COMPARING U.S. AND INTERNATIONAL MODELS FOR IMPLEMENTATION OF ASSET MANAGEMENT PROGRAMS

Over the past several years, United States water and wastewater utilities have struggled to implement programs to systematically manage their assets. A good part of the struggle has been trying to identify just what comprises “asset management.”Although government agencies such as the Environmental Protection Agency and the Government Accounting Standards Board have proscribed the value of managing assets in forums associated with CMOM and GASB-34 respectively, actual implementation methods and processes has been given short shrift in this country. Except for the many, varied models formulated and offered by consultants, there have been few if any standards for implementation of necessary asset management processes.Despite this lack of formal process definition and implementation methodology, the water and wastewater utility industries have grown eager for program implementation. Partially as the result of new or pending regulatory requirements and partly because, as the result of rising service costs and aging infrastructure, formal and systematic management of utility assets promises to provide a means to reduce costs through strategic planning and programming of asset life cycles.Many utilities are attempting to implement asset management programs without consistent, formal guidance on the constitution of asset management, its essential elements and characteristics, its costs or its benefits. Progress to date has been as varied as the definitions of the process itself. Benchmark studies of asset management programs (Westin, 2004) indicate that most utilities claiming formal asset management programs are actually only practicing various forms of non-integrated maintenance, operations and financial management without true consideration of asset lifecycle planning and programming.For lack of better guidance, many utilities have begun to subscribe to the International Infrastructure Management Model (International…, 2002), commonly referred to as the Australia – New Zealand Model, as the best source of asset management program implementation guidance. Indeed, several leading consulting firms have selected it as their sole model for asset management planning and programming.The International model has apparently been successfully instituted in Australia and New Zealand. However, the reasons for success in those countries may not be apparent or applicable to U.S. utilities.The purpose of this paper is to first identify and describe the genesis of the Australia – New Zealand infrastructure management model, and then to compare and contrast a typical U.S. methodology with the international model. The paper will then describe the essential elements of asset management and show how those elements are addressed in both the international and U.S. models. Comparisons of implementation methods will highlight the significant differences in approach, assumptions and outcome between the approaches to asset management implementation.The intent of the paper is to show that there is really “nothing new under the sun,” and then describe how the international model may not be the most appropriate application for U.S. utilities when considering differing regulatory requirements, service level expectations and cultures.It is fully expected that this paper will spark significant debate among practitioners and proponents of the two models. However, it is also expected that the paper will help clarify for many the true differences, the many similarities and the comparative value of competing methodologies which address the same problem.