Programme

Strategic Investment in Infrastructure: Are We Providing Value for Money?
Ross Waugh and Jeff Roorda
Sponsored by Waugh Infrastructure Management Ltd

The recent global financial crisis had seen a renewed interest by governments to invest in infrastructure with the objective of providing both economic stimulus and increased economic efficiency.  In undertaking the provision of infrastructure governments convert community wealth into physical infrastructure, but how effectively are these community assets planned, constructed and managed?

The International Infrastructure Management Manual identifies minimum core standards for asset custodians responsible for all stages of infrastructure planning, construction and operations.

This presentation will examine examples in Canada, USA, Australia and New Zealand of reviews on the asset management performance of infrastructure custodians and provide contrasting case studies  of where infrastructure custodians have been found wanting, but also where some have developed their capacity to plan, manage, operate and report on the performance of infrastructure assets.

The presentation will also highlight some of the difficult questions that face asset managers in the current political and economic environment.

Jeff Roorda
Jeff is the CEO of JRA, as asset management mentoring and consulting organisation working with a range of infrastructure asset custodians and regulators in a number of countries.

Jeff has a Civil Engineering background and has worked extensively with engineers, accountants, economists, community and environmental leaders to develop better ways to engage community decision makers in wise management of infrastructure assets. Recent projects include work with utility and transport companies, Government and Government Regulators.

Ross Waugh
Ross is the founder of Waugh Infrastructure Management and is an asset management and systems integration specialist with over 25 years experience in local government infrastructure asset management and engineering.  Ross has been consulting in infrastructure management for 11 years, in the areas of transportation, utilities, community facilities and property.  Ross has contributed to a number of New Zealand national data capture, advisory and infrastructure standard setting projects.

Ross is passionate about assisting people to practice infrastructure asset management holistically and comprehensively yet practically.  His strategic analysis of client practices is balanced with a strong practical background that always ensures results not theory.  Ross has experience of four cycles of integrating infrastructure asset management planning with long term financial planning within the New Zealand context.

Ross takes an active interest in on-going International infrastructure asset management trends.  Ross has presented internationally on infrastructure asset management, most recently in October 2009 at the US Transportation Research Board of the National Academies, National Transportation Asset Management Conference.  Ross has also provided input into International Asset Management Practice Reviews.

Service Level Management – Achieving Community Outcomes from Assets and Services
Michael Mason

In the work-up to the 2009-19 LTCCP, the Auckland City Council Transport Asset Management Group, led by Veenay Rambisheswar, undertook to develop a more formal and rigorous approach to the levels of service tables within their asset management plan (AMP). The team had a great deal of technical information related to their daily AM activities but this information did not necessarily relate directly to their broader Auckland City transport strategic objectives. In conjunction with AECOM (previously Maunsell) who helped identify best practice and acted as facilitator, the team developed a set of transport performance measures that were identified as ‘necessary and sufficient’ to achieve their customer outcomes.

The team developed the measures within a new service level management (SLM) framework to provide for the ongoing business-as-usual management of key performance information within the AMP. This framework has enabled the transport group to better align their activities and costs with their strategic objectives and track their service delivery against the LTCCP community outcomes.

The audit feedback on this framework approach was very positive and, as a result, the transport assets team has now developed the SLM tool as a database to formally align, monitor and manage their key technical performance measures and costs against customer service measures and strategic objectives.

This presentation will discuss the challenges, outcomes, benefits gained and looks at the opportunities for local government in the SLM approach.

Michael Mason
B.Arch (Hons) NZRAB, ANZIA
Strategic Asset Planner, Transport Assets Group, Auckland City Council
Michael is a professionally qualified architect with over 20 years experience in architecture, facilities management and asset management.  He has worked extensively in best practice asset management services and the development of added value AM solutions through traditional architecture and engineering projects for local and central government agencies as well as industrial and commercial clients in New Zealand and overseas.

Planning for growth – innovation and the maturing of asset management
Brett Elston and Greg Marr

The first 15 years of formal asset management (AM) have seen a focus on assets and asset information, and most organisations now know what assets they own and the condition and value of those assets. Consequently, asset management plans (AMPs) present a mature approach to asset data, lifecycle management and improvement planning.

This paper will look at steps Local Government’s best practitioners have taken towards delivering services that are valued by the existing community.  These are typically based on better approaches to making the difficult connections between customer levels of service (LOS), technical LOS, network performance outcomes and the physical asset base.

This emerging best practice is examined in the context of an area that we suggest has to date been less well developed:  understanding how changes over time to growth and demand affect services and their supporting assets.  Types of LOS statements that assist in improving that understanding are proposed, and examples of the use of these types of statements are reviewed.

This provides a possible model in which the expression of the LOS means they can apply more readily to both assets and services over time and across considerations of costs, community preferences and funding decisions.

Brett Elston
Brett has 12+ years experience in infrastructural asset management planning in local government.  Prior to joining AECOM in 2008 he led and co-ordinated the organisational development of the discipline within a large NZ city council, facilitating and participating in a wide variety of change projects and their transition into 'business as usual'.  His skills and knowledge include improvement planning, process and systems design and development, knowledge management and transfer.

Greg Marr
Greg has over 10 years experience with local government consulting roles covering growth modelling, process documentation, development contributions and asset management.

Highway Asset Management – a Top Down Appoach
Mark Owen

The New Zealand Transport Agency (NZTA) has moved into a new era of asset management.  Regional Operational Asset Management Plans are developed at a local network level and then amalgamated to compliment one national, all encompassing total corridor Asset Management Plan (AMP), for the nations state highway network.

The new AMP includes all activities related to scoping, developing, managing, maintaining, operating and replacing all of the assets within the road corridor.

There is a need to balance the defined levels of service within the AMP against the funding available, while assessing and maintaining each individual asset’s condition. This is required, while at the same time delivering customer expectations of safety, route reliability and efficiency, in a cost effective ‘value for money’ manner.

NZTA is now focussing highway maintenance on ‘how much, for how little’ – ensuring that the nominated funding available for maintaining and operating the highway network is targeting to the areas of greatest need.

Asset Management is not a ‘black box’, but requires skilled people who can interpret data and make informed decisions with the myriad of asset information available.

NZTA’s new asset management methodologies demonstrate the linkage between the high level organisational strategy and the operational state highway plan which outlines the work programme for a three year period.

Risk Management
Jon Mortensen

In today’s mercurial world it is important that organisations are aware of their exposure to risk. To do so the executive will have adopted AS/NZ4360 or ISO31000. However, to achieve this detail on their operational assets organisations sometimes have an insurmountable task. On one hand the executive are after a simplified listing, usually based on a heat chart – likelihood v consequence. On the other hand there are a large range of engineering standards that can be deployed. To use either mechanism for an organisation with over 100,000 assets will take over 50 man years if done even half properly.

This presentation will concentrate on processes that Infor has put together to bring rapid return to value to the organisations looking to assess their asset risk profile. The solid results that once obtained are easily maintained through automated processes, will enable all managers to focus their resources appropriately. Of course, this comes with the added advantage of providing the executive with the heat charts they require, to make the decisions they need, on an equal footing with their other corporate risk profiles.

Jon Mortensen
Jon is an Executive "Green" Consultant at Infor, he has a Master's in Applied Science from the UNSW. He has been in the software business for over 14 years having defected from New South Wales' Department of Conservation and Land Management in 1996. His expertise is in Geographical Information Systems, Business Process Re-engineering, Performance and Risk Management. His focus in the last 24 months has been in the Asset Management arena as Infor moves to assist companies with planning for their future "green" obligations.

Water Asset Management in a Constrained Environment: Developing an Asset Management Strategy that Links Renewal and Replacement cost to levels of service
Theuns Henning

Linking the cost of a particular renewal and replacement programme to the subsequent Level of Service (LoS) remains the ‘holy grail’ in asset management.  In a recent letter to Regulatory Directors of all water and sewerage companies in the United Kingdom, OFWAT signalled future focus to be on:

“appropriate statistical techniques as the foundation for asset planning; common understanding of risk and application across asset groups; and, applying and understanding optimisation toolkits and frameworks within asset planning in order to target the most optimum plan.”

This paper presents learning from the UK in the area of planning processes that ensures the required level of service is met, whilst investing in networks in an optimal manner.  A summary of relevant issues identified during a recent study trip will be presented.  It also covers the developmental planning of an optimisation tool for NZ water companies that will be able to quantify:

the investment required to achieve and/or maintain a given level of service;
what would be the most optimal long-term investment strategy; and,
what would be the consequences of reduced investment levels on the LoS outcomes?

This paper would be of value to all asset managers.  It proposes a road map for meeting advanced planning requirements in asset management, whiles tackling the real life issues of a constraint environment.

Dr Theuns Henning
Theuns is a senior lecturer at the University of Auckland and the Business Manager of IDS Ltd, specialising in Asset Management.  He has recently completed his PhD at the University of Auckland and was a recipient of the Foundation for Research Science and Technology Bright Future Scholarship. Theuns has extensive experience in the areas of asset management, performance management and benchmarking.

To Blame or Not to Blame (the bean counters), That is the Question.
Philip Jones

Asset management plans (AMP) are prepared or revised as part of the LTCCP process based on expected or proposed levels of service.  Unfortunately when the consolidated LTCCP financials are considered by either senior management or Council there are often cuts made to the supporting expenditure of the asset management plan.  Often this comes as a surprise to the asset manager.  It is not uncommon for the accountants to suffer the wrath of asset managers when this occurs.

What the proposed paper will discuss are two different ways to avoid the surprise of the cuts and how to structure the financial information contained in the AMP in a way that identifies the risk and consequences if cuts are made to the proposed expenditure contained within the AMP.  One of the methods discussed has been used by Western Bay of Plenty District Council since 2001.  The other is based on risk management principles.

Philip Jones
Philip is the principal of PJ Associates has been consulting to a variety of Local Government related organizations since June 2007.  He assisted seven Councils in the development of their 2009 – 2019 LTCCPs.  Between 1993 – 2007 Philip was the Chief Financial Officer for Western Bay of Plenty District Council and whilst employed there he was a key member of the Society of Local Government Managers (SOLGM) Financial Working Party.  He was also SOLGM’s financial representative on the National Asset Management Steering Group (NAMS).

Driving AM in Large Metro Cities in a Developing (& Heavily Constrained) Nation - A National Approach for South Africa
Roger Byrne

In this paper / presentation Roger will paint a picture of what sustainable infrastructure asset management (SIAM) is, and how this approach is being used to drive Asset Management Programs in the major Metro Cities of Durban & Cape Town in South Africa.

These programs are being watched as a pilot model for the other four major metros that provide all municipal services and more to over 35 million people.

This presentation will look at how this is being done in a heavily resource constrained environment, including: the impacts of the GFC, the massive infrastructure backlogs driven by poverty alleviation, the loss of skilled staff to overseas markets, the budget of a developing country, the decision to host the World Cup of Soccer, and some massive legacy assets that have been neglected for sometime.

Roger will work through the problems revealed and lessons learned over the last 3 years and identify what he believes are the key success factors that are essential to cost effective SIAM implementation in developing countries like South Africa.

The talk will concentrate on the most cost effective and successful strategies and options available to most organisations, and how they can be adapted to accommodate all the variables that exist across the whole of South Africa and what the regulators, senior staff and professional organizations are trying to do. 

Roger Byrne
Roger has recently retired following a 38-year career in which he was the International Manager of GHD’s Global Asset Management Group. Over these years he has worked for many infrastructure rich businesses in Australia, New Zealand, SE Asia, USA, Canada, UK, Ireland and more recently Africa. He was the principal author of the original Australian Manual (1993) and the Advanced AM Manual (New Zealand 1997) and one of the principal authors the International Infrastructure Management Manual (IIMM) 2000 & 2005 working with both the Australian & NZ NAMS teams. He has written many associated texts on asset management and has assisted in the development of the worlds first published quality framework and assessment process TEAMQF / Gap-Ex.  In recent years he has concentrated on the development of the AMPLE / SIMPLE web based tools that are assisting infrastructure asset owners & managers around the world to implement sustainable, cost effective improvement strategies most successfully. He is now in semi retirement working privately on interesting & challenging projects around the world as Roger Byrne & Associates.

Achieving the Asset Management Value Proposition – Using Real Asset Data for Real Valuations
Andrew Morgan, Kerry Stewart, Rex Harland

A case study on a successful framework Integrating Asset Information with Property Valuations and the Financial Register.

One of the ongoing vexed questions for a mixed property / infrastructure portfolios is valuations; and how do you get your asset data into the financial register. Fundamentally you need to do this to get your depreciation / funding right.

This paper presents the framework that the Assets Manager at Franklin District Council followed to finally achieve success through a “Four i” approach: Innovation, integrity, intelligence, and integration.

Andrew Morgan, Asset Manager Community Facilities, Franklin District Council
Kerry Stewart, Manager (Registered Valuer), Darroch Corporate Advisory
Rex Harland, Principal Infrastructure Strategy Advisor , GHD Consultants

Asset Management : Optimisation versus Innovation?
Malcolm Morrison

Since the revolutionary idea of using engineering techniques to ensure that the cost of consuming assets should be paid in some way by the users, what was once rocket science has become mundane.

Standard practice has taken over from innovative thinking and asset management has become simplified to the point that this is probably exacerbating intergenerational inequity; the very thing that it was intended to cure include finding solutions from outside the field in which they were developed.

With the application of innovative thinking and creative solutions borrowed from different fields there is an opportunity to once again wrestle asset management away from bean counting to science.

As an example, depreciation is a substantial burden upon ratepayers and is often considered similar to a “fixed overhead”. However, the dynamics and assessment of a depreciation charge for any asset(s) can vary quite widely and is influenced by a range of variables such as the asset type (technology change over time), scope (individual to collective renewal programmes), current replacement economics, future inflation, future demand and remaining life.

This paper asserts that the core asset management skill is in understanding dynamics and creating new opportunities that have a positive impact for ratepayers. The paper is based upon a case study at New Plymouth District Council, where during the last LTCCP, some of the early stages of these ideas coupled with creative thinking, principles and techniques were applied to assess, support and deliver significant downward pressure on charges to ratepayers.

Malcolm Morrison
Malcolm has developed a well recognised expertise in solving operational, strategic and governance issues within councils.  He has worked extensively in this field in relation to most services provided by councils and consequently has access to a large database of performance measures and solutions.  Malcolm has extensive experience in general and commercial management in large and small firms and has also owned and managed international contracting companies in private enterprise.  This experience has developed his expertise in optimising business and governance issues by using the best available private enterprise solutions in a local government environment.  Malcolm has provided and implemented innovative solutions for local government throughout New South Wales, Queensland and New Zealand.

From Outrage to Engage - Taking the community on the asset management journey with you to achieve better results
Viviene Twyford and Justin Connelly

Imagine a world where your community of interest has a relationship with your organisation that allows them to be in an informed position about the prioritisation challenges that you face.  In this world your community is empowered to work with decision makers and help them identify the priorities that require focus in the ‘squeeze’ of a constrained environment.

Sound like Shangri La?  It can be a reality for your organisation.

This presentation outlines the benefits of developing a relationship with your community and touches on the core principles that enable this to become a reality.  Investing energy in developing a relationship and taking time to learn from each other allow your community to develop realistic views of the challenges around asset management with constrained resources.  This enables you to build realistic expectations with your community based around their “willingness to pay”.

The result can be an engaged community travelling with you on the journey who has contributed to the decision making process.  As opposed to an outraged community who may be fighting you every step of the way.  Which of these outcomes would you rather invest your valuable time and energy into?

Vivien Twyford
Vivien has been a Community Engagement and Public Participation Consultant since 1991.  She was president of the International Association of Public Participation (IAP2) for the year 2004 and has longstanding involvement with that organisation.  She believes that the ability to address “wicked” problems that have no simple solutions and require a new approach to problem solving is a skill that has a growing need.  Vivien supports politicians, boards and executives in changing their approach from “the experts know best – we’ll give you the best technical answer” to one where cooperation and collaboration between a range of stakeholders creates wisdom and enduring solutions.

Justin Connolly
Justin is a Consultant with GHD’s Infrastructure Strategy Group, based in Auckland City and is a passionate practitioner of communications and engagement.  His involvement in multi-disciplinary projects in New Zealand ranges across a number of clients who deliver large infrastructure projects.  To help him in this he draws upon his previous experience in the industries of finance, recruitment and tourism.

Decision-making as an effective instrument of operational success 
Dwayne Pretli

In the wake of a global financial crisis, a constrained fiscal environment and an economic recovery that has not yet materialised, we are confronted with constraints and challenges not experienced in decades. Appropriate decision-making is one of the most effective instruments an organisation has for successfully navigating this unfamiliar and uncertain business climate. 

Appropriate decision-making provides a relatively simple way of dealing with complexity and realising material benefits.  In this presentation, the author first examines the basic assumptions around the way we make decisions and set priorities.  He then looks at understanding how our limitations shape decisions, and how to use efficient decision-making as a means of providing clarity around the strategic benefits of a particular decision.  Finally, he discusses the business processes that help integrate decision-making with core ‘operational systems’.

The author will draw upon the experiences of GHD’s Infrastructure Strategy Team to illustrate some innovative examples of decision-making within Asset Management, Programme Management, Programme Planning, Capital Works Prioritisation and LTCCP planning.  In all of this, decision-making will be presented as a deceptively simple process that, when used appropriately, can help us to achieve many things.

Dwayne Pretli
Dwayne is a management and sustainability practitioner with 11-years experience as a professional consultant and 13-years experience as a working professional.  He is the Sustainability Consulting Manager for GHD’s New Zealand operations and a Principal Management Consultant within GHD’s Auckland office.  Dwayne is familiar with programme and strategic process design, sustainable asset management, sustainable resource management, integrated design, renewable energy and climate change policies.  In particular, Dwayne has specific skills in strategic research, policy analysis, corporate reporting and prioritisation processes.

The subject of decision-making is one that is very close to Dwayne’s heart, and is a subject that he has worked professionally on in various capacities for the past four years.  He has also had the opportunity to present the subject matter to numerous conferences across New Zealand and Australia (including the Ingenium conference last year).  This is an exciting field of work that offers many benefits that Dwayne looks forward to sharing.

Infrastructure Makers and Takers – Sharing the Benefits and Cost
Hugh Blake-Manson

This paper reviews international and historical decisions on intergenerational equity in infrastructure provision, and highlights a New Zealand lead approach to setting boundaries, measuring and targeting intergenerational effects in the physical Asset Management sector. 

The First New Zealand National Infrastructure Plan – The Plan, clearly identifies that central and local governments Asset Management practices must improve.  With tight fiscal constraints, a keen focus on which and when core infrastructure elements are built is vital.  Each element must be efficient and effective, judged against its 4 well-being attributes.  So on what criteria are the intergenerational costs and benefits passed on?.  Should it be more than an economic assessment?

When taking a lifecycle view, intergenerational effects are considered to be more important than the decision to build infrastructure, given more than 30 % of New Zealanders will be over 65 years old by 2050 and a majority of Councils populations will be in decline.  These people were the “makers”, but are they now taking all the asset inequitably?.

By looking a real world examples, we seek answers to a number of questions including - Is the basis of payment by successive generational takers made according to the relative benefit they reap from the asset? Was depreciation measured as relative benefit/loss? Was the charge to existing and future generations based on relative benefit determined by assessment of contribution to levels of service?

Hugh Blake-Manson
Hugh has been involved with Utilities, Rivers and Roading Asset Management since the mid 1990’s.  Living at the costal end of the Canterbury Plains provides him with a constant reminder of the current and future challenges communities and the environment are predicted to bring.  As Selwyn Districts Utilities Manager, he leads a nationally recognised programme in 5Waters Activity Planning.  Hugh is passionate about actively and effectively meeting the opportunities the district and wider region provide in infrastructure demands, particularly with the primary sector advances forcing changes to 5Waters Utilities services.

Asset Management for public entities: learning from local government examples
Martin Richardson

We have recently published a resource called “Asset management for public entities: learning from local government examples”.

In 2009 we reviewed the asset management plans of 72 local government authorities as part of our audit work on Long-Term Council Community Plans. The publication encourages asset managers to see what other asset managers are doing well by sharing real examples and our views on them.

Good asset management is essential to governance and management of any organisation’s business, and is integral to improving financial planning and service processes. The principles we present are widely applicable across all public sector organisations.

At the NAMS Advanced Asset Management Forum 2010 we would present:

Martin Richardson
Martin is an Associate Director in Audit New Zealand’s Specialist Assurance Team, which he joined in 2007 after 10 years with the UK Audit Commission. He has particular interests in performance measurement, management and reporting, asset management, and regeneration. For two years he worked in the Neighbourhood Renewal Unit of the Office of the Deputy Prime Minister, London, working on regeneration programmes.

In New Zealand he worked on Long-term Council Community Plans in 2005/06, and again in 2008/09. This allowed him to review asset management practices in local authorities up and down the land as well as letting him to travel twice round the country.

Martin is member of the Royal Institution of Chartered Surveyors.

Do you have the right people doing the right things in the right way?
Lisa Roberts

As infrastructure management practices have evolved over the last two decades, ass et managers traditionally focused on engineering practices have developed new competencies to manage more effectively and efficiently.  Strategic planning and analysis skills, performance monitoring and auditing skills, commercial acumen and an understanding of the costs, benefits and risks associated with different service delivery models are all important.  In tougher economic times, the pressure to become more efficient makes these skills even more essential.

The competency framework presented in this paper separates activities into those that would be expected by the Governance, Managerial and Service Delivery functions of the infrastructure management organisation.  It then identifies the skills and competencies required to deliver each of the activities most efficiently within those functional areas.

These competencies may be delivered through different approaches to organisational structure and private sector involvement.  The paper presents a range of successful but different approaches identified through literature and case study research and common success factors in identifying the best approach.

Lisa Roberts
In early 2007 Lisa established a sole consultancy company Infrastructure Decisions Limited which provides asset management and business consulting advice.  Until 2007, Lisa was an Associate Director in AECOM’s Advisory Services Group where she worked for 9 years providing infrastructure management advice to the public sector in NZ and internationally. 

Lisa has been an author and project manager of a number of the NAMS manuals, including the ‘IIMM’, Optimised Decision Making, Levels of Service and Valuation/Depreciation Guidelines.  She partners with clients to help them practically apply these concepts and guideline to achieve more effective asset management and decision making.