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ESTABLISHMENT OF ALLAMA IQBAL INDUSTRIAL

ESTATE (3432 Acres) NEAR SAHIANWALA


INTERCHANGE, M-3 MOTORWAY FAISALABAD
UNDER PPP MODE

Consolidated Feasibility Report


Ref: ELN18-V01-FIEDMC

August 2018

Prepared for,
Faisalabad Industrial Estate Development &
Management Company (FIEDMC)
Élan Partners (Pvt.) Ltd
Head Office:
4th Floor, 9 West Rizwan Plaza,
Jinnah Avenue Blue Area,
SectorF-6,Islamabad,Pakistan
Tel: +92 (51) 2272582-85
Fax: +92(51) 2272580

Peshawar Office:
2nd Floor, Azam Tower, Arbab Road Stop, University Road, Peshawar
Tel.: +92 (91) 5842009
Email: mail@elan.com.pk , Web: www.elan.com.pk

Lahore Office:
House # 39-C, Ahmad Block,
New Garden Town, Lahore. Telephone No: +92 (42) 35883839

International Office:
New Jersey
USA

Report disclaimer:
Élan Partners has prepared this document in accordance with the standard format for Faisalabad Industrial Estate
Development & Management Company (FIEDMC). Any other persons, companies, or institutions that use any information
contained herein do so at their own risk
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange M-3 Motorway,
Faisalabad

EXECUTIVE SUMMARY
E.1. Introduction
An industrial estate of area 3432 acres approx. is being established on M – 3 Motorway
near Sahianwala Interchange under Public-Private Partnership mode. The proponent
of this project is Faisalabad Industrial Estate Development and Management
Company.
This document in hand is the Technical Feasibility report of the proposed project. This
report narrates those technical points and design parameters based on which this
industrial estate will be deemed viable in real case scenario.
The industrial development in Faisalabad is taking place in between the urban in an
un-organized manner. With many industries operating within the urban areas, the
quality of life is deteriorating gradually. Faisalabad Industrial Estate Development and
Management company has taken up the task to relocate existing industries outside
the city premises to ensure a healthy life style for urban dwellers. In this regard,
FIEDMC already has established two industrial estates i.e. M-3 Industrial City and
Value Addition City outside city at fringes. In continuity of this agenda, FIEDMC has
initiated their third project of establishing another industrial estate covering an area of
3432 acres near Sahianwala Interchange. Unlike previous projects, this industrial
estate will be established under Public-Private Partnership Mode which will be
regarded as Pakistan’s first ever industrial estate to be established under this mode.
Faisalabad Industrial Estate Development and Management Company (FIEDMC) has
been set up by Government of the Punjab for deliberate, rapid and planned
industrialization. FIEDMC has created biggest mechanical settlement of nation along
Motorway M-3 which is probably going to fall inside China-Pakistan Economic
Corridor. Administration of FIEDMC now has expectation to build up an Industrial
Estate (Area 3432 Acres approx.) near Sahianwala Interchange M-3 Motorway
Faisalabad.
E.2. Project Description
The proposed Project is the development of an Industrial Estate near Sahianwala
Interchange M-3 Motorway Faisalabad Punjab Province. The territory of this bequest
is roughly 3432 Acres. This project is part of Punjab Govt. Program i-e:
"Implementation of Other Development Program (ODP) 2016-17. The project has
been conceived on the following lines:
a) A State of the Art Industrial Estate under Public Private Partnership on an area
of 3,000 acres at the moment and likely to extend in near future;

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange M-3 Motorway,
Faisalabad

b) Funds for land, infrastructure along with utilities and construction of Industrial
Units and allied facilities would be arranged under Public Private Partnership
mode;
c) Environmental and social compliance would be ensured by this project.
E.3. Legal Framework
Compliance with all the applicable laws and rules is very important to make the
business successful in long term. Rules change over the time and also depends upon
the territory in case of business expansion. Rules also depend upon the type of
business you are dealing in. In case of proposed industrial estate, the legal framework
is developed after literature review of following rules and acts;
i. Punjab Government Rules of Business 2011
ii. Special Economic Zone Act 2012
iii. FIEDMC Building Bylaws
iv. FIEDMC Bylaws for VAC and M – 3 IC
v. National Reference Manual
vi. TMA Rules and Regulation
E.4. Contribution of Industry in Economy
The industry is the second largest sector of economy. This sector mainly comprises of
the textile industry, engineering and goods industry, agro based industry, chemical
industry and small & medium enterprises. This sector provides employment
opportunities to 15.3 percent of the total labor. The GDP growth rate is 5.7% according
to World Bank report.
i. Textile Industry
Pakistan has an inherent advantage of being 4th largest producer of cotton in
the world with a huge potential to further increase crop yield. The sector
contributes nearly one-fourth of industrial value-added and provides
employment to about 40 percent of industrial labor force. Barring seasonal and
cyclical fluctuations, textiles products have maintained an average share of
about 62 percent in national exports.
ii. Sugar Industry
The sugar industry is the second largest agro based industry after textiles.
Pakistan is an important cane producing country and is ranked at fifth in terms
of sugar cane crop acreage and 9th in sugar cane production. The share of
sugar industry in value added of agriculture and GDP are 3.2 and o.7 percent
respectively. The sugar sector constitutes the 4.2 percent of manufacturing.
iii. Cement Industry
Cement dispatches reached historic heights in March 2017 touching almost 4
million tons as the factories utilized their full production capacity to meet robust

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Faisalabad

demand in the local market. The ever increasing domestic market has
vindicated the manufacturers thrust on adding new capacities.

iv. Fertilizer Industry


The fertilizer industry is an integral part of Pakistan’s economy. The Pakistan
fertilizer industry produces imports and distributes various types of fertilizers.
The government has pursued a policy of supporting the industry in the form of
feed gas subsidies, GST relaxation and increasing support prices for
commodities. There are ten urea manufacturing plant, one DAP, three NP,
three SSP, two CAN and one plant of blended NPKs having a total production
capacity of 8,983 thousand product tons per annum.
v. Sports Industry
Sialkot is internationally known as a producer of good quality products in sports,
surgical instruments, leather garments, gloves & accessories, sportswear and
musical instruments. Around 400,000 plus people are engaged directly or
indirectly with export activities. Annual export earnings of the city are around
US $ 1 Billion. Sports goods sector is the main export sector of the city with
total exports of US $ 450 million per annum.
vi. Telecom Industry
Telecom sector is playing a pivotal role in the economy of Pakistan in terms of
providing employment, contribution to national exchequer through taxes and
attracting foreign investment in the country. In the liberalized environment,
telecom share in GDP of Pakistan has increased to 1.9% from mere 1.5% three
years back.
This sector mainly comprises of Large Scale Manufacturing (LSM) with 80% share in
Manufacturing and 10.7 % in GDP. The Small Scale Manufacturing (SSM) accounts
for 1.8% in total GDP and 13.7% contribution share in manufacturing. The third
component of the sector is slaughtering (food processing industry) and accounts for
0.9% in total GDP and 6.7% share in manufacturing
E.5. Physical Planning of Industrial Estate
The Industrial estate is designed under the concept of Industrial mix instead of rigid
zoning. The zoning is avoided to keep the things open and flexible on the one side.
On the other side this flexibility will allow to maintain material chain of any particular
industry in its close proximity.
E.5.1 Land use Distribution and Type of Industry
The eastern portion is given the name of Small & Medium Industry. This block will
accommodate industries of small and medium sizes. The plot size of this block ranges
from 1 acre to 3 acres. The plot size of 1 acre will be suitable for small size industry

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange M-3 Motorway,
Faisalabad

while the plot sizes of 2 and 3 acres will cater for the development of medium size
industry.
The western block of the industrial estate has been given the name of Medium &
Large. This block will be comprised of industries of medium and large scale. The plot
sizes in this block is planned as 4 acres and multiple of 4 acres. However, in case of
area constraint, plots of sizes other than multiple of 5 i.e. 5 acres and 10 acres are
also given. The plot size of 4 acres will be available for medium size industry while plot
sized bigger than 4 acres will be utilized to establish industries of large scale. The
percentage of land uses is given in table below;

Schedule of Land Uses

Sr. No. Land Use Area (Acres) Percentage (%)

1 Saleable Industrial Area 2402 70%

2 Saleable Commercial Area 172 5%

3 Non-Saleable Area 858 25%

Grand Total 3432 100%

E.5.2 Amenities
Provision of services and utilities has been ensured by designing 3 Community Cores
and 6 services area. The community cores have been designed keeping in view all
sorts of work force needs. These community cores are planned at reasonable
distances making them readily accessible throughout the industrial estate. The
community core 1 will features following services;
E.5.2.1 Services in Community Core-I (CC-I)
i. FIEDMC office
ii. Jamia Mosque
iii. Hospital
iv. Central Weigh Station
v. Security Office
vi. Labor Club
vii. Ladies Club
viii. Open space
ix. Commercial area
The Community Core II and III will feature labor club and ladies club, open space and
commercial area but main hospital and jamia mosque will not be provided. Labor club

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange M-3 Motorway,
Faisalabad

and ladies club in community cores 2 and 3 will features internal space specified for
hospital/dispensary and prayer area. Apart from this, each community core 2 and 3
have space reserved for future development as well.
Recreational activities are of prime importance for healthy environment, which
ultimately enhance the working capacity of the workers. Keeping in view the
requirements of the project, Three Labor Clubs and Three Ladies Clubs (one in each
CC measuring 4 acres) have been proposed.
E.5.3 Utilities
The proposed industrial estate will provide following utilities to the industrialists;
i. Electric Supply System
ii. Water Supply System
iii. Combined Effluent Treatment Plant
iv. Solid Waste Disposal/Land fill site
v. Gas Distribution Centre
vi. Fire Fighting System
vii. Utility lines for electric, water, sewerage, gas and phone to be provided in
services corridor underground
E.5.3.1 Electric Power Supply
The main electric power supply moves along the adjacent M3- Motorway which
originates from the Liberty Power Plant. The liberty power plant touches the northern
boundary of the project site. Ascertaining the source location of the electric power
supply, the grid stations of the proposed industrial estate have been aptly placed at
multiple points.
E.5.3.2 Sewerage/Drainage System
The drainage system will be covered by the seepage drain which already exists in the
project site. The seepage drain flows across the project site and ultimately ends at the
main drain/nala Gojra Nala. Keeping in view the flow pattern of effluent and slope of
the site, the Combined Effluent Treatment Plant has been placed at the location which
is converging point for effluent flowing across the site area.
E.5.3.3 Water Supply System
The water requirements will be fulfilled by installing tube wells near RB canal. The
canal RB branch is present at mere a distance of 7.07 Km. The RB canal distributary
originates Chattan da Chak 145 and touches the southern boundary of M3-IC.
E.5.3.4 Natural Gas Supply System
The main natural gas supply line is present on the Chiniot-Jhumra road. The already
established M3 – Industrial City has taken input from this gas line through a SMS

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange M-3 Motorway,
Faisalabad

station located at the entrance point of the industrial estate. In case of proposed
industrial estate, the extension of gas supply line is quite viable because this SMS
station is only 1.76 Km away from the project site.
E.5.3.5 Solid Waste Management System
In case of proposed industrial estate, two types of solid waste will be generated. i.e.
Industrial waste and Municipal waste. The collection of both types of the wastes will
be done via centralized collection system. in case of industrial waste collection,
collection task will be assigned to a contractor after legitimate licensing process. In
case of municipal waste, door to door collection will be carried out. The recyclable
wastes will be recycled and rest of the collected waste will be taken to proper disposal
site present in the nearby vicinity of Faisalabad city.
E.5.3.6 Fire Fighting System
A well-equipped and pressurized water distribution system which will comprise of
pipes, hydrants, gate valves etc. has been proposed which will use water requirement
of 4000 gallons.
E.6. Sustainability and Performance Indicators
The projects which are socially acceptable, economically viable and environmentally
sound can achieve the sustainability. The proposed industrial estate will be made
sustainable economically, environmentally and socially through given below program;
E.6.1 Environmental Sustainability
The environmental sustainability of the proposed industrial estate will be ensured by
opting following parameters;
i. Sustainable use of natural resources (energy, water, resources)
ii. Reduction of emissions (air, water, ground, underground, noise,
electromagnetism)
iii. Reduction in waste production
iv. Sustainability for goods and people
v. Quality and diversity of habitat and landscape
E.6.2 Social Sustainability
The social sustainability of the proposed industrial estate will be ensured by adopting
following parameters;
i. Improvement in the working conditions
ii. Education and Training
iii. Reinforcing cultural identity and area’s vocation
iv. Equity, solidarity and social cohesion

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange M-3 Motorway,
Faisalabad

E.6.3 Performance Indicators


Key Performance Indicators have been set to check the performance of the Industrial
Estate. These indicators help to check the success rate of project. These indicators
also help to make decisions to maintain the direction of project in order to gain
maximum output.
E.7. Financial Feasibility
The industrial estates usually require sizeable up-front capital investment in
infrastructure. However, in case of proposed industrial estate, adequate infrastructure
facilities are present in the vicinity because of existing M3 – Industrial City. Therefore,
mediocre upfront investment is required. Although operating costs tend to be lower for
environmentally friendly infrastructure, but up-front costs may be greater. Total up-
front costs will be driven, to a large extent, by the types of green features.
Given the current state of infrastructure (i.e., roads, water and sewer coverage, energy
transmission), it is likely that a reasonable amount of new and expanded infrastructure
will need to be put in place as a prerequisite to situating an industrial estate in the
identified area. Water supply, wastewater treatment and energy provision are the
largest cost contributors. Requirements of these are also the most variable as these
depend on industry type to be established. Therefore, financial feasibility is prepared
on the basis of certain assumptions and it will hold good only in case the assumptions
sustain. However, due flexibility is provided while allocating the areas for these utilities
and proposing the capacities so that unforeseen variabilities can be adjusted in next
20 years. The expected cost as per estimates is 29.9 billion.
E.8. Revenue Generation
The proposed industrial estate will generate two types of revenue.
i. One-time revenue through plot selling
ii. Continuous revenue through maintenance charges and other means
E.8.1 Industrial Plots
Two types of industrial plots are designed. Plots for Medium and Large industries and
plots for small and medium industries. The price of both types of plots starts from 10.50
million PKR to 45 million PKR per acre for local investment scenario and for CPEC
investment scenario, the price starts from 14 million PKR per acre to 18 million PKR
per acre for both types of plots.
E.8.2 Commercial Plots
The development cost of commercial plots will be same as industrial plots. However,
the profit ratio of commercial plots will be doubled as compare to industrial plots.

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange M-3 Motorway,
Faisalabad

E.8.3 Sale of Amenity Plots


Some amenity plots like petrol pump, weighing station etc. can be sold at appropriate
rates.
E.8.4 Continuous Revenue
This revenue is recurring in its nature. It includes; title transfer fee, possession fee,
scrutiny fee of building plan, conservatory charges and miscellaneous revenue.
E.9. Cost Estimation
In case of development and infrastructure projects like proposed industrial estate,
following major costs are involved;
i. Land cost
ii. Development Cost
iii. Operational Cost
E.9.1 Land Cost
After finalization of site for the proposed industrial estate, information has been
collected from the respective revenue department about the land price. As of now, the
land price set for each acre of land is 2 million PKR.
E.9.2 Development Cost
The table gives the estimated costs likely to be occurred on developing services in the
proposed industrial estate. The total estimated development cost for propose industrial
estate comes out to be 21,950 million and per acre development cost comes out to be
approximately 6.39 million.
Sr. No Cost Type Amount (PKR)
1 Electrical Works 4,067,430,814
2 Street Lights 497,484,268
3 Water Works 4,651,943,427
4 Sewerage System 4,314,106,532
5 Solid Waste Management 394,680,000
6 Road Works 4,818,435,211
7 Main Gate and Boundary Wall 282,912,659
8 Utility Connections 500,000,000
9 Other Costs (Community Core I, Parks etc.) 2,423,420,285
Cost Per Acre 6,395,778
Total Cost 21,950,413,196
i. Electrical Works
The proposed industrial estate will use a power demand of 374.3 MW. Initially the
power supply is proposed to be taken from nearby grid station through 11kV feeder to
start construction works in the Industrial Estate (3432 acres). It is assumed that the
power will be provided by Faisalabad Electric Supply Company (FESCO). The source

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange M-3 Motorway,
Faisalabad

location of the electric power supply to the project area will have to be
identified/connected at later stage of electrical designing.

ii. Street Lights


A total of 5784 street lights will be installed in proposed industrial estate. The street
lights will be of multiple types.

iii. Water Works


The proposed industrial estate will function in shifts with each shift featuring about
36666 labor force. The water requirement of this labor force come out to be 1837330
gallons with additional 4000 gallon reserved for fire-fighting system.

iv. Sewerage System and Drainage


A comprehensive sewerage system consisting of 4 type segments of drain with sturdy
slab cover is designed for proposed industrial estate. This sewerage system will
circulate through whole industrial estate and collect the sewage. After collection, this
sewage will be ultimately transferred to Combined Effluent Treatment Plant for
processing. After treatment, the sewage will be disposed of in the near Gojra Nala.
The estimated cost of sewerage and drainage system comes out to be 4314 million
PKR
v. Solid Waste Management System
Proper solid waste management system will be established for collection,
transportation and disposal of all sorts of waste industrial, commercial, municipal,
hospital. The estimated cost for solid waste management system comes out to be 394
million
vi. Road Pavement
The proposed industrial estate characterizes a very comprehensive road network. The
road network has been designed by keeping in view the current and future needs. The
designed road network also justifies the easy maneuvering of heavy traffic which will
flow after the establishment of the industrial estate. The estimated cost of road network
designed for proposed industrial estate comes out to be 4818 million.
vii. Other Costs
Other costs include main gate and boundary wall construction. It will cost about 282
million. Also an amount of 2423 million is reserved to accommodate miscellaneous
cost.
E.9.3 Operational Cost
cash flows of operational and maintenance cost occur when installed elements of a
project suffer from wear and tear after completing their time period. An estimated
amount of 1% of development cost is reserved for the purpose of maintenance and

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange M-3 Motorway,
Faisalabad

operational cost. A small portion of this cost is spent before the warranty life of the
elements of industrial estate expires.
E.10 PPP Proposal
Governments in the past have undertaken projects under traditional procurement mode
whereby capital and operating costs are paid for by the public sector and bears the risk
of cost overruns and completion delays. In Pakistan, private sector participation in
projects was witnessed in the power sector, where the Government first established
the “Hub Power Company (Hubco)” as the first independent power generation
company. Hubco became operational in 1994 and around that time, the first power
policy was also introduced, establishing a regulatory framework for private investment
in the power generation sector. Traditional procurement was thus superseded by Public
Private Partnership structures in the power sector. Subsequently various projects of
infrastructure development had been undertaken.
E.11 Public Private Partnership
FIEDMC intends to develop this proposed industrial estate under PPP mode. This will
be the very first industrial estate which is going to be to be developed under this mode
in country’s history. As there will be no involvement of Government in this case so
provision of subsidies is out of question. This has considerably increased the potential
of financial risk involved in the project. the investor will have to use his own capital to
develop the proposed industrial estate. Asp per scope of work, the financial model of
the proposed industrial estate will be developed on PPP mode. There are total 13 PPP
agreements and out of these 13 options after rigorous brain storming and discussion
with PPP experts, 2 options i.e. Joint Venture (JV) and Build and Transfer (BT) were
narrowed down.
After the comparison and evaluation of PPP options, the preferred option is the Option-
2 i.e. Build and Transfer, therefore, it is proposed to opt. The option can serve as a
sustainable model that can be replicated for all other similar projects.
E.12 Business and Financial Model
Scenario-1(Local Investment)

The development will be carried out in five years in the form of two packages namely
Package 1 which contains Small and Medium Industrial Plots and lies on the upper
side of the Chiniot road. The Package 2 contains Medium and Large Industrial Plots
and lies on the lower side of Chiniot road. In corresponding packages, civil and
electrical works will be conducted simultaneously to avoid wastage of resources.
Boundaries of packages are defined with the help of existing Sahianwala-Chiniot road
and main road of the proposed scheme. The summary is as follows;

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange M-3 Motorway,
Faisalabad

Scenario-2 (CPEC Investment)


The development will be carried out in five years in the form of two packages namely
Package 1 which contains Small and Medium Industrial Plots and lies on the upper
side of the Chiniot road. The Package 2 contains Medium and Large Industrial Plots
and lies on the lower side of Chiniot road. In corresponding packages, civil and
electrical works will be conducted simultaneously to avoid wastage of resources.
Boundaries of packages are defined with the help of existing Sahianwala-Chiniot road
and main road of the proposed scheme. The summary is as follows;

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange M-3 Motorway,
Faisalabad

E.13 Sensitivity Analysis

A sensitivity analysis is a technique used to determine how different values of an


independent variable impact a particular dependent variable under a given set of
assumptions. This technique is used within specific boundaries that depend on one or
more input variables, such as the effect that changes in interest rates have on bond
prices. In case of proposed industrial estate, the sensitivity analysis is accomplished
in the basis of following assumptions;
i. Test No.1: The Project cost increases by 10%
ii. Test No.2: The Project Revenues decrease by 10%
iii. Test No.3: The Project cost increases and revenue decreases occur
simultaneously
E.14 Viability Gap Fund

In case of proposed industrial estate, the worst case scenario is assumed when the
IRR falls below the required rate i.e. 15% then amount from the VGF will be taken to
pay the grievances to the private party. After sensitivity analysis, the lowest IRR from
both scenario 1 and 2 comes out to be 11.89% and 6.27% respectively. On the basis
of these IRR values, the amount will be taken from VGF. The amount taken will depend
upon the budget allotted to the VGF which will be calculated in later stage of project.

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TABLE OF CONTENTS
1 INTRODUCTION .....................................................................................................................................1-1

1.1 LOCATION .............................................................................................................................................1-3


1.2 AREA AND LAND REQUIREMENT.................................................................................................................1-8
1.3 AVAILABILITY OF INFRASTRUCTURE .............................................................................................................1-8
1.4 CIVIC AMENITIES IN FAISALABAD: ...............................................................................................................1-9
1.4.1 Housing ....................................................................................................................................1-9
1.4.2 Educational Facilities ................................................................................................................1-9
1.4.3 Health Facilities ......................................................................................................................1-10
1.4.4 Communication Network........................................................................................................1-10
1.4.5 Connectivity Network .............................................................................................................1-11
1.4.6 Hotels and Recreational Facilities ...........................................................................................1-11
1.4.7 Shopping Hub .........................................................................................................................1-12
1.5 CLIMATE OF FAISALABAD ........................................................................................................................1-13
1.6 GEOLOGY OF FAISALABAD ......................................................................................................................1-14
1.7 SEISMICITY OF FAISALABAD .....................................................................................................................1-14

2 PROJECT DESCRIPTION ..........................................................................................................................2-1

2.1 PROJECT INTRODUCTION ..........................................................................................................................2-1


2.1.1 Project Justification ..................................................................................................................2-2
2.2 PROJECT PROPONENT AND CONSULTANTS ....................................................................................................2-2
2.2.1 Contact Information .................................................................................................................2-3

3 LEGAL FRAMEWORK ..............................................................................................................................3-1

3.1 PUNJAB GOVERNMENT RULES OF BUSINESS 2011 .........................................................................................3-1


3.2 SPECIAL ECONOMIC ZONES ACT, 2012 .......................................................................................................3-3
3.3 FIEDMC BUILDING BYLAWS .....................................................................................................................3-4
3.4 FIEDMC BYLAWS FOR VAC & M – 3 IC .....................................................................................................3-4
3.5 NATIONAL REFERENCE MANUAL ................................................................................................................3-5

4 CONTRIBUTION OF INDUSTRY TOWARDS ECONOMY AND SOCIAL DEVELOPMENT (HUMAN


DEVELOPMENT INDEX) ...................................................................................................................................4-1

4.1 TEXTILE INDUSTRY ..................................................................................................................................4-4


4.2 AUTOMOBILE INDUSTRY ...........................................................................................................................4-4
4.3 FERTILIZER INDUSTRY...............................................................................................................................4-5
4.4 SUGAR INDUSTRY ...................................................................................................................................4-6
4.5 CEMENT INDUSTRY .................................................................................................................................4-6
4.6 SPORTS INDUSTRY ..................................................................................................................................4-9
4.7 TELECOM INDUSTRY ................................................................................................................................4-9

5 PHYSICAL PLANNING OF THE INDUSTRIAL ESTATE ................................................................................5-1


5.1 CONCEPTUAL PHYSICAL PLANNING OF PROPOSED INDUSTRIAL ESTATE ................................................................5-1
5.2 LAND USE DISTRIBUTION..........................................................................................................................5-1
5.3 ENTRANCE POINT ...................................................................................................................................5-2
5.3.1 Road Network ..........................................................................................................................5-2
5.4 SERVICES CORRIDOR ...............................................................................................................................5-5
5.5 PEDESTRIAN MOVEMENT .........................................................................................................................5-5
5.6 LAND USE DISTRIBUTION..........................................................................................................................5-7
5.6.1 Nature and Type of Industries ..................................................................................................5-7
5.7 AMENITIES..........................................................................................................................................5-10
5.7.1 Services in Community Core-I (CC-I) .......................................................................................5-10
5.7.2 Services in Community Core-II (CC-II)......................................................................................5-10
5.7.3 Services in Community Core-III (CC-III)....................................................................................5-10
5.7.4 Petrol Pump ...........................................................................................................................5-11
5.7.5 Officers Club ...........................................................................................................................5-11
5.7.6 Labor Club .............................................................................................................................. 5-11
5.7.7 Ladies Club .............................................................................................................................5-11
5.7.8 Commercial Buildings .............................................................................................................5-11
5.7.9 Utilities ...................................................................................................................................5-11
5.7.10 Sewerage/Drainage System ...............................................................................................5-12
5.7.11 Electric Power Supply.........................................................................................................5-15
5.7.12 Water Supply System .........................................................................................................5-15
5.7.13 Natural Gas Supply ............................................................................................................5-16
5.7.14 Solid Waste Management ..................................................................................................5-16
5.7.15 Fire Fighting System ...........................................................................................................5-16
5.8 JUSTIFICATIONS OF PHYSICAL PLANNING ....................................................................................................5-19
5.8.1 Size of Plots ............................................................................................................................5-19
5.8.2 Type of Industries ...................................................................................................................5-19
5.8.3 Shape of Site .......................................................................................................................... 5-19
5.8.4 Location of Site .......................................................................................................................5-19
5.8.5 Why PPP mode? .....................................................................................................................5-20

6 SUSTAINABILITY AND PERFORMANCE INDICATORS ..............................................................................6-1

6.1 ENVIRONMENTALLY ................................................................................................................................6-1


6.2 SOCIALLY ..............................................................................................................................................6-1
6.3 PERFORMANCE INDICATORS ......................................................................................................................6-2

7 FINANCIAL FEASIBILITY ..........................................................................................................................7-1

7.1 PROJECT COMPONENTS ...........................................................................................................................7-1


7.2 PROJECT CAPITAL COST............................................................................................................................7-1
7.2.1 Upfront Cost .............................................................................................................................7-1
7.2.2 Construction Cost .....................................................................................................................7-2
7.2.3 Maintenance Cost ....................................................................................................................7-2
7.3 PROJECT COSTS ASSESSMENT ....................................................................................................................7-3
7.3.1 Financial Calculations ...............................................................................................................7-3

8 REVENUE GENERATION .........................................................................................................................8-4

8.1 SALE OF INDUSTRIAL PLOTS.......................................................................................................................8-4


8.2 SALE OF COMMERCIAL PLOTS ....................................................................................................................8-4
8.3 SALE OF AMENITY PLOTS ..........................................................................................................................8-4
8.4 CONTINUOUS REVENUE ...........................................................................................................................8-4

9 COST ESTIMATION .................................................................................................................................9-4

9.1 LAND COST ...........................................................................................................................................9-4


9.2 DEVELOPMENT COST ...............................................................................................................................9-5
9.2.1 Electricity .................................................................................................................................9-5
9.2.2 Power Supply Arrangements ....................................................................................................9-6
9.2.3 Street Lights .............................................................................................................................9-9
9.2.4 Water Supply System .............................................................................................................9-10
9.2.5 Sewerage System and Drainage .............................................................................................. 9-15
9.2.6 Solid Waste Management ......................................................................................................9-18
9.2.7 Construction of Amenities ......................................................................................................9-18
9.2.8 Road Works ............................................................................................................................9-18
9.3 OPERATIONAL COST .............................................................................................................................. 9-30

10 PPP PROPOSAL ....................................................................................................................................10-1

11 PUBLIC PRIVATE PARTNERSHIP............................................................................................................11-1

11.1 TYPES OF PPP MODE .......................................................................................................................11-1


11.1.1 Build-and-Transfer (BT) ......................................................................................................11-1
11.1.2 Build-Lease-and-Transfer (BLT) .......................................................................................... 11-2
11.1.3 Build-Operate-and-Transfer (BOT) .....................................................................................11-2
11.1.4 Build-Own-and-Operate (BOO) .......................................................................................... 11-2
11.1.5 Build-Own-Operate-Transfer (BOOT) .................................................................................11-2
11.1.6 Build-Transfer-and-Operate (BTO) .....................................................................................11-2
11.1.7 Contract-Add-and-Operate (CAO) ......................................................................................11-3
11.1.8 Develop-Operate-and-Transfer (DOT) ................................................................................11-3
11.1.9 Rehabilitate-Operate-and-Transfer (ROT) ..........................................................................11-3
11.1.10 Rehabilitate-Own-and-Operate (ROO) ...............................................................................11-3
11.1.11 Management Contract (MC) .............................................................................................. 11-3
11.1.12 Service Contract (SC) ..........................................................................................................11-3
11.1.13 Joint Venture(JV) ...............................................................................................................11-4
11.2 ADVANTAGES OF PPP MODE .............................................................................................................11-4
11.3 BASIC STRUCTURING OF PPP MODE ....................................................................................................11-5
11.4 PROFITS LIKELY TO BE ACHIEVED VIA PPP MODE .....................................................................................11-5
11.5 DILIGENCE FOR SUCCESS OF PPP MODE................................................................................................11-6
11.6 PREVIOUS PPP OPTIONS ...................................................................................................................11-6
11.7 SCRUTINIZED PPP OPTIONS ...............................................................................................................11-7
11.7.1 Joint Venture (J.V)..............................................................................................................11-7
11.7.2 Built-and-Transfer (BT).......................................................................................................11-7
11.8 EVALUATION OF PPP ............................................................................................................................. 9
11.9 MARKING CRITERIA ............................................................................................................................. 10
11.10 SELECTION OF PREFERRED OPTION.....................................................................................................11-11

12 BUSINESS AND FINANCIAL MODEL ......................................................................................................12-1

12.1 SCENARIO 1 (LOCAL INVESTMENT) .......................................................................................................12-1


12.1.1 Business Plan .....................................................................................................................12-1
12.1.2 Financial Model (Local Investment)....................................................................................12-4
12.1.3 Project Appraisal ..............................................................................................................12-10
12.1.4 Government and Private Party Appraisal .........................................................................12-10
12.2 SCENARIO 2 (CPEC INVESTMENT) .....................................................................................................12-10
12.2.1 Business Plan ...................................................................................................................12-10
12.2.2 Financial Model (CPEC Investment) ..................................................................................12-12
12.2.3 Project Appraisal (CPEC Investment) ................................................................................12-14
12.2.4 Government and Private Party Appraisal .........................................................................12-14

13 SENSITIVITY ANALYSIS .........................................................................................................................13-1

13.1 SCENARIO 1 ...................................................................................................................................13-1


13.1.1 Conclusion ................................................................................. Error! Bookmark not defined.
13.2 SCENARIO 2 ...................................................................................................................................13-1
13.2.1 Conclusion ................................................................................. Error! Bookmark not defined.

14 VIABILITY GAP FUND (VGF) ..................................................................................................................13-1


LIST OF FIGURES
FIGURE 1-1 COORDIANTES OF PROJECT SITE ..............................................................................................................1-5
FIGURE 1-2 LOCATION MAP OF PROJECT SITE............................................................................................................1-6
FIGURE 1-3 PROJECT SITE AND SURROUNDINGS .........................................................................................................1-7
FIGURE 1-4 REFERENCE MAP OF PROPOSED INDUSTRIAL ESTATE .................................................................................1-15
FIGURE 5-1 200' ROAD CROSS-SECTION ..................................................................................................................5-3
FIGURE 5-2 20' ROAD CROSS-SECTION ....................................................................................................................5-4
FIGURE 5-3 66' WIDE ROAD CROSS-SECTION............................................................................................................5-4
FIGURE 5-4 150' ROAD CROSS-SECTION ..................................................................................................................5-4
FIGURE 5-5 50' ROAD CROSS-SECTION ....................................................................................................................5-5
FIGURE 5-6 ROAD NETWORK OF PROPOSED INDUSTRIAL ESTATE ...................................................................................5-6
FIGURE 5-7 LAYOUT PLAN OF PROPOSED INDUSTRIAL ESTATE .......................................................................................5-9
FIGURE 5-8 TYPICAL MANHOLE CROSS-SECTION ......................................................................................................5-12
FIGURE 5-9 TYPE B DRAIN SEGMENT .....................................................................................................................5-13
FIGURE 5-10TYPE A DRAIN SEGMENT ...................................................................................................................5-13
FIGURE 5-11 TYPE C DRAIN SECTION .....................................................................................................................5-14
FIGURE 5-12 TYPE D DRAIN SEGMENT...................................................................................................................5-14
FIGURE 5-13 OHWT SECTION DRAWING ................................................................................................................5-16
FIGURE 5-14 UTILITIES MAP FOR PROPOSED INDUSTRIAL ESTATE ..................................................................................5-18
FIGURE 9-1 ELECTRICAL PLAN OF INDUSTRIAL ESTATE......................................................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 9-2 WATER SUPPLY PLAN .........................................................................................................................9-14
FIGURE 9-3 ROAD PLAN OF PROPOSED INDUSTRIAL ESTATE .........................................................................................9-17
LIST OF TABLES
TABLE 1.1 FEASIBILITY CRITERIA ..............................................................................................................................1-1
TABLE 1.2 CLIMATIC CONDITION OF FAISALABAD .....................................................................................................1-13
TABLE 3.1 SECTIONS OF PUNJAB RULES OF BUSINESS ...................................................................................................3-1
TABLE 4.1 LSM CONTRIBUTION FOR JULY-MARCH FY 2016 VERSUS JULY-MARCH FY 2017 ..............................................4-2
TABLE 4.2 MAJOR INDUSTRIES OF FAISALABAD ...........................................................................................................4-3
TABLE 4.3 EXPORT PERFORMANCE OF TEXTILE INDUSTRY.............................................................................................4-4
TABLE 4.4 AUTOMOBILE PRODUCTION DURING FY JULY-MARCH 2017 & 2016 ..............................................................4-4
TABLE 4.5 PROVINCE WISE SUGARCANE PRODUCTION.................................................................................................4-6
TABLE 4.6 CEMENT PRODUCTION CAPACITY AND DISPATCHES FOR TY 2016-17 ...............................................................4-8
TABLE 5.1 LAND USE AND PLOT DISTRIBUTION ...........................................................................................................5-8
TABLE 9.1 TYPE OF COSTS ......................................................................................................................................9-4
TABLE 9.2 SUMMARY OF DEVELOPMENT COST ...........................................................................................................9-5
TABLE 9.3 ELECTRICAL WORKS COST .......................................................................................................................9-7
TABLE 9.4 STREET LIGHT COST ...............................................................................................................................9-9
TABLE 9.5 WATER SUPPLY SYSTEM COST ...............................................................................................................9-10
TABLE 9.6 SEWERAGE & DRAINAGE SYSTEM COST.....................................................................................................9-15
TABLE 9.7 SOLID WASTE MANAGEMENT SYSTEM COST .............................................................................................. 9-18
TABLE 9.8 ROAD WORKS COST .............................................................................................................................9-19
TABLE 11.1 DEVELOPMENT COST STREAM...............................................................................................................11-4
TABLE 11.2 DOWNSIDES OF PPP MODE .................................................................................................................11-5
TABLE 11.3 EVALUATION OF PPP MODES ................................................................................................................... 9
TABLE 12.1 PACKAGE WISE PLOT DISTRIBUTION........................................................................................................12-1
TABLE 12.2 REVENUE AND EXPENSES STREAM ..........................................................................................................12-5
TABLE 12.3 PROJECT APPRAISAL .........................................................................................................................12-10
TABLE 12.4 GOVT.& PRIVATE PART APPRAISAL ......................................................................................................12-10
TABLE 12.5 PACKAGE WISE PLOT DISTRIBUTION......................................................................................................12-10
TABLE 12.6 REVENUE AND EXPENSES STREAM (CPEC INVEST.) ..................................................................................12-13
TABLE 13.1 SUMMARY-SENSITIVITY ANALYSIS OF SCENARIO 1 .....................................................................................13-1
TABLE 13.2 COST INCREASED BY 10% WHILE REVENUE REMAIN CONSTANT ............................. ERROR! BOOKMARK NOT DEFINED.
TABLE 13.3 TEST 2-REVENUE INCREASED BY 10% WHILE COST REMAIN CONSTANT ................... ERROR! BOOKMARK NOT DEFINED.
TABLE 13.4 TEST 3-DECREASE IN REVENUE AND INCREASE IN COST SIMULTANEOUSLY ............... ERROR! BOOKMARK NOT DEFINED.
TABLE 13.5 SUMMARY-SENSITIVITY ANALYSIS FOR SCENARIO 2 ....................................................................................13-1
TABLE 13.6 TEST 1 COST INCREASED BY 10% WHILE REVENUE REMAINED CONSTANT ................ ERROR! BOOKMARK NOT DEFINED.
TABLE 13.7 TEST 2-REVENUE INCREASED BY 10% WHILE COST REMAIN CONSTANT ................... ERROR! BOOKMARK NOT DEFINED.
TABLE 13.8 TEST 3 DECREASE IN REVENUE AND INCREASE IN COST SIMULTANEOUSLY ................ ERROR! BOOKMARK NOT DEFINED.
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

1 INTRODUCTION
The document in hand is the Technical Feasibility report of project “Establishment of
Allama Iqbal Industrial Estate (Area 3432 acres Approx.) near Sahianwala
Interchange, M–3 Motorway, Faisalabad under Public-Private Partnership Mode”. This
report discusses those technical points based on which this proposed industrial estate
will be deemed viable in real case scenario. The main theme for the development of
the proposed industrial estate encompasses following aspects;
i. Arranging the area in a way which is not only viable for the interested investors
but also preserves its natural and landscape characteristics
ii. Planning and building infrastructure and buildings in accordance with standards
for efficient deployment of natural resources and by using renewable materials
and energy.
iii. Attracting companies who strive for efficient deployment of natural resources
and minimal pollution, including those which support basic industries in
reaching these goals through the services and products they offer.
iv. Management which supports financial, environmental and social success of the
companies
v. Strong connections with the neighboring communities through economic
development and social and environmental programs.
The technical feasibility of proposed industrial estate takes in account the following
criteria and conditions;
Table 1.1 Feasibility Criteria

Sr.No. Criteria Type Description

Evaluation of alternative uses in the industrial


Alternative of
1 area’s plan, after environmental and socio-
Uses
economic analysis.

Correct and transparent communication of


Common

cost/benefit balance for the territory and local


Acceptance and
2 community to the local population for
Sharing
obtaining the necessary acceptance to start
the planning.

Integrating the environmental, economic and


3 Integration social perspectives in the development of
industrial area activities

1-1 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Sr.No. Criteria Type Description

Efficient use of the available local resources,


Rational use of ensuring waste reduction, efficient energy,
4
local resources recycling, conservation of natural resources
from irreversible deterioration etc.

Sustainable Usage of efficient and reduced


5

Environmental
Transports environmental impacts transports

Maintenance of biodiversity around the


6 Biodiversity project area and also guarantee of biological
continuity inside the project area

Clean Adoption of clean technologies to reduce


7
Technologies environmental impacts

Methods of construction and buildings and


Sustainable
8 infrastructure maintenance determining the
Buildings
least environmental impacts

Ability to attract the finance and investments


Attracting the
with introduction of new technologies,
9 Economic
Economic

development of scientific research and


Resources
innovative technology projects

Growth in the value of area site and its


10 Economic Value infrastructure ensuring profitability for the
interested companies

Equity and social Guarantee of positive effects of economic


11
cohesion profits on the local system
Social

Cultural Identity Preservation of the cultural variety and


12 and Area’s improvement of peculiar local conditions from
vocation cultural, historical and landscape aspects

1-2 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Sr.No. Criteria Type Description

Quality of Living Improvement of the quality of life of the local


population (health, services etc.)
13

Transparent, periodic and systematic


exchange of information regarding
Information and
14 stakeholders and guarantee participation of
Participation
local community in the choice regarding area
policy

The major components of this feasibility report are;


i. Location of project
ii. Area and Land requirement
iii. Infrastructure and Utilities
iv. Sustainability and Risk Analysis
v. Financial and Economic feasibility
vi. Estimated Capital Cost
vii. Development charges estimation
viii. Environmental and Social Impact Assessment
ix. Legal Arrangement
x. Implementation framework
1.1 Location
The site of the new proposed industrial estate is located near Sahianwala Interchange,
M – 3 Motorway. The eastern side of the site touches the Pindi Bhattian – Faisalabad
Motorway. The northern side faces the agricultural land and with settlements of Mitran
Wali and Kandan Sian. The southern side of proposed industrial estate surfaces with
the already established M – 3 Industrial City and Chak 157 RB. The western side of
the proposed industrial estate faces agricultural land two rural settlements. The co-
ordinates of the project boundary are given below;
Boundary Co-ordinates
i. 31° 39.427'N, 73° 12.591'E
ii. 31° 40.270'N, 73° 12.521'E
iii. 31° 40.318'N, 73° 12.855'E
iv. 31° 40.983'N, 73° 13.684'E
v. 31° 41.734'N, 73° 14.091'E

1-3 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

vi. 31° 41.707'N, 73° 13.467'E


vii. 31° 42.191'N, 73° 13.424'E
viii. 31° 42.147'N, 73° 12.914'E
ix. 31° 41.879'N, 73° 12.935'E
x. 31° 41.811'N, 73° 12.268'E
xi. 31° 41.256'N, 73° 12.318'E
xii. 31° 41.173'N, 73° 11.268'E
xiii. 31° 40.444'N, 73° 11.347'E
xiv. 31° 40.386'N, 73° 10.718'E
xv. 31° 39.709'N, 73° 10.794'E
xvi. 31° 39.769'N, 73° 11.597'E
xvii. 31° 39.740'N, 73° 11.602'E
xviii. 31° 39.770'N, 73° 11.958'E
Chiniot – Sahianwala Road Co-ordinates
i. 31° 40.358'N, 73° 12.908'E
ii. 31° 41.689'N, 73° 12.273'E

The co-ordinates are also illustrated in the map below;

1-4 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 1-1 Coordiantes of Project Site

1-5 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

The project location is depicted in the figure below;


Figure 1-2 Location Map of Project Site

1-6 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 1-3 Project Site and Surroundings

1-7 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

1.2 Area and Land Requirement


The approximate area for the development of the industrial estate is 3432 acres. The
boundary of the area is already determined and land is readily available for acquisition.
Moreover, there are no trapped settlements in the project area, hence, omitting the
requirement of resettlement plan. The area is divided into two parts by Chiniot road.
The area towards the right side of Chiniot road is approximately 1432 acres while the
area towards the left of the Chiniot road is 2000 acres approximately. The acquisition
of the land is being carried out and subsequently as a result of acquisition process,
compensation will be paid to affected persons under Land Acquisition Act 1894. The
layout plan of the proposed industrial estate has been prepared. The 3432 acre has
been subdivided into different land uses encompassing different types of industries
prevailing in the region.
1.3 Availability of Infrastructure
It is evident from the literature review that well-functioning infrastructure is a major
determinant of locational decisions and is imperative for the success of an industrial
estate. Infrastructure that facilitates the induction and generation of investment is
pivotal for an Industrial Estate. The central motivation of establishing proposed
industrial estate is to compensate for the lack of an estate equipped with appropriate
infrastructure in the province of Punjab. This industrial estate is going to be established
with a clear vision of providing quality infrastructure which is absent in all industrial
estates in Punjab. Outstanding infrastructure is thus one of the primary distinguishing
features of proposed industrial estate and plays an instrumental role in its
performance. The proposed industrial estate will feature following infrastructure;
i. Road Network
ii. Drainage system
iii. Electric Power Supply System
iv. Water Supply System
v. Natural Gas Supply System
vi. Solid Waste Management System
The detail description of available infrastructure is given in the later part of the report.

1-8 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

1.4 Civic Amenities in Faisalabad:


Faisalabad is the third most populous city of Pakistan and second largest city in the
eastern Punjab. Historically, it is the first ever planned city in the British India. Now
Faisalabad has become one of the biggest industrial hub in the country because of its
central location in the region and connecting road, rails and air transportation. The city
comfortability satisfies the needs of every class. The executives can enjoy following
amenities by setting up industry in the area;
1.4.1 Housing
Faisalabad city is home to country’s best posh and luxury areas where apart from
basic amenities, the elements of luxurious life style can be found. The areas which are
attracting investment from across the country include;
i. Gulberg,
ii. Madina Town,
iii. People’s Colony
The Gulberg is an upscale area. Some of Faisalabad’s well known educational
institutions (including Shiblee College and University Tower), recreational avenues
(including Baghdadi Park) and hospitals (including National Hospital) are located
there. Madina Town, located on Susan Road, Madina Town is an upscale residential
district with all basic amenities in place and includes mosques and parks. Several well-
known restaurants, two shopping centers (Nadeem Tower and Roshni Plaza) and
educational institutions (including Government Girls College and Shiblee College) are
also located there. People’s colony is Located nearly three kilometers from the Clock
Tower, People’s Colony is an upscale residential area. In addition to popular shopping
hubs such as D-Ground and Sitara Shopping Mall, several reputable educational
institutions and hospitals, as well as mosques and parks are located there. Some
newly developed residential areas are WAPDA Town, City Housing, FDA city and
other new schemes along Canal Road.
1.4.2 Educational Facilities
The Faisalabad city houses some of the most prestigious educational institutes in
history of country. These institutes provide high quality educational facilities to the
inhabitants. The institutional setup covers education from entrance level to Ph.D. The
famous institutes of the city include;
i. Beacon House Schooling System
ii. The City Public School
iii. Roots Ivy
iv. Allied School System
v. The Educators

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ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

vi. Grammar School System


Famous colleges of the city include;
i. Punjab Group of Colleges
ii. Government College
iii. Shiblee College
And the universities of city include;
i. National Textile University
ii. Government College University
iii. University of Agriculture
iv. University of Faisalabad
v. Punjab Medical College
vi. NFC Institute of Engineering and Fertilizer Research
1.4.3 Health Facilities
The city also fulfills the health related needs of the citizens. The city features a number
of public and private hospitals which operate 24/7 and provide remedial facilities
against major as well as minor diseases. These hospitals include;
Private Hospitals:
i. Aziz Fatimah Hospital
ii. Shifa International Hospital
iii. Faisal Hospital
Public Hospitals:
i. Allied Hospital
ii. DHQ Hospital Faisalabad
iii. F.I.C Hospital
iv. St. Raphael's Hospital
v. Rosary Christian Hospital
vi. General hospital
1.4.4 Communication Network
The features full coverage of wireless network services. All major wireless companies
are operating in the city and offering 3G as well as 4G services. Apart from the wireless
services, landline services of PTCL and Nayatel are also available for the citizens.
World’s latest GPON technology has been installed by PTCL, Nayatel and Cybernet.

1-10 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

1.4.5 Connectivity Network


Faisalabad city is the main industrial hub of Pakistan. It enjoys the undeniable edge of
central location and comprehensive connectivity network with in the country. This
comprehensive network of connectivity includes;
i. Road Network
ii. Rail Network
iii. Airways
The existing road network of the city will be upgraded in near future through its
connection with the CPEC eastern route. The M-3 motorway will be upgraded to
connect the cities industrial activities with the CPEC route. Apart from the eastern
route, the city will be connected to the western route of the CPEC via M-2 motorway.
The city features two rail links. One with Lahore and other with Sargodha. The rail link
with Sargodha is nearest with to the proposed industrial estate. In fact, the Sargodha
link rail route passes through the already existing M3 – IC. This rail network will be
used for the movement of goods as well labor.
The city also features an international airport having daily national and international
flights and a dry port which is situated at a distance of 24 Km from the proposed
industrial estate.
1.4.6 Hotels and Recreational Facilities
Faisalabad city is culturally enriched. It nor only satisfies the commercial need so f the
citizens but also caters for the provision of recreation as well. The famous Ghanta
Ghar situated in the heart of city is commercial as well as recreational hub for the
visitors. The city is also home of famous and luxury hotels where visitors can enjoy
lavish five star facilities. These hotels include;
i. Serena Hotel
ii. Garvaish Hotel
iii. The Chenab Club
iv. Minerva Club
v. Hotel One
vi. Sitara Club
vii. Al Fahad Hotel
The city features parks, restaurants, sports complex etc. The important recreational
spots of the city include;
i. Gat wala Wild Life Park
ii. Company Bagh
iii. D-Ground Park

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ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

iv. Sindbad Wonderland


v. Fun Land
Sports complexes include;
i. Iqbal Stadium, Cricket Stadium
ii. Saeed Ajmal International Cricket Academy (UAF) Ground
iii. Saeed Ajmal International Cricket Academy (Sports Complex, Jhang Road)
academy
iv. Lyallpur Cricket Club
v. Bohranwala Ground
vi. Divisional Public School Ground
vii. Polo Cricket Ground
viii. Jawad Sports Complex
ix. University Sports Complex
x. Al-Fatah Sports Complex
Apart from these, the city also features sports club which provide the facilities of
swimming pools, tennis courts and hockey.
1.4.7 Shopping Hub
The Ghanta Ghar is the main commercial hub of the city. Its eight markets feature
different types of goods. The city also has multiple purpose large scale hyper stores
which include;
i. Metro Cash and Carry
ii. Al-Fatah
iii. Chen One
iv. Mega mart
v. City cash and carry
vi. Makkah cash & carry
Apart from these stores, commercial shopping malls are also present which includes;
i. RCG Mall
ii. Sitara Mall
iii. Koh-I-Noor Mall
iv. Mediacom Center Point Plaza
v. Do Burj Shopping Centre
vi. Al Fatah Shopping Mall
vii. Souk Al-Kuwait Shopping Plaza
viii. Legacy Tower
ix. Mall of Lyallpur
x. Regent Mall

1-12 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

xi. Ripple Plaza


xii. Rex City
xiii. Regent Mall
xiv. Khan Plaza
xv. The One Plaza
xvi. Hassan Shopping Mall
xvii. Computer City Plaza
xviii. Awan Plaza
xix. SB Tower
These malls feature the outlets of both national as well as international brands. Apart
from this, the city also has food chain of national and international restaurants like
McDonald’s. KFC, Pizza Hut etc.
1.5 Climate of Faisalabad
The climate of Faisalabad features a semi-arid climate with very hot and humid
summers and dry cool winters. The average maximum and minimum temperatures in
June are 40.5 °C (104.9 °F) and 26.9 °C (80.4 °F). In January the average minimum
and maximum are 19.4 °C (66.9 °F) and 4.1 °C (39.4 °F).
The summer season starts in mid-April and continues until late October. May and June
are the hottest months, while July, August and the first half of September can be
oppressively humid, except for the days when it rains. June is the hottest month in
Faisalabad, when conditions are dry and dust storms are common. The coldest month
is January, which is also a dry month with significant foggy days. The fog is particularly
dense at night and in early morning hours. The winter season starts in November and
continues until early February. Spring begins after mid-February and lasts usually until
late March, when temperatures begin to rise and conditions become drier and sunnier.
The average annual rainfall is only about 375 millimeters (14.8 in), which is highly
seasonal since approximately half of the yearly rainfall takes place in July and August
during the monsoon season. The climatic summary of Faisalabad is given in exhibit
below;
Table 1.2 Climatic Condition of Faisalabad

1-13 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

1.6 Geology of Faisalabad


Faisalabad is situated in gentle sloping plains of Upper Indus Basin. These plains are
covered by Quaternary Unconsolidated deposits of enormous thickness and bedrock
belonging to Indian Basement exists at a greater depth. The Quaternary deposits
comprised of silty clay and sand in varying proportions which are accumulated by
braided tributaries of Indus river system, originating from the north-west Himalayas
The geologic study is based on general site reconnaissance and detailed geologic and
geotechnical investigations. The city is located on nearly horizontal flood plains
covered by fine grained loamy soils. Bedrock is not exposed within the project sites
and its vicinity not encountered within the investigated depth of boreholes. The
substrata comprised of alluvial deposits of the Indus river system. The sediments are
unconsolidated as deep as 900 feet. The unlined irrigation canals and distributaries
including water courses are the main source of groundwater recharge. Rain fall
contribution to groundwater recharge is not considerable. Ponds also slightly
contribute towards the recharge.
1.7 Seismicity of Faisalabad
The Punjab Plain, in which the city is located, shows low to moderate level of seismicity
which is associated with the faulting in the basement rocks covered by the deep alluvial
deposits. The basement high, depicted by outcrops of basement rocks near Sargodha,
Chiniot, Shahkot and extending from Sargodha to Faisalabad and further southeast
towards Indian border, shows a concentration of earthquakes with magnitude up to
5.5 on the Richter scale. A moderate earthquake originating from the basement high
in Punjab plain could produce appreciable ground shaking at sites due to the thick
alluvial deposits.

1-14 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 1-4 Reference Map of Proposed Industrial Estate

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

2 PROJECT DESCRIPTION
The Faisalabad region is rapidly growing as an economic base of Pakistan. Currently
there are 512 large Textile, 92 Engineering, 92 Chemicals & Food processing units
operating in the city. Other industries include hosiery, carpet & rugs, laundry soap,
pharmaceutical products and a sizeable packing industry.
The industrial development in Faisalabad is taking place in the urban vicinity in an un-
organized manner. With many industries operating within the urban areas, the quality
of life is deteriorating gradually. Faisalabad Industrial Estate Development and
Management company has taken up the task to relocate existing industries outside
the city premises to ensure a healthy life style for urban dwellers. In this regard,
FIEDMC already has established two industrial estates i.e. M-3 Industrial City and
Value Addition City outside city at fringes. In continuity of this agenda, FIEDMC has
initiated their third project of establishing another industrial estate covering an area of
3432 acres near Sahianwala Interchange. Unlike previous projects, this industrial
estate will be established under Public-Private Partnership Mode which will be
regarded as Pakistan’s first ever industrial estate to be established under this mode.
Faisalabad Industrial Estate Development and Management Company (FIEDMC) has
been set up by Government of the Punjab for deliberate, rapid and planned
industrialization. FIEDMC has created biggest mechanical settlement of nation along
Motorway M-3 which is probably going to fall inside China-Pakistan Economic
Corridor. Administration of FIEDMC now has expectation to build up an Industrial
Estate (Area 3432 Acres approx.) near Sahianwala Interchange M-3 Motorway
Faisalabad.
2.1 Project Introduction
The proposed Project is the development of an Industrial Estate near Sahianwala
Interchange M-3 Motorway Faisalabad Punjab Province. The territory of this bequest
is roughly 3432 Acres. This project is part of Punjab Govt. Program i-e:
"Implementation of Other Development Program (ODP) 2016-17.
The project has been conceived on the following lines:
d) A State of the Art Industrial Estate under Public Private Partnership on an area
of 3432 acres at the moment and likely to extend in near future;
e) Funds for land, infrastructure along with utilities and construction of Industrial
Units and allied facilities would be arranged under Public Private Partnership
mode;
f) Environmental and social compliance would be ensured by this project.

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

2.1.1 Project Justification


The main purpose of the establishment of the proposed industrial estate is to provide
all the required necessities to the interested stakeholders under a single umbrella. As
of now, the industrial development in Faisalabad city is being done in an unplanned
manner. This has resulted in establishment of scattered industrial units within the city’s
urban area. These industrial setups are regarded as major cause nuisance and
pollution by city dwellers as they are facing a reduced quality of life because of it.
Therefore, there is need that these dispersed industrial units should be relocated to
city fringes. In order to accomplish that, FIEDMC has taken up the task to setup
industrial estates on city boundaries where these disseminated industrial units can be
relocated. Till now, two industrial estates i.e. M3 – Industrial City and Value Addition
City have been materialized as a part of this agenda. This 3432-acre industrial estate
is also a part of this chain. In addition to relocation, this industrial estate will incorporate
new industries other than the local industries. This has been done by keeping in view
the development prospects induced by the initiation of CPEC. The addition new
industries will not only increase the capacity building of industrial sector but will also
open a new gateway for earning revenue which will surely improves the country’s
economic graph.
2.2 Project Proponent and Consultants
As mentioned earlier, proposed Project is being developed by Faisalabad Industrial
Estate Development & Management Company (FIEDMC). The Feasibility Study for
the proposed Project has been awarded to a consortium of consultants comprising
Élan Partners (Pvt.) Ltd and DESIGNMEN Consulting Engineers (Pvt.) Ltd. The
spectrum of services offered by DESIGNMEN Consulting Engineers (Pvt.) Ltd relates
to engineering fields while ESIA is being led by the Élan Partners (Pvt.) Ltd.

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

2.2.1 Contact Information


1. Faisalabad Industrial Estate Development & Management Company
(FIEDMC)
FIEDMC 1st Floor, FCCI Complex,
East Canal Road, Canal Park, Faisalabad
Tel: (92-41) 9230231-34
Fax: (92-41) 9230235
Email: Sales@fiedmc.com.pk
Website: www.fiedmc.com.pk

2. Élan Partners (Pvt.) Ltd


4th Floor, Rizwan Plaza, Jinnah Avenue,
Blue Area. Sector F-6, Islamabad, Pakistan
Tel: +92 (51) 2272582-85
Fax: +92(51) 2272580
Email: mail@elan.com.pk
Website: www.elan.com.pk

3. DESIGNMEN Consulting Engineers (Pvt) Ltd.


First Floor, 9-West, Rizwan Plaza,
F-6, Islamabad – Pakistan
Tel: +92-51-2828577, 2829002
Fax: +92-51-2307615
E-mail: designmenislamabad@gmail.com
designmn@isb.comsats.net.pk
Website: http://www.designmen.com.pk

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ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

3 LEGAL FRAMEWORK
Compliance with all the applicable laws and rules is very important to make the
business successful in long term. Rules change over the time and also depends upon
the territory in case of business expansion. Rules also depend upon the type of
business you are dealing in. In case of proposed industrial estate, a legal framework
is being formulated which will not only cover the compliance currently applicable to the
industrial estate in the region but will also caters the bylaws which will be applicable
during different phases.
Mega projects like development of industrial estates are governed by multiple laws
and bylaws. In case of proposed industrial estate, the legal framework is developed
after literature review of following rules and acts;
i. Punjab Government Rules of Business 2011
ii. Special Economic Zone Act 2012
iii. FIEDMC Building Bylaws
iv. FIEDMC Bylaws for VAC and M – 3 IC
v. National Reference Manual
vi. TMA Rules and Regulations
3.1 Punjab Government Rules of Business 2011
Punjab Government Rules of Business define the distribution of functions among the
departments of Punjab Government and set out the procedure for disposal of work of
the Punjab Government. Punjab Rules of Business have eight main sections. These
sections are;
Table 3.1 Sections of Punjab Rules of Business

Sr. Section Description


No.

1 General Allocation of business, organization of departments,


functions of chief minister and ministers, functions of
parliamentary secretary, function of chief secretary and
secretary and general procedure for disposal of business.

2 References to Outlines the procedure for making a reference to Governor


Governor or or Chief Minister.
Chief Minister

3 Departmental Consultation among departments, Services and General


Procedure Administration Department, Chief Minister’s Inspection

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Sr. Section Description


No.
Team, Home Department, Consultation with Finance
Department and Law and Parliamentary Affairs
Department, References from Heads of Regional offices
and Heads of attached Departments and District
Government to Departments and Secretaries Committee.

4 Services Appointments, Postings, Promotions and Transfers.

5 Cabinet Cases to be brought before Cabinet and methods of


Procedure disposal, Manne of submission of cases to the cabinet,
Procedure regarding cabinet decisions by circulation,
procedure of cabinet meetings, Procedure regarding
committees of Cabinet, Action of Cabinet decisions,
Secrecy of Cabinet proceedings and custody of Cabinet
papers.

6 Legislation Official bills, Non – Official bills, Amendments and


Ordinances

7 Assembly Rules of procedure of assembly, Summoning,


Business Prorogation, Resolutions, Motions, General provisions
regarding assembly Business, Questions, Call attentions
Notices, Budget, Undertakings and Assurances,
Protection and Communication of Official Information and
Channel of Correspondence, Amendments of Rules,
Repeal

8 Miscellaneous Protection and Communication of Official Information,


Provisions Channel of Correspondence, Amendments of Rules and
Repeal.

The Punjab Government Rules of Business have a statutory importance and are
intended to ensure the application of common standards and uniform procedure for
disposal of work by the civil servants in the province. Not only do these rules serve as
a measure of the performance of individual departments at the operational level, the
legitimacy of the democratic regime is equally validated, or undermined, by how their
application impacts day-to-day service delivery to the people.

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

3.2 Special Economic Zones Act, 2012


Special Economic Zones Act 2012, was prepared by Majlis e Shoora (Parliament) and
received assent from President on the 12th August, 2012. Subsequently, the Act was
modified and amended up to 31st December 2015.
Special Economic Zones Act 2012 was promulgated to encourage industrial
infrastructure. The purpose was to facilitate domestic and foreign investors to make
invest in manufacturing sector of Pakistan by offering them special exemptions and
incentives leading to reduced cost of doing business with efficiency.
The Act provided for duty free import of machinery for zone developers as well as zone
enterprises. It also provided exemption from income tax for a period of ten years
The Act would allow Developers and Zone Enterprises to plan and operate in an
enabling environment that would include security, safety, availability of physical and
social infrastructure, and access to all incentives, facilities, and rules of business. The
central aspect of the Act is the formation of a high-powered Board of Approval with the
Prime Minister as the Chairman. This, in itself, manifests total commitment towards
development and success of SEZs.
As a result of this Act, Special Economic Zones Regulations have been formulated.
The salient features of the regulations include the approval of Zones not less than fifty
acres. Usage of 70% of the area for the purpose of operations of zone enterprises and
up to 30% of the Zone could be used for social infrastructure as per mentioned in
Chapter 6 (Zone Regulations) of formulated rules. This would be attractive for those
investing and working in any particular Zone. The government would ensure the
provision of public utilities and transportation links up to the zero point of the Zone.
SEZ Rules created as a result of SEZ Act ensures that following infrastructure must
be available for proper functioning of the economic zone;
i. Roads
ii. Electricity
iii. Natural Gas
iv. Water
v. Sewerage/drainage
vi. Waste Water Treatment
vii. Communications
viii. Security
ix. Enforced Building Codes
x. Firefighting facilities
xi. Medical facilities

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

xii. Academic and Vocational Training Institutes


Apart from ensuring above listed infrastructure, an economic zone is evaluated on
following parameters;
i. Appropriateness of site location
ii. Result of feasibility study
iii. Adequacy of planned infrastructure
iv. Viability of implementation plans
v. Appropriateness of industrial mix and activities
vi. Feasibility of land acquisition plan
vii. Appropriateness of zone admission criteria
viii. Assessment of environmental impact
The planning of proposed industrial estate is mainly governed by SEZ Rules 2013.
Therefore, these rules were kept on mind while doing the physical planning of
proposed industrial estate.to ensure the success of project as well as sustainability in
long run.
3.3 FIEDMC Building Bylaws
FIEDMC Building Bylaws were formulated by Faisalabad Industrial Estate
Development and Management Company. These laws came in to force on 28 th
December, 2005.
These building bylaws are applicable within areas acquired or to be acquired by
FIEDMC for industrial estates. The design and construction of Building(s) in these
estates is monitored in conformity with these Building Bylaws.
3.4 FIEDMC Bylaws for VAC & M – 3 IC
These Bylaws are made and adopted by Board of Directors for smooth functioning
and efficient management of FIEDMC. These Bylaws stand enforced on all industrial
estates of FIEDMC instantly and as amended from time to time by BOD. These bylaws
are subservient to the Companies Ordinance, 1984 and Memorandum and Articles of
Association of FIEDMC.
These are the rules which are applicable to the overall project. Apart from these rules,
the bylaws which are applicable to the sub studies like environmental studies of the
project are also taken into account. By addressing all these applicable rules and
bylaws, it has been made sure that legal framework formulated will be flexible in its
nature and will mold accordingly in case of any legal or regulatory changes. The legal
framework will not only ensure the success of proposed industrial estate through
smooth and unhindered processing but will also enable the completion of project with
stipulated time frame.

3-4 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

3.5 National Reference Manual


National Reference Manual was in initiated by Government of Pakistan, Ministry of
Housing & Works and Environment and Urban Affairs in May 1983. It was done to
establish the arduous but necessary planning and infrastructure standards. The main
objective of NRM was to;
i. To obtain a consistent basis for review of existing standards of land use,
housing, infrastructure and services
ii. To frame standards and guidelines which could be used by Federal, Provincial
and Local Government Agencies for preparation of local area plans for housing,
commerce, industry, community and other common land uses along with other
associated infrastructure.
Planning standards related to development of industrial estate have been consulted
while designing of proposed industrial estate. Help is taken from section 5.3 and 6.2
which are placed at Annexure - B in the end of report.

3-5 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

4 CONTRIBUTION OF INDUSTRY TOWARDS


ECONOMY AND SOCIAL DEVELOPMENT (HUMAN
DEVELOPMENT INDEX)
According to Economic Survey of Pakistan 2016-17 manufacturing is the backbone of
economy of Pakistan and constitutes the second largest sector of economy
contributing 13.5 percent to Gross Domestic Product (GDP). This sector mainly
comprises of Large Scale Manufacturing (LSM) with 80% share in Manufacturing and
10.7 % in GDP. The Small Scale Manufacturing (SSM) accounts for 1.8% in total GDP
and 13.7% contribution share in manufacturing. The third component of the sector is
slaughtering (food processing industry) and accounts for 0.9% in total GDP and 6.7%
share in manufacturing. During FY 2017, manufacturing recorded an impressive
growth of 5.3 percent against 3.7 percent of last year which helped overall industrial
sector to improve by 5.0 percent This sector provides employment opportunities to
15.3 percent of the total labor. The GDP growth rate is 5.7% according to World Bank
report.
The industry specific data shows that Iron &Steel products recorded highest growth of
16.58 percent (compared to -7.48 percent), Electronics 15.24 percent (compared to -
5.69 percent last year), Automobiles 11.31 percent (compared to 23.51 percent last
year), Food, Beverages & Tobacco 9.65 percent (compared to 3.77 percent last year),
Pharmaceuticals 8.74 percent (compared to 6.85 percent last year), Non Metallic
mineral products 7.11 percent (compared to 10.28 percent last year), Paper
and Board 5.08 percent (compared to -2.93 percent last year), Engineering Products
2.37 percent (compared to -14.04 percent last year). Fertilizers 1.32 percent
(compared to 15.92 percent last year), Textile 0.78 percent (compared to 0.66 percent
last year) and Rubber Products 0.04 percent (compared to 9.17 percent last year).
The other sectors that showed decline included Wood Product -95.04 percent
(compared to -58.09 percent last year), Leather products -17.97 percent (compared to
10.13 percent last year), Chemicals -2.20 percent (compared to 10.28 percent last
year) and Coke & Petroleum Products -0.32 (compared to 2.40 percent last year).
Group wise growth and points contribution of LSM for the period of July-March FY
2016 versus July-March FY 2017 are given in the following table;

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Table 4.1 LSM contribution for July-March FY 2016 versus July-March FY 2017

4-2 March 2018


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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Faisalabad is the major industrial sector in the heart of Pakistan with following
industrial units;
Table 4.2 Major Industries of Faisalabad

Sr.No Type of Industry Industrial Units

1 Textile Spinning Mills 85

2 Power Looms (Standard & autos) 200,000


3 Shuttles Looms /Air jet Loom 30,000
4 Textile Processing, Printing, Dyeing & Finishing Mills 250
5 Sizing Industries 125
6 Hosiery & Knitwear units (small, medium & large) 1000
7 Cotton Ginning / Processing 25
8 Embroidery Units 400
9 Soap (Sodium silicate & Detergent ) 59
10 Flour Mills 45
11 Fiber Plant (Ibrahim Fibers is the Largest in the Country ) 1
12 Chemical Plant (Sitara Chemicals is the largest in the country) 3

The growth of this sector is contingent on better availability of utility services, enabling
environment, credit to private sector, Foreign Direct Investment (FDI), capital market
gains etc. This sector suffered in the past due to non-availability of the desired inputs
for its growth. The major issue which hampered its growth was the power shortages.
The present government has made focused efforts to resolve this issue and developed
a road map to overcome the power crises on fast track and on a sustainable basis. As
a result, this sector started picking up its growth and contributed in overall economic
growth. The overall manufacturing sector continued to maintain its growth momentum
with more vigor during the current fiscal year.
Keeping in view table 3, table 4 and feedback from FIEDMC, it is decided to design
the medium and large scale area in proposed industrial estate considering the
requirements of Textiles, Engineering, Food Processing, Automobiles, Construction
Materials, Glass, Electrical and Electronics industry. It is expected that aforementioned
industry will be established in proposed industrial estate. however, plan is kept flexible
enough to incorporate new and innovative industries.

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ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

4.1 Textile Industry


Pakistan has an inherent advantage of being 4th largest producer of cotton in the world
with a huge potential to further increase crop yield. For success of any export led
industry, local availability of basic raw material is an added advantage being a key
factor in reducing cost of doing business. The textile value chain consists of multiple
industrial sub-sectors. The value chain is quite long starting from cotton picking to a
finished garment of the latest fashion. The end product of one sub-sector is the raw
material for the other. Each sub-sector in the value chain contributes to value addition
and employment generation. As the change moves downstream, each link creates
larger number of jobs with relatively lower investments. The sector contributes nearly
one-fourth of industrial value-added and provides employment to about 40 percent of
industrial labor force. Barring seasonal and cyclical fluctuations, textiles products have
maintained an average share of about 62 percent in national exports. The export
performance during the period under review is given in the table 4-3;

Table 4.3 Export Performance of Textile Industry

4.2 Automobile Industry


In automobile sector, there has been a surge in productions of all its sub sectors.
Remarkable growth has been witnessed in Farm tractors which is recorded at 72.9
percent, Trucks 39.3 percent, Jeeps 30.8 percent, two/three wheelers 21.2 percent,
Buses 19.7 percent and Cars 4.6 percent during July-March FY 2017 as compared to
corresponding period last year, whereas LCVs production declined by 36.9 percent.
Table 4.4 Automobile Production during FY July-March 2017 & 2016

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

The comparative position of the production during the year July-March FY 2017 and
2016 FY is given in table below;
Automobile sector is among the top growth sectors in the large scale manufacturing in
Pakistan. As stated earlier, the negative growth in case of Light Commercial Vehicles
(LCVs) resulted from the discontinuation of Apna Rozgar Scheme but was
compensated by increased production of other models and growth in tractors and
trucks. The trucks production has risen due to economic activity in the country to meet
CPEC related material and freight transport needs. There is still enormous potential of
growth in buses, given an opportunity to local manufactures by the government and
serious measures taken in formulating and implementing urban transport schemes
along with replacing the old dilapidated buses presently plying on the roads of
metropolitan areas.
4.3 Fertilizer Industry
The fertilizer industry is an integral part of Pakistan’s economy. The Pakistan fertilizer
industry produces imports and distributes various types of fertilizers. The government
has pursued a policy of supporting the industry in the form of feed gas subsidies, GST
relaxation and increasing support prices for commodities. There are ten urea
manufacturing plant, one DAP, three NP, three SSP, two CAN and one plant of
blended NPKs having a total production capacity of 8,983 thousand product
tons per annum. Although, the installed production capacity for all products has
attained the level of 8,983 thousand tons per annum, the actual production for all
products remained at 8,015 and 8,065 (estimated) thousand product tones for 2015-
16 and 2016-17 respectively. The entire fertilizer products are manufactured by the
private sector.
The government has allocated Rs. 27 billion as cash subsidy on fertilizer sales in fiscal
year budget 2016-17 but it was discontinued as the entire amount was consumed.
Later on, Prime Minister of Pakistan directed that cash subsidy on fertilizer would be
continued till the end of fiscal year 2016-17. To support the domestic fertilizer industry,
the government this year has allowed the export of 300,000 tons of urea fertilizer
without the subsidy.

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ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

4.4 Sugar Industry


The sugar industry is the second largest agro based industry after textiles. Pakistan is
an important cane producing country and is ranked at fifth in terms of sugar cane crop
acreage and 9th in sugar cane production. The share of sugar industry in value added
of agriculture and GDP are 3.2 and o.7 percent respectively. The sugar sector
constitutes the 4.2 percent of manufacturing. It employs 1.5 million people including
management experts, technologists, engineers, skilled, semiskilled and unskilled
workers. The prince wise production of sugar is given in the table below;
Table 4.5 Province wise Sugarcane Production

According to recent estimates, around 2,000 I\X! of electricity can be produced in the
country in 1.5--2 years, using bagasse in highly efficient boilers. This electricity would
however be available only for 3-4 months annually, after the crushing season. Most of
the sugar mills in Pakistan consume bagasse in heating inefficient boilers of 26 bar.
The Indian sugar mills have installed SO bar or above boilers that produce many times
more electricity.
4.5 Cement Industry
Cement dispatches reached historic heights in March 2017 touching almost 4 million
tons as the factories utilized their full production capacity to meet robust demand in
the local market. The ever increasing domestic market has vindicated the
manufacturers thrust on adding new capacities. The cement industry is playing its due
role to get the momentum going and in April 2017 the industry dispatched 3.576
million tons of cement against 3.551 million tons dispatched during the corresponding
month of last year. In the first ten months of this fiscal year the industry has dispatched
33.880 million tons’ cement showing an overall growth of 6.21 percent over the
corresponding period of last fiscal year. During the period the domestic consumption
increased by 10.74 percent but exports declined by 18.63 percent. It is worth noting

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ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

that the domestic cement consumption during July-April FY 2017 increased by 10.22
percent in the North and by 13.14 percent in the Southern part of the country. In
contrast the exports from North declined by 14.42 percent compared with a decline of
26.19 percent in the South. This should be a matter of concern as in the past the South
based mills being nearer to sea were leading cement exporters. The capacity
utilization during first ten months of current fiscal is 87.64 percent. The domestic
dispatches in April 2017 were 9.53 percent higher than the dispatches in April 2016.
The exports in contrast declined by a whopping 50.75 percent. This massive decline
in exports reduced the dispatches growth in April 17 to only 0.70 percent. In the first
ten months of this fiscal year the domestic dispatches increased by 10.74 percent
while the exports registered a decline of 18.63 percent. The table shows the cement
production capacity and dispatches for TY 2016-17;

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ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Table 4.6 Cement production capacity and dispatches for TY 2016-17

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Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

4.6 Sports Industry


Sialkot is internationally known as a producer of good quality products in sports,
surgical instruments, leather garments, gloves & accessories, sportswear and musical
instruments. Around 400,000 plus people are engaged directly or indirectly with export
activities. Annual export earnings of the city are around US $ 1 Billion.
Sports goods sector is the main export sector of the city with total exports of US $ 450
million per annum. Sialkot caters to around 70% of total world demand of hand stitched
inflatable balls which translates into around 40 million balls annually worth US $ 210
million. These balls are produced by a workforce of nearly 60,000 and exported to
world markets by 1,000 plus entrepreneurs, majority of which fall under SME definition.
4.7 Telecom Industry
Telecom sector is playing a pivotal role in the economy of Pakistan in terms of
providing employment, contribution to national exchequer through taxes and attracting
foreign investment in the country. In the liberalized environment, telecom share in GDP
of Pakistan has increased to 1.9% from mere 1.5% three years back. During Fiscal
Year 2004-05, Telecom sector attracted about US $ 207 million FDI which formed 32%
of total FDI in the country. In the first quarter of the fiscal year (July-Sep?05), a total
of US $ 91.4 million FDI came to the telecom sector. During the same period, telecom
sector contributed about Rs. 6.5 billion in the form of taxes to national exchequer (GST
and activation tax). In the year 2004-05, telecom sector deposited over Rs. 28 billion
in these taxes to the government of Pakistan.
Telecom sector of Pakistan is growing at an astounding pace and surpassing all
forecasts over the last few years. It is expected that cellular subscribers would cross
26 million mark in next year and tele density would be doubled during the same time.
With the increase in telecom services, consumers would enjoy more telecom facilities
with improved quality and lower rates. Moreover, huge investment in telecom sector
has created more avenues for employment resulting in the prosperity of the country.

i. Major categories are Telephone, Mobiles, Internet


ii. Contribution in GDP is 6%
iii. Created 220,000 high paying job
iv. Pakistan is now a leader in mobile usage in south Asia
v. Jazz, Warid, Telenor, Ufone, Zong, PTCL are major Telecom Companies
vi. The direct foreign investment in telecom industry for year 2015-16 in
Pakistan is US$1902 millions
vii. The investment in industrial sector for year 2015-16 was US $719.7 million
viii. The revenues earned via telecom industry for year 2015-16 was Rs456371.

4-9 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

5 PHYSICAL PLANNING OF THE INDUSTRIAL


ESTATE
This chapter explains the physical planning features of the proposed industrial estate.
The chapter mainly focuses the points and considerations kept in mind while carrying
out the physical planning of the proposed industrial estate.
5.1 Conceptual Physical Planning of Proposed Industrial
Estate
The Industrial estate is designed under the concept of Industrial mix instead of rigid
zoning. The zoning is avoided to keep the things open and flexible on the one side.
On the other side this flexibility will allow to maintain material chain of any particular
industry in its close proximity.
The site area of the proposed industrial estate is divided in to two portion because of
existence of Chiniot road which passes through the center of the site. The town
planning concept of the proposed industrial estate has been conceived in such a way
that it has converted this disadvantage into advantage. The industrial estate now has
two major portions which will match with the idea of industrial mix.
For effective and efficient master planning, following parameters have been followed;
i. Concept of industrial mix has been induced in the master plan
ii. No rigid zoning has been done to allow flexibility
iii. The idea of material chain has been incorporated through industrial mix
iv. On the main entrance, admin areas have been provided
v. The common amenities have been provided throughout the master plan via
community core centers
vi. The pedestrian movement of has been encouraged by designing a web of
pedestrian walkways throughout the master plan

5.2 Land Use Distribution


The eastern portion is given the name of SME Block. This block will accommodate
industries of small and medium sizes. The plot size of this block ranges from 1 acre to
3 acres. The plot size of 1 acre will be suitable for small size industry while the plot
sizes of 2 and 3 acres will cater for the development of medium size industry.
The western block of the industrial estate has been given the name of M&LI Block.
This block will be comprised of industries of medium and large scale. The plot sizes in
this block is planned as 4 acres and multiple of 4 acres. However, in case of area
constraint, plots of sizes other than multiple of 5 i.e. 5 acres and 10 acres are also

5-1 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

given. The plot size of 4 acres will be available for medium size industry while plot
sized bigger than 4 acres will be utilized to establish industries of large scale
5.3 Entrance Point
The entrance of the industrial estate has been designed at approximately near center
of the site. The entrance gate is a four pronged grandeur state of architecture. This
gateway will cover the entrances both from main artery of the estate as well as
entrance from Chiniot road. The four majestic pillars of the gateway will have admin
buildings at their base. Apart from the admin offices, the entrance will feature security
offices to conduct the security checks on the incoming and outgoing traffic. The entry
point of the proposed industrial estate will feature following elements’
i. Administration office
ii. Security Offices
iii. Car Parking Area
iv. Public/Private Offices
5.3.1 Road Network
The proposed industrial estate characterizes a very comprehensive road network. The
road network has been designed by keeping in view the current and future needs. The
designed road network also justifies the easy maneuvering of heavy traffic which will
flow after the establishment of the industrial estate. The main features of the road
network of the proposed industrial estate are explained below;
5.3.1.1 Link Road
The industrial estate is accessed through Chiniot road which originates from
Khurrianwala and passes through the center of the industrial estate’s site dividing the
area in to two parts. This division of the site in two parts is faulty and difficult to plan
but we have used this physical anomaly to our advantage while designing the land use
distribution. Currently, the width of Chiniot road is 30 feet but once remodeled, this
road will be widened up to 200 feet.
5.3.1.2 Main Artery
The road network features a main artery of 200 feet which circulates throughout the
industrial estate. The main artery features a service road of 24 feet on both sides. This
service road will be segregated from main road via 6 feet wide footpath. Provision of
service road will ensure the ease access of heavy traffic to respective industry. The
main artery characterizes a total of 6 lanes of width 12 feet each. This lane width will
ensure the easy maneuvering of heavy traffic. The road shoulders have been provided
for temporary parking of trucks prior getting entry to a specific industrial unit. The main
entrance to industrial estate has been designed on the main artery. The entrance is

5-2 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

designed in the form of a two pronged gate which will cover traffic from both Chiniot
road as well as main artery. Once constructed, the entrance gate will be a masterpiece
of architecture in its nature. The main entrance is located at almost the geographical
center of the estate which will be a complete stand out for people moving on Motorway
as well as Chiniot road. Kinks are provided on the main artery which will ease up the
movement of the heavy traffic in reaching the distant parts of the industrial estate. The
community cores which will include almost every type of services are placed on the
main artery and will be readily accessible. The cross-section of 200 feet main artery is
given in figure below;

Figure 5-1 200' Road Cross-section

5.3.1.3 Sub Road Network


The sub-road network is designed so as to give easy access to every industrial block.
Road of 150 feet emerge from the main artery and lead to the categorized industrial
blocks. Within every industrial block, tertiary roads of 66 feet are provided which
completely satisfies the future demands of the traffic in and out flow. The lane width of
these roads are designed by keeping in view the heavy traffic. The 150 feet wide road
has 4 lanes with each lane having width of 12 feet. The 66 feet wide road will be
divided into four lanes through 1 feet cat eyes median. Each lane of 66 feet wide road
has width of 17 feet ensuring smooth movement of heavy traffic. The cross-sections
of 150 feet and 66 feet roads are given in figures below;

5-3 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 5-4 150' Road Cross-section

Apart from these roads, 20 feet wide pedestrian corridors have been designed which
link with a 50 feet corridor running along the boundary of the proposed industrial
estate. The cross-sections of 20 feet and 50 feet road are given in figure below;

Figure 5-3 66' Wide Road Cross-Section

Figure 5-2 20' Road Cross-Section

5-4 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 5-5 50' Road Cross-Section

5.4 Services Corridor


Every industrial plot has been provided with a services corridor of 20 feet. These
corridors will be used for the provision of services like water supply, electricity, natural
gas lines, sewerage etc. This segregation of services corridor has been done to allow
the maintenance staff to readily access these utilities for repair without affecting the
usual routine work. The 20 feet width of the corridor will also allow the movement the
vehicular movement used by the maintenance staff.
5.5 Pedestrian Movement
The pedestrian movement has been given due importance in the designing the road
network. Keeping in view the daily movement of labor and other staff, walking corridors
of 20 feet are designed after approximately 800 feet distance. These corridors will
ease up the daily maneuvering of the labor from the entrance to specific industry and
also from the industry to nearest community core. These pedestrian corridors will be
lines with shady trees which will also soothe the daily pedestrian movement. The
corridors are linked with surrounding 50 feet corridor which run along the boundary of
the site. This corridor also encourages pedestrian movement and also features trees
plantation creating a very practical functional relationship. The overall picture of road
network of proposed industrial estate can be viewed in the figure given below;

5-5 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 5-6 Road Network of Proposed Industrial Estate

5-6 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

5.6 Land Use Distribution


The proposed industrial estate will feature given below industrial setups;
5.6.1 Nature and Type of Industries
The Industrial estate is designed under the concept of Industrial mix instead of rigid
zoning. The zoning is avoided to keep the things open and flexible on the one side.
On the other side this flexibility will allow to maintain material chain of any particular
industry in its close proximity.
The site area of the proposed industrial estate is divided in to two portion because of
existence of Chiniot road which passes through the center of the site. The town
planning concept of the proposed industrial estate has been conceived in such a way
that it has converted this disadvantage into advantage. The industrial estate now has
two major portions which will match with the idea of industrial mix.
The selection of type of industries for the proposed industrial estate has been done by
giving due consideration to existing industries operating in the Faisalabad. Apart from
this, the industrial trends of country and region have been studied while formulating
this list. The type of industrial mix for proposed industrial estate will be comprised of
following industries;
i. Chemicals (SME)
ii. Pharmaceuticals (SME)
iii. Packaging and Printing (SME)
iv. Ware Houses (SME)
v. Furniture (SME)
vi. Plastic (SME)
vii. Textiles (M&L)
viii. Engineering (M&L)
ix. Food Processing (M&L)
x. Automobiles (M&L)
xi. Construction Materials (M&L)
xii. Glass (M&L)
xiii. Electrical and Electronics (M&L)
If any customer is interested in establishment of an industry other than above
mentioned list, the decision to include it and categorize it as SME or M&L will be
made on case to case basis. The schedule of land uses and plots of proposed
industrial estate is given in the table below;

5-7 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Table 5.1 Land Use and Plot Distribution

Schedule of Land Uses


Sr. No. Land Use Area (Acres) Percentage (%)
1 Saleable Industrial Area 2402 70%
2 Saleable Commercial Area 172 5%
3 Non-Saleable Area 858 25%
Grand Total 3432 100%
Schedule of Plots
Sr. No. Block Name Size of Plots (Acres) No. of Plots
Small and Medium Industry
1 Block A 1 208
2 Block B 2 231
3 Block C 3 56
Sub Total 495
Medium and Large Industry
4 5 48
Block D
10 14
5 8 33
Block E
10 50
6 Block F 12 23
Sub Total 168
Grand Total 663

This land use distribution is governed by the land use principle of Chak Jhumra TMA
and SEZ Land Use Rules 2012 which are placed at Annexure C and D.

5-8 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 5-7 Layout Plan of Proposed Industrial Estate

5-9 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

5.7 Amenities
Provision of services and utilities has been ensured by designing 3 Community Cores
and 6 services area. The community cores have been designed keeping in view all
sorts of work force needs. These community cores are planned at reasonable
distances making them readily accessible throughout the industrial estate. The
community core 1 will features following services;
5.7.1 Services in Community Core-I (CC-I)
i. FIEDMC office measuring 0.4 acres
ii. Jamia Mosque measuring 3.5 acres
iii. Hospital measuring 8 acres
iv. Central Weigh Station measuring 1 acre
v. Security Office 0.4 acres
vi. Labor Club measuring 4 acres
vii. Ladies Club measuring 4 acres
viii. Open space measuring 29 acres
ix. Commercial area measuring 31 acres
The Community Core II and III will feature labor club and ladies club, open space and
commercial area but main hospital and jamia mosque will not be provided. Labor club
and ladies club in community cores 2 and 3 will features internal space specified for
hospital/dispensary and prayer area. Apart from this, each community core 2 and 3
have space reserved for future development as well.
5.7.2 Services in Community Core-II (CC-II)
Community core – II will feature following services;
i. Labor Club measuring 4 acres
ii. Ladies Club measuring 4 acres
iii. Open space measuring 60 acres
iv. Commercial Area measuring 31.5 acres
v. Amenity area measuring 24 acres
5.7.3 Services in Community Core-III (CC-III)
Community core – III will feature following services;
i. Labor Club measuring 4 acres
ii. Ladies Club measuring 4 acres
iii. Open Space measuring 30 acres
iv. Commercial area measuring 48 acres
v. Amenity area measuring 22.7 acres

5-10 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

5.7.4 Petrol Pump


Petrol Pump of about 4 Kanals has been provided on the main artery so that heavy
traffic can gain easy access.
5.7.5 Officers Club
A Country Club of 212 acres is present in the vicinity of proposed industrial estate.
This country club features all the facilities of an Officers Club. Therefore, the provision
of officer’s club in the proposed industrial estate has not been included.
5.7.6 Labor Club
Recreational activities are of prime importance for healthy environment, which
ultimately enhance the working capacity of the workers. Keeping in view the
requirements of the project, Three Labor Clubs (one in each CC measuring 4 acres)
have been proposed. These labor club will provide following facilities to the work force;
i. Dining Hall
ii. Sleeping/Rest place
iii. Gym, swimming and fitness area
iv. Playing area for indoor games
v. Area for outdoor games/play ground
vi. Park/garden
vii. Dispensary
viii. Mosque
5.7.7 Ladies Club
Three ladies club (one in each CC measuring 4 acres) have been proposed to facilitate
the needs of female workers. These ladies’ clubs will feature all the facilities as
provided in labor club with addition of Day Care Centers.
5.7.8 Commercial Buildings
To meet the daily requirement of the project, some commercial and public buildings
have also been proposed which include;
i. Post office
ii. Clinics
iii. Banks
iv. Canteens
v. Hotels
vi. General Shops
5.7.9 Utilities
The proposed industrial estate will provide following utilities to the industrialists;

5-11 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

viii. Electric Grid station


ix. Water Supply System
x. Combined Effluent Treatment Plant
xi. Solid Waste Disposal/Land fill site
xii. Gas Distribution Centre
xiii. Fire Fighting System
xiv. Utility lines for electric, water, sewerage, gas and phone to be provided in
services corridor underground
5.7.10 Sewerage/Drainage System
The drainage system will be covered by the seepage drain which already exists in the
project site. The seepage drain flows across the project site and ultimately ends at the
main drain/nala Gojra Nala. Keeping in view the flow pattern of effluent and slope of
the site, the Combined Effluent Treatment Plant has been placed at the location
which is converging point for effluent flowing across the site area. The Gojra Nala is
located at 1.38 Km away from the project site. Combined Effluent Treatment Plant and
Solid Waste Management System.
Keeping in view the slope of project area, the plant is planned on the western side of
the site. After the treatment, the water will be disposed of in Gojra Nala via seepage
drain which flows from eastern side of the project site to the western site. Manholes
have been designed on the roads to collect the sewerage. In addition to this, rain water
harvesting tanks will be constructed in every plot to preserve rain water. Though
designed capacity will be sufficient to conserve 100% rain water nevertheless
harvesting tanks will ensure 80% water conservation. The rain water of streets will be
evacuated by surface runoff towards main road where it will be taken to seepage drain
through a drain channel measuring 5X5 (WidthxHeight) with 6” wall thickness and 12”
base thickness. The typical section of manhole designed for the proposed industrial
estate is shown in the figure below;

Figure 5-8 Typical Manhole Cross-section

5-12 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Four types of drain segments with varying slab thickness are designed. The cross-
section of drain designed for the proposed industrial estate are also depicted in the
figures below;

Figure 5-10Type A Drain Segment

Figure 5-9 Type B Drain Segment

5-13 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 5-11 Type C Drain Section

Figure 5-12 Type D Drain Segment

5-14 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

5.7.11 Electric Power Supply


FIEDMIC industrial state (3432 acres) comprises of two major portions. The first part
is proposed for small & medium industries whereas other is for medium & large
industries. The industrial plots are not fixed for a specific type of industry. Available
data is the type of industry and no. of plots allocated to them.
Secondly, it was informed that any small and medium size of industry may be allotted
anywhere in the first portion and similarly any large industry may be allotted anywhere
in the second portion. Moreover, no firm data regarding electricity requirement was
made available about size, type of industries and allotted location. In view of the above,
to calculate the total electrical load requirement of industrial estate the following
assumptions were made:
i. Data provided
ii. Load is calculated based upon load density in volt-ampere per square foot
(VA/sq. ft.) by referring Industrial Power System Handbook.
iii. The data collected from other sources (Industrial Estates).

5.7.12 Water Supply System


The water requirements will be fulfilled by installing tube wells near RB canal. The
canal RB branch is present at mere a distance of 7.07 Km. The RB canal distributary
originates Chattan da Chak 145 and touches the southern boundary of M3-IC. This
water supply will satisfy the needs of daily labor employed in the industrial estate. The
water demand for industrial processing will be self-fulfilled by industrialists by getting
water from ground sources. The detailed design parameters of OHWT are placed at
Annexure E. The over-head water tank designed for proposed industrial estate is
given in figure below.

5-15 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 5-13 OHWT Section Drawing

5.7.13 Natural Gas Supply


The main natural gas supply line is present on the Chiniot-Jhumra road. The already
established M3 – Industrial City has taken input from this gas line through a SMS
station located at the entrance point of the industrial estate. In case of proposed
industrial estate, the extension of gas supply line is quite viable because this SMS
station is only 1.76 Km away from the project site. Hence, the issues regarding the
unavailability of natural gas are out of question.
5.7.14 Solid Waste Management
In case of proposed industrial estate, two types of solid waste will be generated. i.e.
Industrial waste and Municipal waste. The collection of both types of the wastes will
be done via centralized collection system. However, in case of industrial waste
collection, collection task will be assigned to a contractor after legitimate licensing
process. Both contractor and industrial estate will be responsible for the proper
collection of the industrial waste. In case of municipal waste, door to door collection
will carried out. Both types of collected wastes will be further categorized depending
upon their nature. The recyclable wastes will be recycled and rest of the collected
waste will be taken to proper disposal site present in the nearby vicinity of Faisalabad
city.
5.7.15 Fire Fighting System
A well-equipped and pressurized water distribution system which will comprise of
pipes, hydrants, gate valves etc. has been proposed. The system shall be operated
automatically in case the pressure is dropped in the system by operating any fire

5-16 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

hydrant. As per standards of National Board of Fire Authorities, the water demand is
2000 to 4000 gallons. Being an industrial area, the high value of 4000 gallons will be
adopted to remain on the safer side.

5-17 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 5-14 Utilities Map for proposed Industrial Estate

5-18 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

5.8 Justifications of Physical Planning


This part of the report gives solid justifications about the major queries which arose
while doing the physical planning of the proposed industrial estate.
5.8.1 Size of Plots
The plot size has been determined considering the type of industry which is going to
be established in the proposed industrial estate. The planned plot sizes adequately
fulfill the requirements like plant setup, connectivity and future extension etc. of
selected industry type. Moreover, the plot sizes planned also meet the demand of
clients as well as local investors.
5.8.2 Type of Industries
Primarily, the purpose of this industrial estate was to relocate the scattered industrial
units in the Faisalabad city. Therefore, a portion of selected type of industries satisfies
the lot of already established industrial units within the city premises which are planned
to be transferred to city fringes via development of new industrial estates. Secondly,
keeping in view the development prospects induced due to initiation of CPEC, it has
been decided to include new type of industries in the proposed industrial estate. This
has been done to keep up with the prevailing trends being followed in economic beast
countries like China and also to open a new portal for generating revenue which will
ultimately strengthen the economic uplift of country.
5.8.3 Shape of Site
The shape of the site is governed by two factors. Firstly, there is availability of
government owned land in the project area. Moreover, some compulsory land
acquisition had to be done under section 4 of Land Acquisition Act 1894. The current
demarcation of the proposed industrial estate is amalgam of both these types of lands.
Second factor which affected the shape of the project site is presence of nearby
physical features. It has been made sure that no settlement should be included in the
project site. This consideration ensured the avoidance of Resettlement plan. Physical
features like existing roads, canals, electric poles etc. have also been taken in to
account in this regard. This will prove helpful in provision of utilities and services for
the proposed industrial estate.
5.8.4 Location of Site
The location of site is crucial as it has been selected to fulfill the core two requirements.
Firstly, the location is selected on the city fringe. This is done to shift the scattered
industrial units outside the city premises hence ensuring the improved quality of life
for city dwellers. Secondly, the site selected is near the already established M3 –

5-19 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Industrial City therefore, the extension of services like power supply, gas supply lines
etc. will be easier as well as economical.
5.8.5 Why PPP mode?
The proposed industrial estate will be developed under the concept of Public-Private
Partnership Mode. This will be the first ever industrial estate which will be developed
under this mode. Under PPP mode, the proposed industrial estate will exhibit following
major advantages;
i. Previously, alt the established industrial estates enjoyed the fruit of government
subsidy. Provision of these subsidies act as a burden on the government.
Therefore, in order to eradicate this concept, the proposed industrial estate will
be established under PPP mode which will not only create the air of market
competitiveness but will remove the liability of subsidies from the government.
ii. As funding will be obtained from a private investor, therefore, the infrastructure
constructed under PPP mode will be of improved quality. Also the construction
done will follow an allocated amount of budget and a timeframe. This will allow
the private sector to develop a more disciplined and commercial approach to
infrastructure development whilst allowing them to retain a strategic control of
overall project
iii. In PPP structures the risk of performance is transferred to the private sector.
The private sector only realizes its investment if the project develops according
to the contractual obligations. As the private sector will not receive payment
until the facility is available for use, the PPP structure encourages efficient
completion, on budget without defects
iv. There is evidence of better quality in design and construction than under
traditional procurement. PPP focuses on the whole life cost of the project not
simply on its initial construction cost. It identifies the long term cost and
assesses the sustainability of the project.
v. The expertise and experience of the private sector encourages innovation,
resulting in shorter delivery times and improvements in the construction and
facility management processes. Developing these processes leads to best
practice and adds value

5-20 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

6 SUSTAINABILITY AND PERFORMANCE


INDICATORS
The projects which are socially acceptable, economically viable and environmentally
sound can achieve the sustainability. To ensure sustainability of the proposed
Industrial Estate, Élan has devised modals and carry out analysis. One of the major
factors which pose threat to the sustainability of any project is Risk Involvement. To
address this issue, Élan has generated a Risk Analysis Report which is produced after
identifying the risk associated with project. In this regard, after the risk identification,
Élan has also proposed ways and measures to mitigate the associated risks.
Apart from Risk Analysis, the proposed industrial estate will be made sustainable
economically, environmentally and socially through given below program;
6.1 Environmentally
The environmental sustainability of the proposed industrial estate will be ensured by
opting following parameters;
vi. Sustainable use of natural resources (energy, water, resources)
vii. Reduction of emissions (air, water, ground, underground, noise,
electromagnetism)
viii. Reduction in waste production
ix. Sustainability for goods and people
x. Quality and diversity of habitat and landscape
These set parameters will be met by opting a comprehensive environmental theme.
This environmental theme will include elements like Eco friendly design of products,
green purchases, sustainable building, maximization of use of renewable resources,
water and energy efficiency, prevention of waste production, efficient means of
transportation etc.
6.2 Socially
The social sustainability of the proposed industrial estate will be ensured by adopting
following parameters;
i. Improvement in the working conditions
ii. Education and Training
iii. Reinforcing cultural identity and area’s vocation
iv. Equity, solidarity and social cohesion
For this purpose, a comprehensive social theme has been formulated which will
ensure events like prevention of job accidents, improvements of healthiness of the
working environments, canteen, nurseries, bank, sport facilities, development of
educational programs addressed to the local communities, professional trainings,

6-1 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

easing the setting up of business incubators, fostering employment in the community,


ensuring security of the community and ensuring that accommodation and living
conditions are of good quality and guarantee social integration.
To ease the process of maintaining the sustainability of the project, meetings with
stake holders for their inputs and opinions will be held. In this regard, these
stakeholders will be assigned certain roles as per needed. These stake holders will
include;
i. GoP
ii. FIEDMC
iii. Target Groups
The activities assigned to these stakeholders will hold key importance in ensuring the
success and sustainability of the project.
6.3 Performance Indicators
Performance Indicators have been set to check the performance of the Industrial
Estate. These indicators will help to check the success rate of project. These indicators
will also help to make decisions to maintain the direction of project in order to gain
maximum output.
In this regard Key Performance Indicators are set. For this Industrial Estate,
following possible indicators are being established.
i. Quantitative indicator: Quantitative indicators are commonly believed to be
measurements of cold, hard facts and rigid numbers.
ii. Qualitative Indicator: Qualitative indicators are seen as subjective, unreliable
and difficult to verify. They are more difficult to ascertain because they probe
the whys of situations and the contexts of people’s decisions, actions and
perceptions. However, qualitative indicators are valuable to the evaluation
process because projects and initiatives are involved with studying changes in
people’s lives and in communities.
iii. Financial Indicator: These are the statistical metrics used to measure the
growth or contraction of the economy as a whole or sectors within the economy.
iv. Directional Indicator: It specifies that whether a project or organization is on
a correct direction or getting better or not.
v. Process indicator: It represent the efficiency or the productivity of the process
These indicators can be changed and reviewed as per need during different phases
of the Industrial Estate.

6-2 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

7 FINANCIAL FEASIBILITY
The development of an industrial estate involves a number of key finance and
governance choices and options. These options should be considered in the context
of the country’s long-term strategies and goals for development. The strategy should
ensure broadening of country’s tax base, creating jobs, businesses, and economic
opportunities. This chapter of the feasibility study discusses some of the different
proposed industrial estate finance options available.
7.1 Project Components
An industrial estate comprises of several interrelated components and supporting
facilities. For the purposes of analyzing finance and governance options, the
components are categorized as follows:
i. Out of Boundary infrastructure
ii. Within Boundary infrastructure
iii. Land acquisition
iv. Amenities, Public Buildings and parking

Large industrial estates mostly take years to plan, construct, and colonize. This
analysis assumed that the costs for the proposed industrial estate will be phased in
over many years. The financial arrange for proposed industrial estate will be made
under Public Private Partnership. Construction phase investments by the private
investor will include the development of basic infrastructure. Each phase project and
each component of its feasible presents unique finance and governance challenges.
Therefore, different finance and governing strategies for individual components or
groups of components have been devised.
7.2 Project Capital Cost
The development of a major project like industrial estates, usually requires huge
capital cost. To efficiently manage the capital, this budget is divided into further
categories. In case of proposed industrial estate, the capital cost is categorized as
follows;
7.2.1 Upfront Cost
This is the cost which is required to deal with out of the boundary infrastructure. This
cost mostly covers the expenses of utilities connections, land acquisition etc. This cost
occurs in early stages of developmental project.

7-1 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

7.2.2 Construction Cost


This cost occurs in the mid stage of the project. The construction cost covers expenses
of within the boundary infrastructure. This costs covers expenses of laying down
utilities services within the project boundary.
7.2.3 Maintenance Cost
This cost occurs during the Operation and Maintenance phase of the developmental
project. It is further divided into three categories.
i. Cost of regular maintenance

This cost occurs during routine maintenance of the project. It covers activities
like regular maintenance of machinery, elements of utilities services etc. The
maintenance cost takes as a result of routine checkup of developmental
project.
ii. Cost of maintenance at fault

This expense takes place when out of routine some maintenance needs to be
required. For example, if some underground water pipes burst due to burden
of heavy weight then repairmen of these damaged pipes will be covered by
cost of maintenance at fault
iii. Cost of replacement maintenance

This cost occurs when some items are need to be replaced after completing
their lifetime. The items suffering wear and tear and needed to be replaced are
covered by cost of replacement maintenance.
The industrial estates usually require sizeable up-front capital investment in
infrastructure. However, in case of proposed industrial estate, adequate infrastructure
facilities are present in the vicinity because of existing M3 – Industrial City. Therefore,
mediocre upfront investment is required. Although operating costs tend to be lower for
environmentally friendly infrastructure, but up-front costs may be greater. Total up-
front costs will be driven, to a large extent, by the types of green features.
As mentioned earlier, infrastructure funding will come from private sector. However,
as for as visualization about cost to be incurred is concerned, regardless of where the
funding comes from, it is vital that estimate of infrastructure costs be made as part of
scoping the proposed industrial estate.
To begin to evaluate potential cost and financing options for proposed industrial estate,
the study team has developed a simplified cost model which accounts for offsite and
onsite infrastructure construction, land acquisition and building construction. This
model can be adjusted for factors such as total developed acreage, total developed

7-2 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

square footage, total water demand, and total energy needs. This financial model will
be then get approved from PPP cell.
Given the current state of infrastructure (i.e., roads, water and sewer coverage, energy
transmission), it is likely that a reasonable amount of new and expanded infrastructure
will need to be put in place as a prerequisite to situating an industrial estate in the
identified area. Water supply, wastewater treatment and energy provision are the
largest cost contributors. Requirements of these are also the most variable as these
depend on industry type to be established. Therefore, financial feasibility is prepared
on the basis of certain assumptions and it will hold good only in case the assumptions
sustain. However, due flexibility is provided while allocating the areas for these utilities
and proposing the capacities so that unforeseen variabilities can be adjusted in next
20 years. The expected cost as per estimates is 29.9 billion. The development will be
in the form of two packages namely Package 1 which lies on the upper side of the
Chiniot road and contains Small & Medium Industrial Plots. The Package 2 contains
Medium and Large Industrial Plots and lies on the lower side of Chiniot road. In
corresponding packages, civil and electrical works will be conducted simultaneously
to avoid wastage of resources.
7.3 Project Costs Assessment
To ensure the systematic functioning of financial model, the estimated cost
assessment is further divide into sub-categories. This section of report gives us
justified financial calculations of proposed industrial estate.
7.3.1 Financial Calculations
The financial calculations of the proposed industrial estate have been sub-categorized.
a. Revenue Stream
The summary of revenue stream covers following aspects;

i. Sale of Industrial plots


ii. Sale of Commercial plots
iii. Sale of Amenity plots
iv. Title transfer fee
v. Possession fee
vi. Scrutiny fee of building plan
vii. Conservatory charges
viii. Miscellaneous revenue
b. Expenditure/Cost Stream
The summary of expenditure stream covers following aspects;

i. Land purchase
ii. Development Cost

7-3 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

iii. Cost of services connections


iv. Miscellaneous cost

To calculate the cost for the establishment of cost stream, it is required to know which
type of industry will be established on how much plots. A hypothetical percentage is
assumed for plots allocation to particular type of industry and is given in following table
as category wise;

7-4 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

8 REVENUE GENERATION
Every mega project is meant to generate revenue. This generated revenue not only
benefits the project owner but also contributes towards improved quality of life of
people associated with the project. The proposed industrial estate is meant to follow
the same tradition. Setting up of this industrial estate will boost economy in the region
and will provide employment opportunities to local skilled people. The proposed
industrial estate will generate two types of revenue.
i. One-time revenue
ii. Continuous revenue

One-time revenue is the revenue which occurs only one time in the life of project while
continuous revenue continues for the long term. These two types of revenue are
further subdivided into following means for proposed industrial estate;
i. Sale of Industrial plots
ii. Sale of Commercial plots
iii. Sale of Amenity plots
iv. Title transfer fee
v. Possession fee
vi. Scrutiny fee of building plan
vii. Conservatory charges
viii. Miscellaneous revenue

8.1 Sale of Industrial Plots


The commercial plots would be sold out after the industrial estate’s colonization at
sufficient level. Buildings in all three community cores will be constructed as part of
development work.
8.2 Sale of Commercial Plots
The commercial plots will be sold after the third phase of selling of industrial plots. This
is because during third phase of selling of industrial phase, adequate colonization of
the proposed industrial estate would have been taken place.
The development cost of commercial plots will be same as industrial plots. However,
the profit ratio of commercial plots will be doubled as compare to industrial plots.
8.3 Sale of Amenity Plots
Some amenity plots like petrol pump, weighing station etc. can be sold at appropriate
rates.
8.4 Continuous Revenue
This revenue is recurring in its nature. It includes; title transfer fee, possession fee,
scrutiny fee of building plan, conservatory charges and miscellaneous revenue.

8-4 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

9 COST ESTIMATION
Mega projects involve different types of costs. This costs are estimated and calculated
with justified basis and reason. Before jumping to calculate the costs involved for a
project, one must develop sound and reasonable baseline on which these costs will
be calculated justifiably. The types of costs involved vary from project to project
depending upon the nature. The expected cost as per estimates is 29.9 billion and per
acre cost is 6,395,808 PKR. In case of development and infrastructure projects like
proposed industrial estate, following major costs are involved;
i. Land cost
ii. Development Cost
iii. Operational Cost
These estimated costs are given in the table below;
Table 9.1 Type of Costs

Sr. No. Type of Cost Costs (PKR)

1 Land Cost 6,864,000,000

2 Development Cost 21,950,413,196

4 Escalation in the development cost (5%) 1,097,520,660

Total 29,911,933,856

9.1 Land Cost


The land cost is the expense which occurs when a particular patch of land is bought
or acquired for a certain project. The land cost also depends on method and source of
acquiring land. Generally, in Pakistan, there are two ways to buy land. Either you can
buy it from market or you can acquire it using clauses of Land Acquisition Act 1894.
Both methods have their pros and cons. Generally, a private buyer will purchase land
through market value but when land is required for a project whose proponent is
government, then method of Land Acquisition Act is adopted. In case of proposed
industrial estate, the land is to be acquired by FIEDMC which a company operating
under the Punjab Government. Therefore, in this particular case, a total land of 3432
acres will be acquired using Land Acquisition Act 1894 under section 4. It is also
expected that there is no already existing human settlement in the area identified to
be acquired. Therefore, the need of any resettlement plan or any compensation costs
is avoided.

9-4 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

After finalization of site for the proposed industrial estate, information has been
collected from the respective revenue department about the land price. As of now, the
land price set for each acre of land is 2 million PKR.
9.2 Development Cost
The development cost of any infrastructure and development project involves costing
of all utilities and services. It involves the cost of services laying and utilities
connection. In case of proposed industrial estate, around 663 industrial plots have
been designed. The plot sized are varying as they have been designed keeping in
view the scale of industries which are to be set up in future. Plots of varying sizes will
satisfy the needs of Small, Medium and Large enterprises. Therefore, before selling
of plots, services and utilities need to be in place for the customers. The development
cost will cover these expenses. The summary of estimated development cost of
proposed utilities of industrial estate is given in the table below;
Table 9.2 Summary of Development Cost

Sr. No Cost Type Amount (PKR)


1 Electrical Works 3,884,003,000
2 Street Lights 491,176,504
3 Water Works 4,651,943,427
4 Sewerage System 4,314,106,532
5 Solid Waste Management 394,680,000
6 Road Works 4,818,435,211
7 Main Gate and Boundary Wall 282,912,659
8 Utility Connections 500,000,000
9 Other Costs (Community Core I, Parks etc.) 2,423,420,285
Cost Per Acre 6,395,778
Total Cost 21,950,413,196
The basis of cost estimation of each of these utilities and services is elaborated below;
9.2.1 Electricity
FIEDMIC industrial state (3432 acres) comprises of two major portions. The first part
is proposed for small & medium industries whereas other is for medium & large
industries. The industrial plots are not fixed for a specific type of industry. Available
data is the type of industry and no. of plots allocated to them
Secondly, it was informed that any small and medium size of industry may be allotted
anywhere in the first portion and similarly any large industry may be allotted anywhere
in the second portion. Moreover, no firm data regarding electricity requirement was
made available about size, type of industries and allotted location. In view of the above,
to calculate the total electrical load requirement of industrial estate the following
assumptions were made:

9-5 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

i. Data provided
ii. Load is calculated based upon load density in volt-ampere per square foot
(VA/sq. ft.) by referring Industrial Power System Handbook.
iii. The data collected from other sources (Industrial Estates).
On the basis of above assumptions and using the estimated load requirement of
different type of industry, commercial, amenities etc. has been calculated which is
shown in Table 9-3 as below

9-6 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Table 9-3 Industry Wise Estimated Load Requirement

FAISALABAD INDUSTRIAL CITY, LOAD ASSESSMENT


No. Total Covered Area Covered Total
Area Load/ft Power Demand Total Load
Description of Area Area Load
2
(acres) % (acres) (VA) Factor Factor (kW)
Plots (acres) (ft2) (kVA)
Chemical 98 2.0 196.00 60 117.60 5,122,656 10 0.85 0.80 34,834 40,981
Pharmaceutical 98 2.0 196.00 60 117.60 5,122,656 10 0.85 0.80 34,834 40,981
Packaging and
53 2.0 106.00 60 63.60 2,770,416 10 0.85 0.80 18,839 22,163
Printing
Warehouses 75 2.0 150.00 60 90.00 3,920,400 5 0.85 0.80 13,329 15,682
Furniture 98 2.0 196.00 60 117.60 5,122,656 10 0.85 0.80 34,834 40,981
Plastic 75 2.0 150.00 60 90.00 3,920,400 10 0.85 0.80 26,659 31,363
Textile 31 8 248.00 60 148.80 6,481,728 12 0.85 0.80 52,891 62,225
Engineering 31 8 248.00 60 148.80 6,481,728 10 0.85 0.80 44,076 51,854
Food
24 8 192.00 60 115.20 5,018,112 10 0.85 0.80 34,123 40,145
Processing
Automobiles 24 8 192.00 60 115.20 5,018,112 12 0.85 0.80 40,948 48,174
Construction
18 8 144.00 50 72.00 3,136,320 10 0.85 0.80 21,327 25,091
Materials

9-4 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Glass 18 8 144.00 60 86.40 3,763,584 10 0.85 0.80 25,592 30,109


Electrical &
20 8 160.00 60 96.00 4,181,760 12 0.85 0.80 34,123 40,145
Electronics
Sub Total 663 2322.00 1,379 60,060,528 416,409 489,893

Amenity 1 468.00 468.00 50 234.00 8,424,000 10 0.85 0.80 57283 67392


Commercial 9 17.00 153.00 60 91.80 3,304,800 16 0.85 0.80 35956 42301
Grid Station 9 4.00 36.00 30 10.80 388,800 5 0.85 0.80 1322 1555
P. Pump 1 0.50 0.50 30 0.15 5,400 5 0.85 0.80 18 22
Mosque 1 3.50 3.50 40 1.40 50,400 5 0.85 0.80 171 202
Admin &
1 0.80 0.80 60 0.48 17,280 5 0.85 0.80 59 69
Security
Sub Total 22 662 339 12,190,680 94,810 111,541
Total 2,984 - 1,717 72,251,208 - - - 511,219 601,434
After applying
Diversity
factor of 80% 408,975 481,147
among the
industries

9-5 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

9.2.2 Power Supply Arrangements


Initially the power supply is proposed to be taken from nearby grid station through
11kV feeder to start construction works in the Industrial Estate (3432 acres). It is
assumed that the power will be provided by Faisalabad Electric Supply Company
(FESCO). The source location of the electric power supply to the project area will have
to be identified/connected at later stage of electrical designing.

After preliminary estimation to cater the total requirement, 09 grid stations of 132/11
kV (07 of 2×20/26 MVA & 02 of 3×20/26 MVA) each have been proposed and aptly
placed at nine various points to make sure the design is precise and economical.
Four 132/11 kV (03 of 2×20/26 MVA & 01 of 2×20/26 MVA) grid station are to be
placed at north-east part of the project site to cater the load of small and medium
Industries. Whereas, five 132/11 kV (04 of 2×20/26 MVA & 01 of 3×20/26 MVA) grid
stations are to be placed at the south-west part of the project area to provide power
supply to Large industries. The location of grid stations is placed suitably, keeping in
view the load centers and to optimize the losses.
Electrical power to the consumers will be supplied using 11 kV overhead lines
emanating from the proposed nine 132/11 kV grid stations. The industries will have
their own 11/0.4 kV power distribution transformers as per their load requirement after
sanctioning of load and approval by the Competent Authority. These distribution
transformers will be supplied power from the overhead 11 kV network However, for
bigger loads, the industries will be required to get bulk supply at 132 kV level as per
PEPCO prevailing regulations.
The load growth is gradually increased in such industrial estate. Therefore, the
implementation of electrical plan will be in phases according to the growth rate of
industry in the project area. The provision is kept for 220kV grid station in future.
Electrical Work Cost. The 11 kV distribution network is planned keeping in view the
limitation of service corridor, load estimations of mix industries and layout plan of
industrial estate provided.
The electrical works cost is given in table below;

9-6 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Table 9.3 Electrical Works Cost

Cost in Million Total Cost in


Sr. No Item Description Unit in Km (PKRs) per Millions
K.m (PKRs)
Single pole with single 2 1.4 2.8
circuit

G/s # 01 Single pole with double 6.07 2.5 15.175


circuit
Single pole with triple 1.1 3.5 3.85
circuit
Single pole with single 0.62 1.4 0.868
circuit

G/s # 02 Single pole with double 3.85 2.5 9.625


circuit
Single pole with triple 1.65 3.5 5.775
circuit
Single pole with single 4.9 1.4 6.86
circuit

G/s # 03 Single pole with double 3.3 2.5 8.25


circuit
Single pole with triple 3.2 3.5 11.2
circuit
Single pole with single 4.9 1.4 6.86
circuit

G/s # 04 Single pole with double 8.9 2.5 22.25


circuit
Single pole with triple 1.5 3.5 5.25
circuit
Single pole with single 5.8 1.4 8.12
circuit
G/s # 05 Single pole with double 4.1 2.5 10.25
circuit
Single pole with triple 1.2 3.5 4.2
circuit
Single pole with single 2 1.4 2.8
circuit

G/s # 06 Single pole with double 2.26 2.5 5.65


circuit
Single pole with triple 1.1 3.5 3.85
circuit
Single pole with single 1.9 1.4 2.66
circuit
G/s # 07
Single pole with double 1.75 2.5 4.375
circuit

9-7 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Single pole with triple 0.9 3.5 3.15


circuit
Single pole with single 4.3 1.4 6.02
circuit

G/s # 08 Single pole with double 2.5 2.5 6.25


circuit
Single pole with triple 1.5 3.5 5.25
circuit
single pole with single 1.33 1.4 1.862
circuit

G/s # 09 Single pole with double 1.02 2.5 2.55


circuit
Single pole with triple 0.95 3.5 3.325
circuit
Sub Total in millions (PKRs) 74.6 169.075
132kV Transmission Line Estimated Cost (Internal)
Total Cost in
Sr. No. Transmission Line Unit in Km Million (PKRs) Millions
(PKRs)
132 kV Double Circuit
1 11.17 13.5 150.77
(Rail) on tubular pole
132 kV Single Circuit
2 1.18 12 14.16
(Rail) on tubular pole
Sub Total in millions (PKRs) 164.93
Grid Station 132/11kV, 2*20/26, control room with 2+12
Cost per G/S Total Cost in
Sr. No Type of G/S No. of G/S in million millions
(PKR) (PKR)
1 132/11kV 9 300 2700
*2 125 million per
2 132/11kV 250
Transformers transformer
3 220/132Kv 1 600 600
Sub Total in millions (PKRs) 10 3550.00
Total Cost in millions
(PKRs)
3884.00
*Additional 2 transformers have been added (1 in G/s #03 and 1 in G/s #08) to cater the
additional area load i.e. 41.9 MW

Source: Market Rate System Punjab, 2017

9-8 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

9.2.3 Street Lights


The cost estimation for the street light system devised for proposed industrial estate
is given in the table below;
Table 9.4 Street Light Cost

Single Pole Road Light


Description Unit Unit Rate Quantity Total Amount (PKR) Per Pole Cost (PKR)
Single arm pole (12 m) No. 38,500 5,037 193,919,220
Foundation No. 6,452 5,037 32,497,625
laying and fixing 4
core Cable copper Meter 1,443 58,136 83,903,879
(25mm2)
Wire (2.5mm) Meter 219 97,379 21,364,414
LED Light (60W) No. 20,000 5,037 100,737,257
Earthing (Class 2
Job 13,090 84 1,098,876
components)
DB Cost including
No. 29,040 84 2,437,842
Installation & fixing

Total for Single pole Road lights 435,959,113 86,554

Boundary Wall single Light Pole


Description Unit Unit Rate Quantity Total Amount (PKR) Per Pole Cost (PKR)
Wall mounted ( 3 m) No. 9,900 1,268 12,552,804
Foundation No. - - -
Laying and fixing 4
core Cable copper (16 Meter 1,100 19,329 21,260,887
mm2)
Wire (2.5mm) Meter 219 6,974 1,530,012
LED Light (40W) No. 15,000 1,268 19,019,400
Earthing (Class 2
Job 13,090 32 414,940
components)

DB Cost including
No. 13,860 32 439,348
Installation & fixing

Total for Boundary wall lights 55,217,391 43,548

Grand Total (PKR) 491,176,504

Source: Market Rate Systems 2017

9-9 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

The proposed industrial estate features two types of street lights. Single pole road
lights will be installed on the road networks of the industrial estate. The boundary wall
street light will be erected along the boundary wall of the industrial estate.
9.2.4 Water Supply System
After power, the major requirement of any industry is the water supply. It is estimated
that approximately 110,000 labors force will be employed in the proposed industrial
estate. The proposed industrial estate will function in shifts with each shift featuring
about 36666 labor force. The average water consumption per capita per day is
estimated to be 50 gallons. These 50 gallons will be used for cooking, drinking and
bathing purposes. Therefore, to calculate the water requirement for labor force of
proposed industrial estate;
= No. of gallons per capita per day X Total labor force
= 50 X 36666
= 1833300 gallons per day
Four Over-head water Tanks are designed (Location is given in water supply map).
Average dia. of the pipe comes out as 3 inch.
In addition to these, 4000 gallons of water will be reserved for fire-fighting purposes.
Table 9.5 Water Supply System Cost

BoQ - WATER SUPPLY


Sr. Item Description Unit Quantity Unit Amount
No Price

1 Excavation
Excavation and backfilling in Cft 26,529,319 10 265,293,188
all type of soil up to required
depth in foundation, trenches,
drains etc. and throw earth
clear of edges of excavation
including filling back in layers
to compaction as specified
and disposal of surplus
excavated skiff with in project
area complete or as directed
by the Engineer In Charge.
2 Sand Cushion

9-10 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Providing and placing of sand Cft 14,507,816 30 435,234,476


approved quality in the
bedding of water pipes
including ramming etc.
.Complete in all respects as
per plans, drawings &
specifications or as directed
by the Engineers In Charge.
3 P.E. Pipe for Water Supply
Providing, laying, cutting,
jointing, testing and
disinfecting P.E 100 PN-10
(Polyethylene)
Beta,Dadex,Vasbo are
approved equivalent
pressure pipes including cost
of all P.E Specials such as
bends, tees, crosses,
reducers and tail pieces etc.
Complete in all respects as
per plans, drawings &
specifications or as directed
by the Engineer In Charge.
(i) 6" Dia RFT 2783055 850 2,365,596,750
(ii) 8" Dia RFT 627,907 1000 627,907,000
(iii) 12" Dia RFT 337,155 1300 438,301,500
4 Gate Valve with Chamber
Providing and installation of
gate valve including c.i
adopters P.P.R.C (Beta) pipe
medium grade place with
flanges and construction of
chamber with brick masonry
1:4 cement sand mortar
chamber including
excavation, plasting 1/2" thick
inner & outer walls with 1:3
mortar ,(1:2:4) concrete block
under pipe and valve, hot

9-11 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

bitumen coating on outer side


of the wall ,top cover of
chamber R.C.C concrete,
including jointing material
complete in all respect or
directed by the Engineer In
Charge.
(i) 6" Dia No’s 111 82000 9,102,000
(ii) 8" Dia No’s 4 95000 380,000
(iii) 12" Dia No’s 7 102000 714,000
5 Fire Hydrant
Providing and fixing fire No’s 12 90000 1,080,000
hydrant standard pattern 6"
dia inlet and dia screw outlet
B.S.S. quality and height
including cost of jointing
material, excavation,
construction material, surface
box and indication plates post
mounted as per drawings
conforming to specifications
of NFPA-291 Chapter 3 with
design flow of 500 gpm and
pressure of 20psi complete in
all respect or directed by the
Engineer In Charge.
6 Dead End
Providing and installation of
dead end for draining out the
lines of approved quality
complete in all respect or
directed by Engineer In
Charge.
(i) 6" dia No’s 2 2500 5,000
(ii) 12" dia No’s 9 3500 31,500
TOTAL AMOUNT 4,143,645,413

Source: Market Rate System Punjab, 2017

9-12 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

The water supply system cost has been calculated by multiplying the current market
rate with per running feet of pipeline of average diameter.

9-13 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 9-1 Water Supply Plan

9-14 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

9.2.5 Sewerage System and Drainage


The proposed industrial estate will feature a comprehensive sewerage and drainage
system. An open drain channel covered with slabs sturdy enough to bear the traffic
load is designed. This water usage will ultimately convert in to sewage and will require
adequate system to handle This sewerage system will circulate through whole
industrial estate and collect the sewage. After collection, this sewage will be ultimately
transferred to Combined Effluent Treatment Plant for processing. After treatment, the
sewage will be disposed of in the near Gojra Nala.
Table 9.6 Sewerage & Drainage System Cost

Item Description Quantity Unit Rate Amount

1 Excavation
Excavation and backfilling Cft 14,749,620 10 147496199
in all type of soil up to
required depth in
foundation, trenches, drains
etc. and throw earth clear of
edges of excavation
including filling back in
layers to compaction as
specified and disposal of
surplus excavated skiff with
in project area complete or
as directed by the Engineer
In Charge.
2 P.C.C (1:4:8)
Providing and laying 1:4:8 Cft 1,010,159 170 171726988
(1 cement 4 sand and 8
coarse aggregate) cement
concrete using graded
crushed stone 2 inch (50
mm) and down gauge in
foundation including
leveling, compacting and
curing etc. completed as
per plans, drawings &
specifications or as directed
by the Engineer in Charge.

9-15 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

3 R.C.C Work
Providing, and laying Cft 5,235,920 400 209436795
reinforced cement concrete 8
employing steel formwork
using Margalla screened
crushed stone graded
aggregate 3/4 inch (19 mm)
and down gauge having a
minimum cylinder crushing
strength of 30 Mpa (4000
psi) at 28 days with a mix
not leaner than (1:1-1/2:3)
including cost of form work
and its removal,
compacting, levelling and
curing etc., complete in all
respect as per drawing or as
directed by the Engineer in
Charge.
4 Reinforcement
Providing and laying M.S Ton 19,005 1000 190051538
deformed steel 00 8
reinforcement bars with
minimum yield stress of 415
Mpa (grade 60) and
including the cost of
straightening, cutting,
bending, binding, wastage,
over laps complete in all
kinds of R.C.C work and as
directed by the Engineer In
Charge.
TOTAL AMOUNT 4,314,106,532

Source: Market Rate System Punjab, 2017

Design and specifications of drainage is given in section 5.7.10. The sewerage design
of industrial estate is given in figure below;

9-16 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Figure 9-2 Sewerage/Drainage of Proposed Industrial Estate

9-17 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

9.2.6 Solid Waste Management


Proper solid waste management system will be established for collection,
transportation and disposal of all sorts of waste industrial, commercial, municipal,
hospital.
Table 9.7 Solid Waste Management System Cost

Amount
Sr. No Items
(PKR Million)
1 Collection System 100
2 Transfer Station 50
3 Transportation till disposal site 201.5
Total Cost 351.5
The proposed industrial estate will feature Multi-Bin collection system. Different types
of wastes generated will be kept segregated using multi-bins. Separate collection of
every bin will be carried out. If people, follow the multi-bin system efficiently then
collected waste will be directly transferred to designated disposal site. However, in
case of vice versa scenario i.e. if there is intermixing of wastes at large quantity then
collected waste will be taken to a transfer station for proper segregation The collected
waste in the end will be transferred to a disposal site indicated by the District
Government via a fleet of vehicles.
9.2.7 Construction of Amenities
Cost of amenities like mosque, hospital, management office and 6 clubs is estimated
as 35000 per acre, 170000 per acre, 20000 per acre and 120000 per acre.
9.2.8 Road Works
The proposed industrial estate characterizes a very comprehensive road network. The
road network has been designed by keeping in view the current and future needs. The
designed road network also justifies the easy maneuvering of heavy traffic which will
flow after the establishment of the industrial estate. The cost estimate for pavement of
road network designed for proposed industrial estate;

9-18 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Table 9.8 Road Works Cost

BoQ - ROAD WORKS

SR. Item Description Unit Quantity Rate Amount


No.

1 Trench Excavation

Trench excavation in road areas Cft 1,864,800 6 11188800


in any type of soil up to any
depth to required grade, camber
including compacting dressing
trench top surface disposal of
excavated soil as directed up
to any lead and lift, including the
cost of soil as directed by the
Engineers In Charge.

2 Sub-Grade

Preparation of sub-grade over Sft 15,100,260 4 60401040


top of embankment already
compacted to at least 95%
modified AASHTO max. dry
density with required dressing
including cutting to required
grade camber and side slopes
and disposal of surplus earth
with in 2km or as directed by the
Engineers In Charge..

3 Sub-Base 18" thick

Providing and laying spreading, Cft 17,055,990 45 767519550


furnishing and compacting
grade of sub base and crushed
stone approved quality and
grade accordance with
specification to 100% max
modified AASHTO dry density

9-19 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

by appropriate compaction
equipment and roller to required
lines, grade or chamber and
cross sections shown on
drawing or directed by the
Engineer In Charge.

4 Base 9" thick

Providing and laying base Cft 8,527,995 70 596959650


course of crushed stone
aggregate of approved quality
and grade, and supplying and
speeding, furnishing and
compacting of base course
material to required depth,
camber and grade to achieve
100% max modified AASHTO
dry density , and cross sections
shown on drawing or directed
by the Engineer In Charge.

5 Premix Carpet (Bit-Mac), On WBM Surface

Providing and laying, premix Cft 3,775,065 600 2265039000


carpet of any thickness,
compacted on WBM surface, as
specified, using asphalt bitumen
60/70 or 80/100 and Broken or
Crushed stone, incl Prime coat
complete in all respects and as
directed by the Engineer In
Charge.

6 Kerb Stone

9-20 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

Providing and Fixing Pre-Cast Rft 557,739 300 167321700


Edge Stone size 12"x6"x18"
using cement concrete (1:2:4)
crushed broken stone. Including
cost of excavation, P.C.C
(1:4:8) under edge stone,
haunch front & back concrete
(1:2:4) erection along the road
in C.M (1:4) joining and
pointing, painting including cost
of excavation & shifting, etc as
per plans, drawings &
specifications or as directed by
the Engineers In Charge.

7 P.C.C (1:4:8).

Providing, and laying cement Cft 1,864,800 170 317016000


concrete not leaner than (1:4:8)
using screened Margalla
crushed stone graded
aggregate 1 inch (25 mm) and
down gauge in foundations,
having a minimum cylinder
crushing strength of (1500 psi)
at 28 days including cost of
form work and its removal,
compacting, leveling and curing
etc. as per drawings, technical
provisions and instructions of
the Engineer In charge

4,185,445,74
TOTAL AMOUNT
0

Road Earth Works

Sr. Description Unit Quantity Rate Amount


No. PKR Million

9-21 August 2018


ELN18-V01-FIEDMC
Establishment of Allama Iqbal Industrial Estate
Near Sahianwala Interchange, M-3 Motorway,
Faisalabad

1 Excavation/cutting

General Excavation in all kind of Cft 262962 5 1314810


soil/material wet or dry including
rock blasting, boulders, gravels
conglomerates etc. up to any
depth to required grade, camber
and side slopes including
dressing top and sides slops,
disposal of excavated spoil earth
etc., as per plans, drawings &
specifications or as directed by
the Engineers In Charge. (only
Road earth work)

2 Making Embankment

Making embankments with Cft 1314810 8 105184800


ordinary soil taken from the 0
cutting earth including cost of
placing, including dressing top
and side of the bank with blade
grader and compaction of
embankments earth layers not
exceeding 9" depth as per
approved section by approved
mechanical means, as per plans,
drawings & specifications or as
directed by the Engineers In
Charge. (only Road earth work)

TOTAL AMOUNT 106,499,610

Source: Market Rate System Punjab, 2017

The cost of road pavement has been calculated by determining the total square feet
area of metaled portion of roads, service roads and shoulders. This total area is
multiplied with rate obtained through market rate to get the total cost of road pavement.

9-22 August 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

It is estimated that about 6.39 million per acre will be required as development cost for
provision of all services and utilities. The estimate edge inclines more to 5 million
because costing of these utilities and services may fluctuate. Therefore, 5 million
development cost per acre will not only absorb these cost fluctuations but is also
flexible and practical.
9.3 Operational Cost
The operational and maintenance cost occurs during the O&M Phase of the project.
The importance of operational and maintenance cost is not grave at the beginning of
the project because every installed element is in new condition. However, a certain
budget must be kept reserved. This reserved budget covers the operational and
maintenance expense when some unforeseen and unexpected event takes place.
Other than that, cash flows of operational and maintenance cost occur when installed
elements of a project suffer from wear and tear after completing their time period. An
estimated amount of 1% of development cost is reserved for the purpose of
maintenance and operational cost. It is expected that a small portion of this cost is
spent before the warranty life of the elements of industrial estate expires.

9-30 August 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

10 PPP Proposal
Governments in the past have undertaken projects under traditional procurement mode
whereby capital and operating costs are paid for by the public sector and bears the risk
of cost overruns and completion delays. However, changes in international trends have
led to increase private sector participation in infrastructure and other multi-nature
projects. the traditional procurement generally characterizes following attributes;
i. The public sector procures assets from the private sector instead of services
ii. The procures assets are input specifies and public sector carries a design
analysis prior to procurement
iii. The project management is generally associated with the public sector
iv. Similarly, the project associated risks remain with public sector which includes
cost, over-run, delays etc.
In Pakistan, private sector participation in projects was witnessed in the power sector,
where the Government first established the “Hub Power Company (Hubco)” as the first
independent power generation company. Hubco became operational in 1994 and
around that time, the first power policy was also introduced, establishing a regulatory
framework for private investment in the power generation sector. Traditional
procurement was thus superseded by Public Private Partnership structures in the
power sector. Subsequently various projects of infrastructure development had been
undertaken.

10-1 August 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

11 PUBLIC PRIVATE PARTNERSHIP


A contractual arrangement whereby the private party undertakes the financing and
construction of an infrastructure project, and the operation and maintenance thereof.
The private party operates the facility over a fixed term during which it is allowed to
collect from project users’ appropriate tariffs, tolls, fees, rentals, or charges not
exceeding those proposed in the bid or negotiated and incorporated in the PPP
agreement, to enable the private party to recover its investment and operating and
maintenance expenses for the project. The private party transfers the facility to the
Government Agency at the end of the fixed term that shall be specified in the PPP
agreement. This shall include a supply-and-operate situation, which is a contractual
arrangement whereby the supplier of equipment and machinery for an infrastructure
project operates it, providing in the process technology transfer and training of the
nominated individuals of the Government Agency.
11.1 Types of PPP Mode
Under the PPP Act 2014, following are the types of PPP modes;
i. Build-and-Transfer (BT)
ii. Build-Lease-and-Transfer (BLT)
iii. Build-Operate-and-Transfer (BOT)
iv. Build-Own-and-Operate (BOO)
v. Build-Own-Operate-Transfer (BOOT)
vi. Build-Transfer-and-Operate (BTO)
vii. Contract-Add-and-Operate (CAO)
viii. Develop-Operate-and-Transfer (DOT)
ix. Rehabilitate-Operate-and-Transfer (ROT)
x. Rehabilitate-Own-and-Operate (ROO)
xi. Management Contract (MC)
xii. Service Contract (SC)
xiii. Joint Venture (JV)
11.1.1 Build-and-Transfer (BT)
A contractual arrangement whereby the private party undertakes the financing and
construction of an infrastructure project and after its completion hands it over to the
Government Agency. The Government Agency will reimburse the total project
investment, on the basis of an agreed schedule. This arrangement may be employed
in the construction of any infrastructure project, including critical facilities, which for
security or strategic reasons must be operated directly by the Government Agency.

11-1 August 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

11.1.2 Build-Lease-and-Transfer (BLT)


A contractual arrangement whereby the private party undertakes the financing and
construction of an infrastructure project and upon its completion hands it over to the
Government Agency on a lease arrangement for a fixed period, after the expiry of
which ownership of the project is automatically transferred to the Government
Agency.
11.1.3 Build-Operate-and-Transfer (BOT)
A contractual arrangement whereby the private party undertakes the financing and
construction of an infrastructure project, and the operation and maintenance thereof.
The private party operates the facility over a fixed term during which it is allowed to
collect from project users’ appropriate tariffs, tolls, fees, rentals, or charges not
exceeding those proposed in the bid or negotiated and incorporated in the PPP
agreement, to enable the private party to recover its investment and operating and
maintenance expenses for the project. The private party transfers the facility to the
Government Agency at the end of the fixed term that shall be specified in the PPP
agreement. This shall include a supply-and-operate situation, which is a contractual
arrangement whereby the supplier of equipment and machinery for an infrastructure
project operates it, providing in the process technology transfer and training of the
nominated individuals of the Government Agency.
11.1.4 Build-Own-and-Operate (BOO)
A contractual arrangement whereby the private party is authorized to finance,
construct, own, operate and maintain an infrastructure project, from which the
private party is allowed to recover its investment and operating and maintenance
expenses by collecting user levies from project users. The private party owns the
project and may choose to assign its operation and maintenance to a project
operator. The transfer of the project to the Government Agency is not envisaged in this
arrangement. However, the Government Agency may terminate its obligations after
the specified time period.
11.1.5 Build-Own-Operate-Transfer (BOOT)
A contractual arrangement similar to the BOT agreement, except that the private party
owns the infrastructure project during the fixed term before its transfer to the
Government Agency.
11.1.6 Build-Transfer-and-Operate (BTO)
A contractual arrangement whereby the Government Agency contracts out an
infrastructure project to the private party to construct it on a turn-key basis,
assuming cost overruns, delays and specified performance risks. Once the project is
commissioned, the private party is given the right to operate the facility and collect

11-2 August 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

user levies under the PPP agreement. The title of the project always vests in the
Government Agency in this arrangement.
11.1.7 Contract-Add-and-Operate (CAO)
A contractual arrangement whereby the private party expands an existing
infrastructure facility, which it leases from the Government Agency. The private party
operates the expanded project and collects user levies, to recover the investment
over an agreed period. There may or may not be a transfer arrangement with regard to
the added facility provided by the private party.
11.1.8 Develop-Operate-and-Transfer (DOT)
A contractual arrangement whereby favorable conditions external to an infrastructure
project, which is to be built by the private party, are integrated into the PPP agreement
by giving it the right to develop adjoining property and thus enjoy some of the benefits
the investment creates such as higher property or rent values.
11.1.9 Rehabilitate-Operate-and-Transfer (ROT)
A contractual arrangement whereby an existing infrastructure facility is handed over
to the private party to refurbish, operate and maintain it for a specified period, during
which the private party collects user levies to recover its investment and operation
and maintenance expenses. At the expiry of this period, the facility is returned to the
Government Agency. The term is also used to describe the purchase of an existing
facility from abroad, importing, refurbishing, erecting and operating it.
11.1.10 Rehabilitate-Own-and-Operate (ROO)
A contractual arrangement whereby an existing infrastructure facility is handed over
to the private party to refurbish, operate and maintain with no time limitation imposed
on ownership. The private party is allowed to collect user levies to recover its
investment and operation and maintenance expenses in perpetuity.
11.1.11 Management Contract (MC)
A contractual arrangement whereby the Government Agency entrusts the operation
and management of an infrastructure project to the private party for an agreed period
on payment of specified consideration. The Government Agency may charge the
user levies and collect the same either itself or entrust the collection for consideration
to any person who shall pay the same to the Government Agency.
11.1.12 Service Contract (SC)
A contractual arrangement whereby the private party undertakes to provide
services to the Government Agency for a specified period with respect to an
infrastructure facility. The Government Agency will pay the private party an amount
according to the agreed schedule.

11-3 August 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

11.1.13 Joint Venture(JV)


Joint venture is a form of public private partnership in which both the Government
Agency and the private party make equity contributions and pool their resources
towards the project development and implements the project by forming a new
company (joint venture Company) or assuming joint ownership of an existing
company through the purchase of shares. When the joint venture company is
established, it will have a separate legal identity and it is through this company that
the common enterprise of the public and private partners will be carried out. The
Government Agency and the private party will own the shares of the joint venture
company and there will be a board of directors, usually made up of representatives
of the shareholders.
11.2 Advantages of PPP Mode
The PPP mode bears fruits both for Public as well as Private sector. These advantages
are summarized in the table below;
Table 11.1 Development Cost Stream

From Public Sector Perspective From Private Sector Perspective

 Low upfront capital requirements  Ability to access cheaper sources


of funding (bank debt) due to better
 Private party bears the risk of
credit standing of public sector
development and operations (better
partner
risk allocation)
 Public sector assets typically
 Ability to leverage on private sector
efficiency thereby reducing overall generate stable long term returns
project costs  Public sector partner facilitates in
regulatory approvals and provision
of basic infrastructure

Apart from advantages of PPP mode, there are also some downsides which public
sector need to addressed before commencing the project. These are listed in the table
below;

11-4 August 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

Table 11.2 Downsides of PPP Mode

From Public Sector Perspective From Private Sector Perspective

 Failure by private party in  Project viability is highly contingent


developing the project can result in upon public entity meeting its
loss of economic benefits as well regulatory and legal commitments
as negative publicity for the public  Contract enforcement becomes an
sector issue as Public sector is usually at
 Private sector may not have mature an advantageous position and
sector specialist that can hence sufficient costs are inbuilt in
effectively implement a PPP project project structure (Insurance)
 Limited control over design, delivery  Expectation gap between the public
and maintenance of project and private partners
 Economic return is contingent upon
performance of the private partner

11.3 Basic Structuring of PPP Mode


Typically, PPP projects are characterized by the following factors:
i. Provision by private sector of a public service through a contract that spreads
the cash flow payment for the government arising from the use of the
infrastructure over its life/concession period provision of the service;
ii. Sharing of risk between public and private sector that is innovative with respect
to traditional forms of risk sharing;
iii. Use of capital markets to generate funds for development of the project; and
iv. Deliver a service that provides value for money compared to traditional
procurement
11.4 Profits likely to be achieved via PPP Mode
The benefits which are likely to be achieved via PPP mode are listed below;
i. The implementation of the project under PPP mode is fast resulting in timely
completion. In case of developing countries, the projects taken up by public
sector generally face delays than those initiated by private sector
ii. Leveraging public funds with private financing from local and international
markets. For every rupee that the Government spends it will strive to leverage
the maximum possible from the private sector. The ultimate objective will be to
limit the Government’s contribution to providing targeted subsidies to low

11-5 August 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

income consumers in order to allow full cost recovery by the private service
provider.
iii. Enhanced accountability in service delivery by linking service provision to a firm
contractual arrangement. The service levels will be defined clearly in the PPP
agreements in terms of outputs and outcomes required from the private sector.
The government agencies will be required to put in place strict monitoring
mechanisms. Poor performance by the private service provider will be
penalized and may result in contract termination.
iv. Public sector management shift from budget expenditure to whole life cycle cost
management. Most of the services in the public sector are of poor quality
because government agencies take a short-term viewpoint without considering
whole life costing of assets, with the result that once these are commissioned
they are not maintained and refurbished or upgraded in time. Since the focus
in engaging with the private sector is on services it provides during the entire
concession period, the private investors will have the incentive to ensure that
the underlying assets are of good quality and adequately maintained.
11.5 Diligence for Success of PPP Mode
To ensure that project under PPP mode is successful, certain due diligence will be
carried out. This working will include taking inputs from independent experts and
advisors of different field. It is assumed that experts of following fields will be consulted
in this regard;
i. Technical: Sectoral Experts capable of project management including
quantitative and qualitative accomplishment of development and operation of
works.
ii. Legal: For looking into regulations and policies to timely handle the legal
issues which may arise during different stages of the project
iii. Financial: To structuralize the PPP ensuring adequate source of funding
including model audit mechanism, conducting NPV etc.
iv. Insurance: These experts will look into appropriateness of insurance cover,
adequacy of pricing, provision and suitability of risk sharing mechanism
11.6 Previous PPP Options
In previous PPP Proposal, based on certain scenarios, Build-Lease-Transfer (BLT)
mode was selected. This was because in 2017-2018, the FIEDMC’s request for loan
was not entertained in Annual Development Plan. therefore, it was envisaged that all
the cost for purchasing and developing the land will be bear by Private Party. Hence,
initially BLT was scrutinized in previous PPP proposal. However, in year 2018-19, the
FIEDMC’s request for loan has been approved. Here it gives us two options. Either
use this amount as an equity and form a JV collaboration with private party or use this

11-6 August 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

amount to purchase land and invite private party for task of financing and construction
only i.e. go for Build and Transfer option.
11.7 Scrutinized PPP Options
Understanding the concept of PPP mode, FIEDMC intends to develop this proposed
industrial estate under PPP mode. This will be the very first industrial estate which is
going to be to be developed under this mode in country’s history. As there will be no
involvement of Government in this case so provision of subsidies is out of question.
This has considerably increased the potential of financial risk involved in the project.
the investor will have to use his own capital to develop the proposed industrial estate.
Asp per scope of work, the financial model of the proposed industrial estate will be
developed on PPP mode. There are total 13 PPP agreements and out of these 13
options after rigorous brain storming and discussion, Élan has selected 2 most
applicable and appropriate options in case of proposed industrial estate. These two
options are explained below;
i. Joint Venture (JV)
ii. Build and Transfer (BT))

11.7.1 Joint Venture (J.V)


Joint venture is a form of public private partnership in which both the Government
Agency and the private party make equity contributions and pool their resources
towards the project development and implements the project by forming a new
company (joint venture Company) or assuming joint ownership of an existing
company through the purchase of shares. When the joint venture company is
established, it will have a separate legal identity and it is through this company that
the common enterprise of the public and private partners will be carried out. The
Government Agency and the private party will own the shares of the joint venture
company and there will be a board of directors, usually made up of representatives
of the shareholders.
11.7.2 Built-and-Transfer (BT)
A contractual arrangement whereby the private party undertakes the financing and
construction of an infrastructure project and after its completion hands it over to the
Government Agency. The Government Agency will reimburse the total project
investment, on the basis of an agreed schedule. This arrangement may be employed
in the construction of any infrastructure project, including critical facilities, which for
security or strategic reasons must be operated directly by the Government Agency.

11-7 August 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

11.8 Evaluation of PPP


The evaluation of possible PPP modes scrutinized for the project is given in the table below;
Table 11.3 Evaluation of PPP Modes

No. Evaluation Criteria BT JV


1 Control & Operational Flexibility
The extent to which each procurement option enables the government to
10 5
retain flexibility in terms of the operational profile

2 Risk Management
The extent to which each procurement option provides incentives effectively 8 7
and efficiently to manage and reduce risks, thereby minimizing the whole-of-
life-cost to the government

3 Time to Deliver Project


The extent to which each procurement option is able to support achieving an
5 4
operational supply by X date.

4 Market Interest
The extent to which each procurement option assists in maximizing market 6 8
interest amongst the appropriate market participants with the relevant skills,
expertise and capacity to deliver the project

5 Value for Money


The extent to which each procurement option assists in maximizing the
10 6
government’s value for money from implementing the project:

6 Budget Certainty
The extent to which each procurement option assist in providing earlier budget
8 8
certainty to the government

9 February 2018
PP18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

7 Flexibility (future scope changes)


The extent to which each procurement option assists the government in
10 6
managing and implementing changes to the functional requirements of the
project over time (particularly in relation to any variation in the required
capacity of the project)
8 Stakeholder Management
The extent to which each procurement option assists the government in
7 7
managing stakeholders through the delivery of the project

9 Overall Rating 64 51
Evaluation Results 2nd Preference 1st Preference

11.9 Marking Criteria


i. The Build Transfer mode clearly indicates that after completion of the project, the project will be controlled and operated by
government agency, however, in case of Joint Venture, the element of operating and controlling the project is on shared basis
which can be difficult. Hence, BT holds an upper hand over JV in this regard.
ii. The involvement of risk in both cases is almost same. However, in case of BT, the risk involved can be easily tackled as control
is in hands of government agency.
iii. The parameter about “Time to deliver project” can be affected by externalities like role of utilities provision departments,
regulators etc. therefore time to deliver the project under the both options will not be in too much under control. However, it is
quite possible that this parameter under BT may be managed in better way because government can handle these externalities
in better way
iv. The proposed project is part of CPEC therefore involvement of international market is quite certain. The potential investors
tend to have more control over their investment. Therefore, in this case JV will be more preferred option.
v. In BT mode, the outcome on government’s investment in more as the third party will only get an agreed amount of profit.
Whereas in case of J.V, the government’s money value will be only of its equity in the form land which is approx. 2 million
excluding the hassle which agency went through to get the land. Whereas, the private party will just convert land in to finished

10 February 2018
PP18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

product in the form of developed industrial plots. Per acre investment for private party will be around 6.9 million. Therefore, BT
ensures better money value than J.V in this regard.
vi. This factor is equally in both options. Ideally, the budget will available on time in both cases because there will be no procedural
delay. However, due to unforeseen factor or mishap, we assume that 20% maybe there for delay budget.
vii. In this regard, BT has more flexibility because issues fluctuation in taxes, rates etc. are well tackled by the government agency.
In J.V, due to shared controlling, these issues may face delay due to collision of interests.
viii. This factor affects the both modes equally. In JV, the private sector has better flexibility to tackle the stakeholders while
Government departments are equipped with better regulatory tools to handle the stakeholders, So, this factor affects the both
modes in the same way.

11 February 2018
PP18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

11.10 Selection of Preferred Option


After the comparison and evaluation of PPP options, the preferred option is the Option-
1 i.e. Build and Transfer, therefore, it is proposed to opt. The option can serve as a
sustainable model that can be replicated for all other similar projects.
.

11-11 March 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

12 Business and Financial Model


The business and financial mode crafted for both scenarios of the proposed industrial
estate are explained below;
12.1 Scenario 1 (Local Investment)
The business and financial model for scenario 1 are elaborated below;
12.1.1 Business Plan
The development will be carried out in the form of two packages namely Package 1
which contains Small and Medium Industrial Plots and lies on the upper side of the
Chiniot road. The Package 2 contains Medium and Large Industrial Plots and lies on
the lower side of Chiniot road. In corresponding packages, civil and electrical works
will be conducted simultaneously to avoid wastage of resources. Boundaries of
packages are defined with the help of existing Sahianwala-Chiniot road and main road
of the proposed scheme.
It is envisaged that colonization of proposed industrial estate will start during 3rd year
of development. As it seems that in the meanwhile, enough infrastructure would be
available to support establishment of the industry. It is expected that these industrial
units will become operational in 5th year of industrial estate development when the
development work will also be going to complete. So, 5th year will be quite suitable to
start sale of the commercial plots in parallel to sale of industrial plots.
Table 12.1 Package wise Plot Distribution

Sr. No Packages No. of Plots

1 Package 1 495

3 Package 2 168

5 Total Plots 663

The business plan formulated for proposed industrial estate will allow a costumer to
book a plot by paying a 20% down payment. The rest 80% of the payment will be
recovered through eight equal quarterly installments. The selling of developed
commercial plots will be carried out from year 5 to year 8 in parallel with industrial
plots. Possession of the plots will be available from 5 years after commencement of
development work.

12-1 March 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

Customers who will give early advance payment will enjoy a rebate of 2%. In case of
delay in payment, a deferment charge on per day basis will be imposed whose amount
will be decided by FIEDMC Board.
It is expected that buyer will start construction works within the two years from date of
taking possession. Buyers should have to take possession within one month after
submission of all installments and/or availability of possession. Otherwise, the
possession will be considered automatically transferred to the buyer.
Amenity area and open space are generally non-saleable areas. However, some
amenity plots like petrol pump, weighing station, loading/unloading platforms etc. and
some part of open spaces can be sold. Therefore, 31% of amenity area and open
space area is included in cash flow table for sale in 13th and 14th year when industrial
estate would have become fully operational. In this way, the sale will bring appropriate
revenue. Some of the amenity area e.g. petrol pump plot, weighing station plot would
be required to be sold in parallel to start year of the industrial activity. Therefore, one
third of saleable amenity/open space area would be offered for sale in 4th year and
remaining will be sold in 13th and 14th years.
The continuous revenue will also be part of the business plan. This revenue is
recurring in its nature. It includes; title transfer fee, possession fee, scrutiny fee of
building plan, conservatory charges and miscellaneous revenue. Whereas, in addition
to it, 35% of commercial area is reserved for continuous revenue. FIEDMC will get
constructed the buildings on this area and will rent out for continuous revenue.
However, this unsold commercial area has been considered as revenue in cash flow
table at 15th year of the sale.
Upon recovery of investment of Private party, the party will transfer the project to the
FIEDMC.
It is pertinent to mention here that public consultation from people residing in vicinity
of project site revealed that people want such industrial setup which promotes green
businesses, healthy ecology, social justice and fair wages.

12-2 March 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

12.1.2 Financial Model (Local Investment)


To formulate the financial Model of proposed industrial estate, following data is used;

FIEDMC Financial Feasibility Model

Option Selected: Option 1: Local Investment


Equity : Debt
NPV (PKR)
Project Government Private Party

15,467.24 (3,005.19) 8,849.08


IRR (%)
Project Government Private Party 50% 50%

16.45% 5.04% 15.60%


Payback (Years)
Project Government Private Party

8.01 16.65 8.29 Equity Debt

Project Cash Inflow / Outflow Projections


14,000.00

12,000.00

10,000.00

8,000.00

6,000.00

4,000.00

2,000.00

-
Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12

Year 13

Year 14

Year 15

Year 16

Year 17

Year 18

Year 19

Year 20
TOTAL CASH REVENUE INFLOW TOTAL CASH OUTFLOW

Cummulative Project Cash Flow Projections


100,000.00

80,000.00

60,000.00

40,000.00

20,000.00

-
Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12

Year 13

Year 14

Year 15

Year 16

Year 17

Year 18

Year 19

Year 20

(20,000.00)

(40,000.00)

12-4 March 2018


ELN18-V01-FIEDM
Establishment of an Industrial Estate near
SahianwalaInterchange,M-3Motorway
Faisalabad
Table12.2RevenueandExpensesStream
Sale of Land Accounting Revenue Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
S&M Industrial
Plots 29,944.77 1,198.37 1,255.43 1,126.72 1,386.74 1,733.42 2,166.78 2,600.13 2,860.14 3,120.16 3,380.17 3,640.18 5,476.55 - - - - - - - -
M&L Industrial
Plots 33,707.75 1,348.96 1,413.19 1,268.31 1,561.00 1,951.25 2,439.06 2,926.87 3,219.56 3,512.25 3,804.93 4,097.62 6,164.75 - - - - - - - -

Commercial Area 15,340.00 - - - - 1,062.00 2,478.00 2,950.00 8,850.00 - - - - - - - - - - - -

Amenity Area 9,720.00 - - - - - - - - - - - - 4,455.00 5,265.00 - - - - - -

Total 88,712.52 2,547.32 2,668.62 2,395.03 2,947.73 4,746.67 7,083.84 8,477.00 14,929.70 6,632.40 7,185.10 7,737.80 11,641.29 4,455.00 5,265.00 - - - - - -
Sale of Land Cash Revenue Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
S&M Industrial
Plots 29,944.77 239.67 730.43 1,206.86 1,230.21 1,352.07 1,681.42 2,080.10 2,478.79 2,808.14 3,068.15 3,328.17 3,903.45 3,646.69 2,190.62 - - - - - -
M&L Industrial
Plots 33,707.75 269.79 822.22 1,358.52 1,384.80 1,521.97 1,892.71 2,341.50 2,790.28 3,161.02 3,453.71 3,746.40 4,393.97 4,104.95 2,465.90 - - - - - -

Commercial Area 15,340.00 - - - - 212.40 920.40 2,006.00 3,941.20 4,720.00 3,540.00 - - - - - - - - - -

Amenity Area 9,720.00 - - - - - - - - - - - - 891.00 2,835.00 3,888.00 2,106.00 - - - -

Total 88,712.52 509.46 1,552.65 2,565.38 2,615.01 3,086.44 4,494.53 6,427.60 9,210.28 10,689.16 10,061.86 7,074.56 8,297.42 8,642.64 7,491.52 3,888.00 2,106.00 - - - -
Other Revenue Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Continuous Revenue from Land 18,302.49 - - - - - - - - - 987.66 1,086.43 1,195.07 1,314.58 1,446.03 1,590.64 1,749.70 1,924.67 2,117.14 2,328.85 2,561.74
Title Transfer Fee Revenue
(One Time) 522.00 0.00 0.00 48.52 48.52 36.85 38.65 39.21 41.57 41.57 48.65 36.85 36.85 36.85 51.74 8.10 8.10 0.00 0.00 0.00 0.00
Title Transfer Fee Revenue
(Recurring) 15.72 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.62 2.62 2.62 2.62 2.62 2.62

Possession Fee 2,088.00 0.00 0.00 194.08 194.08 147.39 154.59 156.83 166.27 166.27 194.59 147.39 147.39 147.39 206.96 32.40 32.40 0.00 0.00 0.00 0.00
Building Plan Scrutiny Fee
Revenue 1,305.00 121.30 121.30 92.12 96.62 98.02 103.92 103.92 121.62 92.12 92.12 92.12 129.35 20.25 20.25 0.00 0.00 0.00 0.00 0.00 0.00
Conservatory
Charges 3,740.38 24.26 48.52 66.94 86.27 105.87 126.65 147.44 171.76 190.18 208.61 227.03 252.90 256.95 261.00 261.00 261.00 261.00 261.00 261.00 261.00

Total 25,973.60 145.56 169.82 401.66 425.49 388.12 423.80 447.39 501.21 490.13 1,531.62 1,589.81 1,761.55 1,776.01 1,985.98 1,894.76 2,053.82 2,188.29 2,380.76 2,592.47 2,825.36

TOTAL CASH REVENUE 10,418.6


INFLOW 114,686.12 655.03 1,722.47 2,967.05 3,040.50 3,474.56 4,918.33 6,874.99 9,711.49 11,179.30 11,593.48 8,664.37 10,058.97 5 9,477.50 5,782.76 4,159.82 2,188.29 2,380.76 2,592.47 2,825.36
Development
Cost Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Cost of Land 6,864.00 6,864.00

Development Expenditure 23,047.93 4,609.59 4,609.59 4,609.59 4,609.59 4,609.59 - - - - - - - - - - - - - - - -

Financing Cost 1,094.78 218.96 218.96 218.96 218.96 218.96 - - - - - - - - - - - - - - - -

Total Development Cost 31,006.71 11,692.54 4,828.54 4,828.54 4,828.54 4,828.54 - - - - - - - - - - - - - - - -

Maintenance Cost 5,980.05 230.48 242.00 254.10 266.81 280.15 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16

TOTAL CASH OUTFLOW 36,986.76 11,923.02 5,070.55 5,082.65 5,095.35 5,108.69 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16 294.16

12-5 March2018
ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
SahianwalaInterchange,M-3Motorway
Faisalabad
12.1.3 Project Appraisal
Theprojectappraisal isdepictedinthetable12-3;
Table12.3ProjectAppraisal
Project Cash
Schedule Total Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Development Cost (31,006.71) (11,692.54) (4,828.54) (4,828.54) (4,828.54) (4,828.54) - - - - - - - - - - - - - - - -

Maintenance Cost (5,980.05) (230.48) (242.00) (254.10) (266.81) (280.15) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16)

Revenue 114,686.12 - 655.03 1,722.47 2,967.05 3,040.50 3,474.56 4,918.33 6,874.99 9,711.49 11,179.30 11,593.48 8,664.37 10,058.97 10,418.65 9,477.50 5,782.76 4,159.82 2,188.29 2,380.76 2,592.47 2,825.36

NET CASH FLOW 77,699.36 (11,923.02) (4,415.52) (3,360.17) (2,128.30) (2,068.20) 3,180.41 4,624.18 6,580.83 9,417.33 10,885.14 11,299.32 8,370.21 9,764.81 10,124.49 9,183.34 5,488.60 3,865.66 1,894.13 2,086.60 2,298.31 2,531.20
Net Present Value
(NPV) 15,467.24 (11,923.02) (4,023.25) (2,789.67) (1,609.98) (1,425.52) 1,997.38 2,646.11 3,431.22 4,473.95 4,711.87 4,456.64 3,008.06 3,197.49 3,020.75 2,496.53 1,359.55 872.47 389.52 390.98 392.39 393.76
Internal Rate of Return
(IRR) 16.45%

Cumulative Cash Flow (11,923.02) (16,338.54) (19,698.71) (21,827.02) (23,895.21) (20,714.81) (16,090.63) (9,509.80) (92.47) 10,792.67 22,091.99 30,462.20 40,227.02 50,351.51 59,534.85 65,023.45 68,889.11 70,783.24 72,869.84 75,168.16 77,699.36
Payback Period (Years) 8.01 0 1 1 1 1 1 1 1 1 0.0084952 0 0 0 0 0 0 0 0 0 0 0

12.1.4 Government and Private Party Appraisal


Table12.4Govt.&PrivatePartAppraisal
Private Company Cash
Flows: Total Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Cash Outflows (24,142.71) (4,828.54) (4,828.54) (4,828.54) (4,828.54) (4,828.54) - - - - - - - - - - - - - - - -

Cash Inflows 94,879.00 - 384.11 1,365.58 2,511.22 2,567.12 2,957.78 4,300.48 6,120.17 8,758.12 10,123.18 10,508.37 7,784.30 9,081.28 9,415.78 8,540.51 5,104.40 3,595.07 1,761.54 - - -
Net Cash Flow Before
Tax 70,736.29 (4,828.54) (4,444.43) (3,462.96) (2,317.32) (2,261.42) 2,957.78 4,300.48 6,120.17 8,758.12 10,123.18 10,508.37 7,784.30 9,081.28 9,415.78 8,540.51 5,104.40 3,595.07 1,761.54 - - -

Sales Tax (1,479.59) (295.92) (295.92) (295.92) (295.92) (295.92) - - - - - - - - - - - - - - - -

Corporate Tax (22,012.74) - - - - - (739.44) (1,075.12) (1,530.04) (2,189.53) (2,530.79) (2,627.09) (1,946.07) (2,270.32) (2,353.94) (2,135.13) (1,276.10) (898.77) (440.39) - - -

Super Tax - - - - - - - - - - - - - - - - - - - - - -

Net Cash Flow 47,243.96 (5,124.46) (4,740.35) (3,758.87) (2,613.24) (2,557.34) 2,218.33 3,225.36 4,590.13 6,568.59 7,592.38 7,881.28 5,838.22 6,810.96 7,061.83 6,405.38 3,828.30 2,696.30 1,321.16 - - -

Net Present Value (NPV) 8,849.08 (5,124.46) (4,319.22) (3,120.68) (1,976.81) (1,762.67) 1,393.17 1,845.66 2,393.28 3,120.58 3,286.53 3,108.50 2,098.12 2,230.25 2,106.97 1,741.33 948.28 608.55 271.69 - - -
IRR 15.60%

Cumulative Cash Flow (5,124.46) (9,864.81) (13,623.68) (16,236.92) (18,794.26) (16,575.93) (13,350.57) (8,760.44) (2,191.85) 5,400.54 13,281.81 19,120.04 25,931.00 32,992.83 39,398.21 43,226.51 45,922.81 47,243.96 47,243.96 47,243.96 47,243.96
Payback Period (Years) 8.29 0 1 1 1 1 1 1 1 1 0.28869031 0 0 0 0 0 0 0 0 0 0 0
Government Cash
Flows: Total Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
Cash Outflows:
Maintenance (5,980.05) (230.48) (242.00) (254.10) (266.81) (280.15) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16)
Cash Inflows from
Project 114,686.12 - 655.03 1,722.47 2,967.05 3,040.50 3,474.56 4,918.33 6,874.99 9,711.49 11,179.30 11,593.48 8,664.37 10,058.97 10,418.65 9,477.50 5,782.76 4,159.82 2,188.29 2,380.76 2,592.47 2,825.36
Net Cash Flow from
Project 108,706.07 (230.48) 413.02 1,468.37 2,700.24 2,760.35 3,180.41 4,624.18 6,580.83 9,417.33 10,885.14 11,299.32 8,370.21 9,764.81 10,124.49 9,183.34 5,488.60 3,865.66 1,894.13 2,086.60 2,298.31 2,531.20
Payments to Private
Company (94,879.00) - (384.11) (1,365.58) (2,511.22) (2,567.12) (2,957.78) (4,300.48) (6,120.17) (8,758.12) (10,123.18) (10,508.37) (7,784.30) (9,081.28) (9,415.78) (8,540.51) (5,104.40) (3,595.07) (1,761.54) - - -

Cost of Land (6,864.00) (6,864.00) - - - - - - - - - - - - - - - - - - - -


Net Cash Flow for
Government 6,963.06 (7,094.48) 28.91 102.79 189.02 193.22 222.63 323.69 460.66 659.21 761.96 790.95 585.91 683.54 708.71 642.83 384.20 270.60 132.59 2,086.60 2,298.31 2,531.20

Net Present Value (NPV) (3,005.19) (7,094.48) 26.34 85.33 142.98 133.18 139.82 185.23 240.19 313.18 329.83 311.96 210.56 223.82 211.45 174.76 95.17 61.07 27.27 390.98 392.39 393.76
IRR 5.04%

12-10 March2018
ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
SahianwalaInterchange,M-3Motorway
Faisalabad

Cumulative Cash Flow (7,094.48) (7,065.57) (6,962.78) (6,773.77) (6,580.54) (6,357.91) (6,034.22) (5,573.56) (4,914.35) (4,152.39) (3,361.44) (2,775.52) (2,091.98) (1,383.27) (740.44) (356.23) (85.64) 46.95 2,133.55 4,431.87 6,963.06
0.645891
Payback Period (Years) 16.65 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 0 0 0

12-11 March2018
ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

12.2 Scenario 2 (CPEC Investment)


The business and financial model for scenario is given below;
12.2.1 Business Plan
The development will be carried out in the form of two packages namely Package 1 which
contains Small and Medium Industrial Plots and lies on the upper side of the Chiniot road.
The Package 2 contains Medium and Large Industrial Plots and lies on the lower side of
Chiniot road. In corresponding packages, civil and electrical works will be conducted
simultaneously to avoid wastage of resources. Boundaries of packages are defined with
the help of existing Sahianwala-Chiniot road and main road of the proposed scheme.
It is envisaged that colonization of proposed industrial estate will start during 3rd year of
development. As it seems that in the meanwhile, enough infrastructure would be available
to support establishment of the industry. It is expected that these industrial units will
become operational in 4th year of industrial estate development when the development
work has already been completed. So, 4th year will be quite suitable to start sale of the
commercial plots.
Table 12.5 Package wise Plot Distribution

Sr. No Packages No. of Plots

1 Package 1 495

3 Package 2 168

5 Total Plots 663

The business plan formulated for proposed industrial estate will allow a costumer to book
a plot by paying a 20% down payment. The rest 80% of the payment will be recovered
through eight equal quarterly installments. The selling of developed commercial plots will
be carried out from year 4 to year 5. Possession of the plots will be available from 3 years
after commencement of development work. Customers who will give early advance
payment will enjoy a rebate of 2%. In case of delay in payment, a deferment charge on
per day basis will be imposed whose amount will be decided by FIEDMC Board.
It is expected that buyer will start construction works within the two years from date of
taking possession. Buyers should have to take possession within one month after
submission of all installments and/or availability of possession. Otherwise, the
possession will be considered automatically transferred to the buyer.

12-10 March 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

Amenity area and open space are generally non-saleable areas. However, some amenity
plots like petrol pump, weighing station, loading/unloading platforms etc. can be sold.
Therefore, 25% of amenity area is included in cash flow table for sale in 3rd year when
industrial estate would have become fully operational. In this way, the sale will bring
appropriate revenue.
The proposed industrial estate will generate continuous revenue as well. This revenue is
recurring in its nature. It includes; title transfer fee, possession fee, scrutiny fee of building
plan, conservatory charges and miscellaneous revenue. It is expected at the rate of 10
million per year. Whereas, in addition to it, 35% of commercial area is reserved for
continuous revenue. FIEDMC will get constructed the buildings on this area and will rent
out for continuous revenue. However, this unsold commercial area has not been
considered as revenue in cash flow at the moment.
Upon recovery of investment of Private party, the party will transfer the project to the
FIEDMC.
It is pertinent to mention here that public consultation from people residing in vicinity of
project site revealed that people want such industrial setup which promotes green
businesses, healthy ecology, social justice and fair wages.
* CW=Civil Works *EW=Electric Works

12-11 March 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

12.2.2 Financial Model (CPEC Investment)


To formulate the financial Model of proposed industrial estate, following data is used;

FIEDMC Financial Feasibility Model

Option Selected: Option 2: CPEC Investment


Equity : Debt
NPV (PKR)
Project Government Private Party

18,034.35 3,988.03 5,529.42


IRR (%)
Project Government Private Party 50% 50%

24.00% 14.67% 18.82%


Payback (Years)
Project Government Private Party

3.56 9.80 3.82 Equity Debt

Project Cash Inflow / Outflow Projections


16,000.00
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
-
Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12

Year 13

Year 14

Year 15

Year 16

Year 17

Year 18

Year 19

Year 20
TOTAL CASH REVENUE INFLOW TOTAL CASH OUTFLOW

Cummulative Project Cash Flow Projections


70,000.00
60,000.00
50,000.00
40,000.00
30,000.00
20,000.00
10,000.00
-
Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Year 11

Year 12

Year 13

Year 14

Year 15

Year 16

Year 17

Year 18

Year 19

Year 20

(10 ,000.00)
(20,000.00)
(30 ,000.00)

12-12 March 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
SahianwalaInterchange,M-3Motorway
Faisalabad
Table12.6RevenueandExpensesStream(CPECInvest.)
Sale of Land Accounting Revenue Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

S&M Industrial Plots 18,102.60 5,220.60 5,966.40 6,915.60 - - - - - - - - - - - - - - - - -

M&L Industrial Plots 20,377.44 5,876.64 6,716.16 7,784.64 - - - - - - - - - - - - - - - - -

Commercial Area 8,960.00 - - - 4,200.00 4,760.00 - - - - - - - - - - - - - - -

Amenity Area 1,875.00 - - 1,875.00 - - - - - - - - - - - - - - - - -


Total
49,315.04 11,097.24 12,682.56 16,575.24 4,200.00 4,760.00 - - - - - - - - - - - - - - -
Sale of Land Cash Revenue Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

S&M Industrial Plots 18,102.60 1,044.12 3,281.52 5,857.92 5,152.80 2,766.24 - - - - - - - - - - - - - - -

M&L Industrial Plots 20,377.44 1,175.33 3,693.89 6,594.05 5,800.32 3,113.86 - - - - - - - - - - - - - - -

Commercial Area 8,960.00 - - - 840.00 2,632.00 3,584.00 1,904.00 - - - - - - - - - - - - -

Amenity Area 1,875.00 - - 375.00 750.00 750.00 - - - - - - - - - - - - - - -


Total
49,315.04 2,219.45 6,975.41 12,826.97 12,543.12 9,262.10 3,584.00 1,904.00 - - - - - - - - - - - - -
Other Revenue Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Continuous Revenue from Land 35,041.46 - - - - - 1,102.89 1,213.18 1,334.49 1,467.94 1,614.74 1,776.21 1,953.83 2,149.21 2,364.14 2,600.55 2,860.60 3,146.67 3,461.33 3,807.47 4,188.21
Title Transfer Fee Revenue
(One Time) 517.80 0.00 0.00 158.53 158.53 178.34 11.20 11.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Title Transfer Fee Revenue
(Recurring) 37.10 0.00 0.00 0.00 0.00 0.00 2.47 2.47 2.47 2.47 2.47 2.47 2.47 2.47 2.47 2.47 2.47 2.47 2.47 2.47 2.47

Possession Fee 2,071.20 0.00 0.00 634.13 634.13 713.34 44.80 44.80 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Building Plan Scrutiny Fee
Revenue 1,294.50 396.33 396.33 445.84 28.00 28.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Conservatory Charges 4,881.20 79.27 158.53 247.70 253.30 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90
Total
43,843.25 475.60 554.86 1,486.20 1,073.96 1,178.58 1,420.26 1,530.55 1,595.87 1,729.32 1,876.11 2,037.58 2,215.20 2,410.59 2,625.51 2,861.92 3,121.98 3,408.04 3,722.70 4,068.84 4,449.58
TOTAL CASH REVENUE
INFLOW 93,158.29 2,695.04 7,530.27 14,313.17 13,617.08 10,440.68 5,004.26 3,434.55 1,595.87 1,729.32 1,876.11 2,037.58 2,215.20 2,410.59 2,625.51 2,861.92 3,121.98 3,408.04 3,722.70 4,068.84 4,449.58
Development Cost Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Cost of Land 6,864.00 6,864.00

Development Expenditure 23,047.93 7,682.64 7,682.64 7,682.64 - - - - - - - - - - - - - - - - - -

Financing Cost 1,094.78 364.93 364.93 364.93 - - - - - - - - - - - - - - - - - -

Total Development Cost 31,006.71 14,911.57 8,047.57 8,047.57 - - - - - - - - - - - - - - - - - -

Maintenance Cost 5,529.14 230.48 242.00 254.10 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81

TOTAL CASH OUTFLOW 36,535.85 15,142.05 8,289.57 8,301.67 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81 266.81

12-13 March2018
ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
SahianwalaInterchange,M-3Motorway
Faisalabad
12.2.3 Project Appraisal (CPEC Investment)
Project Cash
Schedule Total Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Development Cost (31,006.71) (14,911.57) (8,047.57) (8,047.57) - - - - - - - - - - - - - - - - - -

Maintenance Cost (5,529.14) (230.48) (242.00) (254.10) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81)

Revenue 93,158.29 - 2,695.04 7,530.27 14,313.17 13,617.08 10,440.68 5,004.26 3,434.55 1,595.87 1,729.32 1,876.11 2,037.58 2,215.20 2,410.59 2,625.51 2,861.92 3,121.98 3,408.04 3,722.70 4,068.84 4,449.58

NET CASH FLOW 56,622.44 (15,142.05) (5,594.53) (771.40) 14,046.36 13,350.27 10,173.87 4,737.45 3,167.74 1,329.06 1,462.51 1,609.30 1,770.77 1,948.40 2,143.78 2,358.70 2,595.11 2,855.17 3,141.23 3,455.90 3,802.03 4,182.78
Net Present Value
(NPV) 18,034.35 (15,142.05) (5,097.52) (640.43) 10,625.52 9,201.78 6,389.45 2,710.93 1,651.65 631.40 633.08 634.73 636.38 638.00 639.62 641.22 642.82 644.41 645.99 647.56 649.13 650.69
Internal Rate of Return
(IRR) 24.00%

Cumulative Cash Flow (15,142.05) (20,736.58) (21,507.98) (7,461.62) 5,888.65 16,062.52 20,799.97 23,967.71 25,296.76 26,759.27 28,368.57 30,139.35 32,087.74 34,231.52 36,590.22 39,185.34 42,040.51 45,181.74 48,637.63 52,439.66 56,622.44
0.5589117
Payback Period (Years) 3.56 0 1 1 1 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

12.2.4 Government and Private Party Appraisal


Private Company Cash
Flows: Total Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Cash Outflows (24,142.71) (8,047.57) (8,047.57) (8,047.57) - - - - - - - - - - - - - - - - - -

Cash Inflows 52,196.82 - 2,207.74 6,548.55 12,641.72 12,015.24 9,156.48 4,263.71 2,850.97 1,196.15 1,316.26 - - - - - - - - - - -
Net Cash Flow Before
Tax
28,054.10 (8,047.57) (5,839.83) (1,499.02) 12,641.72 12,015.24 9,156.48 4,263.71 2,850.97 1,196.15 1,316.26 - - - - - - - - - - -

Sales Tax (1,479.59) (493.20) (493.20) (493.20) - - - - - - - - - - - - - - - - - -

Corporate Tax (10,860.13) - - - (3,160.43) (3,003.81) (2,289.12) (1,065.93) (712.74) (299.04) (329.06) - - - - - - - - - - -

Super Tax - - - - - - - - - - - - - - - - - - - - - -
Net Cash Flow
15,714.38 (8,540.77) (6,333.03) (1,992.22) 9,481.29 9,011.43 6,867.36 3,197.78 2,138.22 897.11 987.19 - - - - - - - - - - -

Net Present Value (NPV) 5,529.42 (8,540.77) (5,770.41) (1,653.97) 7,172.23 6,211.20 4,312.88 1,829.87 1,114.86 426.20 427.33 - - - - - - - - - - -
IRR 18.82%
Cumulative Cash Flow
(8,540.77) (14,873.80) (16,866.01) (7,384.72) 1,626.71 8,494.07 11,691.85 13,830.08 14,727.19 15,714.38 15,714.38 15,714.38 15,714.38 15,714.38 15,714.38 15,714.38 15,714.38 15,714.38 15,714.38 15,714.38 15,714.38

Payback Period (Years) 3.82 0 1 1 1 0.81948337 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0


Government Cash
Flows: Total Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
Cash Outflows:
Maintenance (5,529.14) (230.48) (242.00) (254.10) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81)
Cash Inflows from
Project 93,158.29 - 2,695.04 7,530.27 14,313.17 13,617.08 10,440.68 5,004.26 3,434.55 1,595.87 1,729.32 1,876.11 2,037.58 2,215.20 2,410.59 2,625.51 2,861.92 3,121.98 3,408.04 3,722.70 4,068.84 4,449.58
Net Cash Flow from
Project 87,629.15 (230.48) 2,453.04 7,276.17 14,046.36 13,350.27 10,173.87 4,737.45 3,167.74 1,329.06 1,462.51 1,609.30 1,770.77 1,948.40 2,143.78 2,358.70 2,595.11 2,855.17 3,141.23 3,455.90 3,802.03 4,182.78

Payments to Private (52,196.82


Company ) - (2,207.74) (6,548.55) (12,641.72) (12,015.24) (9,156.48) (4,263.71) (2,850.97) (1,196.15) (1,316.26) - - - - - - - - - - -

Cost of Land (6,864.00) (6,864.00) - - - - - - - - - - - - - - - - - - - -


Net Cash Flow for
Government
28,568.33 (7,094.48) 245.30 727.62 1,404.64 1,335.03 1,017.39 473.75 316.77 132.91 146.25 1,609.30 1,770.77 1,948.40 2,143.78 2,358.70 2,595.11 2,855.17 3,141.23 3,455.90 3,802.03 4,182.78

Net Present Value (NPV) 3,988.03 (7,094.48) 223.51 604.08 1,062.55 920.18 638.94 271.09 165.16 63.14 63.31 634.73 636.38 638.00 639.62 641.22 642.82 644.41 645.99 647.56 649.13 650.69
IRR 14.67%

12-14 March2018
ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
SahianwalaInterchange,M-3Motorway
Faisalabad
Cumulative Cash Flow
(7,094.48) (6,849.18) (6,121.56) (4,716.92) (3,381.90) (2,364.51) (1,890.76) (1,573.99) (1,441.08) (1,294.83) 314.47 2,085.24 4,033.64 6,177.42 8,536.12 11,131.23 13,986.40 17,127.63 20,583.53 24,385.56 28,568.33
0.804593
Payback Period (Years) 9.80 0 1 1 1 1 1 1 1 1 1 45 0 0 0 0 0 0 0 0 0 0

12-15 March2018
ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

13 SENSITIVITY ANALYSIS
A sensitivity analysis is a technique used to determine how different values of an
independent variable impact a particular dependent variable under a given set of
assumptions. This technique is used within specific boundaries that depend on one or
more input variables, such as the effect that changes in interest rates have on bond
prices. Sensitivity analysis, also referred to as what-if or simulation analysis, is a way
to predict the outcome of a decision given a certain range of variables. By creating a
given set of variables, the analyst can determine how changes in one variable impact
the outcome.
In case of proposed industrial estate, the sensitivity analysis is accomplished in the
basis of following assumptions;
i. Test No.1: The Project cost increases by 10%
ii. Test No.2: The Project Revenues decrease by 10%
iii. Test No.3: The Project cost increases and revenue decreases occur
simultaneously
The sensitivity analysis is done for both scenarios keeping the assumptions constant.

13.1 Scenario 1 (Local Investment)


Firstly, a base case was assumed. The values of NPV, IRR and Payback period were
calculated by carrying out sensitivity analysis based on assumption/tests given in the
table 13.1. The summary and working of the sensitivity analysis for scenario 1 is given
in tables below;
Table 13.1 Summary-Sensitivity Analysis of Scenario 1 (Local Investment)

Type of Tests NPV IRR PAYBACK


Base Case 15,467.24 16.45% 8.01
Test 1: Cost Increase 10%; Constant Revenue 12,492.38 14.84% 8.73
Test 2: Revenue Increase 10%; Constant Cost 19,988.82 18.12% 7.85
Test 3: Decreased Revenue 10%; Increased Cost 10% 7,970.80 13.12% 8.63
The detail working of sensitivity analysis for scenario 1 is given under table 13.3;

13-1 March 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
SahianwalaInterchange,M-3Motorway
Faisalabad
Table13.2-SensitivityAnalysisScenario1(Local Investment)
Project Cash Schedule Total Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Development Cost (31,006.71) (11,692.54) (4,828.54) (4,828.54) (4,828.54) (4,828.54) - - - - - - - - - - - - - - - -


Development Cost (Increase by
10%) (34,107.38) (12,861.80) (5,311.40) (5,311.40) (5,311.40) (5,311.40) - - - - - - - - - - - - - - - -

Maintenance Cost (5,980.05) (230.48) (242.00) (254.10) (266.81) (280.15) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16) (294.16)
Maintenance Cost (Increase by
10%) (6,578.05) (253.53) (266.20) (279.51) (293.49) (308.16) (323.57) (323.57) (323.57) (323.57) (323.57) (323.57) (323.57) (323.57) (323.57) (323.57) (323.57) (323.57) (323.57) (323.57) (323.57) (323.57)

Revenue 114,686.12 - 655.03 1,722.47 2,967.05 3,040.50 3,474.56 4,918.33 6,874.99 9,711.49 11,179.30 11,593.48 8,664.37 10,058.97 10,418.65 9,477.50 5,782.76 4,159.82 2,188.29 2,380.76 2,592.47 2,825.36

Revenue Increase by 10% 126,154.73 - 720.53 1,894.72 3,263.75 3,344.54 3,822.02 5,410.17 7,562.49 10,682.63 12,297.23 12,752.83 9,530.81 11,064.87 11,460.51 10,425.25 6,361.03 4,575.80 2,407.12 2,618.83 2,851.72 3,107.89

Revenue Decrease by 10% 103,217.50 - 589.52 1,550.23 2,670.34 2,736.45 3,127.11 4,426.50 6,187.49 8,740.34 10,061.37 10,434.13 7,797.93 9,053.07 9,376.78 8,529.75 5,204.48 3,743.84 1,969.46 2,142.68 2,333.22 2,542.82

NET CASH FLOW (Base Case) 77,699.36 (11,923.02) (4,415.52) (3,360.17) (2,128.30) (2,068.20) 3,180.41 4,624.18 6,580.83 9,417.33 10,885.14 11,299.32 8,370.21 9,764.81 10,124.49 9,183.34 5,488.60 3,865.66 1,894.13 2,086.60 2,298.31 2,531.20

NET CASHFLOW (Test 1) 74,000.68 (13,115.32) (4,922.57) (3,868.44) (2,637.84) (2,579.07) 3,150.99 4,594.76 6,551.42 9,387.91 10,855.72 11,269.91 8,340.80 9,735.40 10,095.07 9,153.92 5,459.18 3,836.25 1,864.72 2,057.18 2,268.90 2,501.78

NET CASHFLOW (Test 2) 89,167.97 (11,923.02) (4,350.02) (3,187.92) (1,831.60) (1,764.15) 3,527.86 5,116.01 7,268.33 10,388.48 12,003.07 12,458.67 9,236.65 10,770.71 11,166.36 10,131.09 6,066.88 4,281.65 2,112.96 2,324.68 2,557.56 2,813.73

NET CASHFLOW (Test 3) 62,532.07 (13,115.32) (4,988.08) (4,040.68) (2,934.54) (2,883.11) 2,803.53 4,102.93 5,863.92 8,416.77 9,737.79 10,110.56 7,474.36 8,729.50 9,053.21 8,206.17 4,880.91 3,420.27 1,645.89 1,819.11 2,009.65 2,219.25
Net Present Value (NPV) (Base
Case) 15,467.24 (11,923.02) (4,023.25) (2,789.67) (1,609.98) (1,425.52) 1,997.38 2,646.11 3,431.22 4,473.95 4,711.87 4,456.64 3,008.06 3,197.49 3,020.75 2,496.53 1,359.55 872.47 389.52 390.98 392.39 393.76
Net Present Value (NPV) (Test
1) 12,492.38 (13,115.32) (4,485.26) (3,211.64) (1,995.42) (1,777.64) 1,978.90 2,629.27 3,415.89 4,459.98 4,699.14 4,445.03 2,997.49 3,187.86 3,011.97 2,488.54 1,352.26 865.83 383.47 385.47 387.37 389.19
Net Present Value (NPV) (Test
2) 19,988.82 (11,923.02) (3,963.57) (2,646.66) (1,385.53) (1,215.95) 2,215.59 2,927.55 3,789.68 4,935.32 5,195.79 4,913.90 3,319.44 3,526.87 3,331.60 2,754.18 1,502.79 966.36 434.53 435.59 436.66 437.72
Net Present Value (NPV) (Test
3) 7,970.80 (13,115.32) (4,544.94) (3,354.64) (2,219.87) (1,987.21) 1,760.69 2,347.83 3,057.43 3,998.61 4,215.22 3,987.77 2,686.11 2,858.48 2,701.12 2,230.89 1,209.02 771.95 338.47 340.86 343.11 345.24
Internal Rate of Return (IRR)
(Base Case) 16.45%
Internal Rate of Return (IRR)
(Test 1) 14.84%
Internal Rate of Return (IRR)
(Test 2) 18.12%
Internal Rate of Return (IRR)
(Test 3) 13.12%
Cummulative Cash Flow (Base
Case) (11,923.02) (16,338.54) (19,698.71) (21,827.02) (23,895.21) (20,714.81) (16,090.63) (9,509.80) (92.47) 10,792.67 22,091.99 30,462.20 40,227.02 50,351.51 59,534.85 65,023.45 68,889.11 70,783.24 72,869.84 75,168.16 77,699.36
Cummulative Cash Flow (Test
1) (13,115.32) (18,037.90) (21,906.33) (24,544.17) (27,123.24) (23,972.25) (19,377.49) (12,826.07) (3,438.16) 7,417.56 18,687.47 27,028.27 36,763.67 46,858.74 56,012.67 61,471.85 65,308.10 67,172.81 69,230.00 71,498.90 74,000.68
Cummulative Cash Flow (Test
2) (11,923.02) (16,273.04) (19,460.96) (21,292.56) (23,056.71) (19,528.85) (14,412.84) (7,144.51) 3,243.97 15,247.04 27,705.71 36,942.36 47,713.07 58,879.43 69,010.51 75,077.39 79,359.03 81,472.00 83,796.67 86,354.23 89,167.97
Cummulative Cash Flow (Test
3) (13,115.32) (18,103.40) (22,144.08) (25,078.63) (27,961.74) (25,158.21) (21,055.28) (15,191.37) (6,774.60) 2,963.19 13,073.75 20,548.11 29,277.61 38,330.82 46,537.00 51,417.91 54,838.17 56,484.06 58,303.17 60,312.82 62,532.07
Payback Period (Years) (Base 0.008495
Case) 8.01 0 1 1 1 1 1 1 1 1 2 0 0 0 0 0 0 0 0 0 0 0
0.729680
Payback Period (Years) (Test 1) 8.73 0 1 1 1 1 1 1 1 1 58 0 0 0 0 0 0 0 0 0 0 0
0.848842
Payback Period (Years) (Test 2) 7.85 1 1 1 1 1 1 1 56 0 0 0 0 0 0 0 0 0 0 0 0
0.627703
Payback Period (Years) (Test 3) 8.63 1 1 1 1 1 1 1 1 96 0 0 0 0 0 0 0 0 0 0 0

13-1 March2018
ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

13.2 Scenario 2 (CPEC Investment)


The sensitivity analysis for scenario 2 is carried out in the same fashion as that of
scenario 1 i.e. with same assumptions/tests. The summary and working of the
sensitivity analysis for scenario 2 is given in tables below;
Table 13.3 Summary-Sensitivity Analysis for Scenario 2 (CPEC Investment)

Type of Tests NPV IRR PAYBACK


Base Case 18,034.35 24.00% 3.56
Test 1: Cost Increase 10%; Constant Revenue 14,890.99 20.48% 3.80
Test 2: Revenue Increase 10%; Constant Cost 22,981.14 27.83% 3.34
Test 3: Decreased Revenue 10%; Increased Cost 10% 9,944.20 16.93% 4.13

The detail working of sensitivity analysis for scenario 2 is given in table 13.4;

13-1 March 2018


ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
SahianwalaInterchange,M-3Motorway
Faisalabad
Table13.4-SensitivityAnalysisforScenario2(CPECInvestment)
Project Cash Schedule Total Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Development Cost (31,006.71) (14,911.57) (8,047.57) (8,047.57) - - - - - - - - - - - - - - - - - -


Development Cost (Increase by
10%) (34,107.38) (16,402.73) (8,852.33) (8,852.33) - - - - - - - - - - - - - - - - - -

Maintenance Cost (5,529.14) (230.48) (242.00) (254.10) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81) (266.81)
Maintenance Cost (Increase by
10%) (6,082.06) (253.53) (266.20) (279.51) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49) (293.49)

Revenue 93,158.29 - 2,695.04 7,530.27 14,313.17 13,617.08 10,440.68 5,004.26 3,434.55 1,595.87 1,729.32 1,876.11 2,037.58 2,215.20 2,410.59 2,625.51 2,861.92 3,121.98 3,408.04 3,722.70 4,068.84 4,449.58

Revenue Increase by 10% 102,474.12 - 2,964.55 8,283.30 15,744.48 14,978.79 11,484.74 5,504.69 3,778.00 1,755.45 1,902.25 2,063.72 2,241.34 2,436.73 2,651.65 2,888.06 3,148.12 3,434.18 3,748.84 4,094.98 4,475.72 4,894.54

Revenue Decrease by 10% 83,842.46 - 2,425.54 6,777.24 12,881.85 12,255.37 9,396.61 4,503.83 3,091.09 1,436.28 1,556.38 1,688.50 1,833.83 1,993.68 2,169.53 2,362.96 2,575.73 2,809.78 3,067.23 3,350.43 3,661.95 4,004.63

NET CASH FLOW (Base Case) 56,622.44 (15,142.05) (5,594.53) (771.40) 14,046.36 13,350.27 10,173.87 4,737.45 3,167.74 1,329.06 1,462.51 1,609.30 1,770.77 1,948.40 2,143.78 2,358.70 2,595.11 2,855.17 3,141.23 3,455.90 3,802.03 4,182.78

NET CASHFLOW (Test 1) 52,968.85 (16,656.25) (6,423.49) (1,601.57) 14,019.68 13,323.59 10,147.19 4,710.77 3,141.06 1,302.38 1,435.83 1,582.62 1,744.09 1,921.72 2,117.10 2,332.02 2,568.43 2,828.49 3,114.55 3,429.22 3,775.35 4,156.10

NET CASHFLOW (Test 2) 65,938.27 (15,142.05) (5,325.03) (18.38) 15,477.68 14,711.98 11,217.93 5,237.88 3,511.19 1,488.64 1,635.44 1,796.91 1,974.53 2,169.92 2,384.84 2,621.25 2,881.31 3,167.37 3,482.03 3,828.17 4,208.91 4,627.73

NET CASHFLOW (Test 3) 43,653.02 (16,656.25) (6,692.99) (2,354.60) 12,588.36 11,961.88 9,103.12 4,210.34 2,797.60 1,142.79 1,262.89 1,395.01 1,540.34 1,700.19 1,876.04 2,069.47 2,282.24 2,516.29 2,773.74 3,056.94 3,368.46 3,711.14
Net Present Value (NPV) (Base
Case) 18,034.35 (15,142.05) (5,097.52) (640.43) 10,625.52 9,201.78 6,389.45 2,710.93 1,651.65 631.40 633.08 634.73 636.38 638.00 639.62 641.22 642.82 644.41 645.99 647.56 649.13 650.69
Net Present Value (NPV) (Test
1) 14,890.99 (16,656.25) (5,852.84) (1,329.65) 10,605.34 9,183.39 6,372.69 2,695.66 1,637.74 618.73 621.53 624.21 626.79 629.27 631.66 633.97 636.21 638.38 640.50 642.56 644.57 646.54
Net Present Value (NPV) (Test
2) 22,981.14 (15,142.05) (4,851.96) (15.26) 11,708.25 10,140.35 7,045.15 2,997.29 1,830.73 707.22 707.94 708.73 709.60 710.54 711.54 712.60 713.71 714.87 716.07 717.31 718.59 719.91
Net Present Value (NPV) (Test
3) 9,944.20 (16,656.25) (6,098.40) (1,954.82) 9,522.60 8,244.82 5,716.99 2,409.30 1,458.66 542.91 546.67 550.21 553.56 556.73 559.74 562.59 565.32 567.92 570.41 572.80 575.10 577.32
Internal Rate of Return (IRR)
(Base Case) 24.00%
Internal Rate of Return (IRR)
(Test 1) 20.48%
Internal Rate of Return (IRR)
(Test 2) 27.83%
Internal Rate of Return (IRR)
(Test 3) 16.93%
Cummulative Cash Flow (Base
Case) (15,142.05) (20,736.58) (21,507.98) (7,461.62) 5,888.65 16,062.52 20,799.97 23,967.71 25,296.76 26,759.27 28,368.57 30,139.35 32,087.74 34,231.52 36,590.22 39,185.34 42,040.51 45,181.74 48,637.63 52,439.66 56,622.44
Cummulative Cash Flow (Test
1) (16,656.25) (23,079.74) (24,681.31) (10,661.63) 2,661.96 12,809.14 17,519.91 20,660.97 21,963.35 23,399.18 24,981.80 26,725.89 28,647.60 30,764.70 33,096.72 35,665.16 38,493.64 41,608.19 45,037.41 48,812.76 52,968.85
Cummulative Cash Flow (Test
2) (15,142.05) (20,467.07) (20,485.45) (5,007.78) 9,704.20 20,922.14 26,160.02 29,671.21 31,159.86 32,795.29 34,592.21 36,566.74 38,736.66 41,121.49 43,742.75 46,624.05 49,791.42 53,273.45 57,101.62 61,310.53 65,938.27
Cummulative Cash Flow (Test
3) (16,656.25) (23,349.25) (25,703.84) (13,115.48) (1,153.60) 7,949.52 12,159.86 14,957.47 16,100.26 17,363.15 18,758.16 20,298.50 21,998.69 23,874.73 25,944.20 28,226.44 30,742.73 33,516.48 36,573.42 39,941.89 43,653.02
Payback Period (Years) (Base 0.558911
Case) 3.56 0 1 1 1 75 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0.800207
Payback Period (Years) (Test 1) 3.80 0 1 1 1 27 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0.340387
Payback Period (Years) (Test 2) 3.34 1 1 1 6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0.126725
Payback Period (Years) (Test 3) 4.13 1 1 1 1 77 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

13-1 March2018
ELN18-V01-FIEDMC
Establishment of an Industrial Estate near
Sahianwala Interchange, M-3 Motorway
Faisalabad

14 VIABILITY GAP FUND (VGF)


The Viability Gap Funding (VGF) is a grant one-time or deferred, provided to support
infrastructure projects that are economically justified but fall short of financial viability.
The lack of financial viability usually arises from long gestation periods and the inability
to increase user charges to commercial levels. Infrastructure projects also involve
externalities that are not adequately captured in direct financial returns to the project
sponsor.
In case of proposed industrial estate, the worst case scenario is assumed when the
IRR falls below the required rate i.e. 15% then amount from the VGF will be taken to
pay the grievances to the private party. After sensitivity analysis, the lowest IRR from
both scenario 1 and 2 comes out to be 11.89% and 6.27% respectively. On the basis
of these IRR values, the amount will be taken from VGF. The amount taken will depend
upon the budget allotted to the VGF which will be calculated in later stage of project.

14-1 March 2018


ELN18-V01-FIEDMC