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Estimating future maintenance and operational costs associated with new assets

  • 1.  Estimating future maintenance and operational costs associated with new assets

    Posted 15 April 2019 19:36
    Hi all,

    Just wondering (again) if and how various Councils are estimating the ongoing maintenance and operational costs associated with new assets?

    I've always thought that a table showing the expected annual maintenance and operational costs associated with a range of new assets expressed as a percentage of replacement cost would be a very useful resource for anyone trying to estimate the whole of life cost of new projects, especially before a detailed design has been undertaken.

    The last time I had a crack at this was about 5 years ago. Unfortunately, I wasn't able to gather enough data to give me much confidence in the figures I was able to come up with.

    For what it's worth this is what I came up with.  My gut feeling is all or nearly all of the percentages are on the low side, some extremely so.  Also the asset types listed are a bit too generic to be really useful. 

    Type of Asset Average Annual Maintenance Cost Average Annual Operational Cost
    BBQ 22.5% 22.5%
    Bridges 0.1% 
    Building 0.7% - 4%
    Car Parks 0.2% 
    Drainage 0.10% - 0.15% 
    Footpaths 0.1% 
    Parks and Open Space 10% 
    Roads 0.6% 


    I am hoping this time around that I'll be able to come up with some better higher confidence figures, and if and when I do, I will share them around.

    Having said that, estimating whole of life costs has been something that Councils have been strongly encouraged to do for well over a decade, and I would have thought at least a handful of Councils must have come up with something much better than my attempt above in that time.

    If you are working for one of those Councils, I be extremely grateful, as I suspect many others would be if you could share your information here.

    Regards,

    Wayne

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    Wayne Eddy
    City of Whittlesea
    wayne.eddy@manningham.vic.gov.au
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  • 2.  RE: Estimating future maintenance and operational costs associated with new assets

    Posted 17 April 2019 00:40
    ​Hi Wayne,

    At City of Launceston we recently completed our Strategic Asset Management Plan, which incorporated all Council expenditure and revenue. Using the existing asset register and financial data from the SAMP (aggregated at an asset class level), I built an estimating spreadsheet that is used to assess whole-of-life impacts of future assets/projects at the concept stage. Below is an extract of the data I used, including Expected Life of Assets by Asset Class (weighted by asset value), and Annual Operations/Maintenance/Depreciation/Revenue by Asset Class as a percentage of Asset Value.

    Obviously these values are specific to City of Launceston and only apply at the asset class level, so they only really work for assessing large projects with a reasonably wide variety of assets. However, if you have sufficiently detailed asset and financial data (e.g. if O&M costs are recorded against each asset) then you can create your own standard rates at the level of individual asset type. Unfortunately, I haven't had the time to go through all the data and come up with the detailed standard rates for Launceston.

    Asset Class

    Expected Avg. Life of Assets (Years)

    Annual Operations $ as % of Asset Value

    Annual Maintenance $ as % of Asset Value

    Annual Depreciation $ as % of Asset Value

    Annual Revenue $ as % of Asset Value

    Aquatic Centre

    39.68

    13.9%

    1.1%

    2.52%

    11.61%

    Buildings

    94.34

    0.3%

    1.7%

    1.06%

    0.24%

    Cemeteries

    82.64

    9%

    2.5%

    1.21%

    11.30%

    Fleet

    11.00

    4.26%

    14.76%

    9.09%

    0.77%

    Flood Protection

    94.34

    1.15%

    0.25%

    1.06%

    1.29%

    IT

    9.52

    5%

    16%

    10.5%

    0.0%

    Museums

    51.28

    9.7%

    0.55%

    1.95%

    3.91%

    Parking

    56.82

    5%

    2.5%

    1.76%

    30.19%

    Parks and Recreation

    56.82

    4%

    5%

    1.76%

    0.34%

    Roads / Transport

    90.09

    0.73%

    0.52%

    1.11%

    0.44%

    Stadium Precinct

    78.74

    3%

    1.8%

    1.27%

    2.35%

    Stormwater

    131.58

    1%

    0.35%

    0.76%

    0.0%

    Theatres

    51.28

    10.5%

    0.2%

    1.95%

    3.91%

    Waste Management

    57.14

    2.5%

    0.5%

    1.75%

    25.01%


    I don't know if this helps you at all, but we are definitely on the same page that more detailed and reliable figures would be very useful!

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    Uriel Walters
    City of Launceston - Asset Planning Engineer
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