget, applying remedies to 

this phase of the project is a serious issue. Because 

of this, it is common to find an owner executing 

these remedies sooner and more strictly than in the 

operations and maintenance phase of the project. 

Some remedies the owner is able to execute change 

across project and country, but the common remedy 

is the step-in right of the owner. Because problems 

and issues may surface on project work or the 

execution of these remedies, each contract provides 

a dispute resolution procedure for design and 

construction to resolve issues to a level that 

both parties can agree on to keep the project on 

schedule and on budget.

Table 22 summarizes the KPIs and related contract 

provisions for remedies and dispute resolution 

procedures for poor design and construction work. 

Example contract language is in the text that follows.

I-595 Corridor Improvements

Dispute Resolution Procedures

The dispute resolution procedure for the I-595 

agreement begins with both the concessionaire and 

the department agreeing to resolve disputes as quickly 

as possible without involving a third party. However, 

if a dispute cannot be resolved at this level, the issue 

will move to the disputes review board elected for the 

contract. The review board will be given the evidence 

and documentation necessary from both parties to 

make a fair and accurate recommendation. Any 

evidence given to the board will be circulated to all 

players involved in the dispute. After the board recommends a resolution, each party will determine whether 

it wishes to appeal the recommendation. If either party 

decides to appeal the review board’s recommendation, 

subsequent proceedings will take place with the initial 

recommendation admissible as evidence. The dispute 

resolution board will be responsible for handling any 

disputes not arising from or related to final acceptance 

or the performance of value added, in which cases the 

Regional Disputes Review Board and Statewide Disputes Review Board will handle the issues, respectively. During any dispute resolution, the concessionaire is 

required to continue performing all work, even in the 

subject area of dispute, as directed by the department. 

Table 22. KPI information for remedies and dispute resolution procedures for poor design and construction work.

KPI Category I-595 

Corridor

Golden Ears 

Bridge

Kicking Horse 

Canyon

EastLink Capital 

Beltway

North-South 

Bypass

M25 Airport 

Link

5.3 Design and Construction (D&C)

 5.3.2 Remedies and Dispute Resolution Procedures for Poor D&C Work

Dispute Resolution 

Procedures ✓ ✓ ✓

Remedies for Poor 

Work ✓ ✓ ✓ ✓ ✓

Bond Safeguards ✓ ✓ ✓
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Chapter 5: Case Study Findings

Golden Ears Bridge

Remedies for Poor Work

The contract agreement offers remedies the ministry 

may execute if the concessionaire does not meet the 

minimum requirements in its design and construction processes or performance. If the contractor fails 

to perform or observe any of its obligations under 

the agreement, or does so in a manner that compromises the safety of the public, adjacent property, 

facility assets, or occupiers, the ministry issues a 

default notice to the contractor. Following the notice, 

the ministry may require the contractor to provide 

within 20 business days a reasonable plan and 

schedule for correcting the default, including details 

on the exact process to be used and latest date 

the correction will be achieved. The plan must be 

submitted to the ministry and approved before 

the program can begin because a plan may not be 

deemed acceptable. In this case, the ministry and 

concessionaire will work together to create a new 

correction plan. If the concessionaire does not 

correct the default according to or by the time 

allotted in an accepted default correction plan, the 

ministry may move to rectify the default itself or hire 

a third party to do so. In this case, the ministry has 

the authority to suspend any concessionaire work to 

begin corrective work while holding the contractor 

responsible for reimbursing the ministry for all costs 

incurred in this process. These costs include administrative fees and any legal expenses. However, if the 

ministry elects not to pursue such a process and the 

concessionaire is unwilling to correct the defaults 

according to plan, both the concessionaire and 

agreement are eligible for complete termination 

unless there is an objection, in which case the 

termination issue will be settled according to the 

dispute resolution procedure in the agreement. 

An example of the ministry implementing such 

measures may be seen in a concessionaire’s failure to 

meet the substantial completion date for the project. 

If substantial completion of the facility is not achieved 

by the target date, the ministry may require the 

concessionaire, within 20 business days, to provide 

a written plan and schedule for achieving substantial 

completion with details on the precise manner and 

latest date it will be realized. This plan and schedule 

must be reviewed and approved by the ministry. 

The concessionaire also is subject to a weekly fee of 

$20,000 for each day the project exceeds the substantial completion target date. Furthermore, if the 

concessionaire fails to achieve substantial completion 

on or before the longstop date established in the 

agreement, the ministry is given the authority to 

terminate the agreement in full unless the concessionaire elects to have the issue reviewed by the contract’s 

dispute resolution procedure.

Kicking Horse Canyon Phase II

Remedies for Poor Work

If any inspections, audits, or investigations of the 

design or construction reveal a defect in the works 

or at any time the concessionaire’s performance does 

not meet the obligations in the concession’s agreement, the concessionaire is responsible for notifying 

the province’s representative about such failures. 

Upon notification, the province’s representative may 

issue a default notice to the concessionaire requiring 

it, at its own cost, to remedy the failure and any 

resulting damage. The remedial period for the concessionaire is 30 days. The concessionaire must show the 

province its plan for corrective action and implement 

the plan within the 30-day period. If the concessionaire continually fails to meet obligations set in the 

agreement, the province’s representative may issue 

a warning notice to the concessionaire, which may 

result in performance payment deductions. If either 

notice is issued, the province’s representative may 

increase the monitoring of the design and construction until the concessionaire can demonstrate it is 

capable of performing all of its obligations under 

the agreement.

Furthermore, if the concessionaire foresees any 

event that may delay or impede the construction 

process and meeting of construction milestones, 

it is required to notify the province’s representative 

immediately. Upon notification, the concessionaire 

must detail the reasons for delay and the measures it 

has taken to mitigate the delay consequences, while 

also supplying the province’s representative with 

reasonable facilities to investigate the delay’s effect 

on the project schedule. These investigations are 

likely to include onsite inspections and meetings 

hosted by the province’s representative. If the delay 

is a result of a force majeure, province change, or 

compensation event, the concessionaire may be 

entitled to compensation payments for the delay. 

However, if the delay is a consequence of the 

concessionaire’s own performance failures, the 

concessionaire may be subject to a reduction in 

the performance payments.
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Key Performance Indicators in Public-Private Partnerships 

Dispute Resolution Procedures 

Both parties involved in the agreement have agreed 

to make bona fide efforts to resolve all disputes at the 

lowest level of management before engaging in the 

formal dispute resolution process. If an issue cannot 

be resolved at this level, either party has the authority 

to write a notice of dispute for review by the independent certifier identified in the agreement. The certifier 

will be provided with all records and documents 

necessary to make an accurate and fair decision on 

the dispute. If the issue is not within the authority of 

the independent certifier or cannot be resolved at this 

level, it is brought before senior executives from both 

parties. If the dispute is resolved by the senior executives, the decision is final and will be signed by an 

authorized representative of both parties. However, 

if the senior executives are unable to resolve the 

dispute within 5 working days, the dispute will be 

referred to an expert. 

For design and construction disputes that exceed 

resolution by the parties’ senior executives, the 

province and concessionaire will jointly appoint 

a construction panel of three experts. The experts 

selected will determine the appropriate process 

for a timely and cost-effective resolution of the 

dispute and have the authority to inspect any project 

facilities to make an accurate decision. Each agreement party will bear its own cost of the resolution 

process by an expert. The decision made by the 

expert panel is final and binding and is not subject 

to appeal or arbitration unless the decision has a 

monetary consequence totaling more than $250,000, 

in which case referral to resolution by arbitration 

may be considered.

Arbitration Procedures

The arbitration will be performed by a single arbitrator or panel of arbitrators selected by both parties 

and is similar to the operations and maintenance 

arbitration procedures for this project. The arbitrators will be provided with the necessary documents 

required to resolve the dispute, and both parties will 

be eligible to be represented by legal counsel in any 

of the meetings for resolution. Any witnesses selected for questioning may be examined, reexamined, 

and cross-examined by either party at the arbitration. 

Within 30 days of the arbitration, a conclusion in 

writing of the hearings will be sent to both parties. 

The decision will be final and binding unless the 

result awards either party an excess of $5 million, 

in which case the decision may be appealed.

EastLink

Remedies for Poor Work

If the independent reviewer believes that a design 

and construction program is not in accordance with 

the contract, the independent reviewer may notify 

the concessionaires and the state of that opinion and 

the reasons for it. On receipt of a notice, the concessionaires must, as soon as practicable, revise the 

design and construction program to address the 

independent reviewer’s concerns and resubmit it to 

the state and the independent reviewer. An updated 

program must incorporate all changes in activities, 

methods, times, or sequence of activities and the 

concessionaires’ planned progress toward the 

freeway section completion date or late completion 

date with the same level of detail as the original 

design and construction program.

Dispute Resolution Procedures 

See the dispute resolution procedures described in 

section 5.2.3 on the operations and maintenance 

phase.

Bond Safeguards

The project’s trustee must deliver to the state up to 

two bonds totaling $87.5 million. Without limiting 

the unconditional nature of the construction bond, 

the state may demand any amount that (1) the state 

considers, or at any time may become, due from the 

concessionaire under a project document or (2) the 

state has incurred in connection with any default, 

wrongful act, omission, or failure to comply with 

an obligation or liability.

Capital Beltway

Generally, the concessionaire is responsible for 

monitoring and managing design and construction 

activities in accordance with the comprehensive 

agreement’s conditions and standards and the conditions and standards established in the separate designbuild agreement between the concessionaire and its 

design-build contractor. The agreement between VDOT 

and the concessionaire is the principal contract, and 

the design-build agreement is a subcontract between 

the concessionaire and its design-builder. VDOT has 

specific remedies for design and construction deficiencies, spelled out in Section 7.19, Section 8.07, Section 

14.01, Section 14.04, and Articles 16 and 17 of its 

agreement with the concessionaire, and a dispute 

resolution process, delineated in Section 17.06.
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Chapter 5: Case Study Findings

Remedies for Poor Work

In the design-build agreement between the concessionaire and its design-builder, the concessionaire has 

a variety of remedies available to handle defects or 

poor work during design and construction. These 

include, but are not limited to, performance guarantees, warranty periods, and termination for cause.

Dispute Resolution Procedures 

The design-build agreement has its own dispute 

resolution process. Any unresolved dispute between 

the concessionaire and the design-builder exceeding 

$1 million shall be submitted to binding arbitration, 

as detailed in Section 19.1 of Exhibit F of the 

comprehensive agreement.

If any issue in dispute between the parties to the 

design-build agreement is also the subject of a concurrent dispute under the comprehensive agreement, 

the parties shall consolidate the dispute with the 

dispute resolution process occurring under the 

comprehensive agreement. If consolidation does not 

occur, any ongoing proceeding on the dispute shall be 

stayed pending final resolution of the dispute under 

the comprehensive agreement. 

Letter of Credit

The design-build contractor must provide the 

concessionaire with a letter of credit from a qualified 

issuer equal to 7.5 percent of the contract sum as 

additional security for the contractor’s performance 

of its obligations. Adjustments in these terms occur 

at substantial completion of the new HOT lanes 

and substantial completion of the entire project, 

as detailed in Section 4.9 of Exhibit F of the 

comprehensive agreement.

CLEM7 North-South Bypass Tunnel

Bond Safeguards

In addition to the management systems, management 

plans, independent verifier, and audits, the contracts 

require performance bonds for the design and construction, operations and maintenance, and project 

handover phases. The design and construction bond 

is $5 million. The concessionaire agrees not to enjoin 

the council from collecting on its bond and the council 

can use the proceeds of the bond as it desires if the 

design and construction plans are not produced or 

are deficient after a period of notice and opportunity 

for correction.

5.4 Handback Requirements and 

KPI Evolution

Public-private partnership agreements involve a 

handback requirement section to ensure the project 

will be handed over to the owner in a functional and 

healthy state after a long concession. These requirements generally target the remaining design life of 

different project elements, such as pavement and 

structure condition and ITS equipment functionality. 

Owners set a standard in these requirements that 

work will not have to be done on the handed-back 

project for a certain time period, generally 5 years. 

These requirements hold the concessionaire accountable for the operations and maintenance performance 

measures included in the contract during the concession period. The project will not be accepted for 

handback unless the concessionaire meets all the 

design life requirements. If not, the concessionaire 

is required to remedy the design life issues.

Table 23 summarizes the KPIs and related contract 

provisions for the handback requirements and KPI 

evolution. Example contract language is in the text 

that follows.

I-595 Corridor Improvements

Handback Management

Before the project is handed back to the department 

after the concession term, the concessionaire must 

guarantee that it will be returned in a good and 

operable condition. This means all project elements 

in the operations and maintenance limits must 

comply with all handback requirements. One requirement is for the concessionaire to develop a capital 

replacement plan for all project equipment, systems, 

and assets to be replaced, overhauled, refurbished, 

or rehabilitated over the term. As part of the plan, 

the concessionaire must rehabilitate any asset that 

has reached the end of its design life or no longer 

functions correctly. The capital replacement plan will 

be developed jointly by the concessionaire and the 

department using the as-built drawings and inspection results during the last 5 years before handback 

to determine the performance of all project components. Moreover, the two parties will also work 

jointly to develop a handback evaluation plan 

that will be used to determine the condition, 

performance, and residual life of project assets. 

This determination process involves inspection 
75

Key Performance Indicators in Public-Private Partnerships 

and testing processes. These processes and criteria 

are prepared by the concessionaire using a table 

provided in the contract as a guideline (see table 24). 

Finally, a handback renewal work plan will also be 

developed 5 years before the end of the term. 

This plan identifies the concessionaire’s plan for 

repairing, replacing, or renovating assets in response 

to the testing and inspection criteria results. 

One handback requirement for this project is that 

the concessionaire must provide maintenance training 

to the department personnel who will take over 

operations and maintenance responsibility after the 

concession term ends. The concessionaire also must 

also provide all software, special tools, special equipment, and ITS spare parts and assemblies purchased 

to support the operations and maintenance work. 

Table 23. KPI information for handback requirements and KPI evolution.

KPI Category I-595 

Corridor

Golden Ears 

Bridge

Kicking Horse 

Canyon

East Link Capital 

Beltway

North-South 

Bypass

M25 Airport 

Link

5.4 Handback Requirements and KPI Evolution

Handback 

Management

✓ ✓ ✓ ✓ ✓ ✓ ✓

Handback Bond ✓ ✓ ✓

Changing KPIs 

Throughout the 

Agreement Term

✓ ✓

Table 24. I-595 example handback requirements.

Asset 

Description

Asset Subsystem 

Description

Handback Evaluation

Tasks

Handback Evaluation 

Criteria

Life Remaining at 

Handback (Years)

Rigid 

Pavement

Pavement section 

within O&M limits 

(operating period)

Inspection is in accordance with FDOT 

Performance-Based Specification 355 

(value-added portland cement concrete 

pavement and FDOT’s Rigid Pavement 

Design Manual and Rigid Pavement 

Condition Survey Handbook).

Perform rehabilitation of the 

pavement to obtain a rigid distress 

rating of greater than 8.5 and rigid 

ride rating of greater than 7.5.

N/A

Bridges Within O&M limits 

(operating period)

Pending the results of the testing and 

inspection criteria, each bridge under 

the responsibility of the concessionaire 

shall have an overall condition rating of 

six or better. This condition rating is in 

accordance with the National Bridge 

Inspection Standards and procedure 

850-010-030 (Bridge and Other 

Structures Inspection and Reporting) 

or its successor.

If any bridge structure under the 

responsibility of the concessionaire is found to have an overall 

condition rating of less than six, 

the concessionaire shall be 

responsible for making any repairs 

necessary to improve the condition 

rating to six or better. All repairs 

shall be of a substantial and 

permanent nature.

N/A

ITS Includes all ITS 

subsystems, 

communication, 

and ancillary 

components

of O&M

The concessionaire shall purchase 

new hardware in the final year of the 

program and configure, test, deploy, 

and deliver it for handback. The 

department will retain manufacturer 

warranties (minimum of 4-year 

warranty) on the hardware.

99.99% of all ITS devices are 

operational.

4
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Chapter 5: Case Study Findings

Golden Ears Bridge

Handback Management

For project handback, the ministry requires that no 

rehabilitation work be needed on project assets for a 

minimum of 5 years. This requirement is intended to 

protect the ministry from asset consumption during 

the project term and ensure that the concessionaire 

has met all operations and maintenance performance 

criteria in the agreement. The contractor must demonstrate throughout the project term, through the 

submittal and reviews of OMR quality management 

systems, that it will achieve or exceed these handback 

requirements. 

The ministry constructed a table of handback requirement standards that the concessionaire must meet. A 

sample section is in table 25. It lists project assets and 

the required remaining life for each at handback. The 

remaining life for an asset included in this project is 

calculated by multiplying the expected service life by 

the life adjustment rate and subtracting the age of 

the asset from this value. It is intended to ensure a 

relatively consistent forward workload beyond the 

end of the project term. 

Kicking Horse Canyon Phase II

Handback Management

Within 40 to 43 months of the expiry date for the 

concession of the project, both the concessionaire 

and the province’s representative will conduct a joint 

inspection termed “the initial inspection” of all 

elements of the project and its facilities, including 

pavement and structure condition. Within 60 days of 

the initial inspection, the concessionaire will provide 

the province’s representative with a report on the 

condition of the project, including its proposal for 

renewal works, a renewal schedule, and an estimate 

of the renewal amount to maintain the assets of the 

project. The concessionaire will then begin work on 

renewing the project and provide progress reports 

to the province.

After these renewal works and within 16 to 19 

months of the expiry date, the concessionaire and 

province’s representative will conduct another 

inspection termed “the second inspection” of all 

project elements identified in the initial inspection. 

Within 60 days of the second inspection, the concessionaire will provide the province’s representative 

with revisions or additions to the renewal works in 

progress. These additions or revisions must be 

approved by the province’s representative 

before they are applied.

Both the initial and second inspections set the foundation for the end-of-term inspection required before the 

concessionaire can receive its end-of-term certificate. 

Within 30 days of the expiry date, the concessionaire 

and the province’s representative will conduct a final 

joint inspection of all elements of the project and its 

facilities. This inspection will determine if the concessionaire has met all the renewal program agreements 

and if the project meets all end-of-term requirements 

set in the agreement. If the inspection reveals the 

concessionaire has complied with the renewal 

program, the province’s representative will issue the 

certificate and distribute the end-of-term payment 

without any deductions. 

Table 25. Golden Ears example handback requirements.

Infrastructure 

Component/ 

Detail

Minimum

Expected

Design Life

Condition Remaining 

Asset Preservation Life

Performance Measures 

Document 3-7

Operations and Maintenance 

Specifications Document 3-8

Special 

Provisions

Roadway Surface—

Asphalt Surface 14 II 1–100 PQI >7.5** rutting <20 mm 10

Shoulders—Paved 14 II 1–100 PQI >7 .5** 

rutting <20 mm 10

Drainage—Ditches, 

Watercourses 75 II 2–250 35
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Key Performance Indicators in Public-Private Partnerships 

Contractual Provisions for KPI Evolution

Schedule 13 of the contract documents sets the 

general conditions and requirements for a contract 

change procedure. A change in performance measures or KPIs is relevant to these change procedures, 

so Schedule 13 gives both the ministry and the 

concessionaire the ability to suggest and implement 

different measures and indicators as the concession 

term advances. Technology and societal standards 

change with time, and a 25-year concession contract 

needs provisions on changing how concessionaire 

performance is measured. The schedule calls for 

negotiations on the submittal and acceptance of a 

new measure and price. The larger and more complex 

the changed measures and indicators are, the more 

costly and time-consuming the change procedure is. 

EastLink

Handback Management

If the state requires, the concessionaire must carry out 

a joint inspection with the state at least 3 years before 

the expected expiry of the concession period and 

every 6 months after the initial inspection until the 

end of the concession period.

ConnectEast must carry out the works and implement 

the program agreed on under the program and costs 

clause to achieve proper handover or determined in 

a dispute resolution. It must deposit into the handover 

escrow account all revenue it receives (after deducting 

operating and maintenance expenses of the project, 

payments, scheduled capital expenditure, and taxes) 

for the last 3 years of the concession period until the 

handover escrow account balance equals or exceeds 

the estimated total cost of the works. It also must 

provide a bond with a face value equal to the 

estimated handover costs.

During the final 3 months of the concession period, 

ConnectEast must train personnel nominated by the 

state in all aspects of the operation, maintenance, 

and repair of the freeway and maintenance and 

repair of the maintained off-freeway facilities.

Handback Bond

ConnectEast must carry out the agreed-on handover 

program and either (1) deposit into the handover 

escrow account all revenue it receives (after deducting 

operating and maintenance expenses of the project, 

payments, scheduled capital expenditure, and taxes) 

during the last 3 years of the concession period until 

the balance of the handover escrow account equals or 

exceeds the estimated total cost of the work identified 

in the program or (2) provide to the state a bond with 

a face value equal to the estimated handover costs.

Capital Beltway

Handback Management

At the end of the term, the concessionaire shall hand 

back the HOT lanes project to VDOT, at no charge to 

the department, with asset condition having a remaining life of greater than 5 years or life within its normal 

life cycle. If VDOT requests, the concessionaire must 

dismantle the HOT lanes toll system to convert the 

lanes back to general-purpose lanes, provided VDOT 

notifies the concessionaire at least 1 year before the 

end of the term that the HOT lanes are to be converted. Any dismantling of the HOT lanes toll system 

shall be at the concessionaire’s cost.

Beginning 20 years before the expiration of the 

term and every 5 years thereafter, the concessionaire, 

VDOT, and the independent engineer will jointly 

conduct inspections of the HOT lanes project to 

(1) determine and verify the condition of all assets 

and their residual lives and (2) determine and revise 

the life-cycle maintenance plan. Beginning 5 years 

before the expiration of the term, the concessionaire, 

department, and independent engineer will jointly 

conduct annual inspections of the HOT lanes to 

ensure that the handback requirements will be met.

Handback Bond

Starting 5 years before the expiration of the term, 

the concessionaire shall post a 10-year irrevocable 

standby letter of credit or performance bond to VDOT 

for a period of 5 years after expiration of the term. The 

letter of credit or performance bond must be equal to 

50 percent of the nominal life-cycle cost expended in 

the previous 5 years under the most recent life-cycle 

maintenance plan approved by VDOT. The agency 

would draw on the letter of credit or performance 

bond only if, after termination or expiration of the 

term, the HOT lane assets fail to address the handback 

requirements and in the amount required to address 

such failures up to the full amount of the letter of 

credit or performance bond.

VDOT will determine whether the HOT lane assets 

meet the handback requirements based on routine 

inspections up to 5 years after termination or 

expiration of the term (handback period). If the 
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Chapter 5: Case Study Findings

concessionaire disagrees with VDOT’s determination, 

the concessionaire may, at its own expense, retain an 

engineer to inspect the facility and review the findings 

of the independent engineer. Resolution of the issue 

will be subject to the dispute resolution process.

CLEM7 North-South Bypass Tunnel

Handback Bond

The handback bond value is determined by the cost 

to repair the facility to bring it into compliance with 

the specified handover conditions. Maintenance and 

operations features need to be in a condition specified 

in the O&M best-practice manual. Larger capital 

items, such as the tunnel, pavements, structures, and 

mechanical and electrical components, must meet a 

residual design life requirement. The residual design 

life generally is one-half of the design life. The design 

life is specified in the engineering design requirements. Three years before handover, an inspection 

will determine the value of the repairs necessary to 

meet the handover conditions. The concessionaire 

has the option of making the repairs, contributing 

all toll receipts during the last 3 years of the contract 

to pay for the repairs, or providing a bond to fund 

the repairs.

Changing KPIs Throughout the Agreement Term

In the CLEM7 North-South Bypass Tunnel, the key 

results areas and KPIs are used to assess compliance 

with the contracts over their life. The KPIs are the apex 

of a very large pyramid of performance mechanisms 

that include the management systems, management 

plans, audits, performance bonds, and activities of 

the independent verifier. While the KPIs are a primary 

mechanism for ensuring contract conformance, 

they are part of a larger system.

Four general, overriding outcomes are desired 

from the KPIs:

 Operate and maintain the CLEM7 North-South 

Bypass Tunnel to ensure its safe, continuous, 

and efficient operation.

 Ensure high levels of customer service to 

maintain the attractiveness of the CLEM7 

North-South Bypass Tunnel and its part 

in the overall network.

 Maintain and repair all tollroad assets to ensure 

that the specified residual design life requirements are achieved at handover.

 Continually improve the standards and quality 

of the operations and maintenance services 

through benchmarking and the incorporation 

of technology advancements.

The concept of continuous improvement is ingrained 

into the operations and maintenance plan, asset 

management system, communication and consultation plan, and other aspects of the contracting system. 

Although the KPIs in the project deed will not change 

without a formal renegotiation of the contract, many 

other performance metrics, standards, and service 

levels are expected to be dynamic. The contract 

language notes that over the life of the project, 

materials, technology, techniques, strategies, and 

practices are likely to improve. The contract is 

designed to encourage the incorporation of such 

improvements into the operation of the facility. 

Therefore, the core KPIs tend to be outcome-based 

and not prescriptive on means and methods. The 

means and methods are expected to become more 

efficient and responsive over time, at least as envisioned by many of the contract objectives.

Airport Link

Handback Requirements

The management systems and operating practices 

are intended to keep the facility in sound condition 

throughout the life of the project and to ensure that 

the residual design life requirements can be met at 

the handover point. Before handover, a series of 

inspections by independent firms are required on 

the major aspects of the project and its components. 

Inspections are to certify that the condition and 

residual service life conditions are being met. The 

project includes $20 million in required bonds that 

can be used for many purposes, including ensuring 

that the facility is in proper condition at the 

handover point.

Assets are required to be built, maintained, rehabilitated, and replaced throughout the 45-year concession period so that all assets have 50 percent of 

their residual service life remaining at the end 

of the contract period. 

Changing KPIs Throughout the Agreement Term

Inherent in the contract documents are several 

continuous improvement provisions that are based 

on the assumption that over time technology, materials, and strategies should improve. Five years after 
79

Key Performance Indicators in Public-Private Partnerships 

the facility begins operation, the operator and the 

state are allowed to renegotiate the KPIs to recalibrate 

them. For the first 6 months of operations, demerit 

points are discounted by 50 percent. They are discounted 25 percent in months 7 through 12 and are 

in effect 100 percent 12 months after opening.

5.5 Conclusions

Chapter 5 of this report summarized the data collected 

from the content analysis of the PPP case study 

agreements and interviews with the project team 

members. The operations and maintenance data 

present the richest set of KPI examples. While KPI 

examples are also included for design, construction, 

and handback requirements, the majority of information in these analyses stems from performance 

requirements in the contract agreements and are not 

KPI examples per se. The information is helpful in 

determining trends across the case studies. Chapter 6 

presents the interpretation of the overall results and 

conclusions from the findings.
80
81

Chapter 6: CONCLUSIONS

6.1 Introduction

The literature review, case studies, and interviews 

with agency and private sector personnel provided 

the basis for the research results and conclusions. The 

central theme of the results focuses on the alignment 

of broad agency performance measures with PPP 

project KPIs. All of the agencies involved in this study 

are evolving and working toward this goal, but no 

one model for ultimate achievement exists.

This section presents the conclusions, which are 

aimed at summarizing the state of practice in applying 

KPIs on PPP projects. A concise set of recommendations is also provided to help agencies apply performance-based management systems to align these 

PPP projects with their long-term network management strategies. 

6.2 Conclusions

6.2.1 Alignment of Agency Goals With 

Performance Measures and PPP Project KPIs

Ideally, agencies will be able to link their higher level 

goals with performance measures and individual 

PPP KPIs. These higher level performance measures 

typically deal with network operations and societal 

goals. For example, AASHTO strongly promotes 

reform for the entire U.S. highway system centered 

on reaching six key national interests.(6) AASHTO is 

in the process of developing and establishing these 

broad agency goals on construction safety, mobility, 

and stewardship of the entire U.S. highway system. 

These six key national interests appear to reflect the 

interests of American society and address the public’s 

major concerns about and views of the transportation 

system. If the reform is accepted and implemented, 

AASHTO believes that every highway agency in the 

United States will be capable of and held accountable 

for producing results that reflect and work toward 

realizing these goals. For the system to be effective, 

accountability has been established as the driving 

force behind performance management. Therefore, 

accountability must be transferred from the concessionaire to the agency via PPP contracts, and from 

the agency to society via public outreach tools and 

achievement of positive results. The challenge for 

each PPP is to link project KPIs to these higher level 

agency goals.

In general, none of the agencies or projects has 

completely achieved a seamless alignment of project 

performance measures and KPIs with its overarching 

agency goals. The largest challenge in this alignment 

is the evolving and dynamic nature of both the agency 

goals and the project performance measures. The 

evolving nature of performance measures is most 

apparent in the United States, where only a few 

agencies have mature performance measurement 

systems. In Australia and England, where the use of 

performance measures and PPP contracts is more 

evolved, the alignment of these measures is more 

apparent. The Highways Agency in the United Kingdom is perhaps the most progressive. It is moving 

toward negotiating KPI terms in agreements instead 

of mandating them in procurement documents 

through prescriptive means.

The Highways Agency provides one of the more 

advanced examples of linking agency performance 

measures to PPP KPIs. As the network’s manager, the 

Highways Agency conducts its business differently 

than a typical U.S. department of transportation. Quite 

simply, the Highways Agency’s principal focus is on 

its customers. Accordingly, its aim is “safe roads, 

reliable journeys, informed travelers.” These three 

principles guide all agency efforts. This aim is 

manifested in several agency objectives:

 Reduce congestion and improve reliability.

 Improve road safety.

 Respect the environment.

 Seek and respond to feedback from customers.

To deliver on its aim and objectives, the Highways 

Agency has established seven key program-level 

performance measures:

 Reliability —Implement a program of delivery 

actions that tackle unreliable journeys on the 

strategic road network.
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Chapter 6: Conclusions

 Major projects —Deliver on time and budget 

the program of major schemes on the strategic 

road network.

 Safety —Deliver the Highways Agency’s 

agreed proportion of the national road casualty 

reduction target.

 Maintenance —Maintain the strategic road 

network in a safe and reliable condition, and 

deliver value for money.

 Carbon emissions —Contribute to national and 

international goals for reducing carbon dioxide 

emissions by lowering the Highways Agency’s 

emissions.

 Customer satisfaction —Deliver a high level of 

road user satisfaction.

 Efficiency —Deliver the Highways Agency’s 

contribution to the Department for Transport’s 

efficiency target.

Across its network, the Highways Agency has enacted 

a number of initiatives to deliver on its aims and 

objectives, and it uses the performance measures to 

guide and monitor its actions at both programmatic 

and project levels. Figure 17 provides an overview 

of how the Highways Agency translates its broader 

goals into PPP project performance measures and 

links them with the payment mechanisms used in 

these contracts. This figure indicates the most current 

thinking because it corresponds to the structure of the 

performance measures and the payment mechanism 

in the agency’s most recent (and largest) PPP project, 

the M25 enhancement.

6.2.2 Dynamic Nature of Performance 

Measures and KPIs Over Time

Some cases illustrate the necessity of a dynamic 

approach to performance measurement because 

service or asset requirement expectations are likely 

to change over time. In some instances, the measure 

and the indicator used have an inherent ability to 

evolve because the indicator is oriented toward 

trends in particular measures, while in other instances 

provisions are put in place to modify measures over 

the contract period.

In the CLEM7 North-South Bypass project, for 

example, the owner’s complex obligations under 

state and federal environmental laws are effectively 

shared with the PPP because of a requirement that 

the PPP develop a comprehensive environmental 

management plan that conforms to ISO environmental certification practices. The plan must include KPIs 

to indicate ISO compliance. In addition, the PPP is 

required to abide by the requirements of and to 

consult with the numerous environmental agencies 

with which the owner would normally interact. 

Compliance with environmental statutes and commitments is among the environmental performance 

indicators that the PPP must enumerate in its 

environmental compliance plan.

The system must be flexible at the performance 

measurement level. In British Columbia, the Ministry 

of Transportation developed a clear set of strategic 

goals to (1) maintain highways to a high standard 

through contracts with private sector road maintenance providers and (2) manage funding for 

Figure 17. Linkage between agency goals, performance 

measures, and KPIs in the Highways Agency.

Reduce Casualties

Maintain Project Road in Safe

and Serviceable Condition

Minimize Delay and Disruption

From Planned Maintenance

Minimize Delay and Disruption

From Incidents

Ensure Technology Systems

Are Kept Operational

Safe

Roads

Reliable

Journeys

Informed

Travelers

Work Proactively With the Agency to Improve

Operational Performance on the Project Road
83

Key Performance Indicators in Public-Private Partnerships 

high-quality, modern public infrastructure that 

supports the development of strong communities 

by contributing to long-term economic growth and 

a clean environment. However, these goals were 

established after the execution of the Kicking Horse 

PPP agreement. For example, the transportation 

sector goal on reducing greenhouse gas emissions 

was not contemplated in the original project KPIs. 

However, the contract does have provisions to make 

changes in the project KPIs so these goals can be met.

The system must also be flexible at the KPI level. The 

Florida I-595 project provides numerous examples of 

how PPP project data are tied to agency performance 

management systems. Table 26 is an excerpt from the 

KPI tables in the PPP agreement. The measurements 

Table 26. Examples from FDOT I-595 KPI table.

Element Category Required Task Minimum Performance 

Requirements

Cure 

Period

Interval of 

Recurrence

Highway Running Surfaces: Pavement

Category 1 Pavement 

(0–3 Years After 

Substantial Completion)

Maintain flexible pavement at 

acceptable level of safety for 

traveling public.

Meet the performance requirements 

set forth in Division II, Section 6 of the 

Technical Requirements for the following:

• Rutting maintained at less than a depth 

of 0.25 inches

90 days Every 5 days

• Ride maintained at a ride number (RN) 

greater than 3.5

90 days Every 5 days

• Settlement/depression at maximum 

depth of 0.5 inches

7 days Daily

• Cumulative length of cracking >30 feet 

for cracks >0.125 inches in a 0.1-mile lot

90 days Every 5 days

• Raveling and/or delamination of 

the friction course as defined and 

determined by the department in 

accordance with the examples at 

www.dot.state.fl.us/specificationsoffice/

pavement.htm or its successor

90 days Every 5 days

• Potholes and slippage areas no greater 

than 0.5 square feet in area and 1.5 

inches deep

24 hours Hourly

Intelligent Transportation Systems

ITS Operations Monitor time required for 

roadway clearance.

I-595 express lanes quarterly average 

roadway clearance duration (in minutes) 

must be no more than 90% of FDOT 

District Four’s ITS performance 

measures published quarterly at 

www.smartsunguide.com.

0 N/A

Monitor time required for incident 

clearance.

I-595 express lanes quarterly average 

Incident/event clearance duration 

(in minutes) must be no more than 90% 

of FDOT District Four’s ITS performance 

measures published quarterly at 

www.smartsunguide.com.

0 N/A
84

Chapter 6: Conclusions

for the raveling and/or delaminating of the friction 

courses for the running surfaces are tied to online 

specifications. These items will change over time, 

and the PPP project will therefore be aligned with 

the other elements of the FDOT network. Similarly, 

the ITS KPIs are tied to a larger ITS program 

across Florida.

6.2.3 Alignment of Performance Data With 

Agency Performance Management System

As U.S. highway agency performance management 

systems continue to mature, PPP performance data 

will need to be integrated with these systems to 

ensure optimal network operations. It is important 

to collect performance data during the concession 

period in a manner consistent with the agency’s 

network management approach. This implies that 

these data will also be used to verify PPP performance. The alignment of these measures is challenging. As these systems evolve, PPP project data collection formats and reporting structures will also need 

to evolve to be consistent with the overall network 

management approach.

An example can be found in the operations, maintenance, and rehabilitation Schedule 2 of the Golden 

Ears Bridge contract. The ministry requires an explicit 

standard for the concessionaire in collecting asset 

condition data as follows:

The Concessionaire is responsible for collecting 

annual pavement condition data for the purposes 

of asset management and measuring performance achievement. The annual data collection 

is required to be conducted in accordance with 

Ministry specifications for network level automated pavement surface condition surveys. All 

collected data must be provided to the Ministry 

for input into their pavement management 

system as per the prescribed Ministry 

specified data file formats.

6.2.4 Use of Asset Management Plans in 

Addition to KPIs

While specific performance measures or key performance indicators are used to categorize and track the 

quality of operations and maintenance services, the 

asset management plans proposed at selection time, 

agreed to at contract close, and modified (per contract provisions) over the contract period are clearly 

a significant dimension of the overall approach to 

asset management in a PPP arrangement.

In the Kicking Horse Canyon Phase II PPP, for example, 

the asset management plan includes elements such 

as a description of the how the KPI will be achieved, 

the intervention criteria for each indicator, and the 

approach for asset condition inspection and work 

identification. The plan is used to track all routine 

maintenance activities and the condition and 

disposition of the highway pavement assets.

The Airport Link and CLEM7 North-South Bypass 

Tunnel projects provide good examples of asset 

management plan application. While priority concerns 

from the state transportation plans are mirrored in 

the contract documents for the projects, the contract 

documents do not rely solely on a set of KPIs to 

ensure that the concessionaire fulfills the state’s 

strategic objectives for the project. Instead the contracts rely on a more comprehensive approach that 

requires the concessionaire to develop management 

plans and systems for all major aspects of the projects’ planning, design, construction, maintenance, 

operation, toll collection, and community relations. At 

least 28 management systems or management plans 

are required for the projects, while only 19 individual 

KPIs are explicitly stated in the contract documents. 

Outside audits and an independent verifier are 

required as part of the contract to attest to the 

Brisbane City Council and Queensland that the many 

provisions of the management systems and plans 

are being followed. At least three management 

systems—project, environmental, and health and 

safety—must comply with the Australian provisions 

of ISO for the management systems. Also, a minimum of three performance bonds are required to 

ensure adherence to the performance specifications. 

These include bonds for design and construction, 

operations and maintenance, and tollroad condition 

at handover. Although KPIs are included in the 

project contracts, they comprise only a small part 

of the oversight framework for the complex, multiphased projects. For example, all 19 KPIs explicitly 

referenced in the contract documents relate to the 

A

t least 28 management systems or 

management plans are required for 

the projects, while only 19 individual 

KPIs are explicitly stated in the contract 

documents.
85

Key Performance Indicators in Public-Private Partnerships 

operations phase, and none relate to the design and 

construction phase. 

6.2.5 Focus on Outcomes Rather 

Than Outputs

The agencies are evolving performance measures 

to use in internal operations and with contractors’ 

measures. Increasingly, these measures focus on 

outcomes rather than outputs. In some cases, this 

evolution has shifted from the agency promulgating 

a lengthy set of prescriptive measures to negotiating 

key outcomes. This negotiation provides the local 

government or contractor more latitude in how to 

achieve results, as opposed to dictating that the 

contractor or local government achieve many detailed 

performance indicators. The consensus is that simply 

measuring and collecting data outputs do not achieve 

results. This is because performance measures and 

indicators must be developed, measured, and understood with a strong motivation to apply the data to 

achieve outcomes that significantly impact agency 

goals. Data application comes through development 

(and in some cases redevelopment, depending on 

performance data collection) of effective asset 

management plans that reflect the indicator results.

For example, travel time reliability appears to be a 

central performance outcome desired by the owners 

of these projects. While in the early years of PPP 

projects contractors may have been compensated

for asset condition and travel volumes, now travel 

reliability has become a prime consideration. Reliability is measured through hourly, real-time calculations 

of not just travel speed, but also variability in travel 

speed. The contracts appear to incentivize advanced 

operations strategies to avoid delays during maintenance and respond quickly to incidents.

6.2.6 Emphasis on Service Requirements 

Versus Asset Condition

Specific performance measures and KPIs used across 

the cases vary, but more recent cases illustrate more 

emphasis on service requirements than asset condition. In the CLEM7 North-South Bypass Tunnel project, for example, the project deed includes generic 

performance requirements, but requires the concessionaire to develop service plans, maintenance 

manuals, and quality plans to ensure acceptable 

service levels. In the communication and consultation 

management plan, the concessionaire is required 

to develop and implement an ongoing process for 

community consultation. The plan calls for “open 

and individual” response to community information 

needs as those needs evolve over the 35-year concession period. The plan includes not only communication channels, but also an oversight panel tasked with 

updating the communication process throughout the 

project’s life.

6.2.7 Use of Incentives (Positive and Negative)

Incentives used are positive and negative, with the 

latter appearing to be more prevalent. In general, 

positive incentives are more associated with overall 

contractor performance, whereas negative incentives 

are more associated with compliance with specified 

service or asset requirements. Some projects include 

a strong emphasis on incentives for outcomes, such 

as rewarding the availability of travel lanes. Penalties 

and payment deductions are also included, but the 

contract emphasizes rewards for performance above 

negotiated minimums.

For example, the Highways Agency has moved 

toward the use of incentives to align the PPP contractor with overall agency goals. The overall intent of the 

KPIs in the M25 PPP is to incentivize the contractor to 

exceed minimum conditions of safety, condition, and 

reliability. As previously described, the three key 

outcomes the department seeks are safe roads, 

reliable journeys, and informed travelers. The incentives are tied to achieving these strategic outcomes.

While the Highways Agency has moved toward the 

use of positive incentives, the majority of case studies 

showed the application of negative incentives. Table 

27 (see next page) is an example from the Capital 

Beltway performance point approach. The accumulation of performance points will result in the negative 

incentives of increased monitoring by the department, 

development of a remediation plan to be submitted to 

the department, or more serious legal actions.

6.2.8 Creating an Asset Management 

Culture

A theme in all of the case studies is to create an 

ongoing asset management culture in the PPP 

organization that seeks to provide a high level of 

service during the life of the contract and that appears 

to preserve a substantial remaining service life at 

the handback point. For example, the state and the 

Brisbane City Council ensure that sound infrastructure 

conditions are maintained by the concessionaires on 

the CLEM7 North-South Bypass Tunnel, but they do 

not achieve that assurance by imposing a lengthy list 
86

Chapter 6: Conclusions

of KPIs to address each roadway component during 

the 40-year contract. Instead, they require the creation 

of asset management and maintenance management 

systems, which must ensure that the projects remain 

in sound condition through each year of their contract 

life. The contract strategy for ensuring serviceability at 

the project handover is to require a remaining service 

life of about 50 percent for each asset component. 

Throughout the project’s life, the oversight of the 

independent verifier and other auditors is the principal means to gauge the adequacy of the asset and 

maintenance management efforts.

Review of the contract documents for the CLEM7 

North-South Bypass Tunnel and Airport Link indicates 

that KPIs are only one component of the strategy to 

ensure quality. Other components include the 

following:

 Performance bonds

 Management systems

 Hiring of an independent quality manager

 KPIs

 Audits of performance and finances

 Oversight of the independent verifier and other 

verifiers, such as the construction verifier 

The clear communication of performance measures 

and the use of KPIs are only part of creating an asset 

management culture. The agencies must take a 

long-term and holistic asset management approach 

to ensure this culture.

6.2.9 Opportunity for More Use of KPIs in 

Design and Construction

While the use of KPIs for operations and maintenance is pervasive in this study, the application 

of performance measurement during design and 

construction is noticeably absent in the case study 

projects. Given that many PPP projects are upgrades 

to existing networks, there is an opportunity to apply 

KPIs to measure network performance during design 

and construction. The broad agency performance 

measures should apply to projects during design 

and construction as they do during operations and 

maintenance. As performance-based management 

systems mature, they can be broadened to cover 

design and construction of PPP projects and more 

traditional forms of project delivery. Table 28 

presents example KPIs from operations and 

maintenance that could be used in construction.

Most highway construction is done under traffic 

conditions, which provides the opportunity to apply 

operations and maintenance KPIs during construction. 

Application of these KPIs will help align design 

and construction teams with agency performance 

measures and societal goals.

6.2.10 Focus of Handback Provisions

Handback provisions are generally asset focused 

and rely almost exclusively on residual service life 

Table 27. Capital Beltway performance point approach.

Category Cure Periods Assessment of Performance Points

A Cure period shall be deemed to start on the date the 

concessionaire first obtained knowledge of, or first 

reasonably should have known of, the breach or 

failure. For breach or failure not later than the date 

of delivery of the initial notice to the concessionaire, as described in § 8.16(a) of the agreement.

Provided that the breach or failure is not cured, performance points 

shall be assessed first at the end of the first cure period

and again at the end of agreement period. Subsequent cure

period is as described in § 8.16 of the agreement.

B Cure period shall be deemed to start from the date 

on which the breach or failure occurred, whether

or not an initial notice has been delivered

to the concessionaire, as described in § 8.16(a)

of the agreement.

Performance points shall first be assessed on the date of the initial 

notification under § 8.16 of the agreement (the start of the first cure 

period). Provided that the breach or failure is not then cured, 

performance points shall be assessed again at the end

of the first and each subsequent cure period.

C No cure period applicable Performance points shall be assessed on the date of the

initial notification under § 8.16 of the agreement.
87

Key Performance Indicators in Public-Private Partnerships 

specification. This practice introduces a tremendous 

auditing effort at the end of the contract and the 

potential for disputes. The nature of these provisions 

also tends toward negative, compliance-oriented 

incentives. Table 29 provides an example of handback 

provisions from the Golden Ears agreement.

Handback requirements generally require the 

concessionaire to develop a capital replacement plan 

for all project equipment, systems, and assets to be 

replaced, overhauled, refurbished, or rehabilitated 

over the term. As part of the plan, the concessionaire 

must rehabilitate any asset that has reached the end 

of its design life or does not perform correctly. The 

capital replacement plan will be developed jointly by 

the concessionaire and the department using the 

as-built drawings and inspection results during 

the last 5 years before handback to determine the 

functionality of all project components.

6.3 Application of Key Findings to 

Other Delivery Methods

Although the results of this research focus on PPP 

delivery, the results have potential application to 

multiple delivery methods. Table 30 (see next page) 

conveys how the key findings from this research 

relate to three other project delivery methods: designbuild, design-bid-build, and maintenance contracting. 

The majority of the findings apply to all four delivery 

methods. The findings that do not apply to designbuild and design-bid-build are those that are most 

applicable to long-term projects.

The delivery of maintenance through term maintenance contracts is relatively new in the United States. 

The majority of findings from this project apply 

directly to term maintenance contracts. The alignment 

of agency goals, alignment of performance data, use 

Table 28. Capital Beltway performance point examples.

Heading Subheading Breach or Failure Category Cure Periods Max Points

Communication Public 

information

The concessionaire issues information to the public or 

in news releases, through variable message signs or 

other means, that is factually incorrect.

C None 5

Operation Work zone 

management

The concessionaire fails to meet requirements of 

I&IM 241 on work zone safety, management, maintenance of traffic, and diversion routes for regular 

maintenance during operations.

B 60 minutes 5

Inspection Quality of 

inspection

The concessionaire fails to identify material defects in 

the inspection reports, life-cycle maintenance plan, or 

work currently undertaken.

C None 5

Table 29. Golden Ears example handback requirements.

Infrastructure 

Component/Detail

Minimum Expected 

Design Life

Condition Remaining Life

Asset Preservation 

Performance Measures Document 3-7

Operations and 

Maintenance 

Specifications 

Document 3-8

Special Provisions

Roadway Surface—

Asphalt Surface 14 II 1–100 PQI >7.5** rutting <20mm 10

Shoulders—Paved 14 II 1–100 PQI >7.5** rutting 

<20 mm 10

Drainage—Ditches 

and Watercourses 75 II 2–250 35
88

Chapter 6: Conclusions

of asset management plans, and creation of an 

asset management culture are the findings that most 

obviously translate from PPP to maintenance contracting situations. Similar to long-term concessionaires, 

maintenance contractors are vital to network operations and their agreements should reflect this integration. If the lengths of maintenance contracts are 

significant (i.e., more than 5 years), the dynamic 

nature of KPIs and handback provisions should be 

considered in the maintenance contracts as well.

Although design-bid-build and design-build contracts 

are much shorter in duration and do not have maintenance components, the majority of the PPP research results apply. During design and construction, 

engineers, contractors, and design-builders impact 

the network. To the most reasonable extent, the 

goals of the design and construction team should be 

aligned with the goals of the agency. Their work will 

likely be done on highway assets that are in operation. The use of KPIs during design and construction 

can help mobility during construction and feed the 

agency’s performance management system in real 

time. As projects grow and builders are provided 

with more control over design and construction 

(i.e., through design-build delivery and performance 

specifications), the results of this research become 

more applicable.

6.4 Recommendations

This study offered considerable insight into the 

evolution and application of performance measurement for PPP projects. Obvious trends toward the 

application of performance-based management 

systems were found in many sectors, including 

transportation. Examination of the PPP agreements 

showed trends in how agencies mandate performance measures and KPIs while allowing for flexibility in changes that will occur over the agreement 

term. The case studies demonstrate the viability of 

PPP projects for meeting critical infrastructure needs. 

The interviews with agency officials also provided 

insights into how agencies and projects have evolved 

over time to better meet the goals of their customers 

and society.

The results of this study can be summarized in the 

following recommendations gleaned from literature, 

case study document analysis, and interviews:

1. Align project performance measures and KPIs 

with overarching agency goals.

2. Plan for the dynamic nature of performance 

measures throughout the PPP life cycle and 

handback.

Table 30. Application to other delivery methods.

Key Findings Public-Private 

Partnerships

Maintenance Design-Build Design-BidBuild

Alignment of agency goals with performance measures and 

project KPIs ✓ ✓ ✓ ✓

Dynamic nature of performance measures and KPIs over time ✓ ✓

Alignment of performance data with agency performance 

management system ✓ ✓ ✓ ✓

Use of asset management plans in addition to KPIs ✓ ✓ ✓ ✓

Focus on outcomes rather than outputs ✓ ✓ ✓ ✓

Emphasis on service requirements versus asset condition ✓ ✓

Use of incentives (positive and negative) ✓ ✓ ✓ ✓

Creation of an asset management culture ✓ ✓

Opportunity for more use of KPIs in design and construction ✓ ✓ ✓ ✓

Focus on handback provisions ✓ ✓
89

Key Performance Indicators in Public-Private Partnerships 

3. Do not rely completely on KPIs to align agency 

goals and project performance, but strive to 

create an asset management culture through 

asset management plans that are continuously 

improved throughout the concession period.

4. Similarly, keep the number of programmatic 

and project-level measures and indicators to a 

manageable number. Focus on measures and 

indicators that result in outcomes rather than 

simply data outputs. 

5. Consider asset management plans during 

procurement and concession agreement 

negotiation.

6. Continue to develop and apply KPIs during 

design and construction to help align all 

types of projects to agency goals.

7. Explore outcomes-based handback provisions 

rather than compliance-oriented means.

8. Recognize that KPIs are not the only means of 

ensuring contract compliance during decades 

of design-build-operate-and-maintain projects.

9. Focus on customer needs and societal goals in 

addition to asset condition.

10. Unique agency locations and user demands 

necessitate unique agency goals, performance 

measures, and strategies, which are developed 

most effectively by involving upper management, stakeholders, community, and end users 

in the process. 
90

Endnotes

1

 MacDonald, Douglas, Yew, Connie, Arnold, Robert, 

Baxter, John, Halvorson, Randall, Kassoff, Hal, 

Meyer, Michael, Philmus, Ken, Price, Jeffrey, Rose, 

Douglas, Walton, Michael, and White, William 

(2004). Transportation Performance Measures 

in Australia, Canada, Japan, and New Zealand 

(FHWA-PL-05-001). Federal Highway 

Administration, Washington, DC, 1–84.

2

 Measurement Working Group (2007). Area 

Performance Indicator (API) Handbook.

Highways Agency, England, 1–60. 

3

 California Department of Transportation, Division 

of Transportation of Planning and Office of State 

Planning (2006). California Transportation Plan 

2025. California Department of Transportation, 

Sacramento, CA, 1–75.

4 Transportation Research Board (2003). A Guidebook 

for Developing a Transit PerformanceMeasurement System. Washington, DC, 1–383.

5

 Booz, Allen, Hamilton (2008). Relationships Between 

Asset Management and Travel Demand. Federal 

Highway Administration Office of Asset 

Management, Washington, DC, 1–99.

6

 American Association of State Highway and 

Transportation Officials (2008). AASHTO 

Authorization Policy Topic I Performance 

Management. Washington, DC, 1–230.

7

 American Society of Civil Engineers (2009). 

Report Card for America’s Infrastructure, 

www.infrastructurereportcard.org/report-cards.

8

 American Association of State Highway and 

Transportation Officials (2007). State DOT 

Performance Management Programs: 

Select Examples. Washington, DC, 1–28.

9

 Simeone, Ronald, Carnevale, John, and Millar, Annie 

(2005). “A Systems Approach to PerformanceBased Management: The National Drug Control 

Strategy.” Public Administration Review, 65(2), 

191–202.

10 Watson, Gregory H. (2005). “Design and Execution 

of a Collaborative Business Strategy.” Journal for 

Quality and Participation, 28(4), 4–9. 

11 Missouri Department of Transportation (2009). 

Tracker: Measures of Departmental Performance. 

Jefferson City, MO, 1–233.

12 Gunaratne, Asoka K., and Plessis, Andries J. du 

(2007). “Performance Management System: 

A Powerful Tool to Achieve Organizational Goals.” 

Journal of Global Business and Technology,

3(1), 17–28.

13 Zwan, J. Th. van der (2003). “Functional Specifications for Road Pavements—A Question of Risk 

Assignment.” XXIInd PIARC World Road 

Congress Proceedings, Durban, South Africa, 

October 19–25, 2003.

14 Miller, John (2005). “A Practical Guide to Performance Measurement.” Journal of Corporate 

Accounting and Finance, 16(4), 71–75. 

15 Page, Sasha, and Malinowski, Chris (2004). 

“Top 10 Performance Measurement Dos 

and Don’ts.” Government Finance Review, 

20(5), 28–32. 
91

Appendix A: ANNOTATED BIBLIOGRAPHY

» Journal Articles

Gunaratne, Asoka K., and Plessis, Andries J. du 

(2007). “Performance Management System: 

A Powerful Tool to Achieve Organizational Goals.” 

Journal of Global Business and Technology, 

3(1), 17–28.

The authors reveal performance management as a system and not simply a oncea-year meeting to review the past year’s 

performance and set goals for the next year. 

This article discusses a performance management system employed by a Fortune 

500 company, how its employees rated the 

individual facets of the system, and their 

overall satisfaction with the total system 

after 5 years of implementation. It elucidates 

how the organization aligned the performance management system and articulated 

the company business objectives to 

individual goals. 

Miller, John (2005). “A Practical Guide to Performance 

Measurement.” Journal of Corporate Accounting 

and Finance, 16(4), 71–75. 

The author emphasizes the role controllers, 

chief financial officers, and cost managers 

play in setting the overall performance 

measurement requirements in an organization and providing guidance in developing 

useful performance measures. Also presented is a generic performance management 

cycle consisting of (1) strategic planning and 

management to develop longer term business objectives and (2) short-term planning 

and budgeting to execute strategy and 

achieve strategic goals and accountability 

during the fiscal year. 

Page, Sasha, and Malinowski, Chris (2004). 

“Top 10 Performance Measurement Dos and 

Don’ts.” Government Finance Review, 20(5), 28–32. 

From New York City to government entities 

of all shapes and sizes, the authors reveal 

that performance measurement continues to 

increase in popularity. To help governments 

make the most of their performance measurement efforts, the authors have compiled 

a top-10 list of performance measurement 

dos and don’ts, illustrated by case studies.

Simeone, Ronald, Carnevale, John, and Millar, Annie 

(2005). “A Systems Approach to Performance-Based 

Management: The National Drug Control Strategy.” 

Public Administration Review, 65(2), 191–202.

The authors examined efforts by the Office 

of National Drug Control Policy to develop a 

National Drug Control Strategy. A theoretical 

model of performance-based management 

is developed within this context that allowed 

them to identify tensions inherent in any 

system of this kind. Given the generality of 

the model, it is possible the observations 

offered here are relevant to other policy 

problems requiring multiagency 

coordination. 

Watson, Gregory H. (2005). “Design and Execution 

of a Collaborative Business Strategy.” Journal for 

Quality and Participation, 28(4), 4–9. 

The author argues that organizations that 

achieve their goals in the long term plan their 

work and work their plan. Realization of 

strategy—the long-term vision of an organization—is achieved by a disciplined approach 

to setting direction and executing that 

direction through the effective use of an 

organization’s resources—its processes, 

capital, and people. 
92

Appendix A: Annotated Bibliography

» Agency Plans and Reports 

(Including Federal Highway Administration, 

State Departments of Transportation, and 

Metropolitan Planning Organizations)

Booz, Allen, Hamilton (2008). Relationships Between 

Asset Management and Travel Demand. Federal 

Highway Agency Office of Asset Management, 

Washington, DC, 1–99.

This study seeks to determine how State 

departments of transportation (DOTs) use 

transportation asset management (TAM) and 

related techniques to address existing and 

anticipated future travel demand. Correspondingly, this study attempts to identify 

and document all cases in which State DOTs 

have incorporated travel demand measures 

in TAM and related analyses and decisionmaking processes.

Brown, Janice Weingart, Pieplow, Robert, Driskell, 

Roger, Gaj, Stephen, Garvin, Michael J., Holcombe, 

Dusty, Saunders, Michael, Seiders, Jeff Jr., and 

Smith, Art (2009). Public-Private Partnerships for 

Highway Infrastructure: Capitalizing on International 

Experience (FHWA-PL-09-010). Federal Highway 

Administration, Washington, DC, 1–80. 

Public-private partnership (PPP) programs 

for highway infrastructure are not widely 

used in the United States. The Federal 

Highway Administration, American Association of State Highway and Transportation 

Officials, and National Cooperative Highway 

Research Program sponsored a scanning 

study to collect information about PPP 

programs for highway infrastructure in 

Australia, Portugal, Spain, and the United 

Kingdom, where PPP experience is more 

extensive. The scan team learned that 

PPPs are an effective strategy for delivering 

highway projects, and they are service 

arrangements as much as financial ones.

California Department of Transportation Division of 

Transportation Planning and Office of State Planning (2006). California Transportation Plan 2025.

California Department of Transportation, 

Sacramento, CA, 1–75.

The California Transportation Plan 2025 (CTP) 

offers a blueprint for a thoughtful and reasoned approach for meeting California’s 

future mobility needs. This plan examines 

some of the future trends and challenges the 

State faces. It presents strategies for improving mobility while strongly supporting a 

growing economy and healthy environment 

and providing equitable opportunities for all 

Californians. The CTP is a long-range transportation policy plan and provides a vision 

for California’s future transportation system 

by defining goals, policies, and strategies to 

achieve the vision. 

MacDonald, Douglas, Yew, Connie, Arnold, Robert, 

Baxter, John, Halvorson, Randall, Kassoff, Hal, 

Meyer, Michael, Philmus, Ken, Price, Jeffrey, Rose, 

Douglas, Walton, Michael, and White, William 

(2004). Transportation Performance Measures in 

Australia, Canada, Japan, and New Zealand

(FHWA-PL-05-001). Federal Highway Administration, 

Washington, DC, 1–84.

A U.S. delegation reported that transportation agencies in the countries visited use 

performance measures for setting priorities 

and making investment and management 

decisions to a greater extent than is typical 

in the United States. The most impressive 

application of performance management 

was in road safety. Agencies included in the 

scanning study used performance measurement to provide greater accountability and 

visibility to the public and elected 

decisionmakers. 

Measurement Working Group (2007). 

Area Performance Indicator (API) Handbook. 

Highways Agency, England, 1–60. 

This handbook details the measurement 

system developed by the area maintenance 

community for delivering the agency’s 

managing agent contractor contracts and 

enhanced managing agent contractor 

contracts. The measurement system is 

viewed as an essential management tool to 

allow the agency to prove and improve its 

performance in delivering service.
93

Key Performance Indicators in Public-Private Partnerships 

Missouri Department of Transportation (MoDOT) 

(2009). Tracker: Measures of Departmental 

Performance. Jefferson City, MO, 1–233.

Tracker is the public window into MoDOT. 

The Tracker document is posted on the 

department’s Web site and available in 

printed format as a tool for the public to 

assess the department’s performance progress. It reveals the measures the department 

has established to gauge this progress and 

provides information on what the department does well, what it does not do well, 

and what it is doing to improve. 

» Transportation Research Board and 

American Association of State Highway 

and Transportation Officials Publications

American Association of State Highway and 

Transportation Officials (2007). State DOT 

Performance Management Programs: Select 

Examples. Washington, DC, 1–28.

State transportation agencies successfully 

use performance measurement to solve 

complex management challenges. This 

report illustrates the use of performancebased management approaches in select 

State DOTS.

American Association of State Highway and Transportation Officials (2008). AASHTO Authorization Policy 

Topic I: Performance Management. Washington, DC, 

1–230.

A report on U.S. transportation funding 

reauthorization, which supports an increase 

in Federal transportation investment, but 

couples that recommendation with support 

for reforms. A specific reform area AASHTO 

proposes is implementing the methodology 

of performance management in transportation agencies.

American Association of State Highway and 

Transportation Officials Task Force on Performance 

Management (2008). A Primer on PerformanceBased Highway Program Management: Examples 

for Select States. Washington, DC, 1–32.

This report by the AASHTO PerformanceBased Highway Program Task Force examined performance-based surface transportation programs now being implemented in 

State DOTs. This report describes the basic 

principles involved in applying performance 

measurement to the State budgeting and 

program delivery process, and profiles how 

11 States have applied these principles to 

improve performance and accountability.

Fishman, Edward, Kirkpatrick, Esquire, and Ellis, 

Lockhart Preston Gates (2009). “Major Legal Issues 

for Highway Public-Private Partnerships.” Legal 

Research Digest 51. Transportation Research Board, 

1–40.

The amount of public funding available to 

State and local transportation agencies has 

failed to keep up with the increasing need to 

invest in highway construction, operation, 

and maintenance projects. Government 

agencies are constantly searching for ways 

to fund or facilitate highway construction 

projects. This report presents public-private 

partnerships as one way to increase the 

availability of funds while also describing 

legal issues associated with this type of 

delivery. 

Transportation Research Board (2003). A Guidebook 

for Developing a Transit Performance-Measurement 

System. Washington, DC, 1–383.

The guidebook provides a step-by-step 

process for developing a performancemeasurement program that includes both 

traditional and nontraditional performance 

indicators that address customer-oriented 

and community issues.

Transportation Research Board (2009). An AssetManagement Framework for the Interstate Highway 

System. Washington, DC, 1–82.

This report presents a practical framework for 

applying asset-management principles and 

practices to managing Interstate Highway 

System (IHS) investments. A major challenge 

in managing these assets lies in developing 

usable management principles and strategies 

that can be accepted and applied by the 
94

Appendix A: Annotated Bibliography

varied government agencies that share 

responsibility for the IHS. The report 

describes the scope of the challenge 

and presents specific asset-management 

practices that may be adapted to IHS 

management.

Transportation Research Board (2009). Public-Sector 

Decision Making for Public-Private Partnerships. 

Washington, DC, 1–138.

Public sector agencies are increasingly 

exploring the use of public–private 

partnerships to increase funding available 

for infrastructure improvement. This study 

examines the information available to 

properly evaluate the benefits and risks 

associated with allowing the private sector 

to have a greater role in financing and 

developing highway infrastructure.

» Web Site Gateways to Performance 

Information

American Society of Civil Engineers (2009). “Report 

Card for America’s Infrastructure.” ASCE Report 

Card for America’s Infrastructure, www.asce.org/

reportcard/2009/grades.cfm.

This report is a summary written by ASCE 

members grading all aspects of the U.S. 

infrastructure system. According to ASCE, 

the current grade point average of America’s 

infrastructure is a “D,” and the estimated 

investment needed to raise this grade is 

about $2.2 trillion. The report states which 

areas need improvement and offers five key 

solutions to raise the system’s grades. 

American Road & Transportation Builders Association 

(2008). “Highways Policy.” Government Affairs, 

www.artba.org/advocacy/government-affairs/

policy-statements/highways. 

This association policy statement presents 

the issues with the current state of the 

National Highway System and possible 

solutions to address them. The association 

proposes a variety of possibilities as partial 

solutions, including pay-for-performance 

contracts, promotion of innovative 

technologies and materials testing, Federal 

Highway Administration accountability, 

incentive and disincentive clauses in highway 

construction contracts, and use of publicprivate ventures. 

Blain, Larry (2009). “Public-Private Partnerships in 

British Columbia.” Presentation, slides 1–55. 

Partnerships British Columbia Chief Executive Officer Larry Blain presented the benefits 

and process of implementing PPP projects at 

a conference in Moscow, Russia. The presentation gives a broad overview of such partnerships and examples of successful PPP 

project case studies, specifically those in 

Canada. 

» Government Articles

U.S. House of Representatives Committee on 

Transportation and Infrastructure (2007). 

Government Hearing, Washington, DC, pp. 1–8.

The purpose of this hearing was to receive 

testimony on innovative contracting and 

procurement techniques under PPP arrangements. The subcommittee heard from 

officials of FHWA, the Federal Transit Administration, the Utah Department of Transportation, TriMet (a transit agency in Oregon), 

and representatives of the engineering and 

construction industries and a transportation 

employee union.
95

The research team developed a case study protocol with three primary categories: (1) design and construction 

of the facility, (2) operation of the facility, and (3) maintenance of the facility. These categories formed the basis 

for a questionnaire and served as categories for the content analysis of the literature and PPP agreements.

Key Performance Indicators Case Study Questionnaire

Appendix B: CASE STUDY PROTOCOL

Background

The U.S. Federal Highway Administration (FHWA) 

is conducting research to develop a state-of-thepractice document to contrast and evaluate existing 

domestic and international practices for key performance indicators (KPIs). The purpose of this case 

study questionnaire is to collect information from 

international partners on their use of KPIs to 

improve transportation network construction 

and performance.

The definitions of performance measures differ from 

country to country and even in a single country. For 

purposes of this document, please relate your agency 

terminology the following two definitions.

Performance measures are derived from 

the programmatic levels of service sought by 

the transport agency and imposed contractually 

as broad classifications of desired outcomes 

required of the contractor.

Key performance indicators are more specific 

milestones or components of performance measures that serve as precursors to indicator progress 

toward the eventual achievement of the desired 

performance measures.

The research will examine public-private-partnership 

projects. This study defines a public-private partner 

as a contract between the public and private sector for 

the delivery of a project or service in which the private 

partner has responsibility for acquiring the majority 

of the necessary financing. Therefore, the team is 

looking for KPIs that relate to the following:

 Design and construction of the facility

 Operation of the facility 

 Maintenance of the facility

This research focuses on KPIs at the project level, 

but an understanding of how these KPIs relate to 

and support each agency’s strategic performance 

measures is essential. Therefore, the research team 

seeks to conduct case studies of specific projects, 

but a number of questions will be asked about 

each agency’s strategic performance measures.

The questionnaire is divided into two main sections:

 Part I: performance measure evolution 

and current state

 Part II: key performance indicators for 

case study project

Performance Measure Evolution and 

Current State

The intent of the questions that follow is to gain 

an understanding of what connections, if any, exist 

between the performance measures your agency uses 

to monitor its performance and the key performance 

indicators you agency uses to measure the performance of contractors in public-private partnerships.

 1. Please describe briefly the issues and challenges 

that were encountered in the original development of your agency performance measures.

a. What were the original motivations for 

developing performance measures?
96

b. What major issues did your country or agency 

need to confront to develop the performance 

measures?

2. How have your original performance measures 

changed over time?

3. Can you provide us with a list and definitions 

of your current performance measures for the 

following?

a. Design and construction

b. Operations

c. Maintenance

4. Can you share any reports or documents on your 

current performance measures that describe how 

they are collected or maintained?

Public-Private Partnership Project

The research team intends to develop a detailed 

case study on one of your public-private partnership 

projects that is now in the operations phase. 

This project should have components of design, 

construction, operations, and maintenance.

The research team will need a copy of the project 

agreement to complete the case study. Please refer 

the team to the contract agreement on the questions 

below if appropriate.

Project Information

5. Please provide the following project information:

a. Project name

b. Project location

c. Project duration (contract award to handback)

d. Size of project (length, dollar amount, etc.)

e. Major partners and organizational structure

Design and Construction KPIs

6. Please describe the KPIs used to measure and 

monitor design and construction of the project.

a.What KPIs did you include in your procurement 

documents? 

b.What was the organizational structure for 

monitoring design and construction (e.g., 

independent engineers)?

c.Were performance points used to track the 

progress of design and construction? If so, how 

did the system work?

d.What measures were taken if the 

concessionaire’s designer-builder did not meet 

quality milestones? For example, do you use 

noncompliance points?

e.What were your dispute resolution or 

arbitration procedures relating to design 

and construction?

Operations KPIs

7. Please describe the KPIs you measure and 

monitor during operations.

a.What KPIs are included in the contract to 

measure operational performance? 

b.What is the organizational structure for 

monitoring operations?

c.Are performance points used to track 

operations? If so, how does the system work?

d.What are the remedies for poor service?

e.What are your dispute resolution or arbitration 

procedures relating to operations?

Maintenance KPIs

8. Please describe the KPIs you measure and 

monitor on maintenance procedures.

a.What KPIs are included in the contract?

b.What is the organizational structure for 

monitoring maintenance procedures?

c.Are performance points used to track the 

maintenance procedures? If so, how does 

the system work?

d.What are the remedies for poor work?

e.What are your dispute resolution or arbitration 

procedures?

Changes to KPIs and Handback Requirements

9. What is the mechanism to change KPIs during 

the life of the concession contract?

10. What handback requirements are included in the 

project and how do they relate to the KPIs?

Appendix B: Case Study Protocol
97

Appendix C: example summary operations

AND maintenance kpi tables

Every public-private partnership (PPP) contract 

analyzed in this study implemented a performance 

measurement system. In the performance management system, performance measures are used to 

assess the progress and effectiveness of the concessionaire in meeting contract requirements. Some of 

these contracts contained specific sections with tables 

of key performance indicators (KPIs) attached to each 

measure to be used as a performance marker for that 

measure. Generally, these indicators include elements 

such as percentages, ratios, indexes, and condition 

states to verify if and when the concessionaire has 

met the required performance standards. These 

measures and indicators exist for a variety of project 

elements, including safety, environmental stewardship, design, construction, operations, and maintenance, but the focus here is on operations and 

maintenance KPIs. Some common examples in 

this category include pavement condition, incident 

response time, and tollway inspection ratings.

KPIs are only the tip of a much larger pyramid 

consisting of performance mechanisms such as 

quality management plans, audits, inspections, 

and independent verifiers. However, it is important 

to understand how these specific mechanisms 

work because they set the benchmarks the audits, 

inspections, and verifiers use for comparison 

and assessment.

This appendix contains tables of KPIs found in the 

PPP agreements. It is important to note that specific 

measures and indicators were extracted from the 

contract language to create each table. These tables 

are not a complete set of the measures and indicators 

for the contracts, but reveal details of a few, handselected measures and indicators. However, a 

complete list of the measures and indicators in 

the contract is provided for reference.
98

Appendix C: Example Summary Operations and Maintenance KPI Tables

Table 31. I-595 categories for operations and maintenance performance measurement.

Operations and Maintenance Requirements

(Construction Period)

Operations and Maintenance Requirements

(Operating Period)

• Incident response

• Fuel spill and contamination

• Mowing, litter removal, road and bridge sweeping, reworking 

 of shoulders, slopes, and roadside ditches

• Flexible pavement

• Raised pavement markers

• Pavement markings

• Pavement symbols

• Guardrail

• Attenuators

• Signs

• Drainage systems

• National Pollutant Discharge Elimination System (NPDES)

• Lighting

• Bridges and bridge maintenance

• Mast arm structure

• Overlane sign structure

• High mast light poles

• Fence

• Concrete sidewalk

• Graffiti

• Intelligent transportation systems (ITS) operations

• Deliverables

• ITS maintenance services

• Backbone fiber network

• ITS reliability

• Transportation management center (TMC) operations

• Severe incident response vehicle operations

• Road Ranger operations

• Maintenance rating performance

• Flexible pavement

• Rigid pavement

• Fuel spills and contamination

• Guardrail

• Attenuators

• Fence

• Signs

• Drainage systems

• NPDES

• Concrete sidewalk inspection

• Barrier wall

• Toll gantry system inspection

• Toll equipment building and ITS hubs

• Clear zone obstructions

• Highway lighting

• Navigation lighting

• Mast arm structure

• Overlane sign structure

• High mast light poles

• Bridges

• Bridge maintenance

• Painting steel structures

• Graffiti

• Pressure cleaning concrete surfaces

• Vegetation control on concrete slopes and surfaces

• Landscape areas

• Chemical vegetation control

• Fertilizer

• Sound barriers

• Roadway characteristics inventory

• Customer service staff

• ITS operations

• TMC operations

• Emergency access gates

• Deliverables

• ITS maintenance services

• Backbone fiber network

• ITS reliability

• TMC operations

• Traffic incident management operations

• Road Ranger operations
99

Key Performance Indicators in Public-Private Partnerships 

Table 32. Golden Ears Bridge/Kicking Horse Canyon Phase II asset preservation performance measure categories.

Asset Preservation Performance Measures

Highway Running Surfaces • Paved traffic lanes

• Paved medians

• Paved pullouts, rest stop areas, side roads, and ramps

Structures • Component condition

• Structure condition

• Stock condition

• Network components: bridges

• Network components: retaining walls

• Network components: major culverts

• Network components: tunnels

• Network components: major signs

Drainage and Debris-Control Structures • Structure condition

• Network condition: on roadway

• Network condition: adjacent roadway

• Network condition: under roadway

• Network condition: debris-control structures

Electrical Systems • Ministry performance-based electrical maintenance specifications
100

Appendix C: Example Summary Operations and Maintenance KPI Tables

Element 

Category

Required 

Task

Minimum Performance 

Requirements

O&M Violation 

Classification

Cure 

Period

Interval of 

Recurrence

Monthly Maintenance Performance Rating (MPR)

Maintenance 

Rating 

Performance 

(MRP)

Conduct a monthly 

MRP cycle in 

accordance with 

the FDOT MRP 

Handbook.

Meet a minimum quarterly overall MRP rating as 

required in FDOT Procedure No. 850-000-015— 

Roadway and Roadside Maintenance.

D O N/A

Meet a minimum quarterly rating as required in FDOT 

Procedure No. 850-000-015—Roadway and Roadside 

Maintenance for individual elements.

C 0 N/A

Meet a minimum quarterly rating as required in FDOT 

Procedure No. 850-000-015—Roadway and Roadside 

Maintenance for individual characteristics.

B 0 N/A

Highway Running Surfaces: Pavement

Category 1 

Pavement (0–3 

years after 

substantial 

completion)

Maintain flexible 

pavement at 

acceptable level of 

safety for traveling 

public.

Meet the performance requirements in Division II, 

Section 6 of the technical requirements for the 

following:

• Rutting to be maintained less than a depth of 0.25 in B 90 days Every 5 days

• Ride to be maintained at RN greater than 3.5 B 90 days Every 5 days

• Settlement/depression maximum depth of 0.5 in B 7 days Daily

• Cumulative length of cracking >30 ft for cracks > 

0.125 in a 0.1-mi lot B 90 days Every 5 days

• Raveling and/or delamination of the friction course 

as defined and determined by the department in 

accordance with the examples at www.dot.state.fl.us/

specificationsoffice/pavement.htm or its successor

C 90 days Every 5 days

• Potholes and slippage areas cannot be greater than 

0.5 square feet in area and 1.5 in deep C 24 hours Hourly

• Bleeding as defined and determined by the 

department in accordance with the examples at 

www.dot.state.fl.us/specificationsoffice/pavement.htm 

or its successor

B 90 days Every 5 days

Guardrail

Guardrail Maintain guardrail 

at acceptable level 

of safety for the 

traveling public.

Meet the performance requirements in FDOT Design 

Standards, Section 536 of Standard Specifications for 

Road and Bridge Construction, Standard Maintenance 

Special Provisions—ME536 or per the concessionaire’s design criteria.

B 3 days Daily

Inspect the 

guardrail system.

Complete the inspection in accordance with FDOT 

Procedure 850-050-003 or its successor. A 0 Daily

Complete repairs identified in the inspection report. B 30 days Daily

Table 33. I-595 corridor improvements example operations and maintenance KPIs.
101

Key Performance Indicators in Public-Private Partnerships 

Signs

Overlane Sign 

Structure

Maintain overlane 

sign structures at 

acceptable level of 

safety for traveling 

public.

Meet the performance requirements set forth in 

the FDOT Design Standards and the Standard 

Specifications for Road and Bridge Construction 

or per the concessionaire’s design criteria.

B 7 days Daily

Perform overlane 

sign structure 

inspection.

Complete the inspection in accordance with FDOT 

Procedure 850-010-030 or its successor. A 0 Daily

Complete repairs identified in the inspection report. B 30 days Daily

Toll System

Toll Gantry 

System 

Inspection

Maintain toll gantry 

at acceptable level 

of safety for the 

traveling public.

Meet the performance requirements in the 

concessionaire’s design criteria. B 5 days Daily

Inspect toll gantry 

system.

Complete the inspection in accordance with FDOT 

Procedure 850-010-030 or its successor. A 0 Daily

Complete repairs identified in the inspection report. B 30 days Daily

Bridges

Bridge 

Maintenance

Perform repairs 

generated from 

bridge inspections. 

Routine: Complete repairs required to maintain an 

existing level of performance and to prevent additional 

deterioration or extend the service life of the structure.

B 180 

days

Every 10 

days

Urgent: Complete repairs required to correct deficiencies or defects to protect the integrity of the structure 

or maintain a desired level of performance.

C 90 days Every 5 days

Emergency: Repairs must begin immediately to repair 

critical damage on the structure and to insure the 

safety of the traveling public. Work is initiated 

immediately and work shall be completed as soon 

as possible.

E 30 days Daily

(continued)
102

Appendix C: Example Summary Operations and Maintenance KPI Tables

Element 

Category

Required 

Task

Minimum Performance 

Requirements

O&M Violation 

Classification

Cure 

Period

Interval of 

Recurrence

Intelligent Transportation Systems

ITS Operations Monitor time 

required for 

roadway clearance.

I-595 express lanes quarterly average roadway 

clearance duration (in minutes) must be no more than 

90% of FDOT District Four’s ITS performance measures 

published quarterly on www.smartsunguide.com.

B 0 N/A

Monitor time 

required for 

incident clearance.

I-595 express lanes quarterly average incident and 

event clearance duration (in minutes) must be no more 

than 90% of FDOT District Four’s ITS performance 

measures published quarterly on www.smartsunguide.

com.

B 0 N/A

Monitor time 

required for 

roadway clearance.

I-595 general-purpose lanes quarterly average 

roadway clearance duration (in minutes) must be no 

more than that of FDOT District Four’s ITS performance 

measures published monthly on www.smartsunguide.

com.

B 0 N/A

Monitor time 

required for 

incident clearance.

I-595 general-purpose lanes quarterly average incident 

and event clearance duration (in minutes) must be no 

more than that of FDOT District Four’s ITS performance 

measures published monthly on www.smartsunguide.

com.

B 0 N/A

Lane Closures and Blockages

TMC Operations Maintain real-time 

data and video 

transfer to the 

department.

Provide real-time access to all video and data in the 

project limits. A 1 Hour Every 15 

minutes

Notify SMART 

SunGuide TMC of 

Lane and road 

closures.

Notify the SMART SunGuide TMC of lane and road 

closures in the O&M project limits within 5 minutes of 

confirmation. A 5 

minutes

Every 5 

minutes

Post DMS and HAR Post DMS and HAR within 3 minutes of confirmed lane 

blockage or road closure. A 3 

minutes

Every 5 

minutes

Populate 511 ATIS 

system.

Send information to populate 511 ATIS system with 

lane blockage and road closure information within 3 

minutes of confirmation.

A 3 

minutes

Every 5 

minutes

Maintain minimum 

CCTV camera 

detection rate.

Meet a minimum CCTV camera detection rate of 30%.

A 0 Per quarter

Incident Response

TIM Operations SIRV operator must 

respond to an 

incident or 

emergency.

SIRV is required to respond in 15 minutes upon 

notification. D 15 

minutes

Every 15 

minutes

 SIRV team incident 

reports must be 

submitted to the 

department by the 

5th working day 

each month.

Provide summary of SIRV-related activities, including 

but not limited to number of events responded to, 

number of meetings attended, agency time savings, 

and list of equipment used. A 0 Daily

(Table 33 continued)
103

Key Performance Indicators in Public-Private Partnerships 

Table 34. Golden Ears Bridge/Kicking Horse Canyon Phase II example asset preservation performance measures. 

Performance 

Measure

Intervention Criteria: 

KPI

Action Maximum 

Response Time

Basis of Measure

Highway Running Surfaces: Pavement

Paved Traffic 

Lanes—Roughness

Where roughness exceeds an IRI 

(International Roughness Index) 

value of 2.5 over any 50-m length 

of traffic lane, excluding concrete 

bridge deck wearing surface, but 

including abutments

1. Confirm that high-speed data 

reflect actual site conditions.

2. Where roughness is 

confirmed, undertake physical 

works to address 

noncompliance.

12 months Longitudinal profile 

roughness measurements, 

expressed as IRI, collected 

for each wheel path as per 

ministry survey specifications and averaged

Paved Traffic 

Lanes—Surface 

Deterioration

Where pavement surface 

deterioration over any traffic 

lane exceeds the limits shown 

in the Concession Local Area 

Specification—Cumulative 

Distribution Curve for PDI

Undertake physical works to 

address noncompliance.

12 months Pavement surface distress 

ratings performed in 

accordance with the ministry 

Pavement Surface Condition 

Rating Manual and the 

Pavement Distress Index 

(PDI) calculated according 

to the Ministry Pavement 

Distress Index model 

Paved Traffic 

Lanes—Rutting

Where pavement rutting deterioration exceeds 20 mm in depth for 

any 50-m length of traffic lane

Undertake physical works to 

address noncompliance.

12 months Transverse profile roughness 

measurements, expressed 

as calculated rut depth in 

millimeters for each wheel 

path as per the ministry 

survey specification and 

averaged 

Signs

Major Signs—

Painted or 

Galvanized 

Surfaces

Where more than 10% of the total 

number of major overhead sign 

structures has a condition state 

worse than poor

Undertake physical remedial 

works to address painted or 

galvanized surfaces that are 

not in sound condition and/or 

free of corrosion.

12 months Visual assessment

Bridges

Bridges—Coating Where more than 10% of the total 

number of steel bridge girders, 

assessed by total deck area, has 

a condition state worse than poor

Undertake physical works to 

address painted surfaces in 

poor condition, including 

corrosion.

12 months Visual assessment

Bridges—Wearing 

Surface

Where more than 1% of the 

wearing surface, assessed by 

total deck area, has a condition 

state worse than poor

Undertake physical works to 

address unsound wearing 

surfaces, cracks, and deterioration affecting structure 

functional life.

12 months Visual assessment

Where more than 5% of the 

wearing surface, assessed by 

total deck area, has a condition 

state worse than fair

Develop a remediation strategy 

or undertake physical works.

(continued)
104

Appendix C: Example Summary Operations and Maintenance KPI Tables

Performance 

Measure

Intervention 

Criteria: KPI

Action Maximum 

Response Time

Basis of 

Measure

Bridges— 

Deck Joints

Where more than 2% of the total 

length of deck joints, assessed by 

(number of spans+1) times total 

deck area divided by bridge 

length, has a condition state 

worse than poor

Undertake physical works to 

address structural damage, 

ineffective or inoperable joints, 

and projections affecting road 

users.

12 months Visual assessment

Where more than 10% of the total 

length of deck joints, assessed by 

(number of spans+1) times total 

deck area divided by bridge 

length, has a condition state 

worse than fair

Develop a remediation strategy 

or undertake physical works to 

address defective joints with 

potential to create unsafe 

conditions for road users and 

reduction of structure 

functional life.

Bridges—Bearings Where more than 2% of the total 

number of bearings, assessed by 

total deck area, has a condition 

state worse than poor

Undertake physical works to 

address structural damage 

and ineffective or inoperable 

bearings.

12 months Visual assessment

Where more than 10% of the total 

number of bearings, assessed by 

total deck area, has a condition 

state worse than fair

Develop a remediation strategy 

or undertake physical works to 

address defective bearings 

with potential to create unsafe 

conditions for road users and 

reduction of structure functional life.

Bridges— Bank, 

Bed Scour, and 

Buildup

Where more than 1% of the total 

number of bridge spans has a 

bank, bed scour, or buildup 

condition state worse than poor

Undertake physical works to 

address scour, bank or 

approach instability, river 

channel blockage, and 

waterway alignments that 

cause high risk to the structure.

12 months Visual assessment

Where more than 5% of the total 

number of bridge spans has a 

footings and pilings condition 

state worse than fair

Develop a remediation strategy 

to address scour, bank or 

approach instability, river 

channel blockage, and 

waterway alignments that 

cause high risk of erosion to 

the structure.

Note: Concessionaire is required to measure the condition for all traffic lanes, paved pullouts, stop areas, side roads, and entrance and exit 

ramp lanes annually.

(Table 34 continued)
105

Key Performance Indicators in Public-Private Partnerships 

Table 35. Kicking Horse Canyon Phase II example corridor and environmental management key performance measures.

Example Corridor Management Key Performance Measures 

Item Key Performance Measures Strategies

Public Relations 

and Customer 

Care

• Ensure that the public has a positive 

perception of the concession highway 

and its management.

• Ensure that communication with all 

highway users is conducted promptly 

and in a professional manner

• Achieve zero complaints on the 

processing of all communications

• Answer general and specific enquiries or requests for information.

• Interact proactively with stakeholders.

• Advise the media of road conditions.

• Coordinate with the Provincial Highway Condition Centre to 

provide information and display accurate and timely messages 

on signage systems.

• Receive and process applications from the public including, but not 

limited to, closing a road, performing works on or below the road surface, 

and constructing a road access.

Emergency 

Response and 

Management

• Maximize road availability.

• Achieve a timely, 24/7 incident 

response service.

• Minimize disruption to highway users.

• Ensure that travel lanes are safe.

• Reinstate asset (i.e., repair damage).

The concessionaire is required to do the following:

• Ensure that staff contact information is available to the ministry, local 

governments, and emergency service providers and that notification 

required to respond to emergencies takes place.

• Train employees in procedures on response and recovery and other 

types of emergency training required by the province.

• Develop and apply an emergency response plan for emergencies such 

as, but not limited to, floods, avalanches, toxic spills, structural damage, 

and earthquakes.

Safety 

Management

• Reduce crash rate and number 

of fatalities.

• Ensure that health and safety systems 

are implemented.

The concessionaire is responsible for the following:

• Reduce the number and severity of crashes by applying proactive, 

best-practice road safety engineering techniques.

• Reduce the number of known road safety hazards on the 

highway route.

• Provide a road that is safe, consistent, free of surprises, and forgiving.

• Eliminate all serious and fatal crashes where road conditions are 

deemed to be a contributing factor (mitigate all significant safety hazards 

along road sections that are reconstructed under the concession).

Access to 

Corridor

• Ensure compliance with the Highways 

Act and limit access to the highway to 

designated intersections and 

interchanges only.

The concessionaire is responsible for the following:

• Monitor access onto secondary side roads by inspections 

every 6 months.

• Conform with the operational performance measures.

Example Environmental Management Key Performance Measures

Item Key Performance Measures Strategies

Identification of 

Environmental 

Impacts

• Develop, document, and maintain a 

register of identified areas of potential 

or known environmental hazards.

The concessionaire will operate, maintain, and rehabilitate the project in 

accordance with the following:

• Best Management Practices Manual, Ministry of Transportation, 

July 2004

• Habitat Conservation and Protection Guidelines, Fisheries and Oceans 

Canada, 1998

• Standards and Best Practices for Instream Works, Ministry of Water, 

Land, and Air Protection, March 2004

• Land Development Guidelines for the Protection of Aquatic Habitat, 

Department of Fisheries and Oceans Canada and Ministry of 

Environment, Lands, and Parks, 1992.

Assessment of 

Environmental 

Impacts

• Prioritize identified areas and activities 

of potential or actual environmental 

impact based on assessment of risk.

Mitigation and 

Management of 

Environmental 

Impacts

• Implement a program of environmental 

impact mitigation based on prioritized 

assessment of areas and activities of 

potential or actual environmental impact. 

Monitor and review effectiveness of 

environmental impact mitigation.
106

Appendix C: Example Summary Operations and Maintenance KPI Tables

Table 36. CLEM7 North-South Bypass Tunnel example project deed KPIs.

No. KPI

 Description

KPI 

Benchmark

Level of 

Service

KPI Demerit 

Points

Assessment 

Period

Reporting Requirements

1 Target level of service—A report to council every 3 

months on the performance of KPIs

100% <20 business days 

after quarter

20–40 business days

>40 business days

0

2

4

Quarterly

Customer Service and Satisfaction

2 Target level of service—Customer calls answered 

within 20 seconds

90% 1 point for every 100 

calls not answered 

within KPI 

benchmark

1 point for every 

100 calls not 

answered

Monthly

3 Target level of service—Customer accounts with 

financial institutions credited or debited with the 

correct accounts

99.999% > 99.999%

99.99–99.999%

99.95–99.99%

<99.99–99.95%

<99.9%

0

5

10

20

50

Monthly

4 Complaint resolution target level of service—Customers contacted by the customer service staff 

within 2 business days of a customer complaint

90% 10 points per 

occurrence outside 

of KPI benchmark

10 points per 

occurrence 

outside of KPI 

benchmark

Monthly

5 Transaction accuracy target level of service—

Timeframes for charging transactions to real-time 

accurate reading customers’ account

99% within 2 

days

>99%

97%–98%

<97%

0

10

15

Monthly

6 Accounts not overcharged 0% 0.1%–0%

0.2%–0.1%

0.3%–0.2%

>0.3%

10

20

30

40

Monthly

7 Correct toll or fee assigned to correct account of 

complying vehicles

0.1% variance 0.2%–0.1%

0.3%–0.2%

0.4%–0.3%

>0.4%

10

40

60

80

Monthly

8 Applications for toll account correctly responded 

to in 5 days

99% 1 point for every 

occurrence outside 

of KPI benchmark

1 point for every 

occurrence 

outside of KPI 

benchmark

Monthly

Communication, Community Relations, and Consultation Management Obligations

9 Weekly council “Issues and Activities Report” 

addressing issues, response times, complaints, 

and corrective actions

100% <1 business day

2 business days

>2 business days

0

1

2

Monthly

10 Free community enquiry line 99% 90%–100%

80%–90%

<80%

0

5

10

Monthly

11 Project Web site 99% 90%–100%

80%–90%

<80%

0

5

10

Monthly
107

Key Performance Indicators in Public-Private Partnerships 

Operations and Maintenance Requirements

12 Annual calendar of planned maintenance closures 100% 2 hours of additional 

closures

1 per additional 2 

hours

Monthly

13 Maintenance at all times of ability of tunnel center 

to communicate with emergency services

99.99% >99.99

99.9%–99.99%

99.8%–99.9%

99.7%–99.8%

0

2

4

6

Quarterly

14 Tunnel air quality (CO, NO2

) <2 <2 instances

2–3 instances

4–5 instances

>5 instances

0

5

10

15

Quarterly

15 Ambient air quality (CO, NO2

, PM, TSP) 0 No violations

1 violation

2 violations

3 or more

0

5

10

15

Quarterly

16 Water from treatment plan at acceptable levels 100% 0–1 violation

2–5 violations

6–9 violations

10 or more

-10

0

10

20

Yearly

Incident Response

17 Initial response time to detect incidents by 

operator

1–2 minutes <1 minute

1–2 minutes

2–3 minutes

3–4 minutes

>7 minutes

-10

0

10

20

30

Monthly

18 Service crew response time to incidents 10–13 minutes <8 minutes

8–10 minutes

10–13 minutes

13–16 minutes

16–19 minutes

>19 minutes

-20

-10

0

10

20

30

Quarterly

Aesthetics

19 Rapid response time to nominate defects that 

impact aesthetics or public perception of tollroad 

or landscaping

0–2 days <2 days

0–2 days

2–4 days

>4 days

-20

-10

10

20

Yearly
108

Table 37. CLEM7 North-South Bypass Tunnel example operating company KPIs.

KPI Area KPI Measures Target Frequency

Asset Condition All management 

systems operating

Asset management response times

Asset management inspections and routine 

maintenance

Improvement initiatives investigated and 

proactive procedures and systems 

developed

To be based on 

equipment and 

materials selected 

in final design

Monthly

Compliance Meet environmental 

coordinator general’s 

conditions

Nonconformity with environmental 

management plan

Environmental issues investigated and 

remediated

Nil

Targets to be 

established

Monthly

Quarterly

Commercial Manage O&M costs Achieve budget

Benchmark top five expenditure firms

Nil

Targets to be 

established

Monthly

Yearly

Stakeholders O&M relationship Assessment against preagreed criteria:

• Daily cooperation with emergency services

• Handling of public complaints

• General facility appearance

• Handling of environmental issues

• Proactive approach to safety

Assessment 

matrix to be 

developed

Quarterly

Employees Safety

Satisfaction

Engagement

Level of compliance to workplace safety TBD TBD

Appendix C: Example Summary Operations and Maintenance KPI Tables



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-10-029

HPIP/3-11(3.5)EW