1. Revenue Generation Plan LAHORE WASTE MANAGEMENT COMPANY

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. Commercial & Industrial Units
Cont’d…
Methodology & Tariff:
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

10. Current 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)

11. Existing Revenue Generation Situation
Cont’d…
Year
Receipts from WASA
Revenue from Commercial & Industrial Units (Rs in million)
(Rs in million)
2001
14.9
2002
6.6
2003
11.7
2004 89
8.1
2005 83
4.2
2006 79
6.1
2007 72
13.7
2008 59
16.8
2009 55
14.6
2010 52 13
2011
23 (115%)
2012
22 (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
Receivable from WASA
2004
100 89 11
2005 83 17
2006 79 21
2007 72 28
2008 59 41
2009 55 45
2010 52 48
2011 -
2012
Total
900
489
411

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

15. Basis of Data Collection
Cont’d…
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.

16. Cont’d…
Description
As per LESCO
data
As per BS,GOP data
Household Units
849,580
750,064
Commercial Units
171,788
146,400
Industrial Units
40,535
36,000
Total Units
1,061,904
932,464

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

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 charged
Rate P.M (Rs.)
0.10%
100
0.08%
180
0.06%
270
0.05%
375
0.04%
480
0.03%
600

19. Cont’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 Charged
Rate P.M
0.30%
525
0.25%
1,125
0.20%
1,600
0.15%
1,800
0.10%
2,000

20. Cont’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 Charged
Rate P.M
0.40%
700
0.33%
1,500
0.30%
2,400
0.25%
3,000
0.20%
4,000
0.17%
5,000

21. DCO Property value (Rs.)
Potential Revenues from Households
DCO Property value (Rs.)
 Rate charged
Rate P.M
No of units
Value per Month
Value per Annum
0.10%
100
82,541
8,254,125
99,049,500
0.08%
180
322,661
58,079,025
696,948,300
0.06%
270
165,083
44,572,275
534,867,300
0.05%
375
105,053
39,394,688
472,736,250
0.04%
480
52,526
25,212,600
302,551,200
0.03%
600
22,200
13,320,000
159,840,000
Total
 750,064
2,265,992,550
 Recovery
80%
1,812,794,040

22. Potential Revenues from Commercial Units DCO Property value (Rs.)
Rate Charged
Rate P.M
No. of Units
Value per Month
Value per Annum
0.30%
525
27,000
14,175,000
170,100,000
0.25%
1,125
84,000
94,500,000
1,134,000,000
0.20%
1,600
18,000
28,800,000
345,600,000
0.15%
1,800
12,600
22,680,000
272,160,000
0.10%
2,000
4,800
9,600,000
115,200,000
Total
146,400
2,037,060,000
Recovery
80%
1,629,648,000

23. Potential Revenues from Industrial Units DCO Property value (Rs.)
Rate Charged
Rate P.M
No.of Units
Value per Month
Value per Annum
0.40%
700
9,000
6,300,000
75,600,000
0.33%
1,500
18,000
26,997,300
323,967,600
0.30%
2,400
4,200
10,080,000
120,960,000
0.25%
3,000
9,000,000
108,000,000
0.20%
4,000
1,200
4,800,000
57,600,000
0.17%
5,000
600
2,999,880
35,998,560
Total
36,000
60,177,180
722,126,160
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
100%
2,266
2,759
5,025
80%
1,813
2,207
4,020

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 ) 1 2 3 4 5 6 7 8 9 10 11 12 13 1415
Legislative Approval
Survey and data collection
Planning & Designing of system for collection of user charges
Commencement 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)

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