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Establishment of a concession of service contract 2005-2010

Considering that the former arrangements for the dissemination of Version 1 couldn’t provide adequate support to users, the Association wouldn’t have by itself the financial resources to undertake further developments beyond version 2, and that the PIARC General Secretariat couldn’t continue to manage directly daily issues associated with the dissemination of the HDM-4 tools and the production of up-grades, in October 2002, PIARC Council took the following resolutions:

The council took note that HDM-4 further development is necessary to get to a logical completion point (version 2.1)...

  • The council acknowledged that this work will complete the HDM-4 project and asked the expert group to report to Lisbon meeting on the proposed on-going management of HDM-4 outside the PIARC structure, with a view to making a final decision at the Durban Council.”

In March 2003, the PIARC General Secretariat launched an international call for candidacies for pre-qualification for services of management of HDM-4 project. The corresponding document was circulated to members of PIARC Executive Committee asking them to relay the information in their country, to members of the Experts Group and to the World Bank. Only three answers were received from three consortia (U.K., New Zealand and South Africa). No candidacy was rejected.

At its July 2003 meeting in Birmingham, the PIARC Executive Committee invited the Secretariat General to look for a solution to manage the HDM-4 Project from 2004, in the form of a concession.

The request for proposals was sent in September 2003 to the three pre-qualified consortia. The South African consortium declined for financial reasons. The two bids from HDMGlobal and HIMS were reviewed by an independent panel of the PIARC Commission on Finances according to the four criteria set in the RfP:

  • quality of user support services,
  • royalties paid to PIARC,
  • pricing policy,
  • distribution strategy for HDM-4.

After interviews and requests for additional information, in its report produced in August 2004, the Commission on Finances acknowledged both consortia had the expertise required to ensure dissemination of the HDM-4 software and assistance to users but consideration of each of the four criteria gave a significant advantage to the proposal presented by HDMGlobal. This consortium was comprised of the following partners -the University of Birmingham, Scott Wilson Kirkpatrick & Co. Ltd, WS Atkins, ARRB Group Ltd, Ponts Formation Edition, Instituto Chilano del Cemento y del Hormigon, Scetauroute International and TRL Ltd.

In September 2004, in Montpellier, PIARC Council took the following resolution:

“Following the resolution 02/10 adopted at the Melbourne Council meeting requesting a solution external to PIARC be found for the management of the operation of HDM-4;

following the resolution 03-07/12 adopted by the Executive Committee in Birmingham, that selected the preferred option as a concession contract for the next five years;

following consultation organised by the General Secretariat;

after the evaluation of the received proposals based on the following evaluation criteria: quality of user support services, royalties paid to PIARC, pricing policy, distribution strategy for HDM-4.

following the advice of the Finance Commission and on recommendation of the Executive Committee,

the Council requested that the Secretary General :

  • establish and sign without delay the service concession contract with the HDMGlobal consortium
  • inform the next Council meeting, and subsequently each year the Executive Committee of the follow up of the concession contract and the results of the concession company’s actions,
  • present to the Council, at the end of four years, the terms for consideration at the end of the concession agreement,
  • present to Council the accounts from the contract at the end of the fifth year of the concession.”

Information of the key aspects of the draft concession of service contract was provided to the World Bank in a letter from PIARC Secretary General, Jean-François Corté, to Richard Scurfield, Transport Sector Leader with copy to Maryvonne Plessis-Fressard:

“…As you are aware from previous correspondence and discussion, PIARC Council has decided that the on-going management of HDM-4 should be outsourced via a concession of service contract. In this way PIARC wants to ensure that HDM-4 users can actually benefit from organized, reliable assistance (which has not been the case up to now) and there can be a sustainable future for HDM-4.

The two bids received have been reviewed by an independent team and the results of the analysis have been presented to PIARC Council which took the resolution to select the consortium HDMGlobal. The decision was made on the basis of the following criteria:

  • quality of user support services,
  • royalties paid to PIARC,
  • pricing policy,
  • distribution strategy for HDM-4.

The contract is currently under preparation. Without getting into details, I am happy to provide to you with indications of the main features:

  • It will be a five year concession of service contract,
  • PIARC retains the property rights for version 2 and subsequent development, on behalf of the different sponsors,
  • The concessionaire will be responsible for the management of a users club and for annually reporting to PIARC not only about the use of the software but on the users and agencies expectations regarding new development,
  • The concessionaire will be responsible for the management of new developments including organization of funding and selection of the issues for new developments,
  • Licence purchase rates will be essentially determined by the costs of product dissemination, assistance to users, management of the project and marketing. Royalties paid back to PIARC will be a small share which will probably not cover, at the end of the five year concession, the monies spent by PIARC from its own funds for the development of version 2. In case of a large success, if the revenues exceed PIARC expenditures, then this excess money will be reinvested for the benefit of the enhancement of HDM-4. …”

No remark was expressed by the World Bank.

Termination of the distributorship agreements signed between the World Road Association (PIARC) and Mc Trans, PFE and the Spanish Road Association, took place on February 1st, 2005.

The concession of service contract was signed between Birmingham Research and Development Limited on behalf of the members of the consortium HDMGlobal and PIARC taking effect on August 1st 2005 for five years.

The contract stated in particular:

“… PIARC is vested with the property rights of the software system HDM-4 on the interest of all the stakeholders of the ISOHDM Project (International Study of Highway Development and Management) and has taken care at their request of co-financing and of the management of the software developments which led successively to versions 1.3 and 2.0 of HDM-4 (..)

8             Property rights

8.1         Version 2.0

PIARC will hold for the duration of this concession, in the interest of the different stakeholders who have contributed to the development of HDM-4, the commercial property rights of version 2.0.

PIARC will also hold, under similar terms to the above, the property rights over the set of technical documentation volumes associated with the software.

8.2         Future developments

For further developments made by the concessionaire during the duration of the present concession contract, PIARC will hold the property rights, for the interest of all the stakeholders who contributed to the development of HDM-4.”

A copy of the contract was sent to the World Bank in February 2006.

In 2008, PIARC General Secretariat signed with the Instituto Mexicano del Transporte (IMT), a memorandum of agreement for the provision of consultancy services for the translation into Spanish of the HDM-4 Version 2 software paid by PIARC.

On June 17th, 2009, a meeting of the HDM-4 Advisory Board was called in Paris. This instance, established by PIARC, comprises representatives of the principal sponsors of the ISOHDM project and of users (former donors IDI declined, and the Swedish Road Administration didn’t answer). One objective of this advisory committee was to provide a forum of discussion between different stakeholders in order to share information about the dissemination, application of HDM4 and needs of its users. It was expected the Advisory Committee would facilitate the constitution of technical groups and financial montages for the achievement of new developments aimed at improving version 2.0 in order to better answer the needs of the users and decision makers.

At this meeting the Advisory Board was informed that the General Secretariat of PIARC will recommend PIARC Council to extend the current concession of service contract for another 5-year period in order to have enough time for developments and to provide a sustainable solution regarding assistance and service to users.

In September 2009, PIARC Council took the following resolution:

“Following Resolution 04/17 adopted by the Council in Montpellier, on the implementation of a contract of service concession with the HDMGlobal consortium; following the General Secretariat’s report on the follow-up of the concession contract implementation and on the results of the concessionaire’s action since the signature of the contract; after examination by the Finance Commission and on recommendation of the Executive Committee, the Council asked the General Secretariat:

  • to sign with the HDMGlobal consortium, an amendment to the concession contract, extending its duration for a period of five years, beyond 31 July 2010;
  • to report every year to the Executive Committee about the follow-up process of the contract and the results of the concessionaire’s action;
  • to submit to the Council in 2014 the arrangements envisaged at the expiry of the concession contract,
  • to submit to the Council in 2015, an assessment report about this activity.


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