Introducing the CIP Validation Process

Often, an organization will introduce this new form of CIP validation because:

• It has a significant CIP program for the next decade
• Rate increases are significant and the organization is looking for ways in which it can legitimately reduce its capital and recurrent expenditures without undue risk.

A CIP validation program can be very large, but advanced asset management philosophies and approaches might also identify assets that need a capital investment. This is particularly the case with renewal expenditures.

Organizations are likely to have a good understanding of their growth and regulatory compliance issues, or failure modes i.e. capacity and levels or standards of service.

However, their knowledge of the condition and future performance of their existing asset portfolio may be far less confident or even non-existent. In these cases, the size of the capital investment program is likely to grow even more than what was anticipated, with much larger renewal expenditures.

In all cases, organizations will need a transition process from their past practices, especially if it has many projects that are about to enter the final design or construction phases.

The organization needs to know which projects it should review and which ones should be allowed to continue on, as proposed. The organization needs a filtering process.