Life-Cycle Asset Investment and Management of Sustainable Infrastructure Systems
/Abstract
Is our future sustainable and secure? Does the infrastructure system grow with the population and social demand? The aim of this book is to develop a dynamic adaptive decision support tool for investing, operating, and maintaining infrastructure asset systems efficiently and effectively. The topics of the book cover various phases of the infrastructure life cycle, with a specific focus on the following questions: How should the economic and environmental impacts on the life cycle of infrastructure assets be evaluated? What is the risk of infrastructure deterioration, and how should the resources be allocated to make the infrastructure system more resilient and sustainable? In what ways is a complex infrastructure system vulnerable to climate change and the disruption due to extreme weather events? How should investment in infrastructure systems be strategically designed to deal with uncertainties in social and economic growth?
Overview
The book has four main components. The first part is an overview of infrastructure investment and asset management, with a brief introduction to life-cycle assessment, life-cycle optimization, and methods of infrastructure investment valuation. The second part addresses project-level infrastructure life-cycle management, with a focus on the effects of life-cycle assessment and construction management of an infrastructure project. The third part deals with system-level infrastructure asset management; we present a comprehensive framework of life-cycle optimization for large infrastructure systems, and identify a procedure for searching for optimal multi-stage maintenance actions and schedules with multi-objective goals, and discuss resource allocation strategies for improving the resilience of an infrastructure system under climate change. In the fourth part, we develop a real-options-based model to determine the optimal timing of infrastructure investment with strategic flexibility; we begin with a single-option investment, and then proceed to multiple compound options selected from a portfolio of interdependent projects considering network effects.
There are four main highlights of the book:
Triple bottom-line objectives. The proposed comprehensive asset management approach not only deals with financial goals but also explicitly considers environmental and social dimensions.
Life-cycle approach and systems view. The research that has gone into this book is not limited to an annual cycle but instead incorporates analysis and decision-making over the entire life cycle of the infrastructure. Thus it comprises not just a traditional maintenance program, but also a means of operating, managing, and optimizing infrastructure assets in a holistic way, with the goal of reducing both agency costs and user costs.
Advanced valuation method. Traditional net-present-value (NPV) methods are compared with a real-options valuation approach that considers future uncertainty and strategic flexibility.
Risk and resilience recognition. The need to optimize risk-adjusted returns in infrastructure asset management is built in, with a view to securing a maximum return at a given acceptable level of risk (for example, inoperability under extreme disaster events).