Highways Agency

Payment Mechanisms - Active Management Payment Mechanism

Introduction

• The Active Management Payment Mechanism (AMPM) comprises of the following two elements:
  • Congestion Management
  • Safety Performance Adjustment
• The mechanism encourages the DBFO Co to actively manage the project road to reduce congestion and increase the reliability of road user journey times. It also retains the benefits of whole life costing, early delivery of schemes, consideration of safety, and proper planning of maintenance to minimise loss of availability of the road at peak periods.
• This is achieved by reducing payments for any times that congestion is experienced on the project road. It is considered that the DBFO Co can influence greatly the occurrence and levels of congestion through the effective management of the causes of congestion.
• The Active Management Payment Mechanism works in tandem with a Safety Performance Adjustment. This Adjustment is made to the DBFO Co.'s payment based on the number of personal injury accidents (PIA's) that occur on the Project Road when compared with a benchmark determined from the accident records of a comparator set of roads.

Contracts

The mechanism was developed for the A1 Darrington to Dishforth project, and has also been used for the A249 Stockbury to Sheerness project where it also combines some elements of the Availability Payment Mechanism used on the A13 project. Both of these HA projects are currently at construction stage.

What the mechanism covers

• The DBFO Co. is considered to be in a good position to control and reduce congestion. The DBFO Co will therefore be required to accept the risk of predictable congestion such as roadworks, special events, slow moving vehicles etc and the risk of unpredictable congestion such as that due to accidents, poor weather, etc.
• Management of these can be achieved through, for example: planning roadworks to be undertaken during off-peak times; liasing with the local authorities, police and other interested third parties to plan for impact of known events, having breakdown and response vehicles on standby; providing additional signing and break down vehicles during special events, placing temporary traffic management during emergencies etc.
• It is recognised that the DBFO Co will have limited control over recurrent congestion caused by sheer volume of traffic demand approaching the nominal capacity of the road. The Payment Mechanism therefore makes allowances for this such that the DBFO Co's exposure to these risks are mitigated.

Basis of congestion management payment

• Tenderers will bid a single annual amount of money which will be indexed for the 30 year contract duration. The amount bid will be divided up into carriageway sections for each hour of the day. The allocated amount for each section and each hour will be directly proportional to the level of traffic.
• Payments are made as follows:
  • Full payment will be made if speeds are above the target speed.
  • Should speeds fall the target speed, then the payment will be reduced
  • However, full payment will be made if traffic exceeds the deemed capacity of the road section, even if the speed falls below the target speed.
  • There will be graduation of the level of deduction for both speeds between minimum and target speed and between 80 and 100% of capacity.
  • A bonus will be paid if flow exceeds 110% and speeds exceed the minimum speed.
  • The maximum bonus that can be earned is 20% of the payment for the hour and road section, if flow exceeds 120% of capacity and speed exceeds the target speed.