Aged Assets

Aged assets are equipment that has outlived its usefulness and requires an upgrade. 

Aged assets are not only expensive to maintain and replace, they can also create serious safety hazards and disrupt operations if they fail. Proper management of aged assets is a significant issue in industries that rely heavily on equipment, such as the oil and natural gas industry. Aged assets, particularly those used for defense, transportation, manufacturing and construction, can sometimes be cost-effectively remanufactured to make them useful and efficient again. Aged assets fall into several common categories. First, they include equipment that still functions but is expensive to operate and maintain, such as machinery that requires expensive or difficult-to-find parts or materials. Other aged assets involve equipment that still works, but breaks down frequently, disrupting operations. Another category includes equipment that is broken and too expensive to repair.

In Wiley Finance’s The Handbook of Infrastructure Investing, published in 2010, editor Michael D. Underhill offers some history on U.S. investments in infrastructure. Underhill submits that, most recently, the Great Recession encouraged a wave of government investment in infrastructure expansion, but says that U.S. rebuilding of infrastructure mostly “focuses on replenishing aged assets” instead of harnessing new technology and considering what lies beyond the horizon. These, he says, are “typically low-medium return opportunities.”

Today, there are a number of high-profile national and local infrastructure investment proposals in the U.S. transportation sector. In 2017, Amtrak proposed a “Ready to Build” vision that called for five major projects to overhaul the company’s aged assets. This comes after a steady series of deadly derailments on heavily utilized train lines on the Eastern Seaboard—as well as recent accidents in South Carolina, North Carolina, California, and Indiana.. The Ready to Build proposal focuses on the East Coast: the Hudson Tunnel, a two-track North River Tunnel damaged in Superstorm Sandy; the Portal North Bridge Project in NJ; the Susquehanna River Bridge, “the longest moveable bridge on the Northeast Corridor and a critical link for intercity, commuter and freight activity in the Mid-Atlantic; the Baltimore and Potomac Tunnel; and investment in major stations, including stations in New York, Philadelphia, Baltimore, Washington, D.C., and Chicago.

In 2018, New York City’s MTA released a six point plan to address “decades of underinvestment in the century-old New York City subway.” The improvement plan includes details on dealing with their aged assets by replacing subway cards, track design enhancements and “enhanced subway infrastructure component inspections and ultrasonic testing.” Economists and city planners point to the necessity of such a plan to offset the threat of declining workforce development in New York City as public transit becomes less reliable. Replacing aged assets, in this case, may be a "low-medium return" investment in one sense yet is a crucial consideration when looking at the larger economic picture.