Asset Management:

Strategic Issues

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 Table of contents
• Background
• Government Wide Immovable Asser Management (Policy)
• User Asset Management Plans (UAMP) and Custodian Asset
Management Plans (CAMP)
• Asset Register: Enhancement
• Asset Register: Lost/Abused Assets
• Un/Under- Utilized Assets (DOD)
• Prioritization of Budgets
• Memorandum of Understanding (MOU)
• Service Level Agreements (SLAs)
• Disposals
• Research
• Pan African Parliament (PAP)
• Ports of Entry

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 Background
• The Asset Management unit’s specific purpose is to ensure that the state-
owned immovable assets are optimally utilized, functional, cost effective and
support service delivery objectives of state’s national client’s department.
• Although the unit has been existent in the department it has just gone through a
major transformation which prompted creation of new structure. The structure
comprise of Portfolio Performance Unit, Investment Analysis and Key Accounts
Management.
• The unit has embarked on a number of initiatives since its inception. Some of
the initiatives in progress are:
– Asset Register Enhancement Project,
– Short term prioritization of maintenance budget,
– Long term criteria of prioritising maintenance budget
– User and Custodian Asset Management Plans in line with GIAMA
– MOUs between DPW and its clients departments,
– Service Level Agreements (SLA) with client departments,
– Options analysis on disposals (both local and foreign) programmes
• It is unit’s intention to have facilitated and developed policies and strategies for
the life cycle management of state’s immovable assets by 2007.

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 Government-wide Immovable Asset
Management (Policy)
• In August 2005, Cabinet approved the Government-wide
Immovable Asset Management Policy and the draft Government
Immovable Asset Management (GIAMF) Bill for submission to
Parliament.
• The policy calls for more efficient and effective use of
immovable assets by three spheres of government and places
an obligation on accounting officers to prepare Immovable Asset
Management Plans to ensure that prudent management of such
assets takes place.
• The policy and draft bill distinguish between users and
custodians of immovable assets.

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 User Asset Management Plans (UAMPs)
and Custodian Asset Management Plan
(CAMP)
• Asset Management has compiled draft guidelines for the
completion of user immovable asset management plans
(UAMPs) to facilitate and assist with the required asset
management plans by national governments. These guidelines
will also be used for provinces.
• Assistance is being provided to user departments to complete
their UAMPs in accordance with the client strategic plans.
• It is envisaged that the necessary basic immovable asset
management plans in compliance with GIAMF would be
completed for national departments in the current MTEF period.
• Parallel, Custodian immovable asset management plan (CAMP)
guideline is being finalised.

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 User Asset Management Plans
(UAMPs)
• Users of immovable assets utilise the space or accommodation
to give best effect to their functions and therefore must produce
a User Immovable Asset Management Plan (UAMP) to ensure:
– accountable, fair and transparent management of immovable
assets;
– effective, efficient and economic use of immovable assets;
– reduced overall cost of service delivery; and
– reduced demand for new immovable assets.
• A.M. will assist with the completion of a final pilot UAMP for the
Department of Home Affairs to be implemented by the
beginning of the financial year 2006/07 by 30 March 2006.
• AM also plans to complete all the UAMPs of its remaining client
departments in March 2007. This will allow capacity build-up
and consultation.

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 Custodian Asset Management Plan
(CAMP)
• DPW as the custodian is responsible for all activities associated
with common law ownership and therefore must produce a
Custodian Immovable Asset Management Plan (CAMP) to
ensure that immovable assets:
– are efficiently and effectively managed throughout their life-cycle;
– provide a transparent and cost effective (best value) manner to
meet service delivery requirements of users;
– are maintained in a state to provide the most effective service;
– are assessed in relation to its performance, suitability, condition and
the effect of the condition service delivery ability; and
– are disposed of in line with assessment recommendations.

To this end, DPW will produce this plan during the 2006/07 fiscal year

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 Asset Register: Enhancement
• For the first time, a comprehensive inventory of State-owned
immovable assets is available in an electronic format. Through the
data gathering exercise, the number of entries in the National and
Provincial Governments’ immovable asset registers increased from 112
000 to 375 000 (consisting of information on land parcels and all
buildings and structures).
• Agreement has recently been reached with the Office of the
Accountant-General in National Treasury on the various fields of
information that an immovable asset register should contain – including
both basic (essential) and additional (supplementary).
• In addition, it has recently been agreed with the Auditor-General that
the basic (essential) fields will serve as the basis for the auditing of
Government’s immovable asset registers in future.

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 Asset Register: Enhancement
• AM commenced the asset register enhancement project in 2005/06 to
improve data integrity of the department’s asset register, service
delivery and to facilitate property management in the eleven regions.
• The project will be completed over three years with an estimated total
budget of R30m, effective from March 2005.
• A total of fifty four (54) contract workers have been employed in its
regional offices to assist with the enhancement of asset register,
service providers will also amply this process.
• Asset register enhancement project is running concurrently with the
property vesting of the Department of Land Affairs.

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 Asset Register: Lost/Abused Assets
• Situational Analysis requires DPW’s capability to acquire
basic source information from the public through existing
structures.
• A dedicated toll-free call centre number is being established.
• The approach of this process covers the entire extent of the
Republic and should not only be former TBVC focused.
• DPW engages the Intelligence Structures to sort
reclassification of the former National Intelligence Services
(NIS), Military Intelligence (MI) Immovable Asset Registers
and establishes all SARS records for transfers and donation
to the State .
• Recommendations to this effect have just been forwarded to
the Minister.

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 Asset Register: Lost/Abused Assets
The lack of comprehensive information and
collection of data necessitates the need for the
institutional framework to assist in the assets
identification strategy, given the recurrent of
this problem.
• Parliamentary Constituency Offices
• South African Local Government
Association (SALGA)
• Media Advertisements
• Capacity Enhancement
• DPW is exploring a FICA modelled verification
process for all the identified grey immovable
assets within and outside RSA

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 Un/Under-utilised Assets
Department of Defence (DoD)
• Confirmed status of DoD’s under -utilised facilities:
– Western Cape: 5 facilities have been identified, DoD to consolidate
its operations in attempt to free some properties for disposal.
– Eastern Cape: awarded to Cacuba community for land claim.
– Gauteng: being investigated for possible disposal subject to
confirmation by DoD.
– Limpopo: 2 properties released to Justice and SAPS.
– Mpumalanga: 1 property under evaluation for possible release to
other departments/disposal.
– North West: 3 properties identified for disposal and 1 still under
investigation for possible disposal.
– For the rest of the un/under-utilised assets, DPW is awaiting
confirmation from DoD.

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 Prioritisation of Budgets
• Prioritising of the department’s Maintenance and
Capital Budgets
• During the 2005/06 financial year, the branch
embarked on a prioritisation of the maintenance and
capital budgets programme for the 2006/07 year.
• The implementation programme was completed after
collaboration with various stakeholders after giving
due consideration to budget constraints.
• A draft long-term prioritisation of budgets is being
prepared to co-incide with the MTEF cycles, going
forward.

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 Prioritisation of Budgets
• In December 2005 the Department developed a short-term criteria of
prioritising maintenance projects for 2006/07.
Criteria- ranked in order of importance:
1.Statutory compliance e.g. OHSA, PFMA, PPPFA other Land,
Environmental & Safety Legislation;
2. Security measures e.g. prevention of escapes and safe keeping of
firearms;
3. Functional vs. Residential accommodation e.g. provision of
“essential services”
4. Special projects e.g. not captured on WCS but are a priority, and
5. Degree of readiness e.g projects that are at a tender stage

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 Prioritised Maintenance Budget
2006/07
A m o u n t a va i l a b l e fo r M a i n t e n a n c e 1 117 619
A m o u n t r e s e r v e d fo r P r e s t i g e 73 347
S A P S A l lo c a t i o n ( in t e r m s o f d e vo lu t io n ) 278 216

A m o u n t d e v o l v e d t o C l i e n t s ( i e m o n e y a va i l a b l e fo r m a i n t e n a n c e ) 766 056

A m o u n t s e t a s i d e fo r U n p l a n n e d M a i n t e n a n c e 258 195

B a la n c e 507 861

C a p it a lis a t io n o f T ra d in g E n t it y 440 000

A m o u n t a va i l a b l e fo r P l a n n e d M a i n t e n a n c e 947 861

A m o u n t s e t a s i d e fo r C o n s u l t a n t s ( 1 8 % ) 146 897

A m o u n t a va i l a b l e fo r P l a n n e d M a i n t e n a n c e c o n t r a c t o r s 800 964

C o n t r a c t u r a l c o m m i t m e n t s ( F o r 2 0 0 6 / 0 7 fo r c u r r e n t c o n t r a c t s ) 541 734

A va i l a b l e fo r p r i o r i t i s a t i o n 259 230

P rio rit is e d , in d e s ig n (R 6 8 7 2 2 3 0 0 0 b e fo r e p r i o r i ti s a ti o n ) 274 362

S h o r t fa l l - 15 132

P r i o r i t i s e d , n e w s e r vi c e s ( o n W C S , b u t n o t y e t i n D e s i g n s t a g e ) 17 714

T o t a l s h o r t fa l l - 32 846

3/9/2006
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Memoranda of Understanding (MOUs)
• The memorandum of understanding (MOU) is aimed at
clarifying the relationship between the Department of Public
Works (DPW) and the User Department with regard to the
provision of services related to the management of immovable
accommodation.
• Asset Management is tasked with the management of roles and
responsibilities of DPW and the user departments and to
ensure that a cooperative working relationship exists between
departments.
• Asset Management is tasked with the management of roles and
responsibilities of DPW and the user department and to ensure
that a cooperative working relationship exists between
departments.
• A total of 8 MOUs have already been signed and it is anticipated
that the rest will be completed by 31 March 2006.

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 Service Level Agreements (SLAs)
• The Department has embarked on an exercise of
developing Service Level Agreements for all clients in
April 2006.
• This is intended to define and monitor the level of services
(service standards) offered to DPW clients in compliance
with GIAMF.
• The SLAs will be governed by best practice principles and
aligned with Government and Departmental strategic
objectives over the MTEF period.
• These SLA’s will be premised on the CVP’s (Asset
Management approach), that will be adopted for our
respective clients.

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 Asset Management Research
• One of the key objectives of AM is to provide past, current and future
property industry researched information / data to enable the
department to make informed decisions.
• AM must provide tools and capacity:
– To research and analyse financial, economic and social market
trends for broader economy,
– To determine economic and social market trends for property and
construction sectors at both micro and macro level,
– To develop and implement analytical tools and models as well as
appropriate systems, and
– To provide data and information to enable financial analysis, risk
and return, socio-economic, planning, and policy for influencing
acquisition, construction, maintenance and disposals.
• It is on the basis of the research outputs that tangible results and
improvements will evident in 2006/07.

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 Disposals
• GIAMF provide that immovable assets are only of value to the user if
they support service delivery objectives (effectively and efficiently).
• The branch has identified about 2000 unutilised properties from the
asset register for possible disposal and has developed a disposal
programme for their disposal over a period of 5 years. The final
disposal decisions will depend on further investigation and analysis in
respect of the 2000 unutilised properties.
• Disposals are now managed in a more integrated and co-ordinated
manner for efficiency and effectiveness.
• Disposal Phases 1 and 2 of the disposal programme have already been
approved by the Minister and it is planned that the surplus properties
will be disposed in the MTEF period 2006/08. In addition to the phases
1 and 2 properties, further investigation into the 2000 unutilised
properties together with other additional unutilised properties will be
continued and included in disposal phase 3.

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 Disposals
• The effective rollout of the disposal programme will minimise holdings
of surplus and under-performing assets and maximise value to
Government.
• Apart from Phases 1, 2 and 3, special disposals , particularly, illegally
occupied and dilapidated properties must be sold immediately. For
example, through auctions.
• An identification and investigation of Foreign properties for disposals
has already commenced.
• Asset Management has already identified properties in Malawi,
Namibia, France, Germany, Madeira and Switzerland for disposal.
• Foreign property disposal is subjected to the laws and regulations of
the country where property is domiciled.

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 Pan African Parliament (PAP)
• Residential Properties has been secured for the President of PAP
whose occupation is earmarked for 1 April 2006.
• Options Analysis Phase
Needs analysis
– This encompasses the identification of site location; site analysis;
location due diligence; evaluation and recommendation.
Design
– Appointment of competitions advisor: Alignment with accreditation
institution of choice; compilation of competition document;
announcement of competition; and appointment of the preferred
bidder to work on drawings and tender documentation.
Construction
– Setting out of the works; site clearance; sub-structure; super-
structure; roof construction; external works; first delivery; 12 months
defects period including specialized work; and final handover.
• Project completion expected in the first half of 2010.

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 BCOCC
• The BORDER CONTROL OPERATIONAL CO-
ORDINATION COMMITTEE (BCOCC) structure was
presented and approved by the Cabinet Lekgotla in July
2005.
• DPW has been mandated to chair the BCOCC
Development Committee.
• National Treasury allocated budget of R 910 million for
the BCOCC until the end of 2008/2009 financial year.
• The funds are utilised for Capital Works, Acquisitions, and
RAMP projects and for the expansion and renewal of the
ICT systems at Ports of Entry (Air, Land, Sea and Rail
which includes 54 Land Ports of Entry, 10 Harbours and
10 International Airports).

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 Siyabonga

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