So, it’s easy, isn’t it? Good. You go write an asset management plan but what happens is when the minute you start doing this, you’ll realize you’ve got gaps.
So, hey, here’s the service level we like but we’re not delivering that or you’ve got gaps in that. Here’s the demand we think was happening but we got no way of meeting it all. We’ve got gaps in asset provision.
Here’s the risk that we’ve analyzed but oh, we haven’t got enough insurance or one of these risks is too high, we haven’t got the money to resolve it, and on it goes.
So the thing is that you end up looking at the gaps and then you say that if we try to resolve those gaps what happens to our life cycle management program.
The other thing that happens is as you get over here to your financials and everyone goes, wow that’s way too much money.
And to give you a tiny little example, we did whole Solomon Islands school system. Solomon Islands has got fairly high growth, 4 percent population growth year on year.
And they haven’t got enough schools. So, we sat down, did a growth model and said, say hey this is how many schools you need to build. And at the end of the day, the annual figure compared to what they’re spending now was 10 times more.
So they’re spending like 250 to 300 million Solomon Island’s dollar a year on their school systems. They need to be spending about 2.5-3 billion on the asset side of it; not the teaching side of it. Just building new schools and building new classrooms and stuff like that.
And so what happened? And we knew that this is going to happen when we produced this. The first instinct of any regulator or whatever at that point is to shoot the messenger.
Okay, I don’t like what you’re telling me so you’re wrong, go away. So that’s what they did to us. And we knew, they going to.
And they’ll have time to be unhappy about that, as governments do. And then they’ll come back and have a look at all the numbers and they go, ah, these guys are pretty right. How are we going to afford this? And that’s a different conversation.
Okay, but the thing is, even here in New Zealand, with roads and with utilities and with public facilities, parks and that, there’s always this conversation about, oh hang on, well now we know the total costs of these, is we haven’t got enough money.
People aren’t prepared to pay. And it’s this willingness to pay versus the cost of infrastructure.
FEATURED IMAGE CREDIT: Jenny Scott via Flickr Creative Commons License