A new joint venture project aimed at helping councils make better decisions around when to replace water pipes could save millions of dollars. By John Pfahlert, CEO of Water New Zealand and Canterbury University Quake Centre manager Greg Preston.
A joint initiative between Water New Zealand, the Institute of Public Works Engineering Australasia (IPWEA) and the Quake Centre based at Canterbury University will provide tools to enable better and more nationally-consistent decisions on where and how to renew and replace water piping.
The three partners have combined to create a long-term programme of work to systematically develop guidance and tools to foster alignment of asset management practices across the country.
The aim of the programme is to demonstrate that an integrated and aligned approach to investment in the 3 waters networks will benefit the health and economic wellbeing of all New Zealanders.
The Evidence Based Investment Decision Making for 3 Waters Pipe Network Programme (or Pipe Renewals programme for short) began life at a workshop at Canterbury University in February 2016.
It has been worked up into a framework of 47 projects across 10 themes. These themes feed an overarching Decision Support Framework which will be used as the basis of balancing cost, risk and levels of service taking account of inputs such as growth, risk, condition, resilience and vulnerability.
The Decision Support Framework will also provide the basis of a business case to facilitate the investment discussion between engineers, asset managers, elected members and the community.
In the first instance, the aim is to allow asset managers to use the data that they currently have to make the best informed maintenance and investment decisions they can using an industry best practice framework.
As the NZ Metadata Standards are implemented and the National Pipe Database is developed (as part of this overall programme of work) asset managers will be able to draw on national data to help inform their decisions.
The Pipe Renewals programme has support from all sectors of the water industry including some of the major asset management organisations, consultants, contractors and manufacturers. With the framework developed and four initial projects planned for 2017, the aim is to beginning creating the changes needed within the industry by the end of the year.
The first four projects include:
The Decision Support Framework
Working with one or more local authorities, Opus International (a Quake Centre partner) will work through the creation of the 30-year infrastructure strategy. This will start with a relatively simple age-based renewals profile and then add increasing sophistication based on the data currently available to the authority.
This process will provide a sensitivity analysis in respect to the most important inputs to the decision-making process which will inform the prioritisation of later guidance material.
Resilience Measures & Opportunities for Increased Resilience
This guidance document will be written by Beca (another Quake Centre partner) in conjunction with several other research and industry parties. It will draw heavily on the lessons learnt from the Canterbury earthquake sequence and the SCIRT experience.
Update of the NZ Pipe Inspection Manual (NZPIM)
The Quake Centre, with the support of EQC, has funded a team led by ProjectMax to undertake a scoping of the required updates to the NZPIM. This is 10 years out of date and does not fully reflect the advent of new technologies or the lessons learnt from the extensive inspection programmes of the pipe networks in Christchurch.
It is proposed to begin the update as soon as funding is secured.
Scoping of a New Zealand Pipe Database
If the value of implementing the New Zealand Metadata Standards is to be fully realised in the water sector there needs to be a way that 3 waters data can be shared across the country. A project to scope the technical, financial and political opportunities and barriers to a NZ Pipe Database will be explored in the first half of 2017.
The overall project is of national significance and the steering group of Water New Zealand, Quake Centre and IPWEA NZ will continue to seek the support of more partners and central government to further develop the guidance material.
At the same time there will be active engagement with the development of the NZ Metadata Standards and the Local Government Risk Agency.
Once the first suite of guidance is completed in 2017, local authorities will be able to begin use the framework to finesse their investment decisions.
- John Pfahlert is CEO of Water New Zealand. firstname.lastname@example.org
- Greg Preston is the Canterbury University Quake Centre manager. email@example.com
- Exploring the Issues Facing New Zealand’s Water, Wastewater and Stormwater Sector. A Castalia Strategic Advisors report for LGNZ. (2014).
- National Infrastructure Plan 2011 by the New Zealand government.
- Water and Roads: Funding and Management Challenges. A 2014 report by the Office of the Auditor-General.
Asset renewals of longstanding concern
Water services make up around 45 percent of most local body rates bills, and managing maintenance and investment is one of the most difficult parts of a territorial authority’s responsibilities. But unlike most other assets such as buildings, parks and roads, water assets are buried underground and it is difficult to assess their condition and understand how this impacts on the level of service that can be delivered.
In 2014, the total replacement value of the 3 waters assets in New Zealand was estimated to be about $45 billion. Many of these assets are nearing the end of their design lives. This all points to a huge replacement burden for local authorities over the next couple of decades.
Yet we know that competing pressures on local authorities means many do not spend what they intend to on capital works.
In 2014 the Office of the Auditor-General identified that during the period between 2007 to 2013, local authorities consistently spent less than they intended on capital works (3 waters and roading), including on asset renewals.
If this continues, the gap between asset renewals expenditure and depreciation for the local government sector could reach between $6 billion and $7 billion in the coming decade.
So it’s vital that councils look to be as efficient and cost effective as possible when facing these costly challenges.
If even a small percentage of the possible renewals cost can be saved by a better understanding of the process, this alone would amount to many millions of dollars saved.
Local authorities need to build their capability to use their information and systems to get the best performance from their asset networks. They need to understand how assets perform throughout their lives to know the points at which and whether to maintain, renew, or replace individual asset parts.
Access to good information, and taking an approach shared across the regions, will provide local authorities with the opportunity to save ratepayers’ dollars.
In a 2014 report for LGNZ, Castalia Strategic Advisors showed that councils invest significant resources in trying to improve performance of assets. But many councils operate in independent silos despite a number of guidance documents available such as the International Infrastructure Management Manual, which outlines generic management approaches. It is clear there is a need for guidance and tools specifically developed for water assets that move the discussion from general process to implementation.
This article was first published in the February 2017 issue of NZ Local Government Magazine.