Reforming Local Government Implementing a Sustainable Infrastructure Asset Management (SIAM) Program in South Africa By Roger Byrne - IMESA Mentor

Transcription

1 Copyright GHD RBA. LLC Reforming Local Government Implementing a Sustainable Infrastructure Asset Management (SIAM) Program in South Africa By Roger Byrne - IMESA Mentor

2 Talk Agenda 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?

3 Topic One Setting The Scene The issues facing South Africa

4 NPC Strategic Planning Challenges Provide Basic Poor AM Skills Disease Educational Burden Crumbling Outcomes & Training HIV/AIDS Divided Infrastructure Better Communities Managed Resource National Saving Money Inequality Infrastructure Intensive Eliminating Poverty Improved & Resources, Public Economy Reducing Inequality Sector Municipal Management Asset Improving Service Management Skills Fight Corruption Provide Long Term Delivery High Unemployment Meaningful 25% Employment Spatial Patterns Marginalise the Poor

5 The Importance of Infrastructure 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

6 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)

7 Concentration Of Assets 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 9 Thanks to Rob Childs

8 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?

9 Lack of Resources & Skills - CE Staff Gauteng Durban P.E. East London

10 Where is our GDP Generated? 3 2 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. GDP 75% 17% 1 Future Capital Needs. Basic Operations & Maintenance Plans. Asset Registers / Value / Condition Small Municipalities (240) Small portfolios / declining growth. AM is not critical. /Poor resources. Townships T 6% 2%

11 Understand Infrastructure Economics Only 6.8% of National Infrastructure Was Effected Result 2.5% off GDP for 3/5 years Will take well over 15 years to fully recover (OECD)

12 RSA Municipal Viability

13 Asset Failures - Sewer Assets

14 Water Mains & Fire Services

15 Paved Roads Poor Condition

16 Drainage Stormwater Assets

17 Stormwater Size or Poor Maintenance

18 Storms & Sea Level Rise

19 The Management Balancing Act Customer Expectations & Willingness to Pay Cost of Service Level of Service Business Risk Exposure Service Delivery The Normal Scene

20 The Management Balancing Act RECURRENT CAPITAL Operations Maintenance Renewal Growth Service Delivery The Normal Scene

21 The Management Balancing Act RECURRENT CAPITAL Operations Maintenance Renewal Growth Service Delivery The Normal Scene

22 The Management Balancing Act RECURRENT CAPITAL Operations Maintenance Renewal Growth Service Delivery The South African Scene

23 Recent Management Focus Growth Augmentation Disadvantaged Housing & Service Backlog Service Delivery The South African Scene

24 Informal Settlements & New Housing

25 What Could Be Done? Maintenance & Renewal of Existing Assets Growth New & Augmentation Disadvantaged Housing & Service Backlog Service Delivery The South African Scene

26 Combating / Slowing Urbanisation POOR SERVICES POTENTIAL INCOME INCREASE TOWNSHIPS TO SMALL CITY S SMALL CITY S TO REGIONAL CITY S TO METRO S BETTER SERVICES HERE WILL SLOW THIS TRANS MIGRATION World Bank 2006

27 Topic Two The Philosophy & Logic of Advanced Asset Management

28 Accounting Standards A View of the Past Like driving down a winding road in poor visibility by looking in the rear vision mirror. Source: Dr John Sing, Qld 1c.103

29 Life Cycle AM Processes and Practices Manage Review & Disposal Work Continuous Knowledge Rationalisation Resulting Improvement Of Assets Predict Strategic Future Planning of Assets Demand & Levels Augment & Capital of Service Add New Investment Assets Validation Predict Predict Repair Create or Future Levels = Future Cost Acquire of Rehabilitate or Assets of Service Service Asset Replace Asset Accounting & Monitor Monitor Asset Operations Economics Condition Maintenance & Asset Risks Performance

30 Infrastructure Assets Strategic Planning

31 Asset Management Plans

32 Ensuring Whole of City / Business Uniformity Aligned Business Processes (ABP) Electricity Housing Traffic Fleet IT & Office Aligned Business Systems (ABS)/JDE/Arcview/VKE

33 Aligned Business Processes Vertical Rolling-up With Confidence Programs From asset / workface to board Level of Service Cost of Service Critical Risks LoS Reliability Cost of Service

34 ethekwini Outputs Agencies

35 Aligned Business Processes Vertical Rolling-up to Whole of City From Assets to Whole of City Understanding City Biggest Gaps Highest Risks Programs Strategic Assets Key Assets Components Value / Condition Future Expenditure

36 ethekwini Outputs Whole of City

37 The Best Practice Model Asset Management Plans Overall Business Plans Long Term Expenditure & Funding Plans Feedback / Revision Customer & Stakeholder Consultation

38 National Infrastructure Strategies

39 Aligned Business Processes Vertical Rolling-up With Confidence National From Assets to National Understanding Biggest Gaps National Highest Risks Provincial Funding Needs Metro s & City s Programs Key Assets Value / Condition Future Expenditure

40 Topic Three The Benefits of A National AM Program

41 Benefits of Introducing SIAM Social Environmental Improved Level of Service 20% Benefits of Introducing Advanced AM Social Improved Improved Customer Satisfaction Means Customer Improved Political +50% Satisfaction Satisfaction Lower Future Cost of Service 80% Economic

42 Estimated South African Benefits IMESA BENEFITS MODEL ESTIMATED BENEFITS R Billion Rand Benefit / Cost 18:1 to 30:1 NPV over 20 Years But remember this is just cost saving, not improved levels of service nor customer satisfaction

43 Topic Four IMESA s National AM Program Framework Model

44 Key Success Factors / Components Clear Integrated Auditable Framework All Linked Quality Framework BAP LCAM Process BAP Industry Practices Regulatory Environment Appropriate Maturity Levels (AML) for Businesses & Assets Competency Frameworks / Education -Training Programs PAS 55 TEAMQF ISO IIMM 2011 Others Global Industry Groups NZ / AU Can / UK

45 The Next Evolutions in Asset Management GAMS web site layout

46 Quality Frameworks TEAMQF / Gap Ex1 FREE AM Maturity Benchmarks

47 IMESA Web Site - Support Materials 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 Asset Management

48 Rolling Up, Down & Out Across SA T Small Regionals Metro s Townships

49 Rolling Out IMESA SIAM Training

50 IMESA IIMS for GRAP 17 Compliance

51 IMESA IIMS for GRAP 17 Compliance

52 IMESA IIMS for Asset Condition Current Replacement Cost vs.

53 Asset GIS with options for Google maps

54 Standard Asset Properties

55 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

56 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

57 Copyright GHD RBA. LLC IFME Congress Finland June 2012 Thanks For Your Time & Interest.. ANY QUESTIONS? A Future Vision For A National Asset Management Program For South Africa rogerbyrne2@bigpond.com or Global Roam cell