After the Construction Minister’s Conference in 1987 where the PAC work had been presented, I was greeted by my CEO. He was well pleased with our contribution.
Not that the PAC’s work on renewing infrastructure was necessarily understood! “I’m the envy of all”, he said, “because at last we have someone who can tell us how much we should be spending on maintenance”. Intrigued, I asked who this was. “Why, you!” he replied happily. I tried to explain that my expertise was in capital component renewal, not in maintenance, but my protestations were considered modesty and did not diminish his happiness, or belief!
It was generally assumed by maintenance personnel (although not by anyone else) that maintenance should be 2%. (Of what was never well speciﬁed). Now it so happened that the PAC calculations of component renewal had averaged out, across all portfolios, to be approximately 2% of the replacement capital value. This was taken as validation of this popular maintenance ﬁgure. It was a misinterpretation, but I could see how it arose.
Chapter 11, “Reactions” of The Asset Management Quest (volume 1 of The Asset Management Story) which I have posted today looks at the many and varied ideas that people had about asset management at the beginning.
What are the mistaken ideas that you have to deal with now?