THE AGA KHAN RURAL SUPPORT PROGRAMME

PROJECT PROPOSALFOR THE MINI HYDEL UNIT SHOGORE

Community physical infrastructure, SectionAKRSP Regional Programme Office, Chitral

NOVEMBER 2010

Table of Contents

CONTENTS Page #

PROJECT SUMMARY……………………………………………………………..... 3Project Location………………………………………………………….. 3Project Description………………………………………………………. 3Description of the Area………………………………………………….. 3Social Organization……………………………………………………… 3Total Cost of the Project…………………………………………………. 3Project Justification……………………………………………………… 4

1. INTRODUCTION……………………………………………………………….. 51.1 Project Location and Description………………………………………… 51.2 Project Identification……………………………………………………... 51.3 Objectives of the Project…………………………………………………. 51.4 Social Organization………………………………………………………. 61.5 Socio-economic set-up…………………………………………………… 6

2. DESIGN AND COST ESTIMATES……………………………………………….. 62.1 Design……………………………………………………………………. 62.2 Cost Estimation..……………………………………………………….. 72.2.1 Construction Cost and Quantities………………………………………... 72.2.2 Maintenance Cost……………………………………………………….. 8

3. ENVIRONMENTAL ASSESSMENT………………………………………............ 8

4. PROJECT IMPLEMENTATION…………………………………………………. 84.1 The Role of AKRSP……………………………………………………… 84.2 The Role of the Community……………………………………………… 94.3 Physical Phasing of the Project Work 9

5. PROJECT MANAGEMENT……………………………………………………... 9 5.1 Project Committee………………………………………………………... 9 5.2 Audit Committee…………………………………………………………. 9 5.3 Maintenance Committee…………………………………………………. 9

6. ECONOMIC ANALYSIS…………………………………………………............ 10 6.1 Qualitative Description of Benefits………………………………………. 10 6.2 Quantitative Assessment of Costs and Benefits………………………….. 10 6.3 Assumptions……………………………………………………………… 11 6.4 Measures of Project Worth………………………………………………. 12

APPENDICES

Annex A: Site Location Map ………………………………………………………Annex B: Man Days Format…………………………………………………….....Annex C: Details of Costs. …………………………………………………………Annex D: Environmental Review Forms…………………………………………..Annex E: Cost Benefit Analysis Table……………………………………………..Annex F: Location Map…………………………………………………………….

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PROJECT SUMMARY

Project Location

Village Shogore Tehsil Chitral Area office Chitral District Chitral Region Chitral Distance from Chitral 25 km

Project Description

Project type Mini Hydel UnitNumber of unitsTotal generation

2 (250 kW)500 kW

Length of power channel 4,250 ftLength of penstock pipe 279 ft (85 m)Total working months required 15Completion period (months) 18

Description of the Area

Social Organization

Village Organization (VO) 25VOs membership 922VOs savings (Rs.) 8,420,416

Valley KarimabadCropping zone SingleAltitude (ft) 6,480

GPS CoordinatesSite Latitude LongitudeWeir site 36o-01’-45.4” 71o-46’-17.2”Powerhouse site 36o-01’-18.4” 71o-45’-53.4”

Major crops Potato,wheat, maize, beans Major source of income Agriculture,livestock,,and off

farm labour

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Total Cost of the Project

Description Cost (Rs.)Total construction cost 66,351,351PPAF contribution 38,192,117Other Donors 19,021,741Community contribution 9,137,493PPAF contribution per household 37,876PPAF contribution per person 4,208Annual operation and maintenance cost 1,944,710

Project Justification

Beneficiaries

Number of villages 22Number of households 922Population 8,298Number of VO (s) 25

Benefits

Cooking, lighting and heating facilities to the local villages Fuel wood security to the population The pressure on the forest will decrease hence the environment will improve Reduction of workload on women with use of electric appliances Improvement in Education and Health hygiene of the population Income generating facilities, as a result of small enterprises

Measures of Project Worth

Net Present Value - NPV (Rs.) 142,028,892Benefit/ Cost Ratio (BCR) 1.57Internal Rate of Return - IRR (%) 29

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1. INTRODUCTION

1.1 Project Location and Description

The proposed project is located at the end of village Shogore, Karimabad valley, which is nearly 25 km away from the Chitral town. The inhabitants in this village speak khowar lan-guage. The project will benefit Karimabad LSO having 922 households with a total population of 8,298. The altitude at power house is 6,230 ft.

The proposed Mini Hydel Unit will generate about 500 kW and will benefit the nearby villages of Shogore, Bil Droneel, Galeh, Gree, Lorigram, Madasheel, Pasturagh, Shah,Tashqar, Awi, Hasanabad, Siwakth, Dondolik, Miralandeh, Ughdeer, Argesh, Taligram, and Parsan fulfilling basic electricity requirements for the local population in the above mentioned villages.

1.2 Project Identification

The Village Shogore and all other above mentioned villages are located in the Karimabad val -ley. Though at present the villagers do have access to the electricity facility, however the sys-tem has completed its designed period and do not produce enough electricity to fulfill, even the basic lighting requirement. Population has increased manifold over the years and electricity de-mand for heating and cooking is on the rise. There are meager chances of having additional electric facility from government or other agencies for these villages in near future. Currently the population is using forest wood, kerosene oil and natural gas for lighting, cooking and heat-ing purposes. Due to severe winters and high demand of wood, the communities have almost deforested their highland forests.

To solve this problem, a meeting of the LSO members was held in February 2010 and it was decided in the meeting to take up the issue with AKRSP Chitral for financial and technical as-sistance. A resolution was later on passed on to AKRSP for the provision of financial help in this regard. The ID section has conducted Ist Dialogue with the cluster organization for social viability of this project. After social feasibility, the engineers of AKRSP have conducted survey and technical feasibility of this project

Objectives of the Project To provide lighting, heating and cooking facilities To decrease the deforestation of trees To improve the education, health and hygiene To promote small enterprise and cottage industry

1.3 Social Organization

Shogore Cluster consists of 260 households. The villagers as mobilized by the AKRSP formed VOs in 1985 to 2009. The objective of VO’s formation was not only to access the AKRSP packages, but also to organize themselves to have access to the facilities available with other government and non-governmental organizations. Also to resolve the disputes arise with in and with surrounding villages. The table 1.1 shows the brief detail of the VO.

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Name of VO Formation Year House holds Membership Saving Shogore 1986 59 59 25000Droneel 1992 22 22 12000Ajrandeh 1985 36 45 511094Galeh 1996 22 12 174027Gree 1984 45 42 1250050Lori Gram 29 36 250788Madasheel 1 62 62 575568Madasheel 2 35 33 312677Oragh 35 40 670055Pasturagh 35 22 350000Shah 50 56 350000Tashqar 1 48 43 589753Tashqar 2 38 36 291000Awi 60 60 250000Hasanabad 27 24 110270Siwakth 1 33 55 180000Siwakth 2 46 48 181000Dondolik 22 12 133035Bil Bil Parsan 28 40 118770Miralandeh 34 34 440067Lashtdeh 50 50 338026Ughdeer 18 12 268306Argesh 22 22 675012Potiek 35 33 15000Taligram 31 24 81000

Total 922 922 8152498

1.4 Socio-Economic Setup

The project villages are situated in the union council Karimabad, comprising of 922 households and a population of 8,298. The social facilities in these villages are almost non-existent. The electricity is short even to fulfill the basic household requirements. The education facilities are as follows, three primary and two high school (boys and girls), two primary school and higher secondary for girls, one private college, BHU hospital, Aga Khan Medical Center, FMFB, Dispensary, Police Station, and three Hostels are located in these villages. However, drinking water supply facilities are available in these villages.

Due to severe cold, the villages lie in the single cropping zone. Agriculture is the major source of household economy; however subsistence farming prevails through out these villages. Aver-age land holding per household is 3 kanals. Major crop includes wheat with an average yields of 100 kg per kanal. Average forest trees per household are 10, which include willow. Live-stock is main part of their household income and average livestock per house hold is 20.

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2. DESIGN AND COST ESTIMATES

2.1 Design

Shogore main stream will feed the proposed Mini hydropower project, containing a minimum discharge of 42.38 cusecs in winters, while in summers maximum discharge remains above 250 cusecs. A 4,250 ft long power channel with a cross section of 4 ft x 3 ft has been designed for 46 cusecs flow.

The available gross head is 170 ft, while diameter of the penstock pipe has been designed as 30 inches in a length of 279 ft (85 m). Two imported (Chinese) Francis Turbine units of 250 kW each having 85% efficiency, will be installed to generate an overall power capacity of 500 kW. Detailed specifications are in table 2.1.

Table: 2.1 Design Specifications

Power Channel Designed Discharge (cusecs) 42Gross head (ft) 170Length of penstock pipe (ft/m) 279 / 85Penstock pipe diameter (inches) 30Thickness of penstock pipe(mm) 6Horizontal Shaft Francis turbines 2 ( 250 kW each)Length of power channel (ft) 4,250Cross section of the power channel (b x d)-(ft) 4 x 3Length of Tailrace channel (ft) 100Length of transmission line (km) 35

Hydrological Survey:The estimated flows for various flow durations at the weir site are listed as below:

Flow Availability Discharge(m³/s)

Flow Availability Discharge(m³/s)

Q100 (100% of the year)

1.2 Q40 (40% of the year)

6.1

Q95 (95% of the year) 1.3 Q30 (50% of the year)

8.0

Q90 (90% of the year) 1.5 Q20 (20% of the year)

11.6

Q80 (80% of the year) 1.6 Q10 (10% of the year)

15.4

Q70 (70% of the year) 2.0 Q05 (05% of the year)

17.5

Q60 (60% of the year) 3.2 Q00 (00% of the year)

20.2

Q50 (50% of the year) 5.4 Qav (Mean Annual) 3.7 As a mini hydel sized scheme has been propose for the local area, a design discharge of 1.23 cumecs (42 cusecs) was selected according to a Plant factor of about 95 %. The flood dis-charges at the weir site for return periods 10, 100 & 1000 years were estimated to 75, 93 & 155

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m³/s respectively. Detailed investigations on sedimentation have been carried out, as a heavy sedimentation in Shogore Stream is observed specially in summers.

Engineering Geological Aspects:Big boulders at the proposed MHP location reveal the intensity steepness of the river bed and speedy water flow / flood. Strong protection works, in heavy stone masonry or gabions for the river sides are proposed. The intake canal with bed level almost in level with river bed made in stone masonry with screen for stopping floating debris and water control gate are to be pro-vided. The permanent weir will require full diversion of the river flow on the left side in low flow season and then making of cofferdam type structures upstream & downstream of proposed weir location for construction purpose. Therefore a temporary stone masonry weir type struc-ture (dry stone damping) across the river for diverting required amount of water toward intake canal is proposed keeping in view the cost of project.

Detail Technical Description:

Intake Structure:The intake canal with bed level almost in level with river bed made in stone masonry with screen for stopping floating debris and water control gate are to be provided. The temporary weir will require full diversion of the river flow on the right side in low flow season and then making of cofferdam type structures upstream & downstream of proposed weir location for construction purpose. Therefore a temporary stone masonry weir type structure (dry stone damping) across the river for diverting required amount of water toward intake canal is pro-posed keeping in view the cost of project

Sand Trap:De-silting basin (sand trap) and Gravel spill structure in stone masonry having dimension of 55 x 10 x 7 ft will be constructed for silt trap. A small flushing channel with steep slope will de-posit the silt back to the river through a short flushing pipe.

Power Channel:A lined power channel of about 4,250 ft in length will be constructed to cater 1.23 cumecs (42 cusecs) of water to the forebay structure.

Head Race Tunnel:From the Power channel to the forebay structure about 710 Ft long head race tunnel is proposed crossing the left ridges of Shogore village. The net diameter of the tunnel will be 8ft, for a de-sign discharge of 1.5m³/s and with X-sectional area of 7.0 m² the flow velocity is 1.80 m/s. The energy slope is assumed to be 0.001, in the tunnel and the total head losses are calculated as 0.50 m approx... The 710 ft long tunnel is a low pressure tunnel to be lined with shortcrete & wherever needed it will be concrete lined as per the geological conditions. The maximum rock cover over the tunnel is about 80 meter.

Forebay Tank:The fore bay is a sort of water tank provided at the penstock head for supplying regular water at a constant head to the twin turbine units. The surface elevation at forebay tank is 6,400 ft m.a.s.l. As enough land is available on top of the selected site, forebay structure with a size of

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25 x 16 x 16 ft is has been proposed. It will be a completely RCC (1:2:4) concrete structure, and constructed completely in the ground.

Penstock:A steel penstock of 30 inches diameter will run in a length of about 279 ft (85 m) coming down to connect the turbines. As the terrain is generally gravelly compacted, however the penstock will run through rocky formation. It is therefore proposed to bury the penstocks into the ground for safety point of view and against frost. At point of change direction anchor blocks have been provided.

Powerhouse:Design and structural calculations for turbine, generator unit, high pressure valves, governor, transformers, electrical equipment, switchyard and cranes has been done while designing the power house. The powerhouse is proposed near Shoghore village with a surface elevation of 6,230 ft m.a.s.l. The proposed dimensions of 45 x 30 ft for the two horizontal shafts Francis Turbine units, has been proposed to be installed in the powerhouse. An operators room is also attached with the power house.

Tailrace Canal:Design and calculations with a view of security against floods has been done. The length of a covered tailrace canal is about 100 ft. It will cater the tail water of 1.23m³/s, from powerhouse back to the Shogore Stream.

Topographic Survey: Detailed topographic survey of the project area has been done to verify the available head, lo-cation for the weir, headrace tunnel axis and power house location etc.

Transmission Lines:About 35 km independent transmission and distribution lines will be required to transmit 500 kW of electricity to local villages of Karimabad valley fulfilling the basic energy requirements. Twelve (12) steps down transformers will be installed for supplying electricity to these villages.

Habitation:There are no houses in alignment of power channel and other project structures, therefore no environmental damage will occur, including no migration. Similarly there will be no damage to other nearby residential areas. The inhabitants of the nearby area will get jobs during con-struction phase and will use power for lighting heating and cooking purpose. Some 99 house-holds, 2 hospitals, commercial banks, slate and marble cutting plants, School and colleges, NGO offices, government offices and 100 shops with other business activities will benefit from the hydel project.

Risk and Pollution: Some noise and air pollution is expected only during the construction activity period due to i,e. transportation, loading and unloading of materials and during excavation/concreting, which is a routine construction activity. Risk factors will be further reduced by in-time construction works completion and observing proper safety and pecautionary standard procedures.

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2.2 Cost Estimates2.2.1 Construction Quantities and Costs

Equipment, Labor and materials are the important components for the construction of the Mini Hydel Unit. About 26,817 man-days will be required for the construction of the project. Of the total, 7336 are skilled man-days and 19481 are unskilled man-days. A total of Rs. 6,830,600 will incur on the construction of this project. Out of the total cost, Rs. 66,351,351 will incur on the labour and Rs. 59,520,751 on the material and other activities.

The PPAF, World Bank upfront and the community will share the cost of construction. PPAF will extend a grant of Rs. 38,192,117, World Bank put there share Rs. 19,021,741 whereas the community will contribute Rs. 9,137,493. On average PPAF share will amount to Rs. 37,876 per household and Rs. 4,208 per person. All the details have been summarized in the tables 2.2, 2.3 and 2.4. For more details see Annex C.

Table: 2.2 Labour cost (skilled and unskilled)Labour Man-Days Rate/Day (Rs) Cost (Rs.)Skilled 7336 400 2,934,400Unskilled 19481 200 3,896,200

Total 26,817 - 6,830,600 Table: 2.3 Material and other costsMaterial and other activities Cost (Rs.)Non-local material 51,120,768Transportation of material 5791650Drilling 934560Tools & Implements 134085Sign Board Cost 12000

Total 57,993,063

Table: 2.4 PPAF and community share in construction cost Description Cost (Rs.)Total construction cost 66,351,351PPAF contribution 38,192,117 World Bank Upfront contribution (Rs.) 19,021,741Community contribution 9,137,493 PPAF contribution per household 37,876PPAF contribution per person 4,208Annual operation and maintenance cost 1,944,710

2.2.2 Annual Maintenance Cost

The community will be responsible to ensure that the project is maintained and repaired whenever there is a need to do so once it is completed. An annual maintenance cost of Rs-1,944,710 has

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been estimated for the recurring cost of this Mini Hydel Unit. The maintenance cost has been estimated @ 3% of the total construction cost of the project as of PPAF standards.

3 ENVIRONMENTAL ASSESSMENT

AKRSP always encourages small-scale community-managed infrastructure projects keeping in view the environmental protection of the local area. In order to determine the environmental review of the proposed Mini Hydel Unit, an environment review has been conducted. The results of the review conclude that there would be positive environmental effects as a result of the project (for details refer Annex D). The standard format developed for PPAF-financed projects has been used.

There are potential positive impacts on the environment after construction of this project. These impacts will be in the shape of improved forests and vegetation and reduced forest cutting in the area.

4. PROJECT IMPLEMENTATION

4.1 The Role of AKRSP

During the first dialogue, Shogore Cluster presented AKRSP with its demand of the Mini Hydel Unit. With the help of the cluster members, a technical and social survey of the project was conducted to evaluate the feasibility of the project. During the third dialogue, terms of partnership (ToP) will be signed between AKRSP and the beneficiary community. This will be carried out after the project has received its final approval from the PPAF. The Engineering staff has designed the project, and will provide the technical assistance and undertake periodic monitoring of the physical progress of the project during the construction period. AKRSP’s field engineers will ensure that the construction is as per design specifications. The social sector staff will play their role to motivate the community members for effective organization and maintenance of the proposed Mini Hydel Unit.

4.2 Role of the Community

The ownership of the entire project will lie on the community, which may lead to the longevity of the project. To enhance this process, the community members would establish their own management structure for the construction and maintenance of the project. The project committee with technical supervision of AKRSP’s engineering staff will carry out construction of the project. The community will organize labor and material during construction of the project. Once the project is completed the community will make the maintenance of the project. The community will be responsible for resolving the disputes if and when arises during the implementation of the project.

4.3 Physical Phasing of the Project Work

The community will start work on the project soon after the third dialogue and signing of the ToP with AKRSP. The project is expected to be completed within fourteen months after its in-ception. A total of seven working months will be required to complete the project.

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5. PROJECT MANAGEMENT

The project VOs will be responsible for the projects management. For better management of the project, the community will form three committees; a Project Committee, an Audit and a Maintenance Committee. These committees will have the following roles and responsibilities.

5.1 Project Committee

The VOs will form a Project Committee comprising at least three members and this committee will be responsible for the overall implementation of the project. They would be responsible to follow instructions from the site engineer of AKRSP, assign the duties to the members, keep the record of funds received from the AKRSP and expenditures made on purchase of material and payments made to the labor etc. The committee will also be responsible for drawing installments from AKRSP based on the physical progress of the project.

5.2 Audit Committee

The beneficiary VOs will also form an Audit Committee comprising at least one literate member representing the beneficiary VOs. This committee will be responsible to prepare a report before requesting the installment from AKRSP. The committee will check the financial records and accounts of the project maintained by the Project Committee. The installments from the AKRSP will be released on the provision of satisfactory audit reports and clearance certificates from the audit committee and on its recommendations.

5.3 Maintenance Committee

The VOs will set up a Maintenance Committee for the maintenance of the project. The committee will be responsible to supervise the repair & maintenance operations of the project once it is completed. They will also ensure that all the beneficiaries are equally involved in the maintenance process. Maintenance Committee will also undertake the responsibility to generate the funds required for the repair & maintenance of the project. A separate bank account will be maintained for this purpose.

6 ECONOMIC ANALYSIS

6.1. Qualitative Description of Benefits

Improvement in heath condition: Smoke produced from fuel wood, generators use and kerosene oil lamp is the common cause of respiratory diseases especially among the women because they are in more contact with it. Increased cooking time due to poor lighting is also another cause of inhaling more smoke. The facility of electricity would decrease the health problems considerably. The project will improve the health conditions of the people especially women in more consistent way.

Improvement in the condition of education and health: During survey it has been observed that the unavailability of electricity in the village has led the school going children to use the oil

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lamps during their study hours at night. Continued studying in oil lamplight, most of the school going children has eye weakness problems and blemishes on their eyes too. The availability of electricity will reduce the aforesaid problems of school going children to great extend and make them do their school works more efficiently. The result of these efficiencies and interests of the school going children in their home works would bring betterment in their quality of education. It is most likely probability that in near future, the school going children and some of the people would be able to have electronic and electric appliances in their homes. Reduction in workload of women: Generally, women collect fuel wood for cooking and heating purposes in the village. The availability of electricity would reduce the drudgery of women outside and inside of their households to great deal. The time saved from the activity of collection of fuel woods would be used in other productive works. Improved Environmental Conditions: Currently, the villagers use fuel woods and kerosene oil for cooking, heating and lighting purposes at their houses. Use of fuel wood and kerosene oil in profusion at their houses has extremely negative effect not only on the health of the villagers but also make the environment deteriorated. On having access to the electricity, the villagers, would use electricity for cooking, heating and lighting purposes to great extent. Use of electricity at household and to some extent commercial level will bring reduction in deforestation. Reduction in deforestation will have positive effect on environment. Reduction in Kerosene oil and diesel consumption on availability of electricity would have better effect not only on the health of the villagers but also would help in making the environment safe and it would indirectly contribute to the global environmental problem solving at Mini level.

6.2 Quantitative Assessment of Costs and Benefits

To conduct ‘Cost Benefit Analysis’ of the proposed Mini hydel project, it seems relevant to identify and quantify the potential ’Costs’ and ‘Benefits’. Therefore, the following mentioned ‘Costs’ and ‘Benefits’ are taken into consideration while assessing the cost benefit analysis of the proposed Mini hydel project.

Costs Capital cost of the project Maintenance cost of the project Cost of enterprise Cost of billing Cost of house hold wiring Cost of tube lights and energy saving bulbs Cost of butter churner and washing machines

Benefits Value of time saved on kerosene oil and fuel wood Value of time saved on electric butter churner and washing machines Value of time saved on sewing machines Increased income from enterprise

6.3 Assumptions

Period of analysis is 30 years

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Total construction cost Rs 1,57,74,582 Maintenance cost is Rs 4,73,237 Average connection charges per hh Rs. 1,000 and all the households connected in the

2nd year after the completion of the project. Average electricity bill per hh per month is assumed to be Rs 350 and for 922 hhs the

electricity bill would be(922*350) for one month . And yearly, they would have to pay Rs .(322,700*12)

Average cost of wiring per b. household is assumed to be Rs. 7,000 and the wiring would have to be done in the 2rd year.

Each b. household would have an average of 4 tube lights in their houses. And 922 b.hhs aresupposed to have 1400 tube lights . These tube lights are assumed to be replaced after 6th month. Price of one tube light is Rs 150

Each b. hh is assumed to have an average of 2 energy saving bulbs and there are 80 b.hhs which are supposed to have 160 energy saving bulbs and the cost of one energy saving bulb is Rs 180

Kerosene oil valued at Rs 70 per litre. Average consumption p.n per hh before project is 432 liter and after the completion of the project it would be 72 liter per annum.

It is assumed that 300 b. hhs would have washing machines after the completion of the project.Each b.hh is assumed to have one washing machine.

500 b. hhs would have electric butter churners . They currently spend 257142 hrs per annum on manual butter churner to produce butter and after the completition of the project it will reduce to to 180,000 hrs per annum. and the saving of time would be in Rs equal to 1,928,571

Fuel wood is valued at Rs 8 per kg .Average consumption p.n per hh before the project is 3600 kg and after the completion of the project it would be 1800 kg per b.hh per annum

Income from Marble factory is assumed to be Rs. Income from the enterprise (saw mill ) is assumed to be Rs 240000 per annum. Currently there are 5 hhs which have manual sewing machines . After the completion of the

project , the 5 hhs are supposed to have 5 electric motor for their sewing machines . Currently, average time 1 b. hh use on

sewing is 77 hrs per month . and it is assumed that th same b.hh would use 21 hours per month after availability of the

electricity . The public organization which include a 2 hospitals and a bank use diesel generator to generate

electricity and average daily consumption of dielsel for each organization is 10 liter which will reduce to 2 liters after completition of this project

It is assumed that atleast 1 marble factory will be established after completion of the project keeping in view the potential of the area and the total capital cost for a normal sized marble factory is assumed to be Rs. 6,000,000

It is assumed that atleast 1 slate cutting unit will be established after complition of the project keeping in view the potential of the area for slate stone and the total capital cost for a normal sized slate stone plant is assumed to be Rs.3,000,000

It is assumed that atleast 1 crash plant will be installed after the complition of the project keeping in view the availabiliyty of lime stone deposit very near the project and the total capital cost of a crash plant is assumed to be Rs. 5,000,000

It is assumed that atleast 5 saw mill will be installed and the total capital cost for a saw mill is assumed to be Rs. 100000

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Average annual Income from Marble Factory is assumed to be 6,748,000 and average annual operational cost including Cost of goods sold is Rs.4,820,000

Average annual Income from Slate stone factory is assumed to be Rs. 4,568,400 and average annual operational cost including cost of goods sold is Rs. 3,384,000

Average annual Income from Crash plant is assumed to be Rs. 5,684,000 and average operational cost including cost of goods sold is Rs. 3,920,000

Average annual Income from 5 saw mills is assumed to be Rs. 1,848,000 and average operational cost is Rs. 1,232,000

It is assumed that atleast 80 water lifting pumps will be installed in the project area with the passage of time Average purchase cost of water lifting pump is assumed to be Rs. 5000

It is assumed that atleast 150 electric gysers will be installed in the project area with the passage of time average purchase cost of water lifting pump is assumed to be Rs.6000

It is assumed that atleast 400 electric ovens will be installed in the project area with the passage of time average purchase cost of water lifting pump is assumed to be Rs.3500

It is assumed that atleast 170 grinding machines will be installed in the project area with the passage of time average purchase cost of water lifting pump is assumed to be Rs.7000

There are 40 fuelwood trees on 1 kanal of land . present average yield of fuel wood is 160 kg per tree Cost of production for fuel wood would be 10% of total value of incremental production of

fuelwood . The increment in the production of fuelwood is assumped to be 6.25% of total present

production of the fuel wood.6.4 Measures of the Project Worth

The calculations reveal that the present value of ‘Benefits’ is higher than the present value of ‘Costs’. The high Benefit-Cost Ratio indicates that the investment in the project is not only worthwhile but also gives a significantly high return per rupee invested. The table 6.1 presents the summary of ‘Costs’ and ‘Benefits’ of the proposed project. For the economic analysis, a simple ‘Cost-Benefit Analysis’ has been conducted based on the data collected from the field and using the expertise of AKRSP economists and engineers.

Table: 6.1 Measures of the Project WorthPresent Value of Costs 248,617,324Present Value of Benefits 390,646,432Discount Rate (%) 12%Net Present Value (NPV) 142,028,892Benefit Cost Ratio (BCR) 1.57Internal Rate of Return - IRR (%) 29

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