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Most new Projects will include the replacement of existing assets. Most asset replacement projects will be sized to replace the original capacity of the aged asset plus some additional capacity for anticipated future growth.
The Cost Allocation Methodology recognises that from the time the asset to be replaced was new until the time of the planned works, depreciation (or decline in service potential) was collected to fund its eventual replacement. This money collected is "available" to assist in meeting the project cost and is acknowledged in the methodology as described in the figure.
Renewal component costs are calculated as a theoretical stand-alone project, with no consideration for the effect of other related projects.
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If renewal is NOT a requirement of this project. The discussion field and the year of estimation field should still be completed. |
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Descriptive text may be simply no renewal. |
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Field |
Description |
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discussion |
Commentary to support the Renewals figures. |
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year of estimation |
The year in which the Renewals component costs were estimated. |
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This may differ from the Capacities estimation year. |
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project start year |
As determined by the Project. |
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planned year of the works |
The median year of the project period. i.e. if a project starts in 2000 and ends in 2004, then the planned year of the works is 2002. |
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Components: |
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item |
A number that identifies the component item. |
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Will be automatically generated, but can be modified. |
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description |
A brief description of the Renewal component. |
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gross replacement cost |
The modern day equivalent cost of the asset. |
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inflation code |
An inflation factor added to the Renewal costs. |
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Selected from a drop down list. |
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Defined in the Inflation setup within the Administration module. |
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installation year |
The year in which the component was installed. |
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expected life |
The expected life of the component. |
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age |
The calculated age of the component. |
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planned year of works - installation year |
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remaining life |
Calculated remaining life. |
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expected life - age |
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renewal cost |
Calculated renewal cost of the component. |
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(gross replacement cost * age) / expected life |
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ren cost (estimated year) |
The inflated gross replacement cost. |
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Determined by the selected inflation code and the estimated year. |
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