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LAHORE WASTE MANAGEMENT COMPANY

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.

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LAHORE WASTE MANAGEMENT COMPANY

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  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 2012-13. • 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… 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. Cont’d… Existing Revenue Generation Situation

  12. Cont’d… Existing Revenue Generation Situation

  13. Targets vs. Recovery from WASA

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

  15. 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…

  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.

  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.

  19. Cont’d… • Proposed method of tariff setting for Commercial units will be area based on the DCO designated values of different areas.

  20. Cont’d… • Proposed method of tariff setting for Industrial units will be area based on the DCO designated values of different areas.

  21. Potential Revenues from Households

  22. Potential Revenues from Commercial Units

  23. Potential Revenues from Industrial Units

  24. Revenue Potential (Households, Commercial & industrial Units)

  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

  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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