Vellakovil City Development Plan - Municipal

Submitted to 

CITY DEVELOPMENT PLAN 

The Commissionerate of Municipal M nicipal 

Administration 

6th Floor, Ezhilagam Annex Building 

Chepauk, Chennai – 600 005 

VELLAKOIL MUNICIPALITY 

Final Report p 

August 2009 

Submitted by 

SMEC (India) (I di ) Pvt. P t Ltd. Ltd 

No. 11/6, 18th East Street, 

Thiruvanmiyur 

Chennai – 600 041

CITY DEVELOPMENT PLAN 

VELLAKOIL MUNICIPALITY 

Final Report 

December 2009 

Submitted to Submitted by 

The Commissonerate of Municipal Administration SMEC (India)Pvt. Ltd 

6 th Floor, Ezhilagam Anex Building No.11/6,18 th East Street, 

Chepauk, Chennai‐600 005 Thiruvanmiyur, 

Chennai‐600 041

Final Report City Development Plan for Vellakoil Municipality 

CITY DEVELOPMENT PLAN - VELLAKOIL MUNICIPALITY 

EXECUTIVE SUMMARY 

1. CITY DEVELOPMENT PLAN – CONTEXT and CONTENT 

The Commissioner of Municipal Administration (CMA), Government of Tamil Nadu, under the Third Tamil 

Nadu Urban Development Programme (TNUDP III) has taken effective steps to assist the Urban Local 

Bodies (ULBs) in the State, particularly the Grade III municipalities to strengthen and improve the financial 

position for effective capital investment management and service delivery to the public. These ULBs spread 

over the State, are service centres to the surrounding rural areas, offering marketing, physical and social 

infrastructure facilities. These centres have potential for future growth, and therefore, it is essential to 

formulate a City Development Plan (CDP) for these urban centres and immediate implementation of reforms 

in these ULBs for better management. In this regard, the CMA has appointed SMEC India Pvt. Ltd as 

Consultants for preparing a comprehensive City Development Plan (CDP) for four of the Grade III Municipal 

Towns in the Thanjavur region. 

2. SWOT and VISION 

Vellakoil, a Grade III Municipality in Tiruppur district is located at a distance of 48 km, east of Coimbatore 

and 60km, south of Erode town. The area of the town is 64.75 sq.km and the population is 34,438 as per 

census 2001. The latitude and longitude of this town are 8º36’’41’’N and 78º3 ‘’30’’E respectively. It is well 

connected by road to the surrounding urban centres. 

Vellakoil municipality is a prominent commercial center for agro products like oil, vanaspathy and textiles. 

The town and its surroundings has high concentration of power loom & handloom weaving, textile 

processing units, rice milling, edible oil expelling units, paper products and basic metal products industries 

etc. 

The City Development Plan is a tool which adapts a participative approach to planning, and implementing 

projects as stakeholder workshops; involving users, elected councillors, line agencies, private organizations, 

NGOs and CBOs. Some of the core issues which emerged during interaction with stakeholders include 

provision of adequate and quality water supply to all the residents of the city, improvement in solid waste 

management and sewerage systems in the town (both currently impacting the physical environment in a 

negative manner), rejuvenation of water bodies, and road improvement and improving the financial and 

technical capacity of the municipal body. 

A town level SWOT analysis, with reference to its regional context has been done based on feedback from 

stakeholder workshops and analysis of the status of various sectors of the city. 

SWOT Analysis for Vellakoil Municipality 

STRENGTH WEAKNESS 

Access to Erode, a major node for textile, Crippling Environmental pollution to odais & agricultural 

leather & agriculture, timber based industries hinterland 

Good connectivity with nearby Urban centres Absence of recreational facilities 

Nh-67 bisecting the town Need to expedite infrastructure improvements 

Perennial source of water from River Cauvery Inadequate social infrastructure facilities 

High Urban literacy rate at 75% Extensive Municipal area – Increased demand for 

Fertile agricultural hinterland 

penetration of Municipal services 

Excellent industrial base of textile, bricks, agro 

Absence of rail connectivity 

based timber & leather 

OPPORTUNITIES THREATS 

Availability of land for future development Rising land and labour costs 

Co-operative mindset of community. Increased Environmental regulations & falling margins 

Access to Higher Educational Institutions Low skill, low technology manufacturing units 

Opposition to leather based industries /brick industries 

Source : Feedback from stakeholders meeting and analysis.


The town of Vellakoil is visualized as “An clean and green town; economically self sustaining, with 

access to physical and social infrastructure”. 

Supporting this vision is a set of development objectives, defined along various sectors of infrastructure. It 

covers the current status, issues in the sector, likely future demand, strategies for improvement and 

identified projects to meet these objectives. The sectors covered in the CDP for Vellakoil include water 

supply, sewerage and sanitation, solid waste management, storm water drains, street lights, slum 

improvement and other remunerative and social projects. 

3. CITY INVESTMENT PLAN 

The summary of sector-wise investment requirements and prioritisation is given in the following table. The 

total investment required would be over Rs. 9018.42 lakhs. 

Capital Investment Needs for Vellakoil 

S.N Physical Infrastructure facilities Amount 

( in lakhs) 

1 Water Supply 1199.12 

2 Sewerage System 3300.00 

3 Storm Water Drains 300.00 

4 Solid Waste management 800.00 

5 Roads 2043.00 

7 Bus Shelter 10.00 

8 Street Lights 182.00 

9 Slum Improvement 709.00 

10 Parks and Play Fields 20.00 

11 Market 150.00 

12 Public Convenience 35.00 

13 Burial Ground 100.00 

14 E-Governance 16.00 

15 Urban Greenery 10.00 

16 Other Projects 100.00 

17 Updation of Database on GIS Platform 4000 

18 Property Mapping 4.30 

Total 9018.42 

4. FINANCIAL PERFORMANCE OF VELLAKOIL MUNICIPALITY 

The summary of the financial status of Vellakoil municipality is as follows: 

• In the case of Vellakoil Municipality, it is observed that the Municipality has shown net deficit in all 

the 5 years. Prior to depreciation, the Municipality has shown surplus in 4 out of the last 5 years 

except 2006-07. Thus the Municipality has earned cash surplus in 4 years. 

• The average current collection efficiency of the municipality is very good as compared as to other 

municipalities in the district in case of all the sources of income and is around 95% - 100%. The 

arrears collection performance in respect of Property Tax and Other Income needs to be improved. 

• The broad financial analysis of the Vellakoil Municipality finances reveal that the Municipality has to 

gradually increase its own sources of income and collection efficiency for servicing the additional 

borrowings in the future. 

• The Municipality’s borrowings are high at Rs. 236 lakhs compared to its income. This may result 

high debt service in future years. So the Municipality’s capacity to borrow further funds depends on 

its capacity to increase its revenues. 

To summarise, the overall income pattern of Vellakovil Municipality indicates both positive and negative 

features. The positive trends are on the income side, where the Municipality has higher growth rate and 

good collection performance.


5. PROPOSED REFORMS IN URBAN MANAGEMENT 

In the Final Report a detailed action plan and implementation schedule to aid the effective execution of the 

business plan would be furnished. Achieving the set objectives would require a high degree of commitment 

from the municipality and active support of the council and the state government. 

• The municipality will be expected to adopt measures to improve property tax base, ensure 

operational efficiency in street lighting and water supply, computerisation of Municipal functions, 

introduce charges for SWM, timely auditing and online publishing of account statements , asset 

management plan , capacity building initiatives in the engineering, health and accounts sections. 

• The Municipal council may assume charge of increase in water charges, removal of public 

fountains, privatisation initiatives, and premobilisation of deposits, parking / advertisement 

regularisation plan and execution of property mapping exercise. The council would also be required 

to include charges for SWM (non-domestic) and regularise unauthorised layouts. 

• The expectations from the State Government are fast track litigation for disputed properties, 

enacting Community Participation law, facilitating private participation in investments, ensuring 

transparency in accounting and creating public awareness on the roles and responsibilities of the 

citizens. 

6. ESTIMATION OF INVESTMENT CAPACITY 

The borrowing and investment capacities of the town are arrived considering the revenue income 

and expenditure under the sustainable scenario, after implementation of the mandatory reforms 

proposed in this report. 

The investment capacity for the sustainable scenario can be summed up as below: 

Summary of Borrowing and Investment Capacity 

Description Scenario I Scenario II Scenario III 

Borrowing Capacity Rs. 373.26lacs Rs. 744.13 lacs Rs. 937.48 lacs 

Investment Capacity Rs. 1493.02 lacs Rs. 4134.08 lacs Rs. 5208.24 lacs 

Investment Requirement - Rs. 9018.12 lacs Rs. 9018.12 lacs 

Sustainable investment capacity % - IC / IR - 46% 57.75% 

Scenario I - Estimation of Investment Capacity on as is where basis 

Scenario II - Estimation of Investment Capacity with Projects & Growth Rate of 7.5% for Devolution Funds 

Scenario III - Estimation of Investment Capacity with Projects & Growth Rate of 10% for Devolution Funds. 

7. INFERENCE 

The investment capacity of Vellakoil Municipality on ‘As is Where Basis’ works out to Rs. 1493 

lacs. 

The investment capacity of Vellakoil Municipality works to 46% in case of Scenario II (Growth 

Rate of Devolution Funds assumed @ 7.5% p.a.) and 58% in case of Scenario III (Growth 

Rate of Devolution Funds assumed @ 10% p.a.). 

In value terms the investment capacity works out to Rs. 4135 lacs under Scenario II and Rs. 

5210 lacs under Scenario III. 

It may be observed that the investment capacity has improved with the introduction of new 

projects as compared to ‘As is Where Basis’ scenario. The same is on account of the fact that 

the Municipality has large number of commercial and industrial assessments, which are 

presently untapped on account of water and sewerage connections. 

Thus it can be inferred that the investment capacity of the Municipality is around 46% of the 

total investment requirement.


Based on the above, it can be inferred that the Municipality can take up only the small projects, 

where the funding is mostly by way of Grants as given below : 

S.No. Particulars Total Priority Funding By 

A Physical Infrastructure Facilities L : G : O 

I Water Supply 

a) Improvements to Water Supply 1199.20 A 0:90:10 

II Sewerage & Sanitation 

a) New Underground Sewerage Scheme 3300.00 A 37:35;28 

Total 4499.20 

The above two projects can be taken up by the Municipality as there are large number of 

commercial and industrial assessments and on stand alone basis these projects are viable at 

the funding pattern given above. 

Besides the above, the following other small projects can be taken up, where the funding 

pattern is mainly by way of grants and deposit mobilization : 

Priority projects suggested under CDP 



I Strom Water Drains 

a) Construction of new drains and providing mesh covers 300.00 A 0:90:10 

II Bus Shelter 

a) Construction of New Bus Shelter 10.00 A 100% Grant 

III Street Lights 

a) High mast lights at Old & New Bus Stand 14.00 A 100% Grant 

b) Retrofitting and energy saving devices 23.00 A ESCO 

c) Central Median lights at main roads for 3Km 45.00 A 0:90:10 

B Social Infrastructure Facilities 

I Slum Improvements 

a) Improvement to Slums 709.00 B 100% Grant 

II Market 

a) Construction of Daily Market 75.00 A 100% ULB 

b) Construction of Weekly Market 75.00 A 100% ULB 

C Other Projects 

I Remunerative Projects 

a) Commercial Building (G+2) at Erode Road near 50.00 A 100% ULB 

Bus Stand 

II E-Governance 

a) E-Governance 16.00 A 100% Grant 

b) Updation of Database on GIS 40.00 C 0:90:10 

c) Property Mapping 4.30 A 100% ULB 

Total 1361.30 

As regards other projects with large financial cost, the Municipality would require more support 

from the Government towards both capital cost and operation & maintenance expenses. Thus 

it would be possible to take up those projects if more support is provided by the Government 

and by improving own sources of income.

Abbreviation and Acronyms 

ANM : Auxiliary Nurse Midwife 

AMT : Anna Marumalarchi Thittam 

BOT : Build, Operate and Transfer 

BPL : Below Poverty Line 

BSUP : Basic Services for Urban Poor 

CAA : Constitution Amendment Act 

CAGR : Compounded Annual Growth Rate 

CC : Cement Concrete 

CCP : City Corporate Plan 

CBED : Community Based Energy Development 

CDP : City Development Plan 

CETP : Common Effluent Treatment Plant 

CFC : Central Finance Commission 

CIP : Capital Investment Plan 

CPHEEO : Central Public Health & Environmental Engineering Organization 

CPM : Consultative Process Meeting 

D&O : Dangerous and Offensive Trade 

DFR : Draft Final Report 

DPR : Detailed Project Report: 

EAR : Environmental Assessment Report 

ECR : East Coast Road 

ESF : Environmental and Social Framework 

ETRP : Emergency Tsunami Reconstruction Project 

FY : Financial Year 

FOP : Financial Operating Plan 

GLR : Ground Level Reservoir 

G.S.T Road : Grand South Trunk Road 

Gm : Grams 

GoTN : Government of Tamil Nadu 

Ha : Hectares 

HP : Horse Power 

HSC : House Service Connection 

IHSDP : Integrated Housing & Slum Development Programme 

IPT : Intermediate Public Transport 

ISP : Integrated Sanitation program 

IUDP : Integrated Urban Development Project 

JNNURM : Jawaharlal Nehru National Urban Renewal Mission 

Kg : Kilogram 

Km : Kilometer 

LAP : Local Assistance Programme

LCS : Low Cost Sanitation 

Ll : Lakh Litres 

LPA : Local Planning Area 

Lpcd : Liters Per Capital per day 

M : Metres 

MIAM : Municipal Infrastructure Asset Management 

ML : Million Litres 

MLD : Million Litres per day 

MSW : Municipal Solid Waste 

NGO : Non Governmental Organisation 

NH : National Highway 

Nos : Numbers 

OHT : Over Head Tank 

O&M : Operation and Maintenance 

PAP : Project Affected Persons 

PHC : Primary Health Center 

PPI : Pulse Polio Immunization 

PPP : Public Private Partnership 

PWD : Public Works Department 

SFC : State Finance Commission 

SH : State Highway 

SHG : Self Help Group 

Sq.km : Square Kilometers 

SST : Summer Storage Tank 

STP : Sewage Treatment Plant 

SWM : Solid Waste Management 

TEAP : Tsunami Emergency Assistance Project 

TNEB : Tamil Nadu Electricity Board 

TNRDC : Tamil Nadu Road Development Corporation 

TNSCB : Tamil Nadu Slum Clearance Board 

TNUDP : Tamil Nadu Urban Development Project 

TNUIFSL : Tamil Nadu Urban Infrastructure Financial Service Limited 

TPD : Tonnes Per Day 

TUFIDCO : Tamil Nadu Urban Finance and Infrastructure Development Corporation 

TWAD : Tamil Nadu Water Supply and Drainage Board 

UA : Urban Area 

UGD : Under Ground Drainage 

UIDSSMT : Urban Infrastructure Development Scheme for Small & Medium Towns 

ULB : Urban Local Body 

VAMBAY : Valmiki Ambedkar Awas Yojana 

WBM : Water Bound Macadem 

WSP : Waste Stabilization Pond 

WTP : Water Treatment Plant

EXECUTIVE SUMMARY 

COUNCIL RESOLUTION 

ABBREVIATIONS AND ACRONYMS 

CONTENT 

1 CONTEXT, CONCEPT AND CONTENTS OF CITY DEVELOPMENT PLAN 

1.1 Context of the Study 1 

1.2 Objectives 1 

1.3 Revice Meeting for Dtaft Final Reports 1 

2 TOWN PROFILE, PHYSICAL PLANNING AND GROWTH MANAGEMENT 4 

2.1 Regional Setting 4 

2.2 Physical Features 4 

2.3 Climate and Rainfall 4 

2.4 History of the Municipality 4 

2.5 Demographic Features 4 

2.5.1 Population and its Growth 4 

2.5.2 Population projection 6 

2.5.3 Sex ration and literacy 7 

2.6 Occupational Pattern 7 

2.7 Physical Planning and growth management issues 8 

2.8 Growth Management issues and solution initiatives 8 

3 VISION AND STRATEGIES FOR ECONOMIC DEVELOPMENT 9 

3.1 Stakeholders workshop and Vision statement 9 

3.2 SWOT Analysis 9 

3.3 Vision for Vellakoil Town 9 

3.4 Strategies for Economic Development 10 

3.5 Urban Infrastructure 11 

3.5.1 Sector wise Vision 11 

3.6 Performance and Demand Assessment 12 

3.7 Strategies for Poverty Reduction and Slum Upgradation 14 

4 ORGANISATIONAL STRUCTURE 15 

4.1 Elected Body 15 

Executive Wing 15 

4.2.1 General Administration 15 

4.2.2 Engineering Department 16 

4.2.3 Accounts Department 16 

4.2.4 Public Health Department 16 

4.2.5 Town Planning Department 16 

4.3 Staff Strength Position and vacancy position 16 

4.4 Issues in Human Resource 18 

4.5 Organisation Management 18 

5 INFRASTRUCTURE STATUS AND NEEDS ASSESSMENT 19 

5.1 Physical Infrastructure 19 

5.1.1 Water Supply 19 

5.1.2 Sewerage 21 

5.1.3 Storm Water Drains 21 

5.1.4 Improvement to water bodies 22 

5.1.5 Soild Waste Management 23 

5.1.6 Roads 25 

5.1.7 Bus Stand 27 

5.1.8 Bus Shelter 27 

5.1.9 Street Lights 27

5.2 Social Infrastructure 29 

5.2.1 Slum Improvement 29 

5.2.2 Parks and Play fields 30 

5.2.3 Market 31 

5.2.4 Public Convenience 31 

5.2.5 Slaughter House 31 

5.2.6 Burial Ground 31 

5.2.7 E-Governance 32 

5.2.8 Urban Greenary 32 

5.3 Other Projects 32 

5.3.1 Updation of Database On GIS Platform 32 

5.4 Proposals to be implemented by other Agencies 33 

5.5 Capital Investment Plan 34 

6 REFORMS AND ACTION PLAN FOR PROJECT IMPLEMENTATION 36 

6.1 Present Scenario in Urban Reforms 36 

6.2 Proposed Interventions at state level 37 

6.3 Proposed Interventions at Municipal level 38 

6.3.1 Reforms In Resource Mobilisation 39 

6.3.2 Privatisation Initiatives 42 

6.3.3 Energy and Resource efficiency 44 

6.3.4 Computerisation and E-governance 45 

6.3.5 Accounts and auditing 46 

6.3.6 Institutional Management 46 

6.3.7 Reforms in Municipal Service Delivery 51 

7 ASSETS MANAGEMENT 52 

7.1 Activities of Asset Management Plan (AMP) 52 

7.2 Priority asset management options 53 

7.3 Land Assets 54 

7.4 Management Options for land assets 55 

7.5 Proposed New Assets 55 

8 FINANCIAL OPERATING PLAN 57 

8.1 Capital Investment Plan 57 

8.2 Other Projects and on going projects 59 

8.3 Means of Finance 60 

8.4 Financial Sustainability 65 

8.5 Basic Assumptions for Projections 65 

8.5.1 Income 66 

8.5.2 Expenditure 71 

8.5.3 Collections 72 

8.5.4 Annuity Factor 73 

8.6 Project Cash Flows and FOP Results 73 

8.7 Impact of Potential Improvements 81 

8.8 Estimation of Investment Capacity 81 

8.9 Key Indicators 83 

8.10 Inference 83 

9 PUBLIC CONSULTATION PROCESS 86

TABLES 

2.1 Population and growth 4 

2.2 Comparative statement of projected population 7 

2.3 Occupational Pattern - 2001 7 

3.1 SWOT Analysis 9 

3.2 Sector wise vision for the key Infrastructure 11 

3.3 Performance Indicators for key Municipal Services 12 

3.4 Demand for Municipal Services 13 

4.1 Staff Strength 17 

4.2 Additional Staff Required 18 

5.1 Details of OHTs 20 

5.2 Water Tariff-Deposit Details 20 

5.3 Demand & Supply in Water Supply - Projection 20 

5.4 Storm water Drains - proposals 22 

5.5 Solid Waste management – Proposals* 25 

5.6 Category of roads 26 

5.7 Road improvement - Proposals 26 

5.8 Existing street lights and energy consumption 27 

5.9 Street lights - Proposals 28 

5.10 Location of Existing Slum Areas 29 

5.11 Details of Existing Slum Areas 29 

5.12 Slum - Proposals 30 

5.13 Market - proposals 31 

5.14 Proposals to be implemented by other Agencies 33 

5.15 Capital Investment Programme 34 

6.1 Road map – Environmental Improvement 39 

6.2 Road Map - Improving revenue from own sources 40 

6.3 Road Map Improving revenue from user charges 41 

6.4 Road Map for Formation of new sustainable revenue bases 42 

6.5 Road Map for Privatization initiatives 44 

6.6 Road Map for Energy and Resource efficiency 45 

6.7 Road map for Computerization and E-Governance 46 

6.8 Technical Assistance for Elected representatives 47 

6.9 Technical Assistance for ULB staff 48 

6.10 Road map for Accounts & auditing and Institutional Management 49 

6.11 Road Map For Implementation Of All Projects 50 

6.12 Reform Agenda - Municipal Service Delivery 51 

7.1 Priority Municipal Assets – Vellakoil Municipality 53 

7.2 Proposed Use – Land Asset 54 

7.3 New Assets for the year - 2010 to 2015 55 

8.1 Projects to be executed by the Municipality 57 

8.2 Projects to be executed by Other Agencies 59 

8.3 Projects under Implementation by the Municipality 59 

8.4 Multi Year Investment Plan and Means of Finance 60 

8.5 Consolidated Means of Finance 65 

8.6 Ratio of Property tax 66 

8.7 Water supply Charges - Existing 67 

8.8 House Service Connections - Percentage 68 

8.9 Sewage Charges 68 

8.10 Increase in Tariff - Sewage Charges 69 

8.11 Increase in Deposit - Sewage Charges 69 

8.12 Assumptions - Increase in Expenditure 71 

8.13 Assumptions – O&M 71 

8.14 Assumptions – Provision of doubtful debts 72 

8.15 Assumptions – Property tax collection 72 

8.16 Assumptions – Profession tax 72 

8.17 Assumptions – Other Non Tax Income 72 

8.18 Assumptions – Water Charges 72 

8.19 Assumptions – Drainage Charges 73 

8.20 Terms of Loan Funding for Proposed Investments 73

8.21 Consolidated Income & Expenditure for next 20 years (up to FY 2028-29) 74 

8.22 Consolidated Balance Sheet for next 20 years (up to FY 2028 – 29) 76 

8.23 Summary of Borrowing and Investment Capacity - Scenario I 82 

8.24 Summary of Borrowing and Investment Capacity - Scenario II 82 

8.25 Summary of Borrowing and Investment Capacity - Scenario III 83 

8.26 Key Indicators 83 

8.27 Priority Projects suggested under CDP 84 

8.27a Priority Projects suggested under CDP through Grants and Deposits 84 

9.1 Major issues and solution initiatives 87 

9.2 Minutes of the consultative process meeting 87 

FIGURES 

2.1 Occupational Pattern of Vellakoil -2001 7 

4.1 Status of Municipal Staff Strength 17 

4.2 Organisational structure of Vellakoil Municipality 17 

5.1 Functional Elements of a Municipal Solid Waste Management System 24 

MAPS 

2.1 Regional setting of the Town 5 

2.2 Town Map - Vellakoil Municipality 6 

1 Minutes of Meeting 

2 Population Projection 

3 Finance Working Sheets 

4 Urban Indicators 

ANNEXURES

City Development Plan for Vellakoil Municipality SMEC India Pvt Ltd 

Final Report TNUDP III 

1.1 CONTEXT OF THE STUDY 

CONTEXT, CONCEPT AND CONTENTS OF CITY DEVELOPMENT PLAN 

The Commissioner of Municipal Administration (CMA), Government of Tamil Nadu, under the 

Third Tamil Nadu Urban Development Programme (TNUDP III) has taken effective steps to 

assist the Urban Local Bodies (ULBs) in the State, particularly the Grade III municipalities to 

strengthen and improve the financial position for effective capital investment management, and 

service delivery to the public. These ULBs spread over the State, are service centres to the 

surrounding rural areas, offering marketing, physical and social infrastructure facilities. These 

centres have a good potential for future growth, and therefore, it is essential to formulate a City 

Development Plan (CDP) for these urban centres and immediate implementation of reforms in 

these ULBs for better management. The CMA has begun the process of capacity building in 

these ULBs to enhance their performance. In this regard, the CMA has appointed Consultants for 

preparing comprehensive City Development Plan (CDP) for each of the Grade III Municipal 

Towns. 

1.2 OBJECTIVES 

The objectives of the study include: 

• Defining the directions of growth of the town, and up gradation of services relevant to 

economic activities and development. 

• Examination of the need for the projects identified by the Urban Local Bodies, and 

assessment of the demand in terms of gaps either as deficiency or as excess. 

• Studying the status of essential urban infrastructural services and outlining broadly the 

needs. 

• Defining specific rehabilitation and capital improvement needs of infrastructural facilities 

and services in all parts of the urban areas including slums. 

• Analysis of improvement techniques and methods to enhance the local bodies’ resource 

positions and improve the management system that would sustain the proposed 

rehabilitation programmes. 

• Identification of reforms required in administration and service delivery system of the 

urban local body. 

• Studying improvements / changes required in the ULB setup to improve the O&M of 

assets. 

• Identifying measures to address overall growth measures including service needs in a 

sustainable mode. 

1.3 REVIEW MEETING FOR DRAFT FINAL REPORTS 

On the review of the Final reports (Stage-IV) held at the RDMA office, Tiruppur on 10.11.09 for 

the towns of Kasipalayam, Surampatti, Veerappanchatram, Periyasemur and Vellakoil 

Municipalities, the Review Committee indicated certain remarks in the minutes of the meeting, 

and the Consultant’s updations are presented below: 

1 

1



The consultants were asked to: 

S.N Points raised in the minutes of meeting 

Vellakoil Municipality 

Reply / Remarks 

1. The cost and funding pattern for water supply improvement scheme 

has to be revised to Rs.1199.12 lakhs (Grant – Rs.852.35 lakhs, 

TUFIDCO Loan –Rs.300 lakhs and ULB contribution – Rs.46.77 

lakhs). The O&M cost to be revised to Rs.49 lakhs. 

Since done. Refer chapter 5, section 5.1.2 

2. Vellakoil Municipality has been annexed to Tiruppur District and the 

same needs to be updated in the report. 

3. The Proposed cost for the construction of commercial building near 

Bus stand has to be revised to Rs.100 lakhs. 

2 

Since updated. 

4. The Weekly Market has to be given as Weekly Market/Shandy. Since done. 

Common Points 

1. The proposed years under CIP need to changed to 2010-11 to 2014- 

15 or as Years 1 to 5. 

Since done. The revised cost has been given under chapter 5, section 5.3 

Since done.



Road map for City Development Plan 

The Table given below presents the stages and contents under each stage of the presentation of the CDP. 

Stage I 

Inception Report 

Town reconnaissance and 

Data collection. 

Modules : 

- Strategic vision 

- Development objectives 

- Methodology 

Stage II 

Interim Report 

Consultations and Analysis 

Modules : 

- Demand assessment 

- Municipal Fiscal status 

- Investment needs 

- Stake holder consultation 

3 

Stage III 

Draft Final Report 

Finalisation of 

Capital Investment Programme 

(CIP) 

Modules : 

- Strategic plan 

- Capital Investment 

Need(CIN) 

-Priority Asset management 

Stage IV 

Final Report 

FOP and Adoption by Council 

Modules: 

- FOP 

- Draft MOA 

- Policy interventions 

- Technical Assistance 

Present stage



2.1 REGIONAL SETTING 

TOWN PROFILE, PHYSICAL PLANNING AND GROWTH MANAGEMENT 

Vellakoil, a Grade III Municipality in Tiruppur district is located at a distance of 48 km, east of 

Coimbatore and 60km, south of Erode town. The area of the town is 64.75 sq.km and the 

population is 34,438 as per census 2001. The latitude and longitude of this town are 8º36’’41’’N 

and 78º3 ‘’30’’E respectively. It is well connected by road to the surrounding urban centres. 

Vellakoil municipality is a prominent commercial center for oil and vanaspathy. The regional 

setting of the town and the town map is shown in Map 2.1 and 2.2. 

2.2 PHYSICAL FEATURES 

Vellakoil is situated on Coimbatore – Thiruchirapalli NH-67. The major arterials from the town are 

the Thiruchirapalli – Coimbatore road running west to east, Erode – Tharapuram road & Moolanur 

road. The general gradient of the town slopes from North to South. The major soil found in this 

region is Black soil. The ground water table varies from 50m to 200m. 

2.3 CLIMATE AND RAINFALL 

The town and the surrounding region have a sub- tropical climate with temperatures varying from 

28 to 36ºC. Rainfall is intermittent, irregular and usually heavy during the southwest monsoon. The 

average annual rainfall ranges between 700-800 mm. 

2.4 HISTORY OF THE MUNICIPALITY 

Vellakoil was constituted as village panchayat during 1938 , upgraded to town panchayat in 1977 

and as Third Grade municipality in 2004. There are 21 wards in the Municipality. 

2.5 DEMOGRAPHIC FEATURES 

2.5.1 Population and its Growth 

Vellakoil population has grown in the past decade. As per the 2001 census, the town registered a 

population of 34438. The population growth rate of the town is19.3% during the period 1991- 

2001. 

Table 2.1 Population and growth. 

Year Population of Vellakoil Growth rate 

1991 28,878 - 

2001 34,438 19.3 

Source: Census of India. 

4 

2



Map 2.1 Regional setting of the Town 

5



PACHAPALAYAM 

VILLAGE 

TO KOVAI 

UTTHAMAPALAYAM VILLAGE 

TO DHARAPURAM 

1 

VELAGOUNDANPALAYAM 

KADAIYARAN VALASU 

PACHAGOUNDANVALASU 

THANEER 

PANTHAL 

LACHAMANAICKANPATTI 

VILLAGE 

21 

VAIYAPURI NAGAR 4 

KALLANKATTU 

VALASU 

KUTTAKATTUPUDUR 

SEERANGAGOUNDANVALASU 

SIVANATHAPURAM 

CHERAN NAGAR 

POTHIYAKADU 

14 

AGALARAIPALAYAMPUDUR 

2 

UPPUPALAYAM 

T.C.ROAD 

20 

L.K.C NAGAR 

METTUPALAYAM VILLAGE 

THIRUMANGALAM 

ARIYANDIPALAYAM 

K.P.C NAGAR 

K.P.C NAGAR 

19 18 

KAMARAJAPURAM 

ANNA NAGAR 

17 

16 

PUDUKADU 

DHARAPURAM ROAD 

15 

GANAPATHYPALAYAM 

THIRUVALLUVAR NAGAR 

KUMARAVALASU 

GANDHI NAGAR 

5 

6 

7 

RAJIV NAGAR 

SIVANATHAPURAM 

THEETHAMPALAYAM 

13 

NACHIYAPPA GOUNDAN 

VALASU 

SALAVAIYALLAR COLONY 

M.G.R.NAGAR 

3 

ARIVOLI NAGAR 

D.R . NAGAR 

THEETHAMPALAYAM 

SEMMANDAMPALAYAM ROAD 

KATCHERI 

VALASU 

6 

TO ERODE 

INDRA GANDHI NAGAR 

8 

10 

11 

ARUN CRUSHER 

MULANUR ROAD 

9 

SEMMANDAMPALAYAM 

KALIMOOPANPATTI 

ORAMPUPALAYAM 

MULAIYAMPOONDI VILLAGE 

MUTHU NAGAR 

TO TRICHY 

12 

KARATTUPALAYAM 

NACHIPALAYAM 

SENAPATHYPALAYAM 

VILLAGE 

PULLACHELIPALAYAM 

SUBRAMANIYAGOUNDANVALASU 

TO 

MULANUR 

MADAMEDU 

MANJAANGADU 

MOOTHANAICKAN VALSU 

Map 2.2 Town Map – Vellakoil Municipality 

2.5.2 Population projection 

Based on the growth rate for the past two decades, the future population of the town has been 

projected using various methods and are tabulated as below: 

1. Arithmetical Increase Method 

2. Geometric Increase Method 

3. Incremental Increase Method 

4. Method of least square 

N 

NW 

W 

SW 

S 

NE 

SE 

E



Table 2.2 Comparative statement of projected population 

Sl. no. Method 

Projected Population for Vellakoil 

2010 2025 2040 

1 Arithmetical Increase 52208 72516 92823 

2 Geometrical increase 51620 81873 112132 

3 Incremental Increase 53348 94325 156681 

4 Method of Least Squares 49605 67605 85605 

Source: Analysis and calculations 

After a detailed analysis and comparison of each method, Geometrical increase method is found 

to be suitable and the population projections are based on the same. The details are given in 

Annexure-2. Therefore, the projected population for Vellakoil town is: 

1. Base year 2010 - 52,702 

2. Intermediate year 2025 - 88,836 

3. Ultimate year 2040 - 1,46,349 

2.5.3 Sex ratio and literacy 

The sex ratio in the town is 964 and the literacy rate is 75% higher than the national average of 

59.5%. 

2.6 OCCUPATIONAL PATTERN 

The work force participation of the town is 19,737 in 2001.As per the census 2001; more than 

80% of the work force is involved in the tertiary sector. The sector wise distribution of the work 

force is depicted in the table below: 

Table 2.3 Occupational Pattern, 2001 

Category of Workers 

Total 

% to 

Population 

% to Total work 

force 

Total workers 19,737 57 - 

Primary sector 1,526 4 8 

Secondary sector 1,252 4 6 

Tertiary sector 16,959 49 86 

Non-workers 

Source: Census of India 2001. 

14,701 43 - 

Fig: 2.1 Occupational pattern of Vellakoil -2001 

7



2.7 PHYSICAL PLANNING AND GROWTH MANAGEMENT ISSUES 

The existing developmental issues and future potential are addressed below: 

The major arterials connecting the town to the surrounding urban centres are: 

• Coimbatore – Thiruchirapalli National Highway 

• Erode – Tharapuram road 

• Moolanur road 

The Coimbatore – Thiruchirapalli road is one of the major road, running west to east connecting the 

town to major urban centres. The town has no railway connectivity. The nearest railway stations 

are in Erode, Karur and Tiruppur. The nearest Airports are at Coimbatore (88km) & Trichy (117km) 

The Major industrial activities in the town are hand loom and power loom, spinning mills, oil mills 

and brick manufacturing. Vellakoil is one of the major marketing centers for sunflower oil. 

Land use Pattern 

The land use pattern for Vellakoil is followed by the major activity areas in the Town. Commercial 

areas are mainly located along the major roads such as Erode road, Coimbatore Road, Trichy 

Road are radiates out from the centre of the town where the bus stand is located. 

The major developments are seen on the north along Erode road and on the west along 

Coimbatore Road, south along Moolanur and Tharapuram Road and east along Karur and Trichy 

road. More than 50 % of the land in the town constitutes undeveloped area comprising of lands 

under agricultural, unused vacant lands and waste lands. 

a. Residential 

Residential development has almost spread over the entire municipal area. The density varies from 

high to low from the centre of the town. 

b. Commercial and Industrial 

The main commercial areas are located along the major road network. Weekly Market is located 

near the bus stand in about 3 acres of land. The oil extracting industries and power loom/handloom 

industries are sporadically distributed in the town. 

2.8 GROWTH MANAGEMENT ISSUES AND SOLUTION INITIATIVES 

Need to strengthen Municipal Revenue base 

• Low levels of revenue generation of Municipality leading to poor service delivery. The 

reforms to be under taken by the urban local body will be addressed in detail in the list of 

Reform Agenda suggested in the CDP. 

Need for guided development for a sustained economic growth 

• The town has vast land for future development. But at present the industrial developments 

are sporadically distributed over the town. There is mixed land use in the town area causing 

congestion and unsafe environmental conditions. 

• Thus, there is an immediate need for Master Plan and Detailed Development Plans for 

sustained economic growth and safe environment to live in. 

Need for Railway connectivity 

• Discontinued Railway connectivity directly affecting the town’s economy. 

Need land for future development 

• Inadequate municipal owned vacant land for implementing social, physical infrastructure 

facilities and remunerative developments. 

8



VISION AND STRATEGIES FOR ECONOMIC DEVELOPMENT 

3.1 STAKEHOLDERS WORKSHOP AND VISION STATEMENT 

The City Development Plan is a tool which adapts a participative approach in planning and 

implementing projects involving users, elected councilors, line agencies, private organizations, 

NGOs and CBOs. In this process, residents of various sections of the communities in the town were 

enquired into at random during reconnaissance survey and visits to all the sites of the projects 

identified by the Municipality and also otherwise suggested by the elders. 

The broad purpose of public participation is to involve the stakeholders in the development plan for 

the city. The Vision Statement has been firmed up based on the feed backs received from the stake 

holders and expert survey of the municipal services for the perspective year of 2030.The analysis 

and findings of the study are based on secondary data collected from respective departments and 

during the course of the study, data gaps if any were supplemented through primary survey. A 

detailed analysis to find out the existing status of each admissible sector, cross-referring the norms 

and standards, demand and gaps based on present and future service requirements is done. A 

SWOT analysis was done based on the data collected on the resources and consultation with the 

stake holders in the following section. Accordingly, interventions are suggested. 

3.2 SWOT ANALYSIS 

Table 3.1 SWOT Analysis 

STRENGTH WEAKNESS 

Access to Erode, a major node for textile, leather & 

agriculture, timber based industries 

Crippling Environmental pollution to odais & agricultural 

hinterland 

Good connectivity with nearby Urban centres Absence of recreational facilities 

Nh-67 bisecting the town Need to expedite infrastructure improvements 

Perennial source of water from River Cauvery Inadequate social infrastructure facilities 

High Urban literacy rate at 75% Extensive Municipal area – Increased demand for 

Fertile agricultural hinterland 

penetration of Municipal services 

Excellent industrial base of textile, bricks, agro 

Absence of rail connectivity 

based timber & leather 

OPPORTUNITIES THREATS 

Availability of land for future development Rising land and labour costs 

Co-operative mindset of community. Increased Environmental regulations & falling margins 

Access to Higher Educational Institutions Low skill, low technology manufacturing units 

Opposition to leather based industries /brick industries 

Source: Feedback from stakeholders meeting and analysis. 

3.3. VISION FOR VELLAKOIL TOWN 

Vellakovil town is a major commercial centre for agro products and textiles. Based on the feed backs 

from stakeholder workshops and analysis of the town the vision statement for the town of 

VELLAKOIL is framed as 

9 

3



“An clean and green town; economically self sustaining, with access to physical and social 

infrastructure”. 

3.4 STRATEGIES FOR ECONOMIC DEVELOPMENT 

The district has high concentration of power loom & handloom weaving, textile processing units, rice 

milling, edible oil expelling units, paper products and basic metal products industries etc. 

1. Benefit from the proximity to Erode and Tiruppur to generate further employment 

opportunities and economic development. 

Vellakoil is strategically located between Erode and Tiruppur, on the National Highway to Trichy 

.Thus there is a scope for further development of knitwear and readymade garments, especially for 

export oriented units. Provision of marketing centers, adequate housing, basic infrastructure 

facilities, medical, educational and recreational facilities would enhance overall growth of the town. 

2. Build on the industrial base to create further scope for development. 

a. Establishment of industrial estates 

b. Development of food processing industries 

c. Establishment of industrial parks and SEZs 

d. Guidance through research and training institutes 

e. Implementing Development centers and schemes for industrial and social 

development 

a. Establishment of industrial estates 

There are 5 industrial estates in this district promoted by official agencies namely SIDCO 

Industrial Estate- Erode, SIDCO Industrial Estate -Dharapuram, SIDCO Industrial Estate -Nanjai 

Uthukuli, TAHDCO Industrial Estate -Perundurai, Perundurai Industrial Estate.The proposed 

Industrial estates in the region are SIDCO Industrial Estate -Rasathivalasu, SIDCO Industrial 

Estate Vadamugam -Kangayampalayam, SIDCO Industrial Estate -Chennimalai. 

As the SIPCOT Industrial Growth centre is at Perundurai providing all the necessary 

infrastructure facilities. There is a good scope for setting up industries like Textile Processing, 

Leather, Chemical, Engineering, Electrical & Electronics Industries. 

The Cabinet Committee on Economic Affairs gave its approval to the implementation of the 

Comprehensive Power loom Cluster Development Scheme at Erode (Tamil Nadu) as a Central 

Sector Plan Scheme with a budget provision of Rs.70 crore. The implementation of the Scheme 

will benefit the weavers in developing / diversifying new designs and products, their skill upgradation, 

up-gradation of their looms, providing a suitable workplace, market support etc. to 

improve their earnings and socio-economic conditions. 

b. Development of Food Processing Industries 

There is ample scope for development of Food Processing Industries in the district. Availability of 

technology and training is a problem for the aspiring entrepreneurs. Hence there is need for 

10



Food Technology & Training centre under the guidance of CFTRI, Mysore, in this district is 

recommended by the Industrial Potential Survey Report- Erode 2001 – 2002. 

c. Establishment of Industrial parks and SEZs 

Establishment of Garment Park in the region will support the industrial activity as Tiruppur is near 

to the town. Establishing Special Economic Zones (SEZs) for textile and agro products in the 

region will enhance the economy of the region. 

d. Implementing 

development 

Development centers and schemes for industrial and social 

To develop handloom sector both Central & State Government are implementing various 

schemes through the office of the Assistant Director (Handloom & Textiles) at Erode. The 

schemes are 

• Handloom Development Centre 

• Project Package Scheme 

• Help Package Scheme 

• Housing scheme for weavers 

• Export Package scheme 

To increase the productivity of power loom, the Government has introduced the Technology 

Upgratation Fund Scheme (TUFS) for undertaking modernization of textile industry. Utilisation of 

this fund will meet the requirement of power loom textile industry. By implementing export 

package scheme and help package schemes, the edible oil units may be further encouraged in 

production and marketing. 

3.5 URBAN INFRASTRUCTURE 

Infrastructure provision is perceived to have a significant impact on health, reducing incidence of 

illnesses which are related to an unhygienic living environment. Thus, infrastructure plays an 

inevitable role in the economic development and social well being of the town. 

3.5.1 Sector wise Vision 

The sector wise vision for the key infrastructure services are as given in the table below: 

Table 3.2 Sector wise vision for the key Infrastructure 

S.n Sector Vision statement 

1 Water Supply To check wastage and pilferage of water 

To generzate more revenue for efficient operation & maintenance of the 

system and to supplement the capital works, in order to render the delivery 

of the service self sustaining over a period of time. 

2 Sewerage and 

sanitation 

To provide coverage of the sewerage facilities or LCS measures for slum 

areas. 

To maintain high level of environmental hygiene generally in the town and 

particularly the cleanliness of the water bodies 

11



3 Storm water drainage 

and improvement to 

water bodies 

4 Solid Waste 

management 

To improve condition of storm water drains to handle run off water and 

prevent water stagnation. 

Rejuvenate water bodies and improve recharge of ground water. 

To provide Rain Water Harvesting to improve the quality and quantity of 

Ground water. 

To provide a litter free town for the healthy living of the public. 

To minimize the O&M expenditure of SWM 

To involve private organizations to the extent possible 

5 Roads and Streets To provide safe, comfortable and speedy circulation network for the 

residents and traffic 

To relieve congestion by adopting a traffic management plan 

To channelise by-passable traffic through arteries outside the town limit. 

6 Street lighting To provide sufficient illumination to the town, for safety of the people and to 

adequately cope with the requirements of traffic. 

To optimize the use of electricity by adapting energy efficient technology 

7 Educational 

Institutions 

To Provide comfortable conducive physical infrastructure and sound 

environment for the learning process 

8 Medicare To make quality preventive and curative care available and 

accessible to the Public. 

To support people for healthy living and environment. 

3.6 PERFORMANCE AND DEMAND ASSESSMENT 

To assess the indicators of performance in each sector of infrastructure, the existing levels of key 

Municipal services is benchmarked against their norms and standards to arrive at performance 

assessment index .The norms and standards are based on SFC recommendation, Planning 

Commission recommendation, UDPFI guidelines, CPHEEO manual, best practices etc. 

The demand assessment for projects is arrived from the Stake holder consultative meetings, 

discussions with officials, field visits and service analysis. The improvement needs proposed are 

based on the demand and performance assessments with reference to short term and long term 

proposals for each sector. 

The Performance assessment index for the existing status against the norms and standards for 

water supply, sewerage, drainage, solid waste, street lighting and social facilities are illustrated in 

the table below: 

Table: 3.3 Performance Indicators for key Municipal Services 

Sl 

No 

Service Indicators Unit Normative 

Standard 

Performance of Key Water Supply Service Indicators 

1 Daily per capita supply lpcd 135 70 

2 Roads covered with distribution network Percent >100 96 

3 Storage Capacity with respect to supply Percent 33 45 

4 Property tax assessments covered by service connections Percent 85 27 

5 Proportion of non – domestic service connections Percent >5.00 2.5 

Performance of Key Sewerage and Sanitation Service Indicators 

6 Roads covered by UGD network Percent 100 - 

7 Sewage contribution lpcd 100 - 

9 Assessment having access to UGD facility Percent 85 - 

12 

Current 

Status



10 Population covered by UGD Percent 85 - 

Performance of Key Storm water Drainage Service Indicators 

11 Road length covered with storm water drainage Percent 130 11 

Performance of Key Solid Waste Management Service Indicators 

12 Estimated waste generation Grams 

capita/ day 

/ 400 300 

13 Waste collected as per the estimate of ULB (w.r.t. waste Percent 

generation) 

100 85 

Performance of Key Road Service indicators 

14 Road density Km/sq.km 10-15 2.7 

15 Per capita road length meters 1.75 3.5 

16 Proportion of surfaced roads Percent 100 67 

Performance of Key Street Lighting Service indicators 

17 Spacing between lamp posts meters 30 87 

18 Proportion of fluorescent lamps (tube lights) w.r.t. total fixtures Percent ≥80 89 

19 Proportion of high power fixtures w.r.t. total fixtures Percent ≤20 11 

Performance of Key indicators for Slums 

20 Proportion of slum population to total city population Percent 100% to road length 

Under Ground Sewerage System 

km 77.43 85.99 122.81 168.20 

Network coverage @ 100% to road length km 77.43 85.99 122.81 168.20 

Storm Water Drains 

Requirement @ 130% to road length km 101 112 160 219 

Solid Waste Management 

Waste generation at 300 gms TPD 15.49 17.20 28.66 39.25 

Compost yard area requirement @ 1 acre per 10000 pop Acres 5 6 8 11 

Roads 

Road requirement with benchmark @ 1.5 to 2 m per capita 

road length km 77.43 85.99 122.81 168.20 

Street Lights 

Requirement @ 30 m gap between street lights Nos 2581 2866 4094 5607 

Parks and Open spaces 

Requirement @1.0 to 1.2 hectare per 1000 population Acres 127.5 141.59 202.23 276.97 

Community Hall and Library 

Requirement @ 1 per 15000 population (2000 sq.m) Nos 3 4 5 7 


13



The chapters that follow propose projects needed to ensure efficient delivery of the services. 

3.7 STRATEGIES FOR POVERTY REDUCTION AND SLUM UPGRADATION 

Towards Building Successful Slum-Upgrading Strategies 

• Youth groups can be very effective. 

Youth SHGs can be encouraged and made active participants in developmental activities. 

Unlike Women SHGs, which are formed originally for social empowerment, Youth SHGs can 

aim at both economic empowerment and social empowerment as the primary focus. The 

focus can be on skill training for increasing their employability and promotion of economic 

activities. 

Group formation: 

The SHGs can be formed with unemployed youth in the age group of 18 to 35 years. Each 

group may comprise 10 to 20 members drawn from the below poverty line population. 

Youth SHGs can be beneficial in the following ways 

• To engage the communities in development activities through a dialogue with the active 

participation of the youth (men and women) with a sense of commitment and integrity 

• To equip the youth by building their skills, capacity and capability in managing 

development, so that, they can help build the capacity of the citizens to manage the affairs of 

the community on their own. 

• Infrastructure provision 

Infrastructure provision brings indirect social and economic development, particularly for 

women. Improved infrastructure reduces women’s work burden and gives them more time, 

increased space allows for more home-based economic activity, and lighting and better road 

coverage increase mobility and security at night. Infrastructure provision is perceived to have 

a significant impact on health, reducing incidence of illnesses which are related to an 

unhygienic living environment. 

• Community halls are valuable for project work as well as for private and public social 

activities, however, halls are prone to capture and maintenance can be a problem. They can 

also be used as location for health camps, balwadis (pre-schools), vocational training and 

neighborhood committee meetings. They can be used by the community for a variety of 

occasion such as religious ceremonies, marriages, political meetings etc. conflicts over use 

and maintenance are common, and control over the hall give some individuals power in the 

community. 

• Balwadis (pre-schools) and Schools 

Both these institutions benefit poor and working families, especially working mothers. If 

timings of balwadis are appropriate, then they have a positive effect on the lives of working 

women, freeing them of childcare and giving more time to women to do paid as well as nonpaid 

work. 

• Medical facilities 

Frequent illnesses and consequent break from work is a major factor that costs the time and 

money of the low income group. The availability and accessibility to medical facilities as 

necessary needs to be addressed as a priority issue. 

14


Final report TNUDP III 

ORGANISATIONAL STRUCTURE 

The organisational structure of the Vellakoil Municipality generally consists of administrative and 

executive wings. 

4.1 ELECTED BODY 

The Municipal Council, the political wing of the Vellakoil Municipality consists of 21 elected 

councilors. Each Councilor represents one electoral ward. The Councilors in turn elect the Chairman 

as head of the Municipal Council. 

Administrative wing 

The administrative wing gives overall guidance to the municipal functions through set of committees. 

Three committees have been formed namely, Appointment Committee, Contract Committee and 

Taxation and Appeal committee consisting of the Chairman, the Municipal Commissioner and 

elected Councilors as members. Appointment Committee is a statutory committee, and the 

Chairman of the Municipality is also the Chairman of the committee. The Committee is responsible 

for making appointments for posts which fall under the purview of the Appointing Committee. 

Contract Committee is another statutory committee and quotation of works is finalized by the 

Contract Committee. The Taxation Appeal Committee is responsible for hearing of appeals of the 

tax items. 

4.2 EXECUTIVE WING 

The executive wing is responsible for the Municipal operations and maintenance. The Executive 

Officer is the administrative head of the executive wing and is supported mainly by 5 department 

heads in the Municipal operation and maintenance. The organization structure of the Municipality 

comprises of 5 functional departments namely, 

1. General Administration 

2. Engineering and Water Supply Department 

3. Accounts Department 

4. Public Health Department, and 

5. Town Planning Department 

4.2.1 General Administration 

Vellakoil Municipality is a Grade Three Municipality. The Manager is the head of Administration, next 

to the Commissioner in the section of General Administration, and he is responsible for general 

supervision and administration of the Office. All establishment matters are dealt by the General 

Administration Section. 

Manager 

Manager is the Head of General Section. His duty includes general supervision of the ministerial 

staff, and maintenance of discipline in the office premises, ' and to sign receipts for all remittances 

made in the Municipal Treasury to acknowledge registered tapals, Money orders etc on behalf of the 

Commissioner. The Manager is the custodian of the cash collected by daily-checking of Chitta and 

15 

4



Cash and Petty cash, payment advance etc, and for the administration report by way of Annual 

Inspection of the office, checking of Personal Registers of all staff and subsidiary registers in respect 

of all the sections. All papers are routed through the Manager to the commissioner except the 

Engineering section and the Health section. 

All matters relating, to the Establishment including public health, maintenance of Increment & 

Punishment registers, maintenance of service registers, register of Probationers; maintenance of 

temporary and permanent post sanction register, Pension & Gratuity for all Establishment Audit 

Register, issue of Office order, common office order book, maintenance of stock file, maintenance of 

personal register & audit objection register etc are looked up by the Manager. 

4.2.2 Engineering Department 

The Municipal Engineer is the over-all in-charge of Engineering Section. The Municipal Engineer is 

controlling the Overseer, Work Inspector, and Road Mazdoor, Water works Superintendent, 

Wiremen, Helper and Fitter working in the section. The Municipal Engineer looks after the 

maintenance of roads, street lights, road laying, and construction of building, drainage, maintenance 

of parks, head works and municipal vehicles. The other subordinate officers are assisting the 

Engineer to look after the above works. 

4.2.3 Accounts Department 

The Account Section is included in the General Section. The Accountant is the Head of the Wing 

controlling financial matters. It involves preparation of Budget and looks after the Accrual based 

Accounting System. 

4.2.4 Public Health Department 

Sanitary Officer is the overall in-charge of the Health Section. He looks after conservancy, sweeping 

streets, maintenance of drainage, controlling of epidemic diseases, ensuring of license to D&O 

trades, Birth and Death Registration and issuing of certificate to birth and death registration. 

Sanitary Inspector, Sanitary Supervisor and Sanitary Workers are assisting the Sanitary Officer. The 

Sanitary Officer is held responsible for the solid waste management. Pulse Polio Immunization 

camps are conducted every year under the section. 

4.2.5 Town Planning Department 

Town Planning Officer/Inspector is over all in-charge of the section. He looks after the work of 

preparation of Master Plan, Detailed Development Plan and maintains the land use registers as per 

the approved zoning uses. He is also responsible for licensing of plan approved, booking of 

unauthorized construction, approval of lay out plans with in the town limit, controlling and removing 

the encroachment in the town. The Town Planning Inspector helps in planning the future 

development of the town and allied works. 

4.3 STAFF STRENGTH POSITION AND VACANCY POSITION 

As of now, there is 136 vacancies in the 177 sanctioned strength of the Municipal office. The 

vacancies are mostly under the Sanitation section. 

16



S. 

No 

Name of the 

department 

Table 4.1 Staff Strength 

Sanctioned 

strength 

17 

Working 

strength 

No. of post 

Vacant 

1 General Section 7 7 - 

2 Engineering Section 9 8 1 

3 Public Health Section 28 28 - 

Total 44 43 1 

Source: Vellakoil Municipality, 2008. 

Engineering 

staff 

Fig 4.1 Status of Municipal Staff Strength 

Vellakoil MUNIC IPALITY 

EXECUTIVE BODY ELECTED BODY 

Wa ter 

Supply 

Dra ins 

Roa ds 

Streetlights 

Ex ecu tiv e Off icer Chairman 

P ublic 

Healt h staff 

Solid waste, 

Drai nage, 

Birth & 

Dea th 

Registration 

Administra tion 

/Re ven ue St aff 

Off ice 

Ad m in istr at i 

on Accounts 

Ta x 

Colle ctio n 

Fig 4.2 Organisational structure of Vellakoil Municipality 

V ice Ch air m an an d 

war d Co un cilo rs 

Project 

Approva ls



4.4 ISSUES IN HUMAN RESOURCE 

Out of the Sanctioned posts of 44, in all sections of the Municipality, 1 post is vacant. Considering 

the present and proposed quantum of work in the municipality, the vacant posts in Engineering 

Section, Public Health Section need to be filled up expediously. 

In view Privatization of Solid Waste Management and Maintenance of street lights through ESCO/ 

Private agency, implementation of proposed improvements in infrastructure, the various sections of 

the municipality need to be strengthened with the following personnel: 

Table 4.2 Additional Staff Required 

S No Name of the Post Section No. of Personnel 

1 Accounts officer General 1 

2 Data Entry Operator General 1 

3 Revenue Inspector General 1 

4 Municipal Engineer Engineering 1 

5 Supervisors Engineering 1 

6 Overseers Engineering 1 

7 Public health Engineer Public Health 1 

8 Town Planning Officer Town Planning 1 

Total 8 

Source: Analysis and discussions with Municipal officials 

Besides appointing the additional staff, the existing staff in the Administrative, Engineering, Public 

Health, and Town Planning sections of the municipality needs to be given training in their respective 

field periodically towards capacity building to take up new assignments. 

4.5 ORGANIZATION MANAGEMENT 

As may be seen from various sections of the report particularly relating to service deliveries, there 

are gaps of various sizes which result in a shortage in the delivery system. This could be over come 

by certain specific options: 

In most of the service sections of the Municipality, there are only a few vacancies which could be 

filled up. A totally satisfactory system delivery of the services would require an efficient personnel 

management system. 

• The organization and delivery mechanism in some of the important personnel intensive 

service sectors have to be modernized. To mention the important few relate to solid waste 

management, where large number of workers and staff are involved, could be privatized. 

Scientific solid waste management need to be assigned to NGOs, voluntary organizations or 

even the respective resident associations in the various colonies. This is a remunerative 

venture as is proved in many places. 

• Privatizing the repair and maintenance of water supply, collection of taxes and fees and 

maintenance of public assets particularly sanitary and public health units is a well known 

option. This also could be taken up as joint venture between urban local body and private 

sector. 

18



5.1 PHYSICAL INFRASTRUCTURE 

5.1.1 WATER SUPPLY 

INFRASTRUCTURE STATUS AND NEEDS ASSESSMENT 

i) Existing Status 

a. Source and headworks: 

Vellakoil municipality is provided with water supply from River Amaravathy and from the Muthur- 

Kangeyam CWSS with River Cauvery as source. Since the flow in River Amaravathy is nonperennial, 

water supply from this source is not dependable. 

Indicators for Water supply 

Population (Census 2001) 34,438 

Present population 49,500 

Total area of the town 64.75 sq.km 

Total no. of wards 21 

Source 

Water supplied 30 Ll 

Length of distribution system 168 km 

Rate of supply 70 lpcd 

Storage 

No. of OHTs and total capacity 6 and 13.50 Ll 

Frequency of supply Once in 4 days, for 3 hrs 

Distribution 

No. of open wells 56 

No. of Hand pumps 136 

No. of power pumps 76 

No. of public fountains 471 

Total no. of service connections 4012 

Domestic connections 3910 

Commercial 57 

Industrial 45 

Muthur-Kangeyam Combined Water Supply Scheme 

The Muthur-Kangeyam CWSS covers 994 rural habitations, 2 municipalities and 7 town 

panchayats. The water requirement for Vellakoil municipality is being pumped from Metukadai 

sump. The present level of supply from Amaravathi scheme and Muthur-Kangeyam CWSS is 0.5 

and 2.5 MLD respectively. Due to the rate of increase in population, the Muthur-Kangayam 

CWSS is inadequate to meet the water demand. 

Formulating a new scheme for additional requirement of Vellakoil municipality, Kangayam Town 

Panchayat, omitted rural habitations and enhancing supply to 994 rural beneficiaries will cause 

overlapping and duplication of pipeline for the entire project area. Hence it is proposed to de-link 

Vellakoil Municipality and Kangayam Town Panchayat from the existing scheme and a separate 

CWSS is prepared for Vellakoil municipality and Kangayam Town Panchayat. 

19 

5



b. Service Reservoirs 

There are totally 6 over head tanks in the town. The details of the Over head tanks are shown in 

Table 5.1. 

Table 5.1 Details of OHTs 

S.No Location of OHT Capacity (Lakh litres) 

1 Salavaiyalar colony 1.00 

2 Natesan nagar 4.00 

3 Uppupalayam 3.50 

4 Municipal office 2.00 

5 Theethampalayam 1.50 

6 Sivananthapuram 1.50 

Total 13.50 

Source: Vellakoil Municipality 

c. Distribution system 

The total length of the existing distribution system is 168 km against a total length of roads 

174.50 km. 

d. Water Tariff 

The monthly tariff and deposits collected for water supply is as follows: 

Table No. 5.2: Water Tariff-Deposit Details 

Type of connection Deposit amount (in Rs) Flat rate /month (in Rs) 

Domestic 3000.00 65.00 

Commercial 6000.00 115.00 

Industrial 6000.00 105.00 


ii) Water Supply Demand 

The population of the town is projected for the intermediate and ultimate years. The projected 

water demand is given in table 5.3 

Year Population 

Table 5.3 Demand & Supply in Water Supply - Projection 

Supply in 

MLD 

Demand @ 135 

lpcd 

20 

Gap in 

MLD 

Floating 

population 

2001 34438 3.0 4.65 1.65 - - 

2010 51620 3.0 6.96 3.96 10000 0.20 

2025 81873 3.0 11.05 8.05 13000 0.26 

2040 112132 3.0 15.14 12.14 17000 0.34 

Source: Municipal records, Analysis and calculation 

Floating population 

demand at 20 lpcd 

The present floating population is taken as 10000. The annual increase of 2% is taken for 

calculating the projection. The per capita supply of 20 lpcd is proposed for floating population. 

The demand of water supply for the above period is calculated at 135 lpcd. 

iii) Demand Assessment 

The water supply improvement scheme has been prepared by TWAD Board which is awaiting 

fund release from Government of India. The issues in water supply are identified and remedial



measures have been suggested. The water supply demand calculated by the TWAD Board for 

the intermediate population (2024) is 6.1 MLD and Ultimate year (2039) is 7.32 MLD. 

The town is experiencing high population growth as the town has a high potential for industrial 

growth. Therefore, the total demand of water supply calculated for intermediate period is 8.31 

MLD and ultimate period is 12.48 MLD. 

The present storage capacity of the service reservoirs is of 13.5 Ll. Therefore the storage 

requirement will be 12.48/3 = 4.16 MLD < 1.35 MLD (existing). Hence, additional storage of 1.42 

ML is required for intermediate period and 2.81 ML, required for the ultimate period. 

iv) Proposals 

The source proposed for this project is River Cauvery near Kodumudi. The proposed head works 

will be located just on the upstream of the existing headworks of Muthur-Kangeyam CWSS. It is 

proposed to draw 6.11 MLD for the intermediate stage and 7.32 MLD for the ultimate stage for 

Vellakoil alone. 

The salient features of the proposal are the head works, pump sets, raw water pumping main, 

treatment plant, clear water reservoir, clear water pump sets, pump house, Booster station, 

Laying of distribution system (feeder mains only) for 23 km and Construction of 4 OHTs at 

Melagoundanpalayam colony (1Ll), Muthur road (5Ll), Sivanathapuram (3 Ll) and Pudur road (2 

Ll). The per capita cost for this project is Rs.2926.00 and the cost per 1000 liters is Rs.8.05 

(schedule of rates 2007-08 + 10% price escalation). 

The installation cost of the water supply improvement scheme is Rs.1199.12 lakhs. The Annual 

Maintenance cost is Rs.49.00 lakhs. 

5.1.2 SEWERAGE 


The town does not have an Under Ground Sewerage System. Disposal of the sewage is 

normally by way of individual facilities and the sullage is through the open drains. The main mode 

of individual disposal in the town is through septic tanks, low cost sanitation units and through 

public / community toilets. 

ii) Demand Assessment 

In order to improve the sanitation in the town, Under Ground Sewerage System is necessary with 

treatment facilities at terminal points. 

iii) Proposals 

The field survey for UGSS has been done by TWAD Board. Identification STP site is in progress. 

The total estimated cost of the proposed Under Ground Sewerage System for Vellakoil 

municipality is Rs.3300.00 lakhs. The Operation and Maintenance cost will be is Rs. 82.00 

lakhs. 

5.1.3 STORM WATER DRAINS 


Vellakoil municipality has provided open storm water drains for a length of 19 km. The total 

length of the existing road length in the town is about 174.50 km. The percentage coverage of 

storm water drains is about 11%. 

21



At present, storm water drains carry the sullage and rain water which is ultimately let into the 

PAP channel (Parampikulam Aazhiyar Program) and Kurukampalayam Pirivu (proposed STP 

site) without any treatment. This imposes health and environmental hazard to the natural water 

system and needs to be addressed through a proper treatment and disposal facilities. 

ii) Issues 

The main issues persisting in the town due to the absence of a storm water drainage system are 

summarized as follows:- 

• Open drains creating unhygienic conditions 

• Absence of Under Ground Drainage System in the town 

• Water stagnation in low lying areas during rainy season 


The residential areas of the town are provided with open drains. The town area is 64.75 sq.km 

and about 75% of land are undeveloped, agricultural lands or barren lands. The storm water is 

carried by the natural drain network in these areas emptying into the channels. 

Absence of UGSS and storm water drains in the residential areas of the town are the major 

causes of land and water pollution. This situation degrades the environment by emanation of foul 

smell and unhealthy conditions due to stagnation at a number of points. 

iv) Proposals 

Proposals by consultants 

To develop a Comprehensive Drainage Master Plan channelizing the runoff along the 

natural contours so as to cover the entire town and implement in phases. 

Measures to be taken to improve, upgrade and clean the existing natural and man made 

storm water drains to the required functional level with the involvement of local 

community to ensure sustainable operation 

Provision of new drains in newly developing areas 

Table 5.4 Storm water Drains - proposals 

S.No Description Capital Investment 

in lakhs 

1 Preparation of Comprehensive Drainage Master Plan 3.00 

2 Provision of new drains including newly developing area (15 km) 240.00 

3 Rejuvenation of entire existing drain network (19 km) 57.00 

Total 300.00 

Annual O & M 4.50 

Source: Analysis and discussions with municipal officials 

Therefore, the total investment required for the improvement of storm water drains (short term) is 

Rs.300.00 lakhs. The rest of the road length will be covered in the long term plan. 

5.1.4 IMPROVEMENT TO WATER BODIES 


There is no water body in the town maintained by the municipality. The PAP channel is the 

manmade channel maintained by the PWD. 

22



5.1.5 SOLID WASTE MANAGEMENT 

i) Existing status 

Vellakoil Municipality generates 14 MT of solid waste. Out of 21 wards, 8 wards in the town are 

privatized (SHG) for solid waste collection. The solid waste generated in the town is collected 

and segregated at source and dumped in the compost yard (3.50 acres) at 

Soriyankinathupalayam. An income of Rs.1000 per annum is generated through selling of the 

segregated recyclable waste. The details on solid waste management are given below: 

Total waste generation per day - 14 MT 

Frequency of collection - daily 

Collection efficiency - 85% (12 MT) 

Collection points - 40 

Push cart - 49 

Tri cycle - 5 

Tipper Lorries - 2 

Tractor - 1 

Power tillers - 2 

ii) Issues 

• Absence of scientific waste management and disposal 

• Inadequate sanitary workers and supervisors – of the 159 sanctioned sanitary workers, 

only 24 workers are available. 

• The existing compost yard is not provided with adequate infrastructure facilities 

• Easy access and availability of open lands has led to negligent dumping and unsanitary 

conditions. 


Currently, 14 MT of solid waste is generated with a per capita waste generation of 300 grams per 

day. In future years assuming the per capita generation of solid waste in the town at 400 gm/day, 

there will be corresponding addition of 30% to 40% in solid waste generation. Solid Waste 

Management is one of the principal sectors of expenditure in Urban Local Bodies. Hence, there 

is a need for scientific management of solid waste to cope with future demand. 

Of the Municipal waste in Tamil Nadu, 40 - 60% of the waste is biodegradable. Of this, on 

conversion, nearly 30% by weight forms the manure. Incidentally, the manure generated from 

Municipal waste is found to be richer in NPK values compared to the one available in the market. 

This has resulted in producing better yield of agricultural products both in quantity and quality. 

iv) Proposals 

The improvements proposed towards solid waste management are as follows. 

Integrated Solid Waste Management is the application of suitable techniques, technologies and 

management programs covering all types of solid wastes from all sources to achieve the twin 

objectives of waste reduction and effective management of waste still produced after waste 

reduction. Municipal solid waste management involves the application of Integrated Solid Waste 

Management to Municipal waste. 

23



The activities associated with the management of municipal solid wastes from the point of 

generation to final disposal can be grouped into the six functional elements: 

a. Waste generation 

b. Waste handling and sorting, storing 

c. Collection 

d. Sorting, processing and transformation 

e. Transfer and transport 

f. Disposal 

The inter-relationship between the functional elements is given in Fig 5.1 

Fig 5.1 Functional Elements of a Municipal Solid Waste Management System 

The objective of solid waste management is to reduce the quantity of solid waste disposed into 

land by recovery of materials and energy form the waste. This in turn results in lesser 

requirement of raw material and energy as inputs for technological processes. 

1. The municipality must focus on revenue enhancement by privatizing of waste 

management of the following components: 

a. Primary collection 

b. Transfer to collection points 

c. Transfer to compost yard 

d. Segregation of waste and option of 

i. Selling scraps/recyclable waste. 

ii. Treatment of biodegradable waste 

iii. Transfer to identified regional land fill sites 

e. Compost yard management and sale of manure. 

2. The management of biodegradable waste as a revenue generating activity may involve, 

24



production of manure from composting. Wind rows composting is an established 

technology for dealing with bio degradable waste, which is the suggested option for this 

Municipality. The necessary infrastructure is given in the proposals. 

3. Conducting IEC campaigns to facilitate effective waste segregation at source and proper 

disposal. 

4. Implementing collection of conservancy fee for primary collection of waste and levy on 

commercial and industrial establishments. 

5. Involvement of voluntary agencies, SHGs in the various components of solid waste 

management on BOT, BOOT basis. 

6. Need to organize the rag pickers into waste-management associations/groups under the 

supervision of the urban local body and the relevant residents’ associations or market 

associations. 

The CDP proposals based on analysis, discussion with Municipal officials and norms is given in 

the table below: 

Table 5.5 Solid Waste management – Proposals* 

Sl. 

No Project details 

Small vehicle with containers for door to door collection @ 160 litres capacity 

Cost in lakhs 

1 (220 Nos) 25.00 

2 Dumper placer vehicle (2 nos) 15.00 

3 Purchase of land for additional Compost yard (2.50 acres) 

Improvements for existing and new compost yard - with one side compound 

wall, segregation sheds, internal roads and machineries for preparation of 

250.00 

4 compost 200.00 

5 Proportionate cost for regional land fill site 300.00 

6 IEC activities 10.00 

Total 800.00 

Annual Operation and Maintenance cost 6.25 


Therefore, the total investment required for improvement in Solid Waste Management is 

Rs.800.00.00 lakhs. 

*-No rational decisions on municipal solid wastes system are possible until data of composition 

and quantity of solid waste are available. The method and capacity of storage, the correct type of 

collection vehicle, the optimum size of crew and the frequency of collection depend mainly on 

volume and density of wastes. Climate also has some influence. 

5.1.6 ROADS 


The major roads connecting the town to the surrounding urban centers are: 

• Coimbatore – Thiruchirapalli National Highway 

• Erode – Tharapuram road 

• Moolanur road 

25



The details of the municipal roads is given in table 5.6 

Table 5.6 Category of roads 

Category Length in km % to total length 

National Highway 5.00 - 

Municipal Roads 

CC Roads 10.36 6 

BT Roads 106.88 61 

Earthen Road / WBM 57.26 33 

Total Length of Municipal Roads 174.50 100 


ii) Issues 

• 33% of the total Municipal roads are earthen and WBM roads 

• Differential settlements and potholed surfaces on the existing BT roads 

• Encroachments on main roads 

• Unorganized parking along main roads 

• Absence of traffic management plan- with demarcated pedestrian corridors, medians, 

signals and traffic islands 


The circulation network forms basic network of the town to move, to interact, and interlink the 

residentials, the work places, and other activity centers. A good road network is a necessity not 

only for growth and development of habitats, but also to sustain it in a progressive mode. The 

access roads in extension areas and the link roads, widening of major roads proposed in the 

DDPs need to be provided. 

iv) Proposals 

The town has 33% earthen road which should be upgraded to BT surface. Apart from this, the 

access roads in extension areas need to be covered. The projects proposed for the road 

improvement in Vellakoil town is as follows. 

Table 5.7 Road improvement - Proposals 

S.no Particulars Rs.in lakhs 

1 Upgradation of earthen road to BT (57 km) 1197.00 

2 Restoration of existing BT roads (106 km) 636.00 

3 Provision of medians (3km) 30.00 

4 Improvements to road geometry – provision of 

medians, traffic islands, Signals, signages etc 

30.00 

5 Pedestrian platform along main roads 50.00 

6 Widening of main roads and link roads 100.00 

Total Rs.2043.00 lakhs 

O&M 22.00 


Therefore, the total investment required for the road improvement is Rs.2043.00 lakhs. 

26



5.1.7 BUS STAND 


The town has a C class bus stand in an extent of 1 acre, within its limits maintained by the 

municipality. About 250 buses per day arrive in this bus stand. The municipality bus stand 

complex has 8 shops. 

ii) Issues 

• The flooring is damaged with differential settlements 

• Inadequate waiting sheds for passengers. 

• Inadequate space for buses 

• Inadequate space for parking of two wheelers 

• Inadequate water and toilet facilities 


In order to bring the bus stand to effective functioning, the cooperation from the private and 

government bus operators, drivers and conductors and the public is necessary. The proposed 

expansion of bus stand with basic facilities work is under progress. 

5.1.8 BUS SHELTER 

The 6 bus stops in the town are provided with bus shelters. The construction of bus shelter at Old 

bus stand area for Rs.5.00 lakhs under MLA fund is in progress. New bus shelters (5 nos) are 

proposed to be constructed at Erode road – Arivoli Nagar stop, Trichy -Coimbatore main road – 

opp. to municipal office, Karattupalayam Pirivu, Madamedu piruvu (Mulanoor road), 

Theethampalyam at a cost of Rs.10.00 lakhs. 

It is also proposed to restore the existing bus shelters and provide space for information boards, 

space for advertisement and hoardings in the bus shelters which will generate revenue for the 

Municipality. The provision of bus shelters can be done with the help of NGOs and community 

organisations, industries etc. 

5.1.9 STREET LIGHTS 


The town is lit by 1986 street lights of which 89% of lights constitute tube light. About 40 number 

of timer switches are provided covering all street lights to minimize the energy consumption. The 

break-up details of the street lights in the town are as follows 

Table 5.8 Existing street lights and energy consumption 

S.No Existing Light details Numbers Percentage distribution Consumption in w 

1 Tube lights (40w) 1777 89 97735 

2 Sodium Vapour lamp (250w) 205 10 57810 

3 High Mast lights 4 1 - 

Total 1986 155545 

Per hour consumption 155545 W or (excluding high mast) 

155.545 kW/hr 

No of timer switches required 60 

Source: Municipal records, Analysis and calculations 

Therefore, the present level of energy consumption of street lights in Vellakoil Municipality is 

664643 KW. i.e. Rs.23.26 lakhs per year on an average. 

27



ii) Proposals 

Proposals under CDP 

An Energy Service Company (ESCO) identifies and evaluates energy saving opportunities in 

industrial units, commercial complexes, hospitals, municipalities, buildings and utilities by using 

energy audit tools and recommends a package of improvements that can pay for itself through 

the resultant savings. 

ESCOs provide their clients with comprehensive services - encompassing audits for energy 

saving performance, design & implementation of conservation measures, maintenance, 

operation and management of the introduced facilities and procurement of project funds. ESCOs 

conduct retrofitting for energy conservation without damaging the environment. The ESCO will 

guarantee the savings that would meet or exceed the annual payments to cover up the entire 

project costs usually a period of 5 to 10 years. The savings can be shared proportionately with 

the institution for which the project is designed and implemented for. 

The salient features of performance contracting for energy savings through ESCO based 

business model are as under: 

1. 'Nil' investment by customer. 

2. ESCO to identify Energy Efficient Measures (EEMs) to replace / modify existing in 

efficient systems. 

3. ESCO supplies, installs and maintains the Energy Efficient Measures (EEMs) during the 

contract period. 

4. Contract period could be 3-5 years or as mutually agreed upon. 

5. Energy saving is shared between ESCO and customer as per agreed terms. Total project 

cost is funded by ESCO. The O & M expenses will be met by the Municipality. 

6. Guarantee Energy savings and recover its investment including interest & other costs out 

of generated energy savings. 

Proposals by ULB 

The components suggested for improvements of street lights are 

• Retrofitting of tube lights 

• Provision of new street lights 

• Provision of High mast lights at 

o Old bus stand 

o Bus stand 

Table 5.9 Street lights - Proposals 

S. No Description units Rs. in lakhs 

1 High mast lights at old bus stand and bus stand 2 14.00 

2 Installation of street lights with poles ( T5 lamps ) 28 4.00 

3 New street lights (SV lamps) 66 8.00 

4 New street lights for newly developing areas 700 90.00 

5 Central median lights at main roads for 3 km 100 45.00 

6 Provision of timer switches 20 2.00 

7 Retrofitting existing tube lights 1777 18.00 

8 Retrofitting existing SV lamps with energy efficient lights 62 1.00 

Total 182.00 

Annual O&M cost 5.00 


28



Therefore, the total cost required for the street light improvements (short term) including the 

energy saving proposals is Rs.182.00 lakhs. 

5.2 SOCIAL INFRASTRUCTURE 

5.2.1 SLUM IMPROVEMENT 


The town has 16 slums with a total population of 7766 (6741+1025) which is about 16% of the 

total population. The details of the slums are given in table below. 

Table 5.10: Location of Existing Slum Areas 

S.No Name of Slum Notified /un notified Total No. of House Population 

1. Soriyankinathupalayam Notified 206 827 

2. Semmandemapalayam Notified 59 237 

3. Karattupalayam Notified 60 225 

4. Pullachellipalayam Notified 61 276 

5. Thaneerpanthal Notified 75 301 

6. Uppupalayam Notified 198 794 

7. Kallankattuvalasu Notified 81 326 

8. Reddivalasu Notified 65 262 

9. M.G.R.Nagar Notified 79 316 

10. Arivolzi Nagar Notified 70 281 

11. Indhira Nagar Notified 170 770 

12. Katcherivalasu Notified 86 442 

13. Theethampalayam Notified 84 379 

14. Agalarapalayampudur Notified 133 601 

15. Velagoundempalayam Notified 103 413 

16. Kadaiyuranvalasu Notified 72 291 

Total 1602 6741 


In addition to this the unapproved slums developed in recent years covers a population of about 

1025. The details of the unapproved slums are as follows 

Table 5.11: Details of Existing Slum Areas 

S. No Name Of The Slum No. of Households Total population 

1 Viraguthoppu 40 200 

2 Patchapali 30 160 

3 Nachipalayam 20 70 

4 Ganapathipalayam 20 100 

5 Subramaniyagoundenvalasu 10 25 

6 Cheran Nagar 50 220 

7 LKC nagar west side 60 250 

TOTAL 230 1025 


29



Upgradation of slums rejuvenates the existing community with minimum disruption and loss of 

physical and social assets. It also involves the improvement of access roads and community 

facilities. Slum improvement consists of physical, social, economic, organizational and 

environmental improvements undertaken cooperatively and locally among citizens, community 

groups, businesses and local authorities. 

Damaged roads, inadequate and damaged storm water drains, inadequate street lights and poor 

housing conditions are the issues identified in the slum areas. 

ii) Proposals 

It is proposed to improve the slums with provision of housing units and infrastructure facilities 

under IHSDP. The details of the proposals are given below 

Table 5.12: Slum - Proposals 

S. No Description Numbers Rs.in lakhs 

1 Shelter 599.00 Nos 479.20 

2 BT Road 6.712 k.m 76.40 

3 C.C Road 0.510 k.m 4.50 

4 Drain 6.213K.m 73.80 

5 Culvert 10Nos 6.25 

6 Retaining Wall 0.014k.m 0.75 

7 Extension of Pipe Line 2.500k.m 3.30 

8 Erecting of Motor 6 Nos 6.00 

9 Bore Well 8 Nos 4.80 

10 Street Light 90 Nos 18.00 

11 Toilet Block 6 Nos 36.00 

Total 709.00 


The total investment required for slum improvement is Rs.709.00 lakhs. 

5.2.2 PARKS AND PLAY FIELDS 


Municipality maintains one Children Park (G.K.Moopanar Park – 25 cents) located at 

Seerangarayagoundan valasu road. The park is provided with basic facilities. 

ii) Issues 

• Absence of recreational facilities 

• Lack of maintenance 


The town has no approved layout open spaces to develop parks. The municipality should ensure 

the approved layout open spaces for park usage in future. Therefore it is proposed to develop 

and maintain the existing park with good landscaping, seating arrangements and play materials 

at a cost of Rs.20.00 lakhs. 

30



5.2.3 MARKET 


The municipality maintains a weekly market which is located behind the bus stand in an extent of 

3 acres. The market supplies groceries and vegetables to fulfill the daily needs of the local 

people. The daily market in this town lacks basic facilities and the shops are functioning in 

makeshift arrangements. The market needs to be improved with modern facilities. 

ii) Proposals 

It is proposed to construct a modern daily market complex and weekly market within the available 

3 acres of land. 

Table 5.13: Market - proposals 

S.No Description Rs. in lakhs 

1 Construction of Daily market with stalls, basic facilities such as water supply, 

sanitation, solid waste disposal and collection, loading, unloading etc 

75.00 

2 Construction of weekly market / shandy with stalls, basic facilties such as 

water supply, sanitation, solid waste disposal and collection, loading, 

unloading etc 

75.00 

Total Rs.150.00 lakhs 

O&M cost 3.00 

Source: Analysis and discussion with municipal officials 

Therefore the total cost required for market improvement is Rs.150.00 lakhs. 

5.2.4 PUBLIC CONVENIENCE 

The town has 6 public toilets located in the following areas: 

• Thiruvalluvar nagar 

• Indhira nagar 

• Amman koil street 

• Dharapuram road 

• Bus stand 

• Veerakumar nagar 

The local body has proposed for the construction of 8 VAMBAY toilets at Agalarapalayam 

Puthur, Uppupalayam, Kumaravalasu, MGR nagar, Arivoli Nagar, Karattupalayam, Thaneer 

Panthal area in addition to the existing ones. The total investment required is Rs.35.00 lakhs. 

5.2.5 SLAUGHTER HOUSE 

At present there is no slaughter house in this municipality. A slaughter house is proposed by the 

municipality within the market and the work is under progress. 

5.2.6 BURIAL GROUND 

The town has 2 number of burial ground maintained by the municipality. The burial grounds are 

provided with compound wall, shed and basic facilities. The municipality has proposed for 

installation of gasifier unit at a cost of Rs.100.00 lakhs. 

31



5.2.7 E-GOVERNANCE 

i. Existing Status 

E-governance is aimed to provide on-line citizen services, information to all hierarchies and 

monitor the performances. It is in practice that citizens are approaching the respective urban 

local bodies to pay their revenues, get certificates, approvals for construction of Building etc. By 

adopting E-governance, the above activities are simplified and made possible at their Information 

and Facilitation counter in the Municipality. By E-governance, the services of Vellakoil 

Municipality will be made easy, transparent, accountable and quick. The citizens may be 

informed about their dues and thus the revenue generation will be faster and easier. The 

modules online in this town are 6 and the rest of the modules will be made online shortly. 

Modules online – 6 (Property tax, Water tax, Professional tax, Salary, FAS, Birth and death) 

ii) Proposals 

It is proposed to provide 4 Seva centers at Booster house Moolanoor road, Natesan nagar, 

Erode road (near bus stand) and at municipal office. The total cost required is Rs.16.00 lakhs. 

5.2.8 URBAN GREENARY 

The main roads, residential avenues need to be provided with trees. It is proposed to provide 

2000 number of saplings/treelings planted along main roads. Private participation and 

involvement of SHGs and NGOs can make this task a success. The total investment required is 

Rs.10.00 lakhs. The annual Operation and maintenance cost is Rs.10000. 

5.3 OTHER PROJECTS 

The municipality has a community hall at Salavaiyalar colony and a shopping complex at 

Theerthampalayam with 4 shops. 

Construction of commercial building with an area of 5000 sq.ft at Erode road near the bus stand 

is proposed by the municipality. The demand for the commercial building may be assessed by 

the municipality. The cost required to implement the project is Rs.100.00 lakhs. 

5.3.1 UPDATION OF DATABASE ON GIS PLATFORM 

There is no realistic database for the town, in the form of topography, updated base map, 

assessment of properties in their location, size, use and intensity, assets -lands and structures in 

their location, status, extent, and quality, topography, land parcels by town survey, numbers and 

sub divisions and so on. All these can be updated with cent percent precision using high 

resolution satellite imageries supplemented by cent percent primary survey or aerial 

photographs. All these with spatial and non-spatial data can be had on a GIS format which, on a 

click at any feature or site on the town map will provide the entire details including the description 

of the feature / address of the owner including tax paid etc. This is a onetime comprehensive 

exercise to include the updated town map with town survey, land parcels, structures, service 

network, assets with the relevant details and description on a GIS format. 

In this ultra modern age, with high-tech interventions, this is considered a must for easy, efficient 

and flawless governance, administration and functional operation from local body level to the 

government level. 

32



This project may cost about Rs. 40.00 lakhs including the cost of high resolution satellite 

imageries. This entire amount may be obtained as grants from the government and it will take 

maximum one year for completion. 

a. Property Mapping 

Property taxes are the major source of revenue of ULBs in India. However, in most cities, not all 

properties are assessed, records are not updated regularly, and tax collection is far from 

satisfactory. ULBs can increase revenue by improving property inventories, record management, 

public awareness and participation, and tax collection. 

As a first step, the Municipality may initiate a door to door survey of all existing properties, with 

details on size & built up area of the property, present use, number of households, houses, size 

of families, etc. which would form a database for GIS projects. At the rate of Rs.10.00 per 

property, the estimated cost for the project would be Rs.4.30 lakhs. This would also aid in 

identifying unassessed and under assessed properties, rationalization of property tax etc. 

5.4 PROPOSALS TO BE IMPLEMENTED BY OTHER AGENCIES 

To make use of the inherent potential of the resources in the town, there are certain proposals 

which can be implemented by other agencies. Implementation of these proposals will enhance 

the development of the town. The proposals are put forward visualizing the optimal utilization of 

the resources available in and around the town. 

Table 5.14 Proposals to be implemented by other Agencies 

Sl. 

No 

Proposals Nodal agency 

1 Regional Development plan DTCP 

2 

Preparation of Integrated Solid waste Management Action 

Plan 

CMA/TNUIFSL 

3 Preparation of Integrated Traffic management Plan Erode Corporation 

Panchayat Union/ Health 

4 Provision and up-gradation of Health facilities 

and Family Welfare 

Department 

5 ESCo Studies CMA/TNUIFSL 

6 

Awareness creation campaign for NGOs for – E 

governance, UGSS, Water Supply, Solid Waste 

Management and tax collection 

33 

Erode 

Corporation/RDMA,Tiruppur.



5.5 CAPITAL INVESTMENT PLAN 

The capital Investment for Vellakoil Municipality under CDP has been detailed out in the previous sections. The projects include major infrastructural 

projects initiated by the State government recently for water supply and drainage and, medium and small projects by way of meeting the long felt 

needs to provide comfortable living environment to the citizens of the town. In all, 16 capital projects are proposed of which 7 relate to provision of 

physical infrastructural facilities and, the rest relate to social infrastructure and commercial ventures. The capital investment plan is detailed in the 

table below: 

The year wise investment plan and prioritizations of all the projects included in the CDP are given in the table shown below: 

S.No 

Project Description 

Estimated capital 

cost (in lakhs) 

Table 5.15 Capital Investment Programme 

Year I Year II Year III Year IV Year V Medium 

Term 2025 

34 

Long term 

2040 

1 Water Supply 1199.12 1199.12 - - - - 825.00 2550.00 

2 Sewerage System 3300.00 - 1500.00 1800.00 - - 1190.00 4105.00 

3 Storm Water Drains 300.00 - 60.00 80.00 100.00 60.00 5848.00 5100.00 

4 Solid Waste management 800.00 300.00 600.00 

a Land cost for compost yard and regional 550.00 

land fill 

250.00 300.00 

b Improvements for existing and new compost 

yard 

200.00 200.00 

c Vehicles and equipments 50.00 25.00 25.00 

5 Roads 2043.00 0.00 3923.00 

a Upgradation & restoration of roads 1833.00 90.00 450.00 657.00 336.00 300.00 

b Improvements to road geometry 110.00 50.00 60.00 

c Widening of main & link roads 100.00 70.00 30.00 

6 Bus Shelter 10.00 6.00 4.00 - - - 0.00 0.00 

7 Street Lights 182.00 - - 255.00 653.00 

High mast lights at old bus stand and bus 

stand 

14.00 7.00 7.00



Installation of street lights & fittings 100.00 10.00 30.00 30.00 30.00 

Retrofitting & energy saving devices 23.00 23.00 

Central median lights for 3 km 45.00 40.00 5.00 

8 Slum Improvement 709.00 - 375.00 150.00 113.00 71.00 0.00 0.00 

9 Parks and Play Fields 20.00 - - - - 20.00 0.00 0.00 

10 Market 150.00 0.00 0.00 

a Construction of Daily market 75.00 75.00 

b Construction of weekly market 75.00 75.00 

11 Public Convenience 35.00 15.00 15.00 5.00 - - 0.00 0.00 

12 Burial Ground 100.00 - 100.00 - - - 0.00 0.00 

13 E-Governance 16.00 8.00 8.00 - - - 50.00 75.00 

14 Urban Greenery 10.00 - - - - 10.00 25.00 50.00 

15 Other Projects - Commercial building at 100.00 

Erode road near bus stand 

100.00 

16 Updation of Database - GIS 40.00 - - - - 40.00 0.00 200.00 

17 Property Mapping 4.30 4.30 - - - - 3.00 8.00 

Total 9018.42 1404.42 3067.00 3377.00 639.00 531.00 8496.00 17264.00 

The total capital investment required for the implementation of the identified projects in Vellakoil municipality is estimated at Rs.9018.12 lakhs, 

35



REFORMS AND ACTION PLAN FOR PROJECT IMPLEMENTATION 

A City Development Plan (CDP) is essentially a road map to achieve a set of development 

objectives within a specific period. This CDP has identified gaps in municipal service delivery 

and institutional management, ascertained by analysis and stakeholder feedback. The proposed 

interventions for the Municipality are in the form of reforms, action plans and strategies to 

achieve the same. 

Strategies and Action Plans are the elements which bridge the gap between the Proposed 

Reforms and implementation. The following sections detail out the strategies and Action Plan 

plans for the proposed Reforms and interventions in the areas of revenue enhancement, 

privatization, computerization initiatives, energy efficiency and municipal service delivery. 

6.1 PRESENT SCENARIO IN URBAN REFORMS 

“Reforms and change are critical elements in development process; they become more 

significant in urban development in the context of growth of towns and consequent pressure on 

infrastructure and services, growth of poverty, etc. This is compounded by institutional 

constraints like in capacity, fragmented structures, functional overlaps and outdated processes 

and procedures. In addition, there has been a paradigm shift in governance from the traditional 

top-down model. As a result governance reforms have become imperative for efficient delivery 

of services, provision and maintenance of infrastructure and to provide efficient and responsive 

governance to the people. Recognizing the significance of reforms to provide efficient and 

effective governance, the State Govt. has initiated and implementing several urban sector 

reforms during the last few years. “ 

The following are the key reforms implemented by the GoTN and GoI : 

1. Devolution of funds: 3.5% of State’s total tax revenue passed on to urban local bodies. 

2. State Finance Commissions: Three consecutive state finance commissions were 

setup for recommendations to Government. 

3. Setting up of TNUDF: A successful private-public partnership initiative to tap the capital 

market. 

4. Accrual Based Accounting System: The new accounting system has been 

implemented in all the urban local bodies. 

5. Computerization and E-governance of select Municipal functions have been 

successfully implemented in all urban local bodies. 

6. Urban indicators: Performance assessment of ULBs initiated by the CMA, Government 

of Tamil Nadu. 

7. Revision of Property tax : With effect from April 1.2008, subject to a maximum of 1.25 

times the existing tax structure. 

8. Debt monitoring cell: It has been established with office of CMA with the objective of 

collecting financial information on individual ULBs, assisting them in making realistic 

financial projections and facilitating the Urban Local Bodies to access the Capital 

Markets by information dissemination from CMA office. 

36 

6



9. GIS for 5 urban local bodies: Consultancy for Preparation of Property mapping and 

Utility Mapping for Madurai, Coimbatore and Tiruchirappalli Corporations and 

Rajapalayam & Gobichettipalayam Municipalities has been initiated as a pilot project by 

the office of CMA. 

10. ESCO Studies: TNUIFSL initiative for the Implementation of energy efficiency in Water 

pumping and Street lighting systems under performance contract. 

11. Right to Information Act, GoI : An Act to provide for setting out the practical regime of 

right to information for citizens to secure access to information under the control of public 

authorities, in order to promote transparency and accountability in the working of every 

public authority. 

12. The Public Disclosure Law: 

To reduce the workload of public officials increased due to additional responsibility of 

responding to RTI requests, the public disclosure law will require that information be 

published voluntarily by public authorities. This will significantly reduce the number of 

routine RTI requests. The Public Disclosure Law will complement the RTI Act. The 

Disclosure Law will provide for commonly requested information on a regular basis and 

the RTI Act may be used for more specific information. 

6.2 PROPOSED INTERVENTIONS AT STATE LEVEL 

a. Property Tax 

Implement a framework law for disputed properties, so that the assessees pay the tax first and 

then carry out necessary litigation as in Central Govt. Depts. 

b. Community participation law 

Enacting the “Community Participation Law” that will make it mandatory for the government and 

its agencies to get the view of citizens, mainly residents’ welfare associations and other citizens’ 

groups, before starting any project. 

c. Initiatives in Private Participation 

In Tamil Nadu, PPP has been identified as a modality for development and the PPP cell has been 

formulated as the nodal agency to guide the various Govt. Agencies such as CMDA, TNSCB,TNAMB . 

The processes such as vetting of RFQ/RFP, Project preparation ,Procurement of private operator , 

Approvals etc are being handled by the cell at present. 

The cell has also prepared training materials, presentations/handouts, compiled case studies 

etc, which are given as a part of capacity building Content for web hosting developed pending 

approval by Go TN. 

The way forward 

1. Information dissemination to public sector agencies and various ULBs through websites 

of the ULBs and CMA and organizing workshops with the aid of Anna Institute of 

Management, TNIUS, Council of Indian Industries etc. 

37



2. A database consisting of model bid documents, success models, sector wise PPP 

consultants and operators can also be formulated. 

Infrastructural Projects: 

Water supply project 

1. As regards water supply projects, the consultant proposes using available local sources 

(surface water) in lieu of capital intensive projects from far off sources. The enforcement of 

RWH in all buildings is a commendable initiative, which has proven successful in improving 

the quality and quantity of ground water table according to a recent study. Rejuvenation and 

protection of water bodies and recycling, reuse of water is also a major issue to be 

addressed in this regard. Participation of SHGS, voluntary organizations, resident welfare 

associations need to be sought. 

UGSS project 

1. Highly engineered and mechanized conventional sewage treatment requires large Capital 

Investment; demand high maintenance costs are not feasible for the developing countries 

like India. Capital intensive and highly technological waste disposal solutions, utilizing 

indiscriminate collection and large-scale disposal, do not consider the value of recovering 

organic waste resources and do not promote recycling. The land required for the disposal of 

treated wastewater in the conventional treatment systems is not readily available in and 

around urban area. Alternative treatment systems like Root zone treatment methods could 

be used. 

2. GoTN may also encourage recycle of water, to meet requisite standards rather than let them 

out into streams or sewage farms. This will not only promote water recycling , but also 

resource recovery of minerals. 

6.3 PROPOSED INTERVENTION AT MUNICIPAL LEVEL 

The Proposed Municipal intervention is broadly categorized under the heads of: 

1. Strategies for Environmental Improvement 

2. Reforms in Resource Mobilisation 

3. Privatisation Initiatives 

4. Energy & resource efficiency 

5. Computerization and E-governance 

6. Accounts and Auditing 

7. Institutional Management 

8. Municipal service delivery 

Strategies for Environmental Improvement 

It includes the following: 

38



• Formation of Sustained Economic Development Organisation 

• Regular monitoring and stringent enforcement of Pollution control regulations on the 

industries utilising the existing CETPs. 

• Initiate a ‘Pollution remediation Pooled fund for Tiruppur region‘ on the lines of 

AMBURTEC and VANITEC - A public-private partnership initiative, with contributions 

from Industrial establishments, Govt. and funding agencies. 

• Launch intensive water recharge activities to surface water bodies including open 

wells, Ooranis, odais and eris, to improve water quality and quantity in this region. 

Table 6.1Road map – Environmental Improvement 

S.N Reforms 

Year 1 

Year of Implementation 

Year 2 Year 3 Year 4 Year 5 

1 

Business Plan for Industrial remediation 

measures 

 

2 

Implementation of Industrial remediation 

measures 

 

3 Intensive water recharge activities 

4 

Enforcement of Pollution control 

regulations 

 

6.3.1 Reforms In Resource Mobilisation 

In an environment in which business activity is booming and urban infrastructure threatens to 

become a constraint to growth, the municipalities are faced with an unprecedented need to find 

substantial resources for development, and an unprecedented opportunity to raise the same. 

The various options for enhancement of Municipal revenue based is discussed below: 

1. Improving revenue from own sources 

2. Improving revenue from user charges 

3. Formation of new sustainable revenue bases 

6.3.1.1 Improving Revenue from Own Sources 

Strategy options: 

i. Property and Profession tax 

1. Expanding Property tax and Profession tax base. 

Onetime assessment of all unassessed and under assessed properties. The project could be 

taken up as a door –to –door survey of all existing properties, with details on 

1. Size & built up area of the property 

2. Present use - residential, commercial, industrial or vacant. 

Street naming and property numbering already undertaken by Govt. of Tamil Nadu needs to be 

linked to this to streamline the study. Property mapping would form a database for GIS projects 

(Land use and Utility Mapping), which is a long term project and in the rationalization of tax 

structure.The issue omission of profession tax assesses within Municipal limits would also be 

39



addressed in this project. The participation of the SHGs, (youth and women) could be utilized 

for the purpose. 

2. Rebates on tax: 

Most of the collections take place during the last quarter of the year. This results in poor 

collection efficiency, wherein the ULB ends up collecting much less taxes than the tax demand 

raised. The option of providing rebates upto 10% for ‘early birds’ paying the tax during the 1 st 

and 2 nd quarter could be explored. This would ensure timely spending on capital and operating 

expenditure and efficient tax management systems. 

3. Regular and periodic increment of property tax at 15% every 5 years. 

4. Levy of penalty on unauthorised construction until regularization and approval. 

ii. Sustainable amendments regarding the above aspects may be considered. 

Identifying and including omitted Profession tax assessees. This project is to be linked to the 

property mapping exercise. An improvement of 20-30% on the existing tax base could be 

expected. 

Table 6.2 Road Map - Improving revenue from own sources 

S.N Reforms 

Year 1 



1 

Property tax Reform 

i Property Mapping 

ii Rebates on Property tax 

iii Regular and periodic increment of property tax 

2 Levy of penalty on unauthorised construction. 

3 

Reassessment of omitted Professional tax 

assessees 

6.3.1.2 Improving Revenue from User Charges 

Strategy options 

i. Water supply and UGSS 

Fixing of bulk water meter at apartment complexes, commercial , industrial , hospitals, 

marriage halls and educational institutions. 

Approval of the Municipal council for the proposed tariff and deposit structure to enhance 

the public contribution and meet the entire O&M cost. 

Increase in the House Service Connections to at least 85% of the total assessments. 

This backed by higher collection efficiency and enforced leakage losses (less than 15%) 

would further improve service delivery. 

Levy Reasonable User Charges to recover full O&M Cost of water supply and UGSS. 

40



Implementation of graded tariff structure (UGSS) for domestic and non-domestic 

connections. This needs to be linked to property mapping project and type of 

assessment to be ensured. 

Mandatory Mobilization of deposits for Capital intensive WS or UGSS projects during 

pre-construction stage of the project. 

Regular and periodic increase in tariff and deposit structure every 5 years. 

ii. Solid Waste Management 

Approval of the Municipal council for the proposed Solid waste conservancy charges for 

commercial and industrial establishments during the base year and after 5 years for 

domestic assessments. 

For implementing collection of conservancy fee for Solid waste Management .The 

proposed tariff structure is given below: 

• Commercial - Rs.10 per ton. 

• Industrial - Rs.15 per ton. 

• Bio-medical - Collected by IMA. 

Privatisation of collection, transfer, construction and management of compost yard and 

compost production. This would reduce the O&M expenses of Municipality on SWM by 

30 to 40%. 

• Revenue generation from selling scrap after segregation at secondary collection point or 

compost yard at Rs.10 –Rs.15 per kg. 

Revenue Generation from sale of compost at the rate of Rs.1000 per one as bulk supply to 

nearby agricultural areas. Incidentally, the manure generated from Municipal garbage is found 

to be richer in NPK values compared to the one available in the market. This has resulted in 

producing better yield of agricultural products both in quantity and quality. 

Table 6.3 Road Map Improving revenue from user charges 

S.N Reforms 

Water Supply and UGSS 

Year 1 



1 

i 

ii 

Increasing deposit and tariff 

Graded tariff for UGSS 

 

 

iii Pre mobilization of deposits 

2 Solid Waste Management 

ii 

iii 

Collection of conservancy fee for Commercial 

and Industrial Establishments 

Collection of conservancy fee for Domestic 

assessments 

41



6.3.1.3 Action Plan: Formation of New Sustainable Revenue Bases 


i. Remunerative projects 

To improve the revenue base of the municipality, following are the remunerative proposals 

identified within municipal area. 

• Construction of Commercial building at Erode road near bus stand 

ii. Parking Regularisation Plan 

Enforcing no-parking zones and identification of possible parking areas with the involvement of 

stakeholders would be the first step in mitigating congestion in the central areas of the town. 

Preparation of inventory for all roadside parking area within the town. Initiating time based pay 

and park facilities for vehicles. Appropriate rent structure from light carriage vehicles and heavy 

vehicles parking would also improve income generation. 

The proposed parking fee structure is: 

◊ Two wheelers - Rs.2.00 per day 

◊ Light Vehicles - Rs.5.00 per day 

◊ Heavy Vehicles - Rs.10.00 per day 

iii Advertisement Regularisation Plan 

Identifying strategic locations such as bus shelters, road medians, for hoardings and poster 

places in Municipal area and levying advertisement tax at the rate of Rs.25 per sq. ft per annum. 

To prepare an inventory of advertisement spaces within their limits with size and type 

.Auctioning the entire rights to a single bidder on an annual basis is suggested. The initiative of 

GoTN to remove hoardings and encroachments is a welcome step to regularize the 

advertisements and hoardings 

Table 6.4 Road Map for Formation of new sustainable revenue bases 

S.N Reforms 

Year 1 



1 Formation of new sustainable revenue bases 

i Remunerative Projects 

a. Premobilization of deposit for commercial 

building at Erode Road near bus stand 

 

ii Parking Regularization 

iii Advertisement Regularization 

6.3.2 Action Plan: Privatisation Initiatives 

The areas of privatization of the functions of the ULB in Tamil Nadu are 

i. Solid waste management 

42



ii. O&M of street lights. 

iii. O&M of water supply distribution. 

iv. AMC of public and pay & use toilet facilities. 

v. Parks and parking lots Maintenance and user charges collection. 

The GoTN states that the above list is indicative and the ULBs are free to explore more options. 

This would not only save the O&M expenses, but also indirectly in pension and gratuities. The 

various strategy options are presented below: 


1. Privatisation of Collection mechanism 

Providing a computer fitted mobile van with online access to municipal database for spot billing 

and collection of all taxes. Performance based incentives can be given to the private operators 

at the rate of 5% of total collection .The support of the Youth / Women SHGs or fan clubs can 

be sought for the purpose of collection with adequate sensitization programmes. 

2. Improving community participation by organizing Public awareness campaigns and Training 

of Tax Inspectors, to improve the ‘willingness to pay’ of the users. The aid of SHGs, fan 

clubs, media could be utilized for the purpose. The following are the various avenues of 

revenue, the collection of which could be privatized. 

1. Property tax 

2. Profession tax 

3. Water - Deposits and tariff 

4. UGSS- Deposits and tariff 

5. Advertisement spaces /rights as a single contract 

6. Parking areas 

7. Solid waste conservancy fees(Domestic and non-domestic) 

3. Privatisation of Operation and Maintenance of the entire Water Supply and Distribution 

System. 

4. Privatisation of operation and maintenance of the UGSS. 

5. Privatisation of Solid waste management (Discussed in detail under Improving revenue from 

user charges) 

6. Privatisation of O&M of street lights & pumping machinery(detailed out in Action plan for 

energy & resource efficiency) 

7. Repair and maintenance of major Municipal roads for 3 years from the period of laying. 

8. Option of BOT, BOOT for parks & play grounds by implementing user charges for areas 

more than 5000 sft. 

9. Option of converting public toilets to Pay & Use type and privatization of O&M. 

10. Private participation in medical infrastructure like RCHP, maternity homes and adoption of 

premium and free facility programme in return for improved medical facility. 

43



Table 6.5 Road Map for Privatization initiatives 

S.N Reforms 

Year 1 



1 Privatization of Operation and Maintenance 

i Water supply and Distribution system 

ii Sewer network & STP 

iv Street lights 

vi AMC of Public and pay % use toilet facilities 

vii 

Parks and parking lots Maintenance and user 

charges collections 

 

2 

Privatisation options in Solid Waste 

Management 

Privatization of Door to door collection of solid 

waste 

 

Compost yard management & sale of compost & 

scrap 

 

3 Privatization of Collection mechanism 

4 

5 

Spot billing and tax collection using mobile van 

Formation and sensitisation of youth & women 

SHGs 

Public awareness campaign for improving tax 

collection (IEC) 

6.3.3 Action Plan: Energy & Resource Efficiency 


Conducting energy audits for water pumping machinery and street lights. 

Conducting leak detection studies, if transmission losses are more than 15%. 

All Head works and service reservoirs may be fitted with bulk water meter to assess the 

loss due to non revenue water and unaccounted water. 

Enforce regulations on illegal tapping of water. 

Fixing Flow Control Valves and meters for all water service connections. 

Provision of energy saving lights, and equipments like dimmer and timer switches to 

reduce energy consumption. 

Privatizing the maintenance of street lights to ESCO companies. 

Street lights 

TNUIFSL has initiated the study of Energy Saving Company (ESCO) for energy efficiency in the 

O&M of street lights and pumping machinery for select Municipalities throughout Tamil Nadu. 

ESCOs provide comprehensive services - encompassing audits for energy saving performance, 

design & implementation of conservation measures, maintenance, operation and management 

of the introduced facilities and procurement of project funds. ESCOs conduct retrofitting for 

energy conservation without damaging the environment. The ESCO will guarantee the savings 

44



that would meet or exceed the annual payments to cover up the entire project costs usually a 

period of 5 to 10 years. The savings can be shared proportionately with the institution for which 

the project is designed and implemented for. 

The salient features of performance contracting for energy savings through ESCO based 

business model are as under: 

1 'Nil' investment by customer / ULB. 

2. ESCO to identify Energy Efficient Measures (EEMs) to replace / modify existing in 

efficient systems. 

3. ESCO supplies, installs and maintains the Energy Efficient Measures (EEMs) during the 

contract period. 

4. Contract period could be 3-5 years or as mutually agreed upon. 

5. Energy saving is shared between ESCO and customer as per agreed terms. Total 

project cost is funded by ESCO. The O & M expenses will be met by the Municipality. 

6. Guarantee Energy savings and recover its investment including interest & other costs 

out of generated energy savings. 

Table 6.6 Road Map for Energy and Resource efficiency 


S.N Reforms 

Year 1 

Year 

2 

Year 

3 

Year 

4 

1 Energy audit 

i Leak detection study 

ii Fixing of bulk water meter 

iii Fixing flow control values and meters 

iv 

Implementing energy saving measures on street 

lights and pumping machineries (ESCo) 

 

6.3.4 Action Plan: Computerization and E-Governance 


1. Launch data warehousing on a large scale, which would avoid cross-reference to paper 

record, which are time consuming and also preservation of paper media, which occupies 

space, could be avoided. 

2. Computerization of bill payment and facilitation of on line payments 

3. Computerisation of registration of land records within Municipal limit 

4. Digitisation of Birth and death certificates for the past 30 years 

5. Property Mapping to be computerised and details on area, year of construction, type of 

assessment to be computerized to facilitate calculation of property tax. 

6. Administration and issue of trade licenses to be on line, including payment and 

reconciliation of license fee. 

7. Computerization of birth and death certificates and on line issue of certificates. 

8. Computerization of public grievances and Redressal mechanism 

45 

Year 

5



9. Introduction of Asset Management System for all the available land and building assets 

available with the Municipality 

10. On-line submission of building plans and approval. 

11. Track O&M of assets and their replacement 

12. E-tendering processes. 

The above proposal can be taken up after giving sufficient training to Municipal staff in hard 

ware and software. 

Table 6.7 Road map for Computerization and E-Governance 

S.N Reforms 

Year 1 



1 Computerization and E-governance 

i Digitizing municipal records (past 30 years) 

ii On-line bill payment 

iii Registration of Land records 

iv Digitization of old Birth and death certificates 

v On-line issue of Birth and Death certificates 

vi Property Mapping 

vii on-line Issue of trade license 

viii Online submission of building plans 

ix E-tendering 

6.3.5 Action Plan: Accounts and Auditing 

A Consultant committee of chartered accountants, consultants having experience in 

municipal accounting should be constituted to provide training to the Municipal employees. 

Timely Auditing should be performed with the use of private Chartered Accountants for 

routine audit and local audit to carry out proprietary audit. 

Closing all Auditing before September 30 of the next financial year and publishing the 

audited statement on the website. 

6.3.6 Action Plan: Institutional Management 

The constant change in urban sector in the context of reforms results in the need for continuous 

upgradation of the skills and knowledge of the ULB staff. TNUDP III has initiated the process of 

providing the required training to the staff during the current planning period. It is essential that 

the training process becomes a sustainable one with the introduction of an institutional 

framework which would ensure that the training is provided in a continuous manner. 

Training programmes need to be evolved depending upon whether they are Elected 

Representatives, Senior level officers, Middle level officers and staff in various sections of the 

ULBs. Training of public representatives and staff of ULBs will not only improve their skills but 

46



also exposes modern/scientific technological advancement in engineering, management and 

inter personal communication. 

The categorization of training is based upon the position at various levels focusing primarily of 

managerial aspects, technical knowledge, skills and management tasks and awareness about 

responsibilities. 


A. CAPACITY BUILDING FOR ELECTED REPRESENTATIVES AND COMMITTEE 

MEMBERS 

The details of the various training requirements for elected representatives and Committee 

members are presented below. 

Table 6.8 Technical Assistance for Elected representatives 

Category Identified Training areas 

Elected representatives • Visioning, goal setting, Planning 

• Urban Governance, Management and Planning 

• Social management and Management of Urban Poor 

• Financial and cost management 

• Budget preparation 

• Tender procedure 

• Training in interpretation of various laws, rules, regulations and 

statutes that ULB is bound by 

• E - Governance 

• Redressal of public grievances 

• Environment management 

• JNNURM, UIDSSMT, IHSDP & BSUP 

• City Corporate Plan, Urban Development plans (Master plans, DDPs) 

• Solid waste management. 

• Disaster management 

• Managerial development and effectiveness 

• Public relations and Human resource development. 

• Crisis management and Stress management 

• Personality development and Motivation skill development 

• Written and Oral Communication skills 

Committee members • Tax appeal committee: tax assessment methods; interpretation of 

various laws, rules, regulations and statutes 

• Contracts committee: procurement procedures; interpretation of 

various laws, rules, regulations and statutes 

• Appointment committee: Interviewing skill and techniques 

47



B. Capacity Building for Ulb Staff 

The training areas identified for ULB staff in all position is classified as functional, managerial & 

behavior and attitude in short, medium and long term training. The details of the various training 

requirements for ULB staff are presented below. 

Table 6.9 Technical Assistance for ULB staff 

Category Identified Training areas 

Senior Management Staff • People management skills 

• Motivation and Interpersonal skills 

• Leadership and Public relations 

• Attitudes – both personal and organizational 

• Team Building, Human resource development 

• Goal setting, Budgeting 

• Written and Oral Communication skills 

• Effective use of computers especially for managerial decision 

making 

• Proper interpretation and effective use of MIS reports 

• Decision support systems 


statutes 

• Time management, Stress management 

• Change management 

• Effective urban management 

• Management principles, Managerial development and effectiveness 

• Interviewing skills 

• Social management and urban poor management 

• Citizen grievance handling 

• Project appraisal, Project Management and project financing 

• Contract management, Bid management, Costing 

• Procurement procedures 

• Pricing and tariffs/taxation methodologies 

• Operations research 

• Quality control 

• Public private partnerships and opportunities for ULB in the same 

• Reforms at the ULB level 

• Financial and cost management 

• Environment management 

• Disaster management 

• Solid waste management 

• Systems management (improving citizen service and ULB 

efficiency) 

• Strategic urban planning 

• Performance management system and key result areas. 

Supervisory Staff • Motivation and Interpersonal skill development 

48



Training for Operational 

staff 

Source: CMA Records. 

Sl.N 

o 

1 

• Effective use of computers 


statutes 

• Training for development of a positive attitude 

• Citizen handling and grievance handling 

• Managing urban poor, education and health services 

• Implementation skills 

• Training in developing a Performance Management Systems (PMS) 

and key Result Areas (KRA) 

• Functional skills required in their respective function 

- Training in office Procedures 

- Training in computers 

- Training in team work 

• Training in general office administration and management 

- Training in effective servicing 

- Training in communication 

- Training in equipment usage 

Table 6.10 Road map for Accounts & auditing and Institutional Management 

Reforms 

Year 1 



Accounts and Auditing with charted 

accountant 

I 

Appointing private charted accountant 

consultant 

 

Ii Closing of audit and accounts (Sept 30th) 

iii 

Online publication of audited statement (Oct 

30 th ) 

2 Institutional Management 

i 

Capacity Building for Elected 

Representatives 

ii Capacity Building for ULB staffs 

49



Table 6.11 Road Map for Implementation of all Projects 

S.N Project Items 

Implementing 

Agency 

Funding 

pattern 

(G:L:M) 

Amount 

(in 

lakhs) Year 1 

Short term (Rs. In lakhs) 


1 Water Supply TWAD Board 71:25:4 1199.12 1199.12 

2 Under Ground Sewerage System TWAD Board 35:37:28 3300.00 1500.00 1800.00 

3 Storm Water drains Municipality 90:00:10 300.00 60.00 80.00 100.00 60.00 


a Land cost for compost yard and regional land fill 

100:0:0 550.00 250.00 300.00 

b Improvements for existing and new compost yard Municipality 0:0:100 200.00 200.00 

c Vehicles and equipments 50:00:50 50.00 25.00 25.00 

6 Roads 2043.00 

a Upgradation and restoration of roads 

1833.00 90.00 450.00 657.00 336.00 300.00 

b Improvements to road geometry Municipality 90:00:10 110.00 50.00 60.00 

c Widening of main roads and link roads 100.00 70.00 30.00 

7 Bus Shelter Pvt. Operator 100% private 10.00 6.00 4.00 

8 Street lights 182.00 

High mast lights at old bus stand and bus stand 

100:00:00 14.00 7.00 7.00 

Installation of street lights and fittings Municipality 50:00:50 100.00 10.00 30.00 30.00 30.00 

Central median lights at main roads for 3km 90:00:10 45.00 40.00 5.00 

Retrofitting and energy saving devices Pvt. Operator 100% private 23.00 23.00 

9 Slum improvement Municipality 100:0:0 709.00 375.00 150.00 113.00 71.00 

10 Parks and Playfields Municipality 70:00:30 20.00 20.00 

11 Market 150.00 

Construction of Daily market 

Construction of weekly market 

Municipality 0:0:100 

75.00 

75.00 

75.00 

75.00 

10 Public Convenience Municipality 50:00:50 35.00 15.00 15.00 5.00 

12 Burial ground Municipality 50:00:50 100.00 100.00 

13 E-Governance Municipality 100:0:0 16.00 8.00 8.00 

14 Urban Greenery Pvt. Operator 100% private 10.00 10.00 


a commercial building at Erode road near bus stand Municipality 00:90:10 100.00 100.00 

16 Updation of Database On GIS Municipality 90:00:10 40.00 40.00 

17 Property mapping Municipality 0:0:100 4.30 4.30 

Note: 

G:L:M – Grants : Loan : Municipal Own Fund 

50



6.3.7 REFORMS IN MUNICIPAL SERVICE DELIVERY 

The reform agenda for municipal service delivery is given in the following table 

Table 6.12 Reform Agenda - Municipal Service Delivery 

Sector Particulars 

Benchmark 

considered Existing 

Year 1 Year 2 

Target 

Year 3 Year 4 Year 5 

Outcome 

After 5 

years 

Net Supply per capita 135 lpcd 70 lpcd Period 

135 lpcd 

WAETR 

SUPPLY 

HSCs - % of assessed 

properties 

Frequency of Supply - Hours 

per day 

≥85% 

24x7 hours 

29% 

Once in 

4 days 

of 

Implem 

entatio 

n - - 

≥85% 

- - 24x7 

SEWERAGE 

HSC coverage ≥85% Nil - 

Period of 

≥85% 

SYSTEM Coverage of UGSS network - % 

of road length 

100% Nil - 

Implementation 

100% 

SOLID WASTE 

MANAGEMENT 

ROADS, 

STORM 

WATER DRAIN, 

STREET 

LIGHTS 

Source: Analysis and research 

Availability of Composting 

facility 

100% 

available 

51 

Availabl 

e 

Collection efficiency 100% 85% 

Surfaced roads- % of total road 

length 

Storm water drains - % of total 

road length 

Average spacing between 

Street lights 

Period of Implementation 

100% 67% Period of Implementation 

100% available 

100% 

130% 11% - Period of Implementation 

30 m 88 m Period of Implementation 

100% 

30m



52 

7 

ASSETS MANAGEMENT PLAN 

All the assets developed, operated and maintained by the Municipality are termed as municipal 

assets and comprise roads, bridges, culvert, water supply & distribution system, UGSS network, 

STPs, drains, and street lights. Municipal Assets also includes social infrastructure assets such as 

municipal owned schools, hospitals, parks and playgrounds, community halls, shopping complexes, 

stadium, and vacant lands. 

Municipal assets are normally classified into movable and immovable assets. Immovable assets 

attain importance as indicators for the financial worth which would help in its borrowing capacity and 

credit worthiness of Vellakoil Municipality. 

The management of assets in the local bodies is at the initial stage where, only the assets are listed 

and status is described. Invariably, in all the cases, the management component is missing as to the 

techniques and methods of managing the assets either in improving their state and value or in 

sustaining them with a growth motive. There is hardly any case where a local body has made use of 

its immovable assets for raising loans or improving its borrowing capacity. It requires an overall 

approach outlining the alternative options of maintaining and managing the assets in a worthwhile 

mode. 

7.1 ACTIVITIES OF ASSET MANAGEMENT PLAN (AMP) 

The Asset Management Plan for Vellakoil Municipality would comprise the following 5 steps as 

explained below: 

1. Asset identification 

All movable and immovable equipments, immovable municipal properties, assets of Municipality that 

have been developed, handed over or acquired over time from various sources and departments 

have to be identified and traced. This would include the detection of unrecorded infrastructure 

facilities and properties; scrutiny of records, land registers and land surveys, etc. 

2. Audit and reconciliation of records 

The Municipality should record all movable and immovable municipal properties and assets and 

infrastructure facilities. Maps and master plans should be crosschecked and an infrastructure 

facilities audit should be prepared or updated (if already existing). Current asset values should be 

assigned based on a ‘condition-survey’ of the infrastructure facilities. 

Land and property records should be crosschecked and municipal registers to be updated to include 

previously undetected land, properties and development. A comprehensive list of municipal land, 

properties and development should be compiled with approximate assigned.



3. Assessment of Remunerative potential 

Municipality should review the existing revenue earning potential of all its assets. New projects or 

initiatives should be taken to maximize the revenue earning potential of assets including 

infrastructure facilities. The intangible benefits of social facilities also need to be considered in the 

process. 

4. Digitisation of asset register 

Focus should be placed on designing, testing and installing a database management system for 

municipal assets. All data, once complied should be classified on the basis of sector specific 

infrastructure facilities, land and properties. Specific software should be customized to suit local 

requirements and data should be translated into specified formats. 

5. Training in database management 

Training is the most important part of an asset management plan. Training should emphasize 

methods of simplified updation of data, and methods of monitoring and follow-up relating to 

infrastructure facilities management, land use, litigation, encroachment, values, expenditure and 

revenue flows. 

7.2 PRIORITY ASSET MANAGEMENT OPTIONS 

There are remunerative and non-remunerative assets of the municipality on which the municipality 

incur considerable expenditure for operation and maintenance. The commercial complexes in the 

town, Shops in the bus stand, Markets, Slaughterhouse, Pay and Use toilets, etc are all 

remunerative. Non-remunerative assets of the municipality are the burial ground, public toilets, 

compost yard, parks and playfields etc,. The list of land assets are given in the table below: 

Sl. 

No 

Name of the Asset 

1 Water supply & 

distribution system 

Table 7.1 Priority Municipal Assets – Vellakoil Municipality 

Revenue Income 

from the asset 

(2006-07) 

53 

Revenue Expenditure 

on the Asset during 

(2006-07) 

27.84 Lakhs 44.84 Lakhs 

Suggested 

Improvement options 

Leak detection study 

Esco Study 

2 Drainage Nil 6.80 Lakhs Improvement of SW 

network & rain water 

harvest. 

Proposed UGSS to 

improve environment 

and revenue to 

Municipality. 

3 Pay and use Toilet 1.38 Lakhs Nil Privatisation of 

maintenance through 

SHGs 

4 Street lights Nil 24.69 Lakhs Esco Study, -Energy 

efficiency & man power 

optimization



5 Markets 6.86 Lakhs Nil Proposed new market 

with basic facilities 

6 Commercial complexes 2.32 Lakhs Nil - 

7 Bus stand 3.25 Lakhs Nil Proposed expansion of 

bus stand with the 

provision of basic 

facilities 

Two / four wheeler 

8 

parking areas 

9 Water Connection 

Charges 

7.3 LAND ASSETS 

1.01 Lakhs Nil 

Proposed renovation of 

existing parking area. 

0.86 Lakhs 14.33 Lakhs Proposed new scheme 

to improve coverage of 

service connections 

The land varies in its value from location to location and time to time as per the weight age of the 

area arrived at based on various factors. It is invariably found that, the value of the municipal land 

varies substantially from that of the adjacent private land for obvious reasons. These differences 

need a practical moderation to estimate the true credit worthiness of the local body. 

The rate of increase of the Municipal land in its value, vis-à-vis that of the adjacent private land at 

the various locations will be useful in drawing up a reasonable assets management technique. 

The proposals for efficient utilization of land assets are given in the table below: 

Table 7.2 Proposed Use – Land Asset 

Sl. No Location of Land Asset Present Use Proposed Use 

1 Ayyasamay colony Vacant land Over Head Tank 

2 Udaiyar colony Vacant land Over Head Tank 

3 Tiruppur road Vacant land Over Head Tank 

4 Agalarapalayam Vacant land Sanitary complex 

5 Puthur Vacant land Sanitary complex 

6 Uppupalayam Vacant land Sanitary complex 

7 Soriankinathupalayam Vacant land Sanitary complex 

8 Kumaravalasu Vacant land Sanitary complex 

9 MGR nagar Vacant land Sanitary complex 

10 Arivoli nagar Vacant land Sanitary complex 

11 Karattupalayam Vacant land Sanitary complex 

12 Thanner Panthal area Vacant land Sanitary complex 

13 Market area Weekly market Slaughter house 

14 Booster house Moonoor road - Seva center 

15 Natesan Nagar - Seva center 

16 Erode road (near bus stand) - Seva center 

17 At municipal office Administrative use Seva center 

54



7.4 MANAGEMENT OPTIONS FOR LAND ASSETS 

The foregoing account of the movable and immovable assets of the Municipality includes basically 

lands, parts of which are occupied by construction of structures for various uses. The structural 

elements in the form of buildings including OHTs, flow elements relating to essential services such 

as water supply, drainage, UGD, street lights and the like are designed with a design life time. The 

lands however as a base have no such limiting factor in terms of time. Thus the super structures and 

the constructed elements below the ground are depreciating in their values as they age. But the land 

assets both constructed and un-constructed keep appreciating in the standard and market values. In 

fact, the rate of appreciation of the lands is of great significance from the point of worthiness of the 

concerned local body and, it is invariably much faster in its appreciating value compared to the rate 

of depreciation of structures imposed on them. Also, the rate of depreciation standardized for 

various items of the structures is much more than the actual while taking into consideration the life 

time of such structures till the point of their condemnation. 

Generally, the assets of the local body, particularly the lands are rarely maintained and their values 

in the management of the resources of the local body are little considered. There must be a scientific 

approach town wise to evolve a dynamic model of the changing values of the assets both in terms of 

appreciation and depreciation from time to time, particularly when sizable developments take place. 

It is important to keep in view that as per the objectives of the devolution of functions and powers to 

the urban local bodies under the 74 th Constitutional Amendment Act, the value of the lands and 

properties are necessarily to be assessed depending on their location, land use and intensity of 

development over a time scale. In order to systemize the highly dynamic factor of values of the 

properties under local body, it is essential for an efficient management of the total assets owned by 

local body. 

The suggestions for the improvement of land asset management are listed below: 

1. Implementation of Asset Management Plan 

2. Establishment of GIS inventory mapping for Municipality owned lands. 

3. Use of land assets for borrowing loans from capital market. 

4. Identifying the most remunerative activity by public–private participation, BOT, BOOT 

initiatives. 

5. Removal of encroachments on Municipal land parcels. 

6. Explore possibilities of acquiring additional land parcels for future requirements 

7.5 PROPOSED NEW ASSETS 

The assets creation by way of the projects proposed under CCCBP for implementation in the years 

to come are indicated with the capital investment values as in table below 

Table 7.3 New Assets for the year - 2010 to 2015 

S.N Physical Infrastructure facilities Amount 

( in lakhs) 

1 Water Supply 1199.12 

2 Sewerage System 3300.00 

3 Storm Water Drains 300.00 

55




5 Roads 2043.00 

7 Bus Shelter 10.00 

8 Street Lights 182.00 

9 Slum Improvement 709.00 

10 Parks and Play Fields 20.00 

11 Market 150.00 

12 Public Convenience 35.00 

13 Burial Ground 100.00 

14 E-Governance 16.00 

15 Urban Greenery 10.00 


17 Updation of Database on GIS Platform 4000 

18 Property Mapping 4.30 

Total 9018.42 

Source: Analysis and calculation 

All these assets are elements that drive the business plan and ensure the timely availability of 

resources to sustain the assets in an acceptable condition for better service delivery. In addition to 

increasing the revenue potential, it is equally important to manage the assets in terms of their 

maintenance and rehabilitation. This would ensure reducing costs, improving reliability, and ensuring 

sustainability. Hence it is imperative for the municipality to have a highly simplified approach with a 

long-term schedule of delivery of actions and a set of short-term measures. 

56



8.1 CAPITAL INVESTMENT PLAN 

57 

8 

FINANCIAL OPERATING PLAN 

The proposed projects for Vellakoil Municipality taking in to account its resources and the existing 

shortfall in services are given below. The projects have been phased out taking in to account the 

time-span required for implementation of the project and the availability of the funds (loans, grants 

and municipality’s own resources) for the same. 

Table 8.1 Projects to be executed by the Municipality 

S.No. Particulars 2009-10 2010-11 2011-12 2012-13 2013-14 Total 

A Physical Infrastructure Facilities 


a) Improvements to Water Supply 1199.12 - - - - 1199.12 


a) New Underground Sewerage Scheme - 1500.00 1800.00 - - 3300.00 

III Strom Water Drains 

Construction of new drains and 

a) providing mesh covers - 60.00 80.00 100.00 60.00 300.00 

IV Solid Waste Management 

a) Cost of land fill site and compost yard 

Land fill site & compost yard 

- 250.00 300.00 - - 550.00 

b) development 

Vehicles & equipment for primary & 

- - 200.00 - - 200.00 

c) secondary colln 25.00 25.00 - - - 50.00 

V Roads 

a) Upgradation and Restoration of Roads 90.00 450.00 657.00 336.00 300.00 1833.00 

b) Improvements to Road Geometry 

Widening of Main Roads and Link 

- - 50.00 60.00 - 110.00 

c) Roads - 70.00 30.00 - - 100.00 

VI Bus Shelter 

a) Construction of New Bus Shelter 6.00 4.00 - - - 10.00 

VII Street Lights 

High mast lights at Old & New Bus 

a) Stand 7.00 7.00 - - - 14.00 

b) Installation of Street Lights & Fittings 10.00 - 30.00 30.00 30.00 100.00 

c) Retrofitting and energy saving devices 

Central Median lights at main roads for 

- 23.00 - - - 23.00 

d) 3Km 40.00 5.00 - - - 45.00 

B Social Infrastructure Facilities




a) Improvement to Slums - 375.00 150.00 113.00 71.00 709.00 

II Parks & Playgrounds 

a) 

Improvement of parks, construction of 

compound wall 

for play ground & play equipments 

- - - - 20.00 20.00 

III Market 

a) Construction of Daily Market - 75.00 - - - 75.00 

b) Construction of Weekly Market - - 75.00 - - 75.00 

IV Burial Ground / Crematorium 

a) Burial Ground with Gasifier - 100.00 - - - 100.00 

V Public Convenience 

a) Improvement to Public Convenience 15.00 15.00 5.00 - - 35.00 



a) 

Commercial Building (G+2) at Erode 

Road near 

Bus Stand 

- 100.00 - - - 100.00 

II Urban Greenary 

a) Planting New Trees - - - - 10.00 10.00 

III E-Governance 

a) E-Governance 8.00 8.00 - - - 16.00 

b) Updation of Database on GIS - - - - 40.00 40.00 

c) Property Mapping 4.30 - - - - 4.30 

Total 1404.42 3067.00 3377.00 639.00 531.00 9018.42 

The initial building blocks of the Corporate Plan are the ‘elements’ required to sustain the town’s 

growth; public utility, urban environment, economic and social development, land use and 

transportation, municipal resources, urban governance and capital facilities. The projects in the plan 

were developed through a consultative process carried out between the Local Body Officials, 

Council Staff and Elected Officials, Public Interest Groups, Project Stakeholders and the local 

citizens. 

The projects have been prioritized in the following order : 

a) Water Supply 

b) Sewerage and Sanitation 

c) Solid Waste Management 

d) Storm Water Drains 

e) Urban Service for Poor (Slum Upgradation) 

f) Roads, traffic and transportation 

g) Street Lighting 

58



8.2 OTHER PROJECTS AND ON GOING PROJECTS 

The details of projects identified to be executed by other departments / agencies and the ongoing 

projects that are being executed by the Municipality are given below : 

Table 8.2 Projects to be executed by Other Agencies 

S.No Particulars Total Funding By 

I Regional Level 

a) District Regional Development Plan 10.00 DTCP 

b) Improvement to Odais and Canals - PWD Department 

c) Preparation of Integrated Solid Waste 

Management Action Plan 

2.00 

CMA / TNUIFSL 

d) Preparation of Integrated Traffic 

Management Plan 

2.00 Erode Corporation 

II Town Level 

a) Provision and upgradation of Health 

- Education Department 

Facilities 

Dept of Tamilnadu 

b) ESCO Studies 2.00 CMA / TNUIFSL, 

c) 

Awareness creation campaign for NGOs 

for - E Governance, UGSS, Water Supply, 

Solid Waste Management and Tax 

Collection 

3.00 

Total 19.00 

S.N Particulars 

1 

2 

3 

4 

59 

Erode Corporation / 

RDMA, Tiruppur 

Table 8.3 Projects under Implementation by the Municipality 

Total 

Cost 

Loan 

Grant 

Mun 

Cont. 

Providing Cement Concrete 50.00 25.00 20.00 

Road to Bus Stand 

Construction of additional first 

- 

Floor building at Municipal 25.00 25.00 - 

Office 

- 

Construction of Modern 25.00 10.00 15.00 

Slaughter House 

- 

85.00 51.00 34.00 

Improvement to Bus Stand 

- 

Total 185.00 0.00 111.00 74.00 

Funding By 

SFC Infrastructure 

Gap Filling Fund (2007-08) 






Gap Filling Fund (2008-09)



8.3 MEANS OF FINANCE 

The means of finance for each individual project identified taking in to account whether the same is 

remunerative or non-remunerative and the availability of Grants from various sources is given below 

Table 8.4 Multi Year Investment Plan and Means of Finance 

Multi Year Investment Plan 

S.No. Particulars 2009-10 2010-11 2011-12 2012-13 2013-14 Total 

A Physical Infrastructure Facilities 

1 Water Supply 

Total Project Cost 1199.12 - - - - 1199.12 

Add : Price Inflation @ 7% 83.94 0.00 0.00 0.00 0.00 83.94 

Total 1283.06 0.00 0.00 0.00 0.00 1283.06 

Means of Finance 

TNUIFSL Loan 320.76 0.00 0.00 0.00 0.00 320.76 

Grant 910.97 0.00 0.00 0.00 0.00 910.97 

Municipality Own Funds 51.32 0.00 0.00 0.00 0.00 51.32 

Total 1283.06 0.00 0.00 0.00 0.00 1283.06 

2 Sewerage 

Total Project Cost - 1500.00 1800.00 - - 3300.00 


Total 0.00 1717.35 2205.08 0.00 0.00 3922.43 


TNUIFSL Loan 0.00 635.42 815.88 0.00 0.00 1451.30 

Grant 0.00 601.07 771.78 0.00 0.00 1372.85 


Total 0.00 1717.35 2205.08 0.00 0.00 3922.43 

3 Storm Water Drains 

Total Project Cost - 60.00 80.00 100.00 60.00 300.00 


Total 0.00 68.69 98.00 131.08 84.15 381.93 


Grant 0.00 61.82 88.20 117.97 75.74 343.74 


Total 0.00 68.69 98.00 131.08 84.15 381.93 

4A SWM - Cost of land fill site 



Total 0.00 286.23 367.51 0.00 0.00 653.74 


Grant 0.00 286.23 367.51 0.00 0.00 653.74 

Total 0.00 286.23 367.51 0.00 0.00 653.74 

60



4B 

SWM - Land fill site & compost yard 

devt 

Total Project Cost - - 200.00 - - 200.00 


Total 


0.00 0.00 245.01 0.00 0.00 245.01 


Total 0.00 0.00 245.01 0.00 0.00 245.01 

4C SWM - Vehicles & Equipments 

Total Project Cost 25.00 25.00 - - - 50.00 


Total 


26.75 28.62 0.00 0.00 0.00 55.37 

Grant 13.38 14.31 0.00 0.00 0.00 27.69 


Total 26.75 28.62 0.00 0.00 0.00 55.37 

5A Roads - Upgradation & Restoration 

Total Project Cost 90.00 450.00 657.00 336.00 300.00 1833.00 


Total 


96.30 515.21 804.85 440.43 420.77 2277.55 

Grant 86.67 463.68 724.37 396.38 378.69 2049.80 


Total 96.30 515.21 804.85 440.43 420.77 2277.55 

5B 

Roads - Improvements to Road 

Geometry 

Total Project Cost - - 50.00 60.00 - 110.00 


Total 


0.00 0.00 61.25 78.65 0.00 139.90 

Grant 0.00 0.00 55.13 70.78 0.00 125.91 


Total 0.00 0.00 61.25 78.65 0.00 139.90 

5C Roads - Widening 



Total 


0.00 80.14 36.75 0.00 0.00 116.89 

Grant 0.00 72.13 33.08 0.00 0.00 105.20 


Total 0.00 80.14 36.75 0.00 0.00 116.89 

61



6 Bus Shelter 



Total 


6.42 4.58 0.00 0.00 0.00 11.00 

Grant 6.42 4.58 0.00 0.00 0.00 11.00 

Total 6.42 4.58 0.00 0.00 0.00 11.00 

7A Street Lights - High Mast Lights 



Total 


7.49 8.01 0.00 0.00 0.00 15.50 

Grant 7.49 8.01 0.00 0.00 0.00 15.50 

Total 7.49 8.01 0.00 0.00 0.00 15.50 

7B Street Lights - Street Lights & Fittings 

Total Project Cost 10.00 - 30.00 30.00 30.00 100.00 


Total 


10.70 0.00 36.75 39.32 42.08 128.85 

Grant 5.35 0.00 18.38 19.66 21.04 64.43 

Municiplaity Own Funds 5.35 0.00 18.38 19.66 21.04 64.43 

Total 10.70 0.00 36.75 39.32 42.08 128.85 

7C Street Lights - Retrofitting of Lights 

Total Project Cost - 23.00 - - - 23.00 


Total 0.00 26.33 0.00 0.00 0.00 26.33 


ESCO 0.00 26.33 0.00 0.00 0.00 26.33 

Total 0.00 26.33 0.00 0.00 0.00 26.33 

7D Street Lights - Central Median Lights 



Total 42.80 5.72 0.00 0.00 0.00 48.52 


Grant 38.52 5.15 0.00 0.00 0.00 43.67 

Municiplaity Own Funds 4.28 0.57 0.00 0.00 0.00 4.85 

Total 42.80 5.72 0.00 0.00 0.00 48.52 


1 Slum Improvements 

Total Project Cost - 375.00 150.00 113.00 71.00 709.00 


62



Total 


0.00 429.34 183.76 148.12 99.58 860.80 

Grant 0.00 429.34 183.76 148.12 99.58 860.80 

Total 0.00 429.34 183.76 148.12 99.58 860.80 

2 Parks & Playgrounds 

Total Project Cost - - - - 20.00 20.00 


Total 0.00 0.00 0.00 0.00 28.05 28.05 


Grant 0.00 0.00 0.00 0.00 19.64 19.64 


Total 0.00 0.00 0.00 0.00 28.05 28.05 

3A Market - Daily Market 



Total 0.00 85.87 0.00 0.00 0.00 85.87 



Total 0.00 85.87 0.00 0.00 0.00 85.87 

3B Market - Weekly Market 

Total Project Cost - - 75.00 - - 75.00 


Total 0.00 0.00 91.88 0.00 0.00 91.88 



Total 0.00 0.00 91.88 0.00 0.00 91.88 

4 Burial Ground with Gasifier 



Total 0.00 114.49 0.00 0.00 0.00 114.49 


Grant 0.00 57.25 0.00 0.00 0.00 57.25 


Total 0.00 114.49 0.00 0.00 0.00 114.49 

5 Public Convenience 

Total Project Cost 15.00 15.00 5.00 - - 35.00 


Total 16.05 17.17 6.13 0.00 0.00 39.35 


Grant 8.03 8.59 3.06 0.00 0.00 19.67 


63



Total 16.05 17.17 6.13 0.00 0.00 39.35 


1 Commercial Building 



Total 0.00 114.49 0.00 0.00 0.00 114.49 


Loan 0.00 103.04 0.00 0.00 0.00 103.04 


Total 0.00 114.49 0.00 0.00 0.00 114.49 

2 Urban Greenary 



Total 0.00 0.00 0.00 0.00 14.03 14.03 


Grant 0.00 0.00 0.00 0.00 14.03 14.03 

Total 0.00 0.00 0.00 0.00 14.03 14.03 

3A E-Governance 



Total 8.56 9.16 0.00 0.00 0.00 17.72 


Grant 8.56 9.16 0.00 0.00 0.00 17.72 

Total 8.56 9.16 0.00 0.00 0.00 17.72 

3B GIS Mapping 



Total 0.00 0.00 0.00 0.00 56.10 56.10 


Grant 0.00 0.00 0.00 0.00 50.49 50.49 


Total 0.00 0.00 0.00 0.00 56.10 56.10 

3C Property Mapping 

Total Project Cost 4.30 - - - - 4.30 


Total 4.60 0.00 0.00 0.00 0.00 4.60 



Total 4.60 0.00 0.00 0.00 0.00 4.60 

The consolidated ‘Means of Finance’ for all the projects put-together is summarized below : 

64



S.No. Particulars 

Table8.5 Consolidated Means of Finance 

Multi Year Investment Plan 

2009-10 2010-11 2011-12 2012-13 2013-14 Total 

I Project Cost 

Total Project Cost 1404.42 3067.00 3377.00 639.00 531.00 9018.42 


Total 1502.73 3511.41 4136.97 837.60 744.75 10733.46 

II Means of Finance 

Municipality Own Funds 

(including Deposits from Public) 

96.58 725.29 1075.83 84.68 85.56 2067.94 

Grant 1085.38 2021.32 2245.26 752.92 659.20 6764.08 

TNUIFSL Loan 320.76 738.46 815.88 0.00 0.00 1875.10 

BOOT / Private Sector 0.00 26.33 0.00 0.00 0.00 26.33 

Total 1502.73 3511.41 4136.97 837.60 744.75 10733.46 

8.4 FINANCIAL SUSTAINABILITY 

The sustainability analysis assumes that the Municipality will carry out reforms indicated as 

assumptions for financial projections. A Financial and Operating Plan (FOP) prepared which 

evaluates the Municipality Fund status for the Full Project scenario. 

The FOP is a cash flow stream of the ULB based on the regular Municipality revenues, expenditures 

and applicability of surplus funds to support project sustainability. The FOP horizon is determined to 

assess the impact of full debt servicing liability resulting from the borrowings to meet the identified 

interventions. The proposed capital investments are phased over 5 years investment from FY 2009- 

10 to FY 2013-14. 

The full project investment scenario is based on all the proposed investments identified for Vellakoil 

Municipality and the requirement for upgrading the town’s infrastructure is estimated and phased 

based on the construction activity. Implications of this investment in terms of external borrowings 

required, resultant debt service commitment and additional operation and maintenance expenditure 

are worked out to ascertain sub-project cash flows. Revenue surpluses of the existing operations are 

applied to the sub-project cash flows emerging from full project investments – the Municipality fund 

net surpluses indicates the ULB’s ability to sustain full investments. 

FY 2009-10 is taken as the base year and FY 2028-29 is assumed as the reference year (20 years) 

to determine the net surpluses and whether the Municipality maintains a debt / revenue surplus ratio 

as an indication of the ULB’s ability to sustain investments. 

8.5 BASIC ASSUMPTIONS FOR PROJECTIONS : 

The FOP is based on a whole range of assumptions related to income and expenditure. These are 

critical to ascertain the investment sustenance and would also provide a tool to test certain specific 

policy decisions regarding revenue and expenditure drivers on the overall Municipality fiscal 

situation. This section elucidated the key assumptions adopted for the FOP scenario. 

65



The growth rates for the various heads of income and expenditure have been arrived based on the 

past growth rates and the future estimated population growth. Improvements to the existing current 

and arrears collection percentages have been assumed for the various revenues directly collected 

by the Municipality, which implies that the Municipality would have to improve its collection 

mechanism to sustain full investments. 

Given below are the various assumptions forming part of the FOP workings : 

8.5.1 INCOME 

a) Property Tax 

The population of Vellakoil Municipality is estimated to grow at around 2.5% p.a. Based on the same 

Property Tax Revenue are assumed to increase @ 2.5% per annum. The last revision of Property 

Tax was carried out on 1-10-98 and it is assumed that the next revision will be carried out in the 

current year. It is assumed that there will be an increase of 25% due to revision in 2008-09 & that 

revision would be done @ 15% every 5 years. 

It has also been established as per the Survey in 2002 that around 27% of the properties are 

unassessed and further 20-25% of the properties are unassessed. Considering the above, it is 

assumed that the same shall be set right and together these shall contribute to increase in property 

tax revenue by 20% from next year viz. 2009-10, after completion of GIS mapping. 

The Property Tax income is divided between Revenue, Water Supply and Education Fund in the 

following ratio: 

Table: 8.6 Ratio of Property tax 

Description Per Annum 

General 4.000% 

Scavanging 2.000% Revenue & Capital Fund 

Lighting 1.000% 

Water Tax 2.000% Water Supply & Drainage Fund 

Drainage 1.000% 

Education - Education Fund 

Total 10.000% 

b) Profession tax 

Income from Profession Tax is assumed to increase @ 5% per annum. The Profession Tax was last 

revised on 1.10.2003 and the next revision is due in 2008-09. It is assumed that every revision 

would contribute to 15% increase 

Besides, the profession tax base would be increased by carrying out survey in 2010-11. It is 

assumed that the survey would increase the profession tax base by 20% in 2010-11. 

c) Assigned revenue 

Assigned Revenue comprises Entertainment Tax and Surcharge on Stamp Duty. It is assumed the 

same shall increase as under : 

Duty on Transfer of Property : 5% 

Entertainment Tax : 1% 

66



d) Devolution Fund 

Devolution Fund is also assumed to increase by 7.5% per annum 

e) Service charges and fees 

Service Charges and Fees are assumed to increase @ 5% per annum 

f) Grant and Contribution 

No Grant has been assumed in the financial projections. 

g) Sales and Hire charges 

Nil income assumed from Sales & Hire Charges. 

h) Other Income 

Other Income comprising basically fees and other rental income are assumed to increase @ 5% per 

annum. 

i) Water Supply Charges 

The present connection charges/deposit and tariff for water are as below : 

Table 8.7 Water supply Charges - Existing 

Type of service connections Connection Tariff 

Residential Rs .3000 Rs.65.00 Per month 

Commercial Rs. 6000 Rs.115.00 per month 

Industrial Rs .6000 Rs.105.00 per month 

It is assumed that after completion of water supply improvements work, the house service 

connections will be equal to 80% of property tax assessments. 

The water charges shall be revised as below : 

Residential - Rs.75.00 p.m 

Commercial – Rs.150.00 p.m 

Industrial - Rs. 150.00 p.m. 

It is also assumed that the water connection charges shall be revised as under : 

Residential - Rs.5000 

Commercial - Rs.10000 

Industrial - Rs.10000 

It is assumed that water charges shall be increased as below every 5 years : 

Residential - Rs.15.00 p.m 

Commercial & industrial – Rs.25.00 p.m 

67



It is assumed that water connection charges shall increase every 5 years as below : 

Residential - Rs.1000 

Commercial & industrial – Rs.2000 

The house service connection as % of property tax assessments is as below: 

Table 8.8 House Service Connections - Percentage 

Year 2004-05 Property tax assessments HSCs % 

Residential 11236 3910 35% 

Commercial 1047 45 2% 

Industrial & Govt. 1649 57 3% 

The improvements in water supply shall result in increase in operation & maintenance by Rs.35.00 

lakhs per annum and the same shall increase @ 5% per annum. 

j) Drainage Charges 

The Municipality does not have Under Ground Sewerage System. A new underground sewerage 

system is proposed to be built at a cost of Rs. 3300 lakhs. The implementation period is 2 years 

starting from 2010-11 to 2011-12. On completion of the scheme, it is assumed that around 70% of 

the property tax assessments would have sewerage connection. It is assumed that the scheme shall 

be completed as below : 

2010-11 60% 

2011-12 40% 

The Deposits and Charges shall be collected accordingly. 

It is assumed that the sewerage charges will be collected as below : 

Table 8.9 Sewage Charges 

% 

Tariff per 

Domestic Connections Connection month 

< 500 Sq.ft. 34% Rs.5000 Rs.70 

500 -1200 Sq.ft. 31% Rs.7000 Rs.100 

1200-2400 Sq.ft. 23% Rs.9000 Rs.150 

Above 2400 Sq.ft. 12% Rs.15000 Rs.200 

Special - Rs.18000 Rs.250 

Non Domestic Connection Tariff 

< 500 Sq.ft. 35% Rs.10000 Rs.140 

500 -1200 Sq.ft. 28% Rs.21000 Rs.300 

1200-2400 Sq.ft. 20% Rs.27000 Rs.450 

Above 2400 Sq.ft. 17% Rs.75000 Rs.1000 

Special - Rs.90000 Rs.1250 

68



It is assumed that the Domestic & Non Domestic drainage charges shall be increased every 5 years 

as below : 

Table 8.10 Increase in Tariff - Sewage Charges 

Domestic Non Domestic 

< 500 Sq.ft. Rs.15 Rs.20 

500 - 1200 Sq.ft. Rs.20 Rs.30 

1200 - 1400 Sq.ft. Rs.25 Rs.45 

Above 2400 Sq.ft. Rs.50 Rs.75 

It is assumed that the Domestic & Non Domestic connection charges shall be increased every 5 

years as below : 

Table 8.11 Increase in Deposit - Sewage Charges 

Domestic Non Domestic 

Up to 500 Sq.ft. Rs.1000 Rs.2000 

500 - 1200 Sq.ft. Rs.1500 Rs.4000 

1200 - 2400 Sq.ft. Rs.2000 Rs.5000 

Above 2400 Sq.ft. Rs.3000 Rs.10000 

The O&M charges shall be Rs. 99.00 lakhs per annum and the same shall increase @ 5% per 

annum. 

k) Solid waste Management 

It has been estimated that solid waste generation per day shall be around 14 MTs. 1/3 rd out of the 

same shall comprise Bio-degradable waste and the manure generation would be 1/3 rd of the same. 

Thus the estimated saleable manure generation per day would be 1.56 MTs. The same shall 

increase @ 5% per annum. 

The revenue from solid waste disposal shall be Rs.1000.00 per MT. The same shall increase by 

Rs.100.00 every 5 years. The number of assets covered by solid waste management scheme shall 

be equal to 70% of property tax assessments. The conservancy fees collected shall be as below to 

be collected after 10 years : 

Domestic - Rs.10.00 per month 

Commercial - Rs.20.00 per month 

Industrial/Government - Rs.30.00 per month 

The same shall increase as below every 5 years ; 

Domestic - Rs.5.00/- 

Commercial/ Industrial/Government - Rs.10.00/- 

69



The cost of the scheme is Rs. 800 lakhs and the O&M cost shall be equal to around Rs. 12.50 lacs 

per annum. The same shall increase @ 5% per annum. 

l) Commercial Buildings 

Commercial Buildings shall be constructed at 1 place and the rent collection and deposit 

mobilization from the same shall be as below : 

Rent Deposit 

Erode Road Rs. 100000 p.m. Rs. 2500000 

The rent shall increase @ of 15% every 3 years. 

Rental holiday of 2 years shall be provided against rental deposit collected. 

The operation & maintenance of the commercial building is estimated at Rs. 3 lacs per annum and 

the same shall increase @ 5% per annum. 

m) Bus Stand 

The income from Bus Stand shall increase by 15% on completion of ongoing improvements. 

n) Markets 

It is estimated that Daily Market shall fetch rental income of Rs. 15 lacs per annum. The Weekly 

Market / shandy shall fetch rental income of Rs. 10 lacs per annum. The rental income shall 

increase @ 15% every 3 years. 

The additional operation & maintenance of markets is estimated at Rs. 3 lacs per annum and the 

same shall increase @ 5% per annum. 

o) Slaughter House & Gasifier Crematorium 

The Slaughter House shall be let out on lease @ Rs. 1.5 lacs per annum. 

The Gasifier Crematorium shall result in income of Rs. 1.5 lacs per annum. 

The O&M charges of Slaughter House shall be Rs. 0.75 lacs per annum. 

The O&M charges of Burial Ground shall be Rs. 1 lac per annum. 

The income shall increase @ 15% every 3 years and the expenditure shall increase @ 5% per 

annum. 

p) Advertisements 

Bill Boards would be put at 20 places through out the Municipality. Rent shall be earned @ 

Rs.500.00 per Bill board per month. The rent shall increase @ Rs. 100/- every 3 years. 

q) Parking Rent 

The income from parking shall be Rs. 1 lac per annum. The same shall increase @ 15% every 3 

years. 

70



8.5.2 EXPENDITURE 

a) Increase in Expenditure 

The expenses are assumed to increase as under : 

Table 8.12 Assumptions - Increase in Expenditure 

Personnel Cost – Salaries 7.50% 

Personnel Cost – Others 5.00% 

Terminal & Retirement Benefits 5.00% 

Operative Expenses 7.50% 

Repairs & Maintenance 5.00% 

Program Expenses 2.50% 

Administrative Expenses 7.50% 

b) Operation and Maintenance 

The additional operation & maintenance expenses to be incurred are as below: 

Table 8.13 Assumptions – O&M 

Ongoing Projects Rs. in lakhs 

Various Projects 5.55 

New Projects (other than Sewerage & Water supply) Rs. in lakhs 

Strom Water Drains 4.50 

Solid Waste Management 12.50 

Roads 22.00 

Street Lights 5.00 

Slum Improvement 15.00 

Parks & Playfields 0.40 

Market 3.00 

Public Convenience 0.50 

Slaughter House 1.00 

Burial Ground 0.50 

E-Governance 0.10 

Urban Greenary 0.10 

Commercial Buildings 3.00 

Updation of Database on GIS 1.00 

Property Mapping 0.15 

Total 74.30 

The same shall increase @ 5% per annum. 

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 not been 

factored in the financial projections for the first 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. 

71



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 8.14 Assumptions – Provision of doubtful debts 

Provision for Doubtful Debts is assumed @ 2% on total revenue for Revenue Fund 

8.5.3 Collections 

a) Property tax 

Table 8.15 Assumptions – Property tax collection 

The current property tax collection is 97% The same shall improve to 97% 

The arrears property tax collection is 21% The same shall improve to 50% 

b) Profession tax 

Table 8.16 Assumptions – Profession tax 

The current profession tax collection is 89% The same shall improve to 100% 

The arrears profession tax collection is 100% The same shall improve to 100% 

c) Other Non Tax Income 

Table 8.17 Assumptions – Other Non Tax Income 

The current rental / lease collection is 99% The same shall be 100% 

The arrears collection % of rent / lease 30% The same shall improve to 60% 

d) Water Charges 

Table 8.18 Assumptions – Water Charges 

The current water charges collection is 99% The same shall improve to 85% 

The arrears water charges collection is 56% The same shall improve to 60% 

72



e) Drainage Charges 

Table 8.19 Assumptions – Drainage Charges 

The current drainage collection is Nil The same shall be 80% 

The arrears drainage collection is Nil The same shall be 60% 

f) Other income 

The collection % of all other income is taken at 100% 

h) Others 

The collection % of all other items of income is taken at 100% 

8.5.4 Annuity Factor 

The Annuity Factor for the new loans works out as under : 

Table 8.20 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 17.00 1.00 

Conversion Factor 2.17 0.18 

Total Conversion Factor 2.36 

Note : Sewerage and Water Supply Loan works out to 17% of total project cost identified. Other 

Loans works out to 1% of total project cost identified. 

8.6 PROJECT CASH FLOWS AND FOP RESULTS : 

Detailed cash flows are worked out for each of the sub projects based on the assumptions with 

regards investment phasing, financing pattern, additional operation and maintenance expenditure 

and additional income out to proposed capital investments for the full project scenario. The net 

project cash flows are then loaded on the existing revenues to test their impact on the overall 

Municipality fiscal situation. 

a) Income and Expenditure projections 

Table 8.21 captures the Income and Expenditure projections for the next 20 years with potential 

improvements and borrowings : 

73



Table 8.21Consolidated Income & Expenditure for next 20 years (up to FY 2028-29) 

S.No Particulars 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 

I Income 

a) Property Tax 45.43 54.11 62.79 64.36 65.97 67.62 76.07 77.97 79.92 81.92 83.97 

b) Other Taxes 10.88 6.26 6.57 7.88 8.28 8.69 9.99 10.49 11.02 11.57 12.15 

c) Assigned Revenue 25.74 26.99 28.31 29.69 31.14 32.66 34.26 35.94 37.70 39.55 41.49 

d) Devolution Fund 108.14 90.00 96.75 104.01 111.81 120.19 129.21 138.90 149.31 160.51 172.55 

e) Service Charges & Fees 46.33 42.68 44.44 143.61 166.83 430.83 441.92 453.30 497.30 510.10 568.45 

f) Grants & Contribution 1.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

g) Sale & Hire Charges 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

h) Other Income 54.36 32.52 37.84 39.55 47.94 73.23 75.16 93.45 97.73 99.95 125.42 

Total Income 291.93 252.56 276.70 389.10 431.96 733.23 766.61 810.06 872.98 903.59 1004.02 

II Expenditure 

a) Personnel Salaries Cost 48.53 52.17 56.08 60.29 64.81 65.62 70.54 75.83 81.51 87.63 94.20 

b) Personnel Cost - Others 1.39 1.49 1.61 1.73 1.86 2.00 2.15 2.31 2.48 2.66 2.86 

b) Terminal & Ret Benefits 3.64 3.82 4.01 4.21 4.42 4.65 4.88 5.12 5.38 5.65 5.93 

c) Operating Expenses 58.48 68.42 103.61 184.70 195.75 306.49 323.91 342.37 361.91 382.61 404.55 

d) Repairs & Maintenance 70.74 74.28 77.99 81.89 85.98 90.28 94.80 99.54 104.52 109.74 115.23 

e) Program Expenses 0.31 2.50 2.56 2.63 2.69 2.76 2.83 2.90 2.97 3.05 3.12 

f) Administration Expenses 10.41 11.24 12.09 12.99 13.97 15.02 16.14 17.35 18.66 20.05 21.56 

g) Finance Expenses 13.40 32.90 57.70 126.88 202.88 205.93 203.02 199.29 192.93 181.32 168.53 

h) Depreciation 122.76 118.52 142.15 347.12 685.99 854.96 842.92 713.66 526.00 406.18 328.15 

Total Expenditure 329.66 365.35 457.80 822.44 1258.36 1547.70 1561.18 1458.36 1296.35 1198.90 1144.14 

Surplus / (Deficit) (37.73) (112.79) (181.11) (433.34) (826.40) (814.47) (794.57) (648.30) (423.36) (295.31) (140.12) 

Profit before Depreciation 85.03 5.73 -38.95 -86.22 -140.41 40.49 48.35 65.35 102.63 110.88 188.04 

74




I Income 

a) Property Tax 94.66 97.02 99.45 101.94 104.49 118.00 120.95 123.97 127.07 130.25 147.35 

b) Other Taxes 13.97 14.67 15.40 16.17 16.98 19.53 20.50 21.53 22.61 23.74 27.30 

c) Assigned Revenue 43.52 45.66 47.91 50.27 52.74 55.34 58.07 60.93 63.94 67.09 70.41 

d) Devolution Fund 185.49 199.40 214.36 230.44 247.72 266.30 286.27 307.74 330.82 355.63 382.31 

e) Service Charges & Fees 583.06 598.07 650.02 666.74 735.05 753.95 773.34 834.60 856.07 935.97 960.03 

f) Grants & Contribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

g) Sale & Hire Charges 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

h) Other Income 130.78 133.81 142.63 148.73 164.91 175.36 182.66 186.96 198.92 221.76 227.04 

Total Income 1051.49 1088.64 1169.77 1214.28 1321.89 1388.48 1441.79 1535.74 1599.43 1734.44 1814.43 

II Expenditure 

a) Personnel Salaries Cost 101.26 108.86 117.02 125.80 135.24 145.38 156.28 168.00 180.60 194.15 208.71 

b) Personnel Cost - Others 3.08 3.31 3.56 3.83 4.11 4.42 4.75 5.11 5.49 5.90 6.35 

b) Terminal & Ret Benefits 6.23 6.54 6.86 7.21 7.57 7.95 8.34 8.76 9.20 9.66 10.14 

c) Operating Expenses 427.79 452.42 478.52 506.19 535.52 566.62 586.56 620.56 656.62 694.85 735.40 

d) Repairs & Maintenance 120.99 127.04 133.39 140.06 147.06 154.42 162.14 170.24 178.76 187.69 197.08 

e) Program Expenses 3.20 3.28 3.36 3.45 3.53 3.62 3.71 3.80 3.90 4.00 4.10 

f) Administration Expenses 23.18 24.91 26.78 28.79 30.95 33.27 35.77 38.45 41.33 44.43 47.76 

g) Finance Expenses 155.88 144.22 134.05 123.76 114.74 104.89 94.79 85.50 75.61 67.15 57.59 

h) Depreciation 276.04 240.17 214.59 195.62 180.99 169.26 159.52 151.19 143.89 137.35 131.41 

Total Expenditure 1117.65 1110.74 1118.13 1134.70 1159.71 1189.83 1211.87 1251.63 1295.39 1345.18 1398.53 

Surplus / (Deficit) (66.16) (22.11) 51.64 79.58 162.19 198.65 229.92 284.11 304.03 389.26 415.90 

Profit before Depreciation 209.89 218.06 266.22 275.20 343.17 367.91 389.45 435.30 447.92 526.62 547.31 

It may be observed from the above table that the Municipality has incurred surplus prior to depreciation in 17 out of the next 20 years 

and the cumulative cash flows are positive for all the years. 

75



b) Balance Sheet - Table 8.22 Consolidated Balance Sheet for next 20 years (up to FY 2028 – 29) 


I Liabilities 

a) Liabilities 

Loans 236.29 172.09 462.33 1080.06 1878.24 1860.54 1842.85 1803.77 1722.32 1586.49 1450.66 

Contn from Municipal Fund 90.68 164.68 261.26 986.56 2062.39 2147.07 2232.62 2232.62 2232.62 2232.62 2232.62 

Contribution from Government 167.32 201.00 201.00 201.00 201.00 201.00 201.00 201.00 201.00 201.00 201.00 

Grant 173.07 284.07 1369.45 3390.77 5636.03 6388.95 7048.15 7048.15 7048.15 7048.15 7048.15 

Accumulated Depreciation 431.05 539.54 681.69 1028.81 1714.80 2569.76 3412.67 4126.33 4652.33 5058.51 5386.67 

b) Current Liabilities 

Reserve for Doubtful Colln 1.86 6.91 12.44 20.23 28.87 43.53 58.86 75.06 92.52 110.60 130.68 

Tender Deposits - Contractors 14.65 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 

Security & Deposit Others 17.54 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 

Other Deposit 1.77 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 

Water Connection Deposit - 3.09 132.04 354.46 480.25 501.73 523.76 546.34 574.10 602.57 631.74 

Sewerage Deposit - 0.00 0.00 230.40 47.36 396.26 433.62 471.92 511.17 551.45 600.53 

Library Cess Payable 9.54 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 

Interest Payable Account 58.52 65.00 65.00 65.00 65.00 65.00 65.00 65.00 65.00 65.00 65.00 

IT & ST Deduction - Conts 0.64 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 

Recoveries - Staff 1.33 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 

Accounts Payable - Suppliers 7.07 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 

Accounts Payable - Expenses 0.15 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 

Other Recoveries & Payables 0.70 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 

c) Accumulated Surplus -117.17 -229.97 -411.08 -844.42 -1670.82 -2485.29 -3279.86 -3928.16 -4351.52 -4646.83 -4786.95 

Total 1095.01 1279.40 2847.15 6585.88 10516.11 11761.55 12611.68 12715.03 12820.70 12882.56 13033.10 

76




I Liabilities 

a) Liabilities 

Loans 1332.52 1214.38 1096.25 978.11 859.97 741.83 623.70 505.56 387.42 269.28 151.15 

Contn from Municipal Fund 2232.62 2232.62 2232.62 2232.62 2232.62 2232.62 2232.62 2232.62 2232.62 2232.62 2232.62 

Contribution from Government 201.00 201.00 201.00 201.00 201.00 201.00 201.00 201.00 201.00 201.00 201.00 

Grant 7048.15 7048.15 7048.15 7048.15 7048.15 7048.15 7048.15 7048.15 7048.15 7048.15 7048.15 

Accumulated Depreciation 5662.71 5902.88 6117.47 6313.09 6494.08 6663.34 6822.86 6974.06 7117.94 7255.30 7386.71 

b) Current Liabilities 

Reserve for Doubtful Colln 151.71 173.48 196.87 221.16 247.60 275.37 304.20 334.92 366.91 401.59 437.88 

Tender Deposits - Contractors 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 

Security & Deposit Others 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 

Other Deposit 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 

Water Connection Deposit 661.64 692.29 728.95 766.52 805.03 844.50 884.95 932.35 980.93 1030.72 1081.76 

Sewerage Deposit 650.83 702.39 755.24 809.46 873.85 939.85 1007.50 1076.84 1147.98 1230.86 1315.81 

Library Cess Payable 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 

Interest Payable Account 65.00 65.00 65.00 65.00 65.00 65.00 65.00 65.00 65.00 65.00 65.00 

IT & ST Deduction - Contrs 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 

Recoveries - Staff 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 

Accounts Payable - Suppliers 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 

Accounts Payable - Expenses 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 

Other Recoveries & Payables 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 

c) Accumulated Surplus -4853.11 -4875.21 -4823.58 -4743.99 -4581.81 -4383.16 -4153.24 -3869.13 -3565.10 -3175.83 -2759.93 

Total 13226.08 13429.99 13690.98 13964.12 14318.49 14701.50 15109.75 15574.37 16055.85 16631.69 17233.14 

77




II Assets 

a) Fixed Assets 1042.31 1227.29 2703.27 6212.81 10378.40 11216.00 11960.75 11960.75 11960.75 11960.75 11960.75 

b) Current Assets 

Stock 0.93 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 

Property Tax Rec - Current 0.97 1.62 1.88 1.93 1.98 2.03 2.28 2.34 2.40 2.46 2.52 

Property Tax Rec - Arrears 1.59 2.05 3.16 4.10 4.59 4.73 4.40 4.48 4.58 4.69 4.80 

Profession Tax Rec - Current 5.38 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Profession Tax Rec - Arrears - 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Lease Amount Rec -Arrears - 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Lease Amount Rec-Current 0.06 0.04 0.03 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.00 

Water Charges Rec - Current - 4.89 5.02 19.81 23.21 23.79 24.38 24.99 30.46 31.22 32.00 

Water Charges Rec - Arrears - 0.00 6.85 9.77 31.64 45.15 51.36 54.68 56.86 65.39 69.87 

Sewerage Charges - Current - 0.00 0.00 0.00 0.00 51.91 53.20 54.53 55.90 57.29 67.77 

Sewerage Charges - Arrears - 0.00 0.00 0.00 0.00 0.00 51.91 73.97 84.12 89.55 93.11 

Specific Grant Receivable 4.47 4.47 4.47 4.47 4.47 4.47 4.47 4.47 4.47 4.47 4.47 

Deposits Recoverable 2.24 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 

Staff Advance Recoverable 0.43 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 

Other Advance - Recoverable 11.84 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 

Other Assets 0.44 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 

c) Cash & Bank Balances 24.35 11.54 94.97 305.49 44.32 385.98 431.43 507.32 593.67 639.24 770.30 

Total 1095.01 1279.40 2847.15 6585.88 10516.11 11761.55 12611.68 12715.03 12820.70 12882.56 13033.10 

78




II Assets 

a) Fixed Assets 11960.75 11960.75 11960.75 11960.75 11960.75 11960.75 11960.75 11960.75 11960.75 11960.75 11960.75 

b) Current Assets 

Stock 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 

Property Tax Rec - Current 2.84 2.91 2.98 3.06 3.13 3.54 3.63 3.72 3.81 3.91 4.42 

Property Tax Rec - Arrears 4.92 5.30 5.56 5.76 5.94 6.10 6.59 6.92 7.18 7.40 7.61 

Profession Tax Rec - Current 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Profession Tax Rec - Arrears 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Lease Amount Rec -Arrears 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Lease Amount Rec-Current 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Water Charges Rec - Current 32.80 33.62 39.95 40.95 41.97 43.02 44.10 51.40 52.69 54.00 55.35 

Water Charges Rec - Arrears 72.75 75.03 77.09 86.76 92.03 95.57 98.46 101.12 112.41 118.73 123.10 

Sewerage Charges - Current 69.46 71.20 72.98 74.80 86.91 89.08 91.30 93.59 95.93 109.90 112.65 

Sewerage Charges - Arrears 105.01 111.47 115.79 119.30 122.52 135.91 143.44 148.68 153.06 157.15 172.76 

Specific Grant Receivable 4.47 4.47 4.47 4.47 4.47 4.47 4.47 4.47 4.47 4.47 4.47 

Deposits Recoverable 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 

Staff Advance Recoverable 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 

Other Advance - Recoverable 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 

Other Assets 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 

c) Cash & Bank Balances 945.56 1137.74 1383.91 1640.76 1973.26 2335.55 2729.51 3176.22 3638.05 4187.88 4764.53 

Total 13226.08 13429.99 13690.98 13964.12 14318.49 14701.50 15109.75 15574.37 16055.85 16631.69 17233.14 

The full projects investment scenario indicates that Vellakoil Municipality would end up with a cumulative cash surplus of Rs. 4765 

lacs by the end of FY 2028-29 (after 20 years) 

79



8.7 IMPACT OF POTENTIAL IMPROVEMENTS 

Vellakoil’s ability to improve on its financial performance hinges primarily on its ability to sustain and 

improve on the revenue growth noticeable in recent years. 

Specific interventions with respect to revenue realization and cost management are detailed in 

chapter 6 of the report. On ‘Full Project Investment Scenario’ basis, Vellakoil’s own revenues 

(comprising taxes, user charges and other income) could grow from Rs. 158 lacs in FY 2006-07 to 

Rs. 1302 lacs by FY 2028-29, implying an absolute growth of 36%. Vellakoil has vast potential for 

increasing its own income given the growth achieved in the last few years. Areas for revenue 

enhancement in own revenue include : 

Property Tax – through an enhanced revision in ARV, widening assessee base and closer 

scrutiny. Besides periodic increase (every 5 years) in property tax rates. 

Professional Tax – sustaining a higher assessment growth. 

User Charges – periodic increases in user charges for water connections and sewerage 

connections. The Municipality could generate additional Rs. 910 lacs (exclusive of Deposits) of 

income per annum by FY 2028-29 by providing water connections to 80% of property tax 

assessments and sewerage connections to 70% of property tax assessments. 

Vellakoil also needs to explore scope for private sector participation for development of 

remunerative projects and city beautification projects that have been identified by Vellakoil. 

While there is potential for expenditure control in certain areas (as in the case of energy costs and 

leakage in water supply), the focus of cost management should be to shift expenditure from 

administration to better asset management and service levels. We have not factored in any cost 

reduction in the FOP and have assumed that any savings generated from cost reduction would go 

into augmenting service levels and better asset management. 

A comprehensive energy audit is required, given that 60% of its operations and maintenance 

expenditure is spent on electricity charges. Plugging leakage in the water supply network and 

installation of timers and energy savers on the street light network are important interventions 

needed in the context of Vellakoil’s high power costs. 

8.8 ESTIMATION OF INVESTMENT CAPACITY 

8.8.1 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. 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 : 

81



Table8.23 Summary of Borrowing and Investment Capacity – Scenario I 

Borrowing Capacity Rs. 373.26 lacs 

Investment Capacity (BC x 4 times) Rs. 1493.02 lacs 

8.8.2 Scenario II - Estimation of Investment Capacity with Projects & Growth Rate of 7.5% 

for Devolution Funds 

In Scenario II, the financial projections have been worked out for the next 30 years assuming that 

the income from Devolution Funds would grow @ 7.5% p.a. But the financial projections for the next 

20 years have been taken to arrive at the Borrowing & Investment capacity. The borrowing capacity 

of Vellakoil Municipality has been arrived on the minimum of the following : 


50% of Primary Operating Surplus less Debt Service 

The overall financing mix has been arrived to include 18% Loans, 63% Grants and 19% 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. 

Table8.24 Summary of Borrowing and Investment Capacity – Scenario II 


Investment Capacity (BC/0.14) Rs. 4134.08 lacs 

Investment Requirement Rs. 9018.12 lacs 

Sustainable Investment Capacity % - IC / IR 46% 

Thus the sustainable investment capacity works out to 46% in case the growth in Devolution Funds 

is taken @ 7.5% p.a. 

8.8.3 Scenario III - Estimation of Investment Capacity with Projects & Growth Rate of 10% 

for Devolution Funds 

In Scenario III, the financial projections have been worked out for the next 30 years assuming that 

the income from Devolution Funds would grow @ 10% p.a. But the financial projections for the next 

20 years have been taken to arrive at the Borrowing & Investment capacity. The borrowing capacity 

of Vellakoil Municipality has been arrived on the minimum of the following : 


50% of Primary Operating Surplus less Debt Service 

The overall financing mix has been arrived to include 18% Loans, 63% Grants and 19% 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. 

82



Table8.25 Summary of Borrowing and Investment Capacity – Scenario III 


Investment Capacity (BC/0.14) Rs. 5208.24 lacs 

Investment Requirement Rs. 9018.12 lacs 

Sustainable Investment Capacity % - IC / IR 57.75% 

Thus the sustainable investment capacity works out to 58% of the total investment requirement at 

Rs. 5210 lacs in case the growth in Devolution Funds is taken @ 10% p.a. 

8.9 KEY INDICATORS 

The key Indictors of the Municipality based on the financial projections of Scenario II (Growth Rate 

of Devolution Funds @ 7.5% p.a.) works out as below : 

Table 8.26 Key Indicators 

Minimum Maximum Average 

Existing (2001-02 to 2006-07) 

Operating Ratio 0.71 1.01 0.85 

Debt Service Ratio 0% 6% 2% 

Category 

Short Term (2009-10 to 2013-14) 

1 



Category 

Long Term (2009-10 to 2028-29) 

3 



Category 1 

Note : 1 – Financially Sound; 2 – Financially Fragile; 3 – Financially Insolvent 

The financials and the ratios of the Municipality are not good in the short term due to high operating 

ratio and debt service ratio. But in the long run, the same have improved and is good due to higher 

number of commercial and industrial assessments. 

8.10 INFERENCE 

The investment capacity of Vellakoil Municipality on ‘As is Where Basis’ works out to Rs. 1493 

lacs. 

The investment capacity of Vellakoil Municipality works to 46% in case of Scenario II (Growth 

Rate of Devolution Funds assumed @ 7.5% p.a.) and 58% in case of Scenario III (Growth Rate 

of Devolution Funds assumed @ 10% p.a.). 

In value terms the investment capacity works out to Rs. 4135 lacs under Scenario II and Rs. 

5210 lacs under Scenario III. 

It may be observed that the investment capacity has improved with the introduction of new 

projects as compared to ‘As is Where Basis’ scenario. The same is on account of the fact that 

83



the Municipality has large number of commercial and industrial assessments, which are 

presently untapped on account of water and sewerage connections. 

Thus it can be inferred that the investment capacity of the Municipality is around 46% of the total 

investment requirement. 

Based on the above, it can be inferred that the Municipality can take up only the small projects, 

where the funding is mostly by way of Grants as given below : 

Table 8.27 Priority projects suggested under CDP 




a) Improvements to Water Supply 1199.20 A 0:90:10 


a) New Underground Sewerage Scheme 3300.00 A 37:35;28 

Total 4499.20 

The above two projects can be taken up by the Municipality as there are large number of 

commercial and industrial assessments and on stand alone basis these projects are viable at the 

funding pattern given above. 

Besides the above, the following other small projects can be taken up, where the funding pattern 

is mainly by way of grants and deposit mobilization : 

Table 8.27a Priority projects suggested under CDP 



I Strom Water Drains 

a) Construction of new drains and providing mesh covers 300.00 A 0:90:10 

II Bus Shelter 

a) Construction of New Bus Shelter 10.00 A 100% Grant 

III Street Lights 

a) High mast lights at Old & New Bus Stand 14.00 A 100% Grant 

b) Retrofitting and energy saving devices 23.00 A ESCO 

c) Central Median lights at main roads for 3Km 45.00 A 0:90:10 



a) Improvement to Slums 709.00 B 100% Grant 

II Market 

a) Construction of Daily Market 75.00 A 100% ULB 

b) Construction of Weekly Market 75.00 A 100% ULB 



a) Commercial Building (G+2) at Erode Road near 50.00 A 100% ULB 

84



Bus Stand 

II E-Governance 

a) E-Governance 16.00 A 100% Grant 

b) Updation of Database on GIS 40.00 C 0:90:10 

c) Property Mapping 4.30 A 100% ULB 

Total 1361.30 

As regards other projects with large financial cost, the Municipality would require more support 

from the Government towards both capital cost and operation & maintenance expenses. Thus it 

would be possible to take up those projects if more support is provided by the Government and 

by improving own sources of income. 

85



86 

PUBLIC CONSULTATION PROCESS 

The City Development Plan is a tool which adapts a corporate approach to plan and implement 

projects in a participatory mechanism involving users, elected councilors, line agencies, private 

organizations, NGOs and CBOs. The broad purpose of stake holders’ participation is to involve 

the stakeholders in the development plan for the city. In this process, residents of various 

sections of the communities in the town were enquired into at random during surveys and visits 

to the sites and also otherwise suggested by the elders. 

This plan focuses largely on the totally implementable urban infrastructure and other projects to 

adequately meet the present and future demands of the growing town. The attendant results and 

concomitant effects in terms of town’s economic development, societies’ standard of living, 

improvement in the living environment, equality in the access to the necessary services, facilities 

and amenities for all the sections of people largely sub-serving alleviation of the urban poverty 

element, on the completion of the project proposals. 

At the initial stage, the Councilors, the Chairman and the Municipal Officials were individually 

discussed with. The consultants gathered information on ward and town level requirements 

relating to Municipal services and other promotive projects. As a second step, a public 

consultation meeting was arranged and the details are as below: 

Minutes of the stake holder’s meeting 

The stake holder’s meeting was held in Vellakoil Municipality at Venkatesan Marriage Hall, 

Vellakoil on 22/05/08 at 10.30 am with an introduction given by the Chairman followed by SMEC 

Consultant Mrs. S. Rajalakshmi. An discussion on the town requirement was thrown open with 

the ward councilors, Senior Citizens of the town, Teachers, working staff, Government official, 

Chairman, and public. 

The stakeholders have been invariably very co-operative and practical about the needs of the 

town at ward and town levels. During the meeting, participants were asked to describe the 

desired future vision for their town. The participants were given a chance to comment on the 

strategic options put forth in broad terms and on the local strength and weaknesses affecting 

city’s future development. These comments were considered while developing strategic options 

for the plan. 

At the end of the workshop, consulting team organized for written feed backs from the 

stakeholders, to be incorporated to the CDP. The major issues highlighted during the meeting 

and the solution initiatives are given below: 

9



Table 9.1 Major issues and solution initiatives 

NO MAJOR ISSUES RAISED SOLUTION INITIATIVES 

1 Implement the source segregation method in 

solid waste management. 

Source segregation and preparation of compost is 

proposed 

2 Set up crematorium for this Vellakoil town A gasifier crematorium is proposed. 

3 Take steps to come all the buses in to bus 

stand. 

4 Improve the basic amenities in Weekly 

market. 

5 Improve the basic amenities of Bus stand. 

6 Require Public Toilet facility at MGR Nagar. 

7 Regulate the house tax for improve the 

financial status of Town 

8 improve the bus shelter facilities through Lions 

Club 

Cooperation from the private and government bus 

operators, Drivers and conductors and the public is 

essential 

Reconstruction of weekly market with basic 

amenities is proposed. 

Expansion of bus stand with basic amenities is 

proposed 

About 10 numbers of public toilets are proposed at 

various locations including MGR nagar. 

Reforms in property tax collection are proposed will 

improve the financial condition of the town. 

5 number of new bus shelters has been proposed 

to be implemented by NGOs and Voluntary 

agencies. 

The suggestions and feed backs from all attendees of the workshop are listed below: 

Table 9.2 Minutes of the consultative process meeting 

Chairman: Mrs. Shanthi Introduction given for City Development Plan for Vellakoil Municipality 

Kandasamy 

Assistant Director, Regional Briefed about the importance of City Development plan and need for 

District Municipal 

development in public toilet facilities, road works, street light, water 

Administration, 

supply, bus stand, Park and play ground. 

V.V.Thambidurai, Ex. Ward • Widening of Tharapuram road. 

Councilor, 

• In new layouts need road facilities, public water stand post. 

• This town requires UGD and street light facility for all the roads. 

DMK Secretary, Vellakoil DMK • Increase the number of municipality workers involved with water 

supply, sanitary workers. 

• Implement the source segregation method in solid waste 

management. 

• Require park, play ground and entertainment facilities. 

P.K. Kumarasamy, President, • Require Public Toilet facility at MGR Nagar. 

Saiva Sidhantha Group 

• Remove and stop the brick industries in settlement area. 

Panner selvam, Lions club • Park should be set up in town center. 

• Set up crematorium for this Vellakoil town. 

• Lions club will help to improve the bus shelter facilities. 

Gurusamy, Financier • Bus stand should be transferred from old location to new location. 

Because buses are not coming to bus stand. 

Periyasamy 

• Give importance to Improvement of bus stand and buses 

operation. 

• Require road improvement and clear the road side encroachment. 

• Improve the storm water drains, daily market, Government collage, 

Farmers daily market 

• Upgrade the Primary health center as Town hospital. 

• Improve the Electric supply of this town. 

87



Jothi, Secretary, Communist 

Party of India (Marxsist) 

Deluxe Mani, 3 rd ward Council 

member 

• Develop basic amenities in textile mills. 

• Construct community marriage hall and recreation facilities. 

• Arrange the facility of free ambulance service. 

• Improve the basic amenities of Bus stand. 

• Improve the basic amenities in Weekly market. 

• Remove the encroachment in the town. 

• Require Park and Play ground facilities. 

• Stop the collection of fees for birth and death certificate. 

• Provide the basic amenities in Arivoli nagar. 

• Take steps to come all the buses in to bus stand. 

• Stop the stray dogs menace. 

• Improve the basic amenities based on population. 

• Regulate the house tax for improve the financial status of Town. 

• Provide patta for all resident of town. 

• Take steps to restrict the cotton export. 

• Provide uninterrupted power supply for Water supply. Take 

immediate action against mixing of sewage water in to drinking 

water. 

88

Vellakovil City Development Plan - Municipal

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?