PROJECT PROPOSAL FOR THE CONSTRUCTION OF

MIXED USE BUILDING

PROJECT TO BE IMPLEMENTED IN ADDIS ABABA

BOLE SUB-CITY

PROMOTER: - MOHAMED ADEM UMARE

January, 2021
Addis Ababa

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Table of Contents
I. Grand Summary -------------------------------------------------------------------4
1. Introduction ------------------------------------------------------------------------5
1.1. General Background-----------------------------------------------------------5
1.2. Objective of the project-------------------------------------------------------- 6
1.3. Project Description -------------------------------------------------------- ----7
1.4. Project Rationale ---------------------------------------------------------------7
1.5. The Significance of the project -----------------------------------------------8
1.6. Project Location ----------------------------------------------------------------9
2. The Market Study --------------------------------------------------------------- 11
2.1. Market Analysis -------------------------------------------------------------- 11
2.2. The Demand-Supply Gap ---------------------------------------------------11
2.3. Current supply of Mixed use Building ------------------------------------12
2.4. Future market or Demand of commercial Building rental--------- ----13
2.5. Target customers -------------------------------------------------------------14
2.6. Marketing Promotion and Strategy-----------------------------------------14
2.7. Competition -------------------------------------------------------------------14
2.8. The project facilities and Services plan------------------------------------15
3. Technical Study ------------------------------------------------------------------16
3.1. Description of the project Service/ Product mix ------------------------ 16
3.2. Land Use Plan ------------------------------------------------------------ --- 16
3.3. Construction work and Technology ----------------------------------- --- 17
3.3.1. Construction schedule --------------------------------------------------17
3.3.2. Architectural Design & Layout ------------------------------------ ----17
3.3.3. Structural Design -------------------------------------------------------18
3.3.4. Reinforced Concrete -----------------------------------------------------18
3.3.5. Foundation Design ------------------------------------------------------18
3.3.6. Construction Plan and process ----------------------------------------19
3.4. Utilities -------------------------------------------------------------------------20
3.5. Project Implementation-------------------------------------------------------20
4. Organizational Structure --------------------------------------------------- ----21
4.1. Organization and Management ---------------------------------------- ----21
4.2. Man Power ---------------------------------------------------------------------21

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 4.3. Organizational Structure ----------------------------------------------------21
5. Financial Requirement and Analysis ------------------------------------- ----23
5.1 Fixed Investment -------------------------------------------------------------24
5.2 Working Capital---------------------------------------------------------------26
5.2.1 Operating Expense at full Capacity ------------------------------- ----26
5.2.2 Operating Expenses ------------------------------------------------------27
5.2.3 Pre-service Expenses -----------------------------------------------------27
5.3 Financial analysis and Statements ----------------------------------------28
5.3.1 Underlying Assumption --------------------------------------------------28
5.3.2 Sources of Fund ------------------------------------------------------ ----29
5.3.3 Bank Loan Repayment Schedule ---------------------------------------29
5.3.4 Depreciation Schedule ---------------------------------------------------30
5.4 Financial Statement ----------------------------------------------------- ----30
5.4.1 Income loss/statement --------------------------------------------------30
5.4.2 Cash flow Statement------------------------------------------------------31
5.5 Financial Analysis ------------------------------------------------------------32
5.6. Environmental Impact of the Project --------------------------------------32
6. Monitoring and Evaluation-----------------------------------------------------33
6.1. Monitoring--------------------------------------------------------------------33
6.2. Evaluation----------------------------------------------------------------------33

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 I. Grand Summary of the Project
1 Project Name Mixed use Building [mole]
2 Project type Multipurpose service business building
3 Project Owner MOHAMED ADAM UMARE
4 Nationality Ethiopian
5 Project location ADDIS ABABA BOLE SUB-CITY
6 Project Composition multipurpose Building (G+9) used for diverse business centers
like banking & insurance, super market, shops, restaurant,
café, beauty salon, Pharmacy, bed rooms and offices.
7 Premises Required 2
The promoter already acquired a total of 5,000m
8 Project Capital The total investment capital of the project is estimated at birr 138,000,000.00 of
which birr (94.3%) 130.13million is for fixed investment items while the remaining
balances of birr (5.7%) 7.9 million will be initial working capital.
9 Source of Finance 138,000,000.00 ETB is required from this amount 30% or 41,000,000 ETB
from owner equity and the rest 70% 96, 600,000 from bank loan.
10 Employment The total manpower required for the envisioned project will be 375 people’s
Opportunity employees at f ull capacity.
 Permanent’ “workers 155
o Skilled 65 and Unskilled 90
 Temporary workers 220
o Skilled 115 and Unskilled 40
11 Technology The machinery equipment and technology of construction can be secured
from the country as well as foreign countries, especially from china.
12 Market Share The project is financially viable with an internal rate of return (IRR) of
20.77% and a net present value (NPV) of Birr 32.21 million, discounted at
8.5%.
13 High of the G+ 9 height building.
Building
14 Benefits of the project Provide service and source of revenue, employment opportunity,
for the city and country save/generate the country foreign exchange, benefit for the local
community stimulate the local economy and technology transfer,

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1. Introduction
1.1. General Background
The current fast and dynamic economic growth of Ethiopia especially in
urban area necessitates equivalent growth of building and construction
sector. The sector should expand rapidly to support the overall economic
development sustainable.
In the building sector of the economy, the multi- purpose in the one
becoming rapidly expanding in urban areas of the country, since dynamic
economic development of urban economy requires the construction of these
buildings in towns to support the growing of business service sectors like
supermarkets, Beauty salon, shops, offices cinemas, Computer Center,
Cafeterias, restaurant, assembly hall, guest house and other activities.
Investment and property development play an important role in any
emerging markets or economies. Property generally comprises reside vial
houses and commercial real estate property (mainly mixed us building)
developed for rental business and sale. The property investment market in
Ethiopia remained under developed for several years. As a consequence, the
supply of residential houses and non-residential real estate that can be used
for residence, office space, shopping malls and catering services in the
urban centers of the country is disproportionately low to cope with the
growing demand in the country spinning from the average growth in GDP of
5.5 percent over the last ten years and population increase. The relatively
good performance of the macro-economy (real growth in GDP, low inflation
rate and growth in investment and export sector) has stimulated
unprecedented investment growth in the property sector over the last five
years. The growth of investment in the property market over the last five
years in consistent with the global experience suggesting that investment in
the residential and commercial property (real estate) is greatly influenced by
the performance of the macroeconomic conditions. In general, a stable
macroeconomic condition leads to economic and business growth and
develops investors’ confidence. This certainly spurs large demand in the
property market for office space, shopping malls, catering services,
apartment and residential houses. Following growing demand trends, and
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with the expectation of high return on their investment capital, large
number of land developers pooled their financial resources and invested in
the property market.
To this effect, the owner of the envisioned Mixed Use Building MOHAMED
ADAM UMARE planned to construct in Addis Ababa Bole Sub-city and
undertaken this project study to check the market, technical and financial
feasibility of this project. The promoter is very ambitious and committed to
realize the project. Hence, he expects to get the necessary support from the
city administration to make the project to be operational.
Looking at the past trends and permits issues by the Government to the
construction of real estate properties including the mixed use building in the
major urban areas of the country especially in Addis Ababa one can easily
conclude that the momentum is more likely to continue.
Besides, the government policies and incentives for the private sector
investment are very promising that motivates the promoter to engaged in
mixed use building business.
1.2. Objective of the project
The major goal of this project is to contribute towards the growth of the
trade sector in the city. Its specific objectives include the following.
 To construct and develop modern shops, offices, and restaurant,
bedroom & cafeteria facilities that enable to provide standard services
to visitors.
 To undertake trading and other refuted business activities that enable
to generate a reasonable to the invested capital.
 To develop modern business center that would provide services of
international standard in order to attract foreign visitors and thereby
contribute towards the generation of hard currency for the country.
 To create employment opportunities for the population in the city and
 Contribute towards the beautification of the town through the
construction of modern building infrastructure and facilities.

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1.3. Project Description
The long-term goal of the project is become the best choice in area and its
surrounding areas by creating a differentiated experience capitalizing on
personal service. The proposed project will have a total area of 5000m 2,
designed to reader a multipurpose giving business, which will in turn plays
significant role towards solving shortage of business center in the city.
The owner plans the project to render banking and insurance, shopping
facility, bank and cafeteria services to create high quality class to satisfy the
interest of customers in the city. Based on environmental and other
considerations, the entrepreneur has determined the type and size of the
building which is already determined by the site; conceptual planning and
preliminary analysis have been carried out by analysts. In order to attract
its clients to the service, the project will develop high standard shop &
banking rooms and office of best choices and will also save best quality
restaurant and café, national and international dish and various types of
soft drinks.

1.4. Project Rationale

Internationally the economic growth that this country is experiencing, the
good governance created and even if the town is in its nascent stage of
development, such kind of projects are feasible and would be a model
development in promoting and attracting different urban investments.
In order to respond to the created environment the town is in need of major,
basic and feasible urban projects to be developed.
The existing promising investment opportunities, the demands of service
needs along with relatively sound investment support made by the
government in such kinds of feasible projects, compelled the project
promoter to initiate the multipurpose oriented business project to be
established. Despite the promising business opportunities of the city, the
trend on such kinds of investment found to be not sufficient. The mismatch
between the demand for and supply of such kind of services in easily
observed in the city.

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Therefore, the existing shortage or absence in the supply of these services,
along with its commercial and administrative access, better location and
infrastructure access, escalating trend of urbanization and business
activities, thus it is with such reason that this project is identified and
proposed and assumed to be more profitable.
In general, the country’s decentralized state based economy, privatized and
free market economy; good governance creates a favorable environment for
the development of investment for private investors.

1.5. The Significance of the project

The envisaged project deemed to add to the economic development of the
nation in general and in Addis Ababa Bole Sub-city in specific with following
ways:
A. Source of Revenue
As public policy of any nation, the government collects different forms of
taxes from different business organizations and individuals. Among the
different forms of taxes, business income taxes, payroll income tax and VAT
are collected from undertaking business activities. Therefore, the building
will serve as sources of revenue for the town as well as for the region.

B. Employment opportunity
One of the problems that our country faced is unemployment. Therefore, the
current objective of the government is working on tackling the problem of
unemployment and fostering the development process either through
creating self-employment or employment in other organization. Hence, this
project will hire 56 individuals and more than 130individuals during
construction.
C. Sources of Social service
In addition to serving as a source of employment and income for the city
Administration, the project renders social services for different group of
people. Hence, it also provides the following services;
 Serve as a source of mental satisfaction for the different users,

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  Since, the center encompasses different recreational areas; it will
divert the attention of the users from different evil deeds.
 It deemed to minimize the demand for shops and other bundles of
services in the area.
Furthermore, it serves as the pilot experience and ground for other investor
to enter in to such kinds of urban development. It also contributes on the
efforts made on as a character given building for physical development
pattern of the city scope.
1.6. Project Location
A. Location
The project under consideration will be implemented in Addis Ababa Bole Sub-city.
The city is selected as appropriate place for the establishment of this project based on the
cumulative effects of the following factors.
 It is the center for the country with good landscape and weather condition.
 Its proximity to different services and facilities like road and transportation,
 Its accessibility and ease of future development are some of the reasons behind
selecting the area for the proposed project.
 Above all, the project area is selected as appropriate place for the project because
the town is located at the main road connecting Addis Ababa with regional states
of the country.

B. Economic Activities
Like that of other parts of the country, majority of the population of the district resides in
rural areas and gets their livelihood from agriculture. The town dwellers, however, engaged
in different commercial activities like wholesale & retail trade where agricultural products
and manufactured industrial government and non-governmental institutions. Currently private
investment activities are also widely undertaken in the district.
Land Administration and Development Authority are directly responsible in dealing with
matters concerning land. However, regarding the manufacturing sector, industrial zone
preparation is one of the strategic intervention measures adopted by the town Administration
for the promotion of the sector and all manufacturing projects are assumed to be located in
the developed industrial zones.

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Regarding land allocation of industrial zones if the land requirement of the project is below
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5,000m , the land lease request is evaluated and decided upon by the Industrial Zone
Development and Coordination Committee of the town’s Investment Authority. However, if
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the land request is above 5,000 m , the request is evaluated by the town’s Investment
Authority and passed with recommendation to the Land Development and Administration
Authority for decision, while the lease price is the same for both cases.

The proposed plant requires a total land area of 5,000m 2. The building includes warehouses,
green area and parking, canteen both for workers and staffs, toilet and shower/wash room,
security room, offices and other facilities. The total floor space of the buildings will cover total
area of 2600m2 (See Appendix-1). The total estimated cost of building at the rate of Birr 4,488
per m2 is about Birr 138. 00 million.
The lease period for the land is 80 years on average, and the payment of lease prices is in 40
years. The land lease rate of Birr 6.5 /M 2/ year is adopted, which is the minimum lease rate in
Addis Ababa 1st grade towns. 10% down payment is expected at the initial year of land
acquisition. Accordingly, the total lease cost of Birr 3,217,500, of which Birr 321,750.00 will be
paid in advance in the first year and the remaining Birr 2,895,750 will be paid in equal
installments of Birr 72,393 .00 within 40 years, after the grace period of 3 years annually.
Table 1. Incentives for lease payment of industrial projects
Score point Grace period Pay completion Down
period payment

Above 75% 5 Years 30 Years 10%

From 50 - 75% 5 Years 28 Years 10%

From 25 - 49% 4 Years 25 Years 10%

For the purpose of this project profile the average i.e. five years grace period, 28 years
payment completion period and 10% down payment is used. The land lease period for
industry is 60 years.

2. The market Study

2.1. Market Analysis
There are a number of factors which affects the demand of standardized
mixed use building. Of these factors, the most important to have influence is
population growth and the level of income. The currently expanding
industrial park around the city and the city has been inviting skilled and

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unskilled labor forces to the town; in addition, the number of both
government and non-government offices has been increasing. Above all the
increase in the number of population of the city increases for the provision
of different services. Nowadays, most of the private business organizations
need their own small-medium offices in order to give their services and
provide their products, and they prefer the place that found with suitable
infrastructure and service.
As clearly indicated in the introductory part of this proposal, the market
demand gap for mixed use building in the city is not clearly understand
there is wider gap for such demand as many merchants, organizations are
flouring to the city every day. From prior business experiences, the demand
of mixed use building in the town is very high and hence the demand and
the supply gap is very wide.
2.2. The Demand-Supply Gap
Addis Ababa is situated in very center of Ethiopian for the whole country
business that bordered Addis Ababa City through the North East on the
high way root to all regional state. This is highly known for its industrial and
best residential area and also a major business center and commercial route
that attract thousands of business travelers. These are also the most
important groups of potential customers that include both the local and
foreign tourists and the modern business community who choose services
that range from economic to high class standards. These groups would also
choose a healthy comfortable climate that combines a more traditional type
with that of modern shops, offices, bedrooms restaurants and cafeterias.
Over the last decade, there has been a significant growth in the number of
local and international trades across the country. This increase is mainly
associated with the stimulation of economic activist and partly due to an
increase in the flow of international and local traders in to the town. Since
Addis Ababa is an important commercial center in addition there is a
significant increase in business activates and hence increasing the number
of traders to the town. Even though there is a lack of quantitative estimates
that depict the actual demand and also the annual growth rate of Hotel
facilities and urban commercial facilities are scarce in the town. They are

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mostly villa type premises modified as show rooms and sailing posits. As a
result there is a large gap between the developed and that of the supply for
modern bed rooms; Bank and cafeteria accommodation hence this project
would not face any problem of demand scarcity for it business Centre and it
would provide good service to customers.
2.3. Current supply of Mixed use Building
Commercial building/office sector has shown a dynamic change in the past
few years. The reason for this could be rapid economic growth and a
supporting public infrastructural development. Other factors relevant in the
specific case of commercial buildings are the large increases in national and
international businesses, particularly firms in the services sector.
The business of multipurpose buildings in Addis Ababa booming highly due
to the recent rapid growth experienced in Ethiopia. As a result, a good
number of local and international organizational are coming in place.
Government offices which used to operate in limited spaces all over the city
are also concentrating on leasing new and modern buildings. Increasing
numbers of international organization and NGOs which in the past had
typically converted residences into office space are now moving towards
renting whole floors or even multiple floors in modern city-center
commercial buildings.

2.4. Future market or Demand of commercial Building rental

The demand for office space is a derived demand because firms rent space
as an input to the production of services or goods they provide to businesses
and households in the local regional or national economy.
Following our survey of office space users in the city are mainly firms
providing banking, cafeteria and restaurants, bed room, supermarkets
service, computer Center Crevice. The different customers for commercial
buildings also include shops and offices that are currently renting out to
provide their goods and services.
Future demand for office space is actually driven from growth in number of
offices in the city which in turn is influenced by the macro-economic growth
in the country. Following the government five year growth and
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 transformation plan (GTP), the Ethiopian economy is expected to increase by
11% for base case scenario and 14% under the optimistic case scenario.
Assuming that demand for office space is directly related to the growth in
the economy, the forecast for office space demand is shown in the following
table;
Table: 2 Office Space Demand Forecast
Office space demand under base case Office space demand under high
economic case economic
Years Growth Growth
2010/2011 9,916,543 11,304,859
2011/2012 11,007,363 12,057,416
2012/2013 12,218,173 12,953,878
2013/2014 13,562,173 13,963,577
2014/2015 15,054,011 14,554,534
2015/2016 16,709,952 14,987,431
Source: G Two estimation based on GTP’s forecasted Ethiopian Economic
Growth.

2.5. Target customers

The target customers of this envisaged project include:-
1. Business Community
2. Nearby business organization
3. The government bureau
4. Small accounts (SOHO) SME
5. Nongovernmental organizations
2.6. Marketing Promotion and Strategy
In order to penetrate and gain considerable market share, one of the major
marketing strategies for the project is consistently rendering quality service
to its tenants. Due emphasis must be placed on improving quality of service
and facilities. The major marketing strategies to promote the project and
gain considerable market share include:
 Advertising through different means focusing on the existing service
and facilities
 Promote in association to the key location and nearby business

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  Working on sustained promotional work.
 Working on public relations to reach and influence key personas and
organization with a capacity of making decision.
 Keeping the quality of its service/ facilities and consistently
improving with changing situations.
 Seasonal discount pricing different others customer centric
marketing strategies will be used by the company.
2.7. Competition
There are different forms of competition that may face the envisaged mixed
use building. These are price and non-price based competition. Moreover,
there are different competitors that will compete with the project either
directly or indirectly. But the mixed use building under discussion has
diversified marketing strategies that could enable it come up with the
different competitors in the market. Moreover it will frequently conduct
competitors research which focuses on, the strength and the weaknesses,
the different competitors’ strategies, the techniques they use in rendering
the service, their customer handling methods, and others. Generally the
project has many other projects all over Ethiopia which compete with it.

2.8. The project facilities and Services plan

In order to provide mixed use business center building services of a high
standard, it has been planned to construct and develop the infrastructure
and facilities that would viable to meet the requirements of an international
standard business center. Accordingly, various buildings and facilities will
be constructed phase by phase starting with the most needed ones that are
essential to commence the operation of its business activities. With the
completion of construction, the building will provide a combined service
such as shops, bedroom, restaurant and café service as well as modern
business center that primarily serve its guests and major clients.
The plan is that the ground will be partitioned in to different rooms:

Building Description UOM Unit price

in Birr

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Ground Supermarket, Pharmacy, Banking & Insurance M2
1st floor Beauty salon, shop, Computer Center, Cafeteria & M2
Restaurant
2nd
floor For Different governmental, NGO & other offices M2
3rd-9thfloor Bedrooms service or apartment and the other M2
Parking Service Car
Total
Since the project will be engaged in mixed building the main sources of its
annual revenue would be from the rental of building spaces such as shops,
offices, and banking, café & restaurant bedrooms. Therefore, the sources of
revenue have been classified in to one category namely the rental of banking
& supermarket, offices, shops, bedrooms restaurant and café based on these
classifications. Based on the market price of similar mixed use building in
the area, the envisioned buildings set the following fair price (Before VAT) for
its service, hence when the building construction fully get operational it is
assumed to generate a yearly income of ETB 70,552,500.

3. Technical Study
3.1. Description of the project Service/ Product mix
The envisioned mixed purpose building will provide different rental services
to the different customer groups for different purpose. The building will have
basement, ground and eight floors. The purpose of the building explained as
follows;
 The ground floor, first floor and second floor designed for different
business centers like banks, supermarket, beauty salon(man and
women), Computer center, pharmacy, internet café, boutiques,
different shops and other business activities,
 The third floor and above designed for bed room or apartment or for
other services.
Besides, the buildings will have enough parking facility for its customers
and green area in its compound.
3.2. Land Use Plan

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The total land required for the envisioned project is estimated to be 5000m 2.
The total area for the construction of the building will be 2600m 2, as
revealed below.
Table land utilization Plan
SN Description Land M2
Ground 1 floor
st
2 floor
nd
3rd Floor & above
1 Building (G+6)
1.1 Basement 2600
1.2 Ground 2600
1.3 First floor 2600
1.4 Second Floor 2600
1.5 Third and above Floor 2600
Parking, warehouse, 2,400
playfield & Green area
Total 5000

3.3. Construction work and Technology

3.3.1. Construction schedule
The construction project is proposed to be started on February 2021, and is
expected to be finished on January 2023. as seen in the abbreviated
construction schedule above, a majority of the schedule’s time is made up of
five major activities; Concrete, building Enclosure, masonry, mechanical
&HVAC and Electrical install. Concrete activities include processes such as
placing foundations and slab on deck. The Building Enclosure Phase
includes erecting the scaffolding that will allow for exterior sheathing
installation and bricklaying.
Mechanical and Electrical install coincide with each other due to the need
for coordination between the two divisions. There are several periods of
construction during the schedule in which there are multiple construction
activities occurring at the same time.
The construction site must be organized accordingly as these processes take
place. As with any construction project, the goal of the schedule was to
complete all construction activities before the required Date of completion.

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This date of completion is practical based on the time of year in which the
building will be completed. The team allowed a two week contingency for any
setbacks. Typically, winter construction tends to cause unforeseen delays
that negatively impact a construction project. These conditions can and will
almost undoubtedly impact the project schedule by causing unforeseen
delays and project inefficiency.
3.3.2. Architectural Design & Layout
Although functional spaces for the project were laid out in significant detail,
the rest of the building had designated spaces but n set layouts. It was at
the discretion of the project promoter to devise typical layouts for the non-
detailed commercial and office spaces. To make sure that the building’s
layouts were practical, the project owner researched typical architectural
layouts for laboratory and executive office spaces.
The walls and partitions throughout the floor were congruent with the
structural frame and column locations.

3.3.3. Structural Design

One of principle deliverables of our project is the structural design of the
building. The structural bays were coordinated with the layout of the
building adjustments were made to the bays if specific layouts are
necessary. The frame was made up of a grid with repeating standard
structural bays. Included in the structural system are bay sizes, shape and
size of structural members, floor compositions and curtain walls. These
elements were established to resist gravity ad lateral loads as appropriate.
The gravity load design was completed for two frames; one of structural steel
and one of reinforced concrete. The structural steel frame was chosen for
further design based on cost per square foot, local availability of material
and constructability considerations, such as erection and fabrication. The
steel system was then designed for lateral loading with necessary
adjustment being made to framing.
3.3.4. Reinforced Concrete

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The project group prepared hand structural design calculations for a typical
bay of a reinforced concrete frame. In all reinforced concrete bay designs, a
superimposed dead load of 7.5 pounds per square foot was assumed for
mechanical equipment, floor coverings and ceilings.
Similarly, the design of the typical bay accounted for the use of different
commercial space, in which a live load of 125 pounds per square was
assumed. Loads were calculated based on the requirements of the minimum
Design loads for Buildings and other Structures.

3.3.5. Foundation Design

The design of a superstructure may be accurate, have considered all
possibilities and still fail because the substructure is incapable of
distributing the applied loads to the supporting soil.
Foundation design takes more into consideration than merely the loading
from the columns. While the main part of the project focused on the
structural frame and its alternate designs, a preliminary foundation plan
was designed based upon maximum load carried from the superstructure
through the columns. The foundation design conducted by the project team
consisted of the selection of foundation type, determination of the bearing
capacity and the design for typical interior and exterior spread footings.
3.3.6. Construction Plan and Process
The project team developed a coordinated project schedule and construction
plans that would reflect the expectations for an actual construction project.
The project schedule was developed using the preliminary designs given to
the project team.
Additionally, the group considered typical construction activities and
durations taken from similar construction projects as well as realistic
constraints on building development. For instance, it is necessary for the
structural frame to be completed before concrete can be placed for the slab
on deck. Hand drawn construction plans detailing site entrances and
storage areas were coordinated with the project schedule to give the reader
visualizations of the construction site set up through various periods of the
construction process.
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The construction process for this project is normally a disjointed three
mages development by which the conceptualized need of the promoter of
this project is translated into a functional facility that will meet their needs
in terms of time, cost and quality.
Based on a general program of the project owners the consultant who is
going to be hired makes site studies, develops structural designs, prepares
drawings and specifications, determines quantities involved and estimated
the resultants costs. All these activities will be done in the first phase of the
project which is the design stage after the document are produced by the
designers have been received, and the works secured the project is supposed
to enter the tendering stage. At this stage contractors study the project
document analyze and subsequently determine the construction methods,
built up their unit rates and submit their bids for the works. The promoter
of this project intends to compare the bids and award the contract for the
lowest responsible bidder. This, is of course, presupposes that the favorable
proposal does not exceed the allocated budget.
After the award is made and the contract signed between this project owner
and the contractor, the project constructor is expected to prepare and
submits a detailed construction program which includes material schedule,
manpower requirement and cash flow forecast.
After the award is made and the contract signed between this project owner
and the contractor, the project constructor is expected to prepare and
submits a detailed construction program which includes material schedule,
manpower requirement and cash flow forecast.

3.4. Utilities
A number of utilities world be put in place in order to ensure smooth
functioning of the project. These utilities include:
 Water Supply,
 Supplementary Electricity supply.
 Telephone line Internet Broadband
 Fuel, Oil and lubricant
 Drainage Facility

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 3.5. Project Implementation
The project’s implementation is expected to take 24 months. The major
activities include Bank loan processing construction of the building,
cleaning the area around the building, Procurement of equipment’s and
start rendering services. The time schedule for the above matured major
activities is presented below:
Table: project Implementation schedule
SN Activities Date
1 Land request processing February-July, 2021
2 Land approval August, 2021
3 Bank loan processing July-August, 2021
4 Site Development August-December, 2021
5 Building and construction work January,2022- September 2022
6 Preparation for service October- December 2022
7 Service execution January, 2023

4. Organizational Structure
4.1. Organization and Management
The organizational structure should be in a way that the company able to
achieve its objectives as well as the satisfaction of standard requirement. In
addition to this, the structure should fit the dynamics of all customers in
the building ranging from small business to large tenants.
4.2. Man Power
The total manpower required for the building will be 375 persons on
permanent and on casual. The manpower list and the corresponding labor
cost are shown in part five of this document.
4.3. Organizational Structure
The organizational structure of the project is designed by including all the
necessary personnel under the right division. At the top of the organizational
structure, there will be manager with the responsibility of supervising the
overall activity of the building. Depending up on the nature of the center and
the amount of work to be performs; there exist auxiliary units under the
general manager. Employees under each unit will be supervised by the

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department head that is accountable for the general manager. General
Manager is appointed by owner.
Owner

General
Manager

Marketing Building Admin Technical &

maintenance manager

HRM and finance

IT, Electricity and
plumper

Cashier Purchaser

Fig:1 Organization structure of the Building

As clearly shown in the organizational structure, the center organization has
one general manager and three main sections. Under the general manager
there are the, marketing Department, maintenance and building
administration department. Under building admin dept. there exist two
sections i.e., HRM & finance and general service. Further sub sections are
also organized under technical and maintenance manager. The following
section deals with the duties and responsibilities of each department.
A. The General Manager’s Duties and Responsibilities
 He/she will plan, organize, direct and control the overall activities of
the building.
 He/she will devise policies and strategies that will enable the center to
be profitable.
 He/she will incorporate modern technological innovation that will
facilitate the service delivery of the building to increase customer’s
satisfaction.
 He/she will plan, organize, direct and control the human and non-
human resources of the building so as to achieve the short and long
run objectives of the organization.

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B. Building Administration Department
The building Administration Department of the multipurpose building has
two main sections (HRM and Finance and General Service section). It has
responsible for undertaking the following activities;
 Manage the human resources and control employee’s activity
 Well non-human resources of the project, which include; effective
handling of the different resources of the building, and devise
strategies of controlling against fraud and damage.
 Will provide the right material or inventory to the center with right
price at the right time.
 Will plan, organize direct and control the financial transaction of the
building by using all the necessary documents.
 Accountant and casher that will collect money from the customers.
 Will develop sound financial control system by developing modern
financial control systems.
 Will prepare the annual financial statements and prepare condensed
reports for both the General Manager and other concerned
government body.
 Follow the overall status of the business and provide maintenance and
repair services
C. The marketing Department
 Will handle the overall marketing activities of the organization which
include planning, organizing, directing, and controlling.
 Will develop the marketing strategies for future multipurpose
building development
 Will develop effective customer handling strategies.
 Execute the promotion methods.
D. Technical and maintenance manager
 Will handle the overall physical maintenance and related issues
 Will make sure electricity and back up is organized.
 Follow up security issues and educate tenants
 Works in collaboration with general service to make sure tenants are
well served.

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 5. Financial Requirement and Analysis
The financial resource is a prime resource for undertaking any activities.
Hence for implementing this mixed use building a total of 138,000,000 ETB
is required. From this 30% or 41,000,000 birr will be covered by the
promoter of the project while the rest 70% 96,600,000 will be covered
through loan from bank at the prevailing interest rate.
Therefore the said amount of finance is needed for undertaking the
following.

5.1. Fixed Investment

A. Land, Building & Construction
S.N Description of works Total Cost in birr

1 Building construction 133,443,508.69

2 Site Development 345,209.66
3 Design and supervision 275,800.00
4 1 Year land lease & (10%) down payment
st
833,019.43

Total 134,897,537.78

B. Building Machineries and Equipment’s

SN Description Measurem Qty Unit cost in Birr Total cost in
ent Birr.
1 Generator Unit 1 120,000.00 120,000.00
2 Carpentry tool box Set 1 17,000.00 17,000.00
3 Electrician tools box Set 1 18,500.00 18,500.00
4 Plumber tools kit Set 1 12,300.00 12,300.00
5 Fire extinguisher Unit 10 6,000.00 60,000.00
(Security Equipment)
6 Total 227,800.00

C. Vehicle
SN Description UOM Qty Unit Cost in Fr. Total cost in Remark
Birr
1 Mini-Bus Unit 5 600,000.00 3,000,000.00 Duty Free

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 Total 3,000,000.00

D. Office Equipment’s
SN Description Measurement Qty Unit cost in Total cost in
birr Birr

1 Managerial tables Unit 5.00 2,600.00 13,000.00

2 Managerial chairs Unit 5.00 1,950.00 9,750.00
3 Office table with chair Unit 7.00 1,350.00 9,450.00
4 Secretarial table with chairs Unit 2.00 1,450.00 2,900.00
5 Computer with chairs Unit 5.00 15,000.00 75,000.00
6 Shelf Unit 3,500.00 3,500.00
7 Filing cabinets Unit 1.00 1,500.00 1,500.00
8 Guest chairs Unit 1.00 900.00 4,500.00
9 Fax & Telephone machine Unit 5.00 1,300.00 1,300.00
10 Carpet and Curtain LS 1.00 23,000.00
Total 143,900.00

5.2. Working Capital

5.2.1. Operating Expense at full Capacity2
A. Salary Expense
SN Position No Qualification Monthly Annual salary
salary in in Birr
Birr
1 General manager 1 BA in management 4000 48,000

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2 Building admin 1 BA in Acct/Mgt 3500 42,000
3 Secretary 1 10+2 in secretariat science 1000 12,000
4 HRM Officer 1 Management 2500 30,000
5 Technical and 1 Diploma in building maintenance 1500 18,000
maintenance manager
6 Finance head 1 BA in Accounting 3000 36,000
7 IT Technician 1 Diploma in computer science/IT 2000 24,000
8 Marketer 1 Diploma in marketing 2000 24,000
9 Accountant 1 Diploma in accounting 2000 24,000
10 Guards/Security 8 Basic 1500 144,000
Parking and greenery 4 Grade 10 complete 1000 48,000
11 General Service head 1 Diploma in Management 1500 18,000
12 Purchaser 1 Diploma in purchasing &Sup Mgt 1250 15,000
13 Electrician 1 10+2 in general electricity 1000 12,000
14 Plumber 1 10+2 in general mechanic 1000 12,000
15 Casher 2 10+1 in bookkeeping 850 20,400
16 Cleaner 6 Unskilled 500 36,000
17 Maintenance officer 1 10+2 in General mechanic 1000 12,000
18 Driver 2 10 completed 1000 24,000
Total 36 599,400
Benefit (20%) 119,880
Grand Total 719,280

5.2.2. Operating Expenses

SN List of Items Annual cost in birr Assumptions Used
1 Audit and legal fee 24,000.00 2000 br/per ,month
2 Stationery supplies 6,000.00 500 br/month
3 Promotional Cost 40,000.00 Lump sum annual cost
4 Property Insurance 84,009.00 1% of the building
5 Cleaning Supplies 10,800.00 900 br. Per month
6 Uniforms 1,670.00 180 per pes for 16 people
7 Water consumption 5,000.00 2500 m3 by 3.15 br
8 Electric consumption 6,000.00 20000KWH By Br.0.4736
9 Fuel 42,672.00 2032 lit per year by Br. 21

25
10 Oil & Iubricants 4,267.20 10% of fuel cost
11 Telephone & fax 18,000.00 1500 per month
12 Repair expense 72,018.00 2% of building cost
13 Miscellaneous costs 20,000.00 3000 per month
Total 334,436.20

5.2.3. Pre-service Expenses

SN Description Cost in birr
1 Project proposal 50,000.00
2 Licensing fee and others
Total 50,000.00

Summary of Total initial investment cost

SN Description Cost in Birr
1 Land, building & construction 135,897,537.78
2 Building machines &Equipment’s 227,800.00
3 Vehicle 3,000,000.00
4 Office Equipment 143,900.00
5 Total fixed investment cost 136,993,786.78
6 Salary expense 719,280.00
7 Operation Expense 334,436.20
8 Pre service Expense 50,000.00
9 Total Working capital 1,103,716.20
10 Sub total 138,097,502.98
11 Contingency (10%) 7,115,132.37
Total initial investment capital 142,266,456.10

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5.3. Financial analysis and Statements
5.3.1. Underlying Assumption
The financial analysis of the mixed use building is based on the data
provided in the preceding sections and the following assumptions.
A. Construction and Finance
Construction period 2 Years
Source of finance 30% equity and 70 loan
Bank interest rate 10%
B. Depreciation
Building 10%
Building machinery and equipment 10%
Office Equipment’s 10%

5.3.2. Sources of Fund

The source of fund to finance the project is planned to be from two sources.
These are promoter’s equity and bank loan. The loan is expected to be
obtained from one of the local lending institutions. Since the project is
expected to take some times to repay all its debts, the bank loan is assumed
to obtain on long term credit basis. Taking the financial position of the
promoters into account, equity contribution and bank loan to finance the
total investment outlays of the project are assumed to be 30% and 70%
respectively. Accordingly, the total financial requirement from the two
sources will be;
SN Description Percentage share Amount
Owners Share 30% 41,000,000
Bank Loan 70% 96,600,000
Total 100% 138,000,000.00

5.3.3. Bank Loan Repayment Schedule

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 Year Principal Interest (10%) Total annual Payment in Remaining Balance
Payment ETB 9,660,000.00
0 0 00 00 96,600,000.00
1 9,660,000.00 9,660,000.00 19,320,000.00 86,940,000.00
2 9,660,000.00 8,694,000.00 18,354,000.00 77,280,000.00
3 9,660,000.00 7,824,600.00 17,484,600.00 67,620,000.00
4 9,660,000.00 7,042,140.00 16,702,614.00 57,960,000.00
5 9,660,000.00 6,337,926.00 15,997,926.00 48,300,000.00
6 9,660,000.00 5,703,133.40 15,363,133.40 38,640,000.00
7 9,660,000.00 5,133,720.06 14,793,720.06 28,980,000.00
8 9,660,000.00 4,620,348.05 14,280,348.05 19,320,000.00
9 9,660,000.00 4,158,313.25 13,818,313.25 9,660,000.00
10 9,660,000.00 3,742,481.92 13,402,481.92 0

5.3.4. Depreciation Schedule

SN Description Original Value in Depreciation Depreciation per year in
Birr rate in % Birr
1 Construction and Building 134,897,907.50 10 13,489,753.78
2 Bldg. machines & Equipment’s 227,800.00 10 22,780.00
3 Vehicle 3,000,000.00 5 150,000.00
4 Office Equipment 143,900.00 10 14,390.00
Total 138,047,607.50 14,944,760.75

5.4. Financial Statement

5.4.1. Income loss/statement
Project revenue and production costs are listed and compared to see
whether the project generate profits or not. Starting from first year of the
project operation, the project will generate a reasonable amount of net profit
for the owners throughout its life period. Profit and loss statement shows
that the project will generate net profit of ETB 16,683,1233.44 in the first
year and increase to ETB 43,856,851.81 starting from the third year of the
project life and hence it is found to be profitable.

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5.5. Financial Analysis
A. Profitability
According to the projected income statement, the building will start
generating profit in the 2nd year of operation. Important ration such as profit
to total sales, net profit to equity (Return on equity) and net profit plus
interest on total investment (return on total investment) show as increasing
trend during the lifetime of the project. The income statement and the other
indicators of profitability show that the project is viable.

B. Pay-Back Periods
The investment cost and income statement projection are used to project the
pay-back period. The building’s total investment will be fully recovered at
the 5.2 year of operation.

5.6. Environmental Impact of the Project

The EIA of the project activities was determined by identifying the
environmental aspects and then undertaking an environmental risk
assessment to determine the significant environmental aspects. The
environmental impact assessment has included all phases of the project
namely construction phase and operational phase.
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The building has both positive and negative impact
Positive impact of the project
The positive impact of the project is:-
 Generation of employment opportunity
 Source income for the government through business income tax
 Income generation for the promoter
 Being exemplary for other investors who want to engage in the same
business line.
Negative impact of the project
The project has the following negative impacts:
 Noise and Dust emission during Construction
There are some noises during the construction due to the construction
operation and the company will use construct the construction during
the day time. Again there is the emission of dust which will be
mitigated by sprinkling water on the service.
 Problem on workers on construction
During construction there are some problems that will materialize on
workers. These are: damage on operation by using machines, construction
materials and others. To mitigate such impact the company will provide
safety insurance and safety equipment’s.
 Sewerage during operation
During operation there are some wastes emitting from the mixed use
building. These are wastes from the latrine and will be mitigated by using
modern waste treatment technology.

6. Monitoring and Evaluation

6.1. Monitoring
With support of executive bodies and decisions in line with agreed up on
project as well as guidelines between stakeholder bodies and the project
owner. The project owner shall monitor all activities [Land request
processing, Land approval, Bank loan processing, Site Development,
Building and construction work, Preparation for service and service

30
execution] required to make the process of the project from beginning to end
and deliver required commercial service efficiently and effectively.

6.2. Evaluation
The project promoter evaluates the on-going process of the project at each
phase of implementation. Even if joint evaluation conducted at the end of
the project, the engineering estimation of bill of quantity is the basic tool of
project success evaluation. This evaluation will be based on the agreed
upon project document.

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