Renewal of water assets is planned through the Operations and Maintenance Engineer and the Planning and Development Engineer. A schedule of potential renewal schemes is maintained and updated by the Operations Engineer. Prioritisation is primarily based on a risk assessment of repeated failure of an asset. The renewal strategy is heavily influenced by the continued rapid growth in demand and wherever possible renewals are coordinated with capacity upgrades. Costs are distributed between the project drivers. Similarly additional priority will be awarded to projects where the existing asset is under- performing causing a level of service issue. The costs of all capital projects are distributed between the main drivers – renewals, improvement to levels of service and growth. Intervention points are established based on the criticality of the asset. Pipes and pumps that provide a critical water supply are not allowed to fail. They are routinely monitored and maintained and renewal planned to avoid service failure. Currently non-critical assets are allowed to fail and are renewed when the cost of maintenance or service interruptions become un-tenable. This strategy ensures the useful life of the asset is maximised and delays renewal as long as possible. This is considered a rational approach at this time. The condition of the whole asset base has yet to be determined through comprehensive survey and assessment. The sequence and detailed design of urban development is still to be established. There is, therefore, a motivation for delaying renewals whilst the overall strategy and condition monitoring is more highly developed. The costs shown have been determined from the re-valuation data using the nominal life expectancy of the pipes within the system. There is a need to verify the nominal life with improved condition grading. The graph would suggest an average annual renewal expenditure of around $7M, a significant increase in current expenditure. The figures are for mains only the renewal of connections is not included but is likely to follow a similar profile. A more detailed renewal programme will be developed once the pipe condition assessment and data analysis has been undertaken and used to inform a renewals strategy. Asset upgrades are included in the capital programme and the costs apportioned between growth, renewal and improved level of service (see Appendix 3 – Capital Budget 2015-18). Page 67