committee in Nairobi City County, excerpts

International experiences show that such a task force or high committee can be an effective tool for overcoming fragmentation of AM within a local government and establishing a consistent, comprehensive countrywide AM system, approaches, and practices (Peteri 2003). The AM directorate should serve as a permanent secretariat of an AM committee, which should be led by a high-ranking county officer and include representatives of the main sectors and units that hold and are responsible for managing substantial volumes of fixed assets and/or have policy-making power. NCC government has adopted a plan and drafted terms of reference for setting up a high-level AM leadership committee (see box 1.6 and appendix D); other counties may emulate these terms of reference for forming AM committees.

Managing municipal enterprises or other subordinated entities Municipal enterprises or other legally independent entities (public utility companies or PUCs) with full or majority county ownership (county corporations and county government–linked corporations) often play important roles in local services in both developed and developing countries, as in Kenya (for example, Nairobi or Kakamega Water Companies, Kajiado Waste Management Company). The critical mistakes local governments in developing countries make in this field include the following:

• Signing short and unclear contracts or failing to sign any specific agreement with PUCs • Assuming that municipal delegates or chairpersons in PUCs’ boards provide sufficient control over these PUCs and ensure proper management of these strategic assets • Poorly measuring investments in PUCs or not measuring investment efficiency at all, or not considering investment alternatives or modalities, because the driving idea of the investment is to form an off-budget entity without considering best forms and modalities • Providing huge capital and/or operating subsidies without measuring and conditioning performance

BOX 1.6

The objective of establishing a high-level asset management leadership committee in Nairobi City County, excerpts

To increase awareness of integrated asset management.

To discuss, approve, and propose for the County Assembly and the governor high-level strategic asset management decisions such as acquisition, disposal, divestiture, or restructuring of assets on strategic nature, size, and value.

To audit and report progress on a regular basis to the governor, the County Assembly, the audit committee, external auditors, and any other committee where necessary.

To fast-track the approval and implementation of the county’s assets management documents such as asset management policy, strategy, plan, and information system, among others.

To establish and approve the performance reporting framework that communicates the status of asset management to all levels of the county.

Source: Excerpted from Nairobi City County draft terms of reference for a high-level asset management committee (see appendix D).