Vellakovil City Development Plan - Municipal
Vellakovil City Development Plan - Municipal
Vellakovil City Development Plan - Municipal
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<strong>City</strong> <strong>Development</strong> <strong>Plan</strong> for Vellakoil <strong>Municipal</strong>ity SMEC India Pvt Ltd<br />
Final Report TNUDP III<br />
Table8.23 Summary of Borrowing and Investment Capacity – Scenario I<br />
Borrowing Capacity Rs. 373.26 lacs<br />
Investment Capacity (BC x 4 times) Rs. 1493.02 lacs<br />
8.8.2 Scenario II - Estimation of Investment Capacity with Projects & Growth Rate of 7.5%<br />
for Devolution Funds<br />
In Scenario II, the financial projections have been worked out for the next 30 years assuming that<br />
the income from Devolution Funds would grow @ 7.5% p.a. But the financial projections for the next<br />
20 years have been taken to arrive at the Borrowing & Investment capacity. The borrowing capacity<br />
of Vellakoil <strong>Municipal</strong>ity has been arrived on the minimum of the following :<br />
30% of revenue projections<br />
50% of Primary Operating Surplus less Debt Service<br />
The overall financing mix has been arrived to include 18% Loans, 63% Grants and 19% own funds.<br />
The repayment period of loans has been taken at 5+15 years for Sewerage and Water Supply Loans<br />
and 2+8 years for other project loans. The above factors have been taken in to account for arriving<br />
at the Annuity Factor, which has been applied on the lowest of the above to arrive at the overall<br />
borrowing capacity and investment capacity.<br />
Table8.24 Summary of Borrowing and Investment Capacity – Scenario II<br />
Borrowing Capacity Rs. 744.13 lacs<br />
Investment Capacity (BC/0.14) Rs. 4134.08 lacs<br />
Investment Requirement Rs. 9018.12 lacs<br />
Sustainable Investment Capacity % - IC / IR 46%<br />
Thus the sustainable investment capacity works out to 46% in case the growth in Devolution Funds<br />
is taken @ 7.5% p.a.<br />
8.8.3 Scenario III - Estimation of Investment Capacity with Projects & Growth Rate of 10%<br />
for Devolution Funds<br />
In Scenario III, the financial projections have been worked out for the next 30 years assuming that<br />
the income from Devolution Funds would grow @ 10% p.a. But the financial projections for the next<br />
20 years have been taken to arrive at the Borrowing & Investment capacity. The borrowing capacity<br />
of Vellakoil <strong>Municipal</strong>ity has been arrived on the minimum of the following :<br />
30% of revenue projections<br />
50% of Primary Operating Surplus less Debt Service<br />
The overall financing mix has been arrived to include 18% Loans, 63% Grants and 19% own funds.<br />
The repayment period of loans has been taken at 5+15 years for Sewerage and Water Supply Loans<br />
and 2+8 years for other project loans. The above factors have been taken in to account for arriving<br />
at the Annuity Factor, which has been applied on the lowest of the above to arrive at the overall<br />
borrowing capacity and investment capacity.<br />
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