Sustainable Asset Management Planning

Tony Miguel17 June 2005

A plan developed for the management of one or more infrastructure assets that combines multi-disciplinary management techniques (including technical and financial) over the lifecycle of the asset in the most cost-effective manner to provide a specified level of service. A significant component of the plan is a long-term cashflow projection for the activities.

Asset Management Plan

• 90% of costs of infrastructure service delivery are due to the physical assets

• 10% administration & overheads

• 50% of assets created by development and subdivisions

• The challenge for asset managers is achieving sustainable asset management and addressing the life cycle costs and consequences

Lifecycle Costs

• Build a pipeline/footpath/road/park worth $2million

• Useful life, say 50 years

• Life cycle cost

• - Depreciation $2,000,000 ÷ 50 = $ 40,000pa

• - Loan repayment = 100,000pa

• - Maintenance @ 0.5% = 10,000pa

• - Management = 1,000pa

• Annual cost $151,000pa

• Total lifecycle cost $151,000 x 50 years = $7.55 million

• Little opportunity for change once the decision has been made

• Key questions: Do we need the asset, what is the level of service?

Lifecycle Costs

Drivers• Legal

-LGA 2002 (Social, economic, cultural and environmental)

- RMA 1991(Sustainable management)

- LTMA 2003 (Sustainable transportation)

• Strategic Platforms

• Community/customer expectations

• Standards

- Auckland Regional Council: Air, Land and Water Plan

-Transit NZ

• Growth

- Population

- Economic

• Asset Condition

Asset Management Planning Process

Cost / Benefit / Risk /

Affordability

Asset Management

Plan

LTCCP

Community Outcomes

Strategic Objectives

Levels of Service

Asset capacity and condition

Options including non-

asset

Integration

• Roads, Parks, 3-Waters, Property, common priorities, affordability

• Multi-discipline approach

• People

• Systems

Process

• Consultation on Levels of Service

• Consultation on Assessment of water, wastewater and

sanitary services

• Develop sustainable, robust, affordable Asset Management Plans for 2006 LTCCP

• Consultation on assessment of water, wastewater and

sanitary services

Strategies

• Water Strategy

• Transport Strategy

• Development Contributions

• Parks Strategy Review

• Leisure Strategy

Conclusion

• In Auckland estimated Capex $15 to $20 over next 10 years

• Sustainable management required to minimise costs and adverse effects on communities and environment