Budgeting Performance-Based Winter Maintenance: Snow Influence on Highway Maintenance Cost

Swedish contracting of winter maintenance is combined with weather-regulated payment since the beginning of the 1990’s. It reduces the weather risk for the contractor and has helped performance-based specifications to find acceptance. The performance-based approach was introduced to save costs and create incentives for innovation. Theory and practice are often unconnected since the mathematical links are lacking behind the political rhetoric around performance-based contracting. This study attempts to bridge some of the gap between theory and practice by linking a climate factor, snow, to highway maintenance costs. To handle the complexity of weather, an iterative process was assumed necessary, with simplification as a first step. An answer was achieved to the two research questions: which stations correlated best with costs and what the winter maintenance cost would be, given the snowfall at these stations. Once having achieved this answer under simplified circumstances (one weather parameter, one region, few observations, linear relationship), the assumptions were relaxed, one after the other, in second and third iterations, to increase the generalizeability of the method and the results. Maintenance cost and weather data of Washington state were used. The method can be used anywhere where the actual costs of the maintenance are known. In countries and regions with privatized highway maintenance, like in Sweden, British Columbia, Alberta, and Ontario, the actual costs are not public. The lessons learned from this study may therefore be of particular interest to such privatized systems. The study supports that the Swedish road weather information system stations are in the right spots and proposes snowfall to weather regulate the payment to the contractor.