ASSET MANAGEMENT SEMINAR
24
-
25 NOVEMBER 2010
Technical Services Perspectives
Engineering
Leon Naudé
CONTENT
1.
Introduction
2.
IMESA
3.
Legislation & Guidelines
4.
Asset Management
5.
Current Situation
6.
Key Stakeholders
7.
Proposed National Plan
8.
Conclusion & Comments
INTRODUCTION
The
municipal
engineer
appreciate
the
attention
that
is
given
to
asset
management
due
to
the
municipal
asset
being
the
tool
that
ensures
service
delivery
to
the
community
.
Currently
the
municipal
engineer
is
associated
with
bad
roads
&
potholes,
dirty
water
from
taps
and
overflowing
man
holes
.
With
a
national
effort
from
all
this
can
be
turned
around
with
effective
asset
management
.
IMESA
•
The
Institute
of
Municipal
Engineering
of
Southern
Africa
(IMESA)
•
Institute
for
individual
municipal
engineering
practitioners
.
•
Promotes
the
engineering
process
of
creating,
developing,
integrating,
sharing
and
applying
knowledge
about
infrastructure
engineering
and
asset
management
for
the
benefit
of
communities
and
the
profession
IMESA
•
Established
1921
as
chapter
of
British
Municipal
Engineers
and
since
1961
as
IMESA
=
50
years
in
2011
•
Knowledge
sharing
through
Conferences,
Seminars,
Journal
and
other
forums
like
this
.
•
International
Infrastructure
Management
Manual
–
South
African
version
Asset Management
The
three
areas
involved
in
Asset
Management
are
the
following
:
1.
Asset
:
the
physical
item
that
is
required
to
achieve
the
service,
which
includes
the
purpose
of
the
asset,
lifecycle
cost,
operation
&
maintenance,
asset
register
and
replacement
.
2.
People
:
Operators
with
the
skills
to
effectively
operate
and
technician
with
the
necessary
skills
to
maintain
the
asset
.
3.
Finance
:
the
Funds
that
is
needed
to
keep
the
asset
operational
and
to
keep
the
required
skills
.
Finance
People
Asset Management
As s e t
Asset Management : Legislation
The
following
legislation
needs
to
be
considered
:
1.
Constitution
of
the
Republic
of
South
Africa
2.
Local
Government
:
Municipal
Systems
Act,
2003
(Act
No
.
32
of
2000
)
.
3.
Local
Government
:
Municipal
Finance
Management
Act,
2003
(Act
No
.
56
of
2003
)
.
4.
Occupational
Health
and
Safety
Act,
1993
(Act
No
.
85
of
1993
)
Asset Management : Legislation
1
.
Constitution
of
the
Republic
of
South
Africa
Right
of
people
:
Clause
24
:
environment
not
harmful
and
being
protected
Clause
27
:
access
to
sufficient
water
Municipal Engineer
Asset
Asset Management : Legislation
2
.
LG
:
Municipal
Systems
Act,
2003
Chapter
8
deals
with
municipal
services
:
Clause
73
:
access
to
basic
services
services
regularly
reviewed
for
upgrading,
extension
and
improvements
Clause
57
:
performance
agreements
with
objectives
and
targets,
to
include
asset
management
.
Municipal Engineer
Asset Management : Legislation
3
.
LG
:
Municipal
Finance
Management
Act
Clause
63
deals
with
assets
Par
1
:
safeguarding
and
maintenance
Par
2
:
asset
management
systems
and
values
Par
3
:
control
and
registers
.
Asset Management : Legislation
4
.
Occupational
Health
and
Safety
Act,
1993
This
deal
with
the
health
and
safety
of
officials
with
the
use
of
plant
and
equipment,
which
forms
part
of
the
assets
.
Proper
asset
management
is
required
to
comply
with
safety
measures
.
Asset Management : Guidelines
The
following
exist
:
1.
Local
Government
Capital
Asset
Management
(National
Treasury)
2.
GAMAP
.
3.
National
Water
Services
Infrastructure
Asset
Management
Strategy
(D
.
W
.
A
.
)
4.
The
National
Infrastructure
Maintenance
Strategy
(D
.
P
.
W
.
,
CSIR
&
CIDB)
Effective Asset Management
maximise
the
service
potential
of
existing
assets
by
ensuring
that
they
are
appropriately
used
;
maintained,
safeguarded
and
that
risks
are
mitigated
;
optimise
the
life
cycle
costs
of
owning
and
using
these
assets
by
seeking
cost
-
effective
options
throughout
an
asset’s
life
cycle
;
reduce
the
demand
for
new
assets
through
optimal
use
of
existing
assets
and
management
of
demand
through
the
use
of
non
-
asset
service
delivery
options
;
and
establish
clear
lines
of
accountability
and
responsibility
for
performance
.
Effective Asset Management
Asset Lifecycle
Asset life
-
cycle costs
Asset Management Process
Develop
Asset
Register
Determine
Failure Modes:
•
Capacity
•
Physical Mortality
•
Level of Service
•
Financial Efficiency
Future
Expenditure /
Funding
Strategies
Determine
Condition
-
Physical &
Est. Economic
& Residual Lives
Determine
Current
Replacement
Cost
& WD Values
Set Current &
Predict Future
Levels
of Service
Develop
Appropriate
Maintenance &
Operations Plans
Develop
Appropriate
Capital
Investment
Program
Establish
Risk Ratings
(Relative
Criticality)
Complete
Stakeholder
Consultation and
Build Final AMP
Asset Register
ACQUISITION
IDENTIFICATION &
LOCATION
ACCOUNT
-
ABILITY
PERFORMANCE
DISPOSAL
ACCOUNTING
MANAGEMENT &
RISK
Transaction
Date
Amount
Supplier /
Contractor
Reference
Asset class
Parent or
standalone
Asset number
Identifi
er
Description
Location
Department
Custodian
Restrictions
Ownership
Licence or
permits
Transfers
Date
Amount
Capacity
Condition
Remainin
g
useful life
Residual
value
Reason
Capacity
Performance
measures
Condition
Assessment
Warranties
Useful life
Residual value
Criticality
rating
Maintenance
history
Operation
al
history
Risk
assessment
Historical cost
Funding source
Useful life
Remaining
useful life
Residual value
Depreciation
method
Revaluation
Impairment
Depreciation
Accumulated
depreciation
Carrying amount
Disposal
Condition assessment
Grade
Description
Detailed Description
Estimated
Remaining Life
1
Very Good
New, sound structure or appearance, well
maintained. Continue with planned
maintenance
As estimated
2
Good
Performance
acceptable with minor
deterioration (<5%). Normal planned
maintenance continues
As estimated
3
Fair
Clearly evident deterioration (10
-
20%).
Significant maintenance required, consider
impairment
Less than
estimated
4
Poor
Significant deterioration in s
tructure or
appearance. Significant impairment of
performance. Significant maintenance
required
Significantly less
than estimated
5
Very Poor
Unsound, does not perform. Reconstruction
or replacement required (>50% needs
replacement).
None or nominal
Condition assessment
Condition
Performance
100 %
100 %
Ideal
Maintenance
Condition
Performance
100 %
100 %
Ideal
Lack of proper
maintenance
Maintenance
Maintenance Policy
Planned Maintenance
Unplanned Maintenance
Condition
Monitoring
Preventative
Maintenance
Servicing
Repair
corrective
Maintenance
Maintenance Policy
Planned Maintenance
Unplanned Maintenance
Condition
Monitoring
Preventative
Maintenance
Servicing
Repair
corrective
Maintenance
Current Situation
•
Everyone
is
doing
their
own
thing
.
•
We
have
over
30
different
approaches
to
asset
management
being
used
.
•
Training
programs
are
being
created
at
a
great
rate,
promoting
even
more
approaches
.
•
We
are
re
inventing
the
wheel
.
There
are
best
appropriate
practices
available
around
the
world
and,
•
A
large
movement
exist
for
a
global
approach
to
SIAM
with
BAP
industry
models
for
the
maturity
needed
by
the
organisation
and
their
assets
.
•
We
should
pool
all
materials,
develop
a
national
approach
and
concentrate
all
our
efforts
on
implementing
it
cost
effectively,
not
re
inventing
it
.
Current Asset Management Process
Copyright © RBA. 2009
Develop
Asset
Register
Determine
Failure Modes:
•
Capacity
•
Physical Mortality
•
Level of Service
•
Financial Efficiency
Future
Expenditure /
Funding
Strategies
Determine
Condition
-
Physical &
Est. Economic
& Residual Lives
Determine
Current
Replacement
Cost
& WD Values
Set Current &
Predict Future
Levels
of Service
Develop
Appropriate
Maintenance &
Operations Plans
Develop
Appropriate
Capital
Investment
Program
Establish
Risk Ratings
(Relative
Criticality)
Complete
Stakeholder
Consultation and
Build Final AMP
Current Drivers
•
High
Growth
Stresses
•
Ageing
Assets
–
Reliability
Failures
/
Risks
•
High
Debt
–
going
broke
•
Inadequate
budgets
to
perform
responsibilities
•
Large
backlog
of
unserved
demand
•
Inadequate
maintenance
•
Regulation
review
/
price
and
or
performance
•
Inadequate
staff
resources
Key Stakeholders
Municipal
Councils
National Government
Auditor General
NT,
DWA
,
DPW
Others EPA , OH&S,etc.
Funding Agencies
Regulators
Industry Associations
Policy / Strategy
Customers / Users
Contractors / Suppliers
Staff / Unions
State / National Government
Owner
Community
Elected
Members
Professional Assoc.
LGA’s
ProvincialGovernment
Customers / Users
IMESA / IMFO / LGMA
Various
Various
Accountant General
Political Bodies
Key National Program Model Elements
National
Quality
Framework
Supporting
Tools
Linked
Drivers
•
Uniformity
•
Transparent
•
Auditable
•
Maturity Model
•
Cont. Imp.
•
Guides
•
Templates
•
BAP process
•
Industry BAP
Models
•
Competencies
& Training
•
Professionalism
•
Regulation
•
Industry
•
Benchmarking
•
Competencies
National Co ordination
National Co ordination
N.A.M.S.
National Asset Management Strategy.
A nationally consistent approach to
Asset Management
Benefits of National Programs
•
More
effective
‘whole
of
city’
approach
•
Ability
to
judge
merits
of
diverse
programs
and
roll
up
with
confidence
(uniform
approaches)
to
:
o
Whole
of
business
o
Whole
of
City
o
Whole
of
Nation
•
Ensure
more
successful
implementations
•
Ensure
that
programs
are
sustainable
•
Enables
leading
organisations
to
help
drive
AM
in
smaller
organisations
Benefits of National Programs (2)
•
National
mentoring
and
advice
easier
•
Eliminates wasteful activities e.g. Valuations
•
Saves re inventing the wheel
•
Enables BAP to be diseminated more easily
and quickly
Conclusion
•
A
National
Sustainable
Infrastructure
Asset
Management
(SIAM)
Program
offers
considerable
benefits
to
South
Africa
(
30
%
reduction
of
future
life
cycle
costs
and
better
asset
performance
.
•
South
Africa
is
at
a
critical
stage
in
rolling
out
its
SIAM
program
and
can
adopt
a
National
Program
without
too
many
issues
.
•
If
SA
doesn’t
act
at
this
time
it
will
loose
the
opportunity
to
adopt
the
structures
and
approaches
now
realised
as
necessary
by
leading
Nations
such
as
Australia
and
NZ
•
Training
programs
that
develop
appropriate
skills
and
competencies
are
the
most
critical
issues
.
Local Government Sector & Education Authority
(LG SETA)
•
Sector
skills
plan
.
•
Learnerships
Programmes
.
•
Education
and
Training
Quality
Assurance
bodies
•
Training
programs
that
develop
appropriate
skills
and
competencies
are
the
most
critical
issues
.
•
Ensure
Asset
Management
is
properly
covered
•
IMESA
to
assist
by
offering
technical
expertise
in
the
ETQA
process
and
being
a
Quality
Partner
ISO Specification : 251 Asset Management
•
The
Institute
of
Asset
Management
(IAM)
began
this
journey
in
2002
when
it
embarked
upon
the
development
of
a
Publicly
Available
Specification
(PAS)
for
Asset
Management
with
the
British
Standards
Institution
(BSI)
.
•
September
2008
saw
the
publication
of
BSI
PAS
55
:
2008
which
had
been
developed
with
the
assistance
of
over
49
organisations
from
15
industries
in
10
different
countries
.
•
SABS
Technical
Committee
:
TC
251
Asset
Management
established
with
first
meeting
in
May
2010
Closing Remarks
•
Too
much
talk
•
For
improved
service
delivery
asset
management
must
be
coordinated
nationally
from
top
to
bottom
•
National
Asset
Management
Strategy
(NAMS)
is
therefore
urgently
needed
•
IMESA
is
thankful
to
be
part
of
this
process
and
grateful
to
National
Treasury
Department
with
starting
this
process
through
these
seminars
which
includes
all
Affected
&
Interested
Parties
.
No Management
Asset Management
Thank You
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