Keep the Dates to Celebrate!

Penny Burns and Talking Infrastructure will be on the move in April to celebrate 40 years of Asset Management, and look forward to the next 40.

Adelaide April 15 & 16, Penny and Ruth will be celebrating at AM Peak.

Brisbane events April 17-19

Sydney April 24, venue TBC: Asset Valuation in a time of Climate Crisis. Including Jeff Roorda on how Blue Mountains City Council is taking a radically new approach, as well as Penny on how we must rethink our AMP modelling.

Melbourne April 30, IPWC. Penny speaking on the opening morning of IPWEA conference

Wellington May 4-6, events to be announced

Let us know if you are interested in meeting up in any of these cities.

See you in April! #AMis40

Dandelion Networks and the Cherry Tree Challenge

© https://www.dreamstime.com/ image120059878

I love a friendly alien.  Some of us – possibly the less military minded – have long preferred stories of good contact experiences, from ET and Close Encounters of the Third Kind to Arrivals. Indeed, the grandmammy of them all, The Day the Earth Stood Still, which is about the shortcomings of militarism.

There’s a new generation of sci-fi with what can only be described as positively cuddly species from other planets. The close encounter in A Half-Built Garden, by Ruthanna Emrys, echoes The Day the Earth Stood Still in that the aliens have come to save humanity from itself. But the ‘dandelion networks’ are already saving the planet through direct democracy based around watersheds, to them the natural way to organise.

And it could not be more cuddly: the first human to meet the aliens is woken by water pollution alarms in the Chesapeake in the middle of the night, and hurries out to check what is happening taking her baby with her. Turns out the aliens don’t trust anyone who would not bring their babies to a key negotiation.

The principle the dandelion networks use in decision-making about infrastructure and other technology is: will what we are building be at least as benign as a cherry tree?  With evident, multiple benefits and few costs, and a net positive impact on the environment?*  

If not, don’t build it.

Is there anything we are building today that would pass the cherry tree challenge?

*Ruthanna borrowed the metaphor from Cradle to Cradle: Remaking the Way We Make Things by William McDonagh and Michael Braungart, 2009.

Infrastructure angels and demons

Last known photo of St Francis Dam before it collapsed, © scvhistory.com

You know when you hear something you never noticed before, and then hear about it again the very next day? (It’s known as the Mandela Effect.)

I mean, I saw Chinatown many years ago and so understood that there was a rotten heart to Los Angeles’ water supply, but I never thought about where the water comes from – or understood how it trashed a valley and its communities in the 1920s.

Originally called Payahǖǖnadǖ, meaning ‘place of flowing water’, Owens Valley is a now dry valley north of LA.

I work with enough hydro dams to be curious about dam failures – there have been a few catastrophic failures in the 20th century – so wanted to watch a PBS documentary about the total failure of St Francis Dam in the valley. It failed because of hubris. It did not make it past its first day in operation. But the documentary was about much more than the immediate collapse and the hundreds of people who died that day.

Los Angeles basically stole the water, buying up water rights surreptitiously and sometimes illegally.   For some reason I can’t comprehend, it even memorialises the engineer responsible for the dam failure (and the overall aqueduct, which does still exist): Mulholland, of the Drive.

And the day after I watched the documentary, I read a review of a book titled Dust, by Jay Owens, using the Owens Valley as a 20th century example of humanity creating arid dust bowls where there were once thriving ecologies.

Metropolitan LA is a funny old place. I have spent plenty of time there as my brother moved to Azusa in the late 1970s, and retired to Orange County to the south. It was hailed as the city of the future once, but water is the big question mark, still. You would have to conclude that the LA basin is well beyond its carrying capacity, and perhaps always was.

Owens Valley, and St Francis Dam, seem suitable reminders of the challenge of sustainability. enshrined in the original BSI PAS 55 definition of Asset Management. The valley and its people – original and immigrant – paid the price for the development of a vast city region.

Not the first and surely not the last example, but a sobering reminder that water engineering is both hard, and not always on the side of the angels.

The Year of the Rabbit

Photo 63254580 © Liliia Epifanova | Dreamstime.com

2023: surely the year for harder questions about the impact of our infrastructure on biodiversity.

For example, researchers in Idaho built a fake road to test out the impact of freeway noise on migrating birds. 

“A third of the usual birds stayed away… those that stayed paid a price,” writes Ed Yong in his fabulous book Immense World on animal senses. The noises drowned out the sounds of their predators, so the birds had to spend more time looking for danger and less for food, so they put on less weight and were weaker for their migrations – which take every bit of energy the birds have.

And this didn’t include actual road effects from headlights, exhaust fumes, polluting run-off.

As Ed Yong says, more than 83% of continental USA lies within a kilometre of a road. There is nowhere else for the birds to go.

We have options to do something about this in our infrastructure, in a year we’re meant to be ‘building back better’.

Just replacing blue or white LEDS with red in, for example, parking lot lighting cuts down the impact of night light on insects. Sound-absorbing surfaces and barriers; slowing down traffic; quieter vehicles – all can immediately reduce noise pollution for animals such as owls and mice who depend on sound to catch or avoid being caught.

If 80% of humanity live under light-polluted skies and two-thirds of Europeans live in the noise equivalent of constant rain, it’s not great for people. But what Ed Yong brings out so brilliantly is how often we don’t even think about the different and miraculous sense worlds of other species, of whales and manatees and frogs and birds, and how very much worse it can be for them.

Is this the year to start taking seriously a problem we’ve only just begun to realise?

Immense World, Ed Young, 2022 – how other animals sense is truly mind-blowing.

Hedges: Infrastructure Past and Future


Hedgerows in the Lincolnshire countryside near the small village of Aslackby. Photograph: Steven Booth/Alamy

Not everywhere in the world uses hedges. But Britain has about 500,000 km of hedgerow – despite losing half of them since 1945, as industrial scale farming has taken hold here. One of my very earliest memories is being driven through a patchwork, hedged landscape in the middle south west of England. And it was magic.

Hedges are not just fence-equivalents, worth the investment for that alone. They also store carbon, of course, as linear (if metre high) woodland.

“Hedgerows help slow down the runoff of water, guarding against flooding and soil erosion, and act as barriers to help prevent pesticide and fertiliser pollution getting into water supplies. Studies show they can improve the quality of air by helping trap air pollution.

“They are perhaps the largest semi-natural habitat in Britain, refuges for wild plants and corridors for wildlife to move through, often in barren farmland landscapes.”  Paul Simons, the Guardian, 18 Aug 2021

For these reasons, the UK Climate Change Committee recommends planting 40& more hedgerows by 2050.

They are only semi-wild, of course, because they are trees manipulated (‘laid’) by humans, and so require effort, and skill. They are very definitely infrastructure.

And magic.

We are the In-Between

Thinking about Waves 3 and 4 of Asset Management, this quote from a recent novel struck me:

It is difficult for anyone born and raised in human infrastructure to truly internalize the fact that your view of the world is backward.

“Even if you fully know that you live in a natural world that existed before you and will continue long after, even if you know that the wilderness is the default state of things, and that nature is not something that only happens in carefully curated enclaves between towns, something that pops up in empty spaces if you ignore them for a while, even if you spend your whole life believing yourself to be deeply in touch with the ebb and flow, the cycle, the ecosystem as it actually is, you will still have trouble picturing an untouched world.

You will still struggle to understand that human constructs are carved out and overlaid, that these are the places that are the in-between, not the other way around.”

– Becky Chambers, A Psalm for the Wild-Built (Monk & Robot Book 1), 2021

Securing Maintenance Funding with CBD

Any maintenance or asset manager knows that the longevity of assets is critically dependent on how well they are maintained.  And you don’t have to be a maintenance manager to know that your car needs regular servicing.  It is kind of obvious!  Yet, when it comes to the important public infrastructure on which we all depend, maintenance is considered dispensable and is the first to be cut in times of financial stringency.

It is all to do with how we account for infrastructure assets. Below is the problem – and how we can overcome it using your asset management plan and condition based depreciation (CBD).

The Problem

It pays to know a little history.  When government departments and agencies adopted accrual accounting practices and had to bring infrastructure assets to account for the first time, (In Australia, from 1989) naturally they turned to the private sector, where this had been the practice for many years. And this is where the first problem arose since private sector assets such as plant and machinery are depreciated over their predetermined lifespan until they reach zero or some predetermned salvage value and then they are completely replaced.

Infrastructure assets are different. This does not happen with infrastructure assets which can be kept in service for an indefinite time by piecemeal, if somewhat lumpy, component renewal. What is the age of an asset which may have some components 100 years old and others that were renewed yesterday?  What is the life of an asset that can be kept in service as long as you want it to?  These are unanswerable questions.  They go to the heart of the difference between infrastructure and non-infrastructure assets and require a different accounting approach.

However when infrastructure assets were first brought to account, there was no alternative accounting approach for infrastructure assets, so rather than account for the entire infrastructure system, it was decided to assign each component a definite life and depreciate it as if it were an independent asset.  It seemed a practical solution to a difficult problem. But in the process it completely ignored the key characteristic of infrastructure assets which is the interdependence of the components, where the life of a component, and thus the need to renew, is dependent on the other components with which it interacts. In other words, the life of components is indefinite, as is the life of the system as a whole. This does not mean infinite!  It just means that you cannot define a life of a component until it reaches the stage of renewal.  So depreciation in this case doesn’t work.  

You will also notice something else about this approach.  The economic life of any asset, as we stated at the beginning, depends on how well it is maintained, and yet maintenance does not feature in this accounting process.  This is what makes it so easy for organisations to cut maintenance, since cutting maintenance does not affect the life of the asset, at least not in the accounting system – only in the real world!

The Solution

We need a better system, one that takes equal account of maintenance (minor and major) and renewal, i.e.everything that we need to spend to maintain the functionality of the asset. (In practice ‘maintenance’ and ‘renewal’ are really just different points on a continuum.)

Why do we depreciate assets at all? It is so that we can represent reduction in asset value in any particular period (asset value = its store of future services)  

Is there a better way of doing this that recognises the distinct character of infrastructure assets?  There is! What better way can there be of valuing the using up of asset services than the cost of making it good again?  This is what is called Condition Based Depreciation (CBD). And it is available to any organisation that has a sound, and audited, AM plan as a costless spinoff.  Put simply, the condition assessment of your assets that tells you what you need to spend over the planning period to maintain service function and that is in your AM Plan. It covers maintenance, minor and major and renewal and is the cost of making good the consumption of the asset over that period. You choose your planning period and it is updated on a rolling annual basis. The cost of ‘making good’ over the planning period is then expressed as an annuity to give you an annual cost and is the best estimate of real depreciation. 

Second history lesson:  When the UK water industry was being privatised in the early 1980s the argument was put forward that their assets should not be depreciated because the assets were continously maintained.  This was rightly rejected by the accounting profession who said, in effect, ‘prove it’  and that is what a sound, audited AM plan does. Unfortunately some do not recognise the distinction between this and the AM plan backed CBD.

CBD was introduced in 1993 and has been well received by maintenance and asset managers and by practising accountants. It was adopted by the NSW Roads authority and by about a half of NZ’s councils for about ten years (until their accounting society called a halt). It is even provided as the ‘modified’ approach in GASB 34, the standard that introduced accrual accounting into the USA in 1999 but it was rejected by the Accounting Standards Board in 2004 and nothing much happened for the next 13-14 years! 

Now it is back into contention because of problems with asset valuation giving depreciation figures that are artificially high and causing councils to be deemed non-viable. These councils are now scrambling to make cuts to their budget, eliminating services and sacking staff – and all at a time of Covid 19!  So fictional figures are giving rise to real – and negative – physical effects.  We can do better, much better!

Would CBD help bring your maintenance to the fore?

Extra references on CBD

Condition based depreciation for infrastructure assets, 1993

Depreciation of infrastructure assets

Condition based depreciation – the questions

  1. Extra information is provided here. 
  2. Ask any questions you like and I will answer all of them.

To ask questions and to find out more about a national forum to develop support for adoption of CBD, use the comments section below. (There is global interest in this subject, so we might extend it to a global forum.)

The Maintainers Fight Back

The Innovation Delusion: How Our Obsession with the New has Disrupted the Work That Matters Most, Lee Vinsel and Andrew L Russell (September 2020)

Is this the first ‘popular’ book on Asset Management & Infrastructure Decisions? You wouldn’t necessarily know from the title.

But maintainers and asset managers are the, well, not heroes here: Vinsel and Russell describe ‘infrastructurers’ as something better than heroes. ‘The people who care about things’, as Lou Cripps puts it. And infrastructure in terms of human rights.

The book is a sustained attack on ‘bright, shiny new things’, especially when they really are not worthy of the name innovation, and when they will land communities in debt and ‘deferred maintenance’ for many years.

“Although you wouldn’t know it from histories that fixate on innovation and inventors, much of human history is, in fact, stories of stability: of how societies coordinate labor to maintain the large-scale public systems we’ve relied on since ancient times.”

But the authors are not simply academics, or popularisers.  With Jessica Myerson, the authors have set up The Maintainers,  https://themaintainers.org/connect. Their vision is:

“Through collaborative efforts across an interwoven network of communities, we pursue our mission of maintaining self and society through reflection, research, and advocacy in the hopes of achieving a more caring and well-maintained world.”

The book itself is a good read, using the current ‘popular’ non-fiction style of stories around individuals: everything you’ve ever worried about with poor rail track maintenance and failing water systems, and some good people trying to sort them. 

I suspect it’s generally true that, when you know the inside story, things are not always quite as simple as written. I was a ‘fly on the wall’ at PG&E over the time of Camp Fire, and I don’t buy that wildfires should be blamed on ‘somebody else’, or one company’s profits alone, for example.

But, with honourable mentions for reliability engineers, Ursula K Le Guin, Melinda Hodkiewicz, and even ISO 55000 – and even computerised maintenance management systems! – this is my kind of territory.

Your reviews of it are most welcome here.

And what do you think about essential infrastructure as a basic human right?

Why Diversity Matters in AM

Why should we encourage diversity among Asset Managers? This is not just about access, equity and inclusive working environments – although there is a way to go, still, on that, even in our fairly young area.

As Janet Yellen, the USA Fed’s first female chair put it: “Beyond fairness, the lack of diversity harms the field because it wastes talent.  It also skews the field’s viewpoint and diminishes its breadth.”

Asset Management is all about how people with different skills and perspectives work together to a better solution, about seeing wider than any of us can do as individuals.

What different perspective did you bring that made the difference?

I work in a group of fantastic North American Asset Management practitioners called Women in Asset Management NA, and this is the question we are tackling. We would love to hear from you.

Covid 19 and Planning for the Unknown

How can you plan for the unknown – when you literally cannot see your own hand in front of your face? Well, back 12 years ago, when she headed up the Strategic Asset Management Team at RailCorp (now Sydney Trains) I facilitated a scenario planning exercise for Ruth Wallsgrove.  The scenario we looked at was an epidemic with an immediate impact on ridership, with everyone – although, of course, we didn’t call it that –  ‘social distancing’. Now over to Ruth to look at the implications that has for us today. PB.

The importance of planning

“Emergencies are overrated as a response mechanism. Are preparation, prevention, and planning about to become more popular alternatives?  Can we nudge this? “

Planning – that is, thinking ahead and co-ordinating what we are going to do – appears to be central to dealing with Covid-19. We do not know for certain what the conclusions will be, except that South Korea seems to be doing well, and the USA not.

The nature of planning

I teach AM to a lot of people, and quite a lot of them ask how you can plan when you don’t know exactly what’s going to happen. The answer is, of course, that it is even more important to plan when you don’t know exactly what will happen. The point is to give yourself a framework for flexibility.  No planning ahead at all gives you nothing to work with.

It would not have been a sensible plan to stockpile ventilators. And there was no possibility to stockpile Covid-19 test kits, because they didn’t exist.  Good planning instead would be putting in place the thinking processes that would enable us quickly to ramp up production of known equipment, and to come up with new tests and vaccines.

Scenario Planning

Scenario planning seems to me to be the opposite of Planning with a capital P: the opposite of a high up committee coming up with a visionary Plan for transforming our infrastructure.

The idea of scenario planning is to look at alternative scenarios, and ask what the data tells us.  It’s to consider what to do if the future doesn’t go the direction you want it to. What you can influence. How you can stay nimble to respond to what reality tells you.

The Chain of Consequences

In our scenario planning session in 2008 we were asked to consider – Could an epidemic lead to an increasein ridership?

Trains and buses are currently empty not just because people don’t want to be in a small space with many other people, but because many of us are in lockdown. Our workplaces have closed and, if we are lucky, we are working from home.  (If we are not… we are out of our paying job, temporarily or permanently).

What if: people go on being nervous about crowded spaces after we go back to whatever the new normal is?

Well, one possibility is that everyone heads to their cars with a vengeance.  But what if that led to impossible traffic jams, as most cities already had no spare capacity for personal vehicles?

What if: someone comes up with a neat way to avoid breathing germs on each other?  This was one of our scenarios.  How could the chain of consequences lead to an increase in ridership? It’s not even hard to do, once you free yourself from thinking you ‘know’ what people will do, or should do, in future.

Along with scenario planning, we also need the skills to go beyond the immediate, and ask what the knock-on impact of one event on another.  Such as the basics of AM: if I build this rail line, what will that mean for operating expenditure for the next thirty years?  What does it mean I can’t do, because I’ve dedicated resources to this rail line instead of that arts centre?  What are possible impacts on our overall capabilities – including the environment? (There is always another Plan, but no Planet B…)

The role of Asset Management practitioners

In late 2018, when a wire down led to a wildfire that burned down a town in California, much attention was paid to control the spread and mitigate the fallout. The AM team were involved, however, not in initiatives to look at the urgent immediate risk, but rather in the important task of what to put in place to reduce such risks in the future. So often, as we know, the urgent drives out the important.

We are not emergency planners; that’s an honourable discipline in its own right. Our job is to consider scenarios and chains of consequences (“and then what?”) and building flexibility into our asset systems and our processes.

And our Question Today:

What steps can we, as Asset Managers, start taking to prepare for the next pandemic?