Local Government Magazine
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Perfect storm

MWH Global specialists warn of challenging times ahead as declining and aging populations in many regions combine with increasing debt and a looming asset renewal cycle.

Asset managers need to be very creative in finding sustainable solutions to these challenges,” writes MWH Global’s ANZ new business director Ralph Fouché in a paper presented by colleague Emma Monk.

Emma was speaking at the International Federation of Municipal Engineering (IFME) and Institute of Public Works Engineering Australasia (IPWEA) public works conference in Rotorua.

According to Ralph, asset managers and engineers can identify and implement the very complex topic of sweating an asset and finding solutions to the challenging renewals cycle that is looming for all of New Zealand’s infrastructure assets.

“However this challenge requires leadership and teamwork from everyone,” he says. “In the past, affordability issues for infrastructure assets were always seen as the financial / accounting departments’ call. Affordability of infrastructure assets should be a very real focus for everyone involved in providing the infrastructure service to ratepayers.”

Ralph says everyone involved in the sector has “a very real chance” of reinventing the future by embracing new technology and sharing their smarts.

Emma, a stakeholder engagement consultant with MWH Global, says asset managers are facing a perfect storm of events.

“There’s no one right way to solve these affordability issues,” she says. “Every region, every area will be different but there are some things that people could consider.”

Sweat the assets. A lot of local authorities are already doing this while also looking at new technologies.
Implement user chargers. The recent LGNZ Funding Review suggest this both allows people to decide what they want to buy and sends strong signals about costings.
Private ownership for unsustainable small schemes.
Regions to merge in order to get economies of scale. These may not necessarily be full mergers but perhaps more about collaboration and partnerships.

This article was first published in the July 2015 issue of NZ Local Government Magazine.

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