A project should maximize sustainable revenues from all potential beneficiaries, and therefore the contracting agency should use the hierarchy of revenue sources when designing a project -
Hierarchy of Revenue
Maximize sustainable revenues from service beneficiaries. Those who receive a service, or a be�er service, should pay for it. Sustainable means that the tariffs are progressive in nature and affordable for users and the contrac�ng agency, and that the users are willing to pay proposed tariffs. First:-
Capture part of the land value increase. This can be achieved through taxa�on, property development levies, contribu�ons, and several other mechanisms. Second:-
Maximize sustainable commercial revenues. Smart city services should be used to create addi�onal economic opportuni�es and improve exis�ng economic ac�vi�es. Third:-
Finally, only then should public money be used as project revenue or public guarantees to enhance project viability, and only where that public support represents VFM for
the government, the community, and the economy. In summary, the project will be vulnerable if the private partner makes too li�le or makes too much.
- failure to mobilize enough revenue will make it difficult or impossible to attract private partners for Smart Cities, there will also be sensitivity to private companies making too much profit from such initiatives -
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| Malaysia Smart City Outlook 2021 - 2022
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