ROAD MANAGEMENT REPORT April 2013

IPWEA (NSW) ROADS & TRANSPORT DIRECTORATE

ROAD ASSET BENCHMARKING PROJECT 2012 ROAD MANAGEMENT REPORT April 2013

The Roads & Transport Directorate is a joint initiative with IPWEA NSW Division Roads & Transport Directorate Road Asset Benchmarking Project 2012 Road Management Report

First Published 2013

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without the prior written permission of IPWEA.

National Library of Australia Cataloguing in-Publication data: Road Asset Benchmarking Project 2012 Road Management Report ISBN 978-0-9870677-4-6

Project Manager Mick Savage, Manager Roads & Transport Directorate

Prepared by John Howard, Jeff Roorda and Associates Steering Group – Roads and Transport Directorate Management Committee Warren Sharpe, IPWEA Board (Chair) Greg Moran, IPWEA Board Clr Ken Keith, LGNSW Clr Allan Smith, LGNSW Bill Woodcock, IPWEA Board Tony Reed, IPWEA David Andrews, IPWEA Cliff Toms, IPWEA Peter McMahon, RMS Richard Connors, LGNSW Roads & Transport Policy Officer Brendyn Williams, Chief Executive Officer IPWEA (NSW&ACT) Mick Savage, Manager Roads & Transport Directorate

Published by IPWEA NSW Division Roads & Transport Directorate Level 12, 447 Kent St Sydney NSW 2000 T: +61 (02) 8267 3000 F: +61 (02) 9283 5255 M: +61 (0) 418 808 085 E: [email protected] W www.roadsdirectorate.org.au

IPWEA believes this publication to be correct at the time of printing and does not accept responsibility for any consequences arising from the use of information herein.

Cover Photograph Wentworth St, Blackheath Table of Contents Executive Summary i 1. Introduction 1 2. Background 2 3. Road Asset Management Practices 3 4. Regional and Local Roads as an Investment 7 5. Funding Needs and Funding Gap 12 6. Response to the Survey 16 7. Findings 19 8. Discussion on Findings 20 9. Improvement Indicators 34 10. Recommendations 42 References 43 Appendix A Asset Management Practices by IPWEA Region. 44 Appendix B Road and Bridge Inventory for IPWEA Regions 48 Appendix C Response from Councils 49 Appendix D Cost Distributions for IPWEA Regions 54 Appendix E Asset Values, Maintenance and Renewal Rates for Regions 59 Appendix F Bridge Renewal Cost and Estimated Useful Life Distributions 61

List of Tables Table 1: Use of IIMM Asset Management Principles 3 Table 2: Adoption and Use of Road Asset Management Plans 3 Table 3: Use of Documented System for Managing Road Risks 4 Table 4: Membership of NAMS.PLUS Asset Management 5 Table 5: Use of Long Term Financial Plans 5 Table 6: Length of Long Term Financial Plans 5 Table 7: Infrastructure Effects in Long Term Financial Plans 6 Table 8: Regional & Local Road Lengths for Responding Councils 7 Table 9: Bridges on Regional and Local Roads for Responding Councils 7 Table 10: Bridges with Known Load Capacity 7 Table 11: Road and Bridge Valuations 8 Table 12: Asset Management Position for Roads & Bridges 8 Table 13: Roads Upgrade/New Expenditure in 2011/12 10 Table 14: Bridges Upgrade/New Expenditure in 2011/12 10 Table 15: Planned Bridge Investment 2013-2018 11 Table 16: Regional and Local Roads Life Cycle Cost and Expenditure 2011/12 12 Table 17: Road Life Cycle Cost apportioned to Usage Categories 2011/12 13 Table 18: Regional and Local Bridges Life Cycle Cost and Expenditure 2011/12 14 Table 19: Road and Bridge Values Extrapolated to 152 Councils 21 Table 20: Estimated Investment in New Assets 2011/12 21 Table 21: Roads Life Cycle Cost and Expenditure extrapolated to 152 Councils 22 Table 22: Road Life Cycle Cost and Road Usage 2011/12 24 Table 23: Bridge Life Cycle Cost and Expenditure 2011/12 24 Table 24: Sample Bridge Data extrapolated to 152 Councils 25 Table 25: Roads and Bridges Life Cycle Funding Position 2011/12 26 Table 26: Life Cycle Renewal Cost and Depreciation Expense 2011/12 27 Table 27: Life Cycle Renewal Expenditure and Depreciation Expense 2011/12 28 Table 28: Life Cycle Renewal Cost, Expenditure and Depreciation 2011/12 29 Table 29: Life Cycle Cost and Life Cycle Expenditure 2011/12 31 Table 30: Life Cycle Funding Gap Components and Asset Management Treatments 33 Table 31: Road & Bridge Asset Management Improvement Assessment 41

List of Figures Figure I: Use and Adoption of Road Asset Management Plans 2011/12 4 Figure II: Asset Renewal and Consumption 9 Figure III: Roads Life Cycle Funding Gap for 146 Councils 13 Figure IV: Bridges Life Cycle Funding Gap for 146 Councils 15 Figure V: Distribution of Regional Sealed Road Maintenance Costs 2011/12 18 Figure VI: Distribution of Local Sealed Road Maintenance Costs 2011/12 18 Figure VII: Councils using NAMS.PLUS for AM Plans 2008-2012 20 Figure VIII: Road Life Cycle Cost and Expenditure 2011/12 23 Figure IX: Road Life Cycle Cost Funding Gap 2011/12 23 Figure X: Bridges Life Cycle Cost and Expenditure 2011/12 25 Figure XI: Bridges Life Cycle Cost Funding Gap 2011/2 25 Figure XII: Roads & Bridges Life Cycle Costs and Expenditure 2011/12 26 Figure XIII: Technical & Financial Measures of Asset Consumption 2005-2012 29 Figure XIV: Asset Sustainability Ratios 2005-2012 30 Figure XV: Life Cycle Funding Gap Components 2011/12 32 Figure XVI: Funding of Life Cycle Costs 2005-2012 34 Figure XVII: Road & Bridge Life Cycle Funding Gap 2005-2012 35 Figure XVIII: Road & Bridges Asset Consumption Ratio 2005-2012 35 Figure XIX: Road & Bridges Asset Sustainability Ratios 2005-2012 36 Figure XX: Asset Sustainability Ratios based on Technical Estimates of Consumption 36 Figure XXI: Capacity to Complete Benchmarking Survey 2005-2012 37 Figure XXII: Use of IIMM principles 2005-2012 37 Figure XXIII: Adoption and Use of Road Asset Management Plans 2005-2012 38 Figure XXIV: System for Managing Road Related Risks 2005-2012 38 Figure XXV: Use of Long-Term Financial Plans 2005-2012 39 Figure XXVI: Period of Long-Term Financial Plans 2005-2012 39 Figure XXVII: Infrastructure Effects in Long-Term Financial Plans 2005-2012 40 Executive Summary

Introduction

There are currently 152 Councils in New South Wales. The 2002-2003 Report on the operation of the Local Government (Financial Assistance) Act 1995 reported that NSW Councils are responsible for managing 143,084 km of local and regional roads. 60,620 km of these are sealed and 82,463 are unsealed. The replacement value of NSW local roads was estimated at approximately $30.8 billion.

The report estimated a NSW annual local road renewal shortfall of $156 million (2001-02) for the next five years. Beyond this period, this renewal shortfall is likely to increase due to network ageing.

This 2012 Road Management Report estimates the length of regional and local roads at 160,417 km, comprising 80,629 km of sealed roads and 79,789 km of unsealed roads. The replacement value at 30 June 2012 is estimated at $61.8 billion.

The 2006 NSW Local Government Inquiry identified a sum of $6.3 billion required to bring existing (including road and bridge) assets to a satisfactory standard. The figure of $6.3 billion is 13% of total asset value and eight times the current level of expenditure. In addition, a further $14.6 billion was required for replacement of existing assets over the next 15 years.

The Roads & Transport Directorate of the IPWEA NSW Division reported a snapshot of the current reported condition of regional and local roads in NSW at 30 June 2005 in its Road Management Report, The report concluded that present levels of road funding were not sustainable and identified a life cycle funding gap of $783 million per annum. Overcoming this funding gap will require a 108% increase in 2005 funding levels.

The 2008 Road Asset Benchmarking Survey reported a life cycle funding gap of $618 million per annum equivalent to an increase of 75% required over 2007-08 funding levels. The life cycle funding gap was reported at $677 million in 2010, equivalent to an increase of 91% over 2009-10 funding levels.

The Australian Local Government Association estimated maintenance and renewal expenditure for local roads in Australia for the period 2010 – 2024 and indicated a shortfall of $17,664 million over the 15 years equivalent to an increase of 39% over estimated available funding levels for the period.

The Directorate commissioned this report to update the 2010 Road Asset Benchmarking report on the condition on NSW roads and bridges at 30 June 2012, update the shortfall in funding required to bring them to a satisfactory condition, provide specific recommendations about rectification of the problems identified and report on whether councils have made any improvement in management of road and bridge assets since the 2010 Road Asset Benchmarking Project survey.

Asset management practices and skills

The response to the survey, level of asset and risk management practices and estimation of a funding gap for roads and bridges indicates that councils have made improvements in these areas. The asset management journey is a continuing process of improvement for councils and need to continue on the improvement path to obtain the best value from investment in road and bridge infrastructure.

Few councils provided the complete survey dataset in a form suitable for database analysis within the requested time. The data sought was considered to be basic financial data and data used for strategic and day-to-day management of roads and bridges. This data should be readily available in councils with good asset management capability. The availability, accuracy and use of asset management data needs improvement.

In 2008, IPWEA released NAMS.PLUS Asset Management, a system of templates and modelling tools to assist councils write infrastructure asset management plans. The take-up of 118 councils (83%) joining NAMS.PLUS to develop road asset management plans is a positive result.

Road Management Report i The NSW Integrated Planning Framework requires councils to have a 10 year financial plan supported by 20 year asset management plans to ensure sustainable service delivery for their communities.

Councils have made great improvements in developing asset management plans and a long-term financial plan. 82% of councils have an adopted road asset management plan, a 100% improvement over 2009/10. 94% of council have a long-term financial plan with 67% having financial plans covering 10 or more years.

Knowledge of the load carrying capacity of concrete and timber bridges is limited. Council know the load capacity of only 14.8% of concrete bridges and 20.6% of timber bridges. Lack of bridge load capacity poses an additional risk to councils and also inhibits more efficient use of regional and local roads by the transport industry.

Road Investment

The estimated investment to replace the NSW local transport infrastructure of 160,417 km of roads and 10,566 bridges is $61.8 billion based on extrapolation of values reported in financial statements of the 146 responding councils.

The assets are reported as being consumed at an estimated $1.049 billion per annum.

Road funding

The road funding gap for all 152 NSW councils is estimated at $567 million per annum based on the data from the 146 responding councils extrapolated to 152 councils. Funding at this level will require a 66% increase on 2011/12 road expenditures if asset management principles are not applied to managing the gap.

Asset management principles to be applied to managing the funding gap include:

• ensuring that all councils have adequate accurate knowledge on the road assets and how these assets are performing, • ensuring that sealed roads are resurfaced/resealed at the optimum time to maintain waterproofing of pavements. This will require an increase in funding from $178 million in 2011/12 to $348 million per annum for all councils (a 96% increase, 254% in 2009/10). • consulting with and select appropriate levels of service and costs to meet community needs and available resources, • ensuring that unsealed roads are resheeted at the optimum time to meet agreed service levels within available resources. This will require an increase in funding from $53 million in 2011/12 to $155 million for all councils if service levels reported in the survey are to be maintained (a 194% increase, 416% in 2009/10), • making efficiencies in operations, maintenance, resurfacing and pavement renewal aimed at reducing life cycle costs, • improving maintenance practices and funding if necessary to extend pavement life and defer projected renewal, • ensuring adequate risk management practices are in place to identify risks and implement appropriate risk treatment actions, • rationalising (dispose) of unnecessary infrastructure assets, • reducing service levels in consultation with the community, • identifying future renewal needs and expenditure required to meet agreed service levels and document in an asset management plan, • increasing funding, and • combinations of all actions above.

ii ROAD ASSET BENCHMARKING PROJECT 2012 Bridge funding

Extrapolating the sample data for 142 responding councils will also give an indication of sustainable funding levels for bridges on regional and local roads. The life cycle funding gap for 10,566 bridges on regional and local roads is estimated at $29.6 million, compared to expenditure level $3.3 million higher than life cycle cost in 2009/10). This reduction in funding levels reflects the end of the NSW Timber Bridge Partnership in June 2011.

Road and bridge funding

The total funding position for roads and bridges can be estimated for all NSW councils from the extrapolated sample data.

Life cycle cost ($M/yr) 2005/06 2007/08 2009/10 2011/12

Roads $1,441 $1,381 $1,422 $1,424

Bridges $62 $62 $59 $69

Subtotal $1,503 $1,442 $1,482 $1,493

Life cycle expenditure ($M) Roads $675 $767 $745 $857 Bridges $45 $58 $63 $39

Subtotal $720 $825 $808 $896

Estimated funding gap ($M/yr) $783 $618 $674 $597

Apparent errors are due to rounding. The estimated 2012 funding gap is equivalent to a 66% increase in funding above the 2009/10 expenditure levels and emphasises the need to take action to manage the funding gap and ensure infrastructure services are sustainable.

Asset consumption and depreciation expense for roads and bridges

Data collected on road and bridge renewal/replacement costs and useful life estimates allowed a comparison to be made of the consumption of road and bridge assets determined from the technical data to depreciation expense. Depreciation expense reports the consumption of assets in financial statements.

There is a difference in asset consumption of roads and bridges determined from technical estimates from the benchmarking surveys and that reported by depreciation in council’s financial reports.

Councils’ reported depreciation expense is 77% of the technical assessment of asset consumption. This is a great improvement from the 53% difference in 2007/08 and 65% in 2009/10, showing a considerable improvement in consistent technical and financial reporting of infrastructure consumption.

The improvement in reporting asset consumption is largely due to NSW councils moving to the fair value basis for asset valuations from the deemed cost basis adopted when the assets were recognised in the mid 1990’s.

Road Management Report iii Reasons for the current variation may include:

• some councils may be valuing assets at ‘greenfield’ (cost to acquire the asset in an undeveloped location) values rather than ‘brownfield’ (cost to replace the asset’s service potential in existing location) values, • the estimated asset useful lives used by councils for financial reporting may be based on ‘industry standards’, not actual performance and field operating conditions of the assets and therefore understate depreciation expense, • the estimated asset lives assessed by the asset managers may be based on technical measures, not community priorities or available resources and therefore overstate the life cycle renewal cost.

The two measures of asset consumption, depreciation expense and life cycle renewal cost should be the same. Asset managers and finance managers should be providing the same information on asset consumption.

Conclusion

Present funding to meet existing service levels for NSW regional and local roads and bridges is 60% of the life cycle costs, an improvement from 57% in 2007/08 and 55% in 2009/10. Current level of service with current level of expenditure is not sustainable.

Councils may be facing a large and increasing risk exposure at present and in the future. These risks include:

• the condition of roads and bridges infrastructure will decline, • potential increase in personal injury and legal claims, • road life cycle expenditure ‘savings’ will be passed onto road users through higher transportation operating costs, • funding will not be available to renew ageing road and bridge assets, • councils will not be able to provide services needed by communities in medium-long term.

Renewal expenditures are being transferred to the next generation.

Councils have a low level of knowledge of the load carrying capacity of bridges. This applies to only 14.8% of concrete bridges and 20.6% of timber bridges. Lack of knowledge is an additional risk to councils and inhibits community benefits from more efficient use of regional and local roads by the transport industry.

Asset consumption as reported by depreciation expense is understating the assessment of asset consumption by local road asset managers by almost 23% (50% in 2007/08, 35% in 2009/10), although councils have made significant improvements in the consistency of technical and financial reporting of infrastructure consumption.

iv ROAD ASSET BENCHMARKING PROJECT 2012 Managing the Gap

The Gap consists of several components. Each gap component requires a different treatment to reduce the gap and move towards sustainable service provision.

Gap ($M / yr) Gap Component Asset Management Treatment 2007/08 2009/10 2011/12

Resurfacing $187 $230 $171 • Increase knowledge of asset performance and useful life, • Develop and use resurfacing treatments that result in reduced life cycle cost, • Increase funding to life cycle cost.

Pavement renewal $303 $316 $293 • Increase knowledge of asset performance and useful life, • Develop and use optimum (low cost) renewal methods, • Develop renewal projections and funding plan and document in Road Asset Management Plan

Unsealed $124 $131 $103 • Increase knowledge of asset performance and resheeting useful life, • Develop/review road hierarchy and service levels for maintenance and resheeting to suit available resources. • Develop resheet projections and funding plan and document in Road Asset Management Plan

Bridges $4 - $3 $30 • Increase knowledge of asset performance and useful life, • Develop/review road hierarchy and service levels to suit available resources. • Develop renewal projections and funding plan and document in Road Asset Management Plan

Total $618 $674 $597

Note: The -$3 M gap shown for bridges indicates that expenditure was greater than the life cycle cost due to the high expenditure levels required to replace/renew aged timber bridges. The resurfacing gap is the most critical component as not resurfacing/resealing roads at the optimum time will result in loss of sealed pavement integrity and increase pavement replacement and renewal funding needs in the future.

New assets and upgrading of existing assets valued at $680M in 2011/12 are estimated to add $19 M per annum to operating costs for roads and bridges in 2012/13 and in following years.

Road Management Report v Improvement Indicators

The initiative of the Roads & Transport Directorate to repeat the 2004-05 Road Asset Benchmarking Survey in 2008, 2010 and 2012 provides the opportunity to report on whether councils had made any progress in:

• managing the road assets, and • improving their asset management knowledge and capability.

The assessment of whether councils have improved the asset management practices, knowledge and capacity to manage the roads and bridges is shown in the Table below.

Of the eleven (11) improvement indicators, nine (9) show a positive improvement in road and bridge management practices over the period 2010 to 2012. The indicators showing a decrease in improvement are those relating to funding of asset renewal.

The indicators showing an improvement are those related to councils’ asset management practices.

It is clear that councils have made major improvements in asset and financial management capacity since 2010.

Performance Indicator Improvement Comment

Managing Road & Bridge Assets

1.1 Road & Bridge funding of life Yes Funding of life cycle costs has increased from cycle cost 55% in 2010 to 60% in 2012.

1.2 Road & Bridge asset life cycle Yes The funding gap has decreased by 11% from funding gap 2010 to 2012.

1.3 Road & Bridge Asset No The average proportion of ‘as new’ condition left Consumption Ratio in the assets has fallen from 62.1% in 2010 to 61.0% in 2012 indicating an ‘ageing’ of the road and bridge asset stock.

1.4 Road & bridge Asset No Asset Sustainability Ratio has fallen form 61% in Sustainability Ratio 2010 to 58% in 2012

Knowledge and Capacity

2.1 Capacity to complete Yes Overall response rate has increased by 2% since benchmarking survey the 2010 survey. 97% of councils completed the benchmarking survey.

2.2 Use of IIMM principles Yes 29% increase from 2010.

2.3 Adoption of road asset Yes 100% increase from 2010. management plans

2.4 Management of road related Yes 32% increase from 2010. risks

2.5 Use of long-term financial plans Yes 46% increase from 2010.

2.6 Period of long-term financial Yes 65% increase from 2010. plans

2.7 Infrastructure effects in long- Yes 67% increase from 2010. term financial plans

vi ROAD ASSET BENCHMARKING PROJECT 2012 Recommendations

The Final Report of the Independent Inquiry into the Financial Sustainability of Local Government identified that councils in NSW have a “huge backlog in infrastructure renewals (over $6 billion), which is expected to grow to almost $21 billion within 15 years”. The report highlighted challenges for councils in “managing rising community expectations, maintaining existing service commitments in the face of a huge infrastructure bill and constraints on rate income” and “overcoming skills shortages”.

The Australian Local Government Association reported a shortfall of $17,664 million for maintenance and renewal expenditure for local roads in Australia for the period 2010 – 2024 equivalent to an increase of 39% over estimated available funding levels for the period.

This 2012 Road Asset Benchmarking report found that NSW councils are responsible for managing 160,400 km of regional and local roads and 10,500 bridges with a replacement cost of $61.7 billion. The life cycle cost of the road and bridge network is estimated at $1.49 billion per annum for 2011/12. Expenditure of $896 million was 60% of the life cycle cost. Current service levels and expenditure levels are not sustainable.

As a result, competition for adequate funding to maintain council’s infrastructure assets is also under pressure. However, it is of critical importance that councils:

• identify their infrastructure assets and the current condition of such assets, • maintain current asset management and long-term financial plans in accordance with the NSW Integrated Planning and Reporting framework and use the plans to direct allocation of resources, • provide adequate funding to maintain and renew what are in effect the community’s greatest financial assets.

To this end it is recommended that:

1. Councils prioritise existing funding and seek additional funds for regional and local roads to allow road resurfacing/ resealing works to be undertaken at the optimum time (estimated at $230 million per annum) to prevent loss of sealed pavement integrity and minimise future sealed pavement replacement/ renewal costs. 2. Councils seek funding from government to improve knowledge of the load carrying capacity of regional and local road bridges to improve risk management knowledge and the efficiency of road transport operations. 3. Councils continue to improve asset management capability under the NSW Integrated Planning Framework to a position that will enable services to be provided to communities in a sustainable manner. The survey analysis indicated that the current level of road infrastructure services that councils are currently providing to their communities is not sustainable. 4. Councils maintain and improve the Integrated Planning and Reporting framework systems and documentation to provide evidence that they can provide a sustainable level of service for road and bridge services to their communities. 5. Councils use the road management model in the survey form as a tool to manage road infrastructure services and life cycle costs. This to be achieved by improving knowledge of assets and asset performance, developing road hierarchies and appropriate service levels, increasing funding for sealed resurfacing/ resealing and unsealed road resheeting to the life cycle cost and managing pavement and bridge renewals through asset management plans. 6. Councils set a target to ‘manage out’ the annual life cycle funding gap of $597 million within a 3 year timeframe and report biennially on performance of the industry towards the target. 7. Councils continue with actions to improve the accuracy of financial reporting of infrastructure asset consumption and set a target to have technical and financial estimates of infrastructure consumption aligned within a 2 year timeframe.

Road Management Report vii 1. Introduction

The 2002-2003 Report on the Operation of the Local Government (Financial Assistance) Act 1995 reported that the 152 NSW Councils are responsible for managing 143,084 km of local and regional roads. 60,620 km of these are sealed and 82,463 are unsealed1.

The replacement value of NSW local roads was estimated at approx $30.8 billion.

The report estimated the NSW annual local road renewal shortfall of $156 million (2001-02) for the next five years.2 Beyond this period, this renewal shortfall is likely to increase due to network ageing.3

This 2012 Road Management Report estimates the length of regional and local roads at 160,417 km, comprising 80,629 km of sealed roads and 79,789 km for unsealed roads. The replacement value at 30 June 2012 is estimated at $61.8 billion.

The Roads & Transport Directorate of the IPWEA NSW Division reported a snapshot of the current reported condition of Regional and Local Roads in NSW at 30 June 2005 in its Road Management Report. The report concluded that present levels of road funding were not sustainable4 and identified a life cycle funding gap of $783 million per annum equivalent to a 108% increase in 2004-05 funding levels.5

The 2008 Road Management Report reported a life cycle funding gap of $618 million per annum equivalent to an increase of 75% required over 2007-08 funding levels.7 The life cycle funding gap was reported at $677 million in 2010, equivalent to an increase of 91% over 2009-10 funding levels.8

Estimates prepared for the Australian Local Government Association projecting maintenance and renewal expenditure for local roads in Australia for the period 2010 – 2024 indicated a shortfall of $17,664 million over the 15 years equivalent to an increase of 39% over estimated available funding levels for the period.9

The Directorate commissioned this report to update the 2010 Road Asset Benchmarking report on the condition on NSW roads and bridges at 30 June 2012, update the shortfall in funding required to bring these to a satisfactory condition, provide specific recommendations about rectification of the problems identified and report on whether councils have made any improvement in management of the road and bridge assets since the 2010 Road Asset Benchmarking Project survey.

1 DoTaRS, 2003, Table 4.1, p 63. 2 DoTaRS, 2003, Table 4.3, p 64. 3 DoTaRS, 2003, p 62. 4 .JRA, 2006b, p viii 5 JRA, 2006b, p v. 6 JRA, 2006a, p 4. 7 JRA, 2010, p 24 8 JRA, 2011, p ii. 9 JRA, 2010, Figure 41, p 30.

1 ROAD ASSET BENCHMARKING PROJECT 2012 2. Background

The IPWEA New South Wales Division recognised the need for improved asset management practices by councils in managing infrastructure assets that provide essential services to the community including access and mobility, recreation, flood protection and cultural and community facilities.

The Division allocated asset management as a specific responsibility to a Director and formed the Roads & Transport Directorate in partnership with Local Government NSW.

In view of the estimated $61.8 billion investment in NSW local access and mobility infrastructure, the Directorate wanted to quantify the investment and life cycle funding needs, identify any funding ‘gap’ and identify and promote asset management practices that will assist Councils in sustaining the provision of access and mobility services to the community.

Good access and mobility services are essential for the modern community to survive. Good access and mobility services supports and makes possible needed community services from infrastructure including.

• transport of produce from farm to market and to the manufacturer and finished goods to the retailer and onto the consumer, • mobility of the community to work, education, recreation and culture, • mobility of the community to service, community and retail centres.

Road Management Report 2 3. Road Asset Management Practices

The benchmarking survey included questions on road asset management practices of councils. Questions and responses are shown below.

3.1 Use of the International Infrastructure Management Manual

The International Infrastructure Management Manual (IIMM) published by the IPWEA and INGENIUM is recognised as the international reference for infrastructure asset management. Councils were asked if the principles contained within the IIMM were employed. Responses are summarised in Table 1 and shown for IPWEA regions in Appendix A.

Table 1: Use of IIMM Asset Management Principles

Response

No In part Yes Total

Councils using IIMM Principles 4 53 88 145

Percent of total 3% 37% 61% 100%

61% of responding councils reporting using the IIMM principles in full (33% in 2007/08, 48% in 2009/10) and 37% in part. Only 3% of responding councils do not use the IIMM.

3.2 Road management

Good practice in managing roads can be demonstrated by the adoption and use of methods and procedures for managing service levels, risks and costs. These may be documented in a Road Asset Management Plan and/or a Road Risk Management Plan/System.

Councils were asked if they had an adopted Road Management Plan and/or a documented system for managing road risks either in a Road Asset Management Plan or included within the corporate risk management system. Responses are shown in Tables 2 and 3 and shown for IPWEA regions in Appendix A.

Table 2: Adoption and Use of Road Asset Management Plans

Response

No Planned in 1 yr In progress Yes Total

Councils with adopted Road Asset 1 5 20 120 146 Management Plans

Percent of total 1% 3% 14% 82% 100%

3 ROAD ASSET BENCHMARKING PROJECT 2012 Adoption and Use of Road AM Plans

Figure I: Use and Adoption of Road Asset Management Plans 2011/12 The adoption of Road Asset Management Plans is well progressed with 82% of councils in the sample reporting having an adopted Road Asset Management Plan (29% in 2007/08, 42% in 2009/10). A further 14% are in the process of developing a Road Asset Management Plan and 3% plan to do so within 1 year. 1% of councils responded ‘No’ to the question.

Table 3: Use of Documented System for Managing Road Risks

Response No Planned in 1 yr In progress Yes Total Councils with a documented system 2 5 39 97 143 for managing road related risk Percent of total 1% 3% 27% 68% 100%

Management of road related risk is more developed with 68% (46% in 2007/08, 52% in 2009/10) of councils having a documented system for managing road risk, either in a road management plan or incorporated into the corporate risk management plan. 27% of responding councils are in the process of developing a road risk management system with 3% planning to do so within 1 year.

Since the 2005 benchmarking survey, IPWEA has developed NAMS.PLUS Asset Management providing templates and web based modelling to assist councils prepare road asset management plans. Councils reporting membership of NAMS.PLUS are shown in Table 4.

Road Management Report 4 Table 4: Membership of NAMS.PLUS Asset Management

Response

No Planned in 1 Year Yes Total

Council members of NAMS.PLUS 22 3 118 143

Percent of total 15% 2% 83% 100%

83% of councils (58% in 2007/08, 68% in 2009/10) are using NAMS.PLUS to develop their road asset management plans.

Long term financial plans are seen as an important tool by both finance managers and asset managers to manage service delivery and costs in the long term.

Councils were asked if they had a long term financial plan, the term of the plan and whether the plan contains infrastructure effects. Summary responses are shown in Tables 5 – 7 and for IPWEA regions in Appendix A.

Table 5: Use of Long Term Financial Plans

Response

No Planned in 1 Year In progress Yes Total

Councils with Long 1 1 7 137 146 Term Financial Plan

Percent of total 1% 1% 5% 94% 100%

94% of responding Councils (66% in 2007/08, 67% in 2009/10) reported having long term financial plans. 5% were in the process of developing long term financial plans with a further 1% planning this in the next year. This data indicates that most councils have long term financial plans.

Table 6: Length of Long Term Financial Plans

Length of Long Term Financial Plans

1 yr 3 yrs 5 yrs 10 yrs 10+ yrs Total

Councils with Long Term 3 10 6 104 22 145 Financial Plans Percent of total 2% 7% 4% 72% 15% 100%

Good practice in asset management requires long term financial plans covering a 10 year period supported by 20 year asset management plans. 87% of the responding councils (45% in 2007/08, 55% in 2009/10) have developed 10 year financial plans. 4% have 5 year plans and a further 7% have 3 year plans. Only 2% of councils manage by annual budgets.

5 ROAD ASSET BENCHMARKING PROJECT 2012 Table 7: Infrastructure Effects in Long Term Financial Plans

Response No In part Yes Total Councils recognising infrastructure 6 59 76 141 effects in long term financial plans Percent of total 4% 42% 54% 100%

Infrastructure has long term financial impacts on councils including planning for and financing infrastructure renewal and providing for growth of networks, and life cycle costs for new infrastructure.

Long term financial effects of infrastructure services include:

• infrastructure renewal. The 2006 NSW Local Government Inquiry reported data from councils’ Special Schedule Seven reports estimating that $6.3 billion is required to bring existing assets to a satisfactory standard with a further $14.6 billion needed over the next 15 years to replace existing assets10. • infrastructure network growth. Councils need to provide for upgrade of existing services to meet higher levels of service and for expansion of services to new consumers. Upgrade adds to asset inventory generally without increasing revenue. Expansion also adds to asset inventory but may be associated with generation of additional revenue. • life cycle costs for new infrastructure. Councils acquire new infrastructure both funded by council and provided by developers and others at no cost. Each new infrastructure asset commits council to fund additional operating and maintenance costs over the life of the infrastructure service and to plan and fund infrastructure renewal.

It is critical that these infrastructure effects are fully incorporated into long term financial plans.

54% (22% in 2007/08, 32% in 2009/10) of responding councils reported the inclusion of infrastructure effects in long term financial plans. 42% include part infrastructure effects with 4% reporting they do not include the financial impacts of infrastructure.

10 JRA, 2006a, p 4.

Road Management Report 6 4. Regional and Local Roads as an Investment

4.1 Road inventory

The responding councils reported a total road length of 154,058 km (150,178 for 142 councils) in 2009/10 as shown in Table 8. Road lengths for IPWEA regions are shown in Appendix B.

Table 8: Regional & Local Road Lengths for Responding Councils

Road Length in km

Sealed Unsealed Total

Regional Roads 14,131 3,093 17,223

Local Roads 63,315 73,547 136,862

Total 77,445 76,640 154,085

Note: 146 Councils responded to question

4.2 Bridge inventory

Responding councils reported a total of 10,149 bridges (9,028 in 2007/08, 9,289 in 2009/10) as shown in Table 9. 21% are located on regional roads and 79% on local roads. Concrete /steel bridges account for 79% of the total (74% in 2007/08, 78 in 2009/10), with 21% of timber construction (26% in 2007/08, 22% in 2009/10). Bridge inventory for IPWEA regions is shown in Appendix B.

Table 9: Bridges on Regional and Local Roads for Responding Councils

No. of Bridges

Concrete/steel Timber Total

Regional Roads 2,070 87 2,157

Local Roads 5,929 2,063 7,992

Total 7,999 2,150 10,149

Note: 146 Councils responded to question The load capacity of bridges is important knowledge for councils in managing the bridges and considering requests for use of bridges by heavy loads and high mass vehicles. The number of bridges with percentage of totals reported by councils in the 2012 benchmarking survey is shown in Table 10. Load capacity inventory for IPWEA regions in shown in Appendix B.

Table 10: Bridges with Known Load Capacity

No. of Bridges

Concrete/steel Timber Total

Regional Roads 384 18.6% 38 43.7% 422 19.6%

Local Roads 796 13.4% 405 19.6% 1,201 15.0%

Total 1,180 14.8% 443 20.6% 1,623 16.0%

Note: 146 Councils responded to question

7 ROAD ASSET BENCHMARKING PROJECT 2012 4.3 Roads and Bridges Investment

The responding councils reported a replacement value of $59,357 million for road and bridge assets. 18% of this value (9% in 2007/08, 18% in 2009/10) is held in non-depreciable assets such as earthworks/formation and residual value. The assets are reported to have a depreciated replacement cost of $40,275 million. Annual consumption of the assets, reported by depreciation expense is estimated at $1,008 million. Investment details are shown in Tables 11 and 12 and Figure II.

Table 11: Road and Bridge Valuations

Depreciated Replacement Depreciable Annual Depreciation Replacement Cost ($M) Amount ($M) Expense ($M) Cost ($M)

Sealed Roads $36,865 $29,067 $25,679 $616

Unsealed Roads $5,980 $3,686 $4,371 $127

Concrete/Steel Bridges $3,717 $3,615 $2,374 $46

Timber Bridges $511 $491 $232 $8

Roads Ancillary $12,283 $12,053 $7,618 $210

Total $59,357 $48,912 $40,275 $1,008

Note: Data from 146 councils.

Table 12: Asset Management Position for Roads & Bridges

Asset Consumption Rate of Asset Consumption Rate of Asset Renewal Asset Category Ratio (DRC-RV)/DA (Deprn/DA) (Renewal Exp/ DA)

Sealed roads 61.5% 2.1% 1.3%

Unsealed roads 56.3% 3.4% 1.4%

Concrete/Steel bridges 62.9% 1.3% 0.2%

Timber bridges 43.1% 1.5% 3.7%

Roads ancillary 61.3% 1.7% NA

Total 61.0% 2.2% * 1.2% *

Note: Data sources as for Table 11. Asset renewal expenditures sourced from Tables 16 and 18. * excluding Roads Ancillary Assets. The Asset Consumption Ratio11 (average proportion of ‘as new’ condition left in assets) of the road and bridge assets of the responding councils is reported at 61.0%. On average the assets are 39% through the expected useful lives.

The assets are being consumed at a rate of 2.2% of the depreciable amount per annum (1.8% in 2007/08 and 2009/10). This is an average figure over the life cycle of the asset (up to 100 years).

Low Level Detour Harden Boorowa Rd, Boorowa Shire

11 IPWEA, 2012, AIFMG Ver. 1.3, Financial Sustainability Indicator 8, p 2.19. Road Management Report 8 Asset Consumption and Renewal 2012

Figure II: Asset Renewal and Consumption Asset renewal in 2011/12 was less than asset consumption for sealed and unsealed roads and concrete bridges.

• sealed roads – asset renewal 1.3% (1.4% in 2007/08, 1.2% in 2009/10) which is 62% of asset consumption of 2.1%, • unsealed roads - asset renewal 1.4% (0.9% in 2007/08, 0.8% in 2009/10) - 40% of asset consumption of 3.4%, • concrete/steel bridges – asset renewal 0.2% (0.7% in 2007/08 and 2009/10) - 17% of asset consumption of 1.3%.

For timber bridges, asset renewal was nearly two and a half times greater than asset consumption in 2011/12:

• timber bridges – asset renewal 3.7% (10.1% in 2007/08, 6.4% in 2009/10) - 241% of asset consumption of 1.5%.

Timber bridges in the responding councils are being renewed at a rate significantly higher than asset consumption, which reflects the investment priority given by councils to renewing ageing timber bridges.

For sustainability in service delivery, the rate of asset renewal should equal the rate of asset consumption on average over the long term. This does not mean that asset renewal should equal asset consumption in each and every year. Asset consumption is an average figure, whereas the rate of annual asset renewal can vary widely, depending on community and council priorities and available funds.

It is important that councils understand the asset management position, know what asset renewals are required to continue to provide the levels of service that the community needs and how the asset renewals are to be funded.

An asset management plan documents the services to be provided, how the services are to be provided and the funds required for asset operation, maintenance and renewal over the asset management planning period. The asset management plan expenditure forecasts feed into the long term financial plan and assist councils in determining the allocation of the community’s resources.

9 ROAD ASSET BENCHMARKING PROJECT 2012 4.4 Investment in New Roads & Bridge Assets in 2011/12

The community and councils have made investments in new road and bridge assets in 2011/12. The investment includes road and bridge assets constructed by developers in subdivisions and contributed free-of-cost to councils and expenditure by councils to upgrade existing road and bridge assets.

The value of contributed road assets received by 52 councils was $107,699,000.

Councils invested $145 million in upgrading existing and new road assets in 2011/12 as shown in Table 13.

Table 13: Roads Upgrade/New Expenditure in 2011/12

Upgrade/New Expenditure in 2011/12 ($M)

Sealed Roads Unsealed Roads Total

Regional Roads $28 $7 $34

Local Roads $99 $12 $111

Total $126 $19 $145

Note: 78 Councils reported these figures. Investment in upgrading existing and constructing new bridges was $24 million in 2011/12 as illustrated in Table 14.

Table 14: Bridges Upgrade/New Expenditure in 2011/12

Upgrade/New Expenditure in 2011/12 ($M)

Concrete Bridges Timber Bridges Total

Regional Roads $6 $3 $9

Local Roads $6 $9 $15

Total $12 $12 $24

Note: 45 Councils reported these figures. The total reported expenditure on upgrading existing assets and acquiring new road and bridge assets by the responding councils in 2011/12 was $277 million as shown below:

Contributed assets $108 million New road assets constructed by councils $145 million New bridge assets constructed by councils $24 million

Total $277 million

Road Management Report 10 4.5 Planned Investment in Bridges 2013-2018

Councils reported a planned investment in bridges over the next 15 years of $403 million as shown in Table 15.

Table 15: Planned Bridge Investment 2013-2018

Planned Investment in Bridges 2013-18

Years 1-5 Years 6-10 Years 11-15 Total

Regional Concrete $39 $16 $28 $82 Local Concrete $20 $25 $43 $89

Subtotal $59 $41 $71 $171

Regional Timber $9 $12 $2 $24 Local Timber $90 $61 $58 $208

Subtotal $99 $74 $60 $232

Total $158 $115 $131 $403

11 ROAD ASSET BENCHMARKING PROJECT 2012 5. Funding Needs and Funding Gap

5.1 Regional and Local Roads

Councils were asked to provide details on road management actions and costs including routine maintenance costs, reseal cycles and costs, sealed pavement renewal cycles and costs and resheet cycles and costs. This data was analysed to provide a road management model for each council and is aggregated into a State-wide position for regional and local roads.

The road life cycle cost, expenditure and life cycle funding gap for the responding councils is shown in Table 16.

Table 16: Regional and Local Roads Life Cycle Cost and Expenditure 2011/12

Length Rate ($/ Life Cycle Cost Expenditure Funding Gap (km) km/yr) ($/yr) ($.yr) ($/yr)

REGIONAL ROADS

Sealed Roads

Routine maintenance 14,131 $4,598 $64,968,236 $64,968,236

Resurfacing 14,131 $4,456 $62,973,190 $33,561,958

Pavement renewal 14,131 $6,381 $90,174,960 $54,296,171

Sub total 14,131 $15,436 $218,116,386 $152,826,364 $65,290,022

Unsealed Roads

Routine maintenance 3,093 $2,515 $7,779,143 $7,779,143

Resheeting 3,093 $4,632 $14,324,832 $1,873,358

Sub total 3,093 $7,147 $22,103,975 $9,652,501 $12,451,474

Total Regional 17,223 $13,947 $240,220,361 $162,478,865 $77,741,496

LOCAL ROADS

Sealed Roads

Routine maintenance 63,315 $3,333 $211,004,223 $211,004,223

Resurfacing 63,315 $4,294 $271,884,325 $137,098,035

Pavement renewal 63,315 $6,386 $404,303,256 $158,311,282

Sub total 63,315 $14,012 $887,191,804 $506,413,541 $380,778,263

Unsealed Roads

Routine maintenance 73,547 $1,435 $105,541,120 $105,541,120

Resheeting 73,547 $1,837 $135,142,142 $49,022,773

Sub total 73,547 $3,273 $240,683,261 $154,563,893 $86,119,368

Total Local Roads 136,862 $8,241 $1,127,875,065 $660,977,434 $466,897,632

Grand Total 154,085 $8,879 $1,368,095,427 $823,456,299 $544,639,128

Note: 146 Councils responded to question, apparent errors are due to rounding. Road maintenance expenditure is assumed to be adequate. Rates for total regional, total local and grand totals are averages for sealed and unsealed roads.

Road Management Report 12 The survey indicated that the responding councils are responsible for the management of 154,085 km of regional and local roads. The life cycle cost of the road network is $1,368 million per annum. The responding councils are currently spending $823 million per annum leaving a funding gap of $545 million per annum.

Roads Life Cycle Funding Gap ($M/yr)

Figure III: Roads Life Cycle Funding Gap for 146 Councils The expenditures reported in 2011/12 may be affected by including flood damage grant funding. Three councils advised that flood damage repair expenditure was not included in their reported expenditures being:

Council A $2,793,000 Council B $1,450,000 Council C $753,807

Any flood damage repair expenditure was included in 2011/12 road and bridge expenditure, will understate the life cycle funding gap, although any understatement may be offset by ‘normal’ Council funded works deferred to repair flood damage.

Councils will need to manage this funding gap by improving knowledge of assets and asset performance, reviewing service levels and costs of delivery, improving maintenance to extend asset lives, improving efficiency in service delivery, asset operation, maintenance and renewal, developing and using low cost asset renewal methods, rationalising assets, increasing funding and combinations of all actions.

5.2 Life Cycle Cost apportioned to Usage

The survey asked councils to estimate the percentage use of their roads by traffic volumes for three vehicle usage categories:

• residential associated usage, • business and commercial usage, and • higher mass vehicle usage.

The survey form apportioned the percentage of road life cycle cost to the three road usage categories. The results are summarised in Table 17.

Table 17: Road Life Cycle Cost apportioned to Usage Categories 2011/12

Road Use Category % of Road Life Cycle Cost

Residential 76.5%

Business/Commercial 20.7%

High Mass Vehicles 2.8%

Total 100.0%

13 ROAD ASSET BENCHMARKING PROJECT 2012 5.3 Bridges

Councils were asked to provide details on bridge management actions and costs including routine maintenance and renewal (replacement) cycles and costs. This data was analysed to provide a bridge management model for each council and is aggregated into a State-wide position for regional and local roads.

Table 18: Regional and Local Bridges Life Cycle Cost and Expenditure 2011/12

Area Rate ($/ Life Cycle Expenditure Funding Gap (m2) m2/yr) Cost ($/yr) ($/yr) ($/yr)

REGIONAL ROADS

Concrete/steel bridges

Routine maintenance 503,799 $3.0 $1,503,700 $1,503,700

Bridge renewal 503,799 $34.0 $17,130,925 $4,129,935

Sub total 503,799 $37.0 $18,634,625 $5,633,635 $13,000,990

Timber Bridges

Routine maintenance 16,480 $53.9 $887,870 $892,384

Bridge renewal 16,480 $49.0 $806,827 $5,778,416

Sub total 16,480 $102.8 $1,694,697 $6,670,800 -$4,976,103

Total Regional 520,278 $39.1 $20,329,321 $12,304,434 $8,024,887

LOCAL ROADS

Concrete/steel bridges

Routine maintenance 897,937 $4.4 $3,944,293 $3,944,293

Bridge renewal 897,937 $32.7 $29,393,582 $3,540,579

Sub total 897,937 $37.1 $33,337,875 $7,484,872 $25,853,003

Timber Bridges

Routine maintenance 162,460 $34.3 $5,572,328 $5,572,328

Bridge renewal 162,460 $43.4 $7,053,116 $12,464,492

Sub total 162,460 $77.7 $12,625,445 $18,036,821 -$5,411,376

Total Local Roads 1,060,398 $43.3 $45,963,320 $25,521,692 $20,441,627

Grand Total 1,580,676 $41.9 $66,292,641 $37,826,127 $28,466,514

Note: 146 Councils responded to question, apparent errors are due to rounding. Bridge maintenance expenditure is assumed to be adequate. Rates for total regional, total local and grand totals are averages for concrete and timber bridges. Difference between Life Cycle Cost and Expenditure for Timber Bridges on regional roads is due to one council incurring maintenance expenditure of $4,514 on a bridge replaced in the year. The calculation of life cycle cost for a bridge replaced in the year returns a zero value.

Road Management Report 14 The responding councils manage 7,999 bridges with a deck area of 1,580,676 m2. The life cycle cost of the bridge network is $66,292,641 per annum. The responding Councils’ expenditure in 2011/12 was $37,826,127 which was $28,466,514 less than the life cycle cost.

Bridges Life Cycle Funding Gap ($/yr)

Figure IV: Bridges Life Cycle Funding Gap for 146 Councils

Detour on Harden-Boorowa Road for vehicles over 5 tonnes

15 ROAD ASSET BENCHMARKING PROJECT 2012 6. Response to the Survey

6.1 Survey responses

The Roads & Transport Directorate launched the 2012 Road Asset Benchmarking by direct e-mail to General Managers of NSW Council on 14 September 2012. The 2012 survey form was attached to the e-mail requesting completion and return by 30 October 2012.

By 29 October 2012, 35 survey forms had been completed and returned.

The consultants followed up councils who had not responded by Directorate Newsletter, e-mail and telephone.

As a result of follow ups, 106 survey forms were received by 24 December 2012.

To assist the 41 councils who had not returned a completed survey form by mid-January 2013, the consultant prepared a draft survey form using readily available road length and expenditure data from previous road asset benchmarking surveys and asset values from council’s annual financial statements. The draft survey forms were e-mailed to 41 councils with a request to review the draft figures and advise if the data was correct or of any corrections required.

The consultant followed up by e-mail and telephone to the 41 councils in January – March 2013 offering to assist the contact officers to review the draft survey forms over the telephone.

A total of 148 completed survey forms had been received by closure of the survey on 21 March 2013. Of these, 146 were checked and validated for analysis.

Survey form responses are shown in Appendix C. Some survey forms were incomplete and validation considered whether the survey data contained sufficient and reasonable data for analysis. The majority of councils were queried on the completeness and reasonableness of their survey data.

The survey results show the number of councils responding to that question as a note on relevant tables.

The response rate of 97% (148 responses from 152 councils) over a six month period and validated response rate of 96% (146 from 152) provides a measure of asset management capability. The high response rate was only achieved through the continued follow up by the Roads Directorate Manager and consultant and preparation of draft survey forms for 41 councils that had not responded by mid-January 2013.

The 2012 survey was the fourth time the Benchmarking Survey has been conducted.

The survey requested data that should be readily accessible and available from councils being:

• asset management practice data • asset valuation data • road management data

–– sealed and unsealed road lengths –– sealed and unsealed roads maintenance costs –– resurfacing costs and average useful lives –– sealed pavement renewal costs and average useful lives –– unsealed resheeting costs and average useful lives. • bridge management data –– concrete/steel and timber bridge inventory and attribute data –– concrete/steel and timber bridge maintenance costs –– concrete bridge renewal average costs and average useful lives –– timber bridge renewal average costs and average useful lives.

The survey form includes a road and a bridge life cycle management model for each council which compares road and bridge life cycle costs with current funding levels and identifies any funding gap. The model can be used to run scenarios on varying service levels and costs with the objective of managing the funding gap to an acceptable level.

Road Management Report 16 6.2 Reasons for the level of response

Reasons for the level of response from non-responding councils could include:

• staff changes in Councils and resulting loss of asset management knowledge, • lack of data, • lack of resources to complete survey, • community emergency management and flood damage events during the survey period, • little understanding of the issues, • lack of asset management skills.

6.3 Organisational commitment to asset management

The level of response and quality of responses gives an indication of the asset management capability in councils. Given the funding gap indicated by the survey response, councils will need to increase asset management capability if they are to manage their funding gap and satisfy community demands for services.

6.4 Data quality issues

The road and bridge model uses average cost and useful life data. There are inherent inaccuracies in use of averaging data for a complex and highly varied road and bridge network. Options were provided for councils to enter road data at a network level or asset/service hierarchy level. Councils predominately provided data at the network level indicating a low level of use of road hierarchies and service levels to manage road networks.

The consultants queried survey forms with councils where data was not provided for all fields, typographical errors were evident or where the data appeared inappropriate, to assist in validating the survey forms and maximising the number of valid survey form returns.

There was a large variability in data values provided for key datasets being:

• average cost of sealed road resurfacing ($/km) • average useful life of sealed road surfaces (yrs) • average cost of sealed pavement renewal ($/km) • average useful life of sealed pavements (yrs) • average cost of unsealed road resheets ($/km) • average useful life of unsealed road gravel sheeting (yrs)

17 ROAD ASSET BENCHMARKING PROJECT 2012 The distributions of maintenance costs for regional and local roads are shown in Figures V and VI as an example of the variability in data values.

Distribution of Regional Sealed Maintenance Cost in $000/km

Figure V: Distribution of Regional Sealed Road Maintenance Costs 2011/12

Distribution of Local Sealed Maintenance Cost in $000/km

Figure VI: Distribution of Local Sealed Road Maintenance Costs 2011/12

The large variations may be explained by the relative condition of sealed surfaces and inclusion of capital renewal and non road maintenance items such as resurfacing, street lighting, street sweeping, verge mowing and similar operational activities.

Road Management Report 18 7. Findings

7.1 97% (148) of NSW councils responded to the IPWEA NSW Roads & Transport Directorate’s Road Asset Benchmarking survey. Of these responses 96% (146 of 152) were assessed as valid for analysis. 7.2 Asset management practice and capability is improving with 61% (88) (33% in 2007/08, 48% in 2009/10) of responding councils reporting that they used the principles of the International Infrastructure Management Manual, the internationally recognised reference on infrastructure asset management, in full. 82% (120) of councils (41% in 2009/10) have an adopted Road Asset Management Plan. 118 (83%) of councils (68% in 2009/10) have joined IPWEA NAMS.PLUS Asset Management to assist in developing their road asset management plans. 7.3 Road related risk was being addressed through a road asset management plan or within a corporate risk management plan in 68% (97) of the responding councils (46% in 2007/08, 52% in 2009/10). 7.4 94% (137) (66% in 2007/08, 67% in 2009/10) of responding councils indicated they have a long term financial plan, 87% (126) (45% in 2007/08, 55% in 2009/10) of the responding councils’ plans cover a period of at least 10 years. 7.5 54% (76) (22% in 2007/08, 33% in 2009/10) of responding councils’ long term financial plans recognise the effects of infrastructure including financing infrastructure renewal, and providing for growth and life cycle costs for new infrastructure. 7.6 The 146 responding councils are responsible for the management of 154,085 km of regional and local roads combined and 10,150 concrete/steel and timber bridges. 7.7 Councils knowledge of the load capacity of bridges is limited to 14.8% of concrete bridges and 20.6% of timber bridges. 7.8 The responding councils’ roads and bridges have a replacement value of $59,357 million, which is being consumed at the rate of $1,008 million per annum. 7.9 Road and bridge assets for the responding councils are reported to have 67.9% of their average ‘as new’ condition (service life) remaining (67.7% in 2007/08, 68.8% in 2009/10). The assets are being consumed at a rate of 2.2% of the depreciable amount. Asset renewal in 2011/12 was less than asset consumption for roads being 62% of consumption for sealed roads (82% in 2007/08, 64% in 2009/10), 40% for unsealed roads (50% in 2007/08, 30% in 2009/10) and 17% for concrete/steel bridges (45% in 2007/08, 59% in 2009/10). Timber bridge renewal is 241% of consumption recognising the continuing investment priority given by councils to renewal of ageing timber bridges (542% in 2007/08, 453% in 2009/10). 7.10 The road life cycle cost for the responding councils was estimated at $1,368 million per annum. Funding in 2011/12 was reported at $823 million leaving a funding gap of $545 million per annum below the life cycle cost. 7.11 Sealed road resurfacing/resealing life cycle cost for the responding councils was estimated at $335 million per annum. Expenditure of $171 million in 2011/12 was $164 million less than the annual life cycle cost. 7.12 Unsealed road resheeting life cycle cost for the responding councils was estimated at $149 million per annum. 2011/12 funding was $51 million which is $98 million less than the annual life cycle cost. 7.13 The estimated apportionment of road life cycle cost to the three major road usage categories based on councils’ best estimate of percentage traffic usage of roads was that residential use was responsible for 76% of the road life cycle cost, business and commercial usage 21% and high mass vehicles 3%. 7.14 The life cycle cost for the responding councils’ concrete/steel bridges was estimated at $18.6 million for regional roads and $33.3 million for local roads per annum. Expenditure in 2011/12 of $5.6 million for bridges on regional roads and $7.5 million for bridges on local roads was $13.0 million and $25.8 million less than the respective life cycle cost. 7.15 The life cycle cost for the responding councils’ timber bridges was estimated at $1.7 million for regional roads and $12.6 million for local roads per annum. Funding in 2011/12 of $6.7 million for regional roads and $18.0 million for local roads was $5.0 million for regional roads and $5.4 million per annum greater than the life cycle cost. This indicates the investment priority given to timber bridge renewal in 2010/12. 7.16 Survey data quality was variable with a few of the responding councils having good and reliable data and others lacking in both quantity and quality of data.

19 ROAD ASSET BENCHMARKING PROJECT 2012 8. Discussion on Findings

8.1 Asset management practices and skills

Few councils provided the complete survey dataset in a form suitable for database analysis. The data sought was considered to be basic financial data and data used for strategic and day-to-day management of roads and bridges. This data should be readily available in councils with good asset management capability. The availability, accuracy and use of asset management data is of need of improvement.

Guidelines to assist councils in asset management and for preparing asset management plans have been available since 1994 with the National Asset Management Manual 199412 and International Infrastructure Management Manual 201113. All Councils should be using the International Infrastructure Management Manual as the asset management reference.

In 2008, IPWEA released NAMS.PLUS Asset Management, a system of templates and modelling tools to assist councils write their infrastructure asset management plans. The increasing number of councils using IPWEA’s NAMS. PLUS common templates and modelling tools to develop the roads asset management plans as shown in Figure VII is a positive result.

NAMS.PLUS Membership

Figure VII: Councils using NAMS.PLUS for AM Plans 2008-2012

The NSW Integrated Planning Framework requires councils to have a 10 year financial plan supported by 20 year asset management plans to ensure sustainable service delivery for their communities.

The funding gap identified in the survey and level of road related risk practices require councils to improve their road related risk management practices to sustain service delivery, minimise liability exposure and potential for increases in insurance premiums. 68% of councils have a risk management plan for road related risks, which is an increase from the 52% reported in 2009/10.

12 IMEA, 1994 13 IPWEA, 2011 Road Management Report 20 8.2 Road transport infrastructure investment

The estimated investment to replace the NSW local transport infrastructure is $61.8 billion ($45.9 billion in 2007/08, $59.2 billion in 2009/10) based on an extrapolation of values reported in financial statements of the 146 responding councils. This represents an investment of $8,465 for each of the 7.3 million people14 in NSW.

The assets are reported as being consumed at an estimated $1,049 million per annum ($735 million in 2007/08, $889 million in 2009/10).

Road infrastructure investment values are shown in Table 19. Wentworth St, Blackheath Table 19: Road and Bridge Values Extrapolated to 152 Councils

Depreciable Depreciated Annual Replacement Amount Replacement Depreciation Cost ($M) ($M) Cost ($M) Expense ($M)

Sealed Roads $38,380 $30,262 $26,735 $642

Unsealed Roads $6,226 $3,837 $4,550 $132

Concrete/Steel Bridges $3,870 $3,764 $2,472 $48

Timber Bridges $532 $511 $242 $8

Roads Ancillary $12,788 $12,548 $7,931 $219

Total $61,797 $50,923 $41,930 $1,049

Note: Data from Table 11, 146 councils extrapolated to 152 councils. New road and bridge assets contributed to and constructed by councils in 2011/12 are estimated to increase the replacement value of road and bridge assets by $608 million or 1.1%. Table 20 shows the estimated value extrapolated to 152 councils.

Table 20: Estimated Investment in New Assets 2011/12

New Assets Value Value extrapolated to Source of new Assets Sample Size ($M) 152 Councils ($M)

Contributed by Others 52 $108 $315

Upgrade & New Roads 78 $145 $283

Upgrade & New Bridges 45 $24 $82

Total $277 $680

Data from Sec 4.4, Sample size extrapolated to 152 councils. ($108 M / 52 x 152 = $315 M)

14 NSW Trade & Investment, 2012, NSW Population Estimate at 30 June 2011, http://www.business.nsw.gov.au/invest-in-nsw/about-nsw/people-skills-and-education/population-estimates

21 ROAD ASSET BENCHMARKING PROJECT 2012 8.3 Road funding

Extrapolating the 2011/12 funding gap of $545 million for the 146 responding councils to cover the 152 NSW councils will give an indication of the size of the road funding gap. The extrapolated road funding gap for 152 councils in NSW is estimated at $567 million ($624 million in 2007/08, $677 million in 2009/10).

The change from 2009/10 to 2011/12 as illustrated in Table 25 is largely due to increase in road funding of $112 million (may include flood damage grants) and reduction in bridge funding of $24 million (end of Timber Bridge Partnership program).

Table 21 shows the road model extrapolated to 152 councils. Funding the life cycle cost will require a 66% increase over 2009/10 expenditures (80% in 2007/08, 91% in 2009/10).

Table 21: Roads Life Cycle Cost and Expenditure extrapolated to 152 Councils

Length Rate Life Cycle Cost Expenditure Funding Gap (km) ($/km/yr) ($/yr) ($/yr) ($/yr)

REGIONAL ROADS

Sealed Roads

Routine maintenance 14,712 $4,598 $67,638,163 $67,638,163

Resurfacing 14,712 $4,456 $65,561,129 $34,941,216

Pavement renewal 14,712 $6,381 $93,880,780 $56,527,520

Sub total 14,712 $15,436 $227,080,073 $159,106,900 $67,973,173

Unsealed Roads

Routine maintenance 3,220 $2,515 $8,098,834 $8,098,834

Resheeting 3,220 $4,632 $14,913,524 $1,950,345

Sub total 3,220 $7,147 $23,012,358 $10,049,179 $12,963,179

Total Regional 17,931 $13,947 $250,092,431 $169,156,079 $80,936,352

LOCAL ROADS

Sealed Roads

Routine maintenance 65,917 $3,333 $219,675,629 $219,675,629

Resurfacing 65,917 $4,294 $283,057,654 $142,732,201

Pavement renewal 65,917 $6,386 $420,918,458 $164,817,225

Sub total 65,917 $14,012 $923,651,741 $527,225,056 $396,426,685

Unsealed Roads

Routine maintenance 76,569 $1,435 $109,878,426 $109,878,426

Resheeting 76,569 $1,837 $140,695,928 $51,037,408

Sub total 76,569 $3,273 $250,574,354 $160,915,834 $89,658,520

Total Local Roads 142,486 $8,241 $1,174,226,096 $688,140,890 $486,085,205

Grand Total 160,417 $8,879 $1,424,318,526 $857,296,969 $567,021,558

Note: Data from 146 Councils extrapolated to 152 councils, apparent errors are due to rounding. Road maintenance expenditure is assumed to be adequate. Rates for total regional, total local and grand totals are averages for sealed and unsealed roads.

Road Management Report 22 The life cycle cost and 2010/12 expenditure for NSW regional roads and local roads is show in Figure VIII. The life cycle funding gap for regional and local roads is shown in Figure IX.

Road Life Cycle Cost and Exp. 2012 ($M/yr)

Figure VIII: Road Life Cycle Cost and Expenditure 2011/12

Road Life Cycle Funding Gap 2012 ($M/yr)

Figure IX: Road Life Cycle Cost Funding Gap 2011/12

8.4 Road life cycle cost and road usage

Table 17 showed the calculated percentages of the road life cycle cost that is estimated to be related to usage of the roads by residential, business and commercial and high mass vehicles for the 146 responding councils. The estimated road life cycle cost related to usage for all 152 councils is shown in Table 22.

Note that the sample traffic volumes used in this instance are ‘best estimates’ only as no data is held for traffic volumes classified by road use.

This usage data and life cycle cost analysis was included in the benchmarking survey to test the methodology. Further research into the life cycle cost and road usage should focus on firstly improving the accuracy of road usage traffic volumes involving detailed sampling of typical urban and rural category road and secondly, relating the traffic usage to effect on the road usage on useful life of the road asset components. This will take into account load effects on surfaces and pavements for the three road uses.

23 ROAD ASSET BENCHMARKING PROJECT 2012 Table 22: Road Life Cycle Cost and Road Usage 2011/12

Road Use Category % of Road Life Cycle Cost Road life cycle cost for 152 councils ($/yr)

Residential 76.5% $1,090,198,806

Business/Commercial 20.7% $294,304,513

High Mass Vehicles 2.8% $39,815,207

Total 100.0% $1,424,318,526

Note: Calculated from Tables 17 and 21.

8.5 Bridge funding

Extrapolating the sample data for 146 responding councils shown in Table 18, gives an indication of sustainable funding levels for bridges on regional and local roads. 2011/12 expenditure on bridges on regional and local roads is estimated at approximately $29.6 million less than the life cycle cost ($3.9 million greater in 2007/08, $3.3 million greater in 2009//10).

Table 23: Bridge Life Cycle Cost and Expenditure 2011/12

Area Rate Life Cycle Cost Expenditure Funding Gap (m2) ($/m2/yr) ($/yr) ($/yr) ($/yr) REGIONAL ROADS Concrete/steel bridges Routine maintenance 524,503 $3.0 $1,565,496 $1,565,496 Bridge renewal 524,503 $34.0 $17,834,935 $4,299,658 Sub total 524,503 $37.0 $19,400,431 $5,865,154 $13,535,277 Timber Bridges Routine maintenance 17,157 $53.9 $924,358 $929,057 Bridge renewal 17,157 $49.0 $839,984 $6,015,885 Sub total 17,157 $102.8 $1,764,342 $6,944,942 -$5,180,600 Total Regional 541,660 $39.1 $21,164,773 $12,810,096 $8,354,677 LOCAL ROADS Concrete/steel bridges Routine maintenance 934,839 $4.4 $4,106,387 $4,106,387 Bridge renewal 934,839 $32.7 $30,601,537 $3,686,082 Sub total 934,839 $37.1 $34,707,924 $7,792,469 $26,915,455 Timber Bridges Routine maintenance 169,137 $34.3 $5,801,328 $5,801,328 Bridge renewal 169,137 $43.4 $7,342,971 $12,976,732 Sub total 169,137 $77.7 $13,144,299 $18,778,060 -$5,633,761 Total Local Roads 1,103,976 $43.3 $47,852,223 $26,570,529 $21,281,694 Grand Total 1,645,635 $41.9 $69,016,996 $39,380,625 $29,636,371

Note: Data from 146 Councils extrapolated to 152 councils, apparent errors due to rounding. Bridge maintenance expenditure is assumed to be adequate. See note on Table 18. Rates for total regional, total local and grand totals are averages for concrete and timber bridges.

Road Management Report 24 A comparison of the sample and extrapolated bridge data in shown in Table 24.

Table 24: Sample Bridge Data extrapolated to 152 Councils

Sample of 146 Councils Extrapolated to 152 Councils

No. concrete/steel bridges 7,999 8,328

No. timber bridges 2,150 2,238

Total bridges 10,149 10,566

Bridge Replacement Value $4,429 M $4,403 M

Bridge Asset consumption $54.0 M/yr $56.2 M/yr

Bridge life cycle cost $66.2 M/yr $69.0 M/yr

2009/10 Expenditure $37.8 M/yr $37.4 M/yr

Funding gap $28.4 M/yr $29.6 M/yr

The life cycle cost and 2011/12 expenditure for bridges on NSW regional roads and local roads is show in Figure X. The life cycle funding gap for regional and local road bridges is shown in Figure XI.

Bridge Life Cycle Cost and Exp. 2012 ($M/yr)

Figure X: Bridges Life Cycle Cost and Expenditure 2011/12

Bridge Life Cycle Funding Gap 2012 ($M/yr)

Figure XI: Bridges Life Cycle Cost Funding Gap 2011/2

25 ROAD ASSET BENCHMARKING PROJECT 2012 The funding gap for regional road bridges is $29.6 million. This is a significant increase from the $3.3 million above the life cycle cost in 2009/10, a change of $32.9 million reflecting the end of the NSW Timber Bridge Partnership program in June 2011.

8.6 Roads and Bridges Combined Funding Position

The estimated funding position for roads and bridges extrapolated for all NSW councils is shown in Table 25 and Figure XII.

Table 25: Roads and Bridges Life Cycle Funding Position 2011/12

Life cycle cost ($M/yr) 2005/06 2007/08 2009/10 2011/12

Roads $1,441 $1,381 $1,422 $1,424

Bridges $62 $62 $59 $69

Subtotal $1,503 $1,442 $1,482 $1,493

Life cycle expenditure ($M)

Roads $675 $767 $745 $857

Bridges $45 $58 $63 $39

Subtotal $720 $825 $808 $896

Estimated funding gap ($M/yr) $783 $618 $674 $597

Apparent errors are due to rounding The estimated funding gap is equivalent to a 66% increase in funding above the 2011/12 expenditure levels. This is an improvement from the 75% increase required in 2007/08 and 83% in 2009/10.

Road & Bridge Life Cycle Cost, Expenditure and Funding Gap 2011-12 ($M/yr)

Figure XII: Roads & Bridges Life Cycle Costs and Expenditure 2011/12

The road and bridge funding gap for all 152 NSW councils is estimated at $597 million per annum based on the data from the 146 responding councils extrapolated to 152 councils. This is equivalent to a 66% increase in 2011/12 road and bridge expenditure or significant decline in services and service levels if asset and risk management principles are not applied to managing the gap.

Road Management Report 26 Asset management principles to be applied to managing the funding gap include:

• Ensuring that all councils have adequate accurate knowledge on their road assets and how their assets are performing, • Ensuring that sealed roads are resurfaced/resealed at the optimum time to maintain waterproofing of pavements. This will require an increase in funding from $178 million in 2011/12 to $348 million per annum for all councils (a 96% increase, 254% in 2009/10), • Undertaking consultation and selection of appropriate levels of service and costs to meet community needs and available resources, • Ensuring that unsealed roads are resheeted at the optimum time to meet agreed service levels within available resources. This will require an increase in funding from $53 million in 2011/12 to $155 million for all councils if service levels reported in the survey are to be maintained (a 194% increase, 416% in 2009/10), • Making efficiencies in operations, maintenance, resurfacing and pavement renewal aimed at reducing life cycle costs, • Improving maintenance practices and funding if necessary to extend pavement life and defer projected renewal, • Ensuring adequate risk management practices are in place to identify risks and implement appropriate risk treatment actions, • Rationalising (disposing) of unnecessary infrastructure assets, • Reducing service levels in consultation with the community, • Identifying future renewal needs and expenditure required to meet agreed service levels and document in an asset management plan, • Increasing funding, and • Combinations of all actions above.

8.7 Reporting Asset Consumption and Renewal

The Asset Sustainability Ratio is used as a measure of whether assets are being replaced at the rate they are wearing out. It is the rate of asset replacement expenditure relative to depreciation for a period. Depreciation expense reports the consumption of service potential of assets for a financial year in financial terms.

A comparison of life cycle renewal cost (the road asset managers’ assessment of asset consumption) for roads and bridges and reported depreciation expense for the 152 NSW councils is shown in Table 26.

Table 26: Life Cycle Renewal Cost and Depreciation Expense 2011/12

Sealed Unsealed Conc. Timber Total Roads Roads bridges bridges ($M) ($M) ($M) ($M) ($M)

LIFE CYCLE RENEWAL COST

Renewal (Required Capex) 2011/12

- Resurfacing (reseals) $349 $349

- Pavement renewal $515 $515

- Resheets $156 $156

- Bridge renewal $48 $8.2 $57

Subtotal Life Cycle Renewal Cost $863 $156 $48 $8.2 $1,076

Depreciation Expense (2011/12) $642 $132 $48 $7.9 $830

Depreciation / LC Renewal Cost 74% 85% 100% 96% 77%

27 ROAD ASSET BENCHMARKING PROJECT 2012 Table 26 indicates that there is a considerable difference in the technical assessment of asset consumption as reported by local road asset managers in this survey and that reported by depreciation expense in council’s financial statements.

Reported depreciation expense for 2010/12 is 74% of the local road asset managers’ assessment of asset consumption of sealed roads (54% in 2007/08, 60% in 2009/10), 85% for unsealed roads (44% & 80%), 100% for concrete/steel bridges (70% & 93%), 96% for timber bridges (65% & 89%) and 77% overall for local roads and bridges (53% in 2007/08, 65% in 2009/10).

Table 27 compares 2011/12 capital renewal expenditure with 2011/12 depreciation expense.

Table 27: Life Cycle Renewal Expenditure and Depreciation Expense 2011/12

Sealed Unsealed Conc. Timber Total Roads Roads bridges bridges ($M) ($M) ($M) ($M) ($M)

LIFE CYCLE RENEWAL EXP.

Capital Renewal Exp. 2011/12

- Resurfacing (reseals) $178 $178

- Pavement renewal $221 $221

- Resheets $53 $53

- Bridge renewal $8 $19.0 $27

Subtotal renewal expenditure $399 $53 $8 $19.0 $479

Depreciation Expense 2011/12 $642 $132 $48 $7.9 $830

Renewal Exp / Depreciation 62% 40% 17% 241% 58%

2011/12 capital renewal expenditure is 58% of asset consumption (81% in 2007/08, 61% in 2009/10) as reported by depreciation expense. For sealed roads, capital renewal expenditure is 62% of depreciation expense (82% & 64%), 40% for unsealed roads (50% & 30%), 17% for concrete/steel bridges (54% & 59%) and 241% for timber bridges (542% in 2007/08, 453% in 2009/10).

The Asset Sustainability Ratio for roads and bridges in 2011/12 is 58%.

Using the depreciation expense figures reported in this survey as a measure of average asset renewal may give a false position of actual funding need. The measures of asset consumption and asset renewal expenditure are shown in Table 28 and Figure XIII.

Road Management Report 28 Table 28: Life Cycle Renewal Cost, Expenditure and Depreciation 2011/12

Sealed Unsealed Conc. Timber Roads Roads bridges bridges Total ($M) ($M) ($M) ($M) ($M)

Life Cycle Renewal Cost 2011/12 $863 $156 $48 $8 $1,076

Depreciation Expense 2011/12 $642 $132 $48 $8 $830

Capital Renewal Exp. 2011/12 $399 $53 $8 $19 $479

Reporting Asset Consumption ($M/yr)

Figure XIII: Technical & Financial Measures of Asset Consumption 2005-2012

The local road asset managers’ assessment of life cycle renewal cost for roads and bridges is $1,076 million per annum ($1,088 million in 2007/08, $1,107 million in 2009/10). This is their estimate of the value of the local road assets that are being consumed (used up) each year.

Depreciation expense is the financial representation of the asset consumption of roads and bridges. Depreciation expense as reported by NSW councils is $830 million per annum ($579 million in 2007/08, $715 million in 2009/10), some 77% of the asset manager’s assessment of asset consumption (53% in 2007/08, 65% in 2009/10).

Expenditure on capital renewal of road and bridge assets in 2011/12 was $479 million ($477 million in 2007/08, $433 million in 2009/10). This is 45% (44% in 2007/08, 39% in 2009/10) of the life cycle cost and 58% of depreciation expense (81% in 2007/08, 60% in 2009/10).

Calculation of the Asset Sustainability Ratio using the above financial and technical data illustrates the difference between technical estimates of asset consumption and depreciation.

The Asset Sustainability Ratio indicates that local road assets are being renewed at a rate of 58% of asset consumption. Calculating the Asset Sustainability Ratio using the technical estimates shows that road assets are being renewed at 45% of consumption.

29 ROAD ASSET BENCHMARKING PROJECT 2012 Consistency in the technical and financial reporting of asset consumption and renewal has greatly improved over the seven years of the benchmarking reports as shown in Figure XIV.

Financial and Technical Asset Sustainability Ratios

Figure XIV: Asset Sustainability Ratios 2005-2012

Reasons for the current variation may include:

The Asset Sustainability Ratio should be providing an accurate measure of asset consumption and replacement/ renewal. The two measures of asset consumption, depreciation expense and life cycle renewal cost illustrated in this section, should be the same. Asset managers and finance managers should be providing the same information on asset consumption.

Trends in the Asset Sustainability Ratio over time can be used as an indicator of whether councils are maintaining the operating capability of the assets. Over the life of the assets, asset renewal should equal asset consumption (Asset Sustainability Ratio = 100%) if the services from the assets are to be sustained.

The survey compared life cycle cost (maintenance plus required renewal) with life cycle expenditure. Life cycle cost and expenditure is summarised in Table 29.

Victoria St, Millthorpe

Road Management Report 30 Table 29: Life Cycle Cost and Life Cycle Expenditure 2011/12

Sealed Unsealed Conc. Timber Total Roads Roads Bridges bridges ($M/yr) ($M/yr) ($M/yr) ($M/yr) ($M/yr)

LIFE CYCLE COST

Maintenance $287 $118 $6 $7 $418

Renewal (Required Capex)

- Resurfacing (reseals) $349 $349

- Pavement renewal $515 $515

- Resheets $156 $156

- Bridge renewal $48 $8 $57

Subtotal renewal $863 $156 $48 $8 $1,076

Life Cycle Cost (maint & renewal) $1,151 $274 $54 $15 $1,493

LIFE CYCLE EXPENDITURE

Maintenance $287 $118 $6 $7 $418

Renewal (2007-08 Capex)

- Resurfacing (reseals) $178 $178

- Pavement renewal $221 $221

- Resheets $53 $53

- Bridge renewal $8 $19 $27

Subtotal renewal $399 $53 $8 $19 $479

Life cycle expenditure (maint & renewal) $686 $171 $14 $26 $897

Life Cycle Exp / Life Cycle Cost 60% 62% 25% 173% 60%

Note: Data from 146 councils extrapolated to 152.

31 ROAD ASSET BENCHMARKING PROJECT 2012 8.8 Conclusion

Present funding to meet existing service levels for NSW regional and local roads and bridges is 60% of the life cycle costs.

Funding levels have risen from 57% of life cycle costs in 2007/08 and 55% in 2009/10. Current service and expenditure levels are not sustainable, although councils have made improvements in sustainability of road services.

Councils may be facing a large and increasing risk exposure at present and in the future. These risks include:

• the condition of roads and bridges infrastructure will decline, • personal injury and legal claims are likely to increase, • road life cycle expenditure ‘savings’ will be passed onto road users through higher transportation operating costs, • funding will not be available to renew ageing road and bridge assets, • councils will not be able to provide services needed by communities in medium-long term.

Renewal expenditures are being transferred to the next generation.

Asset consumption as reported by depreciation expense is understating the assessment of asset consumption by local road asset managers by almost 23% (50% in 2007/08, 35% in 2009/10), Councils have made significant improvements in the consistency of technical and financial reporting of infrastructure consumption over the 4 year period. Engineers and accountants should be giving the same message.

8.9 Managing the Gap

The gap consists of several components as shown in Figure XV. Each gap component requires a different approach to manage the gap and move towards sustainable service provision. Table 30 summarises the recommended management treatments to ‘manage out’ the funding gap.

Life Cycle Funding Gap 2011-12 ($M/yr)

Figure XV: Life Cycle Funding Gap Components 2011/12

Road Management Report 32 Table 30: Life Cycle Funding Gap Components and Asset Management Treatments

Gap Gap ($M / yr) Asset Management Treatment Component 2007/08 2009/10 2011/12

Pavement $303 $316 $293 • Increase knowledge of asset performance and useful life, renewal • Develop and use optimum (low cost) renewal methods, • Develop renewal projections and funding plan and document in Road Asset Management Plan.

Unsealed $124 $131 $103 • Increase knowledge of asset performance and useful life, resheeting • Develop/review road hierarchy and service levels for maintenance and resheeting to suit available resources, • Develop resheet projections and funding plan and document in Road Asset Management Plan.

Bridges $4 - $3 $30 • Increase knowledge of asset performance and useful life, • Develop/review road hierarchy and service levels to suit available resources, • Develop renewal projections and funding plan and document in Road Asset Management Plan.

Total $618 $674 $597

Note: The -$3 M gap shown for bridges indicates that expenditure was greater than the life cycle cost due to the high expenditure levels required to replace/renew aged timber bridges. The investment of $680 million on new assets and upgrading of existing assets in 2011/12 shown in Table 20 and below will add to the future life cycle cost and potentially add to the funding gap.

Contributed asset value $315 M Roads upgrade/new expenditure $283 M Bridges upgrade/new expenditure $82 M Total $680 M

This is estimated to add $19 M per annum to operating costs for roads and bridges in 2012/13 and in following years.15

15 Calculation $680M x 2.8% (0.7% maintenance [ref Table E2] + 2.1% depreciation [ref Figure XIX])

33 ROAD ASSET BENCHMARKING PROJECT 2012 9. Improvement Indicators

• managing the road assets, and • improving their asset management knowledge and capability.

The assessment of performance indicators is undertaken in these two areas.

9.1 Managing road assets

Performance measure 1.1 Funding of Life Cycle Cost16 For sustainability in providing services from infrastructure, funding of the life cycle cost is required on average over the life cycle. An increase in funding of the life cycle cost measure indicates a move toward more sustainable service delivery.

Funding of Life Cycle Cost

Figure XVI: Funding of Life Cycle Costs 2005-2012

Funding of the life cycle costs of road and bridge assets has increased from 55% of life cycle cost in 2010 to 60% in 2011/12.

The funding position for sealed and unsealed roads increased in the period with concrete and timber bridges seeing a significant reduction in life cycle funding. Timber bridges continue to be funded at well above life cycle cost as a consequence of allowing ageing timber bridges to deteriorate to levels requiring expenditure well above the life cycle cost.

Similar funding levels above life cycle costs may be required for other road assets at some time in the future.

Developing asset management and risk management plans and long-term financial plans will assist in managing the financial impact of deteriorating assets and potential reduction in service levels.

16 Title modified from Road asset sustainability used in previous reports.

Road Management Report 34 Performance measure 1.2 Road & bridge asset life cycle funding gap The road asset life cycle funding gap is a snapshot of the gap between life cycle costs and annual expenditure.

Road & Bridge Life Cycle Funding Gap ($M/yr)

Figure XVII: Road & Bridge Life Cycle Funding Gap 2005-2012

The Roads and Bridges life cycle funding gap has decreased from $674 million in 2010 to $597 in 2012, a reduction of 11% from 2010.

Sealed roads and unsealed roads asset categories saw a reduction in life cycle funding gap from 2010 to 2012. The funding gap for concrete and timber bridges has increased with timber bridge funding consistently above the life cycle cost.

Performance measure 1.3 Road & Bridges Asset Consumption Ratio The Asset Consumption Ratio indicator gives a snapshot of the average proportion of ‘as new’ condition left in assets.17

Road & Bridge Asset Consumption Ratio

Figure XVIII: Road & Bridges Asset Consumption Ratio 2005-2012

17 IPWEA, 2012, AIFMG V1.3, Financial Sustainability Indicator 8, p 2.19. Calculation (DRC-RV)/Dep. Amount)

35 ROAD ASSET BENCHMARKING PROJECT 2012 Figure XVIII indicates that the asset consumption ratio (average proportion of ‘as new’ condition) of road and bridge assets has increased since 2005. In 2010, road and bridge assets had 62.1% of their service life remaining. The remaining service reduced to 61.0% in 2012 indicating an overall ‘ageing’ of the assets.

If a council is operating sustainably, with asset renewal approximately equal to asset consumption and annual revaluation of assets, the change in the Asset Consumption Ratio indicator would be due to the value of contributed assets.

A council that is renewing assets at a rate less than consumption and with no or limited contributed growth assets should see its Asset Consumption Ratio indicator reducing.

Performance measure 1.4 Road & Bridges Asset Sustainability Ratio18 For sustainability, asset renewals should equal asset consumption on average over the life of the assets. The Asset Sustainability Ratio measures whether assets are being replaced at the rate they are wearing out. It is the ratio of asset replacement expenditure relative to depreciation for a period.19

Asset Sustainability Ratio

Figure XIX: Road & Bridges Asset Sustainability Ratios 2005-2012 The Asset Sustainability Ratio has declined from 61% in 2009/10 to 58% in 2011/12.

Calculating the Asset Sustainability Ratio using technical life cycle cost, discussed in Section 8.7 gives a different result as shown in Figure XX.

Asset Sustainability Ratio

Figure XX: Asset Sustainability Ratios based on Technical Estimates of Consumption

18 Modified from Road & Bridge Asset Consumption and Renewal used in previous reports. 19 IPWEA, 2012 AIFMG Ver 1.3, National Indicator 3, Sec 2.6, p 2.15.

Road Management Report 36 A technically based Asset Sustainability Ratio has increased from 39% in 2009/10 to 45% in 2011/12.

This supports the need for technical and financial estimates of asset consumption as discussed in Section 8.7, to be in alignment.

9.2 Improving asset management knowledge and capability

Performance Measure 2.1 Capacity to Complete Benchmarking Survey

Councils’ response to Survey

Figure XXI: Capacity to Complete Benchmarking Survey 2005-2012 Figure XXI indicates that the number of councils providing data to the benchmarking survey increased from 95% in 2010 to 97% in 2012. The number of validated survey forms has increased from 93% to 96%.

Performance measure 2.2 Use of IIMM principles

Use of IIMM Principles

Figure XXII: Use of IIMM principles 2005-2012 Figure XXII indicates that the number of councils and adopting the international reference for asset management, IPWEA’s International Infrastructure Management Manual, to guide the asset management practices has increased from 68 in 2010 to 88 in 2012, an increase of 29% from 2010 to 2012.

37 ROAD ASSET BENCHMARKING PROJECT 2012 Performance measure 2.3 Adoption of road asset management plans

Adoption & Use of Road AMPs

Figure XXIII: Adoption and Use of Road Asset Management Plans 2005-2012 The number of councils who have adopted road asset management plans has increased by 100% from 60 in 2010 to 120 in 2012.

Performance measure 2.4 Management of road related risks

System for Managing Road Risks

Figure XXIV: System for Managing Road Related Risks 2005-2012 Figure XXIV illustrates an increased number of councils have adopted systems for managing road related risks either in a corporate risk management system or in an adopted road asset management plan. 97 councils have such a system in 2012 compared to 73 in 2010. This represents a 32% increase from 2010.

Road Management Report 38 Performance measure 2.5 Use of long-term financial plans A long-term financial plan provides a long term strategy to balance competing funding priorities with available funding.

Use of Long Term Financial Plans

Figure XXV: Use of Long-Term Financial Plans 2005-2012 The use of long-term financial plans by NSW councils has increased from 94 in 2010 to 137 in 2012. This is an increase of 46% from the 2010 capability levels as illustrated in Figure XXV.

Performance measure 2.6 Period of long-term financial plans For organisations providing services from infrastructure a long-term plan covering a period of at least 10 years is recommended.20

Period of LTFPs

Figure XXVI: Period of Long-Term Financial Plans 2005-2012 Figure XXVI indicates that councils are making good progress in long-term financial planning. 76 councils in 2010 had long-term financial plans of at least 10 years. This has increased to 126 in 2012, an increase of 65% from 2010.

20 DLG, 2006, Recommendation 6, p 19.

39 ROAD ASSET BENCHMARKING PROJECT 2012 Performance measure 2.7 Infrastructure effects in long-term financial plans

Infrastructure Effects in LTFPs

Figure XXVII: Infrastructure Effects in Long-Term Financial Plans 2005-2012 Recognition of infrastructure effects in long-term financial plans has increased significantly from 2010 with an additional 31 councils recognising the financial effects of infrastructure including renewal of assets, provision of growth and life cycle costs for new assets. This is a 67% increase in capability as shown in Figure XXVII.

9.3 Improvement Assessment

Table 31 summarises the assessment of whether councils have improved their asset management practices, knowledge and capacity to manage their timber bridges.

Of the eleven (11) improvement indicators, nine (9) show a positive improvement in road and bridge management practices over the period 2010 to 2012.

The indicators showing a decrease in improvement are those relating to funding of asset renewals.

The indicators showing an improvement are those related to Councils’ asset management practices.

It is clear that Councils have made major improvements in asset and financial management capacity since 2010.

Road Management Report 40 Table 31: Road & Bridge Asset Management Improvement Assessment

Performance Indicator Improvement Comment

Managing Road & Bridge Assets

1.1 Road & bridge funding of life Yes Funding of life cycle costs has increased from cycle cost 55% in 2010 to 60% in 2012.

1.2 Road & bridge asset life cycle Yes The funding gap has decreased by 11% from funding gap 2010 to 2012.

1.3 Road & bridge Asset No The average proportion of ‘as new’ condition left Consumption Ratio in the assets has fallen from 62.1% in 2010 to 61.0% in 2012 indicating an ‘ageing’ of the road and bridge asset stock.

1.4 Road & bridge Asset No Asset Sustainability Ratio has fallen from 61% in Sustainability Ratio 2010 to 58% in 2012

Knowledge and Capacity

2.1 Capacity to complete Yes Overall response rate has increased by 2% since benchmarking survey the 2010 survey. 97% of councils completed the benchmarking survey.

2.2 Use of IIMM principles Yes 29% increase from 2010.

2.3 Adoption of road asset Yes 100% increase from 2010. management plans

2.4 Management of road related risks Yes 32% increase from 2010.

2.5 Use of long-term financial plans Yes 46% increase from 2010.

2.6 Period of long-term financial Yes 65% increase from 2010. plans

2.7 Infrastructure effects in long-term Yes 67% increase from 2010. financial plans

41 ROAD ASSET BENCHMARKING PROJECT 2012 10. Recommendations

The Final Report21 of the Independent Inquiry into the Financial Sustainability of Local Government identified that councils in NSW have a “huge backlog in infrastructure renewals (over $6 billion), which is expected to grow to almost $21 billion within 15 years”. The report highlighted challenges for councils in “managing rising community expectations, maintaining existing service commitments in the face of a huge infrastructure bill and constraints on rate income” and “overcoming skills shortages”.

This 2012 Road Asset Benchmarking report found that NSW councils are responsible for managing 160,417 km of regional and local roads and 10,566 bridges with a replacement cost of $61.8 billion. The life cycle cost of the road and bridge network is estimated at $1.49 billion per annum for 2011/12. Expenditure of $896 million was 60% of the life cycle cost. Current service levels and expenditure levels are not sustainable.

As a result, competition for adequate funding to maintain council’s infrastructure assets is also under pressure. However, it is of critical importance that councils:

To this end it is recommended that:

1. Councils prioritise existing funding and seek additional funds for regional and local roads to allow road resurfacing/ resealing works to be undertaken at the optimum time (estimated at $230 million per annum) to prevent loss of sealed pavement integrity and minimise future sealed pavement replacement/ renewal costs. 2. Councils seek funding from government to improve knowledge of the load carrying capacity of regional and local road bridges to improve risk management knowledge and the efficiency of road transport operations. 3. Councils continue to improve asset management capability under the NSW Integrated Planning Framework to a position that will enable services to be provided to communities in a sustainable manner. The survey analysis indicated that the current level of road infrastructure services that councils are currently providing to their communities is not sustainable. 4. Councils maintain and improve the Integrated Planning and Reporting framework systems and documentation to provide evidence that they can provide a sustainable level of service for road and bridge services to their communities. 5. Councils use the road management model in the survey form as a tool to manage road infrastructure services and life cycle costs. This is to be achieved by improving knowledge of assets and asset performance, developing road hierarchies and appropriate service levels, increasing funding for sealed resurfacing/resealing and unsealed road resheeting to the life cycle cost and managing pavement and bridge renewals through asset management plans. 6. Councils set a target to ‘manage out’ the annual life cycle funding gap of $597 million within a 3 year timeframe and report biennially on performance of the industry towards the target. 7. Councils continue with actions to improve the accuracy of financial reporting of infrastructure asset consumption and set a target to have technical and financial estimates of infrastructure consumption aligned within a 2 year timeframe.

21 Local Govt Association of NSW & Shires Association of NSW, May 2006. 22 JRA, 2010, Figure 41, p 30.

Road Management Report 42 References

BITRE, 2008, Information Sheet 29, Public road related expenditure and revenue in Australia 2008 update, Bureau of Infrastructure, Transport and Regional Economics, Department of Infrastructure Transport, Regional Development and Local Government, Canberra, 2008.

DLG, Asset Management Planning for NSW Local Government, Position Paper, Department of Local Government, Nowra, 2006.

DLG, Recognition of Certain Assets at Fair Value, Circular 09-09, Department of Local Government, Nowra, 17 March 2009.

DoTaRS, 2002-2003 Report on the Operation of the Local Government (Financial Assistance) Act 1985, Department of Transport and Regional Services, Canberra, 2003, www.dotars.gov.au/localgovt/publications/national_report/02_03/index.aspx

IMEA, National Asset Management Manual, Institute of Municipal Engineering Australia (now IPWEA), Sydney, 1994.

IPWEA, International Infrastructure Management Manual, 2011 edition, IPWEA and INGENIUM, Sydney, 2011, www.ipwea.org.au/iimm

IPWEA, NAMS.PLUS2 Asset Management, IPWEA, Sydney, 2013, www.ipwea.org.au/namsplus2.

IPWEA, Australian Infrastructure Financial Management Guidelines Version 1.3, IPWEA, Sydney, 2012, www.ipwea.org.au/AIFMG.

JRA, Local Government Infrastructure, Sustainability and Practice, Volume 2, Report on Independent Inquiry into the Financial Sustainability of NSW Local Government, Local Government Association of NSW and Shires Association of NSW, Sydney, May 2006.

JRA, Road Asset Benchmarking Project, Road Management, Version 3.3, IPWEA NSW Roads & Transport Directorate, Division, Sydney, September 2006.

JRA, Road Asset Benchmarking Project 2008, Road Management, Version 5, IPWEA NSW Roads & Transport Directorate, Division, Sydney, September 2010.

JRA, Road Asset Benchmarking Project 2010, Road Management, IPWEA NSW Roads & Transport Directorate, Division, Sydney, May 2011.

JRA, The Local Roads Funding Gap, Study of Local Road Funding in Australia 1999-2000 to 2019-20, Australian Local Government Association, Canberra, October 2010.

Local Government Association of NSW and Shires Association of NSW, Final Report: Findings and Recommendations, Independent Inquiry into the Financial Sustainability of NSW Local Government, Sydney, May 2006.

43 ROAD ASSET BENCHMARKING PROJECT 2012 Appendices

Appendix A Asset Management Practices by IPWEA Regions

Appendix B Road and Bridge Inventory for IPWEA Regions

Appendix C Response from Councils

Appendix D Cost Distributions for IPWEA Regions

Appendix E Asset Values, Maintenance and Renewal Rates for Regions

Appendix F Bridge Renewal Costs and Estimated Useful Life Distribution

Appendix A Asset Management Practices by IPWEA Region

A1. Use of International Infrastructure Management Manual Principles 2011/12

Region No In part Yes Total

Central Metro 0 3 4 7

Central West 0 4 8 12

Hunter 0 4 7 11

Illawarra 0 2 4 6

Metro North 0 4 8 12

Metro West 1 2 6 9

Mid North Coast 2 4 2 8

New England 0 6 6 12

North Coast 0 3 4 7

Orana 0 7 6 13

South East Metro 1 2 9 12

South Eastern 0 5 6 11

South West 0 7 18 25

Grand Total 4 53 88 145

Percent of total 3% 37% 61% 100%

Road Management Report 44 A2. Adoption and Use of Road Asset Management Plans 2011/12

Region No Planned in 1 yr In progress Yes Total

Central Metro 0 0 2 5 7

Central West 0 0 0 12 12

Hunter 1 0 0 10 11

Illawarra 0 0 1 5 6

Metro North 0 0 2 10 12

Metro West 0 1 0 8 9

Mid North Coast 0 0 3 5 8

New England 0 1 2 9 12

North Coast 0 0 0 7 7

Orana 0 0 4 10 14

South East Metro 0 2 2 8 12

South Eastern 0 1 2 8 11

South West 0 0 2 23 25

Grand Total 1 5 20 120 146

Percent of total 1% 3% 14% 82% 100%

A3. Use of Documented System for Managing Road Related Risk 2011/12

Region No Planned in 1 yr In progress Yes Total

Central Metro 0 0 2 5 7

Central West 0 1 2 9 12

Hunter 0 0 2 9 11

Illawarra 0 0 1 5 6

Metro North 0 0 3 9 12

Metro West 0 0 1 8 9

Mid North Coast 0 0 3 5 8

New England 1 0 3 7 11

North Coast 0 0 1 6 7

Orana 1 1 5 6 13

South East Metro 0 2 1 9 12

South Eastern 0 1 6 4 11

South West 0 0 9 15 24

Grand Total 2 5 39 97 143

Percent of total 1% 3% 27% 68% 100%

45 ROAD ASSET BENCHMARKING PROJECT 2012 A4. NAMS.PLUS Asset Management Members 2011/12

Region No Planned in 1 Yr Yes Total

Central Metro 2 0 5 7

Central West 3 1 8 12

Hunter 2 0 9 11

Illawarra 1 0 5 6

Metro North 4 0 7 11

Metro West 1 0 8 9

Mid North Coast 1 1 6 8

New England 0 0 12 12

North Coast 2 0 5 7

Orana 1 0 13 14

South East Metro 1 1 10 12

South Eastern 2 0 9 11

South West 2 0 21 23

Grand Total 22 3 118 143

Percent of total 15% 2% 83% 100%

A5. Use of Long-Term Financial Plans 2011/12

Region No Planned in 1 Year In progress Yes Total

Central Metro 0 0 0 7 7

Central West 0 0 0 12 12

Hunter 0 0 0 11 11

Illawarra 0 0 1 5 6

Metro North 0 0 0 12 12

Metro West 0 0 0 9 9

Mid North Coast 0 0 2 6 8

New England 1 0 0 11 12

North Coast 0 0 0 7 7

Orana 0 0 1 13 14

South East Metro 0 1 2 9 12

South Eastern 0 0 0 11 11

South West 0 0 1 24 25

Grand Total 1 1 7 137 146

Percent of total 1% 1% 5% 94% 100%

Road Management Report 46 A6. Length of Long Term Financial Plans 2011/12

Region 1 yr 3 yrs 5 yrs 10 yrs 10+ yrs Total

Central Metro 0 1 0 5 1 7

Central West 0 0 0 9 3 12

Hunter 0 1 0 7 3 11

Illawarra 0 1 0 4 1 6

Metro North 0 1 1 6 4 12

Metro West 0 0 0 8 1 9

Mid North Coast 1 1 0 6 0 8

New England 0 0 1 9 1 11

North Coast 0 2 0 5 0 7

Orana 1 1 1 8 3 14

South East Metro 1 1 0 7 3 12

South Eastern 0 0 1 9 1 11

South West 0 1 2 21 1 25

Grand Total 3 10 6 104 22 145

Percent of total 2% 7% 4% 72% 15% 100%

A7. Infrastructure Effects in Long Term Financial Plans 2011/12

Region No In part Yes Total

Central Metro 2 2 3 7

Central West 0 6 6 12

Hunter 0 3 8 11

Illawarra 0 3 3 6

Metro North 0 2 10 12

Metro West 0 2 7 9

Mid North Coast 1 6 1 8

New England 1 6 4 11

North Coast 0 5 2 7

Orana 0 5 8 13

South East Metro 2 4 6 12

South Eastern 0 6 4 10

South West 0 9 14 23

Grand Total 6 59 76 141

Percent of total 4% 42% 54% 100%

47 ROAD ASSET BENCHMARKING PROJECT 2012 Appendix B Road and Bridge Inventory for IPWEA Regions

B1. Road Lengths 2011/12

Region Road Length in km Regional Roads Local Roads Total Sealed Unsealed Subtotal Sealed Unsealed Subtotal Central Metro 110 0 110 1,320 18 1,338 1,448 Central West 1,627 142 1,768 5,701 10,266 15,967 17,736 Hunter 843 16 859 7,488 2,276 9,764 10,623 Illawarra 474 39 512 4,173 773 4,946 5,458 Metro North 277 1 278 3,588 54 3,642 3,920 Metro West 463 35 499 6,224 400 6,625 7,123 Mid North Coast 682 0 682 3,925 3,510 7,435 8,117 New England 1,915 207 2,123 4,917 12,593 17,510 19,632 North Coast 870 52 923 4,357 3,104 7,461 8,384 Orana 2,517 1,882 4,399 4,356 15,301 19,657 24,057 South East Metro 282 0 282 3,355 0 3,355 3,638 South Eastern 1,132 187 1,319 4,193 5,813 10,006 11,325 South West 2,938 532 3,470 9,716 19,438 29,154 32,624 Grand Total 14,131 3,093 17,223 63,315 73,547 136,862 154,085

Note: 146 councils responded to question

B2. Bridge Inventory 2011/12

Region No. of Bridges Regional Roads Local Roads Total Conc. Timber Subtotal Conc. Timber Subtotal Central Metro 20 0 20 52 1 53 73 Central West 147 2 149 515 86 601 750 Hunter 137 3 140 548 211 759 899 Illawarra 76 2 78 411 66 477 555 Metro North 20 1 21 74 5 79 100 Metro West 117 0 117 375 18 393 510 Mid North Coast 144 14 158 724 704 1,428 1,586 New England 427 4 431 619 244 863 1,294 North Coast 154 23 177 760 430 1,190 1,367 Orana 277 9 286 490 42 532 818 South East Metro 25 0 25 72 0 72 97 South Eastern 257 23 280 508 183 691 971 South West 269 6 275 781 73 854 1,129 Grand Total 2,070 87 2,157 5,929 2,063 7,992 10,150

Note: 136 councils responded to question

Road Management Report 48 B3. Knowledge of Bridge Load Capacity 2011/12

Region No. of Bridges with Known Load Capacity

Regional Roads Local Roads Total

Conc. % Timber % Conc. % Timber %

Central Metro 0 0% 0 NA 0 0% 1 100% 1%

Central West 34 23% 0 0% 170 33% 30 35% 31%

Hunter 66 48% 1 33% 121 22% 54 26% 27%

Illawarra 32 42% 0 0% 49 12% 11 17% 17%

Metro North 6 30% 1 100% 8 11% 3 60% 18%

Metro West 0 0% 0 NA 35 9% 1 6% 7%

Mid North Coast 16 11% 3 21% 62 9% 58 8% 9%

New England 49 11% 4 100% 41 7% 96 39% 15%

North Coast 16 10% 0 0% 25 3% 1 0% 3%

Orana 50 18% 6 67% 53 11% 13 31% 15%

South East Metro 6 24% 0 NA 16 22% 0 NA 23%

South Eastern 107 42% 22 96% 201 40% 115 63% 46%

South West 2 1% 1 17% 15 2% 22 30% 4%

Grand Total 384 19% 38 44% 796 13% 405 20% 16.0%

Note: 41 councils responded to question

Appendix C Response from Councils

Council Survey Form Received Survey Form Validated

Albury City Council X X

Armidale Dumaresq Council X X

Ashfield Municipal Council X X

Auburn Council X X

Ballina Shire Council X X

Balranald Shire Council X X

Bankstown City Council X X

Bathurst Regional Council X X

Baulkham Hills Shire Council X X

Bega Valley Shire Council X X

Bellingen Shire Council X X

Berrigan Shire Council X X

Blacktown City Council X X

Bland Shire Council X X

Blayney Shire Council X X

49 ROAD ASSET BENCHMARKING PROJECT 2012 Blue Mountains City Council X X

Bogan Shire Council X X

Bombala Council X X

Boorowa Council X X

Botany Bay City Council X X

Bourke Shire Council X X

Brewarrina Shire Council X X

Broken Hill City Council X X

Burwood Council X X

Byron Shire Council X X

Cabonne Shire Council X X

Camden Council X X

Campbelltown City Council X X

Canada Bay City Council X X

Canterbury City Council X X

Carrathool Shire Council X X

Central Darling Shire Council X X

Cessnock City Council X X

Clarence Valley Council X X

Cobar Shire Council X X

Coffs Harbour City Council X X

Conargo Shire Council X X

Coolamon Shire Council X X

Cooma-Monaro Council X X

Coonamble Shire Council X X

Cootamundra Shire Council X X

Corowa Shire Council X X

Cowra Shire Council X X

Deniliquin Council X X

Dubbo City Council X X

Dungog Shire Council X X

Eurobodalla Shire Council X X

Fairfield City Council X X

Forbes Shire Council X X

Gilgandra Shire Council X X

Glen Innes Severn Shire Council X X

Road Management Report 50 Gloucester Shire Council X X

Gosford City Council X X

Goulburn Mulwaree Council X X

Great Lakes Council X X

Greater Hume Shire Council X X

Greater Taree City Council X X

Griffith City Council X X

Gundagai Shire Council X X

Gunnedah Shire Council X X

Guyra Shire Council X X

Gwydir Shire Council X X

Harden Shire Council X X

Hastings Council X X

Hawkesbury City Council X X

Hay Shire Council X X

Holroyd City Council X X

Hornsby Shire Council X X

Hunters Hill Municipal Council X X

Hurstville City Council X X

Inverell Shire Council X X

Jerilderie Shire Council X X

Junee Shire Council X X

Kempsey Shire Council X X

Kiama Municipal Council X X

Kogarah Municipal Council X X

Ku-ring-gai Council X X

Kyogle Council X X

Lachlan Shire Council X X

Lake Macquarie City Council X X

Lane Cove Municipal Council X X

Leeton Shire Council

Leichhardt Municipal Council X X

Lismore City Council X X

Lithgow City Council X X

Liverpool City Council X X

Liverpool Plains Shire Council X X

51 ROAD ASSET BENCHMARKING PROJECT 2012 Lockhart Shire Council X X

Maitland City Council X X

Manly Council X X

Marrickville Council X X

Mid-Western Regional Council X X

Moree Plains Shire Council X X

Mosman Municipal Council X X

Murray Shire Council X X

Murrumbidgee Shire Council X X

Muswellbrook Shire Council X X

Nambucca Shire Council X X

Narrabri Shire Council

Narrandera Shire Council X

Narromine Shire Council X X

Newcastle City Council X X

North Sydney Council X X

Oberon Council X X

Orange City Council X X

Palerang Council

Parkes Shire Council X X

Parramatta City Council X X

Penrith City Council X X

Pittwater Council X X

Port Stephens Council X X

Queanbeyan City Council X X

Randwick City Council X X

Richmond Valley Council X X

Rockdale City Council X X

Ryde City Council X X

Shellharbour City Council X X

Shoalhaven City Council X X

Singleton Council X X

Snowy River Shire Council X X

Strathfield Municipal Council X X

Sutherland Shire Council X X

Sydney City Council X X

Road Management Report 52 Tamworth Regional Council X X

Temora Shire Council X

Tenterfield Shire Council X X

Tumbarumba Shire Council X X

Tumut Council X X

Tweed Shire Council X X

Upper Hunter Shire Council X X

Upper Lachlan Council X X

Uralla Shire Council X X

Urana Shire Council X X

Wagga Wagga City Council X X

Wakool Shire Council X X

Walcha Council X X

Walgett Shire Council

Warren Shire Council X X

Warringah Council X X

Warrumbungle Shire Council X X

Waverley Council X X

Weddin Shire Council X X

Wellington Council X X

Wentworth Shire Council X X

Willoughby City Council X X

Wingecarribee Shire Council X X

Wollondilly Shire Council X X

Wollongong City Council X X

Woollahra Municipal Council X X

Wyong Shire Council X X

Yass Valley Council X X

Young Shire Council X X

TOTAL 148 146

53 ROAD ASSET BENCHMARKING PROJECT 2012 Appendix D Cost Distributions for IPWEA Regions

D1. Regional Sealed Road Maintenance Costs for IPWEA Regions 2011/12 Note: Data is for 146 responding councils.

Region Length (km) Rate $/km/yr

Central Metro 110 $6,582

Central West 1,627 $3,368

Hunter 843 $10,653

Illawarra 474 $6,098

Metro North 277 $5,181

Metro West 463 $7,248

Mid North Coast 682 $8,184

New England 1,915 $3,829

North Coast 870 $10,144

Orana 2,517 $2,646

South East Metro 282 $5,331

South Eastern 1,132 $3,553

South West 2,938 $2,781

Total 14,131 $4,598

D2. Regional Sealed Surfacing Life Cycle Costs for IPWEA Regions 2011/12

Region Length (km) Resurfacing Life Cycle Cost ($/km/yr)

Central Metro 110 $11,720

Central West 1,627 $1,969

Hunter 843 $6,269

Illawarra 474 $16,610

Metro North 277 $18,294

Metro West 463 $7,296

Mid North Coast 682 $3,783

New England 1,915 $2,430

North Coast 870 $2,868

Orana 2,517 $2,113

South East Metro 282 $25,975

South Eastern 1,132 $5,121

South West 2,938 $2,960

Total 14,131 $4,456

Road Management Report 54 D3. Regional Sealed Pavement Life Cycle Costs for IPWEA Regions 2011/12

Region Length (km) Pavement LCC ($/km/yr)

Central Metro 110 $11,298

Central West 1,627 $3,984

Hunter 843 $7,705

Illawarra 474 $7,079

Metro North 277 $14,989

Metro West 463 $10,749

Mid North Coast 682 $11,761

New England 1,915 $7,280

North Coast 870 $9,775

Orana 2,517 $3,852

South East Metro 282 $20,123

South Eastern 1,132 $4,839

South West 2,938 $4,133

Total 14,131 $6,381

D4. Regional Unsealed Road Maintenance Costs for IPWEA Regions 2011/12

Region Length (km) Rate $/km/yr

Central Metro 0 NA

Central West 142 $291

Hunter 16 $2,333

Illawarra 39 $2,260

Metro North 1 $12,413

Metro West 35 $3,227

Mid North Coast 0 $0

New England 207 $8,416

North Coast 52 $2,508

Orana 1,882 $1,696

South East Metro 0 NA

South Eastern 187 $5,058

South West 532 $2,780

Total 3,093 $2,515

55 ROAD ASSET BENCHMARKING PROJECT 2012 D5. Regional Unsealed Road Resheeting Life Cycle Costs for IPWEA Regions 2011/12

Region Length (km) Resheet LCC $/km/yr Central Metro 0 NA Central West 142 $2,534 Hunter 16 $541 Illawarra 39 $2,261

Metro North 1 $0 Metro West 35 $5,876 Mid North Coast 0 $3,333 New England 207 $3,521 North Coast 52 $2,261

Orana 1,882 $5,837 South East Metro 0 NA South Eastern 187 $2,230 South West 532 $2,650

Total 3,093 $4,632

D6. Local Sealed Road Maintenance Costs for IPWEA Regions 2011/12

Region Length (km) Rate $/km/yr Central Metro 1,320 $7,347 Central West 5,701 $2,112

Hunter 7,488 $4,608 Illawarra 4,173 $3,662

Metro North 3,588 $5,613 Metro West 6,224 $3,944 Mid North Coast 3,925 $3,574 New England 4,917 $2,758 North Coast 4,357 $4,582

Orana 4,356 $2,294 South East Metro 3,355 $3,102 South Eastern 4,193 $2,505 South West 9,716 $1,681

Total 63,315 $3,333

Road Management Report 56 D7. Local Sealed Road Reseal Life Cycle Costs for IPWEA Regions 2011/12

Region Length (km) Rate $/km/yr

Central Metro 1,320 $8,441

Central West 5,701 $1,702

Hunter 7,488 $4,335

Illawarra 4,173 $6,133

Metro North 3,588 $9,075

Metro West 6,224 $6,931

Mid North Coast 3,925 $3,035

New England 4,917 $2,342

North Coast 4,357 $2,117

Orana 4,356 $2,093

South East Metro 3,355 $13,484

South Eastern 4,193 $1,893

South West 9,716 $2,300

Total 63,315 $4,294

D8. Local Sealed Road Pavement Life Cycle Costs for IPWEA Regions 2011/12

Region Length (km) Rate $/km/annum

Central Metro 1,320 $9,251

Central West 5,701 $3,557

Hunter 7,488 $6,474

Illawarra 4,173 $7,079

Metro North 3,588 $17,398

Metro West 6,224 $8,060

Mid North Coast 3,925 $8,919

New England 4,917 $4,907

North Coast 4,357 $5,914

Orana 4,356 $4,066

South East Metro 3,355 $7,817

South Eastern 4,193 $4,448

South West 9,716 $3,469

Total 63,315 $6,386

57 ROAD ASSET BENCHMARKING PROJECT 2012 D9. Local Unsealed Road Maintenance Costs for IPWEA Regions 2011/12

Region Length (km) Rate $/km/annum

Central Metro 18 $1,425

Central West 10,266 $600

Hunter 2,276 $3,449

Illawarra 773 $3,201

Metro North 54 $20,852

Metro West 400 $5,916

Mid North Coast 3,510 $2,402

New England 12,593 $1,770

North Coast 3,104 $2,708

Orana 15,301 $1,181

South East Metro 0 NA

South Eastern 5,813 $1,800

South West 19,438 $920

Total 73,547 $1,435

D10. Local Unsealed Road Resheeting Life Cycle Costs for IPWEA Regions 2011/12

Region Length (km) Rate $/km/annum

Central Metro 18 $4,600

Central West 10,266 $1,311

Hunter 2,276 $2,469

Illawarra 773 $2,947

Metro North 54 $1,800

Metro West 400 $4,364

Mid North Coast 3,510 $3,824

New England 12,593 $2,390

North Coast 3,104 $2,231

Orana 15,301 $1,395

South East Metro 0 NA

South Eastern 5,813 $1,906

South West 19,438 $1,492

Total 73,547 $1,837

Road Management Report 58 Appendix E Asset Values, Maintenance and Renewal Rates for Regions

Note: Data is for 146 responding councils.

E1. Regional and Local Sealed Road Asset Values 2011/12

CRC/Km Deprn Deprn/Km Region Length (km) CRC ($000) ($000/km) ($000) ($000/km)

Central Metro 1,430 $1,989,943 $1,391 $22,724 $15.89

Central West 7,328 $1,995,651 $272 $25,008 $3.41

Hunter 8,331 $4,321,080 $519 $74,610 $8.96

Illawarra 4,646 $2,683,001 $577 $111,903 $24.08

Metro North 3,865 $2,725,146 $705 $42,840 $11.08

Metro West 6,688 $4,104,252 $614 $75,084 $11.23

Mid North Coast 4,607 $3,316,858 $720 $56,930 $12.36

New England 6,833 $2,094,103 $306 $29,552 $4.33

North Coast 5,227 $2,659,976 $509 $40,176 $7.69

Orana 6,873 $1,830,890 $266 $23,326 $3.39

South East Metro 3,638 $4,923,052 $1,353 $50,659 $13.93

South Eastern 5,325 $1,911,331 $359 $27,756 $5.21

South West 12,655 $2,309,741 $183 $35,808 $2.83

Grand Total 77,445 $36,865,022 $476 $616,374 $7.96

E2. Regional and Local Sealed Roads Maintenance and Renewal Rates 2011/12

Capital Length Maint Maint Renewal Region CRC ($000) Renewal (km) ($000) / CRC / CRC ($000)

Central Metro 1,430 $1,989,943 $10,423 0.5% $17,466 0.9%

Central West 7,328 $1,995,651 $17,521 0.9% $14,755 0.7%

Hunter 8,331 $4,321,080 $43,484 1.0% $61,923 1.4%

Illawarra 4,646 $2,683,001 $18,172 0.7% $30,670 1.1%

Metro North 3,865 $2,725,146 $21,575 0.8% $32,761 1.2%

Metro West 6,688 $4,104,252 $27,907 0.7% $57,751 1.4%

Mid North Coast 4,607 $3,316,858 $19,605 0.6% $26,459 0.8%

New England 6,833 $2,094,103 $20,895 1.0% $14,916 0.7%

North Coast 5,227 $2,659,976 $28,789 1.1% $27,106 1.0%

Orana 6,873 $1,830,890 $16,655 0.9% $14,805 0.8%

South East Metro 3,638 $4,923,052 $11,913 0.2% $29,707 0.6%

South Eastern 5,325 $1,911,331 $14,526 0.8% $20,228 1.1%

South West 12,655 $2,309,741 $24,507 1.1% $34,720 1.5%

Grand Total 77,445 $36,865,022 $275,972 0.7% $383,267 1.0%

59 ROAD ASSET BENCHMARKING PROJECT 2012 E3. Regional & Local Unsealed Roads Asset Values 2011/12

Length CRC CRC/Km Deprn/Km Region Deprn ($000) (km) ($000) ($000/km) ($000/km)

Central Metro 18 $26,800 $1,480 $319 $17.61

Central West 10,408 $584,196 $56 $8,450 $0.81

Hunter 2,292 $280,834 $123 $4,460 $1.95

Illawarra 812 $154,945 $191 $22,990 $28.32

Metro North 55 $8,040 $146 $254 $4.62

Metro West 436 $61,061 $140 $510 $1.17

Mid North Coast 3,510 $726,723 $207 $20,189 $5.75

New England 12,800 $1,094,100 $85 $13,740 $1.07

North Coast 3,157 $405,469 $128 $13,521 $4.28

Orana 17,183 $877,081 $51 $12,969 $0.75

South East Metro 0 $0 NA $0 NA

South Eastern 6,000 $733,241 $122 $5,859 $0.98

South West 19,970 $1,027,556 $51 $23,486 $1.18

Grand Total 76,640 $5,980,045 $78 $126,746 $1.65

E4. Regional and Local Unsealed Roads Maintenance and Renewal Rates 2011/12

Capital Length Maint Maint / Renewal / Region CRC ($000) Renewal (km) ($000) CRC CRC ($000)

Central Metro 18 $26,800 $26 0.1% $0 0.0%

Central West 10,408 $584,196 $6,204 1.1% $3,986 0.7%

Hunter 2,292 $280,834 $7,888 2.8% $2,011 0.7%

Illawarra 812 $154,945 $2,562 1.7% $2,051 1.3%

Metro North 55 $8,040 $1,141 14.2% $0 0.0%

Metro West 436 $61,061 $2,482 4.1% $482 0.8%

Mid North Coast 3,510 $726,723 $8,431 1.2% $4,734 0.7%

New England 12,800 $1,094,100 $24,028 2.2% $8,199 0.7%

North Coast 3,157 $405,469 $8,538 2.1% $3,078 0.8%

Orana 17,183 $877,081 $21,261 2.4% $5,218 0.6%

South East Metro 0 $0 $0 NA $0 NA

South Eastern 6,000 $733,241 $11,406 1.6% $2,955 0.4%

South West 19,970 $1,027,556 $19,353 1.9% $18,182 1.8%

Grand Total 76,640 $5,980,045 $113,320 1.9% $50,896 0.9%

Road Management Report 60 Appendix F Bridge Renewal Cost and Estimated Useful Life Distributions

F1. Concrete Bridges Renewal Cost Distribution 2011/12

Renewal Cost (< $/M2) No of Councils reporting at this value Bridges on Regional Roads Bridges on Local Roads $1,500 5 5 $2,000 13 16 $2,500 23 27 $3,000 35 47 $3,500 28 18 $4,000 9 8 $4,500 7 10 $5,000 5 2 $5,500 2 1 $6,000 2 1 $6,500 1 1 $7,000 0 $7,500 1 $8,000 1 Average $3,098 / m2 $2,915 / m2

Renewal Cost Distribution for Regional Concrete Bridges 2012

Renewal Cost Distribution for Local Concrete Bridges 2012

61 ROAD ASSET BENCHMARKING PROJECT 2012 F2. Timber Bridges Renewal Cost Distribution 2011/12

Renewal Cost (< $/M2) No of Councils reporting at this value

Bridges on Regional Roads Bridges on Local Roads

$1,000 1 2

$1,500 9 11

$2,000 13 19

$2,500 12 20

$3,000 12 14

$3,500 4 6

$4,000 6 7

$4,500 5 6

$5,000 3 0

$5,500 0 1

$6,000 0 1

$6,500 1

$9,500 0 1

AVERAGE $2,719 / m2 $2,177 / m2

Renewal Cost Distribution for Regional Timber Bridges 2012

Renewal Cost Distribution for Local Timber Bridges 2012

Road Management Report 62 F3. Concrete Bridges Estimated Useful Life Distribution 2011/12

Estimated Useful Life (yrs) No of Councils reporting at this value Bridges on Regional Roads Bridges on Local Roads

40 2 2 50 6 7 60 2 2 70 2 3 80 38 33 90 9 8 100 68 73 110 1 1 120 3 4 130 1 1 140 0 0 150 2 2 Average 90.6 years 91.1 years

Useful Life Distribution for Regional Concrete Bridges 2012

Useful Life Distribution for Local Concrete Bridges 2012

63 ROAD ASSET BENCHMARKING PROJECT 2012 F4. Timber Bridges Estimated Useful Life Distribution 2011/12

Estimated Useful Life (yrs) No of Councils reporting at this value

Bridges on Regional Roads Bridges on Local Roads 20 2 2 30 7 8 40 6 5 50 20 26 60 11 12 70 5 7 80 16 20 90 1 1 100 7 10 110 0 0 120 1 1 130 1 Average 61.0 years 63.0 years

Useful Life Distribution for Regional Timber Bridges 2012

Useful Life Distribution for Local Timber Bridges 2012

Road Management Report 64