Analysis of Moderating effect of Performance Based contracting on the relationship between Road Assets Management and Performance of Road Agencies in Kenya

Abstract

Road asset management (RAM) is a comprehensive approach that harmonizes engineering principles, sound business practices, and economic rationality to achieve desired outcomes at the most cost-effective whole-of-life cost. Typically, road agencies (RAs) bear the responsibility of RAM. A substantial portion of Kenya's road network is in a poor or failed condition and necessitates urgent reconstruction. The government and the public are putting more pressure on RAs to boost the productivity of RAM. RAs in Kenya are deliberately transitioning away from traditional engineering approaches towards a collaborative RAM to meet the growing demand for improved road conditions. The aim of this study was to determine the moderating impact of performance-based contracting (PBC) on the relationship between RAM and RA performance. A correlation survey design was adopted, with a study population of 120 purposively selected employees directly engaged in project implementation. The findings indicated that the R2 for the RAM was 0.839 demonstrating that road assets management is responsible for 83.9% of road agency performance. The R2 for the impact of PBC on RA performance was 83.2, indicating that PBC accounts for 83.2% of RA performance. The R2 change was statistically significant at 0.161 (P=0.00), demonstrating a moderation effect of PBC. Overall, the findings imply that RAM and PBC make a substantial contribution to the performance of road agencies. Therefore, the study recommends that road agencies should include RAM and PBC in their road maintenance policy to improve overall road quality and meet stakeholder expectations.