Asset management follows a risk-based approach to realise value from assets, by managing risk and opportunity to achieve the desired balance between cost, risk and performance. As such the consideration of risk, in relation to performance and cost, carries through in all asset management decisions and activities. Risk comes in many forms, some examples of which are shown below:
The above table shows that there are both asset and non-asset risks related to the delivery of services. Asset management concerns itself with both the risks and performance of (1) asset portfolios and (2) the AM system itself.
A robust asset management system follows a structured approach to the identification, assessment and management of both asset and non-asset risks. As a general approach, asset-related risks are identified and assessed using the failure mode, effects and criticality analysis (FMECA) method, described in Section 3.3.5. Assets are also rated in terms of criticality and managed accordingly; this is also dealt with in Section 3.3.5.
Performance monitoring and improvement ensures that the city achieves objectives established for the AM system and for assets. It requires that outputs and outcomes are specified and monitored (see Figure 2.4). Performance monitoring is not a static reporting function. The AM system demands two more functions of performance monitoring and improvement. The first of these is feedback from performance monitoring, focused on continuous improvement in AM practice within the current framework of AM policy, plans and procedures. The second is strategic review, which may indicate that to improve performance, changes are required to the AM policy, procedure, strategy or AM plans.
THE AM SYSTEM SHOULD BE PERIODICALLY AUDITED, FOR THE FOLLOWING REASONS:
An audited opinion stating that a city has a well performing AM system provides assurance to the investor and regulatory communities that funding applications have been well thought through, that investments will deliver net benefits, and that a city is able to both deliver value from assets and to care for those assets. A favourable audit opinion, and the assurance it provides, reduces risks to investors that may result in higher uptake rates in municipal bonds issued, or more favourable lending conditions for cities.
Communities and other stakeholders have an interest in knowing that city assets are well managed. City assets represent community wealth, effectively held in trust by the metropolitan municipality on behalf of the community as a whole. Communities, who pay rates and tariff s, invest in community assets and expect those assets to benefit them. An audited opinion on the performance of the asset management system supports the principles of good governance and transparency, and provides the community and other stakeholders with the assurance that management systems appropriate to the scope, scale and complexity of assets are in place, and performing well.
An independent audit provides an objective assessment of the appropriateness and performance of the asset management system, and confirms that the AM practices (system) improvement plan of the city pursues levels of practice appropriate to the scope and complexity of assets, and the demands of regulation and customers. It provides management with the opportunity to refl ect on past, current and future performance, and to identify scope for further improvements.
The asset portfolio of even a small city is worth billions of Rands whilst in a larger metro the replacement value of asset portfolios can measure well over a hundred billion Rand. Most cities spend several billion annually to augment, renew, operate and maintain these portfolios. Since infrastructure assets typically have lifespans measured in decades, and in several instances, in generations, decisions made tend to lock in expenditure levels and patterns for a very long time. And because infrastructure assets have such long lives, deterioration patterns are not always evident until such time that a renewals bow wave hits a city.
Moreover, decisions on infrastructure directly affect the quality of life of citizens and the economic performance of the city. Informed decisions based on sound information is therefore highly desired. Furthermore, there are also legal requirements on the structure, quality, availability and reporting of asset information. GRAP, for example, demands that a municipality prepares and annually maintains and updates its asset register. This asset register is the subject of annual scrutiny by the Auditor General, and performance in this regard is a major cause of many municipalities receiving undesired audit outcomes.
To be effective, AM plans must be implemented through activities, projects and programmes across the lifecycle. Modules 9 to 11describes the Infrastructure Procurement and Delivery Management System (IPDM) for cities. It is through this system that the lifecycle activities, projects and programmes specified in the AM plans are actioned, services are delivered, assets optimised and AM objectives related to asset portfolios achieved.
The asset management system and asset portfolios must support the city strategy. Asset managers interpret city strategic objectives and undertake demand analysis to identify stakeholder requirements and then develop AM policy, objectives, strategy and plans to achieve city strategic objectives and to address stakeholder expectations.
THE HIERARCHY OF POLICIES & PLANS IN AN AM SYSTEM INCLUDES:
AM strategy and planning, and the delivery of those plans, together with other AM activities, require coordinated capability. The nature of capability required will depend on the AM objectives decided upon, and the service delivery model(s) agreed to deliver on AM objectives. Various service delivery models are available, ranging from full inhouse capacity through to outsourcing – these are discussed in Section 12.2.5. Regardless of the service delivery model(s) chosen, across lifecycle activities and asset portfolios the city will require AM capacity in the form of a dedicated AM unit and formal organisational roles, functions and processes. There are also likely to be suppliers of goods and services, and as these suppliers form part of the supply chain that ultimately delivers services to the city’s customers, they are considered part of the city’s AM capability. Module 12 provides guidance on AM capability development, inclusive of organisational arrangements, competency development and service delivery models.
Climate Resilience Component Specialist Lead: Climate Resilience Component: National Treasury
Contact Information 083 564 6061 [email protected] [email protected]
I lead the CSPs component on Climate Resilience. The extent to which metro assets are responding to climate impacts in terms of both their resilience to impact and contribution to a low carbon development are of interest.
This module describes the enablers that need to be implemented to ensure a well-functioning cities infrastructure delivery and management system that meets stakeholder expectations, deliver value-for-money, and promotes and facilitates continuous learning and improvement. These enablers are:
1. Asset management leadership and teams
2. Asset management plans
3. Asset management information systems
4. Service provision models
5. Audit, review and improvement
Infrastructure Delivery Management, Civil Engineering, Project/Programme/Portfolio Management CSP Infrastructure Delivery sub-component coordinator: Cities Support Programme
Contact Information 011 453 0733 083 324 3236 [email protected]
Registered with ECSA as a Pr Techni Eng – Civil
I am a Civil Engineer by training with vast experience in government infrastructure delivery management and improvement. I have previously assisted a couple of provincial departments with the implementation of the Infrastructure Delivery Management System (IDMS). More recently, I have been coordinating the final stages of the development of the CIDMS leading up to its national launch.
This module describes the infrastructure delivery management framework applicable to municipalities and municipal entities.Specifically, this module:
1. Describes the control framework for infrastructure delivery management, based on the National Treasury Standard for Infrastructure Procurement and Delivery Management (SIPDM); and
2. Provides guidance with respect to the infrastructure delivery management process.
This module describes the infrastructure procurement system applicable to municipalities, inclusive of infrastructure contracts and contract management. Specifically, this module:
1. Describes the control framework for infrastructure procurement, based on the National Treasury Standard for Infrastructure Procurement and Delivery Management (SIPDM); and
2. Provides guidance with respect to the infrastructure procurement process.
Infrastructure asset management specialist Managing director: i @ Consulting
Contact Information 012-001-0500 082 788 9132 [email protected]
Certified Senior Practitioner in Asset Management (CSAM) Certified Maintenance and Reliability Professional (CMRP) Certified Asset Management Assessor (CAMA) Project Management Professional (PMP)
Louis has won local and international awards for his contributions to the practice of infrastructure asset management. He is widely considered to be the foremost public sector infrastructure asset management specialist in South Africa. He was the main author of the CoGTA Local Government Infrastructure Asset Management Guidelines, he authored the National Immovable Asset Maintenance Management Standard, edited the National Immovable Asset Maintenance Management Planning Guidelines and is a contributing author of the International Infrastructure Management Manual. He is the project manager and lead developer of the Cities Infrastructure Delivery and Management System (CIDMS), for the National Treasury. The CIDMS is a fully SANS 55001 compliant system for cities that has been peer reviewed through the World Bank and considered to be representative of global best practice. For this, Louis received the SAAMA 2018 Project Award. He regularly serves as asset management policy advisor to National Government and entities such as the World Bank and the Financial and Fiscal Commission.
The asset management system articulated in Module 2, and the asset management processes described in Modules 3 – 8, identify lifecycle delivery actions to be actioned to achieve stated asset management objectives. This CIDMS Toolkit advocates robust lifecycle planning as a prerequisite for meeting asset management objectives, to ensure value-for-money infrastructure delivery. Accordingly, cities should prepare asset management plans and a strategic asset management plan which define required capital and operating lifecycle delivery actions over the short, medium and long term in the form of projects and programmes. This module:
1. Describes the infrastructure delivery management system through which capital and operating lifecycle delivery actions are implemented, based on the National Treasury Standard for Infrastructure Procurement and Delivery Management (SIPDM);
2. Presents the control frameworks for infrastructure delivery management and infrastructure procurement;
3. Defines projects and programmes, and provides guidance related to the packaging of these; and
4. Addresses governance arrangements.
This module provides tools and techniques for project design, infrastructure investment appraisal, project financial planning and the prioritisation of capital projects for inclusion in the capital budget.
This module describes how the life-cycle plans prepared in Module 6 inform the preparation of asset management plans (AMPs) per sector and how these inform the preparation of the Strategic Asset Management Plan (SAMP) for the city.
This module describes how asset data models and profiles prepared in line with Module 3 are used and further developed to determine the short, medium and long term life-cycle needs and inform progressively optimised responses per sector that respond to city developmental themes. These in turn inform the preparation of sector asset management plans that are the focus of Module 7.
This module focuses on estimating future demand and on managing demand in such a way that economic optimisation is achieved, that the city’s spatial agenda is supported and services are delivered when required, that scarce natural resources are well-managed, and that the city’s assets and services are configured to the adaptations required by climate change. This module strongly advocates the adoption of green infrastructure technologies where appropriate to support the transition to a low carbon environment, and to reduce the consumption of non-renewable resources.
This module provides the means for identifying, locating and quantifying municipal customers, and for profiling such customers in terms of key built environment planning attributes such as land use type, density and income levels. This module also provides levels and standards of service options for infrastructure and community services as a basis for engaging with customers on appropriate service packages, for profiling the current state of service provision, for quantifying service access backlogs, and to estimate current and future demand.
Additionally, this module provides guidance on the type and location of social amenities to be provided in urban spaces to support spatial objectives such as densification and the strengthening of identified spatial structuring elements (e.g. nodes and corridors).
An asset management system comprises the people, policies, processes, plans and information to deliver value from assets. This module:
Key elements of the module are:
1. Describes the scope, content and requirements of a city asset management system;
2. Provides the means for identifying internal and external stakeholders who establish requirements for the asset management system;
3. Defines an asset management policy, states its purpose as providing the principles according to which asset management objectives are established, and that the asset management system and assets must respond to, states requirements for an asset management policy, provides guidance for developing such a policy, and attends to matters relating to policy approval; and
4. Describes requirements for and the elements of asset management strategy. The asset management strategy contains asset management objectives for both the asset management system and assets, as well as strategies for delivering on these objectives. The asset management strategy is presented in the city’s strategic asset management plan.
This module presents an analysis of urban challenges and expectations for cities and their pivotal role in the economic and social development of South Africa, through considered infrastructure delivery and management in the context of the spatial reform agenda. It also describes the unique value that this toolkit offers in supporting cities to meet these challenges, using the Cities Infrastructure Delivery and Management System (CIDMS) that is founded on best practice and tailored for unique application in the South African urban environment.
1. Infrastructure investments, the delivery of infrastructure and the management of infrastructure assets and services need to support national policy and strategy relating to the development of the country. This module summarises key urban built environment strategies and highlights strategic objectives for urban infrastructure.
2. The strategic objectives for urban infrastructure serve as outcome areas that define the parameters for decision-making in city asset management systems, dealt with in Module 2 of this Toolkit.
This module describes the asset data models that have been adopted as the foundation to implement the asset management system contemplated in Module 2. It identifies the scope of data required and provides the rationale for the structuring and nature of the models that have been adopted, and are to be applied consistently to all immoveable assets across the various sectors in the city. The data model underpins strategic, tactical and operational management.
1. A standardised asset and location hierarchy inter-alia defining how the portfolios are broken down to a consistent level of component detail at which the modelling takes place, and is also used to roll-up data for planning and reporting purposes;
2. A standardised scope and design of data attributes on each of the components that inform asset management processes;
3. Interpretation of data to inform cost, value, performance and risk profiling.
Condition grading scales for individual components
Field assessment resource planning calculator
Risk assessment & mitigation for asset assessment
Required protective clothing
ISO/SANS 55 000 defines a stakeholder as an individual or organisation that can affect or be affected by a decision or activity of the city. Note that the stakeholder does not actually need to be affected, but must only perceive to be affected, to be regarded as a stakeholder. Stakeholders are of critical importance to the AM system. They establish both needs and expectations (such as service delivery requirements) as well as constraints (whether regulatory constraints, customer affordability constraints or other constraints). Stakeholders include both external parties such as other spheres of government, the community and investors, as well as internal stakeholders, such as Council and employees. Stakeholders can be identified by any or a combination of the following means:
1. By way of supply/value chain analysis
2. Identification of stakeholders using the asset management landscape as reference
3. Identification of stakeholders by way of asset lifecycle analysis.
EXTERNAL STAKEHOLDERS INCLUDE THE FOLLOWING CATEGORIES: