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Literature Review of Methodology to Evaluate the State of Infrastructure

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Table of Contents

1.0  Introduction

2.0  Definitions

3.0  Literature Review

4.0  Results

5.0  Summary and Highlights     

6.0  Asset Management Initiatives

7.0  Discussion

8.0 Endnotes

LIST OF APPENDICES (See PDF Version)

Appendix A - 2005 Australian Infrastructure Report Card

Appendix B - 2004 New Zealand Infrastructure Report Card

Appendix C - 2006 South Africa Infrastructure Report Card

Appendix D - 2006 UK State of the Nation Report

Appendix E - 2005 America’s Infrastructure Report Card

Appendix F - Transit Infrastructure Needs for the Period 2006-2010

Appendix G - Municipal Water and Wastewater Infrastructure: Estimated Investment Needs 1997 TO 2012

Appendix H - Life-Cycle State of the Infrastructure Report on Public Works Assets – 2006: City of Hamilton

Appendix I - Council’s Infrastructure Strategy – 2006: City of Edmonton

1.0 Introduction

The Mandate

There have been discussions within Infrastructure Canada (INFC) and with stakeholders about the need and feasibility of producing a state of the infrastructure (SOTI) report for Canada.

In 1985, the Federation of Canadian Municipalities (FCM) published the first report on an “infrastructure deficit”. Since then, various groups have provided estimates of the commonly called “Canada’s Infrastructure Gap” (the accumulated deficit between what needs to be invested and actual expenditures – the debt), which, depending on the methodologies used range from $57 billion(1) to $125 billion(2) .

There are a number of national, regional or local initiatives in Canada and internationally that have produced state of the infrastructure reports in various formats, and therefore can be used as lessons learned.

Dillon Consulting was contracted by the Research and Analysis (R&A) division of INFC to provide a literature review of relevant and representative initiatives that have produced state of the infrastructure reports similar to those used in Australia and the United States, and to gain a better understanding of data gathering and analysis tools used in international initiatives on asset management.

Needs Studies versus State of the Infrastructure Reports

There are inherent differences between needs studies (usually referring to investment needs) and state of the infrastructure reports (focused on current condition and performance).

State of the infrastructure reports focus on the current or recent situation depending on the data available. It is most common to evaluate the condition of the infrastructure in terms of its engineering performance since this is the field where most of the data is available. Assumptions are usually made regarding levels of service for these types of reports since standards of health and safety only provide the lowest threshold for engineering performance and do not consider social, economic or environmental factors. Report cards and infrastructure audits are some forms of state of the infrastructure reports used in various countries.

Need Studies are aimed at forecasting (usually over a 5 to 15 year period) the resources required to maintain or improve the infrastructure. In order to achieve this forecast, authors make a number of assumptions which often are not reported in the studies. Some of these assumptions include, but are not limited to:

• Condition of the infrastructure (usually in engineering terms)

• Current and future demand

• Existing and future practices

• Evolution of the technology

• Levels of service

The authors, implicitly or explicitly, consider the above assumptions to produce a “need”, usually expressed in terms of financial investments.

The INFC Research and Analysis Division produced a review of key studies on infrastructure needs(3) . The study concluded that the variation in methodologies, scope and definition resulted in a wide range of investment needs and that a comparison between studies did not allow to arrive at a comprehensive, accurate figure for infrastructure needs in Canada.

Some organizations have done both, the current evaluation of their infrastructure condition and performance, and the investment needs to bring their infrastructure to an “acceptable level of service”. Municipalities like Edmonton or Hamilton (see details later) have gone this route. Cities in Australia and New Zealand have also used such approaches.

2.0 Definitions

Adding to the complexity of various methodologies used in need or condition studies, there is the question of common definitions and terminology. There is no “adopted” glossary of terms for infrastructure. For example, the report to Infrastructure Canada by the Canada West Foundation (CWF) provides a high level overview of these issues and proposes some definitions. The InfraGuide best practices each contain a glossary of terms; the overall glossary (from all the best practices) was never published.

Particularly when assessing needs, it is therefore crucial that a common terminology be adopted to allow for aggregation.

3.0 Literature Review

The literature review focused on methodologies used to identify 1) the gap between infrastructure investment needs and actual expenditures; and 2) the current condition/performance of infrastructure systems at national, regional or local levels.

The literature was screened for relevancy, including but not limited to the objectives of the work (e.g., awareness vs. policy development vs. investment planning), data requirements, and overall potential use in the present Canadian context.

The screening included, but not limited to, answering questions such as:

• Objectives of the study/report? (e.g., who is the target audience?)
• Scope? (e.g., how was “infrastructure” defined?)
• Drivers? (e.g., who championed the initiative, what led to the decision to do study, etc.)
• Methodology used? (e.g., surveys, document reviews, etc.)
• Who was involved? (stakeholder representation; selection of participants, etc.)
• Barriers/obstacles encountered?
• Validation of results? (e.g., process used, by whom)
• Communication process? (including reactions from targeted audience)
• Lessons learned? (if the process was repeated, what – if anything, was done differently?)

The review of the literature was conducted from various sources:

• Published literature: in addition to the extensive publications available to Dillon staff, a comprehensive search (national, international) using the Canadian Institute for Scientific Information (CISTI) at the National Research Council (NRC) was conducted. These searches included the social sciences and policy literature;
• Internet searches: provided general information on activities relating to the project as well as to point towards sources to be explored further;
• Knowledge from practitioners, academics and government officials (national, international): identified and contacted when required to obtain relevant information on the topics at hand.

The technical literature (CISTI search) provided articles and studies relating to methodologies for specific types of infrastructure assessments (mostly in terms of engineering) or theoretical works. The social sciences, economics and policy literature also mostly reported theoretical approaches. Both were not directly relevant to this project and therefore not reported here.

4.0 Results

As expected, the literature provided reports on studies with varying scopes (i.e., the types of infrastructure considered), goals (i.e., condition versus needs), approaches (i.e., surveys versus desktop literature reviews). The following sections present the studies that were found to be most relevant for this project.

4.1 International

From the international perspective, two types of studies were relevant to this project:

• State of the infrastructure reports: presented in different formats

• Report card formats are used by the following countries: Australia, South Africa, United Kingdom, and the United States
• “Stocktake”: audit of infrastructure conducted in New Zealand

• Asset management and long term community plans: particularly in New Zealand where these plans are required under the NZ municipal act. Please note that the evaluation of these plans is not included in this report.

The Organisation of Economic Co-operation and Development (OECD) International Futures Programme – Infrastructure targets high level, policy oriented audiences and has produced several reports, mostly comparators between countries. These reports were not evaluated in this project.

4.1.1 Australian Infrastructure Report Card 2005 - Engineers Australia

The release of the Australian infrastructure report card of 2005 is the latest in a series of studies started in 2000 (National level) which was followed by an update in 2001 and state/territory report cards between 2003 and 2005. The report assigns letter grades to key infrastructure sectors on an A to D + F scale (Appendix A - 2005 Australian Infrastructure Report Card).

4.1.2 New Zealand Infrastructure Stocktake - Ministry of Economic Development (2004)

The report presents the findings of the Infrastructure Audit component of the Ministry of Economic Development’s infrastructure stocktake project (2004). It was prepared by PricewaterhouseCoopers.

In general, the findings indicated:

“… at a national level, New Zealand’s infrastructure is in reasonable condition. Subject to an ongoing appropriate level of investment, it should not pose a barrier to the Government’s growth and sustainable development objectives. But, notwithstanding the overall positive message, there are significant local and sector-specific issues. These may have significant impacts, both locally and nationally.”

More details can be found in Appendix B - New Zealand Infrastructure Stocktake.

4.1.3 Infrastructure Report Card for South Africa - South African Institution of Civil Engineering – SAICE (2006)

SAICE, in the first infrastructure report card for South Africa, investigated nine of the built environment infrastructure sectors. Sectors not investigated included transport as in rolling stock and the operation of road and rail services, housing, schools, stormwater and flood management, and the natural environment.

The format used is that of a report card which assigned a letter grade in six categories (similar to the UK or US cards). Refer to Appendix C – Infrastructure Report Card for South Africa for more details.

4.1.4 State of the Nation Report - UK Institution of Civil Engineers (2006)

This is the fifth State of the Nation report prepared by the Institution of Civil Engineers (ICE) of the UK – the process started in 2002. Refer to Appendix D – UK State of the Nation Report for more details.

ICE presents the evaluation of the condition of infrastructure in a report card format and tracks the progression (positive or negative) over the years. For each infrastructure sector considered, the report indicates:

• The present grade
• Change since last report card (up, stable, down)
• A sustainability grade (a measure of how well the service meets the needs of today without compromising those of the future).

4.1.5 Report Card for America's Infrastructure - American Society of Civil Engineers (2006)

The ASCE 2005 report card (Appendix E) is the fourth produced by the ASCE. The Society’s regional chapters have also produced report cards at the State level.

Public awareness and influence of the government(s) agenda are the primary objectives of the report cards (e.g., media reports of the collapse of the I-35 Bridge earlier this month in Minneapolis refer frequently to the report card).

4.2 Canada

4.2.1 National

At the National level, two studies were retained for a more detailed analysis:

• Transit Infrastructure Needs for the Period 2006-2010 - Canadian Urban

Transit Association (2006)

This is CUTA’s fourth biannual infrastructure survey. The Canadian Urban Transit

Association (CUTA) has estimated the infrastructure requirements of transit systems across the country to be $20.7 billion for the period 2006–2010. In late 2005, CUTA surveyed its transit system members, asking them to detail their capital infrastructure needs for the next five years. Seventy systems responded; they represented 96.6% of total Canada-wide transit operations according to annual operating costs. Refer to Appendix F for more details.

• Municipal Water and Wastewater Infrastructure: Estimated Investment Needs

1997-2012 - Canadian Water and Wastewater Association (1997, revised 1998)

The report was sponsored by CMHC and asked the Canadian Water and Wastewater Association (CWWA) to examine future investment needs for the municipal water and wastewater industry over a 15 year period. Refer to Appendix G for more details.

The study focused on the following elements:

• Potable water: mains, storage tanks, treatment plants
• Wastewater: sewers, combined sewer separations, treatment plants

• Canadian Community Infrastructure: An Analysis of First Nations on Reserve versus Canadians off Reserve Community Infrastructure Deficit - PWGSC for INAC (2005)

The report presents an on-reserve and off-reserve infrastructure deficit analysis.

4.2.2 Provincial/Territorial

Provincial/Territorial jurisdictions have all, at one time or another produced either state of the infrastructure reports or needs studies. Methodologies and scopes are varied.

Although some of the information at the P/T or regional level was collected, no detailed analysis was conducted because of the short timeline of this study. However, it is worth noting that such information exists and could be the subject of a detailed analysis.

4.2.3 Regional/Local

Two examples were retained at the municipal level: Hamilton and Edmonton. These cities are the recognized Canadian, if not North American leaders in the development and implementation of asset management and investment planning systems and strategies.

• Life-Cycle State of the Infrastructure Report on Public Works Assets - City of

Hamilton (2005, 2006)

In 2005, the City of Hamilton undertook the life-cycle evaluation of some of its (public works) infrastructure assets. The 2006 State of the Infrastructure (SOTI) builds on the previous report and expands the types of infrastructure been evaluated (Appendix H).

• Edmonton's City Council Infrastructure Strategy 2006 - City of Edmonton (including 2002, 2004 studies)

The City of Edmonton’s Council’s Infrastructure Strategy builds on two previous key reports (Appendix I):

• 2002 update of the city’s Infrastructure Strategy: this report identified “the gap”, the difference between the projected cost of infrastructure projects and the financing available to pay for them. Two key figures in the report illustrate the expected service life of infrastructure assets as well as their condition as shown below
• 2004 report Thinking Outside the Gap: this report explores corporate strategies in terms of how to close the gap (e.g., opportunities for revenues) and managing the gap (e.g., maximize use of infrastructure, asset management).

Work reported by the Canada West Foundation established a context within which the infrastructure needs of the largest Western Canada cities (Vancouver, Calgary, Edmonton, Saskatoon, Regina and Winnipeg) were evaluated. The study used a three-pronged approach:

• A literature review and an in depth analysis of the cities’ capital plans

• An analysis of past capital spending (national, regional, and local)

• The development of an economic model

4.3 Other Sources of Data/Information

A complete list of other sources of data/information that has the potential to support the development of a state of the infrastructure report for Canada is beyond the mandate of this report. It suffices to say that a number of sources of engineering, economic and other data exist. One of the challenges will be the acquisition of this data since it may resides in a multitude of locations (e.g., municipalities) and difficult to access in an acceptable format.

Some databases/data sources exist that can provide information directly or indirectly applicable to a state of the infrastructure report. These include but are not limited to:

• Statistics Canada: National Accounts

• Environment Canada: Water use statistics

Furthermore, the National Water and Wastewater Benchmarking Initiative, and, at the regional level, the Ontario Municipal Benchmarking Initiative (OMBI) could provide information in terms of unit costs (e.g., low, median, high) and other common municipal activities if a needs study is considered.

5.0 Summary and Highlights

From the review of key international and national initiatives presented in this report, it is evident that not one approach (i.e., needs versus condition studies) is perfect. The following provides a generalization of the processes and lessons learned.

• Most state of the infrastructure reports are aimed at awareness (the target audience may vary but in general includes the public and elected decision makers). The second main common objective of these studies is to influence senior government decisions.
• Most studies are performed in a 12 month timeframe, considering that the first time around takes somewhat longer.
• Costs (expenditures) range generally between CAD $100K to CAD $300K with one exception. All reports have significant in-kind contributions from the stakeholders involved in the process.
• Basic infrastructure systems are at the core of the studies: transportation, water resources, energy.
• All of the international initiatives are uni-dimensional in terms of stakeholder involvement: most are produced by the engineering community with NZ as the exception.
• The main barriers to the production of these reports in consistently data availability and, for needs studies, costing. At the release stage, groups/organizations that did not participate in the production can be a major obstacle.
• In terms of lessons learned, three key issues stand out:
  • There needs to be tight evaluation (i.e., process) criteria from the beginning.
  • Multi-dimensional stakeholder involvement (i.e., from regions, sectors, professions, etc.) is essential.
  • No one should expect 100% accuracy

6.0 Asset Management Initiatives

Infrastructure assets management has its origins in the early 70’s with the work conducted by the US Army Corps of Engineers (US-ACE) on pavement management systems (PMS) for airfields. The process was quickly expanded to highways as various US Departments of Transport, the US Federal Highway Administration (FHWA) and the US Transportation Research Board (TRB) built on that work, adding knowledge and technologies to the process.

In the early 90’s, building on the PMS experience, asset management systems for other linear infrastructure were developed: water transmission and distribution, storm and wastewater collection, and sidewalks.

In 1995, the Institute of Public Works Engineers of Australia (IPWEA) joined with its sister organization in New Zealand, Ingenium, to produce the International Infrastructure Management Manual (IIMM). This technical manual contains generic procedures on how to do inventory, condition assessment and prioritization, and also country specific chapters. In recent years, IPWEA/Ingenium have added country specific chapters for South Africa, the UK and the United States.

In AU and NZ as well, the IPWEA and Ingenium created National Asset Management (NAM) committees to support asset management activities. For example, NAMS-AU has the following objectives:

• To improve the Asset Management skills of practitioners
• To provide national co-ordination and guidelines
• To identify future research and directions for AM
• To raise the awareness of and commitment to sustainable management of assets amongst the community and by decision makers
• To develop and provide for exchange of ideas, information and technology
• To develop strategic asset management, its processes and to achieve practical outcomes
• To provide leadership and support to stakeholders
• To provide public policy advice and advocacy to advance asset management issues for the betterment of the wider community.

In recent years, there have been discussions for NAM type committees in the UK, USA and South Africa.

In the United States, besides State/Municipal asset management work, initiatives are sectoral with the FHWA mostly dealing with highways and bridges, the US Environmental Protection Agency (US-EPA) for water resources, and the American Water Works Association (AWWA) for potable water.

In Canada, as a result of the Civil Infrastructure Systems technology roadmap published in 2003, a Canadian National Asset Management Working Group (NAM-WG) was created. This group, co-chaired by CPWA and INFC, prepared a national asset management framework (in its final stage of publication at the time of this writing). It is composed of multi-sector, multi-profession representatives (public works, engineering, urban planning, government finance, academia, provincial/federal government, municipalities and accounting). The NAM-WG has also established a sub-working group on asset valuation.

Finally, the City of Hamilton organized in May 2007 the first CAN-National Asset Management forum which was attended by 35 municipalities, provincial/federal representatives, and industry. The aim of the forum was to share issues and solutions. The city of Halifax will be the host of the 2008 CAN-AM forum.

7.0 Discussion

The literature review, and discussions about the various initiatives considered for this report indicate that there is a large body of data on the subject. The challenge for the production of a state of the infrastructure report or a needs study is thus to translate this data, which is sometimes difficult to access, into information that can be used in establishing condition or needs.

One good example is the Ontario Good Roads Association (OGRA) Municipal Data Works (MDW) system, a web-based data storage repository based on a common data standard used presently by approximately 150 Ontario municipalities. In addition to the core asset inventory repository, MDW features structure inspection, capital investment plan, and water and sewer modules.

The upcoming Public Sector Accounting Board (PSAB) requirements for municipalities to report on their tangible assets is in the process of generating inventory, condition and asset value (historical) data from a great number of municipalities across the country. This information will be reported starting early 2009 and thus provides an opportunity to access a broad body of information.

Finally, in deciding which type of study (e.g., needs versus state of the infrastructure reports) or on the format (e.g., audit versus report card) some key questions should be answered:

• What are the objectives?
• Who should be involved?
• What is the timeframe?
• Will this be a “one-of” or will there be follow-ups?

8.0 Endnotes

(1) Civil Infrastructure Systems technology road map, Canadian Society for Civil Engineering (CSCE), 2003

(2) The State of Infrastructure in Canada: implications for Planning and Policy, Mirza, S. and Haider, M., report to Infrastructure Canada, 2003

(3) Assessing Canada’s Infrastructure Needs: a Review of Key Studies, Infrastructure Canada Research and Analysis Division, 2004

(4) Municipal Infrastructure in Canada: Issues of Terminology and Methodology, C.G. Vander Ploeg, Canada West Foundation, report to Infrastructure Canada, November 2003.

(5) A Capital Question: Infrastructure in Western Canada’s Big Six, C. Vander Ploeg, Western Cities Project Report #27, Canada West Foundation, October 2003