"Connecting Karnali" , Dailekh Bazar to Jumla: Cable Car connection for public transportation

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 75^th. 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

Jumla 68::170

Mahadev 42::105

Ranchuli 36::90

Chilkhaya 30::75

Dailekh

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

F

E

G

C

D

A

B

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

1.5 million Public

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 5^th 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 2^nd 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.