Feasibility Study and DPR for Delhi- Gurgaon-Rewari-Alwar RRTS Corridor

Date:- 22/04/2017

NCR Planning Board

Implementation Models and Financing

Part I – Financial Analysis

Sequence of Financial Analysis

v Assessment of the project in generic terms i.e. without consideringthe implementation model and agency into account.

Estimating;Ø Project Completion cost (capital cost),Ø Various streams of revenue,Ø Operation and maintenance cost andØ Operational viability and returns from the project;

v Assessment of Proposed Project Implementation Models

Ø Calculation of returns from the project with regard to proposed modelsØ Deliberations on Advantages and disadvantages of each model

v Recommendations for suitable model

Assumptions for Analysis period

vTotal Analysis Period 30 years;

Ø Construction period: 6.5 years, Starting from FY 2018-19 (Oct 2018) to the full FY 2024-25.

Ø Operation Period: 25 years , from FY 2025-26.to FY 2049-50.

Particulars Total (Rs. Crore)

Land 5,429

Aggregate Project cost except Land 29,540

Total Project cost with cost of Land 34,969

General Charges including Design Charges (5% of cost except land)

1,477

Contingencies on all items at 3% 1,093

Total 37,539

Estimated Project Cost (EPC)

v Excludes tax on project goods and IDC. These components will be introduced subsequently in the analysis as per the requirement

vAdditional cost of procurement of AC midi buses for feeder system is introduced.

Particular2018-19

2019-20

2020-21

2021-22

2022-23

2023-24

2024-25

Total

Construction Phasing 10% 18% 20% 16% 14% 12% 10% 100%Project Cost (UnEscalated)

3754 6757 7508 6006 5255 4505 3754 37539

Project Cost (Escalated) 3942 7450 8691 7301 6707 6037 5282 45409

Central Taxes on Project Goods

434 821 957 804 739 665 582 5003

Total 4376 8270 9649 8105 7446 6702 5864 50412

Phasing of Construction and Completion Cost

1.34X

v Project Cost is escalated at 5% pa.

vCentral Taxes would be considered interest free sub debt contributed equally by central govt. and state govts.

v State taxes would be waived off/reimbursed by states and hence not taken.

v No major change is expected on the tax burden on Project Cost due to GST and therefore existing incidence is retained

Figures in Rs. Crores

Summary of Estimated O&M Expenses

Particular2025-26 2034-35 2044-45 2049-50 TOTAL

% of the Total

Rs. Crores

Staff Salaries 386 598 975 1244 18407 21%

Energy Expenses 675 1339 2518 3213 41407 48%

Replacement in Equipment /Addition of Rolling Stock

0 3806 7415 0 11221 13%

Repair & Maintenance Exp. 271 421 685 875 12946 15%Admin Expenses 60 93 151 193 2861 3%Operational Viability Funding to Feeder Bus Services

9 17 0 0 76 0%

Total 1401 6274 11744 5525 86918 100%

• O&M expenses are estimated based on actual experience of operational Metro Systems in India and abroad.

• Energy expenses could be more than half of the total O&M Expenses

8

Distance slabs in Km

0-10

10-20

20-30

30-40

40-50

50-60

60-70

70-80

80-90

90-100

100-110

110-120

120-130

130-140

140-150

150-160

160-170

170-180

Average Fares inpresent terms

(Rs.)30 40 55 70 88 105 122 138 154 169 184 198 211 224 236 248 259 270

Proposed Economy Class Fares

Initial Fare Fixation

Guiding Principles

Mix of distance based flat and increasing fares are adopted. Based on following principals

1. Affordability to the users2. Sustainability of the system3. Competitiveness with the other modes of transport on the similar route4. Flexibility for revision

RevisedFare=BaseFare+(100%ofBaseFarexPercentChangeinCPI)x(1-efficiencyfactor)Fare Revision Formula:

9

Particular2025-

262034-

352044-

452049-

50Daily Passenger ridership (In lakhs) 7.04 13.24 15.78 17.00

Daily pass holders (in lakhs) 4.23 7.94 9.47 10.20

Average Fare/Trip (Rs/pax) 85 125 205 275

Daily fare box from Economy Class A(Rs. Crores) 5.23 14.47 28.28 40.87

Daily Fare Box from Business Class B(Rs. Crores) 0.59 1.63 3.19 4.61

Daily Fare Box Collection = A+B (Rs. Crores) 5.83 16.10 31.48 45.49

Annual fare box collection (Rs. Crores) 1981 5473 10701 15465

• Ramp up of 70%,80% and 90% is taken in the estimateddaily ridership for initial 3 years.

• Pass-holders are estimated to be around 60% of the total daily ridership

• 10% concession for pass holders

• Around 7% of the total commuters may travel in business class by paying 1.5 times

higher fares.

Fare Box Revenue

Yr>> 2025-26 2029-30 2033-34 2039-40 Total

Phases Rs. Crores

Phase 1 1560 1560 0 0 7800

Phase 2 0 1557 1557 0 10900

Phase 3 0 0 2743 2700 19200

Total 1560 3117 4300 2743 37900

Revenue to Project from Property Development

Phase RRTS Stations Key AttributeBuilt up Area (Lakh Sqm)

Comm. Resi.

First 1) Panchgaon 2) Dharuhera Peripheral area of Gurgaon – Spillover advantage 3.81 1.98

Second 1) Rewari 2) MBIRRewari – Key transport/logistic node

MBIR – planned SIR 6.19 2.98

Third 1) BTK 2) SNB 3) AlwarSIRs – Key junctions – benefits of Planned area ;

semi urban settlements11.24 10.64

`Total 21.26 15.60

11

No. of Stations 19Total del. area for all stations (hac. ) 23864Land Area already developed 30%Land Area yet to be developed outside of developed areas 30%

Land Area yet to be developed (hac) 7159Remove 40% for green area/roads/common area (hac) 2864Net area for built up (hac) 4296Average FSI that will be consumed in DA 3Total BUA (hac) - (A) 12887

Existing Developed land area (hac) 7159Remove 65% for green, roads, common areas (hac) 4653Net developed Land Area (hac) 2506Average FSI consumed 1.5Total BUA (hac) - (B) 3759

Area approximating 2 km in radius around each stationcould be earmarked as the Delineated Area (DA).

Property owners whose properties are situated in the DAwould need to pay a cess on every transaction in addition tostamp duty and other statutory levies.

For this purpose cess of Rs 800/ sq mt for open area/plotsand Rs 600/- per sq mt for BUA has been taken.

Higher FAR of upto 3 could be permitted for this purpose.(Higher FAR may not be possible in stations situated in highdensity areas.

Levy of this cess shall begin with RRTS operations.

Structure Calculation of delineated area

Estimated Velocity of transactions in DA

Period Aggregate revenue

(Rs. Crore)

Operation Period of RRTS (25 years) 15564

Revenue from Cess

Cess on Property Transaction

Operation Period

Sale of Additional FAR

v Sale of additional FAR included as a strategy for non fare revenue augmentation.v Strategy useful for densification and value capturev Area approximating 1 KM around station shall be Delineated Area (DA) for sale of

additional FAR of the order of 1.v Ave. 16% of proposed/under construction properties in the DA may opt for purchase

of additional FAR.v Revenue from this sale is calculated @25% of prevailing land circle rates in the DA.v Circle rates are assumed to grow 5% annually.

Illustrative Year

Rate of absorption for add. FAR

A

Sale of Add. FAR (in hec.)

B

Land Circle Rates(Rs.Crores/Hec.)

C

Revenue for theyear (Rs. Crores)

C X B

2025-26 5% 74.58 5.26 392.58

2029-30 10% 149.15 6.40 954.36

2034-35 5% 74.58 8.17 609.01

2039-40 3% 44.75 10.42 466.36

2042-43 2% 29.83 12.07 359.92

TOTAL Rs. 10959 crores

Institutional Mechanism for Cess on Transaction and Sale of Additional FAR v In the state of Haryana

v The Town and Country Planning Department, Govt of Haryana vide Memo dated Date: 06/05/2016permits sale of additional FAR at Rs 120-700 per sq ft. for high and hyper buildings.

v Subsequently, relevant provision for Punjab Scheduled Roads and Controlled Areas Restriction ofUnregulated Development Rules, 1965 and Haryana Building Codes, 1995 to be amended to imposeCess on Transaction.

v In the States of GNCTD and Rajasthanv Similarly other states may give effect to 1) Cess on Property Transaction and 2) Sale of additional FAR

within station wise delineated areas on RRTS corridor by amending relevant acts and regulations.

v Collection and Ring Fencingv The Urban Local Bodies (ULBs)/ Revenue Circle Offices under which respective DA is falling can collect

cess on Transaction

v Revenue from sale of additional FAR within particular DA can be collected by applicable ULBs .

v The funds can be transferred through escrow arrangement to Proposed Regional Transit Fund managedBy NCRTC which will distribute the fund to the regional transit projects as per requirement

Urban Development departments of respective states and MoUD, GOI need to intervene for better coordination and implementation

14

Particular 2025-26 2034-35 2044-45 2049-50 Total As % of total

Rs. CroreFare Box 1981 1565 10702 7305 190056 74%

Property Development 1560 4300 0 0 37900 15%

Advertisement 52 81 133 169 2503 1%Stall Rentals 8 13 21 27 393 -Cess on transactions 631 788 394 0 15664 6%Sale of FAR 393 609 0 0 10959 4%

Total 4625 11265 5185 7988 257475 100%

Summary of revenue

• Fare Collection is the major source of revenue.

• Inflow from Property development and associated activities such as upfront leasepremium, cess on transactions and sale of FAR jointly contribute to around 25% ofrevenue

• This non fare revenue inflow during middle years of operations shall help in operationalsustainability of the project.

• Revenue from advertisement and license fees is expected to be insignificant.

• Inputs related to Depreciation and taxes are taken as per prevailing practices includingeffect of MAT and benefit available As per Income tax Act, u/s 80 IA.

• The operating surplus would remain > 65% as Fare box revenues is supported handsomelyby property development, cess income and sale of FAR.

• The fare revenue grows at 7% pa over 25 years (a combined effect of increase in faresbiannually and y-o-y increase in traffic). In comparison, O&M expenses grows at 5.65% paover 25 years.

• The operating ratio decreases during procurement of rolling stock for periodic replacementof assets though.

Operational Viability

Returns in Generic terms

Pre- Tax : 8.40%Post- Tax : 7.41%

Pre-tax Cashflow

-15000

-10000

-5000

0

5000

10000

15000

200002018-19

2019-20

2020-21

2021-22

2022-23

2023-24

2024-25

2025-26

2026-27

2027-28

2028-29

2029-30

2030-31

2031-32

2032-33

2033-34

2034-35

2035-36

2036-37

2037-38

2038-39

2039-40

2040-41

2041-42

2042-43

2043-44

2044-45

2045-46

2046-47

2047-48

2048-49

2049-50

Rs.Crore

ProjectInvestments O&MCosts Taxes

FareBoxCollection CessonPropertyTransaction UpfrontLeasefromPropertyDevelopment

StallLinceses CarbonCredit

Project IRR

Implementation models

Following models are assessed;

1) Public Sector Model

2) Public Private Partnership Models a) Outsourcing of O&Mb) Viability Gap Funding (VGF)c) Hybrid Annuity Model

18

Public Sector Model

S. No. Means of FinanceContribution

% of Project Cost (Rs. Crores.)

1 Equity Contribution 30.00% 15729A Govt. of India 15.00% 7864

B Govt. of Delhi NCT 3.84% 2011

C Govt. of Haryana 8.57% 4492

D Govt. of Rajasthan 2.60% 1362

2Senior Debt from Multilateral Agencies (Int 2% pa, 30 years repayment + 5 grace period )

55.43% 29061

3 Regional Transit Fund (RTF) 5.00% 26214 Int. free Subordinate Debt from Raj and GNCTD Govt for Govt. Land 0.03% 145 Int. Free sub debt from Central and State Govt for Tax 9.54% 5003

A Govt. of India 4.77% 2501

B Govt. of Delhi NCT 1.22% 640

C Govt. of Haryana 2.72% 1429

D Govt. of Rajasthan 0.83% 433Total (1+2+3+4+5) 100% 52428

Project Structure • A Public sector special Purpose Vehicle (SPV) will

Finance, Build, operate and maintain the project.

• Bear all the risk associated to the project.

Project Cost

At 2017 Prices Escalated @5%

Rs. Crores

With cost of land, tax and IDC 37539 52428

Financing

At Concessional Rate – Hedging Cost to be borne byCentral Govt – Interest rate includes GuaranteeCommission form Central Govt

Interest Free sub debt and RTF reducescapital requirements and WACC andimproves debt service capabilities

Returns from Public Sector Model

Parameter Pre Tax Post Tax

Project IRR 8.40% 7.52%

Avg. DSCR 5.62

Min. DSCR 3.12

• Due to access to low cost funds the Project can achieve PIRR morethan 8% on pre-tax basis which is quite higher than WACC of apporx4.3%.

• The project would have adequate debt service capacity throughoutthe project period

Sensitivity of the project to change in Certain factors which may affect thereturns and debt service capacity are discussed further

Sensitivity Analysis - Public Sector Model S. No. Scenarios PIRR

(Pre Tax)Change in PIRR Minimum

DSCRChange in DSCR

+10% -10% +10% -10%

1. Change in Project Cost 8.40% 7.60% 9.30% 3.12 3.07 3.78

2. Change in O&M cost 8.40% 8.12% 8.66% 3.12 3.00 3.80

3.Change in Fare revenue 8.40% 9.09% 7.66% 3.12 3.76 3.02

4. Change in TOD revenue 8.40% 8.64% 8.15% 3.12 3.68 3.10

S. No. Other Scenarios Particulars

PIRR (Pre Tax) in

Base Case

PIRR with change Minimum

DSCR

Minimum DSCR with

Change

5. Higher Cost of Debt 10% 8.40% 8.40% 3.12 1.22

6.Change in Revenue Streams

Only Fare + Advt. + License Fee 8.40% 3.97% 3.12 <1

7.Change in Revenue streams

Only Fare + Revenue from TOD + Advt. +

License Fee8.40% 6.66% 3.12 2.44

PIRR is below 8% DSCR below 1

Implementation models

Following models are assessed;

1) Public Sector Model

2) Public Private Partnership Models a) Outsourcing of O&Mb) Viability Gap Funding (VGF)c) Hybrid Annuity Model

Sharing 50% of reduction in ER

Development of Property

Revenue from Property Development

Govt. SPV

Private O&M

company

Expected Revenue (ER)

(-)20% of ER

(+)20% of ER

Sharing of 50% of additional ER

Share Fixed % of ER

Fare Collection, Sale of advertising & licensing rights

Fare and non fare revenue

PPP Models – Outsourcing of O&M

Operations of RRTS & feeder service

Maintenance of rolling stock, E&M, Buses, Civil Assets

All Civil construction, E&M

, Traction, Signaling & other

costs

Rolling stock & Feeder Buses

• % of revenue share can be the award criteria since revenue is expected to remain higher than O&Mcost

• Key limitations of the model which can restrict private participation

• Unpredictability in Ridership• Safety Risk to be born by the SPV as per Metro Act despite of not being involved in O&M• Uncertainty over fare revision• Gross Cost Model is globally preferred model in comparison with proposed model

Implementation models

Following models are assessed;

1) Public Sector Model

2) Public Private Partnership Models a) Outsourcing of O&Mb) Viability Gap Funding (VGF)c) Hybrid Annuity Model

Particulars OutputFinancing : Equity: Debt 30:70Debt in form of Term Loan from domestic market with 10 +2 repayment Period and 10% pa interest rateWACC 13.80%Aggregate Project Cost to Pvt. Player @ 2017 prices (Rs. Crore) 40504VGF (Rs Crore) @ 40% of Est Project Cost (Maximum Limit) 16465Project IRR 9.44%Equity IRR 12.06%Minimum DSCR 0.47

PPP Models – Viability Gap Funding

Outcome

• The project is not viable under this model

• The returns would not be attractive to the private sector unless it is convinced about revenuepotential of property development as well as VGF is further increased .

• To get acceptable level of PIRR of 11% and EIRR of 18% plus, the actual viability gap rises to 55% whichis not permitted as per Govt. policy (max 40%) However DSCR may still remain below 1.

Project Structure

• A Private Player will Finance, Build, Operate and Maintain the project. All the risks, except Landacquisition risk, will be borne by private sector.

• Private Player will retain fare and TOD revenue. Govt will retain Cess on Property Transactions,Revenue from Sale of add. FAR.

• Govt will pay Viability Gap Funding on Project Completion cost.

Key Limitations

Implementation models

Following models are assessed;

1) Public Sector Model

2) Public Private Partnership Models a) Outsourcing of O&Mb) Viability Gap Funding (VGF)c) Hybrid Annuity Model

26

NCRTCStateGovt.

(Delhi,Haryana,Rajasthan)

Shareholder’sAgreement

50% 50%

LandAcquisition

Alignment&Formation

PDandStationsBldgs.

R&R

EPCContracts

Lenders(JICA/WB/

ADB)

LoanAgr.

Revenue- Fare-Ad

-License- Carboncredits

P-Way,TractionandPower

RollingStock

SignalingandTelecom

Utilities

TechnologyandOps.

Company(Pvt.)

CivilMaintenance

RollingStock,

E&MMaintenance

LendersBanks/FI

Concession

SPV

PrivateSectorCompany

Annuity payments for 15 years

Proposed Hybrid Annuity Model for DGRA RRTS Project Structure

Revenue- PropertyDevelopment

- Cess ontransaction

- SaleofaddlFAR

Item SPV Tech Ops TotalGovt. Land 12 0 12Pvt. Land 5417 0 5417Alignment and Formation 14678 0 14678Station Buildings 3013 0 3013E & M Works 0 1046 1046Depot 450 0 450Permanent Way 0 1699 1699Traction and Power 0 2521 2521Signalling and Telecom 0 1967 1967Rolling Stock (BG) 0 3174 3174Utilities 0 298 298Environmental, social and R&R costs 58 0 58CISF Barracks and Security equipments 150 0 150Special noise & vibration reduction treatment

100 0 100

Feeder Buses 0 132 132Miscellaneous Cost 127 127 254General Charges including Design Charges 929 549 1477Contingencies 585 345 1093Total without IDC and escalation 25519 11858 37539Share in un-escalated cost 68% 32% 100%

PPP Models – Hybrid Annuity Model

PPP Models – Hybrid Annuity Model S.

No.Means of Finance Contribution (%)

Project Cost Escalated (Rs. Crore)

SPV (Public Sector)1 Equity Contribution 26.15% 9334A Govt. of India 13.07% 4667B GNCT- Delhi 3.34% 1193C Govt. of Haryana 7.47% 2665D Govt. of Rajasthan 2.26% 8082 RRTF 5.00% 17853 Soft Loan (Multilaterals) 60% 21418

4Int. free Sub debt from state Government for land

0.04% 14

5Int. free Sub debt from Central & State govt. for Tax on project Goods

9% 3146

A Govt. of India 4.48% 1573B GNCT- Delhi 1.15% 402C Govt. of Haryana 2.56% 898D Govt. of Rajasthan 0.78% 272

Total of above 100% 35697Tech Ops Company (Private Sector)

Equity Contribution 30% 6272Senior Commercial debt@10% 70% 14635Total of above 100% 20907

Aggregate Total Govt. SPV and Tech Ops (Rs. Crores) 56604

29

PPP Models – Hybrid Annuity Model Returns

The Govt SPV will pay Annuity to the Tech.Ops appreciating latter’s viability (desired PIRR of 15% and EIRR of 18%) and capacity to serve the debt in time (DSCR > 1 during repayment period).

Returns for Tech Ops

• EIRR of 18% and Avg. DSCR of 1.4 on behest of;

• Annuity of Rs. 1550 crore per year for 15 years (cumulatively Rs. 23250 crores)• Revenue from fare box, advertisement and licenses

Returns for Govt SPV

• PIRR of 2.3% which is less than WACC of 5.33%. Average DSCR > 1 • Annuity Payout can be financed through revenue from Property Development, Cess on Property Transactions and Sale of FAR.

Model Limitations

• The project cost is escalated due to the need to service high cost private capital through annuities.

• Risky revenues sources like property development, cess, additional FAR etc. are with Govt. SPV while more certain fare revenue is with private sector SPV.

Conclusion

Model Construction O&MProperty

DevelopmentAttractiveness

Public Sector SPV SPV SPV HigherOutsourcing of O&M SPV Pvt. Sector SPV Limited

VGF Pvt. Sector Pvt. Sector Pvt. Sector LimitedHybrid Annuity SPV and Pvt. Sector Pvt. Sector SPV Moderate

Public Sector Model is recommendable due to following reasons;• Described public sector model is able to achieve threshold of 8% financial return.

• Cost of funding is lower for public sector. Access to low interest and high gestationmultilateral funding makes the project viable.

• Better in handling the risks of ROW clearance, land acquisition, urban development, TODand key approvals

• Higher concessions and supports from the Government in terms of equity support, interestfree sub-debt, property development rights, collection of cess and sale of FAR.

• The private sector capacity in metro development operations is evolving. Significantcapacity and understanding gaps can be disastrous for large scale projects.

• The option to outsource O&M can be worked out provided supporting regulatory frameworkgets into place as described in Model 1.

Part II – Economic Analysis

Sequence of Economic Analysis

• Conceptual Framework – Economic Analysis• Estimated Economic Costs and Benefits• Outcome

Conceptual Framework

RRTS Project

Inputs from Traffic demand Model (Passenger forecast, diverted trips etc.)

Life Cycle Economic Cost Life Cycle Economic Benefits

Conversion of Financial Cost toEconomic Cost by excluding taxes,subsidies, interest payment andthereafter applying StandardConversation factors of 0.9 to financialcost.

1. Project Cost2. O&M Cost3. Asset Replacement

Benefits accrued owing to Diversion ofTraffic from alternate mode leads (i.eRoads and Rails) to RRTS Project.

Benefits derived by Comparing user cost inWith Project and Do- Noting or Alternativescenario.

1. Quantifiable Benefits .a) Fuel Savings.b) Savings in Vehicle Operating

Costs (VOC) of ExistingSystem (Depreciation andMaintenance Cost).

c) Time Savingd) Savings in Infrastructure

Maintenance Costs.e) Pollution reductionf) Accident reduction

2. Non Quantifiable Benefits

Economic Viability Parameters • Economic Internal Rate of Return• Economic Net Present Value• Benefit/Cost Ratio

Sensitivity Analysis with respect to key parameters.

Objective : To Evaluate/Measure the Contribution of Project to Society and Region's Economy

Estimates of Economic Cost and Economic Benefits

Sr. No. Particulars Amount in Present Value terms (at 12% discount rate)

(Rs Crore)Economic Cost (A)

1 Capital Cost (Without Land) 19042

2 Maintenance Cost during operational period 4242

Total Economic Cost 23284Economic Benefits (B)

1 Fuel Savings 99012 Savings in VOC of Diverted Trips

(Depreciation cost + Maintenance Cost ) 4266

3 Time Savings 276644 Infrastructure Maintenance Cost Savings 7475 Accident Reduction Benefits 11416 Pollution Reduction 1530

Total Economic Benefits 45353Net Benefits (B-A) 22069

Key Features

• The Project shall also lead to significant savings in highway lanes and corresponding land acquisition costfor the additional highway lanes owing to diversion of vehicular road traffic to RRTS.

• The benefits of RRTS project shall also accrue to non diverted trips (i.e Residual Traffic ) due to lowercongestions. These benefits have not been captured.

Outcome of Economic Analysis

Particulars Economic Internal Rate of

Return

Economic Net Present Value (ENPV) @ 12% Discount rate

(Rs Crores)

Benefits to cost ratio

Without land cost 17.92% 22069 1.95With land cost 16.58% 18753 1.70

• Project provides 17.92% and 16.58% of E-IRR in without land and with land costscenario which are higher than the social opportunity cost of capital i.e.12% normallyused in the Asian context by ADB and World Bank. Thus on these counts, the returns arehigher than the opportunity cost.

• Further it also provides 1.95 of benefits to cost ratio indicating 95% higher benefitswould be accrued to the economy than the economic cost of the project if project isundertaken.

Economic Viability of Project under different sensitivities

Particular Economic Internal Rate of Return

Without Land cost With Land CostIncrease in Economic Cost of the Project (capex + opex) by 15%. 16.61% 15.32%

Decrease in benefits by 15%. 16.40% 15.10%Combined scenario of increase in Economic Cost of the Project by 15% and decrease in Economic benefits by 15%.

15.13% 13.92%

§ Project provides E-IRR of 13.92% in with land cost scenario under the most pessimisticcombined scenario of increase in economic Cost of the Project by 15% and decrease ineconomic benefits by 15% which is also determined to be higher than social cost of capital.

§ Project also provides many non quantifiable benefits as well as benefits to non divertedtrips which may further improve economic rate of returns.

§ Thus project is determined to be economically viable.

Thank you