Presentation on theme: "Revenue Generation Plan LAHORE WASTE MANAGEMENT COMPANY"— Presentation transcript:
1Revenue Generation Plan LAHORE WASTE MANAGEMENT COMPANY
2Policy StatementLWMC shall implement a system to collect revenue from all segments of society receiving services from LWMC to ensure sustainability of optimum operations under the LWMC charter .
3Financial Streams Streams of funding for LWMC: CDGL (after signing of SAAMA)Receipts against approved budgetary expendituresReceipts against approved budgetary receiptsFinance Department, Government of Punjab;Commitment of support on case to case basisSWM Service contractsRing Road LahoreMetro Bus Service Lahore
4Rationale Subsidized SWM Services: Presently subsidized SWM services are being provided to all areas, full cost recovery is essential to maintain desired level of services.The full cost of SWM services should be charged to;Commercial and Industrial Users
5Cont’d… Financial Sustainability: LWMC is meeting deficit in operational expenditures through loans from F.D, GOP.Total loan from FD, GOP has been accumulated to Rs. 7 billion up till FYObservation of Statutory Auditors regarding the “going concern” in absence of revenues/grants.
6Cont’d… Financial Sustainability: The percentage of loans from the FD to meet the expenses of modern SWM system will gradually be reduced.Additional funds are required to meet social and environmental obligations.
7Cont’d…Pricing of SWM services; The adequate recovering of costs incurred on SWM services to inculcate responsible behavior in citizens and to create a demand for improved service delivery.Level of Service Delivery; Enhanced level of SWM services can only be maintained in the presence of continuous stream of revenue generation.
8Existing Revenue Generation Mechanism Basis of charging user feeUser charges from Households, and Commercial & Industrial Units at the rate of:Commercial unit Rs. 50 per month per unitIndustrial unit Rs. 100 per month per unit
9Commercial & Industrial Units Cont’d…Methodology & Tariff:Household UnitsCollection through WASA30% of water bills as per notificationNotification# supdt/ZN/ /11/2006Currently charging 21% (No documentary evidence provided by WASA on change of collection rateWASA charging 15% of total collection as service chares.Commercial & Industrial UnitsCollection through own departmental recoveryCommercial Rate: Rs. 50 per monthIndustrial Rate: Rs. 100 per month
10Current Revenue Generation System Note:- % is based on total targeted amount Rs million (Rs. 100 million of households and Rs. 20 million of commercial & industrial units)
11Existing Revenue Generation Situation Cont’d…YearReceipts from WASARevenue from Commercial & Industrial Units (Rs in million)(Rs in million)200114.920026.6200311.72004898.12005834.22006796.120077213.720085916.820095514.620105213201123 (115%)201222 (110%)2013 (Expected)30 (120%)
13Targets vs. Recovery from WASA YearBudgeted Targets(Rs in million)Actual RecoveryReceivable from WASA200410089112005831720067921200772282008594120095545201052482011-2012Total900489411
14Contracts with autonomous bodies Proposed Revenue Generation SystemCommercial UnitsIndustrial UnitsHousehold UnitsSourcesSale of wasteRDFContracts with autonomous bodiesRecyclingWaste to Energy
15Basis of Data Collection Cont’d…Basis of Data CollectionLESCO consumer baseBureau of Statistics, Government of PunjabOwn Surveys (Contractor, LWMC, Third party)Election Commission data baseAny other Govt. Dept.
16Cont’d…DescriptionAs per LESCOdataAs per BS,GOP dataHousehold Units849,580750,064Commercial Units171,788146,400Industrial Units40,53536,000Total Units1,061,904932,464
17Proposed Tariff RatesProposed method of tariff setting for households, commercial & industrial will be area based on the DCO designated values of different areas.The proposed user charges are area based on the basis of rich and poor areas.Unit(s)Rate P.M.(Rs.)HouseholdCommercialIndustrial
18Proposed Method & Rates of Tariff Setting Proposed method of tariff setting for households will be area based on the DCO designated values of different areas.DCO Property value (Rs.) Rate chargedRate P.M (Rs.)0.10%1000.08%1800.06%2700.05%3750.04%4800.03%600
19Cont’d…Proposed method of tariff setting for Commercial units will be area based on the DCO designated values of different areas.DCO Property value(Rs.) Rate ChargedRate P.M0.30%5250.25%1,1250.20%1,6000.15%1,8000.10%2,000
20Cont’d…Proposed method of tariff setting for Industrial units will be area based on the DCO designated values of different areas.DCO Property value(Rs.) Rate ChargedRate P.M0.40%7000.33%1,5000.30%2,4000.25%3,0000.20%4,0000.17%5,000
21DCO Property value (Rs.) Potential Revenues from HouseholdsDCO Property value (Rs.) Rate chargedRate P.MNo of unitsValue per MonthValue per Annum0.10%10082,5418,254,12599,049,5000.08%180322,66158,079,025696,948,3000.06%270165,08344,572,275534,867,3000.05%375105,05339,394,688472,736,2500.04%48052,52625,212,600302,551,2000.03%60022,20013,320,000159,840,000Total 750,0642,265,992,550 Recovery80%1,812,794,040
22Potential Revenues from Commercial Units DCO Property value (Rs.) Rate ChargedRate P.MNo. of UnitsValue per MonthValue per Annum0.30%52527,00014,175,000170,100,0000.25%1,12584,00094,500,0001,134,000,0000.20%1,60018,00028,800,000345,600,0000.15%1,80012,60022,680,000272,160,0000.10%2,0004,8009,600,000115,200,000Total146,4002,037,060,000Recovery80%1,629,648,000
23Potential Revenues from Industrial Units DCO Property value (Rs.) Rate ChargedRate P.MNo.of UnitsValue per MonthValue per Annum0.40%7009,0006,300,00075,600,0000.33%1,50018,00026,997,300323,967,6000.30%2,4004,20010,080,000120,960,0000.25%3,0009,000,000108,000,0000.20%4,0001,2004,800,00057,600,0000.17%5,0006002,999,88035,998,560Total36,00060,177,180722,126,160Recovery80%577,700,928
24Revenue Potential (Households, Commercial & industrial Units) Revenue Collection Potential in(%)Household Units(Rs. in million)Commercial & Industrial Units (Rs. in million)Total100%2,2662,7595,02580%1,8132,2074,020
25LWMC Revenue/Receipts vs Govt Support * Year 1 is starting from 2011 & year 1 & 2 contains actual figures
26Revenue Collection System Options and Recommendation Billing and CollectionThird Party as an outsourced ContractorThrough LWMC (own sources)An existing platform such as cell phone service providerGovernment agency such as LESCO, SNGPL ( capacity to enforce the writ)An integrated system for charging City Government provided services through a smart card product (Municipal Services Card)Recommendation : User collection system may be outsourced to third party. Later on collection system may be switched over to smart cards (Municipal Services Card).
27Pre-Requisite Political Commitment User Charges Levying, enforcement and administrative support from CDGLImplementation/Action Plan- Service Delivery
28Time lines Sr. No Activity (Months ) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Legislative ApprovalSurvey and data collectionPlanning & Designing of system for collection of user chargesCommencement of collection of user charges in Phase A (25 UCs)Commencement of collection of user charges in Phase B (25 UCs)Commencement of collection of user charges in Phase C (25UCs)Commencement of collection of user charges in Phase D (25UCs)Commencement of collection of user charges in Phase E (25UCs)Commencement of collection of user charges in Phase F (25 UCs)
29Current StatusSummary to the Chief Minister for approval of User charges and Revenue Plan on Oct 30, 2012Direction by the Chief Minister Punjab to the Secretary LG&CDD for analyzing Revenue Plan and submission of recommendationsSecretary LG&CDD held two meetings for finalization of Revenue PlanMatter is pending with Secretary LG&CDD