The great majority of SA`s municipalities need to manage their engineering infrastructure very much better than they generally do now, warns Dr Kevin Wall, manager of urban management and infrastructure at the CSIR. He was speaking at the 10th annual conference of asset performance management specialist PRAGMA, held in Cape Town and attended by 150 delegates.
Municipal assets need to be better managed and properly maintained to provide reliable service for SA`s growing economy. If municipalities don`t start looking beyond the short-term and adopting a preventative maintenance strategy, many could have a public works disaster on their hands.
SA`s public infrastructure is vast. Roads, sewers, water pipes, power cables, public works vehicles and equipment span but a small portion of the assets owned by municipal departments.
Many municipalities have greatly increased their infrastructure asset base since 1994.
These assets are now several years old and require significant maintenance, but often minimal funding is put aside for this purpose. Municipal focus has been on asset acquisition, with less consideration given to setting aside finance for maintenance to optimise asset life.
Reliable provision of public services is about enabling quality of life for the community. The public should be able to rely on consistent delivery of services such as water, power and refuse collection, and properly maintained roads with traffic lights and road signs.
Economic growth relies on sound infrastructure - without the provision of basic services, economic development slows down and business activity grinds to a halt.
Infrastructure in the metropolitan municipalities, including the country`s largest cities, is generally well maintained. The same, however, cannot be said for many other municipalities. For example, the municipal restructuring of 2000 saw the incorporation of extensive rural areas into municipalities that had an already inadequate economic base. Many of these municipalities are now teetering under the load of inherited debt and a poorly managed maintenance backlog.
It is councillors, ultimately, who should be held accountable for the state of the municipal assets. In his 2004 Budget speech, Finance Minister Trevor Manual referred to "stewardship" and the government`s responsibility to the public for the delivery of services. However, there is simply not enough funding put aside for maintenance.
Many councillors tend to take a view of their responsibilities that extends no further than their current term of office, and so they support only what needs to be done in the short-term. Councillors are notorious for postponing "unnecessary" expenditure such as maintenance. Election years are the worst for this, when many councillors prioritise the creation of visible assets to the virtual exclusion of all other infrastructure spending, and maintenance of infrastructure is put on the backburner.
Delivery is not about laying pipes that will provide water for only the next five years. Real delivery is about ensuring that water flows in those pipes for 50 years, thanks to regular and responsible maintenance.
Municipalities should be spending a percentage of the value of their assets each year on maintenance. But this amount cannot be satisfactorily determined until the value of the asset is established. Current legislation links valuation to depreciation. Many engineers consider that valuation on replacement cost would be more realistic.
The Generally Accepted Municipal Accounting Policies (GAMAP) legislation, which requires that assets be registered, is a step in the right direction. The problem is that sound asset management requires a lot more than legislation currently demands.
It doesn`t help much to know just a bit about all one`s assets, the great majority of which have little bearing on delivery. It is, rather, vital to know which are the important assets and what really matters about them.
If you don`t know what you have, and which of your assets are critical to your operation, and you`re valuing using the wrong method, you`re immediately on the wrong foot determining how much to put aside each year for maintenance and what you should be spending it on.
There are many examples in the private sector of how money spent on proactive planned maintenance protects against asset deterioration and costly reactive maintenance expenditure. In key industries, financial incentives have often been the most effective way to get the commitment of employees. Productivity bonuses based on key performance measures are powerful; if goals are not met or a machine stops outside of scheduled downtime, there are direct financial consequences for the company directors and employees. Financial incentives may be a way to get municipal councillors and employees more committed.
Strong incentives, including legislation that requires appropriate municipal asset management practices and financial provision, are needed. The New Zealand model is often held up as an example of good municipal maintenance practice. Recognising the need for municipalities to put funds aside for maintenance of assets, the New Zealand government during the 1990s worked to improve its legislation. The government cooperated closely with the country`s engineering profession to put together the right tools, methods and practices to enable municipalities to use their budgets wisely to maximise assets.
But simply applying the New Zealand model to SA would be inappropriate. The groundwork must first be laid - legislation prepared, an incentive structure put in place and the mindset of municipalities changed. National and local government, the private sector, the professions and the CSIR would need to work together for this to happen.
We have a long way to go, but it`s essential we start moving in this direction or we`ll see the increasing deterioration of public infrastructure.
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