At AMSPEAK, delegates were intrigued by the presentation by Michael Lesnie, Senior Associate from Qubist1, outlining the juxtaposition of small asset renewal projects in the utilities sector, and the capital expenditure of the business.
Examples of small asset renewal projects include renewal of small diameter pipes for water or gas distribution, valve replacements, and electricity pole or electricity distribution wire replacements. In general, these projects account for a great portion of the utility network cost and therefore, a keen interest is taken from leadership concerned with the business’s cashflow.
Asset owners and managers have always looked for ways to balance asset predictability against capital efficiency. In most cases, organisations will seek ways to incorporate both, and some are successful. Most readers would equally understand the success of such stems from numerous measures to support this balance. A conservative budget is one way, but simply cutting the budget is not enough. It won’t work. An overall analysis of asset’s function, maintenance procedures and other underlying practices are necessary.
If you’re working in the utilities sector, let us know your thoughts on balancing asset and capital efficiency, particularly in relation to small asset renewal projects. If you were a delegate and were present during this presentation, we’d love to hear your thoughts.
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1 This post sourced information from: https://www.amcouncil.com.au/AMSPEAK/amspeak_recording.aspx