Arani Town - Municipal

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Chapter - 14 Final Report: Arani Municipality c) Power charges There will be a savings of around 40% in power charges due to installation of energy saving lights. As the same will be installed by private players, the savings in power charges have been factored in the financial projections after 15 years. It is assumed that the savings in power charges would be utilised towards returns of the private player towards capital cost and interest. d) Interest Interest on loan have been provided based on the sanction rate for each loan. Repayment of loans are based on the repayment schedule of each loan. Sewerage & Water Supply Loan It is assumed that all new loan shall carry interest rate of 9.5% per annum. The loan from TNUIFSL shall be repaid over a period of 20 years with 5 years moratorium. Other Projects Loan It is assumed that all new loan shall carry interest rate of 9.5% per annum. The loan from TNUIFSL shall be repaid over a period of 10 years with 2 years moratorium. e) Depreciation Depreciation is provided based on the rates adopted by the Municipality for previous years. f) Provision of doubtful debts Doubtful debts have been provided as under : Table 14-15: Assumptions ñ Provision of doubtful debts Provision for Doubtful Debts is assumed @ 2% on total revenue for Revenue Fund Provision for Doubtful Debts is assumed @ 1% on total revenue for Water Fund Provision for Doubtful Debts is assumed @ 0% on total revenue for Education Fund 14.5.3 Collections a) Property tax Table 14-16: Assumptions ñ Property tax collection The current property tax collection is 70% The same shall improve to 95% over the next 5 years. The arrears property tax collection is 30% The same shall improve to 60% over the next 5 years. b) Profession tax Table 14-17: Assumptions ñ Profession tax The current profession tax collection is 64% The same shall improve to 90% over the next 5 years. The arrears profession tax collection is 25% The same shall improve to 50% over the next 5 years. . - 120 - Voyants Solutions Private Limited
Chapter - 14 Final Report: Arani Municipality c) Other Non Tax Income Table 14-18: Assumptions ñ Other Non Tax Income The current rental / lease collection is 61% The same shall be 90% over the next 5 years. The arrears collection % of rent / lease is over the next 5 years. 47% The same shall improve to 60% d) Water Charges Table 14-19: Assumptions ñ Water Charges The current water charges collection is 37% The same shall improve to 80% over the next 5 years. The arrears water charges collection is over the next 5 years. 20% The same shall improve to 60% e) Drainage Charges Table 14-20: Assumptions ñ Drainage Charges The current drainage collection is Nil The same shall be 80% over the next 5 years. The arrears drainage collection is Nil The same shall be 60% over the next 5 years. f) Other income The collection % of all other income is taken at 100% g) Others The collection % of all other items of income is taken at 100% 14.5.4 Annuity Factor The Annuity Factor for the new loans works out as under : Table 14-21: Terms of Loan Funding for Proposed Investments Tenor 20 years 10 years Interest Rate 9.50% 9.50 Repayment Period 15 years 8 years Moratorium 5 years 2 years Repayment Factor 0.13 0.18 Conversion Factor Calculation a. Rate of Interest 9.5% 9.5% b. Repayment Period 15 8 c. Loan Amount 31.00 21.00 Conversion Factor 3.96 3.86 Total Conversion Factor 7.83 Note : Sewerage & Water Supply Loan works out to 31% of total project cost identified. Other Loans works out to 21% of total project cost identified. . - 121 - Voyants Solutions Private Limited
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SEPTEMBER 2009 S S T A G E ññ IV
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SWOT Analysis for Arani Municipalit
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The broad financial analysis of the
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Projects Identified for Implementat
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. - ii - Final Report: Arani Munici
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. - iv - Final Report: Arani Munici
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LLI ISSTT OFF FFI IGUURREESS . - vi
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. - viii - Final Report: Arani Muni
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Chapter ñ 1 Final Report: Arani Mu
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Chapter - 3 Final Report: Arani Mun
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Arani Town - Municipal

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