Business Policy

THE URBAN UNIT

URBAN SECTOR PLANNING & MANAGEMENT SERVICES UNIT (PVT.) LTD

SUBMITTED TO SIR. MUBASHER NAZIR

 Theme of the Project

The theme of the project is to elaborate the Business Policy of Government owned
Organization named as The Urban Unit (Holistic Solution with Integrated Development)

How a Project Management Unit (PMU) which was totally financial dependent on
Government of the Punjab
(transformed)
into a for-profit Company generating Own Source Revenue
PMU Cost for 6 Years Rs.557,568,947/-
and
Cumulative Revenue for 3 Years Rs.1,446,887,995/-
 The Urban Unit
Introduction

 Establishment of Urban Sector Policy & Management Unit (The

Urban Unit) was established as a Project Management Unit (PMU)
in November 2005,
 Under the administrative control of Planning and Development
Department, Government of the Punjab.
 Started its operation in April, 2006.
 Transformed into private company limited by shares under the
Companies Ordinance 1984 on June 18, 2012.
 Planning & Development Department

 The Planning and Development Department, Government of Punjab, is the Principal

Planning Organization at the provincial level.
 Coordinates and monitors Development Programs and activities of various
departments of provincial government.
 Provincial Development Working Party (PDWP) is a competent forum to approve all
development projects/programs of the province.
 Preparation & Formulation of overall Medium Term Development Framework
(MTDF) and Annual Development Program (ADP) for developmental activities in the
province.
 Main actor in the growth of economic potential of the province.
Core Objective for the Establishment
of Urban Unit as PMU

 To provide technical assistance to P&D Department & other departments like LG&CD,
HUD&PHE and Transport Department & allied agencies like LDA, FDA, MDA, RDA & GDA on
Urban issues.
 The area of expertise including Urban Planning & Land Management, Urban Transport, Solid
Waste Management, Water & Sanitation, Municipal Finance and Geographical Information
System (GIS) etc.
 2nd The GoPb was negotiating with the World Bank a US$ 300 million Development Policy
Loan (DPL) for improvement of urban infrastructure and service delivery in the five large cities
Lahore, Gujranwala, Multan, Rawalpindi and Faisalabad.
 In line with the vision 2020 of the Punjab Government, which envisages tapping the economic
potential of the large cities and turning these into engines of economic growth.
Defining General Strategic Formulation!
Transformation of PMU into Pvt. Limited Company

 1st Phase: Established Core Competencies on Urban Issues

 2nd Phase: Provided Technical Assistance for the establishment of

different Government Entities

 3rd Phase: Opportunities to Establish Self-sustained Business Unit

 Defining General Strategic Formulation!
1st Phase: Established Core Competencies

Worked on various projects in collaboration with different government departments and organizations to provide
research-based informed policy options for bringing improvement in urban sectors.
 Establish a world class GIS-based information system equipped with the latest hardware and software components
and a team of highly qualified professionals.
 This system served as a basic platform or backbone of data management, asset management, planning, M&E,
administration and execution of e-governance in the Punjab and ultimately the entire Country.
 Developed a broad structured skeleton of multi-user, multi-layered and enterprise level spatial database of entire
Punjab under the brand name of Iris Punjab.
 Executed the project of scanning and digitization of land record as part of a complete Spatial Database Infrastructure
(SDI) of entire Punjab in collaboration with the Board of Revenue, PITB and PDMA.
 A mobile GIS unit also been made for this purpose which was inaugurated by the Chief Minister, Punjab on
November 2, 2011.
Defining Strategic Formulation!
1st Phase! Established Core Competencies

 Computerization of Urban Immoveable Property Tax (UIPT) System in collaboration with

Excise and Taxation Department in Sialkot as Pilot Project which enhanced the 25% revenue
collection of E&T.
 Provided technical support in the execution of solid waste management projects in Lahore,
Gujranwala, Faisalabad and Rawalpindi etc.
 Carried out different foreign assisted development projects in collaboration with donor
agencies like World Bank (WB), Asian Development Bank (ADB), Japan International
Cooperation Agency (JICA), United Nations Development Program (UNDP), and others.
 Drafting of Laws, Rules, Bylaws, Codes and Guidelines
 Assistance to Government entities in interpretation and implementation of Punjab Land
Use Rules 2009
 1st Pakistan Urban Forum 2011 (1st March to 5th March) at Al-Hamra Art Council, Lahore.
Defining Strategic Formulation!
2nd Phase: Technical Assistance for the Establishment of
Govt. Entities

Provided a platform to a number of public and corporate entities not only the GoPb as well as
other provincial governments for capacity building and better planning & decision making.
 The Directorate of Urban Policy & Strategic Planning within P&D Department, Government
of Sindh, Karachi
 Urban Policy Unit within P&D Department, Govt. of Khyper Pakhtunkhwa, Peshawar
 Lahore Transport Company (LTC) under Transport Department
 Lahore Waste Management Company (LWMC) under LG&CD Department
 Punjab Land Development Company under HUD&PHE Department
 Quaid-e-Azam Solar Power (Pvt.) Ltd under Irrigation, Power & Energy Department
 Punjab Saaf Pani Company (PSPC) under HUD&PHE Department
 Defining Strategic Formulation!
3rd Phase: Opportunity to Establish a Self-sustained Business Unit

Gained strong competence in this field through which it can earn revenue; however, functioning in
the mode of PMU had certain limitations
Limitations as PMU provided an opportunity to grow
 Being a PMU, it can’t sell its services or enter into a profit making agreement with other entities like
federal, provincial and local governments, private organizations, foreign governments and
international agencies etc.
 PMU does not have perpetual existence, so in the existing arrangement it is not possible to make long
term planning, or to embark upon long term projects / agreements due to having a temporary
formation.
 Limited functional independence under PMU set up which is a great hurdle in smooth execution of
different projects / agreements.
 PMU being a typical public sector set up does not support working in a corporate mode which is
essential to cope with modern organizational challenges and developing synergies with national and
international organizations.
 Urban Unit as for-profit Company

 In 2012, the PMU underwent significant transformation and converted into an

independent for-profit company named as “Urban Sector Planning & Management
Services Unit (Pvt.) Limited” (hereinafter referred to as “the Urban Unit”), registered
with the Securities and Exchange Commission of Pakistan (SECP)

 The core objective of the company is to facilitate government-run agencies, private

entities and donor agencies with reliable and legitimate technical advisory services.

 The aim is to achieve socio-economic goals in public servicing as cities become engines
of growth
 Board of Directors

Transformed into a for-profit private limited company under the Companies Ordinance, 1984
wholly owned by the Planning and Development Department, GoPb, which comprise six
directors at present.
 Chief Executive Officer (Ex officio) Dr. Nasir Javed (PAS-21)
 Representative of P&D Department not below the rank of Additional Secretary
 Representative of Finance Department not below the rank of Additional Secretary
 Three independent Professionals as nominated by the Government.
The Government nominated
Nayyar Ali Dada-Renowned Urban Architect
Ahmed Raffay Alam-Environmental Lawyer & Activist
Dr. Ali Cheema- Head of Economics Department-LUMS
 Vision

Redefining Urban Settlements to make socially cohesive and

economically sustainable communities and when the future
historian would reflect on the history of the cities in Pakistan,
there will be clear demarcation of “Cities before the Urban Unit
and Cities after the Urban Unit”.
 Mission

The mission of the Urban Unit is to effectively full fill its role as Punjab
Government’s core urban research and policy management unit by
efficiently managing resources and providing optimal quality services that
shall result in sustainable urban development leading to improved quality
of life for the people of Punjab.
 Operating Principles

Commitm Open
Creativity ent to Integrity
Communi Motivation Improvem
& Quality caiton & & ent &
&
Accounta
of Team Inspiration Projects
Innovation bility
Service Work
 Urban Unit Geographical Presence

Our Geographical Presence

Urban Unit has a geographical presence in six major cities of Punjab:
 Lahore (Head Office)

 Rawalpindi

 Faisalabad

 Multan

 Gujranwala

 Gujranwala
 HUMAN CAPITAL (MAJOR SOURCE OF EARNING)

Categories Grades Designation(s) Salary Slabs

The Unit recruited highly qualified and experienced C-I Chief Executive Officer
Corporate Staff CII CFO, CIA & Company
professionals who work to attain the best possible
Secretary
outcomes for clients, in the field of management
services. P-I Senior Specialist
P-II Specialist
To date, human capital has expanded upto 375 plus Professional
P-III Senior Analyst
Staff
employees. P-IV Research Analyst
P-V Research Associate

A-I Senior Manager

A-II Manager
Administrative A-III Assistant Manager
Staff A-IV Office/Assistant
A-V Support Staff (Drivers,
Office Boys, etc)
 HR Strategy
The urban unit’s HR strategy is aligned with the organization’s vision, mission, values and goals. In developing the
corporate strategy the approach is to begin by addressing three key strategic questions:
• Where are we now?
• Where do we want to be?
• How do we get there?
HR is a critical area to help the organization and we do relevant to our corporate objectives. Our human resources also
have to two others questions in developing such a strategy:
• What kinds of people do we need to manage and run our business to meet our strategic business objectives?
• What people programs and initiatives we must design and implement to attract, develop and retain staff to
compete effectively?
In order to answer these questions four key dimensions of organization have been identified. These are:
• Culture: the beliefs, values, norms and our management style
• Organization: the structure, job roles and reporting lines of the organization
• People: the skill levels, staff potential and management capability
• Human Resources systems: the people focused mechanisms which deliver the strategy – employee selection,
communications, training, rewards, career development, etc.
 SECTORAL DIVISION IN THE URBAN UNIT

 Urban Planning, Architecture and Transport  Institutional Development

 Information & Communication  Capacity Development
 Geographical Information System  Municipal Finance & Economics
 Management Information System  Monitoring & Evaluation
 Environment Management  Knowledge Management
 Solid Waste Management
 Water & Sanitation
 Social & Environmental Safeguards
 On-Going Key Projects

 Punjab Cities Governance Improvement Project (PCGIP) in five large districts of the Punjab
funded by the World Bank (WB) US$ 9.000m equivalent to Rs.900m
 Development of Eco-Tourism in Soon Valley at Khabeki & Uchalli Lakes (TDCP) Rs.191.857m
 Pre-feasibility Study for New City & Industrial Development Along Motorway (M-2) Rs.139.734 m
 Conservation & Restoration of Government House Murree Rs. 430.675m
 Segregation, Treatment & Disposal Plant Facility for Sahiwal Rs.148.690m
 GIS Based Survey and Land Demarcation of Pakistan Railways funded by the Government of
Pakistan Rs.375m
 Third Party Validation (TPV) of Khadam-e-Alla Road Programme Rs. 20.000m
 Third Party Validation (TPV) of Bricks Klin (Bhatta) Rs.60.000m
 Executed Projects

 Establishment of Intelligent Transportation System (ITS) and Command & Control Centre for
Metro Bus System of Lahore Rs.551.826m
 GIS Based Survey & Computerization of Urban Immovable Property Tax (UIPT) in five large
districts of the Punjab funded by Government of the Punjab through Excise & Taxation
Rs.683.116m
 Restoration of GPO Building Murree funded by the Government of Pakistan Rs.65m
 Third Party Validation (TPV) of Flood Affected Districts of the Punjab 2014
 Management Information System of Public Sector Infrastructure in Flood Affected District of
the Punjab 2014
 Automation of Wheat Procurement System of Tehsil Dunyapur
 Services for GIS Development & Digitization of Maps (Distt. Lahore, Hafiizabad & Lodhran)
LRMIS under Board of Revenue, Govt. of the Punjab
Implementation of Porter’s Five Forces
Model on Urban Unit (Model)
 Force Key Determinants Strength of the force
Rivalry between competitors Concentration (number) and size of competitors – Few Competitor Low to Medium
NESPAK & PITB etc.
Brand identity – Well Established
Threat of New Entrant Economies of scale – Urban Unit Maintained Low to Medium
(Barrier to entry)
Brand identity - Established
Capital requirements - Needed
Threat of substitutes Price/Performance of substitutes – Data Respiratory Low to medium

Switching costs
Buyer Power Buyer concentration – Enhancing Govt. Capacity Medium to high

Buyer size (volume) – A lot Development Projects

Switching costs – Private consultant charge high

Supplier Power Supplier concentration – Human Capital Medium to High

Supplier size (volume) – Few Experts in Pakistan

Switching costs – Takes a lot to retain talent

SWOT Analysis
Strength: Weaknesses:

1. Ownership of P&D Department, GoPb (A Gateway to undertake 1. Government does not provided Grant-in-Aid or budgetary support
business activities with Govt. entities) 2. Draining financial resources due to higher investment on various
2. Human Capital on-going mega projects and lengthy legal & procedural
3. Core Solution of all Urban Issues requirements on the part of Government for issuance of requisite
4. GIS, IT, ICT and MIS Infrastructure and Data Bank funds
5. Experience of Handling various mega projects 3. More focus on availing new projects and Less focus on execution
6. Exposure of working with International Organizations of on-going projects
7. Affiliation with multiple national, international organizations as well 4. Lack of Resource Planning of on-going projects
5. Undertaking different ventures of Govt. free of cost
as research institutions and academia
6. Appealing favoritism rather than equal opportunities

Opportunities: Threats:

1. A lot of on-going development projects in the Government which 1. Change in policy and procedures with change in higher level
require services, being provided by Urban Unit only. bureaucracy
2. May take projects in other provinces due to having prior 2. Overburden due to excess recruitment and poor performance
experience appraisal system (Monthly payroll is more than 30 million)
3. More involvement of International Donor Agencies for 3. Heavy imposition of taxes by the Federal (WHT) & Provincial (PRA)
Development Projects with whom Urban Unit is having previous Government.
work affiliations (World Bank, ADB, JICA, USAID, DFID etc) 4. Less prices are being offered by its competitor (PITB) for similar
type of IT services
5. Increasing cost of keeping expert human resource
 Comparing Financial positions of PMU with a Transformed
Company / Business Unit Financial Position as PMU

FINANCIAL YEAR WISE FUNDS POSITION OF URBAN UNIT AS AT 30-06-2012

(Amount in Rs.)
Funds Funds Balance %age of
Sr.
Financial Year Released Utilized Un-Spent Utilization
No.
A B C D=(Bx100/A)

1 2005-06 17,568,000 16,770,743 797,257 95.46

2 2006-07 52,709,000 37,395,615 15,313,385 70.95
3 2007-08 54,170,000 49,460,306 4,709,694 91.31
4 2008-09 74,078,000 57,998,029 16,079,971 78.29
5 2009-10 92,034,000 79,902,157 12,131,843 86.82
6 2010-11 97,695,000 91,828,400 5,866,600 93.99
7 2011-12 95,000,000 89,506,863 5,493,137 94.22
Total :- 483,254,000 422,862,113 60,391,887 87.50

Total Project Cost 557,568,947

Funds Released 483,254,000
Funds Utilized 422,862,113
Un-spent Balance 60,391,887
%age of Utilization 87.50
 Financial Position as Company
URBAN SECTOR PLANNING AND MANAGEMENT SERVICES UNIT (PRIVATE) LIMITED
PLANNING & DEVELOPMENT DEPARTMENT, GOVERNMENT OF THE PUNJAB
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2015

Cumulative (3-Ys) F.Y 2014-15 F.Y 2013-14 F.Y 2012-13

Rupees Rupees Rupees Rupees

Project Revenue 1,446,887,995 430,051,351 446,973,673 569,862,971

Project Expenses (1,092,815,035) (310,248,061) (359,058,748) (423,508,226)

Gross Profit 354,072,960 119,803,290 87,914,925 146,354,745

Operating Expenses

Administrative Expenses (268,131,256) (82,262,516) (74,849,866) (111,018,874)

Finance Cost - Bank Charges (293,399) (138,616) (145,512) (9,271)

Other Operating Expenses (9,850,692) (137,500) (3,166,195) (6,546,997)
Other Income 16,811,205 2,925,386 2,811,668 11,074,151

Profit before Taxation 92,608,818 40,190,044 12,565,020 39,853,754

Taxation (9,939,815) (3,149,178) (3,396,812) (3,393,825)

Net Profit for the Year/Period 82,669,003 37,040,866 9,168,208 36,459,929

KEY FINANCIAL RATIOS ANALYSIS (PROFITABILITY RATIOS)

Gross Profit Margin % G.P*100/Revenue 27.86 19.67 25.68

Net Profit Margin % N.P*100/Revenue 8.61 2.05 6.40
Return on Total Assets % N.P*100/T.Assets 6.53 2.38 10.75
Return on Total Equities % N.P*100/T.Equities 37.53 14.87 69.45
 URBAN SECTOR PLANNING AND MANAGEMENT SERVICES UNIT (PRIVATE) LIMITED
PLANNING & DEVELOPMENT DEPARTMENT, GOVERNMENT OF THE PUNJAB

BALANCE SHEET AS AT JUNE 30, 2015

2015 2014 2013 2015 2014 2013

Rupees Rupees Rupees Rupees Rupees Rupees
EQUITY AND LIABILITIES ASSETS

Share Capital & Reserves Non Current Assets

Authorized Share Capital Property, Plant & Equipment 143,237,493 100,546,642 59,256,465
1,000 Shares of Rs.10,000 each 10,000,000 10,000,000 10,000,000 and Other Tangible Assets

Issued, sub. & paid up capital

1,000 Shares of Rs.10,000 each 10,000,000 10,000,000 10,000,000
Capital Reserve 6,037,484 6,037,484 6,037,484
Revenue Reserve 82,669,003 45,628,137 36,459,929
98,706,487 61,665,621 52,497,413

Current Liabilites Current Assets

Project Payables 285,018,061 213,535,322 280,853,980 Project receivables 313,719,725 223,677,510 230,132,546
Accured and Other Liabilities 179,221,747 105,266,137 2,565,049 Advances&Prepaid Expenses 33,348,953 20,674,314 19,412,311
Provision for Taxation 4,409,515 4,469,737 3,393,825 Cash and Bank Balances 77,049,639 40,038,351 30,508,945
468,649,323 323,271,196 286,812,854 424,118,317 284,390,175 280,053,802

567,355,810 384,936,817 339,310,267 567,355,810 384,936,817 339,310,267

 URBAN SECTOR PLANNING AND MANAGEMENT SERVICES UNIT (PRIVATE) LIMITED
PLANNING & DEVELOPMENT DEPARTMENT, GOVERNMENT OF THE PUNJAB

KEY FINANCIAL RATIOS ANALYSIS

2015 2014 2013 2015 2014 2013

Liquidity Ratios Leverage Ratios

Current Assets Total Assets

Current Ratio 0.90 : 1 0.88 : 1 0.98 : 1 Leverage 5.75 : 1 6.24 : 1 6.46 : 1
Current Liabilities Total Equities

Working Capital Total Debt

(44,531,006) (38,881,021) (6,759,052) Debt-to-assets 0.83 : 1 0.84 : 1 0.85 : 1
Current Assets - Current Liabilities Total Assets

Total Debt
Debt-to-equity 4.75 : 1 5.24 : 1 5.46 : 1
Activity Ratios Total S.H Equity

Average Collection Account Receivable Total equities

266 Days 183 Days 147 Days Equity Ratio 0.17 : 1 0.16 : 1 0.15 : 1
Period Total Sales/365 Days Total Assets

Revenue
Total Assets Turnover 0.76 Times 1.16 Times 1.68 Times
Total Assets

Revenue
Fixed Assets Turnover 3.00 Times 4.44 Times 9.62 Times
Total Fixed Assets
Strategy : A Way Forward
1.Corporate Level Strategy
1.Corporate Level Strategy
1.Corporate Level Strategy:Growth
1.Corporate Level
Strategy:Growth/Concentration
1.Corporate Level Strategy:Growth
2.Business Level Strategy:Miles & Snow Model
2.Business Level Strategy:Porter’s Generic
Competitive Model
SUMMARY: PROPOSED STRATEGY
PROPOSED STRATEGY
STRATEGY Corporate Level Grand Growth Concentration Market
Penetration
Market Across
Development provincial
boundaries,
Covering
private &
public entities
Product
Development
Integration
Diversification
Stability
Defensive
Business Level Miles & Snow Defender
Model Prospector
Analyzer Efficient & Innovative, Budget balancing, tough
sustainability
Reactor
Porter’s Differentiation Uniqueness, Multidiscipline
Competitive Model Low cost Economies of scale, Preferential access
Focus
Functional Level Marketing Required for market development, Customer awareness (B2B)
Finance
Human Capital Core competence, Resource based.
Production
R&D Changing environment, Innovation, To meet new challenges.
Picture Gallery of Urban Unit Projects
1st Pakistan Urban Forum 2011
1st Pakistan Urban Forum 2011
40’ Wheel Mounted GIS Mobile Unit of Urban Unit (Inaugurated on 2nd Nov.2011)
Establishment of Command and Control Center of
Metro Bus Lahore
Inauguration of GPO Murree (Conservation & Restoration)
Inauguration of GPO Murree (Conservation & Restoration)
Inauguration of Metro Rawalpindi (Potohar Station)
Khadim-e-Punjab Rural Roads Program
(Monitoring & Evaluation-TPV)
International Seminar on Business Opportunities
in Punjab
Launching Ceremony of Gender Parity Report and
Gender Management Information System (GMIS)
Book Fair Participation by Urban Unit
3rd Pakistan Urban Forum
Restoration & Up-gradation of Murree Mall Road