A review of asset 111aintenance practices on the

Aurora network

Final Report
't I 4 I

Consulting
 FINAL REPORT DELTA NZ LTD
[p o"ffil g uSI t I ng

Prepared for

1, j • • I .,
Prepared by

I j I , Ir • • t 1J

Administration Office
Level 3, 151 Kilmore Street
Christchurch.
Report Author Office
11011 Hobson St
Auckland Central
Auckland 1010

tr +64 9 307 9081

(D www.linetech.co.nz

((I)
_j
alastair.glyn-jones@linetech.co.nz

© Unetech Consulting 2010

The information contained in this document is produced by lineTech Consulting and is solely for the use
of the Client identified on the cover sheet for the purpose for which it has been prepared and Line Tech
Consulting undertakes no duty to or accepts any responsibility to any third party who may rely upon this
document.

---- -- ------------- - - ------- - - -

REVIEW OF ASSET MAINTENANCE JULY 2010 12
r. ,,J JI TEC t-J FINAL REPORl DELTA NZ LTD
l.C on s u I t I ri] S1

Quality Information

Document A review of the asset maintenance practices on the Aurora network

Reference: LRG 5736

Date: 2nd February 2010

Prepared by:
A Glyn-Jones (Senior Consultant) LineTech Consulting Ltd
alastair.glyn-jones@linetech. co. nz
Mobile:+ 64 21 241 3113

Reviewed by:
Ir G. Richard Gibbons (General Manager) LineTech Consulting Ltd
richard.gibbons@linetech.co.nz
Mobile: + 64 27 22 88 160

Revision History

.,.
Revision Authorised
Revision Details
Date Name/Position Signature
I
DraftVl 2/2/2010 Draft for comment R Gibbons/GM (
I
l I' I,
DraftV3 03/07/2010 Draft for comment R Gibbons/GM
I I
I

Fina l 14/7/2010 Client Review R Gibbons/GM I

f I
I
Draft
I

----- - -
REVIEW OF ASSET MAINTENANCE JULY 2010 13
 FINAL REPORT DELTA NZ LTD

A 1·eview of the asset 1naintenance practkes on the Aul'ora

nelworl<

Exec·utive sununary
A review of the DEL TA Utility Services Ltd asset maintenance practices adopted for the
Aurora networks has been carried out, in order to arrive at

• a set of prioritised maintenance schedules and

• development of a rolling 12 month forward maintenance plan.

LineTech Consulting reviewed the assets and their condition and current maintenance
practices both by sample physical inspection and by discussion with DEL TA asset
management staff.

The present maintenance schedules and priorities were reviewed along with the current
practices associated with the variability of fault events and thus expenditure/resources
required.

A proposal was assembled that separated the maintenance work into three categories:

• planned work
• fault work, and
• operational work

The proposal was developed in a spreadsheet that allowed the work to be scheduled for
days, weeks, months or years in advance. Distinction was made for work in the Dunedin
area, the Central area, or both.

The creation of thre.e categories of work is crucial in establishing the priorities for work.
Currently work of different ,ategories is combined into single budget areas, and conflicts
arise when budget limits are challenged or revised. The new categories elimfnate this
difficulty and help identify the trade-offs and associated risks if funding is transferred
between categories.

The proposal integrates and simplifies the information relating to the asset maintenance
plan, to reflect experience gained since the original SAP categories were created.

From the available data and knowledge a set of priorities has been proposed help determine
work and budgets.

The analysis indicates there are some areas where chal lenges are being faced within the
maintenance area and as a first step sample checks on the data are suggested. On the basis
that the problems identified are confirmed, a solution is proposed which is to create
specifically targeted one-off projects to address the identified needs such that the
-----
REVIEW OF ASSET MAINTENAl'JCE JULY 2010 14
 FINAL REPORT DELTA NZ LTD
C o n s ti I t I n· g

underlying maintenance program can be established on a long term sustainable basis at an

acceptable level of risk.

One area of concern, identified dunng Wscossions, was concern over the....c:nanage~ne.nL oP
contractor costsc1nd how costs compare witb..Qlher org_fillisations. As this w~s not par of the
original scope it has not been investigated in any depth, however it rs rons1c:Je1 ed that such a
study could prod uce some useful-management informatio11._and we would be pleased to
develop a proposal to carry out such a study if it'is decided t o proceed with it

REVIEW OF ASSET MAINTENANCE JULY2010 l5

 FINAL F-EPORT DELTA NZ LTD

A review of the asset 1naintenance practices on the Aurora network

Table of Contents

Executive summary 4
1. INTRODUCTION 7
2. ENGAGEMENT AND SCOPE 8
3. REVIEW OF ASSETS 8
4. REVIEW O_F EXISTING ASSET MAINTENANCE PLANS 9
3.1 Existing systems .................................................................................................. 9
3.2 Hierarchy for existing plan .................................................................................. 9
3.3 Unsatisfactory aspects of existing plan ................................................................ 9
5. PROPOSAL FOR PLAN TO MEET SCOPE 10
4.1 Hierarchy for proposed plan ............................................................................. 10
4.2 Proposed plan timeline ..................................................................................... 11
4.3 Proposed plan integration ............................................_. .................................... 11

4.4 Using the proposal ............................................................................................ 11

6. PRIORITY RATINGS OF MAINTENANCE WORK 12
5.1 Maintenance and risk ...............•....................................................................... 12
5.2 Developing work priorities ................................................................................ 13
5.3 Budget priorities ............................................................................................... 13
7. MAJOR FUNDING CHALLENGES WITHIN MAINTENANCE WORK 13
6.1 Areas of concern ............................................................................................... 13
6.2 Vegetation ......................................... :........._. .................................................... 14

6.3 Poles ................................................................................................................. 14

6.4 Focus projects .............................................. ................................................: ... 18
6.5 Asset management resource ............................................................................. 18
6.6 Maintenance work management ...................................................................... 18
8. RECOMMENDATIONS

RE VIEW OF ASSET MAINTENANCE JULY 2010 16

I U rTTECt~ rlNAL REPORT DELTA NZ LTD

A review of ll_1e asset ma intenance practices on the Aurora network

1. INTRODUCTION

"maintenance (of something) the act of keeping something in good condition by checking or
repairing it regularly1"

The concept of carrying out maintenance on an asset is a common practice and accounting
systems recognise the difference bet ween the capital costs of establishing an asset and the
ongoing costs of maintaining and operating the asset. Generally the capital costs are expensed
over the (nominal) life of the asset by means of depreciation and the maintenance and operating
costs are expensed in the year of expenditure.

However there are differences between maintenance expenditure and operational expenditure
which reflect the choice the asset owner faces in when the expenditure occurs. For example pure
operational expenditure covers such work as emergency fault repairs - the work must be done
immediately the fault occurs, especially if safety issues are involved. However, expenditure on
pure maintenance work, however, can be incurred when a controlled (or conscious) decision is
made to carry it out. There are a range of issues in deciding when to carry out pu re maintenance
including the risks taken by not carrying out the work and the ultimate effects of such a decision.

For example the routine trimming of vegetation to keep it defined distances from power lines is a
maintenance activity. A decision (deliberate or by defa ult) can be made to delay such work and
associated expenditure. The risks of not carrying out such work include the vegetation growing
into the lines and causing faults - and thus increased future operational expenditure to correct
the faults, and ultimately the risk of a fatality if a person climbs a t ree that is too close to a wire.

For a long life asset such as a power network, the normal practice is to try to ensure that the
combined costs of the in itial capital expenditure, plus the total costs of ma intenance over the life
of the asset, provide the lowest lifetime costs. (recognising the ti'me value of funds). This is
regarded as best practice and is recogn ised in such guidelines as the British PAS 55-1 &2, 2 Best
Practice Asset Management.

However, from a corporate viewpoint it may be justified to deviate from this approach for a
specific reason, subject to the potential risks and impacts of such a decision being understood.
Thus an asset owner may delay expenditu re on an existing asset to divert available funds when
investing in a new (future revenue producing) asset, recognising that the catch up maintenance

1
Oxford Advanced Learner's Dictionary

2
Specification for the Optimized Management of Physical Infrastructure Assets - The Institute of Asset
Management UK.

------ ----------
REVIEW OF ASSET MAINT EN ANCE JULY 2010 17
 FINAL REPORl DELTA NZ LTD

costs will be higher and that an increased level of risk has been accepted during the period of
reduced maintenance expenditure. But this is justified on the basis of growing the business and
long term viability.

In the longer term, the key issue is to ensure the level of maintenance expenditure is kept at the
appropriate level to minimise total costs at an accepted level of risks of failure of components in
the system including loss of supply, consequential damage, injury, etc.

There are a number of approaches to deciding y.,hat level (and thus costs) of maintenance are
appropriate for the components that make up an electricity network (or any infrastructure asset)
and some of these are outlined later in this report.

There are two key points to recognise:

1) The failure to allocate sufficient funds for maintenance carries both the· consequences of
increased costs in the future as well as the risks of reduced service performance and
damage/injury.

2) Continued underfunding of maintenance activities can lead to a situation where it becomes

very difficult to recover the situation resulting in a downward spiral of performance coupled with
a rapid increase in fault (operational) expense.

Thus spending the appropriate amount at the right time is the key to maintenance management.

2. ENGAGEMENT AND SCOPE

lineTech Consulting was requested to perform a review of the DELTA asset maintenance
practices adopted for the Aurora networks , and to develop proposals so that there was

• · a set of prioritised maintenance schedules and

• development of a rolling 12 month forward maintenance plan.

3. REVIEW OF ASSETS
During November 2009 a two-day tour of the Aurora assets was undertaken. The time was evenly
split between the assets in Dunedin a.ad tbose in Central (Queenstown, Cromwell, Clyde and
Waoaka). This gave an on-site confirmation for the descriptions and information obtained from
reading the AMP (asset management plan) and interviewing members of the asset management
group. The combined data-gathering exercise formed the basis for the review of the maintenance
plan, its priorities and structure, and potential improvements to support the scope in the terms
of engagement.

REVIEW OF ASSET MAINTENANCE JULY 2010 I8

 FINAL REPORT DELTA NZ LTD

4. REVIE\V OF EXISTING ASSET MAINTENANCE P LANS

Following the review of physical assets noted above, a three-day consultation with DELTA asset
management staff was undertaken. This established the existing systems and level of knowledge,
and allowed topics of interest, suggestions and perceived difficulties to be tabled with a view to
contributing to an improved methodology.

3.1 Existing systems

At present the asset maintenance managers are assigned by both region and by asset type. There
is a manager for subtransmission assets throughout the networks, and a manager for distribution
(mainly overhead) assets in both the Dunedin region and Central region.
The managers are responsible for managing the maintenance condition assessments and the
allocation of maintenance work based on these assessments and also capital works
requirements. They liaise with the contract group and review assets after completion of projects.
They manage the input of field data to the GIS system.
Most of the work is handled manually with the support of the Delta IS systems (SAP, NIMS, GIS).

3 .2 Hierarchy for existing plan

The existing asset maintenance plan is set in a hierarchy of

I. External/internal maintenance work (external=contracted out: internal=in-house)

II. Physical asset class (HV/LV lines: zone subs: etc.)

Ill. Work type (building maintenance: earth test: inspections: etc.)

As far as can be determined, this format was arrived at primarily for simplicity in budget
management in the early days of implementing the SAP system.

There are separate plans for Dunedin and Central. The two plans are aligned at the first two
levels, but there is a reasonable degree of difference at the third level (work type lines).

3.3 Unsatisfactory aspects of existing plan

Separation of work into categories of fault or planned only Qccurs at t e th1ro lever(work type).
This leads to a mingling-of budget !locations for thes-e-_cypes orworLin the upp_ertwo Levels.
Since budget re-allocation at the third level is simple in this arrangem ent an historical trend has
emerged for budget shortfalls in these levels to be dealt w ith by re-allocation of planned work
budget amounts to faul t budg-et items whenever there is over expenditure-on fa.ult work (a
com mon occurrence,) .

------ ------ ------ ~--- ·--- - - - - - - - - -

REVIEW OF ASSET MAINTENN~CE JULY 201 0 19
 FINAL REPORT DELTA NZ LTD
c o n s u ,.t .I ns·

r lue need to spend extra funds Oil the emergencyrr'epa'tr of-faults. has resulted in an unsatisfa.c.tory
/ and re-occurring situati.on witb u,nderfunding of planned maintenance work, - altbough the
badgets-are balanced at the upRer evels of tb..e..budget hierarchy.

The delay in carrying out planned maintenance on network-assets leads primarily to an increased
ri-sk of fa ilure (fault). F"or some items there is also an- increased risk t o stafrand the pu6Hc of
injury
Whether the measurement of progress is undertaken by hours worked or dollars spent, the
situation and effects are the same
The budget is formatted as an annual proposal with a single issue.
This results in an unsatisfactory arrangement where no timeline is available for ei;<tending the
useful_application of the budget information. In other arrangements timelines can be used for
regular reviews (daily, monthly, quarterly, annually) or forecasts (~nnual, five yearly, ten yearly).
Information is presented separately for Dunedin i;!n<;I Central, in non-matching formats.

This is unsatisfactory in that useful comparisons between the two regions are not easily available
(if at all)._ Opportunities for integration and improvement within the maintenance plan are
difficult to analyse and hard to extract.

5. PROPOSAL FOR PLAN TO MEET SCOPE

The data in the existing maintenance plan were used as a starting point, but the purpose for the
plan, and practical ways of achieving this, were taken back to fundamentals. A proposal has been
generated that results in a plan that is fundamentally sound and meets the scope. A map has
been created to show the relationship between the format and procedure for using the original
plan and the proposed plan.

4.1 Hierarchy for proposed plan

The relationship between the elements of the maintenance plan is as follows:

I. Maintenance work type (planned: fault: operations)

II. Physical asset class (HV/LV lines: zone subs: etc.)

Ill. Work allocation (internal: external)

IV. Work type (building maintenance: earth test: inspections: etc.)

V. Geographic area (Dunedin: Central: both)

This hierarchy explicitly supports the separation of work and associated funds for planned work
from fault work, and in turn separating both from operational work. Budget adjustments to meet
over or under expenditure in any type can (and should) be made independently.

- ---------------- -- - - - - - - - - - -
REVIEW OF ASSET MAINTENANCE JULY 2010 11 0
 FINAL REPORT DELTA NZ LTD

The hierarchy also establishes the priority of each work type and allows priority work to proceed
without affecting or being affected by other work.

4·.2 Proposed plan tin1eline

The plan has been developed in the spreadsheet with a timeline along the top that Is available for
all the work listings to the left of the spreadsheet.
The timeline can be created to whatever interval required, and can be expanded or contracted
using the spreadsheet hide/unhide and outline functions.
More detailed time intervals (week, month, year) can be used for control purposes for ongoing
current work, and longer intervals (year, 5 year, 10 year) can be used for planning and budgeting
purposes.
In addition to timeline information, planned work can be entered and a comparison made to
actual work when this is recorded at the appropriate time. Planned and actual achievements can
be nominated in physical units, dollar cost, or both.

4.3 ProJJosed plan integration

The plan has been developed in a single spreadsheet. The proposed hierarchy contains a single
list of all types of work, w ith an additional hierarchy level to allow the separation of work unique
to either Dunedin or Central.
The list of work types has been thoroughly reviewed to create (as much as possible) a list
containing elements common to both areas. The existing lists for Dunedin (70) and Central (52)
are replaced w ith a common list with 59 elements. Th is review uses experience gained since the
existing list of work was created for the introduction of the SAP system.
A map/translation sheet has been created to show where the proposed plan accommodates
existing work that has been determined not to need a unique entry.
To improve t he consistency of the plan hierarchies the following changes have been adopted:

"33kV lines and Cables" becomes "66kV/33kV lines and Cables"

"HV/LV Lines and Cables" becomes "llkV/6.6kV/400V Lines and Cables"

4.4 Using the proposa I

The proposal is contained in the attached spreadsheet 'Maintenance category proposal v2'.
The equipment and task hierarchy, together with the timeline and plan/actual matrix, is on the
sheet titled 'Proposal'. Values for the matrix can be enter ed as appropriate. It would be best if a
master copy of the spreadsheet was maintained as a control, and all work relating to the
maintenance plan be integrated into it. Subsets of information released for refreshing or analysis
must be carefully controlled to maintain the integrity of the master document.
(N.B. the numbers currently in the spreadsheet are examples for illustration only).

REVIEW OF ASSET MAll~TENANCE JULY 2010 111

 FINAL REPORT DELTA NZ LTD

The existing/proposed map/translation is on the sheet titled 'Work map'. On this sheet in
addition is a copy of the hierarchy displaying notes that were captured during the discussions, to
aid in correct allocation of work and costs.
For possible comparison purposes (not essential), a copy of the existing Dunedin and Central
hierarchy is placed in the sheet titled 'Existing'.

6. PRIORITY RATINGS OF MAINTENANCE \VORK

5.1 Maintenance and risk

There are various theoretical approaches to maintenance such as "just in time", "run to failure"
and "planned interval or usage based intervention" - all of which can be appropriate on a
network asset and can lead to lowest lifetime costs ..

For example, HV drop-out fuses are only normally replaced on failure. Even though they are
known to deteriorate with age/exposure to weather, their failure is rare. The consequences (and
their cost) are small and thus any form of planned replacement is not justified.

Conversely an asset such as a zone substation transformer has a high value a~d the consequences
of failure can be severe - loss of supply, possibly fire destroying the substation - and almost all
repairs are costly. Thus a regular maintenance program is normally the appropriate way of
maximising asset life and minimising whole of life costs.

Experience with these units has shown that the most appropriate regime is usually a routine
series of small maintenance interventions but with a mid-life major overhaul. However, the stage
at which the "mid-life" overhaul should be undertaken is not an exact science and delaying this
by a year will only increase the risk of early failure by a limited amount. Thus it can be valid to
trade this risk if there is a greater risk in another area - e.g. vegetation not being kept adequately
trimmed.

The situation with maintenance items in a car is very comparable. Whilst replacing the cam belt
at lOOk is normally recommended, delaying this for a further Sk results in a small increase in risk
of total engine failure. However if at lOOk the tyres are bald, and there is only funding to do one
item, the trade-off will be made. Note: this delays the cam belt replacement by a small time - it
does not remove it from the list of essential tasks. The risk is related to the size of the fleet: the
larger the fleet, the greater the likelihood of an engine failure occurring in one of the vehicles
following a delay in maintenance.

A further factor to consider is t~at of statutory requiremen s in terms of "n ust do" work, for
exah1 ple when a pole is "red-tagged" it r ust be replaced wittiin three mdnths rrespective of the
inconvenience to customers, road users etc, and costs. If there is an increase in the number of
such pole~ hen all available (suitable) resources-may end up diverted to this work resulting in
other maintenance being neglected with associated consequences.

Thus when considering the maintenance requirements of a network trade-offs can be made,
expenditure can be delayed, but when doing so the impact of these decisions need to be
- - - -- - - - - - - - - - - - - - -- ----- ---
REVIE'v\/ OF ASSET MAINTENAr JCE JULY 2010 112
 FINAL REPORT DELTA NZ LTD

exam ined - in some -tases delaying exp_enditure simply results in a grep~~r e' p nditt1r' t a Liter
date to bring the overall situation back under control; in other cases thr eff.,,, ts can be increased
ou tages ~nd otl r faults,. A combination of the,se is also possible.

5.2 Developing work priorities

With the new categories, the obvious priorities at the top level are
1. operational requirements
2. planned work
3. fault repairs

The first and third categories have no particular sub-priorities.

Planned work can contain sub-priorities of work mandated by
1. safety and legal imperatives
2. condition assessments
3. policy
4. routine maintenance schedules

5.3 Budget priorities

The proposal contains changes to the budget structure that allow priorities to be altered
dynamically in the top level categories (e.g. as faults of differing importance appear during the
budget period) without necessarily affecting other categories.
It is important that the priority rating is not used to allocate budget in a top to bottom manner.
Appropriate portions of the budget need to be allocated to top level categories and then distributed
through the items within these as appropriate.
When issues occur where for whatever reason funding is not available to carry out all of the
planned work then the categorisation will allow for better understanding of the risks associated with
delaying expenditure on different categories of work.

7. MAJOR FUNDING CHALLENGES WITHIN MAINTENANCE WORK

6.1 Areas of concern

Our review of the data available and of work carried out over recent years, together with the
sample location site visits and d)s'cussions with staff-members and the contractors have identified
two areas of concern where further consideration is -t,ecomrnended- vegetation control and the
agiQg pole population.

--- ------ - -- -- -- - ··--- - - --

REVIEW OF ASSET MAINTENAtJCE JULY 2010 113
 FINAL REPORT DELTA NZ LTD

6.2 Vegetation
The changes that have taken place over recent years associated with the responsibility for costs
and cutting of trees has served to ma sk the underlyirl8' basic level of work needed to ensure the
regu1tions are fully met. With the differing rate of growth of tree it can t1~
some ye~rs before
the 1mpac~ of inadequate triJnming is evideht, By t~is time the extra input {lostsY required
normally rJ~ults'in the Jverall c;osts being above the optimum level for routine trimming.
Hfstorically t?e budget for vegetation control has been in the order of $1 million The actual
spend has ot often been as high as budget. :
As a first pass e..s.tio1ate, based on our knowleclge of expenditure on other networks, the budget
for an asset tne size of the Al!rora one should be in e order of at1easr $2 milJ ion per annum. If
there has been less than this actually spent then the number goes .up, since trees do not stop
growing ar:td recovery work still needs to be done. 'This suggests on first view that there could be
a budget shortfall of $2 - 4 million in this area in the near future .
Failure to meet the required level of maintenance spend for vegetation control will result in an
increased fault budget spend, offset by the time it takes for vegetation to grow into the assets. In
addition there is a public safety aspect that cannot be avoided. An example of this is the incident
in August 2003 in Te Atatu, Auckland when a 10 year old boy climbed a tree that had not been
kept to the legal clearances and was able to come into contact with overhead lines. He lost
fingers, and suffered burns.
One option at this time would be to arrange for a special short inspection program based on
appropriate sampling techniques to check the existence and extent of this risk area.

6.3 Poles
There are various maintenance philosophies that can be applied to maintaining poles. The
present practice is effectively a "just in time o e" where poles ar~ replaced when hey fail the
routine inspection - noting that there is a leg~I requ irement to carry out t his replacement within
a 3 mohth period after iden ~ification.
qt
However, examination t he pole data clearly shows hat continuing this a1wroach will result in
a..,.situation in the immediate future where very large nytnbers of poles will need to be re.placed at
4
the same ime which creates logistic issu~s and results in additional costs

3
Email from David Paterson dated 4/5/2010

4
This situation occurred recently in the Lower Hutt area w here large-numbers of poles reached the condition
w here they were "red-tagged" ln a short space of t ime. ~ocal resources were not able to cope and d!timately
contractor res9urces from all over New Zeala~d were mobffsed o address the pr~blems. The costs were
significantly ~bove the normal r out ine pole replace~Tient costs as the contractors were abje to ext aq
~remiums for being available a\ d willing t o provide resources, i!S well as the need to coxer staff costs oj travel
• and accommQdation.
- - - ~- - - - - - - - ------ -
RE VIEW OF ASSET MAINTEMAUCE JULY 2010 114
 FINAL REPORT DELTA NZ LTD
C o n s u I t f n g_

IU summa ry ~ 'j our view, based on the data provided and inspection ,c~ecks carriea out, that
t ~ere is an aging pole population that is not being replaced at an appropriate rate t o ensure t hat a
major problem ( nd associated costs) does not occur in the next few years ..

In practica l term if no different actidn is taken, the numbr r of red-tagged jcondition O) pol's will
I

in rease rapidly a,_t some point withi~ the next ten years and a managed programme of fo ward
replacement will Jecome less and less possible. ·
The current pole age profile for Dunedin is / hown below w ith the inspection data (years left until
expected required replacement) included.

No.of Pole condition by age group (yrs) - Dunedin

poles
5000
4500 Pole condition
4000
•1i1:n11t dil•,·,ifj,.(I
3500
3000
2500 5: J U·.W ,"t-rlt ,

2000 iJ .J : S J (I ', E'<1I

1500
1000 l: l >., -=-rlt•,
500
0
<::>J:,,
~""~
Age group (years)

The profile for Central is:

- - - - --- ------------
REVIEW OF ASSET IAll lTEI l ANCE JULY 2010 I 15
 FINAL REPORT DELTA NZ. LTD

No. of Pole cond ition by age group (yrs ) - Ce nt ral

poles
5000
Pole
4000 condition

3000 (,: .... . ••titl111

,~di
<,; J U J 0 , .-,11 ,

2000 1.1 -1: <, 111 , .. ii, ~

1
1000
1 :J ,•·,w,
I _, _ _,,, J : J . ,•,lt
0
• O: 3 111u11th•,
, .,<I ta:

Age group (years)

Based on the above data for the pole condition, the numbers of poles that are presently assessed
as requiring replacement within the next 10 years (conditions 0/1/2/3/4) are

Dunedin 8 892
Central 16 935
Total 25 827
However during this period the rest of the pole population will continue to age and deteriorate.
Pole numbers currently assessed as needing replacement between 10 and 20 years (condition 'S)
are
100% 50%
Dunedin 7 762 3 881
Central 5 395 2698

Based on past experience an assumption can be made that in the next ten years 50% of these will
move into the condition 0/1/2/3/4 group, so the estimated total number of poles requiring
replacement becomes

Dunedin 12 773
Central 19 633

----·---------------- -- ---------- --------

REVIEW OF ASSET t,IAIFHENAtlCE JUL'v 2010 116
 FINAL REPORT DEL TA NZ LTD
o?r( s u I t 1·.n~.g

Total 32406

This gives and average number of replacem ents required per year of 3,24 1

This estimated requirement can be compared w ith the recent hist oric rates of replacement

Actual pole replacement numbers per year: 1990 -2010

TOTAL AS AT 9TH JUNE 2010

Year No. poles
replaced
1990 1
1991 1
1994 1
1997 4
1998 16
1999 63
2000 77
2001 148
2002 305
2003 201
2004 277
2005 237
2006 330
2007 365
2008 421
2009 293
2010
1,,,.,,.
127
.z.c \ "t. :;:..·~.{
I <l

TOTAL 2867

Average no. replaced per year= approximately 170

Compared with the estimated requirements developed above fof tlie J.O year penoa this
indicates a twenty- fold increase in resources (and thus expenditure) required .

The above analysis is based on the existing condition assessment data, known pole ages and
experience based judgements. Howe_ve.c even if a very optimistic approach were. t a en - the
remaining lives predicted were in fact double that presently allocated - a five-fold increase in
annual replac__emenl fs indicated.

Thus it iS'l)ur opinion that the issue of pole replacement is a rapidly approaching problem that
needs attention. This situation is not uncommon across networks across New Zealand and
- ------- - - - - - - -
REVIEW OF ASSET l\1AINTENAt~CE JULY 2010 f 17
 I fill' r-;- Te:ct-1 FIN.O.L REPORT DELTA NZ LTD

reflects several factors including the rapid increase in new reticulation post w ar through to when
underground networks became more common in the 1960's and the combined pressure from
regulators and the commercial requirements contained in legislation.
In view of the above analysis it is recommended that an urgent check be carried out to establish
the accuracy of the assessment data for remaining life. This should consist of a targeted sample
check on a selection of poles with indicated lives in the up to 10 years category. Once this is
completed then the above analysis can be reviewed for accuracy.

6.4 Focus projects

With areas of expenditure such as the vegetation and poles, normal annual budgets struggle to
cope. An approach that has been successful in the past Is to consider projects such as these as
special focus projects. The~e projects are of limited term and have a specific focus, and can be
justified as one-off expenditures to bring maintenance planning back into a regular and
manageable routine.
Such an approach can also help in relation to managing regulatory expectations as an underlying
basic sustainable level of maintenance needs can be established for the future.

6.5 Asset n1anagement resource

.j
, Based on our experiencze o i.5imila operations, the staff resource in the asse maintenance
management area is cOhsidered to be lower than opti wm, a,nd appears to be a potential source
of difficul y in managing the ma int nance programme t o ensu e the best outcomes.
'There is a vicious circle that can develop where staff is overloaded, and focus on the da'{-to clay
cha1te1ges.-and requireh'lents. Some of the longer term requirements for ana lysis, forecasi ing and
tr end analysis are thus neglected, and problem areas such as the vegetatio'n and poles are not
, fully appreciated until they become a significant problem.
The age profile of the staff is also of concern, and should be an area for review to put a
succession plan in place. (This was identified in the Engineering/network risk analysis exercise).

6.6 Maintenance work n1anagen1ent

During discussions about budget management, methods available to exercise prudent cost
control over the work done by the contract group for the asset managers were discussed.
It became clear that there was a desire for some control mechanism to be available to the asset
managers to stop a monopoly extraction of costs by the contract group. At present there is no
way to prevent a cost-plus approach other than persuasive argument by the asset managers.
Ways of using the SAP system and the new maintenance programme proposal were examined
and found unsuitable. The amount of data needed to be gathered from the field, and the
resources required to provide benchmark information for comparison would effectively duplicate
the works management system needed for the contract group.
- - --
REVIEW OF ASSET 1\1~,i~TEN!\tJCE JULY 2010 118
 FINAL REPflRT DELTA NZ LTD

- - - - - - - -----

This is an area that is outside the current remit and requires a separate investigation to examine
and clarify problem areas, investigate options and propose options for solutions. LineTech would
be pleased to assist in this.

8. RECOMMENDATIONS
1. The implementation of the new maintenance budgeting structure, maintenance schedules
and budget priority setting continue as started.

2. A brief sample inspection program be carried out to establish the true state of vegetation
control.

3. A targeted sample based check be carried out to check to present remaining asset life for
poles to ensure the full scope of the replacement requirement issue is defined.

4. (tlsed on t e results of the two surveys, "Focus" projects are considered for vegeta ion
management and pole replacement as necessary

S. The asset management staff resource is reviewed with a view to avoiding loss of institutional
knowledge.

6. Consideration is given to a separate review to improve the combined work management

methods of the asset management group and the contract group.

7. Consideration is given to a separate study to confirm the value for expenditure being achieved
by the present contracting arrangements in comparison to other New Zealand operations.

REVll:-W OF ASSET 1AII /TEI JAJ ,CE JULY 2010 119