Investing in infrastructure has long-term implications, making careful planning and execution critical. As crises, including those driven by climate change, become more frequent, infrastructure investment faces increasing pressure to perform. The OECD Recommendation on the Governance of Infrastructure emphasises how a life cycle approach can optimise assets and ensure whole-of-life performance. Efficient management of assets during their planning, construction, operation, maintenance and decommissioning is key to achieving value for money and strengthening resilience.
The OECD Infrastructure Governance Indicator (IGI) on asset performance management provides an overview of the key elements needed for a life cycle approach: policies and tools for asset management, accountability and professionalisation, and financial management. On average, OECD countries score 0.61 (on a scale from 0 to 1), with individual scores ranging from 0.14 to 0.85 (Figure 10.1). Although countries generally demonstrate good practices in financial management, there is still room to improve in the areas of policies and tools, and accountability and professionalisation.
A key element of optimising life cycle performance is accurately assessing the costs and benefits of design features in investment decisions. This requires methodologies that capture an asset's costs and benefits across its whole life cycle. For example, a comprehensive life-cycle costing (LCC) approach takes into consideration the costs of mitigating external environmental impacts in addition to costs over the entire life cycle. Most OECD countries with information available (26 out of 33, 79%) include sustainability savings (e.g. lower energy use, social and environmental impacts) in life cycle cost calculations. However, only 12 out of 33 countries (36%) systematically factor in full life cycle costs (including operation, maintenance, and possible decommissioning costs) when appraising all projects, while 19 (58%) only do this for some (Table 10.1).
There are more tools countries could adopt to help optimise assets’ performance across their life cycle. For instance, only about one-quarter of countries with information available (8 out of 33, 24%) require asset management plans under law or regulation. The absence of such long-term plans may risk organisations prioritising short-term gains over long-term sustainability and affect cost optimisation and quality of service. Similarly, only eight countries have fixed asset registers covering all government assets, while ten (30%) have no centralised register at all (Table 10.1). Countries can also leverage on Public-Private Partnership models to ensure assets are maintained throughout their life and performance optimised. Furthermore, innovative funding instruments can support investment in infrastructure maintenance, e.g. user charges and fees, grants and subsidies (29 or 88% each), long-term revenue generation from existing assets, new forms or applications of taxes (14 or 42% each), and land value capture instruments (11 or 33%) (see Online Figure J.7.1).
To fully benefit from these tools, assets’ performance needs to be monitored for their whole life cycle. Continuous monitoring enhances infrastructure resilience by increasing accountability and enabling resilience measures to be adopted early. Although most OECD countries (24 out of 33, 73%) continually monitor asset performance, only 17 (52%) use predefined service delivery targets and expected outcomes for this monitoring. Only 11 countries (33%) evaluate the impact of infrastructure on the Sustainable Development Goals (SDGs) after implementation (Table 10.1). For example, France has established transport observatories as tools for ex post assessment, which collect data, set benchmarks, and publish audits of transport projects.
