Part 1 - Introduction to Asset Management.pdf
Content
GUIDE TO ASSET MANAGEMENT
Part 1: Introduction to
Asset Management
Guide to Asset Management
Part 1: Introduction to Asset Management
Guide to Asset Management Part 1: Introduction to Asset Management
Summary
This document introduces the Austroads Guide to Asset Management, the aim of which is to offer
guidance on how to best manage physical road infrastructure. The guide covers various aspects
of asset management including how to determine and plan to accommodate
stakeholder/community expectations, formulate and review asset strategies, develop works
programs, assess asset performance and undertake asset valuation and audit.
Whilst the focus of the Guide to Asset Management is on the management of the physical road
assets, the importance of total transport system management, which covers all activities concerned
with the provision, operation, maintenance, renewal and disposal of transport infrastructure assets,
is duly recognised. Road asset owners and managers are therefore encouraged to adopt a
comprehensive range of coordinated activities, from transport planning, through design,
implementation and operations in order to maximise community benefits.
The guide complements the Austroads Publication AP-R202/02 Integrated Asset Management
Guidelines for Road Networks, which describes in detail the integrated asset management
planning processes and recommended implementation stages aimed at achieving business
improvements within road agencies. The guide also recognises the purpose of the Australian
Transport Council’s National Guidelines for Transport System Management in Australia, the scope
of which embraces all land transport modes and is compatible with its principles.
The specific sections of the guide and its accompanying commentaries elaborate key road asset
management principles through providing best practice recommendations and by way of example.
Keywords
Asset management, roads, stakeholder/community expectations, asset strategies, works
programs, asset performance, asset valuation, audit, implementation, business process, improved
practices, information systems, decision support tools, objectives, road use management, heavy
vehicle access, service levels, intervention levels, whole of life cycle costing, managing risks
First published 2006
Second edition November 2009
© Austroads Inc. 2009
This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may
be reproduced by any process without the prior written permission of Austroads.
ISBN 978-1-921551-87-1
Austroads Project No. AP1008
Austroads Publication No. AGAM01/09
Project Manager
Kathy Martin, MR WA
Prepared by
Kieran Sharp and Tyrone Toole, ARRB Group
Published by Austroads Incorporated
Level 9, Robell House
287 Elizabeth Street
Sydney NSW 2000 Australia
Phone: +61 2 9264 7088
Fax: +61 2 9264 1657
Email: [email protected]
www.austroads.com.au
This guide is produced by Austroads as a general guide. Its application is discretionary. Road
authorities may vary their practice according to local circumstances and policies.
Austroads believes this publication to be correct at the time of printing and does not accept
responsibility for any consequences arising from the use of information herein. Readers should
rely on their own skill and judgement to apply information to particular issues.
Guide to Asset Management
Part 1: Introduction to Asset Management
Sydney 2009
Austroads profile
Austroadsp purpose is to contribute to improved Australian and New Zealand transport outcomes
by:
providing expert advice to SCOT and ATC on road and road transport issues
facilitating collaboration between road agencies
promoting harmonisation, consistency and uniformity in road and related operations
undertaking strategic research on behalf of road agencies and communicating outcomes
promoting improved and consistent practice by road agencies.
Austroads membership
Austroads membership comprises the six state and two territory road transport and traffic
authorities, the Commonwealth Department of Infrastructure, Transport, Regional Development
and Local Government in Australia, the Australian Local Government Association, and New
Zealand Transport Agency. Austroads is governed by a council consisting of the chief executive
officer (or an alternative senior executive officer) of each of its 11 member organisations:
Roads and Traffic Authority New South Wales
Roads Corporation Victoria
Department of Transport and Main Roads Queensland
Main Roads Western Australia
Department for Transport, Energy and Infrastructure South Australia
Department of Infrastructure, Energy and Resources Tasmania
Department of Planning and Infrastructure Northern Territory
Department of Territory and Municipal Services Australian Capital Territory
Department of Infrastructure, Transport, Regional Development and Local Government
Australian Local Government Association
New Zealand Transport Agency.
The success of Austroads is derived from the collaboration of member organisations and others in
the road industry. It aims to be the Australasian leader in providing high quality information, advice
and fostering research in the road sector.
GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
CONTENTS
1
INTRODUCTION ............................................................................................................ 1
1.1
1.2
1.3
1.4
1.7
The Need for Asset Management................................................................................... 1
The Aims and Benefits of Asset Management................................................................ 1
Definition and Scope of Asset Management................................................................... 1
The Austroads Integrated Asset Management Guidelines for Road Networks .............. 2
1.4.1
Introduction to the IAM Guidelines.................................................................... 2
1.4.2
Asset Management as a Process Approach..................................................... 3
1.4.3
Implementation and Continuous Improvement in Asset Management
Practices ........................................................................................................... 5
The Role of Asset Managers .......................................................................................... 6
Relationship and Synergies with the National Guidelines for Transport System
Management in Australia ................................................................................................ 7
Achieving Effective Asset Management ......................................................................... 9
2
OVERVIEW OF KEY ASSET MANAGEMENT PRINCIPLES AND PRACTICES....... 10
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
Policy-driven and Results Oriented and Customer Focused ........................................ 10
Managing Current Assets and Providing for Future Assets.......................................... 12
Providing a Defined Level of Service............................................................................ 14
Developing Cost-effective Programs for the Long-term................................................ 15
Managing Risks Associated with Asset Failures .......................................................... 16
Performance Monitoring, Audit and Feedback ............................................................. 17
Use of Information Systems and Decision Support Tools ............................................ 18
Continuous Improvement in Asset Management Practices and Human Resource
Skill Development ......................................................................................................... 20
3
THE AUSTROADS GUIDE TO ASSET MANAGEMENT ............................................ 21
3.1
3.2
3.3
Structure ....................................................................................................................... 21
Relationship to other Austroads Publications ............................................................... 22
Scope of other Parts of the Austroads Guide to Asset Management ........................... 23
3.3.1
Part 2: Community and Stakeholder Requirements ....................................... 23
3.3.2
Part 3: Asset Strategies .................................................................................. 23
3.3.3
Part 4: Program Development and Implementation........................................ 24
3.3.4
Parts 5, 6 and 7: Asset Performance .............................................................. 24
3.3.5
Part 8: Asset Valuation and Audit ................................................................... 24
1.5
1.6
REFERENCES ...................................................................................................................... 25
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
TABLES
Table 1.1:
Table 1.2:
The asset management process ...................................................................... 3
Differences in functional roles........................................................................... 6
FIGURES
Figure 1.1:
Figure 1.2:
Figure 2.1:
Figure 2.2:
Figure 2.3:
Figure 2.4:
Figure 2.5:
Figure 3.1:
Integrated asset management process flow diagram ....................................... 4
Hierarchy of linked objectives for transport system development..................... 8
Elements of asset management for road networks ........................................ 10
Typical road condition deterioration with time................................................. 12
Equitable and economically efficient standards .............................................. 15
Relationship between maintenance standard and transport costs ................. 16
Central role of information in the asset management process ....................... 19
Structure of Austroads Guide to Asset Management with focus on Part 1 ..... 22
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
1
INTRODUCTION
1.1
The Need for Asset Management
Effective asset management is of critical importance for all transport agencies and managers of
road infrastructure because:
Roads and associated infrastructure are vital links in the chain of communications providing
access and mobility for communities and industry.
The value of road infrastructure assets for all classes of roads in Australia and New Zealand
is extremely high compared to other public infrastructure; of the order of A$150 billion dollars
in replacement cost terms. This equates to approximately 50% of the total government
capital investment in education, health, energy, mining and manufacturing combined.
Effective stewardship is essential to help ensure public safety, for retaining the value and
serviceability of these assets for future generations, and for providing best value to users and
investors.
The government and the community demand increased accountability for effective and
efficient spending of public funds.
Competition for limited funds across government and other sectors is increasing.
1.2
The Aims and Benefits of Asset Management
The key asset management objective contained in the Austroads Assets Strategy is to minimise
the whole of life cycle costs of road assets, whilst aiming to meet the needs and expectation of
the community and other stakeholders who use or benefit from the asset, and to fulfil government
objectives in terms of safety, environment and equity of access. Within this context, its main focus
is on the management and preservation of physical assets.
Thus, when asset managers speak about whole of life cycle costs (WOLCC), they mean those
costs incurred by the responsible road agency as well as the costs incurred by road users, such as
vehicle operating costs, travel time and crash costs (see Figure 2.4). In an ideal situation, where
funding is not constrained, the best possible outcome for the community is achieved when the sum
of road agency costs and road user costs is minimised.
To meet these objectives, asset managers should ensure that:
Assets are managed to conditions which are appropriate for intended use.
The immediate and long-term budget requirements, together with the consequences of
budget variations, are explicit.
Risks associated with asset use are managed, recognising the duty of care owed to the
public, with emphasis given to safety and minimising environmental impacts.
1.3
Definition and Scope of Asset Management
Roads exist as part of an integrated land transport system as a service delivery arrangement.
Therefore road system managers need to have a strategic view to manage demand and match
demand with supply, through the ongoing provision of new and upgraded links and maintenance of
existing stock to ensure the least long term cost to the community.
It is essential that this context be borne in mind even in addressing the more routine maintenance
activities to ensure cost-effective solutions are being delivered.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Whilst the term asset management has a variety of interpretations in terms of scope, in the
broadest sense total road system management includes all aspects concerned with the provision,
operation, maintenance, renewal and disposal of road infrastructure assets, such as:
transport planning
traffic modelling
infrastructure maintenance, preservation, provision and renewal
network operations (meaning road use management issues)
project evaluation of new road infrastructure, or major projects
project level preparation and implementation of works
pavements, materials and bridge technology
road design
road safety
traffic engineering.
However most of these functions are well documented in the Austroads Guide to Pavement
Technology and the Austroads Guide to Asset Management complements these other guides by
focusing on best practice management of the physical infrastructure. Therefore, for the purposes
of this guide the definition of road asset management is:
Road asset management is a comprehensive and structured approach to the longterm provision and maintenance of physical road infrastructure using sound
engineering, economic, business and environmental principles to facilitate the effective
delivery of community benefits.
It focuses on the physical asset recognising that:
The management of physical assets is not an end in itself, but is undertaken to ensure the
operating functionality of the road network.
Purely ‘asset-oriented’ interventions will prove constraining and potentially too expensive by
not keeping a broad enough focus on all possible solutions.
Whilst specialised sections of member agencies are actively concerned with the provision of
new assets, asset management practitioners must be aware of the ongoing management
implications of expansion decisions.
Asset managers need to make decisions in the knowledge of road use management (RUM)
strategies and provide feedback to the road use managers in order to ensure optimal use of
current assets.
1.4
The Austroads Integrated Asset Management Guidelines for Road
Networks
1.4.1
Introduction to the IAM Guidelines
In establishing best practice in asset management, Austroads has recognised the need for:
a consistent framework of integrated asset management planning processes
associated implementation guidelines for practitioners.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Thus, in 2002, Austroads published a set of Integrated Asset Management Guidelines for Road
Networks (Austroads 2002b), referred to as the IAM Guidelines. These are fundamental to the
fulfilment of Austroads’ asset management objectives and, therefore, complement the aims of this
guide, and will remain as a ‘flagship’ publication within the Austroads Guide to Asset Management.
This section of the guide summarises the scope and contents of the IAM guidelines and places
them in context by identifying links with the best practice recommendations and examples provided
herein and encouraging commitment to the following key principles:
adoption of a rigorous and cyclic process-based approach
development of clear business processes and organisational accountabilities
continuous improvement in asset management practices and human resource skill
development.
In so doing it describes:
the asset management process
the main stages of an asset management implementation program
the role(s) of the asset manager.
1.4.2
Asset Management as a Process Approach
To aid the establishment of a consistent framework of processes and procedures for improving
asset management practice, Austroads has adopted a conceptual framework which comprises
three main parts and seven phases as shown in Figure 1.1 and Table 1.1.
Table 1.1: The asset management process
Asset management strategic planning
Part 1
Phases 1 to 4 *
Define objectives
Form asset strategies
Develop investment programs
Identify asset maintenance needs
Setting asset management objectives, and defining a strategic
plan based on identified corporate and stakeholder
requirements. The asset management strategic planning
process is the major impetus to the effective working of asset
management.
Asset management actions
Part 2
Phase 5 *
Implement works programs
Creation/acquisition, operation, rehabilitation and
replacement, disposal/rationalisation of the agency’s assets.
Asset management performance
feedback
Part 3
Phases 6 and 7 *
Audit
Review
Auditing the implementation and reviewing the outcomes of
asset management actions to gauge their effectiveness in
satisfying organisational strategies. The results of such
reviews are used as inputs to subsequent strategic planning
cycles.
Refer to Figure 1.1.
Source: After Austroads (2002a).
This conceptual framework has since been developed further and personalised by some state road
authorities as part of their internal asset management practice. Many organisations have also
systematised this process, in terms of establishing corporate procedures and complementary
information systems and decision support tools. The process and procedures are fundamental,
and provide the basis for specifying technological systems.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Source: After Austroads (2002a) with minor adaptation.
Figure 1.1: Integrated asset management process flow diagram
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
The scope of network level asset management covered by the Guide to Asset Management
concentrates on the provision and maintenance of physical infrastructure, shown as a
subcomponent of Figure 1.1. However, it does not ignore the need for complementary activities
and the benefits arising from an integrated approach, and seeks to alert asset managers about the
range of infrastructure-oriented and other solutions at their disposal.
The strategic planning stage is vital to effective asset management and consists of:
The Planning Sub-Process, which describes the overall process flow, and outlines the need
for various frameworks, standards and strategies.
The Information and Communication Sub-Process, which deals with the flow of information
from the Planning Sub-process. This information serves to involve and inform external
stakeholders, and facilitates decision making at different levels of an organisation by
articulating internal objectives, strategies and plans.
Whilst strategic planning may be performed on a multi-year basis linked to an authority’s planning
and funding cycles, specific components fit an annual cycle, including:
asset performance gap analysis, which produces a total needs program
optimisation and prioritisation of options and proposed funding scenarios and an outline of
works programs
submission of agreed work program.
The achievement of objectives through monitoring (Phases 6 and 7) provides feedback on the
overall process allowing strategies to be reviewed and further actions planned.
Organisational objectives, strategies and standards must also be regularly reviewed at least for
current relevance.
1.4.3
Implementation and Continuous Improvement in Asset Management Practices
Asset management is a way of doing business in the broadest sense. It is not simply about
implementing certain activities to achieve specified technical standards, nor is it primarily
concerned with the application of modern software tools, although each have a role to play. It is in
fact much broader. It is about delivering better performance results through appropriately targeted
investment in the introduction and refinement of improved people skills, products and processes.
The ultimate goal is to deliver benefits to all road transport stakeholders.
Four sequential stages are recommended to progress a road agency from the early stages of
initiating an asset management program to full implementation of the Austroads IAM process,
namely:
Stage 1
Program establishment
Stage 2
System design and development
Stage 3
Pilot planning cycle
Stage 4
General implementation.
Whereas many readers of this document will belong to institutions with established practices, the
Austroads Guide to Asset Management recommends a structured re-assessment of current
organisational practice to identify priority areas for improvement. Many reputable organisations
have adopted a similar approach and reaped significant benefits from so doing (AASHTO 2002
and VicRoads 2004a).
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
1.5
The Role of Asset Managers
The role of asset managers in integrating organisational decisions embraces the following:
providing a link between strategic goals and longer term processes and annual project level
decisions
providing a link between asset creation and asset maintenance decisions
providing a link between agency road use management and physical asset decisions
considering all asset classes – pavements, structures, other road-related infrastructure
ensuring consistent communication between legislators, community, stakeholders, agency
executive, frontline practitioners
ensuring the appropriate management and flow of asset related data and information across
the organisation in order to inform asset strategy development and monitor asset
performance
providing a link between finance, planning, human resources, information and delivery
functions of the organisation
providing asset performance feedback to inform future policies and strategies.
Table 1.2: Differences in functional roles
Management
function
Network
information
Network planning
Programming
IAM phases or
related activities
Monitoring and
evaluation
Organisations concerned
All phases and
activities
Management and reporting of information on road assets
Importation and export of data to analytical and reporting
tools
Owners, asset managers and
service providers
IAM Phases 1
and 3
Formulation of objectives and associated levels of
service and standards
Owners and sectoral policy
advisers
IAM Phases 2
and 3
Developing strategies and resource requirements to
support defined levels of service, standards and
objectives, including use of non-build solutions
Owners and asset managers or
operators
IAM Phase 4
Network screening to identify candidate sections
Production of a long list of priority sections with ranking
based on economic criteria, under budget constraint
Determining the necessary work program to meet
performance objectives
Asset managers or operators
IAM Phase 4 and
Transport Planning
Economic (and financial) feasibility of alternatives for
rehabilitation, new investment or capacity expansion
Owners and project/asset
managers or operators
IAM Phase 5
Project investigation and design of works
Preparation and issue of contracts and works
instructions
Project/asset managers or
operators
IAM Phase 5
Planning and undertaking major or minor works to be
done on specific sections and projects
Service providers and project/asset
managers
IAM Phases 6
and 7
Measuring achievements against key performance
indicators
Assessing future asset management strategies and
plans
Owners
Asset managers or operators and
service providers would be
expected to implement internal QA
systems as part of each specific
function
Preparation
Implementation of
physical works
Typical aims
Source: Adapted from Robinson et al. (1998).
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Organisations, and individuals, should aim to identify their role in the overall process. Identifying
such differences in functional roles, as illustrated by the examples in Table 1.2 will help improve
effectiveness through focusing on particular tasks and doing them well. In so doing, the following
points should be emphasised:
ensuring that planning accommodates non-build solutions
undertaking comprehensive project preparation activities, including economic feasibility,
particularly for major works
encouraging increased involvement of project management and delivery staff in preparation
and implementation activities.
1.6
Relationship and Synergies with the National Guidelines for
Transport System Management in Australia
Road asset management needs to take place in support of total (land) transport system objectives,
which in turn aim to meet the transport needs of the community. At the highest level transport
contributes to broader societal and whole-of-government objectives.
The challenge therefore is for road asset management to consider and contribute in a proactive
manner to meeting this demand, and not simply respond with a supply-side approach.
The Australian Transport Council (ATC) has published National Guidelines for Transport System
Management in Australia (ATC 2004) to provide a framework for non-urban land transport
decisions. These guidelines address the Australian Government’s approach to funding, planning,
developing and managing Australia’s national land transport infrastructure.
The National Guidelines address multiple modes, both road and rail, and are primarily concerned
with the designated national land transport network and its corridors, although the overall
framework is relevant to all classes of transport infrastructure and associated modes.
The National Guidelines adopt a similar seven-phase approach as endorsed by Austroads, and
aim to achieve transport system objectives which are vertically linked, and integrated as illustrated
in Figure 1.2. The five-phases illustrated in the Figure are complemented by two further phases,
namely project and program implementation, and post-completion review.
The National Guidelines also recognise that direct linkages will exist between non-sequential
phases, e.g. between policy choices and program structure, such as regional Auslink programs,
black spot improvement programs, etc. Further examples would include the balance between the
routine maintenance, preventative maintenance and rehabilitation components of an overall road
infrastructure preservation strategy.
A key requirement is to ensure ‘strategic fit’ between high level objectives and project and program
responses. To achieve this requires appropriate strategies to be established and policy choices to
be made. Examples of the latter include:
the degree to which desired outcomes should be pursued through land use policy
developments rather than applications of transport instruments alone
the preferred role of infrastructure versus non-infrastructure strategies and investment
the strategic emphasis which should be given to such issues as road freight versus rail
freight as preferred land transport modes
the funding of capital (new asset stock) versus maintenance (existing asset stock)
investment
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
the relative weights given to different objectives
the degree to which an equity objective should be pursued to complement an economic
efficiency objective in defining service levels and evaluating investment alternatives.
Source: After Australian Transport Council (2004).
Figure 1.2: Hierarchy of linked objectives for transport system development
The current version of the National Guidelines is predominantly related to large-scale capital
investment on a selected part of the total land transport system, while this guide is concerned with
a network-oriented approach to road infrastructure preservation covering all road classes.
However, the above issues are equally pertinent to both sets of guidelines and are addressed
throughout this document.
Road asset managers should familiarise themselves with the National Guidelines and always seek
to support the transport needs of the community in its broadest sense.
In addition, it should be understood that this new, integrated approach to transport system
management lends itself to the development of strategic long-term directions which promote the
development of scenarios for anticipating future demand for transport services. A number of
Austroads members have adopted this approach as part of their strategic planning process, see for
example Queensland Department of Main Roads (2002) and Queensland Transport/ Queensland
Department of Main Roads (2000), thus helping to ensure adoption of integrated solutions to meet
society’s needs, both now and in the future. Such initiatives are encouraged amongst all
organisations.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
1.7
Achieving Effective Asset Management
To achieve effective asset management this guide offers guidance and best practice examples of
the following asset management principles:
adoption of a rigorous, and cyclic process-based approach which is policy-driven and results
oriented and customer focused
manages current assets and provides for future assets
provides a defined level of service
develops cost-effective programs for the long-term
manages risks associated with asset failures
requires performance monitoring, audit and feedback
employs appropriate quality information and decision support tools
encourages continuous improvement in asset management practices and human resource
skill development
encourages development of clear business processes and organisational accountabilities.
Accompanying commentaries elaborate the above principles in the following areas:
characteristics and example key results areas and key performance indicators
increasing efficiency through road use management
management of heavy vehicle access
service levels and intervention levels
whole of life cycle costing
managing risks.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
2
OVERVIEW OF KEY ASSET MANAGEMENT PRINCIPLES
AND PRACTICES
2.1
Policy-driven and Results Oriented and Customer Focused
Asset management is conducted within the context of organisational goals, policies and budget
constraints. Goals and policies must be established within a framework which incorporates
community input. Performance objectives provide a way to convey to the community how
agencies are managing public assets.
Figure 2.1 illustrates how asset management strategies aim to meet these needs and are
developed from a number of elements. An understanding of how they relate is necessary to
develop and review the effectiveness of an overall strategy. These relationships also provide a
framework to monitor and review existing strategies.
Figure 2.1: Elements of asset management for road networks
In recognition of the principle that roads should be treated as a service to the community, Phase 1
of the Integrated Asset Management Process requires clear assessment and definition of ‘Road
Agency and Stakeholder Requirements’ and for these to be articulated in terms of key results
areas (KRAs) and key performance indicators (KPIs).
Stakeholder and community input through surveys, focus groups and other structured methods is
an essential requirement of good asset management. Customer input is fundamental in setting
standards and must be followed by ongoing review to track whether customer expectations are
being achieved.
Austroads have and continue to undertake significant studies in this area, see for example Tsolakis
and Thoresen (1998) and the Austroads publication Guidelines for Community Input in Setting
Levels of Service and Intervention Standards for Road Networks (Austroads 2002b). These should
be consulted prior to planning, implementing and presenting the results of surveys.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
From a broad asset management perspective, important considerations include:
a need to start at a network level to agree overall principles and prevent local issues from
dominating outcomes from the outset
giving sufficient attention to study design so that the objectives of any consultation are
fulfilled as far as possible
identifying who the ‘community’ is and ensuring appropriate representation for the task in
hand, including those stakeholders that represent the entire community, those with a local
social interest and those with a clear financial interest
being clear about the value of both qualitative and quantitative surveys, where the latter may
help explain why certain issues are important to users, whilst the former may help quantify
their importance
focusing questions to represent the type of road environment, including different rural and
urban situations, and circumstances where investment is driven by traffic demand or mostly
by social justice and other factors
distinguishing between circumstances where a trade-off under a zero-sum scenario may be
appropriate, and those where a more direct, commercial ‘willingness to pay’ approach may
be best suited.
Agency KRAs should be defined for each generic area in which improvement is required or
performance should be monitored. They should be in line with corporate objectives and should
reflect an agency’s internal operations and performance, and the service provided to users or
areas affecting other stakeholders. KRAs should embrace economic, social, safety,
environmental, customer service and financial performance. For example:
ensure a safe road infrastructure
deliver a target level of service, including meeting ride quality and capacity targets which
contribute to overall transport efficiency
preserve the physical assets and provide continuity of access
contribute to a sustainable environment, by considering environmental outcomes in planning
and decision making and by employing appropriate methods and measures to reduce
impacts and enhance environmental values (Austroads 2006).
Asset management objectives, or KPIs, should also be formulated which are more tightly defined in
terms of indicators and target criteria. Consequently, these KPIs should be specific, directly and
objectively measurable, attributable, affordable, capable of being monitored, achievable and be
used to:
formulate strategies and therefore be applied in IAM Phase 2
determine asset management actions as part of IAM Phases 3 and 4
monitor the achievement of organisational goals and service levels in IAM Phases 6 and 7.
Austroads National Performance Indicators (Austroads 2001) facilitate assessment of both road
system and road agency performance of Austroads member authorities and can provide a basis for
defining suitable indicators for other organisations. The Austroads performance indicators are
available on the Austroads website and at the time of writing comprise a set of 36 indicators, ten of
which are classed as road agency performance indicators. Specific targets are not set, but
statistics related to each indicator are published and provide a basis for monitoring trends in
service levels and other indicators.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
For asset management, the most widely used road agency performance indicator in Australia and
New Zealand is Smooth Travel Exposure (STE); defined as the proportion of travel undertaken
each year on roads less than a specified level of roughness. Road authorities report this and other
information, typically at annual intervals, and also record achievements against the target or
limiting values which they aim to achieve. Reporting may be made separately for different classes
of road, and targets may also vary.
2.2
Managing Current Assets and Providing for Future Assets
The development of road asset management strategies forms the core of IAM Phase 2. Whilst
investment programs concentrate on maintenance and rehabilitation of road pavements and
bridges, they should be developed in coordination with road use strategies. The level of road
system performance provided by the asset can be affected by management actions which
influence the need for travel, the type of travel and types of vehicles allowed.
An effective infrastructure management strategy should address both existing and new assets. It
should contain a suitable range of interventions which are essentially preventative in nature and,
as illustrated in Figure 2.2, can reduce long-term costs. The ‘stitch-in-time’ policies used by a
number of Australian road agencies, which are particularly applicable to the preservation of
pavement assets, adhere to this principle, for example see VicRoads (1993). These and similar
strategies are highly recommended as they have been found by many practitioners to provide a
return on investment of around two or three times that obtained when assets are allowed to
deteriorate in an uncontrolled manner, or to a condition where full replacement is necessary.
Source: After SADC (2003).
Figure 2.2: Typical road condition deterioration with time
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Those components of an infrastructure (preservation) strategy which seek to ensure adequate
performance of existing assets comprise an appropriate mix of the following road asset
management responses:
Routine maintenance activities which address minor defects on the carriageway and
structures, off-carriageway works including grass cutting, drain clearing and the like, and
essential activities to remove obstacles from the road and ensure a base level of road safety.
The need for such activities should not be underestimated. Considerable evidence exists
which demonstrates that rates of deterioration are higher in the absence of effective routine
maintenance, including where basic drain clearing is not performed to an adequate level.
Preventative periodic maintenance designed to reduce future deterioration by timely
surface interventions to limit the need for expensive rehabilitation, and to ensure minimum
skid resistance and general safety levels are maintained. Such works can be relatively
modest in unit cost terms, but highly effective when based on whole of life considerations and
not by adopting a ‘worst-first’ approach.
Rehabilitation which targets roads whose ride quality has deteriorated significantly, or which
display inadequate structural capacity for current or future traffic loading. By their nature,
such works are very costly and might be expected to be of the order of five to ten times more
costly than a preventative treatment program. Where a large program of rehabilitation exists,
say greater than 3-4% per annum, it is likely that this reflects a lack of investment in periodic
interventions, neglect, poor implementation or a discrete increase in traffic loading patterns.
Timely intervention of appropriate quality is best. Conversely, where the replacement
program is very small, say less than 1% per annum, and programmed maintenance costs are
increasing and condition is falling, it is likely that expenditure on rehabilitation is too low.
Again, timely rehabilitation is required to ensure whole of life cycle costs are minimised.
Appropriate solutions should be developed based on best practice, for example see
Austroads (2004a).
In today’s environment, the above set of responses needs to be extended to include:
Capacity improvement programs to optimise traffic flow, including identifying the need for
additional traffic capacity or improved traffic management measures. Solutions require
considerable co-ordination both within and between agencies and in many cases the
optimum response may be through improved road use management.
Road safety and blackspot improvement programs to reduce the incidence of road
crashes and provide appropriate facilities for pedestrians and cyclists and other vulnerable
road users.
Management strategies for heavy vehicle access to deliver efficient freight services thus
helping provide customers with goods at affordable prices. However, asset managers are
often worried at the existence of very heavy or oversized vehicles and the potential for
accelerated damage to roads and structures. Safety may also be a concern. It is important
therefore that such issues are taken into account in both infrastructure and road use
management. Strategies need to recognise the current state of knowledge regarding heavy
vehicle contributions to the damage of road pavements and structures, and should aim to
undertake any analysis in a nationally consistent manner (Austroads 2004b).
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
2.3
Providing a Defined Level of Service
As per Phase 3 of the Integrated Asset Management Process, asset strategies should be
developed with clear level of service objectives providing the basis for:
planning needs
assessing risks
gauging the quality of delivery.
Levels of service should be established for:
all classes of assets, and their use, including for basic access
major structures such as bridges and culverts
environmental and social impacts, these being amongst the least visible yet most important.
Each agency must establish levels of service appropriate to its organisational goals and resource
constraints, and consistent with the perceived needs of the community. Absolute levels of service
should be varied with respect to the role and importance of the asset and its use within the road
system. Higher trafficked roads warrant a higher level of service. This increases overall transport
efficiency through better ride comfort and higher travel speeds, and helps reduce costs to road
users.
Lower trafficked roads provide fewer opportunities for direct road user savings to offset investment
costs, and therefore associated service levels are generally lower. However, minimum levels of
service should be encouraged to ensure basic levels of safety and accessibility to essential
services, and to minimise loss of assets. Access also promotes productivity, and is an essential
catalyst to growth in economic and social terms.
Most asset managers and planners recognise such linkages, and there is general acceptance that
a minimum level of service, which may be varied based on demand, should be adopted as a
general policy.
The choice therefore is to set levels of service which strike a balance between being equitable and
in being economically efficient. The range of possible options is illustrated in Figure 2.3. Typically,
practical considerations usually warrant the adoption of ‘equitable standards’, which neither favour
economically efficient standards, nor uniform standards. The adoption of a set of ‘stepped
minimum standards’ can achieve a comparable result, and may form the basis of an ‘economic
base case’ for investment analyses. Acknowledging this is generally accepted as good practice,
and is highly recommended.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Source: After ATC (2004).
Figure 2.3: Equitable and economically efficient standards
Most road authorities publish target level of service criteria which are based on a hierarchy related
to function and overall use. In many cases these are also directly related to engineering design
guidelines with respect to the safety, speed and comfort of travel.
The availability of such targets provides a further yardstick against which performance can be
monitored and reported later in Phases 6 and 7.
2.4
Developing Cost-effective Programs for the Long-term
Road investment programs present a set of programmed management actions to achieve
performance objectives and are linked to the expected life of the assets and their maintenance
treatments. Road investment programs are formulated on the basis of a gap analysis which is
performed during IAM Phase 3, and are delivered as a ‘Total Needs Program’ in IAM Phase 4 and
should be presented with accompanying plans for:
the entire road network
a region
a road corridor
a road link, or project.
Significant benefits can be gained by employing solutions planned using whole of life cycle costing
(WOLCC).
WOLCC involves an evaluation of all the component costs incurred over the whole life of a project.
By adopting a long-term view of the road system, comprehensive WOLCC promotes consideration
of total costs including construction, maintenance and operational expenditure and all of the
variables involved in the evaluation such as user costs (delays, travel time and vehicle operating
costs), safety costs and associated maintenance and rehabilitation costs, agency capital costs and
routine life cycle maintenance costs.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
The manner in which the component costs change is illustrated in Figure 2.4, where increases in
construction/rehabilitation expenditure reduce the costs to road users. The optimum (economic)
standard is obtained when the total transport costs are minimised, and this optimum varies in
relation to traffic level and the associated mix of costs. For a given traffic level, if the road is built to
a standard higher than optimum or if the timing of its implementation is either premature or
significantly delayed, then the benefits would not sufficiently outweigh the additional costs and
therefore the solution would be sub-optimal. Care should be taken to avoid ‘false economies’
where expenditure shortfall below the optimum level of investment leads to significantly greater
transport costs and long-term asset management backlogs.
WOLCC employs the results of deterioration, the effects of treatments and user cost modelling on
the infrastructure to compare alternative investment strategies, the purpose of which is to:
determine how asset life may be best extended by controlled maintenance
determine the optimum timing, intervention levels and mix of treatments to be employed.
WOLCC techniques applied at a system-level allow competition for funds to take place between
projects, with the aim of maximising benefits across a road network in order to prepare long-term
road development and maintenance plans under different funding scenarios.
Source: After SADC (2003).
Figure 2.4: Relationship between maintenance standard and transport costs
2.5
Managing Risks Associated with Asset Failures
Risk management is a core component of asset management activities. Key risks managed
through asset management are:
financial risks – addressed through the adoption and enforcement of asset preservation and
preventative maintenance policies (see Sections 2.2, 2.3 and 2.4 above)
operational risks – by appropriate planning and operational responses in order to limit harm
to individual members of the public or to their property.
This increased alertness has resulted from changes in legislation which was promulgated following
the Australian High Court’s decision in 2001 that the law of negligence should apply to roads.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
It means that Australian road authorities now owe a ‘duty of care’ to road users by exercising their
maintenance powers to protect (the users) from foreseeable harm. Failure to effectively manage
the maintenance of roads (and road-related assets) to an appropriate and affordable standard
places authorities in a position of liability on the grounds of ‘misfeasance’. Fulfilling this
requirement demands that road asset managers demonstrate they have processes and defendable
plans in place to demonstrate their intent to act responsibly.
The issues surrounding the management of risk are complex since they involve:
reasonable business processes
policy decisions
management decisions based on engineering analysis and risk management
court rulings on adequacy.
Fortunately, an appropriate risk management process has similar components to those used in
asset management.
Asset owners, and delegated managers, should demonstrate compliance with the intent of the law.
This means that certain proactive actions aimed at managing risk are necessary including:
regular inspections
managed asset information
maintenance standards, comprising the inspection periods, defect severity and response
times, developed through community input and aligned to available budget
established and documented business processes and management systems covering policy
development, asset monitoring, priority setting and decision making, resource allocation,
program delivery and audit and incident response.
Thus ‘risk management’ embraces all IAM Phases and is fundamental to the successful delivery of
outcomes to the users. Provision to manage such risks should form an essential component of all
asset management activities, with priority given to minimising operational risks.
2.6
Performance Monitoring, Audit and Feedback
As noted in Phases 6 and 7, monitoring of asset performance, audit of work carried out and review
of performance achievement completes the cycle of asset management.
Asset performance is monitored by physical condition measurements of all asset classes (e.g.
roughness, surface condition, strength, bridge strength, signage reflectivity). Monitoring processes
need to be selected to enable assessment of customer satisfaction, needs planning or risk
assessment. Monitoring processes vary and must be selected or structured to provide relevant
information at an affordable price.
Asset inventories must be updated to reflect completed work and new condition/inventory
measures. Asset owners are provided with information from delivery function areas through ‘as
constructed’ drawings and plans for ongoing asset maintenance requirements.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Asset valuation is one method of monitoring asset management effectiveness and is also a
technique for facilitating the translation of engineering assessments into financial terms for
consideration at an accounting level. Various approaches to asset valuation exist, including both
condition-based and age-based depreciation methods (Austroads 2000). Whilst no single
approach is universally accepted, the condition-based approach is favoured by many asset
managers. However, commercial or technical obsolescence are also important factors.
Differences in approaches also include how various asset classes and their component parts are
valued, e.g. separating the valuation of road surfacings, pavements and lower layers, dealing with
land under roads, etc.
However, the main requirement is to achieve consistency in reporting asset values, including
trends, and to allow the effect of investment strategies on future asset value to be determined.
This aids effective communication with financial and general managers, as well as politicians who
represent road users and the local community, and helps to ensure that road management
decisions are made in a broad community context.
On completion of any asset management cycle, the agency should undertake a review of the
existing road asset performance, infrastructure strategies, and whether agency and stakeholder
requirements have been met or exceeded.
A key part of the asset management process is communication with stakeholders. Stakeholders
may include politicians, other government agencies, industry, communities and road users.
Communication with stakeholders may consist of seeking information (such as in setting levels of
intervention standards) or in providing information about a future program of investment.
Strategies for addressing the above requirements are detailed in other parts of the Guide to Asset
Management.
2.7
Use of Information Systems and Decision Support Tools
Information is fundamental to asset management and, as illustrated in Figure 2.5, is used in all IAM
Phases to inform decisions and quantify the results of implementation. Essential information
includes road asset inventories, asset condition, historical records of construction and
maintenance, traffic and other road use data, unit costs, etc. This data then helps inform the
analyses and decisions taken throughout the asset management process.
As technology has developed, more sophisticated and comprehensive road management
information systems, data bases and user tools to collect, store and process data have been
incorporated into asset management practice. Many agencies now use sophisticated pavement
and bridge management systems to facilitate the management of large amounts of data and to
automate some of the analysis required as input to asset management decisions. These systems
have evolved to the point where they have significant potential to improve the overall effectiveness
of the asset management process and communications with stakeholders.
However, substantial resources can be required to operate such systems effectively and care is
needed in their design and implementation.
A pragmatic approach to developing and implementing formal information systems and decision
support tools includes:
commitment to quality at all levels
clear system specification aligned to documented business processes including defining the
scope based on intended use and the outputs users will require
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
simplicity, since this will ultimately retain a greater feel of transparency and comprehension
by users
selection of appropriate models and information categories to produce required outputs, and
planning for data collection and processing
focus on appropriate and affordable data collection strategies
priorities for staged system implementation
appropriate skilled resources dedicated to the task.
Furthermore, asset managers should ensure that the level of system sophistication and
comprehensiveness is appropriate to the level of resources of the organisation and the level of
decision. As noted earlier, the importance of sound processes and frameworks and good practice
in all elements of asset management are more important than having a sophisticated system.
Robinson et al. (1998) and TRL Overseas Centre (1998) offer additional guidance on the design
and implementation of road management systems.
Figure 2.5: Central role of information in the asset management process
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
2.8
Continuous Improvement in Asset Management Practices and
Human Resource Skill Development
Options for greater efficiency, increased knowledge, better technology, training and the like. all
need to be pursued by agencies to achieve community benefits.
All planning processes existing within road authorities and corporate entities concerned with asset
management will benefit from an appraisal of current practice to review the need for improvements.
A business improvement program should be undertaken at periodic intervals. An assessment of
business processes forms a core component of ‘good practice’ in asset management. Specific
programs need to be tailored to meet the needs of particular organisations.
Such reviews can reveal blind spots in an organisation’s processes, or in the message they
communicate. It offers a means of providing state-of-the art benchmarks and identifying possible
gaps.
Developing team and individual competency to achieve best practice requires a people centred
approach, in which it is essential to understand the roles and responsibilities to be filled and to
establish appropriate levels of asset management competencies.
The process for implementing an asset management system within an organisation is described in
the Integrated Asset Management Guidelines for Road Networks (Austroads 2002a).
Other organisations provide similar advice. For example, in their Transportation Asset
Management Guide, the American Association of State Highway and Transportation Officials
(AASHTO 2002) recommends the application of a ‘self-assessment’ process to help an authority to
characterise its asset management practices and identify opportunities for improvement. The
AASHTO guide also reports a summary of the benchmarking exercise they undertook amongst
participating authorities, and this provides a point of reference for readers.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
3
3.1
THE AUSTROADS GUIDE TO ASSET MANAGEMENT
Structure
The Austroads Guide to Asset Management complements the other Austroads guides which
embrace a wide range of subjects and which are readily available, accessible and comprehensive
resource for practitioners. Austroads and others (e.g. state road authorities and industry) have
compiled a great deal of knowledge on the tools, techniques and practices associated with the
management of physical road infrastructure. The Austroads Guide to Asset Management
assembles this knowledge into a single authoritative electronic guide comprising eight parts, as
shown in Figure 3.1.
The target audience for the Guide to Asset Management includes all those involved with the
management of the physical road and bridge infrastructure assets as well as industry, and students
seeking to learn more about the fundamental concepts, principles, issues and procedures
associated with the management of these assets.
The guide includes an introduction to asset management (this document) and offers guidance on
how to determine and plan to accommodate stakeholder/community expectations, formulate and
review asset strategies, develop works and investment programs, assess asset performance and
undertake audit and asset valuation.
Each part of the guide is accompanied by ‘commentaries’ identified within the text which amplify
the principles and processes by use of examples.
As part of a developing guide of live documents, it is recognised that there will be periodic revisions
to this ‘peak document’ and other parts within the guide and that some previous Austroads
publications will be superseded by the Austroads Guide to Asset Management. The Austroads
website should be referenced (http://www.austroads.com.au) to ensure the reader is accessing the
latest version of this document.
It is also recognised that asset management procedures will vary between jurisdictions and that in
a number of cases procedures may also be determined by central government agencies to ensure
consistent investment evaluation across portfolios. For this reason this guide does not prescribe
detailed processes. Instead it seeks to introduce the overall general principles and process of
asset management in line with best practice and to offer guidance.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
AUSTROADS GUIDES
ASSET MANAGEMENT
GUIDE TO ASSET MANAGEMENT
PART 1: INTRODUCTION TO ASSET MANAGEMENT
(INCLUDING SCOPE OF OTHER PARTS)
BRIDGE TECHNOLOGY
PAVEMENT TECHNOLOGY
PART 2: COMMUNITY AND STAKEHOLDER
REQUIREMENTS
PROJECT DELIVERY
PROJECT EVALUATION
PART 3: ASSET STRATEGIES
ROAD DESIGN
PART 4: PROGRAM DEVELOPMENT AND
IMPLEMENTATION
ROAD SAFETY
ROAD TRANSPORT PLANNING
PART 5: PAVEMENT PERFORMANCE
ROAD TUNNELS
PART 6: BRIDGE PERFORMANCE
TRAFFIC MANAGEMENT
PART 7: ROAD RELATED ASSETS – PERFORMANCE
PART 8: ASSET VALUATION AND AUDIT
PART 1 – INTRODUCTION TO ASSET MANAGEMENT
SECTION 1: INTRODUCTION (INCLUDING WHY, WHAT, HOW, SCOPE & DEFINITION)
SECTION 2: OVERVIEW OF KEY ASSET MANAGEMENT PRINCIPLES AND PRACTICES
SECTION 3 : THE AUSTROADS GUIDE TO ASSET MANAGEMENT
PART 1 – COMMENTARIES
COMMENTARY 1: CHARACTERISTICS AND EXAMPLE KRAS AND KPIS
COMMENTARY 2: INCREASING EFFICIENCY THROUGH ROAD USE MANAGEMENT
COMMENTARY 3: MANAGEMENT OF HEAVY VEHICLE ACCESS
COMMENTARY 4: SERVICE LEVELS AND INTERVENTION LEVELS
COMMENTARY 5: WHOLE OF LIFE CYCLE COSTING
COMMENTARY 6: MANAGING RISKS
Figure 3.1: Structure of Austroads Guide to Asset Management with focus on Part 1
3.2
Relationship to other Austroads Publications
The Austroads Guide to Asset Management is complemented by the Integrated Asset
Management Guidelines for Road Networks (Austroads 2002a). This describes the overall
framework for road asset management adopted by Austroads members and provides guidance on
the effective implementation of asset management processes within a business. The Integrated
Asset Management Framework forms the basis for the process-based approach which is the
foundation of this guide, and its various parts.
The Guide to Asset Management supersedes the earlier Austroads publication — the Road Asset
Management Guidelines (Austroads 1994).
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Additionally, decision makers will need to ensure other documents such as the Austroads guides to
Road Transport Planning, Project Evaluation and Road Safety are referred to where appropriate.
A Glossary of commonly-used terminology associated with asset management and other useful
information on the Australian and the New Zealand road systems is available on the Austroads
website (http://www.austroads.com.au).
3.3
Scope of other Parts of the Austroads Guide to Asset
Management
This Introduction to the Austroads Guide to Asset Management presents the concepts and guiding
principles of asset management. These components are then described in more detail in Parts 2
to 8 of the guide. A summary of the scope of these documents is given below.
3.3.1
Part 2: Community and Stakeholder Requirements
The asset management planning process starts with the identification of organisational and
stakeholder requirements, and this forms the core of Part 2.
Its aim is to foster good practice in the identification of road agency objectives, including how to
take account of customer expectations, social and environmental issues, stakeholder input from
external agencies and government and organisational priorities.
Part 2 encourages the use of effective stakeholder consultation to help identify priorities, potential
issues, social impacts, opportunities, alternatives and solutions to problems, and helps to identify
those outcomes and levels of service which the community is prepared to pay for.
Guidance is given on how to present feedback and information to assist the community in this task
by including documentation about budget limitations and trade-offs implicit in the selection of levels
of service, including the impact of decisions on agency and road user costs in the longer term.
Part 2 also shows how information from the stakeholder / community consultation process can be
integrated into the objectives of the organisation. Part 2 provides guidance on how Key
Performance Indicators (KPIs), otherwise known as performance measures, should be set to
monitor the effectiveness of the asset management process (the works program) towards
achieving the KPIs.
3.3.2
Part 3: Asset Strategies
Part 3 is concerned with the development of asset strategies. These asset strategies translate
organisational objectives into actions linked to defined KPIs. A complete set of strategies consists
of capital investment, infrastructure preservation and road use strategies.
It provides guidance on how to evaluate the strategic fit of investment needs with agency strategic
plans, and how to ensure an equitable allocation of resources where resources are insufficient and
prioritisation is necessary, taking due account of the organisation’s objectives and the broad
objective of minimising life cycle costs.
However, in keeping with the focus of the guide, which is primarily concerned with the
management and preservation of current physical assets, it introduces those aspects of road use
strategies and capital investment strategies which are essential inputs to effective road asset
management.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
3.3.3
Part 4: Program Development and Implementation
Part 4 addresses the program development process, at which point asset strategies are
transformed into defined levels of service and works programs. Part 4 describes the process by
which the type and quality of road-related asset that should be provided in a given set of
operational circumstances (e.g. for a given demand) is defined by an agency.
Each road agency is encouraged to determine its own sets of performance standards, i.e.
combining both quantitative indicators and criteria, based on community consultation, economic
analysis, existing road standards, and budgetary expectations.
Part 4 provides guidance on how intervention criteria may be employed in assessing the current
performance of an existing road-related asset against the target asset performance. It also
explains how such criteria are used to identify performance gaps that can then be addressed by
construction and preservation activities and road use policy interventions.
This then leads on to program development at which point an agency identifies intervention options
to close the asset performance gaps. These intervention options will comprise the total needs
program.
3.3.4
Parts 5, 6 and 7: Asset Performance
Part 5 provides guidance on the establishment and maintenance of asset inventories, and on the
monitoring of asset performance. It discusses the need for agencies to measure asset
performance against objectives, and therefore is primarily concerned with condition data collection
and performance modelling at a network level. Sub-parts include:
Part 5A: Inventory
Part 5B: Roughness
Part 5C: Rutting
Part 5D: Strength
Part 5E: Cracking
Part 5F: Skid Resistance
Part 5G: Texture
Part 5H: Performance Modelling.
Bridges are covered in Part 6 and other road related assets in Part 7.
3.3.5
Part 8: Asset Valuation and Audit
Part 8 provides guidance on how to undertake asset valuation, since such information can provide
the asset manager with valuable insights into the long-term management requirements.
It also provides guidance on how to implement an audit process to ensure work activities reflect the
works program and satisfy the asset and organisational strategies (and in turn stakeholder
requirements).
Finally, Part 8 describes approaches to presenting information to external stakeholders and other
customers by means of public reports and other media.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
REFERENCES
AASHTO 2002, Transportation asset management guide, American Association of State Highway and
Transportation Officials, Washington DC.
Australian Transport Council 2004, National guidelines for transport system management in Australia, 3
vols., Australian Transport Council, Canberra, ACT.
Austroads 1994, Road Asset Management Guidelines, AP-109/94, Austroads, Sydney, NSW.
Austroads, 2000, Valuation of Road Infrastructure Assets in Australia and New Zealand, by LB Dowling, AP144/00, Austroads, Sydney, NSW.
Austroads 2001, Australian and New Zealand Road System and Road Authorities: National Performance
Indicators 2000, AP-43/01, Austroads, Sydney, NSW.
Austroads 2002a, Integrated Asset Management Guidelines for Road Networks, by R Grove, F Mihai, P
Appleby, M Bishop, K Eckeroth, L Leong, D Radcliffe & P Shepherd, AP-R202/02, Austroads, Sydney,
NSW.
Austroads 2002b, Guidelines for Community Input in Setting Level of Service and Intervention Standards for
Road Networks, R Grove, F Mihai, P Appleby, M Bishop, K Eckeroth, & P Shepherd, AP-R201/02,
Austroads, Sydney, NSW.
Austroads 2004a, Pavement Rehabilitation: A Guide to the Design of Rehabilitation Treatments for Road
Pavements, AP-G78/04, Austroads, Sydney, NSW.
Austroads 2004b, Pavement Design: A Guide to the Structural Design of Road Pavements, AP-G17/04,
Austroads, Sydney, NSW.
Austroads 2006, Maintenance Techniques to Reduce Social and Environmental Impacts, by J McRobert & N
Houghton, AP-R291/06, Austroads, Sydney, NSW.
INGENIUM & IPWEA 2002, International infrastructure management manual, Association of Local
Government Engineering of New Zealand Inc (INGENIUM), Thames, New Zealand, & Institute of
Public Works Engineering Australia, Sydney, NSW.
Kerali, HRG 2000, HDM-4: Highway Development and Management: volume one: overview of HDM-4, World Road
Association (PIARC), Paris.
Martin, TC, Toole, T, & Oliver, JWH 2004, ‘The development of HDM-4 technology road deterioration models
for Australia’s sealed granular pavements’, International Conference on Managing Pavements, 6th,
2004 Brisbane, Australia, Queensland Department of Main Roads, Brisbane, Qld., 19p.
Oliver, JWH 2004, ‘Prediction of the life of sprayed seals and the effect of climate, bitumen durability and
seal size’, International Conference on Managing Pavements, 6th, 2004 Brisbane, Australia,
Queensland Department of Main Roads, Brisbane, Qld., 13p.
Prem, H, de Pont, J, Pearson, B & McLean, J 2002, Performance characteristics of the Australian heavy
vehicle fleet, National Road Transport Commission, Melbourne, Vic.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Queensland Department of Main Roads 2002, Roads connecting Queenslanders: a strategic long-term
direction for the Queensland road system and Main Roads, Queensland Department of Main Roads,
Brisbane, Qld.
Queensland Department of Main Roads., Road System and Engineering Group 2005, Traffic and road use
management manual, Queensland Department of Main Roads, Brisbane, Qld.
Queensland Transport & Queensland Department of Main Roads 2000, 4Seeable futures: transport portfolio
scenario-based planning for Queensland Transport and Queensland Department of Main Roads 2000
– 2025, Queensland Department of Main Roads, Brisbane, Qld.
Robinson, R, Danielson, U, & Snaith, MS 1998, Road maintenance management: concepts and systems,
Macmillan, London.
Standards Australia & Standards New Zealand 1999, Risk management, AS/NZS 4360:1999, Standards
Australia, Strathfield, NSW.
Transit New Zealand 2001, Annual report, 2000/01, Transit New Zealand, Wellington.
TRL Overseas Centre, 1998, Guidelines for the design and operation of road management systems,
overseas road note 15, Transport Research Laboratory, Crowthorne, UK.
Tsolakis, D, Rockliffe, N & Patrick, S 2003, Triple bottom line evaluation of transport proposals, research
report ARR 359, ARRB Transport Research, Vermont South, Vic.
Tsolakis, D, Thoresen, T, 1998, ‘A framework for demonstrating that road performance meets community
expectations’, working document WD R98/003, ARRB Transport Research, Vermont South, Vic.
VicRoads 1993, A stitch in time: Victoria’s road maintenance strategy, VicRoads, Kew, Vic.
VicRoads 2003, Program development guidelines, VicRoads, Road System Management, Kew, Vic.
VicRoads 2004a, VicRoads road management plan, VicRoads, Kew, Vic.
VicRoads 2004b, Annual report, 2003/04, VicRoads, Kew, Vic.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 1 CHARACTERISTICS AND EXAMPLE KRAS
AND KPIS
Whatever objectives are chosen, it is important they are designed so that they can be translated to
Key Results Areas (KRAs) and subsequently framed, as closely as possible, in terms of
measurable key performance indicators (KPIs). For this to occur, KPIs should ideally have the
following characteristics:
They should be directly relevant to the assessment of current asset condition, to facilitation
of asset management and to prediction of future asset performance.
They should be capable of being managed by the agency.
They should include objective, quantitative measures, whose derivation is clearly
understood and whose accuracy is widely accepted.
Their procurement should be affordable and not impose excessive costs on road
management agencies or companies.
The specified criterion associated with each measure should be achievable within the
foreseeable future, and be established with funding availability in mind.
They should be repeatable, and reproducible.
Considering the various points, the following observations can be made:
There is no point in measuring things that do not matter, or achieving a degree of accuracy
that is not necessary.
Where multiple factors play a role, as in the case of road crashes, the road authority should
at least aim to monitor rates and trends and include such statistics in annual reports.
Quantitative assessments employing national or internationally accepted standards of
measurement and recognised calibration or verification procedures will be appropriate in
many cases. However, the results of properly designed qualitative surveys which seek user
opinion and feedback are also valuable. See for example Austroads (2002b).
Direct measurement and reporting of specific parameters is preferred over the use of
composite indices, as the latter tend to mask the contributions of various factors, making it
difficult to plan and manage corrective actions.
Some authorities also choose to distinguish between management performance measures, and
road condition measures. In the latter case the measures will also vary and typically reflect the
factors considered important to asset management in each jurisdiction. For example, Transit New
Zealand (2001) reports specific distresses, such as excessive rutting or poor skid resistance. In
other circumstances, surfacing age is used as an indicator of the ‘health’ of a network, having been
associated with the durability of surfacings in different climatic environments (Oliver 2004).
Examples of KRAs and KPIs reported by VicRoads (2004b) and which extend to consider
community and environment indicators for transport infrastructure are shown in Table C1 1
together with published policy objectives and key results areas which are established
organisation-wide.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Table C1 1: Example asset management KRAs and KPIs for transport infrastructure
Policy objectives
Achieve reductions in road crashes and the cost of road trauma
Assist economic and regional development by improving the effectiveness and efficiency of the road transport system
Develop a more integrated and sustainable road transport system
Minimise the impacts of roads and traffic on the community and the environment
Build effective, equitable and efficient relationships with customers by providing suitable access to services in order to
assess both road system and road agency performance.
Key results areas
Road safety
Road system management
Traffic and transport integration
Registration and licensing
Organisational performance
Financial performance
Example KPIs for road system management
Condition of the network
Proportion of travel on smooth roads
Proportion of network with very rough roads
% of bridges subject to mass limits
% of bridges in very poor structural condition.
Construction and maintenance
Proportion of network resurfaced
Proportion of network rehabilitated
Estimated return on economic investment.
Environmental and community
Number of community consultation plans prepared
Number and type of environmental incidents
Percentage of road network with roadside management plans.
Source: After VicRoads (2004b).
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 2 INCREASING EFFICIENCY THROUGH ROAD
USE MANAGEMENT
As the total transport task is becoming larger in volume, and many vehicles are heavier and larger
in size, the growth in road traffic continues to outstrip the ability of the community to finance
additional asset provision. Therefore, an asset manager is concerned to ensure the effective use of
current assets. The complementary application of road use management (RUM) strategies and
actions may help limit the rate of asset consumption and optimise use of current assets. A list of
examples of RUM strategies and how they relate to asset management issues is contained in
Table C2 1 below.
Considering RUM as a complementary activity to road infrastructure asset management provides
the asset manager with a wider range of solutions. It also encourages the adoption of integrated
policies and strategies.
Table C2 1 lists a range of common problems and possible RUM interventions.
Table C2 1: Management of road use
Problem
Possible RUM interventions
High vehicle loadings leading to
potential for excessive deterioration
and high rate of asset consumption
Limiting the loading on roads and bridges by regulation, legislation and surveillance
Promoting use of alternative routes which possess sufficient capacity
Poor utilisation of existing capacity
Improved traffic control and signal coordination
Better route signing and travel information
Introduction of performance-based standards (PBS) approaches to management of
heavy vehicle access (see Commentary 3)
Temporary closure or reduced level of
service
Improved incident and emergency response strategies
Improved ‘work zone’
Excessive demand
Pricing and charging policies
Measures to encourage high vehicle occupancy
Promotion of alternative transport modes
Excessive travel time caused by
relative location of social and
productive activities
Improved strategic planning and land use planning
Comprehensive guidelines for traffic and road use management have been developed in a number
of jurisdictions, e.g. in Queensland (QDMR 2005), and further examples exist of improved
strategies to manage highly-utilised facilities.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 3 MANAGEMENT OF HEAVY VEHICLE
ACCESS
Managing heavy vehicle access to the road network is currently governed through regulations
relating to permissible mass limits, dimensions and configurations and is a key component of an
overall road system management strategy. This helps to ensure appropriate levels of safety, and
to limit environmental impacts and damage to road infrastructure.
The current regulatory system typically comprises general access, public notices and permit
operations. General access regulations are broadly similar across jurisdictions in the interests of
consistency and a common national transport policy.
The rate of consumption of pavement assets, which accounts for a significant proportion of total
infrastructure replacement costs, is generally accepted to be proportional to the number of
equivalent standard axle repetitions applied by heavy vehicles.
For general application, the relative damaging effect of each axle pass is determined based on the
ratio of the actual axle load and a standard load raised to the fourth power. However, a wider
range of exponents of between 4 and 12 may be applicable depending on pavement configuration
and distress mode (Austroads 2004b).
Many roads which carry a significant proportion of total freight have evolved over time, usually from
access tracks, and have not been designed either in a pavements or geometric sense.
Additionally, Australia and New Zealand have extensively used relatively low cost chip-sealed,
granular pavements which require careful management to ensure optimal lives are obtained.
The challenge faced by both regulators and asset managers has been to develop strategies to help
accommodate the significant growth in the road transport task. Simply extending or adding new
infrastructure has not been possible because of economic, environmental, land use and social
factors. Previous solutions have been very ad hoc and have lead to some unplanned outcomes.
To gain more productivity from the road network, the adoption of an alternative performance-based
standards (or PBS) approach to regulation has been proposed so that the interactions between
vehicles, infrastructure standards, traffic conditions and freight or passenger tasks can be more
readily taken into account.
The key issues which require consideration from an asset management perspective include:
having sufficient knowledge of the performance of the existing infrastructure system to be
able to predict the consequences of adopting a new system
determining the standards to be adopted and how they relate to current regulations and the
observed behaviour and interactions between vehicles and infrastructure
assessing the costs and benefits which would result to vehicle operators and asset
managers, and what trade-offs are acceptable.
Whilst the current regulatory system remains in place, Australian Transport Ministers have
approved a set of 20 standards, comprising 16 safety standards and four infrastructure protection
standards (see details in Prem et al. 2002). These provide an optional alternative to the current
prescriptive standard. Introduction of the PBS is currently the subject of study and review and
agreement. Once implemented, considerable productivity benefits should result.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 4 SERVICE LEVELS AND INTERVENTION
LEVELS
C4.1
Service Levels
The terms ‘service level’, or ‘level of service’, describe the quality of service provided by the asset
for the benefit of the customers. Road agencies usually define levels of service in terms of the
convenience of travel and the safety performance of the road network. Depending upon demand
or strategic importance, a higher level of service may be required for some assets compared to
others.
For example, ride quality (qualitative) and road roughness (quantitative assessment of ride quality)
are two asset management service level measures. The road operating condition can generally be
defined as ‘smooth’, ‘rough’ or ‘desirable’ and an agency must decide what standard of ride
quality/roughness is acceptable for specific road classes and/or road use. Most communities
agree that it is appropriate to have a hierarchy of levels of service such that (in this example) roads
with higher demand levels would be maintained to a smoother standard.
Roughness is a prime factor in determining vehicle operating costs and consequently an input to
determining the timing of treatment interventions aimed at minimising total transport costs (see
also WOLCC in Commentary 5). In traffic engineering, the term ‘level of service’ is used to
describe the operating conditions within a traffic stream, and relates to the congestion performance
or traffic capacity of a road. Road agencies have adopted the term and associated measures as
one component of the quality of service provided by the asset for the benefit of the customers. For
the purpose of the Austroads Guide to Asset Management, levels of service is used in its broader
form. Levels of service enable an agency to:
document and measure the service provided
evaluate service versus cost trade-offs
establish what is important to the customer
link operational activities with organisational strategic goals.
C4.2
Intervention Levels and Gap Analysis
‘Intervention levels’ are specified condition parameters (usually limiting values) which, if exceeded,
trigger a maintenance investigation. The process of comparing the existing asset condition with
the desired condition is called gap analysis. However, just because a gap is identified, does not
mean that an action/project must be initiated. Routine maintenance or operational standards are
generally high priority. In other situations, the gap analysis process identifies a portion of the asset
for further investigation using engineering judgment and other organisational considerations (e.g.
budget).
Service levels/intervention levels are established using a process which takes into account:
customary practice, including local performance evidence
legislation and regulatory requirements
economic criteria, aiming to minimise whole of life costs
community views.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Table C4 1 illustrates the variety of intervention criteria which may be used, and summarises the
contents of a typical set of asset management instructions (in this case called Program
Development Guidelines adapted from VicRoads 2003). The reader should note:
the multiple, integrated solutions which may be necessary to minimise whole of life cycle
costs
the clear link between the Guidelines shown in
Table C4 1 and VicRoads multiple agency objectives, or KPIs (shown earlier in Table C1 1).
Routine maintenance standards are more specific than the ‘performance targets’ approach taken in
developing infrastructure preservation programs for reasons of safety and to aid traffic use. This is
because they relate to the repair of ‘hazards’. Consequently, response times and inspection
frequencies are set according to an assessment of risk, taking into account factors such as road
classification, road type and the volume and type of traffic. An example of this approach is shown
in Table C4 2 based on VicRoads Road Management Plan (VicRoads 2004a).
Table C4 1: Example criteria for various maintenance interventions
Routine maintenance to apply to all roads and be based on published intervention levels (see example structure in Table D 2).
Periodic pavement maintenance to be based on area of network to be treated and available funding. The program is expected to
relate to historical norms with candidates including:
those which possess moderate or severe surface distress (typically > 5% of area affected in a 200 m length)
low skid resistance sites and those of high accident potential, with the remaining sites treated under the road safety program.
Rehabilitation pavement maintenance to address sections with high roughness for road classes A, B or C (NRM > 110 - 120), and
for moderate to high roughness for road class M (NRM > 80-90). Ranking to be based on the ‘simplified’ formula (see below) and to
be applied in a separate list for rural and urban projects respectively.
Ranking value = EI * D * T * L/C, where
EI =
expected improvement, in NAASRA roughness meter (or NRM) units of counts/km
D
=
deterioration factor, where 1 is normal, 1.5 is normal but with high maintenance costs, 2 is high
T
=
traffic volume up to a maximum of 2000 veh/day rural and 4500 veh/day urban
C
=
unit cost of treatment ($ per sq.m)
L
=
expected treatment life (years).
Major patching and rehabilitation to be considered using the above ranking formula for sections in a very rough state. Distressed
pavements which are not rough but consume significant maintenance resources should be considered separately.
Drainage improvements to be considered as a long-term strategy for reducing pavement deterioration, noting that poor drainage
can increase the rate of deterioration by a factor of between 2 and 3 ( Martin, Toole and Oliver 2004).
WOLCC tool to be used to determine expected improvements and community benefits from undertaking the proposed program.
Shoulder resheeting to be considered where length is in excess of 500 metres to provide safe driving conditions and adequate
support. This does not include sealing of unsealed shoulders.
Repair of pits, trenches and utility structures where this adversely affects the ride or function of the pavement.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Table C4 2: Example routine maintenance standards
Hazard – a defect listed in the agency’s published ‘maintenance standards’:
Pavements – obstructions on the road, pavement defects including potholes, excessive rutting, excessive edge drops, damaged or
missing drainage pits, lids, surrounds, etc.
Roadside – trees, shrubs and other vegetation likely to cause danger or restrict sightlines, damaged or missing roadside furniture and
damaged structures.
Traffic signals – inoperative or confusing.
Road maintenance category – a nominated road maintenance category for each road according to an assessment of risk.
Hazard inspection frequency – period between successive scheduled inspections.
Response code – a code which indicates the control mechanism and response time for responding to a particular hazard on a particular
road.
Response time – the time to respond to a hazard, based on consideration of severity and type. Response time is measured from the time
the hazard is identified by the managing agency, or reported by the public.
Inspection
type
Hazard inspection frequency by road maintenance category
1
2
3
4
5
6
Day-time
Each week day
Twice per week
Weekly
Monthly
3-monthly
6-monthly
Night-time
6-monthly
6-monthly
6-monthly
Yearly
Yearly
Yearly
Control mechanism
Inspect, rectify or provide
warning
Response code
A
B
C
D
E
F
4 hours
24 hours
1 week
1 month
3 months
6 months
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 5 COMMENTARY E WHOLE OF LIFE CYCLE
COSTING
Whole of life cycle costs have been defined by the World Road Association as the total costs for
acquiring, operating, maintaining and disposing of an asset, reduced to a common base called the
'net present cost'.
C5.1
Benefits
The evaluation of policies and development of medium to long-term asset plans using whole of life
cycle costing (WOLCC) provides a basis for investment decisions related to long term assets.
WOLCC analysis is fundamental to modern asset management and incorporates triple bottom line
(TBL) objectives (Tsolakis et al. 2003) of:
maintaining the physical performance of the asset
considering impacts on road users and the physical environment
financial and economic cost implications for agencies and road users
intergenerational equity.
C5.2
Available Tools
Investment tools such as the HDM-4 suite of technology (Kerali 2000) and the Deighton dTIMS
software are widely used in Australia and New Zealand to assist in the analysis process. Simpler
tools are also available which use more approximate, or ‘aggregate models’ based on the same
knowledge base. The advantage of the HDM-4 style modelling tools is that they enable the
decision maker to incorporate multiple criteria into a formal analysis. Criteria would extend beyond
asset life expectations to include the:
impact on vehicle operating and road user costs, including road crashes
determination of economic benefits of alternatives
estimation of energy consumption, air pollution and noise.
The use of modelling tools is recommended by Austroads as a means of achieving consistency in
determining needs and justifying investment programs.
Models can simply be applied to evaluate future conditions taking into account the consequences
of applying established business rules or contractual obligations. Initial modelling provides an
important starting point for further policy analysis.
C5.3
Analysis Objectives
Having decided the policy objectives to be pursued, and relevant key performance indicators,
analysis can then be extended to predict likely outcomes of alternative scenarios, for example:
at the component level models can assist in estimating the life of a road surfacing in a
particular locality
to determine outcomes over a planning timeframe in terms of network performance, budget
implications and consequences for total transportation costs.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
In all cases the purpose of the analysis needs to be clearly stated. Therefore, a clear objective
function, or decision rule, must be employed so that a solution can be chosen from amongst the
alternatives that have been investigated. This may take a variety of forms including the:
1.
minimisation of life-cycle costs of specific components
2.
minimisation of total agency costs to achieve a desirable level of service for a particular
project, sub-network or network-wide
3.
maximisation of net benefits (to society) under different budget scenarios, the aim being to
minimise total transportation costs.
Purely engineering-based methods have traditionally sought to achieve Objective 1, or perhaps
Objective 2, through the adoption of best practice solutions and specifications for individual
components or comprehensive design and maintenance guidelines or procedures for complete
structures. These are predominantly project-level oriented and do not employ predictive modelling
in a planning sense. The more sophisticated models, i.e. HDM-4 and dTIMS, now make it possible
to meet Objectives 2 and 3 through formal whole of life cycle analysis.
C5.4
Data Requirements
Where such models are used they require the user to specify:
the basic input data which describes the engineering attributes of the asset, climate,
topography, current and future traffic, works history and the vehicle fleet
the intervention criteria, mix of treatments and costs applicable to each option, or to define a
solution space within which acceptable solutions may lie
an acceptable base case or ‘without investment’ alternative against which the project
alternatives will be compared.
Using the models, typical engineering scenarios can be investigated and the consequences
determined in terms of road agency costs and road user effects. Economic benefits are computed
in terms of the net economic benefits (as net present value, or NPV) from comparing a do
minimum alternative with a variety of project alternatives. Typical economic indices such as benefit
cost ratios (BCR) or NPV/cost are recommended as inputs to the prioritisation of investment
alternatives.
C5.5
Challenges
When using sophisticated models, an asset manager must be aware they:
require comprehensive data inputs
comprise internal predictive models which must be well calibrated to local conditions to give
meaningful answers
require a high degree of knowledge and skill to be applied effectively.
However, the principle of WOLCC analysis can be incorporated into decision-making in simpler
forms by taking care to ensure capital, improvement and preservation decisions are made in the
knowledge of the long term cost implications.
Most authorities employ a combination of historical practice, simple rules and the more
sophisticated WOLCC methods because no single approach can be guaranteed to produce an
acceptable and realistic outcome.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
It can be difficult to justify investment on an economic basis for low traffic facilities where agency
costs (as illustrated in Figure C5 1) make up a significant proportion of total costs. This is because
the savings in road user costs associated with a higher level of service are not sufficient to offset
the additional costs of provision or maintenance. In practice there are political and social reasons
for providing a base level of access and safety for smaller communities.
Figure C5 1: Typical split between road user and road agency costs versus AADT
C5.6
Asset Creation
Authorities should consider carefully the future maintenance requirements of proposed new
infrastructure before including it in their works program.
The establishment of complementary capital investment planning processes are recommended to
ensure the most appropriate whole of life cycle decisions are made when constructing new assets.
In this case, the asset manager is interested in knowing that asset management principles have
been applied in selecting improvement and expansion investments.
Consideration of maintenance implications at the design stage should, where possible, highlight
those options with maintenance complications or increasing life-cycle costs. Capital investment
decisions should be made in the knowledge that creation of an asset also creates a commitment to
maintain that asset.
Provision must therefore be made for future maintenance to ensure budgets are available to meet
typical business rules for the particular class of infrastructure. Further guidance is available in the
Austroads Guide to Project Evaluation.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 6 MANAGING RISKS
Formal risk management is a core driver of road authority activities. The impetus to adopt a risk
management approach has been accelerated in recent years through the introduction and
enforcement of legislation and statutory requirements which affect roads, and the responsibilities of
managers, service providers and users. In response, some road authorities have established
formal road management plans (VicRoads 2004a).
In line with established standards (Standards Australia and Standards New Zealand 1999), risk
management comprises the following six main steps:
establishing the strategic, organisational and risk context
identifying risks, including what can happen and how
analysing risks, determining likelihood of occurrence and consequences
assessing risks, setting criteria and priorities
treating risks, options, plans and implementation
monitoring and review.
At a high level, these steps mirror the Austroads Integrated Asset Management Process but risk
must be managed within all phases of the asset management process at varying levels of
complexity. The effort used in managing risks should be commensurate with the risk exposure.
Major financial risks and the general comfort and efficiency of road use are addressed through
appropriate infrastructure preservation, road use management and capital investment strategies.
Risk management in a maintenance context is primarily related to the safe use of a roadway and
related assets, and is therefore performed at an operational level.
In deciding how to best manage risk, asset owners and managers are encouraged to adopt the
following simple classification for categorising activities and responses which has been adapted
from INGENIUM & IPWEA (2002):
‘Must do’ comprising those activities for which deferment is not an option, with public safety
identified as the topmost priority.
‘Should do’ comprising those activities which are required to deliver published ‘desirable’
service levels, with the exception of those which fall into the ‘must do’ category.
‘Could do’ comprising those activities which could bring additional community benefits should
sufficient resources exist.
Maintenance standards (see Table C4 2 Commentary 4) comprising the maximum acceptable
routine inspection periods, severity of defects that can be tolerated and response times within
which defects must be repaired fall within the ‘must do’ category, and should have first call on
available funds. Maintenance standards should be applied irrespective of the management
arrangements for the particular road and should be available for public scrutiny.
Infrastructure preservation strategy actions fall into the ‘should do’ category.
Actions which would maximise community benefits may not be achievable in budget constrained
situations and are classified as ‘Could do’ activities.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Whether networks are managed directly by a government agency, under term contracts, or similar
arrangements, a consistent process-based approach involving annual and long-term planning is
essential to reduce and manage risk effectively. Plans should contain a balance of inputs which
consider past experience, or ‘norms’, as well as the results of formal modelling using strict
intervention criteria.
Austroads 2009
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Part 1: Introduction to
Asset Management
Guide to Asset Management
Part 1: Introduction to Asset Management
Guide to Asset Management Part 1: Introduction to Asset Management
Summary
This document introduces the Austroads Guide to Asset Management, the aim of which is to offer
guidance on how to best manage physical road infrastructure. The guide covers various aspects
of asset management including how to determine and plan to accommodate
stakeholder/community expectations, formulate and review asset strategies, develop works
programs, assess asset performance and undertake asset valuation and audit.
Whilst the focus of the Guide to Asset Management is on the management of the physical road
assets, the importance of total transport system management, which covers all activities concerned
with the provision, operation, maintenance, renewal and disposal of transport infrastructure assets,
is duly recognised. Road asset owners and managers are therefore encouraged to adopt a
comprehensive range of coordinated activities, from transport planning, through design,
implementation and operations in order to maximise community benefits.
The guide complements the Austroads Publication AP-R202/02 Integrated Asset Management
Guidelines for Road Networks, which describes in detail the integrated asset management
planning processes and recommended implementation stages aimed at achieving business
improvements within road agencies. The guide also recognises the purpose of the Australian
Transport Council’s National Guidelines for Transport System Management in Australia, the scope
of which embraces all land transport modes and is compatible with its principles.
The specific sections of the guide and its accompanying commentaries elaborate key road asset
management principles through providing best practice recommendations and by way of example.
Keywords
Asset management, roads, stakeholder/community expectations, asset strategies, works
programs, asset performance, asset valuation, audit, implementation, business process, improved
practices, information systems, decision support tools, objectives, road use management, heavy
vehicle access, service levels, intervention levels, whole of life cycle costing, managing risks
First published 2006
Second edition November 2009
© Austroads Inc. 2009
This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may
be reproduced by any process without the prior written permission of Austroads.
ISBN 978-1-921551-87-1
Austroads Project No. AP1008
Austroads Publication No. AGAM01/09
Project Manager
Kathy Martin, MR WA
Prepared by
Kieran Sharp and Tyrone Toole, ARRB Group
Published by Austroads Incorporated
Level 9, Robell House
287 Elizabeth Street
Sydney NSW 2000 Australia
Phone: +61 2 9264 7088
Fax: +61 2 9264 1657
Email: [email protected]
www.austroads.com.au
This guide is produced by Austroads as a general guide. Its application is discretionary. Road
authorities may vary their practice according to local circumstances and policies.
Austroads believes this publication to be correct at the time of printing and does not accept
responsibility for any consequences arising from the use of information herein. Readers should
rely on their own skill and judgement to apply information to particular issues.
Guide to Asset Management
Part 1: Introduction to Asset Management
Sydney 2009
Austroads profile
Austroadsp purpose is to contribute to improved Australian and New Zealand transport outcomes
by:
providing expert advice to SCOT and ATC on road and road transport issues
facilitating collaboration between road agencies
promoting harmonisation, consistency and uniformity in road and related operations
undertaking strategic research on behalf of road agencies and communicating outcomes
promoting improved and consistent practice by road agencies.
Austroads membership
Austroads membership comprises the six state and two territory road transport and traffic
authorities, the Commonwealth Department of Infrastructure, Transport, Regional Development
and Local Government in Australia, the Australian Local Government Association, and New
Zealand Transport Agency. Austroads is governed by a council consisting of the chief executive
officer (or an alternative senior executive officer) of each of its 11 member organisations:
Roads and Traffic Authority New South Wales
Roads Corporation Victoria
Department of Transport and Main Roads Queensland
Main Roads Western Australia
Department for Transport, Energy and Infrastructure South Australia
Department of Infrastructure, Energy and Resources Tasmania
Department of Planning and Infrastructure Northern Territory
Department of Territory and Municipal Services Australian Capital Territory
Department of Infrastructure, Transport, Regional Development and Local Government
Australian Local Government Association
New Zealand Transport Agency.
The success of Austroads is derived from the collaboration of member organisations and others in
the road industry. It aims to be the Australasian leader in providing high quality information, advice
and fostering research in the road sector.
GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
CONTENTS
1
INTRODUCTION ............................................................................................................ 1
1.1
1.2
1.3
1.4
1.7
The Need for Asset Management................................................................................... 1
The Aims and Benefits of Asset Management................................................................ 1
Definition and Scope of Asset Management................................................................... 1
The Austroads Integrated Asset Management Guidelines for Road Networks .............. 2
1.4.1
Introduction to the IAM Guidelines.................................................................... 2
1.4.2
Asset Management as a Process Approach..................................................... 3
1.4.3
Implementation and Continuous Improvement in Asset Management
Practices ........................................................................................................... 5
The Role of Asset Managers .......................................................................................... 6
Relationship and Synergies with the National Guidelines for Transport System
Management in Australia ................................................................................................ 7
Achieving Effective Asset Management ......................................................................... 9
2
OVERVIEW OF KEY ASSET MANAGEMENT PRINCIPLES AND PRACTICES....... 10
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
Policy-driven and Results Oriented and Customer Focused ........................................ 10
Managing Current Assets and Providing for Future Assets.......................................... 12
Providing a Defined Level of Service............................................................................ 14
Developing Cost-effective Programs for the Long-term................................................ 15
Managing Risks Associated with Asset Failures .......................................................... 16
Performance Monitoring, Audit and Feedback ............................................................. 17
Use of Information Systems and Decision Support Tools ............................................ 18
Continuous Improvement in Asset Management Practices and Human Resource
Skill Development ......................................................................................................... 20
3
THE AUSTROADS GUIDE TO ASSET MANAGEMENT ............................................ 21
3.1
3.2
3.3
Structure ....................................................................................................................... 21
Relationship to other Austroads Publications ............................................................... 22
Scope of other Parts of the Austroads Guide to Asset Management ........................... 23
3.3.1
Part 2: Community and Stakeholder Requirements ....................................... 23
3.3.2
Part 3: Asset Strategies .................................................................................. 23
3.3.3
Part 4: Program Development and Implementation........................................ 24
3.3.4
Parts 5, 6 and 7: Asset Performance .............................................................. 24
3.3.5
Part 8: Asset Valuation and Audit ................................................................... 24
1.5
1.6
REFERENCES ...................................................................................................................... 25
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
TABLES
Table 1.1:
Table 1.2:
The asset management process ...................................................................... 3
Differences in functional roles........................................................................... 6
FIGURES
Figure 1.1:
Figure 1.2:
Figure 2.1:
Figure 2.2:
Figure 2.3:
Figure 2.4:
Figure 2.5:
Figure 3.1:
Integrated asset management process flow diagram ....................................... 4
Hierarchy of linked objectives for transport system development..................... 8
Elements of asset management for road networks ........................................ 10
Typical road condition deterioration with time................................................. 12
Equitable and economically efficient standards .............................................. 15
Relationship between maintenance standard and transport costs ................. 16
Central role of information in the asset management process ....................... 19
Structure of Austroads Guide to Asset Management with focus on Part 1 ..... 22
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
1
INTRODUCTION
1.1
The Need for Asset Management
Effective asset management is of critical importance for all transport agencies and managers of
road infrastructure because:
Roads and associated infrastructure are vital links in the chain of communications providing
access and mobility for communities and industry.
The value of road infrastructure assets for all classes of roads in Australia and New Zealand
is extremely high compared to other public infrastructure; of the order of A$150 billion dollars
in replacement cost terms. This equates to approximately 50% of the total government
capital investment in education, health, energy, mining and manufacturing combined.
Effective stewardship is essential to help ensure public safety, for retaining the value and
serviceability of these assets for future generations, and for providing best value to users and
investors.
The government and the community demand increased accountability for effective and
efficient spending of public funds.
Competition for limited funds across government and other sectors is increasing.
1.2
The Aims and Benefits of Asset Management
The key asset management objective contained in the Austroads Assets Strategy is to minimise
the whole of life cycle costs of road assets, whilst aiming to meet the needs and expectation of
the community and other stakeholders who use or benefit from the asset, and to fulfil government
objectives in terms of safety, environment and equity of access. Within this context, its main focus
is on the management and preservation of physical assets.
Thus, when asset managers speak about whole of life cycle costs (WOLCC), they mean those
costs incurred by the responsible road agency as well as the costs incurred by road users, such as
vehicle operating costs, travel time and crash costs (see Figure 2.4). In an ideal situation, where
funding is not constrained, the best possible outcome for the community is achieved when the sum
of road agency costs and road user costs is minimised.
To meet these objectives, asset managers should ensure that:
Assets are managed to conditions which are appropriate for intended use.
The immediate and long-term budget requirements, together with the consequences of
budget variations, are explicit.
Risks associated with asset use are managed, recognising the duty of care owed to the
public, with emphasis given to safety and minimising environmental impacts.
1.3
Definition and Scope of Asset Management
Roads exist as part of an integrated land transport system as a service delivery arrangement.
Therefore road system managers need to have a strategic view to manage demand and match
demand with supply, through the ongoing provision of new and upgraded links and maintenance of
existing stock to ensure the least long term cost to the community.
It is essential that this context be borne in mind even in addressing the more routine maintenance
activities to ensure cost-effective solutions are being delivered.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Whilst the term asset management has a variety of interpretations in terms of scope, in the
broadest sense total road system management includes all aspects concerned with the provision,
operation, maintenance, renewal and disposal of road infrastructure assets, such as:
transport planning
traffic modelling
infrastructure maintenance, preservation, provision and renewal
network operations (meaning road use management issues)
project evaluation of new road infrastructure, or major projects
project level preparation and implementation of works
pavements, materials and bridge technology
road design
road safety
traffic engineering.
However most of these functions are well documented in the Austroads Guide to Pavement
Technology and the Austroads Guide to Asset Management complements these other guides by
focusing on best practice management of the physical infrastructure. Therefore, for the purposes
of this guide the definition of road asset management is:
Road asset management is a comprehensive and structured approach to the longterm provision and maintenance of physical road infrastructure using sound
engineering, economic, business and environmental principles to facilitate the effective
delivery of community benefits.
It focuses on the physical asset recognising that:
The management of physical assets is not an end in itself, but is undertaken to ensure the
operating functionality of the road network.
Purely ‘asset-oriented’ interventions will prove constraining and potentially too expensive by
not keeping a broad enough focus on all possible solutions.
Whilst specialised sections of member agencies are actively concerned with the provision of
new assets, asset management practitioners must be aware of the ongoing management
implications of expansion decisions.
Asset managers need to make decisions in the knowledge of road use management (RUM)
strategies and provide feedback to the road use managers in order to ensure optimal use of
current assets.
1.4
The Austroads Integrated Asset Management Guidelines for Road
Networks
1.4.1
Introduction to the IAM Guidelines
In establishing best practice in asset management, Austroads has recognised the need for:
a consistent framework of integrated asset management planning processes
associated implementation guidelines for practitioners.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Thus, in 2002, Austroads published a set of Integrated Asset Management Guidelines for Road
Networks (Austroads 2002b), referred to as the IAM Guidelines. These are fundamental to the
fulfilment of Austroads’ asset management objectives and, therefore, complement the aims of this
guide, and will remain as a ‘flagship’ publication within the Austroads Guide to Asset Management.
This section of the guide summarises the scope and contents of the IAM guidelines and places
them in context by identifying links with the best practice recommendations and examples provided
herein and encouraging commitment to the following key principles:
adoption of a rigorous and cyclic process-based approach
development of clear business processes and organisational accountabilities
continuous improvement in asset management practices and human resource skill
development.
In so doing it describes:
the asset management process
the main stages of an asset management implementation program
the role(s) of the asset manager.
1.4.2
Asset Management as a Process Approach
To aid the establishment of a consistent framework of processes and procedures for improving
asset management practice, Austroads has adopted a conceptual framework which comprises
three main parts and seven phases as shown in Figure 1.1 and Table 1.1.
Table 1.1: The asset management process
Asset management strategic planning
Part 1
Phases 1 to 4 *
Define objectives
Form asset strategies
Develop investment programs
Identify asset maintenance needs
Setting asset management objectives, and defining a strategic
plan based on identified corporate and stakeholder
requirements. The asset management strategic planning
process is the major impetus to the effective working of asset
management.
Asset management actions
Part 2
Phase 5 *
Implement works programs
Creation/acquisition, operation, rehabilitation and
replacement, disposal/rationalisation of the agency’s assets.
Asset management performance
feedback
Part 3
Phases 6 and 7 *
Audit
Review
Auditing the implementation and reviewing the outcomes of
asset management actions to gauge their effectiveness in
satisfying organisational strategies. The results of such
reviews are used as inputs to subsequent strategic planning
cycles.
Refer to Figure 1.1.
Source: After Austroads (2002a).
This conceptual framework has since been developed further and personalised by some state road
authorities as part of their internal asset management practice. Many organisations have also
systematised this process, in terms of establishing corporate procedures and complementary
information systems and decision support tools. The process and procedures are fundamental,
and provide the basis for specifying technological systems.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Source: After Austroads (2002a) with minor adaptation.
Figure 1.1: Integrated asset management process flow diagram
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
The scope of network level asset management covered by the Guide to Asset Management
concentrates on the provision and maintenance of physical infrastructure, shown as a
subcomponent of Figure 1.1. However, it does not ignore the need for complementary activities
and the benefits arising from an integrated approach, and seeks to alert asset managers about the
range of infrastructure-oriented and other solutions at their disposal.
The strategic planning stage is vital to effective asset management and consists of:
The Planning Sub-Process, which describes the overall process flow, and outlines the need
for various frameworks, standards and strategies.
The Information and Communication Sub-Process, which deals with the flow of information
from the Planning Sub-process. This information serves to involve and inform external
stakeholders, and facilitates decision making at different levels of an organisation by
articulating internal objectives, strategies and plans.
Whilst strategic planning may be performed on a multi-year basis linked to an authority’s planning
and funding cycles, specific components fit an annual cycle, including:
asset performance gap analysis, which produces a total needs program
optimisation and prioritisation of options and proposed funding scenarios and an outline of
works programs
submission of agreed work program.
The achievement of objectives through monitoring (Phases 6 and 7) provides feedback on the
overall process allowing strategies to be reviewed and further actions planned.
Organisational objectives, strategies and standards must also be regularly reviewed at least for
current relevance.
1.4.3
Implementation and Continuous Improvement in Asset Management Practices
Asset management is a way of doing business in the broadest sense. It is not simply about
implementing certain activities to achieve specified technical standards, nor is it primarily
concerned with the application of modern software tools, although each have a role to play. It is in
fact much broader. It is about delivering better performance results through appropriately targeted
investment in the introduction and refinement of improved people skills, products and processes.
The ultimate goal is to deliver benefits to all road transport stakeholders.
Four sequential stages are recommended to progress a road agency from the early stages of
initiating an asset management program to full implementation of the Austroads IAM process,
namely:
Stage 1
Program establishment
Stage 2
System design and development
Stage 3
Pilot planning cycle
Stage 4
General implementation.
Whereas many readers of this document will belong to institutions with established practices, the
Austroads Guide to Asset Management recommends a structured re-assessment of current
organisational practice to identify priority areas for improvement. Many reputable organisations
have adopted a similar approach and reaped significant benefits from so doing (AASHTO 2002
and VicRoads 2004a).
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
1.5
The Role of Asset Managers
The role of asset managers in integrating organisational decisions embraces the following:
providing a link between strategic goals and longer term processes and annual project level
decisions
providing a link between asset creation and asset maintenance decisions
providing a link between agency road use management and physical asset decisions
considering all asset classes – pavements, structures, other road-related infrastructure
ensuring consistent communication between legislators, community, stakeholders, agency
executive, frontline practitioners
ensuring the appropriate management and flow of asset related data and information across
the organisation in order to inform asset strategy development and monitor asset
performance
providing a link between finance, planning, human resources, information and delivery
functions of the organisation
providing asset performance feedback to inform future policies and strategies.
Table 1.2: Differences in functional roles
Management
function
Network
information
Network planning
Programming
IAM phases or
related activities
Monitoring and
evaluation
Organisations concerned
All phases and
activities
Management and reporting of information on road assets
Importation and export of data to analytical and reporting
tools
Owners, asset managers and
service providers
IAM Phases 1
and 3
Formulation of objectives and associated levels of
service and standards
Owners and sectoral policy
advisers
IAM Phases 2
and 3
Developing strategies and resource requirements to
support defined levels of service, standards and
objectives, including use of non-build solutions
Owners and asset managers or
operators
IAM Phase 4
Network screening to identify candidate sections
Production of a long list of priority sections with ranking
based on economic criteria, under budget constraint
Determining the necessary work program to meet
performance objectives
Asset managers or operators
IAM Phase 4 and
Transport Planning
Economic (and financial) feasibility of alternatives for
rehabilitation, new investment or capacity expansion
Owners and project/asset
managers or operators
IAM Phase 5
Project investigation and design of works
Preparation and issue of contracts and works
instructions
Project/asset managers or
operators
IAM Phase 5
Planning and undertaking major or minor works to be
done on specific sections and projects
Service providers and project/asset
managers
IAM Phases 6
and 7
Measuring achievements against key performance
indicators
Assessing future asset management strategies and
plans
Owners
Asset managers or operators and
service providers would be
expected to implement internal QA
systems as part of each specific
function
Preparation
Implementation of
physical works
Typical aims
Source: Adapted from Robinson et al. (1998).
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Organisations, and individuals, should aim to identify their role in the overall process. Identifying
such differences in functional roles, as illustrated by the examples in Table 1.2 will help improve
effectiveness through focusing on particular tasks and doing them well. In so doing, the following
points should be emphasised:
ensuring that planning accommodates non-build solutions
undertaking comprehensive project preparation activities, including economic feasibility,
particularly for major works
encouraging increased involvement of project management and delivery staff in preparation
and implementation activities.
1.6
Relationship and Synergies with the National Guidelines for
Transport System Management in Australia
Road asset management needs to take place in support of total (land) transport system objectives,
which in turn aim to meet the transport needs of the community. At the highest level transport
contributes to broader societal and whole-of-government objectives.
The challenge therefore is for road asset management to consider and contribute in a proactive
manner to meeting this demand, and not simply respond with a supply-side approach.
The Australian Transport Council (ATC) has published National Guidelines for Transport System
Management in Australia (ATC 2004) to provide a framework for non-urban land transport
decisions. These guidelines address the Australian Government’s approach to funding, planning,
developing and managing Australia’s national land transport infrastructure.
The National Guidelines address multiple modes, both road and rail, and are primarily concerned
with the designated national land transport network and its corridors, although the overall
framework is relevant to all classes of transport infrastructure and associated modes.
The National Guidelines adopt a similar seven-phase approach as endorsed by Austroads, and
aim to achieve transport system objectives which are vertically linked, and integrated as illustrated
in Figure 1.2. The five-phases illustrated in the Figure are complemented by two further phases,
namely project and program implementation, and post-completion review.
The National Guidelines also recognise that direct linkages will exist between non-sequential
phases, e.g. between policy choices and program structure, such as regional Auslink programs,
black spot improvement programs, etc. Further examples would include the balance between the
routine maintenance, preventative maintenance and rehabilitation components of an overall road
infrastructure preservation strategy.
A key requirement is to ensure ‘strategic fit’ between high level objectives and project and program
responses. To achieve this requires appropriate strategies to be established and policy choices to
be made. Examples of the latter include:
the degree to which desired outcomes should be pursued through land use policy
developments rather than applications of transport instruments alone
the preferred role of infrastructure versus non-infrastructure strategies and investment
the strategic emphasis which should be given to such issues as road freight versus rail
freight as preferred land transport modes
the funding of capital (new asset stock) versus maintenance (existing asset stock)
investment
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
the relative weights given to different objectives
the degree to which an equity objective should be pursued to complement an economic
efficiency objective in defining service levels and evaluating investment alternatives.
Source: After Australian Transport Council (2004).
Figure 1.2: Hierarchy of linked objectives for transport system development
The current version of the National Guidelines is predominantly related to large-scale capital
investment on a selected part of the total land transport system, while this guide is concerned with
a network-oriented approach to road infrastructure preservation covering all road classes.
However, the above issues are equally pertinent to both sets of guidelines and are addressed
throughout this document.
Road asset managers should familiarise themselves with the National Guidelines and always seek
to support the transport needs of the community in its broadest sense.
In addition, it should be understood that this new, integrated approach to transport system
management lends itself to the development of strategic long-term directions which promote the
development of scenarios for anticipating future demand for transport services. A number of
Austroads members have adopted this approach as part of their strategic planning process, see for
example Queensland Department of Main Roads (2002) and Queensland Transport/ Queensland
Department of Main Roads (2000), thus helping to ensure adoption of integrated solutions to meet
society’s needs, both now and in the future. Such initiatives are encouraged amongst all
organisations.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
1.7
Achieving Effective Asset Management
To achieve effective asset management this guide offers guidance and best practice examples of
the following asset management principles:
adoption of a rigorous, and cyclic process-based approach which is policy-driven and results
oriented and customer focused
manages current assets and provides for future assets
provides a defined level of service
develops cost-effective programs for the long-term
manages risks associated with asset failures
requires performance monitoring, audit and feedback
employs appropriate quality information and decision support tools
encourages continuous improvement in asset management practices and human resource
skill development
encourages development of clear business processes and organisational accountabilities.
Accompanying commentaries elaborate the above principles in the following areas:
characteristics and example key results areas and key performance indicators
increasing efficiency through road use management
management of heavy vehicle access
service levels and intervention levels
whole of life cycle costing
managing risks.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
2
OVERVIEW OF KEY ASSET MANAGEMENT PRINCIPLES
AND PRACTICES
2.1
Policy-driven and Results Oriented and Customer Focused
Asset management is conducted within the context of organisational goals, policies and budget
constraints. Goals and policies must be established within a framework which incorporates
community input. Performance objectives provide a way to convey to the community how
agencies are managing public assets.
Figure 2.1 illustrates how asset management strategies aim to meet these needs and are
developed from a number of elements. An understanding of how they relate is necessary to
develop and review the effectiveness of an overall strategy. These relationships also provide a
framework to monitor and review existing strategies.
Figure 2.1: Elements of asset management for road networks
In recognition of the principle that roads should be treated as a service to the community, Phase 1
of the Integrated Asset Management Process requires clear assessment and definition of ‘Road
Agency and Stakeholder Requirements’ and for these to be articulated in terms of key results
areas (KRAs) and key performance indicators (KPIs).
Stakeholder and community input through surveys, focus groups and other structured methods is
an essential requirement of good asset management. Customer input is fundamental in setting
standards and must be followed by ongoing review to track whether customer expectations are
being achieved.
Austroads have and continue to undertake significant studies in this area, see for example Tsolakis
and Thoresen (1998) and the Austroads publication Guidelines for Community Input in Setting
Levels of Service and Intervention Standards for Road Networks (Austroads 2002b). These should
be consulted prior to planning, implementing and presenting the results of surveys.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
From a broad asset management perspective, important considerations include:
a need to start at a network level to agree overall principles and prevent local issues from
dominating outcomes from the outset
giving sufficient attention to study design so that the objectives of any consultation are
fulfilled as far as possible
identifying who the ‘community’ is and ensuring appropriate representation for the task in
hand, including those stakeholders that represent the entire community, those with a local
social interest and those with a clear financial interest
being clear about the value of both qualitative and quantitative surveys, where the latter may
help explain why certain issues are important to users, whilst the former may help quantify
their importance
focusing questions to represent the type of road environment, including different rural and
urban situations, and circumstances where investment is driven by traffic demand or mostly
by social justice and other factors
distinguishing between circumstances where a trade-off under a zero-sum scenario may be
appropriate, and those where a more direct, commercial ‘willingness to pay’ approach may
be best suited.
Agency KRAs should be defined for each generic area in which improvement is required or
performance should be monitored. They should be in line with corporate objectives and should
reflect an agency’s internal operations and performance, and the service provided to users or
areas affecting other stakeholders. KRAs should embrace economic, social, safety,
environmental, customer service and financial performance. For example:
ensure a safe road infrastructure
deliver a target level of service, including meeting ride quality and capacity targets which
contribute to overall transport efficiency
preserve the physical assets and provide continuity of access
contribute to a sustainable environment, by considering environmental outcomes in planning
and decision making and by employing appropriate methods and measures to reduce
impacts and enhance environmental values (Austroads 2006).
Asset management objectives, or KPIs, should also be formulated which are more tightly defined in
terms of indicators and target criteria. Consequently, these KPIs should be specific, directly and
objectively measurable, attributable, affordable, capable of being monitored, achievable and be
used to:
formulate strategies and therefore be applied in IAM Phase 2
determine asset management actions as part of IAM Phases 3 and 4
monitor the achievement of organisational goals and service levels in IAM Phases 6 and 7.
Austroads National Performance Indicators (Austroads 2001) facilitate assessment of both road
system and road agency performance of Austroads member authorities and can provide a basis for
defining suitable indicators for other organisations. The Austroads performance indicators are
available on the Austroads website and at the time of writing comprise a set of 36 indicators, ten of
which are classed as road agency performance indicators. Specific targets are not set, but
statistics related to each indicator are published and provide a basis for monitoring trends in
service levels and other indicators.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
For asset management, the most widely used road agency performance indicator in Australia and
New Zealand is Smooth Travel Exposure (STE); defined as the proportion of travel undertaken
each year on roads less than a specified level of roughness. Road authorities report this and other
information, typically at annual intervals, and also record achievements against the target or
limiting values which they aim to achieve. Reporting may be made separately for different classes
of road, and targets may also vary.
2.2
Managing Current Assets and Providing for Future Assets
The development of road asset management strategies forms the core of IAM Phase 2. Whilst
investment programs concentrate on maintenance and rehabilitation of road pavements and
bridges, they should be developed in coordination with road use strategies. The level of road
system performance provided by the asset can be affected by management actions which
influence the need for travel, the type of travel and types of vehicles allowed.
An effective infrastructure management strategy should address both existing and new assets. It
should contain a suitable range of interventions which are essentially preventative in nature and,
as illustrated in Figure 2.2, can reduce long-term costs. The ‘stitch-in-time’ policies used by a
number of Australian road agencies, which are particularly applicable to the preservation of
pavement assets, adhere to this principle, for example see VicRoads (1993). These and similar
strategies are highly recommended as they have been found by many practitioners to provide a
return on investment of around two or three times that obtained when assets are allowed to
deteriorate in an uncontrolled manner, or to a condition where full replacement is necessary.
Source: After SADC (2003).
Figure 2.2: Typical road condition deterioration with time
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Those components of an infrastructure (preservation) strategy which seek to ensure adequate
performance of existing assets comprise an appropriate mix of the following road asset
management responses:
Routine maintenance activities which address minor defects on the carriageway and
structures, off-carriageway works including grass cutting, drain clearing and the like, and
essential activities to remove obstacles from the road and ensure a base level of road safety.
The need for such activities should not be underestimated. Considerable evidence exists
which demonstrates that rates of deterioration are higher in the absence of effective routine
maintenance, including where basic drain clearing is not performed to an adequate level.
Preventative periodic maintenance designed to reduce future deterioration by timely
surface interventions to limit the need for expensive rehabilitation, and to ensure minimum
skid resistance and general safety levels are maintained. Such works can be relatively
modest in unit cost terms, but highly effective when based on whole of life considerations and
not by adopting a ‘worst-first’ approach.
Rehabilitation which targets roads whose ride quality has deteriorated significantly, or which
display inadequate structural capacity for current or future traffic loading. By their nature,
such works are very costly and might be expected to be of the order of five to ten times more
costly than a preventative treatment program. Where a large program of rehabilitation exists,
say greater than 3-4% per annum, it is likely that this reflects a lack of investment in periodic
interventions, neglect, poor implementation or a discrete increase in traffic loading patterns.
Timely intervention of appropriate quality is best. Conversely, where the replacement
program is very small, say less than 1% per annum, and programmed maintenance costs are
increasing and condition is falling, it is likely that expenditure on rehabilitation is too low.
Again, timely rehabilitation is required to ensure whole of life cycle costs are minimised.
Appropriate solutions should be developed based on best practice, for example see
Austroads (2004a).
In today’s environment, the above set of responses needs to be extended to include:
Capacity improvement programs to optimise traffic flow, including identifying the need for
additional traffic capacity or improved traffic management measures. Solutions require
considerable co-ordination both within and between agencies and in many cases the
optimum response may be through improved road use management.
Road safety and blackspot improvement programs to reduce the incidence of road
crashes and provide appropriate facilities for pedestrians and cyclists and other vulnerable
road users.
Management strategies for heavy vehicle access to deliver efficient freight services thus
helping provide customers with goods at affordable prices. However, asset managers are
often worried at the existence of very heavy or oversized vehicles and the potential for
accelerated damage to roads and structures. Safety may also be a concern. It is important
therefore that such issues are taken into account in both infrastructure and road use
management. Strategies need to recognise the current state of knowledge regarding heavy
vehicle contributions to the damage of road pavements and structures, and should aim to
undertake any analysis in a nationally consistent manner (Austroads 2004b).
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
2.3
Providing a Defined Level of Service
As per Phase 3 of the Integrated Asset Management Process, asset strategies should be
developed with clear level of service objectives providing the basis for:
planning needs
assessing risks
gauging the quality of delivery.
Levels of service should be established for:
all classes of assets, and their use, including for basic access
major structures such as bridges and culverts
environmental and social impacts, these being amongst the least visible yet most important.
Each agency must establish levels of service appropriate to its organisational goals and resource
constraints, and consistent with the perceived needs of the community. Absolute levels of service
should be varied with respect to the role and importance of the asset and its use within the road
system. Higher trafficked roads warrant a higher level of service. This increases overall transport
efficiency through better ride comfort and higher travel speeds, and helps reduce costs to road
users.
Lower trafficked roads provide fewer opportunities for direct road user savings to offset investment
costs, and therefore associated service levels are generally lower. However, minimum levels of
service should be encouraged to ensure basic levels of safety and accessibility to essential
services, and to minimise loss of assets. Access also promotes productivity, and is an essential
catalyst to growth in economic and social terms.
Most asset managers and planners recognise such linkages, and there is general acceptance that
a minimum level of service, which may be varied based on demand, should be adopted as a
general policy.
The choice therefore is to set levels of service which strike a balance between being equitable and
in being economically efficient. The range of possible options is illustrated in Figure 2.3. Typically,
practical considerations usually warrant the adoption of ‘equitable standards’, which neither favour
economically efficient standards, nor uniform standards. The adoption of a set of ‘stepped
minimum standards’ can achieve a comparable result, and may form the basis of an ‘economic
base case’ for investment analyses. Acknowledging this is generally accepted as good practice,
and is highly recommended.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Source: After ATC (2004).
Figure 2.3: Equitable and economically efficient standards
Most road authorities publish target level of service criteria which are based on a hierarchy related
to function and overall use. In many cases these are also directly related to engineering design
guidelines with respect to the safety, speed and comfort of travel.
The availability of such targets provides a further yardstick against which performance can be
monitored and reported later in Phases 6 and 7.
2.4
Developing Cost-effective Programs for the Long-term
Road investment programs present a set of programmed management actions to achieve
performance objectives and are linked to the expected life of the assets and their maintenance
treatments. Road investment programs are formulated on the basis of a gap analysis which is
performed during IAM Phase 3, and are delivered as a ‘Total Needs Program’ in IAM Phase 4 and
should be presented with accompanying plans for:
the entire road network
a region
a road corridor
a road link, or project.
Significant benefits can be gained by employing solutions planned using whole of life cycle costing
(WOLCC).
WOLCC involves an evaluation of all the component costs incurred over the whole life of a project.
By adopting a long-term view of the road system, comprehensive WOLCC promotes consideration
of total costs including construction, maintenance and operational expenditure and all of the
variables involved in the evaluation such as user costs (delays, travel time and vehicle operating
costs), safety costs and associated maintenance and rehabilitation costs, agency capital costs and
routine life cycle maintenance costs.
Austroads 2009
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The manner in which the component costs change is illustrated in Figure 2.4, where increases in
construction/rehabilitation expenditure reduce the costs to road users. The optimum (economic)
standard is obtained when the total transport costs are minimised, and this optimum varies in
relation to traffic level and the associated mix of costs. For a given traffic level, if the road is built to
a standard higher than optimum or if the timing of its implementation is either premature or
significantly delayed, then the benefits would not sufficiently outweigh the additional costs and
therefore the solution would be sub-optimal. Care should be taken to avoid ‘false economies’
where expenditure shortfall below the optimum level of investment leads to significantly greater
transport costs and long-term asset management backlogs.
WOLCC employs the results of deterioration, the effects of treatments and user cost modelling on
the infrastructure to compare alternative investment strategies, the purpose of which is to:
determine how asset life may be best extended by controlled maintenance
determine the optimum timing, intervention levels and mix of treatments to be employed.
WOLCC techniques applied at a system-level allow competition for funds to take place between
projects, with the aim of maximising benefits across a road network in order to prepare long-term
road development and maintenance plans under different funding scenarios.
Source: After SADC (2003).
Figure 2.4: Relationship between maintenance standard and transport costs
2.5
Managing Risks Associated with Asset Failures
Risk management is a core component of asset management activities. Key risks managed
through asset management are:
financial risks – addressed through the adoption and enforcement of asset preservation and
preventative maintenance policies (see Sections 2.2, 2.3 and 2.4 above)
operational risks – by appropriate planning and operational responses in order to limit harm
to individual members of the public or to their property.
This increased alertness has resulted from changes in legislation which was promulgated following
the Australian High Court’s decision in 2001 that the law of negligence should apply to roads.
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It means that Australian road authorities now owe a ‘duty of care’ to road users by exercising their
maintenance powers to protect (the users) from foreseeable harm. Failure to effectively manage
the maintenance of roads (and road-related assets) to an appropriate and affordable standard
places authorities in a position of liability on the grounds of ‘misfeasance’. Fulfilling this
requirement demands that road asset managers demonstrate they have processes and defendable
plans in place to demonstrate their intent to act responsibly.
The issues surrounding the management of risk are complex since they involve:
reasonable business processes
policy decisions
management decisions based on engineering analysis and risk management
court rulings on adequacy.
Fortunately, an appropriate risk management process has similar components to those used in
asset management.
Asset owners, and delegated managers, should demonstrate compliance with the intent of the law.
This means that certain proactive actions aimed at managing risk are necessary including:
regular inspections
managed asset information
maintenance standards, comprising the inspection periods, defect severity and response
times, developed through community input and aligned to available budget
established and documented business processes and management systems covering policy
development, asset monitoring, priority setting and decision making, resource allocation,
program delivery and audit and incident response.
Thus ‘risk management’ embraces all IAM Phases and is fundamental to the successful delivery of
outcomes to the users. Provision to manage such risks should form an essential component of all
asset management activities, with priority given to minimising operational risks.
2.6
Performance Monitoring, Audit and Feedback
As noted in Phases 6 and 7, monitoring of asset performance, audit of work carried out and review
of performance achievement completes the cycle of asset management.
Asset performance is monitored by physical condition measurements of all asset classes (e.g.
roughness, surface condition, strength, bridge strength, signage reflectivity). Monitoring processes
need to be selected to enable assessment of customer satisfaction, needs planning or risk
assessment. Monitoring processes vary and must be selected or structured to provide relevant
information at an affordable price.
Asset inventories must be updated to reflect completed work and new condition/inventory
measures. Asset owners are provided with information from delivery function areas through ‘as
constructed’ drawings and plans for ongoing asset maintenance requirements.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Asset valuation is one method of monitoring asset management effectiveness and is also a
technique for facilitating the translation of engineering assessments into financial terms for
consideration at an accounting level. Various approaches to asset valuation exist, including both
condition-based and age-based depreciation methods (Austroads 2000). Whilst no single
approach is universally accepted, the condition-based approach is favoured by many asset
managers. However, commercial or technical obsolescence are also important factors.
Differences in approaches also include how various asset classes and their component parts are
valued, e.g. separating the valuation of road surfacings, pavements and lower layers, dealing with
land under roads, etc.
However, the main requirement is to achieve consistency in reporting asset values, including
trends, and to allow the effect of investment strategies on future asset value to be determined.
This aids effective communication with financial and general managers, as well as politicians who
represent road users and the local community, and helps to ensure that road management
decisions are made in a broad community context.
On completion of any asset management cycle, the agency should undertake a review of the
existing road asset performance, infrastructure strategies, and whether agency and stakeholder
requirements have been met or exceeded.
A key part of the asset management process is communication with stakeholders. Stakeholders
may include politicians, other government agencies, industry, communities and road users.
Communication with stakeholders may consist of seeking information (such as in setting levels of
intervention standards) or in providing information about a future program of investment.
Strategies for addressing the above requirements are detailed in other parts of the Guide to Asset
Management.
2.7
Use of Information Systems and Decision Support Tools
Information is fundamental to asset management and, as illustrated in Figure 2.5, is used in all IAM
Phases to inform decisions and quantify the results of implementation. Essential information
includes road asset inventories, asset condition, historical records of construction and
maintenance, traffic and other road use data, unit costs, etc. This data then helps inform the
analyses and decisions taken throughout the asset management process.
As technology has developed, more sophisticated and comprehensive road management
information systems, data bases and user tools to collect, store and process data have been
incorporated into asset management practice. Many agencies now use sophisticated pavement
and bridge management systems to facilitate the management of large amounts of data and to
automate some of the analysis required as input to asset management decisions. These systems
have evolved to the point where they have significant potential to improve the overall effectiveness
of the asset management process and communications with stakeholders.
However, substantial resources can be required to operate such systems effectively and care is
needed in their design and implementation.
A pragmatic approach to developing and implementing formal information systems and decision
support tools includes:
commitment to quality at all levels
clear system specification aligned to documented business processes including defining the
scope based on intended use and the outputs users will require
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
simplicity, since this will ultimately retain a greater feel of transparency and comprehension
by users
selection of appropriate models and information categories to produce required outputs, and
planning for data collection and processing
focus on appropriate and affordable data collection strategies
priorities for staged system implementation
appropriate skilled resources dedicated to the task.
Furthermore, asset managers should ensure that the level of system sophistication and
comprehensiveness is appropriate to the level of resources of the organisation and the level of
decision. As noted earlier, the importance of sound processes and frameworks and good practice
in all elements of asset management are more important than having a sophisticated system.
Robinson et al. (1998) and TRL Overseas Centre (1998) offer additional guidance on the design
and implementation of road management systems.
Figure 2.5: Central role of information in the asset management process
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
2.8
Continuous Improvement in Asset Management Practices and
Human Resource Skill Development
Options for greater efficiency, increased knowledge, better technology, training and the like. all
need to be pursued by agencies to achieve community benefits.
All planning processes existing within road authorities and corporate entities concerned with asset
management will benefit from an appraisal of current practice to review the need for improvements.
A business improvement program should be undertaken at periodic intervals. An assessment of
business processes forms a core component of ‘good practice’ in asset management. Specific
programs need to be tailored to meet the needs of particular organisations.
Such reviews can reveal blind spots in an organisation’s processes, or in the message they
communicate. It offers a means of providing state-of-the art benchmarks and identifying possible
gaps.
Developing team and individual competency to achieve best practice requires a people centred
approach, in which it is essential to understand the roles and responsibilities to be filled and to
establish appropriate levels of asset management competencies.
The process for implementing an asset management system within an organisation is described in
the Integrated Asset Management Guidelines for Road Networks (Austroads 2002a).
Other organisations provide similar advice. For example, in their Transportation Asset
Management Guide, the American Association of State Highway and Transportation Officials
(AASHTO 2002) recommends the application of a ‘self-assessment’ process to help an authority to
characterise its asset management practices and identify opportunities for improvement. The
AASHTO guide also reports a summary of the benchmarking exercise they undertook amongst
participating authorities, and this provides a point of reference for readers.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
3
3.1
THE AUSTROADS GUIDE TO ASSET MANAGEMENT
Structure
The Austroads Guide to Asset Management complements the other Austroads guides which
embrace a wide range of subjects and which are readily available, accessible and comprehensive
resource for practitioners. Austroads and others (e.g. state road authorities and industry) have
compiled a great deal of knowledge on the tools, techniques and practices associated with the
management of physical road infrastructure. The Austroads Guide to Asset Management
assembles this knowledge into a single authoritative electronic guide comprising eight parts, as
shown in Figure 3.1.
The target audience for the Guide to Asset Management includes all those involved with the
management of the physical road and bridge infrastructure assets as well as industry, and students
seeking to learn more about the fundamental concepts, principles, issues and procedures
associated with the management of these assets.
The guide includes an introduction to asset management (this document) and offers guidance on
how to determine and plan to accommodate stakeholder/community expectations, formulate and
review asset strategies, develop works and investment programs, assess asset performance and
undertake audit and asset valuation.
Each part of the guide is accompanied by ‘commentaries’ identified within the text which amplify
the principles and processes by use of examples.
As part of a developing guide of live documents, it is recognised that there will be periodic revisions
to this ‘peak document’ and other parts within the guide and that some previous Austroads
publications will be superseded by the Austroads Guide to Asset Management. The Austroads
website should be referenced (http://www.austroads.com.au) to ensure the reader is accessing the
latest version of this document.
It is also recognised that asset management procedures will vary between jurisdictions and that in
a number of cases procedures may also be determined by central government agencies to ensure
consistent investment evaluation across portfolios. For this reason this guide does not prescribe
detailed processes. Instead it seeks to introduce the overall general principles and process of
asset management in line with best practice and to offer guidance.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
AUSTROADS GUIDES
ASSET MANAGEMENT
GUIDE TO ASSET MANAGEMENT
PART 1: INTRODUCTION TO ASSET MANAGEMENT
(INCLUDING SCOPE OF OTHER PARTS)
BRIDGE TECHNOLOGY
PAVEMENT TECHNOLOGY
PART 2: COMMUNITY AND STAKEHOLDER
REQUIREMENTS
PROJECT DELIVERY
PROJECT EVALUATION
PART 3: ASSET STRATEGIES
ROAD DESIGN
PART 4: PROGRAM DEVELOPMENT AND
IMPLEMENTATION
ROAD SAFETY
ROAD TRANSPORT PLANNING
PART 5: PAVEMENT PERFORMANCE
ROAD TUNNELS
PART 6: BRIDGE PERFORMANCE
TRAFFIC MANAGEMENT
PART 7: ROAD RELATED ASSETS – PERFORMANCE
PART 8: ASSET VALUATION AND AUDIT
PART 1 – INTRODUCTION TO ASSET MANAGEMENT
SECTION 1: INTRODUCTION (INCLUDING WHY, WHAT, HOW, SCOPE & DEFINITION)
SECTION 2: OVERVIEW OF KEY ASSET MANAGEMENT PRINCIPLES AND PRACTICES
SECTION 3 : THE AUSTROADS GUIDE TO ASSET MANAGEMENT
PART 1 – COMMENTARIES
COMMENTARY 1: CHARACTERISTICS AND EXAMPLE KRAS AND KPIS
COMMENTARY 2: INCREASING EFFICIENCY THROUGH ROAD USE MANAGEMENT
COMMENTARY 3: MANAGEMENT OF HEAVY VEHICLE ACCESS
COMMENTARY 4: SERVICE LEVELS AND INTERVENTION LEVELS
COMMENTARY 5: WHOLE OF LIFE CYCLE COSTING
COMMENTARY 6: MANAGING RISKS
Figure 3.1: Structure of Austroads Guide to Asset Management with focus on Part 1
3.2
Relationship to other Austroads Publications
The Austroads Guide to Asset Management is complemented by the Integrated Asset
Management Guidelines for Road Networks (Austroads 2002a). This describes the overall
framework for road asset management adopted by Austroads members and provides guidance on
the effective implementation of asset management processes within a business. The Integrated
Asset Management Framework forms the basis for the process-based approach which is the
foundation of this guide, and its various parts.
The Guide to Asset Management supersedes the earlier Austroads publication — the Road Asset
Management Guidelines (Austroads 1994).
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Additionally, decision makers will need to ensure other documents such as the Austroads guides to
Road Transport Planning, Project Evaluation and Road Safety are referred to where appropriate.
A Glossary of commonly-used terminology associated with asset management and other useful
information on the Australian and the New Zealand road systems is available on the Austroads
website (http://www.austroads.com.au).
3.3
Scope of other Parts of the Austroads Guide to Asset
Management
This Introduction to the Austroads Guide to Asset Management presents the concepts and guiding
principles of asset management. These components are then described in more detail in Parts 2
to 8 of the guide. A summary of the scope of these documents is given below.
3.3.1
Part 2: Community and Stakeholder Requirements
The asset management planning process starts with the identification of organisational and
stakeholder requirements, and this forms the core of Part 2.
Its aim is to foster good practice in the identification of road agency objectives, including how to
take account of customer expectations, social and environmental issues, stakeholder input from
external agencies and government and organisational priorities.
Part 2 encourages the use of effective stakeholder consultation to help identify priorities, potential
issues, social impacts, opportunities, alternatives and solutions to problems, and helps to identify
those outcomes and levels of service which the community is prepared to pay for.
Guidance is given on how to present feedback and information to assist the community in this task
by including documentation about budget limitations and trade-offs implicit in the selection of levels
of service, including the impact of decisions on agency and road user costs in the longer term.
Part 2 also shows how information from the stakeholder / community consultation process can be
integrated into the objectives of the organisation. Part 2 provides guidance on how Key
Performance Indicators (KPIs), otherwise known as performance measures, should be set to
monitor the effectiveness of the asset management process (the works program) towards
achieving the KPIs.
3.3.2
Part 3: Asset Strategies
Part 3 is concerned with the development of asset strategies. These asset strategies translate
organisational objectives into actions linked to defined KPIs. A complete set of strategies consists
of capital investment, infrastructure preservation and road use strategies.
It provides guidance on how to evaluate the strategic fit of investment needs with agency strategic
plans, and how to ensure an equitable allocation of resources where resources are insufficient and
prioritisation is necessary, taking due account of the organisation’s objectives and the broad
objective of minimising life cycle costs.
However, in keeping with the focus of the guide, which is primarily concerned with the
management and preservation of current physical assets, it introduces those aspects of road use
strategies and capital investment strategies which are essential inputs to effective road asset
management.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
3.3.3
Part 4: Program Development and Implementation
Part 4 addresses the program development process, at which point asset strategies are
transformed into defined levels of service and works programs. Part 4 describes the process by
which the type and quality of road-related asset that should be provided in a given set of
operational circumstances (e.g. for a given demand) is defined by an agency.
Each road agency is encouraged to determine its own sets of performance standards, i.e.
combining both quantitative indicators and criteria, based on community consultation, economic
analysis, existing road standards, and budgetary expectations.
Part 4 provides guidance on how intervention criteria may be employed in assessing the current
performance of an existing road-related asset against the target asset performance. It also
explains how such criteria are used to identify performance gaps that can then be addressed by
construction and preservation activities and road use policy interventions.
This then leads on to program development at which point an agency identifies intervention options
to close the asset performance gaps. These intervention options will comprise the total needs
program.
3.3.4
Parts 5, 6 and 7: Asset Performance
Part 5 provides guidance on the establishment and maintenance of asset inventories, and on the
monitoring of asset performance. It discusses the need for agencies to measure asset
performance against objectives, and therefore is primarily concerned with condition data collection
and performance modelling at a network level. Sub-parts include:
Part 5A: Inventory
Part 5B: Roughness
Part 5C: Rutting
Part 5D: Strength
Part 5E: Cracking
Part 5F: Skid Resistance
Part 5G: Texture
Part 5H: Performance Modelling.
Bridges are covered in Part 6 and other road related assets in Part 7.
3.3.5
Part 8: Asset Valuation and Audit
Part 8 provides guidance on how to undertake asset valuation, since such information can provide
the asset manager with valuable insights into the long-term management requirements.
It also provides guidance on how to implement an audit process to ensure work activities reflect the
works program and satisfy the asset and organisational strategies (and in turn stakeholder
requirements).
Finally, Part 8 describes approaches to presenting information to external stakeholders and other
customers by means of public reports and other media.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
REFERENCES
AASHTO 2002, Transportation asset management guide, American Association of State Highway and
Transportation Officials, Washington DC.
Australian Transport Council 2004, National guidelines for transport system management in Australia, 3
vols., Australian Transport Council, Canberra, ACT.
Austroads 1994, Road Asset Management Guidelines, AP-109/94, Austroads, Sydney, NSW.
Austroads, 2000, Valuation of Road Infrastructure Assets in Australia and New Zealand, by LB Dowling, AP144/00, Austroads, Sydney, NSW.
Austroads 2001, Australian and New Zealand Road System and Road Authorities: National Performance
Indicators 2000, AP-43/01, Austroads, Sydney, NSW.
Austroads 2002a, Integrated Asset Management Guidelines for Road Networks, by R Grove, F Mihai, P
Appleby, M Bishop, K Eckeroth, L Leong, D Radcliffe & P Shepherd, AP-R202/02, Austroads, Sydney,
NSW.
Austroads 2002b, Guidelines for Community Input in Setting Level of Service and Intervention Standards for
Road Networks, R Grove, F Mihai, P Appleby, M Bishop, K Eckeroth, & P Shepherd, AP-R201/02,
Austroads, Sydney, NSW.
Austroads 2004a, Pavement Rehabilitation: A Guide to the Design of Rehabilitation Treatments for Road
Pavements, AP-G78/04, Austroads, Sydney, NSW.
Austroads 2004b, Pavement Design: A Guide to the Structural Design of Road Pavements, AP-G17/04,
Austroads, Sydney, NSW.
Austroads 2006, Maintenance Techniques to Reduce Social and Environmental Impacts, by J McRobert & N
Houghton, AP-R291/06, Austroads, Sydney, NSW.
INGENIUM & IPWEA 2002, International infrastructure management manual, Association of Local
Government Engineering of New Zealand Inc (INGENIUM), Thames, New Zealand, & Institute of
Public Works Engineering Australia, Sydney, NSW.
Kerali, HRG 2000, HDM-4: Highway Development and Management: volume one: overview of HDM-4, World Road
Association (PIARC), Paris.
Martin, TC, Toole, T, & Oliver, JWH 2004, ‘The development of HDM-4 technology road deterioration models
for Australia’s sealed granular pavements’, International Conference on Managing Pavements, 6th,
2004 Brisbane, Australia, Queensland Department of Main Roads, Brisbane, Qld., 19p.
Oliver, JWH 2004, ‘Prediction of the life of sprayed seals and the effect of climate, bitumen durability and
seal size’, International Conference on Managing Pavements, 6th, 2004 Brisbane, Australia,
Queensland Department of Main Roads, Brisbane, Qld., 13p.
Prem, H, de Pont, J, Pearson, B & McLean, J 2002, Performance characteristics of the Australian heavy
vehicle fleet, National Road Transport Commission, Melbourne, Vic.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Queensland Department of Main Roads 2002, Roads connecting Queenslanders: a strategic long-term
direction for the Queensland road system and Main Roads, Queensland Department of Main Roads,
Brisbane, Qld.
Queensland Department of Main Roads., Road System and Engineering Group 2005, Traffic and road use
management manual, Queensland Department of Main Roads, Brisbane, Qld.
Queensland Transport & Queensland Department of Main Roads 2000, 4Seeable futures: transport portfolio
scenario-based planning for Queensland Transport and Queensland Department of Main Roads 2000
– 2025, Queensland Department of Main Roads, Brisbane, Qld.
Robinson, R, Danielson, U, & Snaith, MS 1998, Road maintenance management: concepts and systems,
Macmillan, London.
Standards Australia & Standards New Zealand 1999, Risk management, AS/NZS 4360:1999, Standards
Australia, Strathfield, NSW.
Transit New Zealand 2001, Annual report, 2000/01, Transit New Zealand, Wellington.
TRL Overseas Centre, 1998, Guidelines for the design and operation of road management systems,
overseas road note 15, Transport Research Laboratory, Crowthorne, UK.
Tsolakis, D, Rockliffe, N & Patrick, S 2003, Triple bottom line evaluation of transport proposals, research
report ARR 359, ARRB Transport Research, Vermont South, Vic.
Tsolakis, D, Thoresen, T, 1998, ‘A framework for demonstrating that road performance meets community
expectations’, working document WD R98/003, ARRB Transport Research, Vermont South, Vic.
VicRoads 1993, A stitch in time: Victoria’s road maintenance strategy, VicRoads, Kew, Vic.
VicRoads 2003, Program development guidelines, VicRoads, Road System Management, Kew, Vic.
VicRoads 2004a, VicRoads road management plan, VicRoads, Kew, Vic.
VicRoads 2004b, Annual report, 2003/04, VicRoads, Kew, Vic.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 1 CHARACTERISTICS AND EXAMPLE KRAS
AND KPIS
Whatever objectives are chosen, it is important they are designed so that they can be translated to
Key Results Areas (KRAs) and subsequently framed, as closely as possible, in terms of
measurable key performance indicators (KPIs). For this to occur, KPIs should ideally have the
following characteristics:
They should be directly relevant to the assessment of current asset condition, to facilitation
of asset management and to prediction of future asset performance.
They should be capable of being managed by the agency.
They should include objective, quantitative measures, whose derivation is clearly
understood and whose accuracy is widely accepted.
Their procurement should be affordable and not impose excessive costs on road
management agencies or companies.
The specified criterion associated with each measure should be achievable within the
foreseeable future, and be established with funding availability in mind.
They should be repeatable, and reproducible.
Considering the various points, the following observations can be made:
There is no point in measuring things that do not matter, or achieving a degree of accuracy
that is not necessary.
Where multiple factors play a role, as in the case of road crashes, the road authority should
at least aim to monitor rates and trends and include such statistics in annual reports.
Quantitative assessments employing national or internationally accepted standards of
measurement and recognised calibration or verification procedures will be appropriate in
many cases. However, the results of properly designed qualitative surveys which seek user
opinion and feedback are also valuable. See for example Austroads (2002b).
Direct measurement and reporting of specific parameters is preferred over the use of
composite indices, as the latter tend to mask the contributions of various factors, making it
difficult to plan and manage corrective actions.
Some authorities also choose to distinguish between management performance measures, and
road condition measures. In the latter case the measures will also vary and typically reflect the
factors considered important to asset management in each jurisdiction. For example, Transit New
Zealand (2001) reports specific distresses, such as excessive rutting or poor skid resistance. In
other circumstances, surfacing age is used as an indicator of the ‘health’ of a network, having been
associated with the durability of surfacings in different climatic environments (Oliver 2004).
Examples of KRAs and KPIs reported by VicRoads (2004b) and which extend to consider
community and environment indicators for transport infrastructure are shown in Table C1 1
together with published policy objectives and key results areas which are established
organisation-wide.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Table C1 1: Example asset management KRAs and KPIs for transport infrastructure
Policy objectives
Achieve reductions in road crashes and the cost of road trauma
Assist economic and regional development by improving the effectiveness and efficiency of the road transport system
Develop a more integrated and sustainable road transport system
Minimise the impacts of roads and traffic on the community and the environment
Build effective, equitable and efficient relationships with customers by providing suitable access to services in order to
assess both road system and road agency performance.
Key results areas
Road safety
Road system management
Traffic and transport integration
Registration and licensing
Organisational performance
Financial performance
Example KPIs for road system management
Condition of the network
Proportion of travel on smooth roads
Proportion of network with very rough roads
% of bridges subject to mass limits
% of bridges in very poor structural condition.
Construction and maintenance
Proportion of network resurfaced
Proportion of network rehabilitated
Estimated return on economic investment.
Environmental and community
Number of community consultation plans prepared
Number and type of environmental incidents
Percentage of road network with roadside management plans.
Source: After VicRoads (2004b).
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 2 INCREASING EFFICIENCY THROUGH ROAD
USE MANAGEMENT
As the total transport task is becoming larger in volume, and many vehicles are heavier and larger
in size, the growth in road traffic continues to outstrip the ability of the community to finance
additional asset provision. Therefore, an asset manager is concerned to ensure the effective use of
current assets. The complementary application of road use management (RUM) strategies and
actions may help limit the rate of asset consumption and optimise use of current assets. A list of
examples of RUM strategies and how they relate to asset management issues is contained in
Table C2 1 below.
Considering RUM as a complementary activity to road infrastructure asset management provides
the asset manager with a wider range of solutions. It also encourages the adoption of integrated
policies and strategies.
Table C2 1 lists a range of common problems and possible RUM interventions.
Table C2 1: Management of road use
Problem
Possible RUM interventions
High vehicle loadings leading to
potential for excessive deterioration
and high rate of asset consumption
Limiting the loading on roads and bridges by regulation, legislation and surveillance
Promoting use of alternative routes which possess sufficient capacity
Poor utilisation of existing capacity
Improved traffic control and signal coordination
Better route signing and travel information
Introduction of performance-based standards (PBS) approaches to management of
heavy vehicle access (see Commentary 3)
Temporary closure or reduced level of
service
Improved incident and emergency response strategies
Improved ‘work zone’
Excessive demand
Pricing and charging policies
Measures to encourage high vehicle occupancy
Promotion of alternative transport modes
Excessive travel time caused by
relative location of social and
productive activities
Improved strategic planning and land use planning
Comprehensive guidelines for traffic and road use management have been developed in a number
of jurisdictions, e.g. in Queensland (QDMR 2005), and further examples exist of improved
strategies to manage highly-utilised facilities.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 3 MANAGEMENT OF HEAVY VEHICLE
ACCESS
Managing heavy vehicle access to the road network is currently governed through regulations
relating to permissible mass limits, dimensions and configurations and is a key component of an
overall road system management strategy. This helps to ensure appropriate levels of safety, and
to limit environmental impacts and damage to road infrastructure.
The current regulatory system typically comprises general access, public notices and permit
operations. General access regulations are broadly similar across jurisdictions in the interests of
consistency and a common national transport policy.
The rate of consumption of pavement assets, which accounts for a significant proportion of total
infrastructure replacement costs, is generally accepted to be proportional to the number of
equivalent standard axle repetitions applied by heavy vehicles.
For general application, the relative damaging effect of each axle pass is determined based on the
ratio of the actual axle load and a standard load raised to the fourth power. However, a wider
range of exponents of between 4 and 12 may be applicable depending on pavement configuration
and distress mode (Austroads 2004b).
Many roads which carry a significant proportion of total freight have evolved over time, usually from
access tracks, and have not been designed either in a pavements or geometric sense.
Additionally, Australia and New Zealand have extensively used relatively low cost chip-sealed,
granular pavements which require careful management to ensure optimal lives are obtained.
The challenge faced by both regulators and asset managers has been to develop strategies to help
accommodate the significant growth in the road transport task. Simply extending or adding new
infrastructure has not been possible because of economic, environmental, land use and social
factors. Previous solutions have been very ad hoc and have lead to some unplanned outcomes.
To gain more productivity from the road network, the adoption of an alternative performance-based
standards (or PBS) approach to regulation has been proposed so that the interactions between
vehicles, infrastructure standards, traffic conditions and freight or passenger tasks can be more
readily taken into account.
The key issues which require consideration from an asset management perspective include:
having sufficient knowledge of the performance of the existing infrastructure system to be
able to predict the consequences of adopting a new system
determining the standards to be adopted and how they relate to current regulations and the
observed behaviour and interactions between vehicles and infrastructure
assessing the costs and benefits which would result to vehicle operators and asset
managers, and what trade-offs are acceptable.
Whilst the current regulatory system remains in place, Australian Transport Ministers have
approved a set of 20 standards, comprising 16 safety standards and four infrastructure protection
standards (see details in Prem et al. 2002). These provide an optional alternative to the current
prescriptive standard. Introduction of the PBS is currently the subject of study and review and
agreement. Once implemented, considerable productivity benefits should result.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 4 SERVICE LEVELS AND INTERVENTION
LEVELS
C4.1
Service Levels
The terms ‘service level’, or ‘level of service’, describe the quality of service provided by the asset
for the benefit of the customers. Road agencies usually define levels of service in terms of the
convenience of travel and the safety performance of the road network. Depending upon demand
or strategic importance, a higher level of service may be required for some assets compared to
others.
For example, ride quality (qualitative) and road roughness (quantitative assessment of ride quality)
are two asset management service level measures. The road operating condition can generally be
defined as ‘smooth’, ‘rough’ or ‘desirable’ and an agency must decide what standard of ride
quality/roughness is acceptable for specific road classes and/or road use. Most communities
agree that it is appropriate to have a hierarchy of levels of service such that (in this example) roads
with higher demand levels would be maintained to a smoother standard.
Roughness is a prime factor in determining vehicle operating costs and consequently an input to
determining the timing of treatment interventions aimed at minimising total transport costs (see
also WOLCC in Commentary 5). In traffic engineering, the term ‘level of service’ is used to
describe the operating conditions within a traffic stream, and relates to the congestion performance
or traffic capacity of a road. Road agencies have adopted the term and associated measures as
one component of the quality of service provided by the asset for the benefit of the customers. For
the purpose of the Austroads Guide to Asset Management, levels of service is used in its broader
form. Levels of service enable an agency to:
document and measure the service provided
evaluate service versus cost trade-offs
establish what is important to the customer
link operational activities with organisational strategic goals.
C4.2
Intervention Levels and Gap Analysis
‘Intervention levels’ are specified condition parameters (usually limiting values) which, if exceeded,
trigger a maintenance investigation. The process of comparing the existing asset condition with
the desired condition is called gap analysis. However, just because a gap is identified, does not
mean that an action/project must be initiated. Routine maintenance or operational standards are
generally high priority. In other situations, the gap analysis process identifies a portion of the asset
for further investigation using engineering judgment and other organisational considerations (e.g.
budget).
Service levels/intervention levels are established using a process which takes into account:
customary practice, including local performance evidence
legislation and regulatory requirements
economic criteria, aiming to minimise whole of life costs
community views.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Table C4 1 illustrates the variety of intervention criteria which may be used, and summarises the
contents of a typical set of asset management instructions (in this case called Program
Development Guidelines adapted from VicRoads 2003). The reader should note:
the multiple, integrated solutions which may be necessary to minimise whole of life cycle
costs
the clear link between the Guidelines shown in
Table C4 1 and VicRoads multiple agency objectives, or KPIs (shown earlier in Table C1 1).
Routine maintenance standards are more specific than the ‘performance targets’ approach taken in
developing infrastructure preservation programs for reasons of safety and to aid traffic use. This is
because they relate to the repair of ‘hazards’. Consequently, response times and inspection
frequencies are set according to an assessment of risk, taking into account factors such as road
classification, road type and the volume and type of traffic. An example of this approach is shown
in Table C4 2 based on VicRoads Road Management Plan (VicRoads 2004a).
Table C4 1: Example criteria for various maintenance interventions
Routine maintenance to apply to all roads and be based on published intervention levels (see example structure in Table D 2).
Periodic pavement maintenance to be based on area of network to be treated and available funding. The program is expected to
relate to historical norms with candidates including:
those which possess moderate or severe surface distress (typically > 5% of area affected in a 200 m length)
low skid resistance sites and those of high accident potential, with the remaining sites treated under the road safety program.
Rehabilitation pavement maintenance to address sections with high roughness for road classes A, B or C (NRM > 110 - 120), and
for moderate to high roughness for road class M (NRM > 80-90). Ranking to be based on the ‘simplified’ formula (see below) and to
be applied in a separate list for rural and urban projects respectively.
Ranking value = EI * D * T * L/C, where
EI =
expected improvement, in NAASRA roughness meter (or NRM) units of counts/km
D
=
deterioration factor, where 1 is normal, 1.5 is normal but with high maintenance costs, 2 is high
T
=
traffic volume up to a maximum of 2000 veh/day rural and 4500 veh/day urban
C
=
unit cost of treatment ($ per sq.m)
L
=
expected treatment life (years).
Major patching and rehabilitation to be considered using the above ranking formula for sections in a very rough state. Distressed
pavements which are not rough but consume significant maintenance resources should be considered separately.
Drainage improvements to be considered as a long-term strategy for reducing pavement deterioration, noting that poor drainage
can increase the rate of deterioration by a factor of between 2 and 3 ( Martin, Toole and Oliver 2004).
WOLCC tool to be used to determine expected improvements and community benefits from undertaking the proposed program.
Shoulder resheeting to be considered where length is in excess of 500 metres to provide safe driving conditions and adequate
support. This does not include sealing of unsealed shoulders.
Repair of pits, trenches and utility structures where this adversely affects the ride or function of the pavement.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Table C4 2: Example routine maintenance standards
Hazard – a defect listed in the agency’s published ‘maintenance standards’:
Pavements – obstructions on the road, pavement defects including potholes, excessive rutting, excessive edge drops, damaged or
missing drainage pits, lids, surrounds, etc.
Roadside – trees, shrubs and other vegetation likely to cause danger or restrict sightlines, damaged or missing roadside furniture and
damaged structures.
Traffic signals – inoperative or confusing.
Road maintenance category – a nominated road maintenance category for each road according to an assessment of risk.
Hazard inspection frequency – period between successive scheduled inspections.
Response code – a code which indicates the control mechanism and response time for responding to a particular hazard on a particular
road.
Response time – the time to respond to a hazard, based on consideration of severity and type. Response time is measured from the time
the hazard is identified by the managing agency, or reported by the public.
Inspection
type
Hazard inspection frequency by road maintenance category
1
2
3
4
5
6
Day-time
Each week day
Twice per week
Weekly
Monthly
3-monthly
6-monthly
Night-time
6-monthly
6-monthly
6-monthly
Yearly
Yearly
Yearly
Control mechanism
Inspect, rectify or provide
warning
Response code
A
B
C
D
E
F
4 hours
24 hours
1 week
1 month
3 months
6 months
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 5 COMMENTARY E WHOLE OF LIFE CYCLE
COSTING
Whole of life cycle costs have been defined by the World Road Association as the total costs for
acquiring, operating, maintaining and disposing of an asset, reduced to a common base called the
'net present cost'.
C5.1
Benefits
The evaluation of policies and development of medium to long-term asset plans using whole of life
cycle costing (WOLCC) provides a basis for investment decisions related to long term assets.
WOLCC analysis is fundamental to modern asset management and incorporates triple bottom line
(TBL) objectives (Tsolakis et al. 2003) of:
maintaining the physical performance of the asset
considering impacts on road users and the physical environment
financial and economic cost implications for agencies and road users
intergenerational equity.
C5.2
Available Tools
Investment tools such as the HDM-4 suite of technology (Kerali 2000) and the Deighton dTIMS
software are widely used in Australia and New Zealand to assist in the analysis process. Simpler
tools are also available which use more approximate, or ‘aggregate models’ based on the same
knowledge base. The advantage of the HDM-4 style modelling tools is that they enable the
decision maker to incorporate multiple criteria into a formal analysis. Criteria would extend beyond
asset life expectations to include the:
impact on vehicle operating and road user costs, including road crashes
determination of economic benefits of alternatives
estimation of energy consumption, air pollution and noise.
The use of modelling tools is recommended by Austroads as a means of achieving consistency in
determining needs and justifying investment programs.
Models can simply be applied to evaluate future conditions taking into account the consequences
of applying established business rules or contractual obligations. Initial modelling provides an
important starting point for further policy analysis.
C5.3
Analysis Objectives
Having decided the policy objectives to be pursued, and relevant key performance indicators,
analysis can then be extended to predict likely outcomes of alternative scenarios, for example:
at the component level models can assist in estimating the life of a road surfacing in a
particular locality
to determine outcomes over a planning timeframe in terms of network performance, budget
implications and consequences for total transportation costs.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
In all cases the purpose of the analysis needs to be clearly stated. Therefore, a clear objective
function, or decision rule, must be employed so that a solution can be chosen from amongst the
alternatives that have been investigated. This may take a variety of forms including the:
1.
minimisation of life-cycle costs of specific components
2.
minimisation of total agency costs to achieve a desirable level of service for a particular
project, sub-network or network-wide
3.
maximisation of net benefits (to society) under different budget scenarios, the aim being to
minimise total transportation costs.
Purely engineering-based methods have traditionally sought to achieve Objective 1, or perhaps
Objective 2, through the adoption of best practice solutions and specifications for individual
components or comprehensive design and maintenance guidelines or procedures for complete
structures. These are predominantly project-level oriented and do not employ predictive modelling
in a planning sense. The more sophisticated models, i.e. HDM-4 and dTIMS, now make it possible
to meet Objectives 2 and 3 through formal whole of life cycle analysis.
C5.4
Data Requirements
Where such models are used they require the user to specify:
the basic input data which describes the engineering attributes of the asset, climate,
topography, current and future traffic, works history and the vehicle fleet
the intervention criteria, mix of treatments and costs applicable to each option, or to define a
solution space within which acceptable solutions may lie
an acceptable base case or ‘without investment’ alternative against which the project
alternatives will be compared.
Using the models, typical engineering scenarios can be investigated and the consequences
determined in terms of road agency costs and road user effects. Economic benefits are computed
in terms of the net economic benefits (as net present value, or NPV) from comparing a do
minimum alternative with a variety of project alternatives. Typical economic indices such as benefit
cost ratios (BCR) or NPV/cost are recommended as inputs to the prioritisation of investment
alternatives.
C5.5
Challenges
When using sophisticated models, an asset manager must be aware they:
require comprehensive data inputs
comprise internal predictive models which must be well calibrated to local conditions to give
meaningful answers
require a high degree of knowledge and skill to be applied effectively.
However, the principle of WOLCC analysis can be incorporated into decision-making in simpler
forms by taking care to ensure capital, improvement and preservation decisions are made in the
knowledge of the long term cost implications.
Most authorities employ a combination of historical practice, simple rules and the more
sophisticated WOLCC methods because no single approach can be guaranteed to produce an
acceptable and realistic outcome.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
It can be difficult to justify investment on an economic basis for low traffic facilities where agency
costs (as illustrated in Figure C5 1) make up a significant proportion of total costs. This is because
the savings in road user costs associated with a higher level of service are not sufficient to offset
the additional costs of provision or maintenance. In practice there are political and social reasons
for providing a base level of access and safety for smaller communities.
Figure C5 1: Typical split between road user and road agency costs versus AADT
C5.6
Asset Creation
Authorities should consider carefully the future maintenance requirements of proposed new
infrastructure before including it in their works program.
The establishment of complementary capital investment planning processes are recommended to
ensure the most appropriate whole of life cycle decisions are made when constructing new assets.
In this case, the asset manager is interested in knowing that asset management principles have
been applied in selecting improvement and expansion investments.
Consideration of maintenance implications at the design stage should, where possible, highlight
those options with maintenance complications or increasing life-cycle costs. Capital investment
decisions should be made in the knowledge that creation of an asset also creates a commitment to
maintain that asset.
Provision must therefore be made for future maintenance to ensure budgets are available to meet
typical business rules for the particular class of infrastructure. Further guidance is available in the
Austroads Guide to Project Evaluation.
Austroads 2009
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
COMMENTARY 6 MANAGING RISKS
Formal risk management is a core driver of road authority activities. The impetus to adopt a risk
management approach has been accelerated in recent years through the introduction and
enforcement of legislation and statutory requirements which affect roads, and the responsibilities of
managers, service providers and users. In response, some road authorities have established
formal road management plans (VicRoads 2004a).
In line with established standards (Standards Australia and Standards New Zealand 1999), risk
management comprises the following six main steps:
establishing the strategic, organisational and risk context
identifying risks, including what can happen and how
analysing risks, determining likelihood of occurrence and consequences
assessing risks, setting criteria and priorities
treating risks, options, plans and implementation
monitoring and review.
At a high level, these steps mirror the Austroads Integrated Asset Management Process but risk
must be managed within all phases of the asset management process at varying levels of
complexity. The effort used in managing risks should be commensurate with the risk exposure.
Major financial risks and the general comfort and efficiency of road use are addressed through
appropriate infrastructure preservation, road use management and capital investment strategies.
Risk management in a maintenance context is primarily related to the safe use of a roadway and
related assets, and is therefore performed at an operational level.
In deciding how to best manage risk, asset owners and managers are encouraged to adopt the
following simple classification for categorising activities and responses which has been adapted
from INGENIUM & IPWEA (2002):
‘Must do’ comprising those activities for which deferment is not an option, with public safety
identified as the topmost priority.
‘Should do’ comprising those activities which are required to deliver published ‘desirable’
service levels, with the exception of those which fall into the ‘must do’ category.
‘Could do’ comprising those activities which could bring additional community benefits should
sufficient resources exist.
Maintenance standards (see Table C4 2 Commentary 4) comprising the maximum acceptable
routine inspection periods, severity of defects that can be tolerated and response times within
which defects must be repaired fall within the ‘must do’ category, and should have first call on
available funds. Maintenance standards should be applied irrespective of the management
arrangements for the particular road and should be available for public scrutiny.
Infrastructure preservation strategy actions fall into the ‘should do’ category.
Actions which would maximise community benefits may not be achievable in budget constrained
situations and are classified as ‘Could do’ activities.
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GUIDE TO ASSET MANAGEMENT PART 1: INTRODUCTION TO ASSET MANAGEMENT
Whether networks are managed directly by a government agency, under term contracts, or similar
arrangements, a consistent process-based approach involving annual and long-term planning is
essential to reduce and manage risk effectively. Plans should contain a balance of inputs which
consider past experience, or ‘norms’, as well as the results of formal modelling using strict
intervention criteria.
Austroads 2009
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