One of the most primary and perennial needs for survival of all living beings on earth is water. Adequate, constant, portable and reliable water supply is necessary not only for domestic purpose but also to boost industrialization, irrigation, sustainable development and for maintaining better sanitation and hygiene. India has more than 18% of world’s population and 4% of world’s water renewable resources (NWP, 2012). This poses the biggest challenge to mankind to conserve water and use it effectively, Hence bringing up the necessity of planned water supply system. In 2001-2011, the population of India increased by 17.7% (Census of India, 2011).With the growing population and improvement in economic status, water demand increases which put the strain on natural resources and on the infrastructure of existing water supply systems.
The state and local governments’ approach towards water management had focused on asset creation and developing new bulk sources of water rather than maintaining the assets created and promoting efficient consumption. Even after consideration for affordability and minimum necessary requirement of water for survival, the overall level of water tariffs is too low to even cover the operation and maintenance costs let alone generate any surplus for capital investment. Consequences are that cities suffer from intermittent supply, insufficient coverage and poor quality of water.
A series of systems which are carried out to satisfy the minimum life cycle cost of a water supply system and to reach the desired level of service are defined as asset management.
Water supply system asset management (AM) is often described simply as a decision-making framework. It is an all-encompassing strategy that examines all of the water supply system assets and manages them as one unit. Here, Life Cycle Cost (LCC) refers to a process to assess overall economic values by analysing an initial cost and discounted future costs for tasks such as maintenance, reconstruction, reinforcement, repair and replacement. This study ways to economically manage water supply systems by utilizing the life cycle cost analysis method.