As Oslo Vann og Avløpsetaten (VAV, meaning Water and Sewage Department) looks into the future, it is faced with a quandary—to replace old pipelines or to continue maintaining them. The primary goal is to improve the level of service. The secondary goals are to rejuvenate the system and stem the decline in capital value. In 1991–2006, the Operation and Maintenance expenses (O&M) were far higher than the investments, and the network aged as its capital value plummeted. However, if the funds are insufficient, the self-financing Oslo VAV would have to turn to the consumers for help. Will the consumers pay more to have a ‘younger’ system? What if they are happy with the ‘status quo’ and are unconcerned about the falling capital value? Should the pipelines be depreciated over a longer period than the 40 years which is adopted now? Should the economic method be replaced by a more engineering-based method, whereby the pipes are assessed ‘on merit’—on the basis of their service lives? There are numerous issues and a good decision will ease the road ahead. This paper, using Life Cycle Costing Analysis (LCCA) and scenarios therein, looks at how Oslo VAV could strike a balance between expending on O&M, investing in upgrading the network, and decelerating the ageing of the network while augmenting the capital value, and what is the best attainable set of targets they could aim for, at the end of the next 20 years. The two approaches mentioned above are compared with each other. It is seen that a rehabilitation programme based on the pipes performance approach is preferable to one guided by an economic lifetime approach, when the motive is to optimise expenditure and also improve the level of service.

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