3502 Guidance on cost-benefit analysis for asset integrity: Cost-benefit analysis for repair and rectification of identified inspection anomalies

Overview:

This document provides guidance for utilising cost-benefit analysis when determining the most cost-effective course of action to repair or rectify previously identified asset integrity inspection anomalies. The purpose of this document is to provide such a systematic approach for Integrity Management professionals to assess and justify budgetary requirements for inspection, maintenance, repair and rectification work and effectively communicate recommendations to gain support from Asset Management.

The structure of the document is as follows:

Example use cases:

The process for carrying out the CBA is illustrated using worked examples for different types of anomalies and equipment. Six case studies are presented in full in the Annexes but are outlined in section 4. These examples are chosen to highlight different potential applications of this guidance document and are outlined at the start of the document to provide examples throughout the document.

Cost-benefit process:

The overall process is described in section 5 which outlines the use of the flowchart to support progressively more detailed costings until a recommendation can be made as to a course of action to deal with a specified anomaly.

Flowchart:

A flowchart has been developed to provide a framework to enable a systematic CBA of different remediation options following the identification of an anomaly by inspection. The flowchart will:

• provide prompts to identify all possible action scenarios after the identification of an
  anomaly, and
• provide prompts to gather all costs associated with each scenario.

The structure of the flowchart is outlined in 6.1, with more detailed explanation and guidance on the use of each element in 6.2.

Costings:

Section 7 covers a discussion on costings. The identification of costings and benefits are discussed, as well as how to deal with the risk of failure as a cost and how to calculate the present value of future costs. Different approaches to derive overall costs are also reviewed, along with identifying which costs it would be most beneficial to revisit to improve cost estimates.