A service-oriented approach to assessing the infrastructure value index

Abstract

Many national and regional administrations are currently facing challenges to ensure long-term sustainability of urban water services, as infrastructures continue to accumulate alarming levels of deferred maintenance and rehabilitation. The infrastructure value index (IVI) has proven to be an effective tool to support long-term planning, in particular by facilitating the ability to communicate and to create awareness. It is given by the ratio between current value of an infrastructure and its replacement cost. Current value is commonly estimated according to an asset-oriented approach, which is based on the concept of useful life of individual components. The standard values assumed for the useful lives can vary significantly, which leads to valuations that are just as different. Furthermore, with water companies increasingly focused on the customer, effective service-centric asset management is essential now more than ever. This paper shows results of on-going research work, which aims to explore a service-oriented approach for assessing the IVI. The paper presents the fundamentals underlying this approach, discusses and compares results obtained from both perspectives and points to challenges that still need to be addressed.