Improving water services in the iLembe district

An improved, integrated approach to asset management is expected to improve service delivery for businesses and residents. 

Businesses and communities in the iLembe district will benefit from improved water and sanitation services following the development and implementation of an asset management strategy (AMS) and updated Operations and Maintenance (O&M) Plan, to improve management of municipal infrastructure. 

The AMS and updated O&M Plan will extend the working lifespan of key components in the water and sewerage systems, ensure proper maintenance is carried out and prepare the district to manage emergencies that may arise. This initiative is part of the Vuthela iLembe LED Support Programme.

Asset management is a legal requirement and an operational imperative for municipalities: it is essential for effective service delivery. This asset management strategy will help to streamline and prioritise municipal workflows, improve accuracy of asset records and enhance responses to business and community needs.

The iLembe District Municipality’s Accounting Officer is required to manage and maintain municipal infrastructure assets that are used to deliver services in line with section 63 of the Municipal Finance Management Act.

Aligned to the IDP

The asset management strategy emanated from the Asset Management Policy and supports the overall development objectives of the municipality by controlling the planning, purchasing, construction, operation, maintenance, renewal, and disposal of municipal assets. These objectives are also aligned to the district’s Integrated Development Plan (IDP). 

It will allow the municipality to prioritise budgetary expenditure for asset management and maintenance to improve service delivery and ensure improved use of assets up to and potentially beyond assets’ Expected Useful Life (EUL). Additional infrastructure assets that will be required in the future to meet the needs of the communities have also been identified.

The strategy will be executed through a long-term plan, including the updated O&M Plan, that ensures the consistent and effective management of all assets up to 2030. The O&M Plan puts into effect the organisational and operational objectives of the iLembe District Municipality over the next seven years.

These objectives formed the basis of the strategy and resulting updated O&M Plan, which creates cohesion between the financial, planning, and technical aspects of service delivery.

Asset Management Enabling Policies and Plans

The Vuthela Programme also supported the review of the Asset Management Policy to guide the management of assets and define the key principles around how assets are managed. It also aligned the AM policy to the latest generally recognised accounting practice (GRAP standards) and best practice in asset management. It is further supported by an Asset Management Plan and Practices and Procedures analysis, which outline the activities to be implemented, whereas the updated O&M Plan outlines what will be required in the future for the maintenance – procedures and budget allocation. 

The AM policy and strategy describe how assets will be identified, verified, assessed and listed with spatial information in the Fixed Asset Register.

Each piece of equipment and infrastructure is identified by a unique code attached to it, so it can be easily located and tracked. The code on the asset must correspond to the information recorded and updated in the Fixed Asset Register.

Every asset is assigned a location (local municipality reference), sub-location (area name/scheme name or facility) and exact Geographic Information System (GIS) coordinates where possible, so that it can also be represented in the GIS of the municipality as well as in the newly deployed EDAMS asset management information system. 

Municipal training

Municipal officials from financial asset management, technical asset management and the GIS unit were trained to understand the asset management value chain and manage assets more effectively, ensuring optimum service delivery. 

This includes the management of the traditional water and sanitation business cycle from water source and abstraction to the treatment, distribution, and storage of drinking water, and thereafter the collection, treatment, and disposal of wastewater. It also includes how the municipality reports on and manages potable water quality and effluent water quality for Blue and Green Drop purposes.

The O&M Plan specifies the resources that will be required to operate and maintain assets and locates the responsibility for control, access, and security of the asset. It also defines asset operating policies like working hours and energy management, standards of performance expected from the asset, and how performance data is collected and reported. 

Municipal maintenance activities are structured in customised plans that are compiled for each asset and coded according to the type of work required.

Recommendations are made on the activities and frequency of maintenance to be performed on each asset type to ensure optimal use from the asset in terms of life expectancy as well as meeting service level targets and performance requirements. It is important that maintenance activities performed are recorded or logged in order to inform the future planning, budgeting and prioritisation of maintenance activities.

These will ensure optimal utilisation of each asset to its useful life or even beyond, to best apply financial, human, and technical resources for its operation, as illustrated in Figure 1.

Figure 1. Illustration of asset maintenance investment over asset life

From historical information, the following can be reported on Historic Spend on Repairs and Maintenance, illustrated in Table 1.

Table 1 Historic Spend on Repairs and Maintenance  

Historical Asset Value

Total Assets PPE

Actual Expenditure on R&M

Repairs &Maintenance versus Total PPE Assets (%)

FAR 2020/21

R      2 182 523 256,29

R    56 071 931,00

2.6%

FAR 2021/22

R      2 282 831 814,62

R    47 608 849,00

2.1%

FAR 2022/23

R      2 345 294 942,70

R  126 445 000,00

5.39%

 

The guidelines from National Treasury propose that a municipality allocates a budget of 8% of the value of its Property, Plant and Equipment (PPE), towards planned routine, preventative and reactive maintenance.

Furthermore, from the updated O&M Plan, the budget allocation for maintenance can be taken as a percentage of PPE (carrying value), informed by the Fixed Asset Register. The average annual maintenance budget for 2023/24 was proposed as follows in Table 2, to allow for a gradual increase from the 2022/2023 maintenance budget:

Table 2 Average Annual Maintenance Budget for 2023/24

Type of infrastructure

Current Asset Value

Replacement Costs

Minimum Average Annual Maintenance Budget as % of Replacement Cost

Maximum Average Annual Maintenance Budget as % of Replacement Cost

Bulk water storage

R558 648 766,41

R1 246 264 635,49

R49 850 585,42

R99 701 170,84

Water treatment works

R486 256 357,72

R1 142 432 433,12

R45 697 297,32

R91 394 594,65

Water reticulation

R818 241 819,82

R1 825 386 530,46

R73 015 461,22

R146 030 922,44

Sewage treatment works

R72 181 374,59

R174 040 359,89

R6 961 614,40

R13 923 228,79

Sewer reticulation

R283 729 008,04

R294 039 104,72

R11 761 564,19

R23 523 128,38

 

R2 219 057 326,58

R4 682 163 063,68

R187 286 522,55

R374 573 045,09

 

To give context to the iLembe District Municipality’s water & sanitation asset portfolio, they own and operate 10 water treatment works, the largest being of design capacity of 40Ml/d, an estimated 4 500km of bulk and 15 000km of reticulation water pipelines, 357 reservoirs, 15 water pump stations, 12 wastewater treatment works, 885km of sewer pipelines and 87 sewer pump stations. 

Complementing the strategy, a computerised asset management information system (EDAMS) is being implemented under a separate Vuthela project that commenced in January 2023. This project involves the procurement, installation, and implementation of a comprehensive asset management information system, asset and network data update, planning, management, operation, and maintenance of these assets. 

This project nears completion in September 2023 under the Vuthela contract but will continue under a licencing and support contract directly with the iLembe District Municipality, funded by the Vuthela Programme, until 30 June 2025. To realise its full potential, it will require dedicated efforts from several iLembe District Municipality departments to make the system fully operational. A change management process is critical for the municipality to implement as it involves changes in business processes in the management of assets – not only technical, but also financial and information management. This requires full coordination and cooperation between various departments in the iLembe District Municipality.

The EDAMS Asset Management Software ensures that the municipality moves from a manual system for logging of data or job cards, to a fully electronic and integrated system for planning, budgeting, and financial management tools. It will also automate maintenance schedules, develop workflows and track activities to improve the management of water services from planning to implementation and commissioned asset management. This includes improved management of non-revenue water, development of preventative maintenance procedures based on recorded asset performance and activities conducted on assets, and more.

While the asset management strategy and its supporting policies and plans meet all legislative requirements, they will also safeguard these assets and improve efficiency by streamlining workflows and maintaining accurate records.

Budgeting and planning will be more accurate, and the level of transparency within municipal departments will be enhanced as the records and data will be easily accessible.