Better Asset Management Planning, Leadership, Trade-Offs, and Risk

It’s a constant tension. So, there’s no right or easy answer to it.

I mean you can get smarter about phasing your work, so you can go and say, hey look we could phase it, spread that out rather than trying to do it all there.

We could get a bit more life for those pipes, we can phase it over a longer period of time and therefore bring the average cost down.

So, that’s a sort of stuff you can do. You can sweat your assets and get more out of them.

You can choose to lower your service levels for some asset classes so that you can achieve.

Because the interesting thing is not just a cut-and-dry issue as you pointed out. There’s this issue called livability in cities.

So, if your city is a concrete jungle, with post-Soviet apartment blocks, crumbling down, and rump with crime, maybe you don’t want to live there.

So maybe you move.

So, you know it’s the safety, security, livability aspects, which is all the soft stuff that the stadium and the parks and the public entertainment or these sorts of stuff.

But you have to trade it off against mobility and safe water supply, efficient disposal of wastewater, and those sorts of things.

And that’s what this whole stuff is all about. And there’s no easy or right answer to it. All that I’ve noticed, we continue to try to do more and more and less and less.

And that’s where that hidden risk comes up because if you push that too far, you trip over your safety factor and then you’re not spending far more on fixing the problem created by the hidden risk that’s come out and you’re wasting money again.

A classic example of that at the moment is British Rail. They’ve got a whole heap of Victorian-era bridges.

And about seven or eight years ago, they said to the government we had a bridge that nearly collapsed when it had a chemical train going over, that would have caused this major incident in the city.

And the government said how many of these have you got. The answer was about 5,000.

How much you need? Oh, we need about 20 billion bucks.

So what they did was, they said, oh, that’s really dangerous. We can’t have trains falling off bridges and with chemicals on them and contaminating the city, so we’ll give British Rail 20 billion bucks.

Here’s where the 20 billion bucks came from, English roading.

And then they said, oh we’ll take the money from the roads and we give it to the rail guys.

So, roading in the UK had been running a decent asset management plans for a couple of three decades and have everything in a reasonable state.

I went, good on you guys. You can take less and they will give it to these guys who haven’t managed their bridges for the last 30 years because they’ve created an emergency.

The roading guys are not happy, it would be fair to say.

The rail guys are (happy) because they’ve got all these projects to fix bridges but it’s not a way to run a country.

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