Prestatiegericht Onderhoud (PGO) Performance based maintenance

1. Prestatiegericht Onderhoud (PGO)Performance based maintenance Peter Booij 18th November 2011 Manager Contracting

2. Subjects • Historical perspective • Program PGO • Targets and means • Contract model PGO • Contract Structure • Requirements & Scope of Works • Tender principles & award criteria • Incentives en payment • Performance en costs 2

3. 1. Historical perspective Procurement:Performance based contracts Outsourcing of daily maintenance OPC/PGO Alliance:contractsbasedonKPI’s and maintenance units Management focus more on RAMS thanoncost OPC+ Outsoursing:contracts based on input: workplans and maintenance specs Increase in more business like attitude OPC Internal distiction Management - Operation contracts based on activities and workplans Present day 1998 2002 2005 2011 1994 2000 2007 3

4. Contract distribution in OPC 4

5. 2. Program PGO 5

6. Targets and means • Strong reduction of costs (25%+) • Reduction of Out of Service Periods • Improve on failure performance • Stabilize the overall quality of the infrastructure >>> • Mobilize the ‘know how’ of contractors • Compete on smart maintenance not on man hour costst • Manage on infra performance in stead of realized work 6

7. Asset Rail Strukton Volker Rail BAM Rail Contract distribution in PGO - november 2011 Spitzke In tendering In preparation Drenthe Twente Veluwe Eemland Rijn & Gouwe Gelre Dordrecht Betuwe Zeeland De Peel 7

8. 3. Contract model PGO 8

9. Contract Structure 9

10. Requirements OPC to PGO • A change in style of requirements: • We used to prescribe the frequency and nature of inspections. • We made agreements on the quantity and nature of maintenance. • We did NOT make an explicit agreement on the performance of the infrastructure >>> New requirements 10

11. Reliability & Availability requirements 11

12. Waarborgen veiligheid Waarborgen spoorweg-veiligheid Waarborgen installatie-veiligheid Voorkomen ontsporen Voorkomen botsen Voorkomen ongelukken in trein Handhaven veilige werking systeem Handhaven veiligheidsvoorzieningen Handhaven vluchtwegen Ontsporingsvrij geleiden Voorkomen botsen trein - trein Voorkomen ongelukken bij berijden Handhaven veilige EV Voorkomen oplopen Voorkomen botsen trein - omgeving Voorkomen ongelukken bij wisselen Handhaven veilige energievoorziening diesel Ontsporingsvrij wisselen Voorkomen botsen trein - obstakels Ontsporingsvrij dragen Voorkomen botsen trein – mens/dier Voorkomen botsen trein – kruisend wegverkeer Safety System Requirements 12

13. Safety System Requirements • Keep the track within a alignment for x km/h • Prevent defects and electrocution on installations for power supply • Keep switches within safety tolerances • Keep railway crossings fail safe • Etc etc 13

14. Durability requirements • Durability: condition in which the Life Cycle Cost are minimal (presumed) • Keep the position overhead wires within certain tolerances • Keep the switches within certain tolerances to prevent ‘wear and tear’ • Keep the overall geometry of the track within certain tolerances • Repair all defects on the infrastructure within 3 months. • Etc etc 14

15. Statement of Work • Use FMECA to define all possible (underlying) failmechanisms causing possible deviations to the requirements. • Use FMECA to define all MTBF of infrastructure objects • Maintain accordingly to the FMECA results • Use an inspection regime to validate FMECA results • Proof to ProRail that the infrastructure is OK! • Bottom line: PREVENT DEVIATIONS FROM HAPPENING! 15

16. Scope of Works • All track and switches, power supply, signalling, overhead wire, civil structures, telecom • All ‘small’ renewals • All renewals caused by RCF • Contractor is responsible for the quality of all objects until ProRail executes her major renewal plans (5 year forecast is given to contractor) 16

17. Payment & Incentives (simplified) • In principal: Monthly fixed price payments • no deviations? 105% payment of fixed price • >0 deviations? 75% payment of fixed price, 25% after deviations have been restored in time. Too late? 15% penalty • Small (large) number of deviations throughout the year? Up to 5% bonus (or 10% reduction) • Rather serious safety deviation: 30% penalty • Bonus (or reduction) up to 5% if Urgent Failure performance is going well (bad) throughout the year 17

18. Duration of the contract • In principal: 5 or 6 years • However: In case of a serious safety incident the contract will end. Contract will be re tendered, contractor is liable for damage • Too much Urgent Failures over a period of years? Contract may end. 18

19. Tender: Award Criteria for bidding • Fixed Monthly Price (85%) • Number of required ‘Out of service periods’ (15%), at least 99,37% availability • Urgent failures (Euro 100/minute reduction on price) • Savings on LCC by postponement of renewals by ProRail. (reduction on price) And.. • A few price agreements for settlement of future changes in the contract 19

20. Results so far • Financial targets have been well achieved • Urgent Failure minutes reduced. For example PGO 2: The contractor offers a reduction from 70.000 minutes to 43.000 minutes a year. • Out of service periods: Down by 50 – 75% and no more conflicts with the time table 20

21. Questions? 21