Ross:
Yes, one of the things that we’ve explored here in New Zealand in a 15-year plus journey of asset management planning that’s been legislated with several changes and amendments along the way, is when we originally started, we started with asset management plans.
That was very asset focused. And in the middle, that’s been quite interesting because we are sort of back to asset plans now but in the middle, we had a phase where everybody was doing activity management plans.
So what they were doing, they were lifting up off the hard asset, if you like, the road or the pipe or the treatment plant or the park or the building and taking more of a whole of the activity or a whole of the service type approach.
I think what has happened now is we call them asset plans again, but that activity thinking is quite embedded into our planning processes here in New Zealand. So the names become a bit moot.
Are there alternatives to building hard assets?
Grant:
So with the discussion on asset management plan and activity management plans, Ross, did we create some opportunities to look at the non-asset solutions for example, where you can look at providing the service through a different medium than hard assets, they are seemingly a lot cheaper often to provide.
Ross:
Yes, and again in my case, trained as an engineer, your training is to build stuff; if there’s a problem then build something.
And that’s acquiring assets with capital. As you start working in this asset management journey, if you don’t already know,
- assets are expensive to build,
- they are expensive to maintain,
- they are expensive to operate, and
- they are expensive or even more expensive to replace.
And so, as Grant said, what you start doing is you start saying, hey, are there other ways of delivering the service that doesn’t require me to build new or better or other assets.
Now, often there aren’t. There’s no alternative to building assets and that’s fine.
But often, if it’s congestion or a peak demand-type as you there may be other solutions that might involve smaller assets or a different set of assets but might involve building another freeway or major trunk water main, that sort of thing.
Managing demand in asset management
Grant:
It’s a really good point in terms of the good demand management component of asset management.
Either way, you can actually manage that demand so you won’t be having to build infrastructure to deal with the peak all the time and particularly knowing who your customers are that really ties in with that particularly well when you look at water and wastewater assets in particular, where you have large industrial customers.
If you can work with those customers to ensure that you understand their needs for the quality and the quantity of water supply.
For example, you may well be upon a balance that with the other needs of the community rather than just keep on building bigger and bigger.
So that dialogue with those key stakeholders is really important to actually know what do they need. Because at the end of the day, those large consumers can be the backbone of your economy in your area.
[…] considering your infrastructure asset management plan financial projections remember there are two parts to this – the expenditure projections and […]