Life-cycle asset management is generally based on three steps: you build it, you use it, and you replace it (if you still need it) or you get rid of it.

We’re usually pretty good at the first step—that’s what our engineers are trained to do, and what our institutions have been organized around. In the last few decades, we have also improved in some limited areas of step two—for example, using assets much more efficiently and cost-effectively through technology such as efficient pumps. We’ve also improved somewhat in terms of step three by developing new and improved technologies, such as watermain lining.

Since we have seen continuous improvement, why is this still a matter for discussion? Because there are many things that could be done better. For instance, there are applicable lessons to be learned from the private sector. In addition, the community is not always involved and often does not understand the choices. Sometimes, they’re not even offered alternatives in the discussion phase.

Step two is where the most important advances can be made. It is really the critical step, since it is usually the longest-lasting and by default the most expensive step. It is also the most complex step in its scope. Watermains typically last for 75 to 100 plus years, or over three or four generations, and this can lead to some messaging that service will always be stable and thus taken for granted.

What could we do better?

Make the link between service levels and risk management

Municipalities tend to track the number of watermain breaks as a sign of service level, and also as a way of protecting the deteriorating state of their infrastructure. This can be somewhat misleading for a number of reasons.

First, the length of pipe that must be repaired (or in some cases replaced) as a result of a watermain break is extremely small as a percentage of overall pipe length in the distribution system. Analysis on this basis will show that 99.95 per cent of most systems are not failing in any given year. This is an enviable track record and state of affairs when compared to most other services. For example, one of the authors lives on a street with just over 20 houses, which has had four watermain breaks in the last two years. The street is roughly 200 metres long, so that represents 10 breaks per kilometre every year for two years in a row—that’s a fairly high ratio. Yet, no one on the street is clamouring to have that watermain replaced. Why? Maybe the service disruption was limited as a result of efficient work crews. Perhaps breaks went relatively unnoticed because they happened during the night or while homeowners were at work.

Second, there is rarely a good financial business case for replacing a watermain; that is, it is usually always cheaper to repair than to replace. While there will come a time when replacement is necessary or where other extenuating factors, such as drinking water quality, may warrant a replacement, these should not be defined by an arbitrary level of service such as number of watermain breaks per kilometre per year. As previously discussed, this kind of ratio can be misleading.

Third, customers usually have a much more local view in terms of their water service, and are particularly interested in safe drinking water (or how long they are without water) than how often mains break. Why not develop service levels that are based on what clients want and understand, rather than technical and numerical service levels? Service levels should reflect what the service is worth to clients, which is more in line with what the private sector does in a competitive market. A public sector monopoly should not trump its clients.

Finally, current service levels (or internal policies and standards) are often based on public reaction that asks managers to make sure service interruptions don’t happen in the future. Communities simply cannot afford to continue implementing such policies, although it may make elected officials and the general public feel better in the short term. Watermains will break today and will continue to break in the future, and most probably on an escalating basis.

To combat this situation, realistic risk management techniques must be developed, then conveyed and endorsed by the customers and the community. These can easily be conveyed by developing a number of “what if” scenarios that will guide the discussion in a clear, rational, and objective manner. Private sector expertise can greatly assist in this effort. There is also a need to incorporate a second layer of risk management in terms of work management and work plans. For example, focusing on large mains and valves first, on critical areas of the community second (industrial, commercial and institutional such as hospitals) and finally on strictly residential areas. Community involvement and subsequent communication of the final plan is then paramount, as this will align expectations with well-understood rationality. This will subsequently lead to service management not only on a reasonable and affordable basis but also on a cost-effective and measurable basis with the community’s desired outcomes.

Know your non-revenue water situation

In particular, proactive management to better know and understand a water distribution network means dealing with components of non-revenue water (NRW), such as leak detection and meter inaccuracies. These components are clearly defined in the International Water Association’s and American Water Works Association’s Water Audit Methodology.

Inventory and assessment are good things from many perspectives: financial management (operating revenues and expenses, cost avoidance), asset management (prevention, early detection), economic development (servicing capacity allocation) and finally, and certainly very importantly, environmental stewardship of a precious and life-sustaining resource. Protecting and optimizing existing assets and resources is probably the most obvious and unspoken expectation of the community, and yet it is seldom done as a priority, if at all.

The public sector may need external assistance to get some of these initiatives started. The private sector has significant analytical expertise in this area, whether it is in terms of technology, program delivery or program financing expertise that communities can tap into. Private sector involvement can take many forms, ranging from long-term public-private partnerships to service contracts or subcontracting of certain tasks, including performance-based contracts.  Public sector resources, supported by private sector expertise, can yield superior results in these initiatives. NRW activities can be very public and are easily presented, with enormous benefits in a number of areas such as public communication and education, gaining credibility with the community and local environmental groups and gaining their support to deal with significant infrastructure challenges in the future.

Pay attention to the customers

As we enter into an age of significant “reinvestment” in our physical assets, construction technologies might be the same or similar to old ones, but it’s our approach that requires a new mindset—one that focuses on service recipients and their expected outcomes. In order to gain their support and meet our financial challenges, we must refine the management tools, techniques, and policies with respect to customers. Communication is a key factor in determining the value that the community receives from their assets. This is the true and only value of service delivery.


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