A streamlined client role January 17, 2013 Per Andersson Head of Road and Rail Engineering Section

This is why the Swedish Transport Administration was formed An approach that embraces all means of transportation A clearer customer perspective Strong regional ties A more efficient organisation To support innovation and improvements to productivity in the construction work industry

and… Strategic challenges An energy-efficient transport system Well adapted transport for passengers and freight in metropolitan areas Efficient intermodal transport for trade and industry A robust and reliable infrastructure Trafikverket, a modern agency and… One objective of the formation of the Transport Administration was to contribute to increased productivity and innovation in the construction industry. The government has great expectations that the Swedish Transport Agency acting as the buyer will provide better opportunities for providers to be creative and find efficient solutions. The Authority's strategic challenges has been identified with help from a vision for transports in 2021 that has been set in a comparison with the present situation. The goal has mainly been based on the transport policy objectives and the needs of the citizens. In the analysis expected developments such as population, transportation needs, economy and implementation of transport plans has been taken in consideration.

…more value for the money

Several of our projects is working together … PIA Develop ideas how to increase productivity, but also to develop methods for how productivity is measured SISU 2013 Reviewing our methods and tools for strategic purchasing and procurement. Research & Innovation Several projects within our R&I activity are running in order to increase productivity and meet the demands of both the market and the environment.

Roads and Railway For The Future A National R&D Program For Future Sustainable Road and Railway Engineering Roads and Railway For The Future

The program is based on a broad cooperation between STA, universities, research institutes, contractors, suppliers and consultants. Established to develop common goals, problem descriptions and a joint R & I agenda. Joint venture program of $30 million on research and development in road and rail engineering.

Establish a collaboration among stakeholders to identify, prioritize and fund important R & I efforts in the area. Create opportunities for creative small businesses to influence and participate in industry program of activities. Ensuring access to appropriate and effective R & I environments

Several of our projects is working together … PIA Develop ideas how to increase productivity, but also to develop methods for how productivity is measured SISU 2013 Reviewing our methods and tools for strategic purchasing and procurement. Research & Innovation Several projects within our R&I activity is running in order to increase productivity and meet the demands of both the market and the environment. A streamlined client role Focus on the attitude which should characterize our way of conducting business based on our role as a client.

…increase rate of innovation A streamlined client role – an approach where we create the conditions for the construction industry … Developed client role in the Transport Administration is an approach that means we will: create conditions for the market and its driving forces for increased innovation and productivity develop our role and our actions as a client in order to provide a greater commitment and responsibility to the vendors provide conditions for increased competition and productivity in the construction industry. …increase rate of innovation …increase productivity …take more responsibility …increase competition

Overall objectives Increase productivity, innovation and efficiency in the construction industry. By 2014 the goal is to ”save” 425 million US$. Long term goal is to increase productivity by 2-3% per year. Trafikverket är en stor beställare i anläggningsbranschen och hanterar årligen cirka 30 miljarder kronor utifrån kontrakt inom investering och underhåll. Vi värdesätter varje krona och ser en stor potential att öka produktiviteten. I vår roll som beställare och regelskrivande myndighet kan vi möjliggöra en förändring som leder till en ökad produktivitet. Men för att realisera potentialen krävs att alla parter i branschen medverkar. En grundförutsättning är en väl fungerande marknadsstruktur och en tillräcklig konkurrens. Vår utgångspunkt är att skapa mer nytta för pengarna och bidra till en ökad produktivitet i anläggningsbranschen. Det återspeglar sig i våra satta målnivåer och ambitioner för såväl förslag på åtgärder som uppföljning. På kortare sikt läggs speciellt fokus på att verkställa och följa upp effekter, säkerställa att det finns nödvändiga system och verktyg och att det kontinuerliga produktivitetsarbetet blir en naturlig och integrerad del av verksamheten. Vi har strukturerat upp för vårt produktivitetsarbete utifrån Utmaning – Fokusområden – Projekt – Mål. Utmaning. Vad är drivkraften till förändringen. Fokusområden. Inom vilka områden finns effekten och därmed vårt fokus. Projekt. Hur realiserar och implementerar vi. Mål. Vad ska vi uppnå.

A streamlined client role A great challenge that makes great demands on both the Transport Administration and our suppliers. The focus is to Transport Administration to plan and run their business so as to create conditions for greater responsibility and commitment of our suppliers and that effective cooperation is facilitated.

A streamlined client role Transfer the responsibility for projects and implementation to contractors, consultants as well as material suppliers The logic behind this reasoning is based on our knowledge of how the market works, and our belief that competition creates innovative ways to solve old problems and with this win contracts.

Increased competition The market continues to grow geographically Our goal is to stimulate the development of an efficient market with many players, large and small, national as well as international, who are prepared to meet the challenges that come on the market "We must always help the market develops and ensure that competition increases. It demands that we put out more work in the market who through to that will grow. "

Competition leads to savings A good example of exposing market for competition … … is that the cost of operation and maintenance per railtrack meter has been substantially lowered and is now about 25% lower than before and this with no loss of quality and safety.

(Re)developed roles The transport administration will: Create the conditions, set the requirements and perform quality assurance of the requested product(s) Contractors/consultants will: Organize and lead the planning. Document, validate and quality assure. Take full responsibility to deliver the requested product(s).

Vision – Construction contracts Design & Build contracts with or without operation and maintenance : – the procured volume shall be at least: 20 % 2012 30 % 2013 40 % 2014 50 % 2018 Our vision means that the requirements for Contractor / Supplier is increasing, here are some examples: Ability to innovate, both in design, technology, production methods, time and cost incentives, alternative traffic diversions etc. Better planning, cutting down lead times and more industrial production, leading to more efficient resource utilization Safety issues and other operating conditions must be observed´and be a basis for reimbursement for work performed. Life Cost Analysis as a natural part of the work in the operating contracts For maintenance in 2011 applied ABT 06 in more than 50% of expected contract sums. ABT 06 are general provisions on the general contracting for building, construction and installations. The rules are for use in so-called turnkey projects, that is, contracts where the contractor, in addition to the actual execution, even to take up all or a substantial part of the construction.

Increasing demands on our contractors Larger ability for alternative / innovative solutions More efficient use of resources Better planning and more industrial production More transparent accounting, self-monitoring and verification Increased expertise in managing projects A greater focus on regulatory and safety requirements Smarter temporary traffic solutions Foster working environment and "customer's customer" LCC is a natural part of the work

Vision – Design contracts (consultants) Investigation and planning: – the procured volume at a fixed price shall be at least: 10 % 2012 20 % 2013 30 % 2014 40 % 2018 Vision: Consultants Fixed Price contracts Increasing interest to the project's overall economy Process-oriented approach - safer delivery by the various project stages Technical competence with executive insight

Increasing demands on our consultants Description of the function already in early stages Increased focus on the overall economy More process-oriented way of working Higher technical expertise Documented experience feedback Ability to develop a better knowledge about production More consortia with foreign operators

We have to be a professional and competent client! Increase the proportion of D&B projects Increase the proportion of fixed price consulting contracts Deep competence in management No organizational boundaries Develop our quality assurance practicies Clear internal and external communication – On time Clear goals – Change mindset - for the whole Transport Administration

We need to increase our ability to: Formulate our requirements and contracts Formulate functional and measurable requirements Remove unnecessary deadlocks Understand the suppliers' ability / shortcomings Develop a model for quality assurance Follow up, follow up and follow up … We must also ensure ...

... that our long-term planning is “just in time” 95% of the planned projects should be described according to the time line below It requires that we improve our planning by: Improve our planning and internal collaboration January 15, 2012 for missions in 2013 January 31, 2013 for missions in 2014 June 15, 2013 for missions in 2015 The planning of missions and foresight in the process needs to be developed. What must in particular be worked on with are: To clarify the VP process and interaction between different VO / CF the construction document and production must be ordered at the same time to develop the forecasting process

Business forms streamlined client role implies the choice of: Procurement procedure Construction and / or consulting forms with the associated description Form of reimbursement Form of cooperation The choice of business form is to be based on the project specific circumstances and the conditions on the suppliers markets and be done with a view to achieving competition, high productivity and increased innovation in the construction industry in both the short and long term.

Finally This is a big challenge – and we must do it together! The streamlined client role requires a change in our approach. Therefore it is important that we and the suppliers dares to think further, to question old patterns, tread new paths and standing up for a new direction. To act as buyers will mean a radical new way of working and change of roles both internally and in relation to our suppliers. The change will affect all areas of activity and key features which have been commissioned to create opportunities to pursue and act according to the decided orientation This is a big challenge – and we must do it together!