Revenue Generation Plan for Lahore Waste Management Company
Implementation of a sustainable revenue collection system across all sectors for Lahore Waste Management Company’s operational efficiency and financial stability. Explore financial streams, rationale for subsidized services, and strategies for financial sustainability.
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Presentation Transcript
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 of optimum operations under the LWMC charter .
Financial Streams Streams of funding for LWMC: CDGL (after signing of SAAMA) Receipts expenditures against 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
Contd 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 goingconcern in absence of revenues/grants.
Contd 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.
Contd 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 Rs. 50 per month per unit Industrial unit Rs. 100 per month per unit
Contd Methodology & Tariff: Collection through WASA 30% of water bills as per notification Notification# supdt/ZN/2557 08/11/2006 Currently charging 21% (No documentary evidence provided by WASA on change of collection rate WASA charging 15% of total collection as service chares. Collection through own departmental recovery Commercial Rate: Rs. 50 per month Household Units Commercial & Industrial 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)
Contd Existing Revenue Generation Situation 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%) Receipts from WASA Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (Rs in million) 0 0 0 89 83 79 72 59 55 52 0 0 2013 (Expected)
Contd Existing Revenue Generation Situation Rs. In Million 100 89 90 83 79 80 72 70 59 60 55 52 50 40 30 30 23 22 13.716.814.6 20 14.9 13 11.7 8.1 6.6 6.1 10 4.2 0 0 0 0 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 Receivable from WASA (Rs in million) 11 17 21 28 41 45 48 100 100 411 Budgeted Targets (Rs in million) 100 100 100 100 100 100 100 100 100 900 Actual Recovery (Rs in million) 89 83 79 72 59 55 52 - - 489 Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total
Proposed Revenue Generation System Commercial Units Industrial Units Household Units Sale of waste RDF Sources Contracts with autonomous bodies Recycling Waste to Energy
Contd 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.
Contd As per LESCO data As per BS,GOP data Description 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. Rate P.M. (Rs.) 100-600 Unit(s) Household Commercial 525-2000 Industrial 700-5000
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. Rate charged Rate P.M (Rs.) DCO Property value (Rs.) 30000-150000 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
Contd 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
Contd 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 600001-1000000 0.33% 0.30% 1,500 2,400 1000001-1500000 1500001-2600000 2600001-4000000 0.25% 0.20% 0.17% 3,000 4,000 5,000
Potential Revenues from Households DCO Property value (Rs.) Rate charged Rate P.M No of units Value per Month Value per Annum 30000-150000 0.10% 100 82,541 8,254,125 99,049,500 150001-300000 0.08% 180 322,661 58,079,025 696,948,300 300001-600000 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 750,064 2,265,992,550 Recovery 80% 1,812,794,040
Potential Revenues from Commercial Units DCO Property value (Rs.) Rate Charged Rate P.M No. of 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 9,600,000 115,200,000 Total 146,400 2,037,060,000 Recovery 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 & Industrial Units (Rs. in million) Household Units (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% 53% 50% 48% 47% 47% 50% 44% 42% 42% 40% 40% 34% 37% 40% 33% 33% 30% 23% 18% 20% 9% 10% 2% 0% 0% 0% 1 2 3 4 5 6 7 CDGL- Receipts LWMC-Revenues 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 (Months ) 7 8 Sr. No Activity 9 10 11 12 13 14 15 1 2 3 4 5 6 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) 1 2 3 4 5 Commencement of collection of user charges in Phase D (25UCs) 6 Commencement of collection of user charges in Phase E (25UCs) Commencement of collection of user charges in Phase F (25 UCs) 7 8
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
