D.M. Grant, am,
Surveyor-General’s Department
Land Information Centre
Bathurst, New South Wales 2795, Australia
grantd@lic.gov.au
&
W.A. Robertson
Bill Robertson & Associates Ltd
PO Box 50735, Porirua, New Zealand
billrobertson@xtra.co.nz
ABSTRACT
This paper reviews the recent experience of the geographic information industry in relation to costing and commercialisation, particularly in New Zealand and Australia. Cost recovery initiatives and partnerships between the public and private sectors have occurred as the industry has been transformed through the advent of new technology and as it has experienced a boom in client and community applications of digital information. New Zealand and Australia have both undergone major economic restructuring, and have experienced a heavy reduction in public expenditure to develop the national spatial infrastructure. The results of this experience have provided important lessons in relation to: the long term strategy for developing self sufficiency; the role of user pays; the distinction between the core data required to be readily available for growth and development; and the added value, thematic and derived geographic information which can fuel the development of a local geographic industry. An important lesson has been how to apply transitional changes to advance long term capacity building. This can assist the change from traditional forms of organisation, financing, and products to those appropriate to the new digital environment in an incremental and managed strategy. There is also reference to the longer term organisational forms which more effectively serve government and commercial responsibilities and functions that develop as traditional spatial data systems evolve to a new maturity in the automated and digital environment. This includes developments such as contracting out, co-operative ventures and other appropriate techniques and mechanisms which contribute to the development and role of the land surveying, title and spatial information industry in the decades ahead.
INTRODUCTION
Funding and charging for land surveying services and data continues to be a topical subject. It is the focus of FIG discussion in relation to the economic implications within government and in the wider economy for the provision of security of title and the delivery of reliable spatial information. Internationally, the situation regarding cost recovery and privatisation in cadastral activities is highly variable. Different jurisdictions have different levels of accountability for expenditure, and widely different cost recovery policies. Policies vary from low level charges to charges several times in excess of cost. This latter situation is of concern, for where charges are clearly in excess of costs, the surplus constitutes a form of tax. Without parliamentary authority these charges may be illegal and subject to future challenge and criticism.
The traditional role of government funding is still a common and major component in most countries around the world. However, this traditional model is increasingly being impacted upon, by the effects of both new technology and financial stringency in government financial allocations. The extent of these impacts depends on the national economic environment, the stage of development and the policy direction and commitment of particular governments in relation to their fiscal policies. Like other previously traditional government functions, the issue of microeconomic reform is equally relevant to the funding of cadastral activities. We believe that it is reasonable to suggest that cost recovery trends are an important indicator of the direction of the geomatics industry and that their sound development will be a key component of the realisation of an effective cadastral vision. However, with regard to the cadastre, we conclude from the current industry data that, internationally, the application of cost recovery and cost benefit analysis is generally at an immature stage, lacking a sound basis for the immediate development of alternative funding options of user pays or user levies.
BACKGROUND
Historically, it has been recognised that the State has a responsibility for the provision of fundamental cadastral mapping. This includes the geodetic network which provides the rigour and reference framework necessary to provide the relationship between land parcels throughout a jurisdiction. With economic growth, developing countries establish jurisdictional responsibilities and traditional organisational systems for the cadastre. Developed countries, on the other hand, are faced with competing social demands in education, health and welfare. This is often combined with an ageing population and a demand for smaller government and fewer taxes. This competition for government funds leads to the questioning of all government activity, especially those of a traditional nature that do not attract high public priority. Governments are reacting to different social demands and are being forced to explore other avenues of funding for what has traditionally been seen as government activity. The cadastre and the provision of spatial information has not escaped attention. Internationally, terms such as cost recovery, corporatisation, commercialisation and privatisation are common.
International aid organisations have not been slow to identify the role of the cadastre in facilitating an efficient land and property market and have supported an increasing number of land survey and titling projects in developing nations. The demands of the international economic community for freeing up national economies and international markets reinforce the emphasis on the development of sound cadastral systems to support an efficient land and property market component. Although significant international funding has been made available, it is unlikely in the long term that traditional funding mechanisms will satisfy the escalating demands for reform and automation. International grants and loans generally take the form of initial capital or development expenditure. Often the host country needs to identify supplementary funding to meet necessary adjustments to the size and scope of the initial project and to fund ongoing maintenance costs for hardware, software, training and embedding the project results in regular operational activity.
It is widely accepted that countries managing change to their social, economic and structural fabric will require efficient cadastral and land information systems to support sustainable development. The issue of funding must be resolved and proactive systems developed to meet changing government needs. New approaches have been pioneered to provide alternative and additional funding beyond the general direct taxation base. Evidence of this trend is to be found in what previously was seen as public service utilities, such as water and power supply and the treatment of sewage. Similarly, the cadastral system will need to find alternative funding sources to meet the shortfall that could potentially arise due to cutbacks in future government funding. It is relevant to note that a brief survey was taken of delegates from mainly the Asean Region at the Cadastral Conference at Bogor in 1996. Delegates from 15 countries were asked to list the three most important reasons for cadastral reform in their countries. Of the fifteen countries represented, over half listed costs or efficiency as a key reason driving the cadastral reforms in their particular country.
The development of alternative funding formulae is part of a general trend in relation to government expenditure on lower profile and longer term government activity. Although it is a challenge, it does provide a valuable opportunity to re-evaluate the role of the market and the contribution of the private sector in developing and fully automating the modern cadastre.
GENERAL TRENDS
"There has been a noticeable tension in government policy between the pressure on government agencies to be more commercial and the restrictions placed on their participation in the provision of value added products and services. Conflict has also arisen in some areas between financial objectives set for government information providers and the pressure of greater openness in the provision of information" (Ordnance Survey, 1996).
Until recently, all functions relating to the management of our natural resources were seen as an inalienable responsibility of government. Internationally, recent developments have challenged this traditional assumption, with a resultant re-evaluation of how governments conduct their business. One popular opinion is that a competitive marketplace, rather than political directives, will result in a more economic use of resources. To address these issues, governments have introduced major reforms to improve management practices and economic performance in the public sector. In general terms, these reforms have included:
These reforms were aimed at removing potential conflicts of interest within the public sector and attempted to depoliticise the provision of government services. The aim was to improve efficiency through the improved management of costs and an increased management focus. Community welfare was promoted with community subsidies made transparent but the subsequent taboo of cross subsidisation ignored regional and community pain.
Modern public sector organisations are no longer the stable bureaucratic, inefficient and slow changing organisations of the past. The advent of global competition has meant that governments have had to introduce rapid, and often painful strategies to improve public sector performance. These intervention policies have included user pays, funder/provider, corporatisation, privatisation, competitive neutrality and service competition. Within the public sector survey and mapping organisations, issues such as data infrastructure, standards, data quality, custodianship and management reform have been linked with these micro economic reform initiatives.
THE ANTIPODEAN SITUATION
New Zealand
In New Zealand, the organisation and funding of national survey is not typical of other international survey organisations. Within New Zealand there has been significant restructuring carried out in an environment of reduced government funding for survey and mapping functions. Consequently, the New Zealand model is not necessarily transportable. However, it does provide an opportunity to study funding directions and opportunities and to define essential government land surveying responsibilities, for the decades ahead.
New Zealand has an active private surveying sector which now carries out all of the cadastral survey activity. Central Government has diminished to a residual activity of administering the systems, and regulating and monitoring land surveying and title activity to ensure Central Government outputs and outcomes are consistently achieved. This core Government role is aimed at providing an adequate national spatial digital infrastructure while enhanced services and products are provided by the private sector in response to market demands or opportunities.
Over the last decade, New Zealand has experienced the gamut of funding formulae. Until 1986, the funding of the cadastre was the traditional mixture of full funding for the survey control system, including management and updating of records with small charges for copies and services. Historically, these charges for land registration actions only closely approximated annual operational costs. The requirement in 1987 for the Department of Survey and Land Information to incrementally move towards high levels of total cost recovery had a profound effect on the traditional funding model.
Under this model it was necessary to identify and justify core public good activities for limited and specific crown funding. Other client specific services attracted a charge. As the survey system clearly supports the efficiency and integrity of cadastral activity, a successful case was made for a levy to be applied to all land transfers. The rationale for this was that the national spatial infrastructure was seen as providing a high degree of security in dealings in land and property which could be recognised and funded through a levy at the time of change of ownership. This provided an annual fund sufficient for the support of the costs of all survey system activities which contributed to the integrity and efficiency of the transfer of land parcels. By 1996, the Department of Survey & Land Information had a well developed combined funding formulae consisting of fees and charges for individual services and products. As well, a specified Crown funding appropriation was provided for public good items such as geodetic datum, control and maintenance. In addition, the levy system on land transfer funded survey activities contributed to the definition of parcels used in the registration process. This levy was separate from the fees or charges for specific services as it was a general levy at the time of a change of ownership, for a group of cadastral survey activities that were not readily able to be dis-aggregated at an earlier stage in the service, where standard user pays systems are normally applied.
As could be expected, by this time the Department of Survey and Land Information had become a mixed model of semi-commercial and public good surveying and mapping activities. During the cost recovery phase, both the Department and the cadastral market had matured and benefited significantly from the testing experience of a decade of cost recovery. In addition, the Lands and Deeds Division of the Ministry of Justice had been merged into the Department of Survey and Land Information setting the scene for the full integration of survey and title functions. Cost recovery proved an effective tool for introducing self motivated efficiencies into public sector land surveying and title operations and exposed staff to the needs and feedback of their clients. It also gave an improved understanding and identification of those products and services which were of a commercial nature and were marginally, or not at all, a public good. Although, the combination of commercial activity, public good provision and national administration and regulation was being managed satisfactorily, the potential for conflicts of interest and longer term inefficiencies were perceived in some quarters. By 1996, the time had come for a further restructuring of government survey and mapping activities to reflect clearer perceptions of the role of a modern surveying and land information government department and to take advantage of developing technology and the maturing New Zealand market. Commercial activities and 25% of staff, were transferred into a commercial, government State Owned Enterprise, named Terralink. The remainder of the department was re-focused and re-named Land Information New Zealand (LINZ). The allocation of functions to LINZ was governed by a disciplined analysis of appropriate government functions in the current economic environment. The government role of providing only for the public good and administering and regulating the national and international systems was paramount.
This direction has reaffirmed the role of the New Zealand Government in the administration, regulation, monitoring and assurance of core cadastral activity. The role is that of monitoring and collecting, recording and managing only the information required for core government land property rights responsibilities. This is strictly observed so that the transformation of digital core data to a different digital format is seen as an added value function and is now in the domain of commercial providers.
Concurrently, a review of all production or routine operational activities was undertaken to identify those activities suitable for contracting out to appropriate private sector providers. A revised funding approach was required. Those functions now identified as fundamental government requirements could justify some traditional Crown appropriation with any revenue being directed immediately into the governments consolidated fund. Good in theory. However, putting it into practice is hampered by the reality that substituting revenue from external sources is extremely difficult in a time of continued reduction in government funding. To some degree, the principle has been applied in relation to the Digital Cadastral Data Base (DCDB). An appropriation is made for the annual capital costs of the DCDB with revenue from the sales of digital cadastral data returned directly to the Consolidated Fund of Central Governmental. This is only a partial re-application of the traditional model as the land transfer levy funds a major proportion of digital cadastral activity and the digital topographical mapping base is still subsidised from sales of topographical information.
With the restructuring and the redefining of departmental functions and the identification of a specific core of public good, a funding basis more comparable to the traditional government funding model now applies with the more commercial activities transferred to Terralink. Nevertheless, the legacy from cost recovery is that LINZ still has mixed funding sources. The restructuring has limited production activities with many now delivered through contracting out. The theory is that where these are well managed and there is a competitive market, the value for money spent on contracting out is markedly superior to that of in-house production. However, the confirmation of these conditions will take time to establish and the comparative analysis of the efficiencies of contracting out over in-house production is yet to be undertaken.
LINZ is now well positioned to undertake the integrated automation of core survey and land title processing and records, and has approval to proceed with this automation project over the next three years. In the short term, funding for this will come from an increased levy on land transfers with the efficiencies of automation enabling a reduction in total land transfer fees once the automation is operational and the crown has received a return on investment. Thus, even in the current environment, the levy system has been preferred to the appropriation model indicating Governments wish to avoid and contain risk in its core activities and make individual sectors fund their particular automation without direct taxation funding.
In essence, the decade of cost recovery in New Zealand has been a transitional stage. It has enabled the testing of techniques, the exposure of Departmental services and products to the marketplace, the building of management and technological capacity and infrastructure, and market awareness and profile so as to enable a further evolution of government organisation. The stripping of traditional activity from the Department has led to a stronger focus on its core cadastral business and a more robust and durable funding base.
The New Zealand government policy on cadastral and land or geographic information is encompassed in its general policy framework for government held information. The outcomes for all government held information include a contribution to the effective participation of the people of New Zealand in the making and administration of laws and policies, to provide clear accountability of government and officials, to give confidence in the integrity of government and public decision making, to reduce the cost of government processes, and to support the efficient and effective management of government operations.
Free dissemination of information is deemed appropriate where a target audience is desirable for a public policy purpose, or a charge to recover the cost of dissemination is not feasible or cost-effective. Pricing to recover the cost of dissemination is deemed appropriate where there is no public policy reason to disseminate information and a charge is both feasible and cost-effective. Pricing to recover full costs of information production and dissemination is deemed appropriate where, the information is created for commercial purpose of sale at a profit and to do so would not breach the other pricing principles. Other principles also to be observed relate to availability, coverage, ownership, stewardship, collection, copyright, preservation quality and integrity.
Although the pricing policies enable the recovery of full costs of information production and dissemination, their application signals the grounds for private sector partnership, with government departments providing the raw core data and transformation and added value products being provided by commercial companies. By its restructuring policy and the policy framework for government held information, New Zealand has taken a strong position on the definition and strict limits of the role of government in cadastral activities and information and geographic information generally.
Australia
The last decade has seen intense economic reform of the Australian Public Sector, bringing about fundamental shifts in the way that government services are provided to the community. A similar path to that taken by New Zealand has been pursued. The adoption of the user pays philosophy saw a review of those government services that attracted a full subsidy and those that were subject to a direct community contribution. Some services were discontinued and others that were previously free attracted a direct charge. While this review was uncomfortable for both providers and recipients, it was conducted out of necessity, for government activity in Australia accounted for one third of Gross Domestic Product (GDP).
The public sector mapping and survey activities were not isolated from the user pays philosophy. In the past, special purpose mapping had been provided to government agencies "free of charge". At times these services extended to large private sector developments. Similarly survey control had been established for government agencies and in support of large private sector developments, at no charge. Other value added services were provided to the community and were often seen as desirable and valuable. However, the problem was that often these services were provided by cross subsidisation of the core, tax payer funded, activities. In times of tight government fiscal management the true cost of core activities was easily underestimated and net funded organisations found themselves dependant on value added or quasi-commercial activities for survival. It followed that the emphasis shifted with both focus and effort on these somewhat marginal activities, often at the expense of core activities. A new mechanism was needed to ease the conflict between public good versus value added.
The funder provider model was introduced to remove the uncertainty of organisations caught in the conflict of pursuit of revenue or the provision of public good services. The funder, usually a small group of policy and contract administration staff interpreted Government policy and set out the program of required goods and services. This group then purchased the specified level of product or service from the providers or suppliers. The model allowed both parties to have clarity as to the deliverable and the price. The funder knew exactly the level of service that it would receive and knew the total cost of the service. The provider knew exactly what level and type of services were required and exactly what budget was to be made available to achieve this outcome.
Understandably, the negotiations between the funder and provider on how much service for what budget introduced a healthy tension which was aimed at improving overall efficiency into the service delivery. Unfortunately, the fact that both the funders and providers usually came from the former combined agency and usually had limited skills in contract negotiation, sometimes led to less than optimal solutions. Indeed it also produced, in some instances, the absurd situation of public servants negotiating in a make believe business environment resulting in little net state benefit.
A further refinement was required if the overall microeconomic reform process was to deliver in terms of increased efficiency in the public sector. This refinement came in the form of competitive neutrality which grew out of a 1993 Report to Governments by Professor Hilmer on National Competition Policy. This report focused on the following restructuring principles:
In simple terms, this set a framework adopted by the Council of Australian Governments (COAG) to ensure that a fair and open competitive playing field could be established. It brought forward the question of why should public sector agencies be the only organisations allowed to compete for government funded service provision?
Once it was established that there was, in most cases, no reason for government services to be provided by public sector organisations, the question of competitive neutrality came into play. Public sector organisations have certain advantages over their potential private sector competitors, taxation and risk free borrowing rates to name just two. On the other hand, the private sector has some inherent advantages over the public sector. These include more flexible employment conditions. These inherent inequities between the public and private sector are removed under the competitive neutrality regime. For example, imputed taxes are introduced into the equation for public sector organisations and are paid to the Treasury as part of a dividend in an attempt to remove this particular advantage of taxation. The major thrust of this refinement was aimed at organisations who were competing unfairly for the provision of services in a potential or existing market. To gain efficiency across all aspects of service delivery, one additional element had to be introduced. This has happened in NSW (and some other jurisdictions) and is referred to as Service Competition.
This strategy is aimed at improving the overall efficiency and effectiveness of the public sector. In Memorandum 97-24 from the Premier of NSW, the Hon Bob Carr, the following statement was made:
"Managers are required to:
For the first time public sector managers were required to introduce competitive pressures into the core activities of Government. Also, where this competitive pressure does not realise substantial improvements in efficiency and quality of service, the invitation to external competitive bids must be considered. This final piece of the puzzle (for the moment), will ensure that the combination of user pays, funder/provider, competitive neutrality and service competition will bring about the efficiency outcomes in the public sector that have been sought over the past decade through microeconomic reform.
INTERNATIONAL COMPARISONS
A very useful survey of ‘Cost Recovery and Privatisation’ was undertaken by Working Group 7.1 of Commission VII of FIG, for the Cadastre. Responses were received from some 53 countries providing key-indicators on the state of many national cadastres and the costing regimes now applying. It shows that in some countries such as the Netherlands, Denmark, Australia and New Zealand, the private sector plays a major part in the operation of the national cadastre. In these countries, the charge rates and fees are in the order of 100% cost recovery. However, a low level of financing for land survey and title systems is a concern in many jurisdictions and this is leading to widespread discussion and interest in alternative sources of funding, leaner management, privatisation, marketing and cost recovery.
A second survey was conducted by Commission VII, Working Group 7.2 on Cadastral Projects in developing countries. The results were reported to the Symposium on Cadastral Systems in Developing Countries in Penang in May, 1997, by Osterberg. This survey assessed the responses from 32 countries, including 26 developing countries. The projects varied greatly from those involving a small percentage of the total parcels of a country through to full coverage in about one third of the responses. About one third of the respondents relied on their government for 100% of the funding, with the remainder varying between some or no government funding combined with funds from donor organisations or loans from financial institutions. With regard to the question of expected benefits of the reform arising from the projects, the responses indicate that comparatively speaking, very little serious work has been undertaken on the cost benefits of the cadastral projects or the resulting reforms. Most responses indicate that the documentation of expected benefits has been neglected or assumed to generally apply. However, eight responses provided a range of cost benefit ratios in the order of 1:4 and 1:3 but with figures of 1:7 and 1:0.5 being advised.
SIGNIFICANT FACTORS
Throughout this change of environment, circumstances, a sharper perception of the effective role of central government and a more skeletal and focused definition of the public good element of land surveying is emerging. The data needed for the government responsibility in supporting property rights, although jurisdictional in coverage, is highly specific and limited. The core data is in a raw form and some governments are seeing no justification in incurring the costs of any further data transformation. Thus, in those circumstances, the activity of transforming or making added value products or services is becoming entirely a matter for the commercial market to identify and exploit. This in turn depends on the stage and rate of development of the market in digital spatial and land related information. The definition of public good in surveying and land information can be expected to condense as the land surveying and title systems become more complete and are fully automated.
Up until now, it has generally been accepted that the state has a responsibility for direct funding of the provision of the spatial infrastructure which provides fundamental referencing or data sets. This infrastructure includes: policy and standards; the geodetic network; the cadastral network; and fundamental data sets. This spatial infrastructure has been provided from general taxation on the basis that it plays a major role in the foundation of national growth. The funding of the land registration on the other hand has taken advantage of the ability to charge fees to individuals for transactions of documents and has a history of a retrieval of significant costs. The trend in integration of survey and title activities has been noted in the FIG Commission VII ‘Statements on Cadastre 2014’. It states that the separation between ‘maps’ and ‘registers’ will be abolished with consequential serious changes in responsibility between surveyor and solicitor. It is equally apparent that there will be an amalgamation of charging systems such that single charges reflect the costs of both survey and title processing. The levy system now operating in New Zealand is a forerunner of this joint approach to charging. It should be noted that emerging technology for the dissemination of digital spatial data may remove any necessity to merge organisations. In fact, the facility to distribute data in an integrated form may well create smaller government units. To the client, the source of the data will be unimportant and the delivery will obscure any organisational framework.
LONG TERM IMPLICATIONS
The Vision Statement on the Cadastre 2014 developed in Commission VII, Working Group 7.1 of FIG, has foreshadowed that by 2014, the cadastre will be largely privatised and the private sector will be working closely with the public sector. The private sector will continue to gain in importance with the public sector, as a general rule, concentrating on an overarching supervising and regulatory role. The reasoning behind this view is that free and internationally competing economies will demand optimum flexibility in land markets, land planning and land use. That flexibility is seen to be better provided by private institutions as public systems are seen to be less flexible and customer oriented or responsive. This Vision Statement for the cadastre states that in 2014 the cadastre is expected to be operating on a fully cost recoverable basis. Although cadastral systems need big investments, the land resource they service is highly valuable and the benefits that are derived from the cadastral system are of high order. Thus, it is reasonable and feasible for the identifiable costs to be paid for by the land owners or users. Such charging needs to be simply and clearly justified, and cost benefit analysis, economic, accounting and marketing knowledge and skills will be very important for surveyors undertaking cadastral operations in the future.
Jurisdictional organisations responsible for land surveying and mapping will inevitably evolve from an in-house production role to a planning, contracting management and monitoring role. This role will be subject to further change as the traditional goal of jurisdictional coverage is achieved through the aggregate results of a wide range of public and private sector initiatives. The central government role will develop into an oversight, standard setting, and hands off regulatory role. The skeletal nature of this administrative and regulatory role will be emphasised by the effects of automation on both the survey and the registration processes. This will provide further scope for contracting out with strong but less visible government assurance. More and more the customer will deal with private sector providers and be unaware of the government regulatory and standards assurance underpinning the spatial infrastructure and associated processes.
From a survey conducted by Stuedler between 1995-97, as published in the paper by Steudler et al (1997), it was concluded that current service levels in countries across the world show considerable room for improvement. Figures B5 & B6 of the paper provide the time, in days, to subdivide land and to transfer land respectively for the 53 respondent countries. The average of 120 days, with an extreme for one country of 360 days, indicates that generally the subdivision times are out of terms with the expectations of modern commerce, irrespective of whether trade is in commodities or land and property. However, there are at least seven countries which have a maximum time of no greater than 25 days for subdivision. The performance of these countries indicate that a major improvement in time can be aspired to by all countries in the current circumstances. With full automation of survey processes and data bases, it is reasonable to target survey times of real time minimal with 1 day maximum. As is to be expected, the time in days to transfer land is considerably better with an average of 46 days and an extreme for one country of 270 days. A small number of countries are demonstrating a good level of performance with 10 countries having a maximum time of under 10 days setting a standard that other countries could also achieve with the necessary effort and reform. Again the introduction of automation of processes and data bases could result in a major reduction in time with real time minimum being a one hour maximum.
Results from the survey presented in the section Cost Recovery Aspects (Steudler et al, 1997) are, of course, limited by the way respondents interpreted questions and how they identified these costs. Nevertheless, there are some important initial lessons to be gleaned from the material provided. Firstly, it is not clear how good comparisons are when there is doubt about the consistency and completeness of individual jurisdictional returns. This is significant as it tells us that, for the cadastre, the estimation and even knowledge of costs is somewhat capricious and certainly not well established and reliable for international comparison. This indicates that, in many cases, we have yet to reach square one in costing the cadastre. Until we, as an international community, consistently document all costs of our survey and title processing we are seriously disadvantaged in developing cost effective alternatives. We need to know the true cost of our various cadastres and the constituent components of them. However, even allowing for the lack of consistent calculation of costs, the figures provide some useful indicative evidence for individual countries and for the wider international cadastral scene. There is clearly some 20% of countries throwing the figures high and raising the question of why this tranche of countries vary so much from others and what steps can be taken to effect improvements. Even with the remaining countries there is significant variation signalling that a major closing of the gap is possible and would yield significant benefits. The conclusion from the information shown in the benchmarking paper can be made that costing and cost benefit analysis are not being applied to any significant degree in relation to the cadastre. This would suggest that the industry is neither well positioned to handle the scrutiny of government funding for the cadastre, nor able to develop alternative reliable funding sources. A prerequisite is that existing costs be known, benefits be soundly and convincingly demonstrated and the basis for any alternative means of funding be well established and promulgated to those influential in deciding on new sources of funding.
The evidence provided here is that the processing of survey and title is lagging woefully behind the growing expectations of an automated and demanding commercial community. Indeed, the inefficiency of the above response times impose significant costs, and a rapid improvement in efficiency will result in a major competitive advantage in the development of the land and property market of the country concerned. Considered in relation to loan conditions, interest rates and the volatility of currency rates, the majority of countries performance in the processing of survey and title is already below requirements of modern economies. The situation in a few countries is already too slow for the market to tolerate and the land transfer system is being bypassed through the use of companies to enable surrogate subdivision of land and property. The figures provided by Steudler et al (1997) demonstrate that a majority of countries are not coping with current expectations and needs. Inevitably, this lack of performance will precipitate aberrations such as that referred to above, leading to, in some instances, an informal process of land ownership.
When we project the future demands on the cadastre, a breakdown of the survey and title systems can be predicted if there is not major improvement and reform. Already a steady increase in survey approvals and title registrations are being experienced, demanding improved performance year by year just to maintain current standards. In developing countries, the projected rapid rates of urbanisation and the acceleration in the expansion of major cities will place existing survey and title systems under intolerable pressure. If this is not foreseen and planned for, the demand will simply swamp already inadequate systems and lead to the introduction of less reliable but faster alternatives. Recent experiences in South and North Africa and in Latin America well demonstrate the demand that can arise and highlights the need for an effective and appropriate national cadastral system to meet the demands of an increasing proportion of land and property users.
The key to evolving or reforming present cadastral systems to cope with future demands is the provision of resources to invest in and manage high performance modern systems. In the current environment, the likelihood of increasing or even holding current government expenditures in the long term is not realistic. Thus, the subject of cost recovery, privatisation and our experience in testing various funding formulae is going to be crucial to the successful development and maintenance of the cadastre in the future.
Jurisdictional organisations responsible for land surveying and mapping are likely to evolve from an in-house production role to a planning, contracting, management and monitoring role. This role will be subject to further change as the traditional goal of national coverage becomes the result of the aggregate of a wide range of public and private sector initiatives. The central government role will develop into an oversight, standard setting, and hands off regulatory role.
SUMMARY
The international cadastral industry is now at the cross-roads. Its traditional techniques and funding formulae face reform from new technology and changes in the expectations for government funding allocations. The situation in terms of costing, cost benefit analysis, and service performance levels shows a lack of international competitiveness and consistency. The work of Commission VII in revealing the variable and low performance on the international scene is a valuable early initiative. However, the situation is seriously unsatisfactory and follow up action is urgently required. The authors propose to address this.
Each jurisdiction needs to find formulae to suit its particular needs. However, the antipodean experience is of relevance and shows that significant gains in efficiency and effectiveness can be achieved through applying a number of principles. Where specific beneficiaries can be identified, cost should be recovered and clients developed on a user pays basis. In the long term, departmental activity should be reviewed to identify those functions that have become fully commercial. It is claimed that charging between departments for services introduces an accountability, transparency and motivations with consequent benefits that are well in excess of the administration and overhead costs that are a necessary concomitant. All services and products should be purchased and supplied on a contestable basis as far as this is possible. Contracting out provides a discipline and a scale by which to measure the economics of departmental in-house production. All this, of course, fits a stable world in a static environment. But there are other factors of a social, cultural and economic nature which must be considered as much as the reality of politics. Nevertheless, the trends outlined above are fairly widespread and the drums of change are relentless.
The importance of striking and maintaining the right balance between the provision of products and services by the public and private sectors has been discussed for some time in the industry. It is now becoming clear that the balance is reducing a proportion of public sector activity as the market expands and the public good requirement consolidates and becomes more confined to that clearly justified in a modern automated cadastre. However, the rate of change and entrepreneurial opportunity is directly linked to the maturity of the industry.
As pointed out by Hartley (1998) ‘...price is a tool to be managed by land administrations or governments to serve a political or economic purpose.’ We in the industry need to take the initiative and anticipate the direction of this management rather than react in an ad hoc manner after the event. To do this, all of us need a better costing and economic assessment of the cadastre in our various jurisdictions. The next step is to embark on a strategy which will yield significant improvements in the performance of our cadastre. Effective action in developing such a strategy will enable the international industry to be proactive, learn from the experiences of each other and provide jurisdictions with a constructive agenda for the development of a high performance cadastral system to support and enhance efficient and high levels of national economic activity and growth.
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