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Title: Strategic Asset Management approach for planning investment in a large-scale irrigation system.
Authors: Brito, R.
Alegre, H.
Machado, P.
Keywords: Infrastructure Asset Management (IAM);Irrigation services;Financial planning
Issue Date: Sep-2019
Publisher: IWA Publishing
Abstract: Urban water services have been applying infrastructure asset management (IAM) principles in the last two decades. Rural water services are still grasping this concept, even though some of the IAM fundamentals are already familiar in this context. Urban water services experience both internal pressures for water losses control and external pressures to assure service quality and sustainability, which are probably greater than in irrigation systems. Not only water for irrigation is usually cheaper than urban water but also irrigation systems are seldom a regulated service. The recent economic crisis in Europe emphasised the need to rationalize and justify investments; urban water services found in IAM a solution for efficient management while assuring both service quality and sustainability in the long term (Alegre et al., 2013). European utilities (such as for transport, gas, energy and water services) are in varying stages of asset management (AM), but have in common the need for a better alignment between AM strategy and investment planning. For AM leaders, making the right investment decisions is crucial (IAM Exchange, 2014). The availability of platforms for long-term financial sustainability was identified as one of the prime market opportunities by asset managers (Boon, J. 2017). Irrigation utilities have demonstrated an increased interest in IAM recently, and sound steps have to be taken. Typically, as large-scale irrigation systems are built almost entirely in a given time-frame, a significant part of the assets age at the same time and concentrated investment needs for rehabilitation are predictable. It is essential to have long-term investment programming, namely when the infrastructure is expected to have an indefinite life without jeopardizing service sustainability. This paper focuses on forecasting these needs in an aggregated way, not aiming to identify the specific assets to be intervened and when, but rather to provide a big picture for the long term investment plan. A methodology for this purpose was developed and applied to a large-scale irrigation utility in Portugal. The irrigation system is relatively recent but the utility is already seeking to anticipate and mitigate the concentrated investment needs. The methodology is in line with IAM fundamentals, recommended by IWA and the ISO 55000 standards. Specifically, in a first stage irrigation infrastructural assets that require rehabilitation investment were identified and the correspondent estate value was determined. Afterwards, investment alternatives that contribute to long-term service sustainability were identified and analysed. Dedicated platforms were developed and used. A system breakdown by functional areas and a proposal for infrastructure components disaggregation was made. This disaggregation was based upon similarity of both asset nature and technical useful life, supported on e.g. the type and characteristics of the assets, the quality of the materials or the maintenance practices. The diagnosis of the current situation and the evaluation of the alternatives were made, based on: (i) the Infrastructure Value Index (IVI, Alegre et al., 2014), which reflects the youth of the infrastructure, weighted with its residual value; (ii) the annual rehabilitation rate, as the annual financial effort in rehabilitation; and (iii) the assets in service with appropriate age, lower than their technical useful life. In the paper, the methodology and the specificities of this particular application to irrigation systems will be presented. Alignment with IAM and the contribution to a broader IAM system will be highlighted.
Appears in Collections:DHA/NES - Comunicações a congressos e artigos de revista

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