Best in class asset strategy optimises vital utility investment

EC Harris’ Head of Water, Terry Povall, discusses how asset strategy remains the live bedrock for all strategic and funding decision making, ensuring best in class asset stewardship and optimal utility investment.

“In the United Arab Emirates alone over US $17 billion is being invested in water projects over the next five years from desalination to wastewater treatment.”
-Terry Povall

In the Middle East we are seeing significant commitment to the delivery of major multi-million dollar projects in order to secure a viable future for Middle East utilities. In the United Arab Emirates alone, over US$17 billion is being invested in water projects over the next five years from desalination to wastewater treatment. 

This will result in an increase in responsibility for a massive range of both above ground and below ground assets. Asset condition, performance needs, maintenance issues and operational imperatives are just some of the critical elements that must be fully understood across all asset types.

Sometimes we find that there is a lack of effective asset strategy investment recommendations, which is quickly followed by the latest 'must fix'. The crisis point on an asset is then reached and requires urgent approval to commit investment in new capacity, comprehensive maintenance upgrades or even additional operational costs.

The asset stewardship prioritisation challenge

When these urgent recommendations are submitted, they present governance and funding leaders with a number of challenges. Boards are faced with an almost impossible dilemma; recognising the vital need to approve action, yet uncertain as to how this plays to other, perhaps unflagged, imperatives. As a consequence, approvals can be difficult to achieve as they are asked to make decisions in what is an asset stewardship fog without full insight of prioritised demands.

Even where some form of strategy exists, the analysis can be ill informed, incomplete or out-of-date. It therefore can fail to secure the buy in from all of the key stakeholders.

Developing a comprehensive asset strategy

Developing a comprehensive asset strategy is a critical element in creating a leading utility. A true asset strategy assimilates knowledge in order to produce a comprehensive long-term plan for operations, maintenance and investment, whilst enabling stakeholder and funding support to be secured. In order to deliver a comprehensive asset strategy, utilities must do a number of things.

First, the must fully incorporate a clear understanding of business stewardship and intent, and also adopt a leading methodology to ensure the widest buy in for the proposed strategy from all stakeholders. Second, utilities should ensure all aspects of asset and operation performance receive thorough and detailed attention, and tease out all critical operational and maintenance issues.

Third, they should also ensure realistic load growth assumptions and phasing opportunities. In addition, the should test quality enhancement assumptions to ensure full compliance but not at the cost of excessive over provision. Forth, utilities should establish systems with robust build asset data to provide clean management information for informed decisions. And finally, should recognise areas of data shortfall and set out clear plans to resolve such shortfalls over time.

Establishing such a comprehensive mix of asset knowledge enables strategy options to be generated and prioritisation to maximise return on investment. This is over five, 10 and 20 year horizons, and forms the platform for securing stakeholder buy in and governance approval for long-term asset stewardship.

Once this consensus on the preferred asset strategy is reached, it then needs to be detailed as a series of live action plans for investment planning, maintenance planning and operational strategy. Critical elements may also include investment funding requirements, transformation plans, procurement strategy, and management and organisational development.

From strategy to effective implementation

Asset strategy can't end there. It needs to move right through to implementation and continual review. It will only be a success when it has been embedded into the organisation and governs all strategic decision-making. Regular monitoring of successful delivery of outputs is a crucial visibility measure to ensure satisfaction of stakeholders. Any new data or changes in circumstances must be incorporated into the strategy so that it is refreshed to meet new challenges.

Asset strategy remains the live bedrock for all strategic and funding decision-making, ensuring best in class asset stewardship by a frontier utility organisation.

Terry Povall, Partner and Head of Water

Terry has 35 years experience on all commercial and contractual aspects of the delivery of major investment programmes for both capital and operational expenditure in the water sector; having worked for contractors, consultants and in private practice both in the UK and overseas. He has considerable expertise in alternative procedures including DBO projects, Public Private Partnerships, outsourcing and EU Procurement Legislation.