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

2. 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

3. 199420002007 2011199820022005 OPC+ Outsoursing: contracts based on input: workplans and maintenance specs Increase in more business like attitude OPC/PGO Alliance: contracts based on KPI’s and maintenance units Management focus more on RAMS than on cost Procurement: Performance based contracts OPC Outsourcing of daily maintenance Internal distiction Management - Operation contracts based on activities and workplans Present day 1. Historical perspective 3

4. Contract distribution in OPC 4

5. 2. Program PGO 5

6. 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

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

8. 3. Contract model PGO 8

9. 9 Contract Structure

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

13. 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

14. 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

15. 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!

16. 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)

17. 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

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. 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

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