Costing and Financing of Land Administration Services (CoFLAS) – Moving to Piloting Stage

By Tony Burns, Kate Fairlie, Solomon Haile

CoFLAS: Rationale

• All well established LAS have evolved over long periods

• Policy-makers in developing countries aiming for ‘modern’ systems in shorter timeframe

• LAS reform projects typically have long timeframe, large investment

• Governments and DPs need to prioritise their investments

Stated Objectives for CoFLAS

• Develop a useful and practical methodology (tool) whereby the costing and financing of land administration services in developing countries can be reformed and modernized with a view to enabling the agencies provide cost effective, efficient, sustainable and affordable services.

• The methodology, where appropriate and through incremental process, ought to lead to some kind of cost recovery, but without compromising quality of services provided and limiting access to services especially of the poor and vulnerable.

Scope of CoFLAS as Designed

• Focussed on developing countries:‒ Developing comprehensive LAS‒ Operating and maintaining LAS

• Intended tool for:‒ Land sector staff preparing proposals for LAS reform‒ Policy-makers assessing proposals for LAS reform‒ Key agencies (e.g. MoF), development partners in reviewing proposals,

assessing ‘value-for-money’• Focuses on formal end of continuum of rights

‒ But considers steps to ensure that LAS is affordable and accessible• The key decisions that have major cost implications for LAS reform

‒ Underpinned by “Fit-for-Purpose” LA

Development Process for CoFLAS

• Preliminary investigation by Lantmäteriat in 2011• Desk and literature review early in 2013• Preliminary discussions with DG/SGs in Abuja in May 2013• EGM in Rotterdam in May 2013

‒ questionnaires and country case studies• Piloting and refinement of questionnaires > data gathering• EGM in Sweden in October 2013 > Clarification of scope• Preparation and review of draft report in May/June 2014• Presentation in FIG 2014 > DG/SG, GLTN session• Validation workshop in Bangkok October 2014• Pilots and refining of tool

Information for Design of CoFLAS

• Literature review, desk survey of project experience • Detailed questionnaire prepared and tested• Data gathered from a range of countries:

‒ Albania‒ Denmark ‒ Georgia‒ Lesotho‒ Netherlands ‒ New Zealand‒ Norway‒ Peru‒ Sweden ‒ Thailand

6 Tool Development

CoFLAS Report

CoFLAS Implementation Stages

Stage 1: Context for LAS Reform

Gathering the following information:• Key policy issues that impact on establishing a LAS in the country• Information to estimate the number of properties• Analysis of existing records of rights in land• Preparation of a tenure typology• Preparation of an Institutional Matrix• Business process re-engineering and service delivery• Demonstration of knowledge of:

‒ the key issues, ‒ the status of stakeholder consultation, ‒ other government initiatives and ‒ existing development partner support.

Stage 2: LAS with Broad Geographic Cover

Establishing an LAS with broad geographic cover typically involves:• Completing first registration• Establishing a spatial framework for LA• Establishing physical infrastructure to support LAS• Adopting a service delivery philosophy & BPR• Implementing ICT to support LAS• Capacity development• Project management

CoFLAS: Comprehensive LAS

• Likely unit costs for systematic registration:‒ Adjudication with substantial work by local volunteers and with

no spatial framework for $1/parcel‒ Systematic registration can be undertaken for:

about $9-10/parcel with little investment in mapping/GRN about $15-20/parcel with investment in mapping/GRN

‒ Ground survey methodology is likely to be +$50/parcel• SR also involves HR - ~50 parcels/person month• Conversion - ¢ > $ /parcel – needs to be cost effective

Stage 2: Comprehensive LAS

Staff requirements for LAS service delivery will depend on: • How LAS services are to be delivered and roles and

responsibilities• The nature and complexity of the LAS processes and procedures• The tasks that are expected of staff assigned to LAS service

delivery• The completeness and comprehensiveness of the LAS records • The level of land market activity, user demands (may be

seasonal)

Stage 2: Comprehensive LAS

CoFLAS specifies the physical infrastructure and staffing as follows:• The number of offices providing registration and/or survey/cadastre

services and the estimated number of properties covered by each office

• The estimated maximum number of staff in each office based on an assessment of the: ‒ the number of registration staff required to support 100,000 properties; ‒ the number of survey/cadastre staff required to support 100,000 properties; and ‒ the level of management/administration/other non-technical staff required

• The office space for staff, customer service area and records archive• An estimate for vehicles, furniture and non-ICT equipment• An estimate for ICT software, hardware, maintenance

Stage 2: Comprehensive LAS

Stage 3: Cost of Running LAS

Stage 3: Cost of Running LAS

Stage 4: Revenue from LAS

• Possible sources of revenue to government:‒ Annual property taxes

Effective identification of properties and assessment of taxes Efficient collection of taxes

‒ Transaction taxes, fees and charges Need to balance affordability with cost

‒ Sale/licensing of data/information Can limit use of LAS data for NSDI and SEG

Stage 4: Revenue from LAS

CoFLAS tables provide basis for estimating:• Annual taxes (land properties, condominiums)

• Transaction taxes and duties‒ Range of market conditions (property turnover 3% to 10%)‒ Expected fees for registration (fixed, ad valorem – range of %)‒ Expected revenue by transaction (transfers, mortgages, other)‒ Summary tables of expected annual revenue based on

average values (urban properties, rural properties, condominiums)

CoFLAS: Financing LAS

• Governments with development partner support can fund the development of LAS – but the maintenance/operations need to be sustainable

• Possible strategies for financing LAS:‒ Full funding by government as a public service‒ Setting fees and charges to fully or partially recover the cost of

providing LAS services‒ Transferring core parts of LAS delivery to others such as local

government or private sector service providers‒ Separating the regulatory and service provision LAS functions > PPP

CoFLAS: Next Steps

• Need complete the internal review• Pilot CoFLAS in 1-2 countries (started in Tanzania, discussing with

Lesotho, Uganda)

• Refine tool in light of experience• Broaden tool, perhaps in:

‒ Broader range of tenure types (crowdsourcing, STDM, etc)‒ Include planning‒ Broaden and elaborate the financing options