Using economic asset valuation to meet rehabilitation priority needs in the water sector

Abstract

The current study aims at economic asset valuation of water and wastewater infrastructures to prioritize rehabilitation interventions using the infrastructure value index (IVI) as a key performance indicator. The proposed methodology follows a three-step procedure: (1) identification, characterization and site inspection of existing assets; (2) estimation of the current replacement cost and the current value; and (3) establishment of the priority needs. Data from a utility in the Algarve region of Portugal are used as a case study. The specific objectives are to illustrate the methodology and highlight the inherent challenges and complexities associated with economic asset valuation. Results include the IVI calculation for different assets using scenarios of service lives. Different strategic interventions of rehabilitation in the long term were studied, allowing to assess the evolution of IVI, rehabilitation cost and increased risk assets. Asset valuation is important to establish short-term rehabilitation priorities and to analyse long-term strategies of rehabilitation.