Introduction and Background of
Project
Nepal is landlocked country with series of Mountains, Great Himalayas,
temples, rivers, diversified culture along with affluent flora and fauna. The
topography has enormous variation (30m is the lowest and 8848m as highest), 15%
occupied by Himalayan region, 68% with Mountains and mere 17% plain in the
south. There are about 6000 rivers in Nepal; most of them are fast flowing one.
50% of the country is not accessible by roadway connection. 23 district
headquarter are not connected among 75 district. The food supply, health
facilities, education and other basic amenities are not available for Karnali
zone and other northern part of Nepal. Nepal transportation system in mountain
and Himalayan region is dominated by costlier airways only.
Nepal has robust potential to be tourism destination if we
can facilitate the development of infrastructures and policy framework in order
to boost private entrepreneurship to attract investment for transportation and
tourism industry. Ropeway and cable car could be the crucial
infrastructure to lessen such ruthless life in rural area of Nepal
and it add as a new attraction object and destination for tourism. It
would offer opportunity to create employment, alleviate poverty and provide
basic services including good governance improving the supply of food and
linkage with road network, reducing conflict and ensuring peace and security.
1.
Company Details
Name: Himalaya Transportation Corporation
Connecting Nepal
1.1 Vision:
Transporting @ faster, cheaper and better way.
1.2 Mission:
Become an anchor for transporting solutions in Nepal, with active
participation in facilitating development activities and tourism promotion.
Objectives of HTC:
Ø To connect elsewhere of Nepal.
Ø Define and transformation of transportation system
and practice of Nepal.
Ø Ropeway and Gondolas line development for various
Mountain and Himalayas.
Ø To attracts both internal and international
tourists.
Ø Transporting goods and carriers for fulfilling
demand of region.
Ø To facilitate infrastructure development.
Ø To provide employment to local people, and
underprivileged citizens.
Ø To support helping to improve standard of living and
boosting economic development.
Ø To reducing geographical imbalances by connecting
all places.
2.
Project Introduction:
Himalaya Transportation Corporation (HTC),
Connecting Nepal, has decided to undertake rope way construction to connect
Northern Part of Nepal. The following three routes are explored viable and
suitable;
a.
Sindhuli-Namchhe (to connect Mount Everest)
b.
Pokhara-Dhandruk-Manang-Mustang (to connect Annapurna
range, Tilicho lake and Mukthinath)
c.
Dailekh Bazar- Chikhaya- Jumla (To connect Karnali
Zone)
The all three has its importance. The first two are better
known for tourism. The second route will able to substitute per day Rs 1 Crore
apple import. The third one has also potentiality to bestow fresh apple of
similar or more value to Nepal markets. All these three project were essential
for boosting tourism development of Nepal and would generates half million job.
HTC has preferred third route to do justice
with Karnali region people, who suffered and wasted half of their life to
transport basic needs. This project is not commercial venture, but the trifle
attempt to facilitate to Karnali people to make their life simple and easier.
We appreciate the generous investments made by our NRN brothers, to support
Karnali development activities.
2.1 Why Karnali ….
Karnali
lines with Tibet geographically to the north, is one of Nepal's 14
administrative zones ,which is comprised of Dolpa, Jumla, Kalikot, Humla, Mugu,
and is the home of 3, 09,084 people. It occupies about 15 percent of the total
territory of the kingdom of Nepal.i.e.21,351 square kilometers .Most of Karnali
are unpopulated as 45 percent of its territory is located at an altitude above
45000 meter and 47 percent is above 2500 meters.
Karnali
is the only zone in Nepal that does not have a road link with rest of the
country. The people of Karnali either have to walk for weeks of have to use to
airplane of helicopter paying expensive fair. Air service is available in
Dolpa, Jumla, Mugu and Humla, but there so airport in Kalikot. There is no
regular air service in Mugu district though it boasts the construction of
Talcha airport.
The
zone only one percent arable land paradoxically,94 percent of the population is
mainly count on agriculture and the farm of the most of the places of the
region depend on Manson rain for farming. The monsoon cycle of the zone is
different from that of another part of the country due to the peculiarity of
the relief of land. The 4000 –meter high chyakhure-mabu mountain in the
southern part of the zone does not allow the rain bearing monsoon cloud to flow
northward. Consequently the northern part of zone gets lesser rainfall then the
southern part .Similarly the Api-saipal Mountain in the west of the zone acts
as barrier for the westerly winds thus causing little of no rain.
At
the national level, comparative development indicator places the district of
Karnali at the lowest rank in development process, which are 67, 69, 70, 74 and
75th. These shows the districts of Karnali are below then 66th
position among 75 districts of Nepal.
2.2 Project Objectives:
Ø
To facilitate living of People of Karnali and
surrounding region.
Ø
To reduction of regional imbalances.
Ø
To promote tourism activities and generates
economic activities.
Ø
To make use of apple available, transporting
them to Nepal and India.
Ø
The project can be extended up to Rara lake and
another towards Se-Foksundo reservation, if company able to generate funds from
ADB, World Bank and other institutions.
3.
About Promoters:
The following are promoters of Himalya Transportation
Corporation;
a.
Mr. B.B. Sharma
B.B. Sharma has diverse experience of two
decades in MNC in the field of finance. He holds MBA and CWA from India and
CIMA from U.K. The last assignment he completed was CFO of HSBC India.
b.
Mr. Nishesh Timalsina
Nishesh Timalsina is known Mathematician
and Mechanical Engineer from IIT, Madras and M.E. from AIT, Thailand. He has
served L & T chief engineer in, Middle East for 12 years.
c.
Mr. Ritesh Gautam
Mr. Ritesh Gautam holds MBA from Stanford
University. He has gigantic experience in infrastructure consulting firm. He has
achieved extraordinary growth Siemens within 10 years.
d.
Dr. Atit Pandey
Dr. Pandey has revolutionized Pharmacy and
medical sector in Nepal in last 20 years. His affluent research work and
contribution to education of Pharmacy and medical is highly regarded.
The other probable promoters for the project of “Connecting
Karnali” are;
Ø
World Bank (WB)
Ø
Asian Development Bank (ADB)
Ø
Government of Nepal (GON), Ministry of Physical
and Development Planning
Ø
Friendly countries (Japan, Germany, India and
China)
HTC has been in regular contact and consulted with these
bodies.
4.
Details of the Proposed Project:
The project is undertaken to connect Dailekh
Bazar – Cikhaya—Ranchuli—Mahadev—Jumla.
4.1 Service
/Manufacturing Process:
Route
showing Stations, distance from the origin and estimated travel time
Note:
1.There is total 5 stations, name of the station is given and how many
kilometer far from Dailekh Bazar and time (min) journey to reach that
particular station is mention against the station name.
2.
The station by where some cable
will return to Dailkeh is indicated by
The station where only Cable stops is
indicated by
4.2 Plant Capacity:
1.
HTC cable speed is on an average 24 km per hour. It
needs 170 min to complete journey plus 10 minute of stoppage in each station (2
min each) requiring 3 hours for whole project.
2.
Maximum number of cable car per Km is 450 numbers. HTC
is starting its operation with 215 cable cars. Each Cable Car has capacity to
30 passengers or 2500 kg of logistics.
3.
HTC is planning for running 200 numbers of cable cars
for Dailekh to Jumla. And 15 cable cars will keep rotating Dailekh to Chikhaya
only.
4.
Public transportation Dailekh to Jumla: a. 200CC *30
Seats * 24hr/3hr*9hr/24hr*350 days=6.3 million passengers
b. Dailekh to Chikhaya: 15CC*30seats*24hr/1.25hr*9hr/24hr*350days=
1.134 million passengers
c. Total passenger served: 7.434 million pa.
4.3. Logistics supplied:
a. Dailekh to Jumla: 200
CC*3ton*24hr/3hr*3hr/24hr*350days= 210,000ton pa.
b. Dailekh to Chikhaya:
15CC*3ton*24hr/1.25hr*3hr/24hr*350days= 37800 ton p.a.
4.4 Technical Knowhow and Tie up:
HTC has technical tie up with global giant, Doople Maier,
from Austria. Doople Maier has built niche image in ropeway construction and
consultancy over the years. The whole project is contracted to US$10 million
per Km; i.e. US$780 million (Rs 62400 million) to the company for 1 years as
completion period. Thus includes wire, towers installation, station layout
construction, and installation of Rosenberg, 250 Cable Car cabins (35 to be
delivered within 4 years on demand), battery for power storage, Electricity
connections, Insulators and maintenance of 5 years with full service.
4.5 Management team for Project:
Ø
Mr. Nitesh Timalsina heads this project from HTC
and co-ordinates with Dopple Maier for construction complete by deadline.
Ø
Mr. Ritesh Gautam ensures financial management
of project.
Ø
Dr. Pandey coordinates with government, other
local bodies.
Ø
Mr. B.B. Sharma looking for donor and grants
from ADB, WB, Friend Nations and Financial Institution. He does promotional
activities and generates emotional support from public.
Ø
Mr. John Wright is project head representing
Doople Maier, has team of 30 Engineers and 120 overseers and 900 labors
4.6 Details of Land and Building, Plant and
Machinery and others Fixed Assets:
A. Land acquired:
Table
showing Land acquired for Karnali Project
|
No
|
Particulars
|
Area
(Acres)
|
Value
(Rs. In Millions)
|
|
1
|
Head
Office, Kathmandu
|
0.1
|
5
|
|
2
|
Site
office, Birendranagar
|
5
|
5
|
|
3
|
Stations
(5 Place)
|
100
|
40
|
|
4
|
Land
for route development
|
5000
|
100
|
|
5
|
Total
|
|
150
|
B. Building constructed:
Table
Showing Building details
|
S.N.
|
Particulars
|
Amount
(in Rs. Millions)
|
|
1
|
3
Storey in Kathmandu
|
10
|
|
2
|
2
Storey in Birendranagar
|
5
|
|
3
|
Stations
(9m *5 building for stations)
|
45
|
|
Total
|
|
60
|
C. Plant and Machinery:
Plant and Machinery includes all ropeway
infrastructure, say Ropeway connection, Cable Car Cabins, Machineries, power
connectors, Towers, Rosenberg for generating power, Insulators , batteries for
storing batteries, necessary generators etc. The contract also inclusive of
transportation cost.
These all are being provided by Doople
Maier, an Austrian company, for value of US$10million per kilometers, i.e.
US$780million (Rs 62400million), with free technical assistance and maintenance
for first 5 years of operation.
D. Other Fixed Assets:
This includes computers, office equipment, furniture,
Vehicles etc of worth Rs 50 million.
4.7 Details of Infrastructure facilities:
a. Power:
Power itself is raw material for service what HTC, Ropeway
offers. All towers and route are well equipped and very well connected by
electricity.
The ropeway project itself generates 10-12% of electricity
through Rosenberg connected on its wheel, that are stored on battery which is
attached down the Cable Car. This power is sufficient to fulfill requirement of
stations and office power need.
b. Water:
The service process does not demand water in abundant, and
all stations are well connected for drinking water.
c. Transportation:
Dailekh Bazar is 82km away from East-West highway of Nepal,
or 2 hours journey from Kohalpur.
4.8 Raw material requirements and Availability:
The major raw materials are Power and Parts/ consumables for
machinery or ropeway system.
Power required: 3612000000kw pa= 3612000 units
Cost of Power= 3612000 units @Rs 7= Rs25284000= Rs25.284
million pa
Consumable and parts= 1% of P&M=624million pa
4.9 Labor requirement and Availability:
The
completion of project is responsibility of Doople Maier. The contract has
ensured first 5 years maintenance free.
HTC
has 3 Engineer, a Cost accountant, a administrator, 6 Diploma Engineer, 70
employee and workers.
5.
Schedule of Implementation of the
Project:
Activities
showing time required
|
Activities
|
Particulars
|
Time
required (weeks)
|
|
A
|
Legal
proceeding with alliance-Doople Maier
|
2
|
|
B
|
Technical
Visit by Doople Maier-Confirming route
|
5
|
|
C
|
Transportation
of Equipment & Machinery
|
30
|
|
D
|
Route
clearance
|
4
|
|
E
|
Power
connection on necessary sites
|
5
|
|
F
|
Ropeway
Route construction
|
40
|
|
G
|
Station
building construction
|
10
|
Showing
Activities for Connecting Karnali Project
6.
Project Cost schedule:
|
S.N.
|
Particulars
|
Amount
(In Rs. Millions)
|
|
1
|
Land
|
150
|
|
2
|
Buildings
|
60
|
|
3
|
Plant
and Machinery
|
62400
|
|
4
|
Miscellaneous
Fixed Assets
|
50
|
|
5
|
Preliminary
and Pre-operative expenses
|
5
|
|
6
|
Contingency
Provision
|
13
|
|
7
|
Working
Capital Margin
|
8.1663
|
|
|
Total
cost of Project
|
62686.1663
|
7.
Means of Financing:
a.
Equity capital (Issued to Non Residential Nepali from
Europe and USA): US$83.577 million = Rs 6686.1663 million
b.
Soft loan from friend Nation /Development bank @3%= US$
700 million=Rs 56000 million
c.
The Government of Nepal has promise to exemption from
tax for first 10 years excluding construction period.
d.
The soft loan from friend Nation and Development bank
has interest moratorium for 3 years excluding project implementation period.
The loan to be repayment after 20 years with 5% premium.
8.
Working Capital requirement:
a. Cost sheet:
|
Particulars
|
Year
1
|
Year
2
|
Year
3
|
Year
4
|
Year
5
|
|
Electricity
|
10.896
|
10.896
|
10.896
|
10.896
|
10.896
|
|
Parts
& consumable
|
312
|
312
|
312
|
312
|
312
|
|
Wage/salary
|
14.88
|
16.368
|
17.9208
|
19.5449
|
21.2475
|
|
Depreciation
|
3128.556
|
3128.556
|
3128.556
|
3128.556
|
3128.556
|
|
COP
|
3466.332
|
3467.82
|
3469.3725
|
3470.997
|
3472.7
|
|
Other
OH
|
5
|
5.25
|
5.5125
|
5.788
|
6.077
|
|
Cost
of sales
|
3471.332
|
3473.07
|
3474.885
|
3476.785
|
3478.777
|
|
Working Capital
Computation
|
|
In millions
|
|
|
Particulars
|
period
|
Value
|
year 1
|
year 2
|
year 3
|
year 4
|
year 5
|
|
A. Current Assets
|
|
|
|
|
|
|
|
|
Consumable & Parts
|
1 M
|
312
|
26.0000
|
26.0000
|
26.0000
|
26.0000
|
26.0000
|
|
Work In progress
|
1 Week
|
see COP
|
6.6650
|
6.6690
|
6.6720
|
6.6750
|
6.6780
|
|
FG
|
0
|
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
|
Debtors
|
0
|
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
|
Total CA
|
|
|
32.6650
|
32.6690
|
32.6720
|
32.6750
|
32.6780
|
|
Working Capital
margin-25%
|
|
|
8.1663
|
8.1673
|
8.1680
|
8.1688
|
8.1695
|
|
b. Current Liabilities
|
|
|
|
|
|
|
|
|
Lag in wages &
salary
|
1 M
|
See salary
|
1.2400
|
1.3640
|
1.4934
|
1.6287
|
1.7706
|
|
Electricity bill
|
1 M
|
10.896
|
0.9080
|
0.9080
|
0.9080
|
0.9080
|
0.9080
|
|
Total CL
|
|
|
2.1480
|
2.2720
|
2.4014
|
2.5367
|
2.6786
|
|
NWC
|
|
|
30.5170
|
30.3970
|
30.2706
|
30.1383
|
29.9994
|
|
WC funded by bank
|
|
|
22.3508
|
22.2298
|
22.1026
|
21.9696
|
21.8299
|
|
Interest on WC loan
|
|
|
2.6821
|
2.6676
|
2.6523
|
2.6363
|
2.6196
|
9.
Marketing and Selling arrangement:
9.1 Prospective
Customers and forecasting of Customer:
a.
Locally benefited public:
Karnali population: 3, 93,374 people
Bheri population: 17, 16,467 people
Rapti Population: 14, 74,545 people
Seti Population: 15, 71,911 people
Assumption: 60% people are of age 18 year to 50 years. One of
such age man will travel once a two month. 1.5m*0.60*1/2*12/1*2ways=
10.8 million passenger pa
b.
Internal Tourist (from other parts of Nepal):
Total Population of Nepal = 31.5 million excluding locally
benefited 30 m
Assumption: 60% people are of age 18 year to 50 years and one
person will visit that spot once in an eight year.
= 30m *0.60*1/8year*2ways= 4.5 million internal tourists pa
c.
International Tourist:
On an average 2million international tourist turns out in
Nepal every year. Say, 10% are interested to visit Karnali.
= 2*0.1*2 ways= 0.4 million international tourist pa
9.2 Seven P’s of the
project:
a. Product/Service:
Ø
Connecting Karnali to the country and world.
Ø
Logistics of basic amenities.
Ø
Making available of Apple and other local goods
to remaining part of Nepal.
Ø
Convenient and thrilling tour for tourists.
b. Price:
|
S.N.
|
From
|
To
|
Fare
for Nepali
|
Fare
for foreigner
|
|
1
|
Dailekh
|
Chilkhaya
|
Rs
160 or $2
|
Rs
480 or $6
|
|
2
|
Dailkeh
|
Ranchuli
|
Rs
200 or $2.5
|
Rs
600 or $7.5
|
|
3
|
Dailekh
|
Jumla
|
Rs
320 or $4
|
Rs
960 or $12
|
Note: Prices are Rs 5 per km for
Nepali citizen and Rs 15 per km for foreigners.
The price of
goods carrier is kept constant Rs 1000 per ton for irrespective of distance.
c. Place:
The Connecting Karnali project opens up Karnali and other
remote area with remaining part of Nepal.
The project is located 80 odd KM from East-West Highway of
Nepal.
d. Promotion:
Connecting Karnali has generated attention to general public
before it initiated. Public has emotional support towards the project.
The project scope has tremendous national importance. HTC
does not need to talk and promote the project. There is no cost attached to the
project promotion.
d.
Process:
The topography of Nepal does not support road transportation.
HTC is going along with the nature. The rope way connection goes by the way
mountains prevailing.
People are given comfort seat and Gondola carries them over
the mountain and reaches the destination.
e.
People:
Doople Maier’s technicians are involved into preparation of
structure and infrastructure. HTC manages administration and running of
project. Local people, internal tourists and international tourists are
customers.
f.
Physical Evidence:
Ø
Waiting hall in stations
Ø
Stations with loaded facilities
Ø
The Charming Gondolas
Ø
The scenery of towers
Ø
Online booking facilities
10.
Projected Income Statement of HTC,
Connecting Karnali Project:
|
Projected Income
Statement of Project-Connecting Karnali
|
|
|
|
Values in Millions
|
|
Particulars
|
year 1
|
year 2
|
year 3
|
year 4
|
year 5
|
|
Sales Revenue
|
1999.86
|
2248.96
|
2248.96
|
2248.96
|
2248.96
|
|
Less Cost of sales
|
3471.332
|
3473.07
|
3474.885
|
3476.785
|
3478.777
|
|
EBIT
|
-1471.472
|
-1224.11
|
-1225.925
|
-1227.825
|
-1229.817
|
|
Less Interest on WC
|
2.6821
|
2.6676
|
2.6523
|
2.6363
|
2.6196
|
|
Less Interest on soft loan
|
0
|
0
|
0
|
1680
|
1680
|
|
EBT
|
-1474.1541
|
-1226.78
|
-1228.577
|
-2910.461
|
-2912.437
|
|
Less Tax
|
0
|
0
|
0
|
0
|
0
|
|
EAT
|
-1474.1541
|
-1226.78
|
-1228.577
|
-2910.461
|
-2912.437
|
|
Less Dividend
|
0
|
0
|
0
|
0
|
0
|
|
Retained Earning
|
0
|
0
|
0
|
0
|
0
|
11.
Projected Cash Flow Statement of HTC,
Connecting Karnali Project:
|
Projected Cash flow Statement
|
|
Value in Million
|
|
Sources
|
PI period
|
year 1
|
year 2
|
year 3
|
year 4
|
year 5
|
|
Equity Capital
|
6678
|
0
|
0
|
0
|
0
|
0
|
|
LTL
|
56000
|
0
|
0
|
0
|
0
|
0
|
|
Increase in WC loan
|
0
|
22.3508
|
0
|
0
|
0
|
0
|
|
Increase in CL
|
0
|
2.148
|
0.124
|
0.1294
|
0.1353
|
0.1419
|
|
EBIT+Depreciation
|
0
|
1657.084
|
1904.446
|
1902.631
|
1900.731
|
1898.739
|
|
Total sources
|
62678
|
1681.583
|
1904.57
|
1902.76
|
1900.866
|
1898.881
|
|
Uses
|
|
|
|
|
|
|
|
Fixed Asset
|
62678
|
0
|
0
|
0
|
0
|
0
|
|
Decrease in WC loan
|
0
|
0
|
0.121
|
0.1182
|
0.133
|
0.1397
|
|
Interest on soft loan
|
0
|
0
|
0
|
0
|
1680
|
1680
|
|
Increase in CA
|
0
|
32.665
|
0.004
|
0.003
|
0.003
|
0.003
|
|
Interest on WC loan
|
0
|
2.6821
|
2.6676
|
2.6523
|
2.6363
|
2.6196
|
|
Total Uses
|
62678
|
35.3471
|
2.7926
|
2.7735
|
1682.772
|
1682.762
|
|
|
|
|
|
|
|
|
|
Opening cash
|
|
8.1663
|
1654.402
|
3556.179
|
5456.166
|
5674.26
|
|
Surplus or deficit
|
8.1663
|
1646.236
|
1901.777
|
1899.987
|
218.094
|
216.1186
|
|
Closing balance
|
|
1654.402
|
3556.179
|
5456.166
|
5674.26
|
5890.379
|
|
|
|
|
|
|
|
12.
Projected Balance Sheet of HTC,
Connecting Karnali Project:
|
|
|
|
|
|
|
|
Projected Balance Sheet of
Connecting Karnali Project
|
Value in Millions
|
|
Liabilities
|
PI period
|
year 1
|
year 2
|
year 3
|
year 4
|
year 5
|
|
Share Capital
|
6686.166
|
6686.166
|
6686.166
|
6686.166
|
6686.166
|
6686.166
|
|
LTL
|
56000
|
56000
|
56000
|
56000
|
56000
|
56000
|
|
Reserve & Surplus
|
0
|
0
|
0
|
0
|
0
|
0
|
|
WC loan
|
0
|
22.3508
|
22.2298
|
22.1026
|
21.9696
|
21.8299
|
|
Current Liabilities
|
0
|
2.148
|
2.272
|
2.4014
|
2.5367
|
2.6786
|
|
Total Liabilities
|
62686.17
|
62710.67
|
62710.67
|
62710.67
|
62710.67
|
62710.67
|
|
Assets
|
|
|
|
|
|
|
|
Gross FA
|
62678
|
62678
|
62678
|
62678
|
62678
|
62678
|
|
Acc. Depreciation
|
0
|
3128.556
|
6257.112
|
9385.668
|
12514.22
|
15642.78
|
|
Net FA
|
62678
|
59549.44
|
56420.89
|
53292.33
|
50163.78
|
47035.22
|
|
Investment
|
0
|
0
|
0
|
0
|
0
|
0
|
|
CA other than cash
|
0
|
32.665
|
32.669
|
32.672
|
32.675
|
32.678
|
|
Cash in hand/bank
|
8.1663
|
1654.402
|
3556.179
|
5456.166
|
5674.26
|
5890.379
|
|
Acc. Loss
|
0
|
1474.154
|
2700.934
|
3929.511
|
6839.972
|
9752.409
|
|
Total Assets
|
62686.17
|
62710.67
|
62710.67
|
62710.68
|
62710.68
|
62710.69
|
List
of Assumptions:
Regarding
Plant capacity:
1.
Maximum speed for BDG and TDG technology
is 7.5 meter/second, i.e. 27km per hour. (Ref. Green Gondola project) and
Austrian Gondola project of 3.6 km needs 9 min of travelling.
2.
The Cable cars are available 24 seated
(Austria) and 30 seated (Green Gondola Project-London).
3.
No. of Cable car per kilometers,
according to Austrian: 3.6 km can have 24 cable car cabins, i.e. 1 cable car
per 150 m. This shows that HTC can go for maximum of 453 Cable car cabin.
4.
No. of tower required, with reference to
Manakamana Darsan; they have constructed 20 towers for 3 km. According to that,
HTC need 454 towers for its whole project.
5.
The Cable car service for passenger is 8
am to 5 pm. (9 hours for public transportation)
6.
The cable car service for goods and
logistics is 5:30 pm to 8:30 pm. (3 hours for carriage)
7.
The power consumption according to
Austrian cable car project is 400kw per cable/Gondola.
HTC
power consumption pa= 4000kw*215 CC*12hr*350days=361200000kw=361200units pa
8.
The power cost in Nepal is assumed Rs 7
per unit, and assumed that Government of Nepal has assured to provide 24*7
power connections to project due to importance of the project.
Regarding Contingency:
1.
Contingency is 5% of fixed asset other
than Plant and Machinery. Because P&M is given contract to Austrian giant
Doople Maier. It will be too huge if we keep provision of contingency
(3133millions) on Total Fixed Asset.
2.
Preliminary expense and Pre-operative expenses
is assumed as 5 million.
Regarding forecasting of Customers:
1. Locally
benefited Public: 60% people are of age 18 year to 50 years. One of such age
man will travel once a two month.
2. Internal
tourist: 60% people are of age 18 year to 50 years and one person will visit
that spot once in an eight year.
3. International
tourist: On an average 2million international tourist turns out in Nepal every
year. Say, 10% are interested to visit Karnali.
Regarding 7 P’s:
1. Price
of Manakamana Darshan is US$8 for 3 kilo meter for one way and US$ 10 for two
ways. HTC Connecting Karnali is charging nominal fare of Rs 5 per km for Nepali
Citizen and three times to foreigners.
2. The
price for logistic transportation is Rs1000 per ton or Rs 1 per kilogram for
irrespective of distance.
Regarding Financial
1. Wages
and salaries will increase 10% every year.
2. Administrative
expenses will increase by 10% pa.
3. Selling
expense remains constant over the year.
4. Depreciation
is straight line basis. Building-5%, P&M-5%, Other Fixed Assets:10%
5. One
US$ = Rs 80
Relating working capital:
1.
Maintenance, Consumable and parts
constitute 0.5% of Plant & Machinery, and to be purchased one month earlier
on go down.
2.
Consumable and parts are sent on site
and take on an average one week to fix it. WIP is 10% of COP.
3.
Finished Goods stocks are zero, because
service are perishable.
4.
There are no debtors, because of 100%
cash sales.
5.
Salary and wages are paid following
month first week.
6.
Electricity bills are paid following
month first week.
7.
All tickets are sold in cash. 20-30% is
being booked in advance. HTC is expecting 60% reservation will happen from 5th
year.
8.
The interest on short term loan is 12%.
9. Employee cost:
|
Designation
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
|
Management (4)
|
4.8
|
5.28
|
5.808
|
6.3888
|
7.0277
|
|
Engineer (3)
|
1.08
|
1.188
|
1.3068
|
1.4375
|
1.5813
|
|
Administrator2
|
0.60
|
0.66
|
0.726
|
0.7986
|
0.8785
|
|
Employee/labor
|
8.4
|
9.240
|
10.08
|
10.92
|
11.76
|
|
Total cost
|
14.88
|
16.368
|
17.9208
|
19.5449
|
21.2475
|
Note:
Management draws per month 1, 00,000 and grew 10% each year.
The
number of engineer salary grows by 10% pa. up to 3 year and remain constant for
2 years. They get on an average 30000 pm.
Administrators
include one accountant, and get paid 25,000 pm, and increase for 10%.
Employee
and labors gets 10,000 on an average and will grow by 1000 constant.
10.
Electricity consumption is constant
throughout the 5 years, will vary accordingly Gondola added on the project.
11.
Other overhead is assumed as 5 million
and increase 5% every year.
12.
Adjusting preliminary expenses and
pre-operative expenses and contingencies:
|
Asset head
|
weight
|
Allotted
|
Gross Asset
|
|
Land
|
57.69
|
10.38
|
160.38
|
|
Building
|
23.08
|
4.16
|
64.16
|
|
Other F.A.
|
19.23
|
3.46
|
53.46
|
|
Total= 260
|
100
|
18
|
278
|
13.
Depreciation with straight line method:
a. Building
+ P & M= 62464.16 million @5% = 3123.21 million pa
b. Other
FA= 53.46 million @10% = 5.346m
c. Total
depreciation = Rs 3128.556 million
14.
Depreciation with written down value
method:
|
|
|
|
|
|
|
|
Plant and Machinery +
Building (62464.16 million @5%)
|
|
|
Year
|
Asset
|
Depreciation
|
Value
|
|
|
|
1
|
62464.1600
|
3123.2080
|
59340.9520
|
|
|
|
2
|
59340.9520
|
2967.0476
|
56373.9044
|
|
|
|
3
|
56373.9044
|
2818.6952
|
53555.2092
|
|
|
|
4
|
53555.2092
|
2677.7605
|
50877.4487
|
|
|
|
5
|
50877.4487
|
2543.8724
|
48333.5763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of Other
FA @10%
|
|
|
|
|
year
|
Asset
|
Depreci
|
value
|
|
|
|
1
|
53.4600
|
5.3460
|
48.1140
|
|
|
|
2
|
48.1140
|
4.8114
|
43.3026
|
|
|
|
3
|
43.3026
|
4.3303
|
38.9723
|
|
|
|
4
|
38.9723
|
3.8972
|
35.0751
|
|
|
|
5
|
35.0751
|
3.5075
|
31.5676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Depreciation
under WDV method:
|
|
|
|
year
|
Depreciation for year
|
|
|
|
|
|
1
|
3128.554
|
|
|
|
|
|
2
|
2971.859
|
|
|
|
|
|
3
|
2823.0255
|
|
|
|
|
|
4
|
2681.6577
|
|
|
|
|
|
5
|
2547.3799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regarding Passenger and capacity
utilization:
1. First
year 70% and others year 80% capacity is utilized.
2. There
is 70% capacity utilization for first year in logistics and will increased to
80% from 2nd years and remain constant.
Working Note for sales and revenue:
|
Capacity utilization
|
|
Passenger in Million
|
|
|
year 1
|
year 2
|
year 3
|
year 4
|
year 5
|
|
foreigner
|
0.4
|
0.4
|
0.4
|
0.4
|
0.4
|
|
Dailekh-Chilkhaya
|
0.796
|
0.9096
|
0.9096
|
0.9096
|
0.9096
|
|
Dailekh- Jumla
|
4.01
|
4.64
|
4.64
|
4.64
|
4.64
|
|
|
4.41
|
5.04
|
5.04
|
5.04
|
5.04
|
|
Logistic
|
210000ton+37800ton = 247800ton
|
|
|
1st year= 70%=173460
ton and 2nd year=80%=198240 ton
|
|
Projected Sales and revenue
|
|
|
|
in million
|
|
|
year 1
|
year 2
|
year 3
|
year 4
|
year 5
|
|
a. foreigner
passenger:
|
384
|
384
|
384
|
384
|
384
|
|
b. Nepali passengers
|
|
|
|
|
|
|
Dailekh -Chilkhaya
|
159.2
|
181.92
|
181.92
|
181.92
|
181.92
|
|
Dailekh -Jumla
|
1283.2
|
1484.8
|
1484.8
|
1484.8
|
1484.8
|
|
Total fare from Passenger
|
1826.4
|
2050.72
|
2050.72
|
2050.72
|
2050.72
|
|
from logistic:
|
|
|
|
|
|
|
fee for logistic
|
173.46
|
198.24
|
198.24
|
198.24
|
198.24
|
|
|
|
|
|
|
|
|
Total revenue
|
1999.86
|
2248.96
|
2248.96
|
2248.96
|
2248.96
|
Note: This project has been submitted to Prof. Shivappa, Professor in Project Management on 9th May 2012.
