AssetCost Information Services Feasibility Study

ReportNo WSAA 137

August 1998

EXECUTIVESUMMARY

Theobjective was to investigate the feasibility of establishing a service toprovide Asset Cost Information Services (ACI) to the Australian Water Industry.Asset Cost Information would be provided for all phases of asset life includingcorporate planning, strategic planning, capital works planning, projectdevelopment and implementation, and asset use (operations, maintenance andrefurbishment).

The research found:

·        Australian Water authorities wish to improve the supply andavailability of asset cost information and would be prepared to pay for anexternal service provided if it was relevant to their business, accurate andappropriately priced;

·        No suitable service is currently available in Australia or overseas;

·        The cost of establishing a service is very expensive – it could be over$2 million.

·        The potential Australian market for a service is not large.

·        The data collected from this report suggests that the establishment andprovision of an ongoing Asset Cost Information service would not be financiallyviable.

·        A service could be established and become viable if some of the upfrontcosts were subsidised, for example:

q       Water authoritiesprovided or developed cost functions (or models) free of charge;

q       WSAA (orgovernment) subsidised the establishment costs of the service.

Further research effort is required in orderto:

·        Undertake detailed market research to accurately determine the demandfor an Asset Cost Information service and willingness to pay either for thewhole service or specific parts of the service;

·        Assess the availability of upfront subsidies to develop the service.

This report recommends that the WSAA:

·        Critically review the findings of this research report to assesswhether the WSAA wishes to spend further resources to prove the feasibility ofan Asset Cost Information Service;

·        If further expenditure on research effort is warranted, thenprogressively undertake the activities in the proposed Implementation Plan.

Copiesof the Report are available from WSAA, price $A60. Orders may be placed throughthe Bookshop at www.wsaa.asn.au or by email to info@wsaa.asn.au.