Major changes are happening to the way public assets, such as bridges, roads, parks, stormwater and sewerage systems are being managed and accounted for across Australia.
The introduction of ISO 55000 on Asset Management Systems and a new ruling from the Australian Accounting Standards Board regarding recognition of Residual Value for Infrastructure Assets means that in many instances local and State governments must change the way they manage and report on their public assets.
Just how ISO 55000 and Residual Values will be dealt with has met with some industry controversy, but the industry’s peak body, Institute of Public Works Engineering Australasia (IPWEA), will bring certainty and consistency to the issues this month with the international launch of its two flagship industry manuals.
IPWEA represents public and private sector infrastructure professionals across engineering and finance and is launching its updated “International Infrastructure Management Manual” (IIMM) and its companion “Australian Infrastructure Financial Management Manual” (AIFMM) in response to these major changes.
The new rulings will cause many local governments, government agencies, ports, airports and utilities to re-assess how they manage and report assets on their balance sheets.
The challenge faced by statutory bodies across Australia is how do you assess the fair value of such infrastructure assets, if they cannot be sold at all? If they can, what is their market value? A reliable valuation helps asset managers plan for cost-effective and affordable asset renewal, maintenance and service level strategies.
“Trying to estimate the residual value for long life infrastructure publicly owned assets such as bridges and port facilities, and their maintenance programming, has been a black art science,” said Robert Fuller, CEO, IPWEA.
“The 565 Local Governments and eight State and Territory Governments across Australia are responsible for managing over $1.4trillion worth of public infrastructure and finance assets. ISO 55000 is the new international standard for managing those infrastructure assets but it is very much the ‘what to do’ with little guidance on ‘how to do it.’”
“As a companion set, the IIMM and the AIFMM provide the essential ‘how to’ guidance that local and State Governments and their agencies now require. They allow engineers and accountants to talk the same language – and that’s no mean feat” added Mr Fuller.
The overwhelming majority of Australia’s local governments rely upon the IIMM and AIFMM as their integrated asset management driver with most New Zealand local governments also using the IIMM.
The IIMM provides a platform to deliver sustainable infrastructure by incorporating the ISO 55000 suite to optimize the return on investment (ROI) and achieve stakeholder satisfaction.
Internationally, IPWEA’s Australian National Asset Management System (NAMS.PLUS) based on the IIMM is used widely across Canada, USA, UK, South Africa and Nordic countries.
Mr Fuller added, “This is what Prime Minister Turnbull has been advocating – taking Australian knowledge and expertise to the rest of the world. We have both the practical know-how and the tools and resources for other countries to use our world class asset management approach – and they’re embracing it.”
IPWEA has just completed a Study Tour across northern hemisphere countries promoting the updated IIMM and NAMS.PLUS.
The new IIMM sees a significant enhancement in the following key areas:
- Developing a business case for asset management and key success factors
- The Strategic Asset Management Plan (SAMP) and Policy
- Setting of asset management objectives
- Risk management
- Asset management leadership and communication
- Operational strategies and planning
- Establishing and maintaining the Asset Management System
- Information management
- Asset Management Maturity
- Asset management performance measurement and auditing
- Assessing and managing infrastructure resilience
These publications represent essential industry guidance for asset and financial managers in both public and private sectors as they implement world best practice and continuous improvement of infrastructure management.
“The new editions of these global reference manuals are the culmination of over 18 months of research, consultation and peer review by over 50 industry experts worldwide who underpin IPWEA’s technical rigor,” said Mr Fuller.
IPWEA is staging the international launch of the two manuals at its State Conferences in Queensland and NSW (14/15 October) followed by Victoria, Western Australia and New Zealand.