Daniel Platz, PhD, FSDO, UN-DESA

Presentation at ESCAP workshop on Public Resource Mobilization for municipal finance in partnership with the ADB, UCLG-ASPAC, UNCDF, UN-DESA and UNDP, 8-9 November, Meeting Room G,UNCC, Bangkok. Thailand

Leveraging municipal asset management in LDCs in support of the Sustainable Development Goals

Joint UN DESA/UNCDF project

• Target countries: LDCs• Pilot countries: Uganda, Tanzania, Nepal and

Bangladesh• Steps:

• Scoping missions• Workshops for local officials• ToT for central government officials• Technical assistance on the ground• Global workshop to share experiences in AMAP

implementation• Handbook on municipal asset management

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Overview

• Assets and asset management• Benefits of asset management• Six what’s• Asset management framework

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What are municipal assets?

´ Depends on local context but typically include infrastructure, equipment and real property that serve a community such as:

´Land´Property and buildings´Transportation networks´Water utilities´Flood control systems such as dykes and levees´Energy supply systems´Parks and recreation facilities´Telecommunication networks´Ports and port facilities´ Information technology and systems

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What is Asset Management or AM?

• Coordinated activities and systems that monitor and maintain things of value

• Assets have a service value• Physical infrastructure, equipment, land and

buildings that serve a community

• Assets have a financial value - they cost money to acquire and generate resources when sold

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Benefits of Asset Management

´Improved social equity and benefits - more resources to provide dependable, reliable services and amenities

´Improved environmental sustainability - long term solutions rather than short term affordability

´Improved financial performance´ Sound financial management will attract more investors´Well-managed assets can provide collateral that may help

municipalities get loans from private markets´ Economic sustainability - lower service delivery costs

´Managed risk´Improved compliance´Improved transparency of government

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Fundamental AM Questions

• What do you own and where is it?

• What is it worth?

• What is the condition?

• What is the remaining service life?

• What is the deferred maintenance?

• What do you fix first?• What will it cost and what is the acceptable level of

risk?• Is it affordable?

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Theory and Practice 1 8

Theory and Practice 2

Asset Management Framework

Demand Management

• Current and future demand

• Regulations• Level of Service

Lifecycle Management

• Asset portfolio• Lifecycle analysis• Risk management• Decision support• Capital

Improvement Plan

Financial Management

• Financial analysis (affordability)

• Cost/benefit analysis

• Funding Plan

Asset Management Policy, Strategy and Direction

Operations – Plan, Acquire, Use, Dispose

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The Diagnostic Tool

Assessing Asset Management Needs of Local Governments

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The Diagnostic Tool - Overview

• Based on• ISO 55000 Asset Management standard• International Infrastructure Management Manual 2015

• Three parts• Part 1 - Self-assessment completed prior to assessment visit• Part 2 - Questionnaire delivered during onsite visit/interview• Part 3 - Evaluation completed by assessor post-visit

• Can be done through formal assessment • Can de done as self-assessment prior to visit or as an

asset management ‘health check’

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Part 1 – Cover Sheet 13

Part 1 - Asset Management Self-Assessment: Overall Context

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Part 2: On-site Assessment

• Series of 14 questions based • Understanding and defining requirements (4

questions)• Lifecycle decision making (5 questions)• Asset management enablers (5 questions)

• Includes examples of best practices• Answered by local staff during discussion with

assessor and team• Supported by evidence

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Part 2: Onsite Assessment –Questionnaire

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1 Asset Inventory Data

What asset inventory information does the local government collect (e.g. location, size, type, material, cost, etc), how is it classified and how does the local government ensure the information is accurate, consistent and usable?

Basic building and land information to be collected:• Street address & Cadastre number• Current use(s)• Total floor/land and associated areas• Construction material (e.g. wood, concrete, steel, etc.)• Year of construction Basic infrastructure information to be collected:• Municipality/Region• Type of asset (e.g. water, wastewater, power, etc)• Identification number• Size/capacity (e.g. diameter, height, volume, flow, etc)• Total Length (pipes, transmission lines, roads, etc)• Construction material (e.g. cast iron, steel, wood, etc.)• Year of construction More advanced information• Condition• Current occupancy (i.e. % of usable space occupied)• Inspection date• Construction cost• Annual depreciation amount• Depreciated book value• Combined estimated market value of building & land site • Annual operating and maintenance costs• GIS / digital map of location• Associated assets e.g. manholes, pumping stations, etc

Understanding and Defining Requirements

Qu

esti

on Asset

Management Section

Questions What does this mean/example? Answers(Assessors to complete this column during site visit)

Part 3: Evaluation - Overview

´ Four awareness levels

´Measure progress as a local government gradually increases its asset management capabilities

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Aware

(Level 1)

The municipality is aware of the need for asset management but has not been able to do so.

Basic

(Level 2)

The municipality is aware of the need for asset management and has started to implement some of the activities.

Progressing

(Level 3)

The municipality has implemented all of the asset management activities in at least one of the categories of assets.

Advanced

(Level 4)

The municipality has implemented the asset management activities in all of the categories of assets under its jurisdiction.

Part 3: Evaluation - Overview 18

Aware Basic Progressing Advanced

1 2 3 4

Understanding and Defining Requirements1 Asset Inventory Data The local government understands

the need to collect asset data and may have started to collect it.

Basic physical information (e.g. location, size, type) is recorded manually or electronically in a spread sheet. The date and time of collection, who it was collected by and how is also recorded.

Information is collected electronically. In addition to physical information, information such as replacement costs, approximate age, asset land value, etc is also gathered. Assets are classified by groups, classes, service provided, by holder or a combination thereof.

Complete and accurate data is available for all assets, including new assets. Data is easily accessible to all who require it. There is a high level of confidence in critical asset data. Valuation is based on market value or replacement cost.

2 Asset Performance Asset condition and performance are understood may not be quantified or documented.

Asset condition, use, and/or suitability data and information are gathered and used to monitor asset performance.

Condition and performance information is used to plan maintenance and renewals over the short term.

Condition and performance information is used to estimate future demand and long term needs.

Awareness

Ques

tion Asset

Management Section

Part 3: Evaluation - Scoring and Analysis

´Scoring based on responses´Current score´Target score

´Supported by evidence and rationale

´Summary of Results

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Part 3: Evaluation – Results 20

Part 3: Evaluation – Recommended Interventions

• Recommended interventions• Actions the municipality can take to work towards

target score• Become basis for AMAP

• AMAP Sections …..

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How to Design an Asset Management Action Plan (AMAP)

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Outline

• What is an AMAP?• Step 1: The Asset Management Framework• Step 2: Identifying Stakeholders and Setting

Performance Goals• Step 3: Current AM Practices• Step 4: Gap Analysis• Step 5: Addressing the Gaps

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The Asset Management Action Plan

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Guidancefromdiagnostictool

Your AMAP

• Using your work from Steps 1-4 prepare a draft AMAP for one of your priority assets

• Your AMAP should identify:• Key assumptions and constraints• Concrete actions with timelines• Resources required• Plan for follow up and review

• Be prepared to share your AMAP

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Long-term nature of asset management• Continued mentoring and follow-up important- Benefits

of asset management may take 2-3 years to materialize but is worth the wait!

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Thank you! 27