MAINTENANCE OF PUBLIC INFRASTRUCTURE: Hosted by DBSA 31 OCTOBER 2013

Transcription

MAINTENANCE OF PUBLIC INFRASTRUCTURE: Hosted by DBSA 31 OCTOBER 2013
MAINTENANCE OF PUBLIC INFRASTRUCTURE:
How to master the art of taming contradictory forces.
Hosted by DBSA 31 OCTOBER 2013
SUMMARY
Maintenance, or rather lack thereof, of public infrastructure is a topic which far too frequently is
headlined prominently in the media. This, the 24th Infrastructure Dialogue, took this obviously critical
topic and refined the focus by placing the spotlight squarely on the contradictory forces, and tradeoffs which if not well managed within the limitations of resources and time inhibit and constrain
maintenance and thus act as a catalyst for undesirable outcomes.
The presentations highlighted perspectives from a metro municipality, private investment banking,
development banking, and national government viewpoint. These presentations and the follow-up
discussions besides highlighting the complex nature of the many diverse issues and challenges also
drew attention to the opportunities and practical remedies available to municipalities to improve
maintenance. These included consideration for long term integrated planning, actively linking plans
and budgets, encouraging inter-departmental alignment and co-ordination, co-operating with and
harnessing private sector resources. It was also clear that new more innovative arrangements for
engagement would be necessary both with regards to the private sector as delivery partner as well
as communities as recipients or consumers of the services.
There was reasonable agreement that although funding is important there are many other issues
which negatively impact maintenance practices – and it is this diversity and complexity that needs to
be better understood and resolved.
It was also noted that importantly this engagement on maintenance was not a discussion starting off
a clean slate nor happening in a vacuum – there are programmes and interventions which have been
completed or currently are underway from which lessons can be learnt and which undoubtedly for
the latter category could also produce improved outcomes if they were better aligned, synchronised
and co-ordinated. However to achieve this it was acknowledged political will and good, committed
leadership is necessary.
Needless to say there is no clear nor simple solution – there is no silver bullet. The chain of causality
and consequence runs in various directions and thus many interventions are required. This in itself
can and should be viewed as an opportunity for innovation, doing things differently, testing and
sharing the experiences – both good and bad. International examples were cited of “good practice”.
For example, Brazil as a nation actively supports experimentation and learning and Australia where
maintenance has been conceptualised and institutionalised through a “maintenance industry.”
The dialogue, which brought together a range of stakeholders and provided a platform for the airing
of diverse views, resulted in a very useful exploration of the complexity and multitude of issues and
dimensions. This has created a sound basis for an ongoing discussion as well as promoting and
supporting the issues into mainstream debate and decision making fora.
Please visit www.infrastructuredialogues.co.za for more information or to have your say
SESSION ONE: PANEL PRESENTATIONS
Barry Coetzee: Manager: Technical Strategic Support,
Utility Services Directorate, City of Cape Town.
Barry Coetzee in presenting Cape Town Municipality’s
approach to infrastructure asset management
discussed what a municipality can do, recognising the
powers they have, the challenges they face and the
outcomes that result. In closing he highlighted lessons
and shared some thoughts on what could improve
maintenance.
PRIORITIES - FIRST THINGS FIRST
For Barry Coetzee two key priorities need to be
understood and addressed up-front by a municipality when creating infrastructure to supply
services.
The first priority is to ensure an integrated response driving action to meet the “growth and
development demand as well as to maintain current services”. In order to achieve the right
balance the following needs to be taken into account:
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A municipality cannot invest large amounts of capital in infrastructure without confirmation
and good knowledge of the development it will service as well as having a sound
understanding of the financial or funding arrangements and ability to service the loans or
any debts incurred. Ideally, any response should be carefully planned and deliver “just in
time” (JIT) outputs.
JIT is a relative concept when considering Bulk supply versus Network/Logistics
Infrastructure versus Fleet investments. For example Bulk supply has a much longer planning
horizon and cannot be implemented piecemeal or in small parcels.
A municipality must recognise that a response cannot and does not happen in a vacuum or
without support.
The second priority is for the “municipality to acknowledge that it can only pursue the initiative if it
is affordable and clearly can be paid for”, and this would entail:
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Understanding the nature of the demand; and
Knowing the cost of funding capital and providing services. Ring-fencing is a useful approach
to targeting funding and militating against fund leakages.
BALANCING COMPETING DEMANDS
In addressing the aforementioned priorities, unpacking demand and costs is necessary and
inherently requires achieving a balance between competing and conflicting demands. Of importance
in this debate is the pressure put on municipalities by the imperative to provide free basic services to
the poor and indigent, while continuing to provide normal services to other income groups and
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businesses. Free Basic Services (FBS) includes the provision of electricity, water, sanitation and waste
management.
This all happens within the constraints of an under-performing economy and limited revenue
potential. The following highlight challenges and opportunities that need to be taken into account
when balancing these competing demands:
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Unplanned growth due to in-migration, urbanisation, and (unintended) consequences of
national policies. In this regard the most significant challenge is non-revenue generation and
the demand for increasing rates subsidies versus the reduced availability of national grant
funding. Both water and electricity services are important municipal revenue generators.
Thus, a reduction in potential revenue while facing an increasing demand for investment is a
very significant constraint for a municipality.
Infrastructure Upgrades or Replacement: it should not be considered as either/or.
Preferably a strategy should be devised which seeks to improve infrastructure condition
simultaneously with replacement through for example leveraging densification of the urban
environment.
Inadequate and non-existent repairs and maintenance of current infrastructure. This is a
reflection of limited budgets as well as staff and skills shortages and clearly negatively
impacts on infrastructure condition. The long term consequence includes asset stripping
and lower service levels that in all likelihood also negatively affects sustainability and
economic investment and raises the likelihood of social unrest.
The correct timing of new investment is critical to successfully accommodate population
growth, urbanisation, economic growth and development. However there are differences in
requirements which need to be noted for the following:
o Bulk supply (provides security of supply, opportunities for economic alternatives);
o Networks (ensures access to services);
o Depots and auxiliary support services. (supports new growth areas).
Legislation or Policy changes can and do introduce the need for new functions and services
together with related infrastructure for example:
o Waste minimisation as a new function which is not fully funded in the municipal
budget and results in a funding shortfall. This process generally requires separation
at source, recovery of materials, and is further complicated by the need to integrate
with non-municipal infrastructure and systems.
o Waste water treatment “super standards” including for example ortho-phosphate
removal which requires major upgrades of and/or additional Waste Water
Treatment Works (WWTW) equipment.
o New programmes and standards for compliance create an additional administrative
load requiring new resources as well as systems to generate data and information
for reporting purposes.
Crises requiring a change to Business as Usual (BAU) for example due to water and energy
shortages, climate change and growth impacts with consequent investment in alternative
technologies or changes to service delivery mechanisms: E.g. Landfill Gas Management to
mitigate climate change impacts.
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Given that performance is dependent on sound, serviceable infrastructure, what can be done to
ensure that this is attained and sustained through good maintenance practice.
MUNICIPALITIES HAVE THE POWER
PLANNING, BUDGETING AND MANAGEMENT
If the afore-going seems to be out of reach for local administrations it needs to be recognised and
emphasised that municipalities do have the space and power to intervene and considerably enhance
their planning, management and budgeting with regards to improving maintenance performance. In
this regard they need to actively engage and fulfil their responsibilities in the following areas:
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Recommendations, decisions and resolutions on:
o Resourcing which includes budget allocation to support asset maintenance, prevent
asset stripping, and knowing when to in-source and contract;
o Financial sustainability taking into account funding, cost reflective tariffs and budget
allocations.
Revenue management taking into account policies, billing and debt management.
Leverage current infrastructure where possible, for example through:
o Densification policies;
o Integrated development (housing with socio-economic infrastructure);
o Planned and directed socio-economic growth;
Applying the principle of improvement of sunk capital before investment is made to expand
“new” network infrastructure. Understanding the implications is critical to effectively cater
for repair and maintenance (R&M) resourcing needs.
Develop Infrastructure Asset Management Plans together with Master and Sector plans, in
this regard the age and condition of assets need to be assessed and relevant data captured
to facilitate monitoring and management.
Invest in back-office systems including infrastructure, staff and ensure the implementation
of planning and information systems. An alternative is to hire in capacity and skills to
provide information for planning and decision making.
Training and Skilling, this is an important first line of response and should include for
supervision, back-office and management.
Staffing and recruitment of vital skills, however this depends on skills availability. Currently
the outlook into the future isn’t good due to serious underperformance of key national
programmes, including basic schooling, and artisan training.
Report on and manage the things that matter in infrastructure, noting that KPIs don’t
necessarily support technical asset management – what is useful for an accountant is not
necessarily good for an engineer, however, it is imperative that they understand each
other’s requirements.
Budget drivers underpin and drive municipal budgets and in turn impact infrastructure and
services operations that need to be taken into account in the budget preparation process.
The following highlights key issues that affect and impact budget determination and need to
be taken into consideration:
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o
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Age and condition of existing infrastructure; invariably various Risk Registers already
contain sufficient information to outline plans and priorities for current
infrastructure;
Impact of historic decisions - notably type and standard of infrastructure;
Developer plans which would include both existing and/or approved or
conceptualised plans;
Population growth and economic development estimates (census);
IDP, Spatial Development Frameworks, SDBIPs – these generally would address the
medium term 5 year horizon;
Infrastructure Master Plans, Sector Plans, Business Plans – these would contain the
long term strategy of a department, highlights of business plans, with statutory and
policy requirements and extend over 10-20 year horizon. An example would be the
planning for bulk water supply and storage;
Integrated Asset Management Plans (IAMPs) – IAMP Stage 1 plans need to integrate
with reporting tools to optimize funding for repairs, replacement or upgrading.
Never the less, having the power will probably appear to be insufficient to a municipality wishing to
improve its maintenance performance while there continue to be a range of what are frequently
viewed as extraneous but very real challenges
MUNICIPALITIES ARE HELD BACK
A highly publicised issue with regards to underperforming maintenance is that even where there are
funds available, non-spending of budgets occurs and which has a significant negative impact on
operations. This under-spending happens for various reasons as illustrated by the following:
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Capacity and capability is not matched with experience and this lack of experiential insights
can have a significantly negative impact on planning and cost estimates.
Onerous Supply Chain Management (SCM) processes add to the management burden.
Tender appeals and High Court reviews result in the late or non-start of projects both with
respect to capital expenditure (capex) or routine work – repair and maintenance (R&M) with
respect to operational expenditure.
Tender opportunism coupled with legislative requirements compromises delivery and
allows companies to tender which preferably should not be involved at all. This clearly has
an impact on value for money. These issues include:
o Delays, quality of work (underspend in one financial year will lead to artificial budget
demand in the next where budgets are not rolled -over).
o Non-separation of administration and governance: decisions delaying and impacting
execution (short termism).
Over and above the aforementioned and notwithstanding that municipalities potentially can address
maintenance there are, however, a plethora of challenges hampering performance which are
highlighted by the following examples which need to be understood and taken into account:
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Rapid Urbanisation and Population Growth: both processes directly influence the
increasing demand for infrastructure, services and land. However, land availability,
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particularly well located land, is constrained due to economics of land and housing markets
and policy issues which in turn influences the pace and nature of infrastructure delivery.
Changes to funding: the following funding related issues affect Infrastructure and Service
Delivery:
o Reducing grants: this holds the potential for a looming capital crunch which will be
further exacerbated by funds availability and interest charges;
o Public-Private Partnerships: although necessary, the current structuring and
processes involved frequently place a heavy burden on, and are experienced as
onerous, by municipalities;
o Indigent funding: municipal policy directives can exceed national norms thus
requiring a top-up on the Free Basic grant to be made from the municipality’s own
revenue which includes higher tariffs paid by wealthier ratepayers.
o Incentives – will the trade-offs really work for the City and can increased rates and
tariff revenue really cover total costs.
o Perverse incentives which encourage unsustainable outcomes for example
electricity tariffs encouraging ongoing consumption of unsustainable carbon based
energy.
Ability to raise loan funding: the credit rating is based on infrastructure planning and
performance, and linked to the efficient use of capital. A reduction in the ability to balance
or fund the budget frequently results in a decision directly related to reducing the R&M
budget and asset stripping.
Un-costed, silo-based national policies: eg waste minimisation (separation at source) –
many municipalities do not have the means to fund or provide additional infrastructure and
services and still struggle to implement basic services.
Over-emphasis on compliance (policies) – this requires resources and funding, and diverts
budget and bloats staff complement in “support” functions
Budget allocation to unfunded mandates (policies) diverts budget, impacts ability to
implement sound asset management (R&M) that will ensure services.
Misalignment of strategies/plans and budgets between spheres and entities of government
creating duplication and potentially resulting in fruitless expenditure.
Impacts specifically linked to national electricity supply and looming costs. This in part can
be attributed to not having planned and included strategic investment for future socioeconomic growth. There are also other possible unintended consequences for example the
current reaction is to increase investment in Photo-voltaic (PV) and other localised systems
which impacts on municipal revenue and financial sustainability.
Climate change impacts and resource availability: Natural (climate change) or other
determinants all create scarcity of resource and thus impact both bulk water and electricity
supply.
o Security of water supply requires creating sufficient bulk water storage, supply and
conveyance capacity. Decisions are necessary around choices with regard to
additional resources and infrastructure to be developed. The provides a classic
demand and supply impact with increasing price needing tariffs to increase and thus
in turn impacting affordability which then also affects the municipal revenue stream.
o The national policy imperative to move to a less carbon intensive economy has
accelerated the drive towards a “Green Economy” and energy alternatives. For a
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municipality the inclusion of alternative energy sources is additional to and must be
implemented in parallel to the business as usual (BAU) systems, and places another
burden on already stretched capacity and resources.
IMPROVING PERFORMANCE
LEARNING FROM EXPERIENCE
Against the aforementioned complex backdrop of issues, challenges and opportunities the following
lessons, derived from municipal experience, were offered with regard to the utility and success of
past interventions and improvement programmes:
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Identify a champion who is passionate: Creating an asset management system with plans
takes a lot of time, effort and resources – it is easier said than done and needs commitment
to drive it. Sometimes the information is available; often in peoples’ heads and in some
instances those people have left the organisation resulting in a loss of institutional
knowledge.
Select the appropriate level of plan: separate theory from practicalities – only 2% of assets
are critical and about 10% are vital. A phased, simplified approach, one which is systematic,
with “baby steps” ensuring that the basics are got right, is preferably required.
Resource the interventions: create structure and capacity because the data and plans don’t
update themselves.
Systems integration and use of technology will bring efficiencies to management.
The Consultant Trap: owning a plan and its execution only comes through active
involvement and responsibility should not be abdicated.
ENCOURAGING GOOD MAINTENANCE IN CAPE TOWN
The big challenge for the City is how to optimise budget, which is stretched to the limit by
urbanisation and growth and further impacted by unsustainable policies and unfunded mandates
and various externalities that are not necessarily in anyone’s control
To ensure sound and serviceable infrastructure over an extended period of time led to the City of
Cape Town developing Utility Services, Roads Asset Plans from 2007/08 as per National Treasury
requirements.
This Corporate programme is championed by the CFO and includes the development and
implementation of related budget linked policies and Asset Management Plans for key directorates
and departments. More than maintenance is involved as it includes performance tracking for
“repair, upgrade and replacement” planning and capital expenditure decisions. This is supported
through systems integration which, for example, provides for the Enterprise Resource Platform (SAP)
to link with land use management (GIS based system). Although the municipality is not there yet, it is
moving towards the “Holy Grail” for maintenance and asset management, namely Full Life Cycle
Asset Management (FILCAM) which optimises asset funding, maintenance and management.
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PRACTICAL INTERVENTIONS HELP
Based on experiences in the Cape Town Metro water department, the following are some very
specific actions which can encourage and support good maintenance practices and need to be given
wider consideration:
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Creating, and resourcing an Enterprise Asset Management (EAM) function.
Artisan training – in addition to utilising support from the private sector, focus on improving
municipal systems.
Pressure management of water supply networks to minimise the failures of ageing
infrastructure.
Monthly tracking, and managing performance of:
o Capital and operating budget YTD spend;
o Response to service requests/asset failures (use IT to create basis for timeous
interventions).
Tender training to include:
o Scoping and specifications: (use CIDB, and other);
o Tender management: value for money, implementation.
Revenue management (from cost recovery to fund asset management):
o Pre-payment, billing, debt recovery.
Develop, implement and maintain back-office systems.
Use technology to create efficiencies in:
o Responding to inter alia damage control, restoring services etc;
o Capturing asset data on continuous basis);
o Rolling out field technology using for example handheld devices.
Law enforcement used to manage end-user behaviour by applying:
o By-laws including for water, effluent, waste, stormwater, electricity;
o Protocols of specialist units, for example, “Copper heads” unit established in 2009 to
curb cable theft which was resulting in serious unplanned expenditure and affecting
the economy.
CONCLUSION
In conclusion Barry Coetzee suggested that if performance is to be improved then key changes which
need to be prioritised and seriously considered include the following:
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Aligning and simplifying national policy which should be followed with a similar process to
achieve municipal policy alignment;
Re-thinking bulk supply infrastructure funding;
Re-considering functions and services that are not a municipal competence;
Re-prioritising budget allocations;
Emphasising educating, skilling, capacitation, and succession planning;
Generating access data and information necessary for planning and decision making
(including asset management systems);
Distinguishing between the roles/responsibilities of governance versus administration.
Ensuring implementation action results from plans.
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ANDRE KRUGER – ABSA CAPITAL
Andre Kruger, in presenting a viewpoint from
private sector investors, emphasised the
imperative that for assets to be sustainable they
needed to be understood and managed in the
context of asset life cycle principles. In this
context it is important to acknowledge that “how
municipal infrastructure is planned, designed and
built predestines a large stream of operational
costs for decades to come”. Or put another way,
what is decided now with regard to infrastructure
investment will attract long term recurring
expenditure if its utility is to be sustained over an
extended period of time.
He suggested that for successful service delivery,
partnerships are a necessity - thus in essence,
partnerships and their institutionalisation should be the core of improving infrastructure delivery
and maintenance. However, to be given effect this would need a proper legislative and regulatory
environment.
An approach which has proven useful in creating the conditions for successful partnering is that
known as Alternative Services Delivery (ASD) – it
provides an acceptable procurement
methodology for implementing infrastructure through partnership arrangements. In this regard the
regulatory processes have evolved over the last 10 years and ASD procurement has proven to be
most effective in the increasingly significant Independent Power Producers (IPP) programme
wherein the private sector is playing an important role.
Notwithstanding the acceptance of the approach there are two areas of concern.
Firstly, it is a question as to why there remain significant debilitating inefficiencies across spheres of
government and even sectors, in applying the relevant laws and regulations. Secondly, there
remains an inherent contradiction at municipal level. Municipalities tend to speak out against
involving the private sector in longer term contracts yet, at the same time, are comfortable to use
their services through short term contracting arrangements. By supporting longer term contracting,
inter alia, greater access to resources, capacity, skills and innovation should be forthcoming and in
turn should result in greater efficiency and more affordable and acceptable outcomes.
In conclusion Andre Kruger highlighted that a municipality should consider the following if it is to
improve its infrastructure assets.
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Capital investment planning, including funding and procurement alternatives need to be
taken into account during long term planning.
Asset management strategies including plans dealing with the asset life cycle and the
application of risk management outcomes need to be implemented.
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Contracting with the private sector over longer periods, including transferring more risk and
responsibilities to them, while maintaining ownership of the assets and service delivery
standards.
CHARLES MVUNGI: DBSA
Charles Mvungi, who provided a DBSA perspective
on municipal maintenance support, highlighted
that in general new infrastructure development
attracts vast amounts of attention and support at
the highest level, plans are put in place, resources
are made available and importantly the completed
projects present “ribbon cutting opportunities”.
Unfortunately, in reality, the outcome of projects
is frequently somewhat different as is illustrated
by the following:
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Roads are in disrepair – potholes are the norm;
Sanitation facilities are failing – they are not adequately maintained nor properly used;
Waste water treatment facilities are overloaded – over flowing works result in health
hazards.
The outcome of these failures is frequent protests highlighting the growing community
dissatisfaction with shoddy, failing or non-existent service delivery and frustration and anger aimed
at local government.
However, objectively defining and agreeing on a definition to the problem is illusive. A large body of
opinion indicates that two of the more prominent problematic areas, namely funding and education
together with training, are the primary causes of the breakdown in maintenance. But, based on
what is known it is an issue as to whether they should in fact be considered the key areas of concern.
In this regard Charles Mvungi suggested the following is known and provides the context of and
basis for understanding the reality of infrastructure maintenance provision and management.
Fundamentally Municipalities are mandated to provide water, sanitation, electricity, refuse removal
and community services. However there is an inability to optimally maintain the infrastructure
which leads to poor condition and dysfunctional assets, high operating costs poor level of service
and community dissatisfaction.
The prominent reasons given for this state of affairs include lack of sufficient funds and technical
capacity. Never the less even where there is approved funding, municipalities’ for various reasons,
don’t spend their maintenance budgets. It needs to be noted that these are also generally below
the benchmark amount of what is considered necessary to cover regular and adequate
maintenance. This therefore makes what is actually spent generally totally inadequate.
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Various pieces of legislation, regulations, policies, guidelines and initiatives have been put in place
to promote infrastructure maintenance. Somedata is available on municipal infrastructure asset
value, maintenance funding needs, maintenance backlogs and the cost of poor services (eg water
losses). Never the less there is evidence of mismatches between maintenance requirements and
resources deployed including:
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Municipalities’ failure to timeously respond to infrastructure and service
stress calls (burst pipes, sewer/drain blockages, defective parts, power
failures etc);
Non-compliance to quality standards (drinking water, WWTW effluent,
Health and safety requirement etc).
Basic equipment for routine tasks is unavailable.
Against the aforementioned background the following highlights the challenges and constraints
which need resolving, if the breakdown in maintenance is to be successfully addressed:
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Inadequate funding provision; misallocation of funds as well as inappropriate use of funds.
Limited capacity to implement and deliver O&M Programmes (this includes technical,
planning and financial skills.)
Lack of knowledge: data not always available or reliable thus precluding measurement and
interpretation of asset quantity and quality.
Emphasis on new infrastructure particularly capital works rather than repairs and
replacement etc.
Maintenance backlogs build up and maintenance gets deferred.
Political factors over-ride and new priorities are established.
Regulatory framework is weak and the legislation is not always sufficiently compelling.
Clearly, funding is not the only problem and increasing funding levels will not necessarily resolve the
problematic situation. In considering the consistent under servicing, under budgeting and under
spending by municipalities on maintenance the DBSA has identified the following key problematic
areas as reasons for the undesirable situation:
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Inefficiency in the infrastructure maintenance delivery model: eg public versus private
sector delivery;
Poor asset management practice : needs more emphasis on benefits of systems approach;
Inadequate regulatory regime:compliance is not assured through sanctions or other means;
Fiscal funding focused on new infrastructure: the asset base is increased while the
maintenance backlog on existing assets increases.
In conclusion Charles Mvungi suggested that in order to remedy the situation the following
interventions would be necessary:
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Municipalities require support in the institutionalisation of good infrastructure
maintenance practices.
Roles for infrastructure stakeholders in the local space need to be clearly identified and be
responsible and accountable for their actions (funding, standards, quality assurance,
compliance etc).
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Private sector involvement in Operations & Maintenance of municipal/public infrastructure
is key and needs support if the impact of lack of funds and skills is to be reduced.
Consideration needs to be given to the establishment of an “Infrastructure
Maintenance/Renewal Fund”.
STEPHEN KENYON: Director: Local Government
Budget Process, National Treasury (NT)
Stephen Kenyon was careful to emphasise that he
was neither speaking on behalf of nor presenting a
National Treasury position but rather as a financial
specialist offering a perspective from a view point
of financial efficiency.
Contrary to a fairly widely held view he suggested
that money, although important, is not the big or
binding constraint to improved maintenance
provision. For him the really big problem is not
having sound practices available and it this
shortage that then places infrastructure and services in jeopardy. When considering improving the
practices necessary for infrastructure maintenance the following issues are of particular importance
and need to be taken into account:
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Maintenance should be an ongoing and routine matter and should be viewed as part of and
integrated into the daily routine and value chain. Thus it is imperative to get the incentives
right in order to encourage the average municipality to make maintenance routine.
National Treasury and other departments do emphasise maintenance and this needs to be
recognised, understood and aligned with.
Funding model: municipal own revenue used to provide services for people with adequate
income; MIG and associated grants is for basic service provision to the poor and indigent,
the equitable share includes for maintenance. Nationally, 59% of households are
beneficiaries of MIG and equitable share grants while for some municipalities this is as high
as 80%.
Bulk infrastructure: the model for providing bulk infrastructure needs to be rethought.
Planning and budgets: long term funding needs to be determined and aligned with plan
outputs.
Prioritisation is about trade-offs and in this regard; maintenance is about long term gain.
Many local governments are very much at beginning of journey.
Perverse outcomes: care to be exercised that revenue doesn’t result in unintended
consequences.
Long term systems must be built where responsibility and accountability lie rather than
switching between spheres of government.
Need data systems for measurement – monitoring – this working for roads but difficult for
water.
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In conclusion it was noted that if the NDP works and the anticipated outcomes are achieved then by
2030 there will be a very different landscape: both revenue and incomes should be rising and this
will impact the nature of both demand and supply and thus clearly has implications for medium to
longer term infrastructure planning and budgeting.
SESSION TWO:
KEY ISSUES ARISING FROM THE ROUND TABLE DISCUSSIONS:
There was a strong call made emphasising the need
for integrated planning – the lack of integrated
planning is a serious impediment to sustainable
service delivery that must be addressed. It was
pointed out that engineering and financing
departments frequently neither talk to each other nor
see eye to eye. It was also noted that macro planning
and financing arrangements needed to be closely
integrated. However, it was suggested that if the
issues and approach become too macro-level then it is
possible that they no longer address maintenance but
that issues including governance for delivery are then
the priority to the detriment of the ensuring
maintenance practices
Having the right systems is important as demonstrated in some municipalities, for example, which
use CIDS and are developing appropriate supportive strategies. Although, even in better resourced
municipalities where planning is undertaken for asset management and maintenance there is no
follow through with implementation. There are serious issues related to skills and capacity in the
public sector. One option would be to outsource these requirements. However, this would demand
a very strong public sector capacity particularly in the
legal and contracting areas. It was suggested that the
establishment of a Maintenance Industry, as in
Australia, would go a long way to alleviating various
problems.
It was again emphasised that money per se is not the
problem. However it was noted that in an
environment of scarce resources, questionable
leadership and behaviour, tend to exacerbate the
funding scarcity. Careful prioritisation of scarce
financial resource allocations is important. It was
noted that although individuals will generally look
after their own resources reasonably well, when it
comes to the public realm those responsible for spending appear to be less than frugal with public
money. It is imperative that spending is informed by knowledge of what to do first. This strongly
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implies starting at the design stage of a project in order to gain a sound understanding of what is
needed.
It was noted that the many ideas voiced in the
infrastructure dialogue session as well as in other fora
would only be useful if they are subject and adhered
to an agreed timeline. For example in the short term
ASD, proper planning and budgets together with
improved priorities could be introduced while over the
medium to longer term ring fenced funding could be
put in place. What-ever is done needs to be robust,
periodically reviewed and there needs to be courage
to change as and where necessary. Recognition was
also given to the benefits of innovation and
experimentation and the need for on-going learning
to be supported. The example of Brazil was cited.
Clearly this would require political will and committed leadership. However by contrast it was noted
that far too frequently municipal managers lack capability and leadership competencies which in
turn undermines municipal delivery performance. This is further exacerbated by the shortage of
and inability to retain professional skills – engineering and other professions – in the public sector
It was emphasised that municipalities cannot and should not be viewed as homogenous nor that
nothing is happening with regard to maintenance – there are a variety of experiences from which
lessons can be derived, including that of the possible benefits of framing the issue as one of a
maintenance industry rather than the frequent conception of the issue as someone else’s problem.
This point was further underscored by the emphasis placed on the importance of community
participation. There is a need to encourage and support participation towards behaviour and
attitudinal change with regard to reporting failures but also more fundamentally with building a
moral and ethical awareness of what public infrastructure is.
CONCLUDING RESPONSES
In responding Andre Kruger suggested that “The horse
has bolted” the problem is already too far gone. He
recognised the necessity for training but emphasised
that it is a long term intervention. Something needs to
be done now to militate against total collapse. In this
regard ASD could and should be considered, across the
board, as it would make better use of scarce resources
and would also enhance the capabilities of people to
do things better over the short to medium terms. The
private sector itself is using ASD to improve on its own
performance. Mention was made of the fact that
ABSA, rather than being a property owner, leases
buildings for own use.
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Stephen Kenyon agreed that private sector options should be considered because at minimum such
considerations would enrich the debate. However he emphasised that it does not necessarily mean
that they should be adopted.
He also agreed that capacity is an important issue. However, to be really useful it is necessary to
know in some detail what capacity is needed. In this regard it was pointed out how necessary the
function of monitoring is. Thus it is crucial to have capacity and capability to gather and track
relevant information. It was suggested that in relative terms construction monitoring is easy,
whereas monitoring of maintenance is a lot more complicated and difficult. Monitoring
performance is also essential for complying with the Municipal Systems Act.
The type of infrastructure is not always appropriate to the situation. Ill-advised decisions are taken
and wrong choices are made when selecting infrastructure types. This situation can also be
attributed to lack of appropriate technical and other skills, experience and insight. These decisions
and choices potentially result in a range of negative outcomes with regards to operations and
maintenance. For example lack of compatibility with other similar infrastructure, possibly precludes
ease of obtaining spare parts, increases the likelihood of unfamiliarity with technology used; in short
it reduces the potential for utilising a “standardised tool-kit” for municipal maintenance.
Charles Mvungi emphasised that the maintenance problem does not lie with municipalities alone – it
is a national problem that needs to be addressed holistically across all spheres and entities of
government. However there needs to be a much greater level of awareness of the issues In this
regard, he suggested that the national infrastructure capital expenditure project, besides making
such a fuss about the capital investment, should be also emphasising and creating an equal level of
hype around the operational and maintenance expenditure. He observed that currently it is quite
common for the construction of public works to be outsourced. Notwithstanding the availability of
alternative systems, this does not, however, apply to maintenance possibly because of the oversight
requirements needed
In drawing the session to closure the facilitator emphasised the importance of finding a realistic way
through the complexity but noted that there is “no silver bullet” or easy single solution. Rather there
is a need for more innovation, pilot projects, experimentation, learning lessons and sharing what
both works and fails, with a view to successfully doing things differently. Political will and committed
leadership will be pivotal to the success of the maintenance enterprise going forward.
Left to right: Andre Kruger, Joanne
Yawitch, Steven Kenyon, Zwelakhe
Tshandu, Charles Mvungi
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