Supporting Report L
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The Study on Capacity Development for Jeneberang River Basin Management Final Report Supporting Report L CORPORATE FINANCIAL PLAN Supporting Report L CORPORATE FINANCIAL PLAN Table of Contents Pages L1 Assets to be Owned and Managed....................................................................L-1 L1.1 Owned Assets ..............................................................................................L-1 L1.2 Managed Assets ...........................................................................................L-1 L2 Proposed Revenue .............................................................................................L-2 L2.1 Revenue Planning and Cost Allocation.........................................................L-2 L2.2 Water Service Revenues...............................................................................L-4 L2.3 Public Service Revenue................................................................................L-8 L2.4 Other Government Support ..........................................................................L-9 L2.5 Summary and Adjusted Revenue Plan ..........................................................L-9 L3 Major Expenditures ........................................................................................L-12 L3.1 Expenditures accounting ............................................................................L-12 L3.2 Treatment of Tax, Pension and Insurance ...................................................L-12 L4 Rules of Profit Appropriation and Dividend..................................................L-13 L4.1 Regulation..................................................................................................L-13 L5 Profit and Loss Projection ..............................................................................L-14 L5.1 Assumption of Projection...........................................................................L-14 L5.2 Water revenue ............................................................................................L-14 L5.3 Public Service Revenue..............................................................................L-15 L5.4 Non-water Revenues..................................................................................L-15 L5.5 Expenditure................................................................................................L-18 L5.6 Result of Projection....................................................................................L-19 L6 5 years projection............................................................................................L-20 L6.1 Profit and Loss...........................................................................................L-20 L6.2 Balance sheet projection (Please see attached Table L6.2) ..........................L-20 L6.3 Cash flow analysis (Please see attached Table L6.3)...................................L-20 L-i L6.4 Sensitivity analysis.....................................................................................L-20 L7 Fund Requirement ..........................................................................................L-22 L7.1 Fresh money ..............................................................................................L-22 L7.2 Loan ..........................................................................................................L-22 L7.3 Inter-office account from PJT I Head Office...............................................L-22 L8 Evaluation of the Major Financial Ratio........................................................L-23 L-ii List of Tables Pages Table L1.1 List of Owned Assets Candidates.......................................................... LT-1 Table L1.2 List of Managed Assets Candidates....................................................... LT-2 Table L2.1-1) Review of Benefit for Cost Allocation .................................................. LT-3 Table L2.1-2) Review of Benefit for Cost Allocation (Planned Stream of Benefits by Bili-Bili Multi-purpose Dam) .......................................................... LT-4 Table L2.2 Calculation of Allocated Service Cost on Full-cost Recovery Principle............................................................................................... LT-5 Table L2.3 Calculation of Burden by Commercial Service Beneficiaries to Finance Public Service ......................................................................... LT-6 Table L5.1 PJT Jeneberang Profit and Loss Projection 2007 - 2020 (at 2004 price without inflation factor) Case 1: Beneficiary-to-Pay Principle...... LT-7 Table L5.2 PJT Jeneberang Profit and Loss Projection 2007 - 2020 (at 2004 price without inflation factor) Case 2: Tariff setting with a target of attaining PJT's Self-financing ability within 5 years.............................. LT-8 Table L5.3 PJT Jeneberang Profit and Loss Projection 2007 - 2020 (at 2004 price without inflation factor) Case3: Tariff setting in consideration of Beneficiary's Affordability to Pay..................................................... LT-9 Table L6.1 PJT Jeneberang Profit and Loss Projection 2007 - 2011 (current price) Tariff setting in consideration of Beneficiary's Affordability to Pay..................................................................................................... LT-10 Table L6.2 PJT Jeneberang Balance Sheet Projection 2007 - 2011 (current price) Tariff setting in consideration of Beneficiary's Affordability to Pay..................................................................................................... LT-11 Table L6.3 PJT Jeneberang Cash flow Projection 2007 - 2011 (current price) Tariff setting in consideration of Beneficiary's Affordability to Pay .... LT-12 Table L8.1 Financial Ratio Analysis 2007 - 2011.................................................. LT-13 Appendix Pages Appendix L-1 Breakdown of Personnel Cost..............................................................LA-1 Appendix L-2 Breakdown of Traveling Cost ..............................................................LA-2 Appendix L-3 Initial Mobilization Cost......................................................................LA-3 L-iii The Study on Capacity Development for Jeneberang River Basin Management Supporting Report L CORPORATE FINANCIAL PLAN L1 Assets to be Owned and Managed L1.1 Owned Assets Central government’s paid in capital of PJT I was increased by Rp.13 billion in the year 2002 to Rp.30 billion from Rp.17 billion because of owned assts transfer for Begawan Solo. Likewise at incorporation of PJT I Jeneberang, owned assets for about Rp.3.4 billion will be transferred to PJT I. These assets excluding land should be depreciated by the current depreciation method of PJT I or straight line method without residual value. Depreciation calculation will be made by PJT I head office and reported to PJT Jeneberang. PJT Jeneberang is responsible to keep inventory record and in case of elimination, it should be approved by MPW through application by the president director of the head office. Inventory record should have historical data to recognize whether transferred from government or purchased by PJT I. Amount of owned assets is listed on the B/S together with accumulated depreciation value. PJT Jeneberang’s proposed owned assets are shown in Table L1.1. L1.2 Managed Assets Managed assets will be transferred by the decree of MPW to enact GR No.5/1990 on PJT, for state owned property/state treasure to be managed by the corporation. The decree will be issued as administrative guideline by determining the types and quality of the assets and instruct property bookkeeping, valuation and yearly report of inventory. Managed assets are not listed on the B/S and therefore depreciation calculation is not needed. However for the purpose of property valuation and determination of property status, depreciation calculation is recommended. PBB has been imposed to PJT I on their managed assets, but it is said amount is negligible so far. PJT Jeneberang’s proposed managed assets are shown in Table L1.2. Nippon Koei Co., Ltd. L-1 Final Report, Volume III-2 CTI Engineering International Co., Ltd. Supporting Report 2 The Study on Capacity Development for Jeneberang River Basin Management L2 Proposed Revenue L2.1 Revenue Planning and Cost Allocation (1) Approach To formulate the revenue planning of the corporation, the services subject to fee charge to beneficiary and fund support from the government are to be identified. According to the legal frame and practice of the existing PJTs, the following services will be rendered in the Jeneberang River basin by the corporation; Services Chargeability/Beneficiary Legislation to be revised* 1) Public Service Obligation (PSO) Unable to directly charge a) Flood Control Population Expected GR on PSO Farmers b) Irrigation Water Supply Ditto (not legalized to charge) c) Flush Water Supply Population Ditto d) River Water Quality Monitoring Ditto Ditto e) Watershed Management Ditto Ditto 2) Commercial Service Able to directly charge a) Water Supply Prov. Regulation No.8, 1991 - Municipal Water PDAM Ditto - Industrial Water Industry Ditto - Plantation Water Plantation operator Ditto - Fishpond Water Fishpond operator Ditto b) Water Provision to Hydro Power PLN Ditto c) Non-water Services Intending user GR No.93, 1999 (PJT I) 3) Quasi-public Service Able to only partly charge a) River Area Management River area user Prov. Regulation No.5, 1999 Prov. Regulation No.7, 1993 b) C-class Mining Management Miner GD