GovtGovernment departments across Australia at the local, state or federal level are faced with the complexities of when to renew assets.

Most of the public infrastructure in our nation was built in the post-WWII boom: 1950s to 1970s. With many assets having a life-cycle of between 30 – 80 years, it’s no wonder that right now, across our major cities and rural areas, we’re seeing unprecedented construction, upgrading and renewal. But renewing assets is not as simple as the asset reaching its end-of-life or reducing its functionality. Other factors must be taken into consideration, such as:

  • Changing customer service level expectations
  • Decreasing levels of risk tolerance for public infrastructure owners, operators and insurers
  • Deterioration of asset reliability and maintainability
  • Change in regulatory environment
  • Fluctuating levels of inflation
  • Change in community expectations for environment, finanacial and social sustainability
  • Technological advancements

For owners and operators of public infrastructure assets the decision of asset renewal is fraught. Often, decisions are based solely around the balancing act of maximising life-cycle while minimising risk to result in an injection of revenue.  Revenue is fundamental to any business, however, a renewal decision model should be measured by its ability to appropriately deal with the uncertainties of cost escalation, equipment reliability, and variations in revenue, while at the same time, incorporate flexibility to respond appropriately to these uncertainties at the optimum time. A flexible decision model that considers revenue, as well as costs, and investigates both overhaul and replacement strategies against the decision to keep the asset ‘as is’ is necessary for public infrastructure owners and operators.

Tell us your methods for asset renewal decision-making. If you’re working in the government sector in asset management Linda would love to hear from you – contact .

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