By: Harshavardhan Click to edit Master subtitle style N.

Shinde

5/2/12

Introduction
What is the need for feasibility study?? What are the different feasibility checks?? What the full feasibility report contains ?

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Pre construction activities

Four

phases
Phase 2 FULL FEASIBILITY REPORT, PPP preparation , Clearances Phase 3 Procureme nt , Final approval award Phase 4 Contract manageme nt and monitoring

Phase 1 Stratergic planning PRE FEASIBILITY REPORT Ppp suitability testing, Clearence.

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Pre feasibility analysis

Needs

and options analysis Legal feasibility Technical feasibility Scoping social/environment safeguards analysis Preliminary financial viability including expectations of required Government financial support Institutional capability analysis Identification of next steps required
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Responsibility Of PFA.
Authority :: eg. ministry for Central-level projects, sponsoring department(s), Urban Local Body, other statutory or public sector corporate entity. Support might be provided by dedicated PPP agencies, eg. PPP Cell or Project Development Agency, and the Sponsor may wish to engage external advisors. 5/2/12
Sponsoring

Full feasibility study

1. 2. 3. 4. 5. 6. 7. 8.

Market analysis and project scope Social and environmental feasibility Technical feasibility Risk studies and refined PPP mode Preliminary cost assessment Financial analysis and due diligence Economic feasibility Project implementation schedule

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1. Market analysis and project scope

1.1 .Needs analysis: does the project meet an end-user need? Does it contribute to meeting the objectives of the sponsoring authority? Who will the users be?

Options analysis: what is the best option for meeting the service need: a no-asset solution, existing assets, or new assets? Estimate and forecast demand: what level of demand is there for the outputs / services from the project, and how much are users willing to pay (what is the value of the 5/2/12 demand)?
1.3.

1.2.

EXAMPLE: JAIPUR METRO

1.1.
1.

NEED ANALYSIS:

Total population in 2001 was 23,24,319 Decadal growth is more than 100% in last 3 decades Available present public transport system is not properly organized and inadequate in terms of frequency and comfortable. Roots are in-efficiently planned, The average use of public transport facility is decreased from 26% to 19% in last two decades. Growth rate of private vehicle use has increased upto 12 % , causes congestion , 5/2/12

1.

1.

1.

1.

1.

EXAMPLE: JAIPUR METRO (cont.)

1.2. Options analysis:

Government has taken up the BRTS project under JNURM, and going to invest 480 cr. proposed to develop the 45 km BRT road on wider sections of roads in city, 400 new buses are to be produced to introduce the BRTS.

1. BARTS:

2. METRO RAIL: planned stage 1 of 23.09 km and stage 2 of 12.56 km, stage 1 is supposed to complete up to 2013.
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EXAMPLE: JAIPUR METRO (cont.)

1.3.

Estimate and forecast demand: (0n the basis of survey carried in 2001) 1. population forecast : SR no 1 2 3 4 5 Year 2001 2010 2011 2021 2031 Population ( Lakh ) 23.24 34.40 36.2 54.19 81.09
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Contd. (Estimate and forecast demand)

2.traffic characteristics and forecasted demand:

1.daily commuters are 36 lakh 2. Total peak hour Peak direction trips (PHPDT) required are nearly 3.6 lakh. 3.travel demand is expected to increase with the education and industrial development of city. 4. BRTS has capacity of 10000 to 12000 PHPDT , Year 5. peak hour traffic demand Total peak hour Peak Total peak hour Peak
direction trips (N-S) direction trips (E-W)

2014 2031

12901 22428

11264 27750
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2. Social and environmental feasibility

2.1.Social impacts : impact on quality of life and livelihoods, impacts related to environmental alteration (eg on health and livelihoods) 2.2 Environmental impacts : on the project location and in associated areas (eg downstream, ground water or ambient air) include effects on environmental resources due to alterations or pollutants

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2.1 social feasibility

Describe

the relevant human environment/ area of influence and baseline conditions an effective public plan to involve all potentially affected public the proposed action or policy change and reasonable alternatives to identify the full range of probable social

Develop

Describe

Scoping

impacts

Screening

to determine the boundaries of the SIA (seismic impact assessment)

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EXAMPLE: JAIPUR METRO :

2.1.Social

impacts :

project involves relocation of few shops , complex and apartments and residential areas , compensation is then paid for relocation for affected peoples; alignment sn Description is chosen such that it should be Corridor 1 Corridor 2 more in the governmental land.

1 2 3 4

Station Running section RSS/TSS DEPOTS TOTAL

GOV. PRIVATE GOV PRIVA TE 10.15 4.37 0.839 0.124 0.39 1.04 1.6 0.61 19.79 11.19 2.439 30.064 12.19 5.410
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2.2 environmental safeguard

Environmental

Clearance (EC) must be gained for all physical infrastructure projects that meet certain thresholds. environmental impact assisment

EIA:

Environmental

Clearance is regulated at the Centre by the Ministry of Environment and Forests (MoEF) from the State Forest Department or Central / State Pollution Control Boards are also required.
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Approvals

EXAMPLE: JAIPUR METRO

2.2

Environmental impacts :

majority of data related the water quality , vegetation, air and noise pollution are collected during the November 2009 to December 2009, which was then utilised to assess the incremental impact if any, on the environment due to project implementation, i. total no of loss of trees due to project is 1158. ii. there are more than 601 trees along corridor 1 iii. there are more than 557 trees along corridor 2, iv. air pollution is checked at 10 location of the city. v. noise pollution is also checked at 10 different locations.
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3. Technical feasibility
surveys of the project site, mapping, topographical and geotechnical surveys, Analysis of environmental conditions that impact on the technical design.
Field

A preliminary technical design of facilities required to provide the project outputs. should considerd for alternative design options,
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This

taking

4.Risk assisment
Helps Pre

to bear with the different risks;

operative risks: financial risk, approvals, planning, delays in land aquisition risks: design risk, shortage of material , labour risk, approvals risks: technological risks, payment risk, maintenance risk, finencial risk, volume risk risks: change in law , sponsor risk
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Constructive

Operational

Other

5.Preliminary cost assessment

5.1

A detailed estimate of the capital and operating and maintenance costs needs to be carried out.

.The capital (Capex) cost :: assessment will be based on the components of the preliminary technical design and based on the estimate on prevailing market costs for similar work and materials, Detailed operating and maintenance (Opex) cost : cost estimates would be based on a schedule of activities . 5/2/12
5.2.

EXAMPLE: JAIPUR METRO :

5.1

.The capital (Capex) cost ::

5.1.1 . corridor 1 : (at 2009 ) Rs. 4749.23 cr. , which includes design charge and general charge 7%, and contingencies charges 3 %, excluding taxes and duties. 5.1.2 corridor 2: (at 2009 ) Rs. 2424 cr. which includes design charge and general charge 7%, and contingencies charges 3 %, excluding taxes and duties.
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6. Financial analysis and

due diligence

6.1. life-cycle costs : capital costs and operating and maintenance (O&M) costs identified in the cost assessment and a depreciation schedule for physical assets, 6.2.Revenue options: forecast revenue stream. This will include tariffs (where user-charges are possible), and secondary revenue sources from the project. The discount rates for the public sector and private investor consistent with the capital structure and allocation of project risks Expected returns from the project illustrated by the NPV, IRR Summary financial information including ratio analysis.
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EXAMPLE: JAIPUR METRO :

year
6.1.

life-cycle costs :

Year wise investment with central tax:

Invest ment (crore)

Land acquisition cost is included infirst 2011-12 450 Three investments. Operation and maintenance cost 2012-13 staff and 752 including energy up to 2047 is 17199.59 cr. 2013-14 2049

2014-15 2015-16 2016-17 2017-18 2018-19 total

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2544 1781 936 491 515 9518

EXAMPLE: JAIPUR METRO :

particulars Funding pattern:

GOI (20% of stage 2) Rajasthan state gov. (20% of stage 2) Rajasthan state gov. (stage 1) Land to be provides free of cost by state Equity by Concessionare Concessionares debt @ 10% PA total

Total cost cr
1716 1716 1250 940 1100 2797

9518 cr.
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EXAMPLE: JAIPUR METRO : Dist METRO METRO FARE KM FARE 20132017-18 6.2.Revenue options: 14 RS. Fare structure: RS. 0-2 7 9 2-4 10 12 4-6 12 14 6-9 16 18 9-12 19 12-15 21 15-18 18-21 23
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EXAMPLE: JAIPUR METRO :

Other sources of revenue: 1. leasing of parking rights at railway stations, 2. advertising, 3. allowing stations for movie shooting,

The JMRC has a land of 50 ha. Which is supposed to develop with commercial buildings . The land is proposed to develop through equity and debate, the revenue is supposed to occur from 2017.

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7. Economic feasibility
the

economic benefits from the project,

the economic costs of the project, the balance of these expressed in present value terms (the net economic benefit)

criteria: NPV and EIRR; net present worth, economic internal rate of returns,
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Decision

EXAMPLE: JAIPUR METRO :

Financial internal rate of returns:

financial internal rate of returns is considering the 50 ha. Property to be developed obtained over 35 years of operation is 6.09%

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8. Project

implementation schedule
This

would reflect the timing and interrelationships of all of the major components of the project as follows 1. In-principle clearance timeline: 2. Pre-qualification and final document preparation timeline: 3. Application for Final Approval of the PPP 4. Procurement and award timeline: 5. Technical and financial closure timelines: 6. Engineering, procurement and construction (EPC) activities and timeline (for projects that involve a capital expenditure component) 7. Post-construction activities 8. Expected date for commencement of operations 5/2/12 9. Major milestones in the operating lifecycle of the

Referance
www.jmrc.com www.pppinindia.com

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