Asset management is "the combination of management, financial, economic, engineering and other practices applied to physical assets with the objective of providing the required level of service in the most cost-effective manner" (National Asset Management Steering Group, 2006). In practical terms it is the maintenance of a desired level of service at the lowest life-cycle cost. Asset management is a scalable approach that can be implemented for systems of any size.
Published on: 03/06/2013
Asset management leads to more realistic budgeting and planning and enables considerable cost savings over the medium and long term. Major replacements need to be planned for and financed properly and long-term planning for replacement is crucial if sustainable services are to me maintained permanently. In theory this is usually done by the service authority such as local government or another external body, therefore the service provider may not have full responsibility for large-scale capital replacement or upgrading.
Asset management is centred on a framework of core questions, which provide the foundation for many asset management best practices:
Best practices can include:
Whereas asset management is applied widely in urban water supplies, it is a new concept in rural areas. IRC is testing the development of an asset management approach to rural water supply in Ghana. In addition, we have identified the costs related to asset replacement as part of the WASHCost project, and are currently exploring alternative financing mechanisms to fund such asset replacement.