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The key implications of applying Infrastructure Asset Management solutions outlines why it has become imperative for municipalities to incorporate it in their approach to ensure consistent, reliable service delivery to their communities.
All municipalities, big or small, are faced with juggling limited financial and human resources that must be directed at maintaining and renewing infrastructure, addressing backlogs in service delivery, and comprehensively dealing with changes in demand. In South Africa, the challenges faced by municipalities in meeting their statutory and democratic responsibilities are well known. From service delivery protests to audit reports, it is clear that South African municipalities are struggling to fulfil their asset management obligations.
Top 5 Reasons for Municipalities to implement Infrastrucutre Asset Management
1. LEGISLATIVE COMPLIANCE
In terms of both the Public Finance Management Act and the Municipal Finance Management Act, the accounting officer is responsible for managing the assets and liabilities of the municipality, including the safeguarding and maintenance of its assets. A management, accounting and information system that accounts for the organisation’s assets and liabilities should be maintained. Assets should be valued in accordance with standards and generally recognised accounting practices. The organisation should have and maintain a system of internal control and liabilities.
The Occupational Health and Safety Act requires an organisation to provide and maintain a safe and healthy working environment. An important component is to keep its infrastructure assets safe.
The Municipal Systems Act requires municipalities to consider the most appropriate service delivery vehicle. Integrated IAM practices will assist an organisation to meet all of these requirements.
2. IMPROVED SERVICE DELIVERY
Good IAM assists in achieving service delivery objectives in a cost-effective way.
3. PREVENTION OF FINANCIAL LOSSES
Through an integrated and holistic approach to asset management unnecessary expenditure can be minimised. For example, the systematic management of the estimated and remaining useful lives of assets can delay reconstruction costs, curb losses and prevent costly accidents due to asset failure.
4. SOCIO-ECONOMIC DEVELOPMENT
Well-serviced infrastructure provides the basis for good public health and is a necessary condition for local economic development.
5. MAINTAINING THE COMMUNITY'S TRUST
Good IAM practices minimise the possibility of spectacular and embarrassing infrastructure failures, and ensures that plans are in place to mitigate the impacts on service delivery should an asset fail.
In the complex and technical environments faced by South African municipalities, systematic approaches to IAM facilitate a more holistic financial approach to budgeting, establishing, maintaining, upgrading and operating physical infrastructure assets. Due to the many funding and human capacity constraints faced by the public sector, technological solutions offered by private entities can help municipalities fulfill their asset management mandate.
Municipalities therefore have much to gain from exploring and taking advantage of technological advances through public / private partnerships. This can both legitimate their activities through facilitating clean audits and enhance their efficiency when it comes to service delivery and socio-economic development.