THE CIGFARO VIRTUAL CONFERENCE 22 OCTOBER 2020 1

THE CIGFARO VIRTUAL CONFERENCE 22 OCTOBER 2020 1

OVERVIEW The IDMS Legislative Requirements Asset Management Supporting Guidelines Asset Life Cycle Asset Management Principles Asset management System Infrastructure Asset management – ISO 55000 Asset Management Framework 2

OVERVIEW OF THE IDMS The Infrastructure Delivery Management System (IDMS), is defined as “The Government endorsed management system that guides, directs, and enables infrastructure delivery in the Public Sector” and is represented by what is referred to as the IDMS Diagram. 3

SOME LEGISLATIVE REQUIREMENTS The Municipal Finance Management Act, Act 56 of 2003 4

WHY ASSET MANAGEMENT The objectives of municipalities as set out in Section 152 of the Constitution include ensuring the provision of services to communities in a sustainable manner and the promotion of social and economic development. Infrastructure: is required to deliver services to communities; provides the platform for economic and social development represents a massive historical investment which is often taken for grantedted. The key elements of asset management for infrastructure are: providing a defined level of service; managing the impact of growth through demand management and infrastructure investment; taking a service life approach to developing cost effective management strategies for the long term that meet the desired level of service; identifying, assessing and appropriately controlling risks; and having a long term financial plan which identifies required expenditure and how it will be funded. Asset management is not simply a matter of maintaining existing assets. It is a strategic approach to infrastructure provision that provides direction on decision making throughout the infrastructure planning, delivery, operation and disposal processes 5

AN OVERVIEW OF THE KEY ASSET MANAGEMENT PROCESSES (ZOOM-IN) A municipal asset management system for infrastructure comprises a number of activities which can be grouped together into 6 basic sets of activities or components: asset register Asset Management Policy, Strategy and Levels of Service Service life planning Condition assessments Critical infrastructure needs asset management policy and levels of service condition assessment service life planning critical infrastructure needs Asset register Delivery process inputs Asset management system for infrastructure delivery process inputs 6

AN OVERVIEW OF THE KEY ASSET MANAGEMENT PROCESSES (ZOOM-OUT) AN OVERVIEW OF THE KEY ASSET MANAGEMENT PROCESSES (ZOOM-IN) 7

SUPPORTING GUIDELINES Local Government Capital Asset Management Guideline The DPLG “Guidelines for Infrastructure Asset Management in Local Government” Sector specific guidelines on how asset management principles would be applied for efficient, effective and economical management of sectoral assets: – Verification and Valuation of Major Water Infrastructure Assets – Department of Water and Forestry Affairs (DWAF); – CiDMS for metros International Infrastructure Management Manual co-authored by Institute of Municipal Engineering of Southern Africa IMESA; and National Infrastructure Maintenance Strategy (NIMS) managed by Department of Public Works (DPW). 8 8 8

ASSET LIFE CYCLE The asset life-cycle key concept underpinning asset management (all phases of an asset’s life): The acquisition phase purchase, construction or manufacture of new assets. The operation and maintenance phase operation of the assets, maintenance/refurbishment, enhancement/rehabilitation, depreciation and impairment. Activities of a capital and current nature. The disposal phase timing of and disposal of the assets including the disposal costs and specific requirements for the assets, e.g. dismantling costs, medical equipment legal requirements, etc. 9 Monitoring and Reporting The planning phase planning for service delivery that drives the need for assets. IDP inputs, budget and asset management plans. 99

ASSET MANAGEMENT PRINCIPLES Service delivery needs are to GUIDE asset practices and decisions: The Department is to undertake asset management activities within a strategic framework that is driven by programme and service delivery needs / commitments Asset planning and management are to be INTEGRATED with strategic plans, business plans, budgetary and reporting processes: Planning, budgeting for, and reporting on assets are to be integrated with broader planning processes, within the department and between central and other departments. Asset management decisions are to be based on EVALUATIONS OF ALTERNATIVES that take into account full life cycle costs, benefits and risks of assets: Capital expenditure decisions are to be based on rigorous and documented economic appraisals of options that include financial as well as non-financial parameters. The economic appraisals should be evaluated by a party other than the promoter of the project. Ownership, control, accountability and reporting REQUIREMENTS for assets are to be established, clearly communicated and implemented: Ownership and control of all assets are to be fully defined. Accountability and reporting requirements for both ownership and control are to be determined and clearly communicated. Asset management activities are to be undertaken within an integrated Government ASSET MANAGEMENT POLICY framework: The department's asset management is to be based on best practice in government and industry and on Government policy. 10 10 10

SANS/ISO 55000: ASSET MANAGEMENT SYSTEM – THE RELATIONSHIP OF THE ASSET MANAGEMENT SYSTEM TO ASSET MANAGEMENT Managing the Organisation Asset Management Asset Management System IDMS - Infrastructure Asset Management (IAM) System Stakeholder & Organisation Context Organisational Organisational plans plans and and organizational organizational objectives objectives Coordinated activity of an organisation to realise value from Assets IAM IAM Policy Policy SIAMP SIAMP & & Asset Asset Management Management Objectives Objectives Set Set of of interrelated interrelated or or interacting elements interacting elements to to establish establish asset asset management management policy, policy, asset asset management management objective and objective andprocesses processes to to achieve those objectives. achieve those objectives. Plans Plans for for developing IAM developing IAM system system relevant relevant support support IAM IAM Plans Plans Implementation Implementation of of IAM IAM plans plans Asset Portfolio Assets within the scope of the Asset Management System Programme Management Plans Operations Operations Programme Programme Maintenanc ee Programme Programme Capital Capital Programme Programme Programme Resourcing IAM IAM system system relevant support relevant support elements elements Programme Implementation Relationships between key terms The The grey grey highlighted highlighted box box designates designates the the boundary boundary of of the the Asset Management System. Asset Management System. Note: In this context, the elements of the asset management system should be viewed as a set of tools, including policies, plans, business processes and information systems, which are integrated to give assurance that the asset management activities will be delivered. Operations Activities Activities Maintenance Maintenance Activities Activities Capital Capital Projects Procurement Activities Asset Asset Portfolio Portfolio Updated Asset Register Performance Performance evaluation evaluation and and Improvements Improvements Relationship between key elements within an asset management system 11

INFRASTRUCTURE ASSET MANAGEMENT – ISO 55000 IAM assists organisations to align infrastructure assets, technical and financial decisions, plans and activities with the organisation’s purpose and objectives (ISO 55000 Sect. 2.4.2(b)). The IDMS, using IAM best practices, assists organisations to develop responses to the questions: thus assisting government organisations to improve their service delivery resilience: What is the required Level of Service and how is the demand for these services expected to change in the future? (predictions) What is the current state – Condition, Extent, Functionality, Performance – of infrastructure and facility assets, and can they meet the current and expected demands? What are the Risks associated with using infrastructure and facility assets to Deliver Services? 12 12 12

INFRASTRUCTURE ASSET MANAGEMENT – ISO 55000 ( CONT.) What are the best Life-cycle Strategies for: Operating infrastructure and facility assets? Maintaining infrastructure and facility assets? Renewing infrastructure and facility assets? Acquiring (upgrading, lease, purchase, new construction) these infrastructure and facility assets? Disposing of redundant infrastructure and facility assets in the portfolio? What is the cost of providing the required Level of Service using the above Life-cycle strategies? What are the expected benefits (economic, social, cultural and environmental) of using infrastructure and facility assets? What are the best Funding Strategies for managing infrastructure and facility assets over their full life-cycles? 13 13 13

ASSET MANAGEMENT FRAMEWORK Policy Development Strategy Development Asset Management Planning Implement Asset Management Plans Asset Management Capability Development Risk Management & Performance Improvement Asset Knowledge Management Institute of Asset Management 2014 14 14 14

Thank you 15