Creating long term sustainable value in urban infrastructure Mark Brown, Amey December 2013
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Transcript of Creating long term sustainable value in urban infrastructure Mark Brown, Amey December 2013
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Creating long term sustainable value in urban infrastructure
Mark Brown, AmeyDecember 2013
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Presentation content
• Introductions
• What is Asset Management?
• Case Studies
• Whither Asset Management?
• Conclusions
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What is Asset Management:The goal
To help create better places
to live, work and travel
“ deriving value from assets in a structured and predictable way to meet the objectives of their owner”
Introductions Asset Management Risk Transfer Ideas & Suggestions
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Typical breadth of assets provides a unique understanding of entire city landscapes
Introductions Asset Management Risk Transfer Ideas & Suggestions
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To align with the globally recognised Standard for Asset Management
Introductions Asset Management Risk Transfer Ideas & Suggestions
Strategy &
Planning
Decision
Making
Lifecycle Management
Knowledge
Organisation & People
Risk & Review
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Some of the questions that need answering..
Which roads/bridges, If any, should bereplaced?
What reactive maintenance can beexpected?
What level ofMaintenance/inspection shouldbe planned?
What risk is thebusiness exposed toas a result of the plans?
How can riskbe managed andmitigated?
Assets Policies,Strategies &Plans
What contingencyplans should bein place?
What operationalchanges can be made to extend life ?
What are thesymptoms of imminent failure?
What is the cost? What is the effecton the longer term?
Introductions Asset Management Risk Transfer Ideas & Suggestions
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Business as usual…….
You want how much?!!!
Just as well we doubled the estimate!!!
FINANCE ENGINEERING???
Introductions Asset Management Risk Transfer Ideas & Suggestions
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The Amey Approach - Filling the gap
Introductions Asset Management Risk Transfer Ideas & Suggestions
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Filling the gap
Introductions Asset Management Risk Transfer Ideas & Suggestions
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..and joining things up
Introductions Asset Management Risk Transfer Ideas & Suggestions
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Making the links
THE ASSET MANAGEMENT APPROACHIntroductions Asset Management Risk Transfer Ideas &
Suggestions
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Where is asset management appliedin the built environment?
Introductions Asset Management Risk Transfer Ideas & Suggestions
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Key building blocks of asset management
Process
Data
Maximo
Outputs: Reporting
Decision Making& Behaviours
Achieving
EAMS - systems
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LEADERSHIP/MANAGEMENT REQUIRED TO SUPPORT CULTURE CHANGE
1. Asset Management
- Process Productivity - EAMS systems
Capabilities
2. ManagementAwarenessOwnership
Accountability Responsibility
3. Staff - Mindsets
- Capabilities - Behaviours
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‘Basic - Competent Asset Management’
- Support to asset maintenance, based on knowledge of asset numbers, location, condition, etc
EG:
Controlled asset register Work plans and work execution managed within
asset data systems Basic planning and compliance reporting
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Advanced Asset Management’
– whole-life value goal, through predictive modelling, risk management and optimised decision making techniques using detailed data on asset asset condition, performance and cost.
EG: Integrated Materials Stores Management Optimised planning and scheduling Predictive Maintenance – Condition Monitoring Equipment based maintenance Activity Based Costing Standard Costing Productivity Analysis Cost per Asset Advanced Reporting and Analysis
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Case Study 1 – London Underground‘Tube Lines’
• 50% of London Metro• 500 million passengers a year.• 340km of track,• 101 stations; 251 trains• 2,395 buildings & structures • 93 lifts and 227 escalators• Decades of under-investment • £800m investment – 50% by private sector• 30 year contract split into four 7½ year Periods
Introductions Asset Management Risk Transfer Ideas & Suggestions
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Reporting framework and productivity management
Site Staff to Directors/Executive
Crosses functional/asset boundaries (Assurance/Projects Operations/LU, etc: can get same reports)
No excuses for not knowing
Staff see who is receiving report so enforces good practice against defined processes.
Back up by Report Tracking – total visibility
ProductivityManagement
Performance/AssetManagement
Assurance/Compliance/
Exception
Operational/WorkManagement/
MaterialsManagement
ActuateReports
E -Spreadsheet GIS ReportsKPI Manager
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Reporting structure – driving decision-making
• Ownership
• Accountability
• Monitoring
• Continuous improvement
• Single source of ‘truth’
Work Bank Management: Size and Composition & New and Completed
Operations Pre ExecutiveHSE/Assurance
- Period view- Weekly view- Senior Managers present at PreExecutive Meeting
Senior Management
- Period view- Weekly view- Asset specific
Asset Managers/Maintenance Managers
- Weekly view- Asset/Line/Maintainer specific
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Case Study – ‘Tube Lines’ Outcomes
Introductions Asset Management Risk Transfer Ideas & Suggestions
• Reliability +66%
• Operations spend -15% since 2008
• Introduced single world class asset management system
• Optimising Capex v Opex WLC costs -£26m
• Increased productivity
• Improved our worker safety.
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Tube Lines comparative performance with rest of Underground
to date
Introductions Asset Management Risk Transfer Ideas & Suggestions
£0
£10,000
£20,000
£30,000
£40,000
£50,000
£60,000
Fleet costs per Car
2008/09 Actual
Average
£-
£50,000
£100,000
£150,000
£200,000
£250,000
£300,000
£350,000
Track costs per km
2008/09 Actual
Average
£-£20.00 £40.00 £60.00 £80.00
£100.00 £120.00 £140.00 £160.00 £180.00
Stations costs per m2
2008/09 Actual
Average
£-
£10,000
£20,000
£30,000
£40,000
£50,000
£60,000
£70,000
£80,000
Escalator cost per machine
2008/09 Actual
Average
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Asset Ownership Public Public Public Public Public & Private Private
Operations & Maintenance
Public & Private Shared Private Private Private Private
Capital Investment
Public Public Public Private Private Private
Commercial Risk Public Public Shared Private Private Private
Tariff Collection Public Public Private Private Public Private
Duration 1-2 years 2-5 years 8-12 years 25-30 years 20-30 years Indefinite
BOT DivestitureResponsibility Service Contract
Management Contract
Lease Contract
Concession
A few Examples of Risk Transfer Models
Introductions Asset Management Risk Transfer Ideas & Suggestions
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Case study 2: Birmingham Highways
BIRMINGHAM
London
Introductions Asset Management Risk Transfer Ideas & Suggestions
• Vision to be ‘world class city’ by 2026• PFI funding to deal with maintenance
backlog• £600m PFI credits from central
government• £350m investment over 5 years • Public demand – ‘something must be
done!’• The project is worth c£2.7 billion over
25 years • Largest Local Authority Highways PFI
ever awarded
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What Does the project Cover
Asset Group Quantity
Roads 2,547 km
Footways 4,923 km
Street Lighting Columns 95,107 no.
Structures and Bridges 1,093no.
Traffic Signal Installations 967 no.
Tunnels 3 no.
Pumping Stations 15 no.
Traffic Signs 13,912 no.
Gullies 117,000 no.
Trees 80,000 no.
StreetLighting
Carriageway
PedestrianGuardRailing
TrafficSignals
HighwayTrees
Winter Maintenance
Road Sign
Illuminated Bollard
Footway
Gully
StreetName Plate
RoadMarkings
Introductions Asset Management Risk Transfer Ideas & Suggestions
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Project Overview
• ‘Capex’ in Core Investment Period (CIP) Years 1 - 5:6,500 km of carriageway and footways– over 55% treated
93,000 street lights – 50% replaced in CIP
29 structures strengthened in CIP, 3 tunnels refurbished
Upgrade UTC to UTMC standards
• ‘Opex’ in Years 1 - 25Surveys and inspections
Routine, cyclic, emergency and winter maintenance
Dealing with customers via Help Desk in Operational Control Room
Lifecycle programme to maintain network to ‘performance standards’
Replacing up to1,000 trees each yearIntroductions Asset Management Risk Transfer Ideas &
Suggestions
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• Increase in productivity of around 30% due to packaging works by type and area & eliminating peaks/troughs
• 20% efficiencies via integrated service delivery
• The transfer of risk equates to c£100 million of other savings
• Improved service delivery e.g. Road Traffic Accident response rates
What is the Project delivering?
Introductions Asset Management Risk Transfer Ideas & Suggestions
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Birmingham Street Lighting
• PFI enables long-term investment
• LED solution
• New technology/remote monitoring – flexibility
• Improved visibility & community safety
• Reduction in energy costs of around £2m
• Approx 50% energy/carbon savings
• Delivering council’s carbon reduction targets
Introductions Asset Management Risk Transfer Ideas & Suggestions
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Whither asset management?
There are spectacular examples of the success of asset management, adding significant whole-life value….
…..so why do relatively few organisations employ asset management to its full potential?
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Constraining the full potential of asset management
• Spend-to-save: sourcing funds to invest in long-term benefits
• Excessive focus on technology (eg: EAMS) and too little on people and outcomes
• Simplistic contracts which fail to share risk or incentivise innovation
• Credibility of the discipline: can these promised benefits really materialise?!
• Solutions and appraisal methods are ‘capex biased’: failure to comprehend whole-life value
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Conclusions
• Asset management is a holistic discipline: technology, process, people, finance…
• A key process is that of converting data into knowledge
• Asset management can operate under a variety of contract frameworks
• Finance can be key to unlocking future value: spend-to-save
• There are spectacular examples of success, adding significant value
• But, relatively few organisations employ asset management to its full potential