Dharmen Dhaliah

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Dharmen's Blog

Physical Asset Management - The Regulatory Challenge

10/15/2017

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​While considerable progress has been made by many municipalities with respect to developing and implementing asset management plans, there are still quite a lot to accomplish. A few years ago we were hit with the blitz of ISO 55000. Since then there has been lots of buzz in the asset management field.
Now there is another blitz coming – the regulation of asset management planning.
The Province of Ontario, Canada has recently proposed an Asset Management Planning Regulation. The draft of the proposed regulation is in its final stage after a final round of call for feedback and comments. .     

Asset Management regulation is not new. In New Zealand AM legislation has been in place since 1996 at the Local Government level. In Australia state-based utility regulators expect best practice AM techniques and require regular audits and reporting. In Britain the regulation of national infrastructure is a bit different.
In Ontario, Canada it is a first, even though great asset management practices are in place in different provinces across the country.
So what is the purpose of this upcoming asset management planning regulation?

The main reasons are to introduce new requirements in order to:
  • Provide greater standardization and consistency to municipal asset management planning, while continuing to provide appropriate flexibility for municipalities to plan according to their own unique circumstances.
  • Help municipalities more clearly identify what their infrastructure needs are, and therefore help them work towards a more sustainable position regarding the funding of their infrastructure.
  • Improve the comprehensiveness of and help strengthen the use of asset management plans as a tool to gain support from council and the public in addressing infrastructure challenges.
In my opinion there is another key reason for regulating asset management planning in Ontario – it’s about “show me the money”.
We all know very well that “A plan remains a plan unless it is put in action”, i.e. unless it is operationalized.
In the proposed regulation draft it clearly stipulates that “while municipalities have made excellent progress in asset management planning, significant differences exist among municipalities in the completeness, level of detail, and methodology and assumptions used to develop the plans. The plans also vary widely in the degree to which they are being used to inform decision making”.
 
Operationalizing by definition means setting something up (your asset management plan), so that it can be used, used not only by a few functional areas but across the whole organization.
This is where HPAM comes into the frame - not holistic approach from an asset whole lifecycle perspective only, but from a whole- organizational perspective as well. This means having all functional areas dealing with assets in one way or another to fully understand, endorse and implement the AM plan in their respective areas. As you can imagine, this is not an easy feat because we are now dealing with an Enterprise-Wide Asset Management Program.
How well is your asset management plan understood, endorsed and implemented in the different functional areas of your organization?

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    Dharmen Dhaliah, P.Eng, MBA, PMP, CAMA, MMP, CMRP

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