Hosadurga -ES.pdf - kuidfc

Hosadurga CDP FR (Jan 10).docsewer/drainage and conservancy charges. The CDP recognizes the fact that property taxespay for capital investments and user charges pay for system operation and maintenance –given the aforesaid approach, the financial sustainability analysis focuses on reviewing netcash flows arising out of taxation and tariff reforms.18. The Financial and Operating Plan (FOP) lays out the planned fiscal status of HosadurgaTMC over the CDP period, taking cognizance of Multi-year Investment Plans for eachsub-project, sources and disposition of sub-project funds, and performance of HosadurgaTMC Revenue Account. The FOP will be reviewed annually to determine the extent towhich targets are met and undertake corrections / revisions accordingly. The FOP alsohelps in assessing the requirement of funds over the short-term and identifying sourceswith potential for revenue enhancement. The main objective of the FOP is to enableHosadurga TMC determine their own priority objectives in terms of goals, resources,service and management aspects in the medium-term.(i)Business as usual. In this scenario, the finances of Hosadurga TMC are forecast in a“do nothing” or “without CDP” scenario. The revenue surplus thus generatedindicates Hosadurga capacity to service capital expenditure.(ii)Improved Scenario. The improvement scenario is based on investments identifiedunder the CDP and requirement for upgrading the town’s infrastructure is estimatedand phased based on construction activity. Implications of this investment in termsof external borrowings required, resultant debt service commitment, and additionaloperation and maintenance expenditure are worked out to ascertain sub-project cashflows. Revenue surpluses from the Business as usual Scenario are applied to subprojectcash flows emerging from implementable investments – the municipal fundnet surpluses indicates Hosadurga’s ability to sustain full investments. FY 2023 isassumed as the reference year to determine the net surpluses and whether HosadurgaTMC maintain a debt/revenue surplus ratio as an indication of the Hosadurga ’sability to sustain investments.(iii)Most Optimistic Scenario. This scenario is same as improved scenario and Furtherimprovement in efficiency and tariff rationalization so that along with O&M costrecovery, some percentage of capital cost is also recovered.19. Sustainable investment for the period 2008-23 is Rs.11,75 Crores in the improvedscenario. CDP sustainability is based on three critical factors: (i) Hosadurga TMC shouldundertake assumptions proposed in the FOP; and (ii) Hosadurga TMC should undertakegovernance reforms by way of Urban Governance, Capacity Building and InstitutionalStrengthening.3. Cost Estimates and Financing Plan20. The total cost of the City Development Plan is estimated at Rs.97.77 Crores includingduties, taxes, contingencies (physical and price) and financing charges (front-end fees andcommitment charges). Base cost of sub-project components were determined based one