Introduction to the Working Group on Lifecycle Performance

by Franziska Hasselmann, Director of Studies, CAS Managing Infrastructure Assets, University of St Gallen (HSG), Switzerland  

The operation and maintenance of a real asset, whether a building, an infrastructure network or an industrial plant, accounts for a substantial share of the real asset’s life-cycle costs (LCC). Yet, these costs tend to be overlooked during the pre-operational phases of a new project, as the owners or developers concentrate on the initial projects costs: design, planning, and engineering and construction. Overlooking these costs means overlooking costs managed by a nation, life cycle or region.

Another consideration: investors and infrastructure asset managers aim to increase the value of assets in operation. Opportunities – investments in energy efficiency or smart technologies – yet again, are often neglected.

Furthermore, many infrastructure networks operate inefficiently, and are in need of rehabilitation: in developed countries especially, much of the critical infrastructure (water locks, bridges, ports) dates back to the beginning of 20th century.

Finally, concept development is key for survival in any transforming industry, since concepts co-emerge with industries. LCC performance – a prominent concept for buildings and industrial plants – has been reviewed by this Working Group to address the challenges above. Cognitive maps and daily experience with LCC performance for managing real assets in the infrastructure and urban development industry identified four issues: customer influence, information management, contracting and LCC performance for asset portfolios or infrastructure networks, which differ substantially from individual buildings. For example, the industrial ecology concept for infrastructure networks – by complementing LCC performance – enables information management and contracting to better overcome the fragmentation into pre- operation, operation and maintenance, and incentivizes investment into smart technologies. On the other hand, linking LCC for real assets with industry life-cycle thinking endogenizes the costs for operation and management from a nation’s or industry point of view.

Please access all contribution of the Working Group on Lifecycle Performance here.