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The Federal Transit Administration (FTA) is getting serious about asset management. In what this analyst believes is a first for asset management, the agency has finalized a rule establishing a National Transit Asset Management (TAM) System, effective October 1, 2016. The purpose of the system is to monitor and manage public transportation capital assets to enhance safety, reduce maintenance costs, increase reliability, and improve performance. The rule defines a TAM system as “a strategic and systematic process of operating, maintaining, and improving public transportation capital assets effectively through the life cycle of such assets.” It applies to all owners, operators, and managers of public transportation assets who receive federal funding for such capital assets.
Insufficient funding and historically inadequate asset management practices have contributed to an estimated state of good repair (SGR, cost to replace assets as rated on a scale) backlog for transit assets of $85.9 billion. FTA estimates that an additional $2.5 billion per year above current funding levels from all levels of government is needed just to prevent the current backlog from increasing! When transit assets are not in a state of good repair, the consequences include increased safety risks, decreased system reliability, higher maintenance costs, and lower system performance.
The rule establishes basic principles of transit asset management. TAM requirements are intended to be technology-neutral, and no specific hardware or software required. Implementing a TAM system will require a provider to collect and use asset condition data, set targets, and develop strategies to prioritize investments to meet the provider's goals. The components of the National TAM System will work together to ensure that achieving and maintaining a state of good repair becomes, and remains, a top priority for transit providers.
ARC recommends the manufacturing industry take a lesson from this rule. Seekers of project funding should develop and include specific asset management budgets and plans with their proposals. Exhibiting an understanding of the total lifecycle costs of a project may provide the winning edge particularly in this resource constrained business environment.
Insufficient funding and historically inadequate asset management practices have contributed to an estimated state of good repair (SGR, cost to replace assets as rated on a scale) backlog for transit assets of $85.9 billion. FTA estimates that an additional $2.5 billion per year above current funding levels from all levels of government is needed just to prevent the current backlog from increasing! When transit assets are not in a state of good repair, the consequences include increased safety risks, decreased system reliability, higher maintenance costs, and lower system performance.
The rule establishes basic principles of transit asset management. TAM requirements are intended to be technology-neutral, and no specific hardware or software required. Implementing a TAM system will require a provider to collect and use asset condition data, set targets, and develop strategies to prioritize investments to meet the provider's goals. The components of the National TAM System will work together to ensure that achieving and maintaining a state of good repair becomes, and remains, a top priority for transit providers.
ARC recommends the manufacturing industry take a lesson from this rule. Seekers of project funding should develop and include specific asset management budgets and plans with their proposals. Exhibiting an understanding of the total lifecycle costs of a project may provide the winning edge particularly in this resource constrained business environment.