Infrastructure asset management under Australian Accounting Standard 27 (AAS27) Available to Purchase

Australian local governments are responsible for providing basic infrastructure services to their communities. These services include roads, drainage, recreation facilities and public buildings and in some states water supply and sewerage. Social services are mainly the responsibility of the state governments together with education, police, fire and public housing. The services may be different to those in the UK but the problems are the same: the community is demanding more and better quality services at a lower cost. In 1993, Australian Accounting Standard 27 (AAS27) was applied to local governments. The standard, issued by the Australian Accounting Research Foundation, specifies the nature and form of local governments' general purpose financial reports. The major impact for engineers was that local governments were required to report on the current value and rate of consumption of their infrastructure assets. The value of investment by Australian local governments in infrastructure is approximately $135 billion. These infrastructure assets provide services essential for the community; the assets are being consumed at a rate of $2·6 billion per year ($300 000 per hour). AAS27 gave engineers the tools to report annually on asset condition and consumption to councillors, management and the community. Local government is a highly capital-intensive industry requiring management effort to ensure that the community receives maximum value for its investment in infrastructure and that services can be provided at the lowest life-cycle cost. This paper describes a systems approach to strategic asset management. Examples are given using data from Devonport City Council, Tasmania, and Cairns City Council. The systems include reporting the value and condition of infrastructure assets in annual reports, strategic asset management, capital project analysis and life-cycle costing.