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Financial Model for the Bridge Project

A COST ESTIMATES
B ASSUMPTIONS FOR FINANCIAL MODEL
C TRAFFIC AND TOLL RATE PROJECTIONS
D PROJECT TIME TABLE
E FINANCIAL PLAN
F OPERATION AND MAINTENANCE CALCULATIONS
G DEPRECIATION SCHEDULE
H TERM LOAN REPAYMENT
I PROFIT AND LOSS ACCOUNT & WACC
J CASHFLOW, NPV, IRR & EIRR FOR THE PROJECT
K DEBT SERVICE COVERAGE RATIO
L COMMENT ON PROJECT VIABILITY
Instructions
Above mentioned links are provided to navigate through the financial model
Values mentioned in RED color are negative values
Values Mentioned in BLUE Color Are Assumptions Made by the modeler
A

G
COST ESTIMATES
Consultant Fees 2%
Expert Fees (Deployed By State Govt) 1%
Environmental Clearence 5%
Pre Operative Expences 3%
Contingencies 5%
Increase in manpower cost 10%
Cost Of Engineers (Rs.) ###
cost of supervisior (Rs.) ###
Cost of Permenant Staff (Rs.) ###
Cost of Administrative Office 0%
Cost of Construction Toll Plaza 1%
The general Lighting cost of the Bridge is assumed to be covered in the Per Km cost of Bridge
Land will be transferred by the state govt to the developer as free of cost.
TRAFFIC PROJECTIONS
Average Annual Growth Rate 4%
Inflation Rate (Every 3rd Year) 10%
Bridge Length 2.5
Toll Rates
2-Wheelers 7.5
4-Wheelers 10
S.T. Bus 1000
Advertisement Revenue 1%
Inflation rate is also applied to the per annum payment of State Transport Buses
FINANCIAL PLAN
Interest During Construction is payed back quarterly
Moratorium Period is considered as 3 years for both the debts
OPERATION AND MAINTENANCE
Inflation 4%
Operation and Maintenance of Bridge 2%
Periodic Re-surfacing 4%
Increase in Operations of Toll Plaza 10%
Cost of Operating Toll Plazas 5%
DEPRECIATION
Written Down Value Method 15%
Straight line Method 10%
PROFIT AND LOSS ACCOUNT
Minimum Alternative Tax 0%
Corporate Tax 40%
Repayment of the principal for Debt Amount is not considered in the Profit and Loss Account
CASHFLOW
Method of Depreciation considered for preparing the cash flow is Straight line Method
WACC is considered as Discounting rate for Project NPV
Cost of Equity is Considered as Discounting rate for Equity NPV
of total construction cost
of total construction cost
of construction cost
of total construction cost
of total construction cost
Per Annum
Per Annum
Per Annum
Per Annum
of construction cost
of construction cost
m cost of Bridge

Km.

per km
perkm
per vehicle per annum
of Total Vehicular Toll Revenue

every year
of Initial Investment
every 3rd Year
every year
of O&M for Bridge

d Loss Account
COST ESTIMATES

A Assumptions
Consultant Fees 2% of total construction cost
Expert Fees (Deployed By
State Govt) 1% of total construction cost
Environmental Clearence 5% of construction cost
Pre Operative Expences 3% of total construction cost
Contingencies 5% of total construction cost
Increase in manpower cost 10% Per Annum
Cost Of Engineers (Rs.) ### Per Annum
cost of supervisior (Rs.) ### Per Annum
Cost of Permenant Staff (Rs.) ### Per Annum
Cost of Administrative Office 0.50% of construction cost
Cost of Construction Toll Plaza 1% of construction cost
The general Lighting cost of the Bridge is assumed to be covered in the Per Km cost of Bridg
Land will be transferred by the state govt to the developer as free of cost.

A Construction Costs
Description Unit No Length Breadth Height
Land Cost
Site Clearances Sqm. 2 500 20 1
Bridge Construction Km. 1 2.5 1 1
Site Office L.S.
Construction of Toll Plaza L.S. 2
Environmental Clearence L.S.
Total (Bridge Cost)

B Man Power

Period
Description Unit No (Years)
Engineer Persons 4 1
Supervisor Persons 1 1
Permanent staff Persons 2 1

Total (Man Power)

C Expert & Consultancy


Description
Technical Consultancy fees
Expert employed by State Govt.
Total (Expert & Consultancy)
D Pre Operative Expenses
E Contengencies

(A+B+C
+D+E) Total Project Cost (In INR)
Per Km cost of Bridge

Quantity Rate (Rs.)/Sq.mAmount (Rs.)


0 0
20000 100 2,000,000
2.5 12,000,000 30,000,000
160,000
640,000
1,640,000
32,800,000

Rate / Rate / Amount


Annum(INR.) Annum(INR.) Amount (INR) (INR)
Year I Year II Year I Year II
500,000.00 550,000 2,000,000 2200000
300,000.00 330,000 300,000 330000
150,000.00 165,000 300,000 330000
2,600,000 ###
###

Amount (INR)
656,000
328,000
984,000
1,177,320
1,962,200

43,570,825
TRAFFIC PROJECTIONS

Assumptions

Average Annual
Growth Rate 4%
rd
Inflation Rate (Every 3
Year) 10%
Bridge Length 2.5 Km.
Toll Rates
2-Wheelers 7.5 per km
4-Wheelers 10 perkm
S.T. Bus 1000 per vehicle per annum
Advertisement Revenue 1% of Total Vehicular Toll Revenue
Inflation rate is also applied to the per annum payment of State Transport Buses

1 2 3 4 5 6
2013 2014 2015 2016 2017 2018

Traffic Projection
2-Wheelers 20000 20800 21632 22497 23397 24333
4-Wheelers 75000 78000 81120 84365 87740 91250
S.T. Bus 1000 1040 1082 1125 1170 1217

Toll Rate Projection


2-Wheelers (Rs) 19 19 19 21 21 21
4-Wheelers (Rs) 25 25 25 28 28 28
S.T. Bus (Rs./each) 1000 1000 1000 1100 1100 1100

Toll & Advertizement Revenue Generation (INR)


2-Wheelers 375000 390000 405600 464001 482563 501868
4-Wheelers 1875000 ### ### ### ### ###
S.T. Bus 1000000 ### ### ### ### ###
Advertisement Revenue 32500 33800 35156 40215 41824 43499
Total Revenue Generation
3282500 ### ### ### ### ###
ansport Buses

7 8 9 10 11 12 13
2019 2020 2021 2022 2023 2024 2025

25306 26318 27371 28466 29605 30789 32021


94900 98696 102644 106750 111020 115461 120079
1266 1317 1370 1425 1482 1541 1603

23 23 23 25 25 25 28
30 30 30 33 33 33 37
1210 1210 1210 1331 1331 1331 1464

582038 605314 629533 720190 749007 778962 891144


### ### ### ### 3694191 3841965 4395192
### ### ### ### 1972542 2051071 2346792
49846 51844 53922 61690 64157 66720 76331
### ### ### ### 6479897 6738718 7709459
14 15
2026 2027

33302 34634
124882 129877
1667 1734

28 28
37 37
1464 1464

926795 963864
4570993 4753823
2440488 2538576
79383 82563
8017659 8338826
PROJECT TIME TABLE

Financial Close 31-Dec-10


Operations Period Considered (Months) 180
Construction Schedule
Start of Construction Period 1-Jan-11
Construction Period (months) 24
End of Construction Period 31-Dec-12
Operations:
Commercial Operations Date 1-Jan-13
Project Period Ends 31-Dec-27
First Financial Year Begins 1-Jan-11
First Financial Year Ends 31-Dec-11
Concession Period:
Concession Period Starts 1-Jan-13
Concession Period Ends 31-Dec-27
FINANCIAL PLAN
Assumptions
Interest During Construction is payed back quarterly
Moratorium Period is considered as 3 years for both the debts

Contribution Cost
EQUITY 50%
Private operator 25%
Authority 15%
state government 10%
DEBT 50%
Sub Ordinated 10% 6%
Senior Debt by Senior Lender 40% 10%
Total Project Cost

INTEREST DURING CONSTRUCTION Q1-1 Q1-2


5446353 5446353
16339059
Contribution of Equity 5446353 5446353
Contribution of Sub Ordinated Debt
Contribution of Senior Debt

Total 5446353 5446353


Interest During Construction
Sub Ordinated
Senior Debt by Senior Lender
Total
Grand TOTAL IDC 1187305

Senior Sub-ordinated
Proportion of Total Debt 40% 10%
Proportion of Total Debt (Amount in INR) 0 0
Prime Lending Rate 10% 6%
Interest Rate (During Construction Period) 10% 6%
Interest Rate (During Operations Period) 10% 6%
Drawdown Starts 1-Jan-2012 1-Jan-2012
Repayment (years ) 10 10
Repayment per year 1 1
No. of Instalments 10 10
Repayment / Redemption Starts 1-Jan-2016 1-Jan-2016
Repayment / Redemption Ends ### 31-Dec-2025

Moratorium Period- 3 years 3 3


Share Total Equity/Debt
21785412
10892706
6535624
4357082
21785412
4357082
17428330
43570825 ok

Q1-3 Q1-4 Q2-1 Q2-2 Q2-3 Q2-4


5446353 5446353 5446353 5446353 5446353 5446353
10892706 5446353 0
5446353 5446353
4357082
1089271 5446353 5446353 5446353

5446353 5446353 5446353 5446353 5446353 5446353 ok

261425
108927 408476 272318 136159
370352 408476 272318 136159
INTEREST ON SENIOR AND SUB-ORDINATED DEBT

2011 2012 2013 2014 2015 2016


0 1 2 3 4
Interest On Senior Debt ###
Principal Senior Debt
(Repayment) ###
Repayment of Senior Debt 0 0 0 ###

Interest On Subordinated Debt ###


Principal Sub-Ordinated
Debt (Repayment) 435708
Repayment of Sub-Ordinated Debt 0 0 0 ###
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
5 6 7 8 9 10 11 12 13 14
### ### ### ### 871416 697133 522850 348567 174283 0

### ### ### ### ### ### ### ### ###


### ### ### ### ### ### ### ### ###

235282 209140 182997 156855 130712 104570 78427 52285 26142 0

435708 435708 435708 435708 435708 435708 435708 435708 435708


### ### ### ### ### ### ### ### ### 0
2027
15
OPERATION AND MAINTENANCE
A Assumptions

Inflation 4.00% every year


Operation and Maintenance of Bridge 1.50% of Initial Investment
Periodic Re-surfacing 4.00% every 3rd Year
Increase in Operations of Toll Plaza10.00% every year
Cost of Operating Toll Plazas 5.00% of O&M for Bridge

B Operation and Maintenance

2011 2012 2013


Initial Investment ### 0 1 2
O&M Bridge 653562
Periodic Re-surfacing
Operating Toll Plazas 32678

cost of periodic resurfacng has to be considered in referenece with construction cost


2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
3 4 5 6 7 8 9 10 11 12
679705 706893 ### 764576 795159 ### 860043 894445 ### 967432
### ### ###
35946 39541 43495 47844 52628 57891 63680 70048 77053 84759

onstruction cost
2024 2025 2026 2027
13 14 15 16
### ### ### ###
###
93234 102558 112814 124095
DEPRECIATION

Assumptions
Method of Depreciation WDM SLM
Rate of Depreciation 15% 10%

Depreciation

2011 2012 2013 2014 2015 2016 2017


0 1 2 3 4 5
Depreciation (WDV) ### ### ### ### ###
Written Down Value ### ### ### ### ###
Depreciation (SLM) ### ### ### ### ###
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
6 7 8 9 10 11 12 13 14 15
### ### ### ### ### ### ### 929639 790193 671664
### ### ### ### ### ### ### ### ### ###
### ### ### ### ### ### ### ### ### ###
PROFIT AND LOSS ACCOUNT

Assumptions
Minimum Alternative Tax 0%
Corporate Tax 40%
Repayment of the principal for Debt Amount is not considered in the Profit and Loss Account

Profit and Loss Account

2011 2012 2013


EXPENDITURES
O&M Bridge ###
Periodic Re-surfacing 0.00
Operating Toll Plazas 32678.12
Non-Operating Expenses
Interest On Senior Debt
Interest On Subordinated Debt
TOTAL EXPENSES ###

REVENUES
Operating Revenues
Toll Revenues ###
Advertisement Revenue 32500.00

TOTAL REVENUES ###

PROFIT BEFORE DEPRE & TAX ###


DEPRECIATION ###
PROFIT BEFORE TAX ###
Corporate Tax 0.00
PROFIT AFTER DEPRE & TAX ###

WACC Cost Share


Cost Of Equity 15% 50%
Cost of Debt 10% 50%

WACC 12.50%
the Profit and Loss Account

2014 2015 2016 2017 2018 2019 2020 2021

### ### 735168.79 ### ### ### ### ###


0.00 0.00 ### 0.00 0.00 ### 0.00 0.00
35945.93 39540.52 43494.58 47844.03 52628.44 57891.28 63680.41 70048.45

### ### ### ### ### ###


### ### ### ### ### ###
### ### ### ### ### ### ### ###

### ### ### ### ### ### ### ###


33800.00 35156.00 40215.39 41824.13 43499.43 49846.23 51844.38 53922.14

### ### ### ### ### ### ### ###

### ### ### ### ### ### ### ###


### ### ### ### ### ### ### ###
### ### ### ### ### ### ### ###
0.00 0.00 0.00 0.00 0.00 0.00 ### ###
### ### ### ### ### ### ### ###
2022 2023 2024 2025 2026 2027

### ### ### ### ### ###


### 0.00 0.00 ### 0.00 0.00
77053.29 84758.62 93234.49 ### ### ###

### ### ### ### 0.00


### 78427.48 52284.99 26142.49 0.00
### ### ### ### ### ###

### ### ### ### ### ###


61689.71 64157.40 66719.98 76331.28 79382.76 82562.63

### ### ### ### ### ###

### ### ### ### ### ###


### ### ### ### ### ###
### ### ### ### ### ###
### ### ### ### ### ###
### ### ### ### ### ###
CASHFLOW AND EIRR

Assumptions
Method of Depreciation considered for preparing the cash flow is Straight line Method
WACC is considered as Discounting rate for Project NPV
Cost of Equity is Considered as Discounting rate for Equity NPV

2011
0
Depreciation

Initial Investment

Cash Flow
NPV 27,227,476
IRR 2%

EQUITY IRR
Initial Investment ###
Depreciation (SLM)
Principal Repayment

Cashflow ###

NPV 15,785,345
EIRR 4%

Comment on Project viability


Project's Net present value of the project is negative and also the project
The Net present value of the Equity is also negative and the Internal rate

The Net Present Value is negative, coupled up with a very low level of Internal Rat
With regard to this we can conclude that the Project is not Viable enough to be tak
The project IRR and NPV not yeilding better results, Equity IRR has been worked ou
w is Straight line Method

2012 2013 2014 2015 2016 2017 2018


0 1 2 3 4 5 6
4,357,082.50 ### ### ### ### ###

###

### 417,718.26 ### ### ### ### ###

###
4,357,082.50 ### ### ### ### ###
### ### ###

### 417,718.26 ### ### ### 374,890.21 ###

tive and also the project IRR is also not attractive hence the project is not viable for con
ive and the Internal rate of return of the Equity is Very much Lower than the Cost of Eq

INFERENCES
ery low level of Internal Rate of Return at 2% as compared to the Weighted Average Cost of Capital
not Viable enough to be taken, in accordance with the conditions and assumptions taken for compu
uity IRR has been worked out to check the return on Equity investments
2019 2020 2021 2022 2023 2024 2025
7 8 9 10 11 12 13
### ### ### ### ### ### ###

### ### ### ### ### ### ###

### ### ### ### ### ### ###


### ### ### ### ### ### ###

255,026.66 ### ### ### ### ### ###

not viable for consideration


an the Cost of Equity hence the project is not viable for investment.

age Cost of Capital at 12.5%.


ons taken for computing the Financial Model
2026 2027
14 15
### ###

### ###

### ###

### ###
DEBT SERVICE COVERAGE RATIO

Debt Service Coverage Ratio

2011 2012 2013 2014


0 0 1 2
PROFIT AFTER DEPRE & TAX 0 0 ### ###
Depreciation (SLM) ### ###
Interest On Senior Debt
Interest On Subordinated Debt
Amount Available For Repayment ### ###
Interest Repayment
Principal Repayment
Amount required for Debt Service

DSCR
Average DSCR
2015 2016 2017 2018 2019 2020 2021 2022
3 4 5 6 7 8 9 10
### ### ### ### ### ### ### ###
### ### ### ### ### ### ### ###
### ### ### ### ### ### ###
### ### ### ### ### ### ###
### ### ### ### ### ### ### ###
### ### ### ### ### ### ###
### ### ### ### ### ### ###
### ### ### ### ### ### ###

0.16 1.09 1.32 1.07 1.82 2.01 1.82


1.72
2023 2024 2025 2026 2027
11 12 13 14 15
### ### ### ### ###
### ### ### ### ###
### ### ###
78427.48 52284.99 26142.49
### ### ### ### ###
### ### ###
### ### ###
### ### ### 0.00 0.00

2.55 2.81 2.58