1. Formulation of a Government-wide Fixed Asset Management Framework
Presentation to the
Portfolio Committee of Public Works
13 November 2002

2. Why Immovable Asset Management Framework & Act?
Currently no comprehensive consolidated guideline for the State’s immovable assets
This is a good governance initiative - Like PMFA and Public Service Act, Asset Management Framework – later Act, will guide whole of government to enable:
>Better allocation of limited resources
>Better alignment of immovable assets with service delivery & community expectations
>Reduced demand for new immovable assets
>More effective use of existing immovable assets
>Will apply to any sphere of government that has a role in immovable assets including infrastructure without taking away respective mandates or roles.

3. Why Specific Focus on Immovable Assets?
Impact on macro-economic and physical landscape of the country– positively or negatively
Have land ownership implications & often emotive
Are a finite resource
Are difficult to change location & use
Have lengthy acquisition periods
Costly to manage and maintain
Have a very long life cycle

4. Principles: Immovable Asset Management Framework
Immovable assets should support service delivery
Immovable asset management policies of any authority should be consistent with the government’s policies/legislation
Framework is premised on basis that ownership of immovable assets is centralised in National, Provincial, Local Government & Parastatals entities, ie. title is not devolved to individual depts.
Full life cycle costing, risk analysis and better use of existing immovable assets should be the driving factors in immovable asset management decisions – (user pays)
Full cost of providing, operating, and maintaining of immovable assets should be reflected in the budgets of the authority responsible for delivering a service
Immovable asset management decisions should be focused on meeting the service delivery needs of the present, without compromising the needs of future generations

5. Immovable Asset Management in a govt-wide context
Resource Strategies and Plans
Service Delivery Strategy
Departmental Strategic Plan
Government-wide Policy/Legal Framework
Community Needs and Expectations
Human
Resource Plan
IT and Support
Systems Plan
Im/movable Asset
Management Plan
Financial Plan

6. Immovable Asset in Context of Service Delivery
GOVERNMENT OBJECTIVES AND POLICIES
Current
Assets
Functionality
Condition
Utilisation
Performance
Service Delivery
Strategy
Fixed Asset Requirements
Additional
Utilise
Redundant

7. Useful Life of Immovable Asset
Planning
Disposal
Acquisition
Utilise and
Maintain

8. Immovable Asset Life Cycle Cost
Utilise and
Maintain
Planning
Acquisition
Disposal
Cost
Time

9. Details of 4 Pillars of the Government Wide Immovable Asset Management Framework
Planning (1st Pillar)
The key objective of immovable asset planning, is to ensure that planning for immovable assets is done in a co-ordinated manner to avoid contradictions, duplication and inefficiencies.
Also that asset strategies are properly assessed and are focussed on providing effective, efficient and economical services in line with the short & long term planning framework and service delivery priorities.
This framework will address mainly whether assets are appropriately located for effective service delivery?

10. Details of 4 Pillars of the Government Wide Immovable Asset Management Framework
Investment and Acquisition (2nd Pillar)
The key objective of immovable asset investment and acquisitions framework, is to ensure that investment and acquisitions of immovable assets are considered equally and concurrently with the other resource requirements used in achieving service delivery objectives and requirements.
This framework will address mainly immovable asset procurement and look at whether assets should be:
Owned by government?
Leased from the private sector?
Provide by other means, e.g. PPP, BOT, BORT, etc?

11. Details of 4 Pillars of the Government Wide Immovable Asset Management Framework
Maintenance and Management Framework (3rd Pillar)
Objectives of immovable assets maintenance and management framework is to ensure that:
Immovable assets maintenance support service delivery strategies, needs and priorities
Immovable asset maintenance resources are used efficiently, effectively and economically
Immovable asset value is preserved

12. Details of 4 Pillars of the Government Wide Immovable Asset Management Framework
Maintenance and Management Framework (3rd Pillar)
This framework will address mainly whether:
immovable assets fully used in service delivery,
asset capacity: if the immovable assets sufficient capacity to provide required services,
asset functionality and condition (required condition vs actual condition): if immovable assets in a suitable condition for the optimal delivery of the service they are intended to support,
asset costs: how the cost of operating and maintaining assets relate to budgets and the total costs and/or price of service delivery,
asset values: if asset values commensurate with service delivery requirements.

13. Details of 4 Pillars of the Government Wide Immovable Asset Management Framework
Disposal Framework (4th Pillar)
The objective of this framework is to ensure that surplus and/or redundant immovable assets are properly identified and assessed for alternative use, refurbishment, or disposal.
This framework will address mainly:
asset/service dependency ie. can the service delivery be provided more effectively through the use of resources other than immovable assets,
if disposal is taken after correct analysis and does it yield best financial and social returns for the owner?

14. Proposed Institutional Environment & Processes for the Government wide Immovable Asset Management Framework
Portfolio
Treasury
DPW/Cust
DPSA
FINANCIAL POLICY AND BUDGET
HUMAN RESOURCE POLICY
IMMOVABLE ASSET MANAGEMENT POLICY AND CUSTODIAN
Advice
Dept A
Dept B/Prov/Mun
Strategic Plan
Service Delivery Strategy
Immovable Asset Management Plan
Additional
Utilise
Redundant
Immovable Asset Management Plan

15. Conclusion
Presentation outlines the backbone of initial proposal regarding a Government-wide Immovable Asset Management Framework
Framework will be developed into an Act, mid next year. (GIAMA)
Currently framework consultations–DG to DG
Incorporation into Jan 2003 Lekgotla, anticipated.
Draft Bill to be ready – Feb 2003 for public consultations & promulgation target – July03
In future, govt depts and other organs of govt will prepare yearly asset management plans, similarly to yearly budget plans.
Anticipated other organs of State will begin doing the same, share information, intergrate planning and effort and follow uniform good governance guidelines and approaches, re: immovable assets.