Asset management plans MODULE 7

TOOLKIT EDITION 1 2018

MODULE 7
Asset management plans
MODULE 7 Asset management plans

MODULE PURPOSE
This module describes how the life-cycle plans prepared in Module 6 inform the preparation of asset management plans
(AMPs) per sector and how these inform the preparation of the Strategic Asset Management Plan (SAMP) for the city.

KEY ELEMENTS OF THE MODULE ARE:

1. The provision of a standard chapter structure and scope of content of the AMPs (to be tailored to the respective sectors) aligned
with the salient aspects to be considered and documented in the process;
2. The concept of draft AMPs and a SAMP that inform the annual Lekgotlas and the statutory process of consultation and preparation
of the Integrated Development Plan (IDP) for the city;
3. Documentation of the asset management implications of the outcomes of the IDP process each year in the form of a final SAMP
for the city and an AMP per sector confirming the final budget application and performance plan.

WHY
Improved asset management documentation fosters better communication, which in turn:
1. Improves understanding by internal and external stakeholders of the strategic issues relating to infrastructure management;
2. Fosters more effective decision-making;
3. Strengthens alignment of planning and implementation; and
4. Demonstrates and supports effective governance.

OUTPUTS OF MODULE 7:
1. Sector AMPs prepared covering all immovable asset portfolios in the scope of its asset management system with a level
of sophistication appropriate to the nature and scale of these portfolios, and in accordance with a standard template for the
preparation and updating of sector AMPs that:
• Achieves consistency in approach between sectors;
• Ensures that standardised outputs feed into the SAMP;
• Ensures that standardised outputs feed into budget and performance management processes; and that
• Can draw comparisons between sectors and over time.
2. A SAMP (in line with the structure and content indicated in Module 2) that:
• Defines the:
• Scope of asset portfolios/services included in the AM system; and
• Scope of the AM system, and linkages with other systems.
• Includes a service delivery strategy that:
• Profiles customers by type and spatially;
• Offers a corporate customer growth forecast for the next 30 years, including the spatial apportionment of growth;
• Profiles the state of the city’s assets;
• Presents a report on the state of the city’s services;
• States target LOS for all services, customer types and areas; and
• Provides directives to sector planners in undertaking AM planning.
• Includes a strategy for its AM system that:
• States the respective AM objectives;
• Profiles the current state of practice and performance of its AM system; and
• Presents an AM system improvement strategy.

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 Asset management plans MODULE 7

• Includes an infrastructure investment strategy that:

• Establishes investment and financial performance targets/objectives;
• Sets decision-making criteria;
• Presents long-term revenue and expenditure forecasts (30 years);
• Prioritises investment;
• Matches and smooths cash-flows; and
• Determines funding strategies.
• Includes a change management strategy that:
• States the conditions for a value-centric AM organisation (the state to which the organisation wishes to change to);
• Identification of internal and external stakeholders, and the desired behaviours of such stakeholders; and
• A stakeholder management plan, indicating how behaviours are to be affected.

KEY RELEVANT REGULATION:

1. Municipal Finance Management Act No. 56 of 2003
2. Municipal Systems Act No. 32 of 2000
3. SABS: South African National Standard 55001: Asset Management – Management Systems – Requirements
4. Generally Recognised Accounting Practice
5. Spatial Planning and Land Use Management Act
6. Municipal Standard Chart of Accounts

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MODULE 7 Asset management plans

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 Asset management plans MODULE 7

CONTENTS
Module 7 Asset management plans

7.1 INTRODUCTION TO ASSET MANAGEMENT PLANS 7.1

7.2 SECTOR ASSET MANAGEMENT PLANS 7.3

7.2.1 Why prepare sector asset management plans? 7.3
7.2.2 Assimilation of the draft AM plans per sector 7.3
7.2.3 Finalising the sector asset management plans 7.11

7.3 DRAFT CITY LIFE-CYCLE PLAN 7.13

7.3.1 Why develop a city infrastructure life-cycle plan? 7.13
7.3.2 Establishing the draft city infrastructure life-cycle plan 7.13
7.3.3 Draft city infrastructure programme delivery plan 7.14

7.4 STRATEGIC ASSET MANAGEMENT PLAN (SAMP) 7.15

7.4.1 Why document the SAMP? 7.15
7.4.2 Preparation of the draft SAMP document 7.15
7.4.3 Preparation of the final SAMP 7.16

7.5 SUMMARY 7.17

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MODULE 7 Asset management plans

LIST OF
Figures that appear in this toolkit

FIGURE 7.1: Overview of process steps in preparing the asset management plans 7.2
FIGURE 7.2: Overview of sector AM plan preparation process 7.12
FIGURE 7.3: Overview of SAMP development process 7.16

Tables that appear in this toolkit

TABLE 7.1: Overview of typical data and information sources 7.4
TABLE 7.2: Sector AM Plan chapter structure and overview of content 7.7
TABLE 7.3: Illustration of monthly tasks for SAMP and AMP preparation 7.10

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Asset management plans MODULE 7

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MODULE 7 Asset management plans

7.1 INTRODUC TION TO ASSE T

MANAGEMENT PLANS

This module indicates the processes and techniques to be adopted in preparing the asset management (AM) plans per
infrastructure sector, the draft strategic asset management plan (SAMP) which presents strategic options as an input to the
integrated development planning (IDP) process, and culminates in the finalisation of the SAMP and establishment of a city
infrastructure programme delivery plan (CIPDP).

The programme-level life-cycle plans prepared in terms of

Module 6 provide inputs to prepare the preliminary AM plans
per sector. A draft SAMP is also compiled drawing on the same
data, portraying the integrated view of the sector life-cycle plans
across the city. Technical, spatial and timing dependencies,
opportunities and alignment needs identified in drawing up
the draft life-cycle plans are noted and subjected to a final
review. This also applies to cross-cutting initiatives at portfolio
and programme level, delivery risks, and packaging. The SAMP
also presents alternative courses of action where appropriate –
at strategic and tactical levels – motivated using the appraisal
techniques indicated in Module 8. The IDP process ends with
decisions on the adoption of certain options, and this informs
the preparation of the final sector AM plans and SAMP.

The SAMP and sector AM plans document the rationale for the
programmes being implemented in the short, medium and long
term. This is intended primarily for internal stakeholders but also
as a technical reference for external stakeholders.

THE DEFINITION OF AN ASSET

MANAGEMENT (AM) PLAN The City Infrastructure Programme Delivery Plan (CIPDP) is
Documented information that specifies the a schedule of projects over a period of 5 years, supported by
activities, resources and timescales required for an mSCOA programme segment references as well as an annual
individual asset, or a grouping of assets, to achieve cash-flow and prioritisation rating. The CIPDP features as an
the organisation’s asset management objectives annexure to the SAMP (as the first 5 years of the detailed life-
(from SANS 55000) cycle plan – which extends, albeit at a lower level of detail,
upto 30 years). Each of the sector AMPs also have a Sector
Infrastructure Programme Delivery Plan (SIPDP) which is a
schedule in the same format relating to a given sector only
(featuring as an annexure in the respective sector AMPs).

The City Infrastructure Performance Plan (CIPP) is a parallel

document to the CIPDP focusing on the performance targets
(quarterly for the first year and annually thereafter for a total
period of 5 years) – in line with the city’s AM objectives. It also
appears as an annexure to the SAMP. Each of the sector AMPs
also have a Sector Infrastructure Performance Plan (SIPP) which
is a schedule in the same format relating to a given sector only,
and features as an annexure in the respective sector AMPs.

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 Asset management plans MODULE 7

THE DEFINITION OF A STRATEGIC ASSET MANAGEMENT PLAN (SAMP):

Documented information that specifies how organisational objectives are to be converted into asset management
objectives, the approach for developing asset management plans, and the role of the asset management system in
supporting the achievement of the asset management objectives (from SANS 55000).

A summary of the process flow for the main activities in this module is provided in Figure 7.1.

Preliminary sector life-cycle strategies Modules 2, 3, 4,

and plans (Module 6) and 5

SECTORS
Preliminary asset management plans
- per sector

Final asset
management plans per
sector

CITY-WIDE
Preliminary integrated city
infrastructure life-cycle plan
(with budget proposals)

Financial
strategy,
Draft strategic asset management
appraisal and
plan (SAMP) - with budget scenarios
budget plan
(Module 8)

Integrated development plan (IDP)

consultation and budget finalisation process
Programme
and project
management
system
Final strategic asset management plan (SAMP)
(Module 9) and
procurement
strategy
(Module 10)
City infrastructure programme delivery
plan (CIPDP) and city infrastructure
performance plan (CIPP)

Programme and project management

(Module 9)

FIGURE 7.1: Overview of process steps in preparing the asset management plans

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MODULE 7 Asset management plans

7.2 SEC TOR ASSE T MANAGEMENT PLANS

7.2.1 Why prepare sector asset management plans?

The sector infrastructure life-cycle plans indicate what programmes need to be pursued over the short, medium and long
term. They are an essential building block in positioning the long term strategic direction of the sector in line with the
city’s organisational and asset management objectives, and in determining the most appropriate short- and medium-term
implementation actions to give effect to those objectives. In documenting these in the sector AMPs, an important role is
performed in providing effective communication with stakeholders, and in demonstrating effective custodianship over the
city’s infrastructure. The rationale of pursuing certain strategies, tactics and programmes are provided, and demonstrate
vertical alignment with the city’s corporate objectives, AM policy and objectives, and the adopted IDP and SDBIP. In doing
so, the city is able to demonstrate competent and effective governance within the sector (and through the SAMP considered
later in this module, effective alignment across the sectors within the city).

7.2.2 Assimilation of the draft AM plans per sector

In local government the infrastructure user departments are often also the asset custodians responsible for implementing
projects and programmes – consequently the determination of sector needs and the responsibility for implementing suitable
life-cycle responses generally reside in the same department. However, community facilities and municipal buildings are often
structured with a user department that is responsible for strategic planning, ongoing operations, monitoring performance
and identifying life-cycle planning needs. These departments may be supported by a separate building services (or facilities
management) function that provides maintenance support. Nevertheless, in both instances, a combined asset management
plan document is prepared, documenting both the life-cycle needs, as well as the proposed responses. This approach is in line
with SANS 55001 which indicates the requirements for an asset management system.

Whilst a draft sector life-cycle plan will have been prepared as indicated in Module 6, a wealth of additional data and information is
required to ensure that the sector AMPs are prepared in terms of a clear developmental context and thorough understanding of the
infrastructure and service delivery status. Table 7.1 provides an overview of typical sources of data and information that can inform
the preparation of the AMPs (as applicable to the respective sectors).

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 Asset management plans MODULE 7

TABLE 7.1: Overview of typical data and information sources

CATEGORY DATA AND INFORMATION REFERENCES

External • National development plan • Relevant financial circulars, mSCOA directives
• Demarcation board – mandated services • Provincial development plan
• GIS data from Department of Environmental Affairs; Rural • Provincial spatial development framework
Development and Land Reform; and Agriculture • Demographic data (1996, 2001, 2007, 2011 and 2016
• Census and other socioeconomic survey information Census years) and economic data (GVA, Employment etc.)
• National regulator performance requirements (e.g. DWS,
NERSA, as applicable to the sector)
City level AM DOCUMENTATION PERFORMANCE DATA
• AM policy (financial and or infrastructure/building assets, • SDBIP
as applicable) • Key performance areas and indicators and balanced
• AM strategy score card
• Organisational roles and responsibilities relating to asset • Annual reports on performance (last 3 years)
management (internal and external) • Overview of service delivery protests/engagements (last
• Relevant asset management systems or policies 3 years)
• Asset register, with hierarchy and asset systems
PROJECT DELIVERY, PLANNING, IMPLEMENTATION
breakdown structure
AND PROCUREMENT INFORMATION
• Risk management system: policy/strategy/plan/register –
• Stores arrangements and supply contracts
corporate and assets
• Latest city strategy for delivery and tactical review
• Latest city-level life-cycle plan
reports
• Backlog reports – and any related sector directives/
• Project packaging practice and any scheduling rules (e.g.
response targets
to allow for EIAs, procurement period etc.)
• Previous strategic asset management plans (SAMPs) and
• Project and programme management system overview
infrastructure strategy documents
• Process, criteria and timelines for funding approval
• Previous year’s city infrastructure programme delivery
• Process and criteria for prioritising projects and
plan (CIPDP)
programmes
• Previous year’s city infrastructure performance plan
• Prefeasibility and feasibility studies for any proposed
(CIPP) – or projected SDBIP data
strategic projects
FINANCIAL DOCUMENTATION • Latest approved IDP
• Investment policy • Built environment performance plan
• Municipal financial statements (last 3 years) and any
SPATIAL PLANNING DOCUMENTATION
applicable audit findings (last year)
• Municipal Spatial Development Framework
• MTREF (CAPEX and OPEX forecasted budgets)
• Long term growth and development plan or strategy
• Financial policy/strategy (existing and any planned
• Cadastral data from municipal GIS
adjustments) – revenue and expenditure
• Municipal land use scheme information
• Funding sources and current exposure
• Municipal valuation roll
• Funding strategy (existing and any planned adjustments)
• Land use and development applications
• Historic (last 3 years) overall budgets and expenditure
• Building plan submissions/approvals history
per sector (CAPEX and OPEX)
• Environmental management plan
• Municipal billing system data (consumer file, meter file,
• Climate change strategy and, or plan
12 month transaction file)
HOUSING DEVELOPMENT
HUMAN RESOURCES DOCUMENTATION
• Housing plan
• Organisational structure
• Reports/data on private housing projects: planned,
• Operational regions – depots etc. – and AM staff
historic and predicted future trends
responsibilities
• Reports/data on RDP housing projects: planned, historic
• Human resource development strategies and plans
and predicted future trends
(ongoing, proposed)
• Personnel management performance system (relating to EXTERNAL CONTRACTS
AM roles), senior management performance criteria • Agreements with bulk suppliers/ operators and the
• Staff remuneration structure/scales extent of their responsibilities

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MODULE 7 Asset management plans

CATEGORY DATA AND INFORMATION REFERENCES

Sector level LEGAL DOCUMENTATION STRATEGIC AM DOCUMENTATION
• Applicable external statutory directives relating to the • Demand management reports (nature and/or
sector performance of existing or planned interventions)
• Recent or proposed legal/ statutory changes in the sector • Loss levels and targets
• Relevant municipal by laws • Maintenance strategies/plans
• Asset performance reports (e.g. breakdowns, failures,
FINANCIAL DOCUMENTATION
down-time etc.)
• Billing and revenue management practices and
• Sector risk analysis and register
performance of the sector
• Existing/ planned institutional change plans
• Tariff policy and structure
• Technical reports or master plans indicating upgrade/
• Credit control policies, structure and process
extension needs or other life cycle needs
• Reports on existing or proposed revenue enhancement
• Targeted work studies and reviews on strategic initiatives
initiatives
• Levels and standards of service strategies and customer
• Financial indicators, targets and historic performance (3
service charters
years)
• Information on recent construction costs (e.g.
• Non-revenue levels, trends and targets
completion reports or bills of quantities)
HUMAN RESOURCES DOCUMENTATION • New/emerging technology and obsolete technology
• Organisation chart and vacancies relevant to sector
• Staff competency assessments/reports - sector
OPERATIONAL AM DOCUMENTATION
• HR performance management framework and
• Previous year’s approved sector asset management plans
agreements - sector
• Operational resources and costs (including
• Staff training received/planned
improvement/change plans and results in achieving
plan)
• Maintenance resources and costs (including
improvement/change plans and results in achieving
plan)
• Maintenance management system description
• Breakdown of sectors current capital project programs,
capital plan and results in achieving plan
• Previous asset management practice maturity
assessment results

The structure and purpose of the chapters of the sector asset

management plans are provided in Table 7.2. An indication of
the content of each chapter is also indicated, though this will
need to be adapted as applicable to each respective sector.

The level of confidence in the data and models used to draw

conclusions in the AM plan is stated explicitly at the end
of each chapter – this is an essential part of the process to
highlight where AM practice (including data accuracy and
process maturity in particular) need to be improved to provide
the necessary confidence in the planning outputs. This would
include the following decisions:

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 Asset management plans MODULE 7

The general application of Application on large projects Application to programmes

public funds on behalf of the and programmes where the comprising high volumes of
community financial and service delivery small or routine activities (such
risks are high as repairs of pipe bursts or
replacement of water meters)
need to be based on well-
structured and documented
life-cycle models.

The requirements for data confidence and process maturity in the compilation of the sector AM plans need to be documented
in the AM strategy as part of the SAMP.

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MODULE 7 Asset management plans

TABLE 7.2: Sector AM plan chapter structure and overview of content (as applicable per sector)

DOCUMENT
DESCRIPTION OF PURPOSE AND SCOPE OF CONTENTS
STRUCTURE
• Document title • Date
Cover • Name of city and logo • Planning period start and end dates
• Sector • Version number
• Document version number
Approval and
• Change history details
change history
• Approval date and reference
Glossary of • Glossary of terms consistent with CIDMS definitions
terms, acronyms • Acronyms
and index • Index of contents, tables and figures
Provides a brief summary of the main aspects of the plan: scope and objectives, strategic context and status,
Purpose
key challenges, risks and opportunities; and proposed short, medium and long term tactical responses
• Overview of the purpose of the AMP, its position in the AMP maturity framework, and its focus
• Overview of the city’s growth and development framework, and infrastructure AM objectives and the role
Executive summary

and responsibilities of the sector.

• Overview of the stakeholders
• Overview of the strategic status, constraints, risks and opportunities relating to each of the chapters of the
document
Scope of
• An overview of key modelling and data assumptions and confidence in the AMP outputs
contents
• An overview of the proposed strategic and tactical responses to management of the sector infrastructure and
AM system over the short, medium and long term
• An overview of the multi-year capital and operational expenditure associated with the proposed
implementation programmes and the implied risk exposure and performance of the sector
• A summary of the AMP review and updating process, including specific improvement areas for subsequent
versions of the AMP
Indicates the purpose and scope of the plan, identified stakeholders, notes relevant internal and external
Purpose context, provides an overview of the asset and asset management system status, and the approach to reporting
the level of confidence in the planning outputs
• Objectives of the plan and who is it intended to inform
• Overview of the developmental context of the city (social, political, economic, technical, financial, legal/
statutory compliance, institutional, sector operations and construction procurement strategy), its mandate
and its strategic objectives
• Asset management objectives (city and sector) – relating to infrastructure and the AM system
• Stakeholder analysis
• Key city and developmental themes, spatial vision and structure, and ongoing/planned initiatives
Introduction

• Overview of the context of the sector in the city (including roles and responsibilities)
• Overview of key external supplier roles and responsibilities
Scope of • Overview of the scope, nature, extent, portfolio health, replacement and book value and spatial distribution
contents of the infrastructure portfolio at asset group level, noting critical assets
• Overview of the level of performance of the sector infrastructure and the system (including criteria, targets
and actual), key strategic risks, existing controls and risk exposure
• Overview of the position of this plan in the maturity framework and high-level summary of relevant outputs,
outcomes and maturity of previous sector AM plans
• Overview of the document layout and approach adopted
• Overview of the availability and quality of key data and information, model adopted throughout the AMP,
and key assumptions used in this chapter of the AMP
• Chapter summary providing a brief overview of the sector context, stakeholders and status quo, as well as the
associated constraints, risks and opportunities

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 Asset management plans MODULE 7

DOCUMENT
DESCRIPTION OF PURPOSE AND SCOPE OF CONTENTS
STRUCTURE
Assesses the prevailing levels and standards of service; determines current backlogs, assesses historic and
Purpose
existing initiatives, and identifies needs and associated strategic risks, opportunities and priorities
• Presents a spatially-based, nuanced customer profile in line with the customer categories presented in Module
4, interpreted for this sector
• Overview of the existing levels and standards of service linked to the current customer profile
• Overview and analysis of historic trends and ongoing initiatives
• Overview of any directives from the city (e.g. priorities, areas, targets)
• Overview of how LOS/SOS criteria and measures were determined
Levels of service

• Overview of process adopted in setting targets, including stakeholder consultation

• Lifecycle cost implications of the LOS/SOSs and discussion of implications
Scope of • Overview of the status of service-delivery backlogs in the sector comprising the provision of infrastructure
contents (levels of service) and the standards of service (the manner in which it is provided) – including spatial distribution
and benchmarking
• Analysis of criteria, targets and backlog reduction tactics (existing and/or proposed) informed by affordability
and the recommended approach in the short, medium and long term (what, why, where, when, how)
• Assessment of the maturity of the measures, the certainty of the data, key assumptions, the level of confidence
in the analysis and conclusions, and recommendations on the need for improvement on the data and/or models
in this chapter
• Chapter summary providing a brief overview of LOS/SOS challenges, risks, opportunities, priorities, and
proposed responses
Indicates customer growth trends; assesses future demand and demand management techniques; and identifies
Purpose
associated infrastructure challenges, risks and opportunities, and proposed responses
• Strategic overview and analysis of historic growth trends, drivers and demand management actions
• Strategic overview of directives from the city (future customer demand data with spatial distribution per
customer group, and any city demand management initiatives and/or targets)
• Future demand drivers (anticipated changes in customer expectations and behaviour, technology, and
Future demand

economic)
• Sector demand forecasts – interpretation of customer forecast (including prevailing demand management
initiatives) on sector demand per supply area and overall (including key modelling approach and assumptions)
Scope of
• Impact of changes in demand on infrastructure including bulk and system upgrading, extension and
contents
reconfiguration needs
• Analysis of tactics (existing and/or proposed and asset/non asset solutions including demand management)
and recommended approach in the short, medium and long term (what, where, when, how)
• Assessment of the certainty of the forecast data, the level of confidence in the analysis and conclusions, and
recommendations on the need for any improvement on the data and/or models
• Chapter summary providing a brief overview of the future demand challenges, risks, opportunities, priorities
and proposed responses
Provides an overview of the infrastructure life-cycle needs, affordability constraints, delivery tactics, risks and
Purpose
opportunities, and proposed short, medium and long term responses and expenditure cash-flow

• Risk analysis – assessment of physical failure, operational and delivery risks at asset group type level, and
Life-cycle plan

specifically of critical infrastructure, identification of appropriate responses and allocation of responsibility

• Strategic overview and analysis of ongoing capital programmes and commitments – progress, viability, deferred
programmes, value management, financial implications, sector coordination
Scope of
• Overview of operations management strategy, programmes and commitments – trends, effectiveness and
contents
efficiency improvement needs and priorities, financial implications
• Overview of maintenance strategy, programmes and commitments – trends, backlogs, effectiveness and
efficiency improvement needs, financial implications, sector coordination
• Strategic approach to packaging and scheduling of capital and operational activities, projects and programmes

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MODULE 7 Asset management plans

DOCUMENT
DESCRIPTION OF PURPOSE AND SCOPE OF CONTENTS
STRUCTURE
• Strategic overview and analysis of life-cycle cash flow needs, linked to affordability, priorities and coordination
requirements as identified in previous chapters (including any related city-level directives), and linked to
proposed programmes and cash-flows (mSCOA-format) in the Annexure, as follows:
• Capital – upgrading and new assets
Life-cycle plan

• Capital – renewal (rehabilitation and replacement)

• Capital or OPEX - De-commissioning, restoration and disposal (forecast of income/expenses)
Scope of
• OPEX – operations
contents
• OPEX - project pipeline, studies
• OPEX – maintenance
• Assessment of the certainty of the forecast data, the level of confidence in the analysis and conclusions, and
proposed improvement of the data and/or models
• Chapter summary providing a brief overview of the proposed life-cycle plan, and the associated risks,
opportunities and priorities
Indicates prevailing asset management practice, identifies and prioritises improvement needs and proposes a
Purpose
response plan
Asset management practices

• Organisational context, roles and responsibilities relating to the pursuit of the sector’s AM objectives
• Overview of asset management system performance
• Assessment of current AM practice (data, systems, planning, decision making, implementation, people issues)
• Assessment of staff capacity and competence
Scope of • Review of ongoing improvement activities, projects, programmes, and targets
contents • Identification of priority improvement needs, priorities and development of a change management programme
• Level of confidence in the improvement plan
• Chapter summary providing a brief overview highlighting strategic challenges, risks, opportunities, and
priorities relating to AM practices in the sector and the proposed responses

Identifies the sector’s risk management objectives, and summarises the key risks identified throughout the plan
Purpose
Risk management plan

and the proposed mitigation and control measures

• Overview of the sector’s risk management objectives, practices and risk threshold (with city context)
• Overview and assessment of historic risk management performance
• Overview of key risks and current level of exposure from preceding chapters
Scope of
• Overview of risk mitigation tactics (proposed in preceding chapters), financial implications, residual risk, and
contents
contingency or continuity plans
• Responsibility for risk control
• Chapter summary providing a brief overview of the current AM risk exposure, proposed responses and outlook
Purpose Identifies the sector’s asset management performance objectives and provides a performance forecast
Performance plan

• Overview and analysis of asset management (infrastructure, and AM system) performance objectives, measures
and targets – including the performance of this AMP (with city context)
Scope of • Strategic overview and analysis of historic performance
contents • Assessment of the certainty of the forecast and proposed improvement of the data and/or models
• Chapter summary providing a brief overview of forecasted sector performance based on the response plans in
the preceding chapters
Purpose Provides detail to support the plan including a breakdown of forecasted expenditure and performance
Annexures

• 30 year budget (breakdown of projection over 30 years – including detailed SIPDP in mSCOA format for 5 years )
Scope of • Supporting summarised technical information (where necessary)
contents • SIPP - comprising the asset management (infrastructure and system) performance forecast for the sector in line
with the city’s SDBIP)

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 Asset management plans MODULE 7

Figure 7.2 provides an overview of the nature and sequence

of activities required to prepare the sector AMPs which, as
suggested in Module 6, may take a period of 4 to 6 months (and
probably longer in the first few iterations). The process includes
periodic workshops at the end of each of the various stages of
work activities with internal stakeholders (from the respective
sector, as well as corporate planners and asset managers)
to confirm that all salient aspects have been included in the
assessment and secure agreement with the outputs and
proposed responses.

The activities are presented on the assumption that a person

in each sector is allocated the specific responsibility for
the preparation of the sector AM Plans with the support of
team members, and receiving inputs from across the sector
management including those responsible for project and
programme planning and implementation, operations, ICT
and finance, performance and risk management. Tasks can be
allocated in line with the illustrated activities (interpreted for the
respective sectors and applicable operational environment) and
monthly timelines indicated in Table 7.3.

YR MONTH SAMP TASKS AMP TASKS

1 October Review Align with/review O&M strategy
November O&M plans Prepare draft operations and maintenance plans
December Initial SAMP Prepare portfolio life-cycle plan (Yr 2) Workshop and finalise
January for Yr3 Prepare brief for sector AMPs Receive strategic brief
February Prepare Review data availability and confirm AM model
draft Establish context and status quo
sector Assess the levels and standards of service
AMPs Workshop and document
March (Year 3) Forecast future demand and assess implications
Workshop and document
April Final SAMP Review based on IDP outputs Determine proposed response to lifecycle needs
for Yr2 Review affordability and financial sustainability
Assess sector AM competency and capacity
Consolidate the risk management plan
Consolidate the performance forecast
Workshop and document
May Finalise budgets and plans Finalise the plan, distribute, workshop
June Approval and distribution Finalise the document
2 July Prepare Integrate & develop strategies
August draft SAMP Options analysis & change plan
September for Yr3 Workshop and finalise

TABLE 7.3: Illustration of monthly tasks for SAMP and AMP preparation

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MODULE 7 Asset management plans

7.2.3 Finalising the sector asset management plans

As indicated in Figure 7.1 the sector AM plans are finalised once there has been a review at the city level (in preparing the
draft SAMP). An important element of this review is to check that there is sufficient confidence in the data and processes
used to define the need and shape the nature, timing and priority of the planned responses (as required in terms of the asset
management strategy). The directives that emanate from the city’s IDP process (in which the sectors participate) are reflected
in an updated and final AM plan document for each of the sectors. These final sector AM plans are then communicated to the
stakeholders within the department, relevant stakeholders in the city and other stakeholders in terms of the communications
approach indicated in the city’s AM strategy.

7.11
 PROCESS ACTIONS ASSET MANAGEMENT PLAN DOCUMENT
RECEIVE STRATEGIC BRIEF
Receive city-level directives on infrastructure
and infrastructure management performance DOCUMENT
WORKSHOPS
targets, customer growth scenario; budget CHAPTERS
envelope, risk threshold, and strategic initiatives
(Initial SAMP)

ESTABLISH CONTEXT AND STATUS QUO ACCESS THE LEVELS OF STANDARDS OF

Conduct stakeholder analysis; prepare SERVICE
REVIEW DATA AVAILABILITY AND
preliminary 30 year lifecycle model for the Confirm LOS and SOS measures and targets;
CONFIRM/ ESTABLISH AM MODELS Introduction
portfolio, confirm infrastructure status and determine current controls, nature and life-
Establish baseline data, identify new/
identify main strategic challenges; identify cycle cost of backlogs (bulk and network);
improved relevant data, review data and
AM practice status; document relevant social, prepare/update component life-cycle
process integrity, confirm missing data,
political, economical, legal, engineering, strategies and costing; conduct risk analysis Workshop,
confirm modeling approach, determine
sustainability, customer affordability, on LOS and SOS (including condition ad other confirm and
approach to completing data gaps for the document
institutional, operational and resourcing failure modes); strategic review of measures
AMP, note committed data improvement
context; expenditure, revenue, risk exposure and and targets, existing and planned asset
initiatives, confirm key assumptions; Levels of
performance history (last 3 years); note current and non-asset responses and timeframes;
summarise the status, challenges, risks, service
MTREF programmes; note the integrity of key note the integrity of key data and processes
constraints, opportunities, and proposed
data and processes used; summarise the status, used; summarise the status, challenges, risk,
response (refer to Module 3)
challenges, risks, constraints, opportunities, and constraints, opportunities, and proposed
proposed responses (refer to Module 6) responses (refer to Module 4)

FORECAST FUTURE DEMAND AND ASSESS

IMPLICATIONS
Establish baseline customer growth forecast
and spatial distribution; prepare service
demand projection linked to proposed asset Workshop, Future
and non-asset solutions; forecast and life- confirm and demand
cycle expenditure and revenue implications; document
note the integrity of key data and processes
used; summarise the status, challenges, risks,
constraints, opportunities, and proposed
responses (refer to Module 5)

ASSESS SECTOR AM COMPETENCY AND

DETERMINE A PROPOSED RESPONSE TO REVIEW AFFORDABILITY AND FINANCIAL Lifecycle plan
CAPACITY
THE LIFECYCLE NEEDS SUSTAINABILITY
Determine prevailing AM resources, roles,
Determine aggregate lifecycle needs Map life-cycle cost and revenue forecast data to
responsibilities, performance framework and
required to address backlogs and growth; budget items; determine revenue enhancement Financial plan
performance; identify historic and ongoing AM
critical infrastructure; existing programme opportunities; identify funding strategy;
practice improvement initiatives, determine
commitments, performance, and required forecast financial management performance;
AM improvement needs, priorities and plan;
change; project packaging and readiness; note the integrity of key data and processes
determine change plan; note the integrity
proposed prioritisation of programmes to used; summarise the status, challenges, risks, Sector AM
of key data and processes used; summarise
fit affordability envelope; catalyst projects constraints, opportunities, and proposed Workshop, practices
the status, challenges, risks, constraints,
(capital and operational budgets) and responses (refer to Module 8) confirm and
opportunities, and proposed responses
the project pipeline; cash-flow linked to document
proposed programmes and draft mSCOA
budget programmes - for the annexure; Performance
physical risk exposure and backlog CONSOLIDATE THE PERFORMANCE FORECAST plan
CONSOLIDATE THE RISK MANAGEMENT PLAN
performance forecast; note the integrity of From preceding chapters, consolidate an
From preceding chapters, consolidate an
key data and processes used; summarise overview of existing and forecast performance
overview of existing and forecast risk exposure Risk plan
the status, challenges , risks, constraints, in key categories of infrastructure delivery and
in key categories of infrastructure delivery and
opportunities, and proposed responses management; prepare updated inputs for the
management (refer to Modules 2 and 3)
(refer to Module 8 and 9 to 11) SDBIP over 3 years (refer to Modules 2)
Annexures

FINALISE PLAN AND DOCUMENT

Prepare first draft AMP document from the
outputs of each of the above processes and
conduct iterative alignment of executive Workshop, Executive
confirm and
summary with chapter summaries chapter summary
document
content, and Annexures; workshop and submit
final draft AMP. On finalisation of the IDP
process, amend and prepare the final AMP

7.12
Asset management plans MODULE 7

FIGURE 7.2: Overview of sector AM plan preparation process

MODULE 7 Asset management plans

7.3 DR AFT CIT Y LIFE-C YCLE PLAN

7.3.1 Why develop a city infrastructure life-cycle plan?

In the previous module, the approach to prepare a high-level city infrastructure life-cycle strategy was described (in Section
6.2). It provided directives to develop draft life-cycle plans for each of the sectors. This was to promote horizontal alignment
across sectors and to align vertically to ensure that projects and programmes, and indeed the long-term strategic direction of
the city, are in line with the city’s AM objectives (which, in turn, support the city’s strategic objectives).

In this section, the draft sector infrastructure life-cycle plans

are aggregated to:
• Check horizontal and vertical alignment
• Review and confirm that strategic opportunities are being
optimally leveraged
• Ensure that risk management is seamless and the responses
consistent
• Review the balance of the allocation of resources over space,
time, and sectors
• Review priorities and identify integrated strategic budget
scenarios.

7.3.2 Establishing the draft city infrastructure life-cycle plan

The life-cycle plans submitted by the sectors are aggregated
into two sets of schedules – the proposed application of (1)
capital and (2) operational funds:
• per sector, for the different life-cycle programme types, and,
as applicable, relating to each of the respective planning
areas
• over the three planning horizons (1 to 5, 6 to 15, and 16 to 30
years).

This facilitates a macro-review of the extent to which there is

balance in the proposed application of the city’s resources,
macro-affordability and alignment with strategic priorities. It
also facilitates reflection on the extent to which the underlying
(zero-based) needs can be addressed given the affordability
envelope, and provides a framework to review and determine
strategic revenue and organisational efficiency targets for the
city. Once the appropriate balance is achieved, the respective
OPEX and CAPEX schedules are drilled down to the programme
level, and limited to the 15-year planning horizon.

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 Asset management plans MODULE 7

Each of the programmes are annotated with: In some cases, funds are targeted to specific applications (for
• A programme name and reference code example technical scope, social classifications, or geographic
• The sector (or sectors where applicable) areas). They may also be associated with other specific terms or
• The position in the asset hierarchy requirements that may affect the manner in which programmes
• The project segment (life-cycle stage) are selected for funding and consequently for implementation.
• The viability (reflecting the benefit-cost ratio)
• The cost elements (contractor, labour, plant and materials) The programmes are reviewed for alignment with the
• The latest total cost estimate split into CAPEX and OPEX infrastructure performance targets set in terms of Module
• The cash flow of annual costs and revenues 2, including a performance risk review. This will inform the
• The proposed funding source or sources preparation of the city infrastructure performance plan
• The prioritisation index (reflecting the QBL established in (CIPP), which will be a subset of the city’s SDBIP relating to
line with the models indicated in Module 8) and flag the infrastructure management and delivery performance. A review
sensitivity range of performance risk will be made and mitigation steps identified
• The location of the project, and the area that will benefit as necessary. Based on these schedules of updated and adjusted
• The commitment status (funds spent) data, programmes that have been previously prioritised are
• Dependencies reviewed and are either confirmed, relegated, or discarded, and
• The delivery risk (reflecting any uncertainty of the ability to new ones added where appropriate. It is on this basis that draft
implement timeously) five-year budgets are established.
• The priority ranking

7.3.3 Draft city infrastructure programme delivery plan

The next level of drill down is to review the activities and projects within the programmes over each of the next five years to
develop the draft city infrastructure programme delivery plan (CIPDP). The process includes checks to confirm the following:

• The packaging and logic flow from activities including

dependencies within and external to the programme
• The duration and timing of the activities in line with the
envisaged procurement and delivery strategy
• The allocation of programme and project roles and
responsibilities
• The project cash flow
• The project funding
• An analysis of project and programme risks and appropriate
mitigation
The aggregated programme budgets are aligned to the draft
five-year budgets per sector.

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MODULE 7 Asset management plans

7.4 STR ATEGIC ASSE T MANAGEMENT

PLAN (SAMP)
7.4.1 Why document the SAMP?

As noted above in Section 7.3.1, the finalisation of the city’s draft integrated infrastructure life-cycle plan establishes the
platform for delivery. However, as with the sectors, it is important to document at city level in the SAMP at a more strategic
level:

The data and processes that How the programmes were The vertical alignment with the
informed the establishment of determined city’s corporate objectives, AM
the needs objectives, policy, IDP and SDBIP

This demonstrates that the project and programme activities

maximise the achievement of the city’s strategic objectives in
terms of a coherent and long-term framework, established in
line with recognised best practice. It also shows there is effective
alignment across the sectors within the city and a considered
balance in the treatment of the various life-cycle needs, as well
as over the different areas of the city. As a draft, this document
provides inputs to the IDP process relating to infrastructure-
based services. It is also used by the city as a reference by
internal stakeholders and, in terms of the city’s communication
strategy, for external stakeholders. The document is finalised
by confirming the strategic direction of the city and the
prioritisation of its projects and programmes through the IDP
process.

7.4.2 Preparation of the draft SAMP document

An overview of the layout and content of the final SAMP document is provided in Module 2.

The document is compiled by the Head of Corporate Asset council to inform its consultation with stakeholders at the
Management in consultation with the sector departments Lekgotlas and the IDP process, and, ultimately, decision-
responsible for the preparation of the sector AM Plans. Initial making on the application of the budgets to programmes and
baseline data and assimilation of current commitments, commitment to performance targets.
strategic challenges, risks, opportunities, constraints and
alignment needs are determined from the sector AMPs and are The main tasks in the preparation of the draft SAMP document
reviewed and confirmed in a workshop with representatives are indicated in the second stage of the SAMP development
from all sector departments, finance, risk and performance process illustrated in Figure 7.3.
management. Strategic scenarios are then identified, analysed
and documented in the draft SAMP which is again workshopped
to ensure it is complete and robust. This is then presented to

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 Asset management plans MODULE 7

PREPARE INITIAL DRAFT (DIRECTIVES AND BRIEF FOR SECTOR AMPS)

Review and confirm infrastructure provision and management targets; prepare portfolio-
Workshop,
level life-cycle plans; determine expenditure and revenue budget envelope; prepare
confirm and
customer profiles and growth scenario; determine portfolio-level risk thresholds; identify
document
strategic initiatives (assets and AM); describe scope, value, spatial distribution, and status of
infrastructure; indicate AM objectives and describe AM system; prepare directives to sectors
for preparation of sector AMPs

PREPARE SECTOR AMPs

PREPARE DRAFT SAMP

Review draft sector AMPs; summarise and integrate sector infrastructure challenges, risks,
opportunities, and proposed responses over short, medium and long term; summarise
planning accuracy and required strategic actions; prepare overview of current AM practice, Workshop,
the performance of the AM system and improvement strategy; prepare the infrastructure confirm and
investment strategy: with objectives and targets, stated decision-making criteria, long-term document
revenue and expenditure forecasts and prioritised and smoothed cash-flows; determine
funding strategies; review and demonstrate vertical and horizontal alignment; review the
programme delivery management strategy; identify and assess strategic options; determine
change management implications and prepare strategies

Conduct Lekgotlas and the IDP process

PREPARE FINAL SAMP

Workshop,
Review and update the draft SAMP based on outcomes of IDP process; document the city’s
confirm and
final update of the short, medium and long term infrastructure delivery and performance document
plans; review and finalise annexures reflecting the detailed programmes, MTREF in line with
mSCOA, and SDBIP

FIGURE 7.3: Overview of the SAMP development process

7.4.3 Preparation of the final SAMP

The final SAMP is prepared based on the feedback from the IDP consultative process and aligning with the final CIPDMP,
MTREF and SDBIP. The document is submitted for formal adoption by council.

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MODULE 7 Asset management plans

7.5 SUMMARY

A city has one budget which needs to address a wide range of competing needs. The objective of the SAMP is to communicate
to decision makers all relevant information relating to infrastructure in one brief document. It is based on an aggregation of
the holistic and long-term needs of each sector, as identified in the AM plans, as well as an analysis of common themes, issues
of alignment and priority. On adoption it also confirms the CIPDP and CIPP that set the brief for project and programme
implementation, the processes for which are considered in Modules 9 to 11 of this toolkit.

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Asset management plans MODULE 7

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MODULE 7 Asset management plans