Implementation of the Government Immovable Asset Management Act, 2007 (GIAMA) National Department of Public Works Presentation to the Select Committee on Public Services 5 June 2012

1. Introduction and Legal Framework The Constitution [Section 44(2)] mandates the National Government to pass legislation for all spheres of government with the purpose (inter alia) of establishing uniformity and setting minimum norms and standards with regard to service delivery. In 2003, Cabinet mandated the Minister of Public Works to develop a policy framework to govern the management of immovable assets throughout Government and to implement that policy by means of legislation. In 2007, the Government Immovable Asset Management Act (GIAMA) was promulgated, applicable to National and Provincial Government only. 2

2. Progress made in the implementation of GIAMA GIAMA came into operation as follows – National Government - 30 April 2009 Provincial Governments - 01 April 2010 National and Provincial stakeholders have finalised the following key guidelines in respect of the strategic management of immovable assets – compilation of user asset management plans (U-AMPs) and custodian asset management plans (C-AMP); confirmation of ownership (“vesting”) of state land; and compilation of immovable asset registers; 3

Progress made in implementation of GIAMA (Continued) Confirmation of ownership (“vesting”) of state-owned properties registered in historical names of National/Provincial Government The National Vesting Master Plan incorporating national and provincial land has been developed and requires all custodians to finalise the vesting of state land by 2014; It is important to note that although the vesting programme has not yet been completed, it does not preclude National and Provincial custodians from populating their asset registers and preparing U-AMPs and C-AMPs. The principle of “deemed custodianship” allows national and provincial custodians to exercise control over all such assets in the interim. 4

3. Immovable Asset Life Cycle Management DPW is finalising a comprehensive Immovable Asset Life Cycle Management Guideline for all custodians. The purpose of this Guideline is to be the first point of reference and a user-friendly tool to assist all Custodians in understanding their roles and responsibilities as defined in GIAMA and the various other guidelines that have been produced. Following the enactment of GIAMA, substantial guidance have been provided regarding the roles and responsibilities of the Custodian and of necessity, also the User. However, the information relating to the Custodian mandate has to date not been recorded in one document.

Immovable Asset Life Cycle Management (Continued)

Immovable Asset Life Cycle Management (Continued) The following sequential process illustrates the activities that are required by GIAMA and what Users and Custodians should perform every year with regard to U-AMPs and C-AMPs - Users determine their service delivery goals and obligations; Users determine their (a) immovable asset requirements to meet their 12 month service delivery obligations; and (b) 3 year strategic immovable asset requirements; Users and Custodians jointly conduct strategic planning processes; Custodians provide their Users with salient information to inform the determination of Users’ immovable asset requirements; Users prepare U-AMPS; Users submit U-AMPS to relevant Treasury and Custodian by the determined dates;

Immovable Asset Life Cycle Management Custodians develop and submit their C-AMP to Treasury, comprising - a portfolio strategy and management plan; a high-level management plan for each immovable asset throughout its lifecycle; a performance assessment of each asset; A condition assessment of each asset (based on thorough condition assessment of all assets at least every 5th year); An assessment of maintenance required and the projected cost of such maintenance activities; and A disposal strategy and management plan. Custodians advise relevant Treasury on U-AMPS received from Users; Relevant Treasury determines and approves the budget for Users in terms of the MTEF; Users revise their U-AMPS in line with the approved budget; and Custodians revise their C-AMPS to align with revised U-AMPS.

4. Implementation of GIAMA in Provincial Government In 2008, the GIAMA Implementation Technical Committee (GITC) consisting of DPW, DRDLR and Provincial custodian departments, was established to guide the implementation of GIAMA in National and Provincial Government. DPW provided basic training to selected staff of all Provincial Departments of Works on the compilation of User Asset Management Plans; DPW also participated (upon request) in workshops held at provincial level to clarify GIAMA processes. The GITC (chaired by DPW) continues to meet quarterly to review progress and address areas of mutual concern. 9

5. Plans towards full implementation The extension of the principles of GIAMA to local government remains a priority for DPW, however, the following needs to be taken into account - There are key differences in the legal framework and structure of local government, compared to national / provincial government; It would be particularly complex to draft a single piece of legislation to apply immovable asset management principles to all spheres of government; A different approach has therefore been identified to apply the principles of GIAMA to local government - 10

Plans towards full implementation (Continued) Municipalities are governed by a specific body of legislation, of which the Local Government: Municipal Systems Act, 2000 (MSA) and the Municipal Finance Management Act, 2003 (MFMA) are most relevant to immovable asset management - The principal strategic planning document of a Municipality is its Integrated Development Plan (IDP). The MSA prescribes a specific process for the compilation of IDPs, which must also be aligned with provincial development plans and national priorities. The MSA also prescribes comprehensive consultation requirements in relation to the compilation of IDPs. 11

Plans towards full implementation (Continued) Alternative 1: Requirements for immovable asset management could be incorporated in either a separate set of regulations issued in terms of the Municipal Systems Act , 2000 or an amendment to the Local Government: Municipal Planning and Performance Management Regulations, 2001 issued in terms of that Act. Such additions / amendments to the aforesaid Regulations would be issued by the Minister of Cooperative Governance. Alternative 2: Specific legislation could be developed, based on the requirements, organisational structure and existing legal framework of local government. 12

Plans towards full implementation (Continued) During consultation with the Department of Cooperative Governance (DCoG) strong support was indicated for Alternative 1, especially in view of the often protracted and costly process to enact new legislation. DPW has completed a comprehensive analysis of the most appropriate legal vehicle to implement uniform immovable asset management principles in local government. DPW will shortly be engaging DCoG on the basis of the aforesaid analysis and will keep the Select Committee informed of progress in this regard. 13

6. Conclusion The implementation of GIAMA has reached a critical stage and the continued commitment of the Executive Authorities and Senior Management in National and Provincial custodian and user departments remains essential. GIAMA affords Government the opportunity to improve service delivery through the enhancement of immovable asset management throughout Government – in particular, through the structured development and annual review of immovable asset management plans to improve the prioritisation and implementation of capital and maintenance programmes. 14