Highways Agency

• 1 introduction
• 3 the principles of the dbfo contract
• 3 the principles of the dbfo contract
• 4 payment mechanism
• 5 technical requirements
• 6 timetable and procedure
• 7 prequalification assessment
• 8 information required from candidates for prequalification
• 9 responses and enquiries
• Appendix a a249 stockbury (m2) to sheerness dbfo project
• Appendix b payment mechanism
• Appendix c
• Appendix d draft agreement summary

A249 Stockbury (M2) to Sheerness DBFO Contract

APPENDIX B Payment Mechanism

1.1 The Agency intends to employ a payment mechanism that assists in the achievement of its objectives, set by Ministers. These are to reduce congestion, increase the reliability of journey times, improve safety for all road users, develop the Agency's role as network operator and generally to take steps to improve the level of service to the public.

1.2 To assist the Agency in its role as network operator, the DBFO Co will be encouraged, over the life of the DBFO Contract, to submit proposals that offer an increased level of service to the public. The Agency intends to enable suitable proposals to be implemented. Such proposals, which are expected to be funded through the payment mechanism, could be wide-ranging.

1.3 The Agency is considering applying the principles behind the congestion - based payment mechanism, first developed for the A1 Darrington to Dishforth DBFO project, to this project. This will involve a regular unitary payment calculated by reference to the following factors:

• Congestion
• Lane availability
• Minimum performance criteria
• Safety

1.4 The Agency has not yet reached a final view on the precise constituents or the relative importance of such factors. The current thinking on the factors set out in 1.3 above is:

• Congestion

The mechanism may provide appropriate incentives for the DBFO Co to minimise congestion. Such a mechanism would:

• relate DBFO Payments directly to the service received by road users;
• encourage the DBFO Co actively to operate the Project Road; and
• be consistent with Government and Agency objectives in respect of congestion and journey time reliability.

A congestion - based mechanism would not attempt to differentiate between the various causes of congestion but would simply relate payments to the effect on the travelling public.

The regular unitary payment would be adjusted by reference to a measure of the level of congestion and the volume of traffic on the Project Road over the relevant payment period. Congestion is likely to be measured by reference to the time periods during which the average traffic speed on sections of the road falls below threshold speeds.

The Agency has a strong preference for a congestion - based component of the payment mechanism having a significant influence on the DBFO Co's revenue.

• Lane Availability

The regular unitary payment may be adjusted by a lane availability factor which would reflect the availability or otherwise of limited sections of the Project Road during specified time periods. A lane will be deemed to be unavailable if, for example, roadworks are present rendering part of the carriageway unusable.

• Minimum Performance Criteria

The regular unitary payment will be dependent on the carriageway continuing to meet minimum road - condition performance criteria. If any part of the carriageway fails to meet specified minimum performance criteria, payment will be adjusted accordingly. This condition will be applied across the whole Project Road.

• Safety

To encourage the DBFO Co to address road safety issues a proportion of the payment will relate to road safety. The regular unitary payment will be subject to an annual adjustment, which could be positive or negative, depending on the overall safety performance of the Project Road when compared with an appropriate benchmark.

1.5 The Agency welcomes comments and suggestions regarding the proposed payment mechanism outlined above. Such comments and suggestions should be provided as a separate submission to the contact given in Section 9.5. Candidates should be aware that any information supplied may be used by the Agency in preparing the Tender Invitation Documents. Any such information will not, however, be taken into account in evaluating the extent to which Candidates meet the criteria set out in Section 7.