Research shows ways to improve our stewardship of infrastructure

Whether it is leaky pipes or potholes or cities struggling under demands for growth, New Zealanders will have seen how important it is to look after and plan for infrastructure. A new report from the New Zealand Infrastructure Commission, Te Waihanga speaks to this need, finding ways we can do better in managing our infrastructure.

The Taking care of tomorrow today: Asset Management State of Play report is a high-level snapshot of New Zealand’s approaches to asset management. It incorporates the findings of independent asset management experts as well as expertise and observations from Te Waihanga.

Te Waihanga Chief Executive Geoff Cooper says New Zealand’s most formidable challenge is looking after the assets we already have. On this score, the report shows New Zealand is currently sitting at a ‘pass’, but only just.

"We have inherited $287 billion worth of infrastructure from past generations. But this comes with the obligation of stewardship. The goal should be to proudly hand infrastructure to future generations as a benefit, not a burden. This report highlights some of the challenges to this aspiration, and how we can improve."

"Like calendars and to-do lists in our daily lives, following strong plans and processes is central to the task," Cooper says. "These are efforts that must become business-as-usual; sustained, not over weeks and months, but over years and decades.

Cooper points to a lack of progress in many sectors over the past 10 years. And while mature processes don’t necessarily guarantee good asset management outcomes, they certainly increase the likelihood of these.

"When it comes to our public infrastructure, good stewardship should be largely unequivocal and uncontested; simply part of the furniture. Cooper says. "This includes making sure that what we spend on ‘new’ infrastructure versus ‘renewals’ means we are getting the best value for our dollar."

Earlier research by Te Waihanga has highlighted that for every $10 spent on building infrastructure, $6 should be spent renewing existing assets and $4 spent on building new.

The Taking care of tomorrow today report says that we don’t generally have the resourcing and capability needed to support good all-of-life decision-making, and there is opportunity to grow leadership and governance over asset management across most sectors.

"There’s a need to make sure that the fees and charges funding maintenance keep pace with rising costs. Without this, the funding gap will grow, compromising the quality of infrastructure services we all rely so heavily on."

Improvement comes through building committed teams and leaders, the report says. It found pockets of excellence that reveal common characteristics: passionate, high-performing asset management teams; representation around the executive table; and funding that is prioritised, or even ringfenced.

"We need to create an environment where we can build out these pockets of excellence and set durable, persistent standards across the infrastructure system," Cooper says. "This will ultimately improve value for money and allow us to start making progress against our infrastructure deficit"

He points to an example of good asset management and the value this created which was seen during Cyclone Gabrielle - where it’s estimated that the $2 million invested to increase the Taradale stop-banks in Napier may have averted $2 billion in damage and almost certainly saved lives.

The report sets out eight ambitious recommendations that cover: improving governance and leadership, improving transparency, prioritising infrastructure resilience over ‘recovery’, and building asset management capacity and capability generally.

Findings from Taking care of tomorrow today: Assert Management State of Play will also be considered as Te Waihanga works to develop a National Infrastructure Plan to provide a long-term view of our infrastructure needs and priorities.

Key issues and gaps highlighted in Taking care of tomorrow today include:

• There is limited awareness of the ‘what’ and ‘why’ of asset management in many sectors. We need to look at the big picture when it comes to infrastructure. This includes everything from strategic planning and management of assets through to the day-to-day maintenance.
• Capability and capacity are the biggest constraints in improving infrastructure asset management maturity in NZ. This includes improving the resourcing and skillset of the asset management workforce, as well as the leadership and governance of the asset management system across most sectors.
• There is little transparency of infrastructure and asset management performance and planning. This includes a lack of user-friendly access to information on how infrastructure is performing and what future funding intentions are.
• There is need to better provide for renewal and maintenance of infrastructure. In some cases, funding gaps for maintenance and renewals are known, but there is not always the appetite to achieve the investment required.
• Demand planning and management needs greater focus and we can go further than a Statistics New Zealand population forecast. This could include greater understanding of demographic change, customer behaviour, demand management strategies and potential future scenarios.
• Making the most of operational programmes is a key opportunity for improvement. Organisations can usefully quantify the levels of planned versus reactive maintenance to inform more cost-effective approaches to asset management.
• System and Improvement is one of the lowest scoring functions for all sectors. This is shown in a lack of asset management maturity progress for many sectors over the last ten years.

The study contains recommendations under four key areas:
Improving governance and leadership

1. Strengthen infrastructure asset management requirements and their oversight and enforcement by the relevant system lead.
2. Require all public major infrastructure providers to have an identified and accountable governance body and/or executive lead for asset management. Other major infrastructure providers should meet this requirement especially where they are providing critical infrastructure.
   
   Improving transparency in asset management practices, infrastructure performance and medium-long term funding plans.
    
3. Require all public major infrastructure providers to periodically undertake an independently verified asset management maturity assessment and publicly report on the results. Other major infrastructure providers should meet this requirement especially where they are providing critical infrastructure.
4. Require all public major infrastructure providers to publicly disclose a consistent set of asset performance measures, subject to external audit or scrutiny. Other major infrastructure providers should meet this requirement especially where they are providing critical infrastructure.
5. Require all public major infrastructure providers to publicly disclose a minimum core level, 10-year asset management plan, refreshed at least three-yearly, and subject to external audit or scrutiny. Other major infrastructure providers should meet this requirement especially where they are providing critical infrastructure.
   Better prioritising of resilience over ‘recovery’.
6. All providers of critical infrastructure should be required to explicitly assess and appropriately prioritise infrastructure resilience through their asset management and renewals cycles in accordance with their strategic objectives. Other major infrastructure providers should be encouraged to meet this requirement.
   
   Build asset management capacity and capability.
    
7. Invest in asset management training programmes and develop a clear training and professional pathway for asset managers.
8. Improve co-ordination of regional planning across infrastructure sectors, so that future demand requirements can be met.