Chapter 8: Lifecycle Planning Objectives of lifecycle planning Identify long-term investment for highway infrastructure assets and develop an appropriate maintenance strategy Predict future performance of highway infrastructure assets for different levels of investment and different maintenance strategies Determine the level of investment required to achieve the required performance Determine the performance that will be achieved for the available funding and/or future investment Support decision making, make a case for investing in maintenance activities, and demonstrate the impact of different funding scenarios Minimize costs over the lifecycle while maintaining the required performance Lifecycle planning Lifecycle planning describes the approach to maintaining an asset from construction to disposal. It involves the prediction of future performance of an asset, or a group of assets, based on investment scenarios and maintenance strategies. The lifecycle plan is the documented output from this process. Lifecycle plans may be used to demonstrate how funding and/or performance requirements are achieved through appropriate maintenance strategies with the objective of minimizing expenditure while providing the required performance over a specified period of time. Lifecycle planning can be applied to all highway infrastructure assets and can adopt a range of basic approaches depending on the maturity of the organization and the skills and capabilities of its staff. However, its application may be more beneficial to those assets that have the greatest value, require considerable funding, and are high risk and/or seen as critical assets. In some cases, complex approaches may be applied, and in these circumstances higher quality data and predictive modelling techniques will often be needed. Where minimal data are available, a more basic or a risk-based approach may be adopted, as discussed in Chapter 7. 55
The lifecycle of an asset covers the following stages: Creation of a new asset: This may include a single asset, such as a new bridge, new lamp column, or sign post, or a series of new assets in the construction of a new road. Routine maintenance: This is the reactive and cyclic activity to maintain the asset over time. Examples include pothole repairs, tensioning of safety fencing, and cleaning of drainage and signs. It should be noted that strategies for routine maintenance may affect the long-term performance of the relevant asset. The approach to routine maintenance needs to be considered as part of the lifecycle planning process. Effective routine maintenance has the potential to extend asset life. Renewal or replacement: This is the process required to bring the asset back to the required performance after it has deteriorated. This generally requires capital expenditure, unless it is a smaller item in the highway inventory, in which case it could be replaced as part of routine maintenance. Decommissioning: Most highway infrastructure assets are rarely decommissioned. However, there are instances when some assets are removed from service. Such instances are likely to include closing bridges or removing street lighting, signs, and barriers. Figure 8.1 The asset lifecycle Maintenance strategies may be developed that consider different treatment options and balance renewal with routine maintenance. These strategies should take into consideration the service life for each treatment option and balance the costs over a planned period of time. The objective of this process is to provide a lifecycle plan for an asset that will support the implementation of the asset management strategy and objectives. When applying a lifecycle approach, the following 56
questions may be answered for a short-, medium-, and long-term period of planning for each asset: What funding is needed to achieve the right maintenance standards (or performance targets)? If there is insufficient funding to meet the required maintenance standards, what is the resulting asset performance expected to be? What funding is required to maintain the asset in a steady state or in any other condition? What is the lifecycle plan that delivers the minimum whole-life cost? Adopting a lifecycle planning approach supports organizations in applying the principles of asset management to set maintenance standards that they can afford and/or that are desirable. The desired performance is determined by setting the maintenance standards through developing performance targets, as described in Chapter 5. Current asset performance is assessed through collecting information and data, based on the approach described in Chapter 6, and monitoring performance, as described in Chapters 5 and 13. Typically, maintenance standards will have been selected for each asset type or group. These standards would normally represent the maintenance thresholds but may vary depending on the maturity of the organization that is applying lifecycle planning principles. It should be recognized that different performance requirements may also be adopted across different network hierarchies. For example, strategic roads may have different maintenance standards than less trafficked rural roads. Where assets are to be maintained in a steady state, the lifecycle plan should be developed to meet existing performance requirements, as shown in Figure 8.2. Figure 8.2 Maintenance standards and pavement performance The lifecycle plan The approach to lifecycle planning adopted by an organization should be documented. Documentation should include the assumptions made, performance requirements, maintenance 57
needs, the decision making process, and the proposed maintenance strategy, including the timing of interventions. A lifecycle planning approach will enable the maintenance strategy for all assets to be determined. However, the principal assets, where the greatest investment and/or risk will be incurred, should be considered as priorities when resources are scarce. Lifecycle planning is therefore likely to provide the greatest benefits for assets where large investments are made, including carriageways, footways, structures, and lighting. The lifecycle planning process is shown in Figure 8.3. Queen s Printer and Controller of Her Majesty s Stationery Office 2013 from UKRLG and HMEP 2013 Figure 8.3 Lifecycle planning process The degree to which each aspect is considered, as well as its sophistication, depends on the organization s stage of maturity and the benefits it will achieve by investing in a lifecycle approach. 58
Classification of asset data In developing a lifecycle plan, the asset group and/or its components should be identified at the network level, with similar assets grouped and aggregated together. The approach to selecting and grouping assets is described in Chapter 6 and is summarized as follows: Level 1: Asset type, e.g., highway lighting Level 2: Asset group, e.g., lighting column Level 3: Components that Level 2 implicitly covers, e.g., luminaries Asset data Asset data for lifecycle planning should be available from the organization via an asset management system, asset register, or maintenance management system (Chapter 15). Typically, the following is required to develop lifecycle plans: Inventory (road lengths, widths, and construction, including surfacing and sublayers) Performance (including asset condition) Routine maintenance (including reactive and cyclical maintenance activities) Treatment options (including their historic performance and cost) The data requirements for lifecycle planning should be identified as part of the overall approach, as described in Chapter 6. This may require specific data to be collected for relevant asset groups and their components. The reliability, quality, and quantity of the data available, including inventory data and the historical performance of treatments, should be assessed before developing lifecycle plans. In general, the greater the confidence in the data available, the greater the confidence in the lifecycle plan. Lifecycle plans should be updated regularly as new asset data becomes available. Plans should also be reviewed against any changes in the approach to asset management. Undertaking lifecycle planning The inputs for lifecycle planning are as follows: Asset inventory: This is the number, size, and/or dimensions of the asset that is to be analysed. For a pavement maintenance scheme, this will be the length and width of the treatment area. Analysis period: This is the duration over which the maintenance costs are to be evaluated. It should extend over at least one full lifecycle of the asset/treatment under consideration. Once an analysis period has been selected, it must be consistently applied across all maintenance options that are under consideration. Failure to do so will prevent meaningful comparisons between the lifecycle plans. Treatment options: A treatment option needs to be selected for the lifecycle plan and can be 59
prescribed for each maintenance strategy. Options could range from small-scale superficial works to wholesale replacement or reconstruction. A range of materials options or specification types should be considered. For a pavement maintenance scheme, treatment options will likely include a range of treatment depths. Service life: The service life of an asset or treatment will determine the timing of future maintenance interventions. The use of realistic, achievable service lives is of primary importance in lifecycle planning. Service lives should be determined locally and be based on a number of factors, including performance history, material type, specification (including construction practices and workmanship), local environment, and demand (such as traffic levels and energy consumption, not necessarily applicable to all assets). These factors are based on practical experience, but they could be amended to suit local practices or performance histories. Unit rates: This is the cost per unit measure (number/length/area/volume) to maintain an asset or part of an asset. It could, for example, be the price per square meter to apply a particular resurfacing treatment to a carriageway or the cost to replace a single lighting column. It is important that the engineer appreciates what is included in a particular rate and is aware of any assumptions that were used in deriving its value. This is considered to be essential to arrive at an accurate works cost. Works costs: This is the direct cost of undertaking planned maintenance activities on site. Unit rates are used to estimate the works cost. The cost of site establishment, traffic management, and preliminaries should be included. Routine maintenance costs: These are the (direct) ongoing costs of maintaining an asset in a safe and serviceable condition. These costs exclude cyclic activities such as sweeping and cleaning (because these are normally constant factors that will not vary according to treatment strategies or types). Routine maintenance costs need to be factored into the lifecycle plans if competing maintenance strategies are likely to result in significantly different ongoing costs. Discount rates: Discounting is a technique used to compare costs (and benefits) that occur at different times throughout the analysis period. It works by adjusting these future costs (and benefits) to their present-day values. This practice enables competing maintenance options to be compared on a common basis, in that once a discount rate has been selected, it must be consistently applied across all maintenance options that are under consideration. Failure to do so will prevent meaningful comparisons between the whole-life costing results. The outputs from the lifecycle process are as follows: Investment strategy: The maintenance strategies, timing, and (direct and indirect) costs determined above will enable the production of a profile showing future investment in each year of the analysis period. By analysing cost profiles across a program of works, it is possible to identify instances in the future where major works on several schemes may coincide in a single year. These instances may pose future funding issues (and create network management and workload issues). Alternative maintenance strategies can then be 60
considered to alleviate peak demands. Discounted works cost: This is the present-day cost of all future maintenance requirements. It provides a basis for comparing alternative maintenance options and indicates the level of investment that will be required to meet future expenditure. Once the need for maintenance has been identified, the input parameters above can be used to undertake a lifecycle analysis by considering the maintenance strategy to be adopted: Do Nothing: Under this strategy, the organization would undertake reactive repairs for safety defects only. These repairs are likely to be superficial and would possibly be temporary in nature. The repairs would not arrest the decline of the asset, and frequent revisits are likely to be required. In the short term, routine maintenance costs are likely to be high due to the ongoing liability. Do Minimum: Under this approach, the organization seeks to do the minimal amount of routine maintenance work to keep the asset safe and serviceable. Works will normally be restricted to the repair of safety defects; repairs will normally be permanent in nature, although they will add no value to the asset. In the context of a pavement scheme, this approach might be limited to the permanent repair of potholes only. These repairs would be undertaken on an isolated basis or may extend to small patches. Do Something: This approach is likely to involve capital expenditure by an organization rather than routine expenditure. It may include the wholesale replacement or major repair of an asset to a level that will enhance its long-term durability and minimize future routine maintenance. A proactive approach may also be adopted, which means that repair takes place before the condition intervention level is reached. In the context of a pavement scheme, this approach could see the treatment of a section of pavement classified as being in need of maintenance. It is recommended that more than one Do Something strategy is evaluated for each maintenance strategy in order to explore the range of available treatment types. For the Do Something strategies, the required timing of the initial maintenance intervention requires consideration. Options may include Undertaking capital maintenance at the soonest opportunity and Deferring the capital maintenance for a few years while holding the condition in a safe and serviceable state by undertaking routine maintenance only. If the latter (deferred) option is selected, then the additional routine maintenance costs need to be included in the lifecycle plan. In the context of a pavement scheme, the above factors could be realized. For example, a pavement nearing the end of its serviceable life may exhibit surface defects, such as potholes. If the initial treatment is deferred, then there will be an ongoing (possibly increasing) requirement to revisit the site during the period of deferment to carry out repairs to these defects. The costs of these repairs need to be included in the lifecycle plan. If the initial treatment is deferred, then more deterioration may occur to the pavement structure. This may result in a more extensive treatment eventually being required compared to the treatment 61
that would otherwise have been implemented if the site were repaired earlier. By considering a range of treatment strategies and permutations on the type and timing of the initial intervention, an optimal maintenance strategy can be determined. The maintenance strategy with the lowest net present value (NPV) is generally regarded as the most economically beneficial option (see Figure 8.4). However, whole-life costing is only one factor when selecting a preferred maintenance option. Other factors, such as engineering judgement, network operations, buildability, affordability, and risk management, also require consideration. Queen s Printer and Controller of Her Majesty s Stationery Office 2013 from UKRLG and HMEP 2013 Figure 8.4 Comparison of maintenance strategies An organization may implement the above process according to its skills and capabilities, including data availability and performance models, as follows: Where insufficient data are available, a more basic approach to lifecycle planning may be sufficient to meet the requirements of the organization. However, even standard approaches require data on asset hierarchy, inventory, and service life (estimated life of the treatment option). This approach may require assumptions to be made based on the experience and local/technical knowledge of the staff involved in the process. This experience and knowledge may include quantum as well as the current and predicted future performance of the asset. Any assumptions need to be documented and any significant risks set out. A more advanced approach is likely to require higher quality data for performance or deterioration modelling in order to determine the service life of the proposed treatments (as described above). Subsequently, additional investment in data collection and asset management systems may be required in order to analyse and interrogate these data. Where this is the case, the argument should be made for any additional investment based on the 62
benefits and efficiencies that can be obtained through adopting a more advanced approach. Deterioration models for lifecycle planning The ability of an organization to develop performance models and model asset deterioration will support the advancement of its approach to lifecycle planning. These models have the capability to predict modes of deterioration and/or failure of the proposed treatment, as well as when the next intervention (the time for the asset to reach the end of its serviceable life) will occur. The approach can be advanced and highly complex approach or simple, depending on the capability of the organization. Two approaches to deterioration may be considered: Service Life: This describes the life expectancy from construction to the next structural intervention based on industry best practice and local knowledge. This may vary according to traffic or environmental conditions. A number of sources exist for such information, including the xxxx. An organization s own records of material performance should be a good reference. Performance modelling: Deterioration profiles for an asset can be determined from a variety of sources, including historical performance, local knowledge, and best practice. Some organizations have developed bespoke deterioration profiles. These can be used for lifecycle planning with more sophisticated approaches to decision support. They will require a significant amount of data and potential calibration, which may be a complex and time consuming activity. These models may be part of the decision support component of the asset management system described in Chapter 15. Decision making for lifecycle planning The decision making process to select the investment strategy should align with the approach to asset management and, in particular, provide the most efficient and affordable way of achieving the performance requirements. Typically, the selection of maintenance strategies considers the following: Minimizing whole-life costs Meeting legal requirements Managing risk A number of techniques may be used to select the right investment strategy, some of which are listed below. Further information on each technique can be found in xxx. The International Infrastructure Maintenance Manual also gives advice on these decision making techniques. Risk-based evaluation Risk-based evaluation focuses on minimizing the risk associated with the asset through an investment strategy while ensuring that any risks are managed at the minimum cost. The approach to risk management is described in Chapter 7. Risk evaluation can be used as a decision making technique on its own or considered with the other decision support techniques described below. 63
Whole-life cost Whole-life cost is a cost-benefit analysis that quantifies the investment costs, including the cost of the treatment and subsequent maintenance interventions, against economic benefits, including safety, traffic delays, and pollution. These should be assessed for each maintenance strategy. The maintenance strategy with the lowest NPV over the period of analysis provides the lowest wholelife cost. Costs may be determined as described above. Benefits should be determined by each organization and considered in the context of its overall approach to asset management. Multi-criteria analysis Multi-criteria analysis may be used to prioritize competing treatment options from which the maintenance strategy may be selected. A number of criteria may be selected that align with the levels of service and/or goals and objectives of the organization. Typically, these may include safety, serviceability, sustainability, and accessibility. A weighting to demonstrate the relative importance of these factors may be selected from which an overall score is determined. The necessity to meet statutory requirements needs to be reflected in the scoring. This technique can be used where benefits and costs are less tangible to define. However, it supports a qualitative assessment as well as a quantitative one. Case study: HDM-4 The Highways Development and Management Tool (HDM-4) is a tool for the analysis, planning, management, and appraisal of road maintenance, improvements, and investment decisions. In 1998, PIARC was assigned the intellectual property rights of HDM-4 on behalf of its original stakeholders. The HDM-4 analytical framework is based on the concept of pavement lifecycle analysis and is applied to predict the following over the lifecycle planning period of a road pavement (typically 15 to 40 years): Road deterioration Maintenance and improvement activity effects Road user effects Socioeconomic and environmental effects The model predicts road deterioration as a function of pavement construction characteristics, traffic loading, and climatic conditions and is directly affected by the standards of maintenance and improvements applied to repair the defects calculated. The long-term condition of the road pavement depends upon the application of these maintenance and improvement standards. Consequently, HDM-4 can determine the costs required to maintain the road to a standard defined by the user within HDM-4. The impacts of the road condition and road design standards on road users are quantified in terms of road user costs, which are made up of the following: Vehicle operating costs (fuel, tires, oil, spare parts consumption, vehicle depreciation, utilization, etc.) Travel time costs (for both passengers and cargo) Accident costs (loss of life, injury to road users, or damage to vehicles and other roadside objects) 64
The socioeconomic effects comprise vehicle emissions, energy consumption, and other welfare benefits to the population served by the road network under analysis. HDM-4 is designed to make comparative cost estimates and economic analyses of different investment options or road maintenance strategies. The economic benefit from each road investment strategy is determined by comparing the total cost streams (transportation agency, road user, and socioeconomic costs) against a minimum standard, as illustrated in Figure 8.5. Figure 8.5 Comparison of total cost streams against a minimum standard HDM-4 can be used in the lifecycle planning process by determining the benefits, costs, economic efficiency, and functional performance of the network by applying different maintenance and improvement standards to the network being analysed. HDM-4 also allows organizations to determine the most economically efficient maintenance activities to carry out when budgets may not be sufficient to carry out all the work indicated. Costs for lifecycle planning The costs selected for any routine maintenance and asset renewal activities should be as reliable as possible. The selection of the maintenance strategy may be sensitive to the accuracy of this information. A rigorous process should be developed for the collection and recording of cost data for the purposes of lifecycle planning. These cost data may be different from current contract rates because the data take other factors into account, such as overheads. Rates that are used should take into account inflation and be reviewed and updated as more cost information becomes available. The source of all cost data should be referenced. 65
The build-up of cost data is likely to include a number of assumptions, such as the inclusion of traffic management, contractor s overheads, scheme design, and supervision costs. Such information may not be directly available from unit rates, which may be obtained from sources such as term maintenance contracts or framework contracts. Therefore, care needs to be taken in building up the rates in order to understand the item coverage. Determining the investment strategy The outcome of the lifecycle planning process is an investment strategy for the highway infrastructure asset that comprises an asset group and its components and that is affordable and delivers the required performance at the minimum cost. In meeting this outcome, the investment strategy should also support the asset management strategy. A number of iterations, with different maintenance strategies, may be necessary to optimize the investment strategy. In developing an investment strategy, the following issues should be considered: What is the level of performance required to maintain a steady state condition and what is the budget required? Lifecycle plans may be used to demonstrate the investment required to maintain the asset at its current level of performance. This is useful in cases where organizations are satisfied with the performance of their networks and to compare the impact of different funding scenarios. What is the level of performance that can be achieved with a fixed budget? Where an organization has fixed funding, lifecycle planning may be used to determine the performance of the asset for the funding allocated. It may also be used to target or prioritize funding in those areas that are most in need and to demonstrate the effect of reduced funding on the performance of assets over the short, medium, and long term. What is the budget requirement to deliver the performance required? Organizations can use lifecycle planning to determine future budget requirements. Performance targets may be selected for a hierarchy of asset groups and their components. In doing so, organizations may wish to consider the work needed to sustain the agreed performance requirements and any performance gaps. What are the cross-asset considerations? No organization will have unlimited funds to invest in an asset. Cross-asset prioritization, or trade-off techniques, may be used to determine where budgets are spent most effectively or at the lowest cost. Consideration of the risk, cost, and performance associated with each asset is key. What is the timescale? Lifecycle plans should be prepared for a period of at least 10 years. Lifecycle plans are essential to assist senior decision makers in developing their financial plans and to substantiate any additional funding needed to achieve the required performance. Equally, they provide evidence of the effect on the asset if funding is not made available and the effect on the consequential future performance of the asset. 66
Resources available When developing lifecycle plans, organizations should ensure that staff are appropriately trained and have the time, resources, and suitable tools to develop robust and realistic lifecycle plans. Organizations should select a method of lifecycle planning appropriate to their maturity, needs, and resources. Level of maturity The maturity levels for an organization undertaking lifecycle planning are shown in Table 8.1. Organizations may assess their maturity against this scale. Table 8.1 Lifecycle planning maturity levels Level Maturity Description Examples Basic Proficient Advanced Not applicable An approach to lifecycle planning for each of the major assets has been adopted. Maintenance standards and performance targets are in place for each major asset. Processes to apply appropriate analyses to determine the investment need are in place supported by the necessary tools, for example HDM-4. Investment for future funding has been developed for scenarios in order to identify the best return from investment. Lifecycle plans are audited and checked by third parties within the organization. In addition to the Basic and Proficient characteristics: Performance targets link to a performance management framework. Lifecycle planning decisions are based on documented and audited evidence of the performance of each major asset. Deterioration profiles and performance models have been developed and continuously improved. There is a fully optimized approach to lifecycle planning that can be demonstrated, together with the benefits of that optimal approach. Lifecycle plans are developed for all major assets, together with investment requirements and documented assumptions. A link to the performance management framework can be demonstrated. The historical performance of the asset is recorded and decisions are developed based on this information. 67
Reference United Kingdom Roads Liaison Group (UKRLG) and Highways Maintenance Efficiency Programme (HMEP). 2013. Highway Infrastructure Asset Management Guidance Document. Department for Transport, London. Last accessed July 24, 2015. http://www.ukroadsliaisongroup.org/en/utilities/documentsummary.cfm?docid=5c49f48e-1ce0-477f-933acbfa169af8cb. 68