MN4022 - Engineering Economics

CA 2 – Group Assignment (20% of module assessment)

I. Port City Project

II. New Kelani Bridge Project
III. Uma Oya Multipurpose Development Project
IV. Mannar Wind Power Project
V. Kaluganga – Moragahakanda Transfer Canal (KMTC) Project
VI. Regasified Liquefied Natural Gas (R – LNG) Pipeline Project
VII. Or any other project of your own

Select any project from the above and prepare a Report of not more than 15 pages including the
following:

1. Describe the current market conditions (demand, pricing, competition, etc.) and suppliers of the
affected sector (transport, energy, power, etc.)?

2. Identify with reasons, the stakeholders involved in both demand and supply sides.

3. Identify areas of policy intervention either by new investment or new regulation available for
this sector?

4. Identify the desired outcomes expected from the selected project.

5. Derive a set of goals and objectives you have identified for each of the specified outcome.

6. Cost the investment in terms of: (Make your own estimates based on published costs)

1. Initial Planning Cost

2. Construction Cost (cost of material, transportation, labour, temporary work, tools, etc.)

3. Operation and Maintenance Cost

7. What are the different sources of investment for the project? Discuss their suitability.

8. Discuss how financial sustainability is achieved in the project. What would the pricing structure
be for this project?

9. Identify the possible social and environmental impacts (externalities) arising from the project
and propose ways to prevent or internalize them.

10. Determine the Consumer Surplus and Producer Surplus after the intervention?

11. Identify the different benefits and assess them quantitatively over the design period.

12. Evaluate the Economic BCA (NPV, EIRR, PBP, BCR)

13. Evaluate the Financial BCA (NPV, FIRR, PBP, BCR)

14. How would you use Multi-Criteria Analysis (MCA) to compare the project with its alternatives?
Do a sample Matrix by assuming reasonable values for each alternative.

15. Conduct a risk assessment (sensitivity analysis, acceptable & mitigate risks) for the selected
project to determine the impacts under various scenarios.

Guidelines

• Group Size: 10-12

• Marks allocation: Questions 1-3 account for 10%, questions 4-7 account for 10%, questions 8-
11 account for 40%, questions 12-13 account for 20% and questions 14-15 account for the
remaining 20% out of 100.
• Note: Marks will be given for originality. Copying of previously submitted work from any source
will result in zero marks for the report.
• Each group has to prepare a proposal (1 page document) including team members’ involvement
and workplan for the selected project.
• Date for Submission of the proposal – On or before 19th October 2021
• Date for Submission of the report – On or before 23rd November 2021.
• If necessary, plagiarism tests will be required to be carried out on your submission.
• The number of pages should not exceed 15, including the references, pictures and annexes.
• You should make submission in the approved format for submissions. All references, table and
figure formats should be consistent and in keeping with the prescribed format.