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The Role of Executive Leadership in Municipal Infrastructure Asset Management – a Case Study of the Ilembe District Municipality Local Government & Asset Management

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The Role of Executive Leadership in Municipal Infrastructure Asset Management – a Case Study of the Ilembe District Municipality Local Government & Asset Management Emmanuel Ngcobo Dasagen Pather iLembe District Municipality, Asset Manager & SMEC South Africa, Project Manager The Role of Executive Leadership in Municipal Infrastructure Asset Management – A case study of the iLembe District Municipality Local Government & Asset Management Effective & efficient Infrastructure Asset Management is a must! Infrastructure assets are the vehicles through which this objective can be met. Section 152 (1) South African Constitution: Ensure the provision of services to communities in a sustainable manner. Structure of South Africa Government National Government Provincial Government (9) Local Government/Municipalities (278) Comprising District & Local Municipalities, such as the iLembe DM Represented by the South African Local Government Association (SALGA) Durban Cape Town The Role of Executive Leadership Enforces a Top-Down approach to achieving sound Asset Management Practice Responsible for the Must ensure adoption of a successful compliance to all & sustainable relevant standards and Infrastructure Asset regulations, particularly Management Approach. GRAP & MFMA Responsible for fostering a culture which promotes proactive collaboration between all structures within the organisation The organizational approach must embrace both the technical & financial objectives of Asset Management in a holistic manner. The iLembe District Municipality (IDM) Located on the East Coast of KwaZulu-Natal, about 65 km North of Durban, South Africa. Extent of Infrastructure spans 4 Local Primarily a Water & municipalities: KwaDukuza, Mandeni, Sanitation Authority, Maphumulo & Ndwedwe; totalling +2 Billion with a few municipal Rands. offices. Large degree of Initially, battled to Currently services people live in rural or achieve Municipal approximately semi-urban Asset Management 600,000 people. conditions. Compliance. IDM’s Infrastructure Comprises Waste-Water Sewer Treatment Pumpstations Works Boreholes & Administration Standpipes Offices Bulk & Reservoirs & Consumer Storage Tanks Water Meters Water Bulk Water Pipeline & Pumpstations Reticulation Water Water & Sewer Bulk Treatment Sanitation Pipeline & Works Authority Reticulation Infrastructure Asset Management Compliance Often stigmatises Asset Management as an Emphasises the role of GRAP accounting or finance engineers or technical issue personnel, as vital to ensuring best practice & adequate maintenance practices IMESA Asset Management needs to be a jointly run strategy between both Finance & Technical municipal spheres, MFMA to ensure accurate reporting & accountability The Role of IDM’s Executive Leadership Includes the Executive Committee (The Mayor & Ward Councillors), The Municipal Manager & Senior Management Top-Down Approach; a jointly run strategy between their finance & technical departments was established. Ensured buy-in from all facets of the organisation; Required adequate ‘Change Management’ Strategies. Fostered a culture of collaboration & transparency necessary to address issues. Effective monitoring of the municipality’s administration in accordance with policy directions. Ensured that organisational hold-ups and identified challenges were addressed appropriately & timeously. IDM’s Adopted Asset Management Approach Spear-headed by the Executive Leadership & Facilitated by SMEC South Africa An Holistic Programmed & Phased Approach Verification & Review of Existing Municipal Data (GIS, Establishment of Asset Inventories, Systems) a Working Committee of a Municipal Compilation of Updated, Personnel Engagement Workshops Compliant Fixed Asset with Departmental Registers, Including Personnel & Existing Impairment Testing & Audit Consultants Support Stakeholder Engagement Skills Transfer Quality Control Valuation of Infrastructure Assets (CRCs) including Gap Analysis of Current Calculation of Asset Asset Management Maturity Remaining Useful Lives Level (RULs) Physical Verification & Visual Condition Assessment of Water & Sanitation Infrastructure Assets, including Components Gap Analysis & Engagement Workshops Review of all electronic data, policy documents and existing asset registers/inventories. Formulation of a Gap Analysis. Engagement Workshops conducted. The is prescribed Asset management practice, and comprised a group of municipal experts who are knowledgeable of the infrastructure assets under the custodianship of their respective Departments. These sessions take on an interactive workshop feel, thereby allowing for the confirmation and updating of asset information in the asset register & accompanying GIS. This exercise ultimately serves as an interim solution to reviewing the conditions and useful lives of the Municipalities assets; to be followed by field inspection/physical verification Asset Tree Structure Formation & Componentization This entailed the establishment of Asset Classes and a hierarchy for the management of Assets, i.e. A comprehensive Asset Tree. Organised into Systems, Subsystems, Facilities, Assets and Components. Reflected on the Fixed Asset Register. Enabled for the accurate unbundling or componentisation of assets, in preparation for field inspections. Physical Verification & Condition Assessments Condition Assessment of above ground Assets/Components. All inspections are visual in nature, i.e. not intrusive. Photographic evidence of Assets/Components attained. Unbundling/Componentisation of Assets into Generic Civil, Electrical & Mechanical Components. Development of a spatial geodatabase (GIS) for IDM’s infrastructure. Engagement and collaboration with IDM Technical, during inspections. Quality Audit of the data by IDM Technical following inspections. Enabled for accurate accounting treatment of Assets/Components. Civil Engineering Specialists Graduate Engineers/ Technologists Team Leaders Transparent Field Data Continuous Stakeholder Engagement Inspection Process Flow Inspection Data – Facility Inventory Facility Type Counts Inspected, Per Local Municipality Sewage Pump Water Pump Local Municipality Facilities Borehole Reservoirs WTW WWTW Grand Total Station Station KwaDukuza 5 58 37 25 5 7 137 Mandeni 13 43 10 8 7 4 85 Maphumulo 47 68 NA 20 10 3 148 Ndwedwe 30 161 NA 21 7 1 220 Total 95 330 47 74 29 15 590 Inspection Data – Average Conditions Average Condition Index (CI), Per Facility Type 80 70 60 50 40 30 20 10 0 Borehole Reservoirs Sewage Pump Water Pump WTW WWTW Overall Ave CI Station Station for LM Geospatial Database of Infrastructure Development of a spatial database (GIS) of Water & Sanitation Infrastructure Inspection Data - Analysis Condition Index (CI) Comparison between the Initial Engagement Workshops & Actual Site Verifications Primary reason for the increase in average condition per water and sanitation facility types throughout the DM found to be a direct result of known maintenance efforts (approximately 50 million spent over the course of 2 FY’s by IDM). Another significant factor is that of capitalisation of projects (IDM spent close to 80 million in the last 2 FY’s against their MWIG), of which backlog items were only addressed/capitalised in the last FY; resulting in their inspection in the current FY. 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Borehole Reservoirs Sewage Pump Water Pump WTW WWTW Overall LM Ave Station Station CI Overall Facility Type Ave CI 2013/14 Overall Facility Type Ave CI 2014/15 FAR Accounting Treatment The valuation of the Infrastructure Calculation of Asset Current & Assets will be based on their Depreciated Replacement Costs conditions assessed in the field Calculation of Asset Expected and Remaining Useful Lifes (the calculation takes into Calculation of Asset Impairments consideration the age of an asset, its condition and its ability to provide the intended service) Impairment Testing Impairment Assets Under Construction (AUC)/Work In Progress (WIP) Engagement workshops with Technical Departments. Upon completion of asset construction, the following information needs to be provided by the Technical Department: A Completion Certificate – Official Project/Facility/Scheme Name; Date of completion; Relevant signatories. BOQ aligned to the Generic Components of the Asset/s, i.e. Componentisation; and not at Item level. Project Value (Inclusive of Consulting, Inception, Feasibility, Technical, Environmental, Social, Construction and Project Management fees) – Must be distributed amongst the Assets/Components identified. Asset Disposal & Movements Engagement Workshops with Technical Departments. Obsolete and damaged assets/components (i.e. no future economic benefits) need to be treated as disposals and communicated as such to the Finance Department. An official disposal form should be completed and counter signed by the Asset Management Unit. Movement of assets/components which relate to the transfer of assets/components from one facility to another or from a stores facility to site; must also be communicated to the Finance Department. Theft or Losses, also to be considered and communicated as such. Key to ensuring a constant updated inventory of assets/components is constant communication!!! Water Meter Audit Water Meters play a vital role in determining customer usage of this valuable and life sustaining commodity, and as such directly determines the revenue to be generated from the provision of this service. Revenue generation and collection is particularly important when it comes to the maintenance of the infrastructure at hand, of which Ilembe has already invested over a billion rands. This is a follow on project
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