22 Mar 2018

Asset Management - A South African Experience

Provincial Government of Western Cape – Decision to improve their asset management

Driven by new legislative requirements in a fast changing socio-economic environment in South Africa, GAPP Architects / Urban designers were appointed in 2010 by the Provincial Government (Dept. of Strategic Immovable Asset Management Planning) of the Western Cape, South Africa, to develop an asset management process which will not only comply with the statutory requirements, but also provide a basis for appropriate asset management for the entire provincial fixed asset portfolio. The portfolio consist of about 8.5m square metres of floor area with a current capital replacement value of R118.57bn. (Nz$ 13.59bn and Au$ 12.57bn).

IPWEA guidelines and SPM Assets software – pilot 1 million square meters in 2011

After extensive research, IPWEA in Australia was approached for advice in mid-2010. They in turn directed us to approach SPM Assets as a service provider. Approval was obtained in late 2010 for a pilot condition survey of about 1 million square meters of office buildings within the CBD of Cape Town, using the SPM Assets software. This pilot was successfully completed at the end of 2011 and was immediately followed by a survey of the balance of the portfolio over the next 4 years.

Maintaining data with resurvey finishing late 2017

Once again, driven by the legislative requirement to do condition assessments of all the fixed assets every five years, the appointment was extend to re-survey the entire portfolio within the following two years. This second survey was completed at the end of 2017, providing the Province with a solid database of detailed information of every one of their approximately 2500 facilities.

Traditional approach – maintenance funding was the left overs from new-works

Maintenance in South Africa is traditionally funded from the remaining infrastructure budget after new works have been provided for. In addition, the responsibility for identifying maintenance work is by discipline, each responsible for its own maintenance based on an intuitive set of priorities rather than an evidence based maintenance programme. This fragmented approach is ineffective and leads to uneven levels of service delivery.

Evidence based future budgeting – schools, hospitals and general buildings

The facilities within the province are broadly divided into three categories according to the users. These users are general buildings, health- and education facilities (9%, 26% and 65% by value, respectively). The current Provincial maintenance funding model is heavily biased towards general buildings such as offices, social services facilities and warehousing. In comparison to the funding requirement projections based on the SPM Assets data, the maintenance funding for the education portfolio, by far the worst off in terms of condition, is underprovided for by around 50%, while the shortfall for health is around 40%. General buildings, on the other hand are over provided for by around 50%.

Moving from legislation to real business value

Throughout the six years of the survey, the officials were slow in realising the advantages of using the data as a basis for strategic asset management, maintenance management and policy formulation. However, faced with a rapidly deteriorating asset portfolio due to chronic maintenance underfunding against unrealistic and misplaced levels of service expectations, the technocrats within the various departments started to realise the value of the available data.

Increasingly, over the last few years, GAPP were approached to provide a more in-depth analysis based on the SPM Assets data collected over the last six years.

The aim was to suggest ways to improve maintenance strategies in order to prevent the decline of the facilities to a level where it would be difficult to deliver the mandated service.

Education department is leading the way

This is particularly true for the education department where a large number of school facilities were severely at risk. A thorough report (written by GAPP and SPM Assets) with far-reaching recommendations based on the data collected was prepared for the department of Education Infrastructure in 2017. This report suggested a move away from the traditional annual facility specific maintenance projects to a three year intervention by means of larger projects across 80 % of the education facilities. It is the intention that these projects will only focus on the replacement of critical components, identified to be at risk within the next five years. In this way functionality of the facility can be guaranteed, albeit at a lower level of service, while the instances of emergency repairs will also be reduced. Thereafter the focus would shift towards the poor to very poor components and eventually to addressing the shortfalls in the desired levels of service. In the interim, based on the solid evidence provided by the SPM Assets database, the department will lobby for an increase in maintenance funding to meet the projected requirements. This shift in focus has been welcomed widely not only within the works department but also within the education department.

The value of evidence based criteria to inform strategic decisions and policy for maintenance is now increasingly being realised within the Western Cape Government Department of Public Works. Based on the available SPM Assets data, the allocation of budgets for the maintenance of the school buildings within the Western Province for the next ten years has been proposed to National Treasury, clearly indicating the shortfalls of the current levels of budget provision, as well as the associated impact on service delivery. It is hoped that this will convince treasury that without an increase of the maintenance budget, the desired level of service for education will be compromised. It is also hoped that this will convince the Health and General building portfolios to fully adopt this approach.