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:    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:   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 www.infrastructuredialogues.co.za Page 2 of 15 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:       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. www.infrastructuredialogues.co.za Page 3 of 15 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:           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: www.infrastructuredialogues.co.za Page 4 of 15 o o o o o o o 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:     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:  Rapid Urbanisation and Population Growth: both processes directly influence the increasing demand for infrastructure, services and land. However, land availability, www.infrastructuredialogues.co.za Page 5 of 15         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 www.infrastructuredialogues.co.za Page 6 of 15 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:      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. www.infrastructuredialogues.co.za Page 7 of 15 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:          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:         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. www.infrastructuredialogues.co.za Page 8 of 15 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.   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. www.infrastructuredialogues.co.za Page 9 of 15  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:    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. www.infrastructuredialogues.co.za Page 10 of 15 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:    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:        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:     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:   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). www.infrastructuredialogues.co.za Page 11 of 15   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:          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. www.infrastructuredialogues.co.za Page 12 of 15 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 www.infrastructuredialogues.co.za Page 13 of 15 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. www.infrastructuredialogues.co.za Page 14 of 15 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 www.infrastructuredialogues.co.za Page 15 of 15