Transcript Slide 1

Revenue Generation Plan
LAHORE WASTE MANAGEMENT COMPANY
Policy Statement
LWMC shall implement a system to collect revenue
from all segments of society receiving services from
LWMC
to
ensure
sustainability
operations under the LWMC charter .
of
optimum
Financial Streams
• Streams of funding for LWMC:
– CDGL (after signing of SAAMA)
–
Receipts
against
expenditures
approved
budgetary
–
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
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
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 2012-13.
• Observation of Statutory Auditors regarding the
“going concern” in absence of revenues/grants.
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.
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.
Existing Revenue Generation Mechanism
Basis of charging user fee
 User charges from Households, and Commercial &
Industrial Units at the rate of:
 Commercial unit
 Industrial unit
Rs. 50 per month per unit
Rs. 100 per month per unit
Cont’d…
Methodology & Tariff:
Collection through WASA
30% of water bills as per notification
Notification# supdt/ZN/2557 08/11/2006
Household Currently charging 21% (No
Units
documentary evidence provided by
WASA on change of collection rate
WASA charging 15% of total collection
as service chares.
Collection through own departmental
Commercial recovery
& Industrial Commercial Rate: Rs. 50 per month
Units
Industrial Rate: Rs. 100 per month
Current Revenue Generation System
17%
Household Units
Commercial &
Industrial Units
83%
Note:- % is based on total targeted amount Rs. 120 million (Rs. 100 million of households and
Rs. 20 million of commercial & industrial units)
Existing Revenue Generation Situation
Receipts from WASA
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 (Expected)
(Rs in million)
0
0
0
89
83
79
72
59
55
52
0
0
Cont’d…
Revenue from
Commercial &
Industrial Units
(Rs in million)
14.9
6.6
11.7
8.1
4.2
6.1
13.7
16.8
14.6
13
23 (115%)
22 (110%)
30 (120%)
Cont’d…
Existing Revenue Generation Situation
Rs. In Million
100
89
90
83
80
79
72
70
59
60
55
52
50
40
30
30
20
10
0
23
14.9
0
11.7
6.6
0
0
8.1
13.7
4.2
16.8 14.6
22
13
6.1
0
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Receipts from WASA
Revenue from Commercial & Industrial Units
Targets vs. Recovery from WASA
Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
Total
Receivable from
Budgeted Targets Actual Recovery
WASA
(Rs in million)
100
100
100
100
100
100
100
100
100
900
(Rs in million) (Rs in million)
89
83
79
72
59
55
52
489
11
17
21
28
41
45
48
100
100
411
Proposed Revenue Generation System
Commercial
Units
Industrial
Units
Household
Units
RDF
Contracts with
autonomous
bodies
Sources
Waste to
Energy
Sale of waste
Recycling
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.
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
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.
Household
Rate P.M.
(Rs.)
100-600
Commercial
525-2000
Industrial
700-5000
Unit(s)
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.)
30000-150000
Rate charged
Rate P.M (Rs.)
0.10%
100
150001-300000
0.08%
180
300001-600000
0.06%
270
600001-1000000
0.05%
375
1000001-1500000
0.04%
480
500001-2600000
0.03%
600
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
(Rs.)
60000-250000
0.30%
525
250001-600000
0.25%
1,125
600001-1000000
0.20%
1,600
1000001-1500000
0.15%
1,800
1500001-2600000
0.10%
2,000
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
(Rs.)
60000-250000
0.40%
700
250001-600000
0.33%
1,500
600001-1000000
0.30%
2,400
1000001-1500000
0.25%
3,000
1500001-2600000
0.20%
4,000
2600001-4000000
0.17%
5,000
Potential Revenues from Households
DCO Property
value (Rs.)
Rate
charged
Rate
P.M
30000-150000
0.10%
100
150001-300000
0.08%
300001-600000
Value per
Month
Value per
Annum
82,541
8,254,125
99,049,500
180
322,661
58,079,025
696,948,300
0.06%
270
165,083
44,572,275
534,867,300
600001-1000000
0.05%
375
105,053
39,394,688
472,736,250
1000001-1500000
0.04%
480
52,526
25,212,600
302,551,200
1500001-2600000
0.03%
600
22,200
13,320,000
159,840,000
Total
Recovery
No of
units
750,064
2,265,992,550
80%
1,812,794,040
Potential Revenues from Commercial Units
DCO Property
value (Rs.)
Rate
No. of
Charged Rate P.M Units
Value per
Month
Value per
Annum
60000-250000
0.30%
525
27,000
14,175,000 170,100,000
250001-600000
0.25%
1,125
84,000
94,500,000 1,134,000,000
600001-1000000
0.20%
1,600
18,000
28,800,000 345,600,000
1000001-1500000
0.15%
1,800
12,600
22,680,000 272,160,000
1500001-2600000
0.10%
2,000
4,800
Total
Recovery
9,600,000
115,200,000
146,400
2,037,060,000
80%
1,629,648,000
Potential Revenues from Industrial Units
DCO Property
value (Rs.)
Rate
Charged Rate P.M
No.of
Units
Value per
Month
Value per
Annum
60000-250000
0.40%
700
9,000
6,300,000
75,600,000
250001-600000
0.33%
1,500
18,000
26,997,300
323,967,600
600001-1000000
0.30%
2,400
4,200
10,080,000
120,960,000
1000001-1500000
0.25%
3,000
3,000
9,000,000
108,000,000
1500001-2600000
0.20%
4,000
1,200
4,800,000
57,600,000
2600001-4000000
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
Revenue Potential
(Households, Commercial & industrial Units)
Revenue
Collection
Potential in
(%)
Commercial &
Household Units
Industrial Units
(Rs. in million)
(Rs. in million)
Total
(Rs. in million)
100%
2,266
2,759
5,025
80%
1,813
2,207
4,020
LWMC Revenue/Receipts vs Govt Support
58%
60%
50%
50%
48%
42%
34%
33% 33%
40%
40%
37%
30%
42%
40%
47%
44%
53%
47%
23%
18%
20%
9%
10%
0%
2%
1
2
0%
0%
CDGL- Receipts
3
4
LWMC-Revenues
5
6
7
Receipts from Govt. of Punjab
* Year 1 is starting from 2011 & year 1 & 2 contains actual figures
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).
Pre-Requisite
 Political Commitment
 User Charges Levying, enforcement and
administrative support from CDGL
 Implementation/Action Plan- Service Delivery
Time lines
Sr.
No
1
2
3
4
5
Activity
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)
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)
(Months )
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
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
finalization of Revenue Plan

Matter is pending with Secretary LG&CDD
for
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