reforming local government implementing a sustainable ... · hiv/aids divided communities...

Copyright © GHD LLC 2005

By Roger Byrne - IMESA Mentor

Reforming Local Government

Implementing a Sustainable

Infrastructure Asset Management

(SIAM) Program in South Africa

Copyright © RBA. 2009


1. Issues Facing South African Municipalities

2. Philosophy of Advanced Asset Management

3. A National Planning Framework Model

4. The Potential Benefits of a National Approach

5. What IMESA is doing ?

Talk Agenda


Setting The Scene

The issues facing South

Africa

Topic One


NPC – Strategic Planning Challenges

Eliminating Poverty

Reducing Inequality

Disease

Burden

HIV/AIDS Divided

Communities

Inequality Public

Sector Management

Skills

Spatial Patterns

Marginalise

the Poor

High

Unemployment

25%

Fight

Corruption

Resource

Intensive

Economy

Crumbling

Infrastructure

Poor

Educational

Outcomes

Provide

Long Term

Meaningful

Employment

Better

Managed National

Infrastructure Improved

Municipal Asset

Management

Saving Money

& Resources,

Improving Service

Delivery

Provide

Basic AM Skills

& Training


“Highly developed and reliable infrastructure

systems raises productivity and lowers

production costs. Deficient infrastructure – along

with weak management and poor economic

organization – accounts for a large share of low

factor productivity in developing (and some

developed) countries.” OECD 1996

The Importance of Infrastructure


South African Statistics – Valuations

In other countries it has been shown that

Municipal Cities manage over

45%

of the Nations Public Assets

IMESA’s NAMS group estimates that South African

municipal infrastructure is worth OVER

R3,000 Billion Rand

(in fact between R3,100B & R3,600B - see separate assessment)


9

Councils :

6 Metro’s with more than 4 million people

3 Emerging metro’s with over 2 million

50 Regional cities

250 Towns & Small local councils

Population approx. 47 million people

Concentration Of Assets

Thanks to Rob Childs


Key Issues for Larger Municipalities

Urban population growth 1.9% pa

Backlog housing & basic services

Poor service delivery

Lack of staff & skills

Economies dependent on existing infrastructure

Create employment opportunities

Amalgamation legacies – Lack of data

Climate change implications

Many Others ?

Lack of Resources & Skills - CE Staff

Durban

East London

P.E.

Gauteng


Metro’s &

Emerging Metro’s (9) Large assets portfolios.

Adequate resources.

AM is critical

Major Provincial Cities (45) Reasonable resources.

Average portfolio.

AM is very important.

Small Municipalities (240) Small portfolios / declining growth.

AM is not critical. /Poor resources.

3

2

1

Where is our GDP Generated ?

Townships Future Capital Needs.

Basic Operations & Maintenance Plans.

Asset Registers / Value / Condition

T

75%

17%

6%

2%

GDP


Understand Infrastructure Economics

Result 2.5% off GDP for 3/5 years

Will take well over 15 years

to fully recover (OECD)

Only 6.8% of National

Infrastructure Was Effected


RSA Municipal Viability


Asset Failures - Sewer Assets


Water Mains & Fire Services

Poor Condition

Paved Roads


Drainage – Stormwater Assets

Stormwater – Size or Poor Maintenance

Storms & Sea Level Rise


Cost of Service Level of Service

Service

Delivery

Customer

Expectations &

Willingness to Pay

Business Risk

Exposure

The Management Balancing Act

The Normal Scene


Operations Maintenance Renewal Growth

Service

Delivery


The Normal Scene

RECURRENT CAPITAL


Operations Maintenance Renewal Growth

Service

Delivery


The South African Scene

RECURRENT CAPITAL


Growth

Augmentation

Disadvantaged

Housing &

Service Backlog

Service

Delivery

Recent Management Focus



Informal Settlements & New Housing


Maintenance &

Renewal of

Existing Assets

Growth – New &

Augmentation

Disadvantaged

Housing &

Service Backlog

Service

Delivery

What Could Be Done ?


Maintenance &

Renewal of

Existing Assets


TOWNSHIPS TO

SMALL CITY’S

SMALL CITY’S TO

REGIONAL CITY’S TO METRO’S

Combating / Slowing Urbanisation

POOR SERVICES POTENTIAL INCOME INCREASE

BETTER SERVICES HERE WILL SLOW THIS TRANS MIGRATION

World Bank 2006


The Philosophy & Logic

of

Advanced Asset Management

Topic Two


Accounting Standards – A View of the Past

1c.103

“Like driving down a winding road in

poor visibility by ‘looking in the rear

vision mirror’”.

Source: Dr John Sing, Qld


Life Cycle AM Processes and Practices

Knowledge

Of Assets Strategic

Planning Capital

Investment

Validation

Create or

Acquire Assets Asset

Accounting &

Economics Asset

Operations Asset

Maintenance

Monitor

Condition &

Performance

Monitor

Asset Risks

Repair

Rehabilitate or

Replace

Augment &

Add New

Assets

Disposal

Rationalisation

of Assets

Manage

Work

Resulting

Review &

Continuous

Improvement Predict Future

Demand & Levels

of Service

Predict

Future Cost of

Service

Predict

Future Levels

of Service =


Infrastructure Assets Strategic Planning


Asset Management Plans


Ensuring Whole of City / Business Uniformity

Electricity

Aligned Business Systems (ABS)/JDE/Arcview/VKE

Housing Electricity

Aligned Business Processes (ABP)

Traffic IT & Office Fleet


Rolling-up With Confidence – Programs

Alig

ne

d B

usin

ess P

rocesses –

Vert

ical

From asset / workface to board

Level of Service

Cost of Service

LoS Reliability

Cost of Service

Critical Risks


eThekwini Outputs – Agencies


Rolling-up to Whole of City

Alig

ne

d B

usin

ess P

rocesses –

Vert

ical

From Assets to Whole of City Understanding

Biggest Gaps

Value / Condition

Future Expenditure

City

Programs

Strategic Assets

Highest Risks

Key Assets

Components


eThekwini Outputs – Whole of City


The Best Practice Model

Asset

Management

Plans Overall

Business

Plans Long Term

Expenditure

& Funding

Plans Customer &

Stakeholder

Consultation Feedback / Revision


National Infrastructure Strategies


Rolling-up With Confidence – National

Alig

ne

d B

usin

ess P

rocesses –

Vert

ical

From Assets to National Understanding Biggest Gaps

Value / Condition

Future Expenditure

National

Provincial

Metro’s & City’s

Highest Risks

Programs

Key Assets

Funding Needs


The Benefits of

A National AM Program

Topic Three


Improved Customer

Satisfaction

Lower Future Cost of Service

Improved Level of Service

20%

80%

+50%

Social

Environmental Social

Economic

Benefits of Introducing

Advanced AM

Benefits of Introducing SIAM

Improved Customer Satisfaction Means Improved Political

Satisfaction


Estimated South African Benefits

IMESA BENEFITS MODEL

ESTIMATED BENEFITS

R250 - 310 Billion Rand

But remember this is just cost saving, not improved levels of

service nor customer satisfaction

Benefit / Cost 18:1 to 30:1

NPV over 20 Years


IMESA’s

National AM Program

Framework

Model

Topic Four


PAS 55

TEAMQF

ISO 55000

IIMM 2011

Others

Global

Industry

Groups

NZ / AU

Can / UK

Quality

Framework

Key Success Factors / Components

BAP

LCAM

Process

BAP

Industry

Practices

Regulatory

Environment

Competency Frameworks / Education -Training Programs

Appropriate Maturity Levels (AML) for Businesses & Assets

Clear Integrated Auditable Framework – All Linked


The Next Evolutions in Asset Management

GAMS web site layout


FREE

AM Maturity

Benchmarks

Quality Frameworks TEAMQF / Gap –Ex1


Guidelines for Asset Group - Asset Management

Plans (Templates) - August 2009

Cash Flow Spreadsheets for AMP’s

AMP - Content Responsibility (TOC)

Delphi Group Guideline

Computer System Improvements

IMESA Web Site - Support Materials

Asset Management


3

2

1

Rolling Up, Down & Out Across SA

Metro’s Regionals Small

2

1 1

T

Townships


Rolling Out IMESA SIAM Training


IMESA – IIMS for GRAP 17 Compliance


Current Replacement Cost vs. Asset Condition IMESA – IIMS for Asset Condition


Asset GIS with options for Google maps


Standard Asset Properties


Conclusions

IMESA are providing a vision & leadership for implementing SIAM and a National Basis in the Municipal Sector throughout RSA, and other countries in Southern Africa.

We see our approach as applicable to many countries who are just starting the asset management journey.

We want it to be part of the Global NAMS initiative fostered by IFME


Take Home Messages

I hope you will now believe that:

Infrastructure Asset Management, Asset Management Plans, Future Expenditure Models, and Risk are vital parts of any National Strategic Planning Process

A National Asset Management Program offers huge savings in future life cycle cost and improved service delivery, implemented most cost effectively.

We believe that IMESA’s approach will assist South Africa to achieve this …

Copyright © GHD LLC 2005

ANY QUESTIONS ?

A Future Vision For A National

Asset Management Program For

South Africa

Email: [email protected] or

Global Roam cell +61 419 509 873


Thanks For Your Time & Interest..

2012 IFME Congress

Finland June 2012

mailto:[email protected]



reforming local government implementing a sustainable ... · hiv/aids divided communities...

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