Asset Management Presentation

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  • 04/30/10
  • 04/30/10 Linear Linear assets are continuous in nature connected with each other by their inter-relationship as individual or in networks. Examples: Roads, bridges, pipelines (water, sewer, storm, gas), rail tracks and airport runways Non-linear A non-Linear asset typically occupies a finite space and can be identified by its location (co-ordinates) or grouped as part of a component and its sub-components. Examples: Mobile (Buses, cars, trucks or any transports vehicles) and Fixed (buildings, plants, pump stations, equipment, and facility) Tax supported: is generally supported by property taxation as parks, public facilities and urban road networks. Self-financing: are commercial, marketable or enterprise infrastructure provided by user pay basis. Some water utilities are provided commercialized user pay system. quasi-commercial or blended: are mixed of the two using both taxation and user pay system as public transit and recreation facilities.
  • 04/30/10
  • 04/30/10
  • 04/30/10
  • Infrastructure gap $50 to $125 billion, which is 6-10 times of all current annual infrastructure budget Deferred maintenance for ‘Big Sixes’ $564 million (2003 CWF) First Nations only will cost $475-560 million (2003 CAN$), to address the high and medium risks for water and wastewater assets Estimated cost for upgrading Canadian sewer infrastructure only is $11.8 billion (2003)
  • Water main breaks: Average 700 breaks per day in Canada and USA. Since January 2000, to today 1,352,018 breaks reported costs $4,056,056,685 to repair (approximately $3,000 per repair) Walkerton tragedy: E. coli 0157:H7 outbreak in Walkerton, Ontario, in May 2000, where seven died and over thousands suffered from contaminated drinking water. Each household in the town of 5,000 spent $4,000 on average as a result of the contamination. Estimated cost for the tragedy approximately $64 million. Peterborough flood in 2004 , estimated damage cost was $20 million to $40 million. Compensation provided $500 per household and $2500 per small business. Basement flooding 30,000 to 40,000 events per year costs average $3,000 - $5,000 per events (CMHC 2004)
  • Institute of Public Works Engineering Australia (IPWEA) International Infrastructure Management Manual AAS 27 Financial Reporting by Local Government Asset Management Quarterly International (AMQI) Newsletter on Strategic Asset Management Commonwealth Industrial and Scientific Research Organization (CSIRO) Water and wastewater systems
  • American Public Works Association (APWA) – conferences on public infrastructure AMSA – Managing for Public Infrastructure Assets AWWA – Publications and reports Federal Facilities Council (FFC) - Investments in Federal Facilities: Asset Management Strategies for the 21st Century FHWA Asset Management Office: Primers on Asset management, LCCA, GASB Transportation Asset Management Manual Software: LCCA, BMS, PMS National Association of College and University Business Officers (NACUBO) – Managing the Facilities Portfolio, Facility Condition Index (FCI) Others: WIN, WERF, TRB
  • Ranking: Asset by asset or group of assets (age, condition and risk)
  • PROGRAM LEVEL: High-level (generalized) decision-making / assessment based on performance of groups of assets and aimed at forecasting needs on a system-wide basis. Synonymous to “Top-Down Approach”. MIXTURE OF BOTH PROJECT LEVEL: Detailed assessment on an asset-by-asset basis used to prioritize one project over another. Synonymous to “Bottom-Up Approach”.
  • Asset Management Presentation

    1. 1. 1 Strengthening Communities WorkshopStrengthening Communities Workshop from Policy To Practicefrom Policy To Practice 11 – 13 April, 200711 – 13 April, 2007 Hotel Explorer, YellowknifeHotel Explorer, Yellowknife Municipal Infrastructure Asset Management Saidur Rahman, Ph.D. Senior Capital Planning Officer
    2. 2. 2 Act Locally and Think GloballyAct Locally and Think Globally Waste Reduced Life Society, Economy and Environment Roads, Bridges, Buildings, Transits, Fleets, Water, Sanitary, Drainage, Energy, Communications, Parks and Public Facilities Consumption Services Built EnvironmentBuilt Environment
    3. 3. 3 Presentation OutlinePresentation Outline  Understanding of infrastructure andUnderstanding of infrastructure and asset managementasset management  Why we need to care about?Why we need to care about?  BenefitsBenefits  Asset management plan developmentAsset management plan development  What is going on around?What is going on around?  Where we are now?Where we are now?  What to do next?What to do next?
    4. 4. 4 Municipal InfrastructureMunicipal Infrastructure  The Canadian Oxford Dictionary:The Canadian Oxford Dictionary: “infrastructure” as “the basic structural“infrastructure” as “the basic structural foundation of a society or enterprise; roads,foundation of a society or enterprise; roads, bridges, sewers, etc. regarded as abridges, sewers, etc. regarded as a country's economic foundation”country's economic foundation”  City of Edmonton: “all the physical assetsCity of Edmonton: “all the physical assets developed and used by the City to supportdeveloped and used by the City to support the community’s social and economicthe community’s social and economic activities”activities”  Community infrastructureCommunity infrastructure
    5. 5. 5  ClassificationsClassifications  Linear and non-linearLinear and non-linear  Surface and sub-surfaceSurface and sub-surface  Tax supported, self-financing and quasi-Tax supported, self-financing and quasi- commercial or blendedcommercial or blended (CWF – New Tools for New(CWF – New Tools for New Times, 2006)Times, 2006)  Community public infrastructure (CPI)Community public infrastructure (CPI)  Stationary and movableStationary and movable  Office buildings, fire hall, storage facilities, arena,Office buildings, fire hall, storage facilities, arena, recreation centres, water and sewage facilitiesrecreation centres, water and sewage facilities and solid waste disposal etc.and solid waste disposal etc. Municipal InfrastructureMunicipal Infrastructure
    6. 6. 6 Asset ClassificationsAsset Classifications
    7. 7. 7 Why Municipal Infrastructure?Why Municipal Infrastructure?  Livable and healthy placeLivable and healthy place  SafetySafety  Economic prosperityEconomic prosperity  Quality of lifeQuality of life  In Canada, municipal infrastructure worth $1.1 trillion, approximately 20% of total built asset of $5.5 trillion (NRC)  Municipal assets are economic backbone and extremely high-value assets that cannot be allowed to deteriorate or misuse
    8. 8. 8 Municipal Infrastructure IssuesMunicipal Infrastructure Issues  Population growthPopulation growth Population Growth of CanadaPopulation Growth of Canada [Source: The Sustainability Report] 42.312050 36.202026 32.742006 29.671996 24.821981 Population (millions) Year  Infrastructure demand – $90Infrastructure demand – $90 billionbillion (Infrastructure Canada)(Infrastructure Canada)
    9. 9. 9 Municipal Infrastructure IssuesMunicipal Infrastructure Issues  Municipalities areMunicipalities are spending $12 - $15spending $12 - $15 billion/year onbillion/year on maintenance and rehabmaintenance and rehab (FCM)(FCM)  Huge backlogHuge backlog  Current funding levelCurrent funding level will deficit $1 trillion inwill deficit $1 trillion in 60 years60 years (CSCE 2003)(CSCE 2003) (CSCE 2003)
    10. 10. 10 Municipal Infrastructure IssuesMunicipal Infrastructure Issues  Aging of infrastructure  28% of Canada’s infrastructure is over 80 years old, and only 41% is under 40 years old (CSCE 2003) (CSCE 2003)
    11. 11. 11 Municipal Infrastructure IssuesMunicipal Infrastructure Issues  79% useful service life of infrastructure79% useful service life of infrastructure has been usedhas been used (CSCE 2003)(CSCE 2003)  Condition degradationCondition degradation 0 10 20 30 40 50 60 70 80 90 100 Roads Sidew alk Bridges W aterDistribution Sew age Treatm entStorm Sew erSolid W aste Buildings Transit Parks Condition(%ofAcceptability) Good/Acceptable Needs Repair/Not Acceptable McGill Survey 2003 (Mirza and Haider)
    12. 12. 12 Municipal Infrastructure IssuesMunicipal Infrastructure Issues  Infrastructure gap $50 to $125 billion, 6-10Infrastructure gap $50 to $125 billion, 6-10 times of current annual infrastructuretimes of current annual infrastructure budgetbudget  Deferred maintenance for ‘Big Sixes’ $564Deferred maintenance for ‘Big Sixes’ $564 million (2003 CWF)million (2003 CWF)  First Nations will cost $475 - $560 millionFirst Nations will cost $475 - $560 million (2003 CAN$) to address risks for water and(2003 CAN$) to address risks for water and wastewater assetswastewater assets  Estimated cost for upgrading CanadianEstimated cost for upgrading Canadian sewer infrastructure is $11.8 billion (2003)sewer infrastructure is $11.8 billion (2003)
    13. 13. 13 MIIP Survey ResultsMIIP Survey Results  NRC-MIIP survey (2004) results:NRC-MIIP survey (2004) results: • Total 67 municipalities of over 5000 peoplesTotal 67 municipalities of over 5000 peoples • Questionnaire based on “Six Whats”Questionnaire based on “Six Whats” • 70% spending less than 2% on maintenance70% spending less than 2% on maintenance • 28% do not have system to record asset value28% do not have system to record asset value • Assets were rated as 2.9 or “good” to “fair” fromAssets were rated as 2.9 or “good” to “fair” from range of 1 to 7 ratingsrange of 1 to 7 ratings • 50% of the assets were at least 30 years old, in50% of the assets were at least 30 years old, in 10 years 75% will be +30 years old10 years 75% will be +30 years old • Represents 32% of Canadian populationRepresents 32% of Canadian population
    14. 14. 14 Infrastructure at StakeInfrastructure at Stake  Water main breaks: Avg. 700 breaks perWater main breaks: Avg. 700 breaks per day in Canada and USA ($3,000 per repair)day in Canada and USA ($3,000 per repair)  Walkerton tragedy:Walkerton tragedy: E. coli 0157:H7E. coli 0157:H7 outbreak in Walkerton. Cost $64 millionoutbreak in Walkerton. Cost $64 million  Peterborough flood in 2004Peterborough flood in 2004: Damage cost: Damage cost $20 to $40 million. Compensation $500/$20 to $40 million. Compensation $500/ household and $2500/ small businesshousehold and $2500/ small business  Basement flooding: 30,000 to 40,000 eventsBasement flooding: 30,000 to 40,000 events /year, average cost $3,000 - $5,000 /events/year, average cost $3,000 - $5,000 /events (CMHC 2004)(CMHC 2004)
    15. 15. 15 We Actually NeedWe Actually Need  AccountabilityAccountability  Customer (demand and service)Customer (demand and service)  Staff (Fiscal responsibility, health and safety)Staff (Fiscal responsibility, health and safety)  Environment (regulatory compliance)Environment (regulatory compliance)  Risk ManagementRisk Management  Minimize health and safety tragedies/incidentsMinimize health and safety tragedies/incidents  Reduce liability claimsReduce liability claims  Asset SustainabilityAsset Sustainability  Longer term (cradle to grave)Longer term (cradle to grave)  Reserve fundingReserve funding
    16. 16. 16 So the Challenges are...So the Challenges are...  Infrastructure demand and populationInfrastructure demand and population growthgrowth  Aging of infrastructure and conditionAging of infrastructure and condition deteriorationdeterioration  Infrastructure deficitInfrastructure deficit  Service level improvementService level improvement  Lack of integrated systems/tools andLack of integrated systems/tools and consistent approachconsistent approach  Inadequate fundingInadequate funding  Organizational restructuringOrganizational restructuring
    17. 17. 17 How These Challenges Can be AddressedHow These Challenges Can be Addressed  Identify maintenance, rehab and renewal needs  Increase system’s capacity and extend service life  Stewardship of the environment  Define levels of service (LOS)  Ensure financial sustainability  Implement Asset Management Plan (based on ‘Six Whats’)
    18. 18. 18 Need for ChangeNeed for Change  Asset management needs someAsset management needs some reorganization of public agencies functionreorganization of public agencies function  Traditional design-build- operate-maintainTraditional design-build- operate-maintain approach is simply inadequate in the face ofapproach is simply inadequate in the face of current dilemmacurrent dilemma  Adoption of asset management principlesAdoption of asset management principles and tools (IT tools and financial regulations)and tools (IT tools and financial regulations)
    19. 19. 19 Evolution of Asset ManagementEvolution of Asset Management  In early 1900’s design and durability issues,In early 1900’s design and durability issues, versatile structuresversatile structures  After World War II, reliability issues andAfter World War II, reliability issues and maintenance for mechanical and electricalmaintenance for mechanical and electrical equipmentsequipments  In 1960’s green movements, LCC and LCMIn 1960’s green movements, LCC and LCM  In 1970’s and 1980’s PMS, CMMS and WOIn 1970’s and 1980’s PMS, CMMS and WO  In 1990’s IT tools, CMMS, CMMS to AMS,In 1990’s IT tools, CMMS, CMMS to AMS, GIS and GPSGIS and GPS  2000 ~ Integrated systems2000 ~ Integrated systems
    20. 20. 20 What do You Think?What do You Think?  Clerks/municipal employees -Clerks/municipal employees - datadata recording and reporting using Generalrecording and reporting using General Accepted Accounting Principles (GAAP)Accepted Accounting Principles (GAAP)  Directors of finance –Directors of finance – strategic financialstrategic financial planplan  Utility directors/supervisors -Utility directors/supervisors - maintainmaintain the utilities and manage work order systemsthe utilities and manage work order systems  IT directors –IT directors – software, hardware, integratedsoftware, hardware, integrated systems and database managementsystems and database management
    21. 21. 21 What is Asset Management?What is Asset Management?  What is your definition?What is your definition?  NRC, FHWA and IIAM (Australia)NRC, FHWA and IIAM (Australia)  ““Asset Management is a systematic processAsset Management is a systematic process of planning, operating, maintaining,of planning, operating, maintaining, upgrading and replacing assets costupgrading and replacing assets cost effectively with minimum risk and at theeffectively with minimum risk and at the expected levels of service over the assetsexpected levels of service over the assets life cycle”life cycle”
    22. 22. 22 Asset Management BenefitsAsset Management Benefits (Life cycle)  Reduce cost  Extend life Two fold benefits:
    23. 23. 23 Asset Management BenefitsAsset Management Benefits Balance between cost, risk and LOS Levels of Service (LOS) CostRisk ServiceLevels Service Provided Service Items Service Expected Service Gap Service Agreed/LOS ServiceLevels Service Provided Service Items Service Expected Service Gap Service Agreed/LOSService Agreed/LOS Levels of Service is a compromise between existing and expected service levels Another benefit is to increase the levels of service
    24. 24. 24 Simple Questions?Simple Questions?  Simple questions but…Simple questions but…  Is there anything wrong?Is there anything wrong?  What is wrong?What is wrong?  What should we do? How do we fix it?What should we do? How do we fix it?  What will the benefits be?What will the benefits be?  How much will it cost and how do we pay for it?How much will it cost and how do we pay for it?  How can we be more proactive?How can we be more proactive?
    25. 25. 25 Who is Doing What?Who is Doing What?  Australian InitiativesAustralian Initiatives  Institute of Public WorksInstitute of Public Works Engineering Australia (IPWEA)Engineering Australia (IPWEA)  IIAM ManualIIAM Manual  Asset Management QuarterlyAsset Management Quarterly International (AMQI)International (AMQI)  Commonwealth Industrial andCommonwealth Industrial and Scientific Research OrganizationScientific Research Organization (CSIRO)(CSIRO)
    26. 26. 26 Who is Doing What?Who is Doing What?  In USAIn USA  American Public Works Association (APWA)American Public Works Association (APWA)  AMSA – Managing for Public Infrastructure AssetsAMSA – Managing for Public Infrastructure Assets  AWWA – Publications and reportsAWWA – Publications and reports  Federal Facilities Council (FFC) - Investments in FederalFederal Facilities Council (FFC) - Investments in Federal FacilitiesFacilities  FHWAFHWA  Asset Management Office: Primer on Asset management, LCCA,Asset Management Office: Primer on Asset management, LCCA, GASB and Case StudiesGASB and Case Studies  Transportation Asset Management ManualTransportation Asset Management Manual  Software: LCCA, BMS and PMS etc.Software: LCCA, BMS and PMS etc.  National Association of College and University BusinessNational Association of College and University Business Officers (NACUBO) – Facility Condition Index (FCI)Officers (NACUBO) – Facility Condition Index (FCI)  Others: WIN, WERF and TRBOthers: WIN, WERF and TRB
    27. 27. 27 Who is Doing What?Who is Doing What?  In CanadaIn Canada  National Guide (IC, FCM, NRC)National Guide (IC, FCM, NRC) <www.ifraguide.gc.ca><www.ifraguide.gc.ca>  Canada wide network of $25.7 million budgetCanada wide network of $25.7 million budget  Over 56 best practices in 7 target areasOver 56 best practices in 7 target areas  Infrastructure CanadaInfrastructure Canada  Knowledge - Building, Outreach and Awareness (KOA)Knowledge - Building, Outreach and Awareness (KOA) programprogram  Infrastructure Canada ProgramInfrastructure Canada Program  Canada Strategic Infrastructure FundCanada Strategic Infrastructure Fund  Municipal Infrastructure Investment PlanningMunicipal Infrastructure Investment Planning (MIIP) – NRC(MIIP) – NRC  10 municipalities consortium10 municipalities consortium  Evaluating tools and techniques for investment planningEvaluating tools and techniques for investment planning
    28. 28. 28 Who is Doing What?Who is Doing What?  Transportation Association of Canada (TAC)Transportation Association of Canada (TAC)  Primer on Highway Asset Management (1999)Primer on Highway Asset Management (1999)  Bridge Management Guidelines (2004)Bridge Management Guidelines (2004)  Canadian Institute of Charted AccountantsCanadian Institute of Charted Accountants (CICA)(CICA)  Accounting and Reporting for Physical Assets byAccounting and Reporting for Physical Assets by Governments (1990)Governments (1990)  Accounting for Infrastructure in the Public Sector (2003)Accounting for Infrastructure in the Public Sector (2003)  Canada Mortgage and Housing CorporationCanada Mortgage and Housing Corporation (CMHC)(CMHC)  Study reports on financial planning, alternative financingStudy reports on financial planning, alternative financing and municipal infrastructureand municipal infrastructure  Public Sector Accounting Board (PSAB)Public Sector Accounting Board (PSAB)
    29. 29. 29 Who is Doing What?Who is Doing What?  Municipal Infrastructure Data Standards (MIDS)Municipal Infrastructure Data Standards (MIDS)  Municipal Performance Measurement ProgramMunicipal Performance Measurement Program (MPMP)(MPMP)  Ontario Municipal CAO’s Benchmarking InitiativeOntario Municipal CAO’s Benchmarking Initiative (OMBI)(OMBI)  National Water and Wastewater BenchmarkingNational Water and Wastewater Benchmarking InitiativeInitiative  Municipal Infrastructure Management SystemsMunicipal Infrastructure Management Systems (MIMS)(MIMS)  Acts and Legislation (Federal, Provincial andActs and Legislation (Federal, Provincial and Territorial)Territorial)
    30. 30. 30 What Can Be Included?What Can Be Included?  What are the absolute requirements?What are the absolute requirements?  How do an existing system fit into?How do an existing system fit into?  How does Asset Management assist inHow does Asset Management assist in monitoring of condition and performance?monitoring of condition and performance?  How should an Asset Management systemHow should an Asset Management system be implemented?be implemented?  How Asset Management is compatible withHow Asset Management is compatible with business approach to managingbusiness approach to managing infrastructure assets?infrastructure assets?
    31. 31. 31 Asset Management PlanAsset Management Plan Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Asset knowledge Calculations Models Protocols Decision-making Step 1 to 3 – Data oriented Step 4 to 5 – Methodology and policy issues Step 6 – Decision-making
    32. 32. 32 Revisit the ‘Six Whats’Revisit the ‘Six Whats’  What do you own?  What is it worth?  What is the condition?  What is the deferred maintenance?  What is the remaining service life?  What do you fix first? Calculations Models Protocols Asset knowledge Decision-making
    33. 33. 33 Revisit the ‘Six Whats’Revisit the ‘Six Whats’  What do you own?What do you own? • Asset inventoryAsset inventory • DatabaseDatabase  Paper basedPaper based  ElectronicElectronic (relational database and spreadsheets)(relational database and spreadsheets)  Integration with GIS and CMMSIntegration with GIS and CMMS  What is it worth?What is it worth? • Asset valuationAsset valuation  Book value, historical value, depreciated value, PVBook value, historical value, depreciated value, PV  Current Replacement Value (CRV)Current Replacement Value (CRV)  Cost modeling (direct and indirect costs, PSAB, FCA)Cost modeling (direct and indirect costs, PSAB, FCA) • Life cycle cost/Whole life costLife cycle cost/Whole life cost
    34. 34. 34 Revisit the ‘Six Whats’Revisit the ‘Six Whats’  What is the condition?What is the condition? • Condition assessmentCondition assessment  Condition grading systems (subjective evaluation, distress basedCondition grading systems (subjective evaluation, distress based matrices and hybrid systems)matrices and hybrid systems) • Structural and functional (defects, breaks, hydraulics,Structural and functional (defects, breaks, hydraulics, blockages etc.)blockages etc.) • Protocols (IT tools)Protocols (IT tools)  PMS, BMS, WRc, NAAPI or homegrownPMS, BMS, WRc, NAAPI or homegrown • Prediction modeling (Markov, survival functions, NN)Prediction modeling (Markov, survival functions, NN)  What is the deferred maintenance?What is the deferred maintenance? • Facility Condition Index (FCI)Facility Condition Index (FCI) • Maintenance backlog and economic inflation/deflationMaintenance backlog and economic inflation/deflation
    35. 35. 35 Revisit the ‘Six Whats’Revisit the ‘Six Whats’  What is the remaining service life?What is the remaining service life? • Service life modelingService life modeling  Analytical and probabilistic methodsAnalytical and probabilistic methods  Costs for alternative maintenance, repair and renewalCosts for alternative maintenance, repair and renewal  What do you fix first?What do you fix first? • PrioritizationPrioritization  Methods: AHP, B/C, weighted factor methods, PAN, MOOMethods: AHP, B/C, weighted factor methods, PAN, MOO and expert knowledgeand expert knowledge  Ranking: Asset by asset or group of assetsRanking: Asset by asset or group of assets  Costs for alternative maintenance, repair and renewalCosts for alternative maintenance, repair and renewal • Decision-makingDecision-making  Combination of all and political agendaCombination of all and political agenda
    36. 36. 36 Asset Management FrameworkAsset Management Framework  Planning (proactive and reactive)  Implementation (generally life cycle approach) • Acquisition/construction • Operation • Maintenance • Repair and rehab • decommissioning  Evaluating  Improving/Developing Planning Implementting Evaluating Improving/ Development
    37. 37. 37 Asset Management FrameworkAsset Management Framework TOP DOWN System Knowledge BOTTOM UP Asset / Component Data PROGRAM LEVEL: High-level decision-making. Synonymous to “Top-Down Approach” MIXTURE OF BOTH PROJECT LEVEL: Detailed assessment on an asset-by- asset basis. Synonymous to “Bottom-Up Approach”
    38. 38. 38 Some Specific Issues…Some Specific Issues…  What are the service standards for WTP?What are the service standards for WTP?  What level of details are available for pumpWhat level of details are available for pump station? O&M manual?station? O&M manual?  How many water trucks you need?How many water trucks you need?  Show the investment for next 20 years?Show the investment for next 20 years?  Show the critical asset on the map?Show the critical asset on the map?  What are the risks and how will be managed?What are the risks and how will be managed?  How will you prioritize your investment?How will you prioritize your investment?
    39. 39. 39 Asset Valuation and Management DriversAsset Valuation and Management Drivers  CorporateCorporate  Enhance accountability & responsibility (insurance)Enhance accountability & responsibility (insurance)  Satisfy emerging legislative issuesSatisfy emerging legislative issues  Engineering & OperationsEngineering & Operations  Strategic investment decision-making for short &Strategic investment decision-making for short & long termlong term  Manage future growth & demandManage future growth & demand  FinanceFinance  Stabilize Rates / ReservesStabilize Rates / Reserves
    40. 40. 40 Asset Valuation MethodsAsset Valuation Methods Misleads when an old asset behaves like good condition as new asset Straight forward Reflects current condition Identify backlogs Current replacement value (CRV) Accurate condition/ performance data required Compares replacement optionsWritten down replacement cost Impacts for uncertainties like condition, performance and economic factors Optimized for service life and condition Reflects actual costs and benefits Optimized replacement cost Difficult to predict future cost and asset usage Uses for available data (service life, material usages) Net salvage value Does not account for any changes as: price, technology and usability Data available Simple method Book Value, Historical Costs DisadvantagesAdvantagesMethods
    41. 41. 41 Asset Valuation Model AlgorithmAsset Valuation Model Algorithm Define Component Levels & Attributes Capture Inventories (integrated system) Assess Asset Condition Assess Asset Value & Risk Level Optimized Replacement Cost Asset Value • Inventory data • Condition data • Replacement options • Cost comparison • Depreciation • Performance • Criticality • Prob. of failure Asset Life Expectancy & Remaining Life
    42. 42. 42 Asset Valuation - User vs OwnerAsset Valuation - User vs Owner  EconomicsEconomics  Unit costs based on: area, length, diameter,Unit costs based on: area, length, diameter, material, capacity etc.material, capacity etc.  Service life (design life, expected life, age,Service life (design life, expected life, age, remaining life)remaining life)  Condition & performanceCondition & performance  Depreciation factorsDepreciation factors  Salvage valueSalvage value
    43. 43. 43 Levels of ServiceLevels of Service  Important considerationsImportant considerations  What are the services?What are the services?  What are the standards?What are the standards?  What are the target levels of service?What are the target levels of service?  Levels of Service is a qualitative orLevels of Service is a qualitative or quantitative measure to describe how wellquantitative measure to describe how well or poorly a service is provided by the assetor poorly a service is provided by the asset or network of assets based on the asset’sor network of assets based on the asset’s intended purpose within the capacity andintended purpose within the capacity and satisfactory performancesatisfactory performance
    44. 44. 44 Performance IndicatorsPerformance Indicators  Performance Measured Criteria – KeyPerformance Measured Criteria – Key Performance Indicators (KPI)Performance Indicators (KPI)  Asset informationAsset information  StakeholdersStakeholders  Condition and performanceCondition and performance  Operational/maintenanceOperational/maintenance  Service qualityService quality  FinancialFinancial
    45. 45. 45 Key FactorsKey Factors  System performance (capacity, remainingSystem performance (capacity, remaining service life, condition)service life, condition)  Serviceability Impact (disruptions in dailyServiceability Impact (disruptions in daily life)life)  Risk tolerance level (health, safety andRisk tolerance level (health, safety and other direct and indirect costs)other direct and indirect costs)  Long-term impact (environmental and otherLong-term impact (environmental and other intangible impacts)intangible impacts)  Operation and Maintenance cost (life cycleOperation and Maintenance cost (life cycle basis)basis)
    46. 46. 46 Establishing LOSEstablishing LOS Review Organizational Objectives/Vision Understand the Asset (inventory, condition and performance) Determine Customer Expectations (demand, growth) Identify Required Measures for Levels of Service Assess and Quantify Risk Test Affordability (budget planning and forecasting) Select KPI’s and Set Target Level of Services Policy and Implementation
    47. 47. 47 Examples of Performance IndicatorsExamples of Performance Indicators $$Repair cost /year (last 5 years) 20/yearNumber of complains (taste, color and chlorine residuals) 99% 99% 99% Drink water guidelines: Microbiological Color <15HU Turbidity < 1 NTU >1.5 m/kmHead loss <3 hrsResponse time 5/100 km/yrBreakage rate <20Service interruptions 10 km/ year or no. of days/ year <10%System loss --- M3 paPer capita consumption Target Levels Measured Indicators (WATER) $$Repair cost /year (last 5 years) <20/yearBasement flooding 20/yearSurcharge Target Levels Measured Indicators (WASTEWATER) <3 hrsResponse time <10/yearNumber of complains (pollution, contamination) <20Service interruptions 10km/ year or no. of days/ year 25/yearNumber of blockages >0.3 mHydraulic capacity <5Ipeak day/I average day
    48. 48. 48 RiskRisk  Definition: Risk is the probability that anDefinition: Risk is the probability that an event may adversely affect and measuredevent may adversely affect and measured by consequences and likelihoodby consequences and likelihood  Common risk assessment methodologiesCommon risk assessment methodologies  QuantitativeQuantitative  QualitativeQualitative  Risk categoriesRisk categories  EngineeringEngineering  Public health and safetyPublic health and safety  FinancialFinancial  EnvironmentalEnvironmental
    49. 49. 49 Risk Assessment AlgorithmRisk Assessment Algorithm
    50. 50. 50 Asset Management Model Infrastructure Ratepayers Proactive Maintenance Levels of Service (LOS) Investment Decision-Making Stakeholders Asset Management Implementation Planning and Design Installation/ Construction Operation and Maintenance Repair and Rehabilitation Replacement /Renewal Life Cycle Model Performance indicators Customer Expectations Legislative Orders Asset Valuation Availability of Resources Business Process Sustainability Quality of Service Risk Assessment Asset Information Condition Criticality Probability of Failure Consequence of Failure Cost Processes andProcesses and ActivitiesActivities
    51. 51. 51 Application ToolsApplication Tools Capital Asset Planning ToolCapital Asset Planning Tool
    52. 52. 52 Application ToolsApplication Tools Linear Asset Prioritization ToolLinear Asset Prioritization Tool
    53. 53. 53 MACA Capital Planning ToolMACA Capital Planning Tool
    54. 54. 54 MACA Capital Planning ToolMACA Capital Planning Tool
    55. 55. 55 What Next?What Next?  Think globally and act locallyThink globally and act locally  Learn from failuresLearn from failures  Use best practicesUse best practices  Stewardship for the infrastructureStewardship for the infrastructure  Work for the sustainable communityWork for the sustainable community  New Deal a ‘WIN-WIN’ situation for the NWTNew Deal a ‘WIN-WIN’ situation for the NWT communitiescommunities
    56. 56. saidur_rahman@gov.nt.casaidur_rahman@gov.nt.ca Tel: (867) 873-7944Tel: (867) 873-7944 Questions?Questions? Waste Reduced Life Society, Economy and Environment Roads, Bridges, Buildings, Transits, Fleets, Water, Sanitary, Drainage, Energy, Communications, Parks and Public Facilities Consumption Services Built EnvironmentBuilt Environment

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