to Asset Management Policy and Guidance Draft Version 1.4 9 July 2015

D to Asset Management Policy and Guidance Draft Version 1.4 9 July 2015

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Strategic Asset Management Guidance Page 5 of 24

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Table of Contents 1 Policy guidance 9 1.1 Overview 9 1.2 Glossary 9 1.3 Related documents 10 1.4 Continuous improvement 10 2 Fundamentals of strategic asset management 11 2.1 Overview 11 2.2 Maintenance versus management 11 2.3 Asset management system 12 2.4 Typical asset life cycle 13 3 Strategic asset management system framework 14 3.1 Overview 14 3.2 Framework 14 3.3 Responsibilities distribution 16 3.4 Project accountabilities and responsibilities distribution 17 3.5 PTV Asset management principles 18 4 Project Alignment with PTV s Investment Lifecycle 22 4.1 Overview 22 4.2 Asset management typical activities 22 Trim Ref: DOC/14/120665 Page 7 of 24

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1 Policy guidance 1.1 Overview Through the application of the PTV strategic asset management policy, the asset management system (AMS) will achieve the following goals: 1. measure, maintain and gradually improve the Victorian public transport network (Network) asset performance, particularly reliability 2. improve current asset knowledge, including condition, performance and life expectancy 3. adoption of a life-cycle approach to asset investment, from planning through to disposal 4. adoption of an integrated systems approach to asset management and service delivery 5. deliver more for less, through reduction in overall life-cycle infrastructure costs. The PTV strategic asset management policy requires infrastructure assets to be managed through their entire lifecycle. This starts with the definition of requirements, through acquisition, operations and maintenance through to final decommissioning. PTV will adopt strategic asset management and governance by applying the international standard: ISO 55001:2014 Asset management in line with this guidance. This will focus particularly on PTV s role to govern the Victorian public transport assets for generations of Victorians and provide the Network wide understanding and guidance to the Victorian public transport industry (Industry). This policy is part of the PTV integrated safety and environment management system and the Network Technical Policy suite. These policies are intended to be used by all members of the Industry, who need or want to understand PTV s vision for the continued improvement of the Network assets and systems. The following policy guidance sets out PTV s minimum expectations in terms of formal asset management practice, by PTV and our industry partners. 1.2 Glossary Below is a glossary of abbreviations, definitions and conventions. AMS Industry The Network Operators Maintainers PTV RAMS SFAIRP Asset management system. The Victorian public transport industry, including all metropolitan and regional train, tram, coach, bus operators, maintainers, PTV and other entities working on the Network assets. The Victorian public transport network, this is the physical and technology assets of the network. The operators of Victorian public transport services. The maintainers of public transport infrastructure. Public Transport Victoria Reliability, availability, maintainability and safety. So far as is reasonably practicable. Page 9 of 24

1.3 Related documents The following key documents were used in the development of the strategic asset management policy: Document Name Transport Integration Act 2010 PTV Corporate Plan 2014>2018 PTV Business Plan 2014>2018 Network assurance policy and guidance Reliability, availability and maintainability policy and guidance Requirements management policy and guidance Systems engineering policy and guidance Sustaining Our Assets (2000) VIC Government Asset Management Policy & Framework Office of the National Rail Safety Regulator Asset Management Guideline ISO 55000:2014 Asset Management Overview, principles and terminology ISO 55001:2014 Asset Management Management Systems Requirements ISO 55002:2014 Asset management Management Systems Guideline International Union of Railways - Guidelines for the Application of Asset Management in Railway Infrastructure Organisations Location www.legislation.vic.gov.au DOC/14/216558 DOC/14/216930 DOC/14/32389 DOC/14/79709 DOC/14/80674 DOC/15/197445 www.dtf.vic.gov.au/publications/investmentplanning-and-evaluation-publications/assetmanagement/sustaining-our-assets- Government-asset-management-policystatement www.onrsr.com.au/resourcecentre/publications/guidelines www.iso.org www.iso.org www.iso.org http://uic.org 1.4 Continuous improvement Contact the Director Network Product Development for support, assistance or suggestions for improvements. This policy will be updated and improved as required. Page 10 of 24

2 Fundamentals of strategic asset management 2.1 Overview The international standard for asset management, ISO 55000, defines asset management as the coordinated activity of an organisation to realise value from assets. Asset management addresses the value that assets bring to the achievement of an organisation s business objectives. An AMS allows an organisation to balance costs, risks and performance, in its achievement of the organisation s business outcomes. 2.2 Maintenance versus management The more traditional asset maintenance approach starts with the opening question What assets do we have that need to be maintained? These systems are typically based upon the application of a fixed maintenance budget, from which the asset maintenance manager seeks to maximise the treatments applied in the most cost effective manner. Under this approach the level of service / asset performance is an output. The ability to affect the delivery of a level of service is restricted to the optimisation of the asset treatments within the available budget: By contrast, the opening question in asset management is what level of service is required to achieve our business outcomes?. All subsequent decisions are made to achieve this required level of service. The targeted levels of service and asset performance have implications both for the capital program and for the operations and maintenance phase. Management of assets coordinates and directs the organisation s efforts across the asset lifecycle, from conception, through to implementation, operation and maintenance and final disposal. It allows an organisation to debate the need for an asset based solution and to actively consider non-asset solutions to meet the business needs. Page 11 of 24

Asset management informs the debate on alternative asset portfolios and the balancing of budgets, risk and desired performance in order to optimise the whole-of-life benefits and to realise the desired outcomes: 2.3 Asset management system An AMS can improve the management of risk and provides assurance that the asset management objectives will be achieved on a consistent basis. Not all asset management activities will be addressed through the AMS. People elements such as leadership, culture and capable people have a significant influence on the achievement of the asset management objectives. Often the people elements are managed using arrangements outside the AMS: This strategic asset management policy guidance sets out the principles for the formalised management of the network and the framework for the AMS within which capable people (within PTV, Operators, Maintainers and other service delivery partners) will: undertake processes and procedures gather information and analyse data make use of technology and tools balance performance, risk and costs, over the asset life cycle deliver optimum asset performance and better value for money. Page 12 of 24

2.4 Typical asset life cycle An example of a typical asset management life cycle can be found in the Department of Treasury and Finance s asset management sustaining our assets policy, its framework includes the following four stages: Planning: informed and proactive decision making regarding asset investment, driven by the determination of asset requirements, based on an assessment of the service delivery needs, the current capability of the existing asset base to meet these needs and a review of potential options. Acquisition: procurement of appropriate assets, including upgrading or renewal of existing assets or non-asset alternatives, to meet an identified service need, including the assessment of procurement and funding options and risks. Operation and maintenance: management and use of an asset to deliver services, including costeffective asset maintenance and, potentially, life extension works. Disposal: managing the treatment of an asset that has either reached the end of its useful life, is considered surplus, or is under-performing, through retirement, replacement, renewal or redeployment. Monitoring and performance management of assets are identified as occurring throughout all phases of the life cycle: Page 13 of 24

3 Strategic asset management system framework 3.1 Overview PTV will collaborate with Operators, Maintainers, VicTrack and service delivery partners to develop and improve AMS in line with the asset management ISO 55000 series standards and in line with the PTV asset management framework, roles and responsibilities and asset management principles described below. This approach achieves the strategic asset management goals (section 1.1) by fostering an informed, evidence based, holistic asset life cycle approach that enables the balancing of costs, opportunities and risks against the desired asset performance necessary to deliver the required levels of customer service. 3.2 Framework The asset management framework diagram (overleaf) sets out the relationship between the asset policies and strategies, which support the achievement of PTV s five strategic asset management goals (Section 1.1) and provides the context for continual improvement. A separate framework will be jointly developed for each Operator and Maintainer. Page 14 of 24

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3.3 Responsibilities distribution PTV, Operators, Maintainers and VicTrack work together to provide a public transport system that Victorians choose to use. Each organisation has separate asset management responsibilities and accountabilities, based on contractual agreements, government direction and legislation. Below is a summarised list. Department of Economic Development Jobs Transport and Resources (DEDJTR) VicTrack PTV Franchisees / Operators / Maintainers Roles: Minister s office Secretary Government Department Custodial owner of Victoria s railway land, infrastructure (both operational and nonoperational) and much of the rolling stock. Head Lessor of the public transport assets (operational only) from VicTrack Contracted franchisee /operator Sub-lessor for heavy rail, tram, bus, ferry or Southern Cross Station Responsibilities and accountabilities: Set the policy framework and direction to ensure the public transport network is integrated, safe and sustainable, enabling an inclusive prosperous and environmentally responsible Victoria Maintain the Head lease between VicTrack and PTV though administration of Rail Map systems Lead a customer focused public transport network that is integrated, safe and sustainable, enabling an inclusive prosperous and environmentally responsible Victoria Undertake tactical asset management, including maintenance and renewals in accordance with this policy Ministerial decision making for the public transport portfolio Custodian and asset manager of nonoperational public transport assets and assets outside the infrastructure lease land management Asset governance and stewardship through medium and long term strategic asset management policies, strategies and plans in line with government direction and in accordance with this policy and guidance. Manage maintenance and renewal activities to ensure service, safety and contractual (Franchisee / Operator Agreements, and Infrastructure Leases) requirements are met Delivers network improvements through administrative offices eg RRLA, MMRA and LXRA Deliver a range of projects and commercial services (including telecommunications) to improve the transport system. Develop network improvement projects that meet government objectives, strategic network development plans Work with PTV on network improvements projects in accordance with this policy and guidance, Projects Agreements and PTV s Investment Lifecycle Ensure that the correct public transport legal instruments are enacted Dispose of or develop land surplus to transport requirements Ensure integration of assets and services across all modes Work with PTV on long term project planning in accordance with this Page 16 of 24

policy and guidance. Sources: The Minister The Secretary DEDJTR is part of the Authorising Environment Transport Integration Act 2010 (TIA) VicTrack reports to both the Minister for Public Transport and the Treasurer Transport Integration Act 2010 (TIA) PTV is the Victorian Public Transport Development Authority VicTrack-PTV Head Lease Franchise Agreement Infrastructure or Regional Infrastructure Lease Projects Agreement train and tram PTV Investment Lifecycle PTV will collaborate with VicTrack, Franchisees, Operators, Maintainers and other stakeholders to oversee alignment of strategies, plans and standards. 3.4 Project accountabilities and responsibilities distribution In addition there are specific activities, responsibilities and accountabilities for improvement projects, see section 4 for more details. Project teams have responsibilities to deliver Network change which satisfies stakeholder requirements. The application of systems engineering principles by those teams increases the likelihood of project success and diminishes the risk of stakeholder dissatisfaction. The allocation of all project accountabilities and responsibilities between PTV and the Operator, including systems engineering activities, are agreed by the Network Development Partnership based on the process in the relevant Franchise Agreement and Projects Agreement or other contract with PTV. The projects agreements split the accountabilities and responsibilities into three phases: project proposal, project development and project delivery. The expected responsibility allocation for all project phases should be agreed at the project proposal phase to allow for high quality planning and to avoid confusion. In turn the Operator and PTV are likely to have additional responsibilities for each project, determined on a project by project basis. The following table outlines three examples of how the project responsibilities can be agreed and systems engineering activities allocated across the projects agreements project phases and PTV project lifecycle: Page 17 of 24

Note: projects that remain within the operator s business and do not go through the Projects Agreement process must comply with this policy and are responsible for all of the asset management activities. 3.5 PTV Asset management principles 3.5.1 Continuous improvement Asset performance is optimised, within a continually improving management system. The AMS will be continually improved to optimise asset performance and service delivery. Measurement is key to making improvements, as such the performance of the AMS to achieve the objectives of this policy shall be periodically reviewed at least annually. PTV will review and systematically assess the success of the organisation and its partners to better manage assets and to deliver assets that are fit for purpose, highly utilised and deliver better value for money over their lifecycle. This performance shall be reported to PTV s executive management team. Operators, Maintainers and PTV will work together to develop improvements and implement actions as required. Page 18 of 24

3.5.2 Knowledge and insight A knowledge based approach will ensure insightful asset investment decisions are made. Having the appropriate level of knowledge and insight to make informed asset decisions is a key factor in selecting the appropriate assets and suitable treatments over the life cycle of the asset. Clear understanding of the required levels of asset performance necessary to meet and deliver the expected levels of customer service is an essential input to an informed debate and decision making process Existing asset condition and performance information shall be gathered and made available to support proactive and informed asset investment decision making. Operators and Maintainers manage asset data, on behalf of Victoria, including condition and performance data and shall contribute data to maintain the up to date Industry-wide asset information systems (such as PASS Assets and Renewals Prioritisation Tool). Asset performance can be impacted by a variety of causes, including poor design, construction faults, operator error, poor maintenance, asset mortality. Operators and Maintainers will be tasked to provide insight into the identification of poor asset performance being the cause of service disruptions and to work with PTV to identify root causes and appropriate measures to address poor asset performance. PTV will work with the stakeholders to identify suitable metrics by which asset performance can be measured and by which improvement programs can be judged, building on those already provided through partnership agreements. 3.5.3 Life cycle asset value Assets shall be assessed for their contribution to PTV s business requirements and fitness for purpose. All assets and processes, including those currently approved for use on the Network, shall be subject to critical review against defined fitness for purpose criteria, which will include contribution to PTV s business requirements, compliance with Network requirements and lifecycle value for money tests. Assets and the application of those assets will provide demonstrated value for money throughout their lifecycle; analysis of life cycle costs will be undertaken and independently reviewed for all applications. The costs of extending asset life and ongoing maintenance of expired technology must be weighed against the costs of wholesale replacement or removal of assets no longer contributing to the delivery of service. 3.5.4 Systems approach A systems-based approach to investment decisions. When making asset investment decisions, the ability of the system as a whole, to deliver the required levels of customer service, shall be assessed. A balance is to be drawn between costs, risks and performance, across the whole system, throughout the life cycle. There is little value in improving one asset, only to find that this exposes the system to some other weakness. Non-asset, or lower cost asset solutions should be pursued ahead of asset intensive investments. Low cost upgrades can often lead to substantially improved services, fewer breakdowns and complaints and enhanced customer amenity. Business and operational process improvements can enable improved benefits realisation from current assets and may remove, delay or reduce the need for additional asset investment. Page 19 of 24

3.5.5 Evidenced based performance An evidenced based approach is used to set and measure performance. Knowledgeable asset investment decisions shall be based upon the clear understanding of the required levels of performance necessary to deliver the desired levels of customer service. The employment of asset reliability, availability, maintainability and safety (refer to the PTV RAMS Policy) and environment targets and system modelling tools will provide the measures by which asset performance will be judged. Asset performance data will be used to evidence that assets are meeting or exceeding Network RAMS and environment standards. PTV will work with Operators and Maintainers to ensure that suitable data is gathered and made available to monitor asset performance. New assets will be required to demonstrate compliance against these targets across all applications. 3.5.6 Risk based Asset management strategies and plans will be risk based. Asset management planning and strategic decision making will be based upon clear understanding and appreciation of the risks and opportunities that those decisions present to the business. PTV will expect Operators and Maintainers to shape their asset management plans and actions to address those assets that are most critical to the successful delivery of customer service. 3.5.7 Proven in service Proven solutions are favoured. Asset investment will target solutions that are proven in service in comparable networks and other industries. Acceptance criteria will favour cross-acceptance of proven solutions. 3.5.8 Configuration not customisation Customisation of commercial products is to be avoided. Assets shall be sourced from a proven technology base and configured to local needs. Customisation of core product shall be undertaken by exception only, and only after other solution options have been exhausted and the customisation option appropriately evaluated and authorised. 3.5.9 Open architecture Proprietary technologies shall be avoided. Assets will support long term Network flexibility through use of published interface standards. Adoption of a technology for a specific application shall not unacceptably constrain the use of alternative technologies elsewhere on the Network. Page 20 of 24

3.5.10 Safety Asset safety and its impact on the environment shall be demonstrated through a formal, standards based assurance system. The safety of the infrastructure and its impact on the environment shall be assured to the satisfaction of the relevant statutory authority(ies) using a standards based approach in accordance with the philosophy of So Far As Is Reasonably Practicable (SFAIRP). 3.5.11 Assured Asset management will be demonstrated through formal assurance. Through a process of formal assurance (refer to the PTV network Assurance Policy), it shall be possible to demonstrate the application of an asset management system, in accordance with the ISO 55000 series of standards. At each phase of the asset life cycle it shall be evident that the asset has been appropriately managed through the correct and proper application of process by the individuals responsible for that life cycle stage of the asset. 3.5.12 Safe guarding for change Asset management will ensure the Network is future proofed. Public transport and its infrastructure exist in a dynamically changing environment, with design lives of up to 100 years and beyond. Potential changes include technology, patronage and land use. Network assets, where possible, must safeguard for changes for future operational, expansion, infrastructure or technology changes. This includes designing for these potential changes, facilitating upgrades when maintenance is undertaken or using modular systems that allow for expansion. Page 21 of 24

4 Project Alignment with PTV s Investment Lifecycle 4.1 Overview Good asset management is a vital component of project planning, am must be systematically applied at all stages of the asset lifecycle, from planning through to acquisition, operations and maintenance and final disposal. Typical activities at each of PTV s investment lifecycle are described below. In order to progress through each gate the project team must demonstrate appropriate levels of understanding and development of technical matters for each activity. A key principle is that these processes are recorded and that suitable evidence is retained to provide assurance to PTV and other stakeholders that these asset management activities are being properly applied at the appropriate lifecycle stage (refer to Section 3.4.11). 4.2 Asset management typical activities Stage Typical activities Concept Asset lifecycle impact statement It is important that proposed network change is systematically considered and that the impacts of any proposed change are clearly understood when investment decisions are being made. Before significant investment is committed to a project, it is important that there is clear understanding of the top-level objectives that are to be satisfied by the proposed project and confirmation that these objectives align with PTV s requirements. This might be addressed through the form of an operational concept document or a description of an existing risk or deficiency that is to be addressed or an opportunity for betterment. It is important at this stage to articulate what is needed to be done, not how to do it. To support the investment decision making process, the asset lifecycle impact statement is prepared at this early stage to articulate the overall impacts that the project will generate over the lifecycle of the assets. This statement may form part of the project charter or may be a stand-alone document. The statement addresses the impacts of the proposed network change and describes, at high level: the expected impacts (good and bad) of the project upon customers and other stakeholders, both the end result and impacts of the interim stages the main risks and / or opportunities that the change will address assessment of safety risks the expected impacts upon the network infrastructure and interfacing assets the expected asset lifecycle from planning through to disposal the major lifecycle stages, including any expected future upgrades how assets are expected to be managed at each stage, including how assets will be operated, maintained and finally dismantled an action plan to be taken forward through the project to develop and manage the above issues. This is an initial document and, although design details cannot be expected at this Page 22 of 24

Stage Conceptual needs, benefits, potential solution 1 Typical activities stage, the statement must describe the complete asset lifecycle, the anticipated impacts throughout the lifecycle and how these impacts are to be managed. Asset policies and strategies In order to maintain strategic alignment of asset improvements with business objectives there is a requirement to develop network technical policies and strategies which set out the long term aspirations for public transport in Victoria. Projects and network change must be supported by PTV s network technical policies and strategies. The work to develop these policies and strategies is shared between PTV and other stakeholders. PTV has responsibility for the long term stewardship of the Network and for setting out the architecture of the Network to support future growth and demand outlined in the suite of technical policies and strategies including: network assurance asset management systems engineering reliability, availability, maintainability and safety network technical policy technical asset policies network technical strategy. Consideration of whole of life and strategic alignment The project charter must not be endorsed without consideration of whole of life impacts and strategic alignment of the project. Strategic Option Development /Analysis 2 Preliminary impact assessment This document is prepared during options analysis and analyses and compares the impacts of the options. Key risks and opportunities associated with the proposed options are identified, together with mitigation and strengthening strategies. The risk of unintentional consequences shall also be addressed. This impact assessment shall include all stages of the asset lifecycle. The assessment document articulates the lifecycle asset value and confirms that the preferred option meets PTV s strategic objectives and will satisfy the defined requirements. Asset RAMS targets are confirmed at this stage. Page 23 of 24

Stage Typical activities Outline asset management plan Dependent upon the complexity of the project, the project team may require that an outline asset management plan be prepared as a tender deliverable. If not a tender deliverable then the outline asset management plan shall be delivered with the concept design. The plan: defines the key asset performance criteria defines the asset lifecycles identifies the key asset management stages identifies the major systems. Development and Realisation Project Delivery & Practical Completion 6 Realisation and Operation Detailed asset management plan Designs are nearing completion and assets, systems and products are defined. The outline asset management plan is updated to include: fully developed RAM analysis definition of the systems and products which can achieve the asset lifecycle performance requirements product selection, confirmed by evidential assurance detailed asset management plan(s) covering all lifecycle stages, including future upgrades and disposal. Deployment asset management plan Designs are complete and assets, systems and products are fully defined. The detailed asset management plan is updated to: demonstrate how all requirements, including RAMS are satisfied define full operations and maintenance define remainder of asset lifecycle and future upgrade path(s) demonstrate readiness for handover to Operator / Maintainer define long term asset performance data recording and feedback requirements. Project Close Out and Wrap Up Completion 7 Benefits Realisation 8 Strategic and operational asset management At this stage the deployment asset management plan developed and delivered as part of the project becomes the strategic and operational asset management plan for handover to PTV and the Operator / Maintainer to assist the: PTV with the strategic future lifecycle stages Operator with accepting the assets into service Maintainer with implementation of the in service performance data recording and feedback processes. Page 24 of 24