Infrastructure asset management

Infrastructure asset management is the integrated, multidisciplinary set of strategies in sustaining public infrastructure assets such as water treatment facilities, sewer lines, roads, utility grids, bridges, and railways. Generally, the process focuses on the later stages of a facility's life cycle, specifically maintenance, rehabilitation, and replacement. Asset management specifically uses software tools to organize and implement these strategies with the fundamental goal to preserve and extend the service life of long-term infrastructure assets which are vital underlying components in maintaining the quality of life in society and efficiency in the economy. In the 21st century, climate change adaptation has become an important part of infrastructure asset management competence.

Infrastructure asset management is a specific term of asset management focusing on physical, rather than financial assets. Sometimes the term infrastructure management is used to mean the same thing, most notably in the title of The International Infrastructure Management Manual (2000, 6th edition). Where there is no problem of confusion, the term asset management is more widely used, as in the professional societies: the Asset Management Council in Australia and the Institute of Asset Management in the UK. In this context, infrastructure is a wide term denoting road and rail, water, power, etc. assets. Road asset management is part of infrastructure asset management including all the physical assets on the road network such as roads, bridges, culverts, and road furniture.

The first published use of the term asset management to refer to physical assets is not known for sure. The earliest adopter known for certain is Dr Penny Burns in 1984 (see the Asset Management History Project AMQI's STRATEGIC ASSET MANAGEMENT – Public infrastructure). The National Asset Management Manual was published in Australia in October 1994 by the Institute of Municipal Engineering Australia (now IPWEA). The NAMM and the New Zealand Infrastructure Asset Management Manual published in 1996 are an early use of the specific term infrastructure asset management Home - NAMS NZ. The NAMM and IAMM were combined into the International Infrastructure Management Manual (IIMM) published in 2000. The term "asset management" was first used in a document published in 1983 by the United States Department of Transportation, Federal Highway Administration entitled: Transportation Resource Management Strategies for Elected Officials of Rural Municipalities and Counties. That document consisted of seven chapters of resource management strategies for each of two types of transportation infrastructure - roads & bridges and public transportation. Each of these two parts of the document focused on the following seven categories: Planning, Prioritization, Contracting Out, Innovative Finance, Human Resource Management, Asset Management and Performance Measurement & Reporting.

Most local governments in Australia are required to develop an asset management plan for major asset classes and align the forecast outlays with a long tern financial plan to ensure the needed services from infrastructure are provided in an affordable and sustainable manner. Guidelines for alignment financial and non-financial aspects of asset management are available in the Australian Infrastructure Financial Management Manual published in 2009 and updated in 2015 and International Infrastructure Financial Management Manual, 2020.

After decades of capital investment in United States's infrastructure such as the Interstate Highway System, local water treatment facilities, electric transmission and utility lines, the need to sustain such infrastructure experiences mounting challenges. The current duress includes tight state and local budgets, deferral of needed maintenance funding, and political pressures to cut public spending. Today, shrinking federal appropriations, progressively aging capital stock, and parochial statuses and interest groups have inhibited flexible procurement strategies. And with the rise of design firms, professional societies, licensures, construction and industry associations, and related specialties the management of the infrastructure system has dramatically altered. As a result, the life cycle of a facility, including planning, design, construction, operations, maintenance, upgrading, and replacement has become bifurcated between agencies and firms where design and construction becomes contracted separately from operations and maintenance. The push for more dual-track strategies and not segmented ones such as Design-Build and Build-Operate-Transfer helps in maintaining public facilities. Yet, over time, the government apparatus focused more on start-up capital expenses for constructing public assets without focused monies on maintenance.^{[page needed]}

After World War II, with the policies of the Roosevelt Administration, economic boom of the 1950s, and rise in Federalism, public projects became financed through direct government funding. Additionally, the federal government began setting criteria and procedures for architects and engineers to comply on federal construction and related projects. State and local statutes soon followed suit. Over the years, a large bureaucratic machine began administering infrastructure projects through Design-Bid-Build and debt financing methods. This led to hyper-competition of federal, states, and localities over scant federal resources and overall fostered a limited approach in life-cycle attention (namely, no account of operation and maintenance). Asset management attempts to fill in the gaps of such fragmentation for better performance in infrastructure assets.

In Canada, the majority of municipal assets were built between 1960s to 1970s. The average age of municipal infrastructure has increased since the end of the late 1970s, because investment has been insufficient to replace deteriorating assets. This deficit could be the result a shift in financing policy at the end of 1970s, which made the local governments responsible to fund the municipal assets. Recently, in Ontario municipalities are required to develop an asset management plan to receive provincial fund.

The basic premise of infrastructure asset management is to intervene at strategic points in an asset's normal life cycle to extend the expected service life, and thereby maintain its performance. Typically, a long-life-cycle asset requires multiple intervention points including a combination of repair and maintenance activities and even overall rehabilitation. Costs decrease with planned maintenance rather than unplanned maintenance. Yet, excessive planned maintenance increases costs. Thus, a balance between the two must be recognized. While each improvement raises an asset's condition curve, each rehabilitation resets an asset's condition curve, and complete replacement returns condition curve to new level or upgraded level. Therefore, strategically timing these interventions will aid in extending an asset's life cycle. A simple working definition of asset management would be: first, assess what you have; then, assess what condition it is in; and lastly, assess the financial burden to maintain it at a targeted condition.