Arani Town - Municipal

More documents

Recommendations

Info

Chapter - 14 Final Report: Arani Municipality 14.8 SCENARIO I - ESTIMATION OF INVESTMENT CAPACITY ON AS IS WHERE BASIS We carried out the exercise of arriving at the Investment and Borrowing Capacity on as is where basis without any financial reforms being carried out and no new projects taken in to consideration. The borrowing capacity has been arrived by taking the NPV over the next 20 years on the minimum of the following : 30% of revenue projections Primary Operating Surplus (Surplus before Interest & Depreciation) The investment capacity has been arrived @ of 4 times the borrowing capacity assuming that loans constitute 25% of total investment requirement. In such a scenario, the Investment and Borrowing Capacity works out as below : Table 14-24: Summary of Borrowing and Investment Capacity Borrowing Capacity Rs. 2338.46 lacs Investment Capacity (BC x 4 times) Rs. 9353.86 lacs 14.9 SCENARIO II - ESTIMATION OF BORROWING AND INVESTMENT CAPACITY WITH PROJECTS In Scenario II, the financial projections have been worked out for the next 30 years, by taking in to consideration all the projects identified in CCP. Future income and expenditure of these individual projects have been worked out and then consolidated to arrive at the Municipalityís cash flows for the next 30 years. The financial projections for the next 20 years have been taken to arrive at the Borrowing and Investment capacity. We have arrived at the borrowing capacity of Arani Municipality on the minimum of the following: 30% of revenue projections 50% of Primary Operating Surplus less Debt Service The overall financing mix has been arrived to include 52% Loans, 34% Grants and 14% own funds. The repayment period of loans has been taken at 5+15 years for Sewerage and Water Supply Loans and 2+8 years for other project loans. The above factors have been taken in to account for arriving at the Annuity Factor, which has been applied on the lowest of the above to arrive at the overall borrowing capacity and investment capacity. Table 14-25: Summary of Borrowing and Investment Capacity Borrowing Capacity Rs. 3108.09 lacs Investment Capacity (BC/0.52) Rs. 5977.10 lacs Investment Requirement Rs. 8376.06 lacs Sustainable Investment Capacity % - IC / IR 71.36% . - 130 - Voyants Solutions Private Limited
Chapter - 14 Final Report: Arani Municipality At an aggregate level, assuming loans to be equivalent to 52% of investment, sustainable investment capacity works out to 71.36%. 14.10 KEY INDICATORS OF SCENARIO II The key Indictors of the Municipality based on the financial projections works out as below : Table 14-26: Key Indicators Minimum Maximum Average Existing (2001-02 to 2006-07) Operating Ratio 0.46 1.01 0.82 Debt Service Ratio 0% 17% 10% Category 1 Short Term (2009-10 to 2013-14) Operating Ratio 0.91 1.41 1.18 Debt Service Ratio 17% 68% 44% Category 3 Long Term (2009-10 to 2028-29) Operating Ratio 0.71 1.41 0.97 Debt Service Ratio 12% 75% 43% Category 2 Note : 1 ñ Financially Sound; 2 ñ Financially Fragile; 3 ñ Financially Insolvent It may be observed that the Municipality financials are fragile in the short run with Operating Ratio > 1% and Debt Service Ratio > 30%. But in the long run, the operating ratio has improved to 0.97. 14.11 INFERENCE The investment capacity of Arani Municipality on ëAs is Where Basisí works out to Rs. 9354 lacs. The investment capacity of Arani Municipality works to 71% in case of Scenario II with all projects identified in CCP taken in to consideration. In value terms the investment capacity works out to Rs.5977 lacs in case of Scenario II, with all projects taken in to consideration. The investment capacity has got reduced from Rs. 9354 lacs in Scenario I (As is Where Basis) to Rs. 5977 in Scenario II (with all projects), mainly on account of high operation & maintenance and interest cost in case of certain projects like roads and storm water drainage etc. . - 131 - Voyants Solutions Private Limited
Page 1 and 2:
SEPTEMBER 2009 S S T A G E ññ IV
Page 3 and 4:
SWOT Analysis for Arani Municipalit
Page 5 and 6:
The broad financial analysis of the
Page 7 and 8:
Projects Identified for Implementat
Page 9 and 10:
. - ii - Final Report: Arani Munici
Page 11 and 12:
. - iv - Final Report: Arani Munici
Page 13 and 14:
LLI ISSTT OFF FFI IGUURREESS . - vi
Page 15 and 16:
. - viii - Final Report: Arani Muni
Page 17 and 18:
Chapter ñ 1 Final Report: Arani Mu
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Chapter - 3 Final Report: Arani Mun
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Chapter - 10 Final Report: Arani Mu
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96: Chapter - 11 Final Report: Arani Mu
Page 145: Chapter - 14 Final Report: Arani Mu
Page 149 and 150: Annexure Final Report: Arani Munici
show all

Arani Town - Municipal

Create successful ePaper yourself

Delete template?

Save as template?