Supporting the Vice Presidents Call for Setting up An Asset Management Corporation

Asset (physical) intensive organizations and managers of public infrastructure- face numerous challenges- highest among them are the mandates to improve the return on capital employed (ROCE), extend asset useful life and drive down total life cycle cost (TLCC).
When it comes to Ghana’s infrastructure assets- it’s a double jeopardy. Lack of proper inventory and poor condition.
An effective Asset Management (AM) program is the answer.
As an Asset Management practitioner and the principal of a leading Asset Management firm in Ghana, I read with much elation the key note address delivered by the vice president, Hon. Mahamadu Bawumia, Vice President of the Republic of Ghana, at the maiden National Policy Summit in Accra on May 17, 2017.
He noted that Ghana’s assets are not properly recorded, managed and are underutilized – therefore there is the need to establish Ghana Asset Management Corporation.
Asset Management practice is not new as some government and asset intensive organizations have mandated its implementation to manage their infrastructure and operating assets.
The United States for example has Asset Management policy and regulations for utilities and other infrastructural assets.
However, as noted by the Vice president, the concept and practice pertaining to managing infrastureature assets seems to be lagging in Ghana and in Africa as whole. This is evident with the condition and our inability to inventory public asset.
Asset Management body of knowledge (BOK) is of such importance that, practitioners have sort to standardize best practices. Recently, the International Standards Organization (ISO) released IS0 5500 series to provide AM overview, requirements and implementation guidelines.
Asset Management program could be a critical input to pursuing and achieving sustainable infrastructure.
It is therefore laudable that the leadership of this country could identify infrastructure asset management as a policy area of importance.

Condition of Ghana’s Infrastructure assets
The current condition of Ghana’s infrastructure could best be described as:
1. Deteriorating and ageing – stadia, airports, roads, public transportation, bridges, state buildings-etc
2. Lack of proactive maintenance strategies – Proactive maintenance are activities done to access structural conditions so that we can prevent them from failing. With these types of maintenance chance increases that failure will be prevented or detected before occurrence.
3. If maintenance is ever done at all- then it’s mostly reactive. Reactive maintenance are activities done to repair failures after they have occurred. Reactive maintenance is about 6-10 times more expensive than proactive maintenance
Yes, we need a paradigm shift.
A transition from building and operating- to managing our infrastructural assets with the goal of extending asset life, optimizing maintenance and regeneration, sustaining long term use and developing funding strategies is needed.

A report on America’s infrastructure condition and performance published by the American Society of Civil Engineers (ASCE) revealed that America’s infrastructure asset is poor/at risk and will need in excess of $4 trillion over 10 years to regenerate its infrastructure. This is a stark revelation.
The assessors used the following criteria with a grading scale as– A (Exceptional for the future) B (Good, adequate for now) C (mediocre, requires attention) D (poor, at risk) F (failing/critical unfit for purpose)
1. Capacity: Does the infrastructure’s capacity meet current and future demands?
2. Condition: What is the infrastructure’s existing and near-future physical condition?
3. Funding: What is the current level of funding from all levels of government for the infrastructure category as compared to the estimated funding need?
4. Future Need: What is the cost to improve the infrastructure? Will future funding prospects address the need?
5. Operation and Maintenance: What is the owners’ ability to operate and maintain the infrastructure properly? Is the infrastructure in compliance with government regulations?
6. Public Safety: To what extent is the public’s safety jeopardized by the condition of the infrastructure and what could be the consequences of failure?
7. Resilience: What is the infrastructure system’s capability to prevent or protect against significant multi-hazard threats and incidents? How able is it to quickly recover and reconstitute critical services with minimum consequences for public safety and health, the economy, and national security?
8. Innovation: What new and innovative techniques, materials, technologies, and delivery methods are being implemented to improve the infrastructure?
The question is how would Ghana’s infrastructure compare on the similar scale?

What then is Asset Management?
Asset management is the practice of managing assets to minimize the total cost of owning, operating and maintaining these assets while delivering the desired service levels. Asset management improves decision making throughout the life cycle of the asset- Acquisition, operation, maintenance and regeneration- resulting in lowest total cost of ownership.

Asset Management process
The proposed Asset Management Corporation, apart from advising the Government on Public/infrastructure asset, will also implement an AM program. The following could be considered:
Step 1. Understand the current state of assets
We first need to know what assets we have, what condition they are in, their service history, remaining useful life and what are their economic value
A simple worksheet can help to:-
1. Identify all of infrastructure capital asset
2. Record the condition
3. Record the service history
4. Determine asset adjusted useful life
5. Estimate the remaining useful life of each asset

Step 2. – Prioritize the assets (which assets are critical)
With limited budget we will need to prioritize the assets. To this, we need to know the likelihood of failure of each asset and the consequence if the failure occurs. A process called failure mode, effect and criticality analysis could be helpful in doing this.
Criticality analysis will ensure that we allocate funds to the rehabilitation, or replacement of most important assets.
Step 3. – Develop an Asset Management plan
Planning for the rehabilitation and replacement of the assets include evaluating maintenance strategies that are feasible and also estimating the minimum life cycle cost options for providing the highest level of service over time.
Asset managers need to know how much money they will need to maintain and operate the asset each year.
Step 4.-Implementing the asset management plan
Once funding has been identified, asset managers will need to implement the plan and ensure that they have the technical and financial means to deliver.

Step 5
Reviewing and revising the asset management plan.
Beyond planning, asset management should be implemented to achieve continual improvements through a series of Plan, Do, Check, Act (PDCA) steps.
What are the benefits of asset management?
Examples of outcomes that can be realized through asset management are:
• Prolonging asset life and improving decisions about asset rehabilitation, repair, and replacement
• Meeting public demands with a focus on system sustainability
• Showing public that you are using their tax money effectively and efficiently
• Meeting service expectations
• Improving responses to emergencies
• Improving the security and safety of assets
• Reducing overall costs for both operations and capital expenditures
• Giving you greater access to financial assistance. A well managed asset, coupled with an asset management plan could be used to source funding.
Asset Management is a scalable approach that can be used anywhere- utilities, transportation, stationary/mobile structure-etc. Asset management means putting in place a long-term plan to sustain these systems and the services they provide.
Asset Management programs with good data—including asset attributes (e.g., age, condition, and criticality), life-cycle costing, proactive operations and maintenance, and capital replacement plans based on cost-benefit analyses—can be the most efficient method of meeting the challenges with face with public infrastructure assets.

Author: Elias E. Acquah is the Managing Director of Assured Reliability Technologies (ART) Ghana Limited. He is Ghana and U.S trained, specializes in Asset Management, Maintenance Management, Reliability Engineering and Process Improvement. He is a member of the Institute of Asset Management (IAM), UK. He is also a proctor for the Society for Maintenance and Reliability Professionals (SMRP), USA and an Asset Management Auditor. He provides advisory and leads implementation of Asset Management and Asset Reliability improvement initiatives for local and international companies in Mining, Oil and Gas, Construction, Power and Manufacturing- including, Holmes Western Oil, CA, U.S.A, Shell Petroleum Development Corporation, Nigeria, Petroleum Development Oman and some mining majors in Ghana.
Contact: eliasacquah@assuredreliability.com, eliasacquah@gmail.com 0246595313

Assured Reliability Ghana Limited
Assured Reliability Technologies Ghana Limited is a Ghanaian owned leading consulting firm that offers Asset Management, Reliability Engineering and Process Improvement solutions to firms operating fixed plant, rotating equipment, mobile fleets, in addition to other infrastructure assets.