ebrd serbia roads final phase 1 report

8/11/2019 EBRD Serbia Roads Final Phase 1 Report

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PHASE 1FINAL REPORT

EBRD Roads Technical Assistance Project in Serbia

Republic of Serbia Road Directorate

Activity No. 02-70064A

Grant No. GH2764567

June 2005

This report was funded by the U.S. Trade and Development Agency (TDA), an export promotion agency of theUnited States Government. The opinions, findings, conclusions, or recommendations expressed in this document

are those of the contractor and do not necessarily represent the official position or policies of the TDA.

Mailing Address:Room 309, SA-16, Washington, D.C. 20523-1602Delivery Address:1621 North Kent Street, Suite 309, Arlington, VA 22209

Phone (703) 875-4357 Fax (703) 875-4009


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PHASE 1FINAL REPORT

The U.S. Trade and Development Agency

The U.S. Trade and Development Agency, an

Independent agency of the U.S. federal government,

Provides grants that assist in the planning stage of

Infrastructure and industrial projects in the middle-income

and developing countries. Through the funding of feasibility

studies, orientation visits, training grants, and various

forms of technical assistance, TDA facilitates partnerships

between American companies and foreign entities.

Mailing Address:Room 309, SA-16, Washington, D.C. 20523-1602Delivery Address:1621 North Kent Street, Suite 309, Arlington, VA 22209

Phone (703) 875-4357 Fax (703) 875-4009

Technical Assistance to Serbia Road Directorate Phase 1 Report TOC-1 Booz Allen Hamilton


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PHASE 1FINAL REPORT

Chapter VI Road Design VI-1Introduction and Design Standards VI-3Current Workload and Analysis VI-8Recommendations VI-14

Chapter VII Construction and Maintenance VII-1Current Situation VII-3

Analysis VII-20Recommendations VII-30

Chapter VIII Environmental Issues VIII-1

Chapter IX Management Information System Analysis IX-1

Introduction IX-3Current Situation In The Information And Document Center Department IX-6Existing Situation And Current Computing Requirements Of Other Srd Departments IX-26Comments On Department Analysis And Existing Situation In Other Departments IX-34Recommended Improvements IX-41Hardware, Software, And Equipment Requirements IX-50

Chapter X Procurement X-1

Chapter XI Preparation for Recovery Plan XI-1

Chapter XII Conclusions and Action Plan XII-1



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PHASE 1FINAL REPORT

Appendices

List of Persons Interviewed A-1Summary Report on Rutting Problem on Corridor X B-1Traffic Evaluation C-1Support Documentation for SRD Investments D-1EIA Scoping Checklists E-1Comments on the Draft Law on Public Roads F-1



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Glossary of Terms, Abbreviations and Acronyms

Arterial Roads Also called Main roads; these roads connect international routes, national capitals, important commercialAADT Annual Average Daily TrafficBECOM Societe Francaise dIngenierieCIP Institute for TransportationCPV Center for Roads of VojvodinaSRD Serbia Road Directorate

EIA Environmental Impact assessmentEIB European Investment BankEBRD European Bank for Reconstruction and DevelopmentEU European UnionFWD Falling Weight DeflectometerGIS Geographical Information SystemGPS Global Positioning SystemHDM-4 Highway Development and Management application software

HI The Highway InstituteHz Hertz (cycles per second)IFI International financing InstitutionsIMS Institute for Testing MaterialsIRI International Roughness IndexIRIS Integrated Road Information SystemISO International Standards Organization

IT Information TechnologyMain Roads See Arterial RoadsMMS Maintenance Management SystemMoTT Ministry of Transport and TelecommunicationsMPNRE Ministry for Protection of Natural Resources and EnvironmentMS MicrosoftPIU Project Implementation UnitPMS Pavement Management System


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PZP Road Enterprise

Regional Roads These roads connect regional centers and commercial centers with national capitals and Arterial roadsROW Right-of-WaySCG Government of Serbia and MontenegroSIDA Swedish International Development AidSQL Structured Query LanguageUSTDA United States Trade and Development AgencyYUM Serbian currency unit Dinar

ZTP Railway Transport Enterprise


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Participating Organizations

Several organizations collaborated to produce the information contained in this report:

The Serbia Road Directorate (SRD) is the subject and the beneficiary of the results and recommendations of the study.The Directorate provided access to its personnel for interviews and consultations, helped set up and conduct interviews,provided transportation and translations services, provided extensive comments on and recommendations for the report, andcontributed important members to the team that conducted the study, including:

o Dr. Djordje Uzelac Project Manager and member of the Faculty of Technical Sciences of the University of Novi Sado Ljerka Ibrovic Advisor to the SRD Directoro Bogoljub Mircic Economist and Financial Analysto Nebojsa Radovic Head of SRDs Road Information Centero Dr. Vladan Tubic Member of the SRD Advisory Council, and member of the Faculty of Transport and Traffic

Engineering of the University of Belgradeo Momcilo Veljovic Bridge Engineero Gordana Suboticki Civil Engineero Igor Radovic Head of SRD Environmental sectiono Milutin Strbic Head of SRDs Development and Planning Departmento Djordje Djordjevic Head of SRDs Department for Main and Regional Roadso Vladimir Joksimovic Member of SRDs Advisory Council

Booz Allen Hamilton led the study and prepared the report. Booz Allen provided a group of specialists that worked closely

with the SRD team to conduct investigations and interviews, analyze the information, and prepare the report. This groupincluded:

o Dr. Samuel Mintz Program Manager and Transport Economisto Michael Avery Project Managero Bruce Brong Engineering leado Sergio DelaFuente Institutional Specialist


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o Dr. Rafael Aldrete Engineering and Financial Analysis

o Antonio Di Polina Highway Engineering Specialist

FIDECO is a Serbian management and engineering consulting firm sub contracted to Booz Allen Hamilton for support in theareas of management information systems and environmental issues. FIDECO supplied a group of specialists that workedwith the other team members to conduct investigations, analyze information and contribute to the report. That groupincluded:

o

Milos Svarc Managing Directoro Vladan Stepanovic Assistant Managing Director and Environmental Specialisto Nevena Colic Environmental Engineero Dr. Alempije Veljovic Management Information Specialisto Zoran Eremija Management Information Specialist

European Bank for Reconstruction and Development (EBRD) is an international finance institution currently providingfinancial assistance to the Serbian Government and, in particular, the SRD. The EBRD drew up the Terms of Reference for

this project and represents the grantor of the funding for the project. Members of EBRDs team provided general guidanceduring the study and valuable comments on the draft report. EBRD team members include:

o Lin OGrady Principal Banker, Transport Teamo Miljan Zdrale Analysto Ulf Hindstrom Senior Banker, Infrastructureo Jose Carbajo Director for Project Design and Appraisal

United States Trade and Development Agency (USTDA) is the grantor of the funding for the project. Its interests arerepresented by the EBRD.


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Technical Assistance to Serbia Road Directorate Phase 1 Report Booz Allen Hamilton

I. INTRODUCTION


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Technical Assistance to Serbia Road Directorate Phase 1 Report I-2 Booz Allen Hamilton

This chapter provides an introduction to the Technical Assistance Project and Roads Recovery Plan

The project objectives are to:- Examine the current and future operations and structure of the SRD and formulate suggestions for their

improvement- Produce a Phase 1 Report with recommendations for Institutional Strengthening. This report will be useful input for

future financial support from IFIs- Meet requirements of USTDA grant- Produce a Road Recovery Plan in Phase 3. The plan will be used by:

Serbia Road Directorate Government of Serbia External organizations such as European Bank for Reconstruction and Development (EBRD), World Bank,

European Investment Bank (EIB) and European Agency for Reconstruction (EAR)

The project includes 3 phases, and there is a timetable for each Phase:- Phase 1: Scoping and Recommendations for Institutional Strengthening (Due 15 January 2004)- Phase 2: Procurement of Critical Equipment (Due April 2004)

- Phase 3: Road Recovery Plan (Due July 2004)

This report was written to meet the requirements of Phase 1. The report was prepared in 5 steps:- Identify major functions performed by the Serbia Road Directorate. These major functions include:

Institutional Road Planning Design process and standards Construction Maintenance Environmental issues Information Systems including hardware and softwareDevelop a Best Practices Model for Road Directoratesin Eastern Europe. This model was used as the basis for recommendations for the Serbia Road Directorate

- Conduct interviews regarding the current situation- Compare the current situation to Best Practice- Develop conclusions and recommendations


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Various activities were conducted during Phase 1. The most significant activities were:- Conducted interviews with SRD staff, and representatives of other organizations. A list of interviews is in Appendix

A: List of Persons Interviewed- Participated in numerous meetings with SRD representatives to ensure the project requirements were met- Conducted Stakeholder Workshop:

Present the project objectives and timetable Obtain comments and suggestions from road stakeholders on some of the important issues about road

improvements Issues were organized into 3 groups: Institutional, Financial and Road Management No final decisions were taken during the Workshop

- Prepared various interim progress reports and conducted various meetings with key stakeholders. The stakeholdersincluded the Project Steering Committee, and representatives of the EBRD and World Bank

- Provided support to SRD for: Commissioned contractors to provided updated and expanded traffic growth forecasts for use in developing the

Road Recovery Plan

Commissioned one day traffic count methodology and plan for regional roads to support the Road RecoveryPlan

Helped to identify potential road segments for the Road Recovery Plan

Phase 1 was a major effort, and required significant staff time and commitment:- BAH provided a team of experienced consultants- SRD provided a team of experienced representatives to work closely with the consultants- SRD appointed a Steering Committee to review project progress, and contribute their experience- The working relationship between all people was excellent- At BAH, we believe that SRD staff took the study very seriously and they did an excellent job


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This report consists of these Chapters:- Executive Summary- Chapter I: Introduction- Chapter II: Best Practices- Chapter III: Institutional Arrangements- Chapter IV: Road Financing- Chapter V: Road Planning- Chapter VI: Road Design- Chapter VII: Road Construction and Maintenance- Chapter VIII: Environmental Issues- Chapter IX: Management Information Systems Analysis- Chapter X: Procurement- Chapter XI: Preparation for Recovery Plan- ChapterXII: Conclusions and Action Plans- Appendix A: List of Persons Interviewed

- Appendix B: Summary Report on Rutting Problem on Corridor X- Appendix C: Traffic Evaluation- Appendix D: Support Documentation for SRD Investments- Appendix E: EIA Scoping Checklists- Appendix F: Review of Draft Law on Public Roads


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Technical Assistance to Serbia Road Directorate Phase 1 Report II-1 Booz Allen Hamilton

CHAPTER II

BEST PRACTICES


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BACKGROUND


THE SERBIA ROAD DIRECTORATE (SRD) RECEIVED A GRANT FROM THE UNITED STATES TRADE ANDDEVELOPMENT AGENCY (USTDA) TO PREPARE A ROAD RECOVERY PLAN. A REQUIREMENT OF THE PLAN IS THEANALYSIS OF THE EFFECTIVENESS OF SRD AS AN INSTITUTION. AN IMPORTANT ELEMENT OF THE INSTITUTIONALANALYSIS IS THE CONSIDERATION OF BEST PRACTICES IN MANAGING ROAD AGENCIES.

Why Best Practices?

Because:

Best Practices provide benchmarks or guideposts against which road organizations can be evaluated

Best Practices represent the view and consensus of expert practitioners

Best Practices provide an objective framework of best in class

Best Practices help to identify and define a goal to achieve

Compliance with accepted Best Practices provides status and prestige to an institution


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BEST PRACTICES


Table II-1 presents the common global forces driving change in highway organizations around the world.

Table II-1: Global Forces On Highway Organizations

DRIVER SPECIFIC TRENDS CHANGES IN THE HIGHWAY SECTOR

More Open Trade among Nations Privatization

Increased competition

ISO Standards

Transparency

Increased pressure to provide high standard road networks

Increased emphasis on effective management and qualityassurance

Need for interoperability Performance-based contracts

Advanced Technology Higher quality and lower pricedtechnology

IT Applications

Telecommunications

Internet

Increased use of Intelligent Transportation Systems (ITS)

Information Access

Local/Wide Area Networks

Increasing need for TransportInfrastructure to Meet GrowingDemand

International Funding Institutionsfocus

Private sector investment

Road Funds

Institutional Strengthening

Concession/other financing options to attract investment

Reduction of risk, investment friendly environment

Policy and Regulatory Reforms Decentralization

Customer Focus

Organizational restructuring

Consideration of outsourcing options

Interaction with and responsiveness to users

HIGHWAY ORGANIZATIONS WORLDWIDE HAVE BEEN FORCED TO UNDERSTAND AND DEAL WITH THE LOCALEFFECTS OF THESE GLOBAL CHANGES


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BEST PRACTICES


THESE PRESSURES ARE BEING FELT IN COUNTRIES WITH VARYING POLITICAL, ECONOMIC AND SOCIAL SYSTEMS,ALTHOUGH THE NATIONAL CONTEXT DOES INFLUENCE THE EXTENT AND PACE OF MODERNIZATION

Figure II-1 presents some of these pressures.

Figure II-1: Pressures on Highway Organizations

Political System

Economic System

Social System

Global Pressures:

Information Technology

Global Institutions

Efficiency & Productivity

Global Pressures:

Information Technology

Global Institutions

Efficiency & Productivity

Public OrganizationsHighway Organizations

Feedback

National Context


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BEST PRACTICES


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Table II-2: Selected Institutional Challenges in Balkan CountriesInstitutional Challenge Albania Bulgaria Croatia Macedonia Romania Serbia

High level of political involvement andinterference in decision making

Some personnel promoted to executive positionswith minimal management experience andtraining

Land expropriation laws not designed to handlenew road construction needs Road sector improvements severely underfunded

Unclear roles and responsibilities Increasing influence from foreign aid donors

Insufficient project management capacity orexperience to efficiently handle externallyfinanced projects

Lack of clear project management systems

which link project identification to implementationperformance targets

Lack of familiarity with international and EUprocurement, monitoring, implementation, andreporting practices


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BEST PRACTICES


ANALYSIS OF VARIOUS HIGHWAY ORGANIZATIONS SHOWS THAT AGENCIES MOVE THROUGH SEVERALTRANSITIONAL STAGES TO BECOME MORE EFFICIENT AND PRODUCTIVE, GIVEN THE CHANGING GLOBAL CONTEXT

Table II-3 presents these transitional stages

Table II-3: Characteristics of Highway Organizations

CATEGORY TRADITIONAL MIXED OR TRANSITIONAL MODERN

Regulatory Environment Extensive regulation of a multitude ofprocesses and units

Performance impeded by stop-and-go regulations

Regulation of key outcomes

High level of transparency

Financial Mechanisms Dependence on government assignedfunds

Limited accountability in terms of road

condition or value of asset to society

High level of uncertainty regardingfuture funding allocations

Resources from combination ofgovernment and fees

Partial accountability for funds in

terms of road condition/value

Increasing justification of roadsexpenditure in terms ofeconomic/social benefit

Stable mix of government and privatefunds

High level of accountability for funds in

terms of road condition/value

High degree of awareness ofcomparative performance for moneyspent

OrganizationalCharacteristics

Large size organization with operationsperformed by public workforces

Centralized control, minimal delegation

Lengthy decision-making process

Unclear lines of responsibilities

Smaller size with increasedoutsourcing of functions

Increasing accountability

Smaller size focused on managingcontractorsand information andmonitoring results

Decision-making decentralized tolowest possible level supported bystandards and streamlined reportingand monitoring systems

'Commercial' activities undertaken bycompetitive tendering


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BEST PRACTICES


Table II-3: Characteristics of Highway Organizations (Continued)

CATEGORY TRADITIONAL MIXED OR TRANSITIONAL MODERN

Processes Focus on technical and functionalareas, not long-term strategy,integration or coordination

Management systems for planning,organizing, directing and controllingintroduced

Customer-oriented vision andmission developed and understood

Processes integrated to measureperformance

Competitive tendering ofconstruction and maintenance

Use of certification programs

Improved coordination andcooperation to recognizecontribution to joint performanceeffectiveness

Information Systems Limited use ofautomated/computerized systems

Cumbersome systems

Process-intensive systems

I.T. has small, localized, non-centralfocus within organization

Use of Maintenance Management(MMS), Pavement Management(PMS), and other stand-alonesystems

Advanced integrated systems

Timely electronic informationreported and used for managementof internal and contracted resources

Web-site access to information,plans, forms, tenders, annualreports etc.

Efficient collection and use of'centralized' databases

I.T. has strong management focuswithin organization


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BEST PRACTICES


THE PRACTICES OF SEVERAL NATIONAL AND INTERNATIONAL HIGHWAY ORGANIZATIONS WERE EXAMINED TOIDENTIFY 'BEST PRACTICES' WHICH COULD BE APPLICABLE IN SERBIA

These highway organizations were chosen as inputs to the Best Practices: India, Tamil Nadu USA, Virginia Australia, New South Wales Singapore

Argentina Hong Kong China Malaysia Colombia Bulgaria Romania Croatia

These organizations are located in both developing and developed countries, and have a range of characteristics,representing 'traditional', 'mixed' and 'modern' practices. Each one of them offers one or more Best Practices.

Based on a review of these organisations, a Best Practice model was developed


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BEST PRACTICES


WHILE EACH OF THESE HIGHWAY ORGANIZATIONS ARE OPERATING AT DIFFERENT PERFORMANCE LEVELS, THEYARE FACING COMMONLY-SHARED PRESSURES WHICH ARE FORCING A MOVE AWAY FROM 'TRADITIONAL' TO MOREPERFORMANCE-ORIENTED OR 'MODERN' APPROACHES

Traffic demand is increasing, at the same time government budgets are being tightened and organizations are beingasked to provide 'more for less'

More stringent conditions on external assistance and economic development objectives are key drivers for more efficient

use of resources

The private sector is increasingly providing services to the public sector more effectively and at lower costs

Increasing globalization and international mobilization of skills and techniques is raising overall awareness of 'bestpractices' and improved processes

Public and users expectations of the road system are increasing (e.g. reduced travel times, improved system quality,safer conditions, etc.)

Political and community priority is being given to environmental and safety issues

Increased pressure from the international community and IFIs to implement fair, open, competitive, and transparentprocurement practices


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BEST PRACTICES


THE PRESSURES ARE BOTH EXTERNALLY AND INTERNALLY DRIVENFigure II-2 shows some of these pressures.

FigureII-2: Pressures Driving Highway Organization Change

External

Drivers

The Push

Internal

Drivers

The Pull

Highway

Departments

"on the move"

The need for:

enhancedcapacity within the road network to handle the rapidly increasing vehicle population

quality roads

a more rational approach forprioritising road improvements

improvedroad user safety toreduce highway casualties

reducedenvironmental impact

The need for:

a sharedvision

a clear regulatory environment

stable, expanded sources of

funding an efficient and effective

organizational structure

modern, streamlined processes

integrated informationsystems


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BEST PRACTICES


SOME COMMON 'BEST PRACTICES' FOUND IN MODERN HIGH-PERFORMANCE ORGANIZATIONS

Clearly defined and easily understood vision, mission and objectives

Overarching planning strategies exist based on goals and stakeholder needs

Role is primarily establishing policy and carrying out planning and regulatory functions

Short, medium and long term plans to reach goals and objectives are well defined and respond to identified needs

Competitive tendering of construction and maintenance

Increasing use of appropriate information technology

Usage of innovative financing arrangements

Increasing accountability and transparency, with expenditures tied to achieving economic and social benefits

Performance management and measurement framework inclusive of stakeholders and road users

Inclusion of stakeholders in strategic planning and institutional reform

Stakeholders are clearly identified and kept informed of decisions affecting them directly

Clearly defined roles and responsibilities at all levels

Effective organizational structure that supports the roles and responsibilities

Adequate and appropriate legislation in support of goals and objectives


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BEST PRACTICES


Promotion of private sector involvement

Clearly defined policy on outsourcing

Road safety policy effectively formulated and implemented

Use of construction and maintenance management to implement road investment programs

Active programs to minimize corruption

Ability to recruit, keep and motivate skilled staff

Access to appropriate, steady and reliable funding

Active focus on customer service

Support for cross border relationships and development of transport corridors

Effective protection of the road investment, through actions such as enforcement of axe loading limits

Coordination with other agencies on multi modal issues


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BEST PRACTICES


IT NEEDS TO BE RECOGNISED THAT ANY SHIFT AWAY FROM A 'TRADITIONAL' ORGANIZATION NECESSITATESCHANGE --- AND THIS CHANGE NEEDS TO BE CLOSELY MANAGED

The following represent some common 'lessons' identified by the organizations to help manage this process:

A vision, with a realistic timetable, is needed to help direct the change effort and this vision needs to becommunicated and supported

Key internal and external stakeholders need to perceive a sense of urgency in terms of crises or major opportunities

A powerful guiding coalition is required to support the change from inside and outside the organization (includingpublic-private involvement)

Short-term wins (results) need to be planned and created. Therefore the options selected should be achievable butalso oriented toward measurable results

Results need reinforcing and consolidating by producing more change over longer periods of time


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BEST PRACTICES


SOME SPECIFIC LESSONS ARE APPARENT WHICH ARE SPECIFIC TO ORGANIZATIONS MOVING AWAY FROM THE'TRADITIONAL' MODEL

Table II-4 presents some of these lessons

Table II-4: Lessons Unique to Traditional Highway Organizations

CATEGORY LESSONS

Regulatory Context The highway organization needs to become more aware ofexternal stakeholders and value their responses

Financial Mechanisms Stable sources of funds are required

Benchmarking studies can reorient leaders and financialpersonnel to more commercial practices

Structural Characteristics Restructuring is highly political, and requires strong externalsupport

Organizational 'champions' are needed to help facilitate changeand focus the organization on performance and results

Processes Opportunities provided by technical assistance and technologicaladvances can be used to build organizational capability throughjoint client/consultant teams

Information Systems Information technology awareness and significance must beintegrated into all aspects of capacity improvement work


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BEST PRACTICES


LESSONS SPECIFIC TO FACILITATING CHANGE IN 'MIXED' OR 'TRANSITIONAL' ORGANIZATIONS ARE EMERGING

Table II-5 presents some of these lessons

Table II-5: Lessons Unique to mixed Transitional Highway Organizations

CATEGORY LESSONS

Regulatory Context Identify and prioritize regulatory constraints toefficiency/productivity

Form internal/external task forces to develop recommendationsand implement the required changes

Financial Mechanisms As transparency and accountability increase, experiment withinnovative measures to ensure stable sources of funding throughincreased use of private sector and dedicated funding sources

Ensure effective financial management procedures are applied

Structural Characteristics Combine structural reforms with other efficiency measures, takinginto account incentives for internal staff

Introduce competition as an incentive for continuous improvement

Processes Assure strategic management planning and control processes areoperational including certified project and contract management

staffInformation Systems Provide appropriate data and systems to support managers in

their decision making process

Focus on using available technology such as GIS to providetimely information for management of internal and contractedresources and to provide timely information to road users


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BEST PRACTICES


THERE ARE FIVE ESSENTIAL COMPONENTS TO EFFECTIVELY MANAGING A ROAD AGENCY (see Figure II-3)

Example Vision: to bethe leading transportorganization in thecountry.

Example Mission: Toprovide a safe andefficient state highway

system which meetsthe needs of roadusers and thecommunities itservices

Needs:- Safety

- Road systemreliability

- Support economicgrowth and

competitiveness

- Efficiency

- Price and levels ofservice

Needs Activities- Top managementensures that theappropriate resourcesand systems are inplace to make sure theroad network ismanaged in a

professional, safe andefficient manner andthat goals are achieved

Analysis:- Cost benefit orinternal rate of return.

- Investments can begrouped as safetyimprovements,network expansion or

asset preservation

- Tool: PavementManagement system(HDM-4), BridgeManagement System

Indicators- Road maintenancecost/km- Percentage completion ofprogramme by cost- Percentage completion ofprogramme by output- Roughness, rutting

- Accident statistics- Appeals in court- Number of bridges withposted weight restriction

Figure II-3: Essential components needed for managing a road agency

CLEAR VISION

AND

DIRECTION

UNDERSTANDINGOF STAKEHOLDER

TRANSFORMINGNEEDS INTOORGANIZATIONALACTIVITIES

PRIORITIZATION

ANDOPTIMIZATIONOF TOOLS ANDTECHNIQUES

SET KEYPERFORMANCEINDICATORS


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BEST PRACTICES


EXAMPLES OF PERFORMANCE INDICATORS

Road maintenance cost/km/year Percentage completion of program by cost Percentage completion of program by output Return on the concession of services Roughness Rutting, flushing

Appeals to tribunals Number of bridges with weigh restriction

For example, for road maintenance cost/km/year

Target (in constant cost):

Yr 2000 Yr 2001 Yr 2002

US$ 3,150 US$ 3,050 US$ 3,100

Table II-6 shows some important network performance indicators.

Table II-6: Network Performance Indicators

Efficiency Safety Assets

Cost of maintenance per km Geometric efficiency

Change in road roughness Bridge weigh restrictions

Number and cost of crashes Compatibility of speed

environment Sealed carriage width Bridge width deficiencies

Road roughness Rutting

Flushing Skid resistance Remaining seal life Remaining pavement life

Another indicator:

Road user satisfaction can also be measured to make sure that the road network manager is interpreting the users needscorrectly, and most important, that the road management system is delivering

SPECIFIC INDICATORS ARE NORMALLY PREPARED BY EACH ROAD AGENCY TO REFLECT THEIR NEEDS ANDCONDITIONS AND THEIR CAPACITY TO MEASURE THEM


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BEST PRACTICES


SERBIA IS ALSO SUBJECT TO GLOBAL PRESSURES AND IS IN A PERIOD OF GREAT CHANGE. THESE REALITIES

MUST BE CONSIDERED AS BEST PRACTICE IS BEING APPLIED IN SERBIA.

A majority of public enterprises formerly owned by the government are being privatized

Many engineers formerly employed by government Institutes are having difficulties to remain busy, and many are optingfor leaving the country creating a considerable brain drain effect

As part of the national privatization program, all Road Enterprises are in the process of being privatized

The government of Serbia has recognized that the completion of the Pan-European corridor X (especially related tocompletion of road facilities and commercial facilities according to traffic volume requirements) is one of the highestpriorities for the development of the country, the stimulation of the international transit traffic, increased competitiveness,and Serbias accession to the EU

An increasing proportion of road investments in recent years has been financed by loans from International FinancingInstitutions (IFIs) and the amount of IFI funding is increasing

These works are subject to stringent cost/benefit criteria and their effectiveness is closely tied to economicdevelopment goals

Most of the proposed works are focused in the preservation and recovery of the road infrastructure, rather than inthe construction of new roads and the expansion of the network

With Serbia starting to experiencing economic growth, and better economic performance, traffic growth and vehicleownership are likely to grow rapidly

Legislation affecting the road sector has been proposed and will make significant changes in how the road network isplanned, managed and operated

All the above, plus other unidentified pressures, will force change in the management of the road sector. Best practiceswill help road managers to understand and implement the changes


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BEST PRACTICES


THE MODERNIZATION RESPONSE SERBIA...

ALTHOUGH THE ROAD SECTOR IN SERBIA HAS A GENERALLY LEAN ORGANIZATIONAL STRUCTURE, ITSINFRASTRUCTURE AND INSTITUTIONS WERE SEVERELY WEAKENED BY A DECADE OF INSTABILITY AND CONFLICT

The overall structure of the road sector in Serbia is sound and lean Serbia has a central administration responsible for the main and regional roads

Most of the planning, design, construction and supervision are outsourced Road maintenance (and some small improvement) works in Serbia are contracted out to independent commercial

contractors, on a geographic basis

Prior to the early 1990s, the road sector was rapidly moving towards modernization Modern methods and standards were being introduced for planning, programming and budgeting as well as

infrastructure monitoring and design

Procurement was being conducted competitively and governed by sound regulations Institutions were technically competent and staff well trained

Throughout the 1990s institutional capabilities were severely weakened Systems and procedures for planning and budgeting are neglected or misused, and most decisions are made on a

political rather than on a technical or economic basis

Procurement and work supervision are not transparent and suffer from old practices Staffing of road agencies is not consistent with requirements of workload

Source: Federal Republic of Yugoslavia. Breaking with the Past: The Path to Stability and Growth. The World Bank and the European Commission

THAT DISRUPTED AND EVEN REVERSED THE MODERNIZATION PROCESS


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Technical Assistance to Serbia Road Directorate Phase 1 Report III-1 Booz Allen Hamilton

CHAPTER III

INSTITUTIONAL ARRANGEMENTS


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T A B L E O F C O N T E N T S

I. INTRODUCTION III-3

II. CURRENT SITUATION III-5

III. CONCLUSIONS III-38

IV. RECOMMENDATIONS III-44


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I. INTRODUCTION

INTRODUCTION


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INSTITUTIONAL ARRANGEMENTS OF THE SERBIA ROAD DIRECTORATE (SRD)

The information presented in this chapter is based on a series of interviews conducted with Department heads, SRD staffand members of other agencies and also on findings from Stakeholders Workshop.

The road network in the Republic of Serbia totals about 41,845 km classified in 5,525 km of Arterial road, 11,540 km ofRegional roads and 23,780 km of Local roads (including Kosovo and Metohija). About 80% of the network is paved road.European Corridor X and its two branches constitute the main road infrastructure connecting Serbia with four neighboringcountries.

The SRD is the agency designated by the Road Law as responsible for maintenance, protection, utilization, developmentand management of arterial and regional roads in the Republic of Serbia.

To manage and administer this important network and investment, the SRD is organized in several Departments underthe direction of a Director appointed by the Government. Currently the SRD employs approximately 970 people. TheHeadquarters office in Belgrade has about 88 people, the Toll Collection Department about 850, and the Regional Center- North in Novi Sad about 25.

This section of the report presents the results of an institutional assessment conducted in August 2003. The main

purpose of the assessment was to evaluate the adequacy of the SRD to manage the recovery of the road infrastructureunder its jurisdiction and to suggest changes where it was determined they were needed. The information presentedunder Current SRD Organization is based on interviews of SRD staff and other interested people A Best Practicesmodel has been developed to serve as a basis for the recommendations.

The section presents the current institutional status of SRD, its relation with other agencies, the strengths and weaknessof the current arrangements and a set of conclusions and recommendations.

The information to prepare the section was obtained through a series of interviews conducted with Department heads,SRD staff and members of other agencies.

CURRENT SRD ORGANIZATION


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II. CURRENT SITUATION



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BACKGROUND AND ORGANIZATION

The SRD was established in 1998 pursuant to the Law on Amendments of the Road Law (Official Gazette RS, vol.42/98). A Managing Council, whose members are appointed by the Serbian Government, guides it.

The Managing Councils president is the Minister of Construction and Urban Planning, who was appointed by theGovernment.

The Managing Council members have backgrounds (at senior levels) in finance, engineering, legal, planning and trafficdisciplines.

The Managing Council is the high level management of SRD.

The SRD is managed by a Director who is supported by a Deputy Director and an Assistant to the Director. TheGovernment of Serbia appoints the Director and the Deputy Director. The appointments are normally for a period of 4years. Currently the Deputy position is vacant.

The Director appoints the Department heads. The staff within the Departments is also appointed by the Director butnormally do not change with a change of the Director.

Staff position descriptions were established several years ago under a system denominated systematization. Theposition descriptions and salaries do not reflect the current needs of the Directorate. Several unsuccessful attemptshave been made to update the position descriptions and salaries.

The salaries of the SRD staff are 2-3 times lower than similar positions in the private sector. This situation makes it verydifficult for SRD to attract and retain qualified professionals.

SRD interacts with many government agencies, principally: MoTT, Ministry of Finance, Ministry of Construction, and

Ministry for Environmental Protection Figure III-1 presents the Current SRD organization structure.



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DIRECTOR

Deputy Director

MANAGING COUNCIL

CURRENT ORGANIZATION OF THE

ROAD DIRECTORATE

GOVERNMENT OF REPUBLIC

OF SERBIA

AR TE RIA L AND

REGIONAL ROAD

DEPARTMENT

MOTORWAY

DEPARTMENT

DEVELOPING AND

PLANNING

DEPARTMENT

DEPARTMENT OF

INFORMATION

CENTER

TOLL COLLECTION

DEPARTMENT

GENERAL AND

LEGAL WORK

DEPARTMENT

FINANCIAL, ECONOMIC

AN D CO MM ERC IAL

DEPARTMENT

The East RegionalCenter

The Central SerbiaRegional Center

The West

Regional Center

The SouthRegional Center

REGIONALCENTERS

REGIONAL

DEPARTMENT NORTH

Figure III-1: Current SRD Organization Structure



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DEPARTMENT OF PLANNING AND DEVELOPMENT

Responsibilities:

Managing the development and production of Spatial and Planning Documentation for the road sector in Serbia Managing the planning and production of designs at the Master Plan level for Main, Regional, and Motorway roads.

This includes traffic and pre-feasibility studies Managing the production of preliminary and detailed designs Obtaining all required documents (agreements, permits, etc) from Government authorities (Min of Transport,

Construction & Planning, Environmental Protection, etc.) Issuing all relevant documents (conditions, agreements and permits) for planning, design and construction of all

structures and objects in the Right-of-way (ROW) space Managing research and development in the road sector. Research and Development includes traffic, pre-feasibility,feasibility, environmental, and scientific studies; technical regulations, technical guidelines, specifications,methodology, new technology and new materials for road construction.

Estimating road construction costs Contracting design and design supervision services Conducting construction and maintenance program and plan supervision and monitoring

Staffing issues: Table III-1 presents the current staff information for the Department- The Department currently functions with 11 staff members including the Department head. The Department considers itself understaffed Low salaries and the inflexible civil service law make it difficult to hire qualified staff



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Table III-1: Staff of Department of Planning and Development

Position Number Qualification Level Average Monthly SalaryDinars EurosDepartment Head 1 VII/1 19,993 303Engineer for price and bill of quantities calculationsand price monitoring

2 VII/1 18,005 273

Road maintenance engineer 2 VII/1 18,038 273Planning documentation coordinator 2 VII/1 18,304 277Chief Engineer for studies and designs 2 VII/1 18,463 280

Motorway maintenance and exploitation officer 1 IV 9,895 150

Training needs (according to the Department Head): Computer training: Project Management, MS Office, AutoCad English Language Other training: Quality control, Contract preparation and management, Document Management System,

Procurement, General Management Training

Other than mid and end of the year reports, there is no measure of performance against pre-established goals andobjectives.

Figure III-2 presents the proposed department functional scheme.



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Figure III-2: Proposed Department Of Planning And Development Functional Scheme

Development and PlanningDepartment

Program and Plan Urban and SpatialPlans

Designs Studies

Infrastructure corridors,Detail regulation plan,

Urban planning

Master, Preliminary, Final Traffic,Pre-feasibility,

Feasibility Environmental

Annual plan, Medium termplan

Follow up

NewConstruction

Reconstruction

Rehabilitation

Quality,Research andTechnology

Cost Estimation Traffic Safety



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Legal aspects impacting the functioning of the Department: New Road Law is still under discussion and the existing law (from 1998) is still in effect. A new Procurement law (enacted 13 July 2002) impacts work progress by slowing down the procurement of

consulting and special services (research and science) A new Planning and Construction law (enacted 13 May 2003) has introduced new procedures for obtaining permits

and more restrictive urban construction conditions. The new law is considered too specific in some aspects and toovague in others, many supporting regulations and guidelines are needed.

Financial and budgeting situation: Plan and program is prepared on an annual basis. It is presented in October of the year before and usually

approved in the April to June period of the budget year. Normally there is a budget execution delay of 2-3 months. The actual amount received is between 70-80% of the approved budget. This situation generates a deficit that isthen covered by the following years budget.

Budget priorities are occasionally determined (or influenced) by non-technical criteria.

Performance, control and evaluation issues: Serbias long period under sanctions caused a disaster in road network condition and management Department understaffing is one of the reasons for weak performance, control, and evaluation functions

Due to low salaries, it is difficult to attract and retain high-level, experienced experts. Realization of planned activities depends on, or is obstructed by, the financial conditions The main measure of program performance is the preparation of a mid- and end-of-year budget execution report



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The Department is facing a number of difficulties and issues, most notably:

To avoid delay caused by understaffing, Department engages outside experts. This solution is causingdissatisfaction in the SRD staff because hired experts are much better paid for the same work.

Lack of a long-term strategy for the road sector produces short-term or inadequate solutions. The design and technical standards currently in use are more than ten years old. There is a need to update and

improve these standards and harmonize them with those of the European Union. Lack of a modern, efficient consulting industry leaves SRD with inadequate technical support. There is sufficient

consulting capacity in the existing road institutions but they are poorly organized. Assistance is needed inorganizing these institutions to become modern and competitive businesses.

SRD has an obsolete internal organization that does not foster communication and the formal exchange ofinformation. Communications between departments is weak. Meetings are not properly documented. A neworganization structure and internal policies are needed to address these problems.

It is hoped that the new Road Law will help solve some of the issues affecting the Directorate (particularly the statusof the Road Directorate, the method and availability of road financing, and SRDs external relations).


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The Department has a staff of approximately 26 people to carry out its responsibilities. This includes approximately 16professionals and technicians to supervise and monitors operations in the field. The field staff is supplemented byconsultants to help supervise and monitor works and to conduct material tests.

The Department Head considers the Department to be understaffed and to not have enough qualified staff. There is animmediate need to employ: 4 engineers to assume responsibility for traffic markings, road signs and traffic safety 1 environmental specialist (if not in the Department then in some other department of the Directorate), 1 deputy,

and 1 secretary More inspectors to enforce rules and regulations.

According to the Department Head, the Department needs training in basic computer operations, MS-Office, projectmanagement, and English language.

Currently, the Department is involved in two important tasks: Preparation of a three-year duration pilot maintenance-by-contract program. The World Bank and cover an area in

west-central Serbia will finance the program. The program is expected to begin in 2004. Preparations to coordinate work activities of the SRD with the privatization of the Road Enterprises. The

privatization of these Enterprises will occur gradually over the next several years with the more competent onesprivatized first. The Department will need to ensure that this privatization process leads to competition among roadcontractors and does not simply exchange one form of monopoly for another.

The Department is facing a number of difficulties and issues. Most notable are: Inadequate salaries Absence of an updated master plan and strategy to organize improvement and maintenance activities on a long-

and medium-term basis Some overlapping in roles and responsibilities Numerous demands by the police for safety related works. The Department often cannot fulfill these demands

because of budget restrictions. The police then issue citations that the Department has to address in court. Long bureaucratic procedures to obtain construction permits and to enforce rules and prosecute offenders for right-

of-way encroachments and over weight vehicles. Land related issues are some of the biggest technical problems facing the Department. For example:



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ROW invasions, such as illegal buildings, services, and access roads and construction w/o permits Lack of specialized land administration courts and judges Lack of effective rule enforcement. There are only 10 inspectors. Given the number of rules and regulations to

be enforced, many more inspectors are needed Land records have not been regularly updated

Traffic safety issues: Lack of permanent driver control and adequate punishment measures Users dont follow traffic rules Lack of police enforcement in well known danger spots Main causes of traffic accidents: ignoring traffic safety rules, poor pavement surface, speeding, etc.

The police investigate and report on accidents. There is, however, no cooperation between police and SRD.The Directorate cannot directly and easily obtain accident statistics and reports and. Therefore, cannot analyzeaccident causes, consequences, and impacts

Axle load issues: Obsolete design standards that do not account for the higher axle loads of modern trucks. The design

standards need to be updated to current European standards Lack of enforcement of existing vehicle weight regulations Ineffective vehicle overweight fines. The fines are so low that users prefer to pay the fines rather than comply. Over weight vehicles are one of the prime causes of pavement deterioration Lack of studies to show the consequences of excess axle load in the network Trucks by passing the motorways to avoid paying toll. This results in the destruction of the Main and Regional

roads that are used as alternatives



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INFORMATION AND DOCUMENTATION CENTER DEPARTMENT

The Information and Documentation Department is responsible for:

Maintaining, updating and operating the SRD information technology infrastructure (servers, file backup, etc.), tosupport all road directorate employees computer needs, and

Providing support to the Planning and Development Department and others with their databases.

The Departments customers include other SRD departments, road designers (public and private), industrial users, andothers, specifically:

Planning and Development Department

All SRD computer users- Ministries, State organizations Consulting Service organizations such as: HI, CPV, CIP, and IMS Civil engineering faculty Traffic faculty at University of Belgrade Police for traffic data Private enterprises such as Yugopetrol for the possible location of gas stations and other motorist support facilities

The Department is responsible for the following databases: Road database covering the 16,000 km of arterial and regional roads Bridge database covering about 2,500 bridges (bridges in Kosovo are not included). One bridge inspection of all

bridges has been completed in the past 10 years. A second cycle of inspections was begun in 2003. Traffic database covering 117 traffic counters, principally along the arterial road network Tunnels. The database is being developed and will include information about approximately 80 tunnels Landslides. The database is still under construction and will record information about slippage and ground

settlement problems under and along the roads Database on commercial objects: for example, fuel stations, restaurants, etc. Toll collection information (vehicle counts, revenue collection) is processed by the Toll Collection Department.

Important legal aspects related to the Road Law are:



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-- Article 71 (new article), in the new law, indicates that MoTT is in charge of strategy for road network maintenanceand development and harmonization with other transport modes

-- Article 73, in the old law, says SRD is obligated to produce 5 year plan for road network and annual plans for road

network. (Item 3). SRD is also required to produce program for maintenance. SRD is obligated to produce theseplans based on the condition of road network (Item 7). These articles mean that the SRD must monitor the roadnetwork condition for purposes of effective management. Item 8 requires traffic counts. Item 9 requires the SRDto give notification to the public about the road condition. Item 11 obliges the SRD to keep records, in other words,manage its documents.

These articles provide the legal basis for some of the hardware, software, and staffing needs

Important financial aspects For the 2003 fiscal year, the Department asked for about 1 to 1 percent of SRD budget but received only 1/3 of itsrequest

Last year Department prepared a study for road works using the HDM-4. This study was used by the IFIs, but SRDinternally used only a small part of the information in its annual planning process

Most of the Department funding (approximately YUM 50 Million) goes to the institutes to pay for engineeringservices

Control and Evaluation The performance of the Department is not formally measured. In SRD, the Director monitors senior managers. There are two financial controls within the Department

There is an internal monitoring of spending The SRD Finance Department monitors expenditures. Finance department will give a warning if a department

is spending too quickly or exceeding the yearly program. It will also advise the Director. The Department occasionally prepares reports for upper management of the SRD. Sometimes, the Department

prepares internal reports. For example, a report may be prepared on contractors works, planned versus actual.

Problems faced by the Department Most significant: the low salaries Second: the need for additional staff Third: the lack of stable funding for regular works and permanent development



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Main challenge facing the Department in the future is increasing the usage of the databases and other informationsystem resources to improve the planning and business processes in SRD. The integrated information system isdiscussed in detail in Chapter IX Management Information Systems Analysis.



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THE REGIONAL CENTER - NORTH

The Regional Center - North is responsible for the management of all road related activities in Vojvodina. Maintenance

consist of: routine, repairs and emergency of: 100 km of Motorways (Belgrade Croatia) 170 km of semi-motorways (Belgrade Novi Sad Hungarian border) 1,300 km of main roads 1,700 km of regional roads

There are 25 people total working in the Center. The capabilities of the staff are considered adequate for the type of

work the Center performs.

According to the Head of the Center, additional staff is needed, as follows:

Two engineers to replace older technicians who will soon retire One mid-level person to handle documents One technical-level person in the legal section.

According to the Head of the Center, training needs include: MS Office, project management, effective use of theinternet, and English language.

Budgeting procedure: collect road condition and needs; prepare a summary of needs; add the needs from municipalities;send budget to Belgrade for government approval. Traditionally, the Department receives about 50% of the fundsrequested.

Budget implementation priorities are based on traffic volume, road condition and safety.

Legal aspects:

Road Law: Lack of funding doesnt allow fulfilling regulations regarding maintenance


U b Pl i d C t ti L Thi i l i id d t ifi Th i i i th L ld


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Urban Planning and Construction Law: This is new law is considered too specific. The provisions in the Law wouldbe better implemented by supporting regulations rather than articles in the Law itself.

Procurement Law: procedures are too long and repetitious; Law doesnt take into account the lack of sufficient

qualified bidders

Control and evaluation: The performance of the Center is not formally measured. There are monthly meetings betweenthe head of the Department, supervisors, and technical staff. Each section prepares a report of activities performedduring the month and a plan for the following month. A report is also prepared regarding the quality of the work based onlab results. The Center also prepares a Half of the Year and an Annual Report.

Relation with other agencies, the Center has good cooperation and communications with the following agencies: Road Directorate in the municipalities Water authorities Electric power utilities Railways (to maintain railway crossings)

Issues and problems: The biggest problem facing the Center it is its relation with the police. Traffic police continuouslyask the Center to perform specific works that were not included in the budget. If the requested work is not performed,

the police initiate legal actions against individuals within SRD. These actions divert SRD staff from their duties andconsume valuable time.

Success factors to ensure the continuous good performance of the Center: Replace staff that will be retiring Provide testing and data collection equipment to facilitate work:

Improve quality control of works (asphalt testing, pavement marking paint) Regular pavement condition monitoring and recording pavement condition before/after works Roughness measurement Monitoring of road inventory (for example having a digital camera to record work done (e.g. installation of

signs) and other situations/conditions)

Miscellaneous Except for gas stations, the Center handles all the permits related to roads.


A le loads are checked ia a contract ith CPV


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Axle loads are checked via a contract with CPV Traffic safety is a problem but, in the last two to three years, the situation has been improving. (Traffic police handle

accidents, but it is very difficult to obtain statistics from them).


GENERAL AND LEGAL WORK DEPARTMENT


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GENERAL AND LEGAL WORK DEPARTMENT

Responsibilities:

Supporting the legal and general administrative matters at the SRD Preparing organizational enactments Drafting special contracts Reviewing standard contracts Handling land expropriation Handling claims with the courts Handling transgressions

Responding to legal related mail Keeping track of SRD staff attendance records

Staffing:- According to the Department Head, the Department is understaffed- Currently, the Department has 14 employees - 6 high level educated professionals, 7 medium level and one

assistant- The staffing needs are:

Lawyer (1) Lawyer for Novi Sad office (1) Land Surveyor (1) Agricultural Engineer (1) Office assistant to handle mail

Training needs: the Department Head identified the following training needs:

Basic PC operation MS-Office Labor related issues Legal procedures



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Traffic litigation Insurance regulations

Contract preparations Attendance at professional seminar/forums and other legal related events; etc.



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Budget aspects: Department budget is prepared by the Finance Department. Money needed for legal matters but notprovided for in the budget is taken from the general operating funds.

Control and evaluation: The Departments performance is not regularly measured. Financial control is done by theFinance Department. No other control and or evaluation take place.

Legal aspects. The Department interacts with the following legislation

Criminal Law Litigation Law Business transgressions Law Constitutional cases Law Administrative disputes

Law Labor Law

Enforcement procedures Law Obligation Law Road Law Expropriation Law Inheritance Law Ownership/Legal Relations

Law Registration Law Cadastre Law State Properties Law Procurement Law Traffic Law Public Attorney Office Law Forestry/Water management

Law Public Administration Law Administrative procedures

Vehicle size and axle loads regulations Non-litigated procedures

Issues and problems: The biggest legal problem facing the Department has to do with the application of the LandExpropriation law.- The Law authorizes the government to establish the public interest for land expropriation for required construction

as long as the owner is fairly compensated. Determining the fair compensation is a difficult issue, however.- One of the difficulties arises from the recorded property values verses the actual value. In order to avoid taxes,

many property transactions are reported at much lower values then the actual value. When the government

attempts to use the reported values as a basis for compensation, the property owners object.- Another problem is proving ownership of property. Many properties are not recorded in the cadastral registry.


FINANCIAL, ECONOMIC AND COMMERCIAL DEPARTMENT


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FINANCIAL, ECONOMIC AND COMMERCIAL DEPARTMENT

Responsibilities:

Tracking all the SRD money, based on annual plan. Implementation of the financial and accounting regulations that apply to SRD. Accounting standards are SCG

standards. Organizing the drafting and liquidation of all financial documents. Drafting accounts and reports twice per year, January to June and July to December. Preparing and paying the payroll and paying for all expert services.- Managing accounts payable and accounts receivable

Staffing: The Department has 15 staff working at the headquarters and 26 at various locations on the pay toll system Headquarter staff: the Department head, two experts (one in investments; the other in financial resources and

loans) Accounting service has eight people and the financial operating service has four people. According to the Department Head, four additional people are needed at the headquarters. The field staffing seems

to be adequate.

Training needs identified include foreign languages, professional and advanced training, and basic PC operation.

Legal aspects: The Department interacts with the following legislation

Road Law Budget Law Tax Law Excise and Sales Tax Law Law on Foreign Exchange Procurement Law Law on Credit and Transactions with other Countries

Financial-budgetary aspects: Road tolls go to State budget not directly to an SRD account. The State Treasury owes 350 million Dinars to SRD.

This situation causes problems with payments to creditors. In year 2002, the initial SDR budget was 6.5 billion Dinars. The Ministry of Finance reduced the amount from 6.5 to

5.033 billion Dinars. SRD made commitments for the 6.5 billion and had to use the funds from year 2003 to meetthose commitments. This problem continues to occur.


Budget amounts. In the budget law for year 2003, SRD was allocated 8 billion Dinars (to be disbursed in 12


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g g y , (monthly installments). To date, 4 billion Dinars have been paid. This means payments are behind by about 1.3billion Dinars. Therefore, the SRD is not expecting to receive the full 8 billion Dinars.

The new Road Law considers that the SRD budget should come from fees levied on fuels instead of from thebudget.

Currently, if needed, the SRD can ask for additional funds beyond what they have been allocated in the budget,provided that sufficient justification is submitted and approved.

In summary, there is a significant difference between the amount of funding that is requested in the initial SRDprogram and the actual allocated funds. It is not uncommon in recent years for the SRD to receive only 30% of itsoriginal budget request

The SRD usually receives approximately 80% of the approved funds from state budget for fiscal year. By law, all transactions have to be made in Dinars. SRD pays a 20% tax on procurement of materials and services for road network maintenance. In 2002, for

example, SRD had to pay 1.2 Billion in tax. This is a significant impact on the funds available to purchase materialsand services. Under existing laws, there is no tax on materials and works for new constructions. (Consultingservices are charged with a 20% tax in both cases.)

Performance, control and evaluation:

There is an external control carried out by the tax authority and by the Financial police. The following reports are prepared: Financial Operations report and the Annual report for works completed

Critical success factors: Satisfactory coordination with other departments within SRD, especially in the preparation of timely reports with

required financial information. Preparation and presentation of timely invoices, which are normally due on the 10thof the month

Problems and issues: Budget cuts, which severely impact planning and operations Low salaries

Interaction with other agencies: National Bank of Serbia, Delta Bank, and other commercial banks.


Ministry of Finance:


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Weekly controls (this is onerous) Contacts for interpretation of laws and regulations (for example, the law on excise duties)

MoTT for an increase in tolls and for investments for new sections IFIs (specifically: EBRD, EIB, and World Bank.)

HIGHWAY DEPARTMENT

Highways is used in Serbia to mean the motorways and semi-motorways

Department responsibilities:- Management of construction works on the motorways and semi-motorways- Management of maintenance works on the motorways and semi-motorways- Coordinate planning of works with the Department of Planning and Development

Toll collection on the Belgrade Nis and the Belgrade Croatia border motorways and the Hungarian border Belgradesemi-motorway is performed by the Toll Collection Department

Department has 12 staff positions:- Head of Department position currently vacant; the Director performs the department head functions- One database analyst- Four construction supervising engineers- One investment specialist- Two maintenance supervising engineers- One systems engineer

- Two maintenance technicians

Organization and operation:- Management responsibility divided into four areas:

Belgrade Croatia border Belgrade Hungarian border Belgrade By-pass


Belgrade Nis Macedonian border


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- Each area is managed by one of the engineers who report directly to the Head of Department- Construction and Rehabilitation works are normally performed under contract

- Maintenance is performed by one of the Road Enterprises Belgrade Croatia border by Vojvodinaput-Sremput, based in Ruma Belgrade Hungarian border by Vojvodinaput Backaput, based in Novi Sad and Company Vojput

Subotica, based in Subotica Belgrade By-pass by SerbiaAutoput, based in Belgrade Belgrade N Macedonian border is by SerbiaAutoput and PZP Vranje, based in Vranje

- Supervision of the work is also split: Regional Center North personnel supervise the sections in Vojvodina (Belgrade Croatia border and

Belgrade Hungarian border) The other sections are contracted to either the Highway Institute or the Institute for Testing Materials


TOLL COLLECTION DEPARTMENT


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Primary responsibility is toll collection on all Serbian motorways. They are required to organize toll collection in the most

effective possible way and to minimum costs.

Staff:- About 850 people most of them are toll collectors- 65% permanent, 35 % temporary. Temporary employees have a fixed time of employment.- Department needs to use temporary employees to meet staffing needs- Temporary employees do the same job as the permanent employees

According to the Head of the Department, the department is currently properly staffed.

Department is part of SRD. Because of this, their salaries are not competitive and they cannot attract highly skilledtechnicians/engineers.

Department has a process for monitoring financing performance. The Department of Planning and Development (DPD)performs this function. Toll Collection Department provides its annual plan to DPD. The procedure is very formal and very

detailed. There are monthly, half yearly and annual reports produced. The reports compare forecast and actual numbersof vehicles and revenue

They have internal controls to check if toll collectors are doing their job correctly. This process is constant and random.They prepare a report on each check that they do. They also have a second level of checks, which actually stop the tollcollection in that booth and perform an audit. If there are problems, a report is given to the legal department, for followup. Investigations could result in disciplinary action

According to the Head of the Department, the reports show that there is no problem

Planning of construction and rehabilitation of the motorway is done by the Department of Planning and Development

There are some major changes in the near future: a new toll collection system and revised toll fees


Department is seeking a contractor to implement a new electronic toll collection systemWill b bl h i l t t t id ll th i d i


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- Will probably have a single contractor to provide all the required services- System to be operational within two years

- All existing equipment will be replaced and new equipment will comply with European standards- New system will provide interoperability with European systems- Objective is to decrease as much as possible the use of cash- System will cost between Euro 8 to 9 Million and be funded by the SRD budget no loans will be required.- New system will be on existing toll plazas. Existing lanes will be combined to provide electronic and manual toll

collection- Will still need the staff in toll booths- New staff skills will be required in the fields of: technical knowledge, financial knowledge, legal support- Probably not much impact on staff numbers- Does not mean additional staff, rather, staff with different skills- Training will be provided by the contractor which provides the toll system- Department will not maintain the new toll system, however, Department will need to have staff who can identify

problems

A second major change is for the toll fees

- Currently, toll fees are different for foreign and domestic vehicles- Toll fees are being revised to be equal for both types of users and on par with European toll rates- Timing and process to achieve the revised fee structure is not clear

Road maintenance on the motorway is currently managed by the Highways Department of SRD. SRDs Directormanages Highways Department. Highways Department is separate from the Arterial and Regional Road Department.

There are various interfaces with other departments/agencies. These include: National Bank for foreign exchange

matters. Department must charge a 20% fee for foreign exchange. Department was forced to implement this decision byNational Bank. This has caused complaints, long lines of traffic, etc. New legislation would have to be passed to allowpayments of tolls in foreign currency without the surcharge.

The State receives income from various concessions for fuel stations and motels along the motorways. Thoseconcessions are not the responsibility of Toll Collection Department


There are a variety contracts with suppliers and contractors for services such as maintenance of existing equipment and


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There are a variety contracts with suppliers and contractors for services such as maintenance of existing equipment andsupply of paper supplies. The SRD Director is authorized to sign contracts according to emergencies, plans and

programs.

There is need to place communication fiber optic cable between all booths, so they can have real time monitoring. Thiswould be an effective improvement

Safety is a problem on the motorway. Department is not responsible for safety. Safety problems include:- Unrestricted access by unauthorized vehicles, pedestrians, and animals to the carriageway from outside the road

reserve. Could be improved by putting fences along right-of-way- Pavement is badly rutted, which causes vehicle control problems, especially when it is raining- Relatively old horizontal and vertical signs. New technology could help be installing travel advisory warning signs.- Age of vehicle fleet in Serbia (average age is 15 years)

One significant operational problem is the procurement process- Department has no fund for small immediate spending. Department does not have authority to make relatively minor

spending decisions to respond to common, frequent problems such as computer system breakdowns and

repair/replacement of toll booths.- These types of responses need to be made immediately. For example, if a booth burns or is hit by vehicle, it needs

to be put back into operation quickly.- The Head of the Department proposes that the Department have a fund at its disposal based on some percent of

income. (He proposed to 10-12% of revenue.) The fund would be used, as required, for the effective operation ofthis department such as making the immediate repairs necessary.

Two other concerns voiced by the Head of the Department were:

- The money collected in tolls should be used on toll roads, for example, to improve service and expand the network- New Roads Law will allow concession companies to be established. Establishing such companies to provide

various services would improve the quality and lower the cost


OUTSIDE AGENCIES - THE HIGHWAY INSTITUTE (HI)


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The Highways Institute is an important provider of engineering services to the SRD

HI is a scientific research and design institution established 53 years ago capable of providing consulting services intransport infrastructure. It is the biggest and oldest of such institutions in Serbia.

The HI has experience and it is capable of conducting studies, design and supervision of works, for roads, city streets,bridges, railways, tunnels and airports

The main HI client is the SRD which provides 70-75% of their income. The HI also provides engineering services tocities, and few foreign countries.

The Institute employs 420 employees, of which, 160 are engineers. The disciplines covered are, highway design,geology, traffic engineering, material testing, surveying and land surveying, road condition surveys.

The HI owns several laboratories and has been ISO 9001 certified for the past six years. For construction supervision,they have 60 employees, plus quality control laboratories.

Fifteen years ago, the HI prepared the SRD master plan.

For the past 4 years, the HI has had a contract to collected data. The HI also had contracts for the bridge and tunneldatabase and the landslide database.

The majority of the Institutes equipment is getting old and is in need of replacement. HIs current level of income cannotcover the replacement costs.

The HI feels a negative impact from the new Procurement Law. The competition provisions of the Law allow small firmsto compete against it successfully.

According to the Privatization Law, the HI will have to be privatized under the auction procedure. Tenders will be called

by 2007.

Some of the problems affecting the HI are:

The upcoming privatization is causing great uncertainty among the staff. The large number of employees means they always need a large pipeline to keep everybody busy. Obsolete equipment and unstable funding.


OUTSIDE AGENCIES - THE ROAD CENTER OF VOJVODINA (CPV)


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The Road Center of Vojvodina (CPV) is an important provider of engineering services to the SRD in the Vojvodina region.

Significant facts about the CPV are:

CPV under contract with SRD, is responsible for carrying out the following activities:

Supervision of works Traffic-economic studies Design of traffic signalization and regulation Assembling road condition data Land surveying and mapping Preparing road condition database Design-technical documentation for civil engineering structures, bridges, project management Quality control for asphalt, concrete and aggregates Studies and accompanying designs related to work and road structures Preparing databases for roads, bridges and traffic volumes Testing of materials and soils, geological explorations for the design and implementation of works

CPV has a mix of experienced road professional staff to carry out engineering and transport economic studies, roaddesign and construction supervision. CPV staff numbers 150 people. They are housed in several buildings and are

seriously considering building a new one to consolidate their locations.

CPV purchased ROMDAS, a set of road condition inventory data collection equipment that allows CPV to collect avariety of road data used, together with HDM-4, to prepare project analyses and road investment plans. Along with theequipment, CPV received the training to operate the equipment.

According to the privatization law, CPV is scheduled to be privatized by 2007

OUTSIDE AGENCIES - THE INSTITUTTE FOR TESTING MATERIALS OF REPUBLIC OF SERBIA (IMS)

IMS was established by the Academy of Science in 1949- Has 12 departments, one of which is Roads- Originally structured, staffed, and equipped to address needs in all of the former Yugoslavia- Now adjusting to the smaller market in Serbia


IMS is owned by its shareholders and there is a stakeholders assembly. That assembly names the Managing Board and


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IMS is owned by its shareholders and there is a stakeholder s assembly. That assembly names the Managing Board andthe Executive Director. Shareholders own 27% of the company and 73% is public property

There are approximately 300 employees, of which about 150 have university degrees

Roads department has a staff of about 40- 18 engineers, including civil and others- One computer expert and one traffic engineer- 3 divisions: Laboratory, Construction Supervision and Research and Development

The staffing level in recent years has been steady. When revenues rise, they are able to increase salaries. But theRoads Department is only one department in IMS. Because the Roads Department is profitable, it is expected to support(subsidize) the other departments


Services provided:

Scientific Research and Development Research and Development of Quality Control Services


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Scientific Research and Development Research and Development ofStructural Systems

Quality Control Services

Feasibility Studies Preliminary/Final Design Asphalt Mix DesignPreparation of ConstructionSpecifications and Bid Documents

Authorized Testing and Certification ofConstruction and MaintenanceMaterials

In-Situ Testing of Constructed Works

Bid Evaluation Construction Supervision Pavement Desi