Iimi, Atsushi; Benamghar, Radia
World Bank
Policy Research working paper ; no. WPS 6029
April 2012
The world's climate is changing. It is well recognized that technical standards and project specifications of public infrastructure have to be adjusted, depending on the climate. However, it is less recognized that the public infrastructure procurement also needs to be adjusted. This paper examines a particular case of rural road procurement in Nepal. Severe weather conditions, such as heavy rains and storms, are likely to interrupt civil works and wash away unpaved or gravel roads. It is found that heavy precipitation causes delays, but not cost overruns. The paper also shows that budgetary efficiency and credibility could be improved by taking climate conditions into account. If future precipitation were anticipated by backward-looking expectations, many large project delays could be avoided. If the autoregressive precipitation model were used, the vast majority of the observed delays could be eliminated.
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Showing posts with label Nepal. Show all posts
Showing posts with label Nepal. Show all posts
Thursday, April 19, 2012
Tuesday, April 17, 2012
Optimizing the size of public road contracts
Iimi, Atsushi; Benamghar, Radia
World Bank
Policy Research working paper no. WPS 6028
April 2012
Procurement packaging has important effects on not only the bidders' bidding behavior, but also contractors' performance. By changing the size of public contracts, procurers can encourage (or discourage) market competition and improve contract performance, avoiding unnecessary cost overruns and project delays. In practice, there is no single solution about how to package public contracts. With procurement data from road projects in Nepal, this paper examines the optimal size of road contracts in rural areas. The optimum varies depending on policy objectives. To maximize the bidder participation, the length of road should be about 11 kilometers. To minimize cost overruns and delays, the contracts should be much larger at 17 and 21 kilometers, respectively. Compared with the current procurement practices, the findings suggest that procurers take more advantage of enlarging road packages, although contracts that are too large may increase the risk of discouraging firms from participating in public tenders.
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World Bank
Policy Research working paper no. WPS 6028
April 2012
Procurement packaging has important effects on not only the bidders' bidding behavior, but also contractors' performance. By changing the size of public contracts, procurers can encourage (or discourage) market competition and improve contract performance, avoiding unnecessary cost overruns and project delays. In practice, there is no single solution about how to package public contracts. With procurement data from road projects in Nepal, this paper examines the optimal size of road contracts in rural areas. The optimum varies depending on policy objectives. To maximize the bidder participation, the length of road should be about 11 kilometers. To minimize cost overruns and delays, the contracts should be much larger at 17 and 21 kilometers, respectively. Compared with the current procurement practices, the findings suggest that procurers take more advantage of enlarging road packages, although contracts that are too large may increase the risk of discouraging firms from participating in public tenders.
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