Strategic scenario analysis of long-term asset management planning

Abstract

Evides Waterbedrijf (Evides) has prepared a long term asset management plan (LTAP) for the 30 year to 2045 in relation to pending investments and future developments. Compilation of an LTAP is in the interests of both consumers and shareholders. Insights from the LTAP, as deduced from asset management practices, can be challenged against strategic decisions for the future. In addition, the LTAP can be used to predict long-term financial and technical resourcing requirements, as well as the resulting price for consumers and dividend for shareholders. In this paper the process of setting up an LTAP model based on individual asset replacement at the end of their technical lives is described. The investment plan allows for sufficient possibilities to shuffle investments suitably in relation to risk, without affecting the consumer price directly. Shareholder interests are best served by investing when technically required while spreading investment over time.