sardar sarovar narmada nigam limited
TRANSCRIPT
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Sardar sarovar Narmada Nigam
Limited
S.Manish-09ac22
T.Vinoth Kumar-09ac45
K.Mangala- 09ac21
M.Kowsalya Suganthi-09ac19
K.Priyadarshini-09ac29
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Sardar Sarovar Dam
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UNIDO approach
Stage 1 Calculation offinancial profitability of the project measured at
market prices.
Financial profitability is indicated by the Net Present Value
(NPV) of the project, which is measured by taking into
account inputs (costs) and outputs (benefits) at market price.
!
!n
1tt
t outlayinitialk)(1
CFNPV
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Benefits in market price
Electricity
River bed power house and canal head powerhouse generates electricity with an installedcapacity of 1200 MW and 250 MWrespectively(58 crores)
Fishery
The project involves fresh water reservoirswhich supports fish culture and the incomefrom fishery amounts to 40 crores every year
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Financial profitability
Life time of the project=50 years
Initial cost outlay=Rs.2106 crore
Value of output every year=98 crores Discount rate is assumed as 10 percentage
NPV= (98 crores-2106 crores)
------------------------------- =-11,34 crore
(1+10)^50
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Economic Benefit
Stage 2
The main economic benefit that arises out of Sardar Sarovarproject is listed as follows:
Irrigation
Flood control
Water supply and urban developments
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Irrigation and Flood control
Irrigation Facilities
18.45 lakhs ha. of land
3112 villages of 73 talukas in 15 districts of Gujarat
irrigate 75,000 ha. of land in the desert districts of Barmer
and Jallore in Rajasthan
37,500 ha. in the tribal hilly tract of Maharashtra.
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Flood Control
The Sardar Sarovar dam project provides flood
protection to :
210 villages
Bharuch city
4 lakhs people in Gujarat.
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Water supply and Urban development
The Sardar Sarovar project provides water facilities to :
135 urban centres and 8215 villages
18 millions of people in Gujarat
villages affected by salinity and fluoride in North Gujarat will
be benefited
Industries
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Calculation of Economic Benefit
Benefit type Nature Social Benefit
(in Rs)
Irrigation and flood
control
Annual 834.42 crore
Water supply and
development Annual 1457.99 crore
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Net present value of the project from the social angle is
calculated as follows:
Vt = Shadow price ofBenefit at time t = 2292.41 crore
Ct = Shadow price of Operating Expenses at time t = 1601.5
crore
K = Social Discount Rate = 10% (assuming)
T = Lifetime of the project = 50 years
I0 = Initial cost at the start of the project = 2106 crore
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Therefore,
NPV = {(2292.41 1601.5)(PVFA 10%, 50) 2106}
= {(690.91)(9.915)-2106)}
= 4744.37 crore
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Adjustment for the impact of the
project on Savings & Investment
STAGE 3
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PURPOSE
Determine the amount of income gained orlost because of the project by differentincome group other than business
Evaluate the net impact of these gains andlosses on savings
Measure the adjustment factor for saving and
thus the adjusted values for savings impact Adjust the impact on savings to the net
present value calculated in two stages
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MEASUREMENT GAIN OR LOSS
No of workers=5000
Minimum wages=RS.110Wage paid by ssnnl=RS.100
Gain of workers= (110-100)*5000
= RS.50, 000 per day
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Evaluation of net impact of savings
Net Savings Impact of a project =
Yi = change in income of group i as a result of
the projectMPSi = marginal propensity to save of group i
income gained or lost in income group
Worker=RS.2175croresWorld Bank=RS.2018crores
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Foreign exchange=-rs.29.81crores
MPSw = 0.14, MPSwb= 0.21, MPSf= 0.1
Net savings impact of a project
={0.14*2175+0.21*2018-0.1*29.81}
=RS.725.299 crore
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Adjusted factor for savings
Mpc=0.75
Mps=0.25
average productivity of capital=17.6
Consumption rate of interest=9.76
AFs=0.75 * 17.6/9.76-(0.75*0.25)
=1.378
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Adjusted value of
Saving = (net impact of saving *AFs)
=725.299*1.378
Adjusted value of saving =RS.999.46
Adjusted net profit =999.46+4744.37
=RS 5743.83 crore
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Adjustment for the impact of the
project on Income Distribution
Stage 4
It is calculated to know how the project influences
the income
A project can have various sources of income
Using those sources the weight of the income can be
determined
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Methods ofCalculation ( 1 of 2 )
To be considered,
When only two groups are given
When more than two groups are given
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Methods ofCalculation ( 2 of 2 )
If only two groups are involved:
Bottom-up approach
If more than two groups are involved:
Weight is calculated using the elasticity of
marginal utility of income
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Calculation of Weight ofIncome
The formula used is as follows:
Where,
wi = Weight of income at ci level
Ci = Level of income of group i
b = Base level of income that has a weight of 1.00
n = Elasticity of the marginal utility of income
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Project Calculations ( 1 of 4 )
According to the project the following details are given:
Three sources ofIncome are taken,
1. Agricultural Production = Rs. 1600 cr
2. Power Generation = Rs. 400 cr
3. Water Supply = Rs. 175 cr
The above incomes are taken as b = Base level of income
that has a weight of 1.00
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Project Calculations ( 2 of 4 )
According to the project the following details are given:
The total income of the project for a year (Ci) = Rs.2175 cr
Elasticity of marginal utility of income (n) = 0.20*
*Regarding the elasticity of marginal utility of income, it is not given. Therefore it is assumed to be 0.20
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Project Calculations ( 3 of 4 )
Income Distribution:
1. Agricultural Production:
Wi= (1600/2175).20
= .94
So, value of the impact of the project on agricultural production = ( 2175 * 0.94)
= 2044.5 cr
2. Power Generation:
Wi= (400/2175).20
= .71
So, value of the impact of the project on agricultural production = ( 2175 * 0.71)
= 1544.25 cr
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Project Calculations ( 4 of 4 )
Income Distribution:
3. Water Supply:
Wi= (175/2175).20
= .60
So, value of the impact of the project on agricultural production = ( 2175 * 0.60)
= 1305 cr
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Total Income Distribution
Income Distribution Rs. (in crores)
1.Agricultural
Production
2044.50
2.Power Generation 1544.25
3.Water Supply 1305
Total 4893.75
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Calculation of NPV
NPV got from Stage III = 5743.83
Adjusted NPV = 5743.83 + 0.049
= 5743.879
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Conclusion
When taking the percentage of the incomes.
It is found that the income from agriculture has
73.56% impact
18.39% is contributed by the power generation
The least impact is done by water supply which is
about 8.05%
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