The Changing Approach to Infrastructure Asset Management
“An ounce of prevention is worth a pound of cure.” – Benjamin Franklin
This famous quote by Benjamin Franklin is particularly applicable today when it comes to Australia’s aging infrastructure. Historically the approach to funding infrastructure maintenance has been somewhat more reactive than proactive; delaying the inevitable deterioration impact on assets, particularly in the transport infrastructure area.
Without carefully considered maintenance investment across infrastructure assets we rapidly approach the time at which significant rehabilitation or replacement investment is required to maintain the current levels of service. The approach to infrastructure asset management provides the opportunity to proactively look at maintenance investment and stretch constrained maintenance funding further than it ever has before.
Globally, major infrastructure maintenance funding will never be abundant for the ongoing maintenance and improvement of assets. With a lack of funding comes the need to drive the maintenance dollar further. Asset owners are increasingly looking to deliver more with less, optimising their existing budgets to maintain their infrastructure.
In the current market with a relatively low level of capital expenditure, asset management and maintenance investment optimisation is taking centre stage with the emerging asset management profession fast becoming a focal point in both the public and private sectors alike. It’s becoming apparent that the approach to managing assets and allocating maintenance funding to do so needs to change. This has opened a window of opportunity for firms with a detailed understanding and experience in infrastructure asset management to gain traction within the Australian market providing increased value for money for asset owners.
The new approach looks to minimise costs and maximise operational efficiency, aiming to cut costs over the duration of the asset lifecycle. We believe this can be accomplished by adopting a true asset management approach to infrastructure development. Not just by forming complete asset inventory databases and maintenance processes, but by developing comprehensive asset management plans that consider the lifecycle cost of the asset in order to make both strategic and tactical decisions related to the long-term performance and maintenance of the asset. Simply put, doing more can actually cost less, extending the life of the asset.
The total asset management approach requires us to redefine the infrastructure development lifecycle. No longer can we think of the infrastructure development lifecycle as a series of linear and distinct phases. Instead, we need to think of asset management as an interdependent, connected process throughout the infrastructure lifecycle. It’s about using data analytics, coupled with a risk-based methodology, to prioritise projects and maintenance investment to optimise the performance of an asset and achieve the right balance between routine maintenance and major rehabilitation.
The value of effective asset management can be hard to quantify without long term studies. A past review by the Florida Department of Transportation in the US looked at existing maintenance procedures and costs compared with a new management approach incorporating an asset management contracting methodology for maintenance contracts between 2002 and 2010. The study was able to determine operational savings of over 17% throughout the life of the contracts totalling US $105 million. In addition, this asset management approach increased the structural remaining life of a significant bridge network on average by 2.4 years utilising only existing maintenance funding. Results such as these are crucial in identifying the need for, and encouraging investment in, a new approach.
The landscape in Australia though is changing. There is both an art and a science to asset management and balancing potential costs and benefits against perceived risks may seem like a daunting task. Collectively, the public and private sectors have the knowledge and expertise to work together to better inform key decisions about our long term infrastructure investments. At HDR, we are working together, partnering with clients to take those first steps to change the approach to asset management and drive long term, sustainable value for money initiatives.