Punjab Cities Governance

Improvement Project

Enhancement of OSR
Sit ti A
Situation Analysis
l i and dA
Action
ti PlPlans
Presented to USPMSU

Tanawwur Hyder
15 April
April,, 2013
1
 CONTENTS
9 Background and Objectives
9 OSR Situation Analysis – 5 DAs
9 Action
A ti PlPlan ffor OSR Enhancement
E h t

2
 Background & Objectives
9 Government of the Punjab, with financial assistance from
the World Bank,, is implementing
p g “Punjabj Cities
Governance Improvement Project (PCGIP)” for
strengthening systems for improved planning, resource
management,
g , and accountabilityy in five large
g cities
Lahore, Faisalabad, Multan, Gujranwala and Rawalpindi.

9 The first sub-

sub-component of the Project addresses resource
planning and management, seeking to improve decision
making, consolidate fragmented revenue sources and
strengthen resource mobilization.
mobilization

9 Development
p Linked Indicator 4 ((DLI 4)) of Subcomponent
p
1 (covered under this assignment) asks for improvements
in own source revenue collection system at CDG level. 3
The Key Responsibilities are:are:
9 Literature Review and meetings with all stakeholders to gain
updated information on existing CDG mandates for
generation of OSR
OSR, and the Tax Collection regime;
9 Identification of other avenues for enhancing OSR;
9 Possible improvements in existing collection systems and
procedures to optimize collections, plug leakages, control
expenditures etc
etc;;
9 Consultation with the CDGs and respective authorities on
developing streamlined systems for revenue enhancement
and expenditure control, in the light of international best
practices; and
9 Development of an Action Plan for enhancement of self self--
collected Own Source Revenues.

4
FDA OSR

5
 Own Source Revenues - Actual
FDA Own Source Revenues - Actual
200 188
180
160
140 129
120 Commercialization
upees

96
100 Fee & Fine
Million Ru

80
Rental Income
60
44 41
40 35 34 Departmental
23 24
16 14 12
20 6 7
3 4 2 3 Profit on Investment
-
2009 2011 2012 Other OSR

9 In each of these three years, Profit on investment (Intt on Deposits) was the main
source

6
 Collection of OSR
A t l Compared
FDA - Actual C d to
t Budgeted
B d t d FDA Own Source Revenues
Collection Ratio
600
140%
524
490 119%
120% 114%
500

100%
400 84% 86%
n Rupees

362
326 80% 74%
Budgeted
300 275
-Million

A t l
Actual 60%
237 45%
200 40%

17%
20%
100 8% 8%

0%
0 2009 2011 2012
2009 2011 2012 Total OSR Property Sale Other OSR

9 In each year, total actual OSR were lower as compared to budgeted because Property
Sales did not meet the budgeted expectations
9 In 2012 OSRs (other than property sales) were lower mainly due to lower departmental
charges received;

7
 OSR (Million Rs.)
FDA O
Own S
Source R B d t d
Revenues - Budgeted FDA Own Source Revenues - Actual
120 200 188
105 105 180
100
160
85
77 Commercializa 140 129
80
tion Commercializati
120 on
Rupees

Rupees
63
59 59 Fee & Fine 96
60 100 Fee & Fine
Million R

Million R
42 41 Rental Income 80
39 Rental Income
40 33
28 30 60
26 Departmental 44 41
21 35 34 Departmental
40
20 23 24
6 Profit on 20 14 12
4 3 4 3 6 Profit on
1 2 1 2 Investment 3 4 2 Investment
- -
Other OSR Other OSR
2009 2011 2012 2013 2009 2011 2012

9 Interest on deposits, Fee & Fines are the main sources.

9 In 2012, Commercialization has become the third highest source, controlling illegal land
use will be helpful in planned urbanization

8
 OSR (%)
FDA Own Source Revenues - Budgeted FDA O
Own S
Source R A t l
Revenues - Actual
120% 120%

100% 1% 1% 1% 100%

24%
80% 38% Other OSR 80%
57% 51% 54% Other OSR
entages

entages
Profit on 62%
60% Investment 60% 64% Profit on Investment
34%
13% Departmental
in perce

in perce
Departmental
2%
40% 40% 7% Rental Income
20% Rental Income 1%
24% 23% 31% 11%
1% Fee & Fine
Fee & Fine 12% 2% 23%
20% 3% 16% 20%
2% 2% Commercialization
16%
16% 15% 15% Commercialization 15% 14%
10% 6%
0% 0% 1% 0% 1%
2009 2011 2012 2013 2009 2011 2012

9 In 2012, Fee & Fines, Commercialization and Interest on deposits, provided 91% of
total OSR (sources other than property sales)

9
 FDA Situation Analysis
9 Property
p y Sales Accounted for 45- 45-60% of the budgetedg OSR -
actual sales were only 8%-
8%-17% of the budget – and the actual
contribution to OSR remained between 19%- 19%-25%
9 I 2012,
In 2012 Fee
F & Fines,
Fi Commercialization
C i li ti and d IInterest
t t on
deposits, provided 91% of the total OSR (for sources other
than property sales
sales))
9 In 2012 Commercialization has become the third highest
source - controlling illegal land use will be helpful in planned
urbanization

10
LDA - OSR

11
 Own Source Revenues - Actual
LDA Own Source Revenues - Actual
2,500
2,313

2,000

Commercialization
1,500
Million Rupees

Fee & Fines

Rental Income
1,000
770
Departmental

458 429 Bank Intt

500 402
321 305 314
251 UIPT
175
61 22 93 61 6
67 74
13 2 55 35 0
Other OSR
-
2010 2011 2012

9 Commercialization has become the major component of OSR. Major effort during 2011
and 2012, roads reclassified, most road of Gulberg declared as commercial.
9 Penalties, Fee and Fines providing a steady source of self-collected OSR.
9 In 2012 Rs.314 million received as UIPT share.

12
 Collection of OSR
LDA Own Source Revenues LDA Own Source Revenues
Collection of OSR Collection Ratio
12,000 120% 112%
10,471
10,000
10 000 100%
90%
85%
8,000 80%
62%
6,000 5,321 60% 53% 51%

4,000 3,557 40% 31%

2,720 26%
1,682 1,903 19%
2,000 20%

- 0%
2010 2011 2012 2010 2011 2012

Budgeted Actual Total OSR Property Sale Others

9 Collection compared to budget is low mainly due to lower Property sales which
between 19%-30% of the budgeted amount.
9 Recovery of other OSR is even higher then budgetary provision mainly due to
commercialization which was about 50% higher as compared to budget

13
 OSR (Million Rs.)
LDA O
Own S
Source R B d t d
Revenues - Budgeted DA O
LDA Own S
Source R A l
Revenues - Actual
4,000 2,500
2,313
3,500
3,500
2,000
2 000
3,000
Commercializ
ation Commercializ
2,500 ation
Fee & Fines 1,500
Rupees

Rupees
Fee & Fines
2,000 Rental Income
Rental Income
Million R

Million R
1,500 1,000
1,500 Departmental
770 Departmental
Bank Intt
1,000 Bank Intt
458 402 429
593 500
482 UIPT 321
305 314 UIPT
395 307
350 410
400 386 373 342 251
500 175
217 144 193 249 147 Other OSR 6122 9361 13 2 55 67
74
2645 2537 557 1 35 0 Other OSR
- -
2010 2011 2012 2013 2010 2011 2012

9 Commercialization, Fee & Fines and UIPT are the main sources.
9 In 2012, Commercialization has become the highest source - controlling illegal land use
and planned urban development is the main regulatory function of LDA.
9

14
 OSR (%)
LDA Own Source Revenues - Budgeted LDA O
Own S
Source R A t l
Revenues - Actual
120% 120%

100% 100%
14% 11% 12% 9% %
9%
7%
10% 16% 5%
14% 3% 0%
1%
80% 14% 0% 80% 4%
30% 6% 0%
1% 13% Other OSR
2%
0% Other OSR 35%
entages

entages
8% 11%
20% 26% UIPT
60% UIPT 60%
2%
1% 13% Bank Intt
2%
in perce

in perce
3%
2% 8% Bank Intt 5%
Departmental
40% Departmental 40%
25% 24% 23% Rental Income
69%
62%
Rental Income Fee & Fines
50% 49%
20% 20% Commercialization
Fee & Fines
23% 23% 24%
Commercialization
0% 0%
2010 2011 2012 2013 2010 2011 2012

In 2012, Commercialization, Fee & Fines, and UIPT, provided 91% of total OSR (sources
other than property sales)

15
 LDA Situation Analysis
9 Property
p y Sales Accounted for 43- 43-71% of the budgeted
g OSR -
actual sales were only 19% 19%--31% of the budget – and the
actual contribution to OSR remained between 18%- 18%-37%
9 R
Recovery off other
th OSR iis even hi higher
h ththen b
budgetary
d t
provision mainly due to commercialization which was about
50% higher as compared to budget
9 In 2012, Commercialization, Fee & Fines, and UIPT, provided
91% of total OSR (sources other than property sales)
9 I 2012,
In 2012 Commercialization
C i li ti h has b
become th
the hi
highest
h t source -
controlling illegal land use and planned urban development is
the main regulatory function of LDA.

16
GDA OSR

17
 Own Source Revenues - Actual
GDA Own Source Revenues - Actual
40

35 34

30
30 28
27

25 24
22 Commercialization
22
Rupees

20
20
Fee & Fines
Million R

15
15
Rental Income
10
6 6 Departmental
5 2
2
1 - 1 - - Profit on Investment
-
2010 2011 2012 Other OSR

9 Rental Income is the major source. (Electricity charges of about Rs.22 million is
collected from tenants and paid to WAPDA – grouped under Fee in above Graph)

18
 Collection of OSR
A t l Compared
GDA - Actual C d to
t Budgeted
B d t d GDA Own Source Revenues
Collection Ratio
300 95% 95%
100%
91% 91%
260
90%
250 79%
80%
70%
200
n Rupees

60%
Budgeted 50%
150
-Million

115 109 A t l
Actual 40%
30%
100 30%
79
20%
56 51
50 10%
0%
0 2010 2011 2012
2010 2011 2012 Total OSR Property Sale Other OSR

9 In 2012, Collection compared to budget is low because there was no sale against the
budgeted Property sales of Rs.160 million.

19
 OSR (Million Rs.)
GDA O
Own S
Source R B d t d
Revenues - Budgeted GDA Own Source Revenues - Actual
70 40

60 34
60 35
30
30 28
50 27
Commercializa
tion 25 24 Commercializati
22 22 on
37
Rupees

Rupees
40
34 Fee & Fines 20
20 Fee & Fines
Million R

Million R
30 28 27
Rental Income 15
22 23 15 Rental Income
20 21
20 16
Departmental 10
6 Departmental
10 11 10 6
7 7 9 7
10 6 5
3 Profit on 2 2 Profit on
2 1
1 - - - Investment - 1 - - Investment
- -
Other OSR Other OSR
2010 2011 2012 2013 2010 2011 2012

9 Rental Income and Fee & Fines are the major sources of OSR
9 Jurisdiction of GDA is over a very small area, which was given as the main reason for
low Commercialization fee in 2012.

20
 OSR (%)
GDA Own Source Revenues - Budgeted GDA O
Own S
Source R A t l
Revenues - Actual
120% 120%

100% 4% 100% 0% 0%
11% 6% 4%
0% 16%
0% 11%
4% 22%
18% 19%
80% 11% 8% 80%
Other OSR 38% 0% Other OSR
7%
entages

entages
35% 20%
23% 26% Profit on Investment
60% 60% 28%
22% Profit on Departmental
p
in perce

in perce
Investment
Rental Income
40% Departmental 40% 31%
Fee & Fines
42% 55% Commercialization
49% 52% 34% Rental Income 38%
20% 20%
F & Fines
Fee Fi 25%
10% 10% 8%
0% 1% 0% 1%
2010 2011 2012 2013 Commercialization 2010 2011 2012

In 2012, Rental Income, Fee & Fines, and Interest on Bank Deposits, provided 85% of
total OSR.

21
 GDA Situation Analysis
9 In 2012,, Collection compared
p to budget
g is low because there
was no sale against the budgeted Property sales of Rs.160
million.
9 J i di ti off GDA iis over a very smallll area, which
Jurisdiction hi h was
given as the main reason for low Commercialization fee in
2012..
2012
9 In 2012, Rental Income, Fee & Fines, and Interest on Bank
Deposits, provided 85% of total OSR.

22
MDA OSR

23
 Own Source Revenues - Actual
MDA Own Source Revenues - Actual
120

99
100

83
80 76
69 Commercialization
65 65
Rupees

60 56
50 Fee & Fines
Million R

44
39
40 36 Rental Income
29 29
21 Departmental
20 17
11 10
7
Bank Intt
-
2010 2011 2012 Other OSR

9 Departmental Charges, Interest on Bank deposits, Commercialization, and Fee & Fines
are the major sources.

24
 Collection of OSR
A t l Compared
MDA - Actual C d to
t Budgeted
B d t d MDA Own Source Revenues
Collection Ratio
1,400
1,285 160%
145%147%
1,200
, 140% 134%
121%
120%
1,000 106%
889 856 98%
n Rupees

811 100%
800 765
78%
Budgeted 80%
-Million

600 A t l
Actual
60% 52%
445 39%
400 40%

20%
200
0%
0 2010 2011 2012
2010 2011 2012 Total OSR Property Sale Others

In 2010, Property sales were 47% higher compared to budgeted – and in 2012, the
budgeted sales were realized. Property Sales provided over Rs.1.7 billion during these
three years.
The other OSRs too remained above 100% except in 2011 when budgeted fee for
commercialization and other fee & fines could not be realized
realized.

25
 OSR (Million Rs.)
MDA O
Own S
Source R B d t d
Revenues - Budgeted MDA Own Source Revenues - Actual
120 120

100 99
100 100

83 83
80
80 Commercializa 80 76
74
tion 69 Commercializati
65 65 on
Rupees

Rupees
60 60 60 60 Fee & Fines
60 60 56 Fee & Fines
53
50 50 50 50
Million R

Million R
Rental Income 44
40 40 39 Rental Income
40 35 40 36
33 33
28 29 29
22 Departmental Departmental
21 21
20 15 20 17
9 11 11 10
8 Bank Intt 7 Bank Intt
- -
Other OSR Other OSR
2010 2011 2012 2013 2010 2011 2012

9 Departmental Charges are the major source of revenue with bank interest becoming a
close second in 2012.
9 Steady revenue from Fee & Fines and Commercialization.

26
 OSR (%)
MDA Own Source Revenues - Budgeted MDA O
Own S
Source R A t l
Revenues - Actual
120% 120%

100% 4% 3% 3% 100% 4% 3% 3%
8% 11%
15% 15% 18% 16%
23%
80% 14% 80%
27%
22% Other OSR Other OSR
entages

entages
21% 31% 31%
60% 60% 33%
30%
15% 8% Bank Intt Bank Intt
in perce

in perce
7%
10% 7%
40% Departmental 40% 8% 9% Departmental
30%
28% 26%
25% 25%
Rental Income 26% 20% Rental Income
20% 20%
19% 21% 22% 18% Fee & Fines
15% Fee & Fines 12% 15%
0% 0%
2010 2011 2012 2013 2010 2011 2012 Commercialization
Commercialization

In 2012 Commercialization, Fee & Fines, Departmental Charges and Bank Interest
provided about 92% of the OSR (other than from Property Sales)

27
 MDA Situation Analysis
9 In 2010,, Property
p y sales were 47% higher
g compared
p to
budgeted – and in 2012, the budgeted sales were realized.
Property Sales provided over Rs.1.7 billion during these three
years.
years
9 The other OSRs too remained above 100% except in 2011
when budgeted fee for commercialization and other fee &
fines could not be realized.
9 Departmental Charges are the major source of revenue with
bank interest becoming a close second in 2012
2012.
9 In 2912 Commercialization, Fee & Fines, Departmental
Charges and Bank Interest provided about 92% of the OSR
(other than from Property Sales)

28
RDA - OSR

29
 Own Source Revenues - Actual
RDA O
Own S
Source R A l
Revenues - Actual
70 66

60
53
50
41 Commercialization
Rupees

40 37
32 Fee & Fines
Million R

30
Rental Income

20 16 Departmental
11
10
10 7 6 Bank Intt
3 4 4
- 1 1 1 1
Other OSR
-
2010 2011 2012

9 Commercialization has now become the main revenue source - controlling illegal land
use and planned urban development is the main regulatory function of Development
Authorities.
9 Fee, Fines and Penalties provide a regular source of revenue.

30
 Collection of OSR
RDA Own Source Revenues RDA Own Source Revenues
Collection of OSR Collection Ratio
250 600%
540%
207 208
500%
200

400%
150
119
105 300%
104
100 82
200%

50 79%
100% 67% 58% 57% 65%
51%
0% 0%
- 0%
2010 2011 2012 2010 2011 2012

Budgeted Actual Total OSR Property Sale Others

9 In 2010, Property Sales provided Rs.13.5 million against the budgeted Rs.2.5 million.
The expected property sales could not be realized during 2011 and 2012 resulting in
the low recovery percentage of OSR.

31
 OSR (Million Rs.)
RDA O
Own S
Source R B d t d
Revenues - Budgeted RDA O
Own S
Source R A l
Revenues - Actual
140 70 66
120
120 60
53
100 Commercializa 50
tion 41 Commercializ
80 ation
Rupees

Rupees
80 Fee & Fines 40 37
Fee & Fines
32
Rental Income
Million R

Million R
60 30 Rental Income
50
47
42 42 Departmental
38 Departmental
40 32 20
30
Bank Intt 11
Bank Intt
20 15 14 10 7 6
11 4
7 53 3 4
- 2 25 1 103 Other OSR
- 1 1 1 Other OSR
- -
2010 2011 2012 2013 2010 2011 2012

9 .Fee for Commercialization and other Fee & Fines provide the major portion of OSR.

32
 OSR (%)
RDA Own Source Revenues - Budgeted RDA O
Own S
Source R A t l
Revenues - Actual
120% 120%

100% 100%
7% 9%
1% 14% 13%
3%
0%
3%
0% 1% 11% 3%
1%
80% 1% 80% 5%
41% 44% 23% 6%
Other OSR 9% 1% Other OSR
entages

entages
4% 27%
60% 60% Bank Intt
50% Bank Intt 35%
4%
in perce

14%

in perce
2% Departmental
1%
Departmental
40% 11% 40% Rental Income
21%
2% 65% Rental Income 65% Fee & Fines
55%
20% Fee & Fines 20% 39% Commercialization
32% 28% 32%

Commercialization
0% 0% 0% 0%
2010 2011 2012 2013 2010 2011 2012

9 In 2012, Commercialization, and Fee & Fines provided over 80% of the OSR,

33
 RDA Situation Analysis
9 In 2010,, Property
p y Sales p provided Rs.13.5 million against
g the
budgeted Rs.2.5 million. The expected property sales could
not be realized during 2011 and 2012 resulting in the low
recovery percentage of OSR.
OSR
9 In 2012, Commercialization, and Fee & Fines provided over
80% of the OSR
OSR,,
9 Commercialization has now become the main revenue source
- controlling illegal land use and planned urban development
is the main regulatory function of Development Authorities
Authorities.

34
 Recommendations
and
DRAFT ACTION PLAN FOR
Development Authorities

35
THANK YOU

36