Functioning, safe and reliable assets are vital to the smooth functioning of urban societies. When an asset isn’t working properly it can cause major impacts and reflect poorly on its owners, whether they be in government or private business, writes David Jenkins.
Asset management is no simple feat. Professionals need to have a detailed understanding of the way an asset works, manage tight budgets to ensure assets can be effectively cared for, and ensure assets provide financial stability for owners.
Asset failure is one of the major risks of not having a qualified asset manager on staff to continually audit and repair the condition of an asset.
A major turning point in the value placed on asset management in Australia arose in 2009, when the then Local Government and Planning Minister’s Council (LGPMC) endorsed the Local Government Financial Sustainability – Nationally Consistent Frameworks. This was a unified approach to assessing financial sustainability of local councils, asset planning and management and financial planning and management.
Although this was a great initiative, the focus has since faded, and the framework needs to be reviewed and additional measures considered to support the financial sustainability of local councils. One such important aspect that needs to be sharply brought into focus is the continual upskilling of asset managers.
Education is one of the measures that must be at the forefront of government’s minds to ensure the asset managers of today have the skills to be professional custodians of existing infrastructure.
Investing in the future
In the May Federal budget, the Australian Government announced a $17 billion investment in infrastructure and road projects. This is a sizeable investment; one that needs to have a portion of it ring-fenced for education and training to ensure each project has the right resources to perform at a high level for many years to come.
Not working to prevent premature deterioration or asset failure often costs significantly more down the track. The 2018 National State of the Assets report identified that Australian Local Councils estimated $24 billion worth of existing infrastructure had poor capacity; meaning it was not performing at optimal levels.
The same report revealed to upgrade infrastructure that has poor capacity is likely to cost five times the current value of the asset, thus, providing a clear indication of the cost of not having properly trained asset managers on board from the project’s inception phase.
The Canadian Government is leading the way in asset management and has demonstrated a great example of how governments can invest now to ensure longevity of infrastructure projects.
In its eight year, Municipal Asset Management Program (MAMP) delivered by the Federation of Canadian Municipalities (FCM), the CAD$110 million program supports Canadian municipalities in making informed infrastructure investment decisions based on sound asset management practices. It delivers training, funding and resources to strengthen the knowledge and skills of asset managers. It was launched in February 2017 and is scheduled until 2025.
The Australian government should consider introducing a similar program as it ensures all infrastructure projects going forward have the right resources and skills to maximise the capacity and lifespan of all infrastructure assets.
Delivering strong returns
Governments need to see a strong return on investment in infrastructure projects to highlight to the constituents they understand the needs of the community and are investing wisely. Particularly over the recent 18 months when the economy is under intense pressure, governments cannot be seen to be splurging or misusing funds.
It’s important to plan early who will be responsible to manage completed infrastructure assets and determine how they will be managed for the next 5-10 years – at least. The post-construction management is just as critical as the building phase, because if they are not maintained adequately, the asset will experience a significantly shorter lifespan, and as a result reducing the overall value of a project and return on investment.
The financial and physical management of an asset such as parks, waterways, roads, bridges, sewage works and other infrastructure, is an in-demand profession right now. It offers stability and opportunities for career progression within governments and private organisations.
With significant infrastructure projects underway, there is an increasing number of positions that need to be filled to ensure assets have longevity and deliver strong returns for constituents. The LGNSW revealed that in 2017 asset managers were sixth on the list of top ten professional skill shortage occupations in its Workforce and Future Skills Report. This means there needs to be greater awareness raised about the profession and more quality education pathways that allow people to easily upskill into an asset management role.
It is my opinion that all 537 councils in Australia should have at least one full-time asset manager on staff to ensure the effective management of assets.
It’s time we change our mindset and shift our focus to a more sustainable and profitable way of thinking – properly caring for existing infrastructure so it can perform for generations to come.
David Jenkins is CEO of the Institute of Public Works Engineers Australasia (IPWEA).
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