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LAHORE WASTE MANAGEMENT COMPANY Revenue Generation Plan.

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Presentation on theme: "LAHORE WASTE MANAGEMENT COMPANY Revenue Generation Plan."— Presentation transcript:

1 LAHORE WASTE MANAGEMENT COMPANY Revenue Generation Plan

2 Policy Statement LWMC 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.

3 Financial Streams Streams of funding for LWMC: – CDGL (after signing of SAAMA) – Receipts against approved budgetary expenditures – Receipts against approved budgetary receipts – Finance Department, Government of Punjab; – Commitment of support on case to case basis – SWM Service contracts – Ring Road Lahore – Metro Bus Service Lahore

4 Rationale 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

5 Cont’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 FY Observation of Statutory Auditors regarding the “going concern” in absence of revenues/grants.

6 Cont’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.

7 Cont’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.

8 Existing Revenue Generation Mechanism Basis of charging user fee User charges from Households, and Commercial & Industrial Units at the rate of: Commercial unit Rs. 50 per month per unit Industrial unit Rs. 100 per month per unit

9 Cont’d… Household Units Collection through WASA 30% of water bills as per notification Notification# supdt/ZN/ /11/2006 Currently charging 21% (No documentary evidence provided by WASA on change of collection rate WASA charging 15% of total collection as service chares. Commercial & Industrial Units Collection through own departmental recovery Commercial Rate: Rs. 50 per month Industrial Rate: Rs. 100 per month Methodology & Tariff:

10 Current Revenue Generation System Note:- % is based on total targeted amount Rs. 120 million (Rs. 100 million of households and Rs. 20 million of commercial & industrial units)

11 Existing Revenue Generation Situation Cont’d… Year Receipts from WASA Revenue from Commercial & Industrial Units (Rs in million) (Rs in million) (115%) (110%) 2013 (Expected) 30 (120%)

12 Existing Revenue Generation Situation Cont’d…

13 Targets vs. Recovery from WASA Year Budgeted Targets (Rs in million) Actual Recovery (Rs in million) Receivable from WASA (Rs in million) Total

14 Proposed Revenue Generation System Sources Household Units Commercial Units Sale of waste RDF Waste to Energy Recycling Contracts with autonomous bodies Industrial Units

15 Basis of Data Collection LESCO consumer base Bureau of Statistics, Government of Punjab Own Surveys (Contractor, LWMC, Third party) Election Commission data base Any other Govt. Dept. Cont’d…

16 Description As per LESCO data As per BS,GOP data Household Units849,580750,064 Commercial Units171, ,400 Industrial Units40,53536,000 Total Units1,061,904932,464 Cont’d…

17 Unit(s)Rate P.M. (Rs.) Household Commercial Industrial Proposed Tariff Rates Proposed 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.

18 Proposed 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.) % % % % % %600

19 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.M (Rs.) % %1, %1, %1, %2,000 Cont’d…

20 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 Charged Rate P.M (Rs.) % %1, %2, %3, %4, %5,000 Cont’d…

21 Potential Revenues from Households DCO Property value (Rs.) Rate charged Rate P.M No of units Value per Month Value per Annum % ,541 8,254,125 99,049, % ,661 58,079, ,948, % ,083 44,572, ,867, % ,053 39,394, ,736, % ,526 25,212, ,551, % ,200 13,320, ,840,000 Total 750,064 2,265,992,550 Recovery 80% 1,812,794,040

22 Potential Revenues from Commercial Units DCO Property value (Rs.) Rate ChargedRate P.M No. of Units Value per Month Value per Annum % ,000 14,175, ,100, % 1,125 84,000 94,500,000 1,134,000, % 1,600 18,000 28,800, ,600, % 1,800 12,600 22,680, ,160, % 2,000 4,800 9,600, ,200,000 Total 146,400 2,037,060,000 Recovery 80% 1,629,648,000

23 Potential Revenues from Industrial Units DCO Property value (Rs.) Rate ChargedRate P.M No.of Units Value per Month Value per Annum % 700 9,000 6,300,000 75,600, % 1,500 18,000 26,997, ,967, % 2,400 4,200 10,080, ,960, % 3,000 9,000, ,000, % 4,000 1,200 4,800,000 57,600, % 5, ,999,880 35,998,560 Total 36,000 60,177, ,126,160 Recovery 80% 577,700,928

24 Revenue Potential (Households, Commercial & industrial Units) Revenue Collection Potential in (%) Household Units (Rs. in million) Commercial & Industrial Units (Rs. in million) Total (Rs. in million) 100%2,2662,7595,025 80%1,8132,2074,020

25 LWMC Revenue/Receipts vs Govt Support * Year 1 is starting from 2011 & year 1 & 2 contains actual figures

26 Revenue Collection System Options and Recommendation Billing and Collection Third Party as an outsourced Contractor Through LWMC (own sources) An existing platform such as cell phone service provider Government 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).

27 Pre-Requisite Political Commitment User Charges Levying, enforcement and administrative support from CDGL Implementation/Action Plan- Service Delivery

28 Time lines Sr. No Activity (Months ) Legislative Approval 1 Survey and data collection 2 Planning & Designing of system for collection of user charges 3 Commencement of collection of user charges in Phase A (25 UCs) 4 Commencement of collection of user charges in Phase B (25 UCs) 5 Commencement of collection of user charges in Phase C (25UCs) 6 Commencement of collection of user charges in Phase D (25UCs) 7 Commencement of collection of user charges in Phase E (25UCs) 8 Commencement of collection of user charges in Phase F (25 UCs)

29 Current Status Summary to the Chief Minister for approval of User charges and Revenue Plan on Oct 30, 2012 Direction by the Chief Minister Punjab to the Secretary LG&CDD for analyzing Revenue Plan and submission of recommendations Secretary LG&CDD held two meetings for finalization of Revenue Plan Matter is pending with Secretary LG&CDD

30 THANK YOU


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