Financing Level and Cost Indicators

W dokumencie EFFECTIVENESS OF NATIONAL ROADS MAINTENANCE MANAGEMENT IN POLAND (Stron 51-55)

3. Effectiveness of National Roads Maintenance Management by GDDKiA

3.3. Indicator Analysis of the National Roads Maintenance Management

3.3.1. Financing Level and Cost Indicators

GDDKiA as a government agency funds the routine maintenance

of the national road network out of state budget means, including, to a small extent however, funds from the special purpose National Road Fund (Krajowy Fundusz Drogowy - KFD). As far as repavements and renewals of roads and road engineering structures are concerned, additional funds are raised through loans and credit facilities of international financial institutions.10

While analysing the level of financing of the national road network, we have to distinguish between expenditure on investment projects (capital outlays) like construction and modernisation (upgrading) of roads, and the expenditure on road maintenance and repairs (the so-called current expenses). Though investment outlays are not the subject matter of this report, the basic data on investment, routine maintenance and structural maintenance funding may throw some light onto the differences in financing levels.

In the years 2004-2011 nearly PLN 96 billion was invested into the construction and upgrading of the national roads in Poland, and in 2011 the investment spending achieved a record level so far (PLN 26.4 billion).

A significant increase in outlays in the recent three years was possible as the Programme of National Road Construction has been carried out on a large scale. However, the actual expenses in the years 2008-2011 constituted only 64% of planned investment assumed in the Programme.

Figure 7. Investment expenditure on the development of the national road network (PLN billion)

Source: based on GDDKiA data.

10 In the years 2004-2008 these were loans of the World Bank and credit facilities of the European Investment Bank.

Expenditure on National Roads Maintenance

2004 2005 2006 2007 2008 2009 2010 2011

0 10 20 30

5 15 25

Planned expenses Actual expenses

35

Effectiveness of National Roads Maintenance Management by GDDKiA

Expenses on maintenance of the national road network include expenses on routine and structural maintenance (renewals and upgrading) of roads and bridge structures (see Figure 8). Routine maintenance of roads includes: pavement repairs, maintenance and conservation of traffic signs and traffic safety facilities, drawing and conservation of road surface markings, maintenance and

replacement of greenery, as well as keeping roads clean. As for winter maintenance the scope of works includes anti-skid measures, removal of snow from the carriageway and footways, etc.

Figure 8. GDDKiA expenditure on national roads maintenance by works category

EXPENDITURE ON NATIONAL ROADS MAINTENANCE

BUSD Renewals of bridge structures

Upgrading of roads Reinforcement of bridge

structures

Current expenses Capital spending

Source: own illustration.

The total expenditure on maintenance of the national road network increased from PLN 1.2 billion in 2004 to nearly PLN 3.0 billion in 2009. In 2010, as budgetary means earmarked for renewals and road upgrading had been cut, the total maintenance expenditure dropped by 18% in relation to 2009 (Figure 9). Taking into account the Producer Price Index (PPI), annual expenditure on maintenance increased by 85% in the years 2004-2010 at fixed prices. In 2011 structural maintenance expenditure fell significantly.

Expenses on the road network renewals in 2004-2011 at the average annual level of approx. PLN 1.3 billion were characterised by the lack of stability. One may think of a separation of expenses on roads upgrading and bridge reinforcements, which are financed from investment budget (i.e. capital spending) from the total expenses on national roads renewals. However, in practice such separation is not always possible.

Therefore, for the purpose of the present analysis expenses on renewals and roads upgrading are treated as complementary.

Effectiveness of National Roads Maintenance Management by GDDKiA

Figure 9. GDDKiA expenditure on national roads maintenance (current prices, PLN million)

Source: based on GDDKiA data.

With total annual needs of national roads maintenance in the years 2008-2010 at the level of PLN 3.7 billion, the actual expenses were approx. PLN 2.3 billion, i.e. about 70% of needs. The indicator of financing maintenance needs reached the highest value in 2009 (80%) and the lowest value in 2011 (40%).

It was not possible to calculate the indicator of the financial plan implementation (costs planned to costs actually borne; performance to target indicator) as there is no year-to-year stability in financing the road maintenance.

In the period analysed the expenditure on BUSD (routine maintenance) increased from PLN 0.4 billion to PLN 1.1 billion (annual average of about PLN 726 million). On average, approx. 59% of this expenditures were expenses on routine road maintenance, about 10% on routine bridge maintenance and about 31% on winter road maintenance.

The latter category of expenses is highly variable and depends on weather conditions in the winter period of a given year. In 2010 winter maintenance expenditure amounted nearly to PLN 0.5 billion and was by 86% higher than in 2009 and by 163% higher than in 2008.

Approximately 40% of expenses on BUD (maintenance of trunk roads) in 2010 was earmarked to pavement maintenance, primarily

thermal repairs and bitumen plates; another 13% to maintenance of road aesthetics, and 10% to traffic signs and road surface markings. Comparing the structure of BUD expenses to that

2004 2005 2006 2007 2008 2009 2010 2011

0 2500 3000 3500

2000 1500 1000 500

Rountine maintenance of the road network

Structural maintenance of the road network

Expenditure vs. Maintenance Needs

Effectiveness of National Roads Maintenance Management by GDDKiA

in the preceding years was not possible due to annual changes in expense categorisation, to which data was collected in GDDKiA.

Besides, the database is incomplete and contains erroneous data.

Figure 10. Structure of expenditure on national roads routine maintenance (%)

BUD+BUA ZUD BUM

2004 2005 2006 2007 2008 2009 2010

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Source: based on GDDKiA data.

The analysis of unit costs of individual categories of works, carried out according to main cost items listed in the Catalogue of Maintenance Works in force in 2010, demonstrated high cost differences (even 8 times in the most extreme case) from division to division. It was however impossible to point out rational reasons for those cost discrepancies, such as for example the correlation between the model of maintenance management and the cost level of carried-out works.

Another indicator in this group is the average level of maintenance expenses per one kilometre of the road network managed by a particular GDDKiA division. In the years 2004-2010 this was PLN 110 thousand/km on average per annum. The highest values had been achieved in Małopolskie, Świętokrzyskie, Łódzkie and Kujawsko-Pomorskie; and the lowest – in: Lubuskie, Dolnośląskie, Podlaskie and Zachodnio-Pomorskie. Average maintenance expenses in Małopolskie (maximum value of the indicator) were more than twice higher than in Lubuskie (minimum value of the indicator), whereas the winter maintenance costs are the most decisive factor.

Effectiveness of National Roads Maintenance Management by GDDKiA

Figure 11. Average maintenance expenditure per 1 km of the road network in 2004-2010 in GDDKA divisions (thousands PLN/km)

Source: based on GDDKiA data.

W dokumencie EFFECTIVENESS OF NATIONAL ROADS MAINTENANCE MANAGEMENT IN POLAND (Stron 51-55)