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Asset management key to longevity

WATER IMPORTANCE
The major problem with the current management of water infrastructure is a lack of uniformity

WATER IMPORTANCE The major problem with the current management of water infrastructure is a lack of uniformity

10th October 2014

By: Donna Slater

Features Deputy Editor and Chief Photographer

  

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Managing risk in the water services sector is key to the longevity and cost efficiency of South Africa’s water infrastructure, according to multinational professional services firm Arup.

Risks across the full value chain needs to be considered, including operational, environmental, human resource, financial, technological, social, political and regulatory.

Arup senior engineer Andrew McDonald tells Engineering News that there could be various detrimental impacts if sound risk management is not conducted, which could result in higher operating and maintenance costs, deteriorating service delivery and, ultimately, unhappy customers and stakeholders.

“The only way to understand these issues and their potential impacts is to develop and implement a structured approach to asset management,” he says.

McDonald explains that South African water services organisations, particularly some district and local municipality organi- sations, are struggling to manage their existing infrastructure with large portions of the budget being allocated to the short-term reactive maintenance and repair of assets. “A risk-based approach can help overcome this reactive cycle and allow long-term preventive measures to be implemented,” he says.

Arup, together with the University of Cape Town (UCT) and the Water Research Commission, as partners, is embarking on a two-year-long risk governance study. During this time, research will be conducted into international and local industry best practice and shortfalls to identify how risk governance is integrated throughout water service organi- sations and the business value this can bring. The findings will inform the development of a compendium of best practice case studies and a practical guide to assist these organisations when they implement risk management practices.

The Arup and UCT study will be conducted throughout the country, with the intention being to interview a wide selection of the water services sector, including water boards, and metropolitan, district and local municipalities. Once the study is completed, it is likely that ongoing and follow-up studies will take place to keep the information relevant.

The major problem with the current manage- ment of water infrastructure is a lack of uniformity, McDonald notes. “All the water services organisations in South Africa conduct their various activities in different ways.”

He notes that UK-based water companies were in a similar situation about ten years ago, as many of them were doing things differently, with each company managing its assets in different ways and spending budgets on different things. “This would lead to each company understanding its assets and their associated risks differently and, subsequently, investing differently. The Water Services Regulation Authority, known as Ofwat, realised that companies could not be compared to determine which was providing best value for money, owing to the different approaches, and that a structured and uniform approach was required.”

As an industry, UK water companies and Ofwat collaborated through UK Water Industry Research to create the Common Framework for Capital Maintenance Planning. McDonald notes that this provided an agreed framework and set of approaches for long-term asset management planning. “Central to this document is risk management. Every decision a water company makes, in terms of capital expenditure, is now based on the level of risk it will reduce and the value it will give to customers and stakeholders now and in the future.”

All UK-based water companies now use the Common Framework and perform comprehensive risk-based cost-benefit analyses before any investment decision is made. This has allowed them to better understand asset-related risk and what this means to service delivery, and to select those solutions that balance cost, performance and risk, he continues.

Meanwhile, McDonald says a similar document needs to be developed for the South African water services sector. “South Africa needs a document that will provide a structured risk-based approach to the way water assets are managed in the country.

“The document needs to be relevant to the local context and must be easy to understand and implement. A robust economic regulator is also required, which currently is lacking in South Africa,” he says.

McDonald asserts that South African water services organisations are slowly realising the value that asset management can bring, but notes that many organisations define asset management simply as the procedure of conducting the maintenance of existing infrastructure. “Maintenance forms a small part of what asset management should entail. It is much more than only maintenance – asset manage- ment is the core of what a water services organisation should be doing, including strategy, planning, information management, asset-related decision-making, life cycle activities, people and culture, and, finally, risk management.”

He adds that South Africa lacks a risk framework, such as the one used in the UK, but he believes the introduction of Arup’s study will be the ‘planting of the seed’ for this to begin in South Africa.


Arup will host an internal asset management workshop in Cape Town this month for selected guests who have an interest in water asset management.

Arup Southern Africa water sector leader Andrew Simmans says the major focus of this workshop will be municipalities, water boards, the Department of Water Affairs and other water services sector stakeholders.

“We expect about 30 to 40 people to attend the workshop,” he says.

The workshop schedule will include an interactive session, where international and local specialists and directors from Arup and water sector leaders from South Africa will discuss the future of water asset management in South Africa, what the barriers are and what some of the innovative solutions could be. The workshop will be led by Arup’s innovation and foresight team, who, Simmans says, are renowned for their vision and development of strategies.

It will also provide a platform to brainstorm ideas, taking into account industry challenges and the future prospects and interim objectives to align current procedures with future forecasts.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

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