Technical Assistance Consultant’s Report
Project Number: 40007-02 September 2008
Republic of Uzbekistan: Djizzak and Surkhandarya Rural Water Supply and Sanitation Sector (Supplementary) Financed by Technical Assistance Special Fund
Prepared by David King, Marcus Napud, Nelson Jose, Andrew Mcintyre, Wandert Benthem and Islohotkonsaltservis, Ltd.
Tashkent, Uzbekistan
For Uzbekistan Communal Services Agency (UCSA)
This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. All the views expressed herein may not be incorporated into the proposed project’s design.
SURKHANDARYA WATER SUPPLY AND SANITATION PROJECT
FINANCIAL ANALYSIS
August 2008 FINANCIAL ANALYSIS
A. Introduction
1. The Surkhandarya Water Supply and Sanitation Project (the Project) will cover 7 rayons (district) and Termez city in Surkhandarya oblast (province). The 7 districts are Angor, Djarkurgan, Kizirik, Kumkurgan, Muzrabad, Sariasiya and Shurchi. Angor and Kizirik are under the management of Khodjaipak Regional Trunk Main-Operation and Management Administration (RTM-OMA). In Djarkurgan district, two vodokanals (water supply and sanitation agency) will be covered, Djarkurgan vodokanal which serves the district center and Surkhan vodokanal which serves the nearby settlements. Capital investments will focus on the rehabilitation of existing water supply systems and expansion to settlements near the district centers.
2. Financial analysis for the water supply component was undertaken in two parts: (i) determination of appropriate water tariffs for each subproject that will ensure financial sustainability, and (ii) preparation of financial projections for each subprojects. The projections consist of annual financial statements (income statement, sources and applications of funds statement, balance sheet), key performance indicators, and operating and financial data for the 2009–2020 period.
B. Bases for Financial Projections
3. Price. The financial projections for each subproject are presented on a current price basis. Revenues and costs are converted from a constant 2008 price basis to current prices using projected local annual inflation rates1, which are 10.5% in 2009, 10% in 2010, 9% in 2011 to 2012, 5% in 2013, and 4% in 2014 and onwards.
4. Financial Objectives. The proposed tariff rates for each subproject were designed, after project completion, to (i) fully recover operation and maintenance (O&M) costs, (ii) recover all subproject debt service, (iii) maintain a debt service ratio of at least 1.2 after the grace period, and (iv) cover an increasing proportion of annual depreciation allowance on the subproject fixed assets. In addition, each subproject is projected to maintain its accounts receivable at less than 60 days equivalent of annual sales by 2016.
5. Operating Revenues. Operating revenues include water sales and repayment of water meters. Repayment of water meter is assumed to be made in 36 equal monthly installments and will be billed to the consumers accordingly. Future water sales were calculated on the basis of water demand (Appendix 13) and projected water tariff levels. Tariffs were set in accordance with the government policy, i.e., maximum of 20% per increase, maximum of 2 tariff increases per year, and maximum 10% profit2.
6. Operating Expenses. Annual O&M costs were projected separately for each subproject over the entire forecast period by major expense item (salary, electricity, chemicals, maintenance, social charges, selling and administration expenses). Depreciation allowance was calculated on an average asset life of 20 years on a straight-line basis. Income tax is 10%.
7. Subproject Cost and Financing Plan. Subproject capital costs are funded through an ADB loan and from Government funds. The ADB loan will have a 32-year term, including a grace period of 8 years, and an interest charge of 1% per annum during the grace period and 1.5% per annum thereafter. The Government will onlend the proceeds of the loan to
1 Source: Global Development Finance 2008: The Role of International Banking, World Bank. 2 10% of the sum of O&M costs and depreciation allowance.
UCSA under a subsidiary loan agreement. The terms of onlending will be ADB loan terms with an additional charge not exceeding 0.2 percent on the ADB interest rate (i.e. 1.2 % during grace period and 1.7% per annum thereafter). UCSA will onlend the proceeds of the subsidiary loan to the subproject vodokanals through the Surkhandarya provincial government on the same terms. The government will bear the foreign exchange risks.
C. Tariff and Billing Procedure
1. Tariff Computation
8. The computation of water tariff rates, at present, is based on the O&M costs and depreciation allowance of the previous year’s operation plus a maximum 10% profit3. For example, to compute for a new tariff rate for 2009, the costs data of 2008 will be used as the basis of computation. Since the tariff rates are computed based on the 2008 costs, any planned or unplanned additional expenditures (compared to 2008 level) in 2009 will not be covered by the new tariff. Shown below are the latest water tariff rates for Surkhandarya province (subprojects are in bold font) and Khodjaipak RTM-OMA.
9. In addition, it appears that the design of water tariff rates does not take into account the economic development level of a rayon. In Djarkurgan rayon, for example, water tariff rates in the rayon centers (considered as the place were the more affluent households reside) are much lower than the rates charge outside the rayon centers. Households in the Djarkurgan rayon center (served by Djarkurgan vodokanal) are charge Sum 28 per m3 while households outside the rayon center (served by Surkhan vodokanal) are charge Sum 45 per m3 of water consumed. The same is true in Kumkurgan rayon, residents in the rayon center are charge Sum 34 per m3 while outside the rayon center, the rate is Sum 47 per m3.
Table 1: Water Tariff Rates - Surkhandarya Province Budget № Name of City/Rayon Population Other Sum/m3 organization Sum/m3 Sum/m3 1 Termez city 40.00 40.00 40.00 2 Denov rayon 44.00 105.00 105.00 3 Djarkurgan rayon center 28.00 59.00 59.00 4 Djarkurgan rayon (Surkhan) 45.00 98.00 98.00 5 Kumkurgan rayon center 34.00 59.00 59.00 6 Kumkurgan rayon 47.00 47.00 47.00 7 Sariasiya rayon* 35.00 60.00 60.00 8 Muzrabad rayon* 31.00 32.00 32.00 9 Shurchi rayon center 42.00 52.00 52.00 10 Boysun rayon* 32.00 43.00 43.00 11 Uzun rayon* 30.00 52.00 52.00 12 Termez rayon* 48.00 109.00 109.00 13 Sherabad rayon* 39.00 69.00 69.00 Note: VAT not included. Rates effective April 2008. Rayons in bold font are part of the Project. * Rates effective August 2007. Source: Surkhandarya Province Vodokanal.
3 10% of the sum of O&M costs and depreciation allowance.
3 Table 2: Water Tariff Rates - Khodjaipak RTM-OMA
Budget № Name of Rayon Population Other Sum/m3 organization Sum/m3 Sum/m3 1 Angor 67.00 135.00 135.00 2 Kizirik 67.00 135.00 135.00 Note: VAT not included. Rates effective April 2008. Source: Khodjaipak RTM-OMA.
10. For the Khodjaipak RTM-OMA, application for new tariffs is submitted to the Planning Section of the Uzbekistan Communal Services Agency (UCSA) for approval while for the rayon vodokanals (RVK), the application for new tariffs is submitted to the department of finance in each province for approval. The State Committee for De-monopolization and Supporting Competition and Entrepreneurship reviews the proposed tariff and the Ministry of Finance makes the recommendation for implementation. Below is a table showing the household water tariff in other countries in Asia in 2001 based on a consumption of 20 m3 per month. Most of these unit tariffs, if not all, have increased in the last five years. The average tariff for the 8 vodokanals covered in this project is about Sum 43 per m3 (US$ 0.03) as of May 2008.
Table 3: Typical Domestic Piped Water Unit Charges City Country $ / m3 Sum/m3a Bangkok Thailand 0.20 264 Colombo Sri Lanka 0.07 92 Delhi India 0.03 40 Dhaka Bangladesh 0.08 106 Ho Chi Minh Vietnam 0.20 264 Hongkong P.R. of China 0.66 871 Jakarta Indonesia 0.22 290 Karachi Pakistan 0.16 211 Kathmandu Nepal 0.11 145 Kuala Lumpur Malaysia 0.15 198 Manila Philippines 0.13 172 Osaka Japan 0.78 1030 Phnom Penh Cambodia 0.20 264 Seoul South Korea 0.24 317 Shanghai P.R. of China 0.12 158 Ulaan Baatar Mongolia 0.12 158 Vientiane Lao P.D.R. 0.03 40 Source: Asian Water Supplies: Reaching the Urban Poor. ADB.2003. aConversion based on US$1.0 = Sum 1320.
2. Normative Values as Basis of Per Capita Consumption
11. For customers without water meters, water consumptions are based on normative values. The assumed consumption per capita per month for the rural residents is about 3 m3 per month (100 lpcd) while for the urban residents (including rayon centers) is about 9 to 10.5 m3 per month (300 to 350 lpcd). Compared to other developing countries and developed countries in Asia, the assumed water consumption level for urban residents is high. The table below shows the average household per capita consumption of water in some cities in Asia in 2001.
4
Table 4: Average domestic per capita consumption City Country lpcd Bangkok Thailand 192 Colombo Sri Lanka 119 Delhi India 139 Ho Chi Minh Vietnam 172 Hong Kong P.R. of China 198 Karachi Pakistan 165 Kuala Lumpur Malaysia 135 Manila Philippines 129 Osaka Japan 271 Seoul South Korea 211 Shanghai P.R. of China 258 Vientiane Lao P.D.R. 198 Source: Asian Water Supplies: Reaching the Urban Poor. ADB. 2003.
12. Monthly billings are based on this normative rates multiplied by the number of persons per household (actual count) and then multiplied by the number of hours the water is available to the consumers in one day (number of hours water is available divided by 24 hours). Because of this high normative per capita rates, households with water meters pay less than the households without water meters. The level of metered connection in the 8 subprojects ranged from 0% to 25% of the served households.
D. Past Financial Performance of Vodokanals4
1. Surkhandarya Province Vodokanal
13. Surkhandarya province vodokanal (SPVK) was incorporated in 2006. SPVK monitors the RVKs in the province. The RVKs contribute 1% of their sales revenue to the SPVK to finance its administration and operating costs. Table 5 below shows the financial status of SPVK. For 2006 and 2007, the contribution from the RVKs can be barely cover the administrative and other operating costs of SPVK.
Table 5: Surkhandarya Province Vodokanal - Financial Highlights
Sum ' 000 Description 2006 2007
Revenue 5,959 10,437 Operating Expenses (5,858) (10,437) Other Operating Revenue - - Operating Income (Loss) 101 - Non-operating items 5 - Net Income 106 -
Cash and Cash Equivalent 8,333 2,309 Current Assets 10,314 57,088 Current Liabilities 1,117 2,140 Total Equity - - Total Assets 10,364 57,188
4 Source of financial data is from the financial reports of the vodokanals.
5 2. Djarkurgan Vodokanal (Rayon Center)
14. Djarkurgan RVK’s net sales rose steadily from 2004 to 2007 amounting to Sum 11.3 million, Sum 10.9 million, Sum 12.8 million and Sum 15.2 million respectively. Net income was realized from 2004 to 2006 from Sum 0.05 million to Sum 0.09 million, falling to 0.01 in 2007. Operating expense ratios from 2004 to 2007 are all below 0.90. Return on equity (ROE) and return on assets (ROA) for the same period is less than 1%. Current ratios from 2004 to 2007 ranged from 0.8 to 1.1 while quick ratios for the same period are all less than 0.05.
Table 6: Djarkurgan Vodokanal (Rayon Center) - Financial Highlights Sum ' 000 Description 2004 2005 2006 2007
Net Sales 11 280 10 911 12 789 15 175 Operating Expenses (9 760) (9 511) (11 040) (13 648) Other Operating Revenue - - - - Operating Income (Loss) 1 521 1 399 1 750 1 527 Non-operating items (1 466) (1 357) (1 663) (1 518) Net Income 54 42 87 10
Cash and Cash Equivalent 752 172 212 387 Current Assets 18 770 13 241 15 459 12 034 Current Liabilities 16 515 13 911 17 185 14 203 Total Equity 10 586 10 585 10 585 10 585 Total Assets 35 765 33 884 37 245 34 273
Current ratio 1,14 0,95 0,90 0,85 Quick ratio 0,05 0,01 0,01 0,03 ROA n/a 0,12% 0,23% 0,03% ROE n/a 0,21% 0,43% 0,05% Gross profit margin 42,8% 42,9% 44,7% 33,3% Operating expense ratio 86,5% 87,2% 86,3% 89,9% Days Accounts Receivable n/a n/a 255,03 161,51
3. Surkhan Vodokanal (Djarkurgan rayon)
15. Surkhan VK’s net sales from 2004 to 2007 amounted to Sum 48.4 million, Sum 67.3 million, Sum 69.6 million, and Sum 132.6 million respectively. The almost doubling of net sales in 2007 compared to the 2006 level is due to the revenue from Surkhan VK’s construction activity that contributed about Sum 87 million (65% of total net sales). Net incomes were realized during the same period ranging from Sum 1.9 million to Sum 6.5 million. Operating expense ratios from 2004 to 2007 ranged from 0.89 to 0.99. ROA for the same period ranged from 1.6% to 5.3% and ROE ranged from 2.4% to 9.3%. Current ratios were between 1.6 and 2.5 while quick ratios were less than 0.2 for the same period.
Table 7. Surkhan Vodokanal (Djarkurgan) - Financial Highlights Sum ' 000 Description 2004 2005 2006 2007
Net Sales 48 403 67 287 69 632 132 579 Operating Expenses (46 919) (66 552) (68 451) (117 641) Other Operating Revenue - - - - Operating Income (Loss) 1 484 735 1 181 14 938
6 Non-operating items 4 976 1 118 629 (12 486) Net Income 6 460 1 853 1 810 2 452
Cash and Cash Equivalent 266 764 757 7 036 Current Assets 102 722 100 796 78 812 91 156 Current Liabilities 51 886 60 899 37 364 36 396 Total Equity 20 038 20 038 20 038 15 678 Total Assets 121 588 118 319 111 478 108 602
Current ratio 1,98 1,66 2,11 2,50 Quick ratio 0,01 0,01 0,02 0,19 ROA 5,31% 1,57% 1,62% 2,26% ROE 9,27% 3,23% 2,44% 3,40% Gross profit margin 36,0% 29,9% 35,6% 34,9% Operating expense ratio 96,9% 98,9% 98,3% 88,7% Days Accounts Receivable 408,33 285,26 252,42 145,84
4. Khodjaipak RTM-OMA
16. Khodjaipak Regional Trunk Main-Operation and Management Administration (RTM- OMA), formed in 1989, supplies 7 rayons. The rayons served by Khodjaipak that are covered under the Project are Angor and Kizirik. Unlike in the rayons managed by the Surkhandarya OVK, there are no separate water supply entity (RVK) in the rayons served by Khodjaipak. Khodjaipak do not prepare separate financial statements for each of the rayons they served. The table shown below, therefore, is Khodjaipak’s overall financial performance for the 7 rayons.
17. Khodjaipak RTM-OMA’s net sales in 2004 amounted to Sum 134.8 million while operating expenses was Sum 349.6 million including electricity cost5 of Sum 157.0 million resulting to a net loss of Sum 213.8 million. In 2004 Khodjaipak RTM-OMA had power supply problem and was not able to pay its power bills that resulted to the disconnection of its power supply from the power grid during some parts of the year. Net sales in 2005 dropped to Sum 103.9 million, while operating expenses amounted to Sum 258.6 million. Net loss in 2005 amounted to Sum 181.3 million. Net sales in 2006 increased to Sum 270.6 million and operating expenses increased to Sum 476.1 million. Net income of Sum 150.7 million was realized due to a tax refund of Sum 354.9 million. In 2007 Net sales again increased to Sum 417.9 million but the loss was realized in the amount of Sum 196.4 million again due to high operating expenses. Current ratios for the years 2004 to 2007 ranged from 0.8 to 1.27. Quick ratios for the same period are less than 0.02. Accounts receivable were very high ranging from 601 days equivalent of net sales to 1030 days equivalent.
Table 8: Khodjaipak RTM-OMA - Financial Highlights Sum ' 000 Description 2004 2005 2006 2007
Net Sales 134 841 103 945 270 621 417 987 Operating Expenses (349 585) (258 597) (476 129) (618 236) Other Operating Revenue - - 355 582 3 800 Operating Income (Loss) (214 744) (154 652) 150 074 (196 449) Non-operating items 948 (26 605) 669 - Net Income (213 796) (181 257) 150 743 (196 449)
5 Electricity unit cost jumped from Sum 14/m3 to Sum 42/m3 from 2003 to 2004.
7 Cash and Cash Equivalent 1 125 3 025 3 300 4 200 Current Assets - 360 158 530 480 774 178 Current Liabilities 651 459 448 062 416 267 847 061 Total Equity 113 140 113 140 113 140 113 140 Total Assets - 1 302 623 1 478 743 2 204 715
Current ratio - 0,80 1,27 0,91 Quick ratio 0,00 0,01 0,01 0,00 ROA n/a -13,91% 10,19% -8,91% ROE -30,32% -21,21% 14,19% -14,47% Gross profit margin -107,3% -66,4% -47,5% -31,1% Operating expense ratio 259,3% 248,8% 175,9% 147,9% Days Accounts Receivable 959,23 1 030,33 634,69 601,44
5. Kumkurgan Vodokanal (Rayon Center)
18. Kumkurgan VK’s net sales from 2005 to 2007 were Sum 18.6 million, Sum 23.2 million and Sum 25.9 million respectively. Net income were realized during the same period amounting to Sum 0.11 million, Sum 0.11 million and Sum 0.001 million respectively. Operating expense ratios for 2005 and 2007 ranged from 57% to 90%. ROA for the same period ranged from –0.001% to 0.7%. For the same period, current ratios were all above 1.5 except in 2006 where it dropped to 0.28. Quick ratios were all less than 0.08.
Table 9: Kumkurgan Vodokanal (Rayon Center)- Financial Highlights Sum ' 000 Description 2004 2005 2006 2007
Net Sales no data 18 599 23 179 25 940 Operating Expenses no data (10 573) (20 057) (23 346) Other Operating Revenue no data - - - Operating Income (Loss) no data 2 526 3 122 2 593 Non-operating items no data (2 417) (3 013) (2 594) Net Income no data 109 109 (1)
Cash and Cash Equivalent 485 551 924 199 Current Assets - 10 562 3 836 86 154 Current Liabilities 8 601 6 732 13 919 95 367 Total Equity 6 386 6 386 6 386 6 386 Total Assets - 15 708 23 004 104 452
Current ratio - 1,57 0,28 4,81 Quick ratio 0,06 0,08 0,07 0,01 ROA n/a 0,69% 0,47% -0,001% ROE 0,00% 1,21% 1,20% -0,01% Gross profit margin n/a 64,8% 34,5% 39,6% Operating expense ratio n/a 56,8% 86,5% 90,0% Days Accounts Receivable - 161,59 37,93 51,07
6. Muzrabad Rayon Vodokanal
19. Muzrabad RVK’s net sales from 2004 to 2007 amounted to Sum 62.5 million, Sum 38.1 million, Sum 63.8 million and Sum 55.0 million respectively. Net income/loss was realized during the same period ranging from loss Sum 24 million to income Sum 1 million. Operating
8 expense ratios from 2004 to 2007 were all below 100% except in 2004 at 118%. Return on equity for the same period ranged from –27.34% to 2.6% and return on assets ranged from 0.4% to 1.2%. Current ratios from 2004 to 2007 ranged from 1.19 to 1.35 while quick ratios for the same period were all less than 0.05.
Table 10: Muzrabad Rayon Vodokanal - Financial Highlights Sum ' 000 Description 2004 2005 2006 2007
Net Sales 62 518 38 079 63 820 55 036 Operating Expenses (74 029) (37 234) (61 258) (53 786) Other Operating Revenue 12 863 - - - Operating Income (Loss) (24 374) 845 2 562 1 250 Non-operating items 417 185 561 (215) Net Income (23 958) 1 030 3 123 1 035
Cash and Cash Equivalent 3 246 226 8 609 455 Current Assets - 161 626 253 501 251 085 Current Liabilities 114 730 135 660 187 525 223 077 Total Equity 41 047 41 047 70 975 70 975 Total Assets - 224 322 309 238 396 294
Current ratio - 1,19 1,35 1,13 Quick ratio 0,03 0,00 0,05 0,00 ROA n/a 0,46% 1,01% 0,26% ROE -27,34% 1,16% 2,57% 0,60% Gross profit margin 5,0% 25,8% 17,9% 18,3% Operating expense ratio 118,4% 97,8% 96,0% 97,7% Days Accounts Receivable 692,64 1 344,40 1 115,13 1 596,53
7. Sariasiya Rayon Vodokanal
20. Sariasiya RVK’s net sales from 2004 to 2007 were Sum 29.2 million, Sum 27.0 million, Sum 23.3 million and Sum 32.3 million respectively. Net income were realized during the same period ranging from Sum 0.003 million to Sum 0.061 million. Operating expense ratios from 2004 to 2007 are almost 100%. Return on equity for the same period is less than 0.22% and return on assets is less than 0.1%. Current ratios from 2004 to 2007 ranged from 1.16 to 2.24 while quick ratios for the same period are all less than 0.01.
Table 11: Sariasiya Rayon Vodokanal - Financial Highlights Sum ' 000 Description 2004 2005 2006 2007
Net Sales 29 150 27 000 23 263 32 381 Operating Expenses (28 984) (26 888) (23 238) (32 359) Other Operating Revenue - - - - Operating Income (Loss) 166 112 25 21 Non-operating items (112) (54) (19) (18) Net Income 54 58 6 3
Cash and Cash Equivalent 182 192 53 51 Current Assets 31 573 41 702 102 453 93 454 Current Liabilities 26 665 36 003 45 806 52 992 Total Equity 10 172 10 172 10 172 43 111 Total Assets 52 539 62 402 122 098 139 598
9
Current ratio 1,18 1,16 2,24 1,76 Quick ratio 0,01 0,01 0,00 0,00 ROA n/a 0,09% 0,00% 0,00% ROE n/a 0,22% 0,01% 0,00% Gross profit margin 13,1% 11,8% 11,3% 15,2% Operating expense ratio 99,4% 99,6% 99,9% 99,9% Days Accounts Receivable n/a 533,22 728,02 631,62
8. Shurchi Rayon Vodokanal
21. Shurchi RVK’s net sales from 2004 to 2007 amounted to Sum 22.5 million, Sum 29.8 million, Sum 42.5 million and Sum 82.1 million respectively. Net income were realized during the same period ranging from Sum 0.033 million to Sum 0.05 million, except in year 2005 where net loss was realized in the amount of Sum 8.99 million.
Table 12: Shurchi Rayon Vodokanal - Financial Highlights Sum ' 000 Description 2004 2005 2006 2007
Net Sales 22 473 29 796 42 459 82 063 Operating Expenses (19 518) (35 049) (36 889) (76 133) Other Operating Revenue - - - - Operating Income (Loss) 2 954 (5 253) 5 570 5 930 Non-operating items (2 921) (3 736) (5 520) (5 914) Net Income 33 (8 989) 50 15
Cash and Cash Equivalent 985 828 1 973 348 Current Assets - 15 257 30 273 35 465 Current Liabilities 44 962 61 592 26 579 40 921 Total Equity 10 313 7 500 7 500 7 500 Total Assets - 36 274 65 372 98 790
Current ratio - 0,25 1,14 0,87 Quick ratio 0,02 0,01 0,07 0,01 ROA n/a -24,78% 0,08% 0,02% ROE -2,66% 35,51% 0,13% 0,03% Gross profit margin 38,9% 1,7% 33,1% 18,2% Operating expense ratio 86,9% 117,6% 86,9% 92,8% Days Accounts Receivable 174,48 129,53 124,18 101,14
22. Operating expense ratios from 2004 and 2007 ranged from 0.87 to 1.2. Return on equity was negative in 2004 due to negative retained earnings for the period. In 2005 no return on equity was gained due to loss and negative retained earnings for the period. In 2006 and 2007 return on equity amounted to 0.13% and 0.03% respectively. Current ratios from 2004 and 2007 ranged from 0.25 to 1.14 while quick ratios from 2004 to 2007 are all less than 0.08.
9. Termez City Vodokanal
23. Termez City Vodokanal’s net sales from 2005 to 2007 were Sum 225,7 million, Sum 235.3 million and Sum 301.1 million respectively. Net income was realized during the same
10 period decreasing from Sum 1.8 million to Sum 0.2 million due to increase of operating expenses throughout the period.
Table 13: Termez City Vodokanal - Financial Highlights
Sum ' 000 Description 2004 2005 2006 2007
Net Sales no data 225 669 235 267 301 075 Operating Expenses no data (221 442) (237 027) (302 714) Other Operating Revenue no data - 5 286 1 084 Operating Income (Loss) no data 4 227 3 526 (555) Non-operating items no data (2 458) (2 948) 759 Net Income no data 1 769 578 204
Cash and Cash Equivalent no data 4 139 14 363 11 523 Current Assets no data 74 798 88 676 98 582 Current Liabilities no data 15 595 20 747 27 825 Total Equity no data 37 200 37 200 37 200 Total Assets no data 320 907 326 637 329 340
Current ratio n/a 4,80 4,27 3,54 Quick ratio n/a 0,27 0,69 0,41 ROA n/a 0,55% 0,18% 0,06% ROE n/a 0,58% 0,19% 0,07% Gross profit margin n/a 15,1% 13,3% 13,9% Operating expense ratio n/a 98,1% 100,7% 100,5% Days Accounts Receivable n/a 45,39 34,31 37,33
24. Operating expense ratios from 2004 and 2007 ranged from 98% to 100%. Return on equity ration decreased from 0.58% to 0.07% in 2007 due to decrease of income. Return on assets also decreased from 0.55% to 0.06%. Current ratios from 2004 and 2007 ranged from 4.8 to 3.54 while quick ratios from 2004 to 2007 are all less than 0.7.
E. Financial Projection
25. Tariff. The existing average tariff (household) in the vodokanals covered under this Project is only Sum 43 (US$ 0.03) per m3 as of May 2008. For the 8 vodokanals, the tariff (household) ranges from Sum 28 (US$ 0.02) per m3 to Sum 67 (US$ 0.05) per m3. To attain financial sustainability, average tariff required, after project completion, is projected to range between Sum 54/m3 (US$ 0.04) to Sum 369/m3 (US$ 0.28) from 2015 to 2020. The table below shows the projected tariff levels for the household consumers at constant 2008 prices. The existing tariff structure was followed during the projection period. These tariffs were designed based on the financial objectives enumerated in paragraph 4 above and took into account the affordability of the tariffs to the households belonging to the low-income group.
Table 14: Projected Tariff Requirements and Affordability a (Sum/m3 – constant 2008 prices) Item 2015 2016 2017 2018 2019 2020 Termez Tariff - Sum/m3 112 127 134 142 150 159 Affordability Low Income (%) 0.9 1.1 1.2 1.3 1.5 1.6 Average Income (%) 1.0 1.1 1.3 1.4 1.5 1.7
11 Djarkurgan Tariff - Sum/m3 54 63 72 82 87 92 Affordability Low Income (%) 0.5 0.6 0.8 0.9 0.9 1.0 Average Income (%) 0.4 0.4 0.5 0.6 0.6 0.7 Khojaipak Tariff - Sum/m3 175 176 178 180 181 183 Affordability Low Income (%) 1.8 1.8 1.8 1.9 1.9 1.9 Average Income (%) 1.6 1.6 1.7 1.7 1.7 1.8 Kumkurgan Tariff - Sum/m3 102 112 121 128 135 143 Affordability Low Income (%) 1.1 1.2 1.3 1.4 1.5 1.6 Average Income (%) 1.0 1.2 1.3 1.4 1.4 1.5 Muzrabad Tariff - Sum/m3 159 198 238 286 331 369 Affordability Low Income (%) 1.5 1.8 2.2 2.7 3.2 3.6 Average Income (%) 1.5 1.9 2.3 2.8 3.2 3.6
Sariasiya Tariff - Sum/m3 80 88 97 105 111 117 Affordability Low Income (%) 0.8 0.8 0.9 1.0 1.1 1.2 Average Income (%) 0.8 0.9 1.0 1.1 1.1 1.2 Shurchi Tariff - Sum/m3 81 86 91 92 92 93 Affordability Low Income (%) 0.7 0.8 0.9 0.9 0.9 0.9 Average Income (%) 0.6 0.7 0.7 0.7 0.7 0.8 Surkhan Tariff - Sum/m3 164 197 227 262 278 294 Affordability Low Income (%) 1.6 2.0 2.4 2.8 3.0 3.2 Average Income (%) 1.1 1.3 1.6 1.9 2.0 2.2 aIncludes payment of water meters in 36 equal monthly installment. Source: ADB estimates.
26. Affordability. An affordability analysis was undertaken to ensure that household consumers, particularly those in the low-income group, can afford the proposed water tariffs. Based on the generally accepted principle that the expenditure on water should not exceed 4% of household income, the projected water tariffs are considered affordable. The table above shows the ratio of the monthly bills to the monthly household income for the low- income group and for the average-income group.
27. Capital Costs. The estimated capital costs for the water supply component for each subproject is shown below. Costs are expressed in May 2008 prices6. Per capita investment costs ranged from Sum 38 thousand (US$ 29) to Sum 269 thousand (US$ 204). The high
6 Exchange rate used is Sum 1320 per $1.
12 per capita costs in some subprojects are due mainly to rehabilitation of big-diameter trunk mains.
Table 15: Summary of Capital Costs – Water Supply
Subproject Total Costs Per Capita Cost Sum million US$ million Sum 1000 US$ Termez 18,235 13.81 124.0 94.0 Djarkurgan 2,109 1.60 67.5 51.1 Angor (Khodjaipak RTM-OMA) 3,316 2.51 269.1 203.9 Kizirik (Khodjaipak RTM-OMA) 1,062 0.80 88.4 66.9 Kumkurgan 1,321 1.00 74.8 56.6 Muzrabad 9,694 7.34 175.1 132.7 Sariasiya 3,026 2.29 89.1 67.5 Shurchi 970 0.74 37.9 28.7 Surkhan 4,135 3.13 130.6 99.0 Total 43,869 33.23 119.6 90.6 Excludes interest during construction. Source: Asian Development Bank estimate.
28. Operating and Maintenance Costs and Depreciation. Annual O&M costs were projected separately for each subproject over the entire forecast period by major expense item (salary, electricity, chemicals, maintenance, social charges, selling and administration expenses). Depreciation allowance was calculated on an average asset life of 20 years using the straight-line method. Income tax is 10%.
29. Weighted Average Cost Of Capital. The opportunity cost of the government funds is assumed at 25% including risk premium. Based on a funding ratio of 79:21 between the ADB and the Government, the weighted average cost of capital (WACC) is about 4.2% at constant May 2008.
Table 16: Weighted Average Cost Of Capital Source of Funds % of Cost of Funds Inflation WACC Project Current Tax After Constant Rate Cost Prices Rate Tax Prices
Equity 0.0% 25.00% 0.00% 25.00% 17.97% 5.96% 0.00% ADB Loan 79.0% 1.70% 10.00% 1.53% 0.57% 0.96% 0.45% Government 21.0% 25.00% 0.00% 25.00% 17.97% 5.96% 3.77% Total 100.0% WACC 4.22%
Note: ADB Loan includes interest during construction. Source: ADB estimate.
30. Financial Internal Rate of Return. The financial internal rates of return (FIRR) are estimated to range from 5.1% to 5.8% with an average of 5.4% for the Project. All FIRRs are higher than the WACC. Sensitivity analysis also showed that under assumed adverse conditions, all 8 subprojects are still financially viable. In addition, the proposed tariff rate increases will generate enough revenues to recover full O&M costs starting in year 2013. By year 2015 it is projected that for all the subproject vodokanals, annual revenues will recover full O&M costs and the debt service obligations, and will maintain a debt service ratio of at least 1.2:1.
13
Table 17: Summary of FIRR Subproject FIRR Termez 5.5% Djarkurgan 5.4% Khojaipak RTM-OMA 5.3% Kumkurgan 5.8% Muzrabad 5.2% Sariasiya 5.7% Shurchi 5.8% Surkhan 5.1% Average 5.4% Source: ADB estimate.
F. Projected Financial Performance of Vodokanals
31. Projected Financial Performance. Net income is projected to be positive for all subprojects starting from year 2017, while net cash flow will be positive for all subprojects starting from year 2015 – the year after the project facilities are put into operation (Table 18). The negative net income at the beginning years for some subprojects is due mainly to time needed to expand the connections and gradually increase the tariffs. The difference between the net cash flow and net income performance is mainly because of time difference in collection of depreciation allowance and repayment of the loan - interest payments will start in 2015 and principal repayment will start in year 2017.
32. Termez vodokanal is projected to post a positive return on net fixed assets (ROA) of 2.4% to 16.3% from 2016 to 2020. Debt Service Ration (DSR) will be greater than 1.2 during the projection period. Djarkurgan vodokanal is projected to register a net income starting from year 2018 while ROA will range from 2.6% to 11.7% from 2017 to 2020. DSR will be greater than 1.2 during the projection period. Khodjaipak is projected to show a positive financial performance after project completion. In the financial projection, it was assumed that the other districts served by Khodjaipak7 will implement tariff increases to cover annual increase in total O&M costs. DSR will range from 4.1 to18.3 while ROA will range from 8.2% to 34.7%.
Table 18: Summary of Financial Projections (Sum million – current prices) Item 2015 2016 2017 2018 2019 2020 Termez Financial Performance Revenue 1,638.7 2,165.5 2,510.0 2,909.5 3,372.8 4,021.1 Net Income (243.4) 188.0 399.7 681.5 1,019.6 1,531.2 Net Cash Flow 652.5 1,097.0 715.1 1,001.5 1,331.4 1,801.1 Key Performance Indicators Water Sales (1000 m3/day) 25.9 28.7 29.9 31.2 32.5 33.8 Debt Service Ratio (times) 5.09 7.55 1.88 2.23 2.65 3.29 Depreciation Covered (%) 93.4 100.0 100.0 100.0 100.0 100.0 Return on Net Fixed Assets (%) (0.4) 2.4 4.4 7.1 10.7 16.3
Djarkurgan
7 Khodjaipak vodokanal covers 7 districts, including Angor and Kizirik.
14 Financial Performance Revenue 173.5 212.7 257.8 307.1 341.1 378.7 Net Income (54.7) (20.5) 12.2 57.9 88.4 122.4 Net Cash Flow 45.9 86.9 44.5 87.0 119.8 155.7 Key Performance Indicators Water Sales (1000 m3/day) 4.0 4.0 4.0 4.0 4.0 4.0 Debt Service Ratio (times) 3.7 5.4 1.5 2.0 2.3 2.7 Depreciation Covered (%) 69.3 100.0 100.0 100.0 100.0 100.0 Return on Net Fixed Assets (%) (1.9) 0.0 2.6 5.8 8.4 11.7
Khodjaipak Financial Performance Revenue 1,500.2 1,619.1 1,720.0 1,827.0 1,940.4 2,083.7 Net Income 287.5 370.7 420.1 491.0 568.9 662.4 Net Cash Flow 375.9 464.4 435.9 801.3 802.8 816.2 Key Performance Indicators Water Sales (1000 m3/day) 18.7 18.7 18.7 18.7 18.7 18.7 Debt Service Ratio (times) 16.4 18.3 4.1 4.5 4.9 5.4 Depreciation Covered (%) 100.0 100.0 100.0 100.0 100.0 100.0 Return on Net Fixed Assets (%) 8.2 11.4 14.8 19.1 25.2 34.7
Kumkurgan Financial Performance Revenue 231.0 268.9 304.7 339.0 377.2 424.4 Net Income (33.2) (3.0) 20.0 46.7 76.3 108.5 Net Cash Flow 35.3 65.5 41.5 68.4 97.8 131.6 Key Performance Indicators Water Sales (1000 m3/day) 2.9 2.9 2.9 2.9 2.9 2.9 Debt Service Ratio (times) 3.9 6.2 1.7 2.2 2.7 3.2 Depreciation Covered (%) 74.8 100.0 100.0 100.0 100.0 100.0 Return on Net Fixed Assets (%) (1.5) 1.1 3.9 6.9 10.8 16.3
Muzrabad Financial Performance Revenue 879.7 1,206.4 1,572.1 2,048.4 2,590.4 3,200.9 Net Income (342.6) (65.8) 216.5 647.3 1,118.3 1,514.1 Net Cash Flow 78.4 373.3 271.4 770.0 1,188.0 1,607.0 Key Performance Indicators Water Sales (1000 m3/day) 8.9 9.3 9.6 9.9 10.3 10.7 Debt Service Ratio (times) 2.8 5.7 1.9 2.8 3.9 4.8 Depreciation Covered (%) 51.8 100.0 100.0 100.0 100.0 100.0 Return on Net Fixed Assets (%) (3.0) 0.4 4.8 11.3 19.9 31.0
Sariasiya Financial Performance Revenue 318.2 366.0 425.8 482.5 536.8 603.9 Net Income (33.0) 6.6 46.2 91.7 126.3 174.5 Net Cash Flow 118.9 156.6 91.1 137.0 178.0 224.6 Key Performance Indicators Water Sales (1000 m3/day) 4.9 4.9 4.9 4.9 4.9 4.9 Debt Service Ratio (times) 5.3 6.6 1.7 2.0 2.3 2.7 Depreciation Covered (%) 92.8 100.0 100.0 100.0 100.0 100.0 Return on Net Fixed Assets (%) (0.4) 1.1 3.4 5.8 8.6 12.4
15 Shurchi Financial Performance Revenue 200.7 230.9 265.6 291.6 320.0 355.1 Net Income 41.9 63.8 86.1 104.0 123.8 149.3 Net Cash Flow 89.5 119.1 104.6 116.8 143.1 165.8 Key Performance Indicators Water Sales (1000 m3/day) 4.0 4.1 4.2 4.4 4.5 4.7 Debt Service Ratio (times) 11.1 13.3 3.3 3.7 4.2 4.8 Depreciation Covered (%) 100.0 100.0 100.0 100.0 100.0 100.0 Return on Net Fixed Assets (%) 6.4 9.8 14.2 18.0 22.8 29.5
Surkhan Financial Performance Revenue 433.1 647.0 813.0 1,021.4 1,176.2 1,369.4 Net Income (38.1) 165.6 305.4 458.4 584.6 749.5 Net Cash Flow 161.0 346.6 371.8 512.8 640.6 798.9 Key Performance Indicators Water Sales (1000 m3/day) 4.4 4.6 4.7 4.9 5.1 5.3 Debt Service Ratio (times) 5.4 10.4 2.9 3.8 4.4 5.4 Depreciation Covered (%) 100.0 100.0 100.0 100.0 100.0 100.0 Return on Net Fixed Assets (%) 6.2 12.7 18.6 26.7 34.2 44.6 Source: ADB estimates.
33. Kumkurgan vodokanal is projected to post a net income starting in year 2017 and ROA of 1.1% to 16.3% from 2016 to 2020. DSR will be greater than 1.2 during the projection period. Muzrabad vodokanal will generate net income starting only in year 2017, due mainly to higher per capita investment, although net cash flow will be positive from 2015 to 2020. DSR will be greater than 1.2 during the projection period. Sariasiya vodokanal will have a positive net income by year 2018 and a positive net cash flow starting year 2015. ROA is projected to range from 1.1% to 12.4% from 2016 to 2020. DSR will range from 1.7 to 6.6 after project completion.
34. Shurchi vodokanal is projected to register a net income starting in year 2014 and a positive net cash flow starting 2015. ROA will range from 6.4% to 29.5% from 2015 to 2020. DSR will be greater than 1.2 during the projection period. Surkhan vodokanal will generate net income starting in year 2016 and a positive net cash flow from 2015 to 2020. The vodokanal will have DSRs greater than 1.2 during the projection period.
G. Financial Management Assessment of UCSA and SPVK
35. A financial management assessment (FMA) was conducted for the Uzbekistan Communal Services Agency (UCSA), the executing agency (EA), and the Surkhandarya Provincial Vodokanal, the project implementing agency (PIA) for the Surkhandarya Water Supply and Sanitation Project. The FMA of the EA and PIA includes review of the accounting and reporting system, internal and external auditing, fund disbursement, and information system. The instrument used for the assessment was ADB’s financial management assessment questionnaire (FMAQ).
1. Uzbekistan Communal Services Agency
36. The UCSA satisfies the ADB’s financial management requirements for an EA. The UCSA current financial management system is adequate to (i) record required financial transactions and balances, (ii) provide regular and reliable financial statements and monitoring reports during project implementation, (iii) safeguard the financial assets, and (iv)
16 subject required financial documents to audit acceptable to ADB. The following findings and observations were prepared based on interviews and consultations with the UCSA.
37. The UCSA is a state agency that was established in 2000 by Presidential Decree No. 2791 as of 19 December 2000. The UCSA organizational structure and functions were approved by resolution of the Cabinet of Ministers (RCM) No. 493 as of 21 December 2000. The organizational structure was revised as per Decree of President dated 17 August 2006. The main goal of the UCSA is to oversee and coordinate water supply services to the urban and rural population. The agency is responsible for (i) drafting the sector’s policy, strategy, and standards; (ii) providing regulatory advice to support reforms in the sector; (iii) monitoring compliance of local authorities and commercial entities with sector policies; and (iv) attracting foreign investment to the sector. The UCSA has considerable experience in rehabilitation, upgrading and management of water supply infrastructure facilities and projects.
38. Funds Flow. ADB funds will flow from ADB to MOF (National Bank of Uzbekistan or commercial bank [Imprest fund], then to UCSA, then to Surkhandarya Province, then to suppliers/contractors and/or PIU and/or vodokanals depending on the payment scheme. Two new imprest accounts (one for the loan and one for the grant) will be opened in a commercial bank acceptable to ADB for the Project. The Project counterpart fund will come from the state budget. The counterpart funds flow will follow the existing government set-up. The proposed funds flow for ADB funds is in Figure 1.
39. Staffing. The UCSA has an Accounts Department (AD) with two personnel. The department has experience in dealing with the accounting procedures and requirements of ADB and other international financial institutions. The staff have undergone training on ADB reporting procedures and are knowledgeable of the ADB’s Handbook for Borrowers on the Financial Governance and Management of Investment Projects Financed by the ADB, August 2003.
40. Accounting Policies and Procedures. The UCSA uses accrual method of accounting in their regular and project operations. The accounting system of UCSA, as well as of all state and private legal entities in Uzbekistan, is based on the Uzbekistan National Accounting Standards (UNAS) and the national accounting guidelines adopted by the country in 1999. In addition, UCSA developed a project accounting manual in accordance with the ADB requirements. The manual is updated annually to include project accounting policy changes issued by the MOF. The UCSA uses a chart of accounts recommended by the National Accounting Guidelines.
41. Subsidiary ledgers are adequate for the reconciliation of accounts with the general ledger. All reports and supporting documents on all transactions are stored and retained by the project accountant, and are available to UCSA and project management personnel following UCSA procedures.
42. Budgeting System. The UCSA prepares a set of annual physical and financial targets. The budgets presented a comparison between budgeted and actual amounts, and show variances in accounts.
43. Payments. Processing of the project payment invoices indicates compatibility between quantities, prices and terms in purchase orders and those reported in the receipts. All project payments are made using bank checks or bank transfers. All cash is deposited to the project accounts leaving minimal amounts necessary for the office operations. A cashbook is maintained using the system software . Bank reconciliation is undertaken at the end of each month.
17 44. Cash and Bank. The project accountant ensures the existence of controls when preparing the payroll and that any changes on the payroll are authorized. For the on-going ADB projects, three foreign and three local currency accounts have been opened at city branch of Ipoteka Bank, a domestic commercial bank.
45. Safeguard over Assets. UCSA ensures that sufficient controls are undertaken over project assets, and safeguards are undertaken to protect assets from fraud, waste and abuse. Annual physical inventory of all stocks is carried out as required by UNAS. Fixed assets inventory is required every two years.
46. Other Offices and Implementing Entities. Four key players will be involved in the project implementation: (i) UCSA and PMU – at the central level; and (ii) Province Administration and PIU - at the provincial level. The procedures to ensure flow of funds, financial information exchange, and accountability within the project implementation process are in place.
47. Internal Audit. The UCSA, at present, does not have an established internal audit unit, however, Control Inspection Department of the MOF carries out internal audit of UCSA once every two years and at project completion. An internal audit is also done when a major accountability issue is raised during the external audit.
48. External Audit. State agencies are not required to undergo external auditing but because of its role as the executing agency of foreign funded projects, the UCSA is audited annually by an independent external auditor. External auditors are hired through a selection process that is in accordance with ADB requirements. The external auditors are licensed by the state authorities and are required to apply the international auditing standards. The initial audit conducted for the UWSP in 2004 raised an issue regarding the insufficient exchange of information between PMU and the PIUs during project implementation.
49. Reporting and Monitoring. Financial reporting follows the UNAS procedures and requirements. Through the agency’s Financial and Economic Department, UCSA prepares consolidated financial statements for submission to MOF and other state ministries and agencies. Financial statements are prepared and submitted to MOF quarterly and annually. The project financial statements are prepared using a computerized accounting system and submitted to UCSA and ADB on a quarterly basis. The quarterly project progress reports highlight the physical accomplishments and financial progress and follow the UCSA and ADB formats. Spreadsheet analysis and reports are prepared to adapt to special and supplementary reporting requirements.
50. The UCSA uses a computerized financial reporting system, which is networked within the AD. The accounting software was specifically designed for the agency’s operational needs, and adapted to the MOF requirements. The PMU accounting system will be based on the same software platform and specifications.
51. Information Systems. The UCSA does not have an integrated computerized management information system (MIS). However, a computerized financial management system is in place at AD which connects all the staff accountants. The system enables the AD to (i) respond to operational and project-related queries pertaining to specific accounts, and (ii) prepare financial reports on the transactions that occurred in the reporting period. The accounting system is capable of generating financial reports for both external and internal use, and can be restructured to link the PMU financial reporting system. This will entail additional cost as this will require changes in the existing network to include PMU and other project reporting activities. PMU (existing projects) uses spreadsheets in preparing financial and physical progress reports and submits these to UCSA. UCSA incorporates the project financial information into the UCSA accounting system and submits the consolidated
18 information to MOF and other ministries and state authorities. The UCSA staff is trained to operate the financial accounting system. The UCSA ensures the integrity and confidentiality of the financial information.
2. Surkhandarya Province Vodokanal
52. The PIU in the Surkhandarya Provincial Vodokanal (SPVK) is yet to be formed. Staff from the SPVK can be trained in ADB procedures so they can be seconded to the PIU. The SPVK’s current financial reporting can be used and can be modified to satisfy ADB’ s reporting format and contents requirement. The following findings and observations were prepared based on the interviews and consultations with the SPVK.
53. The SPVK is a government entity with its own charter (ustav). The SPVK monitors and coordinates the activities of the city and rayon vodokanals. Some specific tasks of the SPVK are to: (i) determine annually the limits of water production based on the total population and households within the service area of the city and rayon vodokanals; (ii) review tariffs for all categories of consumers and forward them to the finance department in the province for approval; and (iii) consolidate physical and financial data received from city and rayon vodokanals.
54. Funds Flow. ADB funds will flow from ADB to MOF (National Bank of Uzbekistan or commercial bank [Imprest fund], then to UCSA, then to Surkhandarya Province, then to suppliers/contractors and/or PIU and/or vodokanals depending on the payment scheme. A new account will be opened by the SPVK/PIU for the Project in a commercial bank acceptable to ADB. The counterpart funds flow will follow the existing government set-up.
55. Staffing. The SPVK has sufficient staff with relevant qualification to fill the finance positions of the proposed PIU. SPVK’s accounting department is composed of a chief accountant, deputy chief accountant, and materials accountant, all of whom have high educational attainment. None of the staff are familiar with ADB financial and disbursement procedures. However, the key staff of the PIU and vodokanals will be trained under the Project.
56. Accounting Policies and Procedures. The SPVK uses an accounting system that allows for appropriate recording of financial operations including cost distribution.
57. Budgeting System. The city and rayon vodokanals prepare their respective budgets and these are consolidated by the province vodokanal planning department. Actual expenditures are monitored monthly and are compared with budget.
58. Payments. Processing of the project payments includes comparison of quantities, prices and terms as shown in the purchase orders. All project payments are made using bank checks or bank transfers.
59. Cash and Bank. The SPVK maintains an up-to-date cashbook. Cash receipts are deposited on the same day they are received. Cash and bank balance are reconciled on a monthly basis.
60. Safeguard over Assets. City and Rayon Vodokanals maintain record of their physical assets with a copy to the SPVK. Records are reconciled quarterly and annually. Inventory is done quarterly.
61. Internal Audit. The SPVK, at present, does not have an established internal audit unit.
19
62. External Audit. So far, no external audit was done for the SPVK financial accounts.
63. Reporting and Monitoring. SPVKs financial reporting follows the UNAS procedures and requirements. City and rayon vodokanals prepare financial statements (income statement, cash flow and balance sheet). From these financial reports, SPVK prepares consolidated financial statements for submission to the province administration. Financial statements are prepared monthly, quarterly and annually.
64. Information Systems. The SPVK does not have an integrated computerized MIS. SPVK uses a spreadsheet computer program to prepare its reports.
20
Projected Financial Statements, FIRR and Sensitivity Analysis per Subproject (Sum million)
Table 20: Termez City Vodokanal – Projected Financial Statements
P r o j e c t e d 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Income Statements Operating Revenue 226.0 293.7 400.2 613.3 860.0 1,214.4 1,638.7 2,165.5 2,510.0 2,909.5 3,372.8 4,021.1 Operating Expenses 201.9 242.8 273.9 353.9 513.2 633.4 741.2 836.4 901.1 973.3 1,051.0 1,141.0 Depreciation 36.7 36.7 36.7 36.7 492.2 952.0 960.6 960.6 960.6 960.6 960.6 960.6 Operating Income (12.6) 14.1 89.6 222.6 (145.4) (370.9) (63.2) 368.5 648.3 975.6 1,361.2 1,919.5 Operating Subsidies 0.00.00.00.00.00.00.00.00.00.00.00.0 Net Non-Operating Expenses (14.4) (49.4) (65.6) 4.2 4.5 4.7 4.9 5.1 5.3 5.5 5.7 6.0 Interest & Other Financial Expenses 0.0 0.0 0.0 0.0 0.0 0.0 175.4 175.4 243.3 232.9 222.6 212.2 Income Tax 0.0 3.9 15.5 21.8 0.0 0.0 0.0 0.0 0.0 55.6 113.3 170.1 Net Income 1.8 59.6 139.7 196.6 (149.9) (375.6) (243.4) 188.0 399.7 681.5 1,019.6 1,531.2
Cash Flow Statements Sources Internal Cash 38.5 96.3 176.4 233.3 342.3 576.3 892.6 1,324.0 1,603.6 1,875.1 2,202.8 2,704.1 Debt 0.0 0.0 0.0 7,178.1 7,264.3 173.3 0.0 0.0 0.0 0.0 0.0 0.0 Equity Contributions 0.0 0.0 0.0 2,017.0 2,017.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.00.00.00.00.00.00.00.00.00.00.00.0 Total 38.5 96.3 176.4 9,428.5 9,623.6 749.6 892.6 1,324.0 1,603.6 1,875.1 2,202.8 2,704.1 Applications Capital Investments 0.0 0.0 0.0 9,109.3 9,195.4 173.3 0.0 0.0 0.0 0.0 0.0 0.0 Working Capital Increase (Decrease) 7.7 5.4 5.8 (46.0) 49.3 140.5 64.6 51.6 36.2 31.6 39.8 81.8 Interest 0.0 0.0 0.0 0.0 0.0 0.0 175.4 175.4 243.3 232.9 222.6 212.2 Debt Repayment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 609.0 609.0 609.0 609.0 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 7.7 5.4 5.8 9,063.3 9,244.8 313.8 240.0 227.0 888.5 873.6 871.4 903.0 Cash Changes 30.9 90.9 170.6 365.2 378.9 435.8 652.5 1,097.0 715.1 1,001.5 1,331.4 1,801.1 Ending Cash Balance 96.3 187.2 357.8 723.0 1,101.9 1,537.7 2,190.2 3,287.3 4,002.4 5,003.9 6,335.3 8,136.4
Balance Sheets Assets Current Assets 159.5 262.4 449.5 854.0 1,296.4 1,826.4 2,563.9 3,731.6 4,499.0 5,559.6 6,960.1 8,872.9 Net Fixed Assets 156.9 120.2 83.5 46.8 8,663.9 16,907.4 16,120.1 15,159.4 14,198.8 13,238.2 12,277.6 11,316.9 Work in Progress 0.0 0.0 0.0 9,109.3 9,195.4 173.3 0.0 0.0 0.0 0.0 0.0 0.0 Other Assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 316.4 382.6 533.0 10,010.0 19,155.7 18,907.1 18,684.0 18,891.0 18,697.8 18,797.8 19,237.6 20,189.8 Liabilities and Equity Current Liabilities 39.6 46.1 56.9 142.2 156.4 110.1 130.4 758.4 774.5 802.0 831.2 861.2 Long Term Debt 0.0 0.0 0.0 7,178.1 14,442.4 14,615.7 14,615.7 14,006.8 13,397.8 12,788.8 12,179.8 11,570.8 Equity 276.8 336.4 476.1 2,689.7 4,556.9 4,181.3 3,937.8 4,125.8 4,525.5 5,207.0 6,226.6 7,757.8 Total 316.4 382.6 533.0 10,010.0 19,155.7 18,907.1 18,684.0 18,891.0 18,697.8 18,797.8 19,237.6 20,189.8
Financial Ratios Cost Recovery Ratio 1.11.40.50.40.50.91.62.01.41.51.71.8 Debt Service Ratio NA NA NA NA NA NA 5.1 7.5 1.9 2.2 2.6 3.3 Debt - Asset Ratio 0.0 0.0 0.0 0.7 0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.6
Table 21: Termez City Vodokanal – FIRR and Sensitivity Analysis
Costs Base Case Capital O & M Revenue 1 Year Delay Year Revenue Capital Residual in Capital O & M Total Net 10% 10% -10% Replacement Value Completion
2008 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2009 14.63 0.00 0.00 0.00 0.00 14.63 14.63 14.63 13.16 0.00 2010 39.82 0.00 0.00 15.83 15.83 23.98 23.98 22.40 20.00 -1.21 2011 47.78 0.00 0.00 23.60 23.60 24.18 24.18 21.82 19.40 16.22 2012 120.59 5745.00 0.00 55.43 5800.44 -5679.85 -6254.35 -5685.39 -5691.91 -5752.66 2013 195.61 5419.93 0.00 78.16 5498.09 -5302.49 -5844.48 -5310.30 -5322.05 -5377.50 2014 307.62 97.75 0.00 103.78 201.54 106.09 96.31 95.71 75.32 -5.93 2015 447.51 0.00 0.00 132.01 132.01 315.50 315.50 302.30 270.75 175.61 2016 622.02 0.00 0.00 163.21 163.21 458.82 458.82 442.50 396.62 284.31 2017 715.43 0.00 0.00 177.39 177.39 538.04 538.04 520.30 466.50 444.63 2018 821.28 0.00 0.00 192.59 192.59 628.69 628.69 609.43 546.57 522.85 2019 941.13 0.00 0.00 208.88 208.88 732.25 732.25 711.36 638.14 612.40 2020 1107.26 0.00 0.00 227.66 227.66 879.60 879.60 856.84 768.88 713.47 2021 1230.06 0.00 0.00 245.16 245.16 984.90 984.90 960.38 861.89 862.10 2022 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 970.60 2023 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2024 1352.39 0.00 287.25 259.46 546.71 805.68 805.68 779.73 670.44 805.68 2025 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2026 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2027 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2028 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2029 1352.39 0.00 287.25 259.46 546.71 805.68 805.68 779.73 670.44 805.68 2030 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2031 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2032 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2033 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2034 1352.39 0.00 287.25 259.46 546.71 805.68 805.68 779.73 670.44 805.68 2035 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2036 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2037 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2038 1352.39 0.00 0.00 259.46 259.46 1092.93 1092.93 1066.98 957.69 1092.93 2039 1352.39 0.00 287.25 259.46 546.71 805.68 805.68 779.73 670.44 805.68 2040 1352.39 0.00 0.00 259.46 0.00 259.46 1092.93 1092.93 1066.98 957.69 1092.93 FIRR 5.55% 4.79% 5.32% 4.44% 4.81% NPV 1,658 761 1,364 258 759
Table 22: Djarkurgan Rayon Vodokanal – Projected Financial Statements
P r o j e c t e d 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Income Statements Operating Revenue 15.6 25.5 48.5 82.9 110.2 137.5 173.5 212.7 257.8 307.1 341.1 378.7 Operating Expenses 16.0 25.7 39.4 60.9 83.2 90.0 96.7 101.8 106.2 111.0 115.7 120.5 Depreciation 2.9 2.9 2.9 87.0 108.9 109.9 110.9 110.9 110.9 110.9 110.9 110.9 Operating Income (3.3) (3.1) 6.3 (65.0) (81.9) (62.4) (34.1) 0.1 40.7 85.2 114.5 147.3 Operating Subsidies 0.00.00.00.00.00.00.00.00.00.00.00.0 Net Non-Operating Expenses (6.0) (20.4) (51.1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Interest & Other Financial Expenses 0.0 0.0 0.0 0.0 0.0 0.0 20.6 20.6 28.5 27.3 26.1 24.9 Income Tax 0.2 1.7 5.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net Income 2.6 15.6 51.7 (65.0) (81.9) (62.4) (54.7) (20.5) 12.2 57.9 88.4 122.4
Cash Flow Statements Sources Internal Cash 5.4 18.5 54.6 22.1 27.0 47.4 76.8 111.0 151.6 196.1 225.4 258.2 Debt 0.0 0.0 1,326.3 347.5 20.1 20.3 0.0 0.0 0.0 0.0 0.0 0.0 Equity Contributions 0.0 0.0 393.5 98.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.00.00.00.00.00.00.00.00.00.00.00.0 Total 5.4 18.5 1,774.4 467.9 47.1 67.8 76.8 111.0 151.6 196.1 225.4 258.2 Applications Capital Investments 0.0 0.0 1,683.1 436.7 20.1 20.3 0.0 0.0 0.0 0.0 0.0 0.0 Working Capital Increase (Decrease) 2.9 (2.4) (7.9) 14.4 5.1 12.1 10.3 3.5 7.1 10.4 8.0 6.2 Interest 0.0 0.0 0.0 0.0 0.0 0.0 20.6 20.6 28.5 27.3 26.1 24.9 Debt Repayment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 71.4 71.4 71.4 71.4 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 2.9 (2.4) 1,675.2 451.1 25.2 32.4 30.9 24.1 107.1 109.1 105.6 102.5 Cash Changes 2.5 20.9 99.1 16.8 21.9 35.4 45.9 86.9 44.5 87.0 119.8 155.7 Ending Cash Balance 9.9 30.8 129.9 146.7 168.6 204.0 249.9 336.7 381.2 468.2 588.0 743.7
Balance Sheets Assets Current Assets 18.5 43.7 149.9 179.7 211.1 251.9 303.7 395.8 448.7 544.9 671.4 834.4 Net Fixed Assets 16.5 13.6 10.8 1,606.8 1,934.7 1,844.9 1,754.3 1,643.5 1,532.6 1,421.7 1,310.8 1,199.9 Work in Progress 0.0 0.0 1,683.1 436.7 20.1 20.3 0.0 0.0 0.0 0.0 0.0 0.0 Other Assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 35.0 57.3 1,843.8 2,223.2 2,165.9 2,117.1 2,058.1 2,039.3 1,981.3 1,966.6 1,982.2 2,034.3 Liabilities and Equity Current Liabilities 13.5 20.2 35.2 33.8 38.2 31.5 27.1 100.2 101.5 100.3 98.9 100.1 Long Term Debt 0.0 0.0 1,326.3 1,673.8 1,693.9 1,714.2 1,714.2 1,642.8 1,571.3 1,499.9 1,428.5 1,357.1 Equity 21.4 37.1 482.3 515.7 433.8 371.4 316.7 296.3 308.4 366.3 454.7 577.1 Total 35.0 57.3 1,843.8 2,223.2 2,165.9 2,117.1 2,058.1 2,039.3 1,981.3 1,966.6 1,982.2 2,034.3
Financial Ratios Cost Recovery Ratio 1.10.30.60.40.91.31.31.71.21.41.51.7 Debt Service Ratio NA NA NA NA NA NA 3.7 5.4 1.5 2.0 2.3 2.7 Debt - Asset Ratio 0.0 0.0 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.7
Table 23: Djarkurgan Rayon Vodokanal – FIRR and Sensitivity Analysis
Costs Base Case Capital O & M Revenue 1 Year Delay Year Revenue Capital Residual in Capital O & M Total Net 10% 10% -10% Replacement Value Completion
2008 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2009 4.99 0.00 0.00 0.10 0.10 4.89 4.89 4.88 4.39 -0.10 2010 15.37 0.00 0.00 6.03 6.03 9.33 9.33 8.73 7.80 -1.04 2011 35.15 1157.03 0.00 14.00 1171.03 -1135.88 -1251.59 -1137.28 -1139.40 -1155.66 2012 44.62 275.41 0.00 22.45 297.86 -253.24 -280.78 -255.48 -257.70 -262.71 2013 57.03 11.84 0.00 25.38 37.22 19.81 18.63 17.27 14.11 7.40 2014 68.64 11.46 0.00 26.41 37.88 30.76 29.62 28.12 23.90 19.15 2015 84.28 0.00 0.00 27.93 27.93 56.34 56.34 53.55 47.92 40.71 2016 99.65 0.00 0.00 28.50 28.50 71.15 71.15 68.30 61.18 55.78 2017 116.10 0.00 0.00 28.70 28.70 87.40 87.40 84.53 75.79 70.94 2018 133.01 0.00 0.00 28.95 28.95 104.05 104.05 101.16 90.75 87.15 2019 142.02 0.00 0.00 29.16 29.16 112.86 112.86 109.94 98.66 103.85 2020 151.63 0.00 0.00 29.37 29.37 122.26 122.26 119.32 107.09 112.65 2021 160.08 0.00 0.00 29.54 29.54 130.55 130.55 127.59 114.54 122.09 2022 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 130.37 2023 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2024 169.01 0.00 71.62 29.72 101.34 67.68 67.68 64.70 50.77 67.68 2025 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2026 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2027 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2028 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2029 169.01 0.00 71.62 29.72 101.34 67.68 67.68 64.70 50.77 67.68 2030 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2031 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2032 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2033 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2034 169.01 0.00 71.62 29.72 101.34 67.68 67.68 64.70 50.77 67.68 2035 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2036 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2037 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2038 169.01 0.00 0.00 29.72 29.72 139.30 139.30 136.33 122.40 139.30 2039 169.01 0.00 71.62 29.72 101.34 67.68 67.68 64.70 50.77 67.68 2040 169.01 0.00 0.00 29.72 0.00 29.72 139.30 139.30 136.33 122.40 139.30 FIRR 5.45% 4.70% 5.21% 4.30% 4.72% NPV 208 86 167 13 88
Table 24: Khodjaipak RTM-OMA – Projected Financial Statements
P r o j e c t e d 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Income Statements Operating Revenue 478.6 519.9 634.6 787.4 1,085.6 1,325.6 1,500.2 1,619.1 1,720.0 1,827.0 1,940.4 2,083.7 Operating Expenses 786.4 877.7 956.1 1,066.3 710.2 757.2 801.1 835.7 870.7 909.5 947.5 988.2 Depreciation 150.3 150.3 237.9 370.1 372.2 374.3 376.5 376.5 376.5 376.5 376.5 376.5 Operating Income (458.1) (508.1) (559.4) (649.0) 3.2 194.1 322.6 406.8 472.9 541.1 616.4 719.1 Operating Subsidies 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net Non-Operating Expenses (3.4) (9.1) (7.9) (7.9) (8.0) (8.1) (8.0) (7.0) (7.1) (7.2) (7.2) (7.4) Interest & Other Financial Expenses 0.0 0.0 0.0 0.0 0.0 0.0 43.1 43.1 59.8 57.3 54.7 52.2 Income Tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 11.9 Net Income (454.7) (498.9) (551.5) (641.0) 11.2 202.2 287.5 370.7 420.1 491.0 568.9 662.4
Cash Flow Statements Sources Internal Cash (304.4) (348.6) (313.6) (270.9) 383.4 576.5 707.1 790.4 856.4 924.7 1,000.1 1,091.0 Debt 0.0 1,380.8 2,087.7 41.6 42.1 42.6 0.0 0.0 0.0 0.0 0.0 0.0 Equity Contributions 0.0 419.8 629.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total (304.4) 1,452.0 2,403.8 (229.3) 425.5 619.2 707.1 790.4 856.4 924.7 1,000.1 1,091.0 Applications Capital Investments 0.0 1,752.2 2,644.9 41.6 42.1 42.6 0.0 0.0 0.0 0.0 0.0 0.0 Working Capital Increase (Decrease) (323.2) (269.8) (256.7) (222.2) 363.7 364.1 288.1 282.8 210.9 (83.6) (7.2) 72.9 Interest 0.0 0.0 0.0 0.0 0.0 0.0 43.1 43.1 59.8 57.3 54.7 52.2 Debt Repayment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 149.8 149.8 149.8 149.8 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total (323.2) 1,482.5 2,388.2 (180.6) 405.9 406.7 331.2 325.9 420.5 123.5 197.3 274.9 Cash Changes 18.8 (30.5) 15.6 (48.7) 19.7 212.4 375.9 464.4 435.9 801.3 802.8 816.2 Ending Cash Balance 13.1 (17.5) (1.8) (50.5) (30.8) 181.6 557.5 1,021.9 1,457.8 2,259.1 3,061.8 3,878.0
Balance Sheets Assets Current Assets 401.9 278.4 252.3 209.4 310.4 560.7 985.6 1,461.5 1,900.9 2,629.3 3,401.6 4,242.2 Net Fixed Assets 1,125.5 975.2 2,489.6 4,764.3 4,433.7 4,101.5 3,767.7 3,391.2 3,014.8 2,638.3 2,261.8 1,885.4 Work in Progress 0.0 1,752.2 2,644.9 41.6 42.1 42.6 0.0 0.0 0.0 0.0 0.0 0.0 Other Assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 1,527.4 3,005.8 5,386.8 5,015.3 4,786.3 4,704.9 4,753.3 4,852.7 4,915.7 5,267.6 5,663.4 6,127.6 Liabilities and Equity Current Liabilities 959.3 1,136.0 1,351.1 1,579.0 1,296.7 970.5 731.4 609.8 402.5 413.2 389.9 341.4 Long Term Debt 0.0 1,380.8 3,468.5 3,510.1 3,552.2 3,594.8 3,594.8 3,445.1 3,295.3 3,145.5 2,995.7 2,845.9 Equity 568.1 489.1 567.3 (73.8) (62.6) 139.6 427.1 797.8 1,218.0 1,709.0 2,277.9 2,940.2 Total 1,527.4 3,005.8 5,386.8 5,015.3 4,786.3 4,704.9 4,753.3 4,852.7 4,915.7 5,267.6 5,663.4 6,127.6
Financial Ratios Cost Recovery Ratio 0.8 0.6 0.6 0.8 1.0 1.2 1.3 1.4 1.3 1.8 1.7 1.6 Debt Service Ratio NA NA NA NA NA NA 16.4 18.3 4.1 4.5 4.9 5.4 Debt - Asset Ratio 0.0 0.5 0.6 0.7 0.7 0.8 0.8 0.7 0.7 0.6 0.6 0.5
Table 25: Khodjaipak RTM-OMA – FIRR and Sensitivity Analysis
Costs Base Case Capital O & M Revenue 1 Year Delay Year Revenue Capital Residual in Capital O & M Total Net 10% 10% -10% Replacement Value Completion
2008 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2009 2.84 0.00 0.00 0.00 0.00 2.84 2.84 2.84 2.56 0.00 2010 6.88 1318.98 0.00 0.00 1318.98 -1312.10 -1444.00 -1312.10 -1312.79 -1316.14 2011 5.40 1818.21 0.00 55.11 1873.32 -1867.91 -2049.73 -1873.42 -1868.45 -1866.44 2012 207.15 26.25 0.00 50.56 76.81 130.34 127.72 125.29 109.63 -71.40 2013 258.20 24.83 0.00 47.25 72.08 186.12 183.64 181.39 160.30 135.07 2014 266.36 24.04 0.00 45.21 69.26 197.11 194.70 192.59 170.47 188.94 2015 277.34 0.00 0.00 43.48 43.48 233.87 233.87 229.52 206.13 222.89 2016 275.39 0.00 0.00 41.80 41.80 233.58 233.58 229.40 206.05 235.54 2017 273.99 0.00 0.00 40.20 40.20 233.80 233.80 229.78 206.40 235.19 2018 272.60 0.00 0.00 38.65 38.65 233.95 233.95 230.08 206.69 235.35 2019 271.18 0.00 0.00 37.16 37.16 234.01 234.01 230.30 206.90 235.43 2020 269.80 0.00 0.00 35.73 35.73 234.06 234.06 230.49 207.08 235.44 2021 268.38 0.00 0.00 34.36 34.36 234.02 234.02 230.59 207.18 235.44 2022 266.95 0.00 0.00 33.04 33.04 233.91 233.91 230.61 207.22 235.34 2023 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2024 266.95 0.00 158.17 0.00 158.17 108.78 108.78 108.78 82.08 108.78 2025 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2026 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2027 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2028 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2029 266.95 0.00 158.17 0.00 158.17 108.78 108.78 108.78 82.08 108.78 2030 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2031 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2032 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2033 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2034 266.95 0.00 158.17 0.00 158.17 108.78 108.78 108.78 82.08 108.78 2035 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2036 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2037 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2038 266.95 0.00 0.00 0.00 0.00 266.95 266.95 266.95 240.25 266.95 2039 266.95 0.00 158.17 0.00 158.17 108.78 108.78 108.78 82.08 108.78 2040 266.95 0.00 0.00 0.00 0.00 266.95 308.17 308.17 240.25 266.95 FIRR 5.28% 4.51% 5.20% 4.23% 4.65% NPV 376 110 352 3 160
Table 26: Kumkurgan Vodokanal – Projected Financial Statements
P r o j e c t e d 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Income Statements Operating Revenue 29.5 39.8 66.9 108.4 156.9 198.5 231.0 268.9 304.7 339.0 377.2 424.4 Operating Expenses 25.7 29.6 46.9 96.3 160.3 170.8 178.8 186.2 193.9 202.2 210.5 219.3 Depreciation 2.7 2.7 2.7 13.9 57.6 69.3 69.9 69.9 69.9 69.9 69.9 69.9 Operating Income 1.1 7.5 17.2 (1.8) (61.0) (41.6) (17.6) 12.7 40.8 66.9 96.7 135.2 Operating Subsidies 0.00.00.00.00.00.00.00.00.00.00.00.0 Net Non-Operating Expenses 2.1 2.1 (1.9) (11.0) (6.8) 2.6 2.8 2.9 3.0 3.2 3.3 (0.9) Interest & Other Financial Expenses 0.0 0.0 0.0 0.0 0.0 0.0 12.8 12.8 17.7 17.0 16.2 15.5 Income Tax 0.0 0.0 0.8 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.9 12.1 Net Income (1.0) 5.4 18.4 8.2 (54.2) (44.2) (33.2) (3.0) 20.0 46.7 76.3 108.5
Cash Flow Statements Sources Internal Cash 1.6 8.1 21.1 22.1 3.3 25.1 49.5 79.7 107.7 133.6 162.4 193.9 Debt 0.0 0.0 176.9 688.7 187.2 12.6 0.0 0.0 0.0 0.0 0.0 0.0 Equity Contributions 0.0 0.0 50.8 197.1 50.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.00.00.00.00.00.00.00.00.00.00.00.0 Total 1.6 8.1 248.7 907.9 241.3 37.7 49.5 79.7 107.7 133.6 162.4 193.9 Applications Capital Investments 0.0 0.0 224.4 873.5 234.8 12.6 0.0 0.0 0.0 0.0 0.0 0.0 Working Capital Increase (Decrease) (14.0) (18.8) (10.5) (12.0) 2.9 5.2 1.5 1.4 4.1 3.8 4.1 2.4 Interest 0.0 0.0 0.0 0.0 0.0 0.0 12.8 12.8 17.7 17.0 16.2 15.5 Debt Repayment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 44.4 44.4 44.4 44.4 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total (14.0) (18.8) 214.0 861.5 237.7 17.9 14.2 14.2 66.2 65.2 64.7 62.3 Cash Changes 15.7 26.9 34.7 46.4 3.6 19.9 35.3 65.5 41.5 68.4 97.8 131.6 Ending Cash Balance 21.4 48.2 83.0 129.4 133.0 152.9 188.1 253.7 295.2 363.6 461.4 593.1
Balance Sheets Assets Current Assets 70.0 78.6 107.2 153.7 163.4 188.0 225.7 293.6 340.1 413.4 516.5 654.8 Net Fixed Assets 13.0 10.3 7.6 218.2 1,034.0 1,199.6 1,142.3 1,072.3 1,002.4 932.4 862.5 792.6 Work in Progress 0.0 0.0 224.4 873.5 234.8 12.6 0.0 0.0 0.0 0.0 0.0 0.0 Other Assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 83.0 88.9 339.3 1,245.3 1,432.2 1,400.2 1,367.9 1,365.9 1,342.5 1,345.8 1,379.0 1,447.3 Liabilities and Equity Current Liabilities 3.0 3.5 7.8 19.9 23.0 22.5 23.5 68.8 69.8 70.8 72.1 76.3 Long Term Debt 0.0 0.0 176.9 865.6 1,052.8 1,065.5 1,065.5 1,021.1 976.7 932.3 887.9 843.5 Equity 80.0 85.4 154.6 359.9 356.4 312.2 279.0 276.0 296.0 342.7 419.0 527.5 Total 83.0 88.9 339.3 1,245.3 1,432.2 1,400.2 1,367.9 1,365.9 1,342.5 1,345.8 1,379.0 1,447.3
Financial Ratios Cost Recovery Ratio 2.31.50.60.70.71.01.21.31.21.31.41.4 Debt Service Ratio NA NA NA NA NA NA 3.9 6.2 1.7 2.2 2.7 3.2 Debt - Asset Ratio 0.0 0.0 0.5 0.7 0.7 0.8 0.8 0.8 0.8 0.7 0.7 0.6
Table 27: Kumkurgan Vodokanal – FIRR and Sensitivity Analysis
Costs Base Case Capital O & M Revenue 1 Year Delay Year Revenue Capital Residual in Capital O & M Total Net 10% 10% -10% Replacement Value Completion
2008 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2009 0.20 0.00 0.00 0.16 0.16 0.05 0.05 0.03 0.03 -0.16 2010 1.04 0.00 0.00 1.05 1.05 -0.01 -0.01 -0.11 -0.11 -0.84 2011 12.52 154.28 0.00 11.30 165.59 -153.07 -168.50 -154.20 -154.32 -164.55 2012 40.60 550.87 0.00 39.29 590.15 -549.56 -604.64 -553.48 -553.62 -577.63 2013 55.38 138.41 0.00 40.09 178.50 -123.13 -136.97 -127.14 -128.66 -137.90 2014 67.05 7.13 0.00 40.23 47.35 19.69 18.98 15.67 12.99 8.02 2015 75.03 0.00 0.00 40.33 40.33 34.70 34.70 30.67 27.20 26.71 2016 83.96 0.00 0.00 40.46 40.46 43.50 43.50 39.45 35.10 34.58 2017 91.48 0.00 0.00 40.57 40.57 50.90 50.90 46.85 41.76 43.38 2018 97.88 0.00 0.00 40.68 40.68 57.20 57.20 53.13 47.41 50.79 2019 104.72 0.00 0.00 40.81 40.81 63.91 63.91 59.83 53.44 57.07 2020 113.28 0.00 0.00 41.30 41.30 71.98 71.98 67.85 60.65 63.42 2021 119.81 0.00 0.00 41.46 41.46 78.35 78.35 74.21 66.37 71.82 2022 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 78.18 2023 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2024 126.72 0.00 35.26 41.63 76.89 49.83 49.83 45.67 37.16 49.83 2025 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2026 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2027 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2028 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2029 126.72 0.00 35.26 41.63 76.89 49.83 49.83 45.67 37.16 49.83 2030 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2031 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2032 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2033 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2034 126.72 0.00 35.26 41.63 76.89 49.83 49.83 45.67 37.16 49.83 2035 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2036 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2037 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2038 126.72 0.00 0.00 41.63 41.63 85.09 85.09 80.92 72.42 85.09 2039 126.72 0.00 35.26 41.63 76.89 49.83 49.83 45.67 37.16 49.83 2040 126.72 0.00 0.00 41.63 0.00 41.63 85.09 85.09 80.92 72.42 85.09 FIRR 5.80% 5.04% 5.21% 4.28% 4.83% NPV 154 85 95 5 63
Table 28: Muzrabad Vodokanal – Projected Financial Statements
P r o j e c t e d 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Income Statements Operating Revenue 74.0 122.7 207.7 297.2 443.4 632.2 879.7 1,206.4 1,572.1 2,048.4 2,590.4 3,200.9 Operating Expenses 74.8 138.2 178.1 216.3 536.6 578.6 613.7 663.5 710.2 761.2 823.1 890.0 Depreciation 15.1 15.1 83.1 360.4 504.4 509.0 513.7 513.7 513.7 513.7 513.7 513.7 Operating Income (15.9) (30.7) (53.5) (279.5) (597.5) (455.4) (247.7) 29.2 348.2 773.5 1,253.6 1,797.2 Operating Subsidies 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net Non-Operating Expenses (1.2) (4.5) (5.3) 0.00.00.00.00.00.00.00.00.0 Interest & Other Financial Expenses 0.0 0.0 0.0 0.0 0.0 0.0 95.0 95.0 131.7 126.1 120.5 114.9 Income Tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 14.8 168.2 Net Income (14.7) (26.2) (48.2) (279.5) (597.5) (455.4) (342.6) (65.8) 216.5 647.3 1,118.3 1,514.1
Cash Flow Statements Sources Internal Cash 0.4 (11.0) 34.9 80.9 (93.2) 53.6 266.0 542.9 861.9 1,287.2 1,752.6 2,142.7 Debt 0.0 1,070.8 4,372.7 2,283.5 92.7 93.8 0.0 0.0 0.0 0.0 0.0 0.0 Equity Contributions 0.0 318.4 1,296.4 659.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 0.4 1,378.2 5,703.9 3,023.9 (0.4) 147.4 266.0 542.9 861.9 1,287.2 1,752.6 2,142.7 Applications Capital Investments 0.0 1,358.9 5,545.6 2,880.2 92.7 93.8 0.0 0.0 0.0 0.0 0.0 0.0 Working Capital Increase (Decrease) (19.2) (31.1) (2.2) 47.0 (108.2) 27.9 92.6 74.7 129.0 61.3 114.3 91.0 Interest 0.0 0.0 0.0 0.0 0.0 0.0 95.0 95.0 131.7 126.1 120.5 114.9 Debt Repayment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 329.7 329.7 329.7 329.7 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total (19.2) 1,327.9 5,543.5 2,927.2 (15.4) 121.7 187.6 169.6 590.5 517.2 564.6 535.7 Cash Changes 19.7 50.3 160.4 96.7 15.0 25.7 78.4 373.3 271.4 770.0 1,188.0 1,607.0 Ending Cash Balance 36.0 86.3 246.8 343.5 358.5 384.2 462.6 835.8 1,107.2 1,877.2 3,065.2 4,672.2
Balance Sheets Assets Current Assets 142.9 225.9 425.6 529.6 523.2 591.8 730.7 1,194.7 1,557.7 2,402.9 3,725.5 5,484.0 Net Fixed Assets 115.0 99.8 1,375.7 6,561.0 8,936.8 8,520.6 8,100.7 7,587.0 7,073.3 6,559.6 6,045.9 5,532.2 Work in Progress 0.0 1,358.9 5,545.6 2,880.2 92.7 93.8 0.0 0.0 0.0 0.0 0.0 0.0 Other Assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 257.8 1,684.7 7,346.9 9,970.8 9,552.7 9,206.2 8,831.4 8,781.7 8,631.0 8,962.5 9,771.4 11,016.2 Liabilities and Equity Current Liabilities 89.8 153.6 194.9 155.3 242.0 257.1 224.9 570.8 533.3 547.2 567.4 627.9 Long Term Debt 0.0 1,070.8 5,443.5 7,727.0 7,819.7 7,913.6 7,913.6 7,583.8 7,254.1 6,924.4 6,594.6 6,264.9 Equity 168.1 460.3 1,708.4 2,088.5 1,491.0 1,035.6 692.9 627.1 843.6 1,491.0 2,609.3 4,123.4 Total 257.8 1,684.7 7,346.9 9,970.8 9,552.7 9,206.2 8,831.4 8,781.7 8,631.0 8,962.5 9,771.4 11,016.2
Financial Ratios Cost Recovery Ratio 0.5 0.2 0.3 0.4 0.7 1.0 1.1 1.4 1.2 1.6 1.8 2.0 Debt Service Ratio NA NA NA NA NA NA 2.8 5.7 1.9 2.8 3.9 4.8 Debt - Asset Ratio 0.0 0.6 0.7 0.8 0.8 0.9 0.9 0.9 0.9 0.8 0.7 0.6
Table 29: Muzrabad Vodokanal – FIRR and Sensitivity Analysis
Costs Base Case Capital O & M Revenue 1 Year Delay Year Revenue Capital Residual in Capital O & M Total Net 10% 10% -10% Replacement Value Completion
2008 0.00 0.00 0.00 0.08 0.08 -0.08 -0.08 -0.09 -0.08 -0.08 2009 1.00 0.00 0.00 0.15 0.15 0.85 0.85 0.84 0.75 -0.15 2010 20.99 1022.92 0.00 41.80 1064.72 -1043.73 -1146.03 -1047.91 -1045.83 -1063.73 2011 29.78 3812.25 0.00 61.66 3873.91 -3844.13 -4225.35 -3850.29 -3847.11 -3852.92 2012 35.70 1816.49 0.00 64.11 1880.60 -1844.90 -2026.55 -1851.31 -1848.47 -1850.82 2013 55.06 54.65 0.00 71.11 125.76 -70.71 -76.17 -77.82 -76.21 -90.06 2014 79.89 52.93 0.00 76.10 129.03 -49.14 -54.43 -56.75 -57.13 -73.97 2015 113.19 0.00 0.00 81.30 81.30 31.90 31.90 23.77 20.58 -1.41 2016 167.57 0.00 0.00 93.20 93.20 74.37 74.37 65.05 57.61 19.99 2017 225.92 0.00 0.00 102.27 102.27 123.65 123.65 113.42 101.06 65.30 2018 302.44 0.00 0.00 111.79 111.79 190.65 190.65 179.47 160.40 114.13 2019 398.95 0.00 0.00 125.18 125.18 273.77 273.77 261.25 233.88 177.25 2020 509.31 0.00 0.00 139.14 139.14 370.17 370.17 356.26 319.24 259.82 2021 720.61 0.00 0.00 147.49 147.49 573.12 573.12 558.37 501.06 361.82 2022 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 563.72 2023 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2024 1018.23 0.00 332.58 156.89 489.47 528.76 528.76 513.07 426.94 528.76 2025 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2026 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2027 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2028 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2029 1018.23 0.00 332.58 156.89 489.47 528.76 528.76 513.07 426.94 528.76 2030 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2031 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2032 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2033 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2034 1018.23 0.00 332.58 156.89 489.47 528.76 528.76 513.07 426.94 528.76 2035 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2036 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2037 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2038 1018.23 0.00 0.00 156.89 156.89 861.34 861.34 845.65 759.52 861.34 2039 1018.23 0.00 332.58 156.89 489.47 528.76 528.76 513.07 426.94 528.76 2040 1018.23 0.00 0.00 156.89 156.89 861.34 893.31 877.62 759.52 861.34 FIRR 5.15% 4.57% 4.98% 4.26% 4.54% NPV 935 373 754 33 320
Table 30: Sariasiya Vodokanal – Projected Financial Statements
P r o j e c t e d 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Income Statements Operating Revenue 40.4 57.7 75.4 144.1 209.6 276.7 318.2 366.0 425.8 482.5 536.8 603.9 Operating Expenses 48.0 56.5 62.9 101.5 140.7 161.1 169.3 177.6 186.6 196.1 205.4 215.5 Depreciation 4.8 4.8 4.8 106.5 157.5 159.0 160.5 160.5 160.5 160.5 160.5 160.5 Operating Income (12.5) (3.6) 7.7 (63.9) (88.6) (43.3) (11.5) 27.9 78.8 125.9 170.9 227.9 Operating Subsidies 0.00.00.00.00.00.00.00.00.00.00.00.0 Net Non-Operating Expenses (1.6) (1.1) (0.7) (16.5) (22.2) (12.1) (8.1) (8.3) (8.5) (5.2) (1.8) (1.8) Interest & Other Financial Expenses 0.0 0.0 0.0 0.0 0.0 0.0 29.6 29.6 41.1 39.4 37.6 35.9 Income Tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8.8 19.4 Net Income (10.9) (2.5) 8.4 (47.4) (66.5) (31.3) (33.0) 6.6 46.2 91.7 126.3 174.5
Cash Flow Statements Sources Internal Cash (6.0) 2.3 13.2 59.1 91.1 127.7 157.1 196.7 247.7 291.5 324.4 370.8 Debt 0.0 0.0 1,602.5 808.5 28.9 29.3 0.0 0.0 0.0 0.0 0.0 0.0 Equity Contributions 0.0 0.0 473.0 232.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.00.00.00.00.00.00.00.00.00.00.00.0 Total (6.0) 2.3 2,088.7 1,100.5 120.0 157.0 157.1 196.7 247.7 291.5 324.4 370.8 Applications Capital Investments 0.0 0.0 2,033.6 1,020.9 28.9 29.3 0.0 0.0 0.0 0.0 0.0 0.0 Working Capital Increase (Decrease) (3.6) 2.0 30.6 (12.3) (18.8) 7.7 8.5 10.4 12.6 12.3 5.9 7.5 Interest 0.0 0.0 0.0 0.0 0.0 0.0 29.6 29.6 41.1 39.4 37.6 35.9 Debt Repayment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 102.9 102.9 102.9 102.9 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total (3.6) 2.0 2,064.2 1,008.5 10.2 37.0 38.1 40.0 156.6 154.5 146.4 146.2 Cash Changes (2.5) 0.3 24.5 92.0 109.8 120.0 118.9 156.6 91.1 137.0 178.0 224.6 Ending Cash Balance 13.6 13.9 38.4 130.4 240.2 360.2 479.1 635.8 726.9 863.9 1,041.9 1,266.4
Balance Sheets Assets Current Assets 47.1 45.8 115.1 191.1 283.7 409.5 534.6 699.3 800.4 946.8 1,133.9 1,369.6 Net Fixed Assets 36.5 31.7 26.9 1,954.0 2,817.3 2,687.2 2,556.1 2,395.6 2,235.1 2,074.7 1,914.2 1,753.8 Work in Progress 0.0 0.0 2,033.6 1,020.9 28.9 29.3 0.0 0.0 0.0 0.0 0.0 0.0 Other Assets 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 Total 90.0 83.9 2,181.9 3,172.3 3,136.3 3,132.4 3,097.0 3,101.2 3,041.8 3,027.8 3,054.4 3,129.7 Liabilities and Equity Current Liabilities 22.9 19.3 33.5 29.9 31.4 29.5 27.2 127.7 125.0 122.2 125.4 129.1 Long Term Debt 0.0 0.0 1,602.5 2,411.0 2,440.0 2,469.2 2,469.2 2,366.3 2,263.5 2,160.6 2,057.7 1,954.8 Equity 67.1 64.6 545.9 731.4 664.9 633.6 600.6 607.2 653.3 745.1 871.4 1,045.8 Total 90.0 83.9 2,181.9 3,172.3 3,136.3 3,132.4 3,097.0 3,101.2 3,041.8 3,027.8 3,054.4 3,129.7
Financial Ratios Cost Recovery Ratio 0.90.30.30.51.21.71.61.71.31.41.51.6 Debt Service Ratio NA NA NA NA NA NA 5.3 6.6 1.7 2.0 2.3 2.7 Debt - Asset Ratio 0.0 0.0 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.7 0.7 0.7
Table 31: Sariasiya Vodokanal – FIRR and Sensitivity Analysis
Base Costs Capital O & M Revenue 1 Year Delay Case Year Revenue Capital Residual in Capital O & M Total Net 10% 10% -10% Replacement Value Completion
2008 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2009 14.08 0.00 0.00 8.44 8.44 5.64 5.64 4.79 4.23 -8.44 2010 20.09 0.00 0.00 10.81 10.81 9.29 9.29 8.21 7.28 3.27 2011 24.83 1397.99 0.00 11.63 1409.61 -1384.78 -1524.58 -1385.94 -1387.26 -1389.52 2012 76.62 643.83 0.00 28.89 672.73 -596.11 -660.49 -599.00 -603.77 -647.89 2013 111.88 17.05 0.00 38.85 55.91 55.98 54.27 52.09 44.79 20.71 2014 136.48 16.51 0.00 45.04 61.55 74.92 73.27 70.42 61.28 50.33 2015 147.80 0.00 0.00 46.26 46.26 101.54 101.54 96.92 86.76 90.22 2016 162.88 0.00 0.00 47.72 47.72 115.16 115.16 110.39 98.87 100.08 2017 181.66 0.00 0.00 49.57 49.57 132.08 132.08 127.13 113.92 113.31 2018 195.75 0.00 0.00 50.72 50.72 145.03 145.03 139.95 125.45 130.93 2019 207.58 0.00 0.00 51.81 51.81 155.78 155.78 150.60 135.02 143.94 2020 224.46 0.00 0.00 53.14 53.14 171.33 171.33 166.01 148.88 154.45 2021 237.32 0.00 0.00 54.30 54.30 183.03 183.03 177.60 159.29 170.16 2022 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 181.76 2023 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2024 250.97 0.00 102.09 55.56 157.65 93.32 93.32 87.76 68.22 93.32 2025 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2026 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2027 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2028 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2029 250.97 0.00 102.09 55.56 157.65 93.32 93.32 87.76 68.22 93.32 2030 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2031 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2032 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2033 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2034 250.97 0.00 102.09 55.56 157.65 93.32 93.32 87.76 68.22 93.32 2035 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2036 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2037 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2038 250.97 0.00 0.00 55.56 55.56 195.41 195.41 189.86 170.31 195.41 2039 250.97 0.00 102.09 55.56 157.65 93.32 93.32 87.76 68.22 93.32 2040 250.97 0.00 0.00 55.56 0.00 55.56 195.41 195.41 189.86 170.31 195.41 FIRR 5.69% 4.90% 5.38% 4.43% 4.88% NPV 343 170 269 46 161
Table 32: Shurchi Vodokanal – Projected Financial Statements
P r o j e c t e d 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Income Statements Operating Revenue 55.1 65.0 73.9 97.2 125.3 164.8 200.7 230.9 265.6 291.6 320.0 355.1 Operating Expenses 35.2 40.6 45.2 54.5 73.3 83.4 89.7 95.6 101.7 108.5 115.4 122.8 Depreciation 4.4 4.4 4.4 43.7 53.9 54.3 54.8 54.8 54.8 54.8 54.8 54.8 Operating Income 15.5 20.0 24.3 (0.9) (1.8) 27.1 56.1 80.5 109.0 128.3 149.8 177.5 Operating Subsidies 0.00.00.00.00.00.00.00.00.00.00.00.0 Net Non-Operating Expenses (1.1) (1.8) 0.00.00.00.00.00.00.00.00.00.0 Interest & Other Financial Expenses 0.0 0.0 0.0 0.0 0.0 0.0 9.6 9.6 13.3 12.8 12.2 11.6 Income Tax 1.7 2.2 2.4 0.0 0.0 2.4 4.7 7.1 9.6 11.6 13.8 16.6 Net Income 14.9 19.6 21.9 (0.9) (1.8) 24.7 41.9 63.8 86.1 104.0 123.8 149.3
Cash Flow Statements Sources Internal Cash 19.3 24.0 26.3 42.8 52.1 79.0 106.3 128.2 154.3 171.5 190.8 215.7 Debt 0.0 0.0 619.4 162.3 9.4 9.5 0.0 0.0 0.0 0.0 0.0 0.0 Equity Contributions 0.0 0.0 183.8 45.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.00.00.00.00.00.00.00.00.00.00.00.0 Total 19.3 24.0 829.5 251.0 61.4 88.5 106.3 128.2 154.3 171.5 190.8 215.7 Applications Capital Investments 0.0 0.0 786.1 204.0 9.4 9.5 0.0 0.0 0.0 0.0 0.0 0.0 Working Capital Increase (Decrease) (1.9) (3.9) 1.0 11.2 0.7 5.3 7.1 (0.4) 3.0 8.6 2.2 4.9 Interest 0.0 0.0 0.0 0.0 0.0 0.0 9.6 9.6 13.3 12.8 12.2 11.6 Debt Repayment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 33.4 33.4 33.4 33.4 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total (1.9) (3.9) 787.1 215.1 10.1 14.8 16.7 9.2 49.7 54.7 47.8 49.9 Cash Changes 21.2 27.8 42.4 35.9 51.3 73.7 89.5 119.1 104.6 116.8 143.1 165.8 Ending Cash Balance 32.4 60.3 102.7 138.5 189.8 263.5 353.1 472.1 576.8 693.6 836.7 1,002.5
Balance Sheets Assets Current Assets 48.1 75.2 117.2 157.8 215.0 296.4 392.9 514.7 625.5 745.5 893.6 1,062.6 Net Fixed Assets 54.6 50.2 45.9 788.3 938.4 893.4 848.1 793.3 738.5 683.7 628.9 574.1 Work in Progress 0.0 0.0 786.1 204.0 9.4 9.5 0.0 0.0 0.0 0.0 0.0 0.0 Other Assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 102.7 125.4 949.1 1,150.1 1,162.7 1,199.4 1,241.0 1,308.0 1,364.0 1,429.2 1,522.4 1,636.6 Liabilities and Equity Current Liabilities 25.8 28.9 27.5 21.1 26.2 28.6 28.4 64.9 68.2 62.7 65.5 63.8 Long Term Debt 0.0 0.0 619.4 781.7 791.1 800.6 800.6 767.3 733.9 700.5 667.2 633.8 Equity 76.9 96.5 302.2 347.3 345.4 370.1 412.0 475.8 561.9 665.9 789.7 939.0 Total 102.7 125.5 949.1 1,150.1 1,162.7 1,199.4 1,241.0 1,308.0 1,364.0 1,429.2 1,522.4 1,636.6
Financial Ratios Cost Recovery Ratio 1.60.70.60.71.41.81.82.11.61.71.81.9 Debt Service Ratio NA NA NA NA NA NA 11.1 13.3 3.3 3.7 4.2 4.8 Debt - Asset Ratio 0.0 0.0 0.7 0.7 0.7 0.7 0.6 0.6 0.6 0.5 0.5 0.4
Table 33: Shurchi Vodokanal – FIRR and Sensitivity Analysis
Base Costs Capital O & M Revenue 1 Year Delay Case Year Revenue Capital Residual in Capital O & M Total Net 10% 10% -10% Replacement Value Completion
2008 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2009 2.30 0.00 0.00 0.75 0.75 1.54 1.54 1.47 1.31 -0.75 2010 5.96 0.00 0.00 2.13 2.13 3.83 3.83 3.62 3.23 0.17 2011 7.02 540.39 0.00 2.91 543.29 -536.28 -590.32 -536.57 -536.98 -537.33 2012 12.68 128.63 0.00 4.72 133.35 -120.67 -133.54 -121.15 -121.94 -126.34 2013 20.55 5.53 0.00 6.97 12.50 8.05 7.50 7.35 6.00 0.18 2014 33.97 5.35 0.00 10.38 15.73 18.24 17.71 17.21 14.85 4.82 2015 43.00 0.00 0.00 11.78 11.78 31.22 31.22 30.05 26.92 22.19 2016 50.10 0.00 0.00 12.85 12.85 37.25 37.25 35.96 32.24 30.15 2017 58.11 0.00 0.00 13.97 13.97 44.14 44.14 42.74 38.33 36.13 2018 64.08 0.00 0.00 15.09 15.09 48.99 48.99 47.48 42.58 43.01 2019 70.43 0.00 0.00 16.26 16.26 54.17 54.17 52.54 47.12 47.82 2020 78.02 0.00 0.00 17.47 17.47 60.56 60.56 58.81 52.75 52.96 2021 82.41 0.00 0.00 18.28 18.28 64.13 64.13 62.30 55.89 59.74 2022 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 63.30 2023 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2024 86.97 0.00 33.45 19.12 52.57 34.40 34.40 32.49 25.70 34.40 2025 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2026 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2027 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2028 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2029 86.97 0.00 33.45 19.12 52.57 34.40 34.40 32.49 25.70 34.40 2030 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2031 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2032 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2033 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2034 86.97 0.00 33.45 19.12 52.57 34.40 34.40 32.49 25.70 34.40 2035 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2036 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2037 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2038 86.97 0.00 0.00 19.12 19.12 67.85 67.85 65.94 59.16 67.85 2039 86.97 0.00 33.45 19.12 52.57 34.40 34.40 32.49 25.70 34.40 2040 86.97 0.00 0.00 19.12 0.00 19.12 67.85 67.85 65.94 59.16 67.85 FIRR 5.76% 5.00% 5.49% 4.58% 4.98% NPV 125 68 102 28 64
Table 34: Surkhan Vodokanal – Projected Financial Statements
P r o j e c t e d 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Income Statements Operating Revenue 61.4 87.2 142.6 194.5 255.0 330.4 433.1 647.0 813.0 1,021.4 1,176.2 1,369.4 Operating Expenses 131.2 144.7 161.1 181.1 193.4 204.5 214.8 225.0 235.6 247.5 259.3 271.6 Depreciation 3.4 3.4 3.4 168.4 211.2 213.2 215.2 215.2 215.2 215.2 215.2 215.2 Operating Income (73.2) (60.8) (21.9) (155.0) (149.6) (87.3) 3.1 206.8 362.2 558.7 701.7 882.6 Operating Subsidies 0.00.00.00.00.00.00.00.00.00.00.00.0 Net Non-Operating Expenses (48.5) (36.2) 0.70.70.80.80.80.90.90.91.01.0 Interest & Other Financial Expenses 0.0 0.0 0.0 0.0 0.0 0.0 40.3 40.3 56.0 53.6 51.2 48.8 Income Tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 45.8 65.0 83.3 Net Income (24.7) (24.7) (22.5) (155.8) (150.3) (88.1) (38.1) 165.6 305.4 458.4 584.6 749.5
Cash Flow Statements Sources Internal Cash (21.3) (21.3) (19.1) 12.7 60.9 125.0 217.4 421.1 576.5 727.2 851.0 1,013.5 Debt 0.0 0.0 2,600.6 681.4 39.4 39.9 0.0 0.0 0.0 0.0 0.0 0.0 Equity Contributions 0.0 0.0 771.6 192.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.00.00.00.00.00.00.00.00.00.00.00.0 Total (21.3) (21.3) 3,353.2 886.9 100.3 164.9 217.4 421.1 576.5 727.2 851.0 1,013.5 Applications Capital Investments 0.0 0.0 3,300.3 856.3 39.4 39.9 0.0 0.0 0.0 0.0 0.0 0.0 Working Capital Increase (Decrease) (12.1) (20.5) (7.5) 31.5 24.4 11.3 16.1 34.2 8.7 20.7 19.2 25.7 Interest 0.0 0.0 0.0 0.0 0.0 0.0 40.3 40.3 56.0 53.6 51.2 48.8 Debt Repayment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 140.1 140.1 140.1 140.1 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total (12.1) (20.5) 3,292.8 887.8 63.8 51.2 56.4 74.5 204.7 214.4 210.4 214.6 Cash Changes (9.2) (0.8) 60.3 (0.8) 36.5 113.7 161.0 346.6 371.8 512.8 640.6 798.9 Ending Cash Balance 8.7 7.9 68.2 67.4 103.9 217.6 378.6 725.2 1,097.1 1,609.9 2,250.5 3,049.4
Balance Sheets Assets Current Assets 54.7 36.7 110.1 124.1 181.1 308.3 487.0 869.7 1,252.1 1,800.2 2,467.4 3,299.3 Net Fixed Assets 10.7 7.3 3.9 3,135.8 3,780.8 3,607.0 3,431.7 3,216.5 3,001.3 2,786.1 2,571.0 2,355.8 Work in Progress 0.0 0.0 3,300.3 856.3 39.4 39.9 0.0 0.0 0.0 0.0 0.0 0.0 Other Assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 65.4 44.0 3,414.3 4,116.1 4,001.3 3,955.2 3,918.7 4,086.2 4,253.4 4,586.4 5,038.3 5,655.1 Liabilities and Equity Current Liabilities 31.0 34.3 54.8 38.1 34.3 36.4 38.0 180.0 181.9 196.5 203.9 211.1 Long Term Debt 0.0 0.0 2,600.6 3,282.0 3,321.4 3,361.3 3,361.3 3,221.2 3,081.2 2,941.1 2,801.0 2,661.0 Equity 34.4 9.7 758.8 796.0 645.6 557.5 519.4 685.0 990.4 1,448.8 2,033.4 2,782.9 Total 65.4 44.0 3,414.3 4,116.1 4,001.3 3,955.2 3,918.7 4,086.2 4,253.4 4,586.4 5,038.3 5,655.1
Financial Ratios Cost Recovery Ratio 0.90.40.30.40.91.51.62.21.82.02.22.4 Debt Service Ratio NA NA NA NA NA NA 5.4 10.4 2.9 3.8 4.4 5.4 Debt - Asset Ratio 0.0 0.0 0.8 0.8 0.8 0.8 0.9 0.8 0.8 0.7 0.6 0.5
Table 35: Surkhan Vodokanal – FIRR and Sensitivity Analysis
Base Costs Capital O & M Revenue 1 Year Delay Case Year Revenue Capital Residual in Capital O & M Total Net 10% 10% -10% Replacement Value Completion
2008 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2009 1.07 0.00 0.00 0.03 0.03 1.04 1.04 1.03 0.93 -0.03 2010 1.84 0.00 0.00 0.07 0.07 1.77 1.77 1.76 1.59 0.99 2011 13.48 2268.75 0.00 2.67 2271.41 -2257.93 -2484.81 -2258.20 -2259.28 -2269.57 2012 19.87 540.04 0.00 3.61 543.65 -523.78 -577.79 -524.14 -525.77 -530.17 2013 28.49 23.21 0.00 4.62 27.84 0.65 -1.67 0.19 -2.20 -7.97 2014 38.64 22.48 0.00 5.45 27.93 10.70 8.46 10.16 6.84 0.55 2015 53.04 0.00 0.00 6.37 6.37 46.67 46.67 46.04 41.37 32.27 2016 87.97 0.00 0.00 7.49 7.49 80.48 80.48 79.73 71.69 45.55 2017 107.82 0.00 0.00 8.58 8.58 99.23 99.23 98.38 88.45 79.39 2018 139.38 0.00 0.00 9.78 9.78 129.60 129.60 128.62 115.66 98.03 2019 164.21 0.00 0.00 10.93 10.93 153.28 153.28 152.19 136.86 128.45 2020 194.54 0.00 0.00 12.18 12.18 182.36 182.36 181.15 162.91 152.03 2021 254.72 0.00 0.00 13.83 13.83 240.89 240.89 239.51 215.42 180.72 2022 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 239.00 2023 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2024 332.19 0.00 140.44 15.72 156.16 176.02 176.02 174.45 142.80 176.02 2025 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2026 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2027 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2028 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2029 332.19 0.00 140.44 15.72 156.16 176.02 176.02 174.45 142.80 176.02 2030 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2031 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2032 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2033 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2034 332.19 0.00 140.44 15.72 156.16 176.02 176.02 174.45 142.80 176.02 2035 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2036 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2037 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2038 332.19 0.00 0.00 15.72 15.72 316.46 316.46 314.89 283.24 316.46 2039 332.19 0.00 140.44 15.72 156.16 176.02 176.02 174.45 142.80 176.02 2040 332.19 0.00 0.00 15.72 0.00 15.72 316.46 316.46 314.89 283.24 316.46 FIRR 5.06% 4.42% 5.02% 4.25% 4.51% NPV 319 80 302 10 113
Figure 1
Funds Flow
Republic of Asian Uzbekistan Development (Ministry of Finance) Bank
UCSA (EA)
PMU (Project Account) Surkhandarya Provincial Government
PIU [Subproject Accounts] vodokanals
s
vodokanals
Consultants / Contractors
Lending EA : Executing Agency On-lending PIU : Project Implementation Unit Loan repayment PMU : Project Management Unit Grant Fund Flow UCSA : Uzbekistan Communal Services Payment to Consultants/ Contractors Agency Monitoring/Coordination vodokanal: water supply and sanitation agency Reporting
Source: Asian Development Bank