Introduction to Water Infrastructure Asset Management - Global Drinking Water Management and Conservation - page 153

costs that result from different types of failures. These costs and their relationship to
the failures are discussed. Options for protection from risk in water asset man-
agement are identi

ed. A case is made for risk reduction and management as
opposed to risk removal or transfer. The concepts of risk tolerance and risk aversion
are also discussed brie y.

It is also important to discuss the role of redundancy in a water distribution
network. Three levels of redundancy can be considered: no redundancy, looped
redundancy, and latticed redundancy. Each type is discussed in terms of its reli-
ability. The section concludes with an explanation as to why latticed redundancy is
superior to looped redundancy.
Completion of a risk assessment is an important step in the incorporation of risk
into water asset management. All risks must be identi ed and measured in constant

units. An acceptable level of risk must be determined. A plan must be implemented
to ensure that the level of risk is acceptable. This plan must be continually moni-
tored to ensure its effectiveness.

7.2.2 Risk Considerations

This section discusses some of the basic risk considerations that need to be
understood before introducing risk into asset management. There are three primary
types of failure. A Type 1 failure is best described as an equipment break and can
lead to failure of Type 2 and 3, but cannot be caused by these failure types. A Type
2 failure is the intrusion of pathogens into the system and can lead to a Type 3
failure, but not a Type 1 failure. A Type 3 failure refers to service interruption,
which can be a result of a Type 1 or 2 failure, but cannot cause another type of
failure.
There are several costs of failure. The main costs fall into the categories of:
repair of property; environmental and economic costs; the costs of temporary
replacement; and the costs of communication and maintaining health. Each of these
costs should be taken into account in relation to different failure types.
A standard measurement of risk is developed in the third part and includes both
multiple risks and varying degrees of risk. Reliability of this risk measurement is
also discussed.
The fourth part discusses different methods to protect against risk. Risk can be
transferred to another entity; it can be avoided completely or it can be reduced and
managed. In water distribution, transferring the risk by insurance or other means
does not reduce the human cost. Complete removal of risk will render the service so
expensive that most will no longer be able to afford this kind of water service. The
optimal solution is to reduce and manage the risk.
The last part of this section discusses risk tolerance and risk aversion. An
understanding of risk tolerance is necessary if risk is to be reduced and managed
instead of transferred or removed. Risk aversion is important as it places a value on
appropriate risk estimates.