“I think we just have to see the issue of maintaining infrastructure as a collective issue. And by collective I mean public private partnerships,’ says Bani Kgosana, chief revenue officer at Pragma.
JEREMY MAGGS: A warm welcome to FixSA here on Moneyweb. The idea is to look for real solutions to South Africa’s most urgent challenges. And today, we are addressing the critical state of our public infrastructure, whether it’s water management, public hospitals, or municipal assets. South Africa’s infrastructure backlog affects us all, but local expertise and technology might offer some way forward.
If that happens, we are well on the way to fixing South Africa. And my privilege and pleasure to introduce you to you Bani Kgosana, who is chief revenue officer at Pragma. It’s a South African company that exports its infrastructure management technology to 46 countries I read. Barney a very warm welcome and thanks so much for talking to us. So, let’s dive straight in. In your opinion, in the company’s opinion, what are the most critical infrastructure issues that South Africa needs to fix immediately?
BANI KGOSANA: Jeremy, thanks very much and honored to be on your, your show. In answering your question, I think the lived experience of many South Africans tells you the critical infrastructure that needs to be looked after. I think we’ve just lived through the experience of having an electricity grid, and it’s related infrastructure, that’s not working.
So hopefully we’re on a better road in that respect, but just soon after or around the same time that we were having those electricity infrastructure issues, the topic that is I think top of mind of most people is the water infrastructure that we are experiencing, certainly here in Gauteng, Johannesburg to be specific, but across the country where the infrastructure that is meant to provide us with the water that we need for not just our personal needs, but for industrial needs, is basically not being maintained to the point where almost 40% of the water that we use is going to waste.
I think even if we limited it just to that water infrastructure, there is other infrastructure, like road infrastructure, hospital infrastructure that has a direct impact on each of our lives. Jeremy,
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JEREMY MAGGS: So, let’s focus a little bit on water. And the argument goes that we were so obsessed and focused on the electricity crisis that we had to deal with over the past couple of years that we simply ignored the problems that were creeping up on us as far as water is concerned. And there is a suggestion that the problem is now too big, it’s too insurmountable, it’s even too expensive to fix. Where do you sit on that and how quickly do you think, we can turn things around to make sure that we starting to at least affect the kind of urgent repair that is needed?
BANI KGOSANA: Jeremy, I think we don’t have a choice but to think about ways of fixing our water infrastructure. I mean, as bad as the problem is, we have to find solutions. And as the saying goes, if you have an elephant, you’ve got to eat it one bite at a time. And in the space where I am, as is often said, all issues have three parts to them that you’ve got people side people issues, you’ve either got process issues or you’ve got technology issues.
And I think it’s, it’s a combination of all three that begins to get us closer to the solutions that we’re looking for. From a people point of view, I think there just has to be an understanding of the importance of maintenance. You might think it’s quite obvious that you should understand the importance of maintenance, but when you look at things like water infrastructure, we hardly see accepting maybe for a few water towers around the place.
We hardly see the infrastructure that really brings us water. So, it’s very easy to, as long as the water comes out of the tap, we believe that everything’s okay.
I think it’s the understanding of, firstly, from a people point of view, what do we have as, as water reticulation assets? That’s the first thing that we need to do. I constantly come across organisations that where we go in there to talk about infrastructure and maintenance. And a lot of the time the main issue many people raise is that they actually don’t know the extent of the assets that they’ve got. So I think that’s the first thing that we’d need to, what have we got.
Then do inspections of that infrastructure and then come out with a picture that shows what is the remaining useful life of each of these pieces of infrastructure, and then start attending to the most critical, and then moving backwards, obviously through that infrastructure stack, to the pieces of infrastructure that can last a little bit longer while others are being repaired. It’s exactly the same process that was followed at Eskom and having spoken about knowing, then there’s, there are the processes, and finally of course there are the technologies that we can use to do things like predictive maintenance.
Once we’ve got the base in place, we can put in things like sensors that can tell us that, hey, that piece of pipe work is about to burst because of a certain set of data that we’re getting from our sensors that tell us before it breaks, that it needs to be maintained and looked after.
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JEREMY MAGGS: And Bani, to extend your metaphor then, that elephant that you spoke about, you don’t think it’s dead in the water. You still have a degree of optimism.
BANI KGOSANA: I certainly do Jeremy, and you spoke about the organisation where I am having engagements in over 46 countries. One of those countries is in the Netherlands, where I think both from stories that we heard of a boy sticking his finger into a dam many, many moons ago. The truth is that water is of primary importance to that country and experts whom we work closely with regularly advise water boards in that country about how to look after the resources that and the water management systems in that country.
I’m very confident that through partnership and with the knowledge that we’ve got, we could certainly help the water boards and municipalities in this country to break down the issues that we are currently dealing with and find systematic ways that are well documented on how to repair that infrastructure and get it back into working order.
JEREMY MAGGS: Whether it be water or logistics or whatever the case is. You talk about partnerships, but you will also concede that government doesn’t really have the capacity to maintain its assets. Effectively privatisation it does seem in one way or another, privatisation full or partnership is inevitable, but we’re not moving quick enough in that respect. And the more we prevaricate, the bigger the problem becomes.
BANI KGOSANA: Certainly, and Jeremy, I think we just have to see the issue of maintaining infrastructure as a collective issue. And by collective I mean public private partnerships. That distinction being made between, public and privatising is one that we can, I think begin to, to almost blur, at least certainly in our minds and in the way that we operate.
This notion that government has certain infrastructure that is purely for government must be managed only by employees or people in state owned institutions as distinct from the private sector, is something that I think we need to get rid of.
When electricity, infrastructure, water infrastructure is not operating, it doesn’t care whether you are state institution or you are a private institution, the lights simply go out. So as a result, the finding of the resolutions to the issues that we are looking at has to be a joint responsibility that we in the so-called private sector and public sector tackle together.
I think we just have to see the issue of maintaining infrastructure as a collective issue. And by collective, I mean public private partnerships.
And we have great examples of hospitals of, or where, for instance, there’s Nkosi Albert Luthuli Hospital in, in the KZN Province, where through public private partnerships including with ourselves and the provincial health department, you have a well-run hospital which provides services to everyone, both private and public.
So I think it’s an extension of those pockets of excellence that is really at the heart of any hope we can have of solving some of the seemingly insurmountable problems that we have before us.
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JEREMY MAGGS: Barney, I’m interested in your organisation’s international experience, and let’s pick the Netherlands where your organisation, your company is doing some work in terms of the advisory work that you do, as well as the recommendations that you make. What specific difficulties has a country like that in terms of infrastructure management had to deal with, and is there a unique way in which they have solved things that we could learn from?
BANI KGOSANA: The unique issues, Jeremy, that the Netherlands faces, sit around the fact that they’re a very low-lying nation, and so as opposed to probably having too little water like us they potentially have too much, and so they have to make sure that they manage all of their water systems in a way that doesn’t result in runaway flooding of low lying areas. So as a result of that, much of what we do in the form of advice is really follow, well established, and in this case, ISO 55000 thousand, which is, which is an international standard around the, the maintenance of any form of asset intensive industry.
So, one of our flagship engagements is very much an assessment of the maturity of the processes. Again, the people, the processes and the tech technologies that different water boards have within the sphere of influence.
And out of that assessment comes a report which tells you where you are on a scale of, well, we assess about 20 items. And, and from there come out with an indicator of whether your maturity level ranges from what we call a firefighter level, where you are basically putting out fires as they erupt through to excellence, where across the board, your processes, your systems and procedures of looking after your infrastructure are following a well-documented process.
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Foundational knowledge
So again, it’s about repeating those, make sure that the foundational knowledge needed for knowing how to look after your assets is in place, then implement processes in line with that foundational knowledge, and then only does the technology that we often talk about come into play.
Technology on its own isn’t a strategy as Tim Collins in his book, Good to Great one said, it’s an enabler of already implemented processes and procedures. And if we can adopt those in South Africa, get that culture of being aware of the importance of, well, firstly what we have, how to look after it, have the processes that would result in keeping that equipment in good working order, and then have technology to accelerate the ability to monitor and maintain in reliable working condition that equipment. That’s very much what I’m talking about.
JEREMY MAGGS: Talking about, and in an ideal world, Bani, that is absolutely on point, but you’ve used the word maturity, you’ve also used the phrase foundational knowledge, and it’s the institutional knowledge, the foundational knowledge that often is lacking in South Africa. And that is a huge impediment.
BANI KGOSANA: Absolutely. And it is a pity, yet as we’ve often also heard that as much as we can say that the knowledge is lacking, it might be lacking in the, I suppose, the currently employed people in a number of institutions, but that knowledge is still around in, in the country. It may be in older grayer people like myself and others, but I think those, a lot of those people are in, in great shape, great health. We use them regularly in the academy that we run.
We will call either former chief engineers of many of the state institutions, university professors, many of whom are quite willing to come through and run public courses on online platforms for the public or customised ones for private organisations that want something that is slightly more customised for their needs. So the point I’m making is that the knowledge is actually still there.
It’s in many, many heads and it’s available and we have the platforms and technologies across the world, even if they’re not in our own country we can go and get them from wherever they are. So, I don’t think that’s enough of a reason to, to throw our hands up in the air and say, we’ve got to give up or anything of that nature.
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JEREMY MAGGS: Nature. Yes, and again, I completely agree with you, but often, practically there is a reticence to do that.
BANI KGOSANA: And it’s unfortunate there that’s the case particularly in the public sector because Jeremy, if you think about it, the primary function of state-owned corporations is to provide and make available the fixed assets that they have under the responsibility and control. If you think about the port infrastructure, the rail infrastructure, the pipeline infrastructure, the road infrastructure, all of those are nothing else but assets. So without becoming political, I would say government’s fundamental job is enterprise asset management. And I think if that penny can land, then I think everyone would then wake up and say, what are the fixed assets that we have under our responsibility and control? How can we make sure that they’re ready and available? And if we don’t know how to do it, where can we learn to do so?
And I learned that at an organisation where I was doing some work at Transnet, they have over R300 billion worth of assets Jeremy across their portfolio. It’s an enormous number. And making sure that they’re maintained well just simply extends the working life or what we call the remaining useful life of those assets. And at the points where, like Eskom they need to start considering transitions to greener forms of technology by maintaining what you have right now, well, allows you also to be able to save the money or accumulate the money or go out to markets to get monies to enable those transitions.
JEREMY MAGGS: All right let’s assume then, and I want to continue with this line of conversation. Let’s assume that I gave you for a day or two the keys to the ministry. What would a nationwide asset maintenance strategy look like? And perhaps more important, and we haven’t even started talking about this, how would it be funded?
BANI KGOSANA: Well, a maintenance strategy would begin by, I suppose almost whether we use a lot of the unemployed youth that we have supposedly hanging around on street corners and everywhere, get them out into the field to go and what we call identify and verify that the assets that we have are in fact the assets that we have, do that across municipalities, do that across state owned corporations, and get reliable lists of the assets that we have, classify all of those assets into the different asset types, and then put what we call maintenance schedules against each of those.
It sounds like a very basic and fundamental process, but it’s what we would do if we bought a new house or we bought a new factory first find out, and I mentioned the issue of the youth because exercises like that, whether you saw it in Europe soon after the Second World War where massive projects were put in place, labour absorbing projects were put in place.
This is the type of almost Marshall plan mentality that I would almost channel in trying to resolve this type of issue.
Then in terms of cost, I certainly see a case of where once you’ve got an identification of the state of your asset base, you can then identify which critical parts, going back to the analogy of the elephant, which critical parts actually need immediate action. And again, in South Africa, we have the benefit of having fairly deep funding pools, local funding pools, whether they be through our banks and commercial funding entities that through public private partnerships, can then begin identifying key projects that would bring the highest level of benefit and return both to them, maybe from a financial point of view, but then also to the public in terms of the ability of people either to use roads, electricity, infrastructure, water infrastructure, and then systematically work through a process of fixing the immediately broken pieces until you get to a point where a critical mass of your infrastructure is actually working well.
And then you can then talk about replacing that infrastructure may be with the next generation type of infrastructure, which as we know can probably be AI or machine learning enabled, which should then lead you to a predictive maintenance type of future where well before things break, you fix them, and then you don’t hopefully have to do this exercise again.
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JEREMY MAGGS: And you’ll agree with me that your argument is predicated on better coordination between national and local government in maintaining assets, and therein is a potential logjam.
BANI KGOSANA: Absolutely. There’s no doubt that all three spheres of government, local, provincial, and national have to work together with the private sector to make any of these visions possible. And in terms of log jam, certainly I think there has to be a revisit particularly of a lot of the procurement processes that organisations run into when they attempt to provide services to any one of the spheres of government, including state-owned corporations.
You can go onto the e-tender portal as we do almost daily. You’ll find no shortage of RFPs, RFQ, RFI’s that are out there. But if through our experience you go and see how long it takes to move from a point of RFP issue to RFP adjudication, to implementation of the project, I won’t lie. If I had to depend completely on public sector for, you know, I suppose the revenues that our organistion generates, I’m sad to say it probably starve to death. And so there has to be a speeding up of those processes.
Often, they ask for 120 days for the adjudication, it’s not unusual to six to nine months later still find yourself filling in extensions of validity forms endlessly. And you’re wondering, but if you needed this either advice or solution as much as six months ago, how come nine months later you still haven’t made that decision.
JEREMY MAGGS: Just a final question in what has been a fascinating conversation. You’ve put a lot of good ideas on the table, but how in the short term do you measure success in the infrastructure fix? And what metrics would you need to adopt
BANI KGOSANA In this space? Jeremy, there are very well-established metrics. A simple one that I can think about is once you know all of the equipment that you have and you then have it, ideally on a digital platform similar to one that we’ve built ourselves, you can then start measuring things like what is the mean time to repair of equipment? What is the mean time between failures and on and on? These are well-established metrics.
What they tell you is if a piece of equipment continuously fails outside of a given set of thresholds that you can set, then it is an indication that piece of equipment probably needs to be replaced or if you can even get more granular data like which components on that piece of equipment are failing, you can see to it that you, you go in there and with a high level of precision, go in there and either replace that motor or a washer or whatever it is that’s failing, and that way then not get to a point where the entire thing has collapsed and then you have to replace the entire either transformer or pumphouse, et cetera.
So gathering data is at the heart of making sure that you can actually fix the correct problem in the right piece of equipment. Often, by the way, Jeremy, at the cost of the original equipment manufacturer, because you have the information that this piece of equipment is actually still under warranty, you’ll be amazed how much expenses incurred unnecessary expenses incurred because people didn’t know that a piece of equipment is still under warranty and that they shouldn’t actually have somebody else or they should actually have the equipment manufacturer come and fix it, not have somebody come and replace it.
So maybe there’s a short answer data, data, data, get the information onto the digital platforms that are pervasive in the world and that are available locally and internationally, and then start using that data to make what the famously used term data-driven decisions around how to look after your in infrastructure and maintain it in good working order.
JEREMY MAGGS: I appreciate your time. I also appreciate your thoughts. Bani Kgosana, chief revenue officer at Pragma, thank you so much for joining me on this edition of FixSA right here on Moneyweb.
This article was republished from Moneyweb. Read the original here.
