SENIOR MANAGERS CONFERENCE FREE STATE PROVINCE

SENIOR MANAGERS CONFERENCE

FREE STATE PROVINCE

INFRASTRUCTURE

The Role of Asset Management System and the Benefit of Regular Condition Assessment Audit in the

Life of Infrastructure

Presented by :

James Ratlhagane

Owners of Infrastructure

• Department of Education– Schools, School hostels etc.

• Department of Health– Hospitals, health facilities, nurses homes etc.

• Department of Public Works– Government buildings, Offices for government institutions

• Department of Provincial & Local Government– Municipalities

• Water treatment plants, Reservoirs, Pump stations, Power stations, roadways etc.

Guiding Legislation and documents

• MFMA / PFMA– Asset Register– Accountability

• GIAMA– Rationale– Framework

• GAMAP Best Practice Manual– GAMAP 113 Property, Plant and Equipment

GIAMA

• Government-wide Immovable Asset Management Act

• The management framework requires each organ of state to produce an immovable asset management plan that will form part of the strategic planning and budgeting processes of government.

GIAMA

• Each organ of state must submit its immovable asset management plan to the relevant Treasury annually.

• These asset management plans must inform the budget allocation process, and must be revised and included in the strategic plans of organs of state once budgetary allocations are finalised.

GIAMA

• GIAMA will apply government-wide to all organs of state, including national and provincial government departments, municipalities, constitutional institutions, national and provincial trading entities, Provincial entities and relevant public entities on which the PFMA and MFMA place asset management responsibility

The Framework comprises of the following components:

• Strategic Planning– Link service delivery strategies with IA’s– Analysis of existing IA’s vs IA’s required to

meet service delivery requirements• Acquisition Planning & Management

– Additional IA’s– Upgrades or Improvements

Framework Components Continues

• Operation & Maintenance Planning & Management– Performance & Condition assessments– Prioritised Maintenance Budget

• Disposal Planning & Management– Maximisation of benefits of disposals within financial

and other resource constraints • Performance Management

– Monitor & review to ensure compliance & accountability

Asset Management Framework supporting GIAMA

DisposalPerformanceManagement

Acquisition Planning& Management

Disposal Planning &Management

Operations &Maintenance Planning

& Management

Redundant IA'sAdditional IA'srequired

Exixting IA's tobe retained

Analysis ofcurrent IAportfolio

Strategic Planning

Asset Management Framework supporting GIAMA

GIAMA

• GIAMA requires – Assessment of performance and condition of

immovable assets– Maintenance priorities

Key Points

• Role of Asset Management System• Benefits of condition assessment audits• Development of Asset Management Strategy• Compilation of Asset Inventory / Register• Conducting of Physical audit• Asset Financial Valuation• Establishment of Capital and operating budget• Implementation of an Asset Preservation Programme

Role of Asset Management System

Provide Owners of infrastructure with the functionality to:

• record

• manage

Role of Asset Management System

As a minimum requirement for fully integrated property and fixed asset management the immovable asset register need to provide for the following:

• Asset Identification & Description • Asset Management • Property Development • Maintenance

Case StudyTokologo Local Provinciality

Audit Forms Example

Audit Form Complete Set

Maintenance Budget Typical Site

Condition Analysis Typical Site

Condition Aanalysis Site Services

Maintenance Budget Municipality

Consolidated Maintenance Plan

Consolidated Condition Matrix

Typical FAR

Site Photo

BUDGET AVAILABLE = R1,300,000

Site Photo

Structure B001

Structure B002

Structure B003

Structure B004

Installations & Equipment









Benefits of condition assessment audits

• Conditions Assessment Team

• Condition Standard

• Audit Results

• Translating and analyzing the findings of audit report

Physical Site Audit of Building & Infrastructure

Data search of existing records and drawings

Printing of existing drawings and audit forms

Capturing of drawings in electronic format

Updating of existing electronic drawings

Updating & conversion of paper dwgs into electronic format

Consolidation of existing building records for audit

Measurements for missing buildings/ drawings on site

Preparation of missing drawings in electronic format

Verification & collection of building & infrastructure data

Photographs of buildings & condition/maintrequirements

Assessment of condition & maintenance requirements

Capturing data into electronic database (Fixed Asset Register)

Start

Verification of existing drawings on site

QUALITY ASSURANCESite Audit Process

Physical Site Audit of Building & Infrastructure

Data search of existing records and drawings

Printing of existing drawings and audit forms

Capturing of drawings in electronic format

Updating of existing electronic drawings

Updating & conversion of paper dwgs into electronic format

Consolidation of existing building records for audit

Measurements for missing buildings/ drawings on site

Preparation of missing drawings in electronic format

Verification & collection of building & infrastructure data

Photographs of buildings & condition/maintrequirements

Assessment of condition & maintenance requirements

Capturing data into electronic database (Fixed Asset Register)

Start

Verification of existing drawings on site

QUALITY ASSURANCESite Audit Process


• Current condition, including identification and costs of backlog maintenance and compliance with statutory requirements

• Estimate of requirements for annual preventative and corrective maintenance, and

• Estimate of planned replacement maintenance (replacement of facility components which have reached the end of their economic life) for the next 15 years or so.


• Conditions Assessment Team

– In house vs services of a contractor


• Condition Standard

Prior to developing building condition standards, there is a need to review the department’s service delivery plan to determine the service requirements of building assets to meet service delivery requirements. Through this process, departments will be able to determine the relative importance and required performance of each building asset to meet service delivery and business objectives (e.g. strategically important, high profile, utility, ancillary, heritage, dormant, awaiting disposal).

Five-point rating system CONDITION RATING

Technical Terms

Layperson Terms

Description

1 Replacement Required

Very Bad

The fabric, element, installation or building has failed, is not operational or deteriorated to the extent that does not justify repairs, but should rather be replaced. The condition of the element actively contributes to the degradation of surrounding elements or creates a safety, health or life risk.

2 Rehabilitation Required

Bad

Substantial sections or elements have deteriorated badly,suffered structual damage or require renovations. There is a serious risk of imminent failure. The state of repair has a substantial impact on surrounding elements or creates a potential health or safety risk.

3 Repairs Required

Fair

Significant sections or elements require repair, usually by a specialist. The fabric, element, installation or building has been subjected to abnormal use or abuse, and its poor state of repair is beginning to affect surrounding elements. Backlog maintenance work exists.

4 Maintenance required

Good

The Fabric, element, installation or building exhibits superficial wear and tear, minor defects, minor signs of deterioration to surface finishes and requires maintenance/servicing. It can be reinstated with routine scheduled or unscheduled maintenance/servicing.

5 As New Very Good

The fabric, element, installation or building is either new or has recently been maintained, does not exhibit any signs of deterioration


Translating and analyzing the findings of audit report

Project Structure

Programme 1

Maintenance Programme DevelopmentKey: Condition based, focus on planned preventative maintenance, backlog eradication, ensure reliable service delivery

Programme 2

Maintenance Programme ImplementationKey: Single point responsibility; current tenders end soon

Programme 3

Capacity DevelopmentKey: Build local & facility based capacity; skills transfer; empowerment; awareness

Maintenance Programme Development

Programme 1

Maintenance Programme Development• Situation assessment

• Immovable Asset Register 1

• Preservation policy & strategy

• Generic documentation

• Condition assessments & facility dataset

• Facility preservation strategy

• Facility specific documentation

11

Maintenance Programme Implementation Programme 2

Maintenance Programme Implementation• Process Initiation Workshop

• Feedback & Training

• 2005/06 FY Term Contract Tendering Process

• Term Contract Management & Administration

• Update dataset & condition profile…

• Provincial budget…

• Facility strategy…

• 2006/07 FY

• 2007/08 FY…

22

Capacity Development

Programme 3

Capacity Development & Training• Provincial Maintenance Teams

• IAMS Users– Planners / Managers

• Awareness Training– Management / Department

– Provincial Staff

• Ongoing Training & Mentoring– Provincial Maintenance Staff

– Operators

– Management

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The framework should encompass

• A lateral perspective

• A vertical perspective

• A whole-of-government perspective

IMMOVABLE ASSET MANAGEMENT FRAMEWORK

STATEGIC/CORPORATE PLAN

AdditionalRefurbishReplace

AcquisitionPlan

MaintenancePlan

DisposalPlan

UseMaintainManage

SurplusRedundant

IMMOVABLE ASSET MANAGEMENT PLAN

Performance Monitoring & Review

GO

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NT

OB

JEC

TIV

ES

IMM

OV

AB

LE

AS

SE

T M

AN

AG

EM

EN

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RIN

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Benefits of a strategic approach

• better allocation of limited Provincial resources

• improved alignment of assets with services and community expectations

• reduced demand for new Provincial assets through better integration of service planning and asset planning

• more effective use and maintenance of existing Provincial assets

• improved processes and accountability for capital and recurrent works

Development of Asset management strategy

Step 1 – The Asset Management Strategy

• Immediate or the corrective action phase

• Tactical planning phase, and

• Long-term, or the strategic planning phase

Planning Elements • Organizational Alignment and readiness set goals, ownership of processes etc

• Business process definition and documentation then all plans must be documented

• Technologysophisticated computer tools are required for successful implementation and management of the program

Step 2 – Asset Inventory/Register

• Without a comprehensive, integrated, effective and current Asset Register (AR) of all Provincial property, it is not possible for the Province to fulfil its mandate.

AR needs to fulfil the needs of a wide range of potential users

• A service delivery responsibility

• A service support responsibility

• A fiduciary responsibility

• A legislative responsibility

Step 3 – Assess the Condition of Assets

• Provincial infrastructure is complicated three-dimensional configurations of a diverse range of fabrics and materials

• which deteriorate at different rates depending on use, applications and environmental conditions

• information on the conditions of these fabrics and materials age rapidly, and

• regular and consistent condition assessments are required

A structured Condition Assessment process must be

part of the condition-based maintenance strategy and should

be undertaken as part of the maintenance planning process.

Step 4 – Financial Valuation of Assets

• determine the amount of revenue you will need to keep the assets functioning at the level of service the public demand

• The value of the facility is a function of the remaining useful life of your assets, the cost of replacement, and your ability to preserve the assets through optimal R&R planning

• establish an assessment of the system’s replacement value to inform future budgeting

Step 5 – Establish Capital and Operating Budgets

• replace or perform major rehabilitation for all the assets that have been inventoried

• A planning horizon of at least 20 years is preferred in order to plan adequately for the large asset replacements

• rarely possible to accumulate the full amount necessary to replace multiple major assets

Step 6 – Maintain, Repair, Renew, and Replace Assets to Achieve Sustainability

• dedicating sufficient funding to support system needs

• making smart decisions about where to allocate this funding

• asset management program coupled with a sound decision support approach

• define the functional objectives that must be achieved by a maintenance, repair, and replacement program

Con

ditio

n A

sse

ssm

ents

5

4

As New

Maintenance

3

2

Repairs

Rehabilitation

1 Replace1 Replace3

2

Repairs

Rehabilitation

5

4

As New

Maintenance

Immovable Asset Preservation Programme

• Preservation Policy• Standards & Procedures• Service Level Agreements• Service Level Specifications

• Integrated Asset Management System

• Fixed Asset Register• Condition Assessments

Maintenance ProgrammeAssets in Desirable Condition

Planned Maintenance

• Preventative Maintenance• Condition-based Maintenance• Statutory Maintenance (OHS Act)

Unplanned Maintenance

• Breakdown Maintenance• Incident Maintenance

Minor Repairs

Rehabilitation ProgrammeAssets not in Desirable Condition

Major Repairs

Rehabilitation

Replacement ProgrammeReplacement of Assets, etc.

Replacement of :• Facilities• Buildings• Plant• Equipment• Infrastructure

Con

ditio

n A

sse

ssm

ents

5

4

As New

Maintenance

3

2

Repairs

Rehabilitation

1 Replace

Con

ditio

n A

sse

ssm

ents

Con

ditio

n A

sse

ssm

ents

5

4

As New

Maintenance

3

2

Repairs

Rehabilitation

1 Replace5

4

As New

Maintenance

3

2

Repairs

Rehabilitation

1 Replace1 Replace1 Replace3

2

Repairs

Rehabilitation

3

2

Repairs

Rehabilitation

5

4

As New

Maintenance

5

4

As New

Maintenance

Immovable Asset Preservation Programme










Maintenance ProgrammeAssets in Desirable Condition

Planned Maintenance




Minor Repairs

Maintenance ProgrammeAssets in Desirable ConditionMaintenance ProgrammeAssets in Desirable Condition

Planned Maintenance


Planned Maintenance






Minor RepairsMinor Repairs

Rehabilitation ProgrammeAssets not in Desirable Condition

Major Repairs

Rehabilitation

Rehabilitation ProgrammeAssets not in Desirable ConditionRehabilitation ProgrammeAssets not in Desirable Condition

Major Repairs

Rehabilitation

Major Repairs

Rehabilitation

Replacement ProgrammeReplacement of Assets, etc.


Replacement ProgrammeReplacement of Assets, etc.Replacement ProgrammeReplacement of Assets, etc.



The lessons for the province’s senior managers

The problem

• Large proportion of the health estate is in poor physical condition

• Huge maintenance backlog• High percentage of medical equipment in need of

repair or replacement

The lessons for the province’s senior managers

Reasons for the problem

• Emphasis currently on construction rather than on maintenance

• Emphasis on curative, rather than on prevention of maintenance

• Lack of reliable management information on condition and maintenance requirements

• No effective maintenance network and Lack of communication between Departments.

• Maintenance under-funded

CONCLUSION

?Thanks for your time!

SENIOR MANAGERS CONFERENCE FREE STATE PROVINCE

Documents

asset management framework

asset management plans

fixed asset management

immovable asset register

installations equipment

giama giama

asset preservation programme

assessment of performance