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System Requirement

Asset Criticality Assessment and Analysis System Requirement

PurposeThe system requirement stipulates the high-level system description and business rules for planning and conducting Asset Criticality Assessment and Analysis (ACAA). The procedure describes requirements for ACAA assessments for whole of Sydney Trains maintenance plans for assets that needs to be based on a uniform, cyclical assessment of the actual condition of assets, compared to the desired standard of condition for individual asset portfolios. This requirement requires consistent, quantitative and qualitative approach and information relating to asset performance in terms of condition and associated risks.

ScopeThe ACAA must establish the maintenance necessary to meet this standard, and define the base-line for determining the adequacy and effectiveness of maintenance over both the preceding and subsequent cycles so that informed decision making is done in a timely fashion. This document is relevant to personnel responsible for developing ACAA assessment programs, plans, measuring its performance, reporting on data and reviewing plans.

The Minimum Maintenance StandardThe condition of a physical asset can be gauged objectively in respect of functional suitability, operational needs, physical condition, rail safety, workplace health and safety requirements and the requirements of law. The Sydney Trains Asset Strategy (STAS), Engineering Standards, Asset Management Plans, Technical Maintenance Plans and any associated maintenance requirements specify the (minimum) standard at which the asset should be maintained. Setting this approach may be done at a higher management level in the light of other competing demands such as finance and the value and the utility of the asset. This approach will be interpreted as a set of maintenance standards which describes the desired performance criteria of the physical asset, particularly for rollingstock, industrial plant, rail infrastructure, structures, buildings and installations. Another threshold of acceptability will be determined by workplace health and safety and legislative requirements. If these standards cannot be sustained, some remedial action to restore the asset to an acceptable condition is required. The minimum maintenance standard, together with the

Asset Criticality Assessment and Analysis System requirement

importance of the asset, provides a basis to establish the repairs or remedial action required during a given period. From managements strategic perspective use this ranking system to broadly identify the priority for carrying out ACAA either by inspecting, surveying or auditing:

X - Exceptional - Maintenance in impeccable order at all times for reasons of operational necessity, public importance, client status or environmental quality.

N - Normal - Fully maintained with the appropriate authority’s instructions and with regards to operations or client needs for extended use.

L - Limited Life - Maintained to use for a period of not more than five years.

D – Decommissioned - Disused assets (e.g. facilities, track, siding, turnouts, etc) and maintained only to prevent serious deterioration with due regard to safety.

P – Pending Demolition - Maintained only to a level sufficient to obviate the risk of claims or legal action.

Standard of ServiceA well-defined standard of service is the foundation for determining assets condition of all rollingstock and infrastructure assets. A standard of service, in objective and measurable terms, determines how an asset will perform, including a suitable minimum condition grade in line with the impact of asset failure. There are two main objectives of rollingstock and infrastructure asset management relating to standard of service:

Sustained standard of service: To sustain or deliver an agreed standard of service in the most cost-effective way through the operation, maintenance, refurbishment, and replacement of assets.

Improved standard of service: To make strategic changes and improvements to the standard of service of the asset portfolio through the creation, acquisition, improvement and disposal of assets. Changes to the standard of service are usually managed as a program based on strategic objectives regarding the asset portfolio.

Demand/Capacity Analysis of Tangible Capital AssetsDemand/capacity analysis is related to asset performance. For example, a bridge may be in good physical condition, but is causing passenger train congestion and delays during peak hours because the current volume exceeds the bridge’s original design capacity. Measuring this attribute would involve establishing subjective baseline service levels against which to measure actual performance. Acceptable service levels can be influenced by NSW Government/Transport for NSW (TfNSW) policy making it difficult to establish consistency in performance measures. As a result, it would affect the comparability of information and consistency in reporting about asset condition. The demand/capacity analysis attribute may also bring into scope efficiency and effectiveness measures. For example, it might include information about how an existing signalling system is working compared to new signalling system technology.

Issue date: 12 November 2013 | Version: 1.0© 2013 Sydney Trains I

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Functionality Analysis of Tangible Capital AssetsFunctionality analysis is often excluded from the scope of reporting on the condition of assets. Functionality is closely aligned with asset usage measures. It is related to issues such as whether or not tangible capital assets are meeting user expectations. Such usage expectations are typically found in train passenger transport and freight operations (i.e. busy rail transport systems or waiting times in utilising tracks). Analysing these attributes would be based on acceptable service levels. Some expectations of public infrastructure assets service could be over-optimistic and unsustainable and Sydney Trains working with TfNSW would need to manage the expectations of the public. It would thus be difficult to establish consistency in asset usage quality measures. As a result, it would affect the comparability of information and reporting consistency of assets condition.

Assets Performance AnalysisProtecting service delivery potential and addressing rail safety and workplace health and safety concerns are priorities when making decisions about asset use and maintenance. It is very important, therefore, that asset performance be appropriately reviewed and evaluated to verify that required outcomes are being achieved. The results of any performance assessment need to be reported to management to identify any actions to be taken; and to comply with the ongoing reporting requirements of NSW Government/TfNSW, as well as with corporate, business and asset planning processes. In addition to the asset’s usage ability as a result of its physical condition, there are a number of measures used to analyse the assessment of asset performance, specifically utilisation and functionality.

The following describe the usage ability as a result of physical condition, utilisation and functionality of physical assets as measures to analyse the assessment of asset performance.

Usage Ability as a Result of Physical ConditionAn asset should be able to be used safely and effectively. This means that it needs to be maintained in a condition that is adequate for the purpose for which it is intended, and that it complies with the relevant rail safety and workplace health and safety standards. If this is not the case, the asset's ability to deliver services to the level and standard required will be compromised. Physical condition assessments provide important inputs for compliance with legislation and in planning for asset maintenance.

A proper condition assessment of an asset will involve:

Setting the required condition of the asset relative to its service delivery needs;

Inspecting the asset and comparing its condition with that required; and

Forecasting the future condition of the asset.




Utilisation of a Physical AssetAsset utilisation is a measure of how intensively an asset is being used to meet the entity's service delivery objectives, in relation to the asset's potential capacity. To assess utilisation, criteria and benchmarks appropriate to the services being delivered and to the class of asset being considered, firstly need to be established. The criteria should have regard to:

The value of the asset’s unit of service potential that is being used relative to the units of service being delivered (e.g. the future economic benefit);

The physical measures of asset capacity relative to the units of service being delivered (e.g. floor space relative to the type of activity); and

The use being made of the asset relative to the optimal availability for the type of asset (e.g. the number of hours used relative to the hours available).

The utilisation criteria should be based, wherever appropriate, on best practice data as well as on the results of analyses undertaken either by the entity or elsewhere in the private and public sectors. Under-utilised assets should be identified, and the reasons for this examined. It may be, for example, that the asset is no longer effective in performing the activities required of it or that it is in less than optimum condition. It may also be that the need for the services it delivers or supports has reduced. The following examples illustrate some of the technical reasons for under-utilisation:

Physical constraints; and

Technological obsolescence.

Action should be taken either to improve the asset’s utilisation or to redeploy it (provided that service delivery needs can be met by alternative means). Where asset utilisation is low, entities should consider whether the cost of holding the asset exceeds the cost of transferring the services it delivers, and whether there is a more economical way of delivering the services. Alternative or additional uses of assets should also be considered. The utilisation of each asset should be reviewed annually.

Functionality of a Physical AssetThe functionality of an asset is a measure of the effectiveness of the asset in supporting the activities to be carried out. To assess (and monitor) functionality, it is necessary to determine:

The role that the asset plays in achieving service delivery outcomes; and

The functional characteristics required to support specified activities.

The functionality of assets should be regularly reviewed. This will enable any significant impacts on services to be identified. It will also allow timely changes to be made to improve both service delivery and functional standards. Furthermore, the results of regular functionality reviews are used in the formulation of asset strategies.




Process DescriptionInformation on ACAA underpins effective, proactive Asset Maintenance (AM) programs by enabling prediction of maintenance, Routine Maintenance (RM) and Major Periodic Maintenance (MPM) requirements. Therefore, asset condition is also important to the management of asset risks, because it relates to the likelihood that the asset will physically fail. Understanding asset criticality is key information for the operation of assets. Critical assets are those that have a higher consequence of failure and potentially have a more significant impact on Sydney Train’s objectives hence, knowledge of critical assets can be used for AM decision making. For example, critical assets may be inspected and maintained more often or renewed earlier.

Assets Condition Assessment and AnalysisThe main purpose of asset condition assessment is to detect and quantify long-term degradation and provide some means of quantifying remaining asset life. This includes identifying assets that are of high risk or at their end-of-life, that will require major capital expenditure to either refurbish, replace, or eliminate altogether. Condition assessment procedures are intended to measure asset degradation, the criticality of the degradation, and the remaining asset life. A reasonable understanding of the degradation and failure processes is required to establish sensible assessment criteria or to define appropriate end-of-life criteria.

Condition Assessment of Physical AssetsCondition Assessment of physical assets can be defined as the technical assessment of the operational and physical conditions of an asset, using a systematic method designed to produce consistent, relevant and useful information. A principal objective of Condition Assessment is to provide sufficient information on the condition of physical assets for strategic assets planning decision-making in order to capitalize and depreciate rollingstock and infrastructure assets based on residual value, rather than expense them against earnings. Condition Assessment procedures are intended to measure asset degradation, the criticality of the degradation, and asset residual life. An understanding of the failure as well as degradation processes of physical assets is necessary to establish sensible Condition Assessment criteria and to define asset residual life. The Condition Assessment process for physical assets should, as a minimum, rate asset operational and physical condition, determine the risks associated with continual usage of an asset in such condition, and identify the type of maintenance needed to retain or restore an asset’s required condition. Condition Assessment results, together with asset functionality, utilisation and cost considerations, are used to support a wide range of strategic assets planning decisions particularly in relation to assets operational and physical function performance and assets maintenance strategies.




Attributes of Assets ConditionThere are a number of attributes that are used to assess the condition of physical or tangible capital assets, such as:

Physical condition - the condition of an asset that enables it to meet intended service or operational levels. The physical condition of a tangible asset can be compared to its ability to meet original design standards. The assessment of the condition of a physical asset should reference its operational and physical characteristics and technical, engineering and other specifications. It should also take into consideration the asset’s durability; the quality of its design and manufacture / construction; its use; and the asset’s design maintainability and adequacy for required maintenance.

Demand/capacity - the capacity of the asset to meet existing application requirements. Demand/capacity is related to asset performance. Measuring this attribute would involve establishing subjective baseline service or operational levels against which to measure actual performance. The demand/capacity attribute brings into scope the asset’s efficiency and effectiveness measures.

Functionality - the ability of the asset to meet service or operational delivery requirements. Functionality is closely aligned with the asset’s whole-of-life performance measures such as early life, useful life, and wear-out or residual life operational performance.

It is recognized that none of these attributes are mutually exclusive. For example, physical condition may have an impact on an asset’s ability to meet service or operational delivery requirements.

Benefits and Risks of Condition AssessmentThere are definitive benefits or risks in performing effective or ineffective condition assessment of physical assets. These are:

Benefits - The benefits of performing effective condition assessment include:

The adequacy of existing maintenance and capital funding can be established and evaluated;

Asset condition trends can be analysed;

Asset condition can be reported to NSW Government and TfNSW in a consistent format;

Maintenance programs can be effectively targeted and prioritised;

Current maintenance liabilities and emerging maintenance requirements can be identified and quantified;




The effectiveness of prevailing maintenance strategies can be assessed and adjusted if necessary; and

Strategic asset planning processes can be enhanced by information on future liabilities.

Risks - The risks associated with non-performance or ineffective condition assessments include:

Declining asset condition is not identified and addressed;

Maintenance planning is not related to asset needs;

Asset condition cannot be adequately reported;

Deferred maintenance liability and provisions for future maintenance requirements cannot be reported in financial statements;

Maintenance demand is not properly identified;

Poor quality of data leading to poor decision-making;

Serious deficiencies can be overlooked;

Information gathered on asset condition could be misleading; and

Resources are not used effectively.

Enterprise Asset Risks and its Consequential Business Loss

From Sydney Train’s enterprise perspective there are two areas to identify asset related risks to service

delivery. The risks identified should be discussed in the context of the service delivery performance and

also in the context of protecting asset performance in its own right.

Service Risk shows service-related risk i.e.

Risk that asset performance will prevent services being delivered as planned.

Risk that asset performance will not support required service levels.

Asset Risks shows asset-related risk i.e.

Risk that the expected life of assets will not be realized.

Risk that assets will not comply with statutory and or compliance requirements.

The Assets Condition Assessment ProcessA whole-of-government Total Asset Management Framework (TAM) has been introduced in NSW, from the second half of 2004. The TAM has established a framework for the maintenance of government assets to ensure consistency in the planning, implementation and reporting of a




physical Assets Maintenance Plan. The whole-of-government reporting mechanism is based on input from public assets maintenance performance which flows through to maintenance policy, standards and strategy setting; maintenance strategic planning; and maintenance implementation. Condition assessment, along with budget allocation, stem from the policy, standards, planning and strategy framework, to make up a maintenance works program. Sydney Trains asset management hierarchy and document relationships are shown in Figure 1. Assets identified in the STAMP will be prioritized in the order of critically for ACAA assessments that will be included in the individual Asset Management Plans (AMP’s).

Sydney Trains infrastructure assets generally have the following attributes:

They are large networks constructed over generations which are not often replaced as a whole system;

The system or network has a long and indefinite life because its service capacity is maintained in perpetuity (by continual refurbishment or replacement of components as they wear out);

The system components are interdependent and not usually capable of subdivision or separate disposal, and consequently are not readily disposable within the commercial marketplace;

The system interdependency may limit a component life to a lesser period than the expected life of the component itself; and

The assets have a high initial cost and a value which is difficult to determine.




Figure 1 Illustrates the Sydney Trains Asset Management Hierarchy and Document Relationships



NSW State Plan

TfNSWRail Services

Contract

Sydney Trains Asset Strategy

(STAS)

Operations Management Plan

Capital Plan

Electrical AMP

Track AMP ACCRI Model

Civil / Structures AMP

Fleet AMPSignalling &

Control Systems AMP

Engineering Standards Assurance Framework

Asset Integrity / Assurance

Reports

Network-wide Corridor Maps

Individual Corridor Plans Fixed Assets

Works

Fleet Assets Works

Part A – Maintenance Directorate Asset Management Plans

TAM

Major Plant AMP

Asset Info AMP Technology AMP

Heritage AMP

Facilities AMP

Other AMP’s

ACCRI Model


The condition assessment process can be separated into a series of four phases aimed at providing useful information on the physical condition of an asset. The phases are interrelated and the success of each phase impacts on, and contributes to, the success of succeeding phases. The four phases of the condition assessment process are defined below:

Phase1: Define Condition Assessment ObjectivesDefining the objectives of condition assessment is essential in providing a clear direction for the assessment process. Sydney Trains need to have a clear understanding of why the assessment is being undertaken, and how the findings are intended to be used.

This will allow the outcomes and specific outputs of the assessment process to be properly defined. Well defined assessment objectives will assist in determining:

The type of information required;

The level of accuracy necessary;

The assessment method to be used;

The frequency with which data should be collected; and

The manner in which the assessment will be conducted.

Condition data can be expensive to collect and manage, and has a limited useful life. Therefore, only data essential to the assessment objectives should be collected.

Define Condition Assessment StandardsSydney Trains core service strategies enable asset service requirements and future service potential to be determined. Performance standards for an asset can then be established based on the significance that an asset has in supporting core business. Factors such as criticality, utilisation and functionality are key considerations in determining asset performance standards. Once a performance standard for an asset is determined, a corresponding minimum standard for asset condition can be defined.

Phase 2: Planning for Condition AssessmentCondition assessment is generally a planned activity, involving a number of persons in a systematic review of a physical asset that has been identified for assessment. Planning for condition assessment of physical assets usually includes a determination of the assets to be initially inspected and the inspection intervals. The objectives of the assessment and the type of asset will determine the approach to be employed and the items that need to be inspected. The three methodologies that can be applied for asset condition assessment are:

Inspections

Surveys; and

Audits




Assets Condition Assessment by InspectionAsset inspection is the primary activity undertaken as part of a condition assessment. The level of detail and accuracy of information that can be obtained from an inspection can vary depending on the assessment method used. Assessment methods can range from a survey, which provides fairly broad information, to a detailed audit, which provides a more comprehensive level of detail. The depth of asset inspection will be guided by the assessment objectives and resources available. The assessment method chosen should produce the outputs required as per the objectives, deliver consistent results, and be cost effective.

Some of the key activities that need to be considered when planning for assets condition inspection are:

Allocating sufficient and appropriately skilled resources;

Reviewing the asset register, drawings, manuals, etc.;

Reviewing outstanding maintenance tasks;

Consulting the asset occupants to arrange access at an appropriate time;

Determining how inspection will be carried out;

Selecting an appropriate data collection method; and

Choosing the method for data processing and analysis.

Assets Condition Assessment by SurveysA survey usually involves a broad appraisal which produces a relatively fast scan of asset condition. It is generally used where a quick result is required, funding is limited, and assets are less complex. The inspection can be carried out by technical personnel. A survey can be conducted using a questionnaire process in which asset occupants, operators, users or appraisers provide feedback, particularly about the state and maintenance needs of assets. The results of the survey can then be analysed. However, caution is required when using the results of this approach due to the limited depth of the inspection. Survey results can be subjective and inconsistent according to the varying interest and expertise of the respondents.

Assets Condition Assessment by AuditsAn audit is a more structured examination approach which provides consistent, quantitative and qualitative information relating to asset performance in terms of condition and associated risk. The audit involves a detailed appraisal of an asset by competent qualified personnel. Detailed audits are recommended where an asset is complex or when comprehensive information is required. An audit of a complex asset is normally carried out by assessing an asset’s individual elements. Elements are examined and their actual condition relative to the desired condition standards is then reported in detail. Any deficiencies in asset condition, together with the associated risks, can then be evaluated.




Assets Condition RatingInspections should be performed to enable a rating for asset condition to be applied – see Table 2. The rating provides an indication of the gap between actual asset condition and that which has been specified. In the case where the condition assessment findings are to be used in the development of an asset maintenance program, the following information should be collected:

The presence of any defect (existing or potentially arising within the period the maintenance plan, usually three to five years);

The nature of the defect;

The location of the defect;

How the defect should be corrected (e.g. adjust, repair, replace etc.);

The quantity of corrective work (for estimation and specification purposes);

The remedial cost for each defect; and

When the defect should be addressed (i.e. immediately, or when required).

Phase3: Assessing the Risk of Asset ConditionThe direct risks associated with asset condition should also be assessed. This assessment should be based on both the likely impact and the probability of an event occurring as a direct result of asset condition. The need to bridge the gap between existing and desired conditions can then be considered, taking into account the risks associated with leaving an asset to remain in its existing condition. A risk rating is assigned based on an assessment of the risks resulting from the condition of the asset inspected. Risks that must be considered include those that relate to environment, rail safety, workplace health and safety; security; functionality; financial impacts (including cost of consequential damage); and legal exposure. In the final risk assessment also consider the results of the Engineering Assessments carried out previously.

Condition Assessment StandardsCondition Assessment initially includes a physical inspection of the asset equipment (sub-systems, assemblies and components) using specialised NDT tools such as ultrasonic and laser techniques as well as magnetic field measurements that produce data describing the condition of the equipment providing evidence of various types of wear or damage on a macro- and micro-scale. The data is usually analysed to characterise the variability of operating parameters such as potential, flow, temperature, weather, pressure or capacity fluctuations, from which related physical damage can be assessed.

Condition Assessments are fundamentally evaluations of a physical asset’s service or operating inefficiency, evaluation of asset equipment damage, and prediction of asset residual life. This includes a determination of what possibly caused the operational inefficiency or physical damage; what exactly the damage is and through which mechanisms the damage developed; if the asset equipment has not yet failed, then what the estimated residual life would be, considering a specific




damage mechanism; and what operating recommendations would prevent damage in the future, or allow continued operation in the short term.

Condition Assessments also include engineering evaluation of the physical condition of an asset’s equipment in which a flaw has been detected. The focus of such an evaluation is to determine if the asset’s equipment can continue in service, and if so, for how long. In-house standards, Asset Standards Authority standards, Industry standards, National standards and International standards, may also specify a quantitative procedure for determining ‘fitness-for-service’ (FFS) of different types of assets and industrial asset equipment, however not all asset or equipment are covered by such standards. In cases where no standards exist, a semi-quantitative or qualitative approach to residual life prediction is used to determine whether the asset or equipment could continue in service.

Assessment methods and procedures in Standards can be used for ‘fitness-for-service’ assessments and/or re-rating of asset and equipment designed and manufactured/constructed to recognised codes and standards. The Standard has broad application since the assessment procedures are based on allowable stress methods and plastic collapse loads for non-crack-like flaws, as well as applying the Failure Assessment Diagram (FAD) approach for crack-like flaws. Fitness-for-service assessment procedures cover both the present integrity of an asset or asset’s equipment, given a current state of damage, and the projected remaining or residual life. Assessment techniques are included to evaluate flaws including general and localised corrosion; widespread and localized pitting; blisters and hydrogen damage; weld misalignment and distortions; crack-like flaws including environmental cracking, laminations, dents and gouges; and remaining life assessment procedures for components operating in the creep range. In addition, evaluation techniques are provided for condition assessment of asset equipment including resistance to brittle fracture, long-term creep damage, and fire damage. The procedures are not intended to provide a definitive guideline for every possible situation that may be encountered. However, flexibility is provided in the form of an advanced assessment level to handle uncommon situations that may require a more detailed analysis.

Phase4: Record, Analyse and Report FindingsRecorded data needs to be appropriately stored where it can be readily accessed for analysis, planning and reporting purposes. A suitable method for recording the data would have been established in the planning phase. There is increasing use of electronic devices which enable data transfer to occur quickly and accurately. Data should be stored within a management system capable of handling the quantity of information to be collected both at time of inspection and in the future.

If assets condition assessments are being carried out by different persons, particularly in different geographic locations, it is important that data collected is checked for consistency, and any variations or discrepancies rectified. The objectives of the condition assessment will determine the type of data analysis to be undertaken.

Examples of analyses include:




Statistical analysis of condition ratings to identify an average condition across a portfolio of assets, and the range from worst to best condition;

Sorting of data into particular categories, e.g. asset location or type, to enable comparisons to be made;

Analysing condition trends over time to assess the effectiveness of maintenance strategies, detect asset deterioration, or evaluate the adequacy of works program budgets; and

Prioritisation of identified remedial works to enable the development of works programs (e.g. maintenance, capital improvements, refurbishment, etc).

Presentation of the assessment results should focus on establishing a priority of the works. Priority ranking should result in works with the greatest deviation between desired and actual condition and the largest risk being allocated the highest priority. Condition assessment findings can be reported on and used in a range of strategic asset planning and management processes. For example, findings are used in the development of maintenance plans, capital investment strategic plans, disposal plans, and in asset portfolio planning.

Managing Assets by Condition and Criticality

Managing by Asset ConditionCondition assessment plays a crucial role in the strategic management of assets. It is important therefore that the performance of the assessment is evaluated against predetermined performance indicators.

Some useful indicators are:

Achievement of condition assessment objectives;

Cost of assessment, including any variations from expected costs;

Time taken to complete assessment against projected time frame;

Quality of information gathered, including accuracy and consistency;

Disruptions or inconvenience to building/facilities occupants or operation and usage of the asset at the time of condition assessment; and

Level of building/facilities occupant, operators and asset users and maintainers input into assessment.

Analysis of Physical Condition Assessment of Tangible Capital AssetsReporting on physical asset condition is useful information that must be included in financial reports. It will assist in drawing conclusions about the effect that funding of maintenance and renewal is having on the overall physical condition of tangible capital assets. It is also the first step to drawing conclusions about the management of resources and future revenue requirements to




maintain, renew and replace tangible capital assets, and the affordability and sustainability of services.

The benefits of performing physical condition assessments on tangible capital assets are that it:

Provides information for assessing the adequacy of existing maintenance, renewal and replacement funding;

Provides information for the analysis of asset physical condition trends;

Reports on asset physical condition in a consistent format;

Assists in targeting and prioritising asset management strategies;

Provides information for identifying and quantifying maintenance, renewal and replacement requirements;

Allows for assessment of the effectiveness of asset management strategies; and

Provides information for strategic asset planning processes.

The physical condition of a tangible capital asset can be compared to its ability to meet original design standards. Examples of assessments of physical asset condition are typical for rollingstock and infrastructure assets. An assessment of the physical condition of rollingstock and infrastructure assets forms part of expense budgeting and costing of capital assets.

Subjectivity of physical condition assessment will be reduced and consistency and comparability improved when based on a detailed physical inspection using standardised, clearly defined methodology, pre-defined defect conditions, and measurement scales to determine physical impairment of the tangible capital asset.

Analysis of the asset condition assessment should be reliable and verifiable. Reliable and verifiable analysis can be replicated to produce similar results, whereby concurrence of the data is achieved with a reasonable degree of precision. Evaluation of an asset’s physical condition should be completed with specific knowledge of the asset, its performance capacity, and the expectations for its continued performance. Analysis of an assessment of the physical condition of a tangible capital asset should be completed by reference to physical characteristics and technical, engineering and other specifications of the asset. Such analysis should take into consideration:

The quality of its design and construction;

The asset’s durability versus use or pattern of usage; and

The adequacy of maintenance that has been performed.

It may not be possible to complete a physical examination of all tangible capital assets. For example, it is not always possible to physically examine sub-surface pipes or under water structures. However, physical condition could be based on a combination of age, construction materials and methods, breaks per kilometre, geological and soil conditions, etc. Whatever predictive tool is used, a standardised, clearly defined methodology with pre-established logical relationships between attributes and predicted condition assessment should be employed. The results should be defensible using industry standard best practice to predict asset conditions where they exist.




Assessing Asset ConditionAppropriate condition indicators can be developed for each type of asset and asset equipment. Condition indicators are qualitative scores based on tests, measurements, and inspections that are performed during the condition assessment process. Results are combined into a Condition Index with a scale New – Failed – see Table 1. Mid-to high-range values may trigger actions such as a repair or physical condition evaluation. Such an evaluation includes in-depth, non-routine tests that may be invasive and/or require specialised equipment and expertise however, when performed, physical condition evaluation adds confidence to the assessment results and conclusions. These results are used to adjust the Condition Index score (either up or down). Figure 2 shows a typical Asset Condition vs. Asset Criticality Risk Index scoring chart.

Asset condition is a measure of the asset’s physical integrity. Asset condition is also critical to the management of asset risks, because it is linked to the likelihood that the asset will physically fail. Condition assessment techniques range from simple visual inspections, destructive, non-destructive testing, through to detail mechanical or electrical testing. Create or use a specific asset condition assessment checklist tool to guide and help in the condition assessment process. Make an overall ACAA assessment of the entire asset using the asset condition model shown below in Figure 2.

Table1: Asset Condition Index and Impact

Asset Condition Index

Asset Condition Impact

Description of Relative Condition Level

Description of Required Condition

Remaining Life (where supported)/ Maintenance Required

New (Very Good)

Performing as

intended and/or

operating efficiently.

1 - (Nil/Negligible)

Very good condition – well above Required Condition. Some ageing or deterioration of a limited number of components.

All asset elements meet Required Condition, and:

some key elements significantly exceed Required Condition

many elements well exceed Required Condition

any minor deterioration evident has no affect on the asset’s functioning or availability

asset is very well maintained

> 15 yrs. Normal inspection/TMP work. No action required for all Asset Categories.

GoodPerforming

as intended but with minor

deterioration.

2 - Minor disruption

Minor defects only – above required condition. Deterioration of some components.


many elements exceed Required Condition

some physical deterioration may be present but it does not affect the asset’s function or

10-15 yrs. Minor maintenance and inspections (5%). Attention within 1 – 2 years for Superior, High and Above Average Assets. Attention within 5




Asset Condition Index

Asset Condition Impact

Description of Relative Condition Level

Description of Required Condition

Remaining Life (where supported)/ Maintenance Required

availability

asset is well maintained

years for Average, Below Average & Low Asset Categories.

Average (Fair)

Performing as

intended but with

moderate deteriorati

on.

3 – Moderate Disruption

Maintenance required Returning to Accepted Level of Service – at Required Condition. Noticeable deterioration or serious deterioration of specific components.


the asset’s functioning and availability are at acceptable levels

some elements may be deteriorating

asset needs maintenance

5-10yrs. Important maintenance and repair (10-20%). Increased diagnostic, testing, possible replacement needed before 5 years pending on criticality. Attention within 0 – 1 year for Superior, High and Above Average Assets Categories. Attention within 2 - 4 years for Average, Below Average & Low Assets Categories.

PoorExhibiting

major defects

and/or not operating

as intended.

4 – Major Disruption/ Increased Costs/ Loss of Revenue

Requires Renewal/Upgrade – below Required Condition. Widespread serious deterioration or significant deterioration of a dominant components.

Some asset elements do not meet Required Condition, and:

condition of some key elements is below the limit of acceptability

deterioration affects asset function or availability

asset needs significant maintenance and may need renewal or upgrade

1-5 yrs. Significant renewal/upgrade (20-40%). Start planning process to replace, considering risk and consequences of failures. Immediate attention for Superior, High, Above Average & Average Assets Categories. Attention within 1 -2 years for Below Average & Low Assets Categories.

Failed (Very Poor)Life

expired and/or serious risk of

imminent failure.

5 – Possible liability/ Illegal Condition

Asset unserviceable – well below Required Condition. Extensive serious deterioration or serious deterioration of a dominant component

Many asset elements do not meet Required Condition, and:

condition of many key elements is below the limit of acceptability

deterioration significantly affects asset function or availability

asset in urgent of major maintenance or refurbishment

0-1yr. Over 50% of asset requires replacement. At end-of-life, immediately assess risk; replace based on assessment. Immediate action for all Asset Categories.




Relative Condition Level is a direct comparison of an asset's Actual Condition with its Required Condition, expressed in a Relative Condition Level scale as in Table 1.

The purpose of comparing actual and required condition is to:

Examine the level of fitness for purpose;

Assess the extent of under or over-provision; and

Set maintenance, refurbishment, replacement or disposal requirements.

Where the Relative Condition Level shows a significant variation between Actual Condition and Required Condition, there is likely to be a significant impact on the operation of the asset. There may also be financial impacts. These need to be clearly identified as they are important in making decisions and setting priorities. Assets condition impacts considered with Asset Category are a major determinant of the priority and urgency of action to be taken in respect of a particular physical asset. Maintenance requirement is crossed referenced against the respective conditions in Table 1.

Identifying Required ConditionBefore assessing the actual condition of an asset during asset inspections, it is important to be clear on what condition the asset needs to be in to perform at an appropriate level of efficiency and service. The Required Condition will vary between assets according to the asset's strategic importance, its specific function and its particular physical requirements. The purpose of establishing Required Condition is to provide a benchmark against which Actual Condition can be compared. Required Condition is the acceptable physical condition needed of an asset for effective service delivery. It should perform its functions without unacceptable disruption; provide the expected level of service appropriate for its functions; and provide a safe environment that meets statutory requirements.

Required Condition varies according to function. It will vary not only between Asset Categories but also between individual assets within the same Asset Category. Variations within a single asset can arise as a result of assets that have a number of functions. Physical infrastructure assets or constructed assets are often complex and support a number of functions. Required Condition is simply a judgement of the main physical requirements that must be met. It will depend on the specific functions and physical requirements of those features of the asset with most strategic importance. However, careful and objective identification of Required Condition is a very important part of conducting assets inspections, surveys and audits in the assets condition assessment process. If the Required Condition identified is too high or low, the result can be either unnecessary expenditure on maintenance or refurbishment, or deterioration of the asset and loss of value through under-expenditure. Basically, in establishing Required Condition, the emphasis should be on those elements of the asset most important in meeting business needs.




Identifying Actual ConditionAssessing the actual condition of an asset is the active part of conducting assets inspections, surveys and audits in the assets condition assessment process, in preparation for analysis. An asset's actual physical condition and the acceptability of that condition can fluctuate considerably over its useful life, particularly if there is a change in its function. Information on Actual Condition is needed at any time to be able to make effective decisions on the management of assets. The focus of Actual Condition assessment during assets inspections is on key elements. All physical assets consist of a number of elements or components that can be identified and measured. In assessing Actual Condition it is important to identify and focus on those elements of the asset most important to business needs.

Physical infrastructure asset elements have potentially different life cycles. Different elements of a single asset can therefore be at different stages of deterioration. The asset's overall Actual Condition is the result of independent examination through assets inspections of the condition of its key elements. When the key asset elements have been identified, they should be assessed against a limited number of clear criteria. These may vary according to the function of the asset. Thus, in conducting assets inspections, surveys and audits it is important to assess asset elements against the following criteria:

The purpose of the assessment;

The key asset elements;

The appropriate assessment criteria; and

The way the condition information is to be obtained.

In assessing asset elements against these criteria, it is advisable to include details on how well the criteria are met. There should be enough detail to describe both the condition and any major risks that would be associated with a failure to take action.

Methods of Assessing Actual ConditionAssessing Actual Condition does not always need detailed inspection of an asset. Methods of assessment are either based on prediction or direct inspection. They can vary from a study that comments on specific details of individual assets to a sample survey identifying broad trends. The particular situation for conducting assets inspections determines the appropriate method of condition assessment. In many cases a broad assessment is adequate. More than one method may be needed where a wide range of assets requires information to make strategic and operational decisions.

Direct inspection can range from superficial to detailed physical examination. When direct inspection of the asset or one of its key elements is not practical, physical measurement and non-destructive testing can be used for elements of the asset that cannot be reliably assessed by direct inspection; or when the level of detail required warrants such measurements. The inspection cycle varies depending on the condition of the physical asset. An asset judged to be below its Required Condition should be inspected more frequently than one considered to be above its Required




Condition. Inspection cycles for elements that involve moving parts should be reasonably short. A predictive method of condition assessment involves modelling, estimating or approximation of asset condition and makes predictions about future assets condition.

Managing Asset by CriticalityCritical asset means asset(s) having potential to significantly impact on the achievement of Sydney Trains objectives. The idea of criticality is fundamental to Asset Management. To practice even a base level of Asset Management, it is important to define which assets are critical, and focus its maintenance efforts on those assets. Criticality prioritizes which assets are important to operate, monitor and maintain, therefore identifying critical assets and building an asset plan for them is the first step in designing an effective maintenance program that is based on the condition of assets.

Assigning criticality enables Sydney Trains to begin implementing the practice of Asset Management by providing a formal means to prioritize work activities and investments and to implement performance reporting.

Asset criticality is the relative risk of a high cost arising from failure of that asset and those assets that impacts the customers largely and immediately. So criticality is the relative risk of an asset from customer service and a cost perspective, calculated in order to understand which assets deserve attention and money to prevent failure. To understand this definition of asset criticality, we need to understand the relative importance of these characteristics that will be used to analyse each maintainable asset.

These characteristics should cover a wide range of business attributes, such as:

Mission and customer impact;

Location of the asset;

Safety and environmental impact;

Ability to isolate single-point-failures;

Preventive Maintenance (PM) history;

Corrective Maintenance (CM) history;

Mean-Time-Between-Failures (MTBF) or “Reliability”;

Probability of failure;

Spares lead time;

Maintainability;

Asset replacement value; and

Planned utilization rate.

The asset criticality step will involve the analysis of all assets to identify for Sydney Trains asset criticality which is to be assigned using the following naming convention (see Table 2), classification




is based on consequences of impact on customers and order of priority of usage. Assets can be safety-critical, environment-critical or performance-critical.

Table2: Asset Criticality Criteria

Level Description

Diamond (Highly Critical) - Extreme Priority usage

Extreme disruption to network causing total network operations stoppage and train cancellations.

Platinum

(Critical) – High Priority Usage

Major disruption to main network corridors causing major network operations stoppage / disruption and train cancellations.

Gold

(Mid Level Critical) – Medium Priority Usage

Significant disruption to major network corridors causing up to 50% loss of capacity with major disruptions to train operations and causing significant operations re-scheduling.

Silver

(Low Level Critical) – Low Priority Usage

Disruption to some train operations and causing some operations re-scheduling.

Bronze

(Non-Critical) – Not Applicable

Little to no Disruption to train operations and no operations re-scheduling.

‘Criticality’ represents the relative importance of the asset when assessed by the impact of its failure on trains operations and the travelling public. The assessment and understanding of criticality requires an organisation wide understanding so that all staff understands what assets are critical to the business. Most critical assets will be called Diamond’ assets and least important assets will be called ‘Bronze’ assets

Furthermore, criticality may include and not limited to:

Disruption to the customer;

Asset usage such as Gross Metric Tones per kilometer, passenger rollingstock passes and movements, axle load, freight movements and volumes within network locations;

Loss of image and reputation;

Failure of level of service;

Primary damage - repair costs for failed infrastructure assets;

Secondary damage - repair costs for associated assets that have been impacted by the assets failure;




Cost of alternative supply - in many cases not an option. It may require evaluation of other sources such as road transport during outage;

Duration of disruption - values to measure time to identify failure, make safe, mobilise repair team (remoteness), time to repair (spare part availability) and time to re-commission. If for example standby equipment is available which automatically starts this would then be minimal;

Third party liability claims - value to reflect the short and long term implications to the customer;

Environmental impacts and penalties; and

Lost revenue - during an outage or shutdown revenue may not be able to be generated.

Figure2. Asset Condition vs. Asset Criticality Risk Index Score Chart

Calculating ACAA Asset Criticality Assessment and Analysis (ACAA) = Asset Condition X Asset Criticality

Calculating ACI Index From a financial and cost perspective, calculate the Asset Cost Index (ACI) before carrying out maintenance, repair or replacements of assets. ACI is defined as cost of current maintenance, repair, and replacement deficiencies of the asset divided by current replacement value of the facility. The lower the number, the better.



RankExtreme Risk = E

High Risk = HMedium Risk = M

Low Risk = LNegligible = N

Condition Index Bronze Silver Gold Platinum Diamond

ASS

ET

CO

ND

ITIO

N

Failed (very poor) M H H E E

Poor L M H H E

Average (fair) N L M H H

Good N N L M H

New (very good) N N L M M

ASSET CRITICALITY


Asset Cost Index (ACI) = (Cost of current Maintenance, Repair, and Replacement Deficiencies of the Asset(s)/Current Replacement Value of the Asset(s).

Decision MakingScheduling corrective action to close the gap between actual and required assets condition depends on certain criteria identified during the condition assessment process such as:

The significance of the Relative Condition Level (Table 1);

The severity of Condition Impacts (Table 1);

Asset Criticality (Table 2); and

The Asset Category (Table 3).

The cost of rectification and the financial year in which funding can be made available are also important factors to be considered, particularly in the case of works that can safely be deferred. A schedule for action needs to be considered for each individual case. However, broad conclusions can be drawn on appropriate time frames for action by looking at the Asset Categories against each Relative Condition Level and each Condition Impact.

Once ACAA assessment [Asset Condition ( see Table 1 for explanation) vs. Criticality (see Table 2 for explanation) = RI (use Figure2 for rank quantification)] has been carried out for each Asset Category/Significance (Table 3), a priority grading is applied, that is according to the seriousness of the condition revealed, and any urgency associated with, and breaches of, legislation. This will have particular regard to the possible consequences of maintenance deferment. The following priority grades are in the context of a ten-year planning period:

Priority 1 (P1): Urgent works that will present immediate closure of the asset and/or address an immediate high risk to the reliability and safety of the asset, safety of the public and workplace health and safety of users and/or remedy a serious breach of legislation.

Priority 2 (P2): Essential work required within two years that will prevent serious deterioration of the asset and/or address a medium risk to the reliability and safety of the asset, safety of the public and workplace health and safety of users and/or remedy a less serious breach of legislation.

Priority 3 (P3): Desirable work required within three to five years that will prevent deterioration of the asset and/or address a low risk to the reliability and safety of the asset, safety of the public and workplace health and safety of users and/or remedy a minor breach of legislation.

Priority 4: Long term work required beyond a five year planning period that will prevent deterioration of the asset and/or restore equipment or services.




Identifying the Appropriate ActionThe diagnostic information needed for making decisions is now available. The questions that remain to be answered are:

Remedial Action: Does remedial action needs to be taken? Remedial action is the repairs and/or refurbishment needed to rectify the problems found in the assessment of Actual Condition and restore the asset to its Required Condition.

Costs: How much will it cost? Estimated costs need to be provided at this stage. Urgent works have budget priority. Costs will be an important factor in balancing other expenditure over the asset planning cycle.

Identifying Priorities: What is its priority? The most critical factors in evaluating the information and deciding on priorities are:

o Asset Category

o How important is the asset (Criticality)?

o Condition Impacts

o How serious is the risk?

A time frame for action should be decided based on an evaluation of the critical factors in each case.

Note: Use ACAA and the ACI indexes for prioritisation and decision-making.

Assessment Criteria for Assets ConditionAsset Physical Condition Assessment Methodologies

There are numerous methodologies to assess asset physical condition in use today by engineers and asset managers for most long-lived tangible capital assets that are of great value in managing tangible capital assets. Different condition assessment methodologies may be used for major categories. The asset condition assessment methodology does not have to be consistently applied across all categories of assets.

Methods of measurement should be an easy-to-understand reference that can be updated regularly to track the results of an organisation’s asset management strategies. It should also allow users to predict the status of assets into the future, based on current asset management policies.

Characteristics of a good condition assessment methodology may include:

Use of standardised indicators to identify deficiencies;

Recording of deficiencies in terms of severity and frequency;

Prompts for the inventory and inspection process ensuring that all pertinent data is collected, guiding the inspector through each step of the process;




Predefined measurement scale for each type or category of asset ;

Utilization of knowledgeable inspectors with well-documented inspection procedures; and

Predetermined inspection schedules for tangible capital assets (components, subsystems or networks).

Assessments of tangible capital assets should include any additional evidence provided by subsequent events occurring after the reporting date. Other relevant information that should be provided includes:

A description of the key assumptions used in preparing the assessment of physical condition and whether the assumptions are susceptible to change;

An explanation of the changes made to past assumptions used in previous assessments of the physical condition;

Information about the effect of a change in the underlying assumptions used to prepare the assessment of physical condition; and

The sensitivity of the assessment of physical condition to changes in the assumptions used and the reason for the sensitivity.

Additional Information on Assets Replacement CostsDuring an ACAA assessment exercise it is important to provide information on the current replacement cost of tangible capital assets by category. Current replacement costs represent the amount in today’s money necessary to acquire, develop or construct assets similar to those already owned. Information on tangible capital asset replacement costs gives users a benchmark against which to assess the total replacement costs of all assets relative to the amount being invested in maintenance, renewals and replacements. It also gives users an estimate of the total replacement costs of assets in relation to historical cost.

Sydney Trains acknowledges that the replacement costs do not represent a need to replace all assets in any one particular year. Hence, the provision of a replacement value on all assets has limitations in meeting the information needs of users. Because of the longevity of infrastructure assets, it is difficult to make accurate projections of replacement values. For example, new bridge infrastructure assets can last up to 70 years or more. Replacement values are a snapshot at a particular point in time of the total current value of tangible capital assets.

All ACAA assessments are to include financial information about the tangible capital assets deficit/debt/gap. The information should include:

A definition of the tangible capital assets; and

Details of the types of expenditures included in the calculation of the tangible capital assets deficit such as:

o Deferred maintenance and renewal to bring existing tangible capital assets back to desired condition;




o Replacement of existing assets;

o Enhancing functionality of existing assets;

o Increasing capacity of existing assets;

o Meeting new safety and environmental standards;

o New assets to meet growth service requirements;

o Minimum or expected service levels;

o Minimum or expected asset condition levels required to meet service levels;

o Period over which the tangible capital assets deficit is calculated; and

o Measurement methodology.

Asset Condition Assessment PlansSydney Trains to provide details of assets condition in any asset management plan that may exist. Information in such plans may include:

Assets strategic plans with directions to be taken, given factors such as needs assessments and growth expectations;

Asset tactical plans, given the existing deployment of resources;

Long-term financing needs, including determining whether additional resources are needed;

Operational plans which would include life-cycle costing together with estimates of useful life, required maintenance and timing of major repair and replacements;

Condition assessments for identifying performance, funding requirements; and

Any business risk associated with deteriorating tangible capital asset condition.

Identifying Asset Portfolio CategoriesAssigning the appropriate asset portfolio category prior to conducting assets inspections is designed to achieve consistent and comparable results. The method can also be used in cases where there is still uncertainty as to the appropriate category for a particular asset or class (portfolio) of assets. A checklist is used to identify key elements critical to the successful functioning or operation of a physical asset. Table 3 shows a table of typical physical assets portfolio categories and their significance as applied in Sydney Trains.

Table3. Physical Assets Portfolio Categories and Significance to Sydney Trains

Asset Category

Significance Description

1-Superior Assets of operational significance that is critical to Sydney Trains functions.

Track




Asset Category

Significance Description

Civil

Rollingstock

2-High Key assets with major significance and key assets that must meet very rigorous special requirements.

Electrical

Signalling

3-Above Average Assets very important to operations, including significant infrastructure and assets needing to meet special requirements.

Communication & Control Systems

Geotechnical Systems

4-Average Non-critical assets, including most buildings/facilities supporting typical service delivery functions. The lowest possible category for important infrastructure and rollingstock assets and its supporting asset equipments.

Buildings / Depots/Maintenance Centres

Stabling Yard

Sidings

Off Track Plant, On Track Plant

Non mainline track in stabling yards, sidings and maintenance centres

5-Below Average Non-critical assets where purely functional performance is acceptable to the public.

Railway Stations – Sydney Trains Stations

Lifts and Escalators

6-Low Assets that can reasonably operate safety in very basic conditions. Workshops

Shelters

Car parks

Sheds

Offices

The most fundamental feature of an asset is its function. Function decides strategic importance. In the condition assessment process, particularly in conducting assets inspections, this is taken into account so that an informed judgement can be made about the priority of each asset. The first step in conducting assets inspections in the assets condition assessment process is to assign each asset to the Asset Portfolio Category that best reflects its significance.




Items to be inspectedWhere funds are limited and an indicative assessment is required, a survey of an asset can yield quick results without a detailed inspection of individual components. However, in many instances, assessing the condition of an asset will be more manageable if an asset is broken down into smaller components. The level to which an asset may need to be broken down will depend on the degree of accuracy and detail that needs to be achieved. Items that would normally be individually assessed can be broadly grouped into the physical asset structure and constituency; related support services (electrical, mechanical, hydraulics, etc.); and related infrastructure support/services. These items can then be individually inspected, assessed and the results aggregated to give an overall indication of asset condition.

Inspection intervalsIf a number of assessments are to be undertaken over time, an initial inspection should be undertaken as early as possible in the life of an asset, to determine a baseline condition which can be used as a reference point for future comparisons. The interval between subsequent inspections, which can be used to reveal a trend in asset condition over time, needs to be carefully planned. The inspection interval needs to ensure that inspections capture any significant changes in asset condition before they can impact on asset performance. Factors that can affect the required interval include:

Complexity;

Age;

Location;

Environmental factors;

Asset usage ; and

Engineering Assessments (if carried out previously).

Sydney Trains Asset Management Division (AMD) responsible should formulate asset inspection, surveys and audit requirements, taking the above factors into consideration. Since the data from inspections, surveys and audits may be used for maintenance work programs, asset life cycle planning, assets strategic planning, assets usage logistic support, as well as reporting requirements, an asset should be assessed on a cyclical basis which supports these needs.

Methods of Identifying Actual Condition – Prediction versus Inspection:The following is an outline of two broad methods of identifying actual condition; prediction and direct inspection. It also covers the basis for decisions on which method to use for a particular group of physical assets or for a particular purpose.




Predicting Physical Assets Condition:Estimating current and future assets condition is the essence of the predictive method. Predictive condition assessments involve modelling, estimation, or approximation of asset condition. By analysing information from previous years, a predictive method makes assumptions about the likely current asset condition and predicts its future condition. A predictive method offers a sound and cost-effective way to examine assets and support strategic decision-making and allows for consideration of risks and options for planning purposes. A predictive method has several characteristics:

Uses life cycle approaches to look at asset condition;

Can be modified to suit assessment of particular asset categories; and

Synthesises previous experience and results of direct inspection of a sample.

A predictive method is the most cost-effective way to support strategic decisions. However, the method does have some advantages as well as disadvantages, as indicated in Table 4.

Tabel4: Advantages and Disadvantages of the Predictive Method

Advantages Provides a fast and objective way to estimate condition

Readily understood by strategic asset managers

Allows important condition issues to be analysed

Supports strategic decision-making with minimum data

Disadvantages

Depends on the quality of the information available

Relies on the assumptions underpinning the method

Can provide unrealistic results if not validated by direct inspection sampling from time to time

Direct Physical Assets InspectionDirect inspection of physical assets means actually looking at the asset. It can vary from a superficial walk-through to a detailed specialised inspection. It can also include physical measurement and non-destructive testing. Elements of infrastructure assets such as stormwater pipes and sewers may be inspected by video cameras. Electronic equipment may be needed to inspect the condition of buried power cabling. A form with standard questions is often used to assist in data gathering. Direct inspection is an important part of condition assessment of physical assets. When undertaken by experienced assessors, an on-site assessment remains the most effective way to ensure that the condition of a physical asset is properly understood and recorded. The advantages as well as disadvantages of direct condition inspection of physical assets are indicated in Table 5.

Tabel5: Advantages and Disadvantages of Direct Inspection Method

Advantages Provides a snapshot of current condition




Focus on immediate condition issues

Provides very specific information for maintenance programs

Disadvantages

Tends to focus on negative issues rather than opportunities

Provides little understanding of past or future condition

Can be time consuming and costly if not well planned and managed

A significant characteristic of physical assets inspections is that it provides a snapshot of current assets condition by focusing on immediate condition issues, but provides little understanding of past or future assets condition and thus tends to focus on negative condition issues rather than opportunities.

Selecting an Appropriate Method for InspectionPhysical asset condition assessment does not always mean that a detailed look at all assets is needed. In many cases a broad assessment or sampling is adequate. The most appropriate method provides information needed for optimal use of assets in both the short and long term. Any method chosen should have the following characteristics:

Must be easy to use and audit;

Have simple data collection and data entry;

Allow easy calculations;

Be cost-effective; and

Be widely used so practical experience can be shared.

Both predictive and direct inspection methods can be applied to all classes of constructed assets. The purpose of the assessment and the nature of the information required will in some degree decide the appropriate method. Table 6 shows the fundamental use of either method.

Tabel6: Fundamental use of the Predictive Method or Direct Inspection Method

Predictive Method - Provides information best supports strategic decision-making

Used when an estimation of the remaining useful life of an asset or of its elements is needed

Usually supported by direct inspection sampling to confirm assumptions

Direct Inspection - Provides information best supports operational decision-making

Used when a realistic basis is required for setting immediate priorities

Does not give a forward view and maybe inappropriate for strategic decision-making when




used alone

A combination of predictive and direct inspection methods in determining physical assets condition is often used to support decisions on a group of assets. Both methods may need to be applied to cover the range of information and detail needed. Specialised advice is often needed in undertaking assets condition assessment. Considerable time and money can be lost by the inexperienced through:

Collection of incorrect or inappropriate data;

Use of an unsuitable assessment method; and

An assessment method being inappropriately applied.

Assets Condition Surveys

IntroductionAn assets condition survey is a systematic process of evaluating the condition of rollingstock, physical industrial and infrastructure assets such as industrial plant, structures, buildings and installations. This is to establish whether the physical assets are capable of continually supporting business needs and legal requirements in the medium and long term. Surveys are also conducted to assess the ability of physical assets to satisfy internal expectations and external benchmarks. An objective of assets condition surveys is also to establish any remedial action required to bring physical assets up to the expected conditions (such as modifications, refurbishment and replacements), to identify their relative priorities and to propose a programme of action. Assets condition surveys help to plan for the necessary human and financial resources before functional failure of the assets. Assets condition surveys also help to:

Develop an assets condition database that can be used for other purposes such as assets valuations;

Prepare long term capital asset investment plans;

Achieve a balance between capital and maintenance funds;

Target scarce maintenance resources (people and funds);

Benchmark assets maintenance expenditure; and

Benchmark specific physical assets condition.

Condition surveys are also conducted to:

Establish the condition of physical assets before the decision to purchase (such as pre-acquisition surveys for buildings, rollingstock);




To assess degradation after a period of use; and

To establish the maintenance condition of physical assets before Sydney Trains commit to lump sum maintenance contracts.

A physical assets condition survey is a form of inspection to assess the physical, operational and maintenance conditions of the asset. An assets condition survey can be defined as a collection of data about the condition of an asset, part of an asset, or group of assets, assessing how that condition compares to a pre-determined standard, to identify any actions necessary to achieve that standard, and maintain it there over a specified time horizon, the purpose being to support management decision making.

Assets condition surveys, also known as condition appraisals, are conducted for several reasons. Condition appraisal means ‘A formal and systematic appraisal of the condition of an item in respect of its ability to perform its required function’. The objective of the appraisal is to develop and maintain a knowledge base of the condition of physical assets. Such knowledge would help maintenance managers to plan for future maintenance, replacement and refurbishment needs to continually support the business giving due regard to:

Functional suitability and performance;

Physical and operational condition;

Safety and statutory requirements; and

Energy and environmental performance.

Unlike the case of many rollingstock, industrial plant, structures, buildings and installations, the external physical condition of certain assets, especially components of assets, may not be truly representative of their ability to perform the required function. This is because of the dynamic nature of these assets. For example, the condition of electrical joints in switchgear cannot be established by a visual inspection alone. Condition surveys are also conducted to establish the maintenance condition of physical assets before a commitment is made to lump sum maintenance contracts. It is important for contractors to establish the maintenance condition of physical assets before committing to comprehensive maintenance contracts. The contractors’ ability to deliver the performance set by Sydney Trains and the cost of maintenance activities required to achieve this objective directly depends on the condition of the assets. Furthermore, the condition of physical assets is an important criterion that should be considered in pricing such contracts. Where comprehensive records of conditions are kept, the contractor may obtain the required information. However, such records are often rare, and the contractor may have to carry out a detailed survey to accurately establish the maintenance commitment.




Recording of Assets condition Survey DataSurvey data is recorded on spreadsheets or on database, enabling the survey information to be utilised for technical and presentation purposes and as part of the overall Assets Condition Assessment Plan.

Structural Assets Condition SurveysCondition surveys of infrastructure, structural or rollingstock assets provide a systematic uniform and objective basis for obtaining information on the usable state of the assets. The surveys identify the work necessary to bring infrastructure, structural or rollingstock assets up to a good state of repair, and to comply with current legislation. Once in a good (or at least maintainable) state, routine maintenance can be carried out under a pre-planned programme. This approach also keeps any day-to-day (responsive) maintenance to a minimum and deals only with restoring infrastructure or structural asset components to an acceptable level.

Scope and Extent of Structural and Rollingstock Assets Condition SurveysAspects on which a structural and rollingstock assets condition survey will primarily report are the condition of the infrastructure, structural or rollinstock asset, and the electrical/mechanical services of the infrastructure, structural or rollingstock asset. The surveys are non-invasive and do not incorporate any specialist tests and/or inspections as routine. However the need for any further surveys or tests are identified if deemed necessary. Typical examples would be drainage surveys, ballast surveys or structural assessments. The survey does not ordinarily report on fixtures and fittings that are considered not to be part of the asset structure or fabric. The survey reports principally on elements for which costs are likely to be incurred, and to significant items of repair or replacement in the next five years.

Management Approach to Asset Condition SurveysBefore embarking on an assets condition survey it is necessary to establish its purpose, scope, the extent to which the survey is to be carried out, and the nature of information required from the survey. All assets condition surveys are concerned with physical condition. However, the extent to which the surveys are conducted, and the information required from them, vary depending on the reason for conducting the survey and the available resources. For example, the objective, the depth of investigation and the information to be produced by a survey investigating the dilapidation of a station or building are different to those associated with a survey for maintaining a profile of rollingstock, network infrastructure, plant and installation conditions to help forecasting and prioritising future maintenance needs.

The appraisal of asset condition often needs to draw information from other asset inspections conducted at different times. Therefore, an assets condition survey can also be used as an exercise




to coordinate information from other asset inspections and draw final conclusions on the condition of physical assets, and to determine requirements for future work.

The issues that need to be addressed at the definition stage include:

The objective and the purpose of the survey;

The areas and items to be covered (priorities for structures, rollingstock, buildings, plant items etc, sampling of rollingstock, plant or installations);

The functions of the industrial plant, rollingstock, structures, buildings and installations that should be evaluated (e.g. operation and maintenance condition, compliance with legislation, workplace health and safety compliance, meeting operational requirements, energy savings, sustainable maintenance);

The depth of inspection and investigations (for example, the extent to which the survey should cover visual inspections and other means of assessing conditions, e.g. simple tests and measurements, specialist tests and examinations, plant internal examinations, analysis of supportive data such as plant log books, interviewing maintenance staff and others);

Frequency of assets inspections;

Co-ordination with other inspections of industrial plant, structures, buildings and installations; and

The nature of information required from the survey (for example, operational and physical condition, remedial requirements, alternative action that may be possible, cost estimates etc.).

Setting Priorities for Assets Condition SurveysThe operational and maintenance conditions of certain assets are often more important to businesses than those of others. The deterioration of certain assets may also carry significant risks (for example workplace health and safety risks) or penalties (depreciation of asset value, penalties due to non-compliance with legislation) that can affect business success. With limited resources, major maintenance is only likely to be worthwhile if the cost/penalty of non-performance is high. Assets condition surveys can also be costly. Depending on the scope of the survey, condition inspections may require plant to be shut down or trains put out of service. It can disrupt the core business of the organisation. People conducting surveys need to spend time with management and maintenance staff to establish the history of plant behaviour. This is non-productive time.

The recognition of the importance of assets to the organisation in terms of business needs, rail safety, workplace health and safety, energy and environmental performance etc. in order to set priorities for the survey is an essential part of the survey process. An assessment of the importance of the asset is normally a decision that needs to be made with the asset owner. This assessment should include those areas where the asset is particularly important, for example:

Maintaining the business process;

Rail safety;




Workplace health and safety;

Energy consumption; and

Corporate image.

This would inevitably incorporate a proper understanding and assessment of the consequences of failure. The importance of the assets services can be represented by a ranking system, such as:

Critical services - services that are crucial to the core business of the organisation and have a direct impact on business continuity, and those which affect rail safety, workplace health and safety or compliance with legal requirements (for example, electrical services for essential rollingstock operation, etc.).

Essential services - services that significantly contribute to the core business activities and have a short term impact on business continuity, (e.g. signalling, level crossing, etc);

Important services - services that are less significant to the core business activities but that could have a long term impact (e.g. Tunnel area ventilation); and

Desirable services - services that have no direct bearing on the achievement of core business activities and are desirable to the normal operation of the organisation (e.g. ticketing machine, decorative lighting, etc).

This information also helps the person conducting the survey to prioritise between maintenance demands within limited resources when maintenance requirements are identified.

Benefits of Assets Condition SurveysAn initial assets condition survey is mainly conducted for the purpose of maintenance planning and would normally:

Identify significant defects that can adversely affect the performance of the asset’s delivery of services;

Identify when undesirable asset conditions or defects would be reached;

Report on their cause and provide an indication of what maintenance actions need to be done;

Identify budgets required for this work;

Prioritise the maintenance action recommended; and

Make recommendations for specialist inspections outside the scope of the condition survey.

This information helps to optimise the planning of future maintenance and best utilise the available resources against competing demands. The information derived from assets condition surveys can also help to:

Develop an assets condition database that can be used for other purposes such as asset valuations;




Prepare long term capital asset investment plans;

Achieve a balance between capital and maintenance funds;

Target scarce maintenance resources (people and funds);

Benchmark maintenance expenditure; and

Benchmark physical assets condition.

Managing maintenance is predominantly about preventing failures that can lead to undesirable outcomes before they occur. This requires maintenance needs to be identified in advance so that remedial action can be instigated. The basis of preventive maintenance is to take remedial action before a failure can occur. Performing work only when it is known to be required is the ideal and most cost effective way of maintaining an asset. It requires careful assessment of the conditions that could lead to failure and identifying the optimum time when remedial action should be taken. This is the crux of condition based maintenance. Decisions about maintenance can be short, medium or long term. There are other maintenance, refurbishment and renewal requirements which need to be identified sufficiently in advance to allow time for:

Obtaining funds;

Planning the works;

Planning resources;

Delivering equipment;

Carrying out the works; and

Other logistical arrangements.

Short term maintenance addresses demands as they occur. Where the time between detection and failure is small, action needs to be taken quickly to prevent failure. This type of deterioration is covered by short term maintenance and generally addressed in a planned preventive maintenance programme through activities such as:

Routine inspections;

Condition assessment (monitoring and measurement);

Schedule based maintenance tasks; and

Operational time based maintenance tasks.

Medium term maintenance deals with forecasts for a given period in the future, usually five years. Long term maintenance is about planning maintenance beyond the five year period and usually addresses major refurbishment and replacements. The information requirement for medium and long term planning is strategic in nature and needs a futuristic view of physical assets conditions.




Essential Steps of an Assets Condition SurveyWhereas an initial assets condition appraisal regime usually consists of a single survey or a number of iterations, the assets condition survey can be regarded as consisting of several consequential steps. The seven essential steps of an assets condition survey are:

1. Defining the task;

2. Identifying survey priorities;

3. Briefing a specialist;

4. Planning and organisation;

5. Condition assessment;

6. Data capture, evaluation and analysis and

7. Reporting.

Items 1 and 2, defining the task and identifying survey priorities, are important management issues that provide the basis for the scope, the extent and the priorities associated with the surveys. They should be addressed before briefing a specialist to conduct a survey. Item 3, briefing a specialist, is about preparing a brief to persons who will conduct the survey. Item 4, planning and organisation deals with the preparatory work that needs to be carried out before the commencement of work on site. The remaining items 5 to 7 are about the implementation of the survey relating to assets condition assessment, data capture, evaluation and analysis and reporting.

A condition survey deals with the physical condition of an asset, which is the time period before an asset’s component wears out or breaks down. An assets condition survey is a systematic process of evaluating the condition of asset equipment and installations. The frequency of the condition survey will depend upon its purpose.

Single one-of surveys may be appropriate in dealing with the assessment of repair liabilities in conjunction with a physical asset. On the other hand, if the purpose is to ensure the cost effective long-term maintenance of a group of assets, the store of condition data needs to be refreshed periodically to maintain the time horizon, allow for actions taken, and monitor unpredictable deterioration.

An assets condition survey can consist of:

Visual Inspection

That is examination of the outside of the asset, together with internal examination of the asset’s equipment.

Visual inspections with tests

Is to ascertain a true condition of the asset and its equipment. For example, thermal imaging can be used to identify defects.

Specialist surveys




Certain assets and its equipment will need to be examined and tested by approved suppliers/contractors. Other specialist suppliers/contractors also perform more in depth NDT testing methods such as vibration monitoring, power quality surveys, eddy currents and leak detection.

Conducting an initial condition survey can identify significant defects that can adversely affect the performance of asset services and installations; when undesirable conditions or defects would be reached; cause of defects and an indication of what remedial or maintenance actions need to be applied; budgets required for remedial or maintenance action; remedial or maintenance action recommended; and specialist inspection outside the scope of the condition survey.

The information derived from condition surveys can also help to:

Develop a condition database that can be used for other purposes such as asset valuations and prepare long term asset investment plans;

Achieve a balance between capital and maintenance funds and target scarce maintenance resources (people and funds); and

Benchmark assets condition and maintenance expenditure.

Scope of Assets Condition SurveysGeneric tasks that form a part of a full condition appraisal include the following:

External examination of physical assets such as rollingstock, industrial plant, structures, buildings and installations;

Evaluation of the performance of the physical assets;

Evaluation of the operation and maintenance conditions of the physical assets;

Carrying out specialist inspections and internal examinations;

Co-ordinating information from inspections and tests carried out previously;

Co-ordinating information from other sources;

Evaluation of compliance with workplace health and safety and legal requirements;

Analysis of condition data and information;

Identifying future maintenance requirements, their priorities and time scales;

Identifying funds required to carry out this work; and

Developing a knowledge base of the condition of the physical assets.

Condition surveys can widely vary in scope. The extent to which activities other than external physical examinations are included in a survey depends on the service and operations requirements for the survey, financial resources available for this purpose, and appraisal activities that can be taken.




Co-ordination with Other InspectionsAssets inspections are sometimes carried out as a separate exercise to physical assets surveys. A main reason is that different knowledge and experience may be required to assess the condition of asset and their performance, than a survey of the physical asset itself. Whilst the information may be collected by different specialists, there are advantages in carrying out the assets services inspection as a coordinated exercise with other disciplines. This is because the condition of asset, particularly for rollingstock, industrial plant, structures, buildings and installations, and their maintenance requirements, can significantly interact with the physical asset and other installations such as signalling and electrical systems. A combined survey of a physical asset, its related services, and other installations, helps to achieve close co-ordination between disciplines and avoids duplication of effort.

Frequency of SurveysThere are number of factors that determine the frequency of surveys at any given time. These are:

The present condition of the asset;

Likelihood of failure;

Importance of the asset; and

Consequence of failure and business risk.

An in-depth survey is to be carried out on a five-yearly cycle, supplemented by a two-year superficial inspection. It is useful to conduct a superficial appraisal within one year after a constructed asset’s initial hand over, using the operational and maintenance information gathered during this period. At this stage it is not necessary to carry out a detailed visual inspection as the physical asset should still be in good condition. The purpose of such an appraisal is to identify major shortcomings (e.g. inadequate access for maintenance) in order to make changes, and identify maintenance activities that may need to be carried out to make the asset operationally acceptable in line with its services needs. Such an appraisal is best carried out by the persons responsible for maintenance. Detailed inspections should generally be carried out at longer intervals depending on the operational characteristics and operational environment of the physical asset. Towards the end of the asset’s useful life, the inspection frequency should be increased depending on the criteria described above. It may be necessary to carry out the inspections of specific assets services more frequently than the physical asset itself because most asset are dynamic in nature (e.g. moving parts, etc.), and deterioration can rapidly set in during their operation. Some assets can have a significant impact on safety, and failure of certain services (e.g. electricity, signalling, etc) can directly disrupt Sydney Trains core operations.

A criterion for determining the frequency of physical asset inspections is the likelihood (or risk) of failure after a given operational time. The following characteristics represent low risk and may be inspected at relatively longer intervals for rollingstock, industrial plant, structures, buildings and installations:

Designed and constructed in accordance with accepted technology; and standards




Having a proven durability record;

Having inherent potential failure conditions that can be easily observed during day to day operations;

Subject to regular maintenance inspections; and

Having a good reliability record.

The following characteristics should be inspected relatively more frequently for rollingstock, industrial plant, structures, buildings and installations:

Not subject to regular preventive maintenance;

Having inherent potential failure conditions that cannot be easily observed during day to day operations;

Subjected to heavy or excessive use;

Approaching the end of their useful or economic life;

Not inspected during the last inspection;

Displaying rapid or unusual deterioration during their last inspection; and

Already on the maintenance back log.

It is important to note that a condition survey will only provide a picture of the conditions at the time of inspection. Physical assets such as rollingstock, industrial plant, structures, buildings and installations gradually deteriorate over time between surveys. Condition records and forward maintenance plans may need to be changed on the basis of ongoing maintenance experience. Where an infrequent but detailed survey is carried out, a superficial inspection or a less detailed interim survey is useful in re-examining the conditions for which deterioration over the interim period is difficult to predict accurately. It is also reasonable to relax the frequency of detailed surveys where the maintenance regime can maintain a continuous check on physical assets condition and update assets condition records accordingly. All maintenance activities should include observation of physical asset functions during maintenance, and continually review and update assets condition and forward maintenance records. This will reduce the need for interim surveys in-between major surveys.

Planning Assets Condition SurveysAssets condition surveys may be based on visual inspections or may involve measurements, tests or other forms of investigations. These may be external inspections or may require opening up inspection covers, dismantling plant and possible shutdowns. Planning and programming the work in advance and finding suitable ‘windows of opportunity’ to carry out the inspections with minimum disruption to the organisation’s business are important pre-requisites to the condition survey




process. Therefore the assets condition survey programme needs to be organised in conjunction with the maintenance function.

A list of the most common tasks that need to be carried out before starting on site are:

Identifying physical asset items and services to be examined and time scales;

The preparation of a method statement of the condition survey activities;

Carrying out an assessment of risk associated with any corrective work;

Identifying specific competence and training requirements, for example to work with particular plant and installations;

Making arrangements for shutdowns/closedowns;

Informing users of the physical assets or services being affected;

Making arrangements to visit secure areas, including any safety clearances;

Making arrangements for specialists, contractors, or other technical persons;

Obtaining the necessary permits for specialised work; and

Making arrangements for access to the physical asset.

Assets Condition Survey Methodology

Gathering InformationGathering technical data about assets that need to be examined, is a pre-requisite to the assets condition survey process. This data includes details about asset managers responsible for that asset, location, manufacture/construction/commission date, design details, output requirements and initial operational and performance conditions. This information will help the person conducting the surveyor to plan the survey as well as compare original performance patterns with present conditions. Ideally the person conducting the survey should have access to the following documents:

The asset register;

As-installed drawings (record drawings);

Operation and maintenance manuals;

Workplace health and safety file;

Information about warranties and guarantees;

Commissioning data;

Previous survey data and records of the condition of the physical asset;

Competent person examination reports and other specialist inspection reports;

Forward maintenance plans;

Information on maintenance backlog; and




Relocation or refurbishment plans that could affect asset services.

The asset register, with basic identification information such as the identity, location and the function of assets, is the starting point for an asset and asset service equipment condition survey. This information should help the person conducting the survey to plan the survey process and establish a basis for data capture. Sydney Trains computer based maintenance management systems include an asset register facility. A distinct advantage of capturing the condition survey data on the basis of a computer based asset register is that the asset condition information can easily become a part of the maintenance management information system. Manufacturing and/or construction/installation information about the physical asset, design details and maintenance strategies should be found in operation and maintenance (O&M) manuals. If the asset record does not exist in the asset register, than asset information may need to be established while conducting the survey and all information sorted should be entered against the asset in the asset register. Good quality O&M maintenance manuals are often scarce and the person conducting surveys may have to carry out detailed investigations to find the information required. Where asset information is not available, condition surveys may be used as a tool to gather such information.

Physical Asset Attributes That Should be examinedPhysical conditions that can be observed by visual inspections are not solely representative of the ability of a physical asset or an asset’s item to perform as required. Unlike condition surveys of physical assets such as bridges which generally comprise a visual inspection of components, a comprehensive condition appraisal of an asset’s services requires consideration of both the physical condition and the operational integrity of the services related to the physical asset. The appraisal of such assets and installations should also take the systems approach where the physical state and the operational integrity of an entire system should be examined. This is because the physical and operational compatibility between two items within an installation or construction can affect the overall performance of the asset. An example is inadequate corrosion treatment that can cause corrosion and reduce life of physical asset. Subject to the requirements of the brief, the condition of physical asset should be examined in relation to the following aspects:

Impact on safety;

Compliance with legal requirements;

Operational integrity;

Physical condition;

Conditions affecting operation and maintenance;

Functional suitability;

Economic life and obsolescence; and

Energy and environmental performance.




Asset Services Functional Suitability and Operational IntegrityFunctional suitability of a physical asset’s services is its suitability to the business function. Operational integrity is the ability of the physical asset’s services to perform as expected. These are important attributes of a physical asset which affect the businesses operations and profitability. Some typical examples of functional suitability and operational integrity of a physical asset’s services that need to be considered during a survey are lighting levels and quality of lighting; adequacy of emergency lighting; adequacy of fire alarms; adequacy of power supplies; power quality; an overview of heating and ventilation standards; and an overview of services system performance. Checking functional suitability is often not included in “broad brush” type assets condition surveys. However, checking functional suitability becomes particularly important when there has been a change of physical assets or business function.

Assets Physical ConditionPhysical conditions of assets such as rollingstock, industrial plant, structures, buildings and installations, can be observed through visual inspections and other methods such as non-destructive testing. Sometimes it may be economic to carry out destructive testing on the basis of sampling to establish the true condition of certain installations. For example, a section of pipe work may be removed and examined to establish the integrity of pipe work systems. The aim is to look for indicative signs of conditions leading to failure. An overview of non-destructive testing techniques used in physical assets services applications was highlighted in the earlier topic - Condition Assessment Standard. Typical examples of physical conditions that may signal forthcoming maintenance requirements include:

Deterioration (e.g. corrosion, erosion);

Wear and tear;

Deformation of structure (bending, twisting);

Spalling, cracking and fretting;

Delaminating;

Damage;

Blockages (e.g. scaling of pipes);

Loose electrical joints;

Loose bricks;

Loss of mortar;

Decay (e.g. timber)

Electrical components operating at excessive temperatures.




It is not normally possible to observe some aspects of physical deterioration during a visual inspection, for example, loose electrical joints. Such tests and inspections are often included in separate surveys conducted by specialists.

Compliance with Legal, Rail and Workplace Health and Safety RequirementsAsset conditions must comply with legal, rail and workplace health and safety requirements. There is a vast amount of legislation that impacts upon the condition of physical assets services for rollingstock, industrial plant, structures, buildings and installations. The Rail Safety Act and the Workplace Health and Safety Act (WHS), and its supporting regulations, and both national and international standards, have requirements for assets to be operated and maintained in safe conditions and without detriment to health. There is a vast array of legislation and regulations issued by responsible bodies that could have a direct or indirect impact on the condition of physical assets. It is thus not the objective here to provide a comprehensive list covering all physical asset services regulations. Assessing compliance with rail safety and workplace health and safety requirements and the requirements of law should be part of the initial survey. Non-compliance with legislation and workplace health and safety requirements give rise to urgent work. Workplace health and safety legislation in Australia for example, requires plant and plant designs to be registered with the regulator. The legislation has specified health, safety and welfare standards to be maintained in the workplace, which gave rise to the need for major changes to plant and installations and their construction, erection and maintenance routines for safe operations of plant. Any statutory or legally required periodic inspections, surveys and examinations are to be carried out accordingly.

Asset Conditions Affecting Operation and MaintenanceThe ability to operate and maintain physical asset without hindrance as well as minimising downtime in the case of a failure, can be extremely important to Sydney Trains business activities. The person conducting surveys should note such conditions that will cause downtime of critical asset items beyond acceptable levels. Aspects of rollingstock, industrial plant, structures, buildings and installation configurations that can seriously affect the ability to maintain and reduce downtime include:

Inadequate access to critical asset/equipment;

o Personnel access;

o Personnel egress;

o Ease of carrying tools and materials;

o Access for plant and equipment (e.g. lifts, hoists).

Inadequate space for doing the work, for example;

o Ergonomics;




o Manoeuvring space for persons;

o Space for removing and replacing components;

Lack of built-in features for safe maintenance, for example;

o Guards;

o Blocking facilities to signals and or points;

o Lockable switchgear;

Inadequate information on operation and maintenance;

o Operation and maintenance manuals;

o Record drawings;

o Asset register;

o Planned preventive maintenance records;

o Safety change; and

o Workplace health and safety file.

Assets Economic Life and ObsolescenceThe economic life of an asset is the estimated period beyond which the asset or asset item will not represent the least cost option for providing its required function. The economic life of an asset or a particular asset item can vary significantly from its ‘published life factors’ or specifications declared by the manufacturer, due to a number of reasons. Published life factors assume that items are:

Designed and manufactured to good quality and standards, for example a high standard of quality control, compliance with national standards and international standards;

Installed, tested and commissioned to good practice requirements;

Operated and maintained adequately by competent and skilled persons; and

Subjected to reasonable hours of operation commensurate with their design intent.

A main objective of the assets condition survey is to identify asset items that are reaching the end of their economic service lives or becoming obsolete for other reasons. Although the replacement of such asset items may not be imperative in the short term, a significant amount of planning may be needed before their replacement (for example, the replacement of turnouts). This may require a considerable lead time for planning, obtaining funds, procurement design and contractual services and for maintenance of services whilst the work is being carried out. Obsolescence occurs for a number of reasons.

Physical Obsolescence: This can happen due to reasons such as physical deterioration, damage or non-availability of spare parts.

Condition Obsolescence: This occurs when the physical condition of an item is no longer acceptable due to its physical condition.




Economic Obsolescence: When keeping an asset or asset service equipment in operation is no longer economic and there are cheaper alternatives. This usually happens towards the end of the asset’s economic life where operation, maintenance, energy or environmental costs are high, or if there have been technological changes that provide cheaper options. With regard to economic obsolescence, there are capital asset investment appraisal techniques that can be used to evaluate the relative economics of repair or replacement. Discounted cash flow techniques allow comparison of the cost of new physical assets and future costs against those of existing physical assets on the basis of current prices. Another technique that is used for rollingstock or infrastructure assets is the “equivalent annual cost” which projects the cost of replacement plant of assets services into future years to compare with the cost of keeping existing plant. The decision to repair or replace should also take cognisance of factors such as business production or assets usage losses due the breakdown of services which is more likely with old asset service equipment items.

Functional Obsolescence: Where the function of the asset is no longer required. A physical asset or asset item is functionally obsolete when its operational or physical function is no longer required. Examples are redundant cables and tracks left on site after replacement by new track and cable systems. Redundant (standby) equipment which is not needed to support Sydney Trains business requirements can also be treated as functionally obsolete equipment. Such equipment occupies valuable space and results in maintenance resources being wasted.

Technological Obsolescence: The asset or asset service equipment are no longer technically superior and consideration should be given to their replacement. Assets based on new technologies are being developed continually which can make existing assets and related equipment obsolete. Technological obsolescence takes place when the physical asset or asset item is no longer technologically acceptable for the provision of the required function. Old products may become unacceptable because, for example, more energy efficient equipment is available, or the use of assets services does not meet Sydney Trains image. Developments in the field of information technology, computer hardware and software have caused early replacement of items based on such technology, for example, control systems and fire alarm systems. Another example is the use of fibre optics in lighting systems.

Social and Legal Obsolescence: For example, the asset may contravene environmental standards or legal requirements. Asset service equipment can become redundant because it no longer is socially or legally acceptable. Assets that consume excessive energy can not only be costly, but can raise negative public opinion.

The survey, subject to the requirements of the brief, should identify physical assets that could become obsolete due to the above reasons.

Assets Condition Inspection, Surveys and Audit ReportingThe overall asset condition inspection, surveys and audit reporting process documents the evaluated condition of the Sydney Train’s assets, based on condition criteria and end-of-life criteria




that are indicative of asset condition and consistent with engineering standards and or industry practices. The organisation’s assets are grouped into asset classes and prioritised into categories, for example, Priority A (PA), Priority B (PB) and Priority C (PC), based on the value of Sydney Train’s business (in terms of customer/community service, reliability, finance, health and safety, regulatory/legal/environment requirements) and importance of acquiring the condition information. These prioritised categories include:

PA assets (inclusive of their asset classes) represent the highest priority assets and are of high value in terms of total sustainment program expenditures, and also high risk in terms of sustainable asset costs.

PB assets (inclusive of their asset classes) are second in priority with moderate value and high risk; and

PC assets (inclusive of their asset classes) are lowest in priority with lowest value and/or lowest risk.

The assets condition inspection, surveys and audit report usually presents the condition assessment results of the PA and PB assets. For the low priority PC assets, only a review against the engineering standard and or industry practices is required – any available condition assessment is noted and reported.

The Assets Condition Inspection, Surveys and Audit Reports are prepared by selected staff of the organisation in consultation with assets condition assessment specialists. The condition assessment analysis and its conclusions are based on the findings of the condition assessment specialists, and the results compiled in the assets condition inspection and audit report by selected staff.

In general, a very careful and thoughtful evaluation of condition assessment results is undertaken, and follows a steady and measured program of data collection to secure the information needed to assess the condition of the assets. The data collection methods, tools and technologies are generally appropriate to the task of measuring asset condition, and providing the right data at the appropriate cost. Methods and procedures for data collection are to be well documented within the Asset Management Division for data collection services, and useable data collected and stored in centralised databases.

Assets Condition Data CollectionThe information associated with the condition of asset equipment and installations falls into two generic categories:

Core data about the asset e.g. asset identity, description, age, location, etc.; and

Condition data about the asset.

Condition data recorded should include:

Current condition;

Whether a defective condition exists or not;




Defects or non-conformity in comparison to acceptable condition;

Condition grade;

Maintenance action required to bring the asset up to the required condition; and

Any existing equipment lists that can be used to check off each asset item as verification of the completeness of existing records.

The above condition data is typically supplemented with the following information:

Method of inspection/data collection (including details of inspection techniques used);

Any limitation associated with the survey/inspection process, e.g. where asset equipment could not be inspected and related reasons;

Relevant documents inspected;

Relevant interviews conducted;

Observations including results of any tests and measurements carried out;

Photographic or diagrammatic records to illustrate the conditions.

Separate reports are prepared for each Asset Category, allowing analysis based on relative strategic importance. This is a key factor at both agency (Sydney Trains) and if required at government (Transport for NSW) level. The reports need to provide information on:

Condition Index - a weighted average expressing the current overall condition of a group of assets. A weighted average achieves a balanced view by representing individual assets in proportion to their relative size.

Condition Trend – showing movements in the Condition Index over successive years, indicating whether overall asset conditions are improving, and stable or deteriorating.

An assets condition trend is defined as a comparison of the current year's condition index with that of preceding years. An assets condition trend is used to monitor variations in overall asset condition over time. In particular, measurement of trends is a tool for protecting the long term viability of assets by maintaining optimum condition. It can also show whether expenditure on assets is above or below that required. The trend period must also be calculated. Useful information is gained by comparing the condition index of two successive years. However, a longer monitoring period gives a fuller picture of trends.

Cost to Repair or RenewAn estimate is made at the time of assessment of the cost of repairing or renewing a defective asset or asset services equipment. The costs indicate bringing the asset up to Very Good condition (refer to Table 2). Costs include the cost of works including preliminaries and contingencies, and the cost as appropriate of professional fees connected with such work.

The estimates do not include upgrading specifications to current standards, except where the existing specification is no longer available or would breach legislation. Costs associated with




routine maintenance e.g. servicing, and day-to-day (responsive) maintenance e.g. replacement of consumables and adjustments etc., are not included as part of the condition inspection, survey or audit, but are added and reported separately.

Reporting on Asset Deterioration and Degradation ProcessesWhen considering asset condition assessment, it is important to understand the differences between defect or corrective maintenance and regular routine maintenance versus long-term asset degradation and condition-based maintenance. Defects are usually well defined and associated with failed or defective components mostly in ancillary systems that affect the operation and reliability of the asset well before the asset’s end-of-life. These defects do not normally affect the life of the asset itself, if detected early and corrected. Defects are routinely identified during short-interval inspections, and are dealt with by corrective maintenance activities to repair or replace failed components to ensure continued operation of the asset. However, long term degradation is generally less well defined and is not easily determined by routine inspections. The purpose of asset condition assessment in this case is to detect and quantify long term degradation and to provide some means of quantifying remaining asset life. This includes determining assets that are high risk or near end-of-life that will require major capital or maintenance expenditures to either refurbish or replace.

A proper understanding and reporting of asset degradation and failure processes in the Assets Condition Audit Report is vital if condition assessment procedures and the appropriate remedial maintenance actions are to be effectively applied. It is important to identify the critical modes of degradation, the nature and consequences of asset failure, and, if possible, the time remaining until the asset is degraded to the point of failure. Unless there is a reasonable understanding of the degradation and failure processes, it is impossible to establish sensible assessment criteria or to define appropriate end-of-life criteria.

Strategic Direction from ACAA Assessments The Role of Assets Condition Appraisals in Assets Maintenance Planning

Some key questions faced by maintenance managers with regard to medium and long term maintenance planning are:

What are the Sydney Trains customer service and operational assets?

What assets are critical to the business requirements and other needs of Sydney Trains?

What is the present condition of these assets?

What is the gap between the current and failure condition?

How soon will the failure condition be reached?

What action needs to be taken to avoid failure and to restore the asset to an acceptable condition?




When does this action need to be taken?

What is the cost?

What are the priorities among other maintenance requirements?

What alternatives are there to maintenance, renewal or refurbishment?

The purpose of a knowledge base of physical assets condition is to provide answers to these questions. Technological means of (automatically) assessing all adverse conditions, carrying out expert diagnosis and signalling failure are currently limited to a few applications, such as vibration analysis, thermal imaging etc. Human senses can often pick up a wide range of warning signs from an asset’s physical characteristics and a complex combination of present and past performance patterns, which automatic systems may not be able to do at present. Therefore, assessing the salient conditions, diagnosing failure symptoms and predicting maintenance requirements of plant and installations involve both technological and human expertise. A condition appraisal is an important management tool that uses human expertise to analyse information available from sources such as maintenance records, visual inspections and condition monitoring, to judge the condition of physical assets and asset service equipment, and to forecast future maintenance needs.

Reporting on Asset PerformanceAppropriate performance measures should be included in the Assets Condition Reports to enable adequate understanding of the way in which assets are being managed, used and consumed within the context of service delivery operations. Review of assets performance against the following measures should be reported in respect of all the classes of controlled assets:

Maintenance expenditure

Asset condition

The amount of deferred maintenance

Asset utilisation.

Appropriate financial accounting ratios should also be included to provide a balanced view of asset performance from both an asset management and asset financial accounting viewpoint.

These ratios should be qualified with reference to the capital structures that are required to support service delivery operations. It may also be possible to use some financial ratios in support of information presented with regard to derived asset age, derived effective useful life, etc.

Comparison of Asset Performance with Industry PracticeA benchmarking exercise should be undertaken to compare the organisation’s asset performance with those of similar organisations. This benchmarking exercise is conducted informally through information obtained from the Assets Condition Reports in regard to every type of asset class. The benchmarking should focus on points of reference for several classes of assets, and every asset class should be benchmarked against at least three organisations within each geographic area. The benchmarking should also focus on the types of testing and inspection undertaken for each class of




asset, the frequency of testing and inspection, and the use of maintenance and condition assessment data. Attention should be paid to development of composite ACAA indexes for different classes of assets.

Reporting on Assets Operations and MaintenanceInformation is provided on the operations and maintenance of the existing asset base. The impact of proposed new investments on operations and maintenance strategies and resources should be included in the Assets Condition Report, including strategies for ensuring that the service potential of existing and new assets will be maintained to the appropriate condition standard for output production. The risks associated with funding level adjustments in the current budget year, which impact on whole of life costs and outline options to address maintenance needs, are identified. Comment should also be provided on the management tools adopted in regard to the level of service performance of assets for inclusion in Sydney Trains operations and maintenance strategies, cost benefit analysis, and whole of life costs, as well as any high priority deferred maintenance works and how the proposed strategies would address this issue.

Information in regards to the Sydney Trains Asset Management Plan (STAMP) should consider the following:

Priorities for asset maintenance identified for Asset Class;

Current and future levels of service;

Forecast of planned maintenance work (type and budgets);

Forecast magnitude of unplanned maintenance work (budgets);

Deferred maintenance and related risk (long-term effects of deferral);

Risk management (trends and analysis); and

How maintenance will be funded.

Note: For example, Priority 1 may have many Asset Classes.

Reporting on Assets Disposal StrategyDisposal is any of the activities associated with disposal of an asset, including sale, demolition or relocation. The assets disposal strategy should:

Forecast proposed disposal of assets, including timing and costs;

Forecast cash flow of income from disposals;

forecast cash flow of expenditures;

Destination of disposal proceeds such as a funding source for acquisition; and

Identify any business risk associated with the disposal.




ResponsibilitiesRoleTBCTBCTBC

References




Version ControlDocument StatusThe current status of this document is shown below.

Title Asset Criticality Assessment and Analysis System requirementVersion 1.0Issue DateReview DateCustodian TBAApprover TBADocument NumberTrim number

Document HistoryThe history of changes made to this document is shown below.

Version Date Author Description / changes from previous version

1.0 Suresh Singh Senior Project Manager

Initiator, concept & first draft

Subhead H2



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