5.2 Asset maintenance

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Asset maintenance Entities are responsible for developing five-year asset management strategies for the assets under their control. The strategies are to cover maintenance, refurbishment and energy management and include all operating costs. They shall also detail the systems and processes to be established to monitor asset performance.11

The usefulness of an asset depends on how effectively it meets its purpose. For many types of asset, this may depend on the regularity and appropriateness of its maintenance. Regular maintenance may also help to preserve an asset’s value.

Planning for asset maintenance enables targeted action to be taken in a timely and cost-effective manner. This, in turn, helps to ensure that the entity’s asset portfolio can remain appropriate and productive for the lowest possible long-term cost.

As a first step, the entity must determine which of its assets need to be maintained (ie it must assess the materiality of its assets).

Some assets may, for example, have low or little value and have a relatively short expected life; others may be of a type that normally requires little or no regular maintenance effort (eg furniture). Entities controlling such assets may elect to exclude these from the formal maintenance planning process, and rely on regular condition assessments or inspections (eg in conjunction with stocktakes).

For each of those assets or groups of assets that are to be regularly maintained, the entity should develop a maintenance strategy.

Maintenance strategy
A maintenance strategy is a comprehensive plan that:

• defines the asset, the performance required of it, and the level to which it is to be maintained;

• describes the systems and procedures to be used to plan and manage the maintenance work;

• specifies the types of maintenance to be carried out, and why;

• nominates the means of resourcing and implementing maintenance;

• indicates any requirements for inhouse plant, equipment or spare parts; and

• outlines the projected costs of routine (and corrective/preventive) maintenance, as well as forecasting major replacements for the next 5–10 years.

In developing a maintenance strategy, two considerations are particularly important: the level of maintenance required for the asset, and maintenance priorities.

Level of maintenance: The level of maintenance required for an asset, and the performance expected of it, should be clearly established. The level set should:

• be consistent with the role that the asset will play in the delivery of services, relative to other like assets in the portfolio of the entity;

• reflect obligations for compliance with statutory requirements for occupational health and safety, fire, environmental management and the like;

• be realistically attainable, given the age, condition and expected life of the asset;

• be capable of being achieved within planned resource availability; and

• be agreed with the users of the asset.

The level of maintenance should specify the extent to which the performance of the asset is operationally critical and to which visual appearance is important. It should also stipulate the necessary response times in the event of failure.

Maintenance priorities: Higher priority maintenance tasks (such as those that affect health and safety or that are operationally critical) should be identified in the maintenance strategy. This will enable maintenance effort to be focused on these areas if resources fall below the planned levels.

Maintenance plan
Once a maintenance strategy has been developed for an asset, it must be translated into annual maintenance plans that set out, in detail, the maintenance tasks to be performed each year.

The maintenance plan provides a basis for managing the work and for monitoring maintenance performance. It should set out the maintenance requirements of assets, broken down into individual components, systems or elements when necessary. It should also include a statement of resources, which details such information as:

• the resources required to undertake the maintenance function, including its planning and management;

• the expected number and type of maintenance contracts and suppliers; and

• the expected funds sources for both capital and recurrent costs over the period (sources of funds could include recoveries from user charges and other sources as well as funds appropriated in the budget).

Maintenance data need to be captured as work is performed, with records being kept of maintenance history for planning purposes. As appropriate, such data should also be used to prepare the annual maintenance plan.

Criteria for assessing maintenance performance
The outcomes of effective asset maintenance include:

• a long-term reduction in life cycle costs;

• better asset performance and service;

• the optimisation of asset life; and

• improved public perception of the asset’s service and safety standards.

These outcomes can generally be monitored and reported through the use of performance measures. Typical indicators can be derived from such measures as the asset’s availability, its operational performance in relation to service delivery, its energy consumption, its operating costs, and user satisfaction. Many of these indicators can be benchmarked against other like assets.

Assessing the Condition of Constructed Assets. Department of Planning and Development, Office of Building, 1995 Department of Planning and Development, Office of Building Telephone 61 3) 9651 5800

11 Budget Sector Asset Management Principles
Budget and Expenditure Review Committee, 1993

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