In order to improve asset investment decision-making and achieve sustainable improvements in business performance, utilities must better understand asset condition, asset performance, remaining life and risks. Worldwide, annual expenditure on the maintenance and rehabilitation of water/wastewater reticulation pipes is estimated to be over $33 billion per year, and this is expected to rise significantly over time as aging assets continue to fail at an ever-increasing rate. The long-term cost implications for a utility with a poorly structured replacement/renewal regime can be dramatic. A formal asset management program can help this problem.
A formal asset management program that includes condition assessment can enable an organization to better understand asset condition and remaining life allows for proactive budgeting for renewal/replacement of expensive and high-risk assets.
This article will discuss how condition assessment relates to asset management; how to set up a targeted condition assessment program to support asset management; and how condition assessment data can be leveraged to support decision-making.
Recent infrastructure studies undertaken in the UK, Australia and the US have shown a common theme - that the state of existing water infrastructure is deteriorating and there is a significant level of renewal/replacement investment required to ensure that water utilities can continue to deliver services to their communities.
Worldwide, annual expenditure on the maintenance and rehabilitation of water and wastewater reticulation pipes is estimated to be over $33 billion per year, and this is expected to rise significantly over time as assets continue to deteriorate. Utilities also need to maintain aboveground assets such as treatment works and pumping stations, so as to ensure continuity of supply and compliance with water quality standards.
The challenge for water utilities is how best to manage their assets with limited replacement funds, while maintaining a satisfactory level of service to customers and the environment. Since the long-term cost implications for a utility with a poorly structured renewal/replacement regime can be dramatic, a formal asset management process that includes a condition assessment program can help meet this challenge and enable an organization to better:
- Meet customer service expectations as well as legislative requirements
- Determine the risk of failure (probability vs. consequence) associated with different assets, and therefore prioritize spending within limited budgets
- Understand asset condition and remaining life, allowing for proactive budgeting for renewal/replacement of high-risk assets
- Quantify the benefits of different management/operational strategies
- Determine asset value and comply with accounting standards such as GASB 34
This article discusses the benefits of undertaking a formal condition assessment program and illustrates how condition assessment relates to asset management.