Water Infrastructure In Dubai: Life Cycle Cost Analysis Essay.

The Asset for Assessment

Question:

Discuss about the Water Supply Planning and Operation System.

Heimersson et al. (2014) stated that asset management is managing the infrastructure of capital asset for reducing the total owner cost and operating the assets while deliver the required service levels. Harder et al. (2014) argued that asset management achieves a sustainable infrastructure of the selected asset. United Arab Emirates (UAE) faces various water management challenges such as groundwater scarcity, higher cost of water production and limited wastewater treatment. Due to growing need of water treatment, there is significant requirement of water supply system. Therefore, there is need to invest into new water infrastructure to meet with current demand of Dubai.

The asset for this assessment is development of water supply system (water pipeline network) which is conducted into water infrastructure industry. Dubai Electricity and Water Authority (DEWA) introduced the expansion of water pipeline project in different locations into emirate. The expansion project of water pipeline in Dubai is 46km project which would intend to increase flow of water between two roads (Sheikh Mohammed bin Zayed Road and Emirates Road). The main objective behind the investment into water infrastructure is to improve water quality of Dubai for human consumption and provide the growing population of Dubai with access to water mains. This asset improves the water supply towards the growing population of Dubai (GulfNews 2017). By the year 2030, this asset is planning to increase the capacity of water by 60 percent. The project is based on extension of water connectivity between United Arab Emirates.

Asset management of water infrastructure ensures that planned maintenance is conducted and capital assets (water pipeline) are repaired and upgraded on schedule time and budget. Advanced water infrastructure asset management achieves sufficient level of services into the future with regard to high quality of water, prevention of both pollution and urban flooding (Stark 2015). Water supply system asset management is keystone for sustainability which supports planning and day-to-day need to optimize financially over longer term. One of the significant insights into asset management is to deal with the life cycle price of chosen asset from setting up, scheming and building of the operational cycle. The project manager takes the capital investment decisions concerning the expansion of water supply system (Burke 2013). This study maintains nature of water infrastructure based on cost as well as usage of water into growing population of Dubai. Strategic decision making is established to develop the asset management policies and long term investments into the water infrastructure industry.    

Asset Management of Water Infrastructure

In Dubai, DEWA started to work into the water supply system for commissioning, delivering and installation of water pipeline network across Emirates. This network manages the increasing demand of water into emirate and provide of higher quality infrastructure for sustainable development into Dubai. This water supply system meets with current as well as future demand of water into Dubai (GulfNews 2017). The water management into UAE is improved throughout different types of measures. The government makes various preparations for expansion of proposed system. The current state is such that water flowing throughout ageing pipelines is contaminated of bacteria, which makes the water undrinkable (Campbell, Jardine and McGlynn 2016). Therefore, in order to solve identified problem, water supply system with expansion of water pipeline is selected as asset of this particular assessment. It is advantageous to carry out of life cycle cost breakdown for the water infrastructure and following are the objectives to meet with goals such as:

• To develop of pipeline network for stopping contamination of water
• To determine environmental friendly design of the water supply system
• To reduce water contamination risks with respect to environment and economy
• To achieve of low life cycle cost based on project requirements
• To improve sustainable use of water
• To improve investment and operational competence into water infrastructure organization

Mainly, the assessment study is based on design of water supply system includes of water pipeline network to the population of Dubai. The benefit of this asset is to transport of water using gravity and water quality is being preserved. Water supply system represents most of the assets into water utility (Harder et al. 2014). The design of proposed system is based on one of the most significant factor such as cost. Least cost approach leads to minimum capacity of water supply network. Cost model is used to search for least cost solutions based on pipe size even as satisfying the constraints like required output pressure, maximum flow of pipe furthermore velocity of the flow of pipe. The expenditure of the water supply system execution is purpose of diameter of pipe; consequently it is an issue to find the least cost solution by optimization of pipe size for providing least acceptable capacity (Renuka, Umarani and Kamal 2014). Water supply system is vital for the purpose to take out life cycle price analysis into the water infrastructure work.  

The study is based on “Establishment of inventory for life cycle cost analysis of the water supply system”. Development of water inventory system is handled with defining the data asset into the water infrastructure (Sadhukhan, Ng and Hernandez 2014). The future work is based on purpose and functions of water supply system such as pipeline network, communication, delivery along with water supply services. The main purpose of water supply system is to deliver of water to the consumers with proper quality and quantity (Rodger et al. 2016). After the water pipeline network, pipeline inspection is done with assessment of gravity mains into operational constraints of wastewater utilities. Issues related to selection of pipe diameter to configure low cost water supply system is required to be resolved using cost analysis.

Inventory for Life Cycle Cost Analysis of the Water Supply System

The step into water supply system assessment process is to describe the entire supply of water process. It covers entire system from source to water supply point, covers of different types of source water, processes for water treatment.

In order to conclude on environmental friendly plan of the water supply system, life cycle cost (LCC) analysis is being passed out for creating inventory of the materials as well as energy. This particular study is carried out for different variables regards to water consumption and linked to ecological impact of the planned system (Clay and Fong 2013). This assessment is approached concept of the inventory development for purpose of the LCC analysis. Based on some of the procedures, LCC is done for enabling management to know and direct of the water supply system. LCC analysis is functional on number of water supply system to give consistent information to the manager for making decisions related to asset management issues.

Pikaar et al. (2014) determined that implementation of asset management system needs investment of time and cost into the industry. The life cycle standards is established by ISO 55000 certification. This particular standard formulates that asset management gives value to the customers and project manager. With establishment of water supply system, value of asset is realized to the stakeholders. ISO 55001 standards is provided with asset management decision regarding development of water pipeline network when the decisions are best for managing selected asset into the project work (Sahin, Stewart and Porter 2015). The project management team determines proper design and operation of the water supply system. In order to analyze the life cycle costing of this particular project work, Net Present Value is used by the industry. The benefits of ISO 55001 asset management standards are as follows:

1. Reduction of the risks which are associated with ownership of water supply system is done. The risks are avoidable maintenance cost, inefficiency into prevention of accidents at the site (Monczka et al. 2015).
2. Improvement over the quality assurance of the water pipeline network
3. Supports of international growth of business which demonstrates the requirements of asset management system (Godfrey and Hailemichael 2017).
4. Maximization of the existing operating experiences
5. Alignment of the engineering decisions with the business objectives

LCC analysis calculates the cost which is generated throughout entire process of development of water supply system from planning to disposal of the facility (Lee et al. 2017).  Following are the steps of ISO 55001 standard of asset management are:

Planning: One of the most important parts of LCC analysis for the water pipeline network is estimation of the performance of pipe which makes the network. The performance is measured based on expected failure, replacement along with direct and indirect cost for each stages (Doll et al. 2015). Planning models are used to assess future cost for failure of pipeline. The models require of detailed analysis of failure data for the pipeline asset.

ISO 55001 Certification for Asset Management

Data collection: Collecting of data is another essential part of this standard into water infrastructure activities. Proper planning is required to determine what data are collected, how it is collected and where it has to store (Zhang, Kuczera and Kiem 2015). Data for analyzing the pipeline failure is relied on reliable data over five years for achieving meaningful predictions of the future trends. Following are the types of data which are required:

1. Pipeline material- Using of water industries agreed codes
2. Installation of data- It should provide the year of installation

• Pipeline location- Town and zip code are required and what type of pipe is buried under the road (Lee et al. 2017).

1. Data related to soil- Again, there is use of industry standard codes to get the information on soil type
2. Failure data- After occurrence of failure into the pipeline, then some set of data is needed such as what type of failure, when it occurs and what are possible actions should be taken to overcome the failure (Stenström et al. 2017).

Acquisition: Expansion of water pipeline network requires a significant capital investment. Due to expansion of the network, there is needed to meet current standards which increase both design, operational and examination cost of the project (Scholten et al. 2015). Those changes lead to additional scope into the asset due to new upgradation of water pipeline network.

Operation: The operational cost of the system is estimated using LCC analysis of network (LICAN) model. The users are required to determine installation cost, repair and also pipe replacement cost into the water network varied on size and set of time frame for the analysis (Fletcher et al. 2017). This proposed model includes of cost for water loss. Output of this model includes of tables, charts for comparing the alternatives, characteristics of water pipeline network and summarizing the pipeline materials based on length, size and initial cost for water supply system. The approach to LICAN model is to forecast the annual probability of failure for each size of pipe based on length of pipe (Asefa, Adams and Kajtezovic-Blankenship 2014). For each of the pipeline segment, expected probability of failure into the pipe is estimated for each year into the forecasted period. The inventory for water pipeline network enables the performance of entire network which is obtained based on few parameters.

Maintenance: The maintenance cost is provided per repair and cost for replacement of pipe is calculated from the cost per unit length. Replacement of the pipeline reduces length of existing pipes and creates new pipe into replacement year (Gurung et al. 2016). All the pipeline failures are being repaired.

Disposal: The environmental factors are considered at highest priority in this phase. The old water pipeline network have important amount of the water contamination materials which are required for water treatment throughout removal (Paton, Maier and Dandy 2014). The disposal cost for expansion of the system is expensive.

LICAN model calculates the future cost for development of water pipeline network asset over forecasted period. This particular model is used to forecast the failure on year basis replaces pipeline asset and moves to next year into forecasted period (Pietrucha-Urbanik 2015). LCC analysis is considered as a method to predict the cost effective solutions for development of water supply system (pipeline network). It is not providing an accurate solution but allows the project manager makes a comparison between alternative solutions by means of limited data. The water supply system has lifespan of around 15-20 years, therefore the cost elements are incurred at outset and incurred at various times based on evaluation of various solutions. Therefore, it is probable to predict present as well as discounted value of the LCC analysis to assess of various solutions. This LCC analysis is being concerned with assessment of details of proposed system design.

Conclusion

The project manager considered maintenance cost with initial supply of the equipments. The elements of the LCC analysis are shown in the following table:

Table 1: Elements of the LCC analysis

(Source: Cuéllar-Franca and Azapagic 2014, pp-179)

Following are the costs which are forecasted for growth of water supply system are:

Installation cost- Throughout first period of the planning of selected asset, the installation cost for asset is calculated as cost per foot linked with new material along with diameter is being multiplied by length (Fuchs et al. 2014). LICAN model adds of pipeline asset one at time for each of the material. It includes of set of the equipments, connection to process pipe, connection to electrical wiring, performance evaluation and connection to auxiliary system.

Energy cost- Consumption of energy is one of the most significant cost basics into the LCC analysis when the pump established for the water supply system flows greater than 2000 hours/year. The data are collected on pattern of system productivity. When the output is steady, then calculation becomes simple. When output is varied with time, then there is requirement of time based usage pattern (Hawkins et al. 2013). The cost includes of cooling circuits, liquid or gas barrier arrangements. The cost of cooling circuits include of water cost, filtration, heat dissipation and circulation.

Repair cost- The event cost is being multiplied by fractional number of the repair events expected into provided year for generation of total repair cost for the selected asset (Cabeza et al. 2014).

Leakage cost- The model calculates the leakage from the joints. The volume of loss of water by the asset is multiplied by unit cost of leakage in order to determine the cost of leakage (Shin, Joo and Koo 2016). Loss of water throughout the leakage presents significant cost for the water pipeline network. Through use of leakage model, the cost for leakage is being estimated. The leakage is considered from the background leakage that is occurred throughout joints into the pipe (Zakeri and Syri 2015). There is also leakage from burst failures like longitudinal splits as well as breakage of circumferential.

1. Replacement cost- There is replacement of asset when prediction of total discounted repair cost is greater as compared to cost of asset replacement and it results into lower failure rate in the future (Palma-Behnke et al. 2013).When for the given year, there is no replacement of asset, then cost becomes zero.
2. Pumping cost- The water pipeline network is designed as gravity network, with pumping limited to supply tanks. The cost becomes similar to the network (Vilanova et al. 2015).
3. Corrosion cost- The effects of the corrosion are being included into the pipeline failure models (Hellweg and Canals 2014).

The cost which is estimated for different elements formulate the total life cycle cost requisite allows assessment of the design of the water supply system. The total estimated cost provides LCC values for comparison. The financial factors which are taken into consideration to develop LCC analysis, it includes of:

Apart from all this, the user decides to include of maintenance, disposal, environmental, down time and other costs. The change into investment cost is dependent on growing market. The investment is done based on client’s demand and their satisfaction levels (Heijungs and Suh 2013). The estimation of cost is done by the management team after proper scheduling and planning with maintenance of the water infrastructure. The life cycle cost analysis for the water network is required for the water utilities so as to calculate and estimate long term cost for installation, maintenance as well as upgradation of the asset. The UAE always looks for lowest bid price which lead to consequences into the future with network skilling of high cost for repair as well as loss of water. It requires of faster regeneration frequency of the installation of pipe as outcome of lower upfront price approach (Cuellar-Franca and Azapagic 2014). Prediction of pipeline predictions, higher failure rate is coupled with high rate of leakage which results into significant maintenance cost along with lost water cost for the lifetime of pipeline network. After considering of the life cycle cost, all the cost documentation are done into the report. From the report, the stakeholders can analyze and understand the final project outcome along with implications of the LCC analysis. The proposed report consists of purpose, scope, LCC model, and LCC model analysis, discussion in addition to analysis (Kahn and Lemmon 2016). After the report is prepared, results are reviewed properly to identify if there are any risks within the LCC analysis. Accuracy of the LCC analysis is done properly so that there are no risks and issues results into failure of the project work.

Campbell, Jardine and McGlynn (2016) stated that LCC analysis is considered as cost for the asset based on water supply system through the life cycle which performs the presentation of the project necessities. LCC is used throughout the following stages of the project life cycle of the selected water supply system or water pipeline network asset:

Project management investment along with planning: It consists of planning of the life costing or life cycle cost along with strategic analysis of the water supply system.

Design and construction: During the expansion of the proposed system, LCC analysis is done for the functional and operational requirement of the proposed asset (Sahin et al. 2016).

The water supply system is divided based on the functions of water facilities, water treatment, transmission of water, water supply along with water distribution facilities. The scope of water facilities is to include of structure related to civil engineering for each of the water supply system, water pipeline, and machinery facilities (Marlow et al. 2013). The inventory is used by means for LCC analysis. The flow chart to establish the asset inventory is being shown as follows:

Into the project study, the water supply system is divided into water supply pipelines which are used for developing the pipeline structures for sake of Dubai’s growth of population. The facilities of water pipeline is accounted for most of the water supply system which are grouped for functioning of the pipes, transmission of pipeline, distribution of pipes along with supply pipes (Sahin et al. 2016). Valves are also playing a key role into installation of the water pipeline through complete water supply system asset. Apart from the collection of exacting area into water supply system, for the purpose to install of pipeline network, the construction work is based on type of pipe, water transmission facilities, and water distribution facilities in addition to water supply facilities. Based on the theoretical assessment of the water supply system, it is installed into Dubai to provide water to the population. While analyzing of the proposed system into this particular study, facilities related to water treatment is excluded to be based on water pipeline network (Shin, Joo and Koo 2016). Establishment of the account of the water supply system is also prioritized in this particular study.

Clay and Fong (2013) mentioned some of the methods to analyze existing piping system. One consists to observe the operation of piping system and second is to perform detailed calculation of diameter of pipe. The first method is based on observing the operations and functions of piping system and second method deals with creation of mathematical model of piping system. After that, pressure is calculated and also flow rates in the LCC model (Campbell, Jardine and McGlynn 2016). Observation of piping system permits to view of actual work of proposed system but operational requirements are limited to amount of experimentation. By development of model of the piping system, it is easy to consider the system alternatives, but the model is validated to present the operating piping system. The entire life cycle cost analysis for pipeline network is needed to measure and calculate of long term cost for installation, protection and improve of the chosen water supply system. Vilanova, Magalhães Filho and Balestieri (2015) argued that in order to raise competence of management into water supply system, the inventory elements are categorized into such a way that the waterworks manager requires to replace, repair and rehabilitate. Water supply system is being divided into pipelines, facilities of distribution in addition to pump stations.

Strategic decision making is used to identify of asset management policies as well as optimal longer term investments which are arrived to conduct of life cycle analysis on the current project work. Technological advancement is done to develop the infrastructure of water supply system (Sahin, Stewart and Porter 2015).  Estimation of the life cycle costing is done by means to do proper project scheduling in addition to planning with maintenance of the water infrastructure project work (Scholten et al. 2015). Therefore, LCC analysis is important for the project.

Life cycle cost approaches is evolved from the project appraisal tool to incorporate of sustainable developmental aspects into water infrastructure industry. LCC analysis is considered as broader sustainable development framework. In order to carry out life cycle cost analysis into this particular project work, water supply system is vital for the purpose to carry out (Campbell, Jardine and McGlynn 2016). The aim of proposed system is to carry of water to the customers at proper cost so that there is overcome of water contamination risks. LCC analysis is conducted on number of water supply system to provide reliable information to the project manager to take proper project related decisions related to asset management risks. Based on development of water pipeline network, it is required to meet current standards which raise both design, operational and analysis cost of the project work (Renuka, Umarani and Kamal 2014). LCC analysis for the water pipeline network is needed to compute and estimation of long term cost for the purpose of fixing, continuation as well as upgradation of the chosen asset. The documentation is done based on the project requirements. While analyzing of the proposed water supply system into this particular project study, facilities related to water treatment is expelled to focus on water pipeline network.

By analyzing the life cycle costing into selected asset, it is observed that it benefits the water infrastructure industry by bring out of product as well as process development into sustainable directions. The industry can harvest of benefits related to environmental, health, safety and risk management. Incorporation of the life cycle as well as sustainability management can lead to brand value of the selected water industry (Clay and Fong 2013). The full amount price of ownership of chosen asset is far superior as contrasted to preliminary capital outlay of the cost and it is varied among alternative solutions and operational requirements. The project manager considered each different cost and analyzed the life cycle to get possible information such as:

1. Assessing of the future resource requirements
2. Assessing of the comparative cost of probable acquisitions
3. Deciding among sources of supply (Pikaar et al. 2014).
4. Accounting for the resources used currently and in past
5. Improvement over system design
6. Optimization of operational and support of maintenance, understanding of the input requirement (Monczka et al. 2015).
7. Assessing of the assets reach end of economic life and understanding of manpower and water utilities
8. Improvement over risk management
9. Improvement over cost monitoring (Gurung et al. 2016).
10. Optimization of long term cost

For effective management of the selected asset of water supply system for pipeline facilities, the cost is estimated through entire life cycle with use of LCC analysis. The main factors of LCC analysis are establishment of LCC analysis, formulation, construction, and main factor of LCC, verification of economic efficiency and definition of the lifespan. LCC analysis is determined for different functions and life cycle phases-costing along with accumulating of the cost for entire life cycle (Zhang, Kuczera and Kiem 2015). LCC model is used into water supply system asset for determining the future cost which is associated with development of water pipeline network. Analysis of the water supply system cost provides better presentation of resources, cost for designing, installing, maintaining and procuring activities. Life cycle costing is utilized by the industry to provide information related to maintenance, installation and development of water pipeline network. Alternative solutions of proposed system are resulted into lowering LCC which have significant benefits into the industry (Vilanova, Magalhaes Filho and Balestieri 2015). It is benefited into that area where capitals funding along with limitation of resources are there. The industry builds a cost database to approximate the project life cycle cost. Maintenance along with development activities are carried out into 5 years of planning cycle.

Lee et al. (2017) cited that LCC analysis helps the project manager to measure long term economic benefit of the industry’s assets. When there is assessment of total price of ownership over life cycle of assets, then it gets better of the bottom line of the organization. The completion of life cycle cost analysis for water pipeline network has following benefits such as:

1. The project manager utilizes the LCC analysis for examining the best way to estimate the future budget. The true cost of water pipeline asset is more than initial purchase cost. It serves for economic viability for each of the life cycle of selected asset (Godfrey and Hailemichael 2017).
2. It permits to perform analysis of entire business functions. It will investigate the entire functional area of water infrastructure industry where there is higher resource consumption.
3. This LCC analysis identifies the time of cash flow for selected asset.
4. It also performs better management of project resources and costs (Fuchs et al. 2014).
5. LCC analysis reviews impact of industry’s policies on asset life cycle (Zhang, Kuczera and Kiem 2015).
6. LCC analysis identifies preferred options to upgrade and meet with operating conditions.

With use of LCC analysis, the first step is to estimate the operations and functions of water supply system. It also determines why control valve is failed; then it is done to identify the problems. Proper design of water supply system is an element to minimize the LCC analysis (Zhang, Kuczera and Kiem 2015). The system consists of pump, installation of pipeline, driver in addition to operating controls. Proper design consists of interaction among pipeline installation and entire water supply system. The characteristics of water supply system are measured to determine needed performance of the pipeline network. Installation as well as operational cost is dependent on diameter of pipe in addition to workings of the piping system (Kahn and Lemmon 2016). The diameter of pipe is based on some factors: economy of installation needed lower flow velocity for application, needed minimum diameter for application, maximum flow velocity to reduce erosion into piping and plant standard diameter of pipelines.

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