Infrastructure asset management is a specific term of asset management focusing on physical, rather than financial assets. Sometimes the term infrastructure management is used to mean the same thing, most notably in title of The International Infrastructure Management Manual (2000, first edition). Where there is no problem of confusion, the term asset management is more widely used, as in the professional societies: the Asset Management Council in Australia, and the Institute of Asset Management in the UK. In this context, infrastructure is a wide term denoting road and rail, water, power, etc. assets. Road asset management is part of infrastructure asset management including all the physical assets on the road network such as roads, bridges, culverts and road furniture.
The first published use of the term asset management to refer to physical assets is not known for sure. The earliest adopter known for certain is Dr Penny Burns in 1984 (see the Asset Management History Project ). The New Zealand Infrastructure Asset Management Manual published in 1996 is an early use of the specific term infrastructure asset management . The term "asset management" was first used in a document published in 1983 by the United States Department of Transportation, Federal Highway Administration entitled: Transportation Resource Management Strategies for Elected Officials of Rural Municipalities and Counties. That document consisted of seven chapters of resource management strategies for each of two types of transportation infrastructure - roads & bridges and public transportation. Each of these two parts of the document focused on the following seven categories: Planning, Prioritization, Contracting Out, Innovative Finance, Human Resource Management, Asset Management and Performance Measurement & Reporting.
After decades of capital investment in United States's infrastructure such as the Interstate Highway System, local water treatment facilities, electric transmission and utility lines, the need to sustain such infrastructure experiences mounting challenges. The current duress includes tight state and local budgets, deferral of needed maintenance funding, and political pressures to cut public spending. Today, shrinking federal appropriations, progressively aging capital stock, and parochial statuses and interest groups have inhibited flexible procurement strategies. And with the rise of design firms, professional societies, licensures, construction and industry associations, and related specialties the management of the infrastructure system has dramatically altered. As a result, the life cycle of a facility, including Planning, Design, Construction, Operations, Maintenance, Upgrading, and Replacement, has become bifurcated between agencies and firms where Design and Construction becomes contracted separately from Operations and Maintenance. The push for more dual-track strategies and not segmented ones such as Design-Build and Build-Operate-Transfer helps in maintaining public facilities. Yet, over time, the government apparatus focused more on start-up capital expenses for constructing public assets without focused monies on maintenance.
After World War II, with the policies of the Roosevelt Administration, economic boom of the 1950s, and rise in Federalism, public projects became financed through direct government funding. Additionally, the federal government began setting criteria and procedures for architects and engineers to comply on federal construction and related projects. State and local statutes soon followed suit. Over the years, a large bureaucratic machine began administering infrastructure projects through Design-Bid-Build and debt financing methods. This led to hyper-competition of federal, states, and localities over scant federal resources and overall fostered a limited approach in life-cycle attention (namely, no account of operation and maintenance). Asset management attempts to fill in the gaps of such fragmentation for better performance in infrastructure assets.
In Canada, the majority of municipal assets were built between 1960s to 1970s. The average age of municipal infrastructure has increased since the end of the late 1970s, because investment has been insufficient to replace deteriorating assets. This deficit could be the result a shift in financing policy at the end of 1970s, which made the local governments responsible to fund the municipal assets. Recently, in Ontario municipalities are required to develop an asset management plan to receive provincial fund.